<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / 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 Rule 14a-11(c) or Rule 14a-12
REGENERON PHARMACEUTICALS, 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)(1) 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:
<PAGE>
- --------------------------------------------------------------------------------
Regeneron Pharmaceuticals, Inc.
Proxy
Statement
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON JUNE 27, 1997
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Dear Shareholders:
The Annual Meeting of Shareholders of Regeneron Pharmaceuticals, Inc. (the
"Company") will be held at the Westchester Marriott Hotel, 670 White Plains
Road, Tarrytown, New York 10591 at 10:30 am., Eastern Daylight Savings Time, on
Friday, June 27, 1997.
The purposes of the meeting are:
o To elect three Directors to hold office for a three-year term as Class
III directors, and until their successors are duly elected and qualified;
o To amend the Company's Amended and Restated 1990 Long-Term Incentive
Plan ("the Long-Term Incentive Plan") to increase by 1,500,000 the number of
shares of Regeneron Common Stock available for the grant of options and rights
and the award of restricted stock and to clarify and update the Long-Term
Incentive Plan.
o To approve the selection of Coopers & Lybrand L.L.P. as independent
accountants for the Company's fiscal year ending December 31, 1997.
o To act upon such other matters as may properly come before the meeting
and any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on May 9, 1997 as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting and at any adjournment or postponement thereof.
Whether or not you plan to attend the Annual Meeting, please complete, sign, and
date the accompanying proxy and return it promptly in the enclosed prepaid
envelope. If you attend the Annual Meeting, you may vote in person if you wish,
even if you have previously returned your proxy.
By Order of the Board of Directors,
/s/ Paul Lubetkin
Paul Lubetkin
Secretary
Tarrytown, New York
May 23, 1997
<PAGE>
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591
May 23, 1997
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Regeneron Pharmaceuticals, Inc. to be held on Friday, June 27, 1997 at 10:30
a.m. at the Westchester Marriott Hotel, 670 White Plains Road, Tarrytown, New
York 10591.
Whether or not you plan to attend the Annual Meeting, please mark,
sign, and date the accompanying proxy and return it promptly in the enclosed
prepaid envelope. If you attend the Annual Meeting, you may vote in person if
you wish, even if you have previously returned your proxy.
Sincerely,
/s/ P. Roy Vagelos
P. Roy Vagelos, M.D.
Chairman of the Board of Directors
<PAGE>
Proxy Statement
1997 Annual Meeting of Shareholders
of Regeneron Pharmaceuticals, Inc.
- --------------------------------------------------------------------------------
Proxy Solicitation
This Proxy Statement is furnished to the shareholders of Regeneron
Pharmaceuticals, Inc., a New York corporation (the "Company"), in connection
with the solicitation by its Board of Directors from holders of the Company's
Common Stock (the "Common Stock") and Class A Common Stock (the "Class A Stock")
of proxies to be voted at the Annual Meeting of Shareholders of the Company to
be held on Friday, June 27, 1997, at 10:30 a.m., at the Westchester Marriott
Hotel, 670 White Plains Road, Tarrytown, New York 10591, and at any adjournment
or postponement thereof (the "Annual Meeting"), for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. The Company's
executive offices are located at 777 Old Saw Mill River Road, Tarrytown, New
York 10591.
This Proxy Statement and form of proxy are first being mailed to shareholders of
the Company on or about May 23, 1997. All proxies duly executed and received
prior to or at the Annual Meeting, and not revoked, will be voted on all matters
presented at the meeting in accordance with the instructions indicated on such
proxies. In the absence of instructions, proxies so received will be voted (1)
FOR the named nominees to the Company's Board of Directors, (2) FOR the
amendment to increase by 1,500,000 the number of shares of Regeneron Common
Stock available for the grant of options and rights and the award of restricted
stock and to clarify and update the Long-Term Incentive Plan, and (3) FOR the
approval of the selection of Coopers & Lybrand L.L.P. as independent accountants
for the Company's fiscal year ending December 31, 1997. If any other matters are
properly presented at the Annual Meeting for consideration, the persons named in
the enclosed form of proxy will have discretion to vote on such matters in
accordance with their best judgment.
Any proxy given pursuant to this solicitation may be revoked by (i) filing with
the Secretary of the Company, at or before the taking of the vote at the Annual
Meeting, a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company before the taking of the vote at
the Annual Meeting, or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
the revocation of a proxy). Any written notice of revocation or subsequent proxy
should be sent so as to be delivered to Regeneron Pharmaceuticals, Inc., 777 Old
Saw Mill River Road, Tarrytown, New York 10591, Attention: Secretary, or hand
delivered to the Secretary of the Company at or before the taking of the vote at
the Annual Meeting.
The persons named as proxies in the enclosed form of proxy, Leonard S. Schleifer
and Paul Lubetkin, were selected by the Board of Directors of the Company and
are officers of the Company.
Record Date & Voting at the Annual Meeting
The Board of Directors of the Company has fixed the close of business on May 9,
1997 as the record date for the determination of the shareholders entitled to
notice of, and to vote at, the Annual Meeting. Accordingly, only holders of
record of Common Stock and Class A Stock on the record date will be entitled to
notice of, and to vote at, the Annual Meeting. As of April 30, 1997, 22,166,169
shares of Common Stock and 4,335,824 shares of Class A Stock were outstanding.
The Common Stock and the Class A Stock vote together on all matters as a single
class, with the Common Stock being entitled to one vote per share and the Class
A Stock being entitled to ten votes per shares. No other voting securities of
the Company were outstanding on the record date. The holders of a majority of
the shares issued and outstanding attending personally or by proxy will
constitute a quorum for the transaction of business at the Annual Meeting.
Election of directors will be determined by a plurality of the votes cast in
person or by proxy at the Annual Meeting. All other matters presented to
shareholders will be determined by the affirmative vote of a majority of the
votes cast in person or by proxy at the Annual Meeting. Under applicable New
York law, in determining whether any proposal has received the requisite number
of affirmative votes and tabulating the votes for directors, abstentions and
broker nonvotes will be disregarded and will have no effect on the outcome of
the vote.
