SCHEDULE 14A INFORMATION
Proxy Statement Pursant 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:
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<PAGE>
[LOGO]
Scios Inc.
2450 Bayshore Parkway
Mountain View, California 94043
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 11, 1999
8:30 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 8:30 a.m. on Tuesday, May 11, 1999, to consider and act upon the
following matters:
(1) To elect directors of the Company to serve for the ensuing year
and until their successors are elected.
(2) To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for fiscal 1999.
(3) To act upon such other matters that may properly come before the
meeting or any adjournment or postponement of the meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only stockholders of record at the close of
business on March 16, 1999 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, 1999
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PRE-PAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
Scios Inc.
2450 Bayshore Parkway
Mountain View, California 94043
----------
Proxy Statement
Annual Meeting of Stockholders
May 11, 1999
General
The enclosed proxy 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 8:30 a.m. on
Tuesday, May 11, 1999, and at any adjournment or postponement of that meeting,
for the purposes set forth herein and in the accompanying Notice of Annual
Meeting. The approximate mailing date for this Proxy Statement and the enclosed
proxy is March 31, 1999.
The Board of Directors has fixed the close of business on March 16,
1999 as the record date for the determination of stockholders entitled to vote
at the Annual Meeting. At that time, there were 37,770,114 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 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. Abstentions and broker non-votes are counted
towards a quorum. Each matter is tabulated separately. Abstentions are counted
in tabulations of the votes cast on proposals presented to stockholders and have
the effect of negative votes, 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
attending the meeting and voting in person. Attendance at the meeting will not
itself revoke a proxy.
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 banks,
brokerage houses, fiduciaries and custodians holding in their name shares of
Common Stock beneficially owned by others to forward to such beneficial owners.
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.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
A Board of eight (8) 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
eight 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 represented 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, 1999.
<TABLE>
<CAPTION>
Director
Name Age Since
---- --- --------
<S> <C> <C>
Samuel H. Armacost 59 1995
Richard B. Brewer 47 1998
Myron Du Bain 75 1989
Donald B. Rice, Ph.D. 59 1997
Charles A. Sanders, M.D. 67 1997
Solomon H. Snyder, M.D. 60 1992
Burton E. Sobel, M.D. 61 1996
Eugene L. Step 70 1993
</TABLE>
Mr. Armacost was elected to the Company's Board of Directors in August
1995. In July 1998, Mr. Armacost became Chairman of the Board of Directors of
SRI International. From 1990 to 1998, he was a Managing Director of Weiss, Peck
& Greer, L.L.C., an investment firm. He was a 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
a member of the Board of Directors of Chevron Corporation and Exponent, Inc. In
addition, Mr. Armacost is on the Board of Directors of the James Irvine
Foundation and the Advisory Board of the California Academy of Sciences, and he
is a member of The Business Council.
Mr. Brewer is President and Chief Executive Officer of Scios Inc. He
joined Scios in September 1998 and has served as a Director since that time.
From early 1996 to 1998, he was with Heartport Inc. first as Executive Vice
President of Operations and then, Chief Operating Officer. Prior to that, Mr.
Brewer served in various capacities with Genentech, Inc. from 1984 to 1995, most
recently as Senior Vice President, U.S. Sales and Marketing, Genentech Europe
Ltd., and Genentech Canada, Inc. Mr. Brewer earned a B.S. from Virginia
Polytechnic Institute and a M.B.A. from Northwestern University.
Mr. Du Bain was elected a Director of Scios in June 1989. He was
Chairman of the Board of Directors of SRI International 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 was formerly a member of the Board of Directors of Wells Fargo &
Company, Pacific Gas and Electric Co., Pacific Telesis Group, First Interstate
<PAGE>
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 Chairman of the Board in November 1998 and has
served as a Director of Scios since August 1997. Dr. Rice is the President,
Chief Executive Officer and Director of UroGenesys, Inc. Previously, he served
Teledyne, Inc. as President, Chief Operating Officer and Director from 1993
to 1996, the U.S. Department of Defense as Secretary of the Air Force from 1989
to 1993, and The RAND Corporation as President and Chief Executive Officer from
1972 to 1989. He was also Assistant Director of the Office of Management and
Budget, The White House. Dr. Rice is a member of the Board of Directors of
Wells Fargo & Company, Vulcan Materials Company and Unocal Corporation.
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.
