SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
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[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sect. 240.14a-11(c) or Sect. 240.14a-12
EMISPHERE TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed 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:
EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532
February 10, 1997
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Thursday, March 20, 1997 at 10:00 a.m. local time at
The Ramada Inn, 540 Saw Mill River Road, Elmsford, New York.
At this meeting, you will be asked to consider and vote upon the
election of directors of the Company, to approve and adopt amendments to the
Company's 1991 Stock Option Plan, 1995 Non-Qualified Stock Option Plan and
Stock Option Plan for Outside Directors and to ratify the Board of Directors'
selection of Coopers & Lybrand L.L.P. to serve as the Company's independent
accountants for the fiscal year ending July 31, 1997.
The Board of Directors appreciates and encourages stockholder
participation in the Company's affairs and cordially invites you to attend the
meeting in person. It is in any event important that your shares be
represented and we ask that you sign, date and mail the enclosed proxy in the
envelope provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
MICHAEL M. GOLDBERG, M.D.
Chairman of the Board of Directors
EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532
________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
________________________________
Hawthorne, New York
February 10, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
EMISPHERE TECHNOLOGIES, INC. (the "Company"), a Delaware corporation, will be
held at The Ramada Inn, 540 Saw Mill River Road, Elmsford, New York on
Thursday, March 20, 1997 at 10:00 a.m. local time, for the purposes of
considering and voting upon the following matters, as more fully described in
the attached Proxy Statement:
1. To elect seven directors to serve until the next annual meeting
of stockholders and until their respective successors are elected and
qualified;
2. To approve and adopt an amendment to the Company's 1991 Stock
Option Plan increasing the maximum number of shares of the Company's
Common Stock available for issuance thereunder by 200,000;
3. To approve and adopt an amendment to the Company's 1995 Non-
Qualified Stock Option Plan increasing the maximum number of shares of the
Company's Common Stock available for issuance thereunder by 100,000;
4. To approve and adopt an amendment to the Company's Stock Option
Plan for Outside Directors providing for additional option grants to
directors after five years of continuous service and reserving 170,000
additional shares of the Company's Common Stock for issuance thereunder;
5. To ratify the Board of Directors' selection of Coopers & Lybrand
L.L.P. to serve as the Company's independent accountants for the fiscal
year ending July 31, 1997; and
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only those stockholders of record at the close of business on
February 10, 1997 will be entitled to receive notice of, and vote at, said
meeting. A list of stockholders entitled to vote at the meeting is open to
examination by any stockholder at the principal offices of the Company, 15
Skyline Drive, Hawthorne, New York 10532.
All stockholders are cordially invited to attend the meeting in
person. In any event, please mark your votes, then date, sign and return the
accompanying form of proxy in the envelope enclosed for that purpose (to which
no postage need be affixed if mailed in the United States) whether or not you
expect to attend the meeting in person. Please note that the accompanying form
of proxy must be returned to record your vote. The proxy is revocable by you
at any time prior to its exercise. The prompt return of the proxy will be of
assistance in preparing for the meeting and your cooperation in this respect
will be appreciated.
By order of the Board of Directors
SAM J. MILSTEIN, PH.D.
Secretary
EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532
________________________________
PROXY STATEMENT
________________________________
This Proxy Statement is furnished to holders of the Common Stock,
$.01 par value per share (the "Common Stock"), of Emisphere Technologies, Inc.
(the "Company") in connection with the solicitation of proxies, in the
accompanying form, by the Board of Directors of the Company, for use at the
Annual Meeting of Stockholders to be held at The Ramada Inn, 540 Saw Mill River
Road, Elmsford, New York on Thursday, March 20, 1997, at 10:00 a.m. local time,
and at any and all adjournments thereof. Stockholders may revoke the authority
granted by their execution of proxies at any time prior to their use by filing
with the Secretary of the Company a written revocation or duly executed proxy
bearing a later date or by attending the meeting and voting in person.
Solicitation of proxies will be made chiefly through the mails, but additional
solicitation may be made by telephone or telegram by the officers or regular
employees of the Company. The Company may also enlist the aid of brokerage
houses or the Company's transfer agent in soliciting proxies. All solicitation
expenses, including costs of preparing, assembling and mailing proxy material,
will be borne by the Company. This proxy statement and accompanying form of
proxy are being mailed to stockholders on or about February 18, 1997.
Shares of the Common Stock represented by executed and unrevoked
proxies will be voted in accordance with the choice or instructions specified
thereon. It is the intention of the persons named in the proxy, unless
otherwise specifically instructed in the proxy, to vote all proxies received by
them FOR the election of the seven nominees named herein, FOR the approval of
the amendments to the 1991 Stock Option Plan, the 1995 Non-Qualified Stock
Option Plan and the Stock Option Plan for Outside Directors and FOR
ratification of the Board of Directors' selection of Coopers & Lybrand L.L.P.
to serve as the Company's independent accountants for the fiscal year ending
July 31, 1997.
If a quorum is present at the meeting, those nominees receiving a
plurality of the votes cast will be elected as directors. A majority of the
votes cast (excluding abstentions and broker non-votes) will be required for
the approval of the amendments to the 1991 Stock Option Plan, the 1995 Non-
Qualified Stock Option Plan and the Stock Option Plan for Outside Directors and
the ratification of the Board's selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants.
VOTING
Only stockholders of record at the close of business on February 10,
1997 will be entitled to vote at the meeting or any and all adjournments
thereof. As of February 10, 1997 the Company had outstanding 9,482,204 shares
of the Common Stock, the Company's only class of voting securities outstanding.
Each stockholder of the Company will be entitled to one vote for each share of
the Common Stock registered in his or her name on the record date. A majority
of all shares of the Common Stock outstanding constitutes a quorum and is
required to be present in person or by proxy to conduct business at the
meeting.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information, as of October 10,
1996, except as noted, regarding the beneficial ownership of the Common Stock
by (i) each person or group known to the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock, (ii) each director and nominee
for director of the Company, (iii) each executive officer of the Company named
below and (iv) all directors and executive officers of the Company as a group.
Except as otherwise specified, the named beneficial owner has sole voting and
investment power over the shares listed.
