<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 (S) 240.14a-11(c) or (S) 240.14a-12
Oxis International, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
OXIS INTERNATIONAL, INC.
6040 N. Cutter Circle, Suite 317
Portland, Oregon 97217
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 12, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of OXIS
International, Inc., a Delaware corporation ("OXIS" or the "Company"), will be
held at the Fifth Avenue Suites Hotel, 506 S.W. Washington, Portland, Oregon
97205, on Tuesday, December 12, 2000 at 1:30 p.m. (local time), for the
following purposes:
1. To elect a Board of six (6) directors to serve for the ensuing year and
until their successors are elected.
2. To approve an amendment of the Company's 1994 Stock Incentive Plan to
increase the number of shares of common stock available for issuance
thereunder by 885,000 shares, to an aggregate of 2,250,000 shares.
3. To transact such other and further business as may properly come before
the meeting or adjournment or adjournments thereof.
The Company's common stockholders and holders of Series B and Series C
Preferred Stock of record at the close of business on October 26, 2000, are
entitled to notice of and to vote at the meeting and any adjournments and
postponements thereof. A complete list of such stockholders is open to
examination by any stockholder for any purpose germane to the meeting, during
ordinary business hours, at the offices of the Company, located at 6040 N.
Cutter Circle, Suite 317, Portland, Oregon 97217.
A proxy statement and proxy are enclosed with this Notice. A copy of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, is also enclosed herewith.
By Order of the Board of Directors
/s/ Jon S. Pitcher
Jon S. Pitcher, Secretary
Dated: November 9, 2000
You are urged to fill in, sign, date and mail the enclosed Proxy as soon as
possible. If you attend the meeting and vote in person, the Proxy will not be
used. If the Proxy is mailed in the United States in the enclosed envelope, no
postage is required. The prompt return of your Proxy will save the expense
involved in further communication.
<PAGE>
OXIS INTERNATIONAL, INC.
6040 N. Cutter Circle, Suite 317
Portland, Oregon 97217
November 9, 2000
PROXY STATEMENT
for Annual Meeting of Stockholders
to be held on December 12, 2000
This Proxy Statement is furnished to you in connection with the
solicitation by the Board of Directors of OXIS International, Inc., a Delaware
corporation ("OXIS" or the "Company"), of Proxies in the accompanying form to
be used at the Annual Meeting of Stockholders ("Meeting") to be held at the
Fifth Avenue Suites Hotel, 506 S.W. Washington, Portland, Oregon 97205, on
Tuesday, December 12, 2000 at 1:30 p.m. (local time) and at any subsequent
time which may be necessary by the adjournment thereof.
If you were a holder of record of Common Stock, Series B Preferred Stock or
Series C Preferred Stock of the Company (collectively, the "Voting Stock") at
the close of business on October 26, 2000 (the "Record Date"), you are
entitled to vote at the Meeting and your presence is desired. However, to
assure your representation at the Meeting, you are urged by the Board of
Directors of the Company to sign and return the enclosed Proxy as soon as
possible. You can, of course, revoke your Proxy at any time before it is voted
if you so desire, either in person at the meeting or by delivery of a duly
executed written statement to that effect delivered to the Secretary of the
Company.
The Company is paying all costs of the solicitation of Proxies, including
the expenses of printing and mailing to its stockholders this Proxy Statement,
the accompanying Notice of Annual Meeting of Stockholders and form of Proxy
and the Annual Report on Form 10-K for the fiscal year ended December 31,
1999. The Company will also reimburse brokerage houses and other custodians,
nominees and fiduciaries for their expenses, in accordance with the
regulations of the Securities and Exchange Commission, in sending Proxies and
proxy materials to the beneficial owners of the Company's Common Stock.
Officers or employees of the Company may also solicit Proxies in person, or by
mail, telegram or telephone, but such persons will receive no compensation for
such work, other than their normal compensation as officers or employees.
At the close of business on October 26, 2000, 9,370,677 shares of Common
Stock, 428,389 shares of Series B Preferred Stock and 608,536 shares of Series
C Preferred Stock were outstanding. Shares of Common Stock and Series B and
Series C Preferred Stock are entitled to vote at the Annual Meeting. Each
share of Common Stock outstanding as of October 26, 2000, is entitled to one
vote. Each share of Series B Preferred Stock outstanding as of October 26,
2000, is entitled to .20 votes resulting in a total of 85,677 votes for all of
the Series B Preferred Stock outstanding. Each share of Series C Preferred
Stock outstanding as of October 26, 1999, is entitled to the number of votes
equal to the number of shares of Common Stock into which the Series C
Preferred share is convertible, times 1.30, divided by the average closing bid
price of the Company's Common Stock during the fifteen (15) consecutive
trading days immediately prior to the date such share of Series C Preferred
Stock was purchased. As of the Record Date, each share of Series C Preferred
Stock is entitled to .216 -.223 votes, resulting in a total of 133,259 votes
for all of the Series C Preferred Stock outstanding.
This Proxy Statement and the enclosed Proxy are first being mailed to the
stockholders of the Company on or about November 9, 2000.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received at the Company's executive offices on
or before February 16, 2001, for inclusion in the Company's Proxy Statement
with respect to such meeting.
1
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PROXIES AND VOTE REQUIRED
Proxies
The persons named as proxies for the Meeting in the enclosed proxy card
(Joseph F. Bozman, Jr., Chairman and Stuart S. Lang, Director) were selected
by OXIS' Board of Directors.
Voting of Proxies
All properly executed Proxies that are not revoked will be voted at the
Meeting in accordance with the instructions contained therein. Proxies
containing no instructions regarding the proposals specified in the form of
Proxy will be voted FOR approval of all proposals in accordance with the
recommendation of the Board of Directors of the Company. Any stockholder
signing a Proxy has the power to revoke it prior to the Meeting, or at the
Meeting, prior to the vote pursuant to instructions contained in the Proxy. A
Proxy may be revoked by delivering to the Secretary of the Company a written
notice of revocation or a duly executed Proxy bearing a later date or by
attending the Meeting and voting in person.
Vote Required
The election of directors requires a plurality of the votes of the shares
of Voting Stock present at the meeting in person or represented by Proxy and
entitled to vote thereon. If a quorum is present at the meeting those nominees
receiving a plurality of the votes cast will be elected. Accordingly, shares
not voted in the election of directors (including shares covered by a Proxy as
to which authority is withheld to vote for all nominees) and shares not voted
for any particular nominee (including shares covered by a Proxy as to which
authority is withheld to vote for only one or less than all of the identified
nominees) will not prevent the election of any of the nominees for director.
