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))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Scios Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[SCIOS LETTERHEAD]
February 1, 2000
DEAR STOCKHOLDER:
We are pleased to inform you that the proxy contest between Scios and
Randal J. Kirk has been resolved.
On January 31, Scios signed a definitive settlement agreement with Mr.
Kirk and certain entities he controls, ending his proxy solicitation to elect a
new slate of directors. Under the agreement, Mr. Kirk has been added to the
slate of candidates nominated by the Scios Board for election to a one-year term
at the 2000 annual meeting of stockholders to be held on February 28, 2000. In
return, he has withdrawn his nomination and has agreed to discontinue all
solicitation activities. He has also agreed (if he is elected to the Board) to
certain restrictions on his activities related to Scios until at least 90 days
before next year's annual meeting and for a longer period if the Board decides
to renominate him for a second term next year.
We are convinced that this negotiated settlement is in the best
interests of Scios and its stockholders. It enables Scios management to move
forward with its business strategy, including the Natrecor(R) clinical testing
and approval process. Furthermore, it gives Mr. Kirk, as a significant
stockholder, an opportunity to work with the other directors and management to
build value for all Scios stockholders.
THE SCIOS BOARD HAS APPROVED THE SETTLEMENT AGREEMENT AND RECOMMENDS
THAT YOU VOTE FOR ALL EIGHT NOMINEES AT THE ANNUAL MEETING.
We are enclosing the following important documents for your information
in connection with the settlement:
o the joint press release issued by Scios and Mr. Kirk on January
31, 2000;
o a supplement to our proxy statement containing additional
information about the settlement agreement and the addition of
Mr. Kirk as a Board nominee at the upcoming annual meeting; and
o A new GOLD proxy card for your use in voting for all eight
nominees.
<PAGE>
If you would like to review the complete text of the settlement
agreement, you can find it on file with the Securities and Exchange Commission
as part of our Current Report on Form 8-K dated February 1, 2000. You can also
find it on our website located at www.sciosinc.com.
WHETHER OR NOT YOU HAVE PREVIOUSLY RETURNED A GOLD PROXY CARD TO US OR
A WHITE PROXY CARD TO MR. KIRK, WE ASK THAT YOU COMPLETE AND RETURN THE NEW GOLD
PROXY CARD (WHICH IS ENCLOSED AND IS POSTAGE PRE-PAID IF MAILED IN THE UNITED
STATES). THE WHITE PROXY CARD IS NO LONGER VALID FOR USE AT THE ANNUAL MEETING
AND CANNOT BE USED TO VOTE FOR THE EIGHT BOARD NOMINEES, INCLUDING MR. KIRK.
On Behalf of the Board of Directors
Sincerely,
/s/ Donald B. Rice /s/ Richard B. Brewer
DONALD B. RICE RICHARD B. BREWER
CHAIRMAN OF THE BOARD PRESIDENT AND CHIEF
EXECUTIVE OFFICER
IF YOU HAVE ANY QUESTIONS
OR NEED ASSISTANCE
COMPLETING YOUR PROXY CARD
PLEASE CALL:
MACKENZIE PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212)929-5500 (CALL COLLECT)
OR
CALL TOLL-FREE (800)322-2855
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[SCIOS LOGO]
820 West Maude Avenue
Sunnyvale, CA 94086
www.sciosinc.com
CONTACT:
Wendy Carhart For Randal J. Kirk:
Scios Inc. Caroline Gentile
408/616-8325 Kekst and Company
or 212/521-4800
Stanley J. Kay
MacKenzie Partners, Inc.
212/929-5940
FOR IMMEDIATE RELEASE:
SCIOS AND R. J. KIRK AGREE TO END PROXY CONTEST
Parties Focused On Building Stockholder Value
SUNNYVALE, CALIFORNIA and RADFORD, VIRGINIA--January 31, 2000--Scios Inc.
(NASDAQ:SCIO) and Randal J. Kirk jointly announced today a definitive agreement
which enables Scios management to move forward with its business strategy and
expands the board of directors, if elected by stockholders, to one that will,
together with management, report beneficial ownership of nearly ten percent of
the company's fully diluted shares.
Under the agreement, which ends Mr. Kirk's proxy solicitation to elect a new
slate of directors, Mr. Kirk will be added to the slate of candidates nominated
by the Scios Board for election as directors at the 2000 annual meeting of
stockholders to be held on February 28, 2000. This will raise the number of
Board candidates to eight, including the seven current Scios Board members who
are standing for re-election. If elected, Mr. Kirk as well as all other
directors will serve for a one-year term.
