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
SCIOS INC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
Scios Inc.
2450 Bayshore Parkway
Mountain View, California 94043
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 12, 1998
10:00 a.m.
----------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Scios
Inc., a Delaware corporation (the "Company"), will be held at the Company's
principal executive offices, 2450 Bayshore Parkway, Mountain View, California
94043, at 10:00 a.m. on Tuesday, May 12, 1998, to consider and act upon the
following matters:
(1) To elect directors of the Company.
(2) To approve amendments to the Company's 1992 Equity Incentive
Plan.
(3) To ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent auditors for fiscal 1998.
(4) To act upon such other matters that may properly come before
the meeting or any adjournment or postponement of the meeting.
Only stockholders of record at the close of business on March 16, 1998
will be entitled to notice of and to vote at this meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors
JOHN H. NEWMAN
Secretary
Mountain View, California
March 31, 1998
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THIS MEETING,
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
Scios Inc.
2450 Bayshore Parkway
Mountain View, California 94043
----------
Proxy Statement
Annual Meeting of Stockholders
May 12, 1998
General
This Proxy Statement is solicited on behalf of the Board of Directors
of Scios Inc., a Delaware corporation (the "Company" or "Scios"), for use at its
Annual Meeting of Stockholders to be held at the Company's principal executive
offices, 2450 Bayshore Parkway, Mountain View, California 94043, at 10:00 a.m.
on Tuesday, May 12, 1998, and at any adjournment or postponement of that
meeting. The approximate mailing date for this Proxy Statement and the enclosed
proxy is March 31, 1998.
The Board of Directors has fixed the close of business on March 16,
1998 as the record date for the determination of stockholders entitled to vote
at the Annual Meeting. At that time, there were 37,655,474 shares of Common
Stock issued and outstanding (net of Treasury Shares).
Voting
Each share of Common Stock issued and outstanding on the record date is
entitled to one vote. The proxy holders will vote all proxies in accordance with
the instructions contained in the proxy and, if no choice is specified, the
proxy holders will vote in favor of the proposals to elect directors, to approve
the amendment of the Company's 1992 Equity Incentive Plan and to ratify the
selection of auditors. An automated system administered by the Company's
transfer agent tabulates the votes. The presence at the Annual Meeting in person
or by proxy of a majority of the shares outstanding as of the record date will
constitute a quorum. For quorum purposes, abstentions and broker non-votes are
each included in the determination of the number of shares present and voting.
Each matter is tabulated separately. Abstentions are counted in tabulations of
the votes cast on proposals presented to stockholders, whereas broker non-votes
are not counted for any purpose in determining whether a proposal has been
approved.
Revocability of Proxies
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it at any time before its exercise. It may be revoked by
filing with the Secretary of the Company an instrument of revocation or a duly
executed proxy bearing a later date. It also may be revoked by attendance at the
meeting and election to vote in person. Attendance at the meeting will not
itself revoke a proxy.
<PAGE>
Solicitation
The Company will bear the entire cost of preparing, assembling,
printing and mailing this Proxy Statement, the accompanying proxy and any
additional material which may be furnished to stockholders by the Company.
Copies of solicitation material will be furnished without charge to brokerage
houses, fiduciaries and custodians to forward to beneficial owners of stock held
in their names. The solicitation of proxies will be made by the use of the mails
and through direct communication with certain stockholders or their
representatives by officers, directors and employees of the Company, who will
receive no additional compensation therefor. In addition, the Company may
determine to engage Corporate Investor Communications, Inc. or another proxy
solicitor to solicit proxies and, if it does so, the Company will pay the
standard fee for these services, which is estimated to be approximately $3,000.
PROPOSAL 1
ELECTION OF DIRECTORS
A Board of nine (9) Directors will be elected at the Annual Meeting.
The term of office of each person elected as a Director will continue until the
next Annual Meeting or until a successor has been elected. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
nine nominees of the Board of Directors named below, all of whom are presently
Directors of the Company. The candidates receiving a plurality of the votes of
the shares present in person or by proxy at the meeting and entitled to vote
will be elected. Each person nominated for election has agreed to serve if
elected, and management has no reason to believe that any nominee will be unable
to serve. If any nominee for any reason is unable or declines to serve, the
proxies will be voted for any substitute nominee who shall be designated by the
present Board of Directors to fill the vacancy. Stockholders who desire to
nominate persons for election to the Board must comply with the advance notice
procedures specified in the Company's Bylaws.
The following is information regarding the nominees, including
information furnished by them as to their principal occupation for the preceding
five-year period, certain directorships and their ages as of March 16, 1998.
Director
Name Age Since
Samuel H. Armacost 59 1995
Richard L. Casey 51 1987
Myron Du Bain 74 1989
Donald B. Rice, Ph.D. 58 1997
Charles A. Sanders, M.D. 66 1997
Robert W. Schrier, M.D. 62 1988
Solomon H. Snyder, M.D. 59 1992
Burton E. Sobel, M.D. 60 1996
Eugene L. Step 69 1993
Mr. Armacost was elected to the Company's Board of Directors in August
1995. Since September 1990, Mr. Armacost has been a Managing Director of Weiss,
Peck & Greer, L.L.C., an investment firm. Previously, he served as Managing
Director of Merrill Lynch Capital Markets from 1987 to August 1990, and was
President, Director and Chief Executive Officer of BankAmerica Corporation from
1981 to 1986. Mr. Armacost is also a member of the Board of Directors of
Chevron Corporation, Exponent, Inc. and SRI International. In addition, Mr.
Armacost is on the board of the James Irvine Foundation and the Advisory Board
of the California Academy of Sciences, and he is a member of The Business
Council.