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 Fellowship and Council membership in 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
General. During 1998, the Company reduced the cash compensation to
non-employee Directors in the form of retainer and meeting fees and, following
stockholder approval, instituted an annual stock option grant to non-employee
Directors. It is the Company's belief that these changes are constructive in
building director equity interests in the Company and more closely aligning the
interests of the Board, management and stockholders in building long-term
stockholder value.
Fees. Directors who are not otherwise employed by the Company receive
an annual retainer of $8,000 and a fee of $1,000 per day for attendance at
regular meetings of the Board of Directors or committee meetings, and $500 for
attendance at a telephonic meeting. Directors are also eligible for
reimbursement of expenses incurred in connection with attendance at Board
meetings in accordance with Company policy.
Stock Options. In May 1998, the stockholders of the Company approved
an amendment of the Company's 1992 Equity Incentive Plan (the "Equity Plan") to
provide that each non-employee Director shall automatically be granted, at each
annual meeting where the Director is elected to the Company's Board, a
supplemental stock option to purchase 10,000 shares of the Company's Common
Stock. Such options are granted with exercise prices equal to the current full
market price. 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. Snyder, Dr. Sobel and Mr. Step each
received an automatic option grant at the time of re-election to the Board in
May, 1998.
Board of Directors. During 1998, there were 9 meetings of the Board of
Directors.
Chairman of the Board. In connection with the employment of Richard B.
Brewer as the Company's President and Chief Executive Officer and at Mr.
Brewer's request, the Board determined that separating the roles of Chairman of
the Board and Chief Executive Officer was a constructive step for the Company at
the present time. Accordingly, on November 3, 1998, Donald B. Rice was elected
Chairman of the Board, a nonexecutive position, and for serving in this role the
Board awarded Dr. Rice additional cash compensation of $7,500 per quarter and a
supplemental stock option to purchase 15,000 shares of the Company's Common
Stock at the then current market price.
Audit Committee. The Audi Committee consists of four non-employee
Directors: Mr. Step (Chairman), Mr. Armacost, Dr. Sanders and Dr. Sobel. The
Audit Committee met four times in 1998. 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.
Management Development and Compensation Committee. The Management
Development and Compensation Committee consists of five non-employee Directors:
Mr. Armacost (Chairman), Mr. Du Bain, Dr. Rice, Dr. Sanders and Mr. Step.
The committee met four times during 1998. 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. The committee met three times in fiscal 1998. Among the
committee's functions are recommending nominees to serve on the Board
of Directors, recommending the size and composition of the Board, making
recommendations concerning membership of Board committees and Director
compensation, and consulting with the Board of Directors and management
<PAGE>
to determine criteria for nominations. The Nominating Committee
will consider nominees recommended by stockholders.
Management Succession Committee. During 1998, the Board established
a Management Succession Committee to oversee the recruiting of a new Chief
Executive Officer for the Company. The Committee consisted of Mr. Armacost,
Mr. Du Bain, Dr. Rice and Mr. Step. It met formally as a committee four times
and informally on numerous occasions as part of the search process and
recruiting Mr. Brewer to the Company. The Committee was disbanded in November
1998.
In 1998, all Directors attended at least 75% of the meetings of the
Board and committees of the Board of which they were members, except Dr. Schrier
who attended 58% of meetings.
<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, 1999 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 50,000 *
Richard B. Brewer 165,000 *
Richard L. Casey 494,192(3) 1%
Myron Du Bain 64,500(3) *
Donald B. Rice, Ph.D. 44,166 *
Charles A. Sanders, M.D. 16,333 *
Solomon H. Snyder, M.D. 33,333 *
Burton E. Sobel, M.D. 23,000 *
Eugene L. Step 33,500 *
Elliott B. Grossbard, M.D. 245,949 *
John H. Newman 238,382(3) *
John A. Lewicki, Ph.D. 189,233 *
Thomas L. Feldman 80,864 *
All officers and directors as a
group (14 persons) 1,708,252(3) 4%
- ----------
<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. Brewer, Mr. Casey, Mr. Du Bain, Dr. Rice, Dr.
Sanders, Dr. Snyder, Dr. Sobel, Mr. Step, Dr. Grossbard, Mr. Newman,
Dr. Lewicki and Mr. Feldman, and all officers and directors as a group,
includes 25,000; 65,000; 453,332; 34,500; 24,166; 16,333; 13,333;
23,000; 32,500; 239,665; 144,332; 173,332; 78,164; and 1,322,657
shares, respectively, issuable upon exercise of outstanding options
exercisable within sixty days of March 16, 1999.