Amount and Nature of Percent
Name and Address of Beneficial Owner (1) Beneficial Ownership (2) of Class
Amerindo Investment Advisors Inc. and
affiliates (3)........................ 1,317,500 13.9%
One Embarcardero Center, Suite 2300
San Francisco, California 94111-3162
Elan International Services Ltd......... 850,000 8.7%
102 St James Court
Flatts Smiths FL04
Bermuda
Invesco Funds Group, Inc................ 520,000 5.5%
7800 East Union Avenue
Denver, Colorado 80237
Michael M. Goldberg, M.D................ 940,745 (4) 9.1%
Sam J. Milstein, Ph.D................... 555,631 5.5%
Howard M. Pack.......................... 153,383 (5) 1.5%
Jere E. Goyan, Ph.D..................... 60,000 *
Peter Barton Hutt, Esq.................. 60,000 *
Mark I. Greene, M.D., Ph.D.............. 33,666 *
Joseph R. Robinson, Ph.D................ 2,000 *
Robert A. Baughman, Jr., Pharm.D., Ph.D. 117,490 1.2%
Lewis H. Bender......................... 25,488 *
All directors and executive officers
as a group............................ 1,948,403 (4)(5) 17.7%
_______________________________
* Less than 1%
(1)Unless otherwise specified, the address of each beneficial owner is c/o the
Company, 15 Skyline Drive, Hawthorne, New York 10532.
(2)The number of shares set forth for Elan International Services Ltd. and for
each director and executive officer of the Company includes the following
number of shares with respect to which such individual has the right,
exercisable within 60 days, to acquire beneficial ownership upon exercise of
options granted or warrants issued by the Company:
Number of Shares
Elan International Services Ltd.... 250,000
Dr. Goldberg....................... 908,465
Dr. Milstein....................... 548,538
Mr. Pack........................... 60,000
Dr. Goyan.......................... 60,000
Mr. Hutt........................... 60,000
Dr. Greene......................... 33,666
Dr. Robinson....................... 2,000
Dr. Baughman....................... 115,168
Mr. Bender......................... 22,226
All directors and executive
officers as a group.............. 1,810,063
(3)Based on a Schedule 13D/A dated April 26, 1996, Amerindo Investment Advisors
Inc., a California corporation, Amerindo Investment Advisors, Inc., a Panama
corporation, Alberto W. Vilar and Gary A. Tanaka share voting and dispositive
power with respect to 1,317,500 shares.
(4)Does not include 130,000 shares with respect to which members of Dr.
Goldberg's family have the right to acquire beneficial ownership upon
exercise of options and with respect to which Dr. Goldberg disclaims
beneficial ownership.
(5)Does not include 439,040 shares beneficially owned by various members of Mr.
Pack's family, with respect to which Mr. Pack disclaims beneficial ownership.
PROPOSAL I: ELECTION OF DIRECTORS
At the meeting, seven directors (constituting the entire Board of
Directors) are to be elected to serve until the next annual meeting of
stockholders and until their respective successors are elected and qualified.
The proxies given pursuant to this solicitation will be voted in favor of the
seven nominees listed below unless authority is withheld. Should a nominee
become unavailable to serve for any reason, the proxies will be voted for an
alternative nominee to be determined by the persons named in the proxy. The
Board of Directors has no reason to believe that any nominee will be
unavailable. Proxies cannot be voted for a greater number of persons than the
number of nominees named. The election of directors requires a plurality vote
of those shares voted at the meeting with respect to the election of directors.
Information Concerning Nominees
The persons nominated as directors of the Company (all of whom are
currently directors of the Company), their respective ages, the year in which
each first became a director of the Company and their principal occupations or
employment during the past five years are as follows:
Year
First
Elected
Name Age Director Position with the Company
Michael M. Goldberg, M.D... 37 1990 Chairman of the Board of
Directors and Chief
Executive Officer
Jere E. Goyan, Ph.D........ 67 1992 Director
Mark I. Greene, M.D., Ph.D. 48 1995 Director
Peter Barton Hutt, Esq..... 62 1992 Director
Sam J. Milstein, Ph.D...... 47 1991 Director, President, Chief
Scientific Officer and
Secretary
Howard M. Pack............. 79 1985 Director
Joseph R. Robinson, Ph.D... 58 1997 Director
Michael M. Goldberg, M.D. has served as Chairman of the Board of
Directors since November 1991 and Chief Executive Officer and a director of the
Company since August 1990. In addition, Dr. Goldberg served as President from
August 1990 to October 1995. In February 1990, Dr. Goldberg founded Montaur
Capital Corporation, a health care investment banking firm. Prior thereto he
was a vice president of The First Boston Corporation, and was a founding member
of the firm's healthcare banking group.
Jere E. Goyan, Ph.D., is President, Chief Operating Officer, and a
director of Alteon, Inc., a development stage pharmaceutical company, where he
started as Senior Vice President Research and Development in January 1993.
Prior thereto he was a Professor of Pharmacy and Pharmaceutical Chemistry and
the Dean of the School of Pharmacy at the University of California, San
Francisco, and has served in various other academic, administrative and
advisory positions, including that of Commissioner of the Food and Drug
Administration. He currently serves as a director of Atrix Corporation,
SciClone Pharmaceuticals and Boeringer Ingelheim.
Mark I. Greene, M.D., Ph.D. has been Professor of Medicine,
Department of Pathology, School of Medicine at the University of Pennsylvania
for more than the past five years.
Peter Barton Hutt, Esq., has for more than the past five years been a
partner at the law firm of Covington & Burling in Washington, D.C., where he
specializes in the practice of food and drug law. He currently serves as a
director of IDEC Pharmaceuticals, Inc., Cell Genesys, Inc., Interneuron
Pharmaceuticals, Inc., Vivus Inc. and Sparta Pharmaceuticals, Inc.
Sam J. Milstein, Ph.D. has been with the Company since September
1990, as a director and Chief Scientific Officer since November 1991, as
President since October 1995, as Secretary since December 1990 and as Co-
Director of Science and Research and Development prior to November 1991. In
addition, Dr. Milstein served as Executive Vice President from November 1990 to
October 1995. Prior to September 1990, Dr. Milstein served as President of
Mortar & Pestle Consulting, Inc., a consulting firm.
Howard M. Pack has served as a director of the Company since its
inception in April 1985 and served as Executive Vice President of Finance from
the Company's inception until October 1988. For more than five years until
November 1992, Mr. Pack served as Chairman of the Board for Seatrain Lines,
Inc., a cargo company that filed a consent to an involuntary petition for
reorganization under the Federal Bankruptcy Code in February 1981 and a plan of
complete liquidation under Chapter 7 thereof in November 1992.
