<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] 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-2.
</TABLE>
LIPOSOME COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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> 2
LIPOSOME LOGO
April 1, 1997
TO: All Stockholders
You are cordially invited to attend the 1997 Annual Meeting of the
Stockholders of The Liposome Company, Inc., which will be held at The Holiday
Inn, 1053 Route #1, Princeton, New Jersey 08540, on May 15, 1997, at 10:15 a.m.
Information about the Annual Meeting, including a listing and discussion of the
various matters on which the stockholders will act, may be found in the enclosed
formal Notice of Annual Meeting of Stockholders and Proxy Statement. The
Company's Annual Report for the fiscal year ending December 29, 1996 is also
included.
At the Annual Meeting you will be asked to (1) elect the members of the
Board of Directors, and (2) ratify the appointment of Coopers & Lybrand L.L.P.
as the Company's independent accountants for the 1997 fiscal year.
We plan to give a slide presentation at the Annual Meeting highlighting the
Company's recent progress and our future plans. Upon adjournment of the meeting,
the directors and officers of the Company will be available to confer informally
with stockholders.
We hope that you will be able to attend the meeting. Whether or not you
plan to attend, please sign, date and return your proxy promptly in the postage
prepaid envelope provided.
Sincerely,
/s/ Charles A. Baker
CHARLES A. BAKER
Chairman, President and Chief
Executive Officer
<PAGE> 3
THE LIPOSOME COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 15, 1997
- --------------------------------------------------------------------------------
The Annual Meeting of Stockholders of The Liposome Company, Inc. (the
"Company") will be held at The Holiday Inn, 1053 Route #1, Princeton, New Jersey
08540, on May 15, 1997, at 10:15 a.m. for the following purposes:
(i) To elect nine Directors to serve during the ensuing year;
(ii) To ratify the appointment by the Board of Directors of Coopers &
Lybrand L.L.P. as the Company's independent accountants for the
fiscal year 1997; and
(iii) To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 28, 1997,
as the record date for determining the stockholders entitled to notice of, and
to vote at the Annual Meeting and any adjournment or postponement thereof.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR
NOT YOU INTEND TO BE PRESENT, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD IN THE POSTAGE PREPAID ENVELOPE ENCLOSED FOR YOUR
CONVENIENCE. STOCKHOLDERS CAN HELP THE COMPANY AVOID UNNECESSARY EXPENSE AND
DELAY BY PROMPTLY RETURNING THE ENCLOSED PROXY CARD. THE BUSINESS OF THE MEETING
CANNOT BE TRANSACTED UNLESS AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ARE
REPRESENTED AT THE MEETING.
By Order of the Board of Directors
/s/ Carol J. Gillespie
CAROL J. GILLESPIE
Secretary
Princeton, New Jersey
April 1, 1997
<PAGE> 4
THE LIPOSOME COMPANY, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1997
------------------------------
GENERAL INFORMATION
This Proxy Statement is being sent by the Board of Directors of The
Liposome Company, Inc. (the "Company") to solicit proxies for the ANNUAL MEETING
OF STOCKHOLDERS to be held on May 15, 1997.
Each proxy will be voted as specified by the stockholder. Any duly executed
proxy not specifying the contrary will be voted FOR (i) the nine Directors
nominated for election at the meeting, and (ii) the ratification of Coopers &
Lybrand L.L.P. as the Company's auditors for the fiscal year 1997. A stockholder
giving a proxy may revoke it by written notice to the Secretary of the Company
that is received at any time before it is voted. The address of the Company is
One Research Way, Princeton Forrestal Center, Princeton, New Jersey 08540.
At the close of business on March 28, 1997, the record date for the Annual
Meeting, there were outstanding and entitled to vote 36,219,081 shares of Common
Stock. Each share of Common Stock entitles the holder to one vote. Pursuant to
Delaware General Corporation Law, only votes cast "FOR" a matter constitute
affirmative votes. Votes "WITHHELD" or abstaining from voting on a particular
matter and broker non-votes are counted for purposes of determining the presence
or absence of a quorum for the transaction of business. Votes "WITHHELD" or
abstaining from voting on a particular matter, because they are not cast "FOR"
the particular proposal, will have the same effect as negative votes or votes
cast "AGAINST" a particular matter, but broker non-votes will have no effect on
any of the proposals.
The holders of a majority of the issued and outstanding stock of the
Company entitled to vote at the Annual Meeting, present in person or represented
by proxy, constitute a quorum. To be elected, a director must receive a
plurality of the votes of the issued and outstanding shares of Common Stock
present in person or represented by proxy at the Annual Meeting. Approval of
Proposal (ii) will require the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting.
Votes will be tabulated preliminarily by the Company's transfer agent, American
Stock Transfer & Trust Co. Inspectors of Election, appointed by the Board of
Directors, will finally count and tabulate the votes and determine and announce
the results.
A copy of the Annual Report of the Company, including financial statements
and a description of its operations for the fiscal year 1996, accompanies this
Proxy Statement. Such report is not incorporated herein by reference.
Mailed to Stockholders
on or about April 1, 1997
<PAGE> 5
PROPOSAL 1. ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
Nine Directors are to be elected at the Annual Meeting of Stockholders and
will serve until their successors are elected. All are currently serving as
Directors.
It is intended that proxies received will be voted FOR the election of the
nominees named below unless marked to the contrary. In the event any of these
persons is unable or unwilling to serve as a nominee, the proxies may be voted
for the balance of those nominees named and for substitute nominees designated
by the proxy holders or by the present Board of Directors to fill such vacancy,
or for the balance of those nominees named without nomination of a substitute.
