SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
--------
2) Aggregate number of securities to which transaction applies: N/A
---------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction: N/A
-----
5) Total fee paid: N/A
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( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: N/A
-----
2) Form, Schedule, or Registration Statement No.: N/A
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3) Filing Party: N/A
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4) Date Filed: N/A
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<PAGE>
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
3151 SOUTH SEVENTEENTH STREET
WILMINGTON, NORTH CAROLINA 28412
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 2000
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
The 2000 Annual Meeting of Shareholders of Pharmaceutical Product
Development, Inc. (the "Company") will be held at the principal executive
offices of the Company located at 3151 South Seventeenth Street, Wilmington,
North Carolina, on Tuesday, May 16, 2000, at 10:00 a.m., for the following
purposes:
1. To elect a board of eight directors.
2. To approve an amendment to the Company's Employee Stock Purchase Plan
increasing the number of shares of the Company's stock reserved for
issuance under the plan from 500,000 shares to 1,250,000 shares.
3. To act upon such other matters as may properly come before the meeting
or any adjournment thereof.
These matters are more fully described in the Proxy Statement accompanying this
notice.
The Board of Directors has fixed the close of business on March 15,
2000 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting or any adjournment thereof. All of these
shareholders are cordially invited to attend the meeting in person. However, to
assure your representation at the meeting, you are urged to mark, sign, date and
return the enclosed proxy card as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. You can vote in person at the meeting, even
if you returned a proxy.
The Company's Proxy Statement, proxy and Annual Report to Shareholders
for the year ended December 31, 1999 are enclosed with this notice.
IMPORTANT - YOUR PROXY IS ENCLOSED.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK,
SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE
IS REQUIRED FOR MAILING IN THE UNITED STATES.
Wilmington, North Carolina
Dated: March 30, 2000
By Order of the Board of Directors
/s/ Fred B. Davenport, Jr.
By: Fred B. Davenport, Jr.
SECRETARY
<PAGE>
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
3151 SOUTH SEVENTEENTH STREET
WILMINGTON, NORTH CAROLINA 28412
- --------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2000
Your vote is important. Therefore, the Board of Directors is requesting
that you allow your Common Stock to be represented at the Annual Meeting by the
proxies named in the proxy card enclosed with this Proxy Statement. This Proxy
Statement has been prepared by the management of Pharmaceutical Product
Development, Inc. "We", "our", "PPDI" and the "Company" each refers to
Pharmaceutical Product Development, Inc. We will begin sending this Proxy
Statement to our shareholders on or about March 30, 2000.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE
You are entitled to vote your Common Stock if you held shares as of
March 15, 2000. At the close of business on March 15, 2000, a total of
24,803,553 shares of Common Stock were outstanding and entitled to vote. Each
share of Common Stock has one vote.
VOTING BY PROXIES
If your Common Stock is held by a broker, bank or other nominee, they
should send you instructions that you must follow in order to have your shares
voted. If you hold shares in your own name, you may vote by signing, dating and
mailing the proxy card in the postage paid envelope which we have provided to
you. The proxies will vote your shares in accordance with your instructions. Of
course, you can always come to the meeting and vote your shares in person. If
you sign and return a proxy card without giving specific voting instructions,
your shares will be voted as recommended by our Board of Directors. We are not
now aware of any other matters to be presented except for those described in the
Proxy Statement. If any matters not described in the Proxy Statement are
presented at the meeting, the proxies will use their own judgment to determine
how to vote your shares. If the meeting is adjourned, your Common Stock may be
voted by the proxies on the new meeting date as well, unless you revoke your
proxy instructions.
REVOKING YOUR PROXY INSTRUCTIONS
To revoke your proxy, you must either (1) advise the Secretary in
writing before the meeting, (2) deliver later proxy instructions before the
meeting, or (3) attend the meeting and vote in person.
COUNTING VOTES
The Annual Meeting will be held if a majority of the outstanding Common
Stock entitled to vote is represented at the meeting. If you have returned valid
proxy instructions or attend the meeting in person, your Common Stock will be
counted for the purpose of determining whether there is a quorum, even if you
wish to abstain from voting on some or all matters introduced to the meeting.
Broker non-votes also count for quorum purposes. If you hold your Common Stock
through a broker, bank or other nominee, generally the nominee may only vote the
Common Stock which it holds for you in accordance with your instructions.
However, if the nominee has not received your instructions before the meeting,
the nominee may vote on matters which are determined to be routine by the Nasdaq
National Market. If a nominee cannot vote on a particular matter because it is
not routine, there will be a "broker non-vote" on that matter. We do not count
broker non-votes as votes for or against any
<PAGE>
proposal. We do count abstentions as votes against a proposal. Although there is
no definitive statutory or case law in North Carolina regarding broker non-votes
and abstentions, we believe that our intended treatment of them is appropriate.
COST OF THIS PROXY SOLICITATION
We will pay the cost of this proxy solicitation. In addition to
soliciting proxies by mail, our employees may solicit proxies personally and by
telephone. None of these employees will receive any additional compensation for
this. We will, upon request, reimburse brokers, banks and other nominees for
their expenses in sending proxy material to their principals and obtaining their
proxies.
ATTENDING THE ANNUAL MEETING
If you are a holder of record and you plan to attend the Annual
Meeting, please bring your proxy or a photo identification to confirm your
identity. If you are a beneficial owner of Common Stock held by a bank or
broker, i.e., in "street name", you will need proof of ownership to be admitted
to the meeting. A recent brokerage statement or letter from a bank or broker are
examples of proof of ownership. If you want to vote in person your Common Stock
held in street name, you must get a proxy in your name from the registered
holder.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Our bylaws provide that the number of directors constituting the Board
of Directors shall be not less than eight nor more than twelve. The number of
director seats currently authorized is nine, but there are eight directors
serving. A vacancy on the Board of Directors was created in October 1999 when
Thomas D'Alonzo resigned as a director at the same time he retired as President
and Chief Operating Officer of the Company. The Nominating Committee is
reviewing candidates to fill the vacancy and expects to recommend a replacement
for Mr. D'Alonzo shortly after the Annual Meeting. Accordingly, the number of
directors to be elected at this Annual Meeting is eight.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast at the Annual
Meeting. This means that the eight nominees receiving the highest number of
votes will be elected.