Approval of the proposal to adopt the amendment to the 1994 Stock Incentive
Plan requires the affirmative vote of the majority of shares of Voting Stock
present at the meeting in person or represented by Proxy and abstentions will
be treated as votes against. For any other matter submitted to stockholders at
the Meeting, if a quorum is present, the affirmative vote of the majority of
the shares voted is required for approval. As a result, abstention votes have
the effect of a vote against such matters.
The presence in person or by Proxy of a majority of the votes of the shares
of the Voting Stock outstanding and entitled to vote at the Meeting is
required for a quorum.
Effect of Broker Non-Votes
"Broker Non-Votes" occur when a broker holding shares of stock in street
name withholds its vote on certain non-routine matters because the broker has
not received instructions from the beneficial owner of those shares of stock
and does not have discretionary authority to vote on such non-routine matters
without such instructions. Brokers holding shares of stock in street name must
receive specific instructions from the beneficial owners in order to have the
authority to vote, in person or by Proxy, on certain "non-routine" matters.
When a beneficial owner does not give specific instructions to the broker, the
broker, as the holder of record, is entitled to vote only on "routine" matters
and must withhold its votes as to any non-routine matters. When a Proxy
solicitation includes a non-routine proposal and the broker does not receive
specific instructions from the beneficial owner, the resulting Proxy is
considered a "limited Proxy." Shares represented by limited Proxies are
considered present for quorum purposes. However, shares represented by limited
Proxies are not considered present for purposes of determining the total
number of shares with voting power present with regard to a non-routine
proposal. The resulting broker non-vote will not be counted for or against
such non-routine proposal.
Proposal 1 (Election of Directors) is a "routine" matter upon which brokers
can cast votes with or without specific instructions from the beneficial
holders and such brokers' votes will be counted for purposes of determining
whether such Proposal has been approved. Proposal 2 (Amendment of the OXIS
1994 Stock Incentive Plan) is a "non-routine" proposal. Shares represented by
limited Proxies will not be considered present for purposes of determining the
total number of shares with voting power present with regard to this proposal.
Consequently, Broker non-votes will not be counted for or against this
proposal.
2
<PAGE>
PROPOSAL NO. 1--ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
The Board of Directors of the Company currently consists of nine
individuals, six of whom have been nominated for election at the Meeting. The
Board of Directors of the Company has passed a resolution amending the
Company's bylaws to fix the number of directors at six (6), effective upon the
election of directors at the Meeting. Unless otherwise instructed, the Proxy
holders will vote the Proxies held by them for the Company's six nominees. In
the event that any such nominee is unable or declines to accept nomination or
election, the Proxies will be voted for any nominee who shall be recommended
by the present Board of Directors. Directors are to be elected to hold office
until the next Annual Meeting of Stockholders or until their respective
successors shall have been elected and qualified. The names and ages of the
six nominees for director are set forth below:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Joseph F. Bozman, Jr. ............................ 55 Chairman of the Board
Timothy G. Biro................................... 47 Director
Richard A. Davis.................................. 64 Director
Timothy C. Rodell................................. 49 Director
Stuart S. Lang.................................... 63 Director
Ray R. Rogers..................................... 60 Director
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES LISTED ABOVE TO THE COMPANY'S BOARD OF DIRECTORS.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership of Securities
Common Stock
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock, as of September 30, 2000, with
respect to persons known to the Company to be the beneficial owner of more
than five percent of the Company's Common Stock and directors, director
nominees and executive officers of the Company.
<TABLE>
<CAPTION>
Amount and
nature of
Name and, as appropriate, address of beneficial Percent
beneficial owner ownership(1) of class(1)
------------------------------------ ------------ -----------
<S> <C> <C>
Pictet & Cie................................. 2,888,640(11) 25.59%
29 Bd Georges Favon
P.O. Box 5130
1204 Geneva, Switzerland
Credit Suisse Asset Management Funds......... 920,000(10) 9.36%
Uraniastrasse 9
P.O. Box 800
8070 Zurich, Switzerland
Teachers Pension Fund of Berne............... 1,547,826(12) 14.92%
Unterdorfstrasse 5
3072 Ostermundigen 2, Switzerland
S.R. One Limited............................. 587,800(2) 6.08%
200 Barr Harbor Drive, Suite 250
W. Conshohocken, PA 19428
Forsikrings-Aktieselskabet Alka Liv.......... 544,389(13) 5.61%
Engelholm Alle 1
2630 Taastrup, Denmark
Timothy G. Biro.............................. 8,100(3)(4) *
Joseph F. Bozman, Jr......................... 36,333(3) *
Richard A. Davis............................. 7,340(3)(8) *
Dr. Brenda D. Gavin.......................... 587,800(3)(5)(9) 6.08%
Stuart S. Lang............................... 7,800(3) *
Jon S. Pitcher............................... 48,525(3) *
Humberto V. Reyes............................ 96,666(3) *
Dr. Timothy C. Rodell........................ 154,333(3) 1.62%
Ray R. Rogers................................ 248,034(3)(6) 2.61%
Paul C. Sharpe(14)........................... 143,333(3) 1.51%
A.R. Sitaraman............................... 14,000(3)(7) *
Executive officers and directors as a group--
11 persons.................................. 1,352,264 13.13%
</TABLE>
--------
* Less than one percent.
(1) As required by regulations of the Securities and Exchange Commission, the
number of shares in this table includes shares which can be purchased by
the named party within 60 days, or, shares with respect to which the
named party may obtain voting power or investment power within 60 days.
As also required by
4
<PAGE>
such regulations, each percentage reported in the table for these named
parties is calculated as though shares which can be purchased within 60
days have been purchased by the respective person or group and are
outstanding.
(2) The holdings of S.R. One Limited include 428,389 shares of the Company's
Series B Preferred Stock which are convertible into 85,677 shares of
Common Stock and warrants exercisable for 207,812 shares of Common Stock.
The holdings of S.R. One Limited also include 1,600 shares of Common
Stock owned by Dr. Gavin and 5,000 shares of Common Stock subject to
options held by Dr. Gavin.
(3) The holding of Mr. Bozman include 33,333 shares of Common Stock subject
to options. The holding of Mr. Davis and Dr. Gavin each include 5,000
shares of Common Stock subject to options. The holdings of Mr. Lang
include 7,000 shares of Common Stock subject to options. The holdings of
Mr. Biro and Mr. Sitaraman each include 8,000 shares of Common Stock
subject to options. The holdings of Mr. Pitcher include 44,000 shares of
Common Stock subject to options. The holding of Mr. Reyes include
96,666 shares of Common Stock subject to options. The holdings of Dr.
Rodell include 153,333 shares of Common Stock subject to options. The
holdings of Mr. Rogers include 144,066 shares of Common Stock subject to
options. The holdings of Dr. Sharpe include 133,333 shares of Common
Stock subject to options.