Proxies cannot be voted for more than nine nominees. The Board of Directors
believes that each of the persons named will be able and willing to serve as a
nominee and, if elected, as a Director.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
--- -------------------------------------
<S> <C> <C>
Charles A. Baker................................. 64 Chairman of the Board, President,
Chief Executive Officer and Director
James G. Andress(1).............................. 58 Director
Morton Collins, PhD(1)........................... 61 Director
Stuart F. Feiner(2).............................. 48 Director
Robert F. Hendrickson(2)......................... 64 Director
Professor Bengt Samuelsson, MD................... 63 Director
Joseph T. Stewart, Jr.(1)........................ 67 Director
Gerald Weissmann, MD............................. 66 Director
Horst Witzel, Dr.-Ing(2)......................... 69 Director
</TABLE>
- ------------
(1) Audit and Finance Committee member
(2) Compensation Committee member
NOMINEES FOR ELECTION AS DIRECTORS
- --------------------------------------------------------------------------------
Charles A. Baker was named Chairman of the Board, President and Chief
Executive Officer of the Company in December 1989. Just prior to joining the
Company he was a business development and licensing advisor to several small
biotechnology companies. Mr. Baker has served in several capacities in senior
management at Squibb Corporation (now Bristol-Myers Squibb Company), including
the positions of Group Vice President, Squibb Corporation and President, Squibb
International. He has also held various executive positions at Abbott
Laboratories and Pfizer Inc. Mr. Baker received an undergraduate degree from
Swarthmore College and a J.D. degree from Columbia University. Mr. Baker also
serves as a director of Regeneron Pharmaceuticals, Inc., a biotechnology
company. He is a member of the Science Advisory Council of Rutgers University
and a member of the Council of Visitors of the Marine Biological Laboratory,
Woods Hole, Massachusetts, a not-for-profit research organization.
- --------------------------------------------------------------------------------
James G. Andress has been a director since his appointment in September
1990. Since November 1996, Mr. Andress has been the President and Chief
Executive Officer of Warner Chilcott, plc, a privately-held pharmaceutical
company. From 1989 until 1995, he served as President, Co-Chief Executive
Officer and Director of Information Resources, Inc., a decision support software
and consumer packaged goods research company. Mr. Andress is the former Chairman
of the Pharmaceuticals Group, Beecham Group, plc and the former President and
Chief Operating Officer of Sterling Drug, Inc. Mr. Andress is a director of XOMA
Corp. and NeoRx, Inc., which are biotechnology companies. He also serves as a
director of Sepracor, Inc., a separations technology company; of O.P.T.I.O.N.
Care, Inc., a home health care company; of Favorite Brands, a consumer packaged
goods company; of Allstate Insurance Company; of Source International, Inc., a
prescription tracking service company; and of Information Resources, Inc.
2
<PAGE> 6
- --------------------------------------------------------------------------------
Morton Collins, Ph.D., has been a director since November 1982. Dr. Collins
has been a General Partner of DSV Partners III, a venture capital limited
partnership, since 1981 and a General Partner of DSV Management, Ltd., since
1982. Since 1985, DSV Management, Ltd. has been a General Partner of DSV
Partners IV, a venture capital limited partnership. Dr. Collins served as
interim Chairman of the Board and Chief Executive Officer of the Company from
June to December, 1989. He is also a director of Tandem Computers Inc., a
computer company, of ThermoTrex Corporation, a laser and electro-optics company,
and of Kopin Corporation, a manufacturing company.
- --------------------------------------------------------------------------------
Stuart F. Feiner has been a director since February 1984. Mr. Feiner has
been Executive Vice President, General Counsel and Secretary of Inco Limited, an
international mining and metals company, since August 1993 and served as Vice
President, General Counsel and Secretary of that company from April 1992 to
August 1994. Mr. Feiner was President of Inco Venture Capital Management, the
venture capital unit of Inco Limited, from January 1984 to April 1992. Mr.
Feiner is also a director of ImmunoGen, Inc., a biotechnology company.
- --------------------------------------------------------------------------------
Robert F. Hendrickson has been a director of the Company since 1992. Mr.
Hendrickson was Senior Vice President, Manufacturing and Technology for Merck &
Co., Inc., a pharmaceutical company, from 1985 to 1990. Since 1990, Mr.
Hendrickson has been a manufacturing consultant with a number of biotechnology
and pharmaceutical companies among his clients. He is currently Chairman of the
Board of Envirogen Inc., an environmental biotechnology company, a director of
Cytogen, Inc. and Unigene Laboratories, Inc., both of which are biotechnology
companies, and a trustee of the Carrier Foundation.
- --------------------------------------------------------------------------------
Professor Bengt Samuelsson, M.D., has been a director of the Company since
January 1994. Dr. Samuelsson is Professor of Physiological Chemistry of the
Karolinska Institutet in Stockholm, Sweden, a position that he has held since
1972. He was one of three recipients who shared the 1982 Nobel Prize in medicine
for their work on prostaglandins, specifically the discovery of prostanoids and
leukotrienes. In addition to the Nobel Prize, he has received a number of other
prestigious awards. He has been a member of the Company's Cell Adhesion
Scientific Advisory Board since May, 1991. Dr. Samuelsson is Chairman of the
Nobel Foundation, a member of the Board of Directors of Pharmacia & Upjohn, a
pharmaceutical company, and a member of the Board of Directors of Handelsbanken,
Stockholm, Sweden, a Swedish bank.