<PAGE>
Mr. Casey is Chairman of the Board, President and Chief Executive
Officer of Scios Inc. He joined Scios in December 1987 and has served as a
Director since that time. From early 1985 to 1987, he was with ALZA Corporation
as Executive Vice President and President of ALZA Pharmaceuticals. From 1976 to
1985 he worked for Syntex Corporation, in various positions including Director
of Marketing Research, Director of Sales, Vice President and General Manager of
Syntex Medical Diagnostics. Mr. Casey began his career in pharmaceuticals as a
Sales Representative for Eli Lilly and Company. From 1968 to 1970, Mr. Casey
served in the U.S. Peace Corps in Ethiopia. Mr. Casey serves on the boards of
Guilford Pharmaceuticals Inc., an affiliated publicly-held development-stage
neuroscience company located in Baltimore, Maryland; VIVUS, Inc., a publicly-
held medical devices company located in Mountain View, California; and Karo Bio
AB, an affiliated privately-held biotechnology company located in Stockholm,
Sweden.
Mr. Du Bain was elected a Director of Scios in June 1989. He was
Chairman of the Board of Directors of SRI International of Menlo Park,
California, a contract research and consulting company, from December 1985 until
he retired in December 1989. From 1983 to 1985, he was President and Chief
Executive Officer of Amfac, Inc., a diversified distribution company.
Previously, Mr. Du Bain was Chairman, President and Chief Executive Officer of
Fireman's Fund Corporation and Vice Chairman of the Board of American Express
Company. He is a member of the Board of Directors of SRI International. He was
formerly a member of the Board of Directors of Wells Fargo & Co., Pacific Gas
and Electric Co., Pacific Telesis Group, First Interstate Bancorp, Potlatch
Corporation, Carter Hawley Hale Stores Inc., The Chronicle Publishing Co.,
Transamerica Corporation and several other corporations. He was also Chairman of
the Board of Directors of the James Irvine Foundation and served on numerous
boards of non-profit organizations.
Dr. Rice was elected a Director of Scios in August 1997. Dr. Rice has
been the President and Chief Executive Officer of UroGenesys, Inc. since 1996.
Previously, he served as President and Chief Operating Officer of Teledyne, Inc.
from 1993 to 1996, as Secretary of the Air Force in the U.S. Department of
Defense from 1989 to 1993, and as President and Chief Executive Officer of The
RAND Corporation from 1972 to 1989. He was also Assistant Director of the
Office of Management and Budget, The White House and was formerly a member of
the Board of Directors of Pacific Enterprises and Teledyne, Inc. Dr. Rice is a
member of the Board of Directors of Wells Fargo & Company and Vulcan Materials
Company.
Dr. Sanders was elected a Director of Scios in September 1997. He
served as Chief Executive Officer of Glaxo Inc. from 1989 to 1994, and was
Chairman of the Board from 1992 to 1995. He also served on the Board of
Directors of Glaxo plc. Previously, he held a number of positions at Squibb
Corporation, a multinational pharmaceutical corporation, including Vice
Chairman, Chief Executive Officer of the Science and Technology Group and
Chairman of the Science and Technology Committee of the Board. Dr. Sanders is a
member of the Board of Directors of Magainin Pharmaceuticals, Vertex
Pharmaceuticals, Staff Mark, Inc., Kendle International, Trimeris, and
Pharmacopeia.
<PAGE>
Dr. Schrier was elected a Director of Scios in August 1988. He has been
Professor and Chairman, Department of Medicine, University of Colorado School of
Medicine, since 1976. He has held numerous positions in professional societies,
including President of the National Kidney Foundation, President of the American
Society of Nephrology, President of the Association of American Physicians, and
President of the International Society of Nephrology. He received the Pasteur
Award from the University of Strasbourg; the John Phillips Award from the
American College of Physicians; the David Hume Award from the National Kidney
Foundation; the Mayo Soley Award from the Western Society of Clinical
Investigation; and honorary degrees from the University of Colorado and DePauw
University. He has also served on the editorial boards of numerous professional
publications, has authored over 600 scientific articles and has edited numerous
medical texts and reference books. He is a member of the Institute of Medicine
of the National Academy of Sciences..
Dr. Snyder was elected a Director in September 1992. Dr. Snyder is
Director of the Department of Neuroscience and Distinguished Service Professor
of Neuroscience, Pharmacology and Molecular Sciences and Psychiatry at The Johns
Hopkins University, and has been a member of the faculty there since 1966. Dr.
Snyder received the Albert Lasker Award for Basic Biomedical Research and
Honorary Doctor of Science degrees from Northwestern University, Georgetown
University and Ben Gurion University. Dr. Snyder received the Wolfe Award in
Medicine from the government of Israel for research relating to receptors. Dr.
Snyder is a member of the National Academy of Sciences and a Fellow of the
American Academy of Arts and Sciences. Dr. Snyder is also the author of
numerous articles and several books. Dr. Snyder is a founder and a director of
Guilford Pharmaceuticals Inc.
Dr. Sobel was elected a Director in February 1996. Dr. Sobel is
Physician-in-Chief, E.L. Amidon Professor and Chair of the Department of
Medicine at The University of Vermont College of Medicine. Previously, Dr.
Sobel was Professor of Medicine at Barnes Hospital, Washington University and
Director of its Cardiovascular Division. Dr. Sobel has been a consultant to and
served on scientific advisory boards of several pharmaceutical and biotechnology
companies. Dr. Sobel has been the recipient of numerous awards, including the
American Heart Association's James B. Herrick Award and its Scientific Council's
Distinguished Achievement Award, as well as the American College of Cardiology's
Distinguished Scientist Award. Dr. Sobel has been the editor of Circulation
and, since 1989, has served as editor of Coronary Artery Disease. His
memberships and fellowships include the American College of Physicians, Royal
Society of Medicine, American Heart Association, American College of Cardiology
and the Council of the American Association for the Advancement of Science.
Mr. Step was elected a Director in February 1993. From May 1956 until
he retired in December 1992, Mr. Step was employed by Eli Lilly and Company,
most recently as Executive Vice President, President of the Pharmaceutical
Division, where he was responsible for U.S. pharmaceutical operations and for
the operations of Eli Lilly International. In addition, Mr. Step served on Eli
Lilly's Board of Directors and executive committee. Mr. Step was Chairman of
the Board of Directors of the Pharmaceutical Manufacturers Association and
President of the International Federation of Pharmaceutical Manufacturers
Associations. He is a member of the Board of Directors of Cell Genesys Inc.,
Guidant Corporation, Medco Research Inc., Pathogenesis Corporation and DBT
Online Inc.