Joseph R. Robinson, Ph.D. has been Professor of Pharmacy and
Ophthalmology at the University of Wisconsin for more than the past five years.
He currently serves as a director of Cima Laboratories, Inc.
Meetings and Committees of the Board of Directors
During the fiscal year ended July 31, 1996, the Board of Directors of
the Company held four meetings. Each of the incumbent directors attended more
than 75% of the aggregate number of meetings held by the Board and the
Committees thereof on which he served.
The Company has an Audit Committee and a Compensation Committee of
the Board of Directors. Dr. Goyan and Messrs. Hutt and Pack serve on both
committees and Dr. Greene serves on the Compensation Committee. The Audit
Committee consults with the Company's independent accountants, reviews the
services provided by such independent accountants and oversees the internal
accounting procedures of the Company. The Audit Committee held one meeting
during the fiscal year ended July 31, 1996.
The Compensation Committee makes recommendations to the Board of
Directors regarding compensation of executive officers of the Company and
administers the Company's stock option plans. The Compensation Committee held
one meeting during the fiscal year ended July 31, 1996.
The Company has no standing nominating committee and no committee
performing a similar function.
Compensation of Directors
Directors receive no cash compensation in their capacity as
directors. Directors who are not employees of the Company receive, pursuant to
the Company's Stock Option Plan for Outside Directors (the "Directors Plan"),
options to purchase shares of the Common Stock. Messrs. Hutt and Pack and Drs.
Goyan and Greene have each received an option to purchase 70,000 shares under
the Directors Plan in effect prior to January 29, 1997. Dr. Robinson has
received an option to purchase 35,000 shares under the Directors Plan as
currently in effect. The exercise prices are $13.00 per share for the options
granted to Dr. Goyan and Messrs. Hutt and Pack, $8.625 for the option granted
to Dr. Greene and $23.50 for the option granted to Dr. Robinson. In the event
the holder of an option ceases to serve as a director of the Company, the
option may be exercised with respect to the fully vested shares within six
months thereafter and will terminate immediately with respect to all unvested
shares.
If Proposal IV is approved by the Corporation's stockholders, each of
the current directors will be entitled to the grant of options to purchase
additional shares of the Common Stock.
The Board of Directors of the Company deems the election of the six
nominees listed above as directors to be in the best interest of the Company
and its stockholders and recommends a vote "FOR" their election.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the aggregate
compensation paid by the Company for the three fiscal years ended July 31, 1996
to the Company's Chief Executive Officer and other executive officers whose
total compensation exceeded $100,000 during the last fiscal year:
SUMMARY COMPENSATION TABLE
Fiscal Annual Stock
Name and Principal Position Year Compensation Option Grants Other(2)
Michael M. Goldberg 1996 $335,349 756,749 shares $4,620
Chairman of the Board and 1995 227,605 16,507 shares 4,497
Chief Executive Officer 1994 237,500 - 4,122
Sam J. Milstein 1996 $287,683 555,903 shares $3,850
President, Chief Scientific 1995 202,187 10,792 shares 3,850
Officer and Secretary 1994 192,500 - 3,850
Robert A. Baughman, Jr. 1996 $180,154 3,664 shares $3,175
Senior Vice President and 1995 165,641 8,131 shares 3,175
Director of Development 1994 156,002 65,000 shares 2,910
Lewis H. Bender 1996 $120,125 77,396 shares $2,032
Vice President and Director
of Business Development (3)
_______________________________
(1)Annual compensation consists solely of base salary except that Drs.
Goldberg, Milstein and Baughman were also paid $25,349, $33,873 and $20,154,
respectively, in lieu of earned vacations during the 1996 fiscal year and
Drs. Milstein and Baughman were also paid $14,808 and $12,308, respectively,
in lieu of earned vacations during the 1995 fiscal year. As to each
individual named, the aggregate amounts of all perquisites and other personal
benefits, securities and property not included in the summary compensation
table above or described below do not exceed the lesser of $50,000 or 10% of
the annual compensation. During a portion of the 1995 fiscal year, the
executive officers and certain other employees of the Company agreed to forgo
a portion of cash compensation in return for an option to purchase a number
of shares of the Common Stock determined by dividing the amount of cash
compensation forgone by the fair market value of the Common Stock on the date
of grant of the option.
(2)Other compensation consists solely of matching contributions made by the
Company under a defined contribution plan introduced during the 1994 fiscal
year for substantially all employees.
(3)Mr. Bender became an executive officer of the Company in October of 1995.
The following table sets forth certain information relating to stock
option grants to the executive officers named above during the fiscal year
ended July 31, 1996:
<TABLE>
<CAPTION>
STOCK OPTION GRANTS DURING THE FISCAL YEAR ENDED JULY 31, 1996
Percent
of Total Potential Realizable
Number Option Value at Assumed
of Shares Shares Exercise Annual Rates of Stock
Underlying Granted Price Expir- Price Appreciation
Options to Em- per ation for Option Term
Name Granted<F1> ployees<F2> Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Michael M. Goldberg 1,918 <F3> $ 6.63 2/1/96 $ $
1,944 <F3> 7.38 5/1/96 2,242 2,242
1,919 <F3> 6.06 8/1/96 2,530 2,530
968 <F3> 12.00 11/1/96 2,050 2,050
750,000 46.9% 8.63 10/6/05 2,049 2,049
4,068,162 10,309,521
Sam J. Milstein 1,856 <F3> $ 6.63 2/1/96 $ $ 1,496
1,719 <F3> 7.38 5/1/96 1,496 2,237
1,547 <F3> 6.06 8/1/96 2,237 1,653
781 <F3> 12.00 11/1/96 1,653 1,653
550,000 34.4% 8.63 10/6/05 1,653 7,560,315
2,983,318
Robert A. Baughman, Jr. 1,361 <F3> $ 6.63 2/1/96 $1,283 $ 1,283
813 <F3> 7.38 5/1/96 1,058 1,058
990 <F3> 6.06 8/1/96 1,058 1,058
500 <F3> 12.00 11/1/96 1,058 1,058
Lewis H. Bender 597 <F3> $ 6.63 2/1/96 $ 697 $ 697
635 <F3> 7.38 5/1/96 826 826
774 <F3> 6.06 8/1/96 827 827
390 <F3> 12.00 11/1/96 825 825
75,000 4.7% 8.63 10/6/05 406,816 1,030,952
_______________________________
<FN>
<F1>Options that expired or will expire in 1996 were all granted under the
Company's Employee Stock Purchase Plan or Non-Qualified Employee Stock
Purchase Plan at exercise prices equal to the lower of the fair market value
on the date of grant or 85% of the fair market value on the date of exercise.