- --------------------------------------------------------------------------------
Joseph T. Stewart, Jr., has been a director of the Company since January
1995. Until 1989, he was associated for twenty-two years with Squibb
Corporation, where he held several positions of increasing responsibility,
including most recently Senior Vice President, Corporate Affairs and previously
Vice President, Finance and Planning. He also served as a member of the Board of
Directors of Squibb Corporation. He is currently an executive consultant to
Johnson & Johnson, a director of General American Investors Company, Inc., and a
trustee of the Foundation of the University of Medicine and Dentistry of New
Jersey. He is also a trustee of the New School for Social Research and is a
member of the Council of Visitors of the Marine Biological Laboratory, Woods
Hole, Massachusetts, a not-for-profit research organization.
- --------------------------------------------------------------------------------
Gerald Weissmann, M.D., has been a director of the Company since 1981. Dr.
Weissmann has been a Professor of Medicine at the Division of Rheumatology of
the Department of Medicine at New York University Medical Center since 1973. Dr.
Weissmann is Chairman of the Company's Cell Adhesion Scientific Advisory Board
and the Company's Cancer Scientific Advisory Board. He is also on the Board of
Trustees of the Marine Biological Laboratory, Woods Hole, Massachusetts, a
not-for-profit research organization.
- --------------------------------------------------------------------------------
Dr. Horst Witzel has been a director of the Company since July 1990. Dr.
Witzel is the former Chairman of the Board of Executive Directors of Schering
AG, Berlin, Germany. After his retirement in 1989 he served as a member of the
Supervisory Board of Schering AG until May 1994. Dr. Witzel is a member of the
3
<PAGE> 7
Supervisory Board of Brau und Brunnen AG, Berlin and Dortmund, Germany. He is a
director of Cephalon, Inc., a neuroscience company, and Aastrom Biosciences,
Inc., a cellular therapy medical products company.
STOCK OWNERSHIP
- --------------------------------------------------------------------------------
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 28, 1997, by (i) each
director and Named Executive Officer of the Company (as defined under the
section entitled "Executive Compensation"), (ii) each stockholder known by the
Company to own more than five percent of the outstanding Common Stock, and (iii)
all directors and executive officers, including the Named Executive Officers, as
a group. Except as otherwise indicated, the Company believes that the beneficial
owners of the securities listed below, based on information furnished by such
owners, have sole investment and voting power with respect to the shares of
Common Stock shown as being beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
- -------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Ardsley Advisory Partners (1)................................. 4,595,500 12.7
646 Steamboat Rd.
Greenwich, CT 06830
Lynch & Mayer, Inc. (1)....................................... 2,137,565 5.9
520 Madison Avenue
New York, NY 10022
Charles A. Baker (2)(3)(4)(6)................................. 577,838 1.6
James G. Andress (2).......................................... 50,000 *
Morton Collins, PhD (2)....................................... 50,000 *
Stuart F. Feiner (2).......................................... 20,000 *
Robert F. Hendrickson (2)..................................... 40,000 *
Professor Bengt Samuelsson, MD (2)............................ 32,666 *
Joseph T. Stewart, Jr. (2).................................... 9,000 *
Gerald Weissmann, MD (2)(5)................................... 47,457 *
Horst Witzel, Dr-Ing (2)...................................... 75,000 *
James A. Boyle, MD, PhD (2)(4)(6)............................. 88,398 *
Ralph del Campo (2)(4)(6)..................................... 67,457 *
Andrew S. Janoff, PhD (2)(4)(6)............................... 27,502 *
Donald D. Yarson (2)(4)(6).................................... 21,033 *
All Directors and Executive Officers as a group
(18 persons)(2)(4)(6)....................................... 1,351,461 3.7
</TABLE>
* Less than 1.0 percent
- ---------------
(1) Based on information filed with the SEC on Schedule 13G by the firms
indicated for the year ended December 31, 1996. Mr. Philip J. Hempleman is a
managing partner of Ardsley Advisory Partners and may be deemed to be the
beneficial owner of the shares held by it.
(2) Includes shares of Common Stock issuable upon the exercise of outstanding
options granted under the Company's stock option plans which are exercisable
within 60 days after February 28, 1997, as follows: Mr. Baker, 371,048; Mr.
Andress, 50,000; Dr. Collins, 25,000; Mr. Feiner, 20,000; Mr. Hendrickson,
27,000; Dr. Samuelsson, 32,666; Mr. Stewart, 7,000; Dr. Weissmann, 11,667;
Dr. Witzel, 75,000; Dr. Boyle, 76,900; Mr. del Campo, 63,500; Dr. Janoff,
23,018; Mr. Yarson, 17,500; and all officers and directors as a group (18
persons), 1,026,781.
(3) Includes 201,000 shares owned by the Baker Family Limited Partnership, of
which Mr. Baker is the General Partner.
(4) Includes shares held by Chemical Bank as trustee of the Company's 401(k)
plan as of December 31, 1996, in the following amounts: Mr. Baker, 2,512;
Dr. Boyle, 465; Mr. del Campo, 1,311; Dr. Janoff, 2,171; Mr. Yarson, 674;
and all officers and directors as a group (18 persons), 12,254.
(5) Dr. Gerald Weissmann, a director of the Company, disclaims beneficial
ownership of 5,790 shares held in trust for the estate of his father-in-law,
for which Dr. Weissmann's wife serves as trustee.
(6) Includes shares of restricted stock granted on January 25, 1996 and January
23, 1997, under The Liposome Company 1996 Equity Incentive Plan, in the
following amounts: Mr. Baker, 3,278; Dr. Boyle, 3,533; Mr. del Campo, 2,646;
Dr. Janoff, 2,253; Mr. Yarson, 2,859; all directors and officers as a group
(18 persons), 23,576.
