<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>
SENETEK PLC
- --------------------------------------------------------------------------------
(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:
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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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
SENETEK PLC
NOTICE OF ANNUAL MEETING
The Annual Meeting of the shareholders (the "Annual Meeting") of Senetek PLC
(the "Company") will be held at the St. Ermins Hotel, Caxton Street, London SW1H
OQW, England at 11:00 am on Friday, July 31, 1998 for the purpose of considering
and, if approved, passing the following Ordinary Resolutions.
ORDINARY BUSINESS:
1. To receive the Company's Accounts for the year ended December 31, 1997 and
the Reports of the Directors and Auditors;
2. To re-elect Dr G. Frentz as a Director;
3. To re-elect Mr U. Thieme as a Director;
4. To approve the re-appointment of Price Waterhouse as the Independent
Auditors of the Company, for the fiscal year ending December 31, 1998 and
to authorize the Directors to fix the remuneration of the Auditors;
These items are fully discussed in the following pages, which are made part of
this Notice. The Board of Directors of the Company has fixed the close of
business at Tuesday, March 31, 1998 as the record date for the determination of
shareholders entitled to notice, and to vote, at the Annual Meeting and any
adjournment or postponement thereof.
By Order of the Board of Directors
P.A. LOGAN
April 28, 1998 Secretary
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON OR BY PROXY.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND
RETURN THE ACCOMPANYING VOTING INSTRUCTION CARD. IF YOU ATTEND THE MEETING IN
PERSON, YOU MAY VOTE YOUR SHARES IN PERSON EVEN IF YOU HAVE ALREADY SIGNED AND
RETURNED YOUR PROXY VOTING CARD.
<PAGE> 3
SENETEK PLC
23 PALACE STREET, LONDON SW1E 5HW, ENGLAND
TEL: (171) 828 4800 FAX: (171) 828 8081
PROXY STATEMENT
1998 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the shareholders of Senetek PLC, a public
limited company registered in England ("Senetek" or "the Company") in connection
with the solicitation by the Board of Directors of the Company of Proxies to be
voted at the Annual Meeting of shareholders and at any and all adjournments or
postponements of such Meeting, to be held at 11:00am local time on Friday, July
31, 1998 at the St. Ermins Hotel, Caxton Street, London, SW1H OQW, England (the
"Annual Meeting"). The Company anticipates mailing this Proxy Statement to its
shareholders on or about Friday, May 29, 1998.
RECORD DATE AND VOTING
Only shareholders of record at the close of business on Tuesday, March 31, 1998
(the "record date") are entitled to notice of, and to vote at, the Annual
Meeting. At the close of business on that date, the Company had outstanding
53,228,471 Ordinary shares, nominal value 5p (the "Ordinary shares"), of which
51,877,340 were held in the name of The Bank of New York as depositary (the
"Depositary") which issues Company sponsored American Depositary Receipts
("ADRs") evidencing American Depositary Shares which, in turn, each represent
one Ordinary share.
Each registered holder of Ordinary shares present in person at the Annual
Meeting is entitled to one vote at the Annual Meeting. In the event a matter is
defeated by the vote of those present in person at the Annual Meeting, a poll (a
vote by share) may be demanded, and every holder present in person or by proxy
at the Annual Meeting shall, upon such poll, have one vote for each Ordinary
share held by such holder. In the event that the proxy voting card is executed
but does not indicate by marking a vote "FOR" or "AGAINST", the Board of
Directors shall, at its discretion, treat the vote as "FOR" the proposal as
described herein. Proxy voting cards not received by the Depositary by the
close of business on Friday, July 24, 1998, shall not be included for
calculation in the votes "FOR" or "AGAINST" the proposed Resolutions.
A Deposit Agreement exists between The Bank of New York and the holders of ADRs
pursuant to which holders of ADRs are entitled to instruct the Depositary as to
the exercise of voting rights pertaining to the Ordinary shares so represented.
The Depositary has agreed it will endeavor, insofar as practicable, to vote (in
person or by delivery to the Company of a proxy) the Ordinary shares registered
in its name in accordance with the instructions of the ADR holders as given by
means of the accompanying proxy voting card, which, as indicated above, should
be returned to the Depositary so that it is received by no later than the close
of business on Friday, July 24, 1998.