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD
Compensation of Directors -- Standard Arrangements
Fees. Directors who are not otherwise employed by the Company receive
an annual retainer of $12,000 and a fee of $1,000 for attendance at each meeting
of the Board of Directors, and $500 for attendance at each committee meeting not
occurring within 24 hours of a Board meeting or a telephonic meeting. In the
fiscal year ended December 31, 1997, the aggregate compensation paid to eligible
non-employee directors (8 individuals) under standard arrangements was
$103,500.00. This amount includes payments to Donald B. Rice and Charles A.
Sanders, who were elected Directors of the Company in August and September 1997,
respectively. Directors are also eligible for reimbursement of expenses incurred
in connection with attendance at Board meetings in accordance with Company
policy. If Proposal 2 is approved by the stockholders, the annual retainer will
be reduced to $8,000 and the fee per meeting day will remain $1,000 and $500 for
telephonic meetings.
Stock Options. Upon election to the Board, each non-employee director
is automatically granted an option to purchase 20,000 shares of Common Stock.
These options are currently granted under the Company's 1992 Equity Incentive
Plan (the "Equity Plan"), which contains provisions for automatic grants to
non-employee directors and was approved by stockholders in 1992. Only non-
employee directors of the Company are eligible to receive options under the
applicable provisions of the Equity Plan, and Mr. Armacost, Mr. Du Bain, Dr.
Rice, Dr. Sanders, Dr. Schrier, Dr. Snyder, Dr. Sobel and Mr. Step have each
received option grants. Proposal 2 would modify the Company's program of
automatic grants to non-employee directors to provide for annual grants. See
"Proposal 2, Approval of Amendment of 1992 Equity Incentive Plan".
Board of Directors. During fiscal 1997, there were 5 meetings of the
Board of Directors.
Audit Committee. The Audit Committee consists of four non-employee
directors: Mr. Step (Chairman), Mr. Armacost, Dr. Sanders and Dr. Sobel. Dr.
Sanders joined the Committee upon his election as a Director. The Audit
Committee met four times in fiscal 1997. Among the committee's functions are
recommending engagement of the Company's independent auditors, approving
services performed by such auditors, and reviewing and evaluating the Company's
accounting systems and its system of internal accounting controls.
Compensation Committee. The Compensation Committee consists of five
non-employee directors: Mr. Armacost (Chairman), Mr. Du Bain, Dr. Rice, Dr.
Sanders and Mr. Step. Drs. Rice and Sanders joined the Committee upon their
election as Directors. The committee met four times during fiscal 1997. Among
the committee's functions are establishing the Company's compensation programs
for all employees, fixing the compensation levels of executive officers of the
Company, and administering and making awards under the Company's incentive
programs.
Nominating Committee. The Nominating Committee consists of four non-
employee directors: Mr. Du Bain (Chairman), Dr. Rice, Dr. Schrier and Dr.
Snyder. Dr. Rice joined the Committee upon his election as a Director. The
committee met twice in fiscal 1997. Among the committee's functions are
recommending nominees to serve on the Board of Directors, recommending size and
composition of the Board based on studies conducted by the committee, making
recommendations to the Board regarding stockholders' comments as to composition
of the Board, making recommendations concerning membership of Board committees
and Board and committee fees, and consulting with the Board of Directors and
management to determine criteria for nominations. The Nominating Committee will
consider nominees recommended by stockholders. Any such recommendations,
together with the nominee's qualifications and consent to being considered as a
nominee, should be sent to the Secretary of the Company no later than November
30, 1998 in order to be considered for election at the 1999 Annual Meeting of
Stockholders.
In fiscal 1997, all Directors attended at least 75% of the meetings of
the Board and all committees of the Board of which they were members except for
Dr. Schrier who attended only 29%. In addition, Dr. Sanders was not able to
attend any of the November meetings following his election as a director.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
Beneficial Ownership
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock at March 16, 1998 by (i) all
persons known by the Company to be beneficial owners of more than 5% of its
Common Stock, (ii) each Director, (iii) each of the executive officers named in
the Summary Compensation Table included herein and (iv) all Directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Beneficial Ownership(1)
---------------------------------------
Beneficially Approximate
Officers, Directors & Owned Percent
5% Stockholders Shares(2) of Class
- -------------------------------------------------------------------------------
<S> <C> <C>
Samuel H. Armacost 36,000 *
Richard L. Casey 402,759(3) 1%
Myron Du Bain 52,500(3) *
Donald B. Rice, Ph.D. 12,666 *
Charles A. Sanders, M.D. 2,333 *
Robert W. Schrier, M.D. 17,800 *
Solomon H. Snyder, M.D. 11,333 *
Burton E. Sobel, M.D. 9,000 *
Eugene L. Step 21,000 *
Elliott B. Grossbard, M.D. 197,617 *
John H. Newman 166,049(3) *
John A. Lewicki, Ph.D. 152,567 *
Armin H. Ramel, Ph.D. 85,254 *
All officers and directors as a
group (13 persons) 1,166,878(3) 3%
<FN>
- ----------
* less than 1%
(1) Unless otherwise indicated below and subject to community property
laws, each stockholder has sole voting and investment power with
respect to the shares beneficially owned.
(2) For Mr. Armacost, Mr. Casey, Mr. Du Bain, Dr. Rice, Dr. Sanders, Dr.
Schrier, Dr. Snyder, Dr. Sobel, Mr. Step, Dr. Grossbard, Dr. Lewicki,
Mr. Newman and Dr. Ramel, and all officers and directors as a group,
includes 11,000; 359,999; 22,500; 2,666; 2,333; 17,500; 1,333; 9,000;
20,000; 193,333; 136,666; 103,999; 83,666; and 963,995 shares,
respectively, issuable upon exercise of outstanding options exercisable
within sixty days of March 16, 1998.