4
<PAGE> 8
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The following table shows, for the fiscal years ended December 29, 1996,
and December 31, 1995 and 1994, the annual and long-term compensation paid by
the Company to the Chief Executive Officer, and the four other most highly
compensated individuals who served as officers (as that term is defined in Rule
16a-2(f) adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of the Company as of December 29, 1996 (these individuals,
together with the Chief Executive Officer, are sometimes referred to as the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL ---------------------------
COMPENSATION RESTRICTED SECURITIES
----------------- STOCK UNDERLYING ALL OTHER
SALARY BONUS(1) AWARD(S)(2) STOCK OPTIONS COMPENSATION(3)
NAME AND PRINICPAL POSITION YEAR $ $ $ (NO. OF SHARES) $
- ------------------------------- ----- -------- ------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Baker 1996 $355,943 $75,000 $75,000 60,000 $ 9,490
Chairman of the Board, President 1995 321,847 90,000 -- 70,000 4,500
and Chief Executive Officer 1994 295,000 65,000 -- 40,000 3,810
James A. Boyle, MD, PhD(4) 1996 241,714 50,000 50,000 13,500 9,490
Senior Vice President, Medical 1995 225,394 30,000 29,993 22,500 35,000
and Regulatory Affairs 1994 97,689 -- -- 181,000 --
Ralph del Campo(5) 1996 183,796 40,000 40,000 13,500 9,490
Vice President, Manufacturing 1995 172,745 20,000 19,869 17,500 4,500
Operations 1994 132,635 -- -- 105,000 3,616
Andrew S. Janoff, PhD 1996 172,300 40,000 40,000 11,500 9,490
Vice President, 1995 147,416 11,250 11,250 13,000 4,422
Research 1994 140,400 -- -- 7,500 4,212
Donald D. Yarson(6) 1996 139,330 65,000 50,000 19,000 8,634
Vice President, Marketing 1995 121,829 15,000 15,000 57,500 3,655
and Sales
</TABLE>
- ---------------
(1) Bonuses, all of which have been paid, are shown in the year earned.
(2) All restricted stock grants were made on January 25, 1996 and January 23,
1997 under The Liposome Company 1996 Equity Incentive Plan. The number of
shares awarded to the Named Executive Officers in 1996 (and their market
value as of December 29, 1996) were: Dr. Boyle, 1,348 ($26,286); Mr. del
Campo, 898 ($17,511); Dr. Janoff, 505 ($9,848); and Mr. Yarson, 674
($13,143). The number of shares awarded in 1997 were: Mr. Baker, 3,278; Dr.
Boyle, 2,185; Mr. del Campo, 1,748; Dr. Janoff, 1,748; and Mr. Yarson,
2,185. For further information regarding restricted stock awards, see the
"Report of the Compensation Committee on Executive Compensation."
(3) All other compensation represents amounts credited as Company matching
contributions under the Company's 401(k) stock match (which began in the
third quarter of 1991). In the case of Dr. Boyle, the amount reported as
"all other compensation" for 1995 consists entirely of a payment made at the
end of his first year of employment pursuant to an agreement entered into
when he was hired.
(4) Dr. Boyle commenced employment with the Company on August 8, 1994.
(5) Mr. del Campo commenced employment with the Company on March 15, 1994.
(6) Mr. Yarson commenced employment with the Company on February 1, 1995.
5
<PAGE> 9
EMPLOYMENT AGREEMENT
- --------------------------------------------------------------------------------
The Company entered into an employment agreement with Mr. Baker which began
in December 1989 and was renewed in 1995. The renewed agreement terminates on
May 31, 1998, and may be renewed thereafter for one or more additional terms of
one year. The terms of the agreement relating to compensation are discussed in
the "Report of the Compensation Committee on Executive Compensation." Under the
agreement, Mr. Baker has agreed that he will not during his employment period
and for a period of two years after the termination of his employment, without
the prior approval of the Company's Board of Directors, engage in any business
involved in the research, development, manufacture or sale of lipids or
liposomes or products or services which use natural or artificial lipids or
liposomes to encapsulate, enhance or deliver any product. If Mr. Baker should be
dismissed except for cause or should choose to resign from his position with the
Company during the first six months following the effective date of a change of
control, Mr. Baker would be entitled to receive his then current monthly base
salary for a 12-month period from such effective date and for up to an
additional 12-month period if he does not obtain another full-time position. In
addition, all stock options granted to Mr. Baker which would have vested during
the remainder of his employment term would automatically vest and would remain
exercisable for a period of 24 months following the termination of his
employment. A change of control is deemed to occur if (i) the Company is not the
surviving entity following a merger or consolidation; (ii) a person acquires,
directly or indirectly, securities of the Company representing 35% or more of
the voting power of all then outstanding securities of the Company having the
right to elect the Board of Directors; or (iii) the individuals who constitute
the Board of Directors of the Company at the time of the agreement or
individuals who are subsequently elected to the Board of Directors with the
approval of the incumbent Board cease to constitute a majority of the members of
such Board.
OPTION GRANTS
- --------------------------------------------------------------------------------
The following table presents stock options granted for the period from
January 1, 1996, through December 29, 1996 to the Named Executive Officers. All
grants were made under The Liposome Company 1996 Equity Compensation Plan.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES IN PRICE OPTION TERM(2)
OPTIONS FISCAL ($ PER EXPIRATION ----------------------
NAME GRANTED(1)(#) YEAR(%) SHARE) DATE 5%($) 10%($)
- -------------------------------------- ------------ ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Baker........... 60,000 6.0 $ 16.8750 12/01/06 $635,874 $1,610,923
James A. Boyle, MD, PhD.... 13,500 1.4 17.0000 11/21/06 144,331 365,764
Ralph del Campo............ 13,500 1.4 17.0000 11/21/06 144,331 365,764
Andrew S. Janoff, PhD...... 11,500 1.2 17.0000 11/21/06 122,949 311,577
Donald D. Yarson........... 19,000 1.9 17.0000 11/21/06 203,133 514,779
</TABLE>
- ---------------
(1) All options granted expire ten years from the date of grant and become
exercisable ratably over five years beginning approximately one year from
the date of grant.
