<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
PROTEIN POLYMER 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 maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
PROTEIN POLYMER TECHNOLOGIES, INC.
_____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 28, 2000
_____________________
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of Protein Polymer Technologies, Inc., which will be held at the
Company's executive offices, located at 10655 Sorrento Valley Road, San Diego,
California, on Friday, April 28, 2000 at 9:00 a.m. for the following purposes:
(a) To elect a Board of nine Directors for the ensuing year;
(b) To ratify the appointment of Ernst & Young LLP as independent
auditors for the fiscal year ending December 31, 2000; and
(c) To consider and act upon such other matters as may properly
come before the meeting.
The close of business on March 27, 2000 has been fixed as the record
date for stockholders to receive notice of and to vote at the meeting or any
adjournment or postponement thereof. Holders of a majority of the outstanding
shares must be present either in person or by proxy in order for the meeting
to be held. The proxy is revocable at any time in the manner set forth on
page 1 of the Proxy Statement and will not affect your right to vote in person
in the event you attend the meeting.
By Order of the Board of Directors,
Philip J. Davis
Secretary
March 31, 2000
===============================================================================
WHETHER YOU ATTEND THE MEETING OR NOT, YOU ARE REQUESTED TO SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE AT YOUR EARLIEST
CONVENIENCE. FOR THOSE ATTENDING THE MEETING, AMPLE PARKING WILL BE AVAILABLE.
===============================================================================
<PAGE>
PROTEIN POLYMER TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
April 28, 2000
_____________________
PROXY STATEMENT
_____________________
This Proxy Statement is furnished by Protein Polymer Technologies,
Inc. (the "Company"), 10655 Sorrento Valley Road, San Diego, CA, 92121, in
connection with the solicitation by the Company's Board of Directors (the
"Board") of proxies to be voted at the Annual Meeting of Stockholders to be
held on Friday, April 28, 2000 at 9:00 a.m., or any adjournments or
postponements thereof (the "Meeting"). The Board has fixed the close of
business on March 27, 2000 as the record date for determining stockholders
entitled to notice of and to vote at the Meeting. As of March 22, 2000, there
were 18,286,510 shares of the Company's Common Stock, $.01 par value per share
(the "Common Stock") issued and outstanding.
Any person giving a proxy has the right to revoke it before it is
exercised. It may be revoked either by filing an instrument of revocation
with the Secretary of the Company or by delivering at the Meeting a duly
executed proxy bearing a later date. It also may be revoked by attending the
Meeting and voting in person.
All expenses incurred in connection with solicitation of the enclosed
proxy will be paid by the Company. In addition to solicitation by mail,
officers, directors and regular employees of the Company, who will receive no
additional compensation for their services, may solicit proxies by mail,
telephone, telegraph or personal call. The Company has requested brokers and
nominees who hold stock in their names to furnish this proxy material to their
customers and the Company will reimburse such brokers and nominees for their
related out-of-pocket expenses.
The approximate date on which this Proxy Statement and the enclosed
proxy are first being sent to the Company's stockholders is March 31, 2000. A
copy of the Company's Annual Report for the fiscal year ended December 31,
1999 accompanies this Proxy Statement.
Voting Rights
Each share of Common Stock outstanding on the record date is entitled
to one vote and each share of the Company's Series G Convertible Preferred
Stock, $.01 par value per share (the "Series G Preferred Stock") is entitled
to 200 votes per share. As of March 22, 2000, there were 21,000 shares of the
Series G Preferred Stock issued and outstanding. The holders of Common Stock
and Series G Preferred Stock vote together as a single class and do not have
the right to cumulate votes. An affirmative vote of a majority of the shares
voted at the Meeting, by person or in proxy, is required for approval of each
item being submitted to the stockholders for consideration. Proxies will be
received and tabulated by the Company's transfer agent. Votes cast in person
at the meeting will be tabulated by an election inspector appointed by the
Company. Abstentions and "broker non-votes" are each included in the
determination of the number of shares present and voting, with each tabulated
separately. Abstentions are counted in tabulations of the votes cast on
proposals presented to the stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved. Any
unmarked proxies, including those submitted by brokers or nominees, will be
voted for the directors nominated and for all proposals submitted herewith.
