<PAGE>
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
COLLATERAL THERAPEUTICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LETTERHEAD]
APRIL 22, 1999
TO FELLOW STOCKHOLDERS OF
COLLATERAL THERAPEUTICS, INC.:
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING OF OUR
STOCKHOLDERS, TO BE HELD ON THURSDAY, MAY 27, 1999, AT 9:00 A.M. AT THE
DOUBLETREE HOTEL LOCATED AT 11915 EL CAMINO REAL, SAN DIEGO, CALIFORNIA.
DETAILS OF THE BUSINESS TO BE CONDUCTED AT THE ANNUAL MEETING ARE GIVEN IN
THE ATTACHED NOTICE OF ANNUAL MEETING AND PROXY STATEMENT.
IF YOU DO NOT PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING REPLY ENVELOPE.
IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY
VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE ANNUAL
MEETING.
WE LOOK FORWARD TO SEEING YOU AT THE ANNUAL MEETING.
SINCERELY,
JACK W. REICH, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SAN DIEGO, CALIFORNIA
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NEEDED IF MAILED IN THE
UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
COLLATERAL THERAPEUTICS, INC.
11622 EL CAMINO REAL
SAN DIEGO, CA 92130
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1999
----------------------------
TO THE STOCKHOLDERS OF COLLATERAL THERAPEUTICS, INC.:
NOTICE IS HEREBY GIVEN THAT THE ANNUAL MEETING OF STOCKHOLDERS OF
COLLATERAL THERAPEUTICS, INC., A DELAWARE CORPORATION, WILL BE HELD ON THURSDAY,
MAY 27, 1999, AT 9:00 A.M. PACIFIC DAYLIGHT SAVING TIME AT THE DOUBLETREE HOTEL,
11915 EL CAMINO REAL, SAN DIEGO, CALIFORNIA, FOR THE FOLLOWING PURPOSES, AS MORE
FULLY DESCRIBED IN THE PROXY STATEMENT ACCOMPANYING THIS NOTICE:
1. TO ELECT A BOARD OF DIRECTORS, AS SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT, TO SERVE UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
2. TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
3. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS OF THE ANNUAL MEETING.
ONLY STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MARCH 31, 1999 ARE
ENTITLED TO NOTICE OF AND TO VOTE AT THE ANNUAL MEETING. OUR STOCK TRANSFER
BOOKS WILL REMAIN OPEN BETWEEN THE RECORD DATE AND THE DATE OF THE MEETING. A
LIST OF STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING WILL BE AVAILABLE
FOR INSPECTION AT OUR EXECUTIVE OFFICES AND AT THE ANNUAL MEETING.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE IN THE ENVELOPE ENCLOSED FOR YOUR CONVENIENCE. IF YOU
RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT
NAMES AND ADDRESSES, EACH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT ALL
YOUR SHARES WILL BE VOTED. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING BY FILING A NOTICE OF REVOCATION OR ANOTHER SIGNED PROXY WITH A
LATER DATE. IF YOU ATTEND THE ANNUAL MEETING AND VOTE BY BALLOT, YOUR PROXY WILL
BE REVOKED AUTOMATICALLY AND ONLY YOUR VOTE AT THE ANNUAL MEETING WILL BE
COUNTED.
BY ORDER OF THE BOARD OF DIRECTORS
TYLER M. DYLAN, PH.D.
GENERAL COUNSEL AND SECRETARY
APRIL 22, 1999 SAN DIEGO, CALIFORNIA
- --------------------------------------------------------------------------------
PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY. TO ASSURE YOUR
REPRESENTATION AT THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE>
[LETTERHEAD]
COLLATERAL THERAPEUTICS, INC.
11622 EL CAMINO REAL
SAN DIEGO, CA 92130
---------------------
PROXY STATEMENT
---------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1999
The enclosed proxy is solicited on behalf of the Board of Directors of
Collateral Therapeutics, Inc., a Delaware corporation for use at the annual
meeting of stockholders to be held on May 27, 1999. The annual meeting will be
held at 9:00 a.m. Pacific Daylight Saving Time at the DoubleTree Hotel, 11915 El
Camino Real, San Diego, California. These proxy solicitation materials were
mailed on or about April 22, 1999, to all stockholders entitled to vote at the
annual meeting.
ACTION TO BE TAKEN UNDER THE PROXY
The specific proposals to be considered and acted on at the annual meeting
are summarized in the accompanying notice and are described in more detail in
this proxy statement. On March 31, 1999, the record date for determination of
stockholders entitled to notice of and to vote at the annual meeting, 10,584,189
shares of our common stock, par value $0.001 were issued and outstanding. No
shares of our preferred stock, par value $0.001, were outstanding. Each
stockholder is entitled to one vote for each share of common stock on March 31,
1999. Stockholders may not cumulate votes in the election of directors.
All votes will be counted by the inspector of election appointed for the
meeting, who will separately count affirmative and negative votes, abstentions
and broker non-votes. Abstentions and broker non-votes are counted as present
for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions will be counted towards the tabulations of
votes cast on proposals presented to the stockholders and will have the same
effect as negative votes. Broker non-votes will not be counted for purposes of
determining whether a proposal has been approved.
If the enclosed form of proxy is properly signed, dated and returned, the
shares represented will be voted at the annual meeting in accordance with the
instructions specified on the proxy.
If the proxy does not specify how the shares are to be voted:
- the proxy will be voted FOR the election of the directors nominated by
the Board (unless the authority to vote for the election of eight
nominee directors is withheld) and,
- the proxy will be voted FOR the approval of Proposal 2 described in the
notice and proxy statement (unless contrary instructions are given).