Any holder of ADRs giving instructions to the Depositary in the proxy voting
card accompanying this Proxy Statement also has the power to revoke such
instructions by delivery of notice to the Depositary at The Bank of New York,
101 Barclay Street, 22nd Floor West, New York, NY 10286 at any time so that the
Depositary receives, by no later than the close of business on Friday, July 24,
1998 duly executed instructions bearing a later date or time than the date or
time of the instructions being revoked.
No matters upon which a vote has to be taken, other than those set forth in the
Notice of Annual Meeting, may be brought before the Annual Meeting.
In addition to solicitation by mail, solicitation of instructions from holders
of ADRs may be made by Directors, officers, and other employees of the Company
by personal interview, telephone, telefax or telegraph without additional
remuneration therefor. Cost of the solicitation of proxies, including the
mailing of proxy materials, will be borne by the Company.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Company, the following table sets forth beneficial
ownership information (including information regarding ownership of the
Company's outstanding Ordinary shares, American Depositary Shares representing
Ordinary shares, and option and warrant entitlements) as of March 31, 1998 by:
(i) each Director, (ii) each executive officer named in the "Summary
Compensation Table" below, (iii) all Directors and executive officers as a
group, and (iv) each person who beneficially owns more than five percent. of
the Company's outstanding Ordinary shares, American Depositary Shares
represented by Ordinary shares, and option and warrant entitlements. Each
person has sole investment and voting power with respect to the shares
indicated, subject to applicable community property laws, except as may
otherwise be set forth in the footnotes to the table.
<TABLE>
<CAPTION>
Percentage of
Outstanding
Ordinary
Name & Address Number of Shares Shares (1)
<S> <C> <C>
Anthony J. Cataldo 1,179,100(2) 2.21
620 Airpark Road, Building F,
Napa, California 94588
Gerlof Homan 700,100,(3) 1.32
620 Airpark Road, Building F,
Napa, California 94588
Paul A. Logan 535,000(4) 1.01
23 Palace Street
London SW1E 5HW
Gary D. Frentz 159,727(5) *
620 Airpark Road, Building F,
Napa, California 94588
Steven Georgiev 50,000(6) *
66 Cherry Hill Drive
Beverly, Massachusetts 01915
Clifford D. Brune 700,100(7) 1.32
620 Airpark Road, Building F,
Napa, California 94588
Uwe Thieme NIL *
Untere Schildwache 2/3
Goslar D 38640
Germany
The American Heritage Fund Inc. 2,903,000 5.45
1370 Avenue of the Americas
New York, NY 10019
The Bank of New York, 101 Barclays Street 51,877,340(8) 97.46
22nd Floor West, New York, NY 10286
All Directors and Executive Officers 1,269,027(9) 2.38
as a group (7 persons)
</TABLE>
* Less than one per cent
(1) Assumes that the person has exercised, to the extent exercisable on or
before May 31, 1998 ("currently exercisable"), all options and warrants to
purchase Ordinary shares held by him and that no other person has
exercised any outstanding options.
(2) Includes options to purchase 1,100,000 Ordinary shares, of which 125,000
are currently vested and exercisable, 79,000 shares in ADR format, and 100
Ordinary shares.
<PAGE> 5
(3) Includes options to purchase 500,000 Ordinary shares, 350,000 of which
are currently vested and exercisable, 200,000 shares in ADR format, and
100 Ordinary shares.
(4) Includes options to purchase 535,000 Ordinary shares, of which 351,250
are currently vested and exercisable. Mr Logan may be deemed the
beneficial owner of 23,500 Ordinary shares owned by his wife, 5,000 of
which are held in ADR format; however, Mr Logan disclaims beneficial
ownership on the grounds that he has no voting control or investment power
over such shares.
(5) Includes options to purchase 105,000 Ordinary shares, of which 46,250
are currently vested and exercisable, and 54,727 shares in ADR format
(6) Includes option to purchase 50,000 Ordinary shares, of which 12,500 are
currently vested and exercisable.
(7) Represents options to purchase 700,000 Ordinary shares of which 50,000
are currently vested and exercisable, and 100 Ordinary shares.
(8) The Ordinary shares listed are held by The Bank of New York as depositary
for various holders of ADRs evidencing ownership of and The Bank of New
one Ordinary share American Depositary Shares, except as individually
identifiable from the above tabulation, pursuant to a Deposit Agreement
between York for ADRs of the Company. the Company, the holders of ADRs
evidencing American To the Company's Depositary Shares, knowledge, except
each representing for the individual disclosure in the above tabulation,
each holder individually beneficially owns less than 5% of the Company's
presently issued and outstanding Ordinary shares.