-2-
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of March 22, 2000 with
respect to (i) all persons known by the Company to be the beneficial owner of
more than 5% of the Common Stock and Series G Preferred Stock, if any, (ii)
all Directors and nominees for Director, (iii) each executive officer named
below and (iv) all directors and executive officers as a group. The business
address of each of the Company's directors and named executive officers is the
Company's address unless otherwise stated in the table below.
<TABLE>
<CAPTION>
Name and Address Amount of Common Stock Percent
of Beneficial Owner Beneficially Owned(1)(2) of Class(1)(2)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
J. Thomas Parmeter (5)(6)(7)................................. 781,777 4.22%
Philip J. Davis (5)(6)(8).................................... 834,345 4.48%
Patricia J. Cornell (5)(9)(12)
Taurus Advisory Group
2 Landmark Square
Stamford, Connecticut 06901............................... 15,989,875 59.88%
J. Paul Jones, Ph.D. (5)(10)................................. 22,000 *
Johnson & Johnson Development Company (11)................... 1,648,933 8.67%
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933
Taurus Advisory Group (12)................................... 15,973,875 59.85%
2 Landmark Square
Stamford, Connecticut 06901
George R. Walker (5)(13)..................................... 156,012 *
Edward E. David, Ph.D. (5)(14)............................... 66,107 *
Edward J. Hartnett (5)(15)................................... 45,000 *
Patrick A. Gerschel (3)(16)(17).............................. 1,680,000 8.56%
c/o Gerschel & Co
720 Fifth Avenue
New York, New York 10019
GBA Capital, LLC (17)........................................ 1,670,000 8.51%
c/o Gerschel & Co
720 Fifth Avenue
New York, New York 10019
Richard Adelson (5) (18)..................................... 499,600 2.70%
Kerry L. Kuhn, M.D. (4)(19).................................. 392,500 2.12%
Joseph Cappello, Ph.D. (6)(20)............................... 195,748 1.06%
Franco A. Ferrari, Ph.D. (6)(21)............................. 173,737 *
John E. Flowers (6)(22)...................................... 160,184 *
Erwin R. Stedronsky, Ph.D. (6)(23)........................... 44,803 *
Protein Fund (24)............................................ 1,400,000 7.17%
c/o Williams Jones Associates
717 Fifth Avenue, 24th Fl.
New York, New York 10022
All Directors and Executive Officers
as a Group (13 persons)(25)................................. 20,760,295 70.71%
</TABLE>
---------------------------
* Amount represents less than one percent of the Common Stock.
-3-
<PAGE>
(1) Information with respect to beneficial ownership is based upon the
Company's stock records and data supplied to the Company by the holders.
(2) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and generally includes voting power
and/or investment power with respect to securities. Shares of Common
Stock subject to options or warrants exercisable within 60 days are
deemed outstanding for computing the percentage of the person holding
such options or warrants but are not deemed outstanding for computing the
percentage of any other person. Except as indicated by footnote, and
subject to joint ownership with spouses and community property laws where
applicable, the persons named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.
(3) Director not standing for reelection.
(4) Nominee for Director
(5) Director and Nominee for Director.
(6) Executive Officer.
(7) Includes (i) 160,000 shares subject to options exercisable within 60
days, (ii) 30,000 warrants exercisable within 60 days (which warrants
were issued in connection with the exercise and exchange of the Company's
Series G Warrants) (iii) 40,000 shares issuable upon conversion of 500
shares of the Company's Series E Preferred Stock convertible within 60
days and (iv) 30,000 shares issuable upon conversion of 150 shares of the
Company's Series G Preferred Stock convertible within 60 days (such
Series G Preferred Stock votes with the Common Stock on an as converted
basis).