1
<PAGE>
You may revoke or change your proxy at any time before the annual meeting
by filing a notice of revocation or another signed proxy with a later date.
These should be filed with our General Counsel & Secretary at our principal
executive offices at 11622 El Camino Real, San Diego, California 92130. You may
also revoke your proxy by attending the annual meeting and voting in person.
We do not know of other matters to be presented for consideration at the
annual meeting. However, if any other matters properly come before the annual
meeting, it is the intention of the persons named in the enclosed form of proxy
to vote the shares they represent as the Board of Directors may recommend.
Discretionary authority with respect to such other matters is granted by the
execution of the enclosed proxy.
PROXY SOLICITATION
We will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of this proxy statement, the proxy and any
additional solicitation materials furnished to our stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, we may reimburse such persons for their costs in forwarding the
solicitation materials to such beneficial owners. The original solicitation of
proxies by mail may be supplemented by a solicitation by telephone, telegram or
other means by our directors, officers or employees. No additional compensation
will be paid to these individuals for any such services. We have retained
Georgeson & Co. to aid in the solicitation of proxies, including soliciting
proxies from brokerage firms, banks, nominees, custodians and fiduciaries. The
fees of such firm will total approximately $6,500, plus out-of-pocket costs and
expenses.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The persons named below are nominees for director to serve until the next
annual meeting of stockholders and until their successors have been elected and
qualified. Our bylaws provide that the authorized number of directors is
determined by resolution of the Board of Directors or by the stockholders at an
annual meeting, within the range of five to nine individuals. The authorized
number of directors is currently eight. The Board of Directors has selected
eight nominees, five of whom are current directors of the Company. Each person
nominated for election has agreed to serve if elected, and management has no
reason to believe that any nominee will be unavailable to serve. In the event
the nominee is unable or declines to serve as a director at the time of the
annual meeting, the proxies will be voted for any nominee who may be designated
by the present Board of Directors to fill the vacancy. Unless otherwise
instructed, the proxyholders will vote the proxies received by them FOR the
nominees named below. The proxies received by the proxyholders cannot be voted
for more than eight directors. The eight candidates receiving the highest number
of affirmative votes of the shares entitled to vote at the annual meeting will
be elected directors of the Company. Set forth below is information regarding
the director nominees.
2
<PAGE>
BUSINESS EXPERIENCE OF DIRECTOR NOMINEES
JACK W. REICH, PH.D., age 50, is one of our co-founders and has served as a
director since 1995. He has also served as our President and Chief Executive
Officer since April 1995. In May 1995, Dr. Reich co-founded MyoTech, Inc., a
newly established venture based upon a novel clinical service model and drug
therapy to treat chronic muscle injury, which was sold in November 1996. From
October 1994 to January 1995, Dr. Reich was Senior Vice President of Enterprise
Partners, a Southern California-based venture capital firm that has played a key
role in developing biotechnology and medical technology companies. From
September 1987 to October 1994, Dr. Reich was Vice President, Regulatory Affairs
and Quality Operations of Gensia, Inc., now Gensia Sicor, Inc., a
biopharmaceutical company formed to discover, develop, manufacture and market
novel pharmaceutical products for the diagnosis and treatment of human disease.
Dr. Reich received a B.A. in Biology from Washington and Jefferson College, a
B.S. in Pharmacy from Creighton University, a M.S. in Hospital Pharmacy
Administration from Temple University and a Ph.D. in Pharmaceuticals -
International Pharmaceutical Administration from Temple University.
CHRISTOPHER J. REINHARD, age 45, is one of our co-founders and has served as a
director since 1995. He has also served as our Chief Financial Officer since
April 1995 and as Chief Operating Officer since July 1997. Mr. Reinhard is a
member of the audit committee. From 1990 to 1995, Mr. Reinhard was President of
the Colony Group Inc., a business and corporate development company, and
Reinhard Associates, an investor relations consulting company. From 1986 to
1990, Mr. Reinhard served as Vice President and Managing Director of the Henley
Group, a diversified industrial and manufacturing group, and as Vice President
of various public and private companies created by the Henley Group, including
Fisher Scientific Group, a leading international distributor of laboratory
equipment and test apparatus for the scientific community, Instrumentation
Laboratory, IMED Corporation, Wheelabrator Technologies Inc., and Henley
Properties Inc. (now California Coastal Communities, Inc.). Mr. Reinhard
received a B.S. in Finance and an M.B.A. from Babson College.
CRAIG S. ANDREWS, age 46, is one of our co-founders and has served as a director
since April 1995. Mr. Andrews also served as Secretary from July 1997 to
December 1998. Mr. Andrews is a member of the compensation committee. Since
March 1987, Mr. Andrews has been a partner in the law firm of Brobeck, Phleger &
Harrison LLP and has specialized in representing emerging growth companies. Mr.
Andrews has broad experience in founding companies and in financing transactions
as well as general business and corporate law. Mr. Andrews has played an
important role in the formation and development of numerous start-up
biotechnology companies. Mr. Andrews is a director of Encad, Inc., which designs
and manufactures wide-format color inkjet printers. Mr. Andrews received a B.A.
from the University of California at Los Angeles and a J.D. from the University
of Michigan.
CHARLES J. ASCHAUER, age 70, has been nominated to serve on our Board of
Directors. He currently acts as a business consultant. After an 18 year career
at Abbott Laboratories, an international healthcare company, he retired as
Executive Vice President and a member of the Board of Directors. Mr. Aschauer
has been a director of Boston Scientific Corporation, a medical device company,
and Linc Capital Inc., a financial services company, for more than five years.