Annual Report
The Company's Annual Report to Shareholders for the year ended December 31, 1996
is being furnished herewith to shareholders of record on May 9, 1997. The Annual
Report to Shareholders does not constitute a part of the proxy soliciting
material. The Company has also filed with the Securities and Exchange Commission
a report on Form 10-K for the year ending December 31, 1996, a copy of which
will be furnished (except for exhibits) without charge to any shareholder upon
written request addressed to the Investor Relations Department of the Company at
the address shown above.
1
<PAGE>
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Security Ownership of Management
The following table sets forth, as of April 30, 1997, the number of shares of
the Company's Common Stock and Class A Stock beneficially owned by each of its
directors or nominees for directors, and all directors and executive officers as
a group, and the percentage that such shares represent of the total combined
number of outstanding Common Stock and Class A Stock, based upon information
obtained from such persons.
Management and Directors Stock Ownership Table as of April 30, 1997
<TABLE>
<CAPTION>
Percentage
of
Common Stock
Number of Shares Number of Shares & Class A Stock
of Class A Stock of Common Stock Beneficially
Name of Beneficial Owner Beneficially Owned Beneficially Owned Owned
(1) (1) (2)
- ------------------------------------- -------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
Leonard S. Schleifer, M.D., Ph.D 1,769,340 (3) 144,000 (9) 7.18%
P. Roy Vagelos, M.D 0 724,002 (10) 2.72%
Charles A. Baker 62,384 (4) 30,002 (9) *
Michael S. Brown, M.D 60,750 60,002 (9) *
Alfred G. Gilman, M.D.,Ph.D 109,912 70,702 (11) *
Joseph L. Goldstein, M.D 42,000 41,669 (9) *
Fred A. Middleton c/o Sanderling Ventures 116,133 (5) 48,020 (12) *
Eric M. Shooter, Ph.D 54,311 60,002 (9) *
George L. Sing 0 81,927 (12) *
Murray A. Goldberg 0 30,300 (13) *
Ronald M. Lindsay, Ph.D 109,483 (6) 64,400 (9) *
Paul Lubetkin 39,557 (7) 40,000 (14) *
George D. Yancopoulos, M.D., Ph.D 42,750 (8) 124,300 (9) *
All Directors and Executive Officers 2,446,782 1,607,976 14.79%
as a Group (17 persons)
</TABLE>
- -----------------------------------
* Represents less than 1%
(1) The inclusion herein of any Class A Stock or Common Stock, as the case may
be, deemed beneficially owned does not constitute an admission of beneficial
ownership of those shares. Unless otherwise indicated, each person listed above
has sole voting and investment power with respect to the shares listed
(2) Number of shares outstanding includes 26,501,993 shares outstanding as of
April 30, 1997 plus any shares subject to options held by the person or entity
in question that are currently exercisable or exercisable within sixty days
after April 30, 1997.
(3) Includes 43,950 shares of Class A Stock held in trust for the benefit of Dr.
Schleifer's two sons, of which Dr. Schleifer disclaims beneficial ownership.
Excludes 36,000 shares of Class A Stock held by the Schleifer Family Foundation,
a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership.
(4) Excludes shares owned by Sanderling Ventures, of which Mr. Baker is a
special limited partner.
(5) Fred A. Middleton, a Director of the Company, is a General Partner of
Sanderling Ventures, and the beneficial owner of the shares. Sanderling Ventures
consists of several entities: Sanderling Venture Partners II, L.P., Sanderling
Ventures Limited, L.P., and Sanderling Biomedical, L.P. Also includes 16,018
shares of Common Stock held directly by Mr. Middleton and 2,000 shares of Common
Stock held in trust for the benefit of Mr. Middleton's children, of which Mr.
Middleton disclaims beneficial ownership.
(6) Includes 10,274 shares of Class A Stock held in trust for Dr. Lindsay's
daughters and excludes 350 shares held by Dr. Lindsay's wife. Dr. Lindsay
disclaims beneficial ownership of all such shares.
(7) Includes 4,800 shares of Class A Stock held in trust for the benefit of Mr.
Lubetkin's son and excludes 7,500 shares held by Mr. Lubetkin's wife. Mr.
Lubetkin disclaims beneficial ownership of all such shares.
2
<PAGE>
(8) Includes 13,383 shares of Class A Stock held in trust for the benefit of Dr.
Yancopoulos's children and excludes 7,500 shares held by Dr. Yancopoulos's wife.
Dr. Yancopoulos disclaims beneficial ownership of all such shares.
(9) All shares of Common Stock beneficially owned represents shares of Common
Stock purchasable upon the exercise of options granted pursuant to the Long-Term
Incentive Plan which are exercisable or become so within sixty days from April
30, 1997.
(10) Includes 600,000 shares of restricted Common Stock purchased by Dr. Vagelos
in January 1995 pursuant to an agreement with the Company that provides, among
other things, that such restricted shares are not transferable, with such
restriction lapsing ratably over a five year period. Also includes 124,002
shares of Common Stock purchasable upon the exercise of options granted pursuant
to the Long-Term Incentive Plan which are exercisable or become so within sixty
days from April 30, 1997.
(11) Includes 60,002 of Common Stock Purchasable upon the exercise of options
granted pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 30, 1997.
(12) Includes 30,002 shares of Common Stock purchasable upon the exercise of
options pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 30, 1997.
(13) Includes 28,000 shares of Common Stock purchasable upon the exercise of
options pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 30, 1997, and 300 shares held jointly as
custodian for Mr. Goldberg's children, of which Mr. Goldberg disclaims
beneficial ownership.
(14) Includes 39,000 shares of Common Stock purchasable upon the exercise of
options pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 30, 1997.