(8) Includes (i) 44,000 shares subject to options exercisable within 60 days,
(ii) 100,000 warrants exercisable within 60 days (which warrants were
issued in connection with the exercise and exchange of the Company's
Series G Warrants) and (iii) 80,000 shares issuable upon conversion of
1,000 shares of the Company's Series E Preferred Stock convertible within
60 days and (iv) 100,000 shares issuable upon conversion of 500 shares of
the Company's Series G Preferred Stock convertible within 60 days (such
Series G Preferred Stock votes with the Common Stock on an as converted
basis).
(9) Includes 15,000 shares subject to options exercisable within 60 days. Ms.
Cornell is also a Vice President and Director of Taurus Advisory Group,
and as such may be deemed to exercise investment power over shares held
by Taurus Advisory Group. Ms. Cornell disclaims such beneficial
ownership.
(10) Includes 22,000 shares subject to options exercisable within 60 days.
(11) Includes 728,453 shares issuable upon conversion of 27,317 shares of the
Company's Series D Preferred Stock and Series F Preferred Stock
convertible within 60 days at an assumed conversion price of $3.75. The
conversion price of each share of Series D Preferred Stock and Series F
Preferred Stock is equal to $100 divided by the lesser of (i) $3.75 or
(ii) the market price at the time of conversion.
(12) Includes (i) 7,572,625 shares held by clients of Taurus Advisory Group,
(ii) 551,250 warrants exercisable within 60 days held by clients of
Taurus Advisory Group (which warrants were issued in connection with the
Company's Series E Preferred Stock) and (iii) 1,155,000 shares issuable
upon conversion of 14,437.5 shares of the Company's Series E Preferred
Stock convertible within 60 days held by clients of Taurus Advisory Group
(iv) 15,000 warrants exercisable within 60 days (which warrants were
issued in connection with a bridge loan to the Company), (v) 3,340,000
warrants exercisable within 60 days held by clients of Taurus Advisory
Group (which warrants were issued in connection with the exercise and
exchange of the Company's Series G Warrants) and (vi) 3,340,000 shares
issuable upon conversion of 16,700 shares of the Company's Series G
Preferred Stock convertible within 60 days held by clients of the Taurus
Advisory Group (such Series G Preferred Stock votes with the Common Stock
on an as converted basis). Taurus Advisory Group exercises investment
power over such shares.
(13) Includes 30,000 shares subject to options exercisable within 60 days.
(14) Includes 40,000 shares subject to options exercisable within 60 days.
(15) Represents 45,000 shares subject to options exercisable within 60 days.
(16) Includes 10,000 shares subject to options exercisable within 60 days.
Mr. Gerschel may be deemed to exercise investment power over shares held
by GBA Capital, LLC. Mr. Gerschel disclaims such beneficial ownership.
-4-
<PAGE>
(17) Includes (i) 700,000 warrants exercisable within 60 days (which warrants
were issued in connection with the Company's Series E Preferred Stock)
and (ii) 640,000 shares issuable upon conversion of 8,000 shares of the
Company's Series E Preferred Stock convertible within 60 days.
(18) Includes (i) 5,000 shares subject to options exercisable within 60 days,
(ii) 16,000 warrants exercisable within 60 days (which warrants were
issued in connection with the Company's Series E Preferred Stock), (iii)
100,000 warrants exercisable within 60 days (which warrants were issued
in connection with the exercise and exchange of the Company's Series G
Warrants) and (iv) 100,000 shares issuable upon conversion of 500 shares
of the Company's Series G Preferred Stock convertible within 60 days
(such Series G Preferred Stock votes with the Common Stock on an as
converted basis).