(3) With respect to Mr. Casey, includes 6,837 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 for the benefit of Mr. Newman's children.
</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")
<PAGE>
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,
1998, 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 Officers and each of its four other most highly compensated
executive officers at December 31, 1998 for the fiscal years ended December 31,
1998, 1997 and 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------- ------------
Name Securities
and Restricted Underlying All Other
Principal Stock Stock Compen-
Position Year Salary ($) Bonus (1)($) Award (2)($) Options(#) sation (3)($)
- -------- ---- ---------- ------------ ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard B. Brewer 1998 $103,000(4) $ 50,000 $596,875 275,000 $ 3,000
President and Chief 1997 N/A
Executive Officer 1996 N/A
Richard L. Casey 1998 $302,852(5) $ 86,400 -- 100,000 $ 53,000(6)
Former Chairman of 1997 $400,000 -- -- -- $ 3,000
the Board and Chief 1996 $400,000 $ 120,000 -- 100,000 $ 3,000
Executive Officer
Elliott B. Grossbard, M.D. 1998 $260,000 $ 100,000 -- 68,500 $ 3,000
Senior Vice President 1997 $246,064 -- -- 19,000 $ 3,000
of Development 1996 $218,500 $ 105,000(7) -- 9,375 $ 3,000
John H. Newman 1998 $220,000 $ 50,000 -- 53,500 $ 3,000
Senior Vice President, 1997 $212,500 -- -- 19,000 $ 3,000
General Counsel & 1996 $185,500 $ 65,000 -- 9,375 $ 3,000
Secretary
John A. Lewicki, Ph.D. 1998 $222,000 $ 50,000 -- 50,000 $ 3,000
Vice President 1997 $222,000 -- -- 12,000 $ 3,000
of Research 1996 $215,500 $ 40,000 -- 6,250 $ 3,000
Thomas L. Feldman 1998 $185,000 $ 95,000(8) -- 38,500 $ 3,000
Vice President of 1997 $185,000 $ 55,000(8) -- 16,000 $ 3,000
Commercial Development 1996 $175,300 $ 70,000 -- 6,250 $ 3,000
- ---------------
<FN>
(1) Except as is further described in footnote 7 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.
(2) Mr. Brewer received 100,000 shares of Common Stock valued on the grant
date at $5.96875 per share upon becoming President and Chief Executive
Officer (See Note 4). 50% of the shares vest on each of the first and
second anniversary of his employment.
The aggregate value of such shares on December 31, 1998 was $1,037,500.
(3) Consists of Company matching contributions under the 401(k) Profit Sharing
Plan and Trust, which was established in 1986. As of December 31, 1998,
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
<PAGE>
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.
(4) Mr. Brewer became President and Chief Executive Officer of the Company
at an annual salary of $400,000 in September 1998 upon Mr. Casey's
retirement.
(5) Mr. Casey retired as an officer and director of the Company in September
1998 and is now a consultant to the Company.
(6) Includes $50,000 in consulting fees paid to Mr. Casey in 1998 (See
Note 5).
(7) Includes forgiveness of $30,000 under a relocation loan made to Dr.
Grossbard at the time he joined the Company.
(8) Mr. Feldman's bonus for 1997 and 1998 includes forgiveness of $55,000 per
year under a relocation loan made to him in 1996 as part of the relocation
of the Commercial Operations Division to California. See "Certain
Relationships and Transactions."
</FN>
</TABLE>
STOCK OPTION GRANTS AND EXERCISES
In the Company's efforts to recruit the best available talent in a
competitive labor market, the Company grants stock options to provide equity
incentives. The Company has granted stock options under the 1983 Incentive Stock
Option Plan (expired by its terms on March 5, 1993), the 1986 Supplemental Stock
Option Plan (expired by its terms on January 16, 1996), the 1989 Non-Employee
Director Stock Option Plan (expired by its terms on June 30, 1994), the 1992
Equity and Incentive Plan and the 1996 Non-Officer Stock Option Plan.
