<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
Centocor, 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:
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(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(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:
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(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:
<PAGE>
CENTOCOR, INC.
MALVERN, PENNSYLVANIA 19355
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 1997
----------------
TO THE SHAREHOLDERS:
The annual meeting of shareholders of Centocor, Inc. will be held at the
Company's principal executive office, 200 Great Valley Parkway, Great Valley
Corporate Center, Malvern, Pennsylvania, on Wednesday, May 14, 1997, at 10:00
A.M. for the following purposes:
1. To elect nine members of the Board of Directors, each to serve until
the next annual meeting.
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed March 14, 1997 as the record date for
determining the holders of Common Stock entitled to notice of and to vote at
the meeting. Consequently, only holders of Common Stock of record of the
Company at the close of business on March 14, 1997 will be entitled to notice
of and to vote at the meeting.
Please complete, date and sign the enclosed proxy and return it promptly. If
you attend the meeting, you may vote in person.
George D. Hobbs
Secretary
April 3, 1997
<PAGE>
CENTOCOR, INC.
PROXY STATEMENT
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of Centocor,
Inc., 200 Great Valley Parkway, Great Valley Corporate Center, Malvern,
Pennsylvania 19355. Copies of this Proxy Statement and the accompanying proxy
are first being mailed on or about April 3, 1997 to the holders of record of
Common Stock on March 14, 1997. A proxy may be revoked by a shareholder at any
time prior to its use by giving written notice of such revocation to the
Secretary of the Company, by appearing at the meeting and voting in person, or
by returning a later dated proxy. The expense of this solicitation will be
paid by the Company. Some of the officers and employees of the Company may
solicit proxies personally and by telephone. The Company may use the services
of D. F. King & Co., Inc. to aid in the solicitation of proxies at an
anticipated fee of $5,500 plus reasonable expenses.
Holders of Common Stock of record at the close of business on March 14, 1997
will be entitled to vote at the meeting. On that date, the Company had
69,662,096 shares of Common Stock outstanding. Each shareholder is entitled to
cast one vote per share on all items of business properly presented at the
meeting, except that shareholders have cumulative voting rights with respect
to the election of directors, as described below. Under Pennsylvania law and
the by-laws of the Company, the presence of a quorum is required to transact
business at the meeting. The presence at the meeting, in person or by proxy,
of shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast shall constitute a quorum. Proxies received
with votes withheld or abstentions will be counted in determining the presence
of a quorum, but will not be voted. Broker non-votes will not be counted in
determining the presence of a quorum and will not be voted. As a result,
assuming a quorum is present, votes withheld, abstentions and broker non-votes
will have no impact on any matter submitted to a vote of the shareholders.
Shareholders have cumulative voting rights with respect to the election of
directors. Each shareholder is entitled to cast the number of votes in the
election of directors that is equal to the number of shares of Common Stock
held by such shareholder on the record date, multiplied by the number of
directors to be elected. A shareholder may cast all such votes for a single
nominee or may distribute votes among nominees as the shareholder sees fit.
The nine nominees for director receiving the highest number of votes cast by
shareholders entitled to vote thereon will be elected to serve on the Board of
Directors.
ELECTION OF DIRECTORS
Nine directors are to be elected at the annual meeting of shareholders to
serve one-year terms until the 1998 annual meeting of shareholders and until
their respective successors are elected and shall qualify. The persons named
in the accompanying proxy intend to vote for the election of Anthony B. Evnin,
William F. Hamilton, David P. Holveck, Antonie T. Knoppers, Ronald A.
Matricaria, Hubert J.P. Schoemaker, Richard D. Spizzirri, Lawrence Steinman
and Jean C. Tempel, unless authority to vote for one or more of such nominees
is specifically withheld in the proxy. All of the nominees are currently
directors of the Company. The persons named in the proxy will have the right
to vote cumulatively and to distribute their votes among such nominees as they
consider advisable. All the nominees have informed the Board of Directors that
they are willing to serve as directors, but if any of them should decline to
serve or become unavailable for election as a director at the meeting, an
event which the Board of Directors does not anticipate, the persons named in
the proxy will vote for such nominee or nominees as may be designated by the
Board of Directors, unless the Board of Directors reduces the number of
directors accordingly.
<PAGE>
The following table sets forth, as of March 14, 1997, information as to the
nominees, including their recent employment, positions with the Company, if
any, other directorships and age.