Mr. Aschauer has been a director of Trustmark Insurance Company, for more than
fifteen years. Mr. Aschauer previously served as a director of QLT Therapeutics
and of Rustoleum Corporation. Mr. Aschauer received a B.A. degree in Business
Administration from Northwestern University.
3
<PAGE>
ROBERT L. ENGLER, M.D., age 54, is one of our co-founders and has served as a
director since 1995. He also served as our Vice President, Medical Director from
April 1995 to December 1998. Dr. Engler has been Professor of Medicine at the
University of California at San Diego (UCSD) since 1988, Associate Chief of
Staff for Research and Development at the Veterans' Affairs Medical Center since
1989, and a faculty member of the Institute for Biomedical Engineering UCSD
since 1991. Dr. Engler is a clinical cardiologist practicing at the San Diego
Veterans' Affairs Healthcare System. From its founding in 1985 to 1997, Dr.
Engler was a Scientific Advisor to Gensia, Inc., now Gensia Sicor, Inc.. Dr.
Engler received a B.A. in Physics from the University of North Carolina and a
M.D. from Georgetown University.
H. KIRK HAMMOND, M.D., age 49, our chief scientist, is one of our co-founders
and has served as a director of the Company since 1995. He has also served as
our Vice President, Research since April 1995. Since July 1994, Dr. Hammond has
been Associate Professor of Medicine at UCSD. From 1987 to June 1994, Dr.
Hammond was Clinical Assistant Professor of Medicine at UCSD. Since 1983, Dr.
Hammond has been an active basic research scientist and cardiologist at the San
Diego Veterans' Affairs Healthcare System. Dr. Hammond's laboratory at UCSD has
focused on the development of gene therapy to treat cardiovascular disease. Dr.
Hammond was the primary co-inventor of the technology that served as the basis
for the formation of Collateral. Dr. Hammond received his M.D. from Indiana
University in 1980 and is board certified in internal medicine and
cardiovascular diseases.
RONALD I. SIMON, PH.D., age 60, has been nominated to serve on our Board of
Directors. Dr. Simon has served as a Vice President and Chief Financial Officer
of Western Water Company, a developer and marketer of water rights, since May
1997. Since 1995, Dr. Simon has been a Director of Citadel Holdings Corporation,
a real estate development company, and of Softnet Systems Inc., a cable-based
internet services provider. Since 1996, Dr. Simon has been a director of
WestCorp Investments, a wholly-owned subsidiary of WestCorp, Inc. From 1993 to
1997, Dr. Simon was Chairman and Chief Financial Officer of Sonant Corporation.
From 1986 to 1990, he was Managing Director and Chief Financial Officer of the
Henley Group Inc. From 1976 to 1997, Dr. Simon was a financial consultant and
President of Ronald Simon Inc., a financial consulting company. Dr. Simon
received a B.A. in Economics from Harvard University, an M.A. in History from
Columbia University, and a Ph.D. in Business from the Columbia University
Graduate School of Business.
DALE A. STRINGFELLOW, PH.D., age 54, has been nominated to serve on our Board
of Directors. Since June 1995, Dr. Stringfellow has been President of Berlex
Biosciences, a wholly-owned subsidiary of Schering AG. Dr. Stringfellow has
been a Director of Myriad Genetics Inc. since December 1991. From July 1990
until April 1995, he was President, Chief Executive Officer and a Director of
Celtrix Pharmaceuticals. Dr. Stringfellow has also held other positions
including: Vice President and Senior Director of Preclinical Cancer Research
at Bristol-Myers Company; Research Head, Cancer Virology and Cellular Biology
Research at Upjohn Company; and Vice President, Research and Development at
Collagen Corporation. Dr. Stringfellow received a B.S. and Ph.D. in
Microbiology from the University of Utah.
BOARD COMMITTEES AND MEETINGS
The Board of Directors held five meetings and acted by unanimous written
consent nine times during 1998. The Board of Directors has an audit committee, a
compensation committee, and a stock plan administration committee. Except for
Mr. Hale, each director attended or participated in 75% or more of the aggregate
of: the total number of meetings of the Board of Directors and the total number
of meetings held by all committees of the Board on which such director served
during 1998.
4
<PAGE>
The audit committee currently consists of three directors, Mr. Reinhard,
Mr. Hale and Ms. Klein. Of these, Mr. Hale and Ms. Klein will not be standing
for re-election. The audit committee is primarily responsible for approving the
services performed by our independent auditors and reviewing their reports
regarding our accounting practices and systems of internal accounting controls.
During the 1998 fiscal year, the audit committee did not meet independently of
meetings of the Board of Directors.
The compensation committee consists of two directors, Mr. Andrews and Mr.
Robinson. Of these, Mr. Robinson will not be standing for re-election. The
compensation committee is primarily responsible for reviewing and approving our
general compensation policies and setting compensation levels for our executive
officers. The compensation committee also has the exclusive authority to
administer our employee stock purchase plan. The compensation committee held
three meetings during the 1998 fiscal year.
The stock plan administrative committee currently consists of two
directors, Mr. Robinson and Ms. Klein, neither of whom will be standing for
re-election. The stock plan administration committee has the exclusive authority
to administer our 1998 stock incentive plan and to make option grants under that
plan. The stock plan administrative committee had one meeting and acted by
unanimous written consent one time during 1998.
DIRECTOR COMPENSATION
We reimburse directors for all reasonable and necessary travel and other
incidental expenses incurred in connection with their attendance at meetings of
the Board. Directors are not currently compensated for serving on the Board.