Security Ownership of Certain Beneficial Owners as of April 30, 1997
Set forth below is the name, address, and stock ownership of each person or
group of persons known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock or Class A Stock.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Shares of Common
Number of Shares of of Common Stock Stock and Class A
Class A Stock Beneficially Stock Beneficially
Name and Address of Beneficial Owner Beneficially Owned Owned Owned
- -------------------------------------------- ------------------------ --------------------- ------------------------
<S> <C> <C> <C>
Leonard S. Schleifer, M.D., Ph.D. 1,769,340 (1) 144,000 7.18% (2)
777 Old Saw Mill River Road
Tarrytown, New York 10591
Amgen Inc. 788,766 3,650,000 16.75% (3)
1840 DeHavilland Drive
Thousand Oaks, California 91320
</TABLE>
- ----------
(1) Includes 43,950 shares of Class A Stock held in trust for the benefit of Dr.
Schleifer's two sons, of which Dr. Schleifer disclaims beneficial ownership.
Excludes 36,000 shares of Class A Stock held by the Schleifer Family Foundation,
a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership.
(2) Number of shares deemed outstanding includes 26,501,993 shares outstanding
as of April 30,1997 plus 144,000 shares subject to options held by Dr. Schleifer
that are currently exercisable or exercisable within sixty days after April 30,
1997.
(3) Number of shares deemed outstanding includes 26,501,993 shares outstanding
as of April 30, 1997, and does not include warrant held by Amgen to purchase
700,000 shares of Common Stock.
3
<PAGE>
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ELECTION OF DIRECTORS
Nominees
The Board of Directors is divided into three classes, denominated Class I, Class
II, and Class III, with members of each class holding office for staggered
three-year terms. There are currently three Class III Directors, whose terms
expire at the 1997 Annual Meeting, three Class I Directors, whose terms expire
at the 1998 Annual Meeting, and three Class II Directors, whose terms expire at
the 1999 Annual Meeting (in all cases subject to the election and qualification
of their successors and to their earlier death, resignation, or removal).
At each annual meeting of shareholders, the successors to directors whose terms
expire shall be elected to serve from the time of election and qualification
until the third annual meeting following their election and until a successor
has been duly elected and qualified. All of the nominees for Class III Directors
are currently Class III Directors of the Company. All of these nominees have
indicated a willingness to serve if elected, but if any should be unable or
unwilling to serve, proxies may be voted for substitute nominees designated by
the Board of Directors.
The following table contains information, as of April 30, 1997, with respect to
the persons who serve on the Board, including the persons who have been
nominated to serve a three-year term as directors.
<TABLE>
<CAPTION>
Served as a
Director Class
Name Age Position with the Company Since of Dir.
---- --- ------------------------- ----- -------
<S> <C> <C> <C> <C>
P. Roy Vagelos, M.D. (1)(3) 67 Chairman of the Board 1995 II
Leonard S. Schleifer, M.D., Ph.D. 44 Director, Chief Executive Officer, 1988 I
and President
Eric M. Shooter, Ph.D. (1) 73 Director and Chairman of 1988 I
Scientific Advisory Board
Fred A. Middleton (2) 47 Director 1990 I
Joseph L. Goldstein, M.D. (1) 57 Director and Member of Scientific 1991 II
Advisory Board
Alfred G. Gilman, M.D., Ph.D. (1) 55 Director and Member of Scientific 1990 II
Advisory Board
George L. Sing (2)(3) 48 Director 1988 III
Charles A. Baker (2)(3) 64 Director 1989 III
Michael S. Brown, M.D. (1) 56 Director and Member of Scientific 1991 III
Advisory Board
</TABLE>
- -------------------------------------------
(1) Member of the Technology Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
- --------------------------------------------------------------------------------
Background of Nominees for Class III Directors
- --------------------------------------------------------------------------------
CHARLES A. BAKER, 64, has been a Director of the Company since February 1989.
Since December 1989, he has been the Chairman, President, and Chief Executive
Officer of The Liposome Company, Inc., a publicly held company. During his
career, Mr. Baker served in senior management capacities in various
pharmaceutical companies, including the positions of Group Vice President,
Squibb Corporation (now Bristol-Myers Squibb) and President, Squibb
International. He also held various senior executive positions at Abbott
Laboratories and Pfizer, Inc. Mr. Baker is a special limited partner in
Sanderling Ventures, which is a shareholder of the Company. See "Security
Ownership of Management."
MICHAEL S. BROWN, M.D., 56, has been a Director of the Company since June 1991
and a Member of the Company's Scientific Advisory Board since January 1988. Dr.
Brown is Professor of Medicine and Genetics and the Director of the Center for
Genetic Diseases at The University of Texas Southwestern Medical Center at
Dallas. He is a member of the National Academy of Sciences. He is a Director of
Pfizer, Inc. His scientific contributions in cholesterol and lipid metabolism
were made in collaboration with Dr. Joseph L. Goldstein. Drs. Brown and
Goldstein jointly received the Nobel Prize for Physiology or Medicine in 1985.
4
<PAGE>
GEORGE L. SING, 48, has been a Director of the Company since January 1988. From
February 1990 until February 14, 1991, Mr. Sing served as a consultant to
Merrill Lynch Venture Capital Inc. with respect to the Company. From 1982 to
February 1990, Mr. Sing was a Vice President and member of the Board of
Directors of Merrill Lynch Venture Capital, Inc., a venture capital firm, which
was the management company for ML Venture Partners II, L.P., a shareholder of
the Company. Since 1987, Mr. Sing has been a limited partner of MLVPII Co.,
L.P., a general partner of ML Venture Partners II, L.P. Since 1993, Mr. Sing has
been a general partner of Zitan Partners, an investment and advisory firm.