(19) Includes (i) 12,500 warrants exercisable within 60 days (which warrants
were issued in connection with the Company's Series E Preferred Stock),
(ii) 50,000 shares issuable upon conversion of 625 shares of the
Company's Series E Preferred Stock convertible within 60 days, (iii)
80,000 warrants exercisable within 60 days (which warrants were issued in
connection with the exercise and exchange of the Company's Series G
Warrants) and (iv) 80,000 shares issuable upon conversion of 400 shares
of the Company's Series G Preferred Stock convertible within 60 days
(such Series G Preferred Stock votes with the Common Stock on an as
converted basis).
(20) Includes 125,000 shares subject to options exercisable within 60 days.
(21) Includes 102,000 shares subject to options exercisable within 60 days.
(22) Includes 100,000 shares subject to options exercisable within 60 days.
(23) Includes 36,000 shares subject to options exercisable within 60 days.
(24) Includes (i) 600,000 warrants exercisable within 60 days (which warrants
were issued in connection with the Company's Series E Preferred Stock)
and (ii) 640,000 shares issuable upon conversion of 8,000 shares of the
Company's Series E Preferred Stock convertible within 60 days.
(25) Includes 734,000 shares subject to options exercisable within 60 days,
4,852,250 shares subject to warrants convertible within 60 days, and
5,485,000 shares subject to preferred stock convertible within 60 days.
-5-
<PAGE>
ELECTION OF DIRECTORS
(Proposal No. 1)
At the Meeting, it is intended that the persons named in the proxy
will vote for the election of the nine nominees listed below, each director to
serve until the next annual meeting or until his or her successor is elected
and qualified. All of the nominees other than Kerry L. Kuhn are now members
of the Board. The Board of Directors recommends a vote FOR the election of
each of the nominees listed below. The persons named in the accompanying
proxy intend to vote for the election of the nominees listed below unless
authority to vote for one or more of such nominees is specifically withheld in
the proxy. If any nominee, for any reason currently unknown, cannot be a
candidate for election, proxies will be voted for the election of a substitute
recommended by the Board.
Information Concerning Nominees for Director
The following information is furnished concerning the Company's
nominees for director:
<TABLE>
<CAPTION>
Name Age Position with the Company
- ------------------------------------ --- -------------------------------------------------------------------------
<S> <C> <C>
J. Thomas Parmeter 60 Chairman of the Board of Directors, Chief Executive Officer and President
Edward E. David, Ph.D.(1) 74 Director
George R. Walker (1)(2)(3) 75 Director
Patricia J. Cornell (2)(3) 51 Director
J. Paul Jones, Ph.D. 58 Director
Philip J. Davis (3) 69 Director, Secretary
Edward J. Hartnett (1) 68 Director
Richard Adelson 42 Director
Kerry L. Kuhn, M.D. 51 None
_______________________
</TABLE>
(1) Member of the Stock Option and Compensation Committee of Board of
Directors.
(2) Member of the Audit Committee of Board of Directors.
(3) Member of the Finance Committee of Board of Directors.
Mr. J. Thomas Parmeter has been the Company's President, Chief
Executive Officer and Chairman of the Board of Directors since its inception
in July 1988. He also served as its Chief Financial Officer from its
inception until July 1992. From 1982 to November 1987, Mr. Parmeter was
President, Chief Executive Officer and, from June 1987 to June 1988, Chairman
of the Board of Syntro Corporation.
Dr. Edward E. David has served as a Director of the Company since
January 1989. Dr. David has been a private consultant since 1986. In
addition, he is now a principal in the Washington Advisory Group, LLC, advisor
to industry, universities and institutions. From 1977 to 1986, he was the
President of Exxon Research and Engineering. From 1981 to 1988, Dr. David sat
on the White House Science Council. Among his current responsibilities and
affiliations, Dr. David is a Director of Intermagnetics General Corp.,
Spacehab, Inc., InterVU, Inc., Acquasearch Inc., and is a life member of the
Massachusetts Institute of Technology Corporation. Dr. David is also Chairman
of the Company's Technical Advisory Group.