Options expiring in 2005 were all granted under the Company's 1991 Stock
Option Plan or 1995 Non-Qualified Stock Option Plan at prices equal to the
fair market value on the date of grant.
<F2>The total option shares granted during the 1996 fiscal year to employees
includes 49,952 shares under the Company's Employee Stock Purchase Plan or
Non-Qualified Employee Stock Purchase Plan, 245,024 shares under the
Company's 1991 Stock Option Plan and 1,300,000 shares under the Company's
1995 Non-Qualified Stock Option Plan.
<F3>Less than 0.15%
</FN>
</TABLE>
The following table sets forth information as to the unexercised options
held by the executive officers named above as of July 31, 1996:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
Exercises During Number of Value of Unexercised
the Fiscal Year Shares Underlying In-the-Money
Number Unexercised Options Options <F1>
of Shares Value Exer- Unexer- Exer- Unexer-
Name Acquired Realized cisable cisable cisable cisable
<S> <C> <C> <C> <C> <C> <C>
Michael M. Goldberg 1,900 $ 6,650<F2> 1,040,384<F6> 600,000 $26,682 -
4,948 29,070<F3>
1,918 7,432<F4>
1,944 13,499<F5>
Sam J. Milstein 1,539 $ 5,387<F2> 550,085 440,000 $22,429 -
5,491 32,260<F3>
1,280 4,960<F4>
684 4,749<F5>
Robert A. Baughman, Jr. 1,673 $ 5,856<F2> 94,491 22,267 $13,064 -
3,333 19,581<F3>
857 5,035<F3>
1,098 4,255<F4>
813 5,645<F5>
Lewis H. Bender 2,290 $13,454<F3> 7,940 85,200 $21,760 $44,100
597 2,313<F4>
635 4,409<F5>
_______________________________
<FN>
<F1>Based on a closing price of $7.50 on July 31, 1996 on the Nasdaq National
Market.
<F2>Based on a closing price of $6.625 on August 1, 1995, the date of exercise,
on the Nasdaq National Market.
<F3>Based on a closing price of $7.375 on November 1, 1995, the date of
exercise, on the Nasdaq National Market.
<F4>Based on a closing price of $10.50 on February 1, 1996, the date of
exercise, on the Nasdaq National Market.
<F5>Based on a closing price of $12.00 on May 1, 1996, the date of exercise, on
the Nasdaq National Market.
<F6>Includes 130,000 shares with respect to which Dr. Goldberg has transferred
options to members of his family and with respect to which Dr. Goldberg
disclaims beneficial interest.
Employment Agreements
The Company has entered into employment agreements with Michael M.
Goldberg, M.D. and Sam J. Milstein, Ph.D., expiring on July 31, 2001. Pursuant
to the agreements, Dr. Goldberg is to serve as Chairman and Chief Executive
Officer of the Company at an annual salary of $310,000 to increase at 6% per
year, Dr. Milstein is to serve as President and Chief Scientific Officer at an
annual salary of $250,000 to increase at 6% per year and both are to be
nominated to serve as members of the Board of Directors. The agreements also
provide for the grant of an option to purchase 750,000 shares of the Common
Stock with respect to Dr. Goldberg and an option to purchase 550,000 shares
with respect to Dr. Milstein. The options have an exercise price of $8.625 per
share and they expire on October 5, 2005 except that they become earlier
exercisable if the Company achieves certain milestones, with the rate in no
event being greater than either 25% of the shares for each milestone achieved
or 20% of the shares in any employment year. The Company milestones required
for exercisability of the options are (i) execution of a collaboration
agreement providing for the commercialization of a product utilizing the
Company's drug delivery technology and the payment of a royalty to the Company,
(ii) one or more financings by the Company that provide aggregate net proceeds
of at least $15,000,000 and (iii) any subsequent such collaboration agreement
or such financings.
The agreements provide that, upon (i) termination by the Company either
without cause or for any reason following a Change of Control (as defined in
the agreements) or (ii) termination by Dr. Goldberg or Dr. Milstein, as the
case may be, following an uncured breach or bankruptcy by the Company, the
Company will make severance payments equal to the greater of (i) the
compensation payable under the agreements from the date of termination to July
31, 2001 or (ii) one year's compensation under the agreements.
Compensation Committee Report on Executive Compensation
The Compensation Committee's policies applicable to the compensation of
the Company's executive officers are based on the principle that total
compensation should be set to attract and retain those executives critical to
the overall success of the Company and should reward executives for their
contributions to the enhancement of shareholder value.
The key elements of the executive compensation package are base salary,
employee benefits applicable to all employees and long-term incentive
compensation in the form of stock options. In general, the Compensation
Committee has adopted the policy that compensation for executive officers
should be competitive with that paid by leading biotechnology companies for
corresponding senior executives. The Compensation Committee also believes that
it is important to have stock options constitute a substantial portion of
executive compensation in order to help executives align their interests with
those of the stockholders.
In determining the compensation for each executive officer, the
Compensation Committee generally considers (i) data from outside studies and
proxy materials regarding compensation of executive officers at comparable
companies, (ii) the input of other directors regarding individual performance
of each executive officer and (iii) qualitative measures of Company performance
such as progress in the development of the Company's technology, the engagement
of corporate partners for the commercial development and marketing of products
and the success of the Company in raising the funds necessary to conduct
research and development and the fact that the Company successfully completed a
preliminary human safety and tolerance trial. The Compensation Committee's
consideration of such factors is subjective and informal.
The compensation of Michael M. Goldberg, the Chief Executive Officer of
the Company, for the 1996 fiscal year was as called for by his employment
agreement with the Company entered into during the 1996 fiscal year and the
Compensation Committee did not consider any amendments to the compensation
thereunder. In approving the five-year employment agreement negotiated with
Dr. Goldberg for the period ending July 31, 2001, the Compensation Committee
concluded that Dr. Goldberg's leadership contributed significantly to the
Company's achievements and progress in the past and that Dr. Goldberg will
continue to make significant contributions to the Company's performance in the
future.