<TABLE>
<CAPTION>
YEAR FIRST
NAME, AGE, PRINCIPAL OCCUPATIONS AND BUSINESSES ELECTED
DURING LAST FIVE YEARS AND OTHER CURRENT DIRECTORSHIPS DIRECTOR
------------------------------------------------------ ----------
<S> <C>
Anthony B. Evnin, 56............................................................. 1980
General Partner of Venrock Associates, a venture capital limited partnership.
Director, Arris Pharmaceutical Corporation, Kopin Corporation, Opta Food
Ingredients, Inc., Ribozyme Pharmaceuticals, Inc., SUGEN, Inc. and Triangle
Pharmaceuticals, Inc.
William F. Hamilton, 57.......................................................... 1985
Landau Professor of Management and Technology at the Wharton School of the
University of Pennsylvania. Director, Digital Lightwave, Inc., Hunt
Manufacturing Co., Marlton Technologies, Inc. and Neose Technologies, Inc.
David P. Holveck, 51............................................................. 1994
President and Chief Executive Officer of the Company since November 1992;
President and Chief Operating Officer from April 1992 to October 1992; and
Executive Vice President and President--Diagnostics Division from December 1988
to April 1992.
Antonie T. Knoppers, 82.......................................................... 1986
Self-employed business consultant. Former President, Chief Operating Officer and
Vice Chairman, Merck & Co., Inc., a research-based health products company.
Director, Agouron Pharmaceuticals, Inc.
Ronald A. Matricaria, 54......................................................... 1994
President and Chief Executive Officer of St. Jude Medical, Inc., a medical
products company, since April 1993 and Chairman of the Board since 1995. From
1970 to 1993, Mr. Matricaria was employed by Eli Lilly and Company, Inc., a
research-based pharmaceutical company, where he served in a variety of
capacities, including President of the Medical Devices and Diagnostics Division
and Executive Vice President of the Pharmaceutical Division and President of its
North American operations. Director, The Home Depot, Inc., St. Jude Medical,
Inc. and Health Industry Manufacturers Association.
Hubert J.P. Schoemaker, 46....................................................... 1983
Chairman of the Board of the Company since November 1987; Chief Executive
Officer of the Company from November 1987 to October 1992; President of the
Company from 1983 to 1987. Director, Apollon, Inc., Avitech, Inc., ChemGenics
Pharmaceuticals Inc. and Safeguard Scientifics Inc.
Richard D. Spizzirri, 64......................................................... 1994
Senior Counsel to the law firm of Davis Polk & Wardwell since January 1995;
Partner, Davis Polk & Wardwell from 1967 to 1994. Director, Stuart
Entertainment, Inc., SUGEN, Inc.
Lawrence Steinman, 49............................................................ 1991
Professor of Immunology, Weizmann Institute of Science, Rehovot, Israel since
1994; Professor of Neurology and Neurological Sciences and Pediatrics, Stanford
University School of Medicine since 1991; Associate Professor of Neurology,
Pediatrics and Genetics, Stanford University School of Medicine from 1985 to
1991.
Jean C. Tempel, 53............................................................... 1993
Managing Partner of Technology Equity Partners, an early stage private equity
investment firm and Special Limited Partner of TL Ventures, an affiliate of
Safeguard Scientifics, Inc., since June, 1996; General Partner, TL Ventures,
since November, 1993; President and Chief Operating Officer of Safeguard
Scientifics Inc. from January 1992 to November 1993; Executive Vice President
and Chief Operations Officer, The Boston Company, a bank trust company, from
1986 to 1990. Director, Cambridge Technology Partners Inc. and Sonesta
International Hotels, Inc. and Trustee, Scudder Family of Mutual Funds.
</TABLE>
2
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors are the Audit Committee,
the Compensation Committee and the Corporate Governance and Nominating
Committee. The Audit Committee, consisting of Dr. Evnin, Dr. Hamilton and Ms.
Tempel, met twice during 1996. No member of the Audit Committee is a member of
the Company's management. The Audit Committee is responsible for determining
the adequacy of the Company's internal accounting and financial controls. The
Compensation Committee, consisting of Dr. Evnin, Dr. Hamilton, Dr. Knoppers
and Mr. Matricaria, met twice during 1996. The Compensation Committee is
responsible for reviewing matters pertaining to the compensation of the
executive officers of the Company. The Corporate Governance and Nominating
Committee was formed in 1996 to oversee the Company's compliance with its Code
of Legal and Ethical Conduct (the "Code"), which was adopted by the Company in
1996, and to nominate individuals, other than incumbent directors, for
election to the Company's Board of Directors. The Corporate Governance and
Nominating Committee, consisting of Mr. Matricaria, Mr. Spizzirri and Dr.