(4) Mr. Biro disclaims beneficial ownership of 5,000 shares of Common Stock
subject to options.
(5) Dr. Gavin is President of S.R. One Limited. S.R. One Limited owns 287,711
shares of Common Stock, 428,389 shares of the Company's Series B
Preferred Stock, and warrants exercisable for 207,812 shares of Common
Stock. The holdings of S.R. One Limited are included in Dr. Gavin's
holdings, but Dr. Gavin disclaims beneficial ownership of the OXIS
securities owned by S.R. One Limited.
(6) Included are 2,000 shares of Common Stock owned by Mr. Rogers' individual
retirement account.
(7) Mr. Sitaraman's holdings include 3,060 shares of Common Stock owned by
his SEP-IRA, 1,740 shares of Common Stock owned by his wife's SEP-IRA and
1,200 shares of Common Stock owned in equal amounts by Mr. Sitaraman's
and his spouse's individual retirement accounts.
(8) Mr. Davis' holdings include 1,280 shares of Common Stock owned by Mr.
Davis jointly with his spouse.
(9) Dr. Gavin's holdings include 1,600 shares of Common Stock owned by Dr.
Gavin jointly with her spouse.
(10) The holdings of Credit Suisse include warrants exercisable for 460,000
shares of Common Stock.
(11) The holdings of Pictet & Cie include warrants exercisable for 1,918,332
shares of Common Stock.
(12) The holding of Teachers Pension Fund of Berne include warrants
exercisable for 1,001,884 shares of Common Stock.
(13) The holding of Forsikrings-Aktieselskabet Alka Liv include warrants
exercisable for 324,826 shares of Common Stock.
(14) Dr. Sharpe has resigned as the Company's President and Chief Executive
Officer effective October 27, 2000.
5
<PAGE>
Series B Preferred Stock
The following table sets forth certain information, as of September 30,
2000, with respect to persons known by the Company to be the beneficial owner
of more than five percent of the Company's Series B Preferred Stock. Except as
noted in footnote (1) below, no directors, nominee directors or executive
officers of the Company beneficially own any of the Company's Series B
Preferred Stock.
<TABLE>
<CAPTION>
Percent
Amount and nature of
Name and address of beneficial ownership class
---------------- ----------------------- -------
<S> <C> <C>
S.R. One Limited............................... 428,389(1) 100.00%
200 Barr Harbor Drive, Suite 250
W. Conshohocken, PA 19428
</TABLE>
--------
(1) Dr. Gavin, an OXIS director, is President of S.R. One Limited. S.R. One
Limited owns 287,711 shares of Common Stock, 428,389 shares of the
Company's Series B Preferred Stock, and warrants exercisable for 207,812
shares of Common Stock. Dr. Gavin disclaims beneficial ownership of the
OXIS securities owned by S.R. One Limited.
Series C Preferred Stock
The following table sets forth certain information, as of September 30,
2000, with respect to persons known by the Company to be the beneficial owner
of more than five percent of the Company's Series C Preferred Stock. No
directors, nominee directors or executive officers of the Company beneficially
own any of the Company's Series C Preferred Stock.
<TABLE>
<CAPTION>
Percent
Amount and nature of
Name and address of beneficial ownership class
---------------- ----------------------- -------
<S> <C> <C>
Rauch & Co...................................... 200,000 32.87%
c/o State Street Bank & Trust
225 Franklin Street
Boston, MA 02110
Finovelec S.A. ................................. 155,555 25.56%
6, rue Ancelle
92521 Neuilly Cedex, France
Sofinnova Capital F.C.P.R....................... 94,051 15.46%
51, rue Saint Georges
75009 Paris, France
American Health Care Fund, L.P.................. 77,000 12.65%
2748 Adeline, Suite A
Berkeley, CA 94703
Sofinnova S.A. ................................. 62,700 10.30%
51, rue St. Georges
75009 Paris, France
</TABLE>
6
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information regarding the nominees for director and the
executive officers of the Company.
Joseph F. Bozman, Jr.
Age: 55
Chairman of the Board. President and Chief Executive Officer. Mr. Bozman
has been a director of the Company since August 1, 2000 and Chairman of the
Board since August 30, 2000. Appointed President and Chief Executive Officer
effective October 19, 2000. From November 1998 until March 2000, Mr. Bozman
was Chairman and Chief Executive Officer of Amarin Corp. (formerly Ethical
Holdings plc), a publicly traded pharmaceutical company. Prior to joining
Amarin, Mr. Bozman was a founder and Executive Director of SkyePharma plc, a
company that develops methods for delivering drugs in the human body.
SkyePharma plc is traded on both the London Stock Exchange and the Nasdaq
National Market. Mr. Bozman has also been President and Chief Executive
Officer of MD Pharmaceutical, Inc. and International Medication Systems,
Limited, both subsidaries of Medeva plc. Mr. Bozman holds a B.S. degree in
Business Administration with a concentration in Marketing from California
State University Sacramento.
Timothy G. Biro
Age: 47
Director. Mr. Biro has been a director of the Company since August 15,
1995. Mr. Biro is currently the Managing Partner of Ohio Innovation Fund I,
L.P., a venture capital partnership which invests in early-stage technology
based businesses. In addition to being a director of OXIS, Mr. Biro is a
member of the board of directors of Datatrak, Inc.
Mr. Biro was previously a general partner of Brantley Ventures Partners II,
L.P. and Brantley Venture Partners III, L.P. Prior to joining Brantley Venture
Partners in 1991, Mr. Biro was Superintendent of Pharmaceutical Manufacturing
at Merck & Co., Inc. Mr. Biro holds B.S. degrees in Microbiology from
Pennsylvania State University and in Pharmacy from Temple University, and an
MBA from the Wharton School of Business.
Richard A. Davis
Age: 64
Director. Mr. Davis has been a member of the Board since January 28, 1998.
Mr. Davis has retired as President and Chief Executive Officer of Pentzer
Corporation, a private investment company and subsidiary of AVISTA Corp. He is
currently involved as a private investor. He has 20 years of service with
Pacific Northwest Bell (now US West Communications). He has served as Chief of
Staff to former Washington Governor Booth Gardner, chief executive of the
State of Washington's Department of Labor and Industries and director of the
state's Office of Financial Management. Mr. Davis received a B.S. degree from
the University of Oregon and attended advanced programs at both the University
of Illinois and Stanford University. He has served as an advisor to the
Washington State Investment Board and has served on the boards of several
medical diagnostic companies. He currently is on the Board of Regents for
Washington State University, serves on the Washington Technology Alliance
Board, and is Past Chair of the Association of Washington Business.