Mr. George R. Walker has served as a Director of the Company since
January 1989. Mr. Walker, retired since January 1985, was formerly the Vice
President-Finance for Esso Europe, an operating division of the Exxon
Corporation.
Ms. Patricia J. Cornell, CFA, has served as vice president and
director of Taurus Advisory Group, a registered investment adviser, since
March 1984. From 1976 through 1984, Ms. Cornell held senior positions in
portfolio management at Morris Offit Associates and Lionel D. Edie & Company.
-6-
<PAGE>
Although clients of Taurus Advisory Group hold significant amounts of the
Company's Common Stock, Ms. Cornell does not serve as a member of the Board
pursuant to any arrangement, agreement or understanding with either the
Company or Taurus Advisory Group.
Mr. Philip J. Davis has been the Company's Secretary since January
1989. Mr. Davis has been a director of the Company since April 1994; he
previously served as a director of the Company from January 1989 until October
1991. Mr. Davis has been with Donaldson, Lufkin & Jenrette since June 1994,
currently as its Managing Director of Investment Banking. He was formerly
Director, Institutional Sales, at Merrill Lynch, Inc. (formerly Merrill Lynch
Capital Markets) from February 1991 until March 1994, and had been a Vice
President at Merrill Lynch, Inc. since 1986.
Mr. Edward J. Hartnett has served as a director of the Company since
March 1996. Mr. Hartnett, retired since January 1996, previously served as a
Company Group Chairman for the Johnson & Johnson Company, a diversified drug
and medical products company. Mr. Hartnett is a past chairman of the
Health Industry Manufacturers Association. Although Johnson & Johnson
Development Company, an affiliate of Mr. Hartnett's previous employer (Johnson
& Johnson Company), is a significant holder of the Company's Series D
Preferred Stock, Series F Preferred Stock and Common Stock, Mr. Hartnett does
not serve as a member of the Board pursuant to any arrangement, agreement or
understanding with either the Company or Johnson & Johnson Company.
Dr. J. Paul Jones has served as a director of the Company since May
1998. Mr. Jones, retired since January 1998, was previously with Procter &
Gamble Company since 1969, most recently as its Vice President, Research &
Product Development, OTC Health Care Products Worldwide, and was formerly a
member of the Analgesics subcommittee of the American Society of Clinical
Pharmacology and Toxicology.
Mr. Richard Adelson has served as a director of the Company since
September 1999. Mr. Adelson is presently a private investor. From 1995 to
1996 he was the Senior Managing Director of The Eastman Group, Inc. From 1989
to 1995, he was the Director of Leasing and Acquisitions for the Donald Zucker
Company. From 1987 to 1989 he was the Administrative Director of the Leonard
Garner Group.
Dr. Kerry L. Kuhn is a nominee for director. Dr. Kuhn is currently a
partner and Board certified practicing physician at the Omega Obstetrics and
Gynecology Center in Coral Springs, Florida. Dr. Kuhn also serves as an
adjunct professor in biology at the Nova University Department of Science,
Math and Technology.
Committees and Compensation of the Board of Directors
In 1999, the Company had standing Stock Option and Compensation,
Audit, and Finance Committees. During the Company's last fiscal year, the
Board of Directors held twenty five meetings. All current members of the
Board attended at least 75% of all Board meetings and the meetings of
committees of the Board on which such members served.
Stock Option and Compensation Committee
The Stock Option and Compensation Committee met six times during the
last fiscal year. During 1999, the Stock Option and Compensation Committee
determined grants of stock options under, and administered, the 1989 and 1992
stock option plans of the Company, as well as its 1996 non-employee directors'
stock option plan and employee stock purchase plan. The Stock Option and
Compensation Committee also made recommendations to the Board on the annual
salaries of all elected officers of the Company and made recommendations to
the Board on compensation matters of the Company.