VOTING BY THE PROXIES
The proxies will vote your Common Stock in accordance with your
instructions. Unless you give specific instructions to the contrary, your Common
Stock will be voted for the election of the nominees named in this Proxy
Statement. Each nominee has agreed to serve, and we expect that each of the
nominees will be able to serve. However, if any nominee is unavailable for
election, the proxies will vote your Common Stock to elect a substitute nominee
proposed by the Board of Directors.
NOMINEES
The Nominating Committee unanimously recommends the nominees listed
below. Each nominee currently serves as a director of the Company. None of the
nominees is related by blood, marriage or adoption to any other nominee or any
executive officer of the Company.
STUART BONDURANT, M.D. (age 70) has served as a director of the Company
since October 1994. Dr. Bondurant currently serves as a Professor of the School
of Medicine at the University of North Carolina (Chapel Hill). He served as Dean
of the School of Medicine at the University of North Carolina (Chapel Hill) from
1979 to 1994 and as Interim Dean from July 1996 until May 1997. Dr. Bondurant
served as Director of Epidemiologic Studies at the New York Academy of Medicine
from January 1995 until March 1996. Dr. Bondurant has served as President of the
American College of Physicians and the Association of American Physicians. He
has also served as Vice President of the American Heart Association and the
American Society for Clinical Investigation. He served as the Chairman of the
Board of Directors of the North Carolina Biotechnology Center from 1988 to 1992.
2
<PAGE>
ABRAHAM E. COHEN (age 63) has served as a director of the Company since
June 1998. Mr. Cohen joined Merck & Co., a pharmaceutical company, in 1957 and
retired in 1992 as a Senior Vice President and as President of the Merck Sharp &
Dohme International Division. He currently serves as Chairman of Kramex
Corporation, a pharmaceutical consulting firm. He is also a director of Akzo
Nobel Nv., Teva Pharmaceutical and Smith Barney, and serves as a consultant to
Chugai, Japan.
FREDRIC N. ESHELMAN, PHARM.D. (age 51) has served as Chief Executive
Officer and a director of the Company since July 1990, and as Vice Chairman of
the Board of Directors since July 1993. Dr. Eshelman founded the Company's
predecessor and served as its Chief Executive Officer until its sale to the
Company in 1989. Prior to rejoining the Company in 1990, Dr. Eshelman served as
Senior Vice President, Development and as a director of Glaxo Inc., a subsidiary
of Glaxo Holdings plc.
FREDERICK FRANK (age 67) has served as a director of the Company since
September 1996. Mr. Frank also served as a director of Applied Bioscience
International Inc. from 1988 until its acquisition by the Company in September
1996. Mr. Frank has been an investment banker with Lehman Brothers since 1969
and is currently Vice Chairman of that firm. Previously, Mr. Frank served as a
Partner of Lehman Brothers from 1969 to 1972, as Managing Director from 1972 to
1993, and as Senior Managing Director from 1993 to 1995. Mr. Frank also serves
on the Boards of Directors of Diagnostic Products, Landec Corporation and eSoft,
Inc.
DONALD C. HARRISON, M.D. (age 66) has served as a director of the
Company since March 1999. Dr. Harrison has served as Senior Vice President and
Provost for Health Affairs of the University of Cincinnati Medical Center since
1986 and currently is Chief Executive Officer of the Medical Center. Prior to
joining the University of Cincinnati faculty in 1986 as a Professor of Medicine
and Cardiology, Dr. Harrison was employed in various capacities by Stanford
University, including as Chief of Cardiology of Stanford University Hospital
from 1967 to 1986. Dr. Harrison has served as President of the American Heart
Association and as Vice President of the American College of Cardiology. Dr.
Harrison is also a director of Bioconcepts, Inc., UMD, Inc., Novoste, Inc. and
Heart Stent, Inc.
ERNEST MARIO, PH.D. (age 61) has served as non-executive Chairman of
the Board of Directors of the Company since July 1993. Dr. Mario also serves as
Chairman of the Board of Directors and Chief Executive of ALZA Corporation, a
pharmaceutical company. Prior to joining ALZA in 1993, Dr. Mario served as Chief
Executive of Glaxo Holdings plc from 1989 to March 1993 and as Deputy Chairman
and Chief Executive of Glaxo Holdings plc, a pharmaceutical company, from
January 1992 to March 1993. Dr. Mario also is a director of Catalytica, Inc.,
COR Therapeutics Inc. and SonoSite, Inc.
JOHN A. MCNEILL, JR. (age 50) has served as a director of the Company
since its incorporation in 1989. He served as the Company's President until 1990
and as its Chairman of the Board until July 1993. Mr. McNeill currently serves
as Chief Executive Officer of Liberty Healthcare Services, LLC, a provider of
nursing homes, assisted living facilities, independent living facilities, home
healthcare agencies, home medical equipment and intravenous services.
PAUL J. RIZZO (age 72) has served as a director of the Company since
October 1998. Mr. Rizzo currently is Chairman of the Board of Directors and a
Partner in Franklin Street Partners, an investment company. Mr. Rizzo joined IBM
Corporation in 1958 and retired as Vice Chairman of the Board of Directors in
1987. From 1987 to 1992, he served as dean of the Kenan-Flagler Business School
at the University of North Carolina (Chapel Hill). In 1993 he returned to IBM
Corporation and served as Vice Chairman of the Board of Directors until his
retirement in 1994. Mr. Rizzo also is a director of Ryder Systems, Cox
Enterprises, Inc., Maersk, Inc. and Johnson & Johnson.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors is responsible for the general management of the
Company. In 1999, the board held eight meetings. Each incumbent member of the
board during the time he served as a director of the Company attended at least
75% of the 1999 meetings of the Board of Directors and board committees of which
he was a member.