Stuart S. Lang
Age: 63
Director. Mr. Lang has been a director of the Company since January 19,
1996. Mr. Lang has worked in the accounting field for over 25 years. He has
been a tax partner and subsequently partner in charge of the Portland office
of a national CPA firm. He founded a local accounting firm, The Lang Group, in
Portland, Oregon
7
<PAGE>
in 1985, and was managing member of that firm until 1997 when it combined with
Moss Adams, LLP. Mr. Lang currently divides his time between public accounting
and as an officer of a merger and acquisition advisory company. Mr. Lang is
past Chairman of IA International, an international affiliation of independent
accounting firms. He has served as a member of AICPA tax subcommittees,
including Responsibilities in Tax Practice, and as chairman of the OSCPA
Taxation and Estate Planning Committees.
Timothy C. Rodell
Age: 49
Director. Dr. Rodell was appointed to the Board effective February 15,
2000. Board-certified in Internal Medicine and Pulmonary Medicine, Dr. Rodell
received his M.D. from University of North Carolina School of Medicine in
1980. Dr. Rodell also served as a post-doctoral research fellow at the Webb-
Waring Lung Institute in Denver, Colorado. Prior to joining OXIS, Dr. Rodell
was the Executive Vice President of Operations and Product Development for
Cortech, Inc. Dr. Rodell became Chief Technology Officer of the Company upon
Dr. Sharpe assuming the position of CEO. Dr. Rodell has also been President of
OXIS Therapeutics, Inc. since March 18, 1998 and was the Chief Operating
Officer of OXIS from March 1, 1996 until March 18, 1998. Dr. Rodell has
submitted his resignation as the Company's Chief Technology Officer effective
October 31, 2000.
Ray R. Rogers
Age: 60
Special Advisor and Director. Mr. Rogers was the founder and Chairman of
the Board of International BioClinical, Inc. ("IBC") until 1994, when he
became Chairman of OXIS International, Inc. Mr. Rogers became Chief Executive
Officer of OXIS effective March 18, 1998. He also served as Chairman and
President of DDI Pharmaceuticals, Inc. from 1993 until the completion of the
acquisition of IBC and Bioxytech, which resulted in the creation of OXIS. Mr.
Rogers served on the Supervisory Board of OXIS International, S.A., the
Company's French subsidiary, from 1994 until 1996. Over the years he has
served on both for-profit and non-profit boards and has also been active in
biotechnology in Oregon serving as Chairman of the Oregon Biotechnology
Association during 1993 and 1994. Mr. Rogers resigned as CEO on February 15,
2000 upon Dr. Sharpe assuming the position, and he resigned as Chairman of the
Board effective June 30, 2000. Mr. Rogers is currently employed by the Company
as a special advisor reporting to the Board of Directors.
Jon S. Pitcher
Age: 51
Secretary, Vice President of Finance and Administration and Chief Financial
Officer. A Certified Public Accountant, Mr. Pitcher received an M.S. degree in
Accounting and Information systems from University of California at Los
Angeles. Prior to joining IBC as the Chief Financial Officer, Mr. Pitcher was
a partner with Ernst & Young where he was responsible for coordination of the
firm's services to private and publicly held clients primarily in the
healthcare industry. Mr. Pitcher has been Vice President and Chief Financial
Officer of OXIS since September 7, 1994 and Secretary since August 15, 1995.
Humberto V. Reyes
Age: 55
President, OXIS Health Products Inc. Mr. Reyes holds a B.S. in Chemistry
from the University of Puerto Rico. He has more than 20 years of progressive
management experience in the diagnostic and related industries including VP of
Manufacturing, Dade Division at Baxter, VP/GM Chromatography Division, Varian
and Associates and Senior VP at Microgenics Corporation, a biotechnology
corporation. Mr. Reyes is also a member of the board of directors of Response
Biomedical, a biotechnology company in the Vancouver, Canada area. Mr. Reyes
joined the Company in August 1997 and has been the President of OXIS Health
Products, Inc. since March 18, 1998.
8
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors has a Compensation Committee, which administers the
Company's 1994 Stock Incentive Plan and other compensation plans and acts upon
such other compensation matters as may be referred to it by the Board. The
members of the Committee during 1999 were Messrs. Biro, Lang, and Sitaraman.
The Compensation Committee met three times during 1999.
The Board has an Audit Committee, which oversees the Company's internal
accounting procedures and consults with, and reviews the reports of, the
Company's independent accountants. The members of the Committee during 1999
were Messrs. Biro, Lang and Sitaraman. The Audit Committee met three times
during 1999.
During the year ended December 31, 1999, the Board of Directors of the
Company met four times, and each director, except Dr. Needham, attended at
least 75% of the Company's Board meetings held during the period for which he
or she was a director. Dr. Needham did not attend either of the two meetings
held during the period for which he was a director. The Board does not have a
separate nominating committee.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors
The Company pays an annual fee of $4,000 to each non-employee director and
an additional $1,000 to non-employee directors for serving as committee chair.
The Company does not pay meeting fees but directors are reimbursed for their
expenses incurred in attending meetings. Employee directors receive no
compensation as directors. Non-employee directors may also be compensated for
special assignments.
Under the Company's 1994 Stock Incentive Plan, non-employee directors are
awarded options to purchase 15,000 shares of Common Stock upon becoming
directors of the Company and options to purchase 5,000 shares of Common Stock
annually thereafter.
9
<PAGE>
Executive Officers
Summary Compensation Table
The following table shows the compensation paid during the last three years
to Company officers who received more than $100,000, or served as Chief
Executive Officer, during any such year:
<TABLE>
<CAPTION>
Annual Long Term
Compensation Compensation
---------------- Awards
Name and Position Year Salary Bonus Options
----------------- ---- -------- ------- ------------
<S> <C> <C> <C> <C>
Ray R. Rogers............................ 1999 $240,000 -- 200,000(1)
Chairman of the Board 1998 $210,200 $50,000(3) 28,000(2)
and Chief Executive Officer(6)(7) 1997 $185,000 $37,000(5) 20,000(4)
Dr. Anna D. Barker....................... 1998 $ 61,100 -- --
President and Chief Executive Officer(6) 1997 $185,000 $27,750(5) 20,000(4)
Dr. Timothy C. Rodell.................... 1999 $192,319 -- 175,000(1)
President, OXIS Therapeutics, Inc.(8) 1998 $224,600 $50,000(3) 20,000(2)
(from March 1, 1996) 1997 $220,000 $15,000(5) 10,000(4)
Humberto V. Reyes........................ 1999 $173,500 -- 125,000(1)
President, OXIS Health Products, Inc. 1998 $150,100 $35,000(3) 15,000(2)
(from August 1, 1997)
Jon S. Pitcher........................... 1999 $135,000 -- 75,000(1)
Vice President, Chief Financial Officer 1998 $124,200 $25,000(3) 15,000(2)
and Secretary 1997 $110,400 $14,000(5) 10,000(4)
</TABLE>
--------
(1) Options to purchase 200,000 shares of Common Stock awarded to Mr. Rogers,
options to purchase 175,000 shares of Common Stock awarded to Dr. Rodell,
options to purchase 125,000 shares of Common Stock awarded to Mr. Reyes
and options to purchase 75,000 shares of Common Stock awarded to
Mr. Pitcher as part of their 1999 compensation.
