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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IheTqOTnlRR+Dau4qWnOhABunL5shaEr745pv5ynsRXh8OdtO3LoJBE617TOtoQQ cigK2rX0ftYk6ITP1MQ4JQ== 0000950123-10-030077.txt : 20100330 0000950123-10-030077.hdr.sgml : 20100330 20100330164721 ACCESSION NUMBER: 0000950123-10-030077 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100330 DATE AS OF CHANGE: 20100330 FILER: 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: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11182 FILM NUMBER: 10714466 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 10-K 1 w77909e10vk.htm FORM 10-K e10vk

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

Commission File No. 001-11182

BIOCLINICA, INC.

(Exact name of Registrant as specified in its Charter)


Delaware		11-2872047

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


826 Newtown-Yardley Road, Newtown, Pennsylvania		18940-1721

(Address of principal executive offices)		(Zip Code)

(267) 757-3000

(Registrant’s telephone number,

including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered
Common Stock, $0.00025 par value per share		NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes: o No: þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes: o No: þ

Indicate by check mark if the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes: þ No: o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website; if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulate S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes: o No: o

* The registrant has not yet been phased into the interactive data requirement

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):


Large accelerated filer o		Accelerated filer o		Non-accelerated filer o (do not check if a smaller reporting company)		Smaller reporting company þ

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes: o No: þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $41.3 million on June 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter, based on the average bid and asked prices on that date.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of March 15, 2010:


Class		Number of Shares
Common Stock, $.00025 par value		14,524,102

The following documents are incorporated by reference into the Annual Report on Form 10-K: Portions of the Registrant’s definitive Proxy Statement for its 2010 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

TABLE OF CONTENTS


Item	Page
PART I 1. Business		1
1A. Risk Factors		9
1B. Unresolved Staff Comments		18
2. Properties		18
3. Legal Proceedings		18
4. RESERVED		18

PART II 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		19
6. Selected Financial Data		22
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
7A. Quantitative and Qualitative Disclosures About Market Risk		38
8. Financial Statements and Supplementary Data		39
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		71
9A(T). Controls and Procedures		71
9B. Other Information		72

PART III 10. Directors, Executive Officers and Corporate Governance		73
11. Executive Compensation		73
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		73
13. Certain Relationships and Related Transactions, and Director Independence		73
14. Principal Accounting Fees and Services		73

PART IV 15. Exhibits, Financial Statement Schedules		73

PART I

Item 1. Business.

Overview

On July 8, 2009, our shareholders approved an amendment to our Certificate of Incorporation, as amended, to change our name from Bio-Imaging Technologies, Inc. to BioClinica, Inc.

BioClinica^TM, Inc., referred to herein as “we”, “us” and “our”, provides integrated clinical research services including imaging core lab and eClinical technologies and services to pharmaceutical, biotechnology, and medical device companies, and other organizations such as contract research organizations (CROs), engaged in global clinical studies. Our products and services include: medical image management, electronic data capture, clinical data management, interactive voice and web response, clinical trial supply forecasting tools, and electronic image transport and archive solutions. By supplying enterprise-class software and hosted solutions accompanied by expert services to fully utilize these tools, we believe that our offerings provide our clients, large and small, improved speed and efficiency in the execution of clinical studies, with reduced clinical and business risk.

Our services support clinical stage research and development (R&D) functions for our clients, and specifically, the collection, cleaning, and reporting of data related to their clinical trials. For large pharmaceutical and biotechnology companies, outsourcing these services to BioClinica is a cost effective alternative to the fixed cost model associated with internal drug development. Moreover, these large companies can benefit from BioClinica’s technical resource pool, broad therapeutic expertise, and global infrastructure to support simultaneous multi-country clinical trials. For smaller companies, BioClinica provides the focused expertise and the manpower that they simply may not have in-house to pursue the resource-intensive clinical stages of drug development.

Our vision is to build critical mass in the complementary disciplines of clinical research related to data collection and processing — especially those which can benefit from our information technology products and support services — and to integrate them in ways that yield efficiency and value for our clients. Our goal is to provide demonstrable benefits to sponsor clients through this strategy, that is, faster and less expensive drug development. We believe that the outsourcing of these services should continue to increase in the future because of increased pressure on clients, including factors such as: the need to more tightly manage costs, capacity limitations, reductions in marketing exclusivity periods, the desire to reduce development time, increased globalization of clinical trials, productivity challenges, imminent patent expirations, and more stringent regulation. We believe these trends will continue to create opportunities for companies like BioClinica that are focused on improving the efficiency of drug and medical device development.

Our Business

We view our operations and manage our business as one operating segment. Our extensive customer base includes 19 of the top 20 global pharmaceutical companies measured by revenue and many small and middle-market life sciences companies, as well as CROs. Our product offerings fall into two general product and service categories: eClinical and Imaging Core Laboratory solutions.

BioClinica’s eClinical solutions enhance pharmaceutical and biotech companies’ ability to collect, clean (i.e., verify and ensure accuracy), process, and store the vast quantities of data generated in clinical trials.

Through the use of our proprietary software and associated services, our customers see the results of their clinical trials sooner and more accurately than through alternate methods. We believe our forecasting, simulation, and reporting tools improve our clients’ ability to manage their clinical trials and significantly reduce cost and risk inherent in clinical development.

Like our eClinical solutions, BioClinica’s Imaging Core Laboratory services also support the collection and processing of clinical data, but specifically those related to medical images. The large size of digital image files requires rigorous processes to manage this data. We have developed proprietary expert software applications and services to make image collection both accurate and efficient. BioClinica’s Imaging Core Laboratory services also assist clients with the design and management of the medical imaging component of clinical trials, and with the analysis and regulatory submission. Our systems enable us to contract with the foremost independent radiologists and other medical specialists who are involved in clinical trials to review medical image data in an entirely digital format and make highly precise measurements and biostatistical inferences to evaluate the efficacy and safety of pharmaceuticals, biologics, or medical devices. The resulting data enables our clients and regulatory reviewers, primarily the U.S. Food and Drug Administration (FDA) and comparable European agencies, to evaluate product efficacy and safety.

Acquisitions have been, and may continue to be, an important component of BioClinica’s growth strategy. On September 16, 2009, BioClinica acquired Tourtellotte Solutions, Inc., a private Massachusetts software firm. Tourtellotte Solutions’ supply chain simulation software added a new enterprise-class offering to our eClinical product line, and we believe that their interactive voice (IVR)/interactive web (IWR) technology developments will greatly advance BioClinica’s capabilities in this area.

On August 27, 2009, we acquired the CardioNow unit of Agfa HealthCare. With this addition, BioClinica now offers electronic transport solutions to facilitate the blinding, sharing, tracking, and archiving of medical images for multi-center clinical trials as part of its suite of imaging services. Imaging tracking information can also be integrated with BioClinica eClinical data to further simplify and enhance the clinical trial process for life science companies.

On January 6, 2009, we sold our CapMed division to MBI Benefits, Inc., an indirectly owned subsidiary of Metavante Technologies, Inc. This division included the Personal Health Record (“PHR”) software and the patent-pending Personal HealthKey™ technology. The sale of CapMed enables us to focus on our core Clinical Trials Services business.

We were incorporated in Delaware in 1987 under the name Wise Ventures, Inc. Our name was changed to Bio-Imaging Technologies, Inc. in 1991 and was changed to BioClinica, Inc. in 2009. We changed the company name to BioClinica, Inc. in 2009 to better reflect our expanded products and services. The address of our principal executive offices is 826 Newtown-Yardley Road, Newtown, Pennsylvania, 18940, and our telephone number is 267-757-3000. Our Internet website is www.bioimaging.com. We make available on our Internet website all of our public filings with the Securities and Exchange Commission, or SEC. However, nothing on our Internet website is intended to be incorporated by reference into this Form 10-K or any other filing made by us with the SEC. The public may read or copy any filings that BioClinica, Inc. files with the SEC at the SEC Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The SEC maintains an internet site that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC. The website is http://www.sec.gov. The public can also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Target Markets

Our primary target market is comprised of pharmaceutical, biotechnology, and medical device companies with products in any stage of clinical development (Phase I, Phase II, Phase III, or Phase IV). Though our experience spans a wide range of therapeutic areas, we also target the largest areas of clinical research with customized products and services to support the precise requirements of these projects. Our therapeutic areas of expertise include: oncology, musculoskeletal conditions, and cardiology, plus central nervous system, neurovascular, and metabolic diseases.

Our Solutions and Services

The processes and technology incorporated into our offerings are designed to provide clients with the ease of use and scalability to handle large global trials as well as the flexibility, speed, and efficiency necessary to support smaller or early phase trials. The conduct of clinical trials for new drugs, biological products, and medical devices is regulated by the FDA and other regulatory bodies. Our products and services are designed to help our clients to operate in a manner that is compliant with applicable regulations and follows applicable regulatory guidance.

eClinical Services

Our eClinical product line is comprised of four primary product and service offerings:

	•		BioClinica^TM Express electronic data capture (EDC);

	•		BioClinica^TM Express clinical data management;

	•		BioClinica^TM Optimizer clinical supply forecasting and optimization; and

	•		BioClinica^TM interactive response technologies (IVR/IWR).

Electronic Data Capture

BioClinica Express is an electronic data capture (EDC) technology platform that automates expensive, time-consuming, paper-based clinical trial processes and scales securely, reliably, and cost-effectively for global clinical trials involving large numbers of clinical sites and patients. The Express system integrates EDC functionality with clinical data management system features into a single solution that replaces traditional paper-based methods. Using our proprietary software, clients collect, clean, and manage their clinical data completely in electronic format. This technology-enabled process improves data quality and allows our sponsors to see the results of their clinical trials faster than conventional paper-based methods. Electronic versions of case report forms (eCRFs) are made available to each research site participating in the clinical trial via the Internet. The Express system also allows the import and integration of clinical data from other sources during the course of the trial to help to reduce the imprecision and inefficiencies of waiting until the end of the trial to get a full and accurate analysis of the efficacy and safety of the investigational compound.

We also offer modules and add-on products and services for the Express Platform, which include:

	•		The Express AutoEncoder to automatically or manually code clinical drug names and indications, adverse event terms, and patient medical histories;

	•		Direct integration with BioClinica IVR/IWR to enable randomization and drug supply tracking through either a computer or the telephone with the same clinical study;

	•		The BioClinica Reportal, which enables clinical trial sponsors to securely publish and share relevant clinical trial-related data for use by clinical investigators through a standard Web-browser; and

•

Access to Clinical Data Acquisition Standards Harmonization (CDASH) and Clinical Data Interchange Standards Consortium (CDISC)-based forms libraries to assist clients with the rapid adoption and utilization of complex data formatting standards for regulatory submission.

Data Management

BioClinica’s data management services support the accurate collection, verification, and analysis of clinical data. The data management team designs eCRFs and data management plans to ensure that data are collected in compliance with both the study protocol and applicable regulatory requirements. Prior to data lock, BioClinica personnel screen the data to detect errors, omissions, and other deficiencies in completed eCRFs. Data management personnel review, code, reconcile serious adverse events, and assist with the resolution of any data-related problems. Clients can utilize these services to augment their organization for an entire trial or to manage unexpected resource situations. Other clients choose to completely outsource the data management function in lieu of direct staff.

Clinical Supply Forecasting and Optimization

BioClinica Optimizer is a product that allows biopharmaceutical companies to simulate and optimize their clinical supply chain. Optimizer allows clients to design unlimited supply chain scenarios and vary relevant study parameters — from a global level down to a site level. Simulated results can be analyzed and modified to create the ideal clinical supply chain. Simulation is a process that replicates a real-world system or environment in order to predict actual behavior. Simulating study scenarios can help identify and mitigate supply crisis, study delays, and unnecessary overages. Optimization helps define the minimum thresholds for site stock and local country depots using specific shipping lead times. Finding the maximum unpredictable demand over time allows users to change their minimum stock levels as the study progresses, e.g. dropping off as enrollment or other unpredictable events become complete. BioClinica offers Optimizer both through software licensing and as an outsourced service to make these benefits accessible to organizations of any size.

IVR/IWR Interactive Response Solutions

Interactive Voice Response (IVR) solutions, systems that use the telephone to interact with databases, have been used in clinical trials for many years for basic data capture. BioClinica has significantly expanded the capabilities of our IVR offering with the introduction of BioClinica IVR — the first IVR created from inception as an eClinical module tightly integrated with EDC technology for improved clinical trial management. Our system is extremely useful for obtaining multi-lingual study subject randomization codes and can initiate call backs to issue reminders (such as patient visits) and integrate fully with the central database, for a full electronic data collection mechanism.

Process knowledge and expertise in IVR/IWR, simulation and forecasting, and clinical supplies combined with other innovations, has led to the development of Trident, a next-generation interactive voice/interactive web response system that will be released in 2010. It is parameter-driven, built specifically for the web, and is able to support rapid, flexible customization that supplies greater control over cost and data than legacy clinical IVR systems.

Imaging Core Laboratory Services

BioClinica provides a broad array of medical imaging management services to support clinical development. Medical image data are received by us from clinical trial sites located throughout the world. We have developed systems and procedures for data tracking and quality control that we believe to be of significant

value to our clients. Our facilities in the U.S. and Europe contain specialized hardware and software for the digitization of films and translation of digital data, enabling data to be standardized, regardless of its source. We believe our ability to handle most commercially available image file formats is a valuable technical asset and an important competitive advantage in gaining new business from large, global, multi-center clinical trials.

We have also developed image analysis software to measure key indicators of drug efficacy in different organs and disease states. The results from image analysis derived in our facilities can be transmitted electronically to our clients for regulatory submission. In addition, clients can use our image analysis software to determine patient eligibility for their clinical trials. Our information management services focus on providing specialized solutions for improving the quality, speed, and flexibility of image data management for clinical trials. We believe that our computer assisted masked reading system (BioRead) offers numerous advantages over conventional film-based medical image reading scenarios, including increased reading speed, greater standardization of image reading, and reduced error in the capture of reader interpretations.

Using our BioRead system, independent medical specialists can review medical image data from clinical trials in a digital format. The BioRead system displays all modalities of medical image data, regardless of source equipment. In addition, the systems display either translated digital data or digitized films. Such image reviews are often required during clinical trials to evaluate patients’ responses to therapy or to determine if patients qualify for studies. By using the BioRead system to read and evaluate image data, medical specialists achieve greater reading speed than is possible with a manual film-based system and can perform evaluations in a more objective, reproducible manner.

We have also developed remote BioRead systems that are located on the premises of the individual medical specialists who are engaged by the sponsor to perform the analysis of the medical image data. Historically, the BioRead systems have been utilized to determine efficacy of the compounds being studied.

BioClinica assists clients in the design and management of the medical imaging component of clinical trials for all modalities, which includes computerized tomography (CT), magnetic resonance imaging (MRI), radiography, dual energy x-ray absorptiometry (DXA/DEXA), positron emission tomography (PET), single photon emission computerized tomography (SPECT), quantitative coronary angiography (QCA), cardiac MRI and CT, intravascular ultrasound (IVUS), peripheral quantitative angiography (QVA), central nervous system (CNS) MRI, and ultrasound.

The acquisition of CardioNow resulted in an opportunity for two new product offerings for BioClinica. CardioNow has developed a web-based system for the secure transmission of medical cardiac images. The software was specifically developed for and marketed to the invasive cardiology departments of hospitals within the United States. BioClinica will integrate and enhance the current CardioNow software and service to offer our clients a streamlined electronic transport solution to facilitate the blinding, sharing, tracking and archiving of medical images for multi-center clinical trials as part of our suite of imaging services. Most clinical studies use courier services to transport large medical image files — a process that can be slow, cumbersome, and prone to error. BioClinica WebSend will provide investigator sites with a simple tool to complete transmittal forms with full validation of protocol-specific requirements and send large image studies directly to BioClinica in minutes via an Internet connection. BioClinica WebView will extend WebSend functionality to facilitate electronic sharing, tracking, analysis, and archiving of medical images for single or multi-center clinical trials with imaging endpoints.

Clients are increasingly using imaging criteria for inclusion/exclusion criteria. This use requires extremely rapid turn-around reads. We believe that the combination of WebSend and BioRead offers the optimal tool for this work because it allows us, at our client’s discretion, to provide the images to an expert in the field to

facilitate the review of the images from the expert’s office or home, with the utmost possible speed in transport. Imaging information can also be integrated with BioClinica Express EDC to further simplify and enhance the clinical trial process and improve the visibility of clinical data for life science companies.

Services

Our products are supported by comprehensive consulting, training services, and application hosting and support capabilities to support clinical trials on a global scale. In addition to our U.S. headquarters, we have offices with service personnel in the Netherlands, France, India, China, and the United Kingdom.

Application Hosting Services. Other than our internal Imaging Core Lab systems, our software products are available to customers through software licensing arrangements and as hosted application solutions with technical and training support services.

Consulting Services. We provide technical consulting in the evaluation of the sites that may participate in clinical trials. We also provide consulting services to our clients regarding regulatory issues involved in the design, execution, analysis, and submission of medical image data in clinical trials. BioClinica provides expertise through our deep roster of collaborative consultants, which includes board-certified radiologists, oncologists, rheumatologists, cardiologists, and other therapeutic specialists to ensure the highest quality independent review, as well as eClinical design and deployment expertise.

Customer Support. Our multi-lingual customer and site technical support is available 24 hours per day, seven days per week, via our call center. Customer support also includes training and software maintenance. Support services are bundled within our software licenses and outsourced service offerings.

Intellectual Property

Proprietary intellectual property protection for our computer-imaging programs processes and expertise is important to our business. We have developed certain technically-derived procedures and computer software applications that are intended to increase the effectiveness and quality of our services. We rely upon patents, trademarks, copyrights, trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position. We have claimed trademark protection for BioClinicaÔ and Intelligent ImagingÔ. We hold patents for the two DEXA phantoms, titled Spine and Variable Composition Phantoms, which we sell to trial sites. We have registered our Stylized Man Design with the U.S. Patent and Trademark Office. We cannot assure you that we can limit unauthorized or wrongful disclosures of trade secrets or otherwise confidential information. In addition, to the extent we rely on trade secrets and know-how to maintain our competitive technological position, we cannot assure you that others may not develop independently the same, similar or superior techniques. Although our intellectual property rights are important to the results of our operations, we believe that other factors, such as our independence, process knowledge, technical expertise and experience are more important, and that, overall, these technological capabilities offer significant benefits to our clients.

Government Regulation

It is our view that demand for our software products, services and hosted solutions is largely a function of the regulatory requirements associated with the investigation and approval of drugs, biologics and medical devices, as well as the monitoring of and reporting on the safety of these products. The clinical testing of drugs, biologics and medical devices is subject to regulation by the U.S. Food and Drug Administration, or FDA, and other governmental authorities worldwide. The use of software and services during the clinical trial process must

adhere to the regulations known as Good Clinical Practices and other various codified FDA regulations, and should adhere to regulatory guidance such as the Consolidated Guidance for Industry from the International Conference on Harmonization regarding Good Clinical Practice for Europe, Japan and the United States and other guidance documents. Our products, services and hosted solutions are developed using our domain expertise and are designed to allow compliance with applicable rules and regulations, and conformance with applicable guidance. The foregoing regulations and regulatory guidance are subject to change at any time. Changes in regulations and regulatory guidance to either more or less stringent conditions could adversely affect our business and the software products, services and hosted solutions we make available to our customers. Further, a material violation by us or our customers of Good Clinical Practices could result in a warning letter from the FDA, the suspension or termination of clinical trials, investigator disqualification, debarment, the rejection or withdrawal of a product marketing application, criminal prosecution or civil penalties, any of which could have a material adverse effect on our business, results of operations or financial condition.

In addition to the aforementioned regulations and regulatory guidance, the FDA has developed regulations and regulatory guidance concerning electronic records and electronic signatures. The regulations, codified as 21 CFR Part 11, are interpreted for clinical trials in a guidance document titled Computerized Systems Used in Clinical Trials. This regulatory guidance stipulates that computerized systems used to capture or manage clinical trial data must meet certain standards for attributability, accuracy, retrievability, traceability, inspectability, validity, security and dependability. Other guidance documents have been issued that also help in the interpretation of 21 CFR Part 11. We cannot assure you that the design of our software solutions, will continue to allow customers to maintain conformance with these guidelines as they develop. Any changes in applicable regulations that are inconsistent with the design of any of our software solutions or which reduce the overall level of record-keeping or other controls or performances of clinical trials, may have a material adverse effect on our business and operations. If we fail to offer solutions that allow our customers to comply with applicable regulations, it could result in the suspension or termination of on-going clinical trials, the disqualification of data for submission to regulatory authorities, or the withdrawal of approved marketing applications.

The FDA has established mandatory procedures and safety standards that apply to the clinical testing, manufacturing and marketing of drugs and medical devices. These procedures and safety standards include, among other things, the completion of adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug or device for its recommended conditions or use. We advise our clients in the execution of clinical trials and other drug and device development tasks. We do not administer drugs to or utilize medical devices on patients.

The success of our business is dependent upon continued acceptance by the FDA and other regulatory authorities of the data and analyses generated by our services in connection with the evaluation of the safety and efficacy of new drugs and devices. The FDA has formal guidelines that encourage the use of surrogate measures, through submission of digital image data, for evaluation of drugs to treat life-threatening or debilitating conditions. We cannot assure you that the FDA or other regulatory authorities will accept the data or analyses generated by us in the future and, even assuming acceptance, we cannot assure you that the FDA or other regulatory authorities will require the application of imaging techniques to numbers of patients and over time periods substantially similar to those required of traditional safety and efficacy techniques.

Changes in the FDA’s policy for the evaluation of therapeutic oncology agents may have a positive impact on the time to market of such therapeutics. According to FDA guidelines, approval times for new cancer therapies can be shortened if evidence of tumor shrinkage is verifiable and demonstrable through the use of objective measurement techniques. These guidelines place greater reliance on the use of medical image data to demonstrate objective tumor shrinkage. In addition, the FDA has implemented guidelines aimed at accelerating other therapeutic categories through the use of imaging markers as surrogate endpoints for measuring therapeutic

effectiveness. We believe the FDA’s initiatives to streamline and accelerate the submission and review process of therapeutic agents has had a favorable impact on our business.

We believe that our ability to achieve continued and sustainable growth will be materially dependent upon, among other factors, the continued stringent enforcement of the comprehensive regulatory framework by various government agencies. Any significant change in these regulatory requirements or the enforcement thereof, especially relaxation of standards, could adversely affect our business.

The current European market regulation is more fragmented than in the United States. However, we believe that our expertise in working with the standards of the FDA provides us with experience when working with the various European regulatory agencies.

Competition

The market for medical image management, electronic data collection, data management and other clinical trial services is highly competitive and rapidly evolving. Our imaging services primarily compete against specialty contract research organizations, or CROs, and to a lesser extent, universities and teaching hospitals. Our eClinical Services compete with internally developed solutions, CRO’s, and independent providers of such services. Certain of these competitors are owned by or are divisions of larger organizations, some of which have substantially greater resources than we do. As competition increases, we will look to provide value-added services and undertake marketing and sales programs to differentiate our services based on our expertise and experience in specific therapeutic and diagnostic areas, our technical expertise, our regulatory and clinical development experience, our quality performance and our international capabilities. Our competitive position also depends upon our ability to attract and retain qualified personnel and develop and preserve proprietary technology, processes and know-how. Competition in our industry has resulted in additional pressure being placed on price, service and quality. Although we believe that we are well positioned against our competitors due to our experience in clinical trials and regulatory compliance along with our international presence, we cannot assure you that our competitors or clients will not provide or develop services similar or superior to those provided by us. This competition could have a material adverse impact on us.

Marketing and Sales

We provide and market our services on an international basis primarily to pharmaceutical, biotechnology and medical device companies. We sell our products through a direct sales force and through relationships with CROs. Our direct sales force is operated out of two U.S. field offices and two European field offices, as well as our operational facilities in Pennsylvania and Leiden, The Netherlands. In addition, follow-on sales are accomplished by the efforts of sales professionals, project managers and other consulting services professionals.

Our selling efforts are primarily focused on North America and Western Europe. Our marketing activities include exhibiting at major trade shows, advertising in trade journals and the sponsoring of industry associations. As of December 31, 2009, we had 29 employees in sales and marketing.

Significant Clients

No one client represented more than 10% of our service revenues for the years ended December 31, 2009 or December 31, 2008, while for the year ended December 31, 2007, one client, Hoffmann-La Roche, which encompassed 11 projects, accounted for 13.4% of our service revenues. Contracts are terminable by our clients at any time and for any reason. The loss of a significant client, or a reduction in services provided to a significant client, would have a material adverse effect on our business, financial condition and results of operations.

Business Segments and Geographic Information

We view our operations and manage our business as one operating segment, clinical trials services.

Our corporate headquarters and operational facilities are in Pennsylvania, in the United States. We also have a European facility in Leiden, the Netherlands. We manage our services for European-based clinical trials from the Leiden facility. Our European facility has similar processing and analysis capabilities as our United States headquarters. We also have a facility in Lyon, France that provides product development and research activities. In January 2010, we incorporated BioClinica Private Limited in Bhubaneshwar, India to provide information technology support services.

Employees

As of December 31, 2009, we had 479 employees, four of whom were executive officers.

Of our employees, as of December 31, 2009, 29 were engaged in sales and marketing, 406 were engaged in client-related projects and 44 were engaged in administration and management. A significant number of our management and professional employees have prior industry experience. We believe that we have been successful in attracting skilled and experienced personnel; however, it remains a competitive market for recruiting such personnel. As of February 28, 2010, we have employment agreements with three of our executive officers. See “Item 11. Executive Compensation”. We consider relations with our employees to be good.

Item 1A. Risk Factors.

The more prominent risks and uncertainties inherent in our business are described below. However, additional risks and uncertainties may also impair our business operations. If any of the following risks actually occur, our business, financial condition or results of operations may suffer. Investing in our common stock involves a high degree of risk. Any of the following factors could harm our business and future results of operations and you could lose all or part of your investment.

Risks Related to Our Company and Business

We may incur financial losses because contracts may be delayed or terminated or reduced in scope for reasons beyond our control.

Our clients may terminate or delay their contracts for a variety of reasons, including, but not limited to:

	•		unexpected or undesired clinical results;

	•		the client’s decision to terminate the development of a particular product or to end a particular study;

	•		insufficient patient enrollment in a study;

	•		insufficient investigator recruitment;

	•		failure to perform our obligations under the contract; or

	•		the failure of products to satisfy safety requirements.

In addition, we believe that FDA-regulated companies may proceed with fewer clinical trials or conduct them without assistance of contract service organizations if they are trying to reduce costs as a result of cost containment pressures associated with healthcare reform, budgetary limits or changing priorities. These factors may cause such companies to cancel contracts with contract service organizations.

We cannot assure you that our clients will continue to use our services or that we will be able to replace, in a timely or effective manner, departing clients with new clients that generate comparable revenues. Further, we cannot assure you that our clients will continue to generate consistent amounts of revenues over time.

The loss, reduction in scope or delay of a large contract or the loss or delay of multiple contracts could materially adversely affect our business, although our contracts entitle us to receive all fees earned up to the time of termination.

The recent economic downturn may adversely impact our ability to raise capital.

The recent economic downturn and adverse conditions in the national and global markets may negatively affect our operations in the future. The fallen equity markets and adverse credit markets may make it difficult for us to raise capital or procure credit in the future to fund the growth of our business, which could have a negative impact on our business and results of operations and limit our ability to pursue acquisitions.

We depend on a small number of industries and clients for all of our business, and the loss of one such significant client could cause revenues to drop quickly and unexpectedly.

We depend on research and development expenditures by pharmaceutical, biotechnology and medical device companies to sustain our business. Our operations could be materially and adversely affected if:

	•		our clients’ businesses experience financial problems or are affected by a general economic downturn;

	•		consolidation in the pharmaceutical, biotechnology or medical device industries leads to a smaller client base for us; or

	•		clients reduce their research and development expenditures.

No one client represented more than 10% of our service revenues for the years ended December 31, 2009 or December 31, 2008, while for the comparable period of 2007, one client, Hoffmann-La Roche, which encompassed 11 projects, represented 13.4% of our service revenues. The loss of business from a significant client or our failure to continue to obtain new business to replace completed or canceled projects would have a material adverse effect on our business and revenues.

Our contracted/committed backlog may not be indicative of future results.

Our reported contracted/committed backlog of $98.7 million at December 31, 2009 is based on anticipated service revenue from uncompleted projects with clients. Backlog is the expected service revenue that remains to be earned and recognized on signed and verbally agreed to contracts. Contracts included in backlog are subject to termination by our clients at any time. In the event that a client cancels a contract, we would be entitled to receive payment for all services performed up to the cancellation date and subsequent client authorized services related to the cancellation of the project. The duration of the projects included in our backlog range from less than three months to seven years. We cannot assure that this backlog will be indicative of future results. A number of factors may affect backlog, including:

	•		the variable size and duration of the projects (some are performed over several years);

	•		the loss or delay of projects;

	•		the change in the scope of work during the course of a project; and

	•		the cancellation of such contracts by our clients.