Steinman, did not meet separately in 1996, since the Board of Directors
elected to discuss and consider the Code at a meeting of the entire Board held
subsequent to the adoption of the Code. The Corporate Governance and
Nominating Committee will consider written recommendations by shareholders of
the Company for nominees for election as directors of the Company, provided
each recommendation, together with such information about the nominee as would
be required to be included in a proxy statement with respect to the election
of the nominee under the proxy solicitation rules of the Securities and
Exchange Commission, is received by the Secretary of the Company, in the case
of an annual meeting of shareholders, not later than the date specified in the
most recent proxy statement of the Company as the date by which shareholder
proposals for consideration at the next annual meeting of shareholders must be
received, and, in the case of a special meeting of shareholders at which
directors of the Company are to be elected, not later than the tenth day after
the date of the notice of such meeting.
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
The Board of Directors held four meetings during 1996. Each of the directors
attended at least 75% of the aggregate of all meetings of the Board and of all
committees of which he or she was a member during 1996.
COMPENSATION OF DIRECTORS
During 1996, each director who was not an employee of the Company was
compensated in the amount of $2,000 for each of four Board of Directors'
meetings attended at the Company's Malvern, Pennsylvania offices. Each
director who was not an employee of the Company was also granted options to
purchase 15,000 shares of the Company's Common Stock during 1996. Options are
granted to the Company's directors with an exercise price equal to the closing
price of the Company's Common Stock on the date of grant.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Company's knowledge, each of the following entities were
the only beneficial owners of more than five percent of the Company's Common
Stock as of March 14, 1997:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES OF PERCENT OF
BENEFICIAL OWNER/(1)/ COMMON STOCK/(1)/ CLASS
--------------------- ------------------- ----------
<S> <C> <C>
AXA/(2)/......................................... 8,179,370/(2)/ 11.7%
23, Avenue Matignon
Paris, France
State of Wisconsin Investment Board/(3)/......... 4,990,700/(3)/ 7.2%
646 Steamboat Road
Greenwich, CT 06830
</TABLE>
- --------
(1) Under the rules of the Securities and Exchange Commission (the
"Commission"), a person is deemed to be the beneficial owner of securities
if such person has, or shares, "voting power" (which includes the power to
vote, or to direct the voting of, such securities) or "investment power"
(which includes the power to dispose, or direct the disposition, of such
securities). Under these rules, more than one person may be deemed the
beneficial owner of the same securities. The information set forth in the
above table includes all shares of Common Stock of the Company over which
the above persons individually or together share voting power or
investment power adjusted, however, to eliminate the reporting of shares
more than once in order not to overstate the aggregate beneficial
ownership of such persons.
(2) Based on a copy of an Amendment No. 2 to Schedule 13G dated February 13,
1997, provided to the Company under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), filed by Alpha Assurances I.A.R.D.
Mutuelle, Alpha Assurances Vie Mutuelle, AXA Assurances I.A.R.D. Mutuelle,
AXA Assurances vie Mutuelle and AXA Courtage Assurance Mutuelle (formerly
known as Uni Europe Assurance Mutuelle), as a group pursuant to rules of
the Exchange Act (the "Mutuelle Group"), AXA and The Equitable Companies
Incorporated ("Equitable"). According to such Schedule 13G, Equitable
filed the Schedule 13G as a parent holding company in accordance with Rule
13d-1(b)(ii)(G) of the Exchange Act, reporting sole voting power with
respect to 7,425,730 of such shares and sole investment power with respect
to 8,111,670 of such shares; AXA filed as a parent holding company and as
the beneficial owner of a majority interest in Equitable, reporting sole
voting power with respect to 7,492,430 of such shares and sole investment
power with respect to 8,178,370 of such shares, and the Mutuelle Group
filed the Schedule 13G as a parent holding company, as a group which
beneficially owns a majority interest in AXA, reporting sole voting power
with respect to 7,492,430 of such shares and sole investment power with
respect to 8,178,370 of such shares.
(3) Based on a copy of an Amendment No. 1 to Schedule 13G dated January 21,
1997 provided to the Company pursuant to the Exchange Act, the State of
Wisconsin Investment Board has sole voting and investment power with
respect to all of the shares of Common Stock covered by the Schedule 13G.