(9) Based on the amount of shares outstanding held by Directors and executive
officers as a group, including 935,000 shares for which they have the
right to acquire through the exercise of currently exercisable
options, together with their holdings of 333,727 ADRs and 300 Ordinary
shares.
PROPOSAL 1: FINANCIAL STATEMENTS
The Company's Annual Report for the fiscal year ended December 31, 1997
containing financial and other information pertaining to the Company is being
furnished to shareholders simultaneously with this Proxy Statement. Audited
financial statements of the Company for the 12 months ended December 31, 1997
and the Report of the Directors and Auditors contained in the Annual Report
(the "Report and Accounts") are incorporated herein by reference. Under UK
law, shareholders have to vote to "receive" such Report and Accounts at the
Annual Meeting of the Company.
ADOPTION OF PROPOSAL
Adoption of Proposal 1 requires the affirmative vote of a majority of the
holders present in person at the Meeting or, if a poll is taken, the holders of
a majority of the number of shares represented by proxy at the Meeting. The
Board of Directors recommends a vote "FOR" receiving the Company's Accounts and
the Reports of the Directors and Auditors.
PROPOSALS 2, AND 3: ELECTION OF DIRECTORS
The Company currently has five Directors. Mr Georgiev was elected to the Board
in February 1997 and Mr Thieme in April 1998.
The Articles of Association of the Company provide that one-third of the
Directors (not including those appointed since the last Annual Meeting), or if
their number is not three or a multiple of three, then the number nearest to
but not exceeding one-third, are subject to retirement (expiration of their
term of office) at each Annual Meeting based on the length of time in office as
<PAGE> 6
calculated from each Director's last election or appointment. As between two or
more Directors who have been in office an equal length of time, the Director to
retire shall, absent an agreement between them, be determined by means of a
lottery. Any Director who has been appointed since the last Annual Meeting is
also required to retire. A retiring Director is eligible for re-election. If
at the time of the Annual Meeting, the nominee is unable or declines to serve,
the person named in the Proxy will at the direction of the Board of Directors
either vote for such substitute nominee as the Board of Directors recommends or
vote to allow the vacancy created thereby to remain open until filled by the
Board.
Following representations from investors and their advisors to the effect that
it would be preferable to minimize the number of employee Directors on the
Board, Dr. G. Horman, who was appointed a Director of the Company on April 20,
1989, and Dr. R. Oakes, appointed a Director on October 16, 1995, both resigned
from the Board of Directors in April 1998. Such resignations have been
effected without any disagreement that could have required disclosure under
Item 5 of the SEC Form 8-K, and the Company has expressed its appreciation at
the co-operation of Dr. Homan and Dr. Oakes who will both continue to provide
their valuable services to the Company - but on a consultancy basis, thereby
preserving the important principle of manamgement continuity.
At the Annual Meeting, Dr G. Frentz retires by rotation and is nominated by the
Board for re-election. Mr Thieme having been appointed during the year
preceding the Annual Meeting is nominated by the Board for re-election at the
Annual Meeting.
ADOPTION OF PROPOSALS
Adoption of Proposals 2 and 3 requires the affirmative vote of a majority of
the holders present in person at the Meeting or, if a poll is taken, the
holders of a majority of the shares represented by proxy at the Meeting. The
Board of Directors recommends that the Shareholders vote "FOR" the re-election
of Dr Frentz and Mr Thieme to serve as Directors of the Company.
The following table indicates certain information regarding Dr Frentz and Mr
Thieme, as well as all other Directors.
<TABLE>
<CAPTION>
Year of last
Year first elected re-election as a
Name Position with Company a Director Director Age
<S> <C> <C> <C> <C>
Anthony Joseph Cataldo Chairman of the Board of 1996 1997 46
Directors and Chief Executive
Officer
Paul Anthony Logan Director and Company Secretary 1985 Not subject to 74
re-election
Gary David Frentz Director 1989 1996 54
Steven Georgiev Director 1997 1997 61
Uwe Thieme Director 1998 ------ 58
</TABLE>
BACKGROUND OF NOMINEE
GARY DAVID FRENTZ M.D., was appointed a Director of the Company in April 1989.
Since August 1991, he has been the Senior Associate Director for Hospital
Medical Affairs for Tulane University Medical Center and has been the Medical
Director of its Managed Care Programs since July 1988. He served as Chief of
Staff for the Tulane University Hospital between July 1988 and August 1991.