(3) With respect to Mr. Casey, includes 8,737 shares held in a trust for
the benefit of Mr. Casey's children, of which Mr. Casey and his wife
are trustees. With respect to Mr. Du Bain, includes 25,000 shares held
in a revocable living trust for the benefit of Mr. Du Bain and his
wife; Mr. Du Bain is a trustee of such trust. With respect to Mr.
Newman, includes 7,000 shares held in his spouse's IRA account and
2,000 shares held in a trust for the benefit of Mr. Newman's children,
of which Mr. Newman and his wife are trustees.
</FN>
</TABLE>
The Company is not aware of any material proceeding to which any
Director or executive officer of the Company or any associate of any such
Director or executive officer is a party adverse to the Company or any of its
subsidiaries or has a material interest adverse to the Company or any of its
subsidiaries.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors, executive officers and
holders of more than ten percent (10%) of the Company's Common Stock ("10%
Holders") to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Directors, executive officers and
10% Holders are required by SEC regulation to furnish the Company with copies of
all Section 16(a) forms they file.
The Company believes that during the fiscal year ended December 31,
1997, its Directors, executive officers and 10% Holders complied with all
Section 16(a) filing requirements. In making this statement, the Company has
relied upon the written representations of its Directors, executive officers and
certain other reporting persons.
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses compensation received by the Company's
Chief Executive Officer and each of its four other most highly compensated
executive officers at December 31, 1997 for the fiscal years ended December 31,
1997, 1996 and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Securities
Name Underlying All Other
and Stock Compen-
Principal Salary Bonus(1) Options sation(2)
Position Year ($) ($) (#) ($)
- -------- ---- ------- ------- ------- ----
<S> <C> <C> <C> <C> <C>
Richard L. Casey 1997 $400,000 -- -- $3,000
Chairman of the 1996 $400,000 $120,000 100,000 $3,000
Board, President 1995 $400,000 -- 120,000 $3,000
and Chief Executive
Officer
Elliott B. Grossbard, M.D. 1997 $246,064 -- 19,000 $3,000
Senior Vice President 1996 $218,500 $105,000(3) 9,375 $3,000
of Development 1995 $208,000 $60,577(3) 39,000 $3,000
John H. Newman 1997 $212,500 -- 19,000 $3,000
Senior Vice President, 1996 $185,500 $65,000 9,375 $3,000
General Counsel & 1995 $178,500 $24,425 39,000 $3,000
Secretary
John A. Lewicki, Ph.D. 1997 $222,000 -- 12,000 $3,000
Vice President 1996 $215,500 $40,000 6,250 $3,000
of Research 1995 $208,000 $24,904 39,000 $3,000
Armin H. Ramel, Ph.D. 1997 $208,000 -- 14,000 $3,000
Vice President of 1996 $202,000 $42,000 6,250 $3,000
Product Development 1995 $195,700 $20,084 37,000 $3,000
<FN>
- ---------------
(1) Except as is further described in footnote 3 below, bonus amounts
represent the value of awards under the Company's Employee Incentive Plan.
Awards to executive officers under this plan are determined annually by
the Compensation Committee. The Compensation Committee determined that in
lieu of cash bonuses for 1997 performance, the Company would grant stock
options to Dr. Grossbard, Mr. Newman, Dr. Lewicki and Dr. Ramel in
February, 1998 in the following share amounts: 18,500, 13,500, 10,000 and
7,000, respectively.
(2) Consists of Company matching contributions under the 401(k) Profit Sharing
Plan and Trust, which was established in 1986. As of December 31, 1997,
the Company made matching contributions of 100% of participant
contributions, up to a maximum of $3,000 per participant per plan year.
Employee contributions are at all times 100% vested. The Company's
contributions vest based on years of service: 0% for less than one year;
25% for one but less than two years; 50% for two but less than three
years; and 100% for three or more years. Federal tax laws impose an
overall limit on the amount that may be contributed by participants each
year under 401(k) plans.
(3) Dr. Grossbard's bonuses for 1996 and 1995 include forgiveness of $30,000
and $25,000 respectively, in each year under a loan made to him at the
time he joined the Company.
</FN>
</TABLE>
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
In the Company's efforts to recruit the best available talent in a
competitive labor market, the Company grants stock options to provide equity
incentives. The Company has granted stock options under the 1983 Incentive Stock
Option Plan (expired by its terms on March 5, 1993), the 1986 Supplemental Stock
Option Plan (expired by its terms on January 16, 1996), the 1989 Non-Employee
Director Stock Option Plan (expired by its terms on June 30, 1994), the Equity
Plan and the 1996 Non-Officer Stock Option Plan.
The following table provides information on stock options held by the
executive officers named in the Summary Compensation Table, including
information as to grants and exercises for the fiscal year ended December 31,
1997.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
- -------------------------------------------------------------------------- -----------------------------------
No. of % of
Securities Total
Under- Options
lying Granted to Exercise
Options Employees or Base Expira-
Granted1/ in Fiscal Price tion
Name (#) Year ($/Sh) Date 0%($) 5%($) 10%($)
- ---- -------- --------- -------- -------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Casey -- -- -- -- -- -- --
E. Grossbard 19,000 2.31% $6.13 02/03/07 0 $73,188 $185,472
J. Newman 19,000 2.31% $6.13 02/03/07 0 $73,188 $185,472
J. Lewicki 12,000 1.46% $6.13 02/03/07 0 $46,224 $117,140
A. Ramel 14,000 1.70% $6.13 02/03/07 0 $53,928 $136.663
<FN>
- ---------
(1) These options vest in monthly installments commencing on January 1, 1997
and ending on December 31, 2001. See "Compensation Committee Report" for
additional information on these stock options. All grants in this table
were made pursuant to the 1992 Equity Incentive Plan.
</FN>
</TABLE>
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised,
Shares Underlying Unexercised In-the-Money Options
Acquired on Value Options at FY-End at FY-End
Name Exercise Realized Exercisable Unexercisable Exercisable(1) Unexercisable(1)
---- ------- -------- ---------------------------- -------------------------------
(#) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
R. Casey 0 0 540,000 220,000 $1,487,500 $787,750
E. Grossbard 0 0 185,000 62,375 $306,875 $194,523
J. Newman 0 0 136,500 57,375 $339,125 $175,148
J. Lewicki 0 0 170,000 57,250 $412,500 $172,516
A. Ramel 0 0 77,000 55,250 $298,375 $167,516
<FN>
- ---------
(1) Based on the fair market value of the Company's Common Stock at
December 31, 1997 ($10.00) minus the exercise price of the options.