(2) The percentage rates of increase shown are assumed rates established by the
U.S. Securities and Exchange Commission for purposes of uniform compensation
reporting. Accordingly, they do not constitute predictions or estimates by
the Company of the future price appreciation of its Common Stock or of the
potential realizable value of the options referred to in the table. These
"potential realizable values" are not discounted to present value, and the
present value of these assumed potential realizable values would be less
than the amounts indicated.
6
<PAGE> 10
OPTION EXERCISES AND FISCAL YEAR-END VALUES
- --------------------------------------------------------------------------------
The following table summarizes stock options exercised by the Named
Executive Officers in 1996, and the unexercised stock options and the fiscal
year-end values of all outstanding options held by the Named Executive Officers
as of December 29, 1996.
OPTION EXERCISES IN 1996 AND DECEMBER 29, 1996 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
1996 OPTION EXERCISES OPTIONS AT IN-THE-MONEY OPTIONS AT
---------------------- DECEMBER 29, 1996 DECEMBER 29, 1996(1)
SHARES VALUE ------------------------- -----------------------
ACQUIRED REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME ON EXERCISE $ (#) (#) (#) (#)
- ---------------------------------------- --------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles A. Baker............. 150,000 $2,566,250 371,048 158,952 $5,651,044 $ 948,331
James A. Boyle, MD, PhD...... -- -- 76,900 140,100 1,042,113 1,665,825
Ralph del Campo.............. -- -- 45,500 90,500 540,438 898,000
Andrew S. Janoff, PhD........ 57,336 1,004,064 18,018 47,236 159,742 346,460
Donald D. Yarson............. 4,000 42,000 7,500 65,000 54,188 384,250
</TABLE>
- ---------------
(1) Value of unexercised in-the-money options is equal to the fair market value
of $19.50 per share of common stock, the closing price on the last trading
day prior to December 29, 1996, as quoted by the Nasdaq National Market,
less the exercise price.
(2) "Value realized" does not represent actual cash received in the case of
100,000 shares that were exercised and held by Mr. Baker or in the case of
2,000 shares that were exercised by Dr. Janoff and transferred to his minor
daughters, but reflects instead the difference between the exercise price
and the closing price on the date of exercise. In all other cases, "value
realized" is the difference between the exercise price and the sale price.
7
<PAGE> 11
COMMITTEES OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
The Board of Directors has two standing committees: the Audit and Finance
Committee and the Compensation Committee. The Company has no standing nominating
committee, and the Board of Directors as a whole functions as such a committee.
Stockholders desiring to submit recommendations for nominees to the Board of
Directors should address their recommendations in writing to the Chairman of the
Board.
- --------------------------------------------------------------------------------
The Audit and Finance Committee consists of Mr. James G. Andress, Dr.
Morton Collins and Mr. Joseph Stewart. This committee provides advice and
assistance to the Company regarding accounting, auditing and financial
reporting. The Audit and Finance Committee also recommends a firm of certified
public accountants, whose duty it is to audit the books and accounts of the
Company for the fiscal year for which they were appointed, and monitors the
effectiveness of the audit effort and the Company's financial and accounting
organization and financial reporting. The Audit and Finance Committee held 6
meetings during the fiscal year ended December 29, 1996. No member of the Audit
Committee is an officer or employee of the Company.
- --------------------------------------------------------------------------------
The Compensation Committee consists of Mr. Stuart F. Feiner, Mr. Robert F.
Hendrickson and Dr. Horst Witzel. Its functions are to review and approve
salaries and other matters relating to compensation of all officers and
employees of the Company above a specified salary level, to review and make
recommendations to the Board of Directors for compensation and benefit plans and
practices, and to administer certain benefit plans of the Company. The
Compensation Committee also reviews and approves grants of options to employees
and consultants who are not also Directors of the Company. Option grants to
persons who are Directors of the Company are reviewed and approved by the Board
of Directors. The Compensation Committee held 9 meetings during the fiscal year
ended December 29, 1996. No member of the Compensation Committee is an officer
or employee of the Company.
- --------------------------------------------------------------------------------
The Company's Board of Directors held 8 meetings during the fiscal year
ended December 29, 1996. No Director attended fewer than 75 percent of the
aggregate number of meetings of the Board of Directors or of Committees on which
he served.
- --------------------------------------------------------------------------------
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
In accordance with the rules of the Securities and Exchange Commission, the
Compensation Committee of the Board of Directors (the "Committee") offers this
report regarding compensation policies for executive officers and the Chief
Executive Officer of the Company.
COMPENSATION POLICIES AND COMPONENTS OF COMPENSATION
- --------------------------------------------------------------------------------
The Committee recognizes that attracting and retaining top executive talent
is essential to the Company's continued growth. It also feels that providing
appropriate incentives to motivate management personnel to achieve the Company's
goals is the best way to encourage the progress needed to meet these goals. The
Committee therefore exercises its function of overseeing the Company's executive
compensation and benefits programs and administering the Company's equity-based
incentive plans with the objective of achieving an appropriate balance of cash
compensation, stock options, and bonuses. To do so, it reviews each executive
officer's compensation package annually based on the executive's performance and
with reference to the compensation paid by similar companies.