Howard M. Pack
Jere E. Goyan
Peter Barton Hutt
Mark I. Greene
Comparative Stock Performance Graph
The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total stockholder return of (i) the
Nasdaq Stock Market (U.S.) Index and (ii) the Nasdaq Pharmaceutical Index,
assuming an investment of $100 on July 31, 1991 in each of the Company's Common
Stock, the stocks comprising the Nasdaq Market Index and the stocks comprising
the Nasdaq Pharmaceutical Index.
Date Emisphere Nasdaq Market Nasdaq Pharm.
7/31/91 100 100 100
7/31/92 148 117 116
7/31/93 117 143 93
7/31/94 32 147 82
7/31/95 53 206 115
7/31/96 58 225 139
Section 16(a) Beneficial Ownership Reporting and Compliance
Based solely on a review of the reports under Section 16(a) of the
Exchange Act and representations furnished to the Company during the last
fiscal year, the Company believes that each of the persons required to file
such reports is in compliance with all applicable filing requirements.
PROPOSALS II AND III: APPROVAL OF AMENDMENTS TO THE COMPANY'S 1991 STOCK OPTION
PLAN AND 1995 NON-QUALIFIED STOCK OPTION PLAN
The Company's Board of Directors has determined that additional
shares of the Common Stock should be made available for grants of stock options
to the Company's officers and other employees and consultants who will be
responsible for the profitability and long-term future growth of the Company.
Accordingly, the Board has approved, subject to stockholder approval, an
amendment to the Company's 1991 Stock Option Plan (as amended, the "1991 Plan")
to increase the maximum number of shares of the Common Stock available for the
grant of options thereunder from 1,200,000 shares to 1,400,000 and an amendment
to the Company's 1995 Non-Qualified Stock Option Plan (as amended, the "1995
Plan" and, collectively with the 1991 Plan, the "Plans") to increase the
maximum number of shares of the Common Stock available for the grant of options
thereunder from 1,800,000 shares to 1,900,000. As of January 31, 1997, options
with respect to 1,171,082 shares were outstanding under the 1991 Plan, leaving
28,972 additional shares available for option grants thereunder, and options
with respect to 1,800,000 shares were outstanding under the 1995 Plan, leaving
no additional shares available for option grants thereunder. If the amendments
are not approved by the stockholders, the Company will have to reevaluate how
it will provide incentives to the Company's existing and future officers and
other employees and consultants.
Summary of the Plans
The following is a brief summary of the Plans.
Purpose The purpose of the Plans is to foster the Company's ability
to attract, retain and motivate those individuals who will be largely
responsible for the profitability and long-term future growth of the Company.
Eligible Employees The eligible participants in the 1991 Plan are
the Company's officers and other key employees and consultants other than
directors, as determined and designated from time to time by the Company's
Compensation Committee in its sole discretion. The eligible participants in
the 1995 Plan are the Company's officers and other key executive employees, as
determined and designated from time to time by the Company's Compensation
Committee in its sole discretion.
Grants Under the Plan The 1991 Plan provides for the grant of
options to purchase shares of the Common Stock, including options intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). The 1995 Plan provides for the grant of
options to purchase shares of the Common Stock, such options not intending to
qualify as such incentive stock options.
Administration The Plans are administered by the Compensation
Committee of the Board of Directors of the Company, each member of which is
intended to be a "Non-Employee Director" within the meaning of Rule 16b-3 under
the Exchange Act.
Subject to the provisions of the Plans, the Compensation Committee
has the authority and discretion to grant options under the Plans, to interpret
the provisions of the Plans and option agreements made thereunder and to take
such other action as may be necessary or desirable in order to carry out the
provisions of the Plans.
Maximum Shares to be Issued The maximum number of shares that may be
issued pursuant to the grant of options under the Plans is 1,400,000 in the
aggregate with respect to the 1991 Plan and 1,900,000 in the aggregate with
respect to the 1995 Plan (subject to anti-dilution adjustments). In the event
a stock option granted under the Plans expires or terminates prior to exercise,
the shares subject thereto will thereafter be available for further option
grants.
Terms of Stock Option Grants The Compensation Committee specifies
the terms and conditions of stock options granted under the Plans including
without limitation the number of shares covered by each option, the exercise
price, the option period, any vesting restrictions with respect to the exercise
of the option and, with respect to the 1991 Plan, whether the option is
intended to qualify as an incentive stock option. No option under the 1991
Plan may have an exercise price of less than the par value of the Common Stock
or an option exercise period of more than ten years. Options intending to
qualify as incentive stock options under the 1991 Plan and all options under
the 1995 Plan must have an exercise price per share of not less than the fair
market value of the Common Stock on the date of grant and an option exercise
period of not more than ten years. Furthermore, an option intending to qualify
as an incentive stock option and granted to a person who at the time of the
grant holds more than 10% of the total combined voting power of all classes of
stock of the Company must have an exercise price per share of not less than
110% of the fair market value of the Common Stock on the date of grant and an
option exercise period of not more than five years.
Restrictions on Transfer Options under the Plans may not be
transferred by an optionee other than by will or by the laws of descent and
distribution and may be exercised during the optionee's lifetime only by the
optionee, except that an option under the 1995 Plan may be transferred to
members of the optionee's family or trusts for their benefit.
Federal Income Tax Consequences The grant of options under the Plans
will have no federal income tax consequences to either the Company or the
option grantee. The exercise of incentive stock options will generally have no
federal tax consequences to either the Company or the optionee, although the
excess of the value of the stock over the exercise price is potentially subject
to the alternative minimum tax under Section 55 of the Code. Upon exercise of
options other than incentive stock options, the optionee is subject to federal
income tax on the excess of the value of the stock over the exercise price and
the Company is entitled to take a corresponding federal income tax deduction
(subject to the limitation on deductibility of executive compensation).
The foregoing is a general description of the federal income tax
consequences relating to the grant and exercise of options under the Plans. It
does not purport to cover the special rules under the Code, administrative and
judicial interpretations, possible changes in the law or state and local income
tax consequences.
Amendment The Board of Directors of the Company may at any time
amend or terminate the Plans, provided that no such amendment may be made
without the approval of the stockholders of the Company to the extent approval
is required by applicable laws, rules or regulations and provided further that
no amendment or termination may adversely affect the rights of an optionee with
respect to an outstanding option.