Also, if clients delay projects, the projects will remain in backlog, but will not generate revenue at the rate originally expected. Accordingly, the historical relationship of backlog to revenues may not be indicative of future results.

We made two acquisitions in the third quarter of 2009 and may engage in future acquisitions, which may be expensive and time consuming, and from which we may not realize anticipated benefits.

We acquired the CardioNow unit from AGFA Healthcare and substantially all of the assets of Tourtellotte Solutions, Inc. in the third quarter of 2009 and may acquire additional businesses, technologies and products if we determine that these additional businesses, technologies and products complement our existing business, or otherwise serve our strategic goals. Either as a result of the recent acquisitions or future acquisitions undertaken, the process of integrating the acquired business, technology or product may result in operating difficulties and expenditures, and may absorb significant management attention that would otherwise be available for ongoing development of our business. Moreover, we may never realize the anticipated benefits of any such acquisition. Such acquisitions could result in potentially dilutive issuances of our securities, the incurrence of debt and contingent liabilities and amortization expenses related to intangible assets, all of which could adversely affect our results of operations and financial condition.

Loss of key personnel, or failure to attract and retain additional personnel, may cause the success and growth of our business to suffer.

Future success depends on the personal efforts and abilities of the principal members of our senior management to provide strategic direction, develop business, manage operations and maintain a cohesive and stable environment. Specifically, we are dependent upon Mark L. Weinstein, President and Chief Executive Officer, Ted I. Kaminer, Executive Vice President of Finance and Administration and Chief Financial Officer, David A. Pitler, Executive Vice President, President BioImaging Services, and Peter Benton, Executive Vice President, President eClinical. Although we have employment agreements with Mr. Weinstein, Mr. Kaminer and Mr. Benton, this does not necessarily mean that they will remain with us. Although we have executive retention agreements with our officers, we do not have employment agreements with any other key personnel. Furthermore, our performance also depends on our ability to attract and retain management and qualified professional and technical operating staff. Competition for these skilled personnel is intense. The loss of services of any key executive, or inability to continue to attract and retain qualified staff, could have a material adverse effect on our business, results of operations and financial condition. We do not maintain any key employee insurance on any of our executives.

Our revenues, earnings and operating costs are exposed to exchange rate fluctuations.

During fiscal 2009, a portion of our service revenues were denominated in foreign currency. Our financial statements are denominated in United States dollars. In the event a greater portion of our service revenues are denominated in a foreign currency, changes in foreign currency exchange rates could affect our results of operations and financial condition. Fluctuations in foreign currency exchange rates could materially impact the operating costs of our European facility in Leiden, the Netherlands, which are primarily Euro denominated. We hedge our foreign currency exposure when and as appropriate to mitigate the adverse impact of fluctuating exchange rates.

We may be required to record additional significant charges to earnings if our goodwill becomes impaired.

Under accounting principles generally accepted in the United States, we review our goodwill for impairment each year as of December 31 and when events or changes in circumstances indicate the carrying value

may not be recoverable. The carrying value of our goodwill may not be recoverable due to factors such as a decline in stock price and market capitalization, reduced estimates of future cash flows and slower growth rates in our industry. Estimates of future cash flows are based on an updated long-term financial outlook of our operations. However, actual performance in the near-term or long-term could be materially different from these forecasts, which could impact future estimates. For example, a significant decline in our stock price and/or market capitalization may result in impairment of our goodwill valuation. We may be required to record a charge to earnings in our financial statements during a period in which an impairment of our goodwill is determined to exist, which may negatively impact our results of operations.

We may be unable to adequately protect, and we may incur significant costs in defending, our intellectual property and other proprietary rights.

Our success depends on our ability to protect our intellectual property and other proprietary rights. We rely upon a combination of trademark, trade secret, copyright, patent and unfair competition laws, as well as license agreements and other contractual provisions, to protect our intellectual property and other proprietary rights. In addition, we attempt to protect our intellectual property and proprietary information by requiring certain of our employees and consultants to enter into confidentiality, non-competition and assignment of inventions agreements. To the extent that our intellectual property and other proprietary rights are not adequately protected, third parties might gain access to our proprietary information, develop and market products or services similar to ours, or use trademarks similar to ours, each of which could materially harm our business. Existing U.S. federal and state intellectual property laws offer only limited protection. Moreover, the laws of other countries in which we market our software products, services and hosted solutions may afford little or no effective protection of our intellectual property. If we resort to legal proceedings to enforce our intellectual property rights or to determine the validity and scope of the intellectual property or other proprietary rights of others, the proceedings could be burdensome and expensive, even if we were to prevail. The failure to adequately protect our intellectual property and other proprietary rights may have a material adverse effect on our business, results of operations or financial condition.

Risks Related to Our Industry

Our failure to compete effectively in our industry could cause our revenues to decline.

Significant factors in determining whether we will be able to compete successfully include:

	•		consultative and clinical trials design capabilities;

	•		reputation for on-time quality performance;

	•		expertise and experience in specific therapeutic areas;

	•		the scope of service offerings;

	•		strength in various geographic markets;

	•		the price of services;

	•		ability to acquire, process, analyze and report data in a time-saving and accurate manner;

	•		ability to manage large-scale clinical trials both domestically and internationally;

	•		our size; and

	•		the service and product offerings of our competitors.

If our services are not competitive based on these or other factors, our business, financial condition and results of operations could be materially harmed.

The biopharmaceutical services industry is highly competitive, and we face numerous competitors in our business, including hundreds of CROs. If we fail to compete effectively, we will lose clients, which would cause our business to suffer. We primarily compete against in-house departments of pharmaceutical companies, full service CROs, small specialty CROs, and to a lesser extent, universities and teaching hospitals. Some of these competitors have substantially greater capital, technical and other resources than we do. In addition, certain of our competitors that are smaller specialized companies may compete effectively against us because of their concentrated size and focus.

Changes in outsourcing trends in the pharmaceutical and biotechnology industries could adversely affect our operating results and growth rate.

Service revenues depend greatly on the expenditures made by the pharmaceutical and biotechnology industries in research and development. Accordingly, economic factors and industry trends that affect our clients in these industries also affect our business. For example, the practice of many companies in these industries has been to hire outside organizations like us to conduct clinical research projects. This practice has grown significantly in the last decade, and we have benefited from this trend. However, if this trend were to change and companies in these industries were to reduce the number of research and development projects they outsource, our business could be materially adversely affected.

Additionally, numerous governments have undertaken efforts to control growing healthcare costs through legislation, regulation and voluntary agreements with medical care providers and pharmaceutical companies. If future regulatory cost containment efforts limit the profits that can be derived from new drug sales, our clients might reduce their research and development spending, which could reduce our business.

Consolidation among our customers could cause us to lose customers, decrease the market for our products and result in a reduction of our revenues.

Our customer base could decline because of industry consolidation, and we may not be able to expand sales of our products and services to new customers. Consolidation in the pharmaceutical, biotechnology and medical device industries has accelerated in recent years, and we expect this trend to continue. As these industries consolidate, competition to provide products and services to industry participants will become more intense and the importance of establishing relationships with large industry participants will become greater. These industry participants may try to use their market power to negotiate price reductions for our products and services. Also, if consolidation of larger current customers occurs, the combined organization may represent a larger percentage of business for us and, as a result, we are likely to rely more significantly on the combined organization’s revenues to continue to achieve growth.

The recent economic downturn coupled with the current regulatory environment could have a negative impact on the pharmaceutical, biotechnology and medical device industries.

The recent economic downturn and adverse conditions in the national and global markets may negatively affect our operations in the future. Our revenues are contingent upon the research and development expenditures by pharmaceutical, biotechnology and medical device companies. Some companies in these industries have found it difficult to raise capital in the equity and debt markets or through traditional credit markets to fund research and development. In addition, increased regulatory scrutiny from the FDA may have increased the costs of research and development for these companies. These companies have responded to the recent economic downturn and regulatory environment, by postponing, attenuating or cancelling clinical trials projects, or portions thereof, which may reduce the need for our services. As a result, our revenues may be similarly decreased. Furthermore, while our revenues may decrease, our costs may remain relatively fixed, resulting in decreased earnings.

Failure to comply with existing regulations could result in increased costs to complete clinical trials.

Our business is subject to numerous governmental regulations, primarily relating to pharmaceutical product development and the conduct of clinical trials. In particular, we are subject to 21 CFR Part 11 of the Code of Federal Regulations that provides the criteria for acceptance by the FDA of electronic records. If we fail to comply with these governmental regulations, it could result in the termination of ongoing clinical research or the disqualification of data for submission to regulatory authorities. We also could be barred from providing clinical trial services in the future or be subjected to fines. Any of these consequences would harm our reputation, our prospects for future work and our operating results.

Changes in governmental regulation could decrease the need for the services we provide, which would negatively affect our future business opportunities.

In recent years, the United States Congress and state legislatures have considered various types of healthcare reform in order to control growing healthcare costs. The United States Congress and state legislatures may again address healthcare reform in the future. We are unable to predict what legislative proposals will be adopted in the future, if any. Similar reform movements have occurred in Europe and Asia.

Implementation of healthcare reform legislation that results in additional costs could limit the profits that can be made by clients from the development of new products. This could adversely affect our clients’ research and development expenditures, which could, in turn, decrease the business opportunities available to us both in the United States and abroad. In addition, new laws or regulations may create a risk of liability, increase costs or limit service offerings. We cannot predict the likelihood of any of these events.

In addition to healthcare reform proposals, the expansion of managed care organizations in the healthcare market may result in reduced spending on research and development. Managed care organizations’ efforts to cut costs by limiting expenditures on pharmaceuticals and medical devices could result in pharmaceutical, biotechnology and medical device companies spending less on research and development. If this were to occur, we would have fewer business opportunities and our revenues could decrease, possibly materially.

Governmental agencies throughout the world, but particularly in the United States, strictly regulate the drug development/approval process. Our business involves helping pharmaceutical and biotechnology companies navigate the regulatory drug approval process. Changes in regulation, such as relaxation in regulatory requirements or the introduction of simplified drug approval procedures or an increase in regulatory requirements that we may have difficulty satisfying could eliminate or substantially reduce the need for our services. If these changes in regulations were to occur, our business, results of operations and financial condition could be materially adversely affected. These and other changes in regulation could have a material adverse impact on our available business opportunities.

If governmental agencies do not accept the data and analyses generated by our services, the need for our services would be eliminated or substantially reduced.

The success of our business is dependent upon continued acceptance by the FDA and other regulatory authorities of the data and analyses generated by our services in connection with the evaluation of the safety and efficacy of new drugs and devices. The FDA has formal guidelines that encourage the use of “surrogate measures” through submission of digital image data, for evaluation of drugs to treat life-threatening or debilitating conditions. We cannot assure you that the FDA or other regulatory authorities will accept the data or analyses generated by us in the future and, even assuming acceptance, the FDA or other regulatory authorities may not

require the application of imaging techniques to the number of patients and over time periods substantially similar to those required of traditional safety and efficacy techniques. If the governmental agencies do not accept data and analyses generated by our services in connection with the evaluation of new drugs and devices, the need for our services would be eliminated or substantially reduced, and, as a result, our business, results of operations and financial condition could be materially adversely affected.

Our software products and hosted solutions are at varying stages of market acceptance and the failure of any of our products to achieve or maintain wide acceptance would harm our operating results.

We began offering our electronic data capture software solution for clinical trials in March 2008. Continued use of our current electronic data capture software products, and broad and timely acceptance of newly-introduced electronic data capture software products, as well as integrated solutions combining one or more of our software products, is critical to our future success and is subject to a number of significant risks, some of which are outside our control. These risks include:

	•		our customers’ and prospective customers’ desire for and acceptance of our electronic data capture, clinical data management, drug safety and interactive response technology solutions;

	•		our ability to meet product development and release schedules;

	•		our software products and hosted solutions’ ability to support large numbers of users and manage vast amounts of data;

	•		our ability to significantly expand our internal resources and increase our capital and operating expenses to support the anticipated growth and continued integration of our software products, services and hosted solutions; and

	•		our customers’ ability to use our software products and hosted solutions, train their employees and successfully deploy our technology in their clinical trial and safety evaluation and monitoring activities.

Our failure to address, mitigate or manage these risks would seriously harm our business, particularly if the failure of any or all of our software products or hosted solutions to achieve market acceptance negatively affects our sales of our other products and services.

We may be exposed to liability claims as a result of our involvement in clinical trials.

We may be exposed to liability claims as a result of our involvement in clinical trials. We cannot assure you that liability claims will not be asserted against us as a result of work performed for our clients. We maintain liability insurance coverage in amounts that we believe are sufficient for the pharmaceutical services industry. Furthermore, we cannot assure you that our clients will agree to indemnify us, or that we will have sufficient insurance to satisfy any such liability claims. If a claim is brought against us and the outcome is unfavorable to us, such outcome could have a material adverse impact on us.

Risks Related to Our Common Stock

Your percentage ownership and voting power and the price of our common stock may decrease as a result of events that increase the number of our outstanding shares.

As of December 31, 2009, we had the following capital structure (in thousands):


Common stock outstanding			14,394

Common stock issuable upon:
Exercise of options which are outstanding			1,865
Available shares in the stock incentive plan which have not yet been granted			753
Restricted stock units outstanding			173

Total common stock outstanding assuming exercise or conversion of all of the above			17,185

As of December 31, 2009, we had outstanding options to purchase 1,865,235 shares of common stock at exercise prices ranging from $0.66 to $8.06 per share (exercisable at a weighted average of $4.29 per share), of which 1,303,432 options were then exercisable. Exercise of our outstanding options into shares of our common stock may significantly and negatively affect the market price for our common stock as well as decrease your percentage ownership and voting power. In addition, we may conduct future offerings of our common stock or other securities with rights to convert the securities into shares of our common stock. As a result of these and other events, such as future acquisitions, that increase the number of our outstanding shares, your percentage ownership and voting power and the price of our common stock may decrease.

Shares of our common stock eligible for public sale may have a negative impact on its market price.

Future sales of shares of our common stock by existing holders of our common stock or by holders of outstanding options, upon the exercise thereof, could have a negative impact on the market price of our common stock. As of December 31, 2009, we had 14.4 million shares of our common stock issued and outstanding, all of which are currently freely tradable. As part of the acquisition of substantially all of the assets of Tourtellotte Solutions, we also agreed to issue 350,000 shares of our common stock to Tourtellotte Solutions based upon achieving certain milestones, which include certain product development and revenue targets. At December 31, 2009, we believe these milestones will be achieved in 2010, see Note 2 to our Consolidated Financial Statements for additional information.

We are unable to estimate the number of shares that may be sold because this will depend on the market price for our common stock, the personal circumstances of the sellers and other factors. Any sale of substantial amounts of our common stock or other securities in the open market may adversely affect the market price of our securities and may adversely affect our ability to obtain future financing in the capital markets as well as create a potential market overhang.

There are a limited number of stockholders who have significant control over our common stock, allowing them to have significant influence over the outcome of all matters submitted to our stockholders for approval, which may conflict with our interests and the interests of our other stockholders.

Our directors, officers and principal stockholders (stockholders owning 10% or more of our common

stock), including Covance Inc., beneficially owned 25% of the outstanding shares of common stock, restricted stock units and stock options that could have been converted to common stock at December 31, 2009, and such stockholders will have significant influence over the outcome of all matters submitted to our stockholders for approval, including the election of our directors and other corporate actions. In addition, such influence by these affiliates could have the effect of discouraging others from attempting to take us over, thereby increasing the likelihood that the market price of the common stock will not reflect a premium for control.

Because we do not intend to pay dividends, stockholders will benefit from an investment in our common stock only if it appreciates in value.

We have never declared or paid any cash dividends on our common stock. We currently intend to retain our future earnings, if any, to finance further research and development and do not expect to pay any cash dividends in the foreseeable future. As a result, the success of an investment in our common stock will depend upon any future appreciation in its value. There is no guarantee that our common stock will appreciate in value or even maintain the price at which stockholders have purchased their shares.

Trading in our common stock may be volatile, which may result in substantial declines in its market price.

The market price of our common stock has experienced historical volatility and might continue to experience volatility in the future in response to quarter-to-quarter variations in:

	•		operating results;

	•		analysts’ reports;

	•		market conditions in the industry;

	•		changes in governmental regulations; and

	•		changes in general conditions in the economy or the financial markets.

The overall market (including the market for our common stock) has also experienced significant decreases in value in the past. This volatility and potential market decline could affect the market prices of securities issued by many companies, often for reasons unrelated to their operating performance, and may adversely affect the price of our common stock. Between January 1, 2009 and December 31, 2009, our common stock has traded at a low of $2.75 per share and a high of $4.75 per share. Between January 1, 2010 and February 28, 2010, our common stock has traded at a low of $4.15 per share and a high of $5.93 per share.

Our common stock began trading on the NASDAQ Global Market, formerly called the NASDAQ National Market, on December 18, 2003 and has a limited trading market. We cannot assure you that an active trading market will develop or, if developed, will be maintained. As a result, our stockholders may find it difficult to dispose of shares of our common stock and, as a result, may suffer a loss of all or a substantial portion of their investment.

Certain provisions of our charter and Delaware law could make a takeover difficult and may prevent or frustrate attempts by our stockholders to replace or remove our management team.

We have an authorized class of 3,000,000 shares of undesignated preferred stock, of which 1,250,000 shares were previously issued and converted to common stock. The remaining 1,750,000 shares may be issued by our board of directors, on such terms and with such rights, preferences and designation as the board of directors may determine. Issuance of such preferred stock, depending upon the rights, preferences and designations thereof, may have the effect of delaying, deterring or preventing a change in control of our company. In addition, we are subject to provisions of Delaware corporate law which, subject to certain exceptions, will prohibit us from

engaging in any “business combination” with a person who, together with affiliates and associates, owns 15% or more of our common stock for a period of three years following the date that the person came to own 15% or more of our common stock, unless the business combination is approved in a prescribed manner. In July 2009, our board of directors also adopted a stockholder rights plan, similar to plans adopted by many other publicly-traded companies. The stockholder rights plan is intended to protect stockholders against unsolicited attempts to acquire control of us that do not offer a fair price to our stockholders as determined by our board of directors.

These provisions of our certificate of incorporation, stockholder rights plan and of Delaware law, may have the effect of delaying, deterring or preventing a change in control of our company, may discourage bids for our common stock at a premium over market price and may adversely affect the market price, and the voting and other rights of the holders, of our common stock. In addition, these provisions 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 and our stockholders.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We lease 58,700 square feet of office space located in Newtown, Pennsylvania. This lease expires December 2018 and provides for a fixed base rent of $95,350 per month with an annual inflation increase. We lease 9,300 square feet of additional office space located in Newtown, Pennsylvania for $8,500 per month in base rent, which expires May 2014. We also lease 36,143 square feet of office space in Audubon, Pennsylvania for $59,444 per month in base rent, which expires January 18, 2019. In addition, we lease 23,750 square feet of office space in Leiden, the Netherlands and another 6,265 square feet in Lyon, France. These leases are denominated in the Euro and expire in April 2013 and May 2017, respectively. The base rent for the Netherlands is $46,200 per month and the base rent for Lyon is $12,900, based upon the conversion rate as of December 31, 2009, with an annual inflation increase. We periodically review our office space requirements and may increase the amount of office space we lease as needed.

Item 3. Legal Proceedings.

In the normal course of business, we may be a party to legal proceedings. We are not currently a party to any material legal proceedings.

Item 4. RESERVED

PART II


Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

On July 8, 2009, our shareholders approved an amendment to our Certificate of Incorporation, as amended, to change our name from Bio-Imaging Technologies, Inc. to BioClinica, Inc. and to change our stock symbol from “BITI” to “BIOC”. Our common stock began trading on the NASDAQ Global Market, formerly called the NASDAQ National Market, on December 18, 2003 under the symbol “BITI” and now trades under the symbol “BIOC”. Prior to listing on the NASDAQ Global Market, our common stock was traded on the American Stock Exchange under the symbol BIT from February 25, 2003 until December 18, 2003. Our common stock was quoted on the NASD OTC Bulletin Board under the symbol BITI prior to being listed on the American Stock Exchange.

The following table sets forth the high and low bid quotations for our common stock as reported on the NASDAQ Global Market for each full quarterly period within the two most recent fiscal years. Such quotations reflect interdealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.


	Common
Quarter	Stock
Ended	High		Low
March 31, 2008		8.95		6.57
June 30, 2008		8.15		6.18
September 30, 2008		7.99		6.48
December 31, 2008		7.53		2.15

March 31, 2009		3.71		2.63
June 30, 2009		4.24		3.02
September 30, 2009		4.07		3.20
December 31, 2009		4.75		3.25

As of February 28, 2010, the number of holders of record of our common stock was 77 and the approximate number of beneficial holders, investors who hold our shares through brokers, of our common stock was 1,600.

We believe that the issuances of the foregoing securities was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, as transactions not involving a public offering. Each of the recipients were sophisticated or accredited investors, acquired the securities for investment purposes only and not with a view to distribution and had adequate information about our company.

We have neither paid nor declared dividends on our common stock since our inception and do not plan to pay dividends on our common stock in the foreseeable future. We expect that any earnings which we may realize will be retained to finance our growth.

The following table provides information as of December 31, 2009 with respect to the shares of our Common Stock that may be issued under our existing equity compensation plans.

Number of

Weighted

Securities to be

Average Exercise

Number of Securities

Issued Upon

Price of

Available for Future Issuance

Exercise of

Outstanding

Under Equity Compensation

Plan Category

Outstanding Options

Options

Plans

Equity compensation plans that have been approved by security holders

1,865,000

4.29

1,303,000

Equity compensation plans not approved by security holders

—

Total

1,865,000

4.29

1,303,000

STOCK PRICE PERFORMANCE GRAPH

Our common stock is listed for trading on the NASDAQ Global Market under the symbol “BIOC”. The Stock Price Performance Graph set forth below compares the cumulative total stockholder return on the common stock for the period from December 31, 2004 through December 31, 2009, with the cumulative total return of the NASDAQ U.S. Stock Index and the NASDAQ Health Services Index over the same period. The comparison assumes $100 was invested on December 31, 2004 in our common stock, in the NASDAQ U.S. Stock Index and in the NASDAQ Health Services Index and assumes reinvestment of dividends, if any.


	Dec. 31, 2004		Dec. 31, 2005		Dec. 31, 2006		Dec. 31, 2007		Dec. 31, 2008		Dec. 31, 2009
BioClinica, Inc.		100.00		58.94		147.08		147.45		66.79		77.19
NASDAQ U.S. Stock Index		100.00		102.13		112.21		121.69		58.69		84.30
Nasdaq Health Services Index		100.00		137.44		137.24		179.38		131.01		173.20

The foregoing Stock Price Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.


Item 6.		Selected Financial Data.

The following table presents selected consolidated financial data. This data is derived from historical financial information and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related footnotes included in this Form 10-K.

For the years ended,
(in thousands, except per share data and number of employees)


	Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,
	2009		2008		2007		2006		2005
CONTINUING OPERATIONS
Service revenue	$	57,393	$	56,181	$	37,543	$	31,853	$	23,734
Total revenue		72,723		69,116		47,254		40,257		30,126
Income (loss) from continuing operations before interest and taxes		4,688		8,480		4,848		2,670		(3,226	)
Income (loss) from continuing operations, net of taxes		2,959		5,791		3,343		1,968		(1,881	)

Basic earnings (loss) per share:
Income (loss) from continuing operations		0.21		0.42		0.29		0.18		(0.17	)

Diluted earnings (loss) per share:
Income (loss) from continuing operations		0.20		0.40		0.26		0.16		(0.17	)

Weighted average shares used to calculate earnings (loss) per share:
Basic		14,354		13,752		11,616		11,219		11,114
Diluted		15,100		14,469		12,745		12,364		11,114

FINANCIAL POSITION
Cash, cash equivalents	$	14,570	$	14,265	$	17,915	$	16,166	$	10,554
Working capital		7,302		7,918		9,721		10,219		8,055
Total assets		75,337		69,208		43,057		34,108		28,791
Other liabilities		2,162		641		597		305		757
Stockholders’ equity		48,535		43,412		23,529		18,842		17,197

OTHER DATA
Purchases of property and equipment	$	4,258	$	2,916	$	3,928	$	2,232	$	1,871

Depreciation and amortization		2,713		2,266		2,335		2,035		2,312
Number of employees		479		474		337		283		264


Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

On July 8, 2009, our shareholders approved an amendment to our Certificate of Incorporation, as amended, to change our name from Bio-Imaging Technologies, Inc. to BioClinica, Inc.

BioClinica, provides integrated clinical research services including imaging core lab and eClinical technologies and services to pharmaceutical, biotechnology, and medical device companies, and other organizations such as contract research organizations (CROs), engaged in global clinical studies. Our products and services include: medical image management, electronic data capture, clinical data management, interactive voice and web response, clinical trial supply forecasting tools, and electronic image transport and archive solutions. By supplying enterprise-class software and hosted solutions accompanied by expert services to fully utilize these tools, we believe that our offerings provide our clients, large and small, improved speed and efficiency in the execution of clinical studies, with reduced clinical and business risk.

Market For Our Services

We believe that the short-term market for our services has been adversely impacted by pharmaceutical companies’ response to overall economic conditions, resulting in some contract decisions being delayed and major projects being split into smaller components as part of a revised budgetary approval process. On a long term basis, we believe that the recognition within the bio-pharmaceutical industry of the operational efficiency and scalable reliability of using an independent centralized core laboratory for analysis of medical-imaging data and compliance with the regulatory demands for the submission of such data will continue to drive demand for our services. We also believe that rapidly growing recognition of the inherent advantages of eClinical technology to standardize and accelerate reliable data flow from the clinical trial sites to the clinical trial sponsor will further drive the adoption and growth of our eClinical service offerings. We believe our eClinical services favorably compare to the traditional process of manual data collection on paper case report forms that are more susceptible to transcription and other data entry errors. Our rebranding to BioClinica continues to be well received, re-energizing our marketplace reputation for offering what we believe to be “best in class” solutions for imaging and eClinical services for clinical trials.

Sales and Backlog

Our sales cycle, referring to the period from the presentation by us to a potential client to the engagement of us by such client, has historically ranged from three to 12 months. In addition, the contracts under which we perform services typically cover a period of 3 to 60 months and the volume and type of services performed by us generally vary during the course of a project. We cannot assure you that our project revenues will be at levels sufficient to maintain profitability.

Our contracted/committed backlog, referred to as backlog, is the expected service revenue that remains to be earned and recognized on both signed and verbally agreed to contracts. Our backlog as of December 31, 2009, which includes our medical image management and eClinical services, was $98.7 million compared to $92.7 million at December 31, 2008 and $92.5 million at December 31, 2007. Changes in backlog for the period reflect the net effect of new contract signings, addendums, cancellations expansions, and reductions in scope of existing projects, all of which impacted our backlog at December 31, 2009.

Contracts included in backlog are subject to termination by our clients at any time. In the event that a contract is cancelled by the client, we would be entitled to receive payment for all services performed up to the cancellation date. The duration of the projects included in our backlog range from less than three months to seven years. We do not believe that backlog is a reliable predictor of future results because service revenues may be incurred in a given period on contracts that were not included in the previous reporting period’s backlog and/or contract cancellations or project delays may occur in a given period on contracts that were included in the previous reporting period’s backlog.

Acquisitions and Dispositions

During the third quarter of 2009, the Company acquired two companies that expand the range of products and services the Company offers in the clinical trials services sector.

On September 15, 2009, BioClinica acquired substantially all of the assets of Tourtellotte Solutions, Inc., or Tourtellotte. Tourtellotte provided software applications and consulting services which support clinical trials in the pharmaceutical industry. The purchase price for Tourtellotte was $2.1 million in cash. Pursuant to the acquisition agreement, we agreed to pay up to an additional $3.2 million in cash and 350,000 shares of our common stock based upon achieving certain milestones, which include certain product development and revenue targets, hereinafter referred to as the “earn-out”. The fair value of the cash earn-out of $2.8 million has been recorded as a liability and the fair value of the 350,000 shares of $1.3 million has been classified separately within stockholders’ equity as contingent consideration for a total purchase price of $6.2 million as of December 31, 2009. We used cash from operations to fund the cash purchase price for Tourtellotte. The financial results of Tourtellotte for the fiscal year are included in the consolidated statement of income for the period ended December 31, 2009.