In March 1996, the Committee approved the 1996 Management Incentive Plan
("1996 MIP"), which established certain financial as well as research and
product development goals to be met during the year. During 1996, the goals
established by the Committee were met and exceeded, as the Company achieved
greater than expected revenue growth, due primarily to successful U.S. sales of
its lead commercial product, ABELCET(R) (Amphotericin B Lipid Complex
Injection). In addition to obtaining a broader U.S. indication
8
<PAGE> 12
for this product, the Company also received marketing approvals in a number of
countries during 1996. The Company completed the retrofitting of its
Indianapolis manufacturing facility and made significant progress in the Phase
III trial of VENTUS(TM) in acute respiratory distress syndrome. In recognition
of these achievements, the Board awarded year-end bonuses, paid partly in cash
and partly in restricted stock, to the senior executive group, based on each
individual's contribution to the Company's success. It also considered these
factors in approving stock option awards to the Named Executive Officers (as
defined under the section entitled "Executive Compensation"), as well as merit
salary increases.
BASE SALARY
- --------------------------------------------------------------------------------
In setting the base salary levels for each executive officer, the Committee
refers to a survey of biotechnology and biopharmaceutical companies (the "Peer
Group"), as well as other available information on the base salaries of
executive officers in Peer Group companies. The Hambrecht & Quist Healthcare
Sector Index, which is used in the Performance Graph on page 12, included 63
companies in 1996, 30 of which are in the Peer Group survey. Other factors
considered in establishing salaries include internal performance reviews, the
level of the executive's responsibilities and the value of the executive's job
in the marketplace, in combination with overall compensation recommendations
from management. To remain competitive, the Company's base salary ranges and
salaries generally fall within the broad mid-range of the Peer Group.
Quantitative factors, such as length of service and the Committee's review with
management of an individual's contribution toward the achievement of the
Company's overall annual strategic goals, are also taken into account in
approving specific base salaries.
BONUS AWARDS AND RESTRICTED STOCK
- --------------------------------------------------------------------------------
Starting in 1995, the Company has awarded bonuses to certain executive
officers under annual Management Incentive Plans, which include performance
goals approved by the Committee. The amount of these bonuses is determined by
the Committee depending upon whether the Company has met or exceeded these
goals. The Committee also retains the discretion to consider other criteria and
achievements in determining the range of any bonuses to be awarded. The 1996 MIP
was approved by the Committee in March 1996 and provided specific corporate
goals, as well as weighting for group and individual performance. For 1996, as
reflected in the "Summary Compensation Table" on page 5, the Company paid
year-end bonuses to executive officers, including the Named Executive Officers,
based on the Company's performance against its 1996 goals and each individual's
contribution to that performance. The Company's goals for 1996, which were also
considered in determining the Chairman and Chief Executive Officer's bonus,
included meeting or exceeding ABELCET(R) product sales levels, obtaining
marketing approvals for ABELCET(R) (approvals were received in 8 countries);
obtaining expanded U.S. labeling for ABELCET(R); making progress in the Phase
III clinical trial of VENTUS(TM); and completing the retrofit of the Company's
Indianapolis manufacturing facility. The bonuses paid to the executive officers
under the 1996 MIP, which were paid partly in cash and partly in restricted
common stock, averaged 38.5% of the recipient's year-end base salary. Mr. Yarson
received an additional cash award in recognition of his contribution to the
outstanding results achieved in U.S. sales growth of ABELCET(R).
Awards covering a total of 16,607 shares of restricted common stock were
granted to executive officers of the Company under the 1996 MIP. The granting of
restricted stock awards was authorized by the Company's 1996 Equity Incentive
Plan (the "1996 Plan"), which was approved by the stockholders in May 1996. The
shares of restricted stock are not transferable and are subject to forfeiture if
the executive leaves the Company except due to retirement or death before the
restrictions lapse. The restrictions will lapse as to one-third of the shares
granted on each of the first three anniversaries of the date of grant. The owner
of such restricted shares has the right to vote these shares, and is entitled to
receive any distributions made to holders of shares of Common Stock.
9
<PAGE> 13
STOCK OPTIONS
- --------------------------------------------------------------------------------
The Committee recognizes that the Company is in a highly competitive field,
and the success of the Company is very much dependent on its ability to attract
and retain top technical, marketing and management talent. The Company must
compete with over a thousand biotechnology firms, hundreds of universities and
many large, pharmaceutical firms to recruit top people. The Committee has
concluded that one of the critical ways to compete for key personnel is to offer
significant potential rewards based on the Company's success through the
issuance of stock options.
After adoption of the 1996 Plan in March 1996, the Committee granted no
further stock options under either the 1986 Employee Stock Option Plan or the
1986 Non-Qualified Stock Option Plan, though shares subject to options granted
previously under these plans will be issued as the options are exercised. All
stock options granted to the Named Executive Officers in 1996 were granted under
the 1996 Plan. Options granted under the 1996 Plan, as well as the discontinued
plans, are designed to attract and retain key employees and consultants. The
Company also has a separate stock option plan for non-employee directors, under
which options are granted according to a specified formula in order to attract
and retain highly qualified individuals to serve on the Company's Board of
Directors. As of December 29, 1996 the Company had outstanding grants covering
in total 4,352,523 shares under all of its stock option plans and had 3,845,271
shares available for future grants. Stock options are generally granted at the
fair market value of the Common Stock on the date of grant, and they lapse if
not exercised within ten years from the date of grant. Options granted to
employees typically vest ratably over a period of five years, and options
granted to non-employee directors vest ratably over a five-year period in the
case of the initial grant, and over a one-year period for subsequent annual
grants.