Grant Information
It is not possible to determine the stock option grants that will be
made pursuant to the Plans in the future. The table below sets forth
information regarding the option grants that have been made under the Plans
since their inception.
Number of Shares
Dollar Underlying Options
Name and Position Value (1) 1991 Plan 1995 Plan
Michael M. Goldberg.............. - 266,954 1,050,000
Chairman of the Board and
Chief Executive Officer
Sam J. Milstein.................. - 150,478 750,000
President, Chief Scientific
Officer and Secretary
Robert A. Baughman, Jr........... - 88,000 -
Senior Vice President and
Director of Development
Lewis H. Bender.................. - 91,976 -
Vice President of Business
Development
All current executive
officers as a group............ - 597,408 1,800,000
All current directors who are
not executive officers
as a group (2).................. - - -
All employees, including all
current officers who are not
executive officers,
as a group (3).................. - 573,620 75,000
_______________________________
(1)Based upon the excess of the fair market value of the Common Stock on the
date of grant over the exercise price.
(2)Directors of the Company who are not also either employees of or consultants
to the Company are not eligible to participate in the Plans.
(3)Includes (i) only those options under the 1991 Plan that were outstanding on
January 31, 1997 and (ii) an option under the 1995 Plan granted subject to
stockholder approval of the amendment to the 1995 Plan.
Voting
The amendments to the Plans must be approved by a majority of the
total votes cast on each proposal. An abstention from voting on either
proposal will have the effect of a "no" vote. Broker non-votes are considered
not cast and therefore will not affect the outcome of the vote.
The Board of Directors of the Company deems the approval of the
amendments to the 1991 Stock Option Plan and the 1995 Non-Qualified Stock
Option Plan to be in the best interest of the Company and its stockholders and
recommends that holders of the Common Stock vote FOR Proposal II and FOR
Proposal III.
PROPOSAL IV: APPROVAL OF THE AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN FOR
OUTSIDE DIRECTORS
The Board has unanimously approved an amendment to the Company's
Stock Option Plan for Outside Directors (as amended, the "Plan") that (i)
reduces from 70,000 to 35,000 the number of shares of the Common Stock that may
be purchased under options to be granted to directors upon their initial
election or appointment to the Board and (ii) provides for the grant of options
to purchase 21,000 shares of the Common Stock on the fifth anniversary of each
director's initial election or appointment to the Board and every three years
thereafter. The Plan is set forth in its entirety as Appendix A hereto and is
summarized below. The stockholders are being asked to approve the Plan with
respect to the grant of additional options to directors with five years of
continuous service and with the respect to the reservation of 170,000
additional shares for issuance thereunder. If the amendment is not approved by
the stockholders, the Company will have to reevaluate how it will compensate
outside directors with more than five years of continuous service. Approval or
disapproval of the Plan will not affect the rights of current directors with
respect to options previously granted under the Plan.
Summary of the Plan
The Plan, which is set forth in its entirety in Appendix A hereto, is
summarized briefly as follows:
Purpose The purpose of the Plan is to enable the Company to attract
and compensate eligible directors and encourage the highest level of
performance by providing them with a proprietary interest in the Company's
success and progress.
Eligible Directors The eligible participants in the Plan are the
Company's directors who are neither officers nor employees of the Company and
who do not own 5% or more of the shares of the Common Stock outstanding. There
are currently five directors eligible to participate in the Plan.
Grants Under the Plan The Plan provides for the grant of an option
to purchase 35,000 shares of the Common Stock upon a director's initial
appointment or election to the Board and an option to purchase 21,000 shares on
the fifth anniversary thereof and every three years thereafter.
Administration The Plan is administered by the Board of Directors of
the Company.
Maximum Shares to be Issued The maximum number of shares that may be
issued pursuant to the exercise of options under the Plan is 450,000 in the
aggregate (subject to anti-dilution adjustments). In the event a stock option
granted under the Plan expires or terminates prior to exercise, the shares
subject thereto will thereafter be available for further option grants.
Terms of Stock Option Grants All options granted under the Plan (i)
will have an exercise price per share equal to the fair market value of the
Common Stock as of the date of grant, (ii) will expire ten years from the date
of grant and (iii) will vest and become exercisable with respect to 7,000
shares on each anniversary of the date of grant.
Restrictions on Transfer Options under the Plan may not be
transferred by an optionee other than by will or by the laws of descent and
distribution and may be exercised during the optionee's lifetime only by the
optionee.
Federal Income Tax Consequences The grant of options under the Plan
will have no federal income tax consequences to either the Company or the
optionee. Upon exercise of options, the optionee will be subject to federal
income tax on the excess of the value of the stock over the exercise price and
the Company is entitled to take a corresponding federal income tax deduction.
The foregoing is a general description of the federal income tax
consequences relating to the grant and exercise of options under the Plan. It
does not purport to cover the special rules under the Code, administrative and
judicial interpretations, possible changes in the law or state and local income
tax consequences.
Amendment The Board of Directors of the Company may at any time
amend or terminate the Plan, provided that no such amendment may be made
without the approval of the stockholders of the Company to the extent approval
is required by applicable laws, rules or regulations and provided further that
no amendment or termination may adversely affect the rights of an optionee with
respect to an outstanding option.
Grant Information
If the current directors continue as directors indefinitely, each of
them will be granted an option to purchase 21,000 shares on the later of the
fifth anniversary of his initial election or appointment to the Board or April
29, 1997 and every three years thereafter. The first such grant will be made
to Dr. Goyan and Messrs. Hutt and Pack on April 29, 1997, to Dr. Greene on
October 23, 2000 and to Dr. Robinson on January 29, 2002. The information
regarding the option grants under the Plan set forth in the table below assumes
that each of the current directors will continue as a director until the first
such grant and that no new directors will be added to the Board.
Number of
Dollar Shares Under-
Name and Position Value (1) lying Options
Michael M. Goldberg................. - -
Chairman of the Board and Chief
Executive Officer
Sam J. Milstein..................... - -
President, Chief Scientific
Officer and Secretary
Robert A. Baughman, Jr.............. - -
Senior Vice President and
Director of Development
Lewis H. Bender..................... - -
Vice President, Director of
Business Development
All current executive officers
as a group......................... - -
All current directors who are not
executive officers as a group (2).. - 105,000
All employees, including all
current officers who are not
executive officers, as a group..... - -
_______________________________
(1)Since all options under the Plan will be granted at exercise prices equal to
the fair market value of the Common Stock on the date of grant, they will
have no dollar value on the date of grant.