(2) Options to purchase 28,000 shares of Common Stock awarded to Mr. Rogers,
options to purchase 20,000 shares of Common Stock awarded to Dr. Rodell
and options to purchase 15,000 shares of Common Stock awarded each to
Messrs. Reyes and Pitcher as part of their 1998 compensation.
(3) Bonuses for 1998 approved by the Compensation Committee.
(4) Options to purchase 20,000 shares of Common Stock each awarded to Mr.
Rogers and Dr. Barker and options to purchase 10,000 shares of Common
Stock each awarded to Dr. Rodell and Mr. Pitcher as part of their 1997
compensation.
(5) Bonuses for 1997 approved by the Compensation Committee.
(6) Effective March 18, 1998, Dr. Barker resigned as the Company's President
and Chief Executive Officer and Mr. Rogers was appointed Chief Executive
Officer.
(7) Mr. Rogers resigned his position as the Company's Chief Executive Officer
effective February 15, 2000, and as the Company's Chairman of the Board of
Directors effective June 30, 2000.
(8) Dr. Rodell has submitted his resignation as the President of OXIS
Therapeutics, Inc. and as the Company's Chief Technology Officer effective
October 31, 2000.
In connection with Dr. Barker's resignation as the Company's President and
Chief Executive Officer, the Company and Dr. Barker entered into a consulting
agreement pursuant to which the Company agreed to pay to Dr. Barker $15,417
per month for a nine-month period. Pursuant to the agreement, Dr. Barker has
become fully vested with respect to all stock options issued to her by the
Company, and her right to exercise such options has been extended until a date
two years and nine months following her resignation.
10
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
Options granted to executive officers of the Company who are included in
the Summary Compensation Table above for 1999 were as shown below:
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------
Number of % of total
common shares options granted Exercise
underlying to employees in price per
Name grant 1999 share Expiration date
---- ------------- --------------- --------- -----------------
<S> <C> <C> <C> <C>
Ray R. Rogers........ 200,000(1) 30% $.4375 December 21, 2009
Timothy C. Rodell.... 175,000(1) 26% $.4375 December 21, 2009
Humberto V. Reyes.... 125,000(1) 19% $.4375 December 21, 2009
Jon S. Pitcher....... 75,000(1) 11% $.4375 December 21, 2009
</TABLE>
--------
(1) The options granted to the above executive officers during 1999 become
exercisable as to 1/3 of the shares in each of 1999, 2000 and 2001.
FISCAL YEAR END OPTION VALUES
During 1999, no options were exercised by any of the Company's executive
officers. All options issued to executive officers who are included in the
Summary Compensation Table above are shown below.
<TABLE>
<CAPTION>
Number of common shares Value of unexercised
underlying unexercised in-the-money
options at options at
December 31, 1999 December 31, 1999
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ray R. Rogers............... 134,732 142,668 $77,083 $154,167
Anna D. Barker.............. 49,400 0 $ 0 $ 0
Timothy C. Rodell........... 137,666 132,334 $67,448 $134,896
Humberto V. Reyes........... 91,666 88,334 $48,176 $ 96,355
Jon S. Pitcher.............. 64,000 55,000 $28,906 $ 57,812
</TABLE>
EMPLOYMENT CONTRACTS
Effective April 3, 2000, the Company entered into an Executive Separation
and Employment Agreement with Ray R. Rogers. The agreement provides that Mr.
Rogers would resign as Chairman of the Company's Board of Directors no later
than June 30, 2000, and that the Company would employ Mr. Rogers as a special
advisor reporting to the Board of Directors for a period of twelve months
following his resignation as Chairman. The agreement provides an annual base
salary of $240,000. Unless terminated by either party, the agreement will
automatically renew for one year. The agreement prohibits Mr. Rogers from
accepting other full-time employment or engaging in certain activities
competitive to the Company without prior consent. If the Company terminates
Mr. Rogers' employment prior to the expiration of the agreement, it must
continue Mr. Rogers' salary for twelve months after termination. If the
agreement is not renewed after one year, Mr. Rogers' salary is to be continued
for six months. Upon termination Mr. Rogers' unvested stock options will fully
vest, and the period during which he can exercise the options will be
extended.
The Company also entered into employment agreements with Mr. Reyes and Mr.
Pitcher, effective April 3, 2000. These agreements provide that the Company
will employ Mr. Reyes and Mr. Pitcher in their current positions for a period
of one year at their current annual salaries ($182,000 for Mr. Reyes and
$135,000 for Mr. Pitcher). Unless terminated by either party, the agreements
will automatically renew for one year. The agreements prohibit either
executive from accepting other full-time employment or engaging in certain
activities
11
<PAGE>
competitive to the Company without prior consent. If the Company terminates
either executive's employment prior to the expiration of the agreement it must
continue his salary for twelve months. If either agreement is not renewed
after one year, the executive's salary is to be continued for six months. Upon
termination, Mr. Reyes' and Mr. Pitcher's stock options will fully vest, and
the period during which they can be exercised will be extended.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, no directors or executive officers of the
Company or beneficial owners of more than ten percent of the Company's Common
Stock failed to file on a timely basis reports required by Section 16(a) of
the Securities Exchange Act of 1934, as amended, for transactions or events
with respect to the Company's Common Stock occurring in the preceding fiscal
year ended December 31, 1999.