The 1996 Plan is administered by the Committee, which has the authority to
determine the grantees, the exercise price, the number of shares subject to each
option, the time or times during which all or a portion of each option may be
exercised, and the other provisions of each option. In determining the number of
options to be granted to executive officers, the Committee considers a number of
factors, including the Company's performance against annual goals, each
officer's level of job responsibility, the prospective contributions of
individuals to the success of the Company, and the number of options awarded to
executives in comparable positions by companies in the Peer Group. Generally,
the Company's grants are in the mid-range of the Peer Group. The stock options
granted to the Named Executive Officers in 1996 were generally less than in the
prior year because, as the Company begins generating product revenues, the
Committee feels that it is appropriate to place greater emphasis on cash bonuses
tied to the achievement of specific goals and objectives and similar
performance-based incentives. In granting stock options in 1996, the Committee
generally did not consider the overall number and value of options then held by
individuals who were granted options. The Company does not currently have
specific target ownership levels for equity holding in the Company by executive
officers and other key employees, although increasing share ownership by
executive officers is an additional advantage of stock options and restricted
stock over some other forms of incentive compensation.
CHIEF EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------
The Committee determines Mr. Baker's salary and stock options based on an
annual review conducted each November. When Mr. Baker joined the Company in
December 1989, the Company entered into an employment agreement with him, which
was renewed on June 1, 1995. The agreement provides that Mr. Baker will receive
a designated annual base salary, which may be increased from time to time by the
Committee. During 1996, Mr. Baker's base salary was $350,000, which represented
an increase of $15,000 over his 1995 base salary. This increase reflected a
review of salary data for chief executive officers of various companies in the
Peer Group and was in recognition of Mr. Baker's contribution to the Company's
success in commercializing ABELCET(R), advancing the Company's other development
programs and improving its financial position in 1996.
Mr. Baker's employment agreement also provides that, upon the achievement
of certain objectives to be set by the Committee annually, he is entitled to
receive a cash bonus. In prior years, the amount of this bonus was determined in
November, but for 1996, Mr. Baker's bonus, like the bonuses paid to other
executive
10
<PAGE> 14
officers, was determined under the 1996 MIP after the end of the year. The 1996
objectives were the same as those discussed under "Bonus Awards and Restricted
Stock" above. Based upon the achievement of these objectives, among others, the
Committee awarded Mr. Baker his full target bonus of $75,000 for the 1996 fiscal
year, together with a grant of restricted stock having a market value of $75,000
as of January 23, 1997. The restrictions applicable to Mr. Baker's restricted
stock award are identical to those described above for all other restricted
stock awards made under the 1996 MIP.
The Committee also granted a stock option covering 60,000 shares of Common
Stock to Mr. Baker during 1996, which vests in five equal annual installments
and has an exercise price equal to the fair market value of the Common Stock on
the date of grant. Because of the Committee's reduced emphasis on stock option
awards, and in view of the grant to Mr. Baker of 3,278 shares of restricted
stock, his 1996 stock option award was not as large as the award made in the
prior year. This was also due partly to the fact that the 1995 award was
increased based on the early US marketing approval of ABELCET(R). In addition,
Mr. Baker is entitled to receive the same standard benefits other Company
executives receive.
Other aspects of Mr. Baker's employment agreement are discussed in the
section of this Proxy Statement entitled "Employment Agreement."
DEDUCTIBILITY CAP ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section
162(m)"), disallows corporate deductibility for certain compensation paid in
excess of $1 million to the chief executive officer and the four other most
highly paid executive officers. "Performance-based compensation," as defined in
the tax law, is not subject to the deductibility limitation, provided certain
stockholder approval and other requirements are met. The Committee believes that
awards designated as "Section 162(m) Awards" and stock options granted under the
1996 Plan will qualify for this exemption. The Committee anticipates that
amounts paid as cash compensation will continue to be fully deductible because
the amounts are expected to be less than the $1 million threshold.
SUMMARY
- --------------------------------------------------------------------------------
In summary, the Compensation Committee believes that the Company's
compensation policies, and their application to compensation paid to executive
officers in 1996, appropriately take into account those factors characteristic
of the biotechnology/biopharmaceutical industry of which the Company is part and
provide adequate rewards and incentives, tied to performance, to help insure
that the Company's management team is among the best in the industry.
STUART F. FEINER
ROBERT F. HENDRICKSON
HORST WITZEL, DR.-ING
Members of the Compensation Committee
March 13, 1997
11
<PAGE> 15
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 Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Performance
Graph and the Report of the Compensation Committee on Executive Compensation
shall not be incorporated by reference into any such filings.
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The graph below summarizes the total cumulative return experienced by the
Company's stockholders from 1991 through 1996, compared to the Nasdaq Total
Return Index of U.S. Companies (the "Nasdaq U.S. Stock Index") and the Hambrecht
& Quist LLC Healthcare Sector Index (the "H & Q Healthcare Sector Index"). As
stated in prior proxy statements, the Company believes that the Nasdaq U.S.
Stock Index is an appropriate index to use as a broad based comparative measure
of the Company's performance, as it incorporates the stocks of many companies
whose size and stage of development are similar to those of the Company.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD 'THE LIPOSOME NASDAQ U.S. STOCK H & Q HEALTHCARE
(FISCAL YEAR COVERED) COMPANY, INC.' INDEX SECTOR INDEX
<S> <C> <C> <C>
1991 100 100 100
1992 83 116 86
1993 47 134 66
1994 59 131 67
1995 142 185 112
1996 141 227 115
</TABLE>
DIRECTORS' COMPENSATION
- --------------------------------------------------------------------------------
Directors who are not employees of the Company receive an annual retainer
of $1,000 per quarter. In addition, during 1996, such directors received $2,000
for each Board meeting attended in person, and $500 for each telephonic Board
meeting attended. A director who participates in a regular Board meeting by
telephone receives $1,000. No non-employee director receives any separate
compensation for serving on a committee of the Board of Directors.
Dr. Weissmann and Dr. Samuelsson are consultants to the Company. In the
fiscal year ended December 29, 1996, the Company paid $32,500 in fees to Dr.