3
<PAGE>
The Board of Directors has established an Audit Committee, a
Compensation Committee and a Nominating Committee. Mr. Frank, Chairman, Dr.
Mario, Mr. McNeill and Mr. Rizzo are the members of the Audit Committee. The
Audit Committee held three meetings in 1999. The Audit Committee recommends to
the Board of Directors the engagement of the independent auditors and reviews
with management and with the independent auditors the scope and results of the
Company audits, the internal accounting controls of the Company, audit practices
and the professional services furnished by the independent auditors.
Dr. Mario, Chairman, Dr. Bondurant and Mr. McNeill are the members of
the Compensation Committee. The Compensation Committee held four meetings in
1999. The Compensation Committee reviews and approves all compensation
arrangements for the officers of the Company and administers our Equity
Compensation Plan.
Dr. Eshelman, Chairman, Dr. Mario and Mr. Frank are the members of the
Nominating Committee. The Nominating Committee did not hold any meetings in
1999. The Nominating Committee has not established any procedures for
shareholder submission to the committee of nominees for election to the Board of
Directors. However, our bylaws permit any shareholder of record to nominate
directors. You must give written notice of your intent to make nominations by
personal delivery or by certified mail, postage prepaid, to the Secretary of the
Company. If the election is to be held at the Annual Meeting of Shareholders,
you must give your notice not more than 90 days nor less than 50 days before the
meeting. If the election is to be held at a special meeting of shareholders
called to elect directors, you must give your notice by the tenth business day
following the date on which notice of the special meeting is first given to
shareholders. Your notice must include the following: (1) your name and address,
as they appear on the Company's books, and the name and residence address of the
persons to be nominated; (2) the class and number of shares of the Company which
you beneficially own; (3) a representation that you are a shareholder of record
of the Company entitled to vote at the meeting and intend to appear in person or
by proxy to nominate the persons specified in your notice; (4) a description of
all arrangements or understandings between you and each nominee and any other
persons, by name, as to how you will make the nominations; (5) all other
information regarding each nominee you propose which is required to be disclosed
in a solicitation of proxies for election of directors or is required under
Regulation 14A of the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act"), including any information required to be included in
a proxy statement if the nominee had been nominated by the Board of Directors;
and (6) the written consent of each nominee to be named in a proxy statement to
serve as a director if elected.
No shareholder has properly nominated anyone for election as a director
at this Annual Meeting.
PROPOSAL NO. 2 - AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
TO INCREASE THE NUMBER OF SHARES RESERVED FOR AWARDS
In February 2000, the Board of Directors unanimously approved an
amendment to the Company's Employee Stock Purchase Plan (the "Employee Purchase
Plan") that increases the number of shares reserved for issuance under the
Employee Purchase Plan from 500,000 to 1,250,000. The Company adopted the
Employee Purchase Plan effective July 1, 1997 and reserved 500,000 shares of the
Company's Common Stock for issuance under the plan. As of March 15, 2000,
approximately 69,966 shares remain available for purchase by plan participants,
and the Company anticipates that, unless this proposal is approved, there will
not be sufficient shares available for purchase by participants on June 30,
2000.
The plan has two six-month offering periods in each year. The first
offering period begins January 1 each year and the second offering period begins
July 1. Eligible employees can deduct up to 15% of their compensation during
each payroll period included in an offering period. However, no employee can
purchase Common Stock of the Company under the Employee Purchase Plan in excess
of $25,000 in any calendar year. Eligible employees who own 5% or more of the
outstanding Common Stock of the Company are subject to special limitations.
Contributions made by eligible employees to purchase the Company's Common Stock
under the plan are not tax deductible to the employees. At the end of each
offering period, contributions are used to purchase Common Stock of the Company
at a price equal to 85% of the lesser of (1) the reported closing price of the
Company's Common
4
<PAGE>
Stock for the first day of the offering period, or (2) the reported closing
price of the Common Stock for the last day of the offering period.
Eligible employees can increase, decrease or stop payroll deductions
under the Employee Purchase Plan at any time during an offering period. An
employee who stops payroll deductions can purchase shares of the Company's
Common Stock with the payroll deductions already made, or the employee can
withdraw the payroll deductions from the plan. If an eligible employee
terminates employment during an offering period, the employee's payroll
deductions will automatically be terminated and all payroll deductions made
during the offering period prior to termination will be returned to the
employee. Payroll deductions do not earn interest during the offering period.
The Employee Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code. An eligible
employee who purchases Common Stock under the plan during an offering period has
a basis in his or her stock for federal income tax purposes equal to the
purchase price of the stock. If the employee holds the stock for at least two
years from the first day of the offering period during which the stock was
purchased, the employee recognizes ordinary income in an amount equal to the
lesser of (1) the difference between the fair market value of the stock when
sold and the purchase price paid for the stock, or (2) the difference between
the purchase price paid for the stock and the fair market value of the stock on
the first day of the offering period. If the employee sells the shares before
the end of the two-year holding period, the employee will recognize ordinary
compensation income and possibly capital gain or loss in amounts prescribed by
the Internal Revenue Code. The Company will generally be entitled to a federal
income tax deduction in the amount of the employee's ordinary compensation
income.
Employees of the Company and its United States and larger foreign
operating subsidiaries are eligible to participate in the Employee Stock
Purchase Plan. However, employees who customarily work less than 20 hours per
week or five months in a year generally cannot participate in the plan. Because
eligible employees determine both whether and in what amount they will
participate in the Employee Purchase Plan, we cannot determine the benefits and
amounts that will be received by participants in the future. As of March 15,
2000, approximately 2,985 employees are eligible to participate in the Employee
Purchase Plan.