</FN>
</TABLE>
COMPENSATION COMMITTEE REPORT (1)
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for establishing the Company's compensation programs for all
employees, including executives. For executive officers, the Committee evaluates
performance and determines compensation policies and levels. In 1997, the
Committee was composed of Mr . Armacost, Mr. Du Bain and Mr. Step and, after
their election to the Board, Dr. Rice and Dr. Sanders. None of these directors
were officers or employees of the Company.
Compensation Philosophy
The goals of the compensation program are to align compensation with
business objectives and performance, and to enable the Company to attract,
retain and reward executive officers and other key employees who contribute to
the long-term success of the Company and to motivate them to enhance long-term
stockholder value. Key elements of this philosophy are:
The Company pays competitively with leading biotechnology and other
companies with which the Company competes for talent. To ensure that
pay is competitive, the Company regularly compares its pay practices
with these companies and sets its pay parameters based on this review.
The Company maintains annual incentive opportunities sufficient to
provide motivation to achieve specific operating goals and to generate
rewards that bring total compensation to competitive levels.
The Company provides significant equity-based incentives for
executives and other key employees to ensure that they are motivated
over the long-term to respond to the Company's business challenges and
opportunities as owners and not just as employees.
- --------
(1) Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as
amended, or the Exchange Act that might incorporate by reference future
filings in whole or in part, including this Proxy Statement, neither
this Report nor the Performance Graph in this Proxy Statement shall be
incorporated by reference into any such filings.
<PAGE>
The primary components of executive compensation are base salary,
annual incentives and long-term equity incentives. Over the last five years, the
Committee has not granted a salary increase to the CEO and has granted modest
salary increases over the last three years to other executives. These actions
reflect the Committee's intent to lower the relative percentage of fixed
compensation (base salary) and increase the relative percentage of variable pay
or pay based on performance (long-term equity incentives). In addition, the
Committee elected to distribute annual incentive awards to executives for 1997
performance in the form of additional stock option grants made in February, 1998
that vest over four (4) years.
The Committee's objective in general is to set each component of
executive compensation at the market average when compared to a nationwide
survey of the biotechnology industry (the "comparator group"). In 1997, the
comparator group contained approximately 300 companies. Many of the companies in
the comparator group are included in the Performance Graph included in this
Proxy Statement.
Base Salary. The Committee annually reviews each executive officer's
base salary against the base salaries paid for similar positions by companies
within the comparator group. A range of salary levels is established by this
comparison centered on the 50th percentile salary in the comparator group for
comparable positions. Within this range, the Committee subjectively considers
individual factors, including individual performance, level of responsibility,
prior experience, breadth of knowledge and competitive pay practices, as well as
the extent to which the Company achieved its corporate objectives described in
the section below entitled Annual Incentive. From year to year, the relative
weighting of the individual components and the corporate performance component
may differ from officer to officer, and can be expected to change over time in
response to the Company's development stage and the evolution of the
biotechnology industry.
Annual Incentive. The Employee Incentive Plan, an annual incentive
award plan, is the variable pay program for officers and other employees of the
Company to earn additional annual compensation. The actual incentive award
earned depends on the extent to which Company and individual performance
objectives are achieved. At the start of each year, the Committee and the full
Board of Directors review and approve the annual performance objectives for the
Company and individual officers. The Company objectives consist of operating,
strategic and financial goals that are considered to be critical to the
Company's fundamental long-term goal -- building stockholder value. For fiscal
1997, these objectives, listed in order of relative importance, were:
completing the key development benchmarks for the Company's
lead products - AURICULIN(R) anaritide, NATRECOR(R) hBNP and
FIBLAST(R) trafermin - that had been identified for
accomplishment in 1997
securing commercial partners for certain of the Company's
technologies and commercial operations
financial performance related to the Company's cash
utilization and expanding the sales and profits derived from
the Company's commercial operations group, which markets
certain products to psychiatrists and mental health clinics
identifying and developing additional products from the
Company's research pipeline as candidates for clinical testing
<PAGE>
After the end of the year, the Committee evaluates the degree to which
the Company has met its objectives and, at the discretion of the Committee,
establishes a total incentive award pool under the Employee Incentive Plan.
Individual awards are determined by evaluating the Company's overall performance
and by evaluating each participant's performance against objectives for the
year. The incentive award pool is then allocated based on the assessment of each
participant's contribution to achievement of corporate and individual
objectives. In prior years, awards were paid in cash and distributions were made
in the February following the performance year. As part of its effort to
increase the relative portion of total compensation to executives that is paid
in the form of long-term equity incentives, the Committee elected to distribute
annual incentive awards to executives for 1997 performance in the form of
additional stock option grants vesting over four years. These awards were made
in February, 1998.
In February, 1998, the Committee determined that while the Company
accomplished significant achievements in fiscal 1997, not all of its key
corporate objectives that are outlined above were met. The Committee concluded
that the following goals were met: advancing NATRECOR into Phase III trials;
preparations for the NATRECOR NDA filing and facilities inspections that would
follow successful completion of clinical programs; ongoing assistance to Kaken
Pharmaceutical Co., Ltd., the Company's FIBLAST licensee in Japan, and to
American Home Products Corporation, the Company's Partner for FIBLAST in stroke
and vascular disease; and certain financial objectives. The Committee determined
that in 1997 the Company had not been successful in filing an NDA for AURICULIN
or advancing other projects to the degree planned. Based on the Company's
performance, the Committee determined that the total incentive pool for
participants in the Employee Incentive Plan would be 50% of the maximum possible
pool. Based on its assessment of individual contribution to achievement of
corporate and individual objectives, the Committee determined the incentive
award for each of the seven executives on the Company's corporate management
committee reflecting their 1997 performance and distributed it in the form of an
additional stock option grant vesting over four (4) years.