4
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of March 14, 1997, the number of shares
and percentage of the Company's Common Stock beneficially owned by each
director, each executive officer named in the Summary Compensation Table in
this Proxy Statement, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF COMMON
NUMBER OF SHARES STOCK OUTSTANDING IF
NAME BENEFICIALLY OWNED/(1)/ GREATER THAN 1%
---- ----------------------- --------------------
<S> <C> <C>
Anthony B. Evnin................. 141,252
William F. Hamilton.............. 118,974
David P. Holveck................. 583,371
Antonie T. Knoppers.............. 113,832
Ronald A. Matricaria............. 19,300
Hubert J.P. Schoemaker........... 736,799 1.1%
Richard D. Spizzirri............. 106,144
Lawrence Steinman................ 22,200
Jean C. Tempel................... 36,000
Joseph C. Scodari................ 31,250
Martin R. Page................... 147,518
Warren C. Bogard, Jr............. 18,383
All directors and executive offi-
cers as a group................. 2,074,690 3.0%
</TABLE>
- --------
(1) Includes shares which the individual named in the table has the right to
acquire, on or before May 13, 1997, through the vesting of awards under
the Company's 1983 Restricted Common Stock Award Plan (the "1983 Award
Plan") or the exercise of stock options pursuant to individual agreements
under the Company's 1987 Non-Qualified Stock Option Plan or 1989 Non-
Employee Directors' Non-Qualified Stock Option Plan, as follows: Anthony
B. Evnin--79,800; William F. Hamilton--107,800; David P. Holveck--516,000;
Antonie T. Knoppers--94,800; Ronald A. Matricaria--19,300; Hubert J.P.
Schoemaker--502,750; Richard D. Spizzirri--13,700; Lawrence Steinman--
22,200; Jean C. Tempel--13,300; Joseph C. Scodari--31,250; Martin R.
Page--137,700; Warren C. Bogard, Jr.--15,000; and all directors and
executive officers as a group--1,553,600.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers, directors
and persons who own more than 10% of the Company's Common Stock to file
reports of ownership and changes in ownership with the Commission. The
Commission's rules also require such reporting persons to furnish the Company
with a copy of all Section 16(a) forms they file.
Based solely on a review of the copies of the forms which the Company
received and written representations from certain reporting persons, the
Company believes that, during the fiscal year ended December 31, 1996, all
filing requirements applicable to its reporting persons were complied with.
5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company, who are elected to serve at the
discretion of the Board of Directors, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
David P. Holveck.......... 51 President and Chief Executive Officer
Joseph C. Scodari......... 44 Executive Vice President and President--
Pharmaceutical Division
Martin R. Page............ 52 Senior Vice President--Regulatory Affairs
and Quality Assurance
Dominic J. Caruso......... 39 Vice President--Finance, Chief Financial Officer
and Acting General Manager--Diagnostics Division.
</TABLE>
Mr. Holveck has been associated with Centocor since June 1983, as President
and Chief Executive Officer since November 1992, as President and Chief
Operating Officer from April 1992 to October 1992, and as Executive Vice
President and President--Diagnostics Division from December 1988 to April
1992.
Mr. Scodari has been associated with Centocor since April 1996, as Executive
Vice President and President--Pharmaceutical Division. Previously, Mr. Scodari
was employed by Rhone-Poulenc Rorer Pharmaceuticals (RPR). Mr. Scodari joined
RPR in 1989 as Vice President of Marketing and Business Development, and later
served as Vice President and General Manager--U.S. Pharmaceuticals, Senior
Vice President and General Manager--North America Ethicals, and most recently
as Senior Vice President and General Manager--The Americas.
Mr. Page has been associated with Centocor since September 1987, as Senior
Vice President--Regulatory Affairs and Quality Assurance since March 1994, as
Senior Vice President--Worldwide Regulatory Affairs from August 1992 to March
1994, as Vice President--Worldwide Regulatory Affairs from June 1990 to August
1992, and as Vice President--International Regulatory Affairs from September
1987 to June 1990.
Mr. Caruso has been associated with Centocor since November 1985, as Vice
President--Finance and Chief Financial Officer since December 1994, and as
Vice President and Corporate Controller from January 1991 to November 1994.
Additionally, since January 1997, Mr. Caruso has served as the Company's
Acting General Manager--Diagnostics Division.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
REPORT OF BOARD OF DIRECTORS' COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting entirely of
non-employee directors, is responsible for establishing and reviewing the
compensation of the Company's executive officers.