Accordingly, Mr. Kirk and certain entities he controls, which own approximately
5.2% of Scios' outstanding shares will vote their Scios shares in favor of the
Board's nominees at the upcoming annual meeting.
-- more --
<PAGE>
January 31, 2000
Page 2
Randal J. Kirk stated, "I strongly believe that there is substantial shareholder
value to be realized at Scios as evidenced by the size of my holdings, and I am
pleased to be nominated to a slate of this caliber. I am convinced that
Natrecor(R), for example, is a product with extremely attractive commercial
potential, and that Scios' management should be in a position to devote its full
energies to obtaining FDA approval for this product. At the same time, Scios'
offer to have me on its board will enable me, if elected, to work with the other
directors and management to build value for all Scios stockholders."
Donald B. Rice, Scios' Chairman, and Richard B. Brewer, President and Chief
Executive Officer, said, "The priority of the board and management of Scios is
to achieve enhanced value for all stockholders. This negotiated agreement is
consistent with that priority. By ending a distractive situation we can now
devote everyone's energies to the business of growing Scios. Scios can now move
forward with a board that is strong in business experience, industry expertise
and stockholder representation. We believe Mr. Kirk can bring a valuable
perspective to the board."
Consistent with the agreement's spirit of cooperation, Mr. Kirk and his entities
have agreed to certain "stand still" provisions. Both parties will file the
definitive settlement agreement with the SEC shortly and Scios will be
supplementing its proxy statement to add Mr. Kirk as a nominee to its Board.
Scios, Inc.
Scios is a biopharmaceutical company engaged in the discovery, development, and
commercialization of novel human therapeutics. Scios has commercial or research
and development relationships with Chiron Corporation, The DuPont
Pharmaceuticals Company, Eli Lilly and Company, GenVec Inc., Kaken
Pharmaceutical Co., Ltd., and Novo Nordisk A/S of Denmark. Scios' Psychiatric
Sales and Marketing Division successfully markets seven psychiatric products,
including co-promotion arrangements with Janssen Pharmaceutica's Risperdal(R)
(risperidone) and SmithKline Beecham's Paxil(R) (paroxetine hydrochloride).
Additional information on Scios is available at its web site located at
www.sciosinc.com and in the Company's various filings with the Securities and
Exchange Commission.
-- end --
[SCIOS LOGO]
SCIOS INC.
820 WEST MAUDE AVENUE
SUNNYVALE, CA 94086
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SUPPLEMENT TO PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 28, 2000
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GENERAL
Scios Inc., a Delaware corporation (the "Company"), hereby supplements
its proxy statement dated January 20, 2000 (the "Scios Proxy Statement") for its
Annual Meeting of Stockholders to be held at the Company's office located at 749
North Mary Avenue, Sunnyvale, California 94086 at 9:00 a.m. on February 28, 2000
and any adjournment or postponement of the annual meeting.
Enclosed with this Supplement is a new GOLD proxy card for use by
stockholders in voting their shares of Common Stock at the annual meeting.
AS INDICATED BELOW, UNDER A RECENTLY-SIGNED SETTLEMENT AGREEMENT THE
BOARD OF DIRECTORS HAS ADDED MR. RANDAL J. KIRK AS A BOARD NOMINEE FOR ELECTION
AT THE ANNUAL MEETING AND IT IS IMPORTANT THAT STOCKHOLDERS COMPLETE AND RETURN
THE ENCLOSED NEW GOLD PROXY CARD TO ENSURE THAT THEIR SHARES ARE VOTED AS TO ALL
EIGHT NOMINEES.
Neither the February 28, 2000 date of the annual meeting, nor the
January 11, 2000 record date for determining stockholders entitled to vote at
the annual meeting, have changed.
Capitalized terms used but not defined in this Supplement have the
meanings given to them in the Scios Proxy Statement.
<PAGE>
SETTLEMENT AGREEMENT; TERMINATION OF PROXY CONTEST; ADDITION OF MR. KIRK AS A
BOARD NOMINEE
On January 31, 2000, the Company and the Kirk Group entered into a
Settlement Agreement (the "Settlement Agreement") which ended the proxy contest
between the parties relating to the election of directors at the annual meeting.
Among other things, the Settlement Agreement provides for Mr. Kirk to be added
to the Board's slate of nominees for election to the Board at the annual meeting
(see "PROPOSAL NO. 1 - Election of Directors" below).