-7-
<PAGE>
Audit Committee
The Audit Committee met two times during the last fiscal year. The Audit
Committee makes recommendations concerning the engagement of the Company's
independent auditors, consults with the independent auditors concerning the
audit plan and reviews the comments and recommendations resulting from the
auditors' report.
Finance Committee
The Finance Committee did not have any meetings during the last fiscal
year. The Finance Committee reviews and makes recommendations concerning
potential private financing transactions for the Company.
Directors' Compensation
No directors received any cash compensation for their services as
directors during the 1999 fiscal year. Edward E. David, Inc., of which Dr.
David is the sole shareholder, received $16,000 during 1999 for Dr. David's
services as Chairman of the Company's Technical Advisory Group. All directors
were reimbursed for their out-of-pocket expenses in attending meetings of the
Board or committees thereof.
Outside directors may be granted options to purchase Common Stock under
the Company's 1996 Non-Employee Directors' Stock Option Plan (the "1996 Option
Plan"). Non-employee directors are currently granted options to purchase
5,000 shares of Common Stock of the Company upon their election to the Board
or on the first business day in June of each calendar year. Such options are
exercisable six months after the date of grant at a price equal to the fair
market value of the Common Stock on the date of grant. During 1999, Ms.
Cornell and each of Messrs. David, Davis, Hartnett, Jones, and Walker received
options to purchase 5,000 shares of Common Stock, at an exercise price of
$0.44 per share, and Mr. Adelson received options to purchase 5,000 shares of
Common Stock, at an exercise price of $0.38 per share, under the 1996 Option
Plan.
-8-
<PAGE>
APPOINTMENT OF AUDITORS
(Proposal No. 2)
The firm of Ernst & Young LLP, independent auditors, has been the
Company's independent auditors since the Company's inception in 1988 and has
been selected by the Board of Directors to serve as its independent auditors
for the fiscal year ending December 31, 2000.
The independent auditors meet periodically with the Audit Committee of
the Board. The members of the Audit Committee were Ms. Cornell and Mr.
Walker.
Professional services performed by Ernst & Young LLP for the fiscal year
ended December 31, 1999 consisted of an audit of the financial statements of
the Company, consultation on interim financial information, services related
to filings with the Securities and Exchange Commission, meetings with the
Company's Audit Committee, and consultation on various matters relating to
accounting and financial reporting.
The Audit Committee approved in advance or ratified each of the major
professional services provided by Ernst & Young LLP and considered the
possible effect of each such service on the independence of that firm.
Representatives of Ernst & Young LLP are expected to be present at the
meeting with the opportunity to make a statement, if they desire, and will be
available to respond to appropriate questions during the Meeting.
The Board of Directors recommends a vote FOR ratification.
-9-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
--------------------------
The following table shows for the periods indicated the compensation paid
to or accrued to, or for the benefit of, each of the named executive officers
of the Company for services rendered to the Company during 1999.
<TABLE>
<CAPTION>
Restricted
Salary Other Annual Stock Securities
------ Bonus Compensation Awards Underlying
Name and Principal Position Year ($) ($) ($) ($) Options
- --------------------------- ---- ------ ------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. Thomas Parmeter 1999 $200,000 -0- -0- -0- -0-
President, Chief Executive 1998 $190,000 -0- -0- -0- -0-
Officer and Chairman of the 1997 $180,000 -0- -0- -0- -0-
Board
Joseph Cappello, Ph.D. 1999 $129,000 -0- -0- -0- 42,500
Vice President - Research 1998 $124,500 $10,000 -0- $8,594 25,000
and Development, Director- 1997 $120,000 -0- -0- -0- 25,000
Polymer Research and Chief
Technical Officer
Franco A. Ferrari, Ph.D. 1999 $119,700 -0- -0- -0- 30,000
Vice President - Laboratory 1998 $116,850 $ 7,500 -0- $6,446 20,000
Operations and Polymer 1997 $114,000 -0- -0- -0- -0-
Productions, Director-
Molecular Genetics
John E. Flowers 1999 $117,600 -0- -0- -0- 30,000
Vice President-Planning 1998 $114,800 $ 7,500 -0- $6,446 20,000
and Operations 1997 $112,000 -0- -0- -0- -0-
Erwin R. Stedronsky, Ph.D. 1999 $119,700 -0- -0- -0- 42,500
Vice President-Product 1998 $116,850 $ 8,750 -0- $7,520 10,000
Formulation and Engineering 1997 $114,000 -0- -0- -0- 25,000
</TABLE>
-10-
<PAGE>
Option Grants in Last Fiscal Year
---------------------------------
The following table provides information about the number of options
granted to each of the named executive officers of the Company during the
fiscal year ended December 31, 1999. No stock appreciation rights were
granted to any executive officer during the last fiscal year.