Under our stock incentive plan, directors who are not officers or employees will
receive periodic option grants under the automatic option grant program. Under
the automatic option grant program, each individual who first becomes a
non-employee director at any time after the July 2, 1998 effective date of the
program will automatically receive an option grant for 15,000 shares of common
stock on the date such individual joins the Board, provided such individual has
not been in our employ. In addition, on the date of each annual meeting, each
non-employee director who is to continue to serve as a non-employee director
will automatically be granted an option to purchase 5,000 shares of common
stock, provided such individual has served on the Board for at least six months.
Each automatic grant for non-employee directors will have an exercise
price equal to 100% of the fair market value per share of common stock on the
option grant date, and will have a term of 10 years, subject to earlier
termination following the optionee's cessation of Board service. Each
automatic option will be immediately exercisable for all of the option
shares; however, any unvested shares purchased under the option will be
subject to repurchase by us, at the exercise price paid per share, should the
optionee cease Board services prior to vesting in those shares. The shares
subject to each initial 15,000-share automatic option grant will vest in
successive equal annual installments upon the individual's completion of each
year of Board service over the three-year period measured from the option
grant date. Each 5,000-share automatic option grant will vest on the one-year
anniversary of the option grant date. However, the shares subject to each
automatic grant will immediately vest in full upon certain changes in control
or ownership of the Company or upon the optionee's death or disability while
a director.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the
election of the nominees listed above.
5
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP, our
independent public auditors during 1998, to serve in the same capacity for the
year ending December 31, 1999, and is asking the stockholders to ratify this
appointment. The affirmative vote of a majority of the shares represented and
voting at the annual meeting is required to ratify the appointment of Ernst &
Young LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board of Directors
believes that such a change would be in the best interests of the Company and
its stockholders.
A representative of Ernst & Young LLP is expected to be present at the
annual meeting. This representative will have the opportunity to make a
statement if he or she desires to do so, and will be available to respond to
appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the
ratification of the selection of Ernst & Young LLP to serve as our independent
auditors for the fiscal year ending December 31, 1999.
OTHER MATTERS
We know of no other matters that will be presented for consideration at the
annual meeting. If any other matters properly come before the annual meeting, it
is the intention of the persons named in the enclosed form of proxy to vote the
shares they represent as the Board of Directors may recommend. Discretionary
authority with respect to such other matters is granted by the execution of the
enclosed proxy.
OWNERSHIP OF SECURITIES
The following table sets forth certain information known to us with respect
to the beneficial ownership of the common stock as of March 31, 1999, by:
- all persons who are beneficial owners of 5% or more of common stock,
- each director and nominee for director,
- the executive officers named in the Summary Compensation Table of the
Executive Compensation and Other Information section of this proxy
statement, and
- all current directors and executive officers as a group.
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<PAGE>
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable. Except as otherwise indicated, the
address of all stockholders listed in the table is 11622 El Camino Real, San
Diego, California 92130. Percentage of ownership is based on 10,584,189 shares
of common stock outstanding on March 31, 1999, and is calculated as required
under SEC Rule 13d-3(d)(1).
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIALLY SHARES BENEFICIALLY
BENEFICIAL OWNER OWNED OWNED
- ---------------------------------------------------------------------------- -------------- ---------------------
<S> <C> <C>
Schering Berlin Venture Corp. .......................................... 1,584,676 15.0%
110 East Hanover Avenue
Cedar Knolls, New Jersey 07929
The Wellcome Trust...................................................... 987,500 9.3%
183 Euston Road
London, England NW1 2BE
State of Wisconsin Investment Board .................................... 833,000 7.9%
P.O. Box 7842
Madison, WI 53707
Jack W. Reich (1)....................................................... 1,564,857 14.5%
Christopher J. Reinhard (2)............................................. 759,357 7.0%
Craig S. Andrews (3).................................................... 259,705 2.5%
Robert L. Engler (4).................................................... 989,557 9.3%
H. Kirk Hammond (5)..................................................... 1,947,807 18.1%
Ruth Wikberg-Leonardi (6)............................................... 187,436 1.8%
Kathleen E. Rooney (6) ................................................. 187,224 1.8%
David F. Hale........................................................... 265,785 2.5%
David E. Robinson....................................................... 210,685 2.0%
Elise G. Klein (7)...................................................... 19,000 0.2%
All directors, director nominees and executive officers as a group
(10 persons) (1)--(7)............................................ 6,391,413 56.1%
</TABLE>
- ------------------------
(1) Includes 76,000 shares beneficially owned by the Jordon A. Reich Trust
dated January 31, 1992, Mary P. Reich, Trustee and 76,000 shares
beneficially owned by the Jason D. Reich Trust dated January 31, 1992,
Mary P. Reich, Trustee. Dr. Reich disclaims beneficial ownership of these
shares. Also includes 227,850 option shares of which 61,183 options are
exercisable within 60 days of March 31, 1999.
(2) Includes 38,000 shares beneficially owned by Griffin J. Reinhard, a minor
son of Mr. Reinhard. Also includes 240,150 option shares of which 123,483
options are exercisable within 60 days of March 31, 1999.
7
<PAGE>
(3) Includes 28,500 shares and 28,500 shares of common stock beneficially
owned by two family trusts for the benefit of Lisa C. Andrews and Daniel
C. Andrews, respectively. Also includes 21,660 shares of common stock
beneficially owned by Brobeck, Phleger & Harrison LLP, of which Mr.
Andrews is a partner. Mr. Andrews exercises shared voting and investment
power with respect to all such shares. Mr. Andrews disclaims beneficial
ownership of these shares.
(4) Includes 867,707 shares beneficially owned by the Robert L. Engler
Separate Property Trust. Also includes 47,500 shares beneficially owned by
Mathew Lawrence Engler and 47,500 shares beneficially owned by Eric
Herschel Engler. Dr. Engler disclaims beneficial ownership of these
shares. Also includes 26,850 option shares of which 6,850 options are
exercisable within 60 days of March 31, 1999.