The following table provides information on stock options held by the
executive officers named in the Summary Compensation Table, including
information as to grants and exercises for the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
- -------------------------------------------------------------------------- ----------------------------------
No. of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted(1)(#) Fiscal Year ($/Sh) Date 0%($) 5%($) 10%($)
- ---- ------------- ------------ -------- ---------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Brewer 275,000 22.17% $5.97 09/09/08 0 $1,032,272 $2,615,979
R. Casey 100,000 8.06% $9.63 12/31/00(2) 0 $ 145,921 $ 305,607
E. Grossbard 68,500 5.52% $9.63 02/09/08 0 $ 414,638 $1,050,774
J. Newman 53,500 4.31% $9.63 02/09/08 0 $ 323,841 $ 820,678
J. Lewicki 50,000 4.03% $9.63 02/09/08 0 $ 302,656 $ 766,989
T. Feldman 38,500 3.10% $9.63 02/09/08 0 $ 233,045 $ 590,581
- ---------
<FN>
(1) These options vest in monthly installments commencing on January 1, 1998
and ending on December 31, 2002. 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.
(2) Pursuant to Mr. Casey's retirement, his options vest through the
termination of his consulting agreement at which time he will have 90 days
to exercise the vested options.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Value of Unexercised,
Shares Number of Securities Underlying In-the-Money Options
Acquired on Value Unexercised Options at FY-End at FY-End
Name Exercise(#) Realized($) Exercisable(#) Unexercisable(#) Exercisable(1)($) Unexercisable(1)($)
- ---- ----------- ----------- -------------- --------------- ----------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
R. Brewer 0 0 65,000 210,000 $286,406 $925,312
R. Casey 200,000 $630,563 425,000 235,000 $1,166,250 $754,000
E. Grossbard 0 0 227,125 88,750 $439,219 $176,320
J. Newman 40,000 $133,125 132,375 75,000 $324,219 $157,258
J. Lewicki 40,000 $131,937 162,500 74,750 $393,250 $163,234
T. Feldman 0 0 69,208 61,542 $187,494 $145,866
- ------------------
<FN>
(1) Based on the fair market value of the Company's Common Stock at December 31,
1998 ($10.375) minus the exercise price of the options.
</FN>
</TABLE>
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
Richard B. Brewer became the Company's President and Chief Executive
Officer in September 1998. Pursuant to the employment offer between Mr. Brewer
and the Company, Mr. Brewer is to be compensated at the rate of $400,000 per
annum and he received options to purchase 275,000 shares of Common Stock of the
Company at an exercise price of $5.97 per share, vesting in annual increments
over 4 years, and a restricted stock grant for 100,000 shares ($596,875 value at
grant), vesting in equal amounts on the first two anniversaries of Mr. Brewer
joining the Company. Both grants were at the current market price of the
Company's Common Stock at the time of grant.
Richard L. Casey retired as the Company's Chairman of the Board and
Chief Executive Officer in September 1998. Pursuant to an agreement between Mr.
Casey and the Company, Mr. Casey will serve as a consultant to the Company
through September 2000, with compensation of $16,667 per month.
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 specific compensation policies and levels.
In 1998, the Committee was composed of Mr. Armacost, Mr. Du Bain, Dr. Rice, Dr.
Sanders and Mr. Step. None of these directors were officers or employees of the
Company.
Compensation Philosophy
The goals of the compensation program are to link 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 build long-term stockholder value.
Key elements of this philosophy are:
o The Company pays competitively with leading biotechnology and other
companies with which the Company competes for management or employee
talent. To ensure that pay is competitive, the Company regularly
compares its pay practices with these companies and sets its
compensation parameters based on this review.
o The Company maintains annual incentive opportunities sufficient to
provide motivation to achieve specific business goals and to generate
rewards that bring total compensation to competitive levels.
o 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 strategic
opportunities as owners as well as employees.
- ---------
(1) The material in this report and the chart on page 15 is not "Soliciting
Material", is not deemed "filed" under the Securities Act of 1933, as
amended, or the Exchange Act and is not to be incorporated by reference
into any filing of the Company whether made before or after the date
hereof, regardless of any general incorporation language in such filing.
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 only granted
modest or no 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 and increase the relative percentage of pay at risk based on
performance.
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 1998, the
<PAGE>
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 targeted at the 50th percentile salary for comparable positions.
Within this range, the Committee subjectively considers individual factors,
including individual performance, level of responsibility, prior experience and
breadth of knowledge, as well as competitive pay practices and 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 evolution.