Since July 1988, he has been a Professor in the Department of Urology at the
Tulane University School of Medicine. Dr Frentz is currently involved with
several research programs at the Tulane University School of Medicine. He has
presented, or has been associated with, seventeen articles published in medical
journals and has made numerous presentations at national meetings in the field
of urology. Dr Frentz received his M.D. from the Tulane University School of
Medicine.
UWE THIEME was appointed a Director in April 1998. He qualified as a Doctor of
Medicine at the University of Gottingen in 1968 and became a Board-certified
Radiologist in 1975. He practices as a senior partner in a private Radiology
practice, and is a Board Member of the German Radiology Association, ("GRA")
and of the German Radiology Science Association, ("GRSA") and is a member of
the management advisory committee of GRSA's DM 5 billion Medical Pension Fund.
<PAGE> 7
He has until recently been both Deputy Mayor of the City of Goslar, and
Deputy Governor of the County of Goslar.
BACKGROUND OF DIRECTORS WHOSE TERMS ARE CONTINUING
ANTHONY JOSEPH CATALDO was appointed a Director in August 1996. He received a
BA from Ohio State University and a Masters Degree in Economics from Georgia
Technical Institute. During the 20 years prior to joining Senetek, Mr Cataldo
focused on the financing and management of emerging companies, particularly in
the technology and medical sectors. As Chairman and CEO of Management
Technologies, Inc., he was instrumental in raising over $50 million from
1990-1995 where revenues increased from $300,000 to over $20 million. As
financial consultant, he was associated with successful funding arrangements
for Palomar Medical Technologies Inc.
PAUL ANTHONY LOGAN has been Secretary since October 1983 and worked on the
Company's formation. He has been a Director of the Company since December
1985. He also served as the Company's principal financial and accounting
officer from February 1989 until October 1996. Mr Logan is a Chartered
Accountant and a former member of the London Stock Exchange in England. He has
many years of experience in finance and industry and the financial and legal
regulations affecting public stock issues, and is familiar with the compliance
procedures and practices relating to public companies.
STEVEN GEORGIEV was appointed a Director in February 1997. Since 1991, he has
acted as Chairman and Chief Executive Officer of Palomar Medical Technologies
Inc., based in Beverly, Massachusetts, a company specialising in the design,
manufacture and marketing of lasers for use in medical and cosmetic procedures,
and which also operates in the field of electronic circuitry for use in
industrial, military and medical devices, and in products for the personal
computer industry. Mr Georgiev is also presently Chairman of American Materials
& Technology Inc., and a director of Excel Technology Inc., a public company he
co-founded in 1972 which was later acquired by EG&G Inc., a NYSE company. He
has a Bachelor of Science in Engineering Physics from Cornell University and a
Master of Science in Management from the Massachusetts Institute of Technology
(Sloan Fellow).
COMPENSATION OF DIRECTORS
Directors do not receive salaries or cash fees for serving as Directors nor do
they receive cash compensation for serving on any committee. However, all
members of the Board of Directors who are not employees of the Company are
reimbursed for attendance and out-of-pocket expenses incurred in their capacity
as members of the Board of Directors.
Certain Directors have been retained from time to time to provide consulting
services to the Company in their areas of expertise. Dr Frentz had a two-year
consulting agreement with the Company at an annual rate of $36,000 which
expired on April 30, 1996. Dr Frentz is now to be remunerated at the rate of
$1,000 per day for attending Board Meetings and for providing such specialized
services relating in particular to the Company's MSD project, as the Board may
request from time to time. Following the submission of an Innovative New Drug
("IND") application to the Food and Drug Administration ("FDA") for the
Vasopotin product, Dr Frentz is due to be granted a further 25,000 options.
The Company operates stock options plans for employees, including Directors,
and for non-executive Directors and consultants to the Company, as referred to
under "Stock Option Plans", below.
BOARD MEETINGS
The Company's Board of Directors met 4 times in 1997. Dr Frentz and Mr
Georgiev attended 50% of the Meetings. Two of the executive members of the
Board met an additional 51 times to attend to certain ministerial items
including the review and approval of the grant of options and the allotment of
equity securities.
<PAGE> 8
BOARD COMMITTEES
During 1997, the Compensation Committee consisted of Dr Frentz and Mr Logan.
The Compensation Committee reviews and authorises salaries and other matters
relating to compensation including the grant of options for the principal
officers of the Company and its subsidiaries, subject subsequently to Board
approval.