PROPOSAL NO. 2--APPROVAL OF AMENDMENT TO 1994 STOCK INCENTIVE PLAN
(Item 2 on Proxy Card)
The Company's Board of Directors and stockholders have previously approved
the adoption of the Company's 1994 Stock Incentive Plan (the "Plan") and the
reservation of 1,365,000 shares of the Company's Common Stock for issuance
thereunder. In January 2000, the Board of Directors approved the issuance of
options to acquire shares of the Company's Common Stock under the Plan to the
executive officers of the Company as follows: Ray R. Rogers--200,000 shares,
Timothy C. Rodell--92,500 shares, Humberto V. Reyes--100,000 shares, and Jon
S. Pitcher--100,000 shares. The options for Mr. Reyes and Mr. Pitcher and
options for 100,000 shares for Mr. Rogers and 41,111 shares for Dr. Rodell are
subject to the adoption by the Company's stockholders of an amendment
increasing the number of shares issuable under the Plan by at least 400,000
shares. In January 2000, the Board of Directors also authorized an amendment
to the Plan, subject to stockholder approval, to increase the number of shares
issuable under the plan by 400,000 shares. In August 2000, the Board of
Directors approved the issuance to Joseph F. Bozman, Jr. of an option to
acquire 100,000 shares of the Company's Common Stock under the Plan. This
option is subject to shareholder approval of an amendment to the Plan to make
adequate shares available for issuance under the Plan. In October 2000, the
Board of Directors authorized another amendment to the Plan, subject to
stockholder approval, to increase the shares reserved for issuance thereunder
by a total of 885,000 shares, bringing the total number of shares issuable
under the Plan to 2,250,000. At the Meeting, the stockholders are requested to
consider and approve the proposed amendment to the Plan to increase the number
of shares issuable under the Plan to 2,250,000. The OXIS Board believes that
adoption of the amendment to the Plan will ensure OXIS' ability to attract and
retain the best available individuals to serve as employees, officers,
directors, consultants, independent contractors and advisors of OXIS.
Summary of the Plan
The Plan permits granting stock options to acquire shares of OXIS' Common
Stock ("Options"), awarding stock bonuses of OXIS' Common Stock, selling
shares of OXIS' Common Stock and granting stock appreciation rights ("SARs")
(collectively, the "Awards"). Both incentive stock options ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options ("NQSOs") may be granted under the
Plan.
Awards under the Plan to persons other than directors of OXIS who are not
employees of either OXIS or a subsidiary of OXIS (the "Non-employee
Directors") are not determinable because such awards are made in the
discretion of the OXIS Board or its designated committee. See "Administration"
below.
Purpose
The purposes of the Plan are to attract, retain and provide equity
incentive to selected persons to promote the financial success of OXIS. The
OXIS Board of Directors believes that it is essential to the future of OXIS
12
<PAGE>
that OXIS be in a position to grant Awards under a stock incentive plan to
selected employees, officers, directors, consultants, independent contractors
and advisors in order for OXIS to remain competitive in attracting and
retaining such individuals.
Administration
The Plan is administered by a committee of the Board of Directors of OXIS
(the "Plan Committee") comprised of at least two "disinterested persons"
within the meaning of former Rule 16b-3(c)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), although the Plan could be
administered by the OXIS Board if it were comprised solely of "disinterested
persons." The interpretation and construction of any provision of the Plan or
any related agreement by the Plan Committee is final and binding. With the
exception discussed below in "Options--Non-Employee Director Formula Option
Grants", the Plan Committee selects the persons to whom Awards will be
granted, determines the type of Award, the number of shares to be covered by
any Options or SARs awarded, the exercise price of any such Options, the
period during which any such Options may be exercised and all other terms and
conditions of Awards.
Eligibility
With the exception discussed below in "Options--Non-Employee Director
Formula Option Grants," the Plan provides that Awards may be granted to
employees, officers, directors, consultants, independent contractors and
advisors of OXIS or any parent, subsidiary or affiliate of OXIS. ISOs may be
granted only to employees (including officers and directors who are also
employees) of OXIS or any parent, subsidiary or affiliate of OXIS. See
"Certain United States Federal Income Tax Information" below for information
concerning the tax treatment of ISOs and NQSOs.
As of September 30, 2000, there were nine directors of OXIS (five of whom
are Non-Employee Directors) and two OXIS officers (who are not directors)
eligible to participate in the Plan. There are approximately 49 employees of
OXIS and its subsidiaries who are not serving as officers who are also
eligible to participate in the Plan. It is not possible to estimate the number
of consultants, independent contractors and advisors who are or may become
eligible to participate in the Plan.
Options
Grant of Options
The date of grant of an Option is the date on which the Plan Committee
makes the determination to grant the Option unless otherwise specified by the
Plan Committee. Option grants are evidenced by a written stock option grant
and, if for any reason a written stock option grant is not executed within
sixty (60) days of the date of grant, such Option grant shall be null and
void. No consideration shall be received by OXIS for the granting of Options.
Subject to the express provisions of the Plan, the exercise of an Option shall
be subject to such terms, conditions and restrictions as the Plan Committee
may impose in its sole discretion, including restrictions concerning
transferability, repurchase and forfeiture.
Options shall be exercisable on the terms set forth in the stock option
grant; provided that no Option shall be exercisable after the expiration of
ten years from the Option grant date. The Plan Committee may accelerate the
earliest exercise date of any Option.
The Plan states that there is a $100,000 limit to the aggregate fair market
value (calculated as set forth in "Option Price" below) of stock with respect
to which ISOs, whether granted under the Plan or any other ISO plan of OXIS or
its parent or subsidiary, are exercisable for the first time by an optionee
during any calendar year. The above limitations are driven by provisions of
the Code and are subject to change in the event that the relevant sections of
the Code or regulations promulgated thereunder are amended.
13
<PAGE>
Option Price
The exercise price of a NQSO shall be not less than eighty-five percent
(85%) of the fair market value of the shares underlying the Option on the date
the Option is granted. The exercise price of an ISO shall be no less than one
hundred percent (100%) of the fair market value of the shares on the date the
Option is granted, unless the person to whom the Option is granted is a ten
percent (10%) shareholder of OXIS in which case the exercise price shall be
not less than one hundred ten percent (110%) of the fair market value of the
shares on the date the Option is granted. The Plan Committee shall have the
power, within certain limitations, to reduce the exercise price of outstanding
Options.
For purposes of the Plan, the fair market value of a share of OXIS' Common
Stock on a given date shall be the closing price on the Nasdaq National Market
System on the last trading day prior to the date of determination. The closing
price per share of OXIS' Common Stock on October 26, 2000, on the Nasdaq
National Market System was $0.8125.
The method of payment for shares issued upon exercise of Options granted
under the Plan shall be determined by the Plan Committee and may consist of
cash, cancellation of indebtedness, other shares of Common Stock and certain
other methods permitted by law.