EXECUTIVE COMPENSATION POLICIES
The Company's executive compensation programs are designed to attract and
retain experienced and well-qualified executive officers who will enhance the
performance of the Company and build shareholders' equity. The Company's
executive compensation packages generally include four components: base
salary; a discretionary annual cash bonus; stock options and restricted stock
awards; and executive benefits.
In setting the compensation level for executive officers, the Committee is
guided by the following considerations:
--compensation levels should be competitive with compensation generally
being paid to executives in the pharmaceutical and biotechnology
industries to ensure the Company's ability to attract and retain superior
executives;
--a significant portion of executive officer compensation should be paid in
the form of equity-based incentives to link closely shareholder and
executive interests and to encourage stock ownership by executive
officers; and
--each individual executive officer's compensation should reflect the
performance of the Company as a whole, the performance of the officer's
business unit, if applicable, and the performance of the executive
officer.
BASE SALARY
An executive's base salary is determined by the Company's overall
performance, the responsibility of the particular position, and an assessment
of his/her performance against his/her individual responsibilities and
objectives, including, where appropriate, the impact of such performance on
the business results of the Company. The Committee also may consider non-
financial indicators, including, but not limited to, strategic developments
for which an executive officer has responsibility and intangible elements of
managerial performance. Executive officer salaries are generally reviewed
annually and adjusted on a calendar year basis based upon these
considerations.
ANNUAL CASH BONUS
The Committee may make cash awards to executive officers based on certain
financial and non-financial indicators of corporate performance. An individual
executive's annual bonus is a percentage of his/her base salary determined by
the executive's job level and scope of responsibility.
Based on the Company's performance in 1996, the Committee awarded cash
bonuses to its executive officers with respect to such year.
STOCK OPTIONS AND RESTRICTED STOCK AWARDS
The Committee may grant stock options and/or restricted stock awards to
executive officers. The Committee sets guidelines for the number of stock
options granted or shares awarded, based on the Company's performance and the
targeted value of each executive's overall compensation package. In setting
such guidelines, the Committee evaluates the long-term incentive packages
offered to the
7
<PAGE>
Company's executives in relation to the long-term incentive packages other
biotechnology companies which the Committee considers to be in the Company's
peer group offer their executives. The Committee considers the Company's peer
group to be: Amgen Inc.; Biogen, Inc.; Genentech Inc.; Genzyme Corporation and
Chiron Corporation.
The Committee granted certain executive officers stock options and
restricted stock awards in 1996 as an incentive for future performance.
EXECUTIVE BENEFITS
In order to provide an attractive package for executive officers, thereby
enabling the Company to attract and retain necessary executive talent, the
Company often supplements the standard benefits package offered to all
employees with special executive benefits.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Holveck's 1996 compensation consisted of base salary, a cash bonus,
stock options, restricted stock awards and executive benefits.
In view of Mr. Holveck's responsibility and seniority, the Committee set his
1996 base salary at $384,500, to be competitive with base salaries paid to
other executives in the biotechnology industry with similar responsibilities
and seniority. Based on his achievement of certain objectives, in 1996 the
Committee granted Mr. Holveck a cash bonus of $144,750, options to purchase
100,000 shares of Common Stock and awarded him 30,000 shares of Common Stock
under the 1983 Award Plan. These option grants and restricted stock awards,
together with prior grants and awards, reflect the Committee's policy of
encouraging long-term performance and promoting executive retention while
further aligning management's and shareholders' interest in the performance of
the Company's Common Stock.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, applicable in tax years
beginning on or after January 1, 1994, generally disallows a tax deduction to
publicly-held companies for annual compensation in excess of $1 million earned
by the chief executive officer or any of the other four highest compensated
officers. The deduction limit does not apply, however, to performance-based
compensation that satisfies certain requirements. The Committee does not
anticipate that in the foreseeable future any officer of the Company will earn
compensation in excess of $1 million that would not qualify as performance-
based compensation. Therefore, the Committee has not yet determined a policy
with respect to Section 162(m). The Committee intends to review the
implications of Section 162(m) when it becomes more relevant with respect to
the Company's executive compensation policies.