<TABLE>
<CAPTION>
Number of Securities % of Total Options
Underlying Options Granted to Employees Exercise Expiration
Name Granted in Fiscal Year Price ($/sh) Date
---- -------------------- --------------------- ------------ ----------
<S> <C> <C> <C> <C>
J. Thomas -0- -0-% n/a n/a
Parmeter
Joseph Cappello, 42,500 9% $0.47 6/14/09
Ph.D.
Franco A. Ferrari, 30,000 6% $0.47 6/14/09
Ph.D.
John E. Flowers 30,000 6% $0.47 6/14/09
Erwin R. Sedronsky, 42,500 9% $0.47 6/14/09
Ph.D.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value
- --------------------------------------------------------------------------------
The following table provides information about the number of unexercised
options held by each of the named executive officers of the Company at
December 31, 1999. None of the executive officers exercised options during
the fiscal year. The Company has not granted stock appreciation rights to any
named executive officer.
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Value of Unexercised
on Value Underlying Unexercised In-the-Money Options
Name Exercise Realized Options at Fiscal Year End At Fiscal Year End(1)
- ------------------------ -------- -------- ---------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
J. Thomas Parmeter -0- -0- 120,000 80,000 $0 $0
Joseph Cappello, Ph.D. -0- -0- 120,000 95,000 $0 $0
Franco A. Ferrari, Ph.D. -0- -0- 102,000 60,500 $0 $0
John E. Flowers -0- -0- 100,000 60,000 $0 $0
Erwin R. Stedronsky, -0- -0- 115,000 82,500 $0 $0
Ph.D.
</TABLE>
(1) calculated using the closing price of $0.1875 per share as of December
31, 1999
-11-
<PAGE>
The Company does not have a defined benefit or actuarial pension plan.
The Company does not have a long-term incentive plan and did not make any long
term awards in 1999.
Employment Agreements
As of November 1, 1996, the Company entered into three-year employment
agreements with certain of its officers. As of July 1, 1999, the agreement
with: Mr. Parmeter provided for an annual salary of $200,000, a term life
insurance policy in the amount of $250,000 and certain other benefits; Mr.
Flowers provided for an annual salary of $117,600 and certain other benefits;
Dr. Cappello provided for an annual salary of $129,000 and certain other
benefits; Dr. Ferrari provided for an annual salary of $119,700 and certain
other benefits, and Dr. Stedronsky provided for an annual salary of $119,700
and certain other benefits.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities ("Section 16
Participants"), to file reports of ownership and changes in ownership with the
SEC. Such persons are required to furnish the Company with copies of all
forms they file pursuant to Section 16(a). Based solely on review of the
copies of such forms furnished to the Company, or written representations that
no such forms were required, the Company believes that during 1999 all Section
16 Participants complied with all applicable Section 16(a) filing
requirements, except for the inadvertent failure of certain officers of the
Company to timely file Forms 5 with respect to certain grants of options,
which Forms 5 covering all such transactions were filed on March 27, 2000 and
March 29, 2000. The required information with respect to such inadvertent
failures is as follows: Richard Adelson, Joseph Cappello, Franco Ferrari,
Erwin Stedronsky and John Flowers each respectively failed to file a Form 5
covering one grant of options and filed these Forms 5 late covering all such
transactions.