Non-Employee Director Formula Option Grants
No ISOs, SARs or stock bonuses shall be awarded or shares sold to Non-
Employee Directors under the Plan. All grants of Options to Non-Employee
Directors are automatic and nondiscretionary. Accordingly, no person shall
have any discretion to select which such Non-Employee Directors shall be
granted Options, to determine when such Options may be granted or to determine
the number of shares of OXIS' Common Stock to be covered by Options granted to
such Non-Employee Directors. All grants of Options to such Non-Employee
Directors shall be made in strict accordance with the following provisions:
(i) On the first business day following OXIS Board approval of the Plan,
each Non-Employee Director received a NQSO covering 3,000 shares of Common
Stock. The OXIS Board approved the Plan on June 15, 1994 and the closing price
per share of OXIS' Common Stock was $17.50. Non-Employee Directors appointed
by the OXIS Board or elected by the OXIS stockholders after such date shall
receive a NQSO covering 3,000 shares of Common Stock on the first business day
following such appointment or initial election. Thereafter, annually on the
first business day following the 1995 Annual Meeting of OXIS' stockholders and
the first business day following each Annual Meeting thereafter, each Non-
Employee Director (other than one taking office for the first time as a result
of his or her election at such Meeting) shall receive a NQSO covering
1,000 shares of Common Stock. Effective August 1, 2000, the Plan was amended
by the Company's Board of Directors so that new Non-Employee Directors shall
receive a NQSO covering 15,000 shares of Common Stock upon their appointment
or election and each Non-Employee Director shall receive a NQSO covering 5,000
shares of Common Stock annually on the first business day following each
Annual Meeting.
(ii) The exercise price of such Options shall be equal to one hundred
percent (100%) of the fair market value of the shares on the date of grant
determined as set forth under "Option Price" above.
(iii) Such Options shall be exercisable beginning six months after the date
of the grant and their term shall be ten years.
Stock Bonuses
The Plan Committee may award shares under the Plan as stock bonuses for no
consideration or for such minimum consideration as may be required by
applicable law in an amount and form as determined by the Plan Committee. An
award of a stock bonus shall be subject to such terms, conditions and
restrictions as the Plan Committee may impose in its sole discretion,
including restrictions concerning transferability, repurchase and forfeiture.
The recipient of a stock bonus must also satisfy any applicable federal, state
or local tax withholding requirements.
14
<PAGE>
Stock Sales
The Plan Committee may issue shares of OXIS Common Stock under the Plan for
such amount (no less than par value) and form of consideration as determined
by the Plan Committee. A stock sale under the Plan shall be subject to such
terms, conditions and restrictions as the Plan Committee may impose in its
sole discretion, including restrictions concerning transferability, repurchase
or forfeiture. The purchaser must also satisfy any applicable federal, state
or local tax withholding requirements.
Stock Appreciation Rights
A SAR may be granted by the Plan Committee in tandem with an Option or as a
freestanding SAR. No consideration shall be received by OXIS for the granting
of SARs. Subject to the express provisions of the Plan, the exercise of a SAR
shall be subject to such terms, conditions and restrictions as the Plan
Committee may impose at its sole discretion, including restrictions concerning
transferability, repurchase and forfeiture. The recipient of a SAR must also
satisfy any applicable federal, state or local tax withholding requirements.
A SAR shall be exercisable only at the time or times established by the
Plan Committee; provided that no SAR shall be exercisable after the expiration
of ten years from the date the SAR was granted. If a SAR is granted in
connection with an Option, the SAR shall be exercisable only to the extent and
on the same conditions that the related Option could be exercised and, upon
exercise of such a SAR, any Option or any portion of such Option to which the
SAR relates shall terminate. Similarly, upon the exercise of an Option to
which a SAR relates, the SAR or portion thereof to which the Option relates
shall terminate.
The Plan Committee may accelerate the earliest exercise date of any SAR.
Nonassignability of Options and SARs
Options and SARs granted pursuant to the Plan are nonassignable and
nontransferable by the optionee or recipient, other than by will or by the
laws of descent and distribution and may be exercised, during the lifetime of
the optionee or recipient, only by the optionee or recipient or any permitted
transferee.
Adjustment Upon Changes in Capitalization and Corporate Transactions
In the event that the number of outstanding shares of Common Stock of OXIS
is increased or decreased by a change in the capital structure of OXIS without
consideration, such as stock splits or dividends, or, if a substantial portion
of the assets of OXIS are distributed without consideration to the
stockholders of OXIS in a spin-off or similar transaction, appropriate
adjustments shall be made in the number or kind of shares available for Awards
under the Plan, the number or kind of shares subject to outstanding Options or
SARs and the exercise price per share of such Options.
In the event of a merger, consolidation, or similar occurrence where OXIS
is not the surviving corporation, or the sale of all or substantially all of
the assets of OXIS, each outstanding Award shall be assumed or substituted by
such successor corporation. In the event such successor corporation does not
agree to assume or substitute such Awards or to provide substantially similar
consideration to optionees or other recipients of Awards as was provided to
stockholders, or in the event of a dissolution or liquidation of OXIS, OXIS
shall notify each optionee or other recipient that the Awards shall expire on
a date at least twenty (20) days after OXIS gives such written notice.
Termination of Employment or Service Through Death, Disability or Otherwise
Under the Plan, in the event an optionee ceases to be employed by or to
provide services to OXIS or any parent or subsidiary of OXIS (and, in the case
of a NQSO, by or to any affiliate of OXIS) for any reason other than death or
permanent and total disability, any Option which was exercisable at the date
of termination may thereafter be exercised for a period of thirty (30) days.
If termination results from death or permanent and total
15
<PAGE>
disability, any Option which was exercisable at the date of termination may
thereafter be exercised for a period of twelve (12) months. However, in no
event may any Option be exercised once its term has expired.
Plan Amendment and Termination
Except as described below, the Plan Committee may amend the Plan at any
time or may terminate the Plan without stockholder approval. However, except
with respect to SARs which may be withdrawn or amended at any time or may
become subject to retroactive rules and regulations, no action may be taken
which would impair the rights of any recipient of an Award without the consent
of such recipient. In any event, the Plan will terminate on April 30, 2004.
Stockholder approval is required for certain specified amendments to the
Plan, including any amendment that increases the total number of shares for
which Awards may be granted, extends the duration of the Plan, extends the
period during and over which Options or SARs may be exercised under the Plan,
or changes the class of persons eligible to receive awards granted under the
Plan (except as may be required to comport with changes in the Code, ERISA or
regulations promulgated thereunder).
Certain United States Federal Income Tax Information Regarding Options
Options granted under the Plan may be either ISOs, as defined in Section
422 of the Code, or NQSOs.
Incentive Stock Options
If an Option granted under the Plan is an ISOs, the optionee will recognize
no income under the grant of the ISO and incur no tax liability at the time of
exercise unless the optionee is subject to the alternative minimum tax. OXIS
will not be allowed a deduction for federal income tax purposes as a result of
the exercise of the ISO regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares at least two years after
the grant of the option and one year after receipt of the shares by the
optionee, any gain will be treated as long-term capital gain. If these holding
periods are not satisfied, the optionee will recognize ordinary income equal
to the difference between the exercise price and the lower of the fair market
value of the stock at the date of option exercise or the sale price of the
stock. OXIS will be entitled to a deduction in the same amount as the ordinary
income recognized by the optionee.