The Compensation Committee
Dr. Anthony B. Evnin
Dr. William F. Hamilton
Dr. Antonie T. Knoppers
Mr. Ronald A. Matricaria
8
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for the fiscal years ended December 31,
1996, 1995 and 1994, the cash compensation paid by the Company, as well as
certain other compensation paid with respect to those years, to the chief
executive officer and each of the four other most highly compensated policy
making principals of the Company in all capacities in which they served. Cash
bonuses are stated in the year for which they are awarded, whether paid or
accrued.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------ ---------------------------
AWARDS
---------------------------
SECURITIES
NAME AND RESTRICTED UNDERLYING ALL OTHER
PRINCIPAL STOCK AWARD(S) OPTIONS/SARS COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)/(1)/ (#)/(2)/ ($)/(3)/
--------- ---- --------- -------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David P. Holveck......................... 1996 $384,500 $144,750 $1,035,000 100,000 $6,934
President and 1995 $309,000 -- $ 423,750 90,000 $6,066
Chief Executive Officer 1994 $300,000 -- -- 120,000 $6,463
Hubert J.P. Schoemaker................... 1996 $385,700 $144,750 $1,035,000 100,000 $6,997
Chairman of the Board 1995 $371,000 -- $ 423,750 90,000 $6,718
1994 $360,000 -- -- 125,000 $6,724
Joseph C. Scodari/(4)/................... 1996 $213,500 $115,000 $2,267,500 155,000 $4,124
Executive Vice President and President
-- Pharmaceutical Division
Martin R. Page........................... 1996 $209,900 $ 47,250 $ 172,500 25,000 $5,080
Senior Vice President--Regulatory 1995 $204,000 -- $ 141,250 25,000 $4,942
Affairs and Quality Assurance 1994 $198,000 -- -- 40,000 $5,013
Warren C. Bogard, Jr./(5)/............... 1996 $174,800 $ 33,450 -- -- $4,731
Senior Vice President and General 1995 $157,200 -- $ 141,200 20,000 $4,466
Manager--Diagnostics Division 1994 $138,600 -- -- 10,000 $4,313
</TABLE>
- --------
(1) Of the 60,000 shares awarded to Mr. Holveck under the 1983 Award Plan
during the three fiscal years ended December 31, 1996, 25% vest each year
for four consecutive years beginning one year from the date of grant. At
December 31, 1996, Mr. Holveck held unvested awards under the 1983 Award
Plan for an aggregate of 59,700 shares with a market value of $2,134,275.
Of the 60,000 shares awarded to Dr. Schoemaker under the 1983 Award Plan
during the three fiscal years ended December 31, 1996, 25% vest each year
for four consecutive years beginning one year from the date of grant. At
December 31, 1996, Dr. Schoemaker held unvested awards under the 1983 Award
Plan for an aggregate of 56,500 shares with a market value of $2,019,875.
Of the 65,000 shares awarded to Mr. Scodari under the 1983 Award Plan during
the fiscal year ended December 31, 1996, 25% vest each year for four
consecutive years beginning one year from the date of grant. At December 31,
1996, Mr. Scodari held unvested awards under the 1983 Award Plan for an
aggregate of 65,000 shares with a market value of $2,323,750.
Of the 15,000 shares awarded to Mr. Page under the 1983 Award Plan during
the three fiscal years ended December 31, 1996, 25% vest each year for four
consecutive years beginning one year from the date of grant. At December 31,
1996, Mr. Page held unvested awards under the 1983 Award Plan for an
aggregate of 14,500 shares with a market value of $518,375.
Of the 10,000 shares awarded to Dr. Bogard under the 1983 Award Plan during
the three fiscal years ended December 31, 1996, 25% vest each year for four
consecutive years beginning one year from the date of grant. At December 31,
1996, Dr. Bogard held unvested awards under the 1983 Award Plan for an
aggregate of 9,740 shares with a market value of $348,205.
9
<PAGE>
The vesting of all of the foregoing unvested shares may be accelerated under
certain events constituting a change in control of the Company. With respect
to restricted stock awards, shares of Common Stock are not issued prior to
the vesting of an award. The holder of unvested restricted stock awards has
no rights as a shareholder of the Company, including the right to receive
dividends. The Company has not paid any dividends on its Common Stock and
does not expect to pay any dividends in the foreseeable future.
(2) All of the options granted to Mr. Holveck, Dr. Schoemaker, Mr. Scodari,
Mr. Page and Dr. Bogard in the three fiscal years ended December 31, 1996
were granted in tandem with limited stock appreciation rights ("LSARs").