- --------------------------------------------------------------------------------
Background of Directors Whose Terms are
Continuing
- --------------------------------------------------------------------------------
Directors Whose Terms Expire at the 1988 Annual Meeting (Class I)
LEONARD S. SCHLEIFER, M.D., Ph.D., 44, founded Regeneron in 1988 and has been
its President and Chief Executive Officer since its inception and served as
Chairman of the Board from 1990 through 1994. In 1992, Dr. Schleifer was
appointed Clinical Professor of Neurology at the Cornell University Medical
School, and from 1984 to 1988 he was Assistant Professor at the Cornell
University Medical School in the Departments of Neurology and Neurobiology. Dr.
Schleifer received his M.D. and Ph.D. in Pharmacology from the University of
Virginia. Dr. Schleifer is a licensed physician and is certified in Neurology by
the American Board of Psychiatry and Neurology.
ERIC M. SHOOTER, Ph.D., 73, a co-founder of the Company, has been a Director of
the Company and Chairman of the Scientific Advisory Board since 1988. Dr.
Shooter has been a Professor at Stanford University School of Medicine since
1968. He was the founding Chairman of the Department of Neurobiology at Stanford
University School of Medicine in 1975 and served as its Chairman until 1987. He
is a Fellow of the Royal Society of England, a Fellow of the American Academy of
Arts and Sciences, and a Foreign Associate of the Institute of Medicine of the
National Academy of Sciences.
FRED A. MIDDLETON, 47, has been a Director of the Company since July 1990. Mr.
Middleton also served as the Company's Chief Financial Officer and Treasurer
from October 1988 to May 1991. Mr. Middleton is a General Partner of Sanderling
Ventures, a venture capital firm he co-founded with Dr. Robert McNeil in
December 1987 specializing in early stage biomedical companies. Sanderling
Ventures is a shareholder of the Company. See "Security Ownership of
Management." Between 1984 and 1987, he was Managing General Partner of Morgan
Stanley Ventures and, from 1978 through 1984, was Vice President and Chief
Financial Officer of Genentech, Inc., and President, Genetech Development
Corporation. He is also a member of the Board of Directors of Vical, Inc. and
Chairman of the Board of Directors of Depotech Corporation.
- --------------------------------------------------------------------------------
Directors Whose Terms Expire at the 1999
Annual Meeting (Class II)
ALFRED G. GILMAN, M.D., Ph.D., 55, a co-founder of the Company, has been a
Director of the Company since July 1990 and a member of the Scientific Advisory
Board since 1988. Dr. Gilman has been the Raymond and Ellen Willie Professor of
Molecular Neuropharmacology and Chairman of the Department of Pharmacology at
The University of Texas Southwestern Medical Center at Dallas since 1981 and was
named a Regental Professor in 1995. Dr. Gilman is a member of the National
Academy of Sciences. He is the Consulting Editor of "Goodman and Gilman's The
Pharmacological Basis of Therapeutics," the leading medical pharmacology
textbook. Dr. Gilman received the Nobel Prize for Physiology or Medicine in
1994. Dr. Gilman is a member of the Board of Directors of Eli Lilly & Company.
JOSEPH L. GOLDSTEIN, M.D., 57, has been a Director of the Company since June
1991 and a Member of the Company's Scientific Advisory Board since January 1988.
Dr. Goldstein has been the Professor of Medicine and Genetics and Chairman of
the Department of Molecular Genetics at The University of Texas Southwestern
Medical Center at Dallas for more than five years. Dr. Goldstein is a member of
the National Academy of Sciences. Drs. Goldstein and Brown jointly received the
Nobel Prize for Physiology or Medicine in 1985.
P. ROY VAGELOS, M.D., 67, has been a Director of the Company, Chairman of the
Board, and member of the Scientific Advisory Board since January 1995. Dr.
Vagelos was Chairman of the Board and Chief Executive Officer of Merck & Co.,
Inc. He joined Merck in 1975, became a director in 1984, President and Chief
Executive Officer in 1985, and Chairman in 1986. Dr. Vagelos retired from all
positions with Merck in 1994. He is also currently Chairman of the Board of
Trustees of the University of Pennsylvania and a member of the Board of
Directors of PepsiCo, Inc., McDonnell Douglas Corporation, The Prudential
Insurance Company of America, and Estee Lauder Companies.
Board Committees
The Company's Board of Directors has an Audit Committee of which Messrs. Baker,
Middleton, and Sing are members. The Audit Committee is responsible for
reviewing the Company's financial results, the scope and results of audits, and
the evaluation of the Company's
5
<PAGE>
system of internal controls. It also recommends the appointment of independent
accountants. The Audit Committee is comprised of Directors who are not officers
or employees of Regeneron.
The Board of Directors has a Compensation Committee of which Dr. Vagelos and
Messrs. Baker and Sing are members. The Compensation Committee has
responsibility for administering and approving cash compensation of all
corporate officers and of other employees of the Company, and for the
administration of the Company's Executive Stock Purchase Plan and Long-Term
Incentive Plan. Members of this committee are Directors who are not officers or
employees of Regeneron.
The Board of Directors also has a Technology Committee of which Drs. Brown,
Gilman, Goldstein, Shooter, and Vagelos are members. The Technology Committee
has the responsibility for reviewing the Company's scientific and medical
programs and policies. The Technology Committee members are also members of the
Regeneron Scientific Advisory Board and are not officers or employees of the
Company.
During the last fiscal year, the Board of Directors held seven meetings, the
Audit Committee held two meetings, the Compensation Committee held five
meetings, and the Technology Committee held five meetings. No director attended
fewer than 75 percent of the number of Board of Directors meetings and meetings
of committees on which he served.
- --------------------------------------------------------------------------------
Compensation of Directors
Non-employee directors receive an annual retainer of $5,000 and a payment of
$2,000 for each Board meeting attended in person. No additional retainer is paid
for Committee service. Directors who are not employees are reimbursed for their
actual expenses relating to their attendance at Board of Directors meetings. For
his service as Chairman of the Board, Dr. Vagelos receives an additional
$70,000. In accordance with an agreement dated as of January 8, 1995 between Dr.