Annual Incentive. The Employee Incentive Plan, an annual award plan,
offers variable pay for officers and other employees of the Company based 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 long-term goal of
building stockholder value. For 1998, these objectives included:
o completing the key development benchmarks for the Company's lead
products - NATRECOR(R) hBNP and FIBLAST(R) trafermin - that had been
identified for accomplishment in 1998
o securing commercial partners for certain of the Company's technologies
and commercial operations
o financial performance related to the Company's cash utilization
o identifying and developing additional products from the Company's
research pipeline as candidates for clinical testing and developing
lead compounds for future research and development
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 that assessment.
Awards are paid in cash and distributions are made in February following the
performance year. In lieu of making cash awards to executives for 1997
performance, the Committee elected to distribute annual incentive awards to
executives in the form of additional stock option grants vesting over four
years.
In February 1999, the Committee determined that the Company made
significant progress in 1998, and that most of its key corporate objectives were
met. Specifically, the Company: filed an NDA in the United States for NATRECOR;
completed development of the manufacturing processes for NATRECOR and validated
those processes; secured a worldwide commercial partner for NATRECOR which was
accomplished through the agreement with Bayer AG; prepared for the launch of
NATRECOR; extended its agreement with a third party manufacturer of NATRECOR;
advanced another product into development; identified lead targets in discovery
research, and met certain financial objectives. The Company was not fully
successful in advancing the clinical development of FIBLAST. Based on the
Company's performance, the Committee determined the incentive pool available
under the Employee Incentive Plan. The Committee then determined the cash
incentive award for each of the executives on the Company's corporate management
committee reflecting their individual and collective 1998 performance. The
Committee exercised its discretion and approved bonuses for members of the
corporate management committee that totaled less than the pool available. The
former CEO, Mr. Casey, received a prorated award for the nine months during 1998
that he was CEO.
<PAGE>
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 and to look to achieve the Company's long-term strategic goals.
Through option grants, executives receive significant equity incentives to build
long-term stockholder value. All 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 generally 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.
In 1996, 1997 and 1998, 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 1998 through 2002. 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 1998, 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
executive officers in an appropriate 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. For 1994 through 1998, the
Committee elected to maintain the CEO's base salary at $400,000. In doing so,
the Committee intended to increase the relative portion of the CEO's total
compensation that is variable pay based on achievement of the annual corporate
objectives and on increases in the Company's stock price. Mr. Casey was
compensated in accordance with the foregoing until his retirement in September
1998. In connection with his retirement, Mr. Casey was awarded a prorated bonus
equal to his base salary multiplied by 75% of the bonus pool percentage. At the
time of his retirement, the Company retained Mr. Casey as a consultant for a
period of two years. See "Employment and Severance Agreements" above.
When Mr. Brewer was hired as President and CEO of the Company in
September, 1998, the Committee established his base salary at $400,000 per
annum, the same annual salary as Mr. Casey had received. In connection with Mr.
Brewer's joining the Company, the Committee agreed to certain other elements of
compensation, including the stock options, restricted stock and bonus for 1998
appearing in the Summary Compensation Table and other future benefits described
under the caption "Employment and Severance Agreements." The Committee believes
Mr. Brewer's compensation is consistent with the special demands of the
position, the compensation of chief executive officers in the comparator group
and in accord with the compensation philosophy articulated above. See
"Compensation Philosophy-Annual Incentive" and "Compensation Philosophy-Long
- -Term Incentive" above.
<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, the program for executive officers, is contingent on
Company performance, and that the 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 Company is still in a developmental stage and
that the competitive market for talented executives and the volatility of the
Company's business may result in highly variable compensation for any 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
PERFORMANCE GRAPH
The graph below 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, 1993. These comparator indices were selected in 1992. The graph
below also includes the Russell 2000 Index and the Amex Biotechnology Index. The
Company believes these two indices each include companies that are more similar
to the Company than the companies in the NASDAQ Stock Market (U.S.) and the
NASDAQ Pharmaceuticals Stock Index. The stock price performance shown on the
graphs below is not necessarily indicative of future price performance.