On August 27, 2009, BioClinica acquired the CardioNow unit of Agfa Healthcare, or CardioNow. CardioNow has developed a web-based system for the secure transmission of medical cardiac images. The software was specifically developed for and marketed to the invasive cardiology departments of hospitals within the United States. BioClinica will integrate and enhance the current CardioNow software and service to offer our clients a streamlined electronic transport solution to facilitate the blinding, sharing, tracking and archiving of medical images for multi-center clinical trials as part of our suite of imaging services. The purchase price for CardioNow consisted of cash consideration paid to Agfa Healthcare of $1 million. We paid the purchase price for CardioNow with cash from operations. The financial results of CardioNow for the fiscal year are included in the consolidated statement of income for the period ended December 31, 2009.

On January 6, 2009, pursuant to the asset aurchase agreement by and among BioClinica and MBI Benefits, Inc., or MBI, an indirectly owned subsidiary of Metavante Technologies, Inc., or Metavante, dated as of January 6, 2009, we sold our CapMed Division, including the division’s Personal Health Record (PHR) software and the patent-pending Personal HealthKey™ technology, to Metavante. Under the terms of the agreement, Metavante paid us an upfront payment of Five Hundred Thousand Dollars ($500,000) in cash and will make an earn-out payment to us based upon a percentage of the gross revenues recognized by Metavante for contracts entered into with certain “prospects” set forth on a schedule during certain time periods in 2009 and 2010. We will receive 25% of the gross revenues recognized by Metavante during any period ending on or prior to December 31, 2010 from the sale pursuant to any contract MBI enters into with certain “prospects” during the first six months of 2009. Additionally, we will receive 15% of the gross revenues recognized by Metavante during any period ending on or prior to December 31, 2010 from the sale pursuant to any contract MBI enters into with certain “prospects” during the period commencing on July 1, 2009 and ending on December 31, 2010. At December 31, 2009, we have not received any earn-out payments from Metavante.

Forward Looking Statements

Certain matters discussed in this Form 10-K are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes”, “expects”, “may”, “should” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, our statements regarding: our projected financial results; the demand for our services and technologies; growing recognition for the use of independent centralized core laboratories; trends toward the outsourcing of imaging services in clinical trials; realized return from our marketing efforts; increased use of digital medical images in clinical trials; integration of our acquired companies and businesses; expansion into new business segments; the success of any potential acquisitions and the integration of current acquisitions; and the level of our backlog are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the timing of revenues due to the variability in size, scope and duration of projects, estimates made by management with respect to our critical accounting policies, regulatory delays, clinical study results which lead to reductions or cancellations of projects, and other factors, including general economic conditions and regulatory developments, not within our control. The factors discussed in this Form 10-K and expressed from time to time in our filings with the SEC, as well as the risk factors set forth in this Form 10-K, could cause actual results and developments to be materially different from those expressed in or implied by such statements. The forward-looking statements are made only as of the date of this filing, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Critical Accounting Policies, Estimates and Risks

Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including the recoverability of tangible and intangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reported period.

On an on-going basis, we evaluate our estimates. The most significant estimates relate to the recognition of revenue and profits based on the proportional performance method of accounting for fixed service contracts, accounting for acquisitions, capitalization of software development costs, income taxes and fair value accounting for stock based compensation.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements:

Revenue. Service revenues are recognized over the contractual term of our customer contracts using the proportional performance method. Service revenues are first recognized when we have a signed contract from a customer which: (i) contain fixed or determinable fees; (ii) collectability of such fees is reasonably assured; and (iii) services are performed. Any change to recognized service revenue as a result of revisions to estimated total hours are recognized in the period the estimate changes.

We enter into contracts that contain fixed or determinable fees. The fees in the contracts are based on the scope of work we are contracted to perform; there are unitized fees per service and fixed fees with a total

estimated for the contract based upon the estimated unitized service expected to be performed, as well as the service to be delivered under the fixed fee component of the contract. The units are estimated based on the information provided by the customer, and we bill the customer for actual units completed in accordance with the terms of the contract. In the event that a contract is cancelled by the client, we would be entitled to receive payment for all services performed up to the cancellation date.

We, at the request of our clients, directly contract with and pay independent radiologists, referred to as Readers, who review the client’s imaging data as part of the clinical trial. The costs of the Readers and other out-of-pocket expenses are reimbursed to us and recognized gross as reimbursement revenues

Goodwill and Other Intangible Assets, Net. Goodwill is not amortized; instead, it is tested for impairment annually (at December 31^st) or more frequently if indicators of impairment exist or if a decision is made to sell a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, or slower growth rates, among others. It is important to note that fair values that could be realized in an actual transaction may differ from those used to evaluate the impairment of goodwill.

Goodwill is allocated among and evaluated for impairment at the reporting level unit, which is defined as an operating segment or one level below an operating segment. BioClinica has one operating segment, clinical trial services, which is a single reporting unit.

We use a discounted cash flow model to estimate the current fair value of the reporting unit when testing for impairment, as management believes forecasted cash flows are the best indicator of such fair value. A number of significant assumptions and estimates are involved in the application of the discounted cash flow model to forecast operating cash flows, including revenue growth rate, operating profit margins, discount rate, tax rates, capital spending, and working capital changes. We consider market participant assumptions in estimating fair value of the reporting unit. Revenue growth rate and operating profit assumptions are consistent with those utilized in our operating plan and long-term financial planning process. Management judgment is required in the determination of each assumption utilized in the valuation model, and actual results could differ from the estimates. At December 31, 2009, we conducted the required annual test of impairment. In 2009, the estimated fair values of the clinical trial services reporting unit was in excess of its carrying values, resulting in no impairment.

Capitalized Software Development. We capitalize development costs for a software project once the preliminary project stage is completed, we have committed to fund the project and it is probable that the project will be completed and the software will be used to perform the function intended. We cease capitalization at such time as the computer software project is substantially complete and ready for its intended use. The determination that a software project is eligible for capitalization and the ongoing assessment of recoverability of capitalized software development costs require considerable judgment by us with respect to certain external factors including, but not limited to, anticipated future revenue, estimated economic life and changes in software and hardware technologies.

Income Taxes. We evaluate the need to record a valuation allowance to reduce our deferred tax assets to an amount that is more likely than not to be realized. In assessing the need for the valuation allowance, we consider our future taxable income and on-going prudent and feasible tax planning strategies. In the event that we were to determine that, in the future, we would be able to realize our deferred tax assets in excess of its net recorded amount, an adjustment to the deferred tax asset would be made, thereby increasing net income in the period such determination was made. Likewise, should we determine that it is more likely than not that we will

be unable to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged, thereby decreasing net income in the period such determination was made. We recognize contingent liabilities for any tax related exposures when those exposures are more likely than not to occur.

Stock-based compensation costs. We account for stock-based compensation costs in accordance with FASB ASC 718 Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to our employees and directors. Under the fair value recognition of this guidance, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of the stock-based awards at the grant date requires considerable judgment. In addition, judgment is also required in estimating the amount of stock-based awards that are expected to be forfeited. If the actual experience differs significantly from the assumptions used to compute our stock-based compensation cost, or if different assumptions had been used, we may have recorded too much or too little stock-based compensation cost.

Foreign Currency Risks

Our financial statements are denominated in U.S. dollars. Fluctuations in foreign currency exchange rates could materially increase the operating costs of our facilities in the Netherlands and France, which are Euro denominated. A ten percent increase or decrease in the Euro to U.S. dollar spot exchange rate would result in a change of $215,000 and $279,000 to our net asset position, at December 31, 2009 and December 31, 2008, respectively. In addition, certain of our contracts are denominated in foreign currency. We believe that any adverse fluctuation in the foreign currency markets relating to these costs will not result in any material adverse effect on our financial condition or results of operations. In the event we derive a greater portion of our service revenues from international operations, factors associated with international operations, including changes in foreign currency exchange rates, could affect our results of operations and financial condition.

Our foreign currency financial assets and liabilities primarily consist of cash, trade receivables, prepaid expenses, fixed assets, trade payables and accrued expenses. We were in a net asset position at December 31, 2009 and December 31, 2008. An increase in the exchange rate would result in less net assets when converted to U.S. dollars. Conversely, if we were in a net liability position, a decrease in the exchange rate would result in more net liabilities when converted to U.S. dollars.

We hedge our foreign currency exposure when and as appropriate to mitigate the adverse impact of fluctuating exchange rates. As of December 31, 2009, there are no outstanding derivative positions.

Results of Operations

Year Ended December 31, 2009 Compared with Year Ended December 31, 2008.


				% of						% of
				Total						Total			$			%
(in thousands)	2009			Revenue			2008			Revenue			Change			Change
Service revenues	$	57,393			78.9	%	$	56,181			81.3	%	$	1,212			2.2	%
Reimbursement revenues		15,330			21.1	%		12,935			18.7	%		2,395			18.5	%


Total revenues		72,723			100.0	%		69,116			100.0	%		3,607			5.2	%


Cost and expenses:
Cost of service revenues		35,630			49.0	%		32,446			46.9	%		3,184			9.8	%
Cost of reimbursement revenues		15,330			21.1	%		12,935			18.7	%		2,395			18.5	%
Sales and marketing expenses		8,052			11.1	%		7,860			11.4	%		192			2.4	%
General and administrative expenses		7,414			10.2	%		7,015			10.1	%		399			5.7	%
Amortization of intangible assets related to acquisitions		489			0.7	%		380			0.6	%		109			28.7	%
Restructuring charges		466			0.6	%		—			0.0	%		466			—
Merger and acquisition related costs		654			0.9	%		—			0.0	%		654			—


Total cost and expenses		68,035			93.6	%		60,636			87.7	%		7,399			12.2	%

Income from continuing operations before interest and taxes		4,688			6.4	%		8,480			12.3	%		(3,792	)		(44.7	%)

Interest income		41			0.1	%		429			0.6	%		(388	)		(90.4	%)
Interest expense		(13	)		0.0	%		(7	)		0.0	%		(6	)		85.7	%
Income tax provision		(1,757	)		(2.4	%)		(3,111	)		(4.5	)%		1,354			(43.5	%)


Income from continuing operations, net of taxes	$	2,959			4.1	%	$	5,791			8.4	%	$	(2,832	)		(48.9	%)


Loss from discontinued operations, net of taxes		—			0.0	%		(3,001	)		(4.3	)%		3,001			(100	%)

Net income	$	2,959			4.1	%	$	2,790			4.1	%	$	169			6.1	%

The Consolidated Statements of Income for all periods presented reflect the CapMed division in discontinued operations.

The results of operations of CardioNow and Tourtellotte are included in the Consolidated Statements of Income for the period ended December 31, 2009 from the respective acquisition dates. The results of operations for the year ended December 31, 2008 excludes the results of PDS from January 1, 2008 through March 31, 2008 (PDS was acquired on March 24, 2008 and we did not include the eight days from March 24, 2008 through March 31, 2008 due to immateriality).

Service revenues were $57.4 million for fiscal 2009 and $56.2 million for fiscal 2008, an increase of $1.2

million, or 2.2%. The increase in our service revenues was due to a full year of PDS service revenue for fiscal 2009 versus only nine months of PDS service revenue for fiscal 2008 offset by an overall decrease in service revenues for fiscal 2009. Our service revenues have been impacted due to the pharmaceutical companies’ response to overall economic conditions, resulting in re-evaluation of drug programs and some contract decisions being delayed. We believe as worldwide demand for new drugs grow, our customers will continue to conduct more clinical trials in pursuit of regulatory approval in countries around the world and clinical trials service organizations, such as ours, with an established global presence, depth of services and expertise, will continue to benefit.

Reimbursement revenues and cost of reimbursement revenues was $15.3 million for fiscal 2009 and $12.9 million for fiscal 2008, an increase of $2.4 million, or 18.5%. Reimbursement revenues and cost of reimbursement revenues consist of payments received from the customer for reimbursable costs. Reimbursement revenues and cost of reimbursement revenues fluctuate significantly over the course of any given project and quarter to quarter variations are a reflection of this project timing. Therefore, our management believes that reimbursement revenues and cost of reimbursement revenues are not a significant indicator of our overall performance trends. At the request of our clients, we may directly pay the independent radiologists who review our client’s imaging data. In such cases, per contractual arrangement, these costs are billed to our clients and are included in reimbursement revenues and cost of reimbursement revenues.

Cost of service revenues was $35.6 million for fiscal 2009 and $32.4 million for fiscal 2008, an increase of $3.2 million, or 9.8%. The increase in cost of service revenues is primarily due to a full year of PDS costs in 2009 versus nine months of PDS costs in 2008 and the addition of personnel from the Tourtellotte acquisition in the third quarter of 2009. The cost of service revenues as a percentage of total revenues also fluctuates due to work-flow variations in the utilization of staff and the mix of services provided by us in any given period. We expect that our cost of service revenues will increase in 2010 due to the addition of personnel from Tourtellotte from the acquisition on September 15, 2009 offset by the savings of $1.6 million from the restructuring in Q2 2009.

Sales and marketing expenses were $8.1 million for fiscal 2009 and $7.9 million for fiscal 2008, an increase of $192,000 or 2.4%. The increase is primarily due to a full year of sales personnel from the PDS acquisition offset by less marketing costs and tradeshow attendance. We expect that sales and marketing expenses will remain relatively flat in fiscal 2010.

General and administrative expenses were $7.4 million for fiscal 2009 and $7.0 million for fiscal 2008, an increase of $400,000, or 5.7%. General and administrative expenses in fiscal 2009 and 2008 consisted primarily of salaries and benefits, allocated overhead, professional and consulting services and corporate insurance. This increase is primarily due to a full year of finance and administrative personnel from the PDS acquisition offset by less professional and consulting service fees. In the second quarter of 2009, as a result of a potential acquisition which was terminated, we incurred $734,000 of acquisition related costs and received $750,000, comprised of a $500,000 break-up fee and $250,000 expense reimbursement, from the target company, resulting in a $16,000 gain on the transaction. We expect that our general and administrative expenses will remain relatively flat for fiscal 2010.

Amortization of intangible assets related to acquisitions for fiscal 2009 and 2008 were $489,000 and $380,000, respectively, an increase of $109,000, or 28.7%. Amortization of intangible assets related to acquisitions consisted primarily of amortization of customer backlog, customer relationships, software and non-compete intangibles acquired from the acquisitions of PDS, Tourtellotte and Theralys. The increase is primarily

due to the addition of Tourtellotte. We expect that the amortization of intangible assets related to acquisitions may increase as we look to continue to expand our pharmaceutical contract services through potential acquisitions.

In the second quarter of 2009, in order to streamline the operations and reduce costs, management decided to eliminate certain positions and consolidate redundant departments. This resulted in restructuring charges of $466,000 consisting of $439,000 in employee severance and $27,000 in other close down costs. We have paid the $466,000 in the third and fourth quarters of 2009 and nothing is left to be paid from the restructuring at December 31, 2009. We expect to realize annual savings of $1.6 million from the restructuring.

Merger and acquisition related costs of $654,000 for fiscal 2009 include expenses of $560,000 consisting of costs resulting directly from merger and acquisition activities for the Tourtellotte and CardioNow acquisitions such as legal, accounting and investment banking fees and other due diligence and integration costs. Also included in this cost is $94,000 of earn-out accretion from the Tourtellotte acquisition due to the difference in the fair value from the purchase price recorded at the date of acquisition to December 31, 2009. On January 1, 2009, we adopted FASB ASC 805 which requires acquisition-related costs to be expensed in the period in which the costs are incurred and the services are received instead of including such costs as part of the acquisition price.

Net interest income was $28,000 for fiscal 2009 and net interest income was $422,000 for fiscal 2008, a decrease of $394,000, or 93.4%. Net interest income and expense for fiscal 2009 and 2008 is comprised of interest income earned on our cash balance and interest expense incurred on equipment lease obligations. The decrease was due to a decline in market interest rates for short-term cash investments; we expect this trend to continue throughout 2010.

Our income tax provision for fiscal 2009 was $1.8 million and $3.1 million for fiscal 2008. Our effective tax rate from continuing operations was 37% for fiscal 2009 and 35% for fiscal 2008. The lower effective tax rate in fiscal 2008 was due to the mix of pre-tax income in the U.S. and in the Netherlands, which has a lower corporate income tax rate than the U.S., and the changes affecting state tax rates.

Results of Operations

Year Ended December 31, 2008 Compared with Year Ended December 31, 2007.


				% of						% of
				Total						Total			$			%
(in thousands)	2008			Revenue			2007			Revenue			Change			Change
Service revenues	$	56,181			81.3	%	$	37,543			79.4	%	$	18,638			49.6	%
Reimbursement revenues		12,935			18.7	%		9,711			20.6	%		3,224			33.2	%


Total revenues		69,116			100.0	%		47,254			100.0	%		21,862			46.3	%


Cost and expenses:
Cost of service revenues		32,446			46.9	%		21,900			46.3	%		10,546			48.2	%
Cost of reimbursement revenues		12,935			18.7	%		9,711			20.6	%		3,224			33.2	%
Sales and marketing expenses		7,860			11.4	%		5,005			10.6	%		2,855			57.0	%
General and administrative expenses		7,015			10.1	%		5,734			12.1	%		1,281			22.3	%
Amortization of intangible assets related to acquisitions		380			0.6	%		56			0.1	%		324			578.6	%


Total cost and expenses		60,636			87.7	%		42,406			89.7	%		18,230			43.0	%


Income from continuing operations before interest and taxes		8,480			12.3	%		4,848			10.3	%		3,632			74.9	%

Interest income		429			0.6	%		654			1.4	%		(225	)		(34.4	)%
Interest expense		(7	)		0.0	%		(11	)		0.0	%		4			(36.4	)%
Income tax provision		(3,111	)		(4.5	)%		(2,148	)		(4.6	)%		(963	)		44.8	%


Income from continuing operations, net of taxes	$	5,791			8.4	%	$	3,343			7.1	%	$	2,448			73.2	%

Loss from discontinued operations, net of taxes		(3,001	)		(4.3	)%		(1,011	)		(2.1	)%		(1,990	)		196.8	%


Net income	$	2,790			4.1	%	$	2,332			5.0	%	$	458			19.6	%

The Consolidated Statements of Income for all periods presented reflect the CapMed division in discontinued operations.

The Consolidated Statement of Income for fiscal 2008 excludes the financial results of PDS from the acquisition date of March 24, 2008 through March 31, 2008 due to immateriality of PDS’s results of operations for that period.

Service revenues were $56.2 million for fiscal 2008 and $37.5 million for fiscal 2007, an increase of $18.6 million, or 49.6%. The increase in fiscal 2008 service revenues of $18.6 million, included $12.5 million in service revenue from PDS from the date of acquisition through December 31, 2008. The additional increase in service revenues of $6.1 million, a 16.3% increase in non-PDS revenues, resulted from an increase in work

performed from our backlog. In fiscal 2008, no one client accounted for more than 10% of our service revenues, while in fiscal 2007 one client, Hoffmann-La Roche, with 11 projects, represented 13.4% of our service revenues.

Reimbursement revenues and cost of reimbursement revenues was $12.9 million for fiscal 2008 and $9.7 million for fiscal 2007, an increase of $3.2 million, or 33.2%. Reimbursement revenues and cost of reimbursement revenues consist of payments received from the customer for reimbursable costs. Reimbursement revenues and cost of reimbursement revenues fluctuate significantly over the course of any given project and quarter to quarter variations are a reflection of this project timing. Therefore, our management believes that reimbursement revenues and cost of reimbursement revenues are not a significant indicator of our overall performance trends. At the request of our clients, we may directly pay the independent radiologists who review our client’s imaging data. In such cases, per contractual arrangement, these costs are billed to our clients and are included in reimbursement revenues and cost of reimbursement revenues.

Cost of service revenues was $32.4 million for fiscal 2008 and $21.9 million for fiscal 2007, an increase of $10.5 million, or 48.2%. Cost of service revenues for fiscal 2008 and 2007 were comprised of professional salaries and benefits and allocated overhead. The increase in cost of service revenues was primarily due to the addition of salaries and other labor related costs of $7.8 million, a 35.6% increase related to the operations of PDS. The remaining increase of $2.7 million was attributable to the increase in costs of our European facilities, and an increase in operational personnel to support the increased service revenue. The cost of revenues as a percentage of total revenues also fluctuates due to work-flow variations in the utilization of staff and the mix of services provided by us in any given period.

Sales and marketing expenses were $7.9 million for fiscal 2008 and $5.0 million for fiscal 2007, an increase of $2.9 million, or 57.0%. Sales and marketing expenses in fiscal 2008 and 2007 were comprised of direct sales and marketing costs, salaries and benefits and allocated overhead. The increase was primarily due to the addition of sales personnel from the PDS acquisition along with increased marketing and tradeshow attendance.

General and administrative expenses were $7.0 million for fiscal 2008 and $5.7 million for fiscal 2007, an increase of $1.3 million, or 22.3%. General and administrative expenses in fiscal 2008 and 2007 consisted primarily of salaries and benefits, allocated overhead, professional and consulting services and corporate insurance. The increase was primarily due to the addition of personnel and other professional services related to the administration of PDS.

Net interest income was $422,000 for fiscal 2008 and net interest income was $643,000 for fiscal 2007, a decrease of $221,000, or 34.4%. This decrease is primarily due to a lower investable cash balances and lower interest rates on short term investments. Net interest income and expense for 2008 and 2007 is comprised of interest income earned on our cash balance and interest expense incurred on equipment lease obligations.

Our income tax provision for fiscal 2008 was $3.1 million and $2.1 million for fiscal 2007. Our effective tax rate from continuing operations was 34.9% for fiscal 2008 and 39.1% for fiscal 2007. The lower effective tax rate in fiscal 2008 was due to the mix of pre-tax income in the U.S. and in the Netherlands, which has a lower corporate income tax rate than the U.S., and the changes affecting state tax rates.

Quarterly Results

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2009 and 2008. This quarterly financial data should be read in conjunction with the audited consolidated financial statements included herein.

Quarter Ended


	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			Mar. 31,
(in thousands except per share data)	2009			2009			2009			2009			2008			2008			2008			2008
Service revenues		14,851			14,146			13,921			14,475			14,956			15,093			15,109			11,023
Reimbursement revenues		5,366			4,227			3,142			2,595			2,737			3,048			4,073			3,077

Total revenues		20,217			18,373			17,063			17,070			17,693			18,141			19,182			14,100

Cost and expenses:
Cost of service revenues		9,024			8,937			8,608			9,061			8,995			8,513			8,595			6,343
Cost of reimbursement revenues		5,366			4,227			3,142			2,595			2,737			3,048			4,073			3,077
Sales and marketing expenses		2,113			1,617			2,166			2,156			2,043			2,120			2,229			1,468
General and administrative expenses		1,871			1,759			1,867			1,917			1,614			1,962			1,900			1,539
Amortization of intangible assets related to acquisitions		145			112			112			119			11			212			133			24
Restructuring charges		—			—			466			—			—			—			—			—
Mergers and acquisitions expense		94			560			—			—			—			—			—			—

Total cost and expenses		18,613			17,212			16,361			15,848			15,400			15,855			16,930			12,451

Income from continuing operations before interest and taxes		1,604			1,161			702			1,222			2,293			2,286			2,252			1,649
Interest income		4			5			10			22			77			98			101			153
Interest expense		(7	)		(1	)		(3	)		(2	)		(3	)		(1	)		(3	)		—
Income tax provision		(658	)		(463	)		(180	)		(456	)		(702	)		(856	)		(887	)		(666	)

Income from continuing operations, net of taxes		943			702			529			786			1,665			1,527			1,463			1,136
Loss from discontinued operations		—			—			—			—			(1,836	)		(451	)		(402	)		(312	)

Net income		943			702			529			786			(171	)		1,076			1,061			824

Basic earnings per share:
Income from continuing operations		0.07			0.05			0.04			0.05			0.12			0.11			0.10			0.09
Discontinued operations		—			—			—			—			(0.13	)		(0.03	)		(0.03	)		(0.03	)
Net Income		0.07			0.05			0.04			0.05			(0.01	)		0.08			0.07			0.06

Diluted earnings per share:
Income from continuing operations		0.06			0.05			0.04			0.05			0.11			0.10			0.10			0.09
Discontinued operations		—			—			—			—			(0.12	)		(0.03	)		(0.03	)		(0.03	)
Net Income		0.06			0.05			0.04			0.05			(0.01	)		0.07			0.07			0.06

Weighted average shares used to calculate earnings per share:
Basic		14,358			14,367			14,356			14,341			14,341			14,279			14,279			12,021
Diluted		15,158			15,146			15,118			15,085			14,764			15,168			15,168			12,964

Liquidity and Capital Resources

Our principal liquidity requirements have been and we expect will be, for working capital and general corporate purposes, including capital expenditures.

Statement of Cash Flow for the year ended December 31, 2009 compared to December 31, 2008


(in thousands)	2009			2008

Net cash provided by activities from continuing operations	$	7,552		$	9,768
Net cash used in investing activities from continuing operations	$	(7,713	)	$	(10,605	)
Net cash (used in) provided by financing activities from continuing operations	$	(43	)	$	523

At December 31, 2009, we had cash and cash equivalents of $14.6 million. Working capital, defined as current assets minus current liabilities, at December 31, 2009 was $7.3 million as compared to working capital at December 31, 2008 of $7.9 million.

Net cash provided by continuing operating activities for fiscal 2009 was $7.6 million compared to net cash provided by operating activities of $9.8 million for fiscal 2008. The primary drivers of the change in cash provided by continuing operations is the decrease in accounts receivable and decrease in accrued expenses.

Net cash used in investing activities consists primarily of our investment in capital and leasehold improvements from continuing operations of $4.3 million and cash paid for the acquisition of Tourtellotte Solutions and CardioNow for $3.1 million. We currently anticipate that capital expenditures for fiscal 2010 will be approximately $4.5 million. These expenditures primarily represent additional upgrades in our networking, data storage and core laboratory capabilities for both the United States and European operations as well as capitalization of software costs.

Net cash provided by (used in) financing activities is primarily attributable to a tax benefit related to stock options of $44,000 and proceeds from stock option exercises of $31,000 offset by payments on capital leases of $118,000.

The following table lists our cash contractual obligations as of December 31, 2009:


	Payments Due By Period
(in thousands)			Less than						More than
Contractual obligations	Total		1 year		1-3 years		3-5 years		5 years
Facility rent operating leases		20,822		1,874		4,761		4,864		9,323
Employment agreements		1,289		225		1,064		—		—
Earn-outs for Tourtellotte acquisition		3,258		1,258		2,000		—		—
Total contractual cash obligations	$	25,369	$	3,357	$	7,825	$	4,864	$	9,323

We have neither paid nor declared dividends on our common stock since our inception and do not plan to pay dividends on our common stock in the foreseeable future.

We have not entered into any off-balance sheet transactions, arrangements or other relationships with

unconsolidated entities or other persons.

We anticipate that our existing capital resources together with cash flow from operations will be sufficient to meet our foreseeable cash needs. However, we cannot assure you that our operating results will continue to achieve profitability on an annual basis in the future. The inherent operational risks associated with the following factors may have a material adverse affect on our future liquidity:

	•		our ability to gain new client contracts;

	•		project cancellations;

	•		the variability of the timing of payments on existing client contracts;

	•		acquisition expenses; and

	•		other changes in our operating assets and liabilities.

We may seek to raise additional capital from equity or debt sources in order to take advantage of opportunities such as more rapid expansion, acquisitions or the development of new services. We cannot assure you that additional financing will be available, if at all, on terms acceptable to us.

Our fiscal year 2010 operating plan contains assumptions regarding revenue and expenses. The achievement of our operating plan depends heavily on the timing of work performed by us on existing projects and our ability to gain and perform work on new projects. Project cancellations or delays in the timing of work performed by us on existing projects or our inability to gain and perform work on new projects could have an adverse impact on our ability to execute our operating plan and maintain adequate cash flow. In the event actual results do not meet the operating plan, our management believes it could execute contingency plans to mitigate these effects. Considering the cash on hand and based on the achievement of the operating plan and management’s actions taken to date, management believes it has the ability to continue to generate sufficient cash to satisfy our operating requirements in the normal course of business for at least the next twelve months and the foreseeable future.

Recently Issued Accounting Statements

On September 30, 2009, BioClinica adopted FASB ASC 105, Generally Accepted Accounting Principles, (FASB ASC 105). FASB ASC 105 establishes the FASB Accounting Standards Codification™ (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. FASB ASC 105 and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of FASB ASC 105 had no impact on the Financial Statements.

In May 2009, the FASB issued guidance regarding subsequent events, which was subsequently updated in February 2010. This guidance established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. In particular, this guidance set forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009, and was therefore adopted by us for the second quarter 2009 reporting. The adoption did not have a significant impact on the subsequent events that we report, either through recognition or disclosure, in the consolidated financial statements. In February 2010, the FASB amended its guidance on subsequent events to remove the requirement to disclose the date through which an entity has evaluated subsequent events, alleviating conflicts with current SEC guidance. This amendment was effective immediately and we therefore removed the disclosure in this Annual Report.