Vagelos and the Company, Dr. Vagelos purchased 600,000 restricted shares of
Common Stock ("Restricted Shares"), for $300,000. He also received an option to
purchase up to 285,000 shares of the Company's Common Stock. The Restricted
Shares are nontransferable, with such restriction lapsing ratably over a five
year period. The stock options entitle Dr. Vagelos to purchase an equal number
of shares of Common Stock at the fair market value of the Common Stock as of the
date of grant, or $3.50 per share. Pursuant to the Company's Long-Term Incentive
Plan, each member of the Board of Directors who is not at the time of grant an
employee of the Company or any subsidiary of the Company (an "Outside Director")
receives an automatic grant of an option to purchase 10,000 shares of Common
Stock with an exercise price per share equal to the fair market value of a share
of Common Stock on the date of grant. The grant occurs on March 1 of each year
prior to the termination of the Long-Term Incentive Plan. An option so granted
is exercisable as to one-third of the shares on each of the three subsequent
calendar years, and will expire ten years following the date of grant. If prior
to the option's expiration or exercise the grantee ceases to be a voting member
of the Board of Directors, then the portion of the option that at that time is
not exercisable will expire and the portion of the option, if any, that is
exercisable may be exercised during the three months after the director ceases
to be a voting member of the Board of Directors. In 1996, the Company paid Dr.
Shooter $60,000 for services provided as Chairman of the Scientific Advisory
Board. In addition, the Company paid Drs. Brown, Gilman, Goldstein, and Vagelos
$15,000 each as members of the Scientific Advisory Board.
6
<PAGE>
- --------------------------------------------------------------------------------
Executive Compensation
Set forth below is information concerning the annual and long-term compensation
for services performed during each of the last three fiscal years for the
Company's Chief Executive Officer and its four other highest-compensated
executive officers (by the "Named Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------------------------------------------
Other Securities
Name and Annual Underlying
Principal Position Year Salary Bonus Compensation Options
- ------------------ ---- ------ ----- ------------ -------
<S> <C> <C> <C> <C> <C>
Leonard S. Schleifer, M.D., Ph.D 1996 $363,683 $ 60,000 $ 2,790 80,000
President and Chief 1995 347,288 60,000 2,440 0
Executive Officer 1994 330,144(1) 25,000 1,620 0
George D. Yancopoulos, M.D., Ph.D 1996 $195,500 0 0 25,000
Vice President, Discovery 1995 182,546 0 0 0
1994 170,769 0 0 422,250(2)
Ronald M. Lindsay, Ph.D 1996 $184,577 0 0
Vice President, Neurobiology 1995 173,574 0 0 20,000
1994 162,612 0 0 0
161,000(2)
Paul Lubetkin 1996 $179,615 0 0 20,000
Vice President, General 1995 169,577 0 0 0
Counsel, and Secretary 1994 158,654 0 0 132,000(2)
Murray A. Goldberg(3) 1996 $174,615 0 0 30,000
Vice President, Finance and Adminis- 1995 151,288 0 0 60,000
tration, Treasurer, and Chief Financial
Officer
</TABLE>
- ----------
(1) Includes $25,000 deferred compensation earned in 1993 and paid
in 1994.
(2) Includes 25,000 options which were granted in 1994, then
subsequently canceled, as well as the regrant of options in
accordance with a repricing program administered by the Board
of Directors.
(3) Mr. Goldberg joined the Company in March 1995.
7
<PAGE>
- --------------------------------------------------------------------------------
Options
All options to purchase Regeneron Common Stock granted to the Named Officers
have been granted under the Company's Long Term Incentive Plan. Set forth below
is information about grants of options during 1996 to the Named Officers. No
Restricted Share Rights, Stock Appreciation Rights, Incentive Stock Rights, or
Incentive Unit Rights have been granted by the Company.
Options Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
Number of Percent of of Stock Price
Securities Total Options Appreciation for
Underlying Granted to Exercise Option Term
Options Employees Price Expiration -----------
Name Granted (#)(1) In Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---- -------------- -------------- --------- ---- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Schleifer, M.D., Ph.D 80,000 14.1% $12.75 1/2/06 641,473 1,625,617
George D. Yancopoulos, M.D., Ph.D 5,500 1.0% $12.75 1/2/06 44,101 111,761
19,500 3.4% $12.75 1/2/06 156,359 396,244
Ronald M. Lindsay, Ph.D 20,000 3.5% $12.75 1/2/06 160,368 406,404
Paul Lubetkin 3,750 0.7% $12.75 1/2/06 30,069 76,201
16,250 2.9% $12.75 1/2/06 130,299 330,204
Murray A. Goldberg 12,725 2.2% $12.75 1/2/06 102,034 258,575
17,275 3.0% $12.75 1/2/06 138,518 351,032
</TABLE>
- ----------------------------
(1) All options granted expire ten years from the date of grant and become
exercisable ratably over five years beginning one year from the date of grant.
8
<PAGE>
- --------------------------------------------------------------------------------
Aggregated Option Exercise in Last Fiscal Year and Fiscal Year-End Option Values
The following table shows information with respect to the Named Officers
concerning options exercised during 1996 and the value of stock options held as
of the end of 1996.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired on Value Option at Options at
Name Exercise (#) Realized ($) Fiscal Year-End (#) Fiscal Year-End ($) (1)
- ----------------------------------- ------------- ------------- ----------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard S. Schleifer, M.D., Ph.D. 0 0 121,000 119,000 163,625 302,625
George D. Yancopoulos, M.D., Ph.D. 60,000 848,750 114,500 247,750 1,313,888 2,614,956
Ronald M. Lindsay, Ph.D 0 0 56,800 99,200 650,300 963,200
Murray A. Goldberg 2,000 23,126 10,000 78,000 100,000 566,250
Paul Lubetkin 13,000 209,004 31,800 82,200 362,425 769,325
</TABLE>
- ----------
(1) Based on the closing sales price of the Company's Common Stock on December
31, 1996 reported on the Nasdaq Stock Market of $15.625, less the exercise
price.