<PAGE>
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Return
Among Scios Inc., NASDAQ Stock Market (U.S.),
NASDAQ Pharmaceutical Stocks Index, Russell 2000 Index
and Amex Biotechnology Index
Nasdaq Stock Nasdaq Russell
Dates Scios Inc. Market (U.S.) Pharmaceuticals 2000 Amex Biotechnology
----- --------- ------------- --------------- ------- ------------------
<S> <C> <C> <C> <C> <C>
12/31/93 100.000 100.000 100.000 100.000 100.000
1/31/94 101.351 118.281 91.842 103.067 104.733
2/28/94 93.243 117.177 83.574 102.684 94.153
3/31/94 79.730 109.971 72.698 97.088 79.478
4/29/94 85.135 108.544 69.773 97.664 75.168
5/31/94 72.297 108.809 68.831 96.399 81.085
6/30/94 68.919 104.830 63.455 92.923 69.097
7/29/94 68.919 106.980 65.375 94.381 68.647
8/31/94 82.432 113.800 72.469 99.509 83.244
9/30/94 72.973 113.509 71.469 99.045 78.606
10/31/94 72.973 115.740 69.026 98.619 72.336
11/30/94 64.865 111.900 69.331 94.455 73.329
12/30/94 71.622 112.214 67.084 96.817 70.876
1/31/95 83.784 112.843 70.798 95.460 69.874
2/28/95 89.189 118.811 73.472 99.219 71.653
3/31/95 82.432 122.334 72.422 100.843 66.989
4/28/95 72.973 126.186 74.456 102.931 69.235
5/31/95 38.514 129.442 75.395 104.509 67.162
6/30/95 43.919 139.932 84.228 109.683 77.682
7/31/95 45.946 150.218 91.480 115.906 84.306
8/31/95 44.595 153.262 102.300 118.067 95.492
9/29/95 44.595 156.787 105.244 120.028 98.627
10/31/95 39.189 155.888 101.302 114.564 90.534
11/30/95 41.892 159.549 106.385 119.332 94.084
12/29/95 46.622 158.699 122.722 122.190 115.538
1/31/96 58.108 159.482 133.452 121.961 124.633
2/29/96 53.378 165.552 130.874 125.655 119.563
3/29/96 49.324 166.101 127.685 127.913 116.454
4/30/96 51.351 179.882 134.277 134.684 129.237
5/31/96 79.054 188.141 138.823 139.932 134.436
6/28/96 71.622 179.660 124.029 134.042 121.506
7/31/96 60.811 163.658 110.568 122.201 100.346
8/30/96 62.162 172.828 118.580 129.116 111.081
9/30/96 66.892 186.048 126.865 133.953 120.936
10/31/96 62.162 183.993 121.139 131.703 114.484
11/29/96 62.162 195.367 119.411 136.939 116.480
12/31/96 66.385 195.192 123.079 140.226 124.633
1/31/97 64.189 209.064 133.429 142.871 143.488
2/28/97 77.703 197.506 134.288 139.236 141.432
3/31/97 73.649 184.612 116.886 132.472 120.522
4/30/97 50.676 190.384 109.958 132.642 113.396
5/30/97 68.243 211.969 126.527 147.245 128.537
6/30/97 68.919 218.452 126.180 153.281 123.096
7/31/97 86.486 241.510 129.780 160.285 119.218
8/29/97 81.081 241.142 128.240 163.746 131.594
9/30/97 105.405 255.404 141.556 175.498 152.470
10/31/97 88.514 242.129 134.322 167.547 146.234
11/28/97 81.757 243.326 130.203 166.256 142.918
12/31/97 108.108 239.527 127.185 169.001 140.283
1/31/98 102.703 246.649 126.277 166.306 135.982
2/28/98 108.108 269.807 130.412 178.596 138.798
3/31/98 131.757 279.772 140.149 185.885 150.769
4/30/98 127.027 284.522 136.692 186.740 151.287
5/31/98 101.351 268.906 131.989 176.581 139.290
6/30/98 95.946 287.873 129.894 176.879 126.827
7/31/98 82.432 284.833 131.016 162.323 119.174
8/31/98 51.351 228.988 100.358 130.690 90.266
9/30/98 61.486 260.615 122.918 140.605 120.392
10/31/98 56.757 271.265 131.013 146.239 141.734
11/30/98 81.757 297.988 137.381 153.815 141.328
12/31/98 112.162 336.124 163.202 163.177 159.898
</TABLE>
The graph below reflects the performance of the Company's Common Stock
over calendar years 1997 and 1998 (periods which are also included in the five
year graph above) as compared to the new comparator indices described above. The
graph assumes the investment of $100 in the Company's Common Stock, the Russell
2000 Index and the AMEX Biotechnology Index on December 31, 1996.
<TABLE>
<CAPTION>
Comparison of Two Year Cumulative Total Return
Among Scios Inc., Russell 2000 Index and
Amex Biotechnology Index
Russell Amex
Dates Scios Inc. 2000 Biotechnology
----- ---------- ------- -------------
<S> <C> <C> <C>
12/31/96 100.000 100.000 100.000
1/31/97 96.692 101.886 115.506
2/28/97 117.048 99.294 113.851
3/31/97 110.941 94.471 97.018
4/30/97 76.336 94.592 91.282
5/30/97 102.799 105.005 103.470
6/30/97 103.817 109.310 99.090
7/31/97 130.280 114.305 95.968
8/29/97 122.137 116.773 105.932
9/30/97 158.779 175.498 122.736
10/31/97 133.333 167.547 117.716
11/28/97 123.155 166.256 115.047
