[Penederm Letterhead]
June 23, 1997
To certain Shareholders of
Penederm Incorporated
Re: Reincorporation of Penederm Incorporated
Ladies/Gentlemen:
Penederm Incorporated held its annual shareholders meeting
on June 16, 1997. One of the items on the agenda for
consideration by the shareholders was a change in Penederm's
state of incorporation from California to Delaware through the
merger of Penederm into a newly formed Delaware corporation that
is a wholly owned subsidiary of Penederm (the "Reincorporation
Proposal").
Penederm adjourned the shareholders meeting before a vote
was taken on the Reincorporation Proposal because an insufficient
number of shares had been voted on that proposal. The
shareholders meeting has been adjourned until 10:00 a.m. on July
11, 1997 at the offices of the Company in Foster City. The sole
matter to be considered when the meeting is convened is the
Reincorporation Proposal.
We urge you to carefully review the information set forth in
the proxy statement dated May 8, 1997 with respect to the
Reincorporation Proposal and to complete and return the enclosed
proxy card at your earliest convenience in the envelope provided
so that your vote can be considered when the annual meeting is
reconvened. If you no longer have a copy of the proxy statement
and would like us to provide a copy, please contact Jane Nazzaro
at (415) 358-0100.
Please call me or Mike Bates, Director of Finance and
Administration, at (415) 358-0100 if we can answer any questions
regarding the proposal. Thank you for your consideration of this
matter.
Lloyd H. Malchow
President and Chief Executive
Officer
Enclosures
Penederm Incorporated
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Lloyd H. Malchow
and Michael A. Bates, or either of them, each with full
power of substitution, the lawful attorneys and
proxies of the undersigned to vote as designated
below, and, in their discretion, upon such other
business as may properly be presented to the meeting,
all of the shares of PENEDERM INCORPORATED which the
undersigned shall be entitled to vote at the Annual
Meeting of Shareholders to be held on June 16, 1997,
and at any adjournments or postponements thereof.
1. To elect as directors David E. Collins, Lloyd H.
Malchow, Robert F. Allnutt, William I. Bergman, Mark
J. Gabrielson, Harvey S. Sadow, Ph.D. and Gerald D.
Weinstein.
[ ] FOR all nominees listed (except as
indicated below)
[ ] WITHHOLD AUTHORITY to vote (as to all
nominees)
To withhold authority to vote for any individual
nominee, write that nominee's name on the line provided
below:
_______________________________________________________
2. To approve the proposed change in Penederm Incorporated's
state of incorporation from California to Delaware.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the proposed amendment to the Penederm
Incorporated Equity Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve the proposed amendment to the Penederm
Incorporated Employee Stock Purchase Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the
manner directed by the undersigned shareholder. WHEN NO CHOICE
IS INDICATED, THIS PROXY WILL BE VOTED FOR THE NOMINEES OR
PROPOSALS LISTED ABOVE. The proxy holders in their discretion
may cumulate votes for the election of directors. This proxy
may be revoked at any time prior to the time it is voted by any
means described in the accompanying Proxy Statement.
_______________________________
(Signature)
_______________________________
(Signature)
Please date and sign exactly as
name(s) appear(s) hereon. If shares
are held jointly, each holder should
sign. Please give full title and
capacity in which signing if not
signing as an individual.
Dated: _______________, 1997
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN
THE ENCLOSED ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES.