- --------------------------------------------------------------------------------
Employment Agreement
The Company has an agreement with Dr. Schleifer providing for his employment
with the Company through December 31, 1997. During the term of his employment,
the Company will pay Dr. Schleifer a base salary of $315,000, with such
increases as may be determined by the Compensation Committee and approved by the
Board of Directors. Under his employment agreement, Dr. Schleifer may
participate in all Company benefit and incentive programs. During his employment
term, the Company maintains life insurance on Dr. Schleifer's life in the amount
of $1,000,000 payable to beneficiaries designated by Dr. Schleifer. Also under
the employment agreement, the Company has agreed that in the event that Dr.
Schleifer's employment is terminated other than for cause or is terminated by
Dr. Schleifer for good reason (defined to include specified acts of constructive
termination, as well as the first year following a change in control of the
Company), the Company will pay Dr. Schleifer his base salary for 15 months,
continue to provide Dr. Schleifer and his dependents medical, dental, and life
insurance for 18 months, and accelerate certain otherwise unexercisable stock
options granted to Dr. Schleifer.
- --------------------------------------------------------------------------------
Compensation Committee
Report on Executive Compensation
The Company's executive compensation program is administered by the Compensation
Committee, which is comprised of three non-employee directors. Subject to
approval by the Board of Directors, the Compensation Committee is responsible
for (among other things) determining the compensation package of each executive
officer. The Compensation Committee considers the views and recommendations of
other directors, including those of Dr. Schleifer, in making decisions regarding
the compensation of the Company's executive officers.
The Company's executive compensation program is designed to promote the
achievement of the Company's business objectives and, thereby, to maximize
long-term corporate performance and shareholder value. The compensation of the
executive officers consists of a combination of base salary, bonuses, and
long-term stock-based incentives through the Company's Long-Term Incentive Plan.
The Compensation Committee believes it is important for stock incentives to
constitute a significant portion of the compensation package in order to help
align executive and shareholder interests. In determining the total amount and
mixture of the compensation package for each executive officer, including
9
<PAGE>
Dr. Schleifer and the other Named Officers, the Compensation Committee and the
Board consider numerous factors, the most important of which are (i) the
Company's needs and objectives, including attracting, motivating, and retaining
key management personnel, (ii) individual performance, including the expected
contribution to the Company's objectives of each executive officer, (iii)
compensation of persons holding comparable positions, including data obtained
from outside studies and proxy materials on the payment of executive officers at
comparable companies as well as the Company's most direct competitors, and (iv)
the overall value to each executive of his or her compensation package. No
specific numerical weight is given to any of these factors.
The 1996 base salaries of the Named Officers other than Dr. Schleifer increased
by an average of 6.3 percent over 1995. These increases were made in January
1996 and reflected the Committee's review in late 1995 of individual performance
and internal and outside compensation studies of competitive and regional
factors.
Dr. Schleifer's 1996 compensation package was based on the same factors as
described above for all executive officers pursuant to the Company's executive
compensation objectives. In 1996, Dr. Schleifer's base salary increased 4.7
percent over 1995. In addition, the Compensation Committee directed that Dr.
Schleifer be paid a bonus of $60,000 in 1996 based on his achievements in 1995.
The Compensation Committee considered, among other things, the clinical progress
of brain-derived neurotrophic factor and neurotrophin-3, the Company's progress
in its preclinical programs aimed at diseases and conditions outside of the
nervous system, and other significant accomplishments that were occurred during
1995. These important achievements were guided and managed by Dr. Schleifer and
the Named Officers.
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation over $1 million to the Chief Executive Officer and the other Named
Officers unless certain conditions are met. The Company's Chief Executive
Officer and the other Named Officers have not received compensation over $1
million. As described elsewhere in this Proxy Statement, the Board of Directors
has adopted, subject to shareholder approval, certain amendments to the
Long-Term Incentive Plan to bring the Long-Term Incentive Plan into compliance
with Section 162(m).
P. Roy Vagelos, M.D., Chairman
Charles A. Baker
George L. Sing
- --------------------------------------------------------------------------------
Performance Graph
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock with the cumulative total return of (i) The
Nasdaq Pharmaceutical Stocks Index and (ii) The Nasdaq Stock Market (U.S.) Index
for the period from December 31, 1991 through December 31, 1996.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
---------------- ---------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Regeneron $100 $ 66 $86 $17 $70 $89
Nasdaq Pharm 100 83 74 56 102 102
Nasdaq-US 100 116 134 131 185 227
</TABLE>
The above graph assumes $100 investments on December 31, 1991 in the Company's
Common Stock, The Nasdaq Pharmaceutical Stocks Index , and The Nasdaq Stock
Market (U.S.) Index, with all dividends reinvested.
10
<PAGE>
- --------------------------------------------------------------------------------
Officers of the Registrant
All officers of the Company are appointed annually and serve at the pleasure of
the Board of Directors. The names, positions, ages, and background of the
Company's senior managers who are not nominees for or currently Directors as of
April 29, 1996, are set forth below:
JESSE M. CEDARBAUM, M.D., 45, has been Vice President, Clinical Affairs since
January 1993, and was Program Director of Clinical Affairs of the Company from
July 1990 until December 1992. He was Associate Professor of Neurology and
Neuroscience at Cornell University Medical College and director of the Parkinson
and Movement Disorders Clinics, New York Hospital and The Burke Rehabilitation
Center from 1983 to 1990 and is currently Clinical Associate Professor of
Neurology at Mt. Sinai Medical School in New York. Dr. Cedarbaum is a board
certified neurologist. Dr. Cedarbaum received his M.D. from the Yale University
School of Medicine.