(5) Includes 72,200 shares of common stock held in a family trust for the
benefit of Dr. Hammond's children, 142,500 shares of common stock held in
a trust for the benefit of Talisin T. Hammond and 142,500 shares of common
stock held in a trust for the benefit of Shura X. Hammond. Dr. Hammond
exercises shared voting and investment power with respect to all such
shares. Dr. Hammond disclaims beneficial ownership of these shares. Also
includes 149,100 option shares held by H. Kirk Hammond, and 9,500 option
shares held by Tamsin L. Kelly. Of these 158,600 total option shares,
50,266 are exercisable within 60 days of March 31, 1999.
(6) Includes 73,100 option shares of which 26,433 options are exercisable
within 60 days of March 31, 1999.
(7) Includes 19,000 option shares of which 19,000 options are exercisable
within 60 days of March 31, 1999. Ms. Klein is Vice President of Sales
and Corporate Development of Berlex Laboratories Inc., a subsidiary of
Schering AG, Germany ("Schering AG"). Does not include 1,584,676 shares
beneficially owned by Schering Berlin Venture Corporation, a subsidiary of
Schering AG.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned by our Chief Executive Officer and each of our four other
most highly compensated executive officers whose salary and bonus for the 1998
fiscal year was in excess of $100,000, for services rendered in all capacities.
Information for fiscal years prior to 1997 have not been included as Collateral
was not a reporting company under the Exchange Act, and the information has not
been previously reported to the SEC.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------------------- ----------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) OPTIONS/SARS COMPENSATION
- ----------------------------------- -------- ----------- ------------- ------------------- ---------------- ----------------
#
<S> <C> <C> <C> <C> <C> <C>
Jack W. Reich...................... 1998 $324,887 $85,000 -- 227,850 $5,542
President, Chief 1997 $298,712 $70,000 -- -- $6,532
Executive Officer and
Director
Christopher J. Reinhard............ 1998 $231,259 $75,000 -- 240,150 $2,722
Chief Operating 1997 $213,713 $70,000 -- -- $4,003
Officer, Chief
Financial Officer
and Director
Robert L. Engler................... 1998 $104,079 -- $109,378(4) 26,850 --
Vice President, 1997 $100,000 $35,000 $140,000(4) -- --
Medical Director
and Director
H. Kirk Hammond.................... 1998 $166,935 $40,000 -- 149,100 --
Vice President, 1997 $145,936 $35,000 -- -- --
Research
and Director
Kathleen E. Rooney................. 1998 $145,370 $30,000 -- 73,100 --
Vice President, 1997 $119,791 $25,000 -- -- --
Administration
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes amounts deferred pursuant to our 401(k) Plan.
(2) Bonuses were paid in 1999 for performance in 1998.
(3) Except as noted, the aggregate amount of perquisites and other personal
benefits, if any, did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus reported for each officer and has therefore been
omitted.
(4) The amounts paid to Dr. Engler during 1997-1998 represented a special
allowance in connection with his employment by us during his 18-month
sabbatical leave from the San Diego Veterans' Affairs Healthcare System.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The table below contains information concerning the stock options granted
to the named executive officers during the 1998 fiscal year. All grants were
made under our 1998 stock incentive plan or under our 1995 stock incentive plan,
subsequently incorporated into the 1998 stock incentive plan. Except for the
limited stock appreciation rights summarized below, no stock appreciation rights
were granted to the following named executive officers during such fiscal year.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
Potential Realizable Value at
Number of Percent of Total Assumed Annual Rates of
Securities Options/SARs Stock Price Appreciation for
Underlying Granted to Option Term (4)
Options/SARs Employees in Exercise or Expiration
Granted Fiscal Year (1) Base Price (2) Date (3) 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
Name # % $/Share $ $
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jack W. Reich 225,000 20.8% $5.19 9/13/08 $734,038 $1,860,196
2,850 0.3% $5.41 4/16/03 $2,460 $7,154
- ------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Reinhard 157,500 14.5% $5.19 9/13/08 $513,827 $1,302,137
82,650 7.6% $4.92 4/16/08 $255,787 $648,216
- ------------------------------------------------------------------------------------------------------------------------------------
Robert L. Engler 24,000 2.2% $5.19 9/13/08 $78,297 $198,421
2,850 0.3% $4.92 4/16/08 $8,820 $22,352
- ------------------------------------------------------------------------------------------------------------------------------------
H. Kirk Hammond 146,250 13.5% $5.19 9/13/08 $477,125 $1,209,128
2,850 0.3% $4.92 4/16/08 $8,820 $22,352
- ------------------------------------------------------------------------------------------------------------------------------------
Kathleen E. Rooney 56,000 5.2% $5.19 9/13/08 $182,694 $462,982
17,100 1.6% $4.92 4/16/08 $52,921 $134,113
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Assumes 1998 stock option grants only. Represents all 1998 stock option
grants minus those granted to consultants/non-employees, including those
granted to Dr. H. Kirk Hammond.
(2) The exercise price may be paid in cash or in shares of common stock valued
at fair market value on the exercise date. Alternatively, the option may
be exercised through a cashless exercise procedure in which the optionee
provides irrevocable instructions to a brokerage firm to sell the
purchased shares and to remit to the Company, out of the sale proceeds,
an amount equal to the exercise price plus all applicable withholding
taxes. The compensation committee may also assist an optionee in the
exercise of an option by (i) authorizing a loan from us in a principal
amount not to exceed the aggregate exercise price plus any tax liability
incurred in connection with the exercise or (ii) permitting the optionee
to pay the option price in installments over a period of years upon terms
established by the compensation committee.