LSARs may be exercised only upon the occurrence of certain events
constituting a change in control of the Company, only during the 30-day
period following shareholder approval of any such event (but may not in
any event be exercised for six months after the date of grant of the
LSAR), and will be exercisable only if and to the extent that the options
to which they relate are exercisable. For each share for which an LSAR is
exercised, the optionee will receive an amount in cash equal to the
difference between (1) the exercise price per share of the option to which
the LSAR relates and (2) the fair market value per share of the Common
Stock issuable upon exercise of the option on the date the LSAR is
exercised.
(3) All of such amounts constitute contributions made by the Company to the
Company's Qualified Savings and Retirement Plan for the accounts of the
named principals.
(4) Mr. Scodari became an officer and employee of the Company effective as of
April 8, 1996.
(5) Dr. Bogard resigned as an officer and employee of the Company effective as
of January 2, 1997.
10
<PAGE>
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table sets forth information concerning the grant of stock
options and LSARs under the Company's 1987 Non-Qualified Stock Option Plan to
the principals named in the Summary Compensation Table during the fiscal year
ended December 31, 1996:
OPTION/LSAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/LSARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS/LSARS EMPLOYEES PRICE EXPIRATION ---------------------
NAME GRANTED (#) IN FISCAL YEAR ($/SH)/(3)/ DATE/(4)/ 5%($) 10%($)
---- ------------- -------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
David P. Holveck........ 100,000/(1)/ 13.35% $34.50 12/4/06 $2,169,686 $5,498,411
Hubert J.P. Schoemaker.. 100,000/(1)/ 13.35% $34.50 12/4/06 $2,169,686 $5,498,411
Joseph C. Scodari....... 125,000/(2)/ 16.69% $35.00 4/8/06 $2,751,414 $6,972,623
30,000/(1)/ 4.01% $34.50 12/4/06 $ 650,906 $1,649,523
Martin R. Page.......... 25,000/(1)/ 3.33% $34.50 12/4/06 $ 542,422 $1,374,603
</TABLE>
- --------
(1) Such options first become exercisable as to one-quarter of the option
shares on December 4, 1997, one-quarter of the option shares on December
4, 1998, one-quarter of the option shares on December 4, 1999 and one-
quarter of the option shares on December 4, 2000. The exercisability of
all of the options will accelerate upon the occurrence of certain events
constituting a change in control of the Company. All of the options
granted to Mr. Holveck, Dr. Schoemaker, Mr. Scodari and Mr. Page were
granted in tandem with LSARs.
(2) Such options for Mr. Scodari first become exercisable as to one-quarter of
the option shares on April 8, 1997, one-quarter of the option shares on
April 8, 1998, one-quarter of the option shares on April 8, 1999 and one-
quarter of the option shares on April 8, 2000. The exercisability of all
the options will accelerate upon the occurrence of certain events
constituting a change in control of the Company. All of the options were
granted in tandem with LSARs.
(3) The price payable upon exercise of options may be paid in cash, property,
services rendered, or, under certain circumstances, in shares of the
Company's Common Stock having a fair market value equal on the date of
exercise to the exercise price, or any combination thereof.
(4) Each of the options generally expires upon the earlier of six months after
the employee's termination of employment or the expiration date noted
above.
The following table sets forth information with respect to option exercises
during the fiscal year ended December 31, 1996, and the unexercised options
and LSARs held by each of those principals as of the end of such fiscal year:
AGGREGATED OPTION/LSAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/LSAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/LSARS OPTIONS/LSARS AT
SHARES AT FY-END (# ) FY-END ($)
ACQUIRED ON VALUE REALIZED ---------------------------- -------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David P. Holveck........ 28,000 $ 723,600 417,500/(1)/ 288,500/(1)/ $ 9,338,937 $4,697,812
Hubert J.P. Schoemaker.. 160,000 $3,509,688 632,750/(1)/ 296,250/(1)/ $13,138,343 $4,908,281
Joseph C. Scodari....... -- -- 0 155,000/(1)/ $ 0 $ 131,250
Martin R. Page.......... 24,000 $ 634,450 121,700/(2)/ 77,500/(1)/ $ 3,171,562 $1,296,562
Warren C. Bogard, Jr.... 30,000 $ 723,481 27,668/(1)/ 30,500/(1)/ $ 651,072 $ 685,812
</TABLE>
- --------
(1) All of such options were granted in tandem with LSARs.
(2) 52,500 of such options were granted in tandem with LSARs.