MURRAY A. GOLDBERG, 52, has been Vice President, Finance and Administration,
Treasurer, and Chief Financial Officer since March 1995. Prior to joining the
Company, Mr. Goldberg was Vice President, Finance, Treasurer, and Chief
Financial Officer of PharmaGenics, Inc. from February 1991 and a Director of
that Company from May 1991. From 1987 to 1990, Mr. Goldberg was Managing
Director, Structured Finance Group at the Chase Manhattan Bank, N.A. and from
1973 to 1987 he served in various managerial positions in finance and corporate
development at American Cyanamid Company.
GAIL M. KEMPLER, Ph.D., 42, has been Vice President, Intellectual Property and
Associate General Counsel since January 1995, and was Regeneron's Patent Counsel
from December 1991. From May 1986 through November 1991, Dr. Kempler was
associated with the intellectual property law firm Kenyon & Kenyon.
RONALD M. LINDSAY, Ph.D., 49, has been Vice President, Neurobiology, since
January 1992. He was Program Director of Regeneron's Neurobiology Group from
March 1989 to December 1991. From March 1985 to March 1989, Dr. Lindsay was an
Adjunct Professor of Cell Biology, Department of Zoology, University College,
London, England and Head of Cell Biology at the Sandoz Institute for Medical
Research, London, England. Dr. Lindsay was a staff scientist in the Laboratory
of Neurobiology at the National Institute for Medical Research, London from
January 1978 to March 1985. Dr. Lindsay received his Ph.D. as a Killam Scholar
at the University of Calgary, Alberta.
PAUL LUBETKIN, 46, has been Vice President, General Counsel, and Secretary since
January 1992. From September 1994 through March 1995, Mr. Lubetkin also served
as Acting Chief Financial Officer and Treasurer of the Company. From April 1990
to December 1991, he was the General Counsel and Secretary of the Company. From
January 1990 until April 1990, Mr. Lubetkin was a partner of the law firm Kelley
Drye & Warren and from 1988 to 1990 he was of counsel to Kelley Drye & Warren.
RANDALL G. RUPP, Ph.D., 50, has been Vice President, Manufacturing and Process
Science since January 1992, and was Regeneron's Director of Manufacturing from
July 1991 until December 1992. From July 1990 to July 1991, Dr. Rupp was Vice
President, Research at Biohybrid Technologies, Inc. and from April 1989 to July,
1990 he served as Vice President of Development and Manufacturing at Somatogen
Corp. From 1986 to 1989, he served as Vice President of Development and Director
of Cell Biology at Invitron Corporation, and from 1985 to 1986, he was Assistant
Director, Cell Biology Department, at SmithKline Beckman, Inc. He received his
Ph.D. in Biomedical Sciences from the University of Texas, M.D. Anderson
Hospital and Tumor Institution, Houston.
GEORGE D. YANCOPOULOS, M.D., Ph.D., 37, has been Vice President, Discovery since
January 1992, and was employed by the Company since March 1989 as Senior Staff
Scientist, and Head of Discovery from January 1991 to January 1992. From January
1988 to February 1989, he was a Lucille P. Markey Scholar at Columbia
University. He received his Ph.D. in Biochemistry and Molecular Biophysics and
his M.D. from Columbia University.
BEVERLY C. DUBS, 42, has been Controller of the Company since March 1989 and
Assistant Treasurer of the Company since August 1990. Ms. Dubs was a controller
at Tri-County Micro Systems, Inc. from 1983 to 1989 and a senior accountant in
the Small Business Section of Deloitte Haskins & Sells from 1980 to 1983.
- --------------------------------------------------------------------------------
AMENDMENT OF THE LONG-TERM INCENTIVE PLAN
The Board of Directors Unanimously Recommends a Vote FOR Amendment and
Restatement of the Long-Term Incentive Plan.
On March 7, 1997 and May 12, 1997, the Board of Directors adopted, subject to
shareholder approval, a series of amendments to the Long-Term Incentive Plan
(the "Plan"), to increase by 1,500,000 the number of shares of Regeneron Common
Stock available for the grant of options and rights and the award of restricted
stock and to clarify and update the Plan. The Board believes that this amendment
and restatement is reasonable and appropriate to meet the Company's objectives
of attracting, motivating, and retaining officers, employees, and nonemployee
service providers with appropriate experience and ability, and increasing the
alignment of interests of officers, employees, and other grantees with those of
the Company's shareholders. The Plan provides for the grant and award of
Restricted Share Rights, Performance Unit Rights, Stock Options, Stock
Appreciation Rights, Incentive Stock Rights (each as defined below). Changes
made to material terms of the Long-Term Incentive Plan in the amendment and
restatement are noted below. In addition, certain restrictions no longer
required under applicable law have been removed from the Plan and flexibility in
the administration of the Plan has been increased. Capitalized terms not
otherwise defined herein are as defined in the Plan. A copy of the amended and
revised Plan is set forth as Exhibit A to this Proxy Statement.
11
<PAGE>
- --------------------------------------------------------------------------------
Description of Principal Features of the Long-Term Incentive Plan
In 1990, the Company adopted, and in February 1991, June 1991, June 1994, June
1995, and June 1996 the Company amended and restated the Plan, under which there
are reserved for issuance a total of 3,900,000 shares of Common Stock. The Plan
is administered by the Compensation Committee of the Board of Directors (the
"Committee") comprised of non-employee directors, each of whom is a
"non-employee director" person (as defined in Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended) and an "outside
director" (as defined in Section 162(m)). Company officers, employees,
nonemployee directors, and other nonemployee service providers are eligible to
participate in the Plan.
Restricted Share Rights consist of a grant of shares of restricted Common Stock.
A holder of restricted stock may vote and, if he or she remains in the service
of the Company throughout the restricted period as defined in the Plan (the
"Restricted Period"), may generally receive all dividends on all such shares.
However, such holder may not transfer such shares except for limited
circumstances during the Restricted Period. If for any reason during the
Restricted Period, a holder of restricted stock ceases to be in the service of
the Company (other than as the result of such holder's death) the holder may be
required under certain circumstances, to transfer and return to the Company such
restricted stock, and may not receive dividends on such restricted stock.