(3) The options include a "limited stock appreciation right" pursuant to which
those options may, upon the successful completion of a hostile tender
offer for securities possessing more than 50% of the total combined voting
power of our outstanding securities, be surrendered to us in return for a
cash payment equal to the excess of (i) the then market price of the
shares of common stock subject to the surrendered option or, if higher,
the highest price paid per share of common stock in such tender offer over
(ii) the exercise price payable for those shares. The options expiring on
September 13, 2008, which were made under our 1998 stock incentive plan,
become exercisable over 48 successive monthly installments upon Optionee's
completion of each additional month of service as measured from September
14, 1998; with the exception of 25,000 option shares granted to Jack
Reich, 16,250 option shares granted to H. Kirk Hammond, and 17,500 option
shares granted to Christopher Reinhard, all of which were immediately
exercisable.
10
<PAGE>
The options expiring prior to September 13, 2008, which were made under
our predecessor stock incentive plan, are immediately exercisable but are
subject to repurchase based on a 48-month vesting schedule beginning on
April 17, 1998, upon Optionee's completion of each additional month of
service over the 48-month period. In no event are options exercisable for
any additional option shares after an Optionee's cessation of service,
under either of our stock incentive plans. Options become exercisable on
an accelerated basis upon a liquidation or dissolution of the Company or a
merger or consolidation in which there is a change in ownership of
securities possessing more than 50% of the total combined voting power of
our outstanding securities, unless the option is assumed by the surviving
entity. In addition, the compensation committee of the Board of Directors
may accelerate the vesting of the option in the event there is (i) a
change in the composition of the Board of Directors over a period of two
years or less such that those individuals serving as Board members at the
beginning of the period cease to represent a majority of the Board or (ii)
a change of ownership of securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities pursuant to
a hostile tender offer.
(4) There can be no assurance provided to any of our executive officers or
other holders of our securities that the actual stock price appreciation
over the option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the common stock
appreciates over the option term, no value will be realized from those
option grants which were made to the officers with an exercise price equal
to the fair market value of the option shares on the grant date.
AGGREGATED OPTION\SAR EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information, with respect to the named
executive officers, concerning options held by them at the end of the 1998
fiscal year, all of which options are unexercised. None of the named executive
officers exercised any options or stock appreciation rights during the 1998
fiscal year, and except for the limited stock appreciation rights described
above, no stock appreciation rights were held by the officers at the end of such
year.
11
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options/SARs at FY-End in-the-Money Options/SARs
at FY-End (1)
-------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------
# # $ $
<S> <C> <C> <C> <C>
Jack W. Reich 40,350 187,500 $72,491 $339,844
Christopher J. Reinhard 108,900 131,250 $219,403 $237,891
Robert L. Engler 4,350 22,500 $8,644 $40,781
H. Kirk Hammond 27,225 121,875 $50,105 $220,898
Kathleen E. Rooney 20,600 52,500 $41,894 $95,156
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon the market price of $ 7.00 per share, determined on the basis
of the closing selling price per share of common stock on the NASDAQ
National Market on the last day of the 1998 fiscal year, less the option
exercise price payable per share.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
There are no formal employment agreements with any of our officers, all of
whom are advisors or employees on an at-will basis.
The stock plan administrative committee of the Board of Directors, as plan
administrator of our 1998 stock incentive plan, has the authority to provide for
accelerated vesting of any outstanding options held by our executive officers or
any unvested share issuances actually held by such individual, in connection
with certain changes in control of the Company or the subsequent termination of
the officer's employment following the change in control event.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of our Board of Directors currently consists of
Mr. Andrews and Mr. Robinson. Neither of these individuals was an employee of
ours and, except for Mr. Andrews service as Secretary until November 1998,
neither was an officer.
None of our current executive officers has ever served as a member of the
Board of Directors or compensation committee of any other entity that has or has
had one or more executive officers serving as a member of our Board of Directors
or compensation committee.
The following report of the compensation committee and performance graph
should not be considered to be part of this proxy statement. Any current or
future cross-references to this proxy statement in filings with the SEC under
either the Securities Act or the Securities Exchange Act will not include the
report or graph reproduced below.
12
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
It is the duty of the compensation committee, which currently consists of
Mr. Andrews and Mr. Robinson, to review and determine the base salaries, annual
incentives compensation and long-term incentives of our executive officers,
including our Chief Executive Officer, and to establish the general compensation
policies for such individuals. The stock plan administrative committee, which
currently consists of Ms. Klein and Mr. Robinson, has the sole and exclusive
authority to make discretionary option grants to our executive officers under
our 1998 stock incentive plan.
The compensation committee believes that the compensation programs for our
executive officers should reflect our performance and the value created for our
stockholders. In addition, the compensation programs should support our
short-term and long-term strategic goals and values and should reward individual
contribution to our success. We are engaged in a very competitive industry, and
our success depends upon our ability to attract and retain qualified executives
through the competitive compensation packages we offer to such individuals.
GENERAL COMPENSATION POLICY. The compensation and stock plan
administrative committees' policy is to provide our executive officers
with compensation opportunities which are based upon their personal
performance, our financial performance and their contribution to that
performance and which are competitive enough to attract and retain highly
skilled individuals. Each executive officer's compensation package is
comprised of three elements:
- base salary that is competitive with the market and reflects
individual performance,
- annual variable performance awards payable in cash and tied to our
achievement of annual performance goals, and
- long-term stock-based incentive awards designed to strengthen the
mutuality of interests between our executive officers and our
stockholders.
As an officer's level of responsibility increases, a greater proportion of
his or her total compensation will be dependent upon our financial
performance and stock price appreciation rather than base salary.