Long-Term Incentives. The Company's long-term incentive program for
officers consists of the 1983 Incentive Stock Option Plan, (expired March 5,
1993), the 1986 Supplemental Stock Option Plan (expired January 16, 1996) and
the 1992 Equity Incentive Plan. The option program utilizes vesting periods
(generally four years) to encourage key employees to continue in the employ of
the Company. Through option grants, executives receive significant equity
incentives to build long-term stockholder value. Grants have been made at or
above 100% of fair market value on the date of grant. Executives receive value
from these grants only if the Company's Common Stock appreciates over the
long-term. The size of option grants is determined based on competitive
practices at companies in the comparator group and the Company's philosophy of
significantly linking executive compensation with stockholder interests. In
addition, the Committee considers the terms and number of options previously
awarded in determining the size of option grants.
<PAGE>
In 1995, 1996 and 1997, the Committee reviewed the equity incentives of
executive officers and made additional grants in each year to remain competitive
with the comparator group and maintain appropriate long-term incentives for key
individuals. These grants will vest during 1997 through 2001. The Committee
believes the approach of making grants that vest over an extended time period
creates an appropriate focus on longer term objectives and promotes executive
retention.
Section 162(m) of the Internal Revenue Code limits the federal income
tax deductibility of compensation paid to the Company's CEO and to each of the
other four most highly compensated executive officers. The Company intends that
the long-term incentive compensation paid to these executives will be deductible
by the Company under Section 162(m). In 1997, the Board and stockholders
approved amendments to the 1992 Equity Incentive Plan intended to meet the
requirements of Section 162(m).
Chief Executive Officer Compensation
In the fall of 1992, the Committee retained Hewitt Associates (an
international employee compensation and benefits consulting firm) to conduct a
comprehensive review of the base salaries and incentive compensation of all
executive officers as compared to a comparator group. Following the Hewitt
Associates review, the Committee set Mr. Casey's 1993 base annual salary at
$400,000. This amount, in addition to the annual incentive provided by the
Employee Incentive Plan, was estimated to provide an annual cash compensation
level at the average of the comparator group. In setting this amount, the
Committee took into account (i) its belief that Mr. Casey is one of the CEOs of
leading biotechnology companies with significant and broad-based experience in
the pharmaceutical industry, (ii) the scope of Mr. Casey's responsibility,
especially following the merger with Nova Pharmaceutical Corporation, and (iii)
the Board's confidence in Mr. Casey to lead the Company's continued development.
For 1994 through 1997, the Committee elected to maintain Mr. Casey's
base salary at $400,000, the same level as 1993. In doing so, the Committee has
intended to increase the relative portion of Mr. Casey's total compensation that
is variable pay, which is based on achievement of the corporate objectives
annually established by the Board and on increases in the Company's stock price.
See "Compensation Philosophy-Annual Incentive" and "Compensation Philosophy-
Long-Term Incentive" above.
In February, 1996, the Committee determined that it would enhance Mr.
Casey's incentive to build long-term stockholder value by granting Mr. Casey an
option to purchase 100,000 shares of stock that will vest in the year 2000. At
the time of this grant, the Committee determined that it would not make an
additional grant to Mr. Casey during 1997.
<PAGE>
Conclusion
In summary, the Compensation Committee believes that, through the plans
and actions described above, a significant portion of the Company's compensation
program and, in particular, Mr. Casey's compensation are contingent on Company
performance, and that realization of benefits is closely linked to achievement
of key corporate objectives that will produce increases in long-term stockholder
value. The Company remains committed to this philosophy of pay for performance,
recognizing that the competitive market for talented executives and the
volatility of the Company's business may result in highly variable compensation
for a particular time period. We will continue to monitor closely the
effectiveness and appropriateness of each of the components of compensation to
reflect changes in the Company's business environment.
COMPENSATION COMMITTEE
Samuel H. Armacost, Chairman
Myron Du Bain
Eugene L. Step
Donald B. Rice
Charles A. Sanders
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1997, Scios paid $57,468.80 in portfolio management fees to Weiss,
Peck & Greer, L.L.P., an investment firm of which Mr. Armacost is a managing
director. Such fees were paid in the normal course of business.
PERFORMANCE GRAPH
The rules of the Securities and Exchange Commission require that the
Company include in this Proxy Statement a line-graph presentation comparing
five-year stockholder returns on an indexed basis with the Nasdaq Stock Market
(U.S.) and either a nationally recognized industry standard index or an index of
peer companies selected by the Company. The Company has elected to use the
Nasdaq Pharmaceutical Stocks Index for the purpose of the performance comparison
that appears below. The graph assumes the investment of $100 in the Company's
Common Stock, the Nasdaq Stock Market (U.S.) and the Nasdaq Pharmaceutical
Stocks Index on December 31, 1992. The stock price performance shown on the
graph below is not necessarily indicative of future price performance.