Weissmann for his services as Chairman of the Company's Cell Adhesion Scientific
Advisory Board and Cancer Scientific Advisory Board, and $6,000 in fees to Dr.
Samuelsson for his services as a member of the Company's Cell Adhesion
Scientific Advisory Board.
The Company believes that it is very important that it be able to continue
to attract the highest caliber of persons to serve as non-employee directors. To
do so, the Company must be able adequately to compensate the directors for the
responsibility and risk they assume. Since the Company does not offer directors
the levels of cash compensation they would normally receive for a directorship
of a larger pharmaceutical or other industrial company, stock options offer an
appropriate way to partially compensate directors and allow them to share as
stockholders in the ultimate success of the Company. The 1991 Directors'
Nonqualified Stock Option Plan (the "Directors' Plan"), which was adopted by the
stockholders in 1992, constitutes a key element of the Company's long-term
program to attract and compensate non-employee directors.
12
<PAGE> 16
As amended in 1996, the Directors' Plan currently provides that options to
purchase 10,000 shares of Common Stock are automatically granted on July 1 of
each year from 1991 until 2001 to each non-employee director. These grants are
fully vested on the first anniversary of the date of grant. In addition, each
new director receives an initial grant of 10,000 shares, which vests in equal
installments over a five-year period.
As of February 28, 1997, there were eight non-employee directors
participating in the Directors' Plan. There were eight grants of options to
acquire an aggregate of 80,000 shares of the Company's Common Stock during
fiscal year 1996 under the Directors' Plan at an exercise price of $19.0625 per
share.
PROPOSAL 2. APPOINTMENT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
The Board of Directors of the Company proposes that its appointment of the
firm of Coopers & Lybrand L.L.P. as the Company's independent accountants for
the fiscal year ending December 28, 1997, be ratified by the stockholders. If
not otherwise specified, proxies will be voted in favor of the ratification of
the appointment. Representatives of Coopers & Lybrand L.L.P. are expected to be
present at the Company's Annual Meeting with the opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
- --------------------------------------------------------------------------------
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, directors and executive officers of the Company are required to file
reports with the Securities and Exchange Commission indicating their holdings of
and transactions in the Company's equity securities. To the Company's knowledge,
based solely on a review of the copies of such reports furnished to the Company
and written representations that no other reports were required, during the
fiscal year ended December 29, 1996, all current directors and executive
officers filed all required reports on a timely basis, but two late reports were
filed by Edward G. Silverman, a former executive officer of the Company.
EXPENSE OF SOLICITATION
- --------------------------------------------------------------------------------
The Company expects to solicit proxies by mail and by telephone, and it has
retained Corporate Investor Communications to provide proxy solicitation
services, at a cost of approximately $4,000. In addition, directors, officers
and regular employees of the Company may also solicit in person, by telephone or
telegram. All expenses in connection with the solicitation of proxies will be
borne by the Company. Arrangements will be made by the Company for the
forwarding, at the Company's expense, of soliciting materials by brokers,
nominees, fiduciaries and other custodians to their principals.
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
To be considered for presentation to the Annual Meeting of Stockholders to
be held in 1998, a stockholder proposal must be received by Carol J. Gillespie,
Vice President, General Counsel and Secretary, The Liposome Company, Inc., One
Research Way, Princeton Forrestal Center, Princeton, New Jersey 08540, not later
than December 2, 1997.
13
<PAGE> 17
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors knows of no other business which will be presented
at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the persons voting the
proxies.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, YOUR VOTE IS
IMPORTANT. ACCORDINGLY, PLEASE COMPLETE, SIGN AND RETURN YOUR PROXY PROMPTLY.
14
<PAGE> 18
LIPOSOME LOGO
15
<PAGE> 19
THE LIPOSOME COMPANY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders, May 15, 1997
The Holiday Inn, 1053 Route #1, Princeton, New Jersey 08540
The undersigned hereby appoints Charles A. Baker and Carol J. Gillespie,
P and each of them, as proxies of the undersigned, each with full power to
act without the other and with full power of substitution, to vote all
R the shares of Common Stock of THE LIPOSOME COMPANY, INC. held in the
name of the undersigned at the close of business on March 28, 1997 at
O the Annual Meeting of Stockholders to be held on May 15, 1997, at 10:15
A.M. and at any adjournment thereof, with all the powers the undersigned
X would have if personally present. The undersigned hereby revokes any and
all proxies heretofore given with respect to such meeting.
Y
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE> 20
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS:
1) Election of Directors
/ / FOR all nominees listed below (except as marked to the contrary below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
Charles A. Baker, James G. Andress,
Morton Collins, Ph.D., Stuart F. Feiner,
Robert F. Hendrickson, Bengt Samuelsson, M.D.
Joseph T. Stewart, Gerald Weissmann, M.D.
Horst Witzel, Dr.-Ing
To withhold authority to vote for any individual nominee, write that
name on the line below.
_____________________________________________________________________
2) Ratification of the appointment by the Board of Directors of Coopers &
Lybrand L.L.P. as independent accounts for the 1997 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
3) In their discretion, upon such other matters as may properly come before the
meeting, all in accordance with the accompanying Notice and Proxy Statement,
receipt of which is acknowledged.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED THEREBY
WILL BE VOTED. IF A CHOICE IS SPECIFIED BY THE STOCKHOLDER, THE SHARES WILL BE
VOTED ACCORDINGLY. IF NOT OTHERWISE SPECIFIED, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
SIGNATURE(S)________________________________________ DATE_____________________
SIGNATURE(S)________________________________________ DATE_____________________
Please sign your name exactly as it appears hereon. In the case of joint
owners, each should sign. If signing in a representative capacity, please give
title.