On June 30, 2009, BioClinica adopted FASB ASC 270, Interim Reporting (FASB ASC 270), issued by the FASB to fair value disclosures of financial instruments. FASB ASC 270 requires a publicly traded company to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. Such disclosures include the fair value of all financial instruments, for which it is practicable to estimate that value, whether recognized or not recognized in the statement of financial position; the related carrying amount of these financial instruments; and the method(s) and significant assumptions used to estimate the fair value. Other than the required disclosures, the adoption of FASB ASC 270 had no impact on the Financial Statements.

On January 1, 2009, BioClinica adopted FASB ASC 820, Fair Value Measurements and Disclosures,(FASB ASC 820), issued by the FASB to fair value accounting and reporting as it relates to nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value in the financial statements on at least an annual basis. FASB ASC 820 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. This guidance applies to other GAAP that require or permit fair value measurements and is to be applied prospectively with limited exceptions. The adoption of FASB ASC 820, as it relates to nonfinancial assets and nonfinancial liabilities, had no impact on the Financial Statements.

accounting for business combinations, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination, FASB ASC 805 defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. These changes require an acquirer in a business combination, including business combinations achieved in stages (step acquisition), to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. This guidance also applies to all assets acquired and liabilities assumed in a business combination that arise from certain contingencies and requires (i) an acquirer to recognize at fair value, at the acquisition date, an asset acquired or liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be determined during the measurement period otherwise the asset or liability should be recognized at the acquisition date if certain defined criteria are met; (ii) contingent consideration arrangements of an acquiree assumed by the acquirer in a business combination be recognized initially at fair value; (iii) subsequent measurements of assets and liabilities arising from contingencies be based on a systematic and rational method depending on their nature and contingent consideration arrangements be measured subsequently; and (iv) disclosures of the amounts and measurement basis of such assets and liabilities and the nature of the contingencies. Additionally, FASB ASC 805 requires acquisition-related costs to be expensed in the period in which the costs are incurred and the services are received instead of including such costs as part of the acquisition price. The adoption of FASB ASC 805 resulted in a charge of $560,000 ($333,000 after-tax) in mergers and acquisitions related expenses on the accompanying Consolidated Statements of Income for acquisitions completed in the third quarter of 2009. These provisions were applied to the acquisitions completed in the fourth quarter, refer to Note 2 of our Consolidated Financial Statements.

On January 1, 2009, BioClinica adopted changes to FASB ASC 350, Intangibles — Goodwill and Other (FASB ASC 350), issued by the FASB to accounting for intangible assets. The changes to FASB ASC 350 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset in order to improve the consistency between the useful life of a recognized intangible asset outside of a business combination and the period of expected cash flows used to measure the fair value of an intangible asset in a business combination. The adoption of FASB ASC 350 had no impact on the Financial Statements.

In October 2009, the FASB issued guidance on revenue recognition that will become effective for us beginning January 1, 2011, with earlier adoption permitted. Under the new guidance on arrangements that include software elements, tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue recognition guidance. Additionally, the FASB issued guidance on revenue arrangements with multiple deliverables that are outside the scope of the software revenue recognition guidance. Under the new guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. Management believes the adoption of this new guidance will not have a material impact on our financial statements.

Existing Contracts

As of December 31, 2009, we had entered into agreements to provide services with a remaining value of $98.7 million. Such contracts are subject to termination by us or our clients at any time or for any reason. In addition, clients’ clinical trials or other projects are subject to timing and scope changes. Therefore, total service revenue generated by us during the life of these contracts may be less than initial contract values.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

We invest in high-quality financial instruments, comprised of savings accounts, certificate of deposits and money market funds. Due to the short-term nature of our investments, we do not believe that we have any material exposure to interest rate risk arising from our investments.

Foreign Currency Risk

In accordance with our foreign exchange rate risk management policy, we had purchased monthly Euro call options in prior years. These options were intended to hedge against the exposure to variability in our cash flows resulting from the Euro denominated costs for our Netherlands and France subsidiaries. During the twelve months ended December 31, 2009 and 2008, we have not purchased any Euro call options, because our foreign currency needs are generally being met by the cash flow generated by Euro denominated contracts. The last Euro call option expired March 31, 2007, and we have not entered into any new Euro call options since that time. As of December 31, 2009, there were no outstanding derivative positions.

Under our current foreign exchange rate risk management policy, and upon expiration or ineffectiveness of any derivatives, we will record a gain or loss from such derivatives that are deferred in stockholders’ equity to cost of revenues and general and administrative expenses in the Consolidated Statement of Income based on the nature of the underlying cash flow hedged.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Foreign Currency Risks” for a more detailed discussion of our foreign currency risks and exposures.

Item 8. Financial Statements and Supplementary Data.


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	PAGE
Report of Independent Registered Public Accounting Firm		40
Consolidated Balance Sheets as of December 31, 2009 and 2008		41
Consolidated Statements of Income for the year ended December 31, 2009, 2008 and 2007		42
Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2009, 2008 and 2007		43
Consolidated Statements of Cash Flows for the year ended December 31, 2009, 2008 and 2007		44
Notes to Consolidated Financial Statements		46

Report of Independent Registered Public Accounting Firm

To the Board of Directors
And Shareholders of
BioClinica, Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, present fairly, in all material respects, the financial position of BioClinica, Inc. and its subsidiaries at December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for business combinations in 2009.

PricewaterhouseCoopers LLP
Philadelphia, PA
March 30, 2010

BIOCLINICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


	December 31,
(in thousands)	2009		2008
ASSETS
Current assets:
Cash and cash equivalents	$	14,570	$	14,265
Accounts receivable, net of allowance for doubtful accounts of $9 and $11, respectively		10,966		11,982
Prepaid expenses and other current assets		1,869		2,315
Assets held for sale		—		500
Deferred income taxes		3,370		3,084

Total current assets		30,775		32,146
Property and equipment, net		9,040		7,022
Intangibles, net		1,969		2,058
Goodwill		32,933		27,391
Other assets		620		591


Total Assets	$	75,337	$	69,208


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	3,899	$	3,832
Accrued expenses and other current liabilities		4,134		5,236
Deferred revenue		14,256		15,106
Current maturities of capital lease obligations		—		54
Current liability for acquisition earn-out		1,184		—

Total current liabilities		23,473		24,228
Long-term capital lease obligations		—		65
Long-term liability for acquisition earn-out		1,657		—
Deferred income tax		1,167		927
Other liability		505		576

Total liabilities		26,802		25,796


Commitments and Contingencies

Stockholders’ equity:
Preferred stock- $.00025 par value; authorized 3,000,000 shares, 0 issued and outstanding at December 31, 2009 and 2008		—		—
Common stock — $.00025 par value; authorized 36,000,000 shares, issued and outstanding 14,394,374 shares at December 31, 2009 and authorized 18,000,000 shares, issued and outstanding 14,341,403 shares at December 31, 2008		4		4
Common stock consideration for earn-out		1,309		—

Additional paid-in capital		43,104		42,270
Retained earnings		4,039		1,080
Accumulated other comprehensive income		79		58

Stockholders’ equity		48,535		43,412


Total liabilities and stockholders’ equity	$	75,337	$	69,208

The accompanying notes are an integral part of these statements.

BIOCLINICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	For the year ended December 31,
(in thousands except per share data)	2009			2008			2007
Service revenues	$	57,393		$	56,181		$	37,543
Reimbursement revenues		15,330			12,935			9,711


Total revenues		72,723			69,116			47,254


Cost and expenses:
Cost of service revenues		35,630			32,446			21,900
Cost of reimbursement revenues		15,330			12,935			9,711
Sales and marketing expenses		8,052			7,860			5,005
General and administrative expenses		7,414			7,015			5,734
Amortization of intangible assets related to acquisitions		489			380			56
Restructuring charges		466			—			—
Mergers and acquisitions related costs		654			—			—


Total cost and expenses		68,035			60,636			42,406


Income from continuing operations before interest and taxes		4,688			8,480			4,848

Interest income		41			429			654
Interest expense		(13	)		(7	)		(11	)
Income tax provision		(1,757	)		(3,111	)		(2,148	)


Income from continuing operations, net of taxes	$	2,959		$	5,791		$	3,343

Loss from discontinued operations, net of taxes		—			(3,001	)		(1,011	)


Net income	$	2,959		$	2,790		$	2,332


Basic earnings per share:
Income from continuing operations	$	0.21		$	0.42		$	0.29

Loss from discontinued operations		—		$	(0.22	)	$	(0.09	)

Net Income	$	0.21		$	0.20		$	0.20


Diluted earnings per share:
Income from continuing operations	$	0.20		$	0.40		$	0.26

Loss from discontinued operations		—		$	(0.21	)	$	(0.08	)

Net Income	$	0.20		$	0.19		$	0.18


Weighted average shares used to calculate earnings per share:
Basic		14,354			13,752			11,616

Diluted		15,100			14,469			12,745

The accompanying notes are an integral part of these statements.

BIOCLINICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


													Other
					Additional			Common Stock		Accumulated			Comprehensive
	Common Stock				Paid-in			Consideration for		(Deficit) Retained			Gain			Stockholders’
(in thousands)	Shares		Amount		Capital			Earn-out		Earnings			(Loss)			Equity
Balance at December 31, 2006		11,310	$	3	$	22,864		$	—	$	(4,043	)	$	17		$	18,841
Stock options exercised		341		—		301					—			—			301
Restricted shares issued		15		—		—					—			—			—
Stock issued for acquisitions		99		—		802					—			—			802
Stock based compensation		—		—		474					—			—			474
Tax benefit on exercise of stock options		—		—		643					—			—			643
Net unrealized loss on derivative instruments		—		—		—					—			(17	)		(17	)
Equity adjustment from foreign currency translation		—		—		—					—			151			151
Net income		—		—		—					2,333			—			2,333

Balance at December 31, 2007		11,765	$	3	$	25,084		$	—	$	(1,710	)	$	151		$	23,528
Stock options exercised		290		—		387					—			—			387
Restricted shares issued		21		—		(86	)				—			—			(86	)
Stock issued for acquisitions		2,265		1		15,946					—			—			15,947
Stock based compensation		—		—		649					—			—			649
Tax benefit on exercise of stock options		—		—		290					—			—			290
Equity adjustment from foreign currency translation		—		—		—					—			(93	)		(93	)
Net income		—									2,790			—			2,790

Balance at December 31, 2008		14,341	$	4	$	42,270		$	—	$	1,080		$	58		$	43,412
Stock options exercised		38		—		31					—			—			31
Restricted shares issued		15		—		(31	)				—			—			(31	)
Stock consideration for acquisitions		—		—		—			1,309		—			—			1,309
Stock based compensation		—		—		790					—			—			790
Tax benefit on exercise of stock options		—		—		44					—			—			44
Equity adjustment from foreign currency translation		—		—		—					—			21			21
Net income		—									2,959			—			2,959

Balance at December 31, 2009		14,394	$	4	$	43,104		$	1,309	$	4,039		$	79		$	48,535


Statements of comprehensive income	For the year ended December 31,
(in thousands)	2009		2008			2007
Net income	$	2,959	$	2,790		$	2,333
Net unrealized income (loss) on derivative instruments, net of tax		—		—			(17	)
Equity adjustment from foreign currency translation		21		(93	)		151

Total comprehensive income	$	2,980	$	2,697		$	2,467

The accompanying notes are an integral part of these statements.

BIOCLINICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the year ended December 31,
(in thousands)	2009			2008			2007
Cash flows from operating activities:
Net income	$	2,959		$	2,790		$	2,332
Adjustments to reconcile net income to net cash provided by Operating activities, net of acquisition:
Depreciation and amortization		2,711			2,266			2,335
(Benefit) provision for deferred income taxes		336			(311	)		286
Accretion of acquisition earn-out		94			—			—
Bad debt provision (recovery)		93			(6	)		15
Stock based compensation expense		760			563			474
Gain on foreign currency options		—			—			(10	)
Loss from discontinued operations		—			3,001			1,011
Changes in operating assets and liabilities, net of acquisitions:
Decrease (increase) in accounts receivable		1,802			(1,339	)		(145	)
Decrease (increase) in prepaid expenses and other current assets		447			(830	)		(77	)
(Increase) decrease in other assets		(30	)		93			(53	)
Increase in accounts payable		403			1,599			78
(Decrease) increase in accrued expenses and other current liabilities		(1,100	)		353			1,334
(Decrease) increase in deferred revenue		(852	)		(850	)		2,073
(Decrease) increase in other liabilities		(71	)		(3	)		23
Increase in net assets held for sale		—			2,442			309

Cash provided by activities from continuing operations		7,552			9,768			9,985
Cash used by discontinued operations		—			(2,974	)		(1,319	)

Net cash provided by operating activities		7,552			6,794			8,666


Cash flows used in investing activities:
Purchases of property and equipment		(4,569	)		(2,677	)		(2,575	)
Net cash paid for acquisition		(3,144	)		(7,928	)		(3,507	)

Net cash used in investing activities from continuing operations		(7,713	)		(10,605	)		(6,082	)
Purchase of plant, property and equipment for discontinued operations		—			(239	)		(1,353	)
Net cash received for sale of assets of discontinued operations		500			—			—

Net cash used in investing activities		(7,213	)		(10,844	)		(7,435	)


Cash flows from financing activities:
Payments under equipment lease obligations		(118	)		(153	)		(454	)
Proceeds from exercise of stock options		31			386			301
Excess tax benefit related to stock options		44			290			643

Net cash (used in) provided by financing activities from continuing operations		(43	)		523			490


Effect of exchange rate changes on cash		9			(123	)		28

Net increase (decrease) in cash and cash equivalents		305			(3,650	)		1,749
Cash and cash equivalents at beginning of period		14,265			17,915			16,166

Cash and cash equivalents at end of period	$	14,570		$	14,265		$	17,915


Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	11		$	11		$	12
Cash paid during the period for income taxes	$	1,226		$	1,970		$	604

The accompanying notes are an integral part of these statements.

Supplemental cash flow disclosure

Schedule of non cash investing and financing activities


	For the year ended December 31,
(in thousands)	2009		2008		2007
Increase in property, plant and equipment acquisitions in accounts payable	$	334	$	7	$	11
Value of contingent stock and cash to be used for earn-out provisions related to acquired business	$	4,150	$	—	$	—


Acquired business	For the year ended December 31,
(in thousands)	2009			2008			2007
Accounts receivable	$	934		$	4,926		$	228
Property and equipment		—			721			185
Other assets		55			295			53
Intangible assets and goodwill		2,248			23,874			4,590
Current liabilities assumed		(93	)		(1,061	)		(377	)
Other liabilities assumed		—			(4,880	)		(412	)
Common stock issued		—			(15,947	)		(760	)

Cash paid for acquired business, net of cash acquired of $0, $418,000 and $201,000, respectively	$	3,144		$	7,928		$	3,507

The accompanying notes are an integral part of these statements.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

1. Organization and Summary of Significant Accounting Policies

Description of Business

On July 8, 2009, our shareholders approved an amendment to our Certificate of Incorporation, as amended, to change our name from Bio-Imaging Technologies, Inc. to BioClinica, Inc.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Oxford Bio-Imaging Research, Inc. and BioClinica Holding B.V. The results of companies acquired during the year are included in the consolidated financial statements from the effective date of the acquisition. All intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

The financial information for all prior periods presented have been reclassified to reflect assets held for sale and discontinued operations related to the CapMed division. See Note 3 for additional information.

Our results for fiscal 2009 include reductions to net income of $42,000 as a result of additional income tax provision recorded in the fourth quarter of fiscal 2009 that should have been recorded as a reduction of net income in fiscal 2008. An additional out-of-period adjustment was recorded in the fourth quarter of fiscal 2009 that decreased goodwill and increased our deferred tax asset by $363,000, related to recording a net operating loss carryforward that should have been recorded in the first quarter of fiscal 2008. We have determined that the impact of these adjustments recorded in the fourth quarter of fiscal 2009 were immaterial to our results of operations in all applicable prior interim and annual periods. As a result, we have not restated any prior period amounts.

Foreign Currency Translation

Assets and liabilities of non-U.S. subsidiaries are translated into U.S. dollars at fiscal year-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

fiscal year. The resulting translation adjustments are recorded as a component of shareholders’ equity. Gains and losses from foreign currency transactions are included in net income.

Functional Currency

Historically, the functional currency for our Netherlands operations was the US Dollar based on an initial evaluation, as well as periodic evaluations of economic factors, as set forth in FASB ASC 830 Foreign Currency Matters.

We periodically evaluated the economic facts and circumstances that led to the initial conclusion that the functional currency of the Netherlands operation was the US Dollar for any significant changes that might indicate that the functional currency of the Netherlands operation had changed. Based on our evaluation performed in connection with the commencement of our quarter ended September 30, 2007, we concluded that, effective July 1, 2007, the functional currency of our Netherlands operation is the Euro. The primary economic factor change was the increase in the sales price and market indicator of significantly more contracts in Euros as well as the cash flow and financing indicator of US Dollar to Euro in our Netherlands operation.

The equity adjustment from foreign currency translation was $21,000 and $(93,000) at December 31, 2009 and 2008, respectively.

The functional currency for our French operations is the Euro based on our initial and periodic evaluations of economic factors as set forth in FASB ASC 830 Foreign Currency Matters.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying values of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable and other accrued expenses approximate their fair values due to their short maturities. The earn-out liability from the Tourtellotte acquisition is recorded at fair value, see Note 2 for additional information.

Cash and Cash Equivalents

The Company maintains cash in excess of FDIC insurance limits in certain financial institutions. The Company considers cash equivalents to be highly liquid investments with an original maturity of three months or less.

Revenue Recognition

Service revenues are recognized over the contractual term of the Company’s customer contracts using the proportional performance method. Service revenues are first recognized when the Company has a signed contract from a customer which: (i) contains fixed or determinable fees; (ii) collectability of such fees is reasonably assured; and (iii) the services were performed. Any change to recognized service

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

revenue as a result of revisions to estimated total hours are recognized in the period the estimate changes.

The Company enters into contracts that contain fixed or determinable fees. The fees in the contracts are based on the scope of work we are contracted to perform; there are unitized fees per service and fixed fees with a total estimated for the contract based upon the estimated unitized service expected to be performed, as well as the service to be delivered under the fixed fee component of the contract. The units are estimated based on the information provided by the customer, and the Company bills the customer for actual units completed in accordance with the terms of the contract. In the event that a contract is cancelled by the client, we would be entitled to receive payment for all services performed up to the cancellation date.

The Company’s revenue recognition policy entails a number of estimates including an estimate of the total hours that are expected to be incurred on a project, which is used as the basis for determining the portion of the Company’s revenue to be recognized for each period. The revenue recognized in any period might have been materially affected if different assumptions or conditions prevailed. The timing of the Company’s recognition of revenue would be revised if there were changes in the total estimated hours (other than scope changes in a project which typically result in a revision to the contract). The Company reviews its total estimated hours monthly. Provisions for losses expected to be incurred on contracts are recognized in full in the period in which it is determined that a loss will result from performance of the contractual arrangement.

Unbilled services represent revenue recognized which pursuant to contractual terms have not yet been billed to the client. In general, amounts become billable pursuant to contractual milestones or in accordance with predetermined payment schedules. Unbilled services are generally billable within one year from the respective balance sheet date and are usually billed within the next quarter from any balance sheet. Deferred revenue is recorded for cash received from clients for services that have not yet been earned at the respective balance sheet date.

The Company, at the request of its clients, directly contracts with and pays independent radiologists, referred to as Readers, who review the client’s imaging data as part of the clinical trial. The costs of the Readers and other out-of-pocket expenses are reimbursed to the Company and recognized gross as reimbursement revenues.

Allowance For Doubtful Accounts

The Company maintains allowances for doubtful accounts on a specific identification method for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of its customers were to deteriorate, resulting in an impairment of the customers ability to make payments, additional allowances may be required. The Company does not have any off-balance-sheet credit exposure related to its customers and the trade accounts receivable do not bear interest.


	December 31,
(in thousands)	2009		2008
Billed trade accounts receivable		10,164	$	10,091
Unbilled trade accounts receivable		747		1,863
Other		55		28

Total receivables		10,966	$	11,982

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)


Allowance Rollforward:

Balance at December 31, 2007	$	29
Additions		6
Write offs (net of recoveries)		(24	)

Balance at December 31, 2008	$	11
Additions		93
Write offs (net of recoveries)		(95	)

Balance at December 31, 2009	$	9

Property and Equipment

Property and equipment is recorded at historical cost and depreciated over the estimated useful lives of the respective assets. Amortization of leasehold improvements is provided for over the lesser of the related lease term, or the useful lives of the related assets. The cost and related accumulated depreciation of assets fully depreciated, sold, retired or otherwise disposed of are removed from the respective accounts and any resulting gains or losses are included in the statements of income.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets is determined by comparing the estimated undiscounted cash flows of the operations related to the assets to their carrying amount An impairment loss would be recognized when the carrying amount of the assets exceeds the estimated undiscounted net cash flows. The amount of the impairment loss to be recorded is calculated as the excess of the carrying value of the assets over their fair value, with fair value determined using the best information available, which generally is a discounted cash flow model. The estimated undiscounted net cash flows require significant management judgments.

Capitalized Software Development

The Company capitalizes development costs for a software project once the preliminary project stage is completed, management commits to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. The Company ceases capitalization at such time as the computer software project is substantially complete and ready for its intended use. The determination that a software project is eligible for capitalization and the ongoing assessment of recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, anticipated future revenue, estimated economic life and changes in software and hardware technologies. The Company capitalized software development costs of $1,806,000, $897,000 and $1,7000,000 for the year ended December 31, 2009, 2008 and 2007 respectively. Amortization expense related to capitalized computer software costs amounted to $423,000, $582,000 and $445,000 at December 31, 2009, 2008 and 2007 respectively. Capitalized software development costs are included as a component of property and equipment.

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate the carrying value may not be recoverable. The company’s fair value methodology is based on quoted market prices, if available. If quoted market prices are not available, an estimate of fair market value is made based on prices of similar assets or other valuation methodologies including present value techniques.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

Definite-lived intangible assets, such as purchased and licensed technology, patents and customer lists are amortized over their estimated useful lives, generally for periods ranging from 2 to 7 years. The Company continually evaluates the reasonableness of the useful lives of these assets.

Income Taxes

The Company accounts for income taxes under the provisions of FASB ASC 740 Income Taxes, which utilizes the liability method. Deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities at currently enacted tax laws and rates. A valuation allowance is provided against the carrying value of deferred tax assets when management believes it is more likely than not that the deferred tax assets will not be realized. The Company recognizes contingent liabilities for any tax related exposures when those exposures are more likely than not to occur.

Earnings Per Share

FASB ASC 260 Earnings Per Share requires the presentation of basic earnings per share and diluted earnings per share. Basic earnings per common share are calculated by dividing the net income available to Common Stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per common share is calculated by dividing net income by the weighted average number of shares of Common Stock outstanding, adjusted for the effect of potentially dilutive securities using the treasury stock method.

The computation of basic earnings per common share and diluted earnings per common share is as follows:


	For the year ended December 31,
(in thousands except per share data)	2009		2008		2007
Net income — diluted and basic		2,959	$	2,790	$	2,332


Denominator — basic:
Weighted average number of common shares		14,354		13,752		11,616

Basic income per common share	$	0.21	$	0.20	$	0.20


Denominator — diluted:
Weighted average number of common shares		14,354		13,752		11,616
Common share equivalents of outstanding stock options		403		648		1,023
Common share equivalents of unrecognized compensation expense		343		69		106

Weighted average number of dilutive common equivalent shares		15,100		14,469		12,745

Diluted income per common share	$	0.20	$	0.19	$	0.18

We excluded options to purchase 656,000, 719,000 and 140,000 shares of our common stock for the twelve months ended December 31, 2009, 2008 and 2007, respectively, since they were out-of-the-money and antidilutive.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

Recently Issued Accounting Statements

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

prospectively with limited exceptions. The adoption of FASB ASC 820, as it relates to nonfinancial assets and nonfinancial liabilities, had no impact on the Financial Statements.

On January 1, 2009, BioClinica adopted FASB ASC 805, Business Combinations (FASB ASC 805), issued by the FASB to accounting for business combinations. While retaining the fundamental requirements of accounting for business combinations, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination, FASB ASC 805 defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. These changes require an acquirer in a business combination, including business combinations achieved in stages (step acquisition), to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. This guidance also applies to all assets acquired and liabilities assumed in a business combination that arise from certain contingencies and requires (i) an acquirer to recognize at fair value, at the acquisition date, an asset acquired or liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be determined during the measurement period otherwise the asset or liability should be recognized at the acquisition date if certain defined criteria are met; (ii) contingent consideration arrangements of an acquiree assumed by the acquirer in a business combination be recognized initially at fair value; (iii) subsequent measurements of assets and liabilities arising from contingencies be based on a systematic and rational method depending on their nature and contingent consideration arrangements be measured subsequently; and (iv) disclosures of the amounts and measurement basis of such assets and liabilities and the nature of the contingencies. Additionally, FASB ASC 805 requires acquisition-related costs to be expensed in the period in which the costs are incurred and the services are received instead of including such costs as part of the acquisition price. The adoption of FASB ASC 805 resulted in a charge of $560,000 ($333,000 after-tax) in mergers and acquisitions related expenses on the accompanying Consolidated Statements of Income for acquisitions completed in the third quarter of 2009. These provisions were applied to the acquisitions completed in the fourth quarter, refer to Note 2 of our Consolidated Financial Statements.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. Management believes the adoption of this new guidance will not have a material impact on our financial statements.

2. Acquisitions

2009 Acquisitions:

On August 27, 2009, BioClinica acquired the CardioNow unit of Agfa Healthcare (“CardioNow”). CardioNow has developed a web-based system for the secure transmission of medical cardiac images. The software was specifically developed for and marketed to the invasive cardiology departments of hospitals within the United States. BioClinica will integrate and enhance the current CardioNow software and service to offer our clients a streamlined electronic transport solution to facilitate the blinding, sharing, tracking and archiving of medical images for multi-center clinical trials as part of our suite of imaging services. The purchase price for CardioNow consisted of cash consideration paid to Agfa Healthcare of $1 million. The Company paid the purchase price for CardioNow with cash from operations. The financial results of CardioNow for the fiscal year are included in the consolidated statement of income for the period ended December 31, 2009 since the date of acquisition. The pro forma impact of the CardioNow acquisition on 2009 results was immaterial.

On September 15, 2009, BioClinica acquired substantially all of the assets of Tourtellotte Solutions, Inc. (“Tourtellotte”). Tourtellotte provides software applications and consulting services which support clinical trials in the pharmaceutical industry. The purchase price for Tourtellotte was $2.1 million in cash. Pursuant to the acquisition agreement, the Company agreed to pay up to an additional $3.2 million in cash and 350,000 shares of our common stock based upon achieving certain milestones, which include certain product development and revenue targets. (the “earn-out”). The fair value of the cash earn-out of $2.8 million has been recorded as a liability and the fair value of the 350,000 shares of $1.3 million has been classified separately within stockholders’ equity as contingent consideration for a total purchase price of $6.2 million as of December 31, 2009. The Company used cash from operations to fund the cash purchase price for Tourtellotte. The financial results of Tourtellotte from the acquisition date are included in the consolidated statement of income for the period ended December 31, 2009.

Pro Forma Results. The following schedule includes consolidated statements of income data for the unaudited pro forma results for the twelve months ended December 31, 2009 and 2008 as if the Tourtellotte acquisition had occurred as of the beginning of each of the periods presented after giving effect to certain adjustments. The unaudited pro forma information is provided for illustrative purposes only and is not indicative of the results of operations or financial condition that would have been achieved if the Tourtellotte acquisition would have taken place at the beginning of each of the periods presented and should not be taken as indicative of our future consolidated results of operations or financial condition. Pro forma adjustments are tax-effected at our effective tax rate.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)


	Twelve Months Ended
(in thousands except per share data)	2009		2008
Total revenue	$	76,823	$	72,979
Income from continuing operations before interest and taxes		5,003		8,270
Income from continuing operations, net of taxes		3,156		5,654
Basic earnings per share:
Income from continuing operations	$	0.22	$	0.41
Diluted earnings per share:
Income from continuing operations	$	0.21	$	0.39

In connection with the acquisitions of CardioNow and Tourtellotte, the Company performed an evaluation of the guidance included in FASB ASC 280, Segment Reporting (“FASB ASC 280”) and FASB ASC 350, Intangibles — Goodwill and Other (“FASB ASC 350”). Based on that evaluation, the Company included CardioNow and Tourtellotte as part of its clinical trials services reportable segment.