THE COMPANY HAS FILED THE SETTLEMENT AGREEMENT AS AN EXHIBIT TO A
CURRENT REPORT ON FORM 8-K DATED FEBRUARY 1, 2000. THE FOLLOWING SUMMARY OF THE
SETTLEMENT AGREEMENT IS QUALIFIED BY THE FULL TEXT OF THAT DOCUMENT.
Under the Settlement Agreement, Mr. Kirk has been added to the Board's
slate of nominees for election to a one-year term at this year's annual meeting,
increasing the total number of Board nominees to eight (including the seven
existing nominees of the Board, who are all current members of the Board). The
Board has agreed to recommend the election of all eight nominees. The Kirk Group
has withdrawn its nomination of Mr. Kirk and six other Board candidates and has
agreed to discontinue all efforts (direct and indirect) to solicit votes for its
nominees or otherwise to pursue the nomination.
The Settlement Agreement provides that the Kirk Group will vote its
Company shares in favor of the Board's nominees and against the removal of any
director, and not pursue any unsolicited acquisition attempts or engage in any
proxy contest, for a specified period (the "Term"). The length of the Term will
depend on whether Mr. Kirk is elected at this year's annual meeting and, if he
is, on whether the Board chooses to re-nominate him for next year's annual
meeting. If Mr. Kirk is not elected at this year's annual meeting, the Term will
expire at the conclusion of that meeting. If he is elected at that meeting, the
Term will expire at the earliest to occur of:
o Mr. Kirk's resignation from the Board within 15 days of the Board
deciding, at a meeting required to be held no later than 90 days
before next year's annual meeting, that he will not be
re-nominated at that meeting, in which event the provisions of
the Company's Bylaws requiring advance notice to be given, by a
specified date, of a stockholder's intention to nominate
directors, or propose other business, at an annual meeting of
stockholders (the "Advance Notice Bylaws") will be waived to the
extent necessary to permit any or all of the members of the Kirk
Group (but no other person) to nominate one or more of their own
candidates for election to the Board at next year's annual
meeting;
o the conclusion of next year's annual meeting if Mr. Kirk is
re-nominated for election at that meeting but is not elected; or
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<PAGE>
o the later of (i) the 30th day prior to the deadline established
by the Advance Notice Bylaws for nominations of candidates for
election to the Board at the 2002 annual meeting or (ii) the date
of Mr. Kirk's resignation from the Board, but in no event beyond
the conclusion of that meeting.
In addition, during the Term (or until Mr. Kirk resigns from the Board
before the end of the Term, if he is elected), the Kirk Group:
o must vote all of its Company shares on all matters other than the
election or removal of directors either (as it chooses in its
sole discretion) in accordance with the recommendation of a
majority of the Board or in the same proportion as shares held by
the other stockholders are voted;
o may not increase its aggregate ownership of Company shares above
7.2% and must effect all purchases in compliance with all
then-applicable Company policies regarding compliance with the
federal securities laws and transactions in Company voting
securities by members of the Board and their affiliates (the
"Company Policies"); and
o must give the Company prior notice if it intends to dispose of
any of its Company shares (except that open-market sales of less
than 1%, in the aggregate, in any 90-day period are not subject
to this notice requirement) and must effect all sales in
compliance with the Company Policies.
The Settlement Agreement contains certain other provisions, including
restrictions on public announcements, mutual releases of claims in connection
with the proxy contest and related covenants not to sue, certain representations
and warranties, and the Company's agreement to reimburse 50% of certain of the
Kirk Group's actual documented out-of-pocket costs in connection with the proxy
contest. In addition, the Company has agreed that, without Mr. Kirk's prior
consent (not to be unreasonably withheld), it will not change the date of this
year's annual meeting, hold next year's annual meeting later than June 1, 2001,
or amend the Advance Notice Bylaws during the Term.
The Settlement Agreement permits Mr. Kirk to exercise his rights, and
fulfill his obligations, as a member of the Board while he is serving on it, and
to make confidential proposals to the Board, without violating any of the
provisions summarized above.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Company refers you to the section of the Scios Proxy Statement
captioned "PROPOSAL NO. 1 - Election Of Directors" for information about the
seven current members of the Board who have previously been nominated by the
Board for re-election at the annual meeting.