The Company may terminate the Employee Purchase Plan at any time for
any reason. Some amendments to the plan, such as an increase in the number of
shares reserved for issuance under the plan, require shareholder approval.
We believe that the proposed increase in the amount of the Company's
Common Stock reserved for issuance under the Employee Purchase Plan is in the
best interests of the Company and its shareholders. A substantial number of our
employees are not considered for participation in the Company's Equity
Compensation Plan, and the Employee Purchase Plan offers all eligible employees
an opportunity to participate in the potential future success of the Company. We
believe that this opportunity can encourage employee productivity and allegiance
to the Company.
The Employee Purchase Plan is administered by the same administrative
committee that administers the Company's 401(k) retirement plan. The Company's
Senior Vice President of Human Resources, Director of Corporate Benefits and
Compensation, Chief Financial Officer and General Counsel are members of the
administrative committee.
This amendment to the Employee Purchase Plan requires approval by the
majority of all eligible votes present or represented by proxy at a meeting of
shareholders at which a quorum is present.
OTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table shows the number of shares of the Company's Common
Stock as of February 29, 2000, by (1) each person known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (2) each
director and nominee for director, (3) each of our executive officers named in
the Summary Compensation Table below, and (4) all directors and current
executive officers of the Company as a
5
<PAGE>
group. Except as indicated in footnotes to this table, the persons named in this
table have sole voting and investment power with respect to all shares of Common
Stock shown.
6
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Shares
Beneficially Percentage
Name Owned (1) Owned
---- --------------------------- ------------
<S> <C> <C>
Joshua S. Baker (2) 30,000 *
Stuart Bondurant (3) 18,000 *
Abraham E. Cohen (4) 8,000 *
Paul S. Covington (5) 27,552 *
Thomas D'Alonzo (6) 92,233 *
Fred B. Davenport, Jr. (7) 69,333 *
Fredric N. Eshelman (8) 3,024,211 12.2%
Frederick Frank (9) 22,250 *
Franklin Resources, Inc. (10) 1,757,215 7.1%
Donald C. Harrison, M.D. (4) 8,000 *
Rudy C. Howard (11) 75,574 *
Ernest Mario (12) 515,256 2.1%
John A. McNeill, Jr. (13) 1,360,939 5.5%
Mellon Financial Corporation (14) 1,318,190 5.3%
Paul J. Rizzo (4) 13,000 *
Strong Capital Management, Inc. (15) 1,408,100 5.7%
All directors and current executive
officers as a group (10 persons) (16) 5,066,541 20.3%
</TABLE>
- ----------
* Less than one percent.
(1) As of February 29, 2000, the Company had 24,739,721 shares of Common
Stock outstanding. Share ownership in each case also includes shares
issuable upon exercise of outstanding options that can be exercised
within 60 days after February 29, 2000 for purposes of computing the
percentage of Common Stock owned by the person named. Options owned by
such person are not included for purposes of computing the percentage
owned by any other person.
(2) Consists of shares of Common Stock issuable pursuant to options.
(3) Includes 17,000 shares of Common Stock issuable pursuant to options.
(4) Includes 8,000 shares of Common Stock issuable pursuant to options.
(5) Includes 24,999 shares of Common Stock issuable pursuant to options.
(6) Includes 83,333 shares of Common Stock issuable pursuant to options and
1,500 shares of Common Stock held by Mr. D'Alonzo's wife.
(7) Includes 1,000 shares of Common Stock held through an individual
retirement account for the benefit of Mr. Davenport and 68,333 shares
of Common Stock issuable pursuant to options.
(8) Includes 43,333 shares of Common Stock issuable pursuant to options.
Dr. Eshelman's address is 6814 Towles Road, Wilmington, North Carolina
28409.
(9) Includes 21,864 shares of Common Stock issuable pursuant to options.
(10) Based on information contained in Schedule 13G filed with the
Securities and Exchange Commission on or about January 28, 2000.
(11) Includes 4,100 shares of Common Stock held through an individual
retirement account for the benefit of Mr. Howard; 69,999 shares of
Common Stock issuable pursuant to options; 1,250 shares of Common Stock
issuable pursuant to options held by Mr. Howard's wife who is employed
by the Company; and 120 shares of Common Stock held by Mr. Howard's
wife.
(12) Includes 284,388 shares of Common Stock held in a family partnership;
51,413 shares of Common Stock held in trust for Mrs. Mario; 51,413
shares of Common Stock held in trust for Dr. Mario; 28,620 shares of
Common Stock held by Dr. Mario's wife; and 28,666 shares of Common
Stock issuable pursuant to options.
(13) Includes 64,615 shares of Common Stock held in a family partnership;
25,017 shares of Common Stock held in trust for Mr. McNeill's three
children, all of whom reside with Mr. McNeill; and 12,000 shares of
Common Stock issuable pursuant to options. Mr. McNeill's address is 304
East Oliver Street, Whiteville, North Carolina 28472.
(14) Based on information contained in Schedule 13G filed with the
Securities and Exchange Commission on or about January 27, 2000.
(15) Based on information contained in Schedule 13G filed with the
Securities and Exchange Commission on or about January 25, 2000.
(16) Includes all shares referenced in the table above except those owned by
Joshua S. Baker, Thomas D'Alonzo, Rudy C. Howard, Franklin Resources,
Inc., Mellon Financial Corporation and Strong Capital Management, Inc.
7
<PAGE>
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors. Non-employee directors
receive an annual retainer of $20,000 payable in quarterly installments after
each regularly scheduled meeting of directors. Each non-employee director also
receives $1,000 for each meeting of the Board of Directors attended in person
and $1,000 for attendance of the Annual Meeting of Shareholders. In addition,
each non-employee director receives $750 for each committee meeting attended,
and the chairman of each committee receives $1,000 for attendance of each
meeting of his committee. In the discretion of the Chairman of the Board of
Directors, each non-employee director receives $500 for each Board and committee
meeting attended by telephone. In addition, each non-employee director is
granted options to purchase 4,000 shares of Common Stock of the Company on the
date the non-employee director is first elected to the Board of Directors and on
each date the non-employee director is re-elected to the Board. The options are
fully vested on the grant date.