(2)Assumes that each of the current directors continues as a director until the
later of (i) the fifth anniversary of his appointment or election to the
Board or (ii) April 29, 1997.
Voting
The amendment to the Plan must be approved by a majority of the total
votes cast. An abstention from voting will have the effect of a "no" vote.
Broker non-votes are considered not cast and therefore will not affect the
outcome of the vote.
The Board of Directors of the Company deems the approval of the
amendment to the Stock Option Plan for Outside Directors to be in the best
interest of the Company and its stockholders and recommends that holders of the
Common Stock vote FOR Proposal IV.
PROPOSAL V: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. to serve
as independent accountants for the fiscal year ending July 31, 1997. Coopers &
Lybrand L.L.P. has served as the Company's independent accountants since
November 1991.
A representative of Coopers & Lybrand L.L.P. is expected to be
present at the meeting with the opportunity to make a statement if he desires
to do so and is expected to be available to respond to appropriate questions.
Although it is not required to do so, the Board of Directors is submitting the
selection of independent accountants for ratification at the meeting. If this
selection is not ratified, the Board of Directors will reconsider its choice.
A majority of the votes cast (excluding abstentions and broker non-
votes) at the meeting in person or by proxy is necessary for ratification of
the selection of Coopers & Lybrand L.L.P. as independent accountants of the
Company.
The Board of Directors of the Company deems the ratification of the
selection of Coopers & Lybrand L.L.P. as independent accountants of the Company
to be in the best interest of the Company and its stockholders and recommends
that holders of the Common Stock vote FOR Proposal V.
FORM 10-K
Stockholder may obtain without charge a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended July 31, 1996 by directing
written requests to Investor Relations, Emisphere Technologies, Inc., 15
Skyline Drive, Hawthorne, New York 10532.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the
Annual Meeting of Stockholders of the Company contemplated to be held in
January 1998 must be received by the Company no later than July 31, 1997, for
inclusion in the Board of Directors' proxy statement and form of proxy relating
to the meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at
the meeting. However, if any other business properly comes before the meeting,
it is the intention of the persons named in the enclosed proxy to vote on such
matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend
the meeting, please sign the proxy and return it in the enclosed envelope.
By order of the Board of Directors
SAM J. MILSTEIN, PH.D.
Secretary
Hawthorne, New York
February 10, 1997
APPENDIX A
EMISPHERE TECHNOLOGIES, INC.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
as amended
January 29, 1997
1. Purpose
The purpose of the Stock Option Plan for Outside Directors (the "Plan") of
Emisphere Technologies, Inc. (the "Company") is to enable the Company to
attract and compensate eligible directors of the Company and to encourage the
highest level of performance by providing such persons with a proprietary
interest in the Company's success and progress.
2. Shares Subject to the Plan
The Company may issue and sell a maximum of 450,000 shares of the Company's
Common Stock, par value $.0l per share (the "Common Stock"), pursuant to
options granted under the Plan. Such shares may include shares that have been
subject to unexercised options, whether terminated or expired by their terms,
by cancellation or otherwise.
3. Administration of the Plan
The Plan shall be administered by the Board of Directors of the Company
(the "Board") or by a committee of the Board consisting of two or more members
of the Board appointed by the Board. The interpretation and construction by
the Board or such committee of any provisions of the Plan or of any other
matters related to the Plan shall be final. The Board or such committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem advisable. No member of the Board shall be liable for any action
or determination made in good faith with respect to the Plan.
4. Eligibility
Options under the Plan shall be granted only to directors of the Company
who (i) are neither officers nor employees of the Company or any of its
subsidiaries, (ii) do not beneficially own five percent or more of the Common
Stock outstanding on the date of grant and (iii) are not affiliated with any
person referred to in (i) or (ii) above.
5. Stock Option Grants
(a) Each eligible director who is first elected or appointed to the Board
on or after January 29, 1997 shall be granted an option to purchase 35,000
shares of the Common Stock on the date of such initial election or appointment.
(b) On the fifth anniversary of the date that is the later of (i) each
director's initial election or appointment to the Board or (ii) April 29, 1992,
and on the date every three years thereafter, such director shall, if he or she
is an eligible director on such date and has continuously served as a director
since the date of such initial election or appointment, be granted an option to
purchase 21,000 shares of the Common Stock.
(c) All options granted under the Plan shall (i) have an exercise price
per share equal to the Fair Market Value of the Common Stock as of the date of
grant, (ii) expire ten years from the date of grant and (iii) vest and become
exercisable with respect to 7,000 shares on each anniversary of the date of
grant.
(d) As used herein, the Fair Market Value of the Common Stock as of any
date shall be (i) the closing price per share thereof on such date on the
American Stock Exchange or the New York Stock Exchange, whichever exchange on
which the Common Stock is then admitted to trading, or otherwise on the Nasdaq
National Market if then quoted thereon, and (ii) if no such closing price is
available, the value as determined in good faith by the Board.
(e) Options granted under the Plan and held by directors who were
initially elected or appointed to the Board prior to January 29, 1997 shall
continue in full force and effect and nothing hereunder shall adversely affect
the rights of the holders thereof.
6. Regulatory Compliance and Listing
The exercise of any option granted under the Plan may be postponed by the
Company for such period as may be required to comply with federal securities
laws, state "blue sky" laws, any applicable listing requirements of any
applicable securities exchange or any other law or regulation applicable to the
issuance or delivery of shares of the Common Stock and the Company shall not be
obligated to issue or deliver any such shares if such issuance or delivery
would constitute a violation of any law or any regulation of any governmental
authority or applicable securities exchange.
7. Change of Control
In the event of a "Change in Control of the Company," all options granted
under the Plan and outstanding at the time thereof shall become immediately
exercisable. A "Change in Control of the Company" shall be deemed to have
occurred if (i) there is consummated (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Common Stock are converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, (ii) the stockholders of the
Company approve any plan or proposal for liquidation or dissolution of the
Company, (iii) any person (as such term is used in Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
becomes the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 40% or more of the Common Stock outstanding other than
pursuant to a plan or arrangement entered in by such person and the Company or
(iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
8. Death and Other Cessation as Director
In the event the holder of an option granted under the Plan dies, his or
her estate, personal representative or beneficiary may exercise such option, to
the extent otherwise exercisable as of the date of his or her death, within
twelve months after that date. In the event the holder of an option granted
under the Plan ceases to be a director of the Company for any reason other than
the director's death, such holder may exercise such option, to the extent
otherwise exercisable on the date he or she ceases to be a director of the
Company, within six months after that date. In no event may an option be
exercised after the date of expiration thereof.