In accordance with FASB ASC 805, the Company expensed all costs related to the acquisitions. The total costs related to the acquisitions were $560,000 and included in mergers and acquisition related costs on the consolidated statement of income.

The following table summarizes the consideration transferred to acquire CardioNow and Tourtolette at the respective acquisition dates:


	CardioNow		Tourtellotte
Cash	$	1,000	$	2,144
Estimated earnout payments:		—
Contingent consideration to be settled in cash		—		2,656
Contingent consideration to be settled in stock		—		1,300
Working capital adjustment		—		94

Total purchase price	$	1,000	$	6,194

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

The following table summarizes the amounts of identified assets acquired and liabilities assumed from CardioNow and Tourtellotte at the respective acquisition date fair value:


	CardioNow		Tourtellotte
Accounts Receivable		—	$	934
Other Assets		—		55
Other Liabilities		—		(93	)
Customer Relationships		—		393
Goodwill, including Workforce	$	1,000		4,905

Total Fair Value of Purchase Price	$	1,000	$	6,194

Accounts receivable, other assets and other liabilities were stated at their historical carrying values, which approximate fair value given the short-term nature of these assets and liabilities.

The cash contingent consideration expected to be paid within one year from December 31, 2009 of $1,184,000 was classified as a short-term liability and the remaining cash contingent consideration of $1,657,000 was classified as a long-term liability on the financial statements. The contingent consideration expected to be paid in stock of $1,309,000 is recorded in the equity section of the financial statements. The difference between the fair value of the cash contingent consideration at date of acquisition and the expected payment will be recorded as an expense in the financial statements at the end of each reporting period. In fiscal 2009, the Company recorded $94,000 of accretion expense in mergers and acquisition related costs on the income statement for this difference.

In accordance with FASB ASC 820, Fair Value Measurements (“FASB ASC 820”) the Company determined that the non-financial assets and liabilities summarized above are derived from significant unobservable inputs (“Level 3 inputs”) determined by management based on various market and income analyses and recent asset appraisals. The goodwill recorded in connection with these acquisitions will be deductible for tax purposes over 15 years.

The results of operations of CardioNow and Tourtellotte are included in our financial statements from the respective acquisition dates.

2008 Acquisition:

On March 24, 2008, BioClinica acquired Phoenix Data Systems, Inc. (“PDS”) to expand our pharmaceutical services in the area of electronic data capture and other eClinical data solutions to our clients (the “Acquisition”). The Acquisition was made pursuant to an Agreement and Plan of Merger (the “PDS Merger Agreement”), dated March 24, 2008, by and among the Company, BioClinica Acquisition Corporation, a Pennsylvania corporation and wholly-owned subsidiary of the Company (“PDS Merger Sub”), and PDS and its Stockholders’ Representative.

Under the terms of the PDS Merger Agreement, the Company acquired all of PDS’s outstanding capital stock. The total consideration paid by the Company to the PDS stockholders was $23.9 million, comprised of $6.9 million in cash and 2.3 million shares of common stock, par value $0.00025 per share, of the Company, with an average closing price per share over the last 30 trading days ending and

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

including March 19, 2008 of $7.42. The aggregate purchase price was subject to a post-closing adjustment based on the Tangible Net Worth (as defined in the PDS Merger Agreement) of PDS on the Closing Date (as defined in the PDS Merger Agreement). Pursuant to the terms of the PDS Merger Agreement, five percent of the aggregate consideration was held in escrow for the finalization of the Closing Tangible Net Worth Statement (as defined in the PDS Merger Agreement). On June 13, 2008, BioClinica and the Stockholders’ Representative agreed to a decrease of $230,000 to the purchase price due to the minimum threshold to the Closing Tangible Net Worth Statement not being achieved. BioClinica received $64,000 in cash back in June 2008 and 22,453 shares of our common stock back in July 2008 from the purchase price escrow. Additionally, ten percent of the aggregate consideration was to be held in escrow to cover any potential indemnification claims under the PDS Merger Agreement for a period ending no later than March 31, 2009. There were no indemnification claims and this amount was paid to the stockholders in April 2009. We also incurred approximately $1.1 million in Acquisition costs. At the Acquisition date, the stock was recorded at an average price of $7.04 per share.

In connection with the Acquisition, the stockholders of PDS entered into various agreements. The stockholders of PDS executed stockholders’ agreements, whereby each stockholder agreed, among other things, to approve the Acquisition and not to compete in the business area occupied by PDS at the time of the Acquisition for a reasonable period of time. All stockholders executed lockup agreements, whereby all stockholders agreed not to directly or indirectly sell, or otherwise dispose of any shares of the Company’s common stock received pursuant to the PDS Merger Agreement for a period of 180 days after the Closing Date (the “Initial Lockup Period Date”), and certain additional stockholders agreed not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of 67% of the shares of the Company’s common stock received pursuant to the PDS Merger Agreement for a period beginning on the Initial Lockup Period Date and continuing to and including the date of the first anniversary of the Closing Date. The Company also entered into employment agreements with members of the senior management team of PDS. However, none of these individuals are executive officers of the Company.

The following table summarizes the final allocation of the total cost of the PDS Acquisition to the assets acquired and the liabilities assumed.


(in thousands)
Net Working Capital	$	701
Fixed Assets		721
Other Assets		46
Other Liabilities		(175	)
Deferred Tax Liability		(854	)
Software		552
Trademark		48
Customer Backlog		730
Customer Relationships		665
Non-Compete Agreements		138
Goodwill, including Workforce		21,366

Total Purchase Price	$	23,938

The results of operations of PDS from the Acquisition date, March 24, 2008 to March 31, 2008

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENT—(Continued)

were immaterial; therefore, the Company did not include the results of operations for those eight days in the Consolidated Statement of Income for the 12 months ended December 31, 2008.

Pro Forma Results. The following schedule includes consolidated statements of income data for the unaudited pro forma results for the twelve months ended December 31, 2008 and 2007 as if the Acquisition had occurred as of the beginning of each of the periods presented after giving effect to certain adjustments. The pro forma results for the twelve months ended December, 31, 2008 include $789,000 of acquisition costs incurred by PDS. The unaudited pro forma information is provided for illustrative purposes only and is not indicative of the results of operations or financial condition that would have been achieved if the acquisition would have taken place at the beginning of each of the periods presented and should not be taken as indicative of our future consolidated results of operations or financial condition. Pro forma adjustments are tax-effected at our effective tax rate.


	Twelve Months Ended
(in thousands except per share data)	2008		2007

Total revenue	$	73,566	$	59,324
Income from continuing operations before interest and taxes		7,783		5,523
Income from continuing operations, net of taxes		5,300		3,723
Basic earnings per share:
Income from continuing operations	$	0.38	$	0.27
Diluted earnings per share:
Income from continuing operations	$	0.35	$	0.25

2007 Acquisition:

On February 6, 2007, we acquired 100% of the outstanding securities of Theralys S.A., a company headquartered in Lyon, France to expand our therapeutic expertise in the Central Nervous System and Neurovascular areas. The aggregate purchase price was 2,958,000 Euros ($3,853,000 as determined by an agreed upon exchange rate), of which 2,375,000 Euros ($3,093,000) was paid in cash and $760,000 in value was paid with 93,000 shares of our common stock. We also incurred approximately $615,000 in acquisition costs. The purchase of the business was accounted for under the purchase method of accounting. The result of operations of Theralys were included in our financial statements at the acquisition date in our clinical trials services business segment. The assets acquired primarily consisted of $4,153,000 goodwill, $291,000 software, $52,000 customer relationship and $36,000 non-compete. The pro forma impact of the Theralys acquisition on 2007 results was immaterial.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other:

In the second quarter of 2009, as a result of a potential acquisition which was terminated, we incurred $734,000 of acquisition related costs and received $750,000, comprised of a $500,000 break-up fee and $250,000 expense reimbursement, from the target company, resulting in a $16,000 gain on the transaction.

3. Discontinued Operations and Assets Held for Sale

In the fourth quarter of 2008 the Company classified its interest in its CapMed business as held for sale. Therefore, the financial statements for the years ended December 31, 2008 and 2007 have been presented as discontinued operations in the consolidated financial statements. The sale generated total gross proceeds of $500,000 and a pretax loss of $5,049,000 ($3,001,000, net of income taxes), which was recognized in the fourth quarter of 2008.

Our exit of the CapMed business resulted, in part, from our strategy to exit non-strategic businesses. Results of the CapMed business are reported as discontinued operations for all periods presented.

The following amounts related to the CapMed operations were derived from historical financial information and have been segregated from continuing operations and reported in discontinued operations (in thousands):


(in thousands)	2008			2007
Service revenues	$	321		$	653


Loss from operations		(2,323	)		(1,659	)
Loss from impairment		(2,726	)		—


Pretax loss		(5,049	)		(1,659	)
Benefit from income taxes		2,048			648

Net loss from discontinued operations		(3,001	)		(1,011	)

The following is a summary of the assets and liabilities of the CapMed discontinued operations as of December 31, 2008. The amounts presented below were derived from historical financial information and adjusted to exclude intercompany receivables and payables between CapMed discontinued operations and the Company (in thousands):


Current Assets		27
Fixed Assets		1,257

Net Assets and Liabilities	$	1,284

On January 6, 2009, pursuant to the Asset Purchase Agreement by and among the Company and MBI Benefits, Inc. (the “Purchaser”), an indirectly owned subsidiary of Metavante Technologies, Inc. (“Metavante”), dated as of January 6, 2009 (the “Agreement”), the Company sold its CapMed Division,

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

including the division’s Personal Health Record (“PHR”) software and the patent-pending Personal HealthKey™ technology, to Metavante. Under the terms of the Agreement, Metavante paid the Company an upfront payment of Five Hundred Thousand Dollars ($500,000) in cash and will make an earn-out payment to the Company based upon a percentage of the gross revenues recognized by Metavante for contracts entered into with certain “prospects” set forth on a schedule during certain time periods in 2009 and 2010. The Company will receive 25% of the gross revenues recognized by Metavante during any period ending on or prior to December 31, 2010 from the sale pursuant to any contract the Purchaser enters into with certain “prospects” during the first six months of 2009. Additionally, the Company will receive 15% of the gross revenues recognized by Metavante during any period ending on or prior to December 31, 2010 from the sale pursuant to any contract the Purchaser enters into with certain “prospects” during the period commencing on July 1, 2009 and ending on December 31, 2010. At December 31, 2009, the Company has not received any earn-out payments from Metavante.

As a result of the sale, the results of the CapMed operations, which had previously been presented as a separate reporting segment, are included in discontinued operations in the Company’s consolidated statements of operations. In addition, any assets and liabilities related to these discontinued operations are presented separately on the consolidated balance sheets, and any cash flows related to these discontinued operations are presented separately in the consolidated statements of cash flows. All prior period information has been reclassified to be consistent with the current period presentation.

4. Property and Equipment

Property and equipment, at cost, consists of the following:


	December 31,						Estimated
(in thousands)	2009			2008			Useful Life
Equipment		9,796		$	8,692		5 years
Equipment under capital leases		4,332			4,332		5 years
Furniture and fixtures		2,115			1,582		7 years
Leasehold improvements		1,913			1,336		5 years
Computer software costs		7,065			5,038		5 years

		25,221			20,980

Less: Accumulated depreciation and amortization		(16,181	)		(13,958	)

Property and equipment, net		9,040		$	7,022

Accumulated depreciation related to equipment acquired under capital leases amounted to $4.3 million and $4.1 million at December 31, 2009 and 2008, respectively. Accumulated amortization related to capitalized computer software costs amounted to $3.2 million and $2.5 million at December 31, 2009 and 2008, respectively. Depreciation expense for the year ended December 31, 2009 and 2008 were $2.2 million and $2.1 million, respectively.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. Intangible Assets

Included in other assets, the following is the acquired intangible assets:


	December 31,						Estimated
(in thousands)	2009			2008			Useful Life
Amortizable intangible assets:
Technology	$	843		$	843		5 years
Trademarks		48			48		5 years
Customer backlog		2,012			1,613		3-7 years
Non-competition agreement		349			349		2-3 years
	$	3,252			2,853
Accumulated amortization		(1,283	)		(795	)

	$	1,969		$	2,058


Unamortized intangible assets:
Goodwill	$	33,296		$	27,391

The goodwill relates to the Company’s clinical trials services segment. The Company has evaluated the goodwill and has determined that there is no impairment of the values at December 31, 2009. Amortization expense of intangible assets for the year ended December 31, 2009, 2008 and 2007 were $489,000, $382,000 and $283,000, respectively.

Future amortization of the intangible assets is as follows:


	Year Ending
(in thousands)	December 31, 2009
2010	$	556
2011		513
2012		424
2013		227
2014		199
Thereafter		50

	$	1,969

The following table details the changes in the carrying amount of goodwill:


(in thousands)	2009			2008
Balance at the beginning of year	$	27,391		$	6,025
Acquisition of businesses		5,905			21,366
Changes to goodwill due to tax contingencies		(363	)		—

Balance at end of year	$	32,933		$	27,391

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Accrued Expenses

Accrued expenses and other current liabilities at December 31, 2009 and 2008 consist of the following:


	December 31,
(in thousands)	2009		2008
Accrued compensation		2,797	$	3,351
Accrued consulting fees		255		88
Accrued other		1,082		1,797

		4,134	$	5,236

7. Capital Lease Obligations

Capital lease obligations at December 31, 2008 consisted of equipment lease obligations. The equipment lease obligations were payable in monthly installments ranging from $2,000 to $3,000. Interest rates ranged from 7.71% to 8.71%, and were collateralized by the related equipment. In December 2009, the Company paid the balance of the outstanding equipment lease obligations. There are no capital lease obligations outstanding at December 31, 2009.

8. Stock Based Compensation

We account for stock based compensation plans under the provisions of FASB ASC 718 Compensation – Stock Compensation (“FASB ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors. The stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the requisite service period of the entire award. This period is generally the vesting period of the corresponding award. We have adopted the forfeiture rate on stock option grants issued after January 1, 2006 and the application of the forfeiture rate on unvested stock options at January 1, 2006 was immaterial to our financial statement.

At December 31, 2009, the Company has one stock-based employee compensation plan. The compensation cost that has been recorded to income under the plan for the year ended December 31, 2009 was $790,000, of which $479,000 is a result of the expensing of stock options pursuant to FASB ASC 718, $285,000 is a result of expensing restricted stock units issued to our Board of Directors and $26,000 is a result of expensing a potential stock award to our President and Chief Executive Officer. For the year ended December 31, 2008, the compensation cost that has been recorded to income under the plan was $649,000, of which $315,000 is a result of expensing stock options pursuant to FASB ASC 718, $240,000 is a result of expensing restricted stock units issued to our Board of Directors and $94,000 is a result of expensing a potential stock award to our President and Chief Executive Officer.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the total stock-based compensation expense resulting from stock options and restricted stock unit awards:


	For the year		For the year		For the year
	ended		ended		ended
	December 31,		December 31,		December 31,
(in thousands)	2009		2008		2007
Cost of revenues	$	598	$	386	$	335
General and administrative		81		94		66
Sales and marketing		81		83		73

Stock-based compensation expense before income taxes	$	760	$	563	$	474

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


	2009			2008			2007
Risk-free interest rate (range)		2.06-2.33	%		2.29-2.63	%		4.13-4.48	%
Dividend yield		0.00	%		0.00	%		0.00	%
Expected volatility		61.00	%		55.00-56.00	%		56.00	%
Expected term (in years)		5.00			4.00-5.00			4.00-5.00

Expected Volatility. Expected volatility is calculated on a weekly basis over the expected term of the option using the Company’s common stock close price.

Expected Term. The expected term is based on historical observations of employee exercise patterns during our history.

Risk-Free Interest Rate. The interest rate used in valuing awards is based on the yield at the time of grant of a U.S. Treasury security with an equivalent remaining term.

Dividend Yield. The Company has never paid cash dividends, and does not currently intend to pay cash dividends, and thus has assumed a 0% dividend yield.

Pre-Vesting Forfeitures. Estimates of pre-vesting option forfeitures are based on our experience. We used a 10% forfeiture rate assumption. We will adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Options

Fiscal 2009


						Weighted
				Weighted		Average
				Average		Remaining
(in thousands)				Exercise		Contractual		Aggregate
stock options	Shares			Price		Term		Intrinsic Value
Outstanding at December 31, 2008		1,718		$	4.58		4.39	$	1,467
Granted		298			3.06		6.16		349
Exercised		(38	)		0.81		—		130
Forfeited or expired		(112	)		6.62		—		0

Outstanding at December 31 ,2009		1,866		$	4.29		3.83	$	2,062

Unvested at December 31, 2009		562			5.56		5.48		277

Exercisable at December 31, 2009		1,304		$	3.74		3.11	$	1,785

Fiscal 2008


						Weighted
				Weighted		Average
				Average		Remaining
(in thousands)				Exercise		Contractual		Aggregate
stock options	Shares			Price		Term		Intrinsic Value
Outstanding at December 31, 2007		1,628		$	3.31		4.37	$	7,763
Granted		395			7.53		6.37		0
Exercised		(290	)		1.64		—		645
Forfeited or Expired		(15	)		1.80		—		27

Outstanding at December 31, 2008		1,718		$	4.58		4.39	$	1,467

Unvested at December 31, 2008		541			7.23		5.94	$	0

Exercisable at December 31, 2008		1,177		$	3.35		3.67	$	1,467

The weighted-average grant date fair value of options granted for the years ended December 31, 2009, 2008 and 2007 was $3.06, $7.53 and $8.02, respectively. Cash received from option exercises for the years ended 2009, 2008 and 2007 was $31,000, $386,000, and $301,000, respectively.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2009, there was $1.5 million of total unrecognized compensation cost related to nonvested stock options. That cost is expected to be recognized over a period of 4.25 years.

During 2002, the Company’s Board of Directors and stockholders approved the adoption of the BioClinica, Inc. Stock Incentive Plan (the “Plan”) and authorized the issuance of 950,000 shares of the Company’s common stock under the Plan. In May 2005, the Company’s Board of Directors and stockholders approved an amendment to the Plan and authorized the issuance of an additional 750,000 shares of the Company’s common stock under the plan. In May 2008, the Company’s Board of Directors and stockholders approved an amendment to the Plan and authorized the issuance of an additional 1,000,000 shares of the Company’s common stock under the plan. At December 31, 2009 we have 753,000 available shares to be issued from the Plan. On January 20, 2010, the Company’s Board of Director’s approved an amendment to the Plan to reflect the Company’s name change and to provide an exemption to the yearly grant limitation for new hires.

Each option is exercisable into one share of common stock. Options granted pursuant to the Plan may be qualified incentive stock options, as defined in the Internal Revenue Code, or nonqualified options. The exercise price of qualified incentive stock options may not be less than the fair market value of the Company’s Common Stock at the date of grant. The term of such stock options granted under the Plan shall not exceed ten years and the vesting schedule of such stock option grants varies from immediate vesting on date of grant to vesting over a period of up to five years.

The following table summarizes the transactions pursuant to the Plan for the three years ended December 31, 2009:


				Weighted Average
	Number of Shares			Option Grant Date Fair
(in thousands)	Underlying Options			Value
Non-vested at December 31, 2006		180		$	3.49
Granted		148		$	6.71
Vested		(100	)	$	3.73
Non-vested at December 31, 2007		228		$	5.47
Granted		395		$	6.70
Vested		(82	)	$	5.66
Non-vested at December 31, 2008		541		$	6.34
Granted		298		$	2.72
Vested		(277	)	$	4.03
Non-vested at December 31, 2009		562		$	5.56

1.3 million, 1.2 million and 1.6 million options are exercisable at December 31, 2009, 2008 and 2007, respectively, at a weighted average exercise price of $3.74, $3.35 and $2.79, respectively.

The intrinsic value of stock options exercised for the years ended December 31, 2009, 2008 and 2007 respectively, were $130,000, $586,000 and $2.3 million.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2009, by range of exercise prices, the number of shares represented by outstanding options with their weighted average exercise price and weighted average remaining contractual life, in years, and the number of shares represented by exercisable options with their weighted average exercise price are as follows:


Options Outstanding							Options Exercisable
Range of Exercise Prices	Number Outstanding (in thousands)			Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exerciable (in thousands)			Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

$0.66-$0.88		272	0.53 years		$	0.74		272	0.53 years		$	0.74
$1.00-$1.16		140	1.92 years		$	1.11		140	1.92 years		$	1.11
$1.28-$2.80		107	1.93 years		$	2.19		107	1.93 years		$	2.19
$3.05-$5.10		719	4.84 years		$	3.74		461	4.28 years		$	4.07
$6.97-$8.06		628	4.84 years		$	7.51		324	4.53 years		$	7.42

$0.63-$8.06		1,866	3.83 years		$	4.29		1,304	3.11 years		$	3.74

Restricted Stock Units: On March 4, 2009, we entered into an employment agreement with our President and Chief Executive Officer effective March 1, 2009 and expiring February 28, 2012. Pursuant to this employment agreement we granted him 40,000 restricted stock units that vests over three years and the underlying common stock will be issued, after the vesting period, and the earlier of: cessation of service; change in control; or seven years. Based on a fair value of $3.09 at March 4, 2009 we recorded stock compensation expense of $34,000 for the twelve months ended December 31, 2009.

On July 8, 2009 we granted to our Board of Directors 60,000 restricted stock units that vests monthly until May 2010 and the underlying common stock will be issued, after the vesting period, and the earlier of: cessation of service; change in control; or seven years. Based on a fair value of $3.62 at July 8, 2009 we recorded stock compensation expense of $118,000 for the twelve months ended December 31, 2009.

9. Commitments

The Company has entered into non-cancelable operating leases for office facilities which expire through November 2018.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum aggregate rental payments on the noncancelable portion of the lease are as follows:


	Year Ending
(in thousands)	December 31, 2009
2010	$	1,874
2011	$	2,179
2012	$	2,583
2013	$	2,503
2014	$	2,361
Thereafter	$	9,322

	$	20,822

Rent expense charged to operations for the year ended December 31, 2009, 2008 and 2007 was $3.3 million, $2.2 million and $1.8 million, respectively.

On March 4, 2009, the Company entered into an employment agreement with its President and Chief Executive Officer effective March 1, 2009 and expires on February 28, 2012. In addition, the Company has employment agreements with its Chief Financial Officer and the President of eClinical division. The Chief Financial Officer’s agreement expires February 24, 2011 and is renewable on an annual basis. The President of eClinical division’s agreement expires September 30, 2010 and is renewable on an annual basis. The aggregate amount due from January 1, 2010 through the expiration under these agreements was $1.3 million.

10. Employee Benefit Plan

The Company sponsors the BioClinica, Inc. Employees’ Savings Plan (the “401(k) Plan”), a defined contribution plan with a cash or deferred arrangement. Under the terms of the 401(k) Plan, eligible employees may elect to reduce their annual compensation up to the annual limit prescribed by the Internal Revenue Service. The Company may make discretionary matching contributions in cash, subject to plan limits. The Company made contributions of $283,000, $235,000 and $158,000 for the year ended December 31, 2009, 2008 and 2007, respectively.

11. Major Customers

No one client represented more than 10% of our service revenues for the year ended December 31, 2009 or 2008, while for the year ended December 31, 2007, one client, Hoffmann-La Roche, which encompassed 11 projects, accounted for 13.4%.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12. Income Taxes

The income tax provision from continuing operations consist of the following:


	For the year ended December 31,
(in thousands)	2009			2008		2007
Current:
Federal	$	1,040		$	2,027	$	546
State and local		356			136		504
Foreign		25			167		164

		1,421		$	2,330	$	1,214

Deferred:
Federal		317			730		458
State and local		(172	)		42		(172	)
Foreign		191			—		—
		336			772		286

Income tax provision from continuing operations	$	1,757		$	3,102	$	1,500

The Company’s reconciliation of the expected federal provision rate to the effective income tax rate from continuing operations is as follows:


	For the year ended December 31,
	2009			2008			2007
Tax provision at statutory rate		34.0	%		34.0	%		34.0	%
State and local income taxes, net of federal benefit		4.1	%		2.8	%		5.7	%
Permanent differences		0.6	%		0.4	%		0.6	%
Foreign rate difference		(0.9	)%		(0.5	)%		(1.0	)%
Other		(0.5	)%		(1.9	)%		(0.2	)%

Effective income tax rate from continuing operations		37.3	%		34.8	%		39.1	%

The Company’s domestic and foreign income before income tax from continuing operations is as follows:


	For the year ended December 31,
(in thousands)	2009		2008		2007
Domestic income before income tax	$	4,080	$	8,290	$	4,891
Foreign income before income tax.		636		612		600

Total income before income tax from continuing operations	$	4,716	$	8,902	$	5,491

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of net deferred tax assets consist of the following:


	For the year ended December 31,
(in thousands)	2009			2008
Deferred tax assets:
Accrued expenses	$	104		$	47
Allowance for doubtful accounts		4			4
Deferred revenue		2,952			3,212
Net operating loss carryforwards		317			580
Restricted stock		279			183
Stock options		429			254
Amortization of acquisition costs		—			—
Impairment of assets		—			723

Total deferred tax assets		4,085		$	5,003


Deferred tax liabilities:
Excess of tax over book depreciation		(1,126	)		(1,653	)
Amortization of acquisition costs		(358	)		(479	)
Prepaid expenses		(398	)		(340	)

Total deferred tax liabilities.		(1,882	)		(2,472	)


Valuation allowance		—			(374	)


Net deferred tax assets	$	2,203		$	2,157

The Company records a valuation allowance to reduce its deferred tax assets to an amount that is more likely than not to be realized. In assessing the need for the valuation allowance, the Company considers future taxable income and on-going prudent and feasible tax planning strategies. In the event that the Company was to determine that, in the future, they would be able to realize the deferred tax assets in excess of its net recorded amount, an adjustment to the deferred tax asset would be made, thereby increasing net income in the period such determination was made. Likewise, should the Company determine that it is more likely than not that it will be unable to realize all or part of the net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged, thereby decreasing net income in the period such determination was made.

As of December 31, 2008 the Company had $1.3 million in accumulated tax losses in the United States, which included allowable deductions related to exercised employee stock options, generating federal and state net operating loss (NOL) credit carryforwards. Under limitations imposed by Internal Revenue Code Section 382, certain potential changes in ownership of the Company, which may be outside the Company’s knowledge or control, may restrict future utilization of these carryforwards. Due to such ownership changes that have occurred in prior years, the Company estimated that $1.1 million of the federal net operating loss would likely expire unused, in the years 2010 through 2022, due to Internal Revenue Code Section 382 limitations. The Company has foreign NOL carryforwards from its French subsidiary of $575,000 as of December 31, 2009 and $717,000 as of December 31, 2008. GAAP requires that the Company establish a valuation allowance for any portion of its deferred tax assets for which

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

management believes that it is more likely than not the Company will be unable to utilize the asset to offset future taxes. The Company will continue to evaluate the potential use of its deferred tax assets and the need for a valuation allowance by considering future taxable income and on-going prudent and feasible tax planning strategies. Subsequent revisions to the estimated realizable value of the deferred tax assets could cause the provision for income taxes to vary significantly from period to period, although the cash tax payments would remain unaffected until the NOL credit carryforward is fully utilized or has expired. Our deferred tax assets are primarily comprised of the temporary book to tax differences related to deferred revenue.

The tax benefit of the stock option deductions have been recorded to additional paid-in capital in the amount of $44,000 and $290,000 for the year ended December 31, 2009 and 2008, respectively.

The Company recognizes contingent liabilities for any tax related exposures when those exposures are more likely than not to occur.

The Company has not provided for U.S. federal income and foreign withholding taxes on approximately $1.8 million of undistributed earnings from its non-U.S. operations as of December 31, 2009 because such earnings are intended to be reinvested indefinitely outside of the United States.

On January 1, 2007, we adopted FASB ASC 740 Income Taxes (FASB ASC 740). FASB ASC 740 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements.

Historically, our tax provision for financial statement purposes and the actual tax returns have been prepared using consistent methodologies. There were no material unrecognized tax benefits as of December 31, 2006. Accordingly, the adoption did not have a material impact on the financial statements. We do not expect the unrecognized tax benefit to materially change during the next 12 months. Any interest and penalties incurred on settlements of outstanding tax positions would be recorded as a component of tax expense. We file our tax returns as prescribed by the tax laws of the jurisdictions in which we operate. Our federal tax returns for years 2005 through 2008 are subject to examination. We are currently under a routine IRS examination of our 2007 tax return year. Our state taxes for years 2000 through 2008 are subject to examination. Our foreign taxes for years 2002 through 2008 are subject to examination by the respective authorities.

13. Foreign Operations

Foreign customers accounted for 29% and 28% of service revenues for the year ended December 31, 2009 and 2008, respectively.