The Audit Committee consisting of Dr Frentz and Mr Georgiev, being the two
non-executive members of the Board, was appointed in 1998. The duties of the
Audit Committee comprise inter alia, assessing the financial reporting process,
the Company's internal controls, and reviewing the independence of the
Company's public accountants, monitoring lines of communication between
directors, financial management, internal auditors, and the Company's
independent accountants.
EXECUTIVE OFFICERS
Mr Cataldo and Mr Logan are executive officers of the Company. On October 1,
1996 Mr Clifford D. Brune, 44, was appointed the Company's Chief Financial
Officer under a 2 year agreement, subsequently replaced by a fresh agreement
dated June 30, 1997 for a fixed period to December 1999. Subsequently, he was
appointed as the Company's Chief Operating Officer. Prior to joining Senetek
he was a business unit executive for the Computer Task Group of Buffalo, New
York, a publicly held professional information technology services company
where he was responsible for the development and marketing internationally of
an Australian financial services software start-up company, Huon Corp. From
1991 to 1993, Mr Brune served as Senior Vice-President - Business Development,
and Chief Financial Officer of Management Technologies Inc., an international
financial systems company, and was formerly employed in a senior position with
one of the major international accountancy firms. Mr Brune is a Certified
Public Accountant and received a Bachelor of Science degree in Accounting from
the University of South Carolina.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
Under the securities laws of the United States, the Company's Directors,
executive officers and any persons holding more than 10% of the equity
securities are required to report their ownership of equity securities and any
changes in their ownership, on a timely basis, to the SEC. Directors,
executive officers and greater than 5% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms that
they have filed. To the Company's knowledge, based solely on materials
provided to the Company, for the fiscal year ended December 31, 1997, all such
required reports were filed on a timely basis.
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
None.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the compensation
of the Chief Executive Officer, a Director, a former Director and an officer of
the Company whose total salary and bonus during the last three fiscal years
exceeded $100,000:
<PAGE> 9
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
Fiscal ANNUAL COMPENSATION AWARDS
Name and Principal Position Year Salary (1) Bonus Options (2)
$ $ $
<S> <C> <C> <C> <C>
Anthony J. Cataldo * 1997 250,000 -- 300,000
Chairman and
Chief Executive Officer
Gerlof Homan* 1995 236,258 100,000 --
Chief Scientific Advisor 1996 247,926 -- --
1997 206,352 -- 150,000
Paul A. Logan* 1995 146,182 30,000 50,000
Director and Company 1996 160,936 -- --
Secretary 1997 172,911 -- 150,000
Cliff Brune* 1997 181,250 -- 300,000
Chief Operating Officer
</TABLE>
* Dr Homan and Mr Logan are also Directors of Senetek Drug Delivery
Technology Inc ("SDDT"), a Delaware corporation and a wholly-owned
subsidiary of the Company. Mr Cataldo, Dr Homan and Mr Brune are also
Directors of Carme Cosmeceutical Sciences Inc. ("CCSI"), a Delaware
corporation and a wholly-owned subsidiary of the Company.
(1) The base salary includes cost of living adjustment for Dr Homan and Mr
Logan, which in Dr Homan's case provides for an increase on January 1 of
each year by the percentage by which the cost of living, as determined by
the US Labor Department, has increased over the previous year, and in Mr
Logan's case by the end year percentage increase in the UK Index of Retail
Prices published by the Central Statistical Office; neither of these
increases have been effected for 1998. In both cases such salaries may
also be supplemented by annual performance bonuses as determined by the
Board of Directors. No such bonuses were awarded in 1997.
(2) Options entitle the grantee to subscribe for Ordinary shares on the UK
register of stockholders. There is no market for the Company's Ordinary
shares in this format. Any subsequent conversion from Ordinary shares
into American Depositary Shares, evidenced by American Depositary
Receipts, entails the grantee paying UK Inland Revenue Reserve Stamp Duty
at 1.5% on the deemed market value or, in certain cases, on the exercise
price, of the shares so converted, and a present fee of either US$0.030
or US$0.015 per Ordinary share converted into an ADR, to The Bank of New
York, the US Depositary for such conversion.
EMPLOYMENT CONTRACTS
The Company has entered into employment agreements with Mr Cataldo, Dr Homan,
Mr Logan, and Mr Brune.