<PAGE>
Comparison of Five Year Cumulative Total Return
Among Scios Inc., Nasdaq Stock Market (U.S.) and
Nasdaq Pharmaceutical Stocks Index
EDGAR representation of data points used in printed graphic
<TABLE>
<CAPTION>
Scios Nasdaq Stock Market Nasdaq Pharm
----- ------------------- ------------
<S> <C> <C> <C>
12/31/92 100.000 100.000 100.000
1/29/93 82.432 102.847 92.948
2/26/93 72.973 99.010 71.341
3/31/93 75.676 101.876 71.984
4/30/93 64.865 97.528 72.740
5/28/93 64.865 103.354 75.720
6/30/93 60.811 103.832 75.860
7/30/93 62.162 103.954 73.683
8/31/93 72.973 109.327 77.609
9/30/93 81.081 112.583 82.242
10/29/93 118.919 115.114 89.515
11/30/93 112.162 111.682 87.551
12/31/93 110.811 114.796 89.132
1/31/94 101.351 118.281 91.842
2/28/94 93.243 117.177 83.574
3/31/94 79.730 109.971 72.698
4/29/94 85.135 108.544 69.773
5/31/94 72.297 108.809 68.831
6/30/94 68.919 104.830 63.455
7/29/94 68.919 106.980 65.375
8/31/94 82.432 113.800 72.469
9/30/94 72.973 113.509 71.469
10/31/94 72.973 115.740 69.026
11/30/94 64.865 111.900 69.331
12/30/94 71.622 112.214 67.084
1/31/95 83.784 112.843 70.798
2/28/95 89.189 118.811 73.472
3/31/95 82.432 122.334 72.422
4/28/95 72.973 126.186 74.456
5/31/95 38.514 129.442 75.395
6/30/95 43.919 139.932 84.228
7/31/95 45.946 150.218 91.480
8/31/95 44.595 153.262 102.300
9/29/95 44.595 156.787 105.244
10/31/95 39.189 155.888 101.302
11/30/95 41.892 159.549 106.385
12/29/95 46.622 158.699 122.722
1/31/96 58.108 159.482 133.452
2/29/96 53.378 165.552 130.874
3/29/96 49.324 166.101 127.685
4/30/96 51.351 179.882 134.277
5/31/96 79.054 188.141 138.823
6/28/96 71.622 179.660 124.029
7/31/96 60.811 163.658 110.568
8/30/96 62.162 172.828 118.580
9/30/96 66.892 186.048 126.865
10/31/96 62.162 183.993 121.139
11/29/96 62.162 195.367 119.411
12/31/96 66.385 195.192 123.079
1/31/97 64.189 209.064 133.429
2/28/97 77.703 197.506 134.288
3/31/97 73.649 184.612 116.886
4/30/97 50.676 190.384 109.958
5/30/97 68.243 211.969 126.527
6/30/97 68.919 218.452 126.180
7/31/97 86.486 241.510 129.780
8/29/97 81.081 241.142 128.240
9/30/97 105.405 255.404 141.556
10/31/97 88.514 242.129 134.322
11/28/97 81.757 243.326 130.203
12/31/97 108.108 239.527 127.185
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
In 1993, the Company formed Guilford Pharmaceuticals Inc. ("Guilford").
Mr. Casey and Dr. Snyder are directors of Guilford. The Company currently owns
approximately 7% of the outstanding stock of Guilford. In 1997, Guilford rented
space from the Company, for which it paid $255,150.
PROPOSAL 2
APPROVAL OF AMENDMENT OF 1992 EQUITY INCENTIVE PLAN
In February 1992, the Board of Directors adopted, and the stockholders
subsequently approved, the Company's 1992 Equity Incentive Plan (the "Equity
Plan"). In February 1998, the Nominating Committee, as part of its duty of
overseeing the compensation of non-employee directors, reviewed the stock option
grants to non-employee directors made by a comparator group of 26 biotechnology
companies. That review disclosed that the shares of Common Stock currently being
vested by non-employee directors of the Company on an annual basis under stock
option grants is lower in number and value than the average number of shares
being vested on an annual basis by non-employee directors of the comparator
companies. The Nominating Committee and the Board believe that this puts the
Company at a disadvantage in terms of recruiting and retaining directors.
Subject to stockholder approval, the Nominating Committee has proposed and the
Board of Directors has approved a change in the automatic stock option grants to
non-employee directors under the Equity Plan. This Proposal now seeks
stockholder approval for that change. The Nominating Committee and the Board
believe that increasing the portion of director compensation represented by
stock options would further align non-employee directors' interests with
stockholders and provide further incentive to build long-term stockholder value.
Stockholders are requested in this Proposal to approve an amendment of
the Equity Plan to provide that each non-employee director of the Company shall
automatically be granted, at each annual meeting where the director is elected
to the Board, a supplemental stock option to purchase ten thousand (10,000)
shares of the Company's Common Stock. This would replace the current automatic
stock option granting practices as approved by stockholders in 1992. The Equity
Plan currently provides that upon election to the Board each new non-employee
director receives an option to purchase 20,000 shares of the Company's Common
Stock vesting over a five (5) year period of service as a director of the
Company. At five year intervals thereafter assuming continued service as a
director, each non-employee director receives an option to purchase an
additional 10,000 shares of the Company's Common Stock vesting over a five (5)
year period. All options are granted with an exercise price equal to the fair
market value of the Company's Common Stock on the date of the grant.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
The essential features of the Equity Plan that are applicable
to non-employee directors are outlined below:
GENERAL
Non-employee directors are only eligible for the grant of nonstatutory
stock options under the Equity Plan. The granting and terms of such options are
subject to the following special provisions of the Equity Plan. Except as
described below, Non-Employee Director Options are subject to the same
provisions of the Equity Plan applicable to other nonstatutory stock options.
<PAGE>
Automatic Grants. As amended, the Equity Plan would provide for the
automatic grants of options to purchase shares of Common Stock of the Company to
non-employee directors. Pursuant to the terms of the Equity Plan, at each annual
election, a non-employee director shall automatically be granted an option to
purchase 10,000 shares of the Company's Common Stock. The number of shares
automatically granted will be prorated for any person who is elected as a
non-employee director for the first time at other than a regular annual meeting
of stockholders. The first grant under the revised schedule will not be made
until approval of this Proposal by the stockholders at the 1998 Annual Meeting
of Stockholders.
Term. Non-Employee Director Options under the Equity Plan have a ten
year term; however, each such option will terminate prior to the expiration date
if the optionee's service as a non-employee director terminates. In that event,
the Non-Employee Director Option will terminate twelve months following the date
of termination of service, unless the termination of service is due to the
optionee's death or disability, in which case the option will terminate on the
earlier of the expiration date or eighteen months following the date of the
optionee's death or disability. The term of a Non-Employee Director Option may
be extended if exercise within the periods is prohibited for specified reasons.
Exercise Price; Payment. The exercise price of each Non-Employee
Director Option under the Equity Plan must be equal to the fair market value of
the Company's Common Stock on the date of grant. Payment of the exercise price
is due in full in cash at the time of exercise when the number of shares being
purchased is less than 1,000 shares; when the number of shares being purchased
is 1,000 or more shares, the optionee may elect to make payment under one of the
following alternatives: (i) in cash at the time of exercise; (ii) payment by
delivery of shares of the Company's Common Stock already owned by the optionee
for at least six months; or (iii) payment by a combination of the methods
specified above.