The Company maintains offices in Newtown and Audobon, Pennsylvania, Leiden, the Netherlands and Lyon, France. Net fixed assets located in Newtown, Pennsylvania were $2.7 million and $4.4 million at December 31, 2009 and 2008, respectively. Net fixed assets located in King of Prussia, Pennsylvania were $1.8 million and $1.1 million at December 31, 2009 and 2008, respectively. Net fixed assets located in Leiden, the Netherlands, were $1.2 million and $1.3 million at December 31, 2009 and 2008, respectively. Net fixed assets located in Lyon, France were $714,000 and $722,000 at December 31, 2009 and 2008, respectively.

BIOCLINICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. Related Party Transactions

At December 31, 2009, Covance, Inc. owned 16.4% of the Company’s outstanding Common Shares. The Company and Covance, Inc. have entered into various services agreements, for Covance’s clients that sponsor clinical trials, in the ordinary course of business. The Company’s service revenues from Covance, Inc. include $446,000, $1.7 million and $1.2 million for the year ended December 31, 2009, 2008 and 2007, respectively. At December 31, 2009 and 2008, the amounts due from Covance, Inc. were $82,000 and $122,000, respectively as reported in accounts receivable.

15. Subsequent Events

On March 25, 2010, the Company acquired substantially all of the assets of privately held TranSenda International, LLC (“TranSenda”). Headquartered in Bellevue, WA, TranSenda is a provider of clinical trial management software (CTMS) solutions. TranSenda’s suite of web-based, Office-Smart CTMS solutions create efficiencies for trial operations through interoperability with Microsoft Office tools. With this acquisition, BioClinica enhances its ability to serve customers throughout the clinical research process with technologies that include improved efficiencies by reducing study durations and costs through integrated operational management. The Acquisition was made pursuant to an Asset Purchase Agreement, dated March 25, 2010, by and between the Company and TranSenda (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, the Company purchased and acquired from TranSenda all right, title and interest of TranSenda in and to the Purchased Assets (as defined in the Purchase Agreement) and assumed the Assumed Liabilities (as defined in the Purchase Agreement) of TranSenda.

As consideration for the Purchased Assets and Assumed Liabilities, the Company paid Five Hundred Seventy-Seven Thousand Nine Hundred Sixty (577,960) shares of common stock, par value $0.00025 per share, of the Company, valued at a volume weighted average price per share equal to $4.325560, and subject to a post-closing adjustment based on the Final Closing Net Working Capital (as defined in the Purchase Agreement). Pursuant to the terms of the Purchase Agreement, fifteen percent (15%) of the aggregate consideration is to be held in escrow to cover any potential indemnification claims under the Purchase Agreement for a period of twelve (12) months following the Closing Date (as defined in the Purchase Agreement). As part of the Purchase Agreement, TranSenda agreed not to directly or indirectly offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of the Company’s common stock received pursuant to the Purchase Agreement for a period beginning on the date the Purchase Agreement was executed and continuing to and including the date twelve (12) months after such date.


Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.


Item 9A(T).		Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. We evaluated, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (“Exchange Act”), as amended) as of December 31, 2009, the end of the period covered by this report on Form 10-K. Based on this evaluation, our President and Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal accounting and financial officer) have concluded that our disclosure controls and procedures were effective at December 31, 2009. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and were operating in an effective manner for the period covered by this report, and (ii) is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act and is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to:

	•		Provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

	•		Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and

	•		Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2009. In making this assessment, the company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on its evaluation, our management has concluded that, as of December 31, 2009, our internal control over financial reporting was effective.

This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

Changes in internal control over financial reporting There was no change in our internal controls over financial reporting that occurred during the year ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


Item 9B.		Other Information.

None.

PART III


Item 10.		Directors, Executive Officers and Corporate Governance.

The information relating to our directors, nominees for election as directors and executive officers under the headings “Election of Directors” and “Executive Officers” in our definitive proxy statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement.

We have adopted a written code of business conduct and ethics that applies to our principal executive officer and principal financial and accounting officer, or persons performing similar functions. We intend to disclose any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to rules of the SEC and the NASDAQ Global Market by filing such amendment or waiver with the SEC.


Item 11.		Executive Compensation.

The discussion under the heading “Executive Compensation” in our definitive proxy statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement.


Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The discussion under the heading “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement.


Item 13.		Certain Relationships and Related Transactions, and Director Independence.

The discussion under the headings “Certain Relationships and Related Transactions” and “Election of Directors” in our definitive proxy statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement.


Item 14.		Principal Accounting Fees and Services.

The discussion under the heading “Independent Registered Public Accounting Firm Fees and Other Matters” in our definitive proxy statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement.


Item 15.		Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements. The financial statements filed as part of this report are listed on the Index to the Consolidated Financial Statements.

(a)(2) Financial Statement Schedules. Schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

(a)(3) Exhibits. Reference is made to the Exhibit Index. The exhibits are included, or

incorporated by reference, in the Annual Report on Form 10-K and are numbered in accordance with Item 601 of Regulation S-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 30th day of March, 2010.


	BIOCLINICA, INC.
	By:	/s/ Mark L. Weinstein
		Mark L. Weinstein, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Mark L. Weinstein Mark L. Weinstein	President and Chief Executive Officer and Director (principal executive officer)	March 30, 2010

/s/ Ted I. Kaminer Ted I. Kaminer	Executive Vice President of Finance and Administration and Chief Financial Officer (principal financial and accounting officer)	March 30, 2010

/s/ Jeffrey H. Berg, Ph.D. Jeffrey H. Berg, Ph.D.	Director	March 30, 2010

/s/ Richard F. Cimino Richard F. Cimino	Director	March 30, 2010

/s/ E. Martin Davidoff, CPA, Esq. E. Martin Davidoff, CPA, Esq.	Director	March 30, 2010

/s/ David E. Nowicki, D.M.D. David E. Nowicki, D.M.D.	Chairman of the Board and Director	March 30, 2010

/s/ Adeoye Y. Olukotun Adeoye Y. Olukotun, M.D., M.P.H., F.A.C.C., FAHA	Director	March 30, 2010

/s/ David Stack David Stack	Director	March 30, 2010

/s/ James A. Taylor, Ph.D. James A. Taylor, Ph.D.	Director	March 30, 2010

EXHIBIT INDEX


Exhibit
No.		Description of Exhibit
2.1		Asset Purchase Agreement, dated as of September 15, 2009, by and among BioClinica, Inc., BioClinica Acquisition, Inc., and Tourtellotte Solutions, Inc. Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, dated September 18, 2009.

2.2**		Asset Purchase Agreement, dated January 6, 2009, by and between Bio-Imaging Technologies, Inc. and MBI Benefits, Inc. Incorporated by reference to Exhibit 2.3 of our Annual Report on Form 10-K for the year ended December 31, 2008.

2.3		Asset Purchase Agreement, dated March 25, 2010, by and between BioClinica, Inc. and TranSenda International LLC. Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K, dated March 26, 2010.

3.1		Restated Certificate of Incorporation of Bio-Imaging Technologies, Inc. Incorporated by reference to Exhibit 3.1 of our Registration Statement on Form S-1 (File Number 33-47471), which became effective on June 18, 1992. Amendments incorporated by reference to Exhibit 3.1 of our Annual Report on Form 10-K for the year ended September 30, 1993, Exhibit 3.1 of our Quarterly Report on Form 10-QSB for the quarter ended March 31, 1995 and Exhibit 3.1 of our Current Report on Form 8-K, dated July 8, 2009.

3.2		Amended and Restated Bylaws of BioClinica, Inc. Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K, dated November 23, 2009.

4.1		Specimen Common Stock Certificate. Incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-1 (File Number 33-47471), which became effective on June 18, 1992.

4.2		Registration Agreement, dated October 13, 1994, between Bio-Imaging Technologies, Inc. and Corning Pharmaceuticals Services Inc., now Covance Inc. Incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K, dated October 13, 1994.

4.3		Rights Agreement, dated as of July 20, 2009, between BioClinica, Inc. and Computershare Trust Company, N.A. Incorporated by reference to Exhibit 4.1 of our Current Report on form 8-K, dated July 20, 2009.

10.1*†		2002 Stock Incentive Plan, adopted by the stockholders of Bio-Imaging Technologies, Inc. on February 27, 2002, as amended and restated on April 14, 2005, as amended and restated on May 14, 2008, as amended and restated on January 20, 2010.

10.2*		401(k) Plan. Incorporated by reference to Exhibit 10.7 of our Registration Statement on Form S-1 (File Number 33-47471), which became effective on June 18, 1992.

10.3		Form of Employee’s Invention Assignment, Confidential Information and Non-Competition Agreement. Incorporated by reference to Exhibit 10.9 of our Annual Report on Form 10-K for the fiscal year ended September 30, 1992.

10.4		Stock Purchase Agreement, dated October 13, 1994, by and between Bio-Imaging Technologies, Inc. and Covance Inc. Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K dated October 13, 1994.

10.5*		Invention Assignment and Confidential Information Agreement, dated January 20, 2000, by and between Bio-Imaging Technologies, Inc. and Mark L. Weinstein. Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-QSB for the quarter ended December 31, 1999.


Exhibit
No.		Description of Exhibit
10.6*		Employment Agreement, dated March 4, 2009, by and between Bio-Imaging Technologies, Inc. and Mark L. Weinstein. Incorporated by reference to Exhibit 10.6 of our Annual Report on Form 10-K for fiscal year ended December 31, 2008.

10.7		Agreement of Lease by and between 826 Newtown Associates, L.P. and Bio-Imaging Technologies, Inc., dated December 1, 2008, such lease superseding and rendering null and void all previous leases related to the Premises at 826 and 828 Newtown-Yardley Road, Newtown, Pennsylvania. Incorporated by reference to Exhibit 10.7 of our Annual Report on Form 10K for fiscal year ended December 31, 2008.

10.8*†		Amended and Restated Employment Agreement, dated February 24, 2010, by and between BioClinica, Inc. and Ted I. Kaminer.

10.9*†		Form of Amended and Restated Executive Retention Agreement by and between BioClinica, Inc. and certain executive officers.

10.10*		Employment Agreement, dated September 19, 2008, by and between Bio-Imaging Technologies, Inc. and Peter Benton. Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.

21†		List of Subsidiaries of Registrant.

23.1†		Consent of PricewaterhouseCoopers LLP.

31.1†		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2†		Certification of principal financial and accounting officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†		Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.

32.2†		Certification of principal financial and accounting officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.


*		A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 13(a) of Form 10-K.

**		Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

†		Included herewith.

EX-10.1 2 w77909exv10w1.htm EX-10.1 exv10w1

Exhibit 10.1

BIOCLINICA, INC.
2002 STOCK INCENTIVE PLAN

AS AMENDED AND RESTATED EFFECTIVE MAY 11, 2005

AND AS SUBSEQUENTLY AMENDED AND RESTATED MAY 14, 2008 AND
JANUARY 20, 2010

ARTICLE ONE

GENERAL PROVISIONS

I. PURPOSE OF THE PLAN

The 2002 Stock Incentive Plan, as amended and restated (the “Plan”), is intended to promote the interests of BioClinica, Inc., a Delaware corporation, by providing eligible persons in the Corporation’s service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain in such service.

The Plan was amended and restated in its entirety in (i) 2005 and approved by the Corporation’s stockholders at the 2005 Annual Meeting held on May 11, 2005 (the “2005 Restatement”) and (ii) 2008 and approved by the Corporation’s stockholders at the 2008 Annual Meeting held on May 14, 2008 (the “2008 Restatement”). The purpose of this 2010 Amendment and Restatement (the “2010 Restatement”) is to effect the following changes to the 2008 Restatement, which do not require stockholder approval:

(i) change the name of the Corporation from Bio-Imaging Technologies, Inc. to BioClinica, Inc.; and

(ii) exempt grants of options to new Employees of the Corporation as inducement for their employment from the limitation on the maximum number of shares for which options may be granted in the aggregate under the Plan in any fiscal year pursuant to Article One, Section V.B. under the 2008 Restatement.

Capitalized terms shall have the meanings assigned to such terms in the attached Appendix.

II. STRUCTURE OF THE PLAN

The Plan shall consist of a Discretionary Grant Program under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of

Common Stock or be issued such shares pursuant to restricted stock or restricted stock unit awards.

III. ADMINISTRATION OF THE PLAN

A. The Compensation Committee shall have sole and exclusive authority to administer the Discretionary Grant Program with respect to Section 16 Insiders. Administration of the Discretionary Grant Program with respect to all other persons eligible to participate in that program may, at the Board’s discretion, be vested in the Compensation Committee or a Secondary Board Committee, or the Board may retain the power to administer the program with respect to all such persons. However, any discretionary option grants or other awards for members of the Compensation Committee must be authorized by a disinterested majority of the Board.

B. Members of the Compensation Committee or any Secondary Board Committee shall serve for such period of time as the Board may determine and may be removed by the Board at any time. The Board may also at any time terminate the functions of any Secondary Board Committee and reassume all powers and authority previously delegated to such committee.

C. Each Plan Administrator shall, within the scope of its administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Grant Program and to make such determinations under, and issue such interpretations of, the provisions of that program and any outstanding options or other awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Grant Program under its jurisdiction or any stock option or other award thereunder.

D. Service as a Plan Administrator by the members of the Compensation Committee or the Secondary Board Committee shall constitute service as Board members, and the members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No member of the Compensation Committee or the Secondary Board Committee shall be liable for any act or omission made in good faith with respect to the Plan or any option grant or other award thereunder.

IV. ELIGIBILITY

A. The persons eligible to participate in the Discretionary Grant Program are as follows:

(i) Employees,

(ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary, and

(iii) consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).

B. The Plan Administrator shall have full authority to determine, with respect to the grant of options or other awards under the Discretionary Grant Program, which eligible persons are to receive such grants or awards, the time or times when those grants or awards are to be made, the number of shares to be covered by each such grant or award, the time or times when any granted option is to become exercisable, the vesting schedule (if any) applicable to each grant or award, the maximum term for which a granted option is to remain outstanding and the status of that option as either an Incentive Option or a Non-Statutory Option.

C. To the extent permitted by applicable law, the Board may delegate to one or more executive officers of the Corporation the power to grant stock options under the Plan to one or more Employees and to exercise such other powers under the Plan as the Board may determine; provided, however, that, the Board shall fix the terms of the option grants to be made by such executive officers (including the exercise price of any awarded stock options, which may include a formula by which such exercise price is to be determined, the applicable vesting schedules and the maximum option term) and the maximum number of shares for which stock options may be granted by such executive officers. In no event, however, shall any executive officer be authorized to make option grants to any Section 16 Insider.

V. STOCK SUBJECT TO THE PLAN

A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Corporation on the open market. The number of shares of Common Stock reserved for issuance over the remaining term of the Plan shall be limited to two million six hundred thirty eight thousand two hundred and eight (2,638,208) shares. Such share reserve is comprised of (i) the number of shares of Common Stock which remained available for issuance under the Plan on the May 11, 2005 effective date of the 2005 Restatement, including the portion of those shares subject to options outstanding under the Plan on that date, plus (ii) an additional 1,000,000-share increase which was approved by the Corporation’s stockholders at the 2008 Annual Meeting. All options or other awards outstanding under the Plan on the 2010 Restatement Effective Date shall continue in full force and effect in accordance with their terms, and no provision of this 2010 Restatement shall be deemed to affect or otherwise modify the rights or obligations of the holders of those options or awards with respect to their acquisition of shares of Common Stock thereunder.

B. The maximum number of shares for which options may be granted in the aggregate in any fiscal year of the Corporation shall be limited to three percent (3%) of (i) the total number of shares of Common Stock actually outstanding at the start of that fiscal year plus (ii) any additional shares of Common Stock newly issued in that year as a result of new equity investments in the Corporation (including exercises of outstanding options under the Plan) or the

Corporation’s acquisitions of other companies or enterprises for consideration payable in Common Stock; provided, however, any grants made by the Corporation to new Employees as inducement for their employment shall not be considered in calculating the number of shares remaining for which options may be granted by the Corporation for that fiscal year.

C. The maximum number of shares of Common Stock for which any one person may be granted restricted stock or restricted unit awards under the Plan in any calendar year shall be limited to fifty thousand (50,000) shares. Such restricted stock or restricted stock unit awards shall vest upon the attainment of designated performance goals or the satisfaction of specified Service requirements.

D. No one person may receive stock options or other awards under the Plan for more than two hundred thousand (200,000) shares of Common Stock in the aggregate per calendar year.

E. Shares of Common Stock subject to outstanding options or other awards made under the Plan shall be available for subsequent grant under the Plan to the extent those options or awards expire or terminate for any reason prior to the issuance of the shares of Common Stock subject to those options or awards. Unvested shares issued under the Plan and subsequently forfeited or repurchased by the Corporation, at a price per share not greater than the original issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for subsequent reissuance. Should the exercise price of an option under the Plan be paid with shares of Common Stock, then the authorized reserve of Common Stock under the Plan shall be reduced by the gross number of shares for which that option is exercised, and not by the net number of shares issued under the exercised stock option. If shares of Common Stock otherwise issuable under the Plan are withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with the exercise of an option or the vesting or issuance of shares under Plan, then the number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross number of shares issuable under the exercised stock option or the total number of shares vesting or issued, calculated in each instance prior to any such share withholding.

F. If any change is made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, or should the value of outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, then the Compensation Committee shall make equitable adjustments to: (i) the maximum number and/or class of securities issuable under the Plan; (ii) the maximum number and/or class of securities for which any one person may be granted stock options or other awards in the aggregate under the Plan per calendar year, (iii) the maximum number and/or class of securities for which any one person be awarded restricted stock or restricted stock units under the Plan per calendar year, (iv) the number and/or class of securities and the exercise price per share

in effect under each outstanding option and (v) the number and/or class of securities subject to each outstanding restricted stock unit or other stock-based award under the Plan and the cash consideration (if any) payable per share. Such adjustments shall be made by the Compensation Committee in such manner as it deems appropriate, and the adjustments shall be final, binding and conclusive upon each person holding an option or other award under the Plan. The foregoing adjustment provisions shall govern all options and awards outstanding under the Plan on the 2010 Restatement Effective Date and all options and awards granted under the Plan thereafter; provided, however, that each Incentive Option outstanding under the Plan on the 2010 Restatement Plan Effective Date shall continue to be governed by the capital adjustment provisions of this Section V.F of Article One as in effect at the time that Incentive Option was granted.

G. Outstanding options or other awards granted pursuant to the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

ARTICLE TWO

DISCRETIONARY GRANT PROGRAM

I. OPTION TERMS

Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.

A. Exercise Price.

1. The exercise price per share shall be fixed by the Plan Administrator; provided, however, that such exercise price shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the grant date.

2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of the documents evidencing the option, be payable in one or more of the forms specified below:

(i) cash or check made payable to the Corporation,

(ii) shares of Common Stock held for the requisite period (if any) necessary to avoid any resulting charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or

(iii) to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide instructions to (a) a brokerage firm (reasonably satisfactory to the Corporation for purposes of administering such procedure in compliance with the Corporation’s pre-clearance/pre-notification policies) to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm on such settlement date in order to complete the sale.

Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.

B. Exercise and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option. However, no option granted under the 2005 Restatement shall have a term in excess of seven (7) years measured from the option grant date.

C. Effect of Termination of Service.

1. The following provisions shall govern the exercise of any options granted pursuant to the Discretionary Grant Program that are outstanding at the time of the Optionee’s cessation of Service or death:

(i) Any option outstanding at the time of the Optionee’s cessation of Service for any reason shall remain exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option, but no such option shall be exercisable after the expiration of the option term.

(ii) Any option held by the Optionee at the time of the Optionee’s death may, to the extent vested and exercisable at that time, be subsequently exercised by the personal representative of the Optionee’s estate or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or the laws of inheritance or by the Optionee’s designated beneficiary or beneficiaries of that option.

(iii) Should the Optionee’s Service be terminated for Misconduct or should the Optionee otherwise engage in Misconduct while holding one or more outstanding options granted under this Article Two, then all of those options shall terminate immediately and cease to be outstanding.

(iv) During the applicable post-Service exercise period, the option may not be exercised for more than the number of vested shares for which the option is at the time exercisable. No additional shares shall vest under the option following the Optionee’s cessation of Service, except to the extent (if any) specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written agreement with the Optionee. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any shares for which the option has not been exercised.

2. The Plan Administrator shall have complete discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to:

(i) extend the period of time for which the option is to remain exercisable following the Optionee’s cessation of Service from the limited exercise period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term,

(ii) include an automatic extension provision whereby the specified post-Service exercise period in effect for any option granted under this Article Two shall automatically be extended by an additional period of time equal in duration to any interval within the specified post-Service exercise period during which the exercise of that option or the immediate sale of the shares acquired under such option could not be effected in compliance with applicable federal and state securities laws, but in no event shall such an extension result in the continuation of such option beyond the expiration date of the term of that option, and/or

(iii) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares of Common Stock for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested had the Optionee continued in Service.

D. Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares. Notwithstanding the foregoing, in the event the outstanding shares of Common Stock are split by means of a stock dividend and the exercise price of and the number of shares subject to outstanding options under the Plan are to be adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an Optionee who exercises such an option between the record date and the distribution date for that stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon the exercise of such Option, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

E. Repurchase Rights. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while such shares are unvested, the Corporation shall have the right to repurchase any or all of those unvested shares at a price per share equal to the lower of (i) the exercise price paid per share or (ii) the Fair Market Value per share of Common Stock at the time of repurchase. The terms upon which such repurchase right shall be exercisable (including the

period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.

F. Transferability of Options. The transferability of options granted under the Plan shall be governed by the following provisions:

(i) Incentive Options: During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or the laws of inheritance following the Optionee’s death.

(ii) Non-Statutory Options. Non-Statutory Options shall be subject to the same limitation on transfer as Incentive Options, except that the Plan Administrator may structure one or more Non-Statutory Options so that the option may be assigned in whole or in part during the Optionee’s lifetime, by gift or pursuant to a domestic relations order, to one or more Family Members of the Optionee or to a trust established exclusively for one or more such Family Members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.

(iii) Beneficiary Designations. Notwithstanding the foregoing, the Optionee may designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Two (whether Incentive Options or Non-Statutory Options), and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee’s death.

II. INCENTIVE OPTIONS

The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Five shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II.

A. Eligibility. Incentive Options may only be granted to Employees.

B. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or

any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000).

To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, then for purposes of the foregoing limitations on the exercisability of those options as Incentive Options, such options shall be deemed to become first exercisable in that calendar year on the basis of the chronological order in which they were granted, except to the extent otherwise provided under applicable law or regulation.

C. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date, and the option term shall not exceed five (5) years measured from the option grant date.

III. CHANGE IN CONTROL

A. In the event of a Change in Control, each outstanding option under the Discretionary Grant Program shall automatically accelerate so that each such option shall, immediately prior to the effective date of that Change in Control, become exercisable as to all the shares of Common Stock at the time subject to such option and may be exercised as to any or all of those shares as fully vested shares of Common Stock. However, an outstanding option shall not become exercisable on such an accelerated basis if and to the extent: (i) such option is to be assumed by the successor corporation (or parent thereof) or is otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction or (ii) such option is to be replaced with a cash retention program of the successor corporation which preserves the spread existing at the time of the Change in Control on any shares as to which the option is not otherwise at that time exercisable and provides for subsequent vesting and payout of that spread in accordance with the same exercise/vesting schedule applicable to those shares or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator.

B. All outstanding repurchase rights under the Discretionary Grant Program shall automatically terminate, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of a Change in Control, except to the extent: (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) or are otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator.

C. Immediately following the consummation of the Change in Control, all outstanding options under the Discretionary Grant Program shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction.

D. Each option which is assumed in connection with a Change in Control or otherwise continued in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Change in Control had the option been exercised immediately prior to such Change in Control. Appropriate adjustments to reflect such Change in Control shall also be made to (i) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same, (ii) the maximum number and/or class of securities available for issuance over the remaining term of the Plan, (iii) the maximum number and/or class of securities for which any one person may be granted stock options and other awards in the aggregate under the Plan per calendar year and (iv) the maximum number and/or class of securities for which any one person be awarded restricted stock or restricted stock units under the Plan per calendar year. To the extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption or continuation of the outstanding options under the Discretionary Grant Program, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control transaction.

E. The Plan Administrator shall have the discretionary authority to structure one or more outstanding options under the Discretionary Grant Program so that those options shall, immediately prior to the effective date of a Change in Control, become exercisable as to all the shares of Common Stock at the time subject to those options and may be exercised as to any or all of those shares as fully vested shares of Common Stock, whether or not those options are to be assumed in the Change in Control transaction or otherwise continued in effect. In addition, the Plan Administrator shall have the discretionary authority to structure one or more of the Corporation’s repurchase rights under the Discretionary Grant Program so that those rights shall immediately terminate upon the consummation of the Change in Control transaction, and the shares subject to those terminated rights shall thereupon vest in full.

F. The Plan Administrator shall have full power and authority to structure one or more outstanding options under the Discretionary Grant Program so that those options shall become exercisable as to all the shares of Common Stock at the time subject to those options in the event the Optionee’s Service is subsequently terminated by reason of an Involuntary Termination within a designated period following the effective date of any Change in Control transaction in which those options do not otherwise fully accelerate. In addition, the Plan Administrator may structure one or more of the Corporation’s repurchase rights so that those rights shall immediately terminate with respect to any shares held by the Optionee at the time of such Involuntary Termination, and the shares subject to those terminated repurchase rights shall accordingly vest in full at that time.

G. The portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent

such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-statutory Option under the Federal tax laws.

IV. PROHIBITION ON REPRICING PROGRAMS

The Plan Administrator shall not (i) implement any cancellation/regrant program pursuant to which outstanding options under the Plan are cancelled and new options are granted in replacement with a lower exercise price per share, (ii) cancel outstanding options under the Plan with exercise prices per share in excess of the then current Fair Market Value per share of Common Stock for consideration payable in equity securities of the Corporation or (iii) otherwise directly reduce the exercise price in effect for outstanding options under the Plan, without in each such instance obtaining stockholder approval.

V. STOCK ISSUANCE TERMS

A. Shares of Common Stock may also be issued under the Discretionary Grant Program, either as vested or unvested shares, through direct and immediate issuances without any intervening option grants and without cash consideration payable for the shares. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below. Shares of Common Stock may also be issued pursuant to share right awards or restricted stock units which entitle the recipients to receive the shares underlying those awards or units upon the attainment of designated performance goals or the satisfaction of specified Service requirements or upon the expiration of a designated time period following the vesting of those awards or units. However, the maximum number of shares of Common Stock for which any one person may be granted restricted stock or restricted unit awards under the Plan in any calendar year shall be limited to fifty thousand (50,000) shares, subject to adjustment from time to time in accordance with Section V.F. of Article One. The terms and conditions of each such award or restricted stock unit, (including, without limitation, the applicable vesting schedule and vesting acceleration provisions) shall be determined by the Plan Administrator.

B. The Plan Administrator shall also have the discretionary authority, consistent with Code Section 162(m), to structure one or more restricted stock issuances or restricted stock unit awards so that the shares of Common Stock subject to those issuances or awards shall vest (or vest and become issuable) upon the achievement of certain pre-established corporate performance goals based on one or more of the following criteria: (1) return on total stockholder equity; (2) earnings per share of Common Stock; (3) net income or operating income (before or after taxes); (4) earnings before interest, taxes, depreciation and amortization; (5) earnings before interest, taxes, depreciation, amortization and charges for stock-based compensation, (6) sales or revenue targets; (7) return on assets, capital or investment; (8) cash flow; (9) market share; (10) cost reduction goals; (11) budget comparisons; (12) measures of customer satisfaction; (13) any combination of, or a specified increase in, any of the foregoing; (14) new product development or successful completion of research and development projects; and (15) the formation of joint ventures, research or development collaborations, or the completion of other corporate transactions intended to enhance the Corporation’s revenue or

profitability or enhance its customer base. In addition, such performance goals may be based upon the attainment of specified levels of the Corporation’s performance under one or more of the measures described above relative to the performance of other entities and may also be based on the performance of any of the Corporation’s business units or divisions or any Parent or Subsidiary. Performance goals may include a minimum threshold level of performance below which no award will be earned, levels of performance at which specified portions of an award will be earned and a maximum level of performance at which an award will be fully earned.

C. The recipient shall have full stockholder rights with respect to any shares of Common Stock issued to him or her under the Plan, whether or not the recipient’s interest in those shares is vested. Accordingly, such individual shall have the right to vote such shares and to receive any dividends paid on such shares, subject to any applicable vesting requirements. The recipient shall not have any stockholder rights with respect to the shares of Common Stock subject to a restricted stock unit until that unit vests and the shares of Common Stock are actually issued thereunder. However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom shares of Common Stock, on outstanding restricted stock unit or share right awards, subject to such terms and conditions as the Plan Administrator may deem appropriate.

D. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock or restricted stock units which would otherwise occur upon the cessation of the recipient’s Service or the non-attainment of the performance objectives applicable to those shares or units. Any such waiver shall result in the immediate vesting of the recipient’s interest in the shares of Common Stock or restricted stock units as to which the waiver applies. Such waiver may be effected at any time, whether before or after the recipient’s cessation of Service or the attainment or non-attainment of the applicable performance objectives. However, no vesting requirements tied to the attainment of performance objectives may be waived with respect to shares or units which were intended at the time of issuance to qualify as performance-based compensation under Code Section 162(m), except in connection with a Change in Control or, with respect to awards made prior to January 1, 2009, in the event of the recipient’s Involuntary Termination.

E. The Plan Administrator shall have full power and authority to structure one or more restricted stock or restricted stock unit awards under the Plan so that those awards shall vest, and all the underlying shares shall become immediately issuable, upon the effecitve date of a Change in Control transaction or in the event the individual’s Service is terminated by reason of an Involuntary Termination within a designated period following the effective date of the Change in Control transaction.

ARTICLE THREE

MISCELLANEOUS

I. TAX WITHHOLDING

A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of options or the vesting or issuance of shares under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.

B. The Plan Administrator may, in its discretion, provide one or more participants in the Plan with the right to use shares of Common Stock in satisfaction of all or part of the Withholding Taxes to which such participants may become subject in connection with the exercise of their options or the vesting or issuance of any shares acquired by them under the Plan. Such right may be provided to any such participant in either or both of the following formats:

Stock Withholding: The election to have the Corporation withhold, from the vested shares of Common Stock otherwise issuable upon the exercise of such Non-Statutory Option or upon the vesting or issuance of shares under the Plan, a portion of those shares with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by such person.

Stock Delivery: The election to deliver to the Corporation, at the time the Non-Statutory Option is exercised for vested shares or at the time any shares vest or are issued under the Plan vest, one or more shares of Common Stock previously acquired by such person (other than in connection with the option exercise or share vesting or issuance triggering the Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by such person.

II. SHARE ESCROW/LEGENDS

Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the recipient’s interest in such shares vests or may be issued directly to the recipient with restrictive legends on the certificates evidencing those unvested shares.

III. EFFECTIVE DATE AND TERM OF THE PLAN

A. This 2010 Restatement shall become effective on the 2010 Restatement Effective Date.

B. Each option or other award outstanding under the Plan immediately prior to the 2010 Restatement Effective Date shall continue to be governed solely by the terms of the documents evidencing such option or award, and no provision of the 2010 Restatement shall be deemed to affect or otherwise modify the rights or obligations of the holders of such options or awards with respect to their acquisition of shares of Common Stock thereunder. However, one or more provisions of the 2010 Restatement may, in the Plan Administrator’s discretion, be extended to one or more of those options or awards that do not otherwise contain such provisions.

C. The Plan as hereby amended and restated shall terminate upon the earliest to occur of (i) January 13, 2012, (ii) the date on which all shares available for issuance under the Plan shall have been issued as fully vested shares or (iii) the termination of all outstanding options and repurchase rights in connection with a Change in Control. Should the Plan terminate on January 13, 2012, then all option grants and other awards outstanding at that time shall continue to have force and effect in accordance with the provisions of the documents evidencing such grants or awards.

IV. AMENDMENT OF THE PLAN

A. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects, except with regard to Article II, Section IV hereof. However, no such amendment or modification shall adversely affect the rights and obligations with respect to stock options or other awards at the time outstanding under the Plan unless the Optionee or other Plan participant consents to such amendment or modification. In addition, amendments to the Plan will be subject to stockholder approval to the extent required under applicable law or regulation or pursuant to the listing standards of the Stock Exchange on which the Common Stock is at the time primarily traded.

B. Options may be granted under the Discretionary Grant Program that in involve shares of Common Stock in excess of the number of shares then available for issuance under the Plan, provided no shares shall actually be issued pursuant to those grants until the number of shares of Common Stock available for issuance under the Plan is sufficiently increased by stockholder approval of an amendment of the Plan authorizing such increase. If stockholder approval is required and is not obtained within twelve (12) months after the date the first excess grant made against such contingent increase, then any options granted on the basis of such excess shares shall terminate and cease to be outstanding.

V. USE OF PROCEEDS

Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes.

VI. REGULATORY APPROVALS

A. The implementation of the Plan, the granting of any stock option under the Plan and the issuance of any shares of Common Stock under the Plan shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the stock options or other awards granted under it and the shares of Common Stock issued pursuant to it.

B. No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance with all applicable requirements of applicable securities laws, including the filing and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the Plan, and all applicable listing requirements of any Stock Exchange on which Common Stock is then listed for trading.

VII. NO EMPLOYMENT/SERVICE RIGHTS

Nothing in the Plan shall confer upon the Optionee or other Plan participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or other participant, which rights are hereby expressly reserved by each, to terminate such person’s Service at any time for any reason, with or without cause.

APPENDIX

The following definitions shall be in effect under the Plan:

A. Board shall mean the Corporation’s Board of Directors.

B. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

(i) a merger, consolidation or other reorganization approved by the Corporation’s stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately prior to such transaction,

(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets, or

(iii) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Corporation) becomes directly or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Corporation’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Corporation or the acquisition of outstanding securities held by one or more of the Corporation’s existing stockholders.

C. Code shall mean the Internal Revenue Code of 1986, as amended.

D. Common Stock shall mean the Corporation’s common stock.

E. Compensation Committee shall mean the Compensation Committee of the Board comprised of two (2) or more non-employee Board members.

A-1.

F. Corporation shall mean BioClinica, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of BioClinica, Inc. which has by appropriate action assumed the Plan.

G. Discretionary Grant Program shall mean the discretionary grant program in effect under Article Two of the Plan pursuant to which stock options and other awards may be granted to one or more eligible individuals.

H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

I. Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise.

J. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time traded on the Nasdaq Global Market, then the Fair Market Value shall be the closing selling price per share of Common Stock at the close of regular hours trading (i.e., before after- hours trading begins) on such Stock Exchange on the date in question, as such price is reported by the National Association of Securities Dealers. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

K. Family Member means, with respect to a particular Optionee or other Plan participant, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.

L. Incentive Option shall mean an option which satisfies the requirements of Code Section 422.

A-2.

M. Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of:

(i) such individual’s involuntary dismissal or discharge by the Corporation (or any Parent or Subsidiary) for reasons other than Misconduct, or

(ii) such individual’s voluntary resignation following (A) a change in his or her position with the Corporation (or any Parent or Subsidiary) which materially reduces his or her duties and responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual’s place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Corporation (or any Parent or Subsidiary) without the individual’s consent.

N. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct.

O. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

P. Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422.

Q. Optionee shall mean any person to whom an option is granted under the Discretionary Grant Program.

R. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

S. Permanent Disability or Permanently Disabled shall mean the inability of the Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.

A-3.

T. Plan shall mean the Corporation’s 2002 Stock Incentive Plan, as amended and restated in this document.

U. Plan Administrator shall mean the particular entity, whether the Compensation Committee, the Board or the Secondary Board Committee, which is authorized to administer the Discretionary Grant Program with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under that program with respect to the persons under its jurisdiction.

V. 2010 Restatement shall mean the January 20, 2010 amendment and restatement of the Plan which effects the changes set forth in this document.

W. 2010 Restatement Effective Date shall mean January 20, 2010.

X. Secondary Board Committee shall mean a committee of one or more Board members appointed by the Board to administer the Discretionary Grant Program with respect to eligible persons other than Section 16 Insiders.

Y. Section 16 Insider shall mean an officer or director of the Corporation subject to the short-swing profit liabilities of Section 16 of the 1934 Act.

Z. Service shall mean the performance of services for the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established) by a person in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance. For purposes of the Plan, a person shall be deemed to cease Service immediately upon the occurrence of the either of the following events: (i) the person no longer performs services in any of the foregoing capacities for the Corporation or any Parent or Subsidiary or (ii) the entity for which the person is performing such services ceases to remain a Parent or Subsidiary of the Corporation, even though such person may subsequently continue to perform services for that entity. Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that should such leave of absence exceed three (3) months, then for purposes of determining the period within which an Incentive Option may be exercised as such under the federal tax laws, the Optionee’s Service shall be deemed to cease on the first day immediately following the expiration of such three (3)-month period, unless Optionee is provided with the right to return to Service following such leave either by statute or by written contract. Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or the Corporation’s written policy governing leaves of absence, no Service credit shall be given for vesting purposes for any period the person is on a leave of absence.

AA. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

A-4.

BB. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

CC. 10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).

DD. Withholding Taxes shall mean the applicable income and employment withholding taxes to which the holder of an option or shares of Common Stock under the Plan may become subject in connection with the grant or exercise of those options or the vesting or issuance of those shares.

A-5.

EX-10.8 3 w77909exv10w8.htm EX-10.8 exv10w8

Exhibit 10.8

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Restated Agreement”), made as of this 24th day of February, 2010, is entered into by BioClinica, Inc., a Delaware corporation (the “Company”), and Ted Kaminer (the “Employee”).

WHEREAS, the Employee is currently a party to an employment agreement with the Company dated as of February 6, 2003, as amended and restated on December 31 , 2008 (the “Prior Employment Agreement”);

WHEREAS, the Company desires to continue to employ the Employee, and the Employee desires to continue to be employed by the Company; and

WHEREAS, the Company and the Employee desire to amend and restate the terms and conditions of the Prior Agreement in order to clarify the parties understandings regarding treatment of the Employee’s equity awards upon a Change in Control (as defined below).

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Restated Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties to this Restated Agreement, the parties agree as follows:

1. Term of Employment. The Company hereby agrees to employ the Employee, and the Employee hereby accepts employment with the Company, upon the terms set forth in this Restated Agreement, for the period commencing on February 24, 2010 and ending on February 24, 2011 (such period, as it may be extended, the “Employment Period”), unless sooner terminated in accordance with the provisions of Section 4; provided, however, that the Employment Period shall automatically renew for successive 12 month terms unless either party provides the notice of termination set forth in Section 4.5 below.

2. Title; Capacity. The Employee shall serve as Executive Vice President of Finance and Administration and Chief Financial Officer or in such other reasonably comparable position as the Company or its Board of Directors (the “Board”) may determine from time to time. The Employee shall be based at the Company’s headquarters in Newtown, Pennsylvania, or such place or places in the continental United States as the Board shall reasonably determine. The Employee shall be subject to the supervision of, and shall have such authority as is delegated to the Employee by, the Board, President or Chief Executive Officer of the Company.

The Employee hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the Board or its designee shall from time to time reasonably assign to the Employee. The Employee agrees to devote his entire business time, attention and energies to the business and interests of the Company during the Employment Period; provided, that, the Employee may serve as a non-executive director or trustee of other companies or entities so long as such service does not unreasonably interfere with the Employee’s duties hereunder. The Employee agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company. The Employee further agrees to abide by the applicable rules, practices, policies, restrictions and principles

outlined by the Board in its Corporate Policy Governance Manual and amendments adopted thereto.

3. Compensation and Benefits.

3.1 Salary. The Company shall pay the Employee, in periodic installments in accordance with the Company’s customary payroll practices, an annual base salary of $270,000 effective February 24, 2010.

3.2 Fringe Benefits. The Employee shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes available to its senior executives, if any, to the extent that Employee’s position, tenure, salary, age, health and other qualifications make him eligible to participate. The Employee shall be entitled to four (4) weeks paid vacation per year, to be taken at such times as may be approved by the Chief Executive Officer.

3.3 Reimbursement of Expenses. The Company shall reimburse the Employee for all reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection with, or related to, the performance of his duties, responsibilities or services under this Restated Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the Company or the Board from time to time. The Employee must submit to the Company receipts and other details of each such expense, in the form required by the Company within sixty (60) days after the later of (i) the Employee’s incurrence of such expense or (ii) the Employee’s receipt of the invoice for such expense. If such expense qualifies for reimbursement, then the Company will reimburse the Employee the expense within thirty (30) days thereafter. In no event will such expense be reimbursed after the close of the calendar year following the calendar year in which that expense is incurred. The amount of reimbursements to which the Employee may become entitled in any one calendar year shall not affect the amount of expenses eligible for reimbursement hereunder in any other calendar year. The Employee’s right to reimbursement cannot be liquidated or exchanged for any other benefit or payment.

3.4 Bonuses; Incentive Compensation. The Employee shall be eligible to receive an annual bonus (the “MIP Bonus”) up to a maximum amount equal to 45% of the Employee’s annual base salary upon the achievement of certain milestones as set forth in an annual Management Incentive Plan. Additional milestones may be established to increase the MIP Bonus to a maximum amount equal to 90% of the Employee’s annual base salary. The specific annual milestones will be set each year by the Compensation Committee of the Board of Directors. Any MIP Bonus awarded to the Employee shall be paid by the 15th day of the third month following the close of the calendar year for which such bonus is earned or as soon as administratively practicable thereafter, but in no event shall such payment be made prior to the first business day in January in the calendar year immediately following the calendar year for which that bonus is earned or after April 30 of that calendar year.

3.5 Equity Grants. In addition to the stock options previously granted to the Employee, the Employee shall be eligible for periodic grants of stock options or other equity awards under the Company’s equity award program, subject to the Employee’s continued employment hereunder. The term, exercise price (if applicable), vesting period, any post-employment provisions (including post-employment exercise periods) and the remaining

provisions of each stock option or other equity award granted pursuant to this Section 3.5 shall, subject to the express provisions of this Restated Agreement, be determined by the Board (or committee thereof) at the time of grant.

4. Termination of Employment Period. The employment of the Employee by the Company pursuant to this Restated Agreement shall terminate upon the occurrence of any of the following:

4.1 Expiration of the Employment Period;

4.2 At the election of the Company, for Cause (as defined below), immediately upon written notice by the Company to the Employee, which notice shall identify the Cause upon which the termination is based. For the purposes of this Section 4.2, “Cause” shall mean that (i) the Employee has repeatedly failed to perform his assigned duties for the Company after 10 days written notice and an opportunity to cure, (ii) the Employee has engaged in dishonesty, gross negligence or misconduct materially detrimental to the Company’s interest, or (iii) the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude or any felony;

4.3 At the election of the Employee, for Good Reason (as defined below), immediately upon written notice by the Employee to the Company, which notice shall identify the Good Reason upon which the termination is based. For the purposes of this Section 4.3, “Good Reason” for termination shall mean (i) a material adverse change in the Employee’s authority, duties or compensation without the prior written consent of the Employee, (ii) a material breach by the Company of the terms of this Restated Agreement, which breach is not remedied by the Company within 10 days following written notice from the Employee to the Company notifying it of such breach or (iii) the relocation of the Employee’s place of work more than 50 miles from the Company’s current executive offices;

4.4 Upon the death or disability of the Employee. As used in this Restated Agreement, the term “disability” shall mean the inability of the Employee, due to a physical or mental disability, for a period of 90 days, whether or not consecutive, during any 360-day period, to perform the services contemplated under this Restated Agreement, with or without reasonable accommodation as that term is defined under state or federal law. A determination of disability shall be made by a physician satisfactory to both the Employee and the Company; provided, that, if the Employee and the Company do not agree on a physician, the Employee and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties; or

4.5 At the election of either party, upon not less than 180 days’ prior written notice of termination (the “Termination Notice Period”); provided, however, that if the Company pays the severance amount set forth in Section 5.1(b) below, then the Termination Notice Period shall automatically end on the date the Severance Period (as defined below) begins.

5. Effect of Termination.

5.1 Payments Upon Termination.

(a) In the event the Employee’s employment is terminated pursuant to Section 4.1, Section 4.2, and Section 4.4 or by the Employee pursuant to Section 4.5, the Company shall pay to the Employee the compensation and benefits otherwise payable to him under Section 3 through the last day of his actual employment by the Company.

(b) In the event the Employee’s employment is terminated by the Employee pursuant to Section 4.3 or by the Company pursuant to Section 4.5, the Employee shall be entitled to the following payments and benefits, provided the Employee executes a mutual general release and waiver in a form reasonably satisfactory to the Board (the “Release”) within 21 days (or 45 days if such longer period is required under law) and such Release becomes effective and enforceable in accordance with applicable law after the expiration of any applicable revocation period:

(A) The Company shall continue to pay to the Employee his salary as in effect on the date of termination for a period of 180 days (the “Severance Period”). Such salary continuation payments shall be made at periodic intervals in accordance with the Company’s normal payment practices for salaried employees, beginning with the first pay date within the 60-day period following the Employee’s Separation from Service due to such termination on which the requisite Release is effective following the expiration of any applicable revocation period, but in no event will the first such payment be made later than the last day of such 60-day period on which the Release is so effective.

(B) The Company shall pay a pro rata amount of the Employee’s target annual bonus for the year of termination with such pro rata amount based on the sum of (1) the number of days of service completed in the year of termination, plus (2) the Severance Period, to be paid within the 60-day period following the Employee’s Separation from Service due to such termination on which the requisite Release is effective following the expiration of any applicable revocation period, but in no event will the first such payment be made later than the last day of such 60-day period on which the Release is so effective.

(C) Should the Employee elect under the Internal Revenue Code of 1986, as amended (the “Code”), Section 4980B to continue health care coverage under the Company’s group health plan for himself, his spouse and his eligible dependents following such termination date, then the Company shall provide such continued health care coverage at the Company’s expense until the earlier of (i) the expiration of the 180-day period measured from the date of such termination or (ii) the first date the Employee is covered under another employer’s heath benefit program which provides substantially the same level of benefits without exclusion for pre-existing medical conditions. In the event the Company’s provision of such continued health care coverage results in the recognition of taxable income (whether for federal, state or local income tax purposes) by the Employee, then the Company shall report such taxable income as taxable W-2 wages and collect the applicable withholding taxes, and the Employee shall be responsible for the payment of any additional income and employment tax liability resulting from such coverage. To the extent the health care coverage under this Section 5.1(b)(C) is to be provided through a self-funded program maintained by the Company, the Employee shall directly pay for the costs to obtain such health care coverage and shall, within 30 days after each periodic payment for a reimbursable health care coverage expense under this Section 5.1(b)(C), submit appropriate evidence of such payment to the Company for reimbursement, and the

Company shall pay such reimbursement on the 30th day following receipt of the submission. During the period such health care coverage remains in effect hereunder, the following provisions shall govern the arrangement: (a) the amount of the health care costs eligible for reimbursement in any one calendar year of such coverage shall not affect the amount of such costs eligible for reimbursement in any other calendar year for which such reimbursement is to be provided hereunder; (ii) no costs shall be reimbursed after the close of the calendar year following the calendar year in which those costs were incurred; and (iii) the Employee’s right to the reimbursement of such costs cannot be liquidated or exchanged for any other benefit. In the event the reimbursement of health care coverage results in the recognition of taxable income (whether for federal, state or local income tax purposes) by the Employee, then the Company shall make an additional payment (the “Health Care Gross-Up Payment”) to the Employee in a dollar amount to fully cover all taxes payable by the Employee on the income recognized with respect to the reimbursed health care coverage, including taxes imposed upon the Health Care Gross-Up Payment. The Health Care Gross-Up Payment shall be paid to the Employee at the time the related taxes are remitted to the tax authorities.

(D) The Company shall pay the Employee a lump sum cash payment, not to exceed $5,000, to cover the cost to obtain post-employment continued coverage under life and accidental death or dismemberment insurance and disability insurance plans for a period of 180 days following the date of termination. Such payment shall be made on the earlier of (i) the first business day of the first calendar month within the 60-day period measured from the Employee’s Separation from Service, that is coincident with or next following the date on which the required Release is effective following the expiration of any applicable revocation period or (ii) the last business day of such 60-day period on which such Release is effective following the expiration of any applicable revocation period.

(E) All outstanding options or other equity awards held by the Employee shall continue to vest for a period of 180 days following such termination.

Any payments and benefits payable pursuant to this Section 5.1(b) shall immediately cease if the Employee fails to be reasonably cooperative, responsive or available for reasonable requests by the Company to the Employee to assist the Company pertaining to areas of the Company’s business that the Employee is familiar with as a result of her employment. The payment to the Employee of the amounts payable under this Section 5.1(b) shall constitute the sole remedy of the Employee in the event of a termination of the Employee’s employment in the circumstances set forth in this Section 5.1(b).

(c) Change in Control. (i) In the event that there shall be a Change in Control (as defined below) of the Company or in any person directly or indirectly presently controlling the Company, as defined in paragraph (ii) below, all options to purchase shares of Common Stock of the Company and other equity awards granted to the Employee shall vest and become immediately exercisable by the Employee for a period of not less than one year after the date of such Change in Control (or earlier termination of such equity awards).

(d) For purposes of this Restated Agreement, a Change in Control of the Company, or in any person directly or indirectly controlling the Company, shall mean:

(A) A Change in Control as such term is presently defined in Regulation 240.12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act); or

(B) If any “person” (as such term is used in Section 13(d) and 14(d) of the Exchange Act) other than the Company or any “person” who on the date of this Restated Agreement is a director or officer of the Company, becomes the “beneficial owner” (as defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least fifty (50%) percent of the voting power of the Company’s then outstanding securities, unless such person becomes such a beneficial owner as a result of a transaction approved by a majority of the board of directors of the Company; or

(C) If during the term of this Restated Agreement, individuals who at the beginning of such period constitute the Board of Directors cease for any reason to constitute at least a majority thereof, unless the election of each director who is not a director at the beginning of such period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the period.

5.2 Section 409A. Certain payments contemplated by this Restated Agreement may be “deferred compensation” for purposes of Section 409A of the Code. Accordingly, the following provisions shall be in effect for purposes of avoiding or mitigating any adverse tax consequences to the Employee under Code Section 409A.

(a) It is the intent of the parties that the provisions of this Restated Agreement comply with all applicable requirements of Code Section 409A. Accordingly, all provisions of this Restated Agreement shall be interpreted and applied in a manner that does not result in a violation of the applicable requirements or limitations of Code Section 409A and the applicable Treasury Regulations thereunder and such provisions shall be deemed amended to comply with Code Section 409A and the applicable Treasury Regulations thereunder.

(b) Notwithstanding any provision to the contrary in this Restated Agreement, no payments or benefits to which the Employee may become entitled under Section 5 of this Restated Agreement shall be made or provided to him prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his Separation from Service with the Company or (ii) the date of his death, if the Employee is deemed, pursuant to the procedures established by the Compensation Committee in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, to be a “specified employee” at the time of such Separation from Service and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments and benefits deferred pursuant to this Section 4.3 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or reimbursed to the Employee in a lump sum, and any remaining payments and benefits due under this Restated Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. The specified employees subject to such a delayed commencement date shall be identified on December 31 of each

calendar year. If the Employee is so identified on any such December 31, he shall have specified employee status for the twelve (12)-month period beginning on April 1 of the following calendar year. For purposes of this Restated Agreement, including (without limitation) this Section 5.3(b), “Separation from Service” shall mean a separation from service as defined under Treasury Regulation Section 1.409A-1(h).

5.3 Survival. The provisions of Sections 5.1(b), 5.2, 8.3, 8.5 and 8.9 shall survive the termination of this Restated Agreement.

6. Non-Competition and Non-Solicitation. The Employee shall execute, if not previously executed and still in effect, simultaneously with the execution of this Restated Agreement, or otherwise upon the request of the Company, the Company’s customary form of Non-Competition and Non-Solicitation Agreement and form of Invention Assignment and Confidential Information Agreement, substantially in the form attached hereto as Exhibit A and Exhibit B, respectively.

7. Other Agreements. The Employee represents that his performance of all the terms of this Restated Agreement and the performance of his duties as an employee of the Company do not and will not breach any agreement with any prior employer or other party to which the Employee is a party (including without limitation any nondisclosure or non-competition agreement). Any agreement to which the Employee is a party relating to nondisclosure, non-competition or non-solicitation of employees or customers is listed on Schedule A attached hereto.

8. Miscellaneous.

8.1 Notices. Any notices delivered under this Restated Agreement shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service, in each case to the address of the recipient set forth on the signature page hereto. Either party may change the address to which notices are to be delivered by giving notice of such change to the other party in the manner set forth in this Section 8.1.

8.2 Pronouns. Whenever the context may require, any pronouns used in this Restated Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

8.3 Entire Agreement. This Restated Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Restated Agreement (including, without limitation, the Prior Employment Agreement). Notwithstanding the foregoing, to the extent there is an inconsistency in the terms of this Agreement and the Employee’s executive retention agreement, option agreement(s), equity award agreement(s) or such other agreements relating to the subject matter of this Restated Agreement, the provision(s) in the agreement that are most favorable to the Employee shall govern.

8.4 Amendment. This Restated Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee.

8.5 Governing Law. This Restated Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without reference to the conflicts of laws provisions thereof). Any action, suit or other legal proceeding arising under or relating to any provision of this Restated Agreement shall be commenced only in a court of the Commonwealth of Pennsylvania (or, if appropriate, a federal court located within Pennsylvania), and the Company and the Employee each consents to the jurisdiction of such a court. The Company and the Employee each hereby irrevocably waive any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Restated Agreement.

8.6 Successors and Assigns. This Restated Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to the Company’s assets or business; provided, however, that the obligations of the Employee are personal and shall not be assigned by him. Notwithstanding the foregoing, if the Company is merged with or into a third party which is engaged in multiple lines of business, or if a third party engaged in multiple lines of business succeeds to the Company’s assets or business, then for purposes of this Restated Agreement, the term “Company” shall mean and refer to the business of the Company as it existed immediately prior to such event and as it subsequently develops and not to the third party’s other businesses.

8.7 Waivers. No delay or omission by the Company in exercising any right under this Restated Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

8.8 Captions. The captions of the sections of this Restated Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Restated Agreement.

8.9 Severability. In case any provision of this Restated Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

[Signature Page Follows]

THE EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS RESTATED AGREEMENT, HAS HAD A FULL OPPORTUNITY TO REVIEW THIS RESTATED AGREEMENT AND CONSULT WITH COUNSEL AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS RESTATED AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have executed this Restated Agreement as of the day and year set forth above.


BIOCLINICA, INC.
By:	/s/ Mark L. Weinstein
	Name:	Mark L. Weinstein
	Title:	President & CEO
	Address:	826 Newtown-Yardley Road Newtown, Pennsylvania 18940

EMPLOYEE
	/s/ Ted Kaminer
	Ted Kaminer
	12 Chateau Drive Cherry Hill, NJ 08003

EX-10.9 4 w77909exv10w9.htm EX-10.9 exv10w9

Exhibit 10.9

BIOCLINICA, INC.

Amended and Restated Executive Retention Agreement

THIS AMENDED AND RESTATED EXECUTIVE RETENTION AGREEMENT (the “Restated Agreement”) by and between BioClinica, Inc., a Delaware corporation (the “Company”), and [ ] (the “Executive”) is made as of December 31, 2008 (the “Effective Date”).

WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders, and

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company’s key personnel without distraction from the possibility of a change in control of the Company and related events and circumstances, and

WHEREAS the Executive is a party to an Executive Retention Agreement with the Company dated as of March 1, 2006 (the “Prior Agreement”), and

WHEREAS, the Company and the Executive desire to amend and restate the terms of the Prior Agreement in order to bring these terms into documentary compliance with the final Treasury Regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its employ, the Company agrees that the Executive shall receive the severance benefits set forth in this Restated Agreement in the event the Executive’s employment with the Company is terminated under the circumstances described below in connection with a Change in Control (as defined in Section 1.1).

1. Key Definitions.

As used herein, the following terms shall have the following respective meanings:

1.1 “Change in Control” means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection):

(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3

promulgated under the Exchange Act) more than 50% of either (x) the total fair market value of the then-outstanding shares of the Company’s stock (the “Outstanding Company Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition of securities directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 1.1; or

(b) a change in the composition of the Board over a period of twelve (12) months or less such that the Continuing Directors (as defined below) fail to constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of the Prior Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

(c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of related transactions over a 12-month period (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding common stock (the “Company Outstanding Common Stock”) and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation)

beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or

(d) a complete liquidation or dissolution of the Company approved by the stockholders of the Company.

1.2 “Change in Control Date” means the first date during the Term (as defined in Section 2) on which a Change in Control occurs.

1.3 “Cause” means:

(a) the Executive’s willful and continued failure to substantially perform his reasonable assigned duties as an officer of the Company (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason), which failure is not cured within 30 days after a written demand for substantial performance is received by the Executive from the Board of Directors of the Company which specifically identifies the manner in which the Board of Directors believes the Executive has not substantially performed the Executive’s duties; or

(b) the conviction of the Executive of, or the entry of a pleading of guilty or nolo contendere by the Executive to, any crime involving moral turpitude or any felony; or

(c) the Executive’s commission of dishonesty or gross negligence which is materially and demonstrably injurious to the Company; or

(d) the Executive’s willful engagement in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company; or

(e) any material breach by the Executive of this Restated Agreement or any employment agreement and related agreements with the Company, including, but not limited to, any non-competition or non-solicitation provision, which breach is not cured within 30 days after a written notice of such breach is received by the Executive from the Board of Directors of the Company, which specifically identifies such breach.