12/31/97 162.850 169.001 112.926
1/31/98 154.707 166.306 109.464
2/28/98 162.850 178.596 111.730
3/31/98 198.473 185.885 121.367
4/30/98 191.349 186.740 121.784
5/31/98 152.672 176.581 112.126
6/30/98 144.529 176.879 102.094
7/31/98 124.173 162.323 95.934
8/31/98 77.354 130.690 72.663
9/30/98 92.621 140.605 96.914
10/31/98 85.496 146.239 114.094
11/30/98 123.155 153.815 113.767
12/31/98 168.957 163.177 128.716
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
In 1993, the Company formed Guilford Pharmaceuticals Inc. ("Guilford").
Dr. Snyder is a director of Guilford. Until March 9, 1999, the Company owned
approximately 7% of the outstanding stock of Guilford.In March 1999, the Company
sold substantially all of its holdings in Guilford, reducing its ownership to
less than 1% of Guilford's outstanding stock. During 1998, Guilford rented space
from the Company, for which it paid $687,511.
In 1998, in connection with the exercise of a stock option, the Company
extended a loan to Mr. Newman in the amount of $137,500. The loan bears interest
at the rate of 5.59% per annum and is repayable over four years. The current
balance is $103,125. Interest has been paid through March 3, 1999.
In 1995, Mr. Feldman received a relocation loan in the amount of
$275,000 to assist in his move to California as part of the Company's decision
to bring the management offices for its commercial operations division to the
Company's headquarters. The loan is being forgiven over 5 years of employment.
$110,000 was outstanding under the loan as of March 16, 1999.
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors of
the Company appointed PricewaterhouseCoopers LLP to be the Company's independent
auditors for the fiscal year ending December 31, 1999.
Services provided to the Company and its subsidiaries by
PricewaterhouseCoopers with respect to the fiscal year ended December 31, 1998
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.
PricewaterhouseCoopers has audited the Company's financial statements
annually since the Company's inception in 1982. Representatives of
PricewaterhouseCoopers 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 PricewaterhouseCoopers as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers 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 PricewaterhouseCoopers as the
Company's independent auditors for fiscal year 1999 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 2.
<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 - 2000 ANNUAL MEETING
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2000 annual
meeting if stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is December 2, 1999.
By Order of the Board of Directors
JOHN H. NEWMAN
Secretary
March 31, 1999
THE BOARD OF DIRECTORS HOPE 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.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
DETACH HERE
SCIOS INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS MAY 11, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O The undersigned hereby appoints Richard B. Brewer and John H. Newman,
X or either of them, each with full power of substitution, as proxies
Y 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 11, 1999 at 8:30 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 AND 2.
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
THIS EXAMPLE
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
- --------------------------------------------------------------------------------
1. Election of Directors.
NOMINEES: Samuel H. Armacost, Richard B. Brewer, Myron Du Bain, Donald B. Rice,
Charles A. Sanders, Solomon H. Snyder, Burton E. Sobel, Eugene L. Step
FOR WITHHELD
/ / / /
/ / __________________________________________
For all nominees except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW / /
2. To ratify the selection of PricewaterhouseCoopers
LLP as the Company's Independent auditors for
fiscal 1999. FOR AGAINST ABSTAIN
/ / / / / /
- --------------------------------------------------------------------------------
(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
partnership, please sign in partnership name by authorized person.)
Signature:________________ Date:________ Signature:_________________ Date:_____