Nonqualified Stock Options
All Options which do not qualify as ISOs under the Code are NQSOs.
Generally, an optionee will not recognize any taxable income at the time the
optionee is granted a NQSO. However, upon exercise of the Option, the optionee
will recognize ordinary income for income tax purposes equal to the excess of
the then fair market value of the shares over the option price. The income
recognized by an optionee who is also an employee of OXIS will be subject to
tax withholdings by OXIS by payment in cash or out of the current earnings
paid to the optionee. OXIS will be allowed a deduction for federal tax
purposes in an amount equal to the income recognized by the optionee so long
as OXIS has met all applicable withholding requirements and so long as the
exercise of the option by optionee does not cause OXIS to violate the limits
on executive compensation set forth in Section 162(m) of the Code. If the
optionee holds such shares for more than one year following exercise of the
option, any gain realized upon disposition will be treated as long-term
capital gain. If the shares are sold within one year after the exercise date,
any gain realized upon disposition will be treated as short-term capital gain.
The gain realized upon disposition will be the excess, if any, of the sales
price over the tax basis of the shares.
Tax Summary Only
The foregoing summary of the effect of federal income taxation upon the
optionee and OXIS with respect to the purchase of OXIS' shares under the Plan
does not purport to be complete, and reference should be made to the
applicable provisions of the Code. In addition, the summary does not discuss
the provisions of the income tax laws of any municipality, state, or foreign
country.
16
<PAGE>
Options Received by Certain Persons
Options granted under the 1994 Stock Incentive Plan to certain individuals
and groups of individuals since the inception of the Plan are set forth below:
<TABLE>
<CAPTION>
Number of
Common
Shares
Underlying
Grant
----------
<S> <C>
Executive officers included in Summary Compensation Table:
Ray R. Rogers................................................... 477,400(1)
Timothy C. Rodell, Chief Technology Officer..................... 362,500(1)
Humberto V. Reyes, President, OXIS Health Products, Inc......... 280,000(1)
Jon S. Pitcher, Vice President, Chief Financial Officer and
Secretary...................................................... 219,000(1)
Nominees for election as directors, other than Rogers and Rodell:
Joseph F. Bozman, Jr............................................ 400, 000(1)
Timothy G. Biro................................................. 8,000
Richard A. Davis................................................ 5,000
Stuart S. Lang.................................................. 7,000
All current executive officers, as a group........................ 1,338,900
All current directors who are not executive officers, as a group.. 33, 000(2)
All employees, excluding executive officers, as a group........... 111,060
</TABLE>
--------
(1) Including options subject to stockholder approval of an amendment to the
Plan.
(2) Including options to acquire 8,000 shares by director Sitaraman and 5,000
shares by director Gavin, neither of which are nominees for re-election
Stockholder Rights
The recipient of an Award shall have no rights as a stockholder of OXIS
with respect to any shares underlying such Award until the date such recipient
is issued a stock certificate for such shares of OXIS.
Vote Required
The approval of the amendment of OXIS' 1994 Stock Incentive Plan requires
the affirmative vote of the holders of a majority of the shares of Voting
Stock present in person or represented by Proxy. Consequently, abstentions
will have the effect of a vote against the proposed amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO OXIS' 1994 STOCK INCENTIVE PLAN AND THE RESERVATION OF AN
ADDITIONAL 885,000 SHARES FOR ISSUANCE THEREUNDER. UNLESS OTHERWISE DIRECTED
BY A STOCKHOLDER, PROXIES WILL BE VOTED "FOR" ADOPTION OF THIS AMENDMENT OF
THE 1994 STOCK INCENTIVE PLAN AND RESERVATION OF AN ADDITIONAL 885,000 SHARES
FOR ISSUANCE THEREUNDER.
SELECTION OF INDEPENDENT AUDITORS
Deloitte & Touche LLP has been selected to act as the Company's principal
accountant for the fiscal year ending December 31, 2000. Representatives of
Deloitte & Touche are expected to be present at the Meeting with the
opportunity to make a statement if they desire to do so and to respond to
questions of stockholders.
17
<PAGE>
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which are
to be brought before the Meeting. If any other matters should be presented for
proper action, it is the intention of the persons named in the Proxy to vote
in accordance with their discretion pursuant to the terms of the Proxy.
It is important that the Proxies be returned promptly. Therefore,
stockholders who do not expect to attend the meeting in person are urged to
fill in, sign, date and return the enclosed Proxy.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, filed with the Securities and Exchange Commission, is
being delivered simultaneously herewith to each stockholder of the Company of
record as of October 26, 2000, and is incorporated by reference herein.
The Company's stock transfer agent and registrar is Boston EquiServe, P.O.
Box 644, Boston, MA 02102. Telephone: (800) 442-2001.
OXIS INTERNATIONAL, INC.
By Joseph F. Bozman, Jr.
Chairman
18
<PAGE>
OXIS INTERNATIONAL, INC.
PROXY SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph F. Bozman, Jr., and Stuart Lang, and
each of them, as Proxies, each with the power to appoint his or her substitute,
to represent and to vote, as designated on the reverse side, all the shares of
Common Stock and voting Preferred Stock of OXIS International, Inc., held of
record by, or otherwise entitled to be voted by, the undersigned on October 26,
2000 at the 2000 Annual Meeting of Stockholders of OXIS International, Inc., to
be held on December 12, 1999 and any adjournment or postponement thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE>
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no directions are indicated, the Proxies will
vote FOR Proposals 1 and 2.
1. ELECTION OF DIRECTORS
Nominees: Timothy G. Biro; Joseph F. Bozman, Jr.; Richard A. Davis; Stuart S.
Lang, Timothy C. Rodell; Ray R. Rogers
For Withheld For all nominees except as noted
---- ---- -------------------
2. To approve an amendment of the Company's 1994 Stock Incentive Plan to
increase the number of shares of common stock available for issuance thereunder
by 885,000 shares, to an aggregate of 2,250,000 shares.
For Against Abstain
---- ---- ----
3. OTHER MATTERS
The Proxies are authorized to vote in their discretion, upon such other
matters as may properly come before the meeting, and any adjournment or
postponement thereof.
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE RETURN ENVELOPE
--------
ENCLOSED.
If stock is held jointly, signature should include both names. If stock is held
by executors, administrators, trustees, guardians and others signing in a
representative capacity, please give full title. If stock is held by a
corporation, please sign in full corporate name and give name and title of
authorized officer. If stock is held by a partnership, please sign in
partnership name by authorized person.
Signature: Date:
------------------------ ----------
Signature: Date:
------------------------ ----------