FACTORS. Several of the more important factors which we considered in
establishing the components of each executive officer's compensation
package for the 1998 fiscal year are summarized below. Additional factors
were also taken into account, and we may in our discretion apply entirely
different factors, particularly different measures of financial
performance, in setting executive compensation for future fiscal years.
All compensation decisions will be designed to further the general
compensation policy indicated above.
BASE SALARY. In setting base salaries, the compensation committee reviewed
published compensation survey data for 28 biotechnology companies. The
base salary for each officer reflects the salary levels for comparable
positions in the published surveys for such comparative group of
companies, as well as the individual's personal performance and internal
alignment considerations. The relative weight given to each factor varies
with each individual in the sole discretion of the compensation committee.
13
<PAGE>
Each executive officer's base salary is adjusted yearly on the basis of
(i) the compensation committee's evaluation of the officer's personal
performance for the year and (ii) the competitive marketplace for persons
in comparable positions. Our performance and profitability may also be a
factor in determining the base salaries.
ANNUAL INCENTIVE COMPENSATION. Annual bonuses are earned by each executive
officer on the basis of our achievement of the corporate performance
targets established at the start of the fiscal year and the achievement of
other individual goals.
LONG-TERM INCENTIVES. Generally, stock option grants are periodically made
to each of our executive officers by the stock plan administrative
committee. Each grant is designed to align the interests of the executive
officer with those of the stockholders and provide each individual with a
significant incentive to manage from the perspective of an owner with an
equity stake in the business. Each grant allows the officer to acquire
shares of our common stock at a fixed price per share (the market price on
the grant date) over a specified period of time (up to ten years). Each
option becomes vested in a series of installments over a four-year period,
contingent upon the officer's continued employment. Accordingly, the
option will provide a return to the executive officer only if he or she
remains employed by us during the vesting period, and then only if the
market price of the shares appreciates over the option term. The size of
the option grant to each executive officer, including the Chief Executive
Officer, is set by the stock plan administrative committee at a level that
is intended to create a meaningful opportunity for stock ownership based
upon the individual's current position, the individual's personal
performance in recent periods and his or her potential for future
responsibility and promotion over the option term. The stock plan
administrative committee also takes into account the number of unvested
options held by the executive officer in order to maintain an appropriate
level of equity incentive for that individual. The relevant weight given
to each of these factors varies from individual to individual. The stock
plan administrative committee has established certain guidelines with
respect to the option grants made to the executive officers, but has the
flexibility to make adjustments to those guidelines at its discretion.
CEO COMPENSATION. In setting the total compensation payable to our Chief
Executive Officer, Dr. Reich, for the 1998 fiscal year, the compensation
committee sought to make that compensation competitive with the compensation
paid to the chief executive officers of the companies in the surveyed group,
while at the same time assuring that a significant percentage of compensation
was tied to the achievement of corporate performance targets established at the
start of the 1998 fiscal year.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m). Section 162(m) of
the Internal Revenue Code disallows a tax deduction to publicly held companies
for compensation paid to certain of their executive officers, to the extent that
compensation exceeds $1 million per covered officer in any fiscal year. The
limitation applies only to compensation that is not considered to be
performance-based. Non-performance based compensation paid to our executive
officers for the 1998 fiscal year did not exceed the $1 million limit per
officer. The compensation committee does not anticipate that the non-performance
based compensation to be paid to our executive officers for fiscal year 1999
will exceed that limit. Our 1998 stock incentive plan has been structured so
that any compensation deemed paid in connection with the exercise of option
grants made under that plan with an exercise price equal to the fair market
value of the option shares on the grant date will qualify as performance-based
compensation which will not be subject to the $1 million limitation. Since it is
unlikely that the cash compensation payable to any of our executive officers in
the foreseeable future will approach the $1 million limit, the
14
<PAGE>
compensation committee has decided at this time not to take any action to limit
or restructure the elements of cash compensation payable to the Company's
executive officers. The compensation committee will reconsider this decision if
the individual cash compensation of any executive officer ever approaches the
$1 million level.
It is the opinion of the compensation committee and the stock plan
administrative committee that the executive compensation policies and plans
provide the necessary total remuneration program to properly align our
performance and the interests of our stockholders through the use of competitive
and equitable executive compensation in a balanced and reasonable manner, for
both the short and long-term.
COMPENSATION COMMITTEE STOCK PLAN ADMINISTRATIVE COMMITTEE
Craig S. Andrews Elise G. Klein
David E. Robinson David E. Robinson
STOCK PERFORMANCE GRAPH
The graph depicted below shows a comparison of our cumulative total stockholder
returns for our common stock, the Russell 2000 Index and the Standard & Poors'
SmallCap Biotech Index, from the date of our initial public offering on July 2,
1998 through December 31, 1998. The graph assumes that $100 was invested on July
2, 1998, in our common stock and in each index, and that all dividends were
reinvested. No cash dividends have been declared on the Company's common stock.
Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
[GRAPH]
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In addition to the indemnification provisions contained in our certificate
of incorporation and bylaws, we have entered into separate indemnification
agreements with each of our directors and officers. These agreements require us,
among other things, to indemnify such director or officer against certain
expenses, including attorneys' fees, judgments, fines and settlements paid by
such individual in connection with any action, suit or proceeding arising out of
such individual's status or service as a director or officer. These agreements
also require us to advance expenses incurred by such individual in connection
with any proceeding against such individual with respect to which such
individual may be entitled to indemnification by us.