8
<PAGE>
EXECUTIVE COMPENSATION TABLES
1. SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- --------------
OTHER ANNUAL SECURITIES ALL OTHER
BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($) OPTIONS(#) ($)
- --------------------------- ---- --------- --------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fredric N. Eshelman (2) 1999 $ 452,500 $ 135,750 $-- 50,000 $ 5,833
Vice Chairman and 1998 425,000 127,500 -- 30,000 5,736
Chief Executive Officer 1997 423,750 63,563 -- 50,000 6,316
Rudy C. Howard (3) 1999 $ 211,500 -- $-- 20,000 $ 5,422
Chief Financial Officer, 1998 204,090 61,227 -- 10,000 5,536
Vice President Finance 1997 179,167 27,178 -- 10,000 7,394
and Treasurer
Fred B. Davenport, Jr. (4) 1999 $ 212,750 $ 63,825 $-- 20,000 $ 5,527
General Counsel and 1998 200,500 60,150 -- 10,000 5,506
Vice President Legal 1997 200,000 30,000 -- 15,000 5,968
Paul S. Covington (5) 1999 $ 214,375 $ 64,312 $-- 10,000 $ 5,429
Senior Vice President, 1998 199,458 59,838 -- 10,000 5,459
Medical Affairs, and 1997 192,732 30,415 -- 10,000 5,378
Chief Safety Officer
Thomas D'Alonzo (6) 1999 $ 194,452 $ -- $-- -- $ 5,819
1998 226,869 68,061 -- 15,000 5,763
1997 225,000 33,750 -- 25,000 7,054
Joshua S. Baker (7) 1999 $ 193,471 $ -- $-- 5,000 $4,682
1998 205,208 61,563 -- 20,000 5,028
1997 184,167 29,480 -- 20,000 5,277
</TABLE>
- --------------------
(1) All bonuses were paid in the calendar year following the year in which
they were earned as set forth in this table.
(2) Dr. Eshelman was awarded options to acquire 50,000, 30,000 and 50,000
shares of Common Stock on December 18, 1997, December 1, 1998 and
December 6, 1999, respectively. Dr. Eshelman received other
compensation in 1999 consisting of $833 in taxable benefit of premiums
paid for group term life insurance on his behalf and $5,000 in 401(k)
plan matching contributions. Dr. Eshelman received other compensation
in 1998 consisting of $736 in taxable benefit of premiums paid for
group term life insurance on his behalf and $5,000 in 401(k) plan
matching contributions. Dr. Eshelman received other compensation in
1997 consisting of $1,566 in taxable benefit of premiums paid for group
term life insurance on his behalf and $4,750 in 401(k) plan matching
contributions.
(3) Mr. Howard was awarded options to acquire 10,000, 10,000 and 20,000
shares of Common Stock on December 18, 1997, December 1, 1998 and
December 6, 1999, respectively. Mr. Howard received other compensation
in 1999 consisting of $422 in taxable benefit of premiums paid for
group term life insurance on his behalf and $5,000 in 401(k) plan
matching contributions. Mr. Howard received other compensation in 1998
consisting of $457 in taxable benefit of premiums paid for group term
life insurance on his behalf and $5,079 in 401(k) plan matching
contributions. Mr. Howard received other compensation in 1997
consisting of $622 in taxable benefit of premiums paid for group term
life insurance on his behalf, $4,750 in 401(k) plan matching
contributions and $2,022 of compensation for forfeited paid time off.
9
<PAGE>
(4) Mr. Davenport was awarded options to acquire 15,000, 10,000 and 20,000
shares of Common Stock on December 18, 1997, December 1, 1998 and
December 6, 1999, respectively. Mr. Davenport received other
compensation in 1999 consisting of $527 in taxable benefit of premiums
paid for group term life insurance on his behalf and $5,000 in 401(k)
plan matching contributions. Mr. Davenport received other compensation
in 1998 consisting of $506 in taxable benefit of premiums paid for
group term life insurance on his behalf and $5,000 in 401(k) plan
matching contributions. Mr. Davenport received other compensation in
1997 consisting of $1,218 in taxable benefit of premiums paid for group
term life insurance on his behalf and $4,750 in 401(k) matching
contributions.
(5) Dr. Covington was awarded options to acquire 10,000 shares of Common
Stock on each of December 18, 1997, December 1, 1998 and December 6,
1999. Dr. Covington received other compensation in 1999 consisting of
$429 in taxable benefit of premiums paid for group term life insurance
on his behalf and $5,000 in 401(k) plan matching contributions. Dr.
Covington received other compensation in 1998 consisting of $459 in
taxable benefit of premiums paid for group term life insurance on his
behalf and $5,000 in 401(k) plan matching contributions. Dr. Covington
received other compensation in 1997 consisting of $628 in taxable
benefit of premiums paid for group term life insurance on his behalf
and $4,750 in 401(k) matching contributions.
(6) Mr. D'Alonzo served as President and Chief Operating Officer of the
Company until his retirement on October 5, 1999. Mr. D'Alonzo was
awarded options to acquire 25,000 shares and 15,000 shares of Common
Stock on December 18, 1997 and December 1, 1998, respectively. Mr.
D'Alonzo received other compensation in 1999 consisting of $819 in
taxable benefit of premiums paid for group term life insurance on his
behalf and $5,000 in 401(k) plan matching contributions. Mr. D'Alonzo
received other compensation in 1998 consisting of $763 in taxable
benefit of premiums paid for group term life insurance on his behalf
and $5,000 in 401(k) plan matching contributions. Mr. D'Alonzo received
other compensation in 1997 consisting of $2,304 in taxable benefit of
premiums paid for group term life insurance on his behalf and $4,750 in
401(k) plan matching contributions.