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock during the five fiscal
years ended December 31, 1996 with the cumulative total return on the Nasdaq
Stock Market Index (U.S. and Foreign Companies) and the Hambrecht & Quist
Biotechnology Index. The comparison assumes $100 was invested on December 31,
1991 in the Company's Common Stock and in each of the foregoing indices and
further assumes reinvestment of dividends. The Company did not declare or pay
any dividends during the comparison period.
[GRAPH APPEARS HERE]
TRANSACTIONS INVOLVING MANAGEMENT
At various times in 1996, various executive officers were awarded and vested
in shares awarded pursuant to the 1983 Award Plan, and were granted and
exercised options pursuant to the 1987 Non-Qualified Stock Option Plan.
The Company has arrangements with all executive officers other than Mr.
Holveck pursuant to which each will receive severance payments of twelve
months compensation in certain cases in the event of termination of his
employment by the Company. The Company has an arrangement with Mr. Holveck
pursuant to which he will receive a lump-sum payment of twelve months
compensation in certain cases in the event of termination of his employment by
the Company.
The terms of currently unexercisable options for an aggregate of 1,189,625
shares and currently unvested restricted stock awards for an aggregate of
257,060 shares granted to all executive officers and certain other employees
of the Company provide for the acceleration of the exercisability of such
options and the vesting of such common stock awards upon the occurrence of
certain events constituting a change in control of the Company.
12
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no business that will be presented at the
meeting other than the election of directors. If any other matter is properly
presented to the meeting, the persons named in the accompanying proxy will
have discretionary authority to vote proxies with respect to such matter in
accordance with their best judgment.
ADDITIONAL INFORMATION
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP, independent certified public accountants, audited the
consolidated financial statements of the Company for the year ended December
31, 1996. Representatives of KPMG Peat Marwick LLP are expected to attend the
1997 annual meeting of shareholders, will have the opportunity to make a
statement if they desire to do so and are expected to be available to answer
appropriate questions. The Board of Directors has selected KPMG Peat Marwick
LLP as the independent public accountants to audit the Company's consolidated
financial statements for the year ending December 31, 1997.
DEADLINE FOR SHAREHOLDERS' PROPOSALS
The Company must receive any proposal which a shareholder wishes to submit
to the 1998 annual meeting of shareholders before December 4, 1997, if the
proposal is to be considered by the Board of Directors for inclusion in the
proxy material for that meeting.
George D. Hobbs
Secretary
April 3, 1997
13
<PAGE>
CENTOCOR, INC.
Malvern, PA
PROXY
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting of Shareholders to be held May 14, 1997
The undersigned hereby appoints David P. Holveck and George D. Hobbs, and
each of them, attorneys and proxies, with power of substitution in each of them,
to vote and act for and on behalf of the undersigned at the annual meeting of
shareholders of Centocor, Inc. to be held on Wednesday, May 14, 1997, and at all
adjournments thereof, according to the number of shares which the undersigned
would be entitled to vote if then personally present, as indicated hereon, and
in their discretion upon such other business as may arise during the meeting,
all as set forth in the notice of the meeting and in the proxy statement
furnished herewith, copies of which have been received by the undersigned; and
hereby ratifies and confirms all that said attorneys and proxies may do or cause
to be done by virtue hereof.
It is agreed that unless otherwise marked on the reverse side, said
attorneys and proxies are appointed with authority to vote FOR the election of
directors.
(PLEASE FILL IN, SIGN AND DATE THIS PROXY CARD ON
THE REVERSE SIDE AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE.)
-----------
SEE REVERSE
SIDE
-----------
<PAGE>
[X] Please mark
votes as in
this example.
1. ELECTION OF DIRECTORS
Nominees: Anthony B. Evnin, William F. Hamilton, David P. Holveck,
Antonie T. Knoppers, Ronald A. Matricaria, Hubert J.P. Schoemaker,
Richard D. Spizzirri, Lawrence Steinman and Jean C. Tempel.
FOR WITHHELD
ALL (for all
NOMINEES nominees)
[_] [_]
For, except vote withheld from the following nominees:
[_]___________________________________
MARK HERE
MARK HERE IF YOU PLAN
FOR ADDRESS [_] TO ATTEND [_]
CHANGE AND THE MEETING ON
NOTE AT LEFT MAY 14, 1997
Signature should be the same as the name printed hereon: Executors,
administrators, trustees, guardians, attorneys and officers of corporations
should add their title when signing.
Signature: Date:
---------------------------- ----------------
Signature: Date:
---------------------------- ----------------