Exercise. Non-Employee Director Options under the Equity Plan, as it is
proposed to be amended will become exercisable in twelve equal monthly
installments after the date of grant. Subject to the satisfaction of certain
conditions, each option will be exercisable with respect to each installment on
or after the date of vesting applicable to such installment.
New Plan Benefits. Following approval of the Proposal, each
non-employee director will be automatically granted at the May 1998 Annual
Meeting of Stockholders, and at each subsequent annual meeting at which such
director is reelected, an option to purchase 10,000 shares of the Company's
Common Stock. The exercise price of each option will be the closing price of the
Company's Common Stock on the grant date. In the aggregate, the eight
non-employee directors will receive in May, 1998, options to purchase 80,000
shares at the May 1998 Annual Meeting. Thereafter, a grant will be made
automatically to each non-employee director at the time of each reelection of
the director at an Annual Meeting of Stockholders.
FEDERAL INCOME TAX INFORMATION
There are no tax consequences to the optionee or the Company by reason
of the grant of a nonstatutory stock option to the non-employee director. Upon
exercise of a nonstatutory stock option, the non-employee director normally will
recognize taxable ordinary income equal to the excess of the stock's fair market
value on the date of exercise over the option exercise price. Generally, the
Company will be entitled to a business expense deduction equal to the taxable
ordinary income realized by the non-employee director. Upon disposition of the
stock, the director will recognize a capital gain or loss equal to the
difference between the selling price and the sum of the amount paid for such
stock plus any amount recognized as ordinary income upon exercise of the option.
Such gain or loss will be long or short-term depending on whether the stock was
held for more than one year.
<PAGE>
The foregoing discussion is not a complete description of the federal
income tax aspects of stock awards to non-employee directors granted under the
Equity Plan. In addition, administrative and judicial interpretations of the
application of the federal income tax laws are subject to change. Furthermore,
no information is given with respect to state or local taxes that may be
applicable.
The Board of Directors unanimously recommends a vote FOR proposal 2.
PROPOSAL 3
RATIFICATION OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors of
the Company appointed Coopers & Lybrand L.L.P. to be the Company's independent
auditors for the fiscal year ending December 31, 1998.
Services provided to the Company and its subsidiaries by Coopers &
Lybrand with respect to the fiscal year ended December 31, 1997 included
examination of the Company's consolidated financial statements, limited reviews
of quarterly reports, services related to filings with the SEC, and
consultations concerning information systems and various tax matters.
Coopers & Lybrand has audited the Company's financial statements
annually since the Company's inception in 1982. Representatives of Coopers &
Lybrand are expected to be present at the Annual Meeting. They do not expect to
make a statement, but will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Coopers & Lybrand as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Coopers & Lybrand
to the stockholders for ratification as a matter of good corporate practice. If
the stockholders fail to ratify this selection, the Board will reconsider
whether or not to retain that firm. Even if the selection is ratified, the Board
in its discretion may direct the appointment of a different independent
accounting firm at any time during the year if the Board feels that such a
change would be in the best interests of the Company and its stockholders.
Ratification of the selection of Coopers & Lybrand as the Company's
independent auditors for fiscal year 1998 will require the affirmative vote of
at least a majority of the shares of Common Stock represented in person or by
proxy and entitled to vote at the Annual Meeting.
The Board of Directors unanimously recommends a vote FOR Proposal 3.
<PAGE>
OTHER MATTERS
The Board of Directors does not know of other matters that may come
before the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise to act, in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS - 1999 ANNUAL MEETING
Stockholders are entitled to present proposals for action at a
forthcoming stockholder meeting if they comply with the requirements of the
proxy rules. Proposals of stockholders that are intended to be presented at the
Company's 1999 Annual Meeting of Stockholders must be received by the Company no
later than November 30, 1998 in order to be included in the proxy statement and
proxy relating to that meeting.
By Order of the Board of Directors
JOHN H. NEWMAN
Secretary
March 31, 1998
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THIS MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND THE MEETING
MAY VOTE THEIR SHARES PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
<PAGE>
DETACH HERE
SCIOS INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard L. Casey and John H. Newman, or
either of them, each with full power of substitution, as proxies of the
undersigned, to attend the Annual Meeting of Stockholders of Scios Inc., to be
held at the offices of the Company, 2450 Bayshore Parkway, Mountain View,
California, on May 12, 1998 at 10:00 a.m. and at any adjournment or
postponement thereof, to vote the number of shares the undersigned would be
entitled to vote if personally present, and to vote in their discretion upon any
other business that may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1,2 AND
3.
Please sign, date and return this proxy in the envelope provided, which
requires no postage if mailed in the United States.
-----------
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
-----------
<PAGE>
DETACH HERE
PLEASE MARK
/ X / VOTES AS IN
EXAMPLE
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposals 1,2 and 3.
- -------------------------------------------------------------------------------
1. Election of Directors.
NOMINEES: Samuel H. Armacost, Richard L. Casey, Myron Du Bain, Donald B. Rice,
Charles A. Sanders, Robert W. Schrier, Burton E. Sobel, Solomon H. Snyer, Eugene
L. Step
FOR WITHHELD MARK HERE
/ / / / IF YOU PLAN
TO ATTEND
THE MEETING / /
/ / __________________________________________
For all nominees except as noted above
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE BELOW / /
2. To ratify and aprove amendments to FOR AGAINST ABSTAIN
the Company's 1992 Equity Incentive Plan. / / / / / /
3. To ratify the election of Coopers & FOR AGAINST ABSTAIN
Lybrand LLP as the Company's independent / / / / / /
auditors for fiscal 1998.
(Please sign exactly as name appears. When shares are held by joint tenants,
both should sign. When signing as attorney, as executor, administrator, trustee
or guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnerhsip,
please sign in partnership name by authorized person.)
Signature:_________________ Date:______ Signature:_________________ Date:_______