(7) Dr. Baker most recently served as Executive Vice President of Global
Operations of PPD Development, Inc., a wholly owned subsidiary of the
Company, until his resignation on October 7, 1999 to become chief
executive officer of PPGx, Inc., a pharmacogenomics company of which
the Company owns 18% of the common stock. Dr. Baker was awarded options
to purchase 10,000, 10,000, 20,000 and 5,000 shares of Common Stock on
October 1, 1997, December 18, 1997, December 1, 1998 and March 2, 1999,
respectively. Dr. Baker received other compensation in 1999 consisting
of $367 in taxable benefit of premiums paid for group term life
insurance on his behalf and $4,315 in 401(k) plan matching
contributions. Dr. Baker received other compensation in 1998 consisting
of $394 in taxable benefit of premiums paid for group term life
insurance on his behalf and $4,634 in 401(k) plan matching
contributions. Dr. Baker received other compensation in 1997 consisting
of $527 in taxable benefit of premiums paid for group term life
insurance on his behalf and $4,750 in 401(k) plan matching
contributions.
10
<PAGE>
2. STOCK OPTION/SAR GRANTS TABLE - 1999 GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ANNUALIZED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(1) FOR OPTION TERM (2)
--------------------------------------------------------- ------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE OR
GRANTED FISCAL YEAR BASE PRICE EXPIRATION
NAME (#) (3) ($/SH) DATE 5% ($) 10%($)
- ---- ----------- ------------- ------------ ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Fredric N. Eshelman 50,000 7.25% $ 13.0625 12/05/09 $ 410,865 $1,040,875
Rudy C. Howard 20,000 2.90% 13.0625 12/05/09 164,350 416,350
Fred B. Davenport, Jr. 20,000 2.90% 13.0625 12/05/09 164,350 416,350
Paul S. Covington 10,000 1.45% 13.0625 12/05/09 82,175 208,175
Joshua S. Baker (4) 5,000 .72% 34.0000 03/01/09 106,900 270,950
</TABLE>
(1) All options to current executive officers named in this table were
granted under the Equity Compensation Plan on December 6, 1999. The
exercise price per share of all options granted equals the fair market
value per share of the Company's Common Stock on the date of grant. The
options are exercisable over a term of ten years from the date of
grant. Shares subject to the options granted vest ratably over the
three-year period starting on the date of the grant, with vesting
occurring on the anniversary dates of the grant. All options are
non-qualified stock options and expire three months after termination
of employment. However, if employment is terminated because of death or
disability, the options can be exercised until one year after death or
disability.
(2) Potential realizable value of each grant is calculated assuming that
the market price of the underlying security appreciates at annualized
rates of 5% and 10%, respectively, over the ten-year term of the
option. The assumed annual rates of appreciation of 5% and 10% would
result in the price of the Common Stock increasing to $21.28 and $33.88
per share, respectively, for options expiring December 5, 2009, and
$55.38 and $88.19 per share, respectively, for options expiring March
1, 2009. Actual gains, if any, on stock option exercises depend on the
future performance of the Common Stock and overall stock market
conditions. The amounts shown in this table might not be achieved.
(3) The Company granted options to acquire 690,085 shares of Common Stock
in 1999, including 216,311 substitute options issued under the Ask the
Pharmacist, Inc. 1995 Incentive Stock Option Plan and 96,024 substitute
nonqualified options issued to Michael P. Tower in connection with the
Company's acquisition of ATP, Inc. The Ask the Pharmacist stock plan
and the Tower options were assumed by the Company as part of the ATP
acquisition.
(4) The options granted to Dr. Baker were forfeited when he terminated his
employment with the Company on October 7, 1999.
3. AGGREGATED OPTION/SAR EXERCISES IN 1999
AND OPTION/SAR VALUES AS OF YEAR-END 1999(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
SHARES YEAR-END (#) AT FISCAL YEAR-END (1) ($)
ACQUIRED ON VALUE ------------------------- --------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fredric N. Eshelman -- -- 43,333 86,667 $ -- $ --
Rudy C. Howard -- -- 69,999 30,001 -- --
Fred B. Davenport, Jr. -- -- 68,333 31,667 -- --
Paul S. Covington 10,000 151,250 24,999 20,001 -- --
Thomas D'Alonzo -- -- 83,333 -- -- --
Joshua S. Baker -- -- 30,000 -- -- --
</TABLE>
(1) The value of the options is based on the difference between the
exercise price and $11.875, the closing price per share of the
Company's Common Stock on the National Association of Securities
Dealers' Automated Quotation National Market System on December 31,
1999.
11
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
Fred Eshelman, Chief Executive Officer, entered into an employment
agreement with the Company effective July 1, 1997. Under the employment
agreement, Dr. Eshelman was employed for a one-year term which expired on June
30, 1998. The employment agreement provides for automatic one-year renewals
unless either party gives notice that the agreement will not be renewed, and the
agreement automatically renewed for a third one-year term beginning July 1,
1999. Dr. Eshelman's annual base salary for the renewal term is $485,000.
Rudy Howard, Chief Financial Officer, entered into an employment
agreement with the Company effective January 1, 1998. The employment agreement
provides for automatic one-year renewals unless either party gives notice that
the agreement will not be renewed. The agreement was renewed for a third
one-year term beginning January 1, 2000, and Mr. Howard's annual base salary for
the renewal term was increased to $230,000. Mr. Howard and the Company mutually
agreed to terminate the employment agreement effective February 8, 2000.
Fred Davenport entered into an employment agreement with the Company on
September 26, 1996 to serve as General Counsel of the Company. The employment
agreement provides for automatic one-year renewals unless either party gives
notice that the agreement will not be renewed. The agreement was renewed for a
fourth one-year term starting December 1, 1999. Mr. Davenport's base salary for
the renewal term is $230,000.