Mr Cataldo has an agreement effective from June 1, 1997 to December 31, 1999,
at an annual base salary of $250,000. Under the terms of this agreement, he was
granted 300,000 options
<PAGE> 10
exercisable into a similar number of Ordinary shares of the Company as to
100,000 options at $1.50 per share issued on December 31, 1997, 100,000 options
at $1.50 per share issuable on December 31, 1998 and 100,000 options at $1.50
per share issuable on December 31, 1999. In addition, under the terms of an
earlier agreement dated September 1996, he was granted 800,000 options
exercisable into a similar number of Ordinary shares.
Dr Homan has an agreement effective from June 1, 1997, to December 31, 1999 at
an annual base salary of $200,000. Under the terms of this agreement, he was
granted 150,000 options exercisable into a similar number of Ordinary shares of
the Company as to 50,000 options at $1.50 per share issued on December 31,
1997, 50,000 options at $1.50 per share issuable on December 31, 1998 and
50,000 options at $1.50 per share issuable on December 31, 1999.
Mr Logan has a two year agreement effective from September 1, 1995 to August
31, 1997, subsequently extended to September 30, 1998, at an annual base
salary of L.100,000 (the pound sterling exchange rate fluctuated from
approximately $1.58 to $1.71 during 1997), and a subsequent 3 year consultancy
agreement. Under the terms of the employment agreement, he was granted 150,000
options exercisable into a similar number of Ordinary shares of the Company as
to 50,000 options at $1.50 per share issued on December 31, 1997, 50,000
options at $1.50 per share issuable on December 31, 1998 and 50,000 options at
$1.50 per share issuable on December 31, 1999.
Mr Brune's employment agreement is from June 1, 1997 to December 1, 1999 and
provides an annual salary of $200,000, together with the grant of 300,000
options exercisable into a similar number of Ordinary shares of the Company as
to 100,000 options at $1.50 per share issued on December 31, 1997, 100,000
options at $1.50 per share issuable on December 31, 1998 and 100,000 options at
$1.50 per share issuable on December 31, 1999. In addition, under the terms of
an earlier agreement dated October 1996, he was granted 400,000 options
exercisable into a similar number of Ordinary shares.
The employment agreements for Mr Cataldo, Dr Homan, Mr Logan, and Mr Brune
provide that if the Company is not the surviving entity in any merger or other
reorganization, they shall be offered employment by the Company's successor for
the remainder of the term of their respective agreements.
STOCK OPTION PLANS
The Company has two stock option plans pursuant to which options to purchase
the Company's Ordinary shares may be granted. The first plan relates to the
grant of options to employees, including employee Directors, and officers of
the Company. The second plan relates to the grant of options to non-executive
Directors and consultants to the Company. In both cases, the exercise price of
these options may not be less than the fair market value of the American
Depositary Shares representing the Company's Ordinary shares twenty-one days
before the date of grant.
The following table sets forth information with respect to the options granted
in 1997 exercisable by two Directors, a former Director and an officer named
in the Summary Compensation Table.
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants in 1997 Option Term
<TABLE>
<CAPTION>
Number of Percentage of Total
Securities Options Granted
Underlying to Employees Exercise or Base
Name Options Granted in Fiscal Year Price Expiration Date 10%
<S> <C> <C> <C> <C> <C>
A.J. Cataldo 100,000 4 $1.50 12/30/2004 794,493
100,000 4 $1.50 12/30/2005 874,318
100,000 4 $1.50 12/30/2006 962,124
C.D. Brune 100,000 4 $1.50 12/30/2004 794,493
100,000 4 $1.50 12/30/2005 874,318
100,000 4 $1.50 12/30/2008 962,124
G. Homan 50,000 4 $1.50 12/30/2004 397,247
50,000 4 $1.50 12/30/2005 437,159
50,000 4 $1.50 12/30/2006 481,062
P.A. Logan 50,000 2 $1.50 12/30/2004 397,247
50,000 2 $1.50 12/30/2005 437,159
50,000 2 $1.50 12/30/2006 481,062
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
Value SECURITIES VALUE OF UNEXERCISED
Realized UNEXERCISED IN-THE-MONEY OPTIONS
Shares at OPTIONS AT FY-END AT FY-END(1)
acquired on Exercisable Exercisable/ Exercisable/
Name exercise Date Unexercisable Unexercisable
<S> <C> <C> <C> <C>
G. D. Frentz 50,000 $154,687 Exercisable 46,250 Exercisable $181,473
Unexercisable 58,750 Unexercisable $230,520
</TABLE>
(1) The value of the unexercised but exercisable options, and the
unexercisable options, is based on the closing bid price of the American
Depositary Receipts ("ADR's") of $4 29/32 per share on the Nasdaq system
on December 31, 1997, less the estimated conversion costs of the Ordinary
shares so acquired upon such exercise into ADR's.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION PRINCIPLES
The Company's compensation policy is administered by two Directors acting as
the CompensationCommittee and is designed to complement the Company's short and
long term business strategy for attracting and retaining key executives
critical to the Company's success.