Affiliate Transactions
In February 1997, the Compensation Committee approved a loan of up to
$250,000, of which a loan of $140,000 was made at a rate of 8% per annum, to
Mr. Parmeter, secured by a pledge of stock, solely to meet his tax obligations
arising from the exercise of a stock option. In May 1999, the Stock Option
and Compensation Committee extended the term of the loan until April 2005.
The Company does not anticipate seeking stockholder ratification of the loan
to Mr. Parmeter.
OTHER MATTERS
Management knows of no other business to be presented at the annual
meeting. If other matters do properly come before the meeting, or any
adjournments or postponements thereof, it is the intention of the persons
named in the proxy to vote on such matters according to their best judgment.
-12-
<PAGE>
STOCKHOLDER INFORMATION
ANY PERSON FROM WHOM PROXIES FOR THE MEETING ARE SOLICITED MAY OBTAIN,
IF NOT ALREADY RECEIVED, FROM THE COMPANY, WITHOUT CHARGE, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE 1999 FISCAL YEAR BY WRITTEN
REQUEST ADDRESSED TO THE COMPANY, 10655 SORRENTO VALLEY ROAD, SAN DIEGO,
CALIFORNIA 92121, ATTENTION: INVESTOR RELATIONS DEPARTMENT. THE ANNUAL
REPORT ON FORM 10-KSB IS NOT SOLICITING MATERIAL AND IS NOT INCORPORATED IN
THIS DOCUMENT BY REFERENCE.
STOCKHOLDER PROPOSALS
Proposals by stockholders to be presented at the Company's 2001 annual
meeting must be received by the Company no later than 120 days prior to March
31, 2001, in order to be considered for inclusion in the Company's proxy
statement and form of proxy for such meeting. Furthermore, proposals by
stockholders may be considered untimely and ineligible to properly come before
the Company's 2001 annual meeting if such proposal is not submitted at least
45 days prior to March 31, 2001.
By Order of the Board of Directors,
PHILIP J. DAVIS
Secretary
Dated: March 31, 2000
-13-
<PAGE>
PROXY PROTEIN POLYMER TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 2000
J. Thomas Parmeter and Philip J. Davis, and each of them, with full power of
substitution, are hereby authorized to represent and to vote the shares of
Common Stock and Series G Preferred Stock, if any, of Protein Polymer
Technologies, Inc. held of record by the undersigned on March 27, 2000, as
directed on the reverse side and, in their discretion, on all other matters
which may properly come before the Annual Meeting of Stockholders to be held on
April 28, 2000, and at any adjournment or postponement thereof, as if the
undersigned were present and voting at the meeting.
Whether or not you expect to attend the meeting, you are urged to execute and
return this proxy, which may be revoked at any time prior to its use.
The shares represented by this proxy will be voted as directed by the
stockholder. Where no direction is given when the duly executed proxy is
returned, such shares will be voted FOR all proposals.
The Board of Directors recommends a vote FOR each of the nominees named in
Proposal No. 1 and FOR Proposal No. 2.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS:
1) J. Thomas Parmeter, 2) Edward E. David, 3) George R. Walker, 4) Richard
Adelson, 5) Patricia J. Cornell, 6) J. Paul Jones, 7) Philip J. Davis, 8)
Edward J. Hartnett, 9) Kerry L. Kuhn
[_] For All Nominees [_] Withhold All Nominees
To withhold authority to vote for any individual nominee(s), write the
nominee's names on the space(s) provided below:
- --------------------------------------------------------------------------------
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT
OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS. [_] FOR [_] AGAINST [_] ABSTAIN
Dated: _________, 2000
----------------------
(Signature)
----------------------
(Signature if held
jointly)
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