Paul Covington, Senior Vice President of Medical Affairs and Chief
Safety Officer, entered into an employment agreement with PPD Development on
October 1, 1997. Dr. Covington's employment agreement provides for automatic
one-year renewals unless either party gives notice that the agreement will not
be renewed. The employment agreement was renewed for a third one-year term
beginning January 1, 2000. Dr. Covington's annual base salary for the renewal
term is $230,000.
Each of the executive officers named in the Summary Compensation Table
entered into a severance agreement with the Company on February 2, 1998. Each
severance agreement provides that upon termination of the executive officer's
employment within one year after a change of control of the Company, including
required relocation that he declines, the executive officer will be paid an
amount equal to his annual W-2 compensation for the prior 12 months in all cases
except Mr. Howard and Mr. Davenport, each of whom is entitled to twice his
annual W-2 compensation for the prior 12 months. In addition, all outstanding
unvested stock options granted at least six months prior to the executive
officer's termination of employment will vest upon termination. The additional
compensation amounts provided to Mr. Howard and Mr. Davenport in the event of
their termination of employment after a change in control of the Company reflect
similar preexisting compensation arrangements which they had with the Company in
the event of their termination of employment upon a change in control of the
Company. These prior arrangements were terminated when Mr. Howard and Mr.
Davenport entered into new severance agreements with the Company. The Company's
obligations under its severance agreements with Mr. Howard, Mr. D'Alonzo and Dr.
Baker expired when each voluntarily terminated his employment with the Company.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Ernest Mario, Chairman, Stuart Bondurant and John A. McNeill, Jr. are
the members of the Company's Compensation Committee. All of the committee
members are outside directors.
Executive Pay Policy.
--------------------
The Compensation Committee believes that the Company should have a
compensation system that is performance-oriented and designed to achieve
long-term shareholder returns. To help the Company to achieve these objectives,
the committee recommended that the Company retain Frederic W. Cook & Co., Inc.,
a consulting firm, to conduct a study of the competitiveness of the Company's
executive compensation practices. The committee also suggested that the Cook
firm should be asked to recommend appropriate changes to short-term and
long-term executive incentive plans that will help the Company to achieve its
stated objectives. The Company retained the Cook firm in June 1997 and received
its report in September 1997.
Using the Cook firm's recommendations as a guide, the Compensation
Committee approved changes in the executive cash bonus plan and adopted a new
set of guidelines for grants of stock options. The committee believes that the
changes made are consistent with its stated objective of establishing a
compensation system that is
12
<PAGE>
performance-oriented and is intended to achieve long-term shareholder returns.
The Company regularly consults with the Cook firm on executive compensation
issues and has asked the firm to update and supplement its 1997 report later
this year.
Specific Compensation Programs.
------------------------------
The Company's compensation policy for its executive officers includes a
mix of base salary, annual cash bonus awards and long-term incentive
compensation in the form of stock options.
BASE SALARY. The committee reviews the base salaries of the Company's
executive officers annually. In its December 1999 annual reviews of Mr. Howard,
Mr. Davenport and Dr. Covington, the committee approved increases in their base
salaries. Mr. Howard and Mr. Davenport each received an $18,000 increase in base
salary, an 8.5% increase in each case. Dr. Covington received a $15,000
increase, or 7% of his base salary. Both Mr. Davenport and Dr. Covington were
assigned additional administrative and operational responsibilities upon the
retirement of Mr. D'Alonzo and the resignation of Dr. Baker. The committee still
adheres to its general policy that executive employment agreements will be for
one-year terms, with a provision for successive one-year renewal terms unless
either party gives notice to the other that the agreement will not be renewed.
All of the employment agreements that the Company has with its executive
officers include these terms. The committee's experience has been that a
one-year employment term with annual performance reviews encourages better
performance by executives.
ANNUAL BONUS AWARDS. All current employment agreements with executive
officers provide for payment of cash bonus awards in the discretion of the
Compensation Committee. In 1997 the Compensation Committee approved a new bonus
plan for its life sciences division which included recommendations made by the
Cook firm. This bonus plan is reviewed and updated annually. Under the 1999
employee incentive compensation plan, target bonuses for executives who
participate in the plan were equal to 30% of base salary. All of the current
executive officers named in the Summary Compensation Table earned target bonuses
in 1999 under the bonus plan.
STOCK OPTION AWARDS. All annual stock option awards received by
executive officers named in the Summary Compensation Table were made under the
comprehensive guidelines for grants of nonqualified stock options adopted by the
committee in December 1997. Initial and annual awards of stock options are based
upon the position held by an executive and the size of the stock option awards
generally are tied to the Company's overall performance. The committee in its
discretion may also issue stock option grants in lieu of increases in base
salary or cash bonus awards to incentivize executives. The committee believes
that this approach is consistent with its stated objective of establishing a
performance-based executive compensation system since the value of the
executive's stock options generally will be related to the Company's overall
performance.
Chief Executive Officer Compensation.
------------------------------------
Dr. Eshelman's current base salary of $485,000 was determined in March
1999 as part of his annual performance review. Based on his and the Company's
performance in the prior twelve months, the committee increased his salary to
$485,000, a 14.1% increase, effective July 1, 1999 when Dr. Eshelman's
employment agreement was renewed for another one-year term. Dr. Eshelman also
earned a bonus of $135,750 under the 1999 employee incentive compensation plan,
which was paid in March 2000. The committee reviewed Dr. Eshelman's base salary
again in late February 2000 as part of his annual performance review. The
committee noted the Company's stock price was down from the same time last year.
However, the Company's revenue and earnings were up substantially in 1999 and
the stock price increased notably during the first two months of 2000.