3
<PAGE>
In view of Mr. Kirk's addition as an eighth nominee, and pursuant to
the procedure set forth in the Company's Certificate of Incorporation, the
number of directors (which had been reduced to seven to reflect the longstanding
retirement plans of one of the current Directors) has been changed back to eight
and a Board of eight (8) Directors will be elected at the annual meeting. The
term of office of each person so 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 new GOLD
proxy cards received by them for the eight nominees. HOWEVER, IF A STOCKHOLDER
DOES NOT RETURN THE ENCLOSED NEW GOLD PROXY CARD (WHICH CONTAINS THE NAMES OF
ALL EIGHT NOMINEES, INCLUDING MR. KIRK), THAT STOCKHOLDER'S SHARES CANNOT BE
COUNTED IN THE ELECTION OF MR. KIRK BUT ONLY IN THE ELECTION OF THE OTHER SEVEN
NOMINEES, WHETHER OR NOT THE STOCKHOLDER PREVIOUSLY RETURNED A WHITE PROXY CARD
TO THE KIRK GROUP. THE WHITE PROXY CARD IS NO LONGER VALID FOR USE AT THE ANNUAL
MEETING.
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, (including Mr. Kirk) has agreed to
serve if elected, and management has no reason to believe that any nominee will
be unable to serve.
Under the Advance Notice Bylaws, the deadline for nominating candidates
for election to the Board, or submitting other business, at the annual meeting
has passed. Accordingly, and because the Kirk Group has withdrawn its nomination
of its candidates for election to the Board, under the Advance Notice Bylaws
only the Board's eight nominees may be nominated for election at the annual
meeting. Since the Kirk Group has agreed to vote its shares in favor of all
eight nominees, and in light of the fact that a plurality of the votes cast for
each nominee will elect that nominee providing a quorum is present (which
requires the presence, in person or by proxy, of a majority of the shares
outstanding on the record date), all eight nominees are expected to be elected.
The following information has been provided by Mr. Kirk for inclusion
in this Supplement with respect to his candidacy for election as a Board
nominee.
"Mr. Kirk's full name is Randal J. Kirk. He is 45 years of age. He
beneficially owns 2,000,000 shares of Common Stock, or approximately
5.2% of the outstanding Common Stock (see note (4) to the table
appearing in the Scios Proxy Statement under the caption "SECURITY
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS"). He has served as
the Managing Director of Third Security, LLC (an investment banking
firm) since 1999. In addition, he currently serves in the following
capacities: Chairman of Lotus Biochemical Corporation (a pharmaceutical
company) since 1996; Manager of New River Management Company, L.L.C.
(an investment holding company) since 1996; Chairman of BCCX, Inc. (a
clinical laboratory management company) since
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<PAGE>
1998; Chairman of SFR, LLC (a real estate investment company) since
1998; Chairman of Clinical Chemistry Holdings, Inc. (a diagnostic
instrumentation and supplies company) since 1999; Chairman of Biopop
Integration Group, Inc. (a systems integration company) since 1999; and
Manager of Zhong Mei, LLC (an investment holding company) since 1999.
Previously, he served as Chairman of General Injectables & Vaccines,
Inc. (a pharmaceutical distributor) between 1994 and 1998 and as
Chairman and Chief Executive Officer of Biological & Popular Culture,
Inc. (a holding company) between 1996 and 1998."
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THIS MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE ASKED TO COMPLETE, SIGN AND RETURN THE
ENCLOSED NEW GOLD PROXY CARD IN THE ACCOMPANYING ENVELOPE (WHICH IS POSTAGE
PRE-PAID IF MAILED IN THE UNITED STATES). 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.
By Order of the Board of Directors
JOHN H. NEWMAN
Secretary
February 1, 2000
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[FORM OF REVISED PROXY CARD]
NEW GOLD PROXY
SCIOS INC.
Annual Meeting of Stockholders
Monday, February 28, 2000
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Richard B. Brewer 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, 749 North Mary Avenue, Sunnyvale, CA 94086 on February
28, 2000 at 9:00 a.m. and at any adjournments 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
NEW GOLD PROXY
X PLEASE MARK 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 Randal J. Kirk
Donald B. Rice Charles A. Sanders Solomon H. Snyder
Burton E. Sobel Eugene L. Step
FOR ALL NOMINEES
WITHHOLD ALL NOMINEES
To withhold your vote on any nominee(s), write their name(s) below:
___________________________________________________________________
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for Fiscal 2000.
FOR AGAINST ABSTAIN
DATE:_______________________________________________________
SIGNATURE:__________________________________________________
TITLE OR AUTHORITY:_________________________________________
SIGNATURE (IF JOINT):_______________________________________
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.
PLEASE SIGN, DATE, AND RETURN THIS PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