<PAGE> 12
At its present stage of development, the Company's corporate performance cannot
be gauged nor can compensation be measured in terms of profitability as it has
focused on developing its products, obtaining the necessary approvals,
attracting sufficient equity finance for this purpose and endeavoring to
negotiate licensing agreements for the development and marketing of its
products.
Currently the Company and its two subsidiaries SDDT and CCSI have 44 employees,
38 in the United States (including one Director), and 6 in the United Kingdom
(including one Director). Given its personnel structure and the Company's
formative former stage of development, it had not, in the past, been
practicable for the Company to set-up a detailed and integrated compensation
philosophy for its executives, nor to specify levels of seniority, areas of
responsibility, performance criteria and profitability-related awards.
EXECUTIVE COMPENSATION
Typically, executives have been awarded fixed term employment agreements. In
the cases of Mr Cataldo, Dr. Homan, and Mr Brune for a fixed period to
December 31, 1999, and in the case of Mr Logan to September 30, 1998, at a
base salary subject in certain cases to an annual cost of living increase.
The compensation of executive officers, including the Chief Executive Officer,
has been determined by a consideration of the compensation paid to officers in
companies in a similar position to Senetek. In certain cases the agreements
provide for consideration by the Board of a bonus but there is otherwise no
provision for a review of compensation during the fixed term of the agreements.
No such bonuses or increases were granted in 1997.
Additionally, stock options entitling the grantee to purchase Ordinary shares
in the Company may be issuable at such times when the Board considers that
certain critical stages in the Company's product development or funding
requirements have been achieved.
EMPLOYEE OPTION PLAN
The Company approved the adoption of a Stock Option Plan for Employees and
Non-Executive Directors (the No. 1 Plan) and the No. 2 Plan respectively at a
Special Meeting of stockholders on December 20, 1985. At a subsequent meeting
of stockholders on December 16, 1992, the number of options that may be granted
under the No. 1 plan was increased from a figure representing the lesser of
800,000 options or 5 percent. of the outstanding shares to a maximum figure of
2,000,000. At the Annual Meeting of stockholders on May 23, 1997, the issuance
of 1,808,000 options that had been made under the No. 1 Plan was approved and
the total number of options available for issuance under the Plan was increased
to 6,000,000. Options under the No. 1 and No. 2 Plans may not be granted at
an exercise figure lower than the market price ruling for the Company's shares
21 days prior to the date of grant.
G.D. FRENTZ
P.A. LOGAN
Members of the Compensation Committee
April 28, 1998
<PAGE> 13
PERFORMANCE GRAPH
The following graph reflects a comparison of the total cumulative return of the
Company's Ordinary shares in ADR format with the cumulative total return of the
Nasdaq Health Services Stocks index; Nasdaq (US and Foreign Companies) Stock
Market index from December 31, 1991 through December 31, 1997. The comparisons
in the table are required by the Securities Exchange Commission and are not
intended to represent a forecast or to provide any indication of possible
future performance of the Company's shares.
RETURN PERFORMANCE FOR YEARS ENDED DECEMBER 31, 1992 TO DECEMBER 31, 1997
INCLUSIVE
(BASE YEAR DECEMBER 31, 1992)
COMPARISON OF 5 YEAR TOTAL RETURN BETWEEN SENETEK PLC,
NASDAQ HEALTH SERVICES STOCKS INDEX,
AND THE NASDAQ STOCK MARKETS (US AND FOREIGN COMPANIES) STOCK MARKET INDEX.
[GRAPH.1]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
YEAR 1992 1993 1994 1995 1996 1997
ALL 100.0 115.8 112.3 157.7 193.1 236.2
HEALTH 100.0 115.4 123.8 157.2 157.3 160.4
SENETEK 100.0 455.7 138.3 97.7 93.0 365.0
</TABLE>
<PAGE> 14
PROPOSAL 4: INDEPENDENT AUDITORS
The Company wishes to obtain from the shareholders their approval for the
re-appointment of Price Waterhouse as the Company's auditors for the fiscal
year 1998, and to authorize the Directors to fix their remuneration. Price
Waterhouse has acted as the Company's auditors since January 1991.