Accordingly, the committee increased Dr. Eshelman's salary to $525,000, an 8.25%
increase, effective July 1, 2000 when Dr. Eshelman's employment agreement is
renewed for another one-year term. Based upon the criteria discussed in
"Specific Compensation Programs - Stock Option Awards", the Committee approved
an annual grant of 50,000 nonqualified stock options to Dr. Eshelman on December
6, 1999 at an exercise price of $13.0625 per share.
Submitted by: THE COMPENSATION COMMITTEE
Ernest Mario, Chairman
Stuart Bondurant,
John A. McNeill, Jr.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee was an officer or
employee of the Company at any time in 1999. Mr. McNeill served as the Company's
President from 1989 until 1993. No executive officer of the Company serves as a
member of the board of directors or compensation committee of any entity which
has one or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
PERFORMANCE GRAPH
Below is a graph which compares the cumulative total shareholder return
on the Company's Common Stock from January 24, 1996, the effective date of the
Company's initial public offering, through December 31, 1999, against the
cumulative total return for the same period on the NASDAQ Stock Market (U.S.)
Index and the NASDAQ Health Services Index. The results are based on an assumed
$100 invested on January 24, 1996 and reinvestment of all dividends.
(PERFORMACE GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS.)
Comparison of Cumulative Total Return Among PPDI and the
NASDAQ U.S. Stock and NASDAQ Health Services Indices
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 1/24/96 6/28/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
- ----------------------------- ------- ------- -------- -------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PPDI 100.000 131.373 99.02 86.275 60.294 86.275 117.892 107.353 46.569
NASDAQ U.S. Stock Index 100.000 114.346 124.214 139.010 152.390 183.469 214.221 262.610 387.646
NASDAQ Health Services Index 100.000 102.507 98.606 102.766 100.491 100.171 86.174 94.811 70.369
</TABLE>
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Shareholder proposals to be included in the Proxy Statement for our
next annual meeting of shareholders must be received by the Company not later
than December 1, 2000. Under the Company's bylaws, shareholder proposals to be
considered at our next annual meeting must be received by the Company not later
than 50 days prior to that meeting. All submissions must comply with all of the
requirements of the Company's bylaws and Rule 14a-8 of the Securities Exchange
Act. Proposals should be mailed to Fred B. Davenport, Jr., Secretary,
Pharmaceutical Product Development, Inc., 3151 South Seventeenth Street,
Wilmington, North Carolina 28412.
14
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our officers and
directors and persons who own more than 10% of our outstanding Common Stock to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. These officers, directors and shareholders are required by
regulations under the Securities Exchange Act to furnish us with copies of all
forms they file under Section 16(a).
Based solely on our review of the copies of such forms we have
received, we believe that during 1999 all of our officers, directors and
shareholders described above complied with all Section 16(a) filing
requirements.
OTHER MATTERS
The Board of Directors of the Company has appointed
PriceWaterhouseCoopers LLP ("PWC"), Raleigh, North Carolina to serve as the
independent auditors of the Company for the fiscal year ended December 31, 1999.
PWC and its predecessor, Coopers & Lybrand L.L.P., have audited our accounts
since 1994. PWC has advised the Company that it does not have, and has not had,
any direct or indirect financial interest in the Company or its subsidiaries in
any capacity other than that of serving as independent auditors. Representatives
of PWC are expected to attend the Annual Meeting. They will have an opportunity
to make a statement if they desire, and they also will be available to respond
to appropriate questions.
By Order of the Board of Directors
/s/ Fredric N. Eshelman, Pharm.D.
Fredric N. Eshelman, Pharm.D.
Chief Executive Officer
15
<PAGE>
********************************************************************************
APPENDIX
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
3151 SOUTH SEVENTEENTH STREET
WILMINGTON, NORTH CAROLINA 28412
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 16, 2000
The undersigned hereby appoints Fredric N. Eshelman and Fred B. Davenport,
Jr., and each of them, as proxies, each with full power of substitution, and
hereby authorizes them to represent and to vote, as designated below, all
the shares of Common Stock of Pharmaceutical Product Development, Inc., a
North Carolina corporation (the "Company"), held of record by the
undersigned on March 15, 2000, at the Annual Meeting of Shareholders to be
held at the principal offices of the Company located at 3151 South
Seventeenth Street, Wilmington, North Carolina at 10:00 a.m. on May 16,
2000, or at any adjournment(s) thereof. The following proposals to be
brought before the meeting are more specifically described in the
accompanying Proxy Statement.
(1) Election of Directors:
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHOUT AUTHORITY TO VOTE
(except as marked to the contrary below) FOR ALL NOMINEES LISTED
BELOW
INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.
Stuart Bondurant, M.D., Abraham E. Cohen, Fredric N. Eshelman, Pharm D.,
Frederick Frank, Donald C. Harrison, M.D.,
Ernest Mario, Ph.D., John A. McNeill, Jr., Paul J. Rizzo
(2) Amendment to the Employee Stock Purchase Plan to Increase the Number
of Shares Reserved for Awards
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such
other matters as may properly come before the meeting.
[ ] GRANT AUTHORITY [ ] WITHHOLD AUTHORITY
(CONTINUED ON OTHER SIDE)
<PAGE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(CONTINUED FROM OTHER SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR MANAGEMENT'S NOMINEES FOR DIRECTOR LISTED ABOVE, FOR THE
AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES
RESERVED FOR AWARDS, AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO ANY
OTHER MATTERS PROPERLY BROUGHT BEFORE THE SHAREHOLDERS AT THE MEETING.
_________________________________________
Signature
_________________________________________
Signature, if held jointly
Please date and sign exactly as name
appears on your stock certificate. Joint
owners should each sign personally.
Trustees, custodians, executors and
others signing in a representative
capacity should indicate the capacity in
which they sign.
Date: _____________________________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE, WHETHER OR NOT YOU PLAN TO BE
PRESENT AT THE MEETING. IF YOU ATTEND THE
MEETING, YOU CAN VOTE EITHER IN PERSON OR
BY YOUR PROXY.