In May 1996, we entered into a collaboration, license and royalty
agreement with Schering AG, the parent corporation of Schering Berlin Venture
Corporation which is a holder of more than 5% of our securities. The agreement
established a strategic alliance related to the development and
commercialization of gene therapy products to promote angiogenesis. Our 1998
revenues under this agreement were $5.4 million. We issued two secured
promissory notes dated August 12, 1995 and October 12, 1995 in the aggregate
amount of $500,000 to Schering Berlin Venture Corp. Both the notes were amended
and restated on May 16, 1996. The amended notes bear interest at 1% below the
prime rate; at March 31, 1999, the amended notes bore interest at 6.75%. Such
notes are secured by our assets, with the exception of certain equipment
purchased from February 15, 1998 through November 15, 1998 which is pledged on a
first priority basis under our $1 million bank loan. Principal and interest on
the notes are due and payable upon demand on or after June 30, 1999.
Mr. Andrews, a Director, Secretary and one of our co-founders, is a
partner in the law firm of Brobeck, Phleger & Harrison LLP, which has provided
legal services to us in connection with corporate matters since our inception in
April 1995.
We believe that all of the transactions set forth above were made on terms
no less favorable to us than could have been obtained from unaffiliated third
parties. All future transactions between us and our officers, directors and
principal stockholders and their affiliates will be approved in accordance with
the Delaware General Corporation Law by a majority of the Board, including a
majority of the independent and disinterested directors of the Board, and will
be on terms no less favorable to us than could be obtained from unaffiliated
third parties.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of our Board of Directors, our executive officers and persons
who hold more than 10% of our outstanding common stock are subject to the
reporting requirements of Section 16(a) of the Securities Exchange Act which
require them to file reports with respect to their ownership of the common stock
and their transactions in such common stock. Based upon the copies of Section
16(a) reports which we received from such persons and the written
representations received from one or more of such persons that no annual Form 5
reports were required to be filed by them for 1998, we believe that all
reporting requirements under Section 16(a) for such fiscal year were met in a
timely manner by these individuals, with the following exceptions. Dr. Engler
and Mr. Robinson each filed their Form 3 two days late. Dr. Friedman filed his
Form 3 six days late. Dr. Hammond filed a timely initial Form 3, but was
required to file an amended Form 3 with respect to one transaction at a later
date.
16
<PAGE>
STOCKHOLDER PROPOSALS FOR OUR 2000 ANNUAL MEETING
Stockholder proposals that are intended to be presented at our 2000 annual
meeting must be received no later than December 20, 1999, in order that they may
be included in the proxy statement and form of proxy relating to that meeting,
and must meet all other requirements as specified in our bylaws. In addition,
the proxy solicited by the Board of Directors for the 2000 annual meeting will
confer discretionary authority to vote on any stockholder proposal presented at
that meeting, unless we receive notice of such proposal not later than December
20, 1999.
ANNUAL REPORT TO STOCKHOLDERS
A copy of our annual report for the 1998 fiscal year has been mailed
concurrently with this proxy statement to all stockholders entitled to notice of
and to vote at the annual meeting. The annual report is not incorporated into
this proxy statement and is not considered proxy solicitation material.
ANNUAL REPORT ON FORM 10-K
We filed an annual report on Form 10-K with the Securities and Exchange
Commission on or about March 31, 1999. Stockholders may obtain a copy of this
report, without charge, by writing to the Chief Financial Officer of the
Company, at our principal executive offices located at 11622 El Camino Real, San
Diego, CA 92130.
THE BOARD OF DIRECTORS OF
COLLATERAL THERAPEUTICS, INC.
DATED: APRIL 22, 1999
17
<PAGE>
COLLATERAL THERAPEUTICS, INC.
PROXY
Annual Meeting of Stockholders, May 27, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
COLLATERAL THERAPEUTICS, INC.
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders to be held May 27, 1999 and the
Proxy Statement and appoints Jack W. Reich, Christopher J. Reinhard and Tyler M.
Dylan, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of Common Stock of Collateral Therapeutics,
Inc. (the "Company") which the undersigned is entitled to vote, either on his or
her own behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders of the Company to be held at The DoubleTree Hotel, 11915 El Camino
Real, San Diego, California on Thursday, May 27, 1999 at 9:00 a.m. Pacific Time
(the "Annual Meeting"), and at any adjournment or postponement thereof, with the
same force and effect as the undersigned might or could do if personally present
thereat. The shares represented by this Proxy shall be voted in the manner set
forth on the reverse side.
<TABLE>
<S> <C>
1. To elect the following directors to serve until the next Annual Meeting of Stockholders and until their successors
are duly elected and qualified;
Nominees: Jack W. Reich
Christopher J. Reinhard INSTRUCTIONS: To withhold authority to vote for
FOR WITHHOLD Craig S. Andrews any nominee, check the box "WITHHOLD AUTHORITY
AUTHORITY Charles J. Aschauer TO VOTE" and write that nominee's name on the
TO VOTE Robert L. Engler line below; to withhold authority to vote for
H. Kirk Hammond ALL nominees, check the box "WITHHOLD AUTHORITY
Ronald I. Simon TO VOTE" and write "ALL" on the line below.
------- --------- Dale A. Stringfellow -------------------------------------------------
2. FOR AGAINST ABSTAIN To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 1999.
------- ------- -------
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors recommends a vote FOR the directors listed above
and a vote FOR the proposal(s) listed above. This Proxy, when properly executed,
will be voted as specified above. IF NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTORS LISTED ABOVE AND FOR THE OTHER
PROPOSAL(S).
Please print the name(s) appearing on each share
certificate(s) over which you have voting authority:
--------------------------------------------------------------------------
(Print name(s) on certificate)
Please sign your name: Date:
----------------------------------------------------------- ------------------------------
(Authorized Signature(s))
</TABLE>