For purposes of this Section 1.3, no act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted to be done, in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company.

Notwithstanding the foregoing, if the Executive has an effective employment agreement with the Company that contains a definition of “Cause” for purposes of termination of the Executive’s employment with the Company, the definition of “Cause” contained in such effective employment agreement shall be used in this Restated Agreement.

1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of any of the events or circumstances set forth in clauses (a) through (g) below.

Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute Good Reason if, prior to the Date of Termination specified in the Notice of Termination (each as defined in Section 3.2(a)) given by the Executive in respect thereof, such event or circumstance has been fully corrected and the Executive has been reasonably compensated for any losses or damages resulting therefrom (provided that such right of correction by the Company shall only apply to the first Notice of Termination for Good Reason given by the Executive):

(a) the assignment to the Executive of duties materially inconsistent with the Executive’s authority or responsibilities taken as a whole in effect immediately prior to the earliest to occur of (i) the Change in Control Date, (ii) the date of the execution by the Company of the initial written agreement or instrument providing for the Change in Control or (iii) the date of the adoption by the Board of Directors of a resolution providing for the Change in Control (with the earliest to occur of such dates referred to herein as the “Measurement Date”), or any other action or omission by the Company which results in a material diminution in such position, authority or responsibilities; or

(b) a reduction in the Executive’s annual base salary as in effect on the Measurement Date; or

(c) the failure by the Company to (i) continue in effect any material compensation or benefit plan or program (including without limitation any life insurance, medical, health and accident or disability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in which the Executive participates or which is applicable to the Executive immediately prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan, a lump sum payment or increase in compensation) has been made with respect to such plan or program, (ii) continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than the basis existing immediately prior to the Measurement Date or (iii) award cash bonuses to the Executive in amounts and in a manner substantially consistent with past practice in light of the Company’s financial performance; or

(d) a change by the Company in the location at which the Executive performs his principal duties for the Company to a new location that is outside a radius of 50 miles from the Executive’s principal residence and outside a radius of 25 miles from the location at which the Executive performed his principal duties for the Company immediately prior to the Measurement Date; or

(e) the failure of the Company to obtain the agreement from any successor to the Company to assume and agree to perform this Restated Agreement, as required by Section 6.1; or

(f) a purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.2(a); or

(g) any material breach by the Company of this Restated Agreement or any employment agreement with the Executive, which breach is not cured within 30 days after a written notice of such breach is received by the Company from the Executive, which specifically identifies such breach.

The Executive’s right to terminate his employment for Good Reason shall not be affected by his incapacity due to physical or mental illness.

1.5 “Disability” means the Executive’s absence from the full-time performance of the Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal representative, which consent shall not be unreasonably withheld.

2. Term of Agreement. This Restated Agreement, and all rights and obligations of the parties hereunder, shall take effect upon the Effective Date and (except to the extent provided in Section 4.2(b)) shall expire upon the first to occur of (a) the termination of the Executive’s employment with the Company more than 60 days prior to the Change in Control Date, (b) the date 24 months after the Change in Control Date, if the Executive is still employed by the Company as of such later date, or (c) the fulfillment by the Company of all of its obligations under Sections 4 and 5.2 and 5.3 if the Executive’s employment with the Company terminates within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date.

3. Employment Status; Termination Following Change in Control.

3.1 Not an Employment Contract. The Executive acknowledges that this Restated Agreement does not constitute a contract of employment or impose on the Company any obligation to retain the Executive as an employee and that this Restated Agreement does not prevent the Executive from terminating employment at any time.

3.2 Termination of Employment.

(a) If the Change in Control Date occurs during the Term, any termination of the Executive’s employment by the Company or by the Executive within 24 months following the Change in Control Date (other than due to the death of the Executive) shall be communicated by a written notice to the other party hereto (the “Notice of Termination”), given in accordance with Section 7. Any Notice of Termination shall: (i) indicate the specific termination provision (if any) of this Restated Agreement relied upon by the party giving such notice, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) specify the Date of Termination (as defined below). The effective date of an employment termination shall be (i) the close of business on the date specified in the Notice of Termination (which date may not be less than 15 days or more than 120 days after the date of delivery of such Notice of Termination) in the case of a termination by the Company or by the Executive within 24 months following the Change in Control, (ii) in the case of termination due

to the Executive’s death, the date of the Executive’s death, and (iii) in the case of the Executive’s termination prior to the Change in Control, the date of such termination. In the event the Company fails to satisfy the requirements of Section 3.2(a) regarding a Notice of Termination, the purported termination of the Executive’s employment pursuant to such Notice of Termination shall not be effective for purposes of this Restated Agreement.

(b) If a Change in Control Date occurs during the 60 days after the termination of the Executive’s employment by the Company, the Company shall give the Executive notice of such Change in Control.

(c) The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(d) Any Notice of Termination for Cause given by the Company must be given within 90 days of the discovery by the Board of the occurrence of the event(s) or circumstance(s) that constitute(s) Cause. Prior to any Notice of Termination for Cause being given (and prior to any termination for Cause being effective), the Executive shall be entitled to a hearing before the Board of Directors of the Company at which he may, at his election, be represented by counsel and at which he shall have a reasonable opportunity to be heard. Such hearing shall be held on not less than 15 days prior written notice to the Executive stating the Board of Directors’ intention to terminate the Executive for Cause and stating in detail the particular event(s) or circumstance(s) which the Board of Directors believes constitutes Cause for termination.

(e) Any Notice of Termination for Good Reason given by the Executive must be given within 90 days of the discovery by the Executive of the occurrence of the event(s) or circumstance(s) that constitute(s) Good Reason.

4. Benefits to Executive.

4.1 Stock Acceleration. If the Executive’s employment is terminated by the Company other than for Cause, or the Executive terminates his employment for Good Reason, during the Pre-Closing Period or at any time thereafter during the remainder (if any) of the Term, then, effective upon such termination of employment, (a) each outstanding option to purchase shares of Common Stock of the Company held at that time by the Executive shall become immediately exercisable in full and shares of Common Stock of the Company received upon exercise of any options will no longer be subject to a right of repurchase by the Company, and (b) each outstanding restricted stock award shall be deemed to be fully vested and will no longer be subject to a right of repurchase by the Company. Each option shall remain so exercisable until the expiration date of the option term or (if earlier) the termination of that option in accordance with the provisions of the applicable stock option agreement. For purposes of this Section 4.1, the Pre-Closing Period means the period commencing with the Company’s execution of the definitive agreement for a Change in Control transaction and ending upon the earlier of (i) the closing of the Change in Control contemplated by such definitive agreement or

(ii) the termination of such definitive agreement without the consummation of the contemplated Change in Control.

4.2 Compensation. If the Change in Control Date occurs during the Term and the Executive’s employment with the Company terminates within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, the Executive shall be entitled to the following benefits:

(a) Termination Without Cause or for Good Reason. If the Executive’s employment with the Company is terminated by the Company (other than for Cause, Disability or death) or by the Executive for Good Reason within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, then, subject to Section 4.2(a)(v) below, the Executive shall be entitled to the following benefits:

(i) The Company shall pay to the Executive in cash the aggregate of the following amounts:

(1) The Company shall make a lump sum cash payment to the Executive equal to (A) the Executive’s base salary through the Date of Termination, (B) the product of (x) the greater of (i) Executive’s largest annual bonus for the most recently completed three (3) fiscal years and (ii) the Executive’s target annual bonus at time of termination and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (C) any accrued vacation pay, in each case to the extent not previously paid (the sum of the amounts described in clauses (A) and (C) shall be hereinafter referred to as the “Accrued Obligations” and the dollar amount described in clause (B) shall be hereinafter referred to as the “Pro-Rata Bonus” ). Payment of the Accrued Obligations shall be made on the Date of Termination, and the payment of the Pro-Rata Bonus shall be made on the 30th day following the later of the Executive’s Separation from Service or the Change in Control Date (the “Applicable Date”) or as soon as administratively practicable following such scheduled payment date, but in no event later than the close of the calendar year in which the Applicable Date occurs or (if later) the 15th day of the third calendar month following that date.

(2) Any compensation deferred on behalf of the Executive on the Date of Termination or the Change in Control Date under any deferred compensation plan subject to Section 409A of the Internal Revenue Code, as amended (the “Code”), shall be paid at the time or times specified for payment pursuant to the provisions of such plan.

(3) The Company shall, in a series of eighteen (18) successive equal monthly installments pursuant to the Company’s normal payment practices, pay in cash to the Executive an amount equal to (A) 1.5 multiplied by (B) the sum of (x) the greater of (i) the Executive’s annual base salary for the most recently completed fiscal year or (ii) the Executive’s current annual base salary at the time of termination and (y) the greater of (i) Executive’s largest annual bonus for the most recently completed three (3) fiscal years and (ii) the Executive’s target annual bonus at time of termination. The first such installment shall be paid on the 30th day following the Applicable Date or as soon as administratively practicable

following such scheduled payment date, but in no event later than the close of the calendar year in which the Applicable Date occurs or (if later) the 15th day of the third calendar month following that date.

(4) The Company shall make a lump sum cash payment, not to exceed $15,000, to cover the cost to obtain post-employment continued coverage under life and accidental death or dismemberment insurance and disability insurance plans for a period of eighteen (18) months following such termination date. Such payment shall be made to the Executive on the 30^th day following the Applicable Date or as soon as administratively practicable following such scheduled payment date, but in no event later than the close of the calendar year in which the Applicable Date occurs or (if later) the 15^th day of the third calendar month following that date.

(ii) For a period not to exceed eighteen (18) months measured from the Applicable Date, the Company shall, if the Executive elects under Code Section 4980B to continue health care coverage under the Company’s group health plan for himself, his spouse and his eligible dependents following the Date of Termination, provide such continued health care coverage at the Company’s expense; provided, however, that such coverage at the Company’s expense shall immediately terminate on the date the Executive is first covered under another employer’s heath benefit program which provides substantially the same level of benefits without exclusion for pre-existing medical conditions (the period of coverage as so terminated shall be referred to as the “Coverage Period”). Such health care coverage shall be at the same level and provide the same type of benefits as would have been provided to them if the Executive’s employment had not been terminated and they had continued to be covered under the applicable Benefit Plans in effect on the Measurement Date or, if more favorable to the Executive and his family, in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies. Such continued health care coverage shall be provided pursuant to the provisions of this subparagraph (ii) even if such coverage extends beyond the period of statutorily-required coverage under Code Section 4980B, but subject to earlier termination in accordance with the above proviso relating to coverage under another employer’s plan. In the event the Company’s provision of such continued health care coverage results in the recognition of taxable income (whether for federal, state or local income tax purposes) by the Executive, then the Company shall report such taxable income as taxable W-2 wages and collect the applicable withholding taxes, and the Executive shall be responsible for the payment of any additional income and employment tax liability resulting from such coverage. To the extent the health coverage under this Section 4.2(a)(ii) is to be provided through a self-funded program maintained by the Company, the Executive shall directly pay for the costs to obtain such health coverage and the Company shall reimburse the Executive for such costs incurred during the Coverage Period. The Executive shall, within 30 days after each periodic payment for a reimbursable health or medical care expense under this Section 4.2(a)(ii), submit appropriate evidence of such payment to the Company for reimbursement, and the Company shall pay such reimbursement on the 30th day following receipt of the submission. In the event such reimbursement of health care coverage during the Coverage Period results in the recognition of taxable income (whether for federal, state, or local income tax purposes) by the Executive, then the Company shall make an additional payment (the “Health Care Gross-Up Payment”) to the Executive in a dollar amount to fully cover all taxes payable by the Executive on the income recognized with respect to the reimbursed health care coverage, including taxes

imposed upon the Health Care Gross-Up Payment. The Heath Care Gross-Up Payment shall be paid to the Executive at the time the related taxes are remitted to the tax authorities.

In the event that the Executive’s Date of Termination occurs prior to the Change in Control Date, then the Coverage Period hereunder shall be reduced by the period from the Executive’s Date of Termination to the Change in Control Date (the “Interim Period”) and the Company shall reimburse the Executive for the cost of such coverage paid by the Executive during the Interim Period. The Executive shall, within 30 days after the Change in Control Date, submit appropriate evidence of such costs to the Company for reimbursement, and the Company shall pay such reimbursement on the 30^th day following receipt of submission.

During the period health care coverage remains in effect hereunder, the following provisions shall govern the arrangement: (i) the amount of the health care costs eligible for reimbursement in any one calendar year of such coverage shall not affect the amount of such costs eligible for reimbursement in any other calendar year for which such reimbursement is to be provided hereunder; (ii) no costs shall be reimbursed after the close of the calendar year following the calendar year in which those costs were incurred; and (iii) the Executive’s right to the reimbursement of such costs cannot be liquidated or exchanged for any other benefit.

For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits to which the Executive is entitled, the Executive shall be considered to have remained employed by the Company until 18 months after the Date of Termination.

(iii) Notwithstanding the foregoing, if the Executive breaches any ongoing obligation with the Company (by way of example and not by way of limitation, any breach of a non-competition or non-solicitation provision with the Company), and such breach is not cured within 30 days of written notice of such breach received by the Executive from the Company, then the Company shall no longer be required to provide any of the benefits set forth in this Section 4.2(a).

(b) Termination More Than 60 Days Prior to Change in Control. If (a) a Change in Control occurs, (b) the Executive’s employment with the Company is terminated more than 60 days prior to the date on which the Change in Control occurs, and (c) it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a Change in Control, then the Executive shall receive the payments and benefits set forth in Section 4.2(a), subject to Section 4.2(a)(iv).

(c) Resignation without Good Reason; Termination for Death or Disability. If the Executive voluntarily terminates his employment with the Company within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, excluding a termination for Good Reason, or if the Executive’s employment with the Company is terminated by reason of the Executive’s death or Disability within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, then the Company shall (i) pay the Executive (or his estate, if applicable), in a lump sum in

cash on the Date of Termination, the Accrued Obligations, (ii) pay the Executive (or his estate, if applicable) the Pro-Rated Bonus in a lump sum in cash on the 30th day following the Applicable Date or as soon as administratively practicable following such scheduled payment date, but in no event later than the close of the calendar year in which the Applicable Date occurs or (if later) the 15th day of the third calendar month following that date, and (iii) pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive following the Executive’s termination of employment under any plan, program, policy, practice, contract or agreement on the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”) as they become due and payable in one or more installments under the applicable plan or arrangement subject to compliance with Code Section 409A. In addition, any vested compensation deferred on behalf of the Executive under any deferred compensation plan subject to Code Section 409A shall be paid at the time or times specified for payment pursuant to the provisions of such plan.

(d) Termination for Cause. If the Company terminates the Executive’s employment with the Company for Cause within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, then the Company shall (i) pay the Executive, in a lump sum in cash on the Date of Termination, the Accrued Obligations and (ii) timely pay or provide to the Executive the Other Benefits as they become due and payable in one or more installments under the applicable plan or arrangement subject to compliance with Code Section 409A. In addition, any vested compensation deferred on behalf of the Executive under any deferred compensation plan subject to Code Section 409A shall be paid at the time or times specified for payment pursuant to the provisions of such plan.

4.3 Section 409A. Certain payments contemplated by this Restated Agreement may be “deferred compensation” for purposes of Section 409A of the Code. Accordingly, the following provisions shall be in effect for purposes of avoiding or mitigating any adverse tax consequences to the Executive under Code Section 409A.

(b) Notwithstanding any provision to the contrary in this Restated Agreement, no payments or benefits to which the Executive may become entitled under Section 4 or Section 5.3 of this Restated Agreement shall be made or provided to him prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of the Executive’s Separation from Service or (ii) the date of his death, if the Executive is deemed, pursuant to the procedures established by the Compensation Committee in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, to be a “specified employee” at the time of such Separation from Service and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2)

deferral period, all payments and benefits deferred pursuant to this Section 4.3 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Restated Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. The specified employees subject to such a delayed commencement date shall be identified on December 31 of each calendar year. If the Executive is so identified on any such December 31, he shall have specified employee status for the twelve (12)-month period beginning on April 1 of the following calendar year. For purposes of this Restated Agreement, including (without limitation) this Section 4.3(b), “Separation from Service” shall mean a separation from service as defined under Treasury Regulation Section 1.409A-1(h).

4.4 Excise Tax Gross-Up

(a) In the event that any payments or benefits to which the Executive becomes entitled in accordance with the provisions of this Restated Agreement or any other agreement with the Company constitutes a parachute payment under Section 280G of the Code (collectively, the “Parachute Payment”) subject to the excise tax imposed under Section 4999 of the Code or any interest or penalties related to such excise tax (with such excise tax and related interest and penalties to be collectively referred to as the “Excise Tax”), then the Executive will be entitled to receive from the Company an additional payment (the “Gross-Up Payment”) in a dollar amount such that after payment of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains a net amount equal to the Excise Tax imposed upon the aggregate Orachute Payment.

(b) All determinations as to whether any of the payments or benefits to which the Executive becomes entitled in accordance with the provisions of this Restated Agreement or any other agreement with the Company constitute a Parachute payment, whether a Gross-Up Payment is required with respect to any Parachute Payment, the amount of such Gross-Up Payment, and any other amounts relevant to the calculation of such Gross-Up Payment, will be made by an independent registered public accounting firm selected by the Company from among the largest four accounting firms in the United States (the “Accounting Firm”). Such Accounting Firm will make the applicable determinations (the Gross-Up Determination”), together with detailed supporting calculations regarding the amount of the Excise Tax, any required Gross-Up Payment and any other relevant matter, within thirty (30) days after the date of the Executive’s Separation from Service. The Gross-Up Determination made by the Accounting Firm will be binding upon both the Executive and the Company. The Gross-Up Payment (if any) determined on the basis of the Gross-Up Determination shall be paid to the Executive or on the Executive’s behalf with ten (10) business days after the completion of such Determination or (if later) at the time the related Excise Tax is remitted to the appropriate tax authorities.

(c) In the event that the Executive’s actual Excise Tax liability is determined by a Final Determination to be greater than the Excise Tax liability taken into account for purposes of any Gross-Up Payment or Payments initially made to the Executive pursuant to the provisions of Section 4.4(a), then within thirty (30) days following that Final

Determination, the Executive shall notify the Company of such determination, and the Accounting Firm shall, within thirty (30) days thereafter, make a new Excise Tax calculation based upon that Final Determination and provide both the Executive and the Company with the supporting calculations for any supplemental Gross-Up Payment attributable to that excess Excise Tax liability. The Company shall make the supplemental Gross-Up payment to the Executive within ten (10) business days following the completion of the applicable calculations pr (if later) at the time such excess tax liability is remitted to the appropriate tax authorities. In the event that the Executive’s actual Excise Tax liability is determined by a Final Determination to be less than the Excise Tax liability taken into account for purposes of any Gross-Up Payment initially made to the Executive pursuant to the provisions of Section 4.4(a), then the Executive shall refund to the Company, promptly upon receipt (but in no event later than ten (10) business days after such receipt), any federal or state tax refund attributable to the Excise Tax overpayment. For purposes of this Section 4.4(c), a “Final Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed to by both the Executive and the Company or (ii) sustained by a court of competent jurisdiction in a decision with which both the Executive and the Company concur or with respect to which the period within which an appeal may be filed has lapsed without a notice of appeal being filed.

(d) Should the Accounting Firm determine that any Gross-Up Payment made to the Executive was in fact more than the amount actually required to be paid to the Executive in accordance with the provisions of Section 4.4(a), then the Executive will, at the direction and expense of the Company, take such steps as are reasonably necessary (including the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such overpayment. Furthermore, should the Company decide to contest any assessment by the Internal Revenue Service of an Excise Tax on one or more payments or benefits provided the Executive under this Restated Agreement or otherwise, the Executive will comply with all reasonable actions requested by the Company in connection with such proceedings, but shall not be required to incur any out-of-pocket costs in so doing.

(e) Notwithstanding anything to the contrary in the foregoing any Gross-Up Payments due the Executive under this Section 4.4 shall be subject to the hold-back provisions of Section 4.3(b). In addition, no Gross-Up Payment shall be made later than the end of the calendar year following the calendar year in which the related taxes are remitted to the appropriate tax authorities or such other specified time or schedule that may be permitted under Section 409A of the Code. To the extent the Executive becomes entitled to any reimbursement of expenses incurred at the direction of the Company in connection with any tax audit or litigation addressing the existence or amount of the Excise Tax, such reimbursement shall be paid to the Executive no later than the close of the calendar year following the calendar year in which the Excise Tax that is the subject of such audit or litigation is paid by the Executive. If no Excise Tax liability is found to be due as a result of such audit or litigation, the reimbursement shall be paid to the Executive no later than the close of the calendar year following the calendar year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the litigation.

4.5 Mitigation. The Executive shall not be required to mitigate the amount of any payment or benefits provided for in this Section 4 by seeking other employment or otherwise.

5. Disputes.

5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Restated Agreement shall be directed to and determined by the Board of Directors of the Company and shall be in writing. Any denial by the Board of Directors of a claim for benefits under this Restated Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Restated Agreement relied upon. The Board of Directors shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Restated Agreement shall be settled exclusively by arbitration in Philadelphia, Pennsylvania, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which the Executive may reasonably incur as a result of any claim or contest (so long as a court of competent jurisdiction renders a final order, decree or judgment in favor of the Executive, and after the time for appeal has expired and no appeal has been perfected for such final order, decree or judgment) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Restated Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive regarding the amount of any payment or benefits pursuant to this Restated Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

5.3 Compensation During a Dispute. If the Change in Control Date occurs during the Term and the Executive’s employment with the Company terminates within the period from 60 days prior to the Change in Control Date to 24 months following the Change in Control Date, and the right of the Executive to receive benefits under Section 4 (or the amount or nature of the benefits to which he is entitled to receive) are the subject of a dispute between the Company and the Executive, the Company shall continue (a) to pay to the Executive his base salary in effect as of the Measurement Date commencing within 30 days following the Applicable Date and (b) to provide benefits to the Executive and the Executive’s family at least equal to those which would have been provided to them, if the Executive’s employment had not been terminated, in accordance with the applicable Benefit Plans in effect on the Measurement Date, until such dispute is resolved either by mutual written agreement of the parties or by an arbitrator’s award pursuant to Section 5.1. Following the resolution of such dispute, the sum of the payments made to the Executive under clause (a) of this Section 5.3 shall be deducted from any cash payment which the Executive is entitled to receive pursuant to Section 4; and if such sum exceeds the amount of the cash payment which the Executive is entitled to receive pursuant to Section 4, the excess of such sum over the amount of such payment shall be repaid (without interest) by the Executive to the Company within three (3) business days following the resolution of such dispute.

6. Successors.

6.1 Successor to Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Restated Agreement to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain an assumption of this Restated Agreement at or prior to the effectiveness of any succession shall be a breach of this Restated Agreement and shall constitute Good Reason if the Executive elects to terminate employment, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Restated Agreement, “Company” shall mean the Company as defined above and any successor to its business or assets as aforesaid which assumes and agrees to perform this Agreement, by operation of law or otherwise.

6.2 Successor to Executive. This Restated Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to the Executive or his family hereunder if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Restated Agreement to the executors, personal representatives or administrators of the Executive’s estate.

7. Notice. All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide overnight courier service, in each case addressed to the Company, at 826 Newtown-Yardley Road, Newtown, Pennsylvania 18940, and to the Executive at the Executive’s address indicated on the signature page of this Restated Agreement (or to such other address as either the Company or the Executive may have furnished to the other in writing in accordance herewith). Any such notice, instruction or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service. Either party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed to have been duly delivered unless and until it actually is received by the party for whom it is intended.

8. Miscellaneous.

8.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’s employment with the Company shall not be deemed to have terminated solely as a result of the Executive continuing to be employed by a wholly-owned subsidiary of the Company.

8.2 Severability. The invalidity or unenforceability of any provision of this Restated Agreement shall not affect the validity or enforceability of any other provision of this Restated Agreement, which shall remain in full force and effect.

8.3 Injunctive Relief. The Company and the Executive agree that any breach of this Restated Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies which may be available, the Executive shall have the right to specific performance and injunctive relief.

8.4 Governing Law. The validity, interpretation, construction and performance of this Restated Agreement shall be governed by the internal laws of the Commonwealth of Pennsylvania, without regard to conflicts of law principles.

8.5 Waivers. No waiver by the Executive at any time of any breach of, or compliance with, any provision of this Restated Agreement to be performed by the Company shall be deemed a waiver of that or any other provision at any subsequent time.

8.6 Counterparts. This Restated Agreement may be executed in counterparts, each of which shall be deemed to be an original but both of which together shall constitute one and the same instrument.

8.7 Tax Withholding. Any payments provided for hereunder shall be subject to the Company’s collection of the any applicable tax withholding required under federal, state or local law, and the Executive shall only be entitled to the amount of each payment remaining the applicable withholding taxes have been collected.

8.8 Entire Agreement. This Restated Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements (including, without limitation, the Prior Agreement), promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of the subject matter contained herein; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled.

8.9 Amendments. This Restated Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive.

8.10 Executive’s Acknowledgements. The Executive acknowledges that he or she: (a) has read this Restated Agreement; (b) has been represented in the preparation, negotiation, and execution of this Restated Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek such counsel; (c) understands the terms and consequences of this Restated Agreement; and (d) understands that the law firm of Morgan, Lewis & Bockius LLP is acting as counsel to the Company in connection with the transactions contemplated by this Restated Agreement, and is not acting as counsel for the Executive.

IN WITNESS WHEREOF, the parties hereto have executed this Restated Agreement as of the day and year first set forth above.


BIOCLINICA, INC.
By:
	Name:	Mark L Weinstein
	Title:	President & CEO



	Name:
	Address:

EX-21 5 w77909exv21.htm EX-21 exv21

EXHIBIT 21

SUBSIDIARIES

Oxford Bio-Imaging Research, Inc., a New Jersey corporation and wholly-owned subsidiary of the Company

BioClinica Holding B.V., a corporation organized under the laws of the Netherlands and wholly-owned subsidiary of the Company

BioClinica Acquisition Inc., a Delaware corporation and wholly-owned subsidiary of the Company

BioClinica Private Limited, a corporation organized under the laws of India and wholly-owned subsidiary of the Company

Red Oak Research, Inc., a Delaware corporation and wholly-owned subsidiary of Oxford Bio-Imaging Research, Inc.

BioClinica, B.V., a corporation organized under the laws of the Netherlands and wholly-owned subsidiary of BioClinica Holding B.V.

BioClinica SAS, a corporation organized under the laws of France and wholly-owned subsidiary of BioClinica Holding B.V.

EX-23.1 6 w77909exv23w1.htm EX-23.1 exv23w1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 333-25477, 333-109702, and 333-150641) and Form S-8 (Nos. 333-85394, 333-139554, and 333-153842) of BioClinica, Inc. and its subsidiaries of our report dated March 30, 2010 relating to the financial statements, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
March 30, 2010

EX-31.1 7 w77909exv31w1.htm EX-31.1 exv31w1

EXHIBIT 31.1

CERTIFICATION

I, Mark L. Weinstein, certify that:

1.		I have reviewed this Annual Report on Form 10-K of BioClinica, Inc.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(t) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Mark L. Weinstein
Dated: March 30, 2010	Mark L. Weinstein, President and Chief Executive Officer (Principal Executive Officer)

EX-31.2 8 w77909exv31w2.htm EX-31.2 exv31w2

EXHIBIT 31.2

CERTIFICATION

I, Ted I. Kaminer, certify that:

1.		I have reviewed this Annual Report on Form 10-K of BioClinica, Inc.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(t) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	/s/ Ted I. Kaminer
Dated: March 30, 2010	Ted I. Kaminer, Executive Vice President of Finance and
	Administration and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1 9 w77909exv32w1.htm EX-32.1 exv32w1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of BioClinica, Inc. (the “Company”) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Mark L. Weinstein, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Mark L. Weinstein*
Dated: March 30, 2010	Mark L. Weinstein, President and Chief Executive Officer
	(Principal Executive Officer)


*		A signed original of this written statement required by section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 10 w77909exv32w2.htm EX-32.2 exv32w2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of BioClinica, Inc. (the “Company”) for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Ted I. Kaminer, Executive Vice President of Finance and Administration and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Ted I. Kaminer*
Dated: March 30, 2010	Ted I. Kaminer, Executive Vice President of Finance and
	Administration and Chief Financial Officer (Principal Financial and Accounting Officer)


*		A signed original of this written statement required by section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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