9. Stock Splits, Mergers, etc.
In the event of any stock split, stock dividend or similar transaction
which increases or decreases the number of shares of the Common Stock
outstanding, appropriate adjustment shall be made by the Board, whose
determination shall be final, to the number of shares and exercise price per
share under any options outstanding. In the case of a merger, consolidation or
similar transaction which results in a replacement of the Common Stock with
stock of another corporation but does not constitute a Change in Control of the
Company, the Company will make a reasonable effort, but shall not be required,
to replace any options granted under the Plan with comparable options to
purchase the stock of such other corporation, or will provide for the immediate
maturity of all options outstanding and the termination of options not
thereafter exercised within the time period specified by the Board.
10. Transferability
An option granted under the Plan may not be assigned or transferred except
by will or the laws of descent and distribution and may be exercised during a
director's lifetime only by the director.
11. Exercise of Options
The holder of an option granted under the Plan electing to exercise the
option shall deliver to the Company written notice of such election, setting
forth the number of shares of the Common Stock with respect to which the option
is being exercised, together with payment of the option exercise price. The
option exercise price shall be paid in cash, check or shares of the Common
Stock. If shares of the Common Stock are tendered as payment of the option
exercise price, the value of such shares shall be the Fair Market Value as of
the date of exercise. If such tender would result in the issuance of
fractional shares of the Common Stock, the Company shall instead return the
difference in cash or by check. The holder of an option under the Plan shall
have none of the rights of a stockholder with respect to shares of the Common
Stock covered by the option until the option has been exercised and a stock
certificate representing such number of shares has been issued and delivered to
him.
12. Term of Plan
The Plan shall terminate on January 29, 2007 and no option shall be granted
under the Plan after that date. Termination of the Plan shall not affect
options granted under the Plan prior to termination.
13. No Obligation to Exercise or Right to Continue as a Director
The grant of an option under the Plan shall impose no obligation on the
director to exercise such option and nothing in the Plan shall be deemed to
create a right to continue as a director or an obligation on the part of the
Board to nominate any director for reelection by the Company's stockholders.
14. Effectiveness of the Plan
The Plan was initially adopted by the Board on April 29, 1992 and approved
by the stockholders of the Company on April 19, 1993. As amended and restated
hereby, the Plan shall become effective as of January 29, 1997, the date of its
approval by the Board, except that Section 5(b) hereof shall become effective
only upon approval by a majority of the total votes cast with respect to shares
of the Common Stock present in person or represented by proxy at a meeting at
which a quorum is present and entitled to vote thereon, or by such greater
percentage as may from time to time be required under the laws of the State of
Delaware.
15. Amendment of the Plan
The Board may at any time and from time to time alter, amend, suspend or
terminate the Plan in whole or in part, provided, however, that (i) no
alteration, amendment, suspension or termination shall adversely affect the
rights of the holder of any outstanding option granted under the Plan and (ii)
any amendment which must be approved by the stockholders of the Company in
order to ensure that option grants under the Plan continue to be exempt
transactions under Rule 16b-3 under the Exchange Act or any successor provision
or to comply with any rule or regulation of a governmental authority,
applicable securities exchange or Nasdaq National Market shall not be effective
unless and until such stockholder approval has been obtained in compliance with
such rule or regulation.
16. Withholding of taxes
The Company shall have the right, prior to the delivery of any certificate
evidencing shares of the Common Stock acquired upon exercise of an option, to
require payment of an amount in cash sufficient to satisfy any Federal, state,
or local tax withholding requirements.
EMISPHERE TECHNOLOGIES, INC.
15 Skyline Drive
Hawthorne, New York 10532
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael M. Goldberg, M.D. and Sam J.
Milstein, Ph.D., and each of them, as Proxies each with the power to appoint
his substitute and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Common Stock of Emsiphere Technologies,
Inc. held of record by the undersigned on February 10, 1997 at the Annual
Meeting of Stockholders to be held on March 20, 1997 or any adjournments or
postponements thereof.
1. ELECTION OF DIRECTORS
Nominees:
Michael M. Goldberg, M.D. STOCKHOLDERS MAY WITHHOLD AUTHORITY TO
Jere E. Goyan, Ph.D VOTE FOR ANY NOMINEE BY DRAWING A LINE
Mark I. Greene, M.D., Ph.D. THROUGH OR OTHERWISE STRIKING OUT THE
Peter Barton Hutt NAME OF SUCH NOMINEE. ANY PROXY EXECUTED
Sam J. Milstein, Ph.D. IN SUCH MANNER AS NOT TO WITHHOLD
Howard M. Pack AUTHORITY TO VOTE FOR THE ELECTION OF ANY
Joseph R. Robinson, Ph.D. NOMINEE SHALL BE DEEMED TO GRANT SUCH
AUTHORITY.
_ GRANT authority to vote for _ WITHOLD authority to
the seven nominees as a vote for the seven
group nominees as a group
2. Approval and adoption of the amendment to the Company's 1991 Stock Option
Plan increasing the number of shares of the Common Stock available for
issuance thereunder by 200,000
_ FOR _ AGAINST _ ABSTAIN
3. Approval and adoption of the amendment to the Company's 1995 Non-Qualified
Stock Option Plan increasing the number of shares of the Common Stock
available for issuance thereunder by 100,000
_ FOR _ AGAINST _ ABSTAIN
4. Approval and adoption of the amendment to the Company's Stock Option Plan
for Outside Directors providing for additional option grants and reserving
170,000 additional shares of the Common Stock for issuance thereunder
_ FOR _ AGAINST _ ABSTAIN
5. Ratification of the Board of Directors' selection of Coopers & Lybrand
L.L.P. to serve as the Company's independent accountants for the fiscal
year ending July 31, 1997
_ FOR _ AGAINST _ ABSTAIN
6. Authority to vote in their discretion on such other business as may
properly come before the meeting
_ FOR _ AGAINST _ ABSTAIN
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted for each of the proposals named above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Dated , 1997
(Signature)
(Signature if held jointly)
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
</TABLE>