Representatives of Price Waterhouse are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they so desire, and
will be available to respond to questions which the Board deems appropriate.
If the reappointment of Price Waterhouse as the Company's auditors is not
approved by the shareholders, the adverse vote will be considered a
direction to the Board of Directors to select other independent accountants
to serve as the Company's auditors for the fiscal year 1998.
ADOPTION OF PROPOSAL
Adoption of Proposal 4 requires the affirmative vote of a majority of the
holders present in person at the Meeting or, if a poll is taken, the holders of
a majority of the shares represented by proxy at the Meeting. The Board of
Directors believes that the Resolution is in the best interests of the Company
and its shareholders and, accordingly, recommends a vote "FOR" the
re-appointment of Price Waterhouse as the Company's auditors for the fiscal
year 1998.
FINANCIAL STATEMENTS
As discussed in "Proposal 1: Financial Statements" above, the Company's Annual
Report to shareholders for the fiscal year ended December 31, 1997 containing
the audited consolidated balance sheet as of the end of the year and audited
consolidated statements of operations, and shareholders' equity and source and
application of funds for the fiscal year is being mailed with this Proxy
Statement to shareholders entitled to notice of the Annual Meeting and is
incorporated herein by reference.
SHAREHOLDERS' PROPOSALS
The Company will, in future Proxy Statements of the Board, include shareholder
proposals complying with the applicable rules of the US Securities and Exchange
Commission and any applicable US state laws. In order for a proposal by a
shareholder to be included in the Proxy Statement of the Board relating to the
Annual Meeting of shareholders to be held in 1999 that proposal must be
received in writing by the Secretary of the Company at the Company's registered
office no later than December 31, 1998.
ANNUAL REPORT ON FORM 10-K
SHAREHOLDERS MAY OBTAIN COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("THE SEC") WITHOUT CHARGE BY
WRITING TO THE COMPANY AT THE ABOVE MAILING ADDRESS DIRECTED TO THE ATTENTION
OF THE SECRETARY, OR TO THE COMPANY AT 620 AIRPARK ROAD, BUILDING F, NAPA,
CALIFORNIA 94558, USA
By Order of the Board of Directors
PAUL ANTHONY LOGAN
April 28, 1998 Secretary
<PAGE> 15
SENETEK PLC
NOTICE OF ANNUAL GENERAL MEETING
INSTRUCTIONS TO THE BANK OF NEW YORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO THE CLOSE OF BUSINESS ON JUNE 19, 1998)
The undersigned registered holder of American Depositary Receipts hereby
requests and instructs The Bank of New York, as Depositary, to endeavor, in so
far as practicable, to vote or cause to be voted the amount of shares or other
Deposited Securities represented by such Receipt of Senetek PLC registered in
the name of the undersigned on the books of the Depositary as of the close of
business March 31, 1998 at the Annual General Meeting of the Members of Senetek
PLC to be held in London, England, July 31, 1998 in respect of the resolutions
specified on the reverse.
Note:
Please direct the Depositary how it is to vote by placing an X in the
appropriate box opposite the resolution.
SENETEK PLC
P.O. BOX 11296
NEW YORK, N.Y. 10203-0296
(Continued and to be dated and signed on the reverse side.)
<PAGE> 16
ORDINARY RESOLUTIONS
1. To receive the Company's Accounts for the
year ended December 31, 1997 and the
Reports of the Directors and Auditors
FOR AGAINST
2. To re-elect Dr G. Frentz as a Director
FOR AGAINST
3. To re-elect Mr U. Thieme as a Director
FOR AGAINST
4. To approve the re-appointment of Price Waterhouse as
the Independent Auditors of Company, for the fiscal
year ending December 31, 1998 and to authorize the
Directors to fix the remuneration of the Auditors
FOR AGAINST
Change of Address Mark Here
The Voting Instruction must be signed by the person
in whose name the relevant Receipt is registered
on the books of the Depositary. In the case of a
Corporation, The Voting Instruction should be
executed by a duly authorized officer or Attorney.
Dated:_______________________________, 1998
____________________________________
Signature of Registered Holder
Votes MUST be indicated (x) in Black or Blue Ink.
Sign, Date and Return the Instructions Card
Promptly Using the Enclosed Envelope