Consistent with Section 162(m), the Plan provides that (i) restrictions on
restricted stock may, in the sole discretion of the Committee, lapse upon the
achievement of certain preestablished performance goals based upon the criteria
described below, and (ii) the maximum number of such performance based
Restricted Share Rights that may be granted to an employee in any year is
200,000.
Performance Unit Rights entitle the holder to receive either cash or shares of
Common Stock, as determined by the Committee or Administrator, to the extent
that preestablished performance goals, based upon the criteria described below,
are achieved. Each Performance Unit Right granted is given a maximum value at
the beginning of the performance period. The actual value of each right that may
be distributed to the recipient is determined by the extent to which the
predetermined objective is made. The Plan provides that the maximum unit value
of Performance Unit Rights that may be granted to an employee in any year is
$500,000.
The Plan provides that performance goals will be based on one or more of the
following criteria: (i) the attainment of certain target levels of, or a
percentage increase in, after-tax or pre-tax profits of the Company including,
without limitation, that attributable to continuing or other operations of the
Company; (ii) the attainment of certain target levels of, or a specified
increase in, operational cash flow of the Company; (iii) the achievement of a
certain level of, reduction of, or other specified objectives with regard to
limiting the level of increase in all or a portion of, the Company's bank debt
or other long-term or short-term public or private debt or other similar
financial obligations of the Company, which may be calculated net of such cash
balances and/or other offsets and adjustments as may be established by the
Committee; (iv) the attainment of a specified percentage increase in earnings
per share or earnings per share from continuing operations of the Company; (v)
the attainment of certain target levels of, or a specified percentage increase
in, revenues, net income, or earnings before income tax of the Company; (vi) the
attainment of certain target levels of, or a specified increase in, return on
capital employed or return on investment; (vii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax return on
shareholders' equity of the Company; (viii) the achievement of certain target
levels of discovery or development of products, including, without limitation,
of regulatory approval of new products; (ix) the achievement of certain target
levels of sales of new products or licensing in or out of new drugs; and (x) the
formation of joint ventures or the completion of other corporate transactions.
In addition, the Plan provides that such performance goals may be based upon the
attainment of specified levels of Company performance under one or more of the
measures described above relative to the performance of other corporations. To
the extent permitted under Section 162(m), the Committee may: (i) designate
additional business criteria on which the performance goals may be based or (ii)
adjust, modify, or amend the aforementioned business criteria.
Stock options (which may be "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"))
entitle the holder to purchase shares of the Common Stock during a specified
period at a purchase price of not less than 50% (100% in the case of incentive
stock options) of the fair market value of the Common Stock on the day the
option is granted. The Plan provides that the maximum number of shares of Common
Stock for which Stock Options may be granted to an employee in any year is
500,000, except that such number is 1,000,000 with respect to the employee's
initial year of employment with the Company. As amended, the Plan provides that
(i) the Committee may in its discretion grant stock options that are
transferable, (ii) the exercise price of stock options and any tax withholding
may be paid in cash or by the use of withheld or already owned shares, and (iii)
stock options that are exercisable as of the date of the termination of an
option holder's employment with the Company may be exercised after such date for
the period set forth in the option agreement or as otherwise determined by the
Committee.
Stock Appreciation Rights may be granted only to recipients of Stock Options,
and the number of shares that may be received pursuant to such Rights is limited
to the number of shares subject to the Option. Stock Appreciation Rights may be
exercised in lieu of purchasing shares under a related Option and entitles the
holder, without payment to the Company, to a number of shares or cash, at the
election of the Committee or the Administrator, determined by the increase, if
any, in the market value of the shares under the Option between the dates of
grant and exercise. The Plan provides that the maximum number of shares of
Common Stock for which Stock Appreciation Rights may be granted to an employee
in any year is 500,000, except that such number is 1,000,000 with respect to the
employee's initial year of employment with the Company.
12
<PAGE>
Incentive Stock Rights are composed of Incentive Stock Units, each of which
gives the holder the right to receive, without cash payment to the Company, one
share of Common Stock, automatically, at the end of the relevant incentive
periods fixed by the Committee or Administrator. Holders of Incentive Stock
Rights receive payments equal to any cash dividends that are paid on the Common
Stock. In the event of a Change in Control of the Company, as defined in the
Plan, the vesting, exercisability and/or payout of Options and Rights may become
accelerated, and the value of rights may be determined by the change in control
price, as defined in the Plan.
Because awards and grants under the Plan are discretionary, it is not possible
to determine the size of future awards. Grants of stock options made to the
Named Officers during the last Fiscal Year are set forth above. During the last
fiscal year, stock options were granted as follows; to all current executive
officers as a group, 240,500 and to all employees other than executive officers
232,895.
The agreements evidencing grants and awards under the Plan may provide that such
grants and awards will vest or become payable upon a "Change in Control" of the
Company, as defined in the Plan.
Approximately 243 employees and an indeterminate number of nonemployee service
providers are eligible to participate in the Plan. As of December 31, 1996,
options for 2,921,867 shares were held by 261 employees and nonemployee service
providers at option prices averaging $7.36 per share and expiring during the
period from January 2001 to December 2006. No Restricted Share Rights,
Performance Unit Rights, Stock Appreciation Rights, or Incentive Stock Rights
have been granted under the Plan. The market price per share of Common Stock on
May 19, 1997 was approximately $10.625.
- --------------------------------------------------------------------------------
Certain Federal Income Tax Consequences
Set forth below is a discussion of certain federal income tax consequences with
respect to Stock Options (including incentive stock options ("ISOs") and
nonqualified stock options ("NQSOs)) that may be granted pursuant to the Plan.
Nonqualified Stock Options. In the case of a NQSO, an option holder generally
will not be taxed upon the grant of an option. Rather, at the time of exercise
of such NQSO (and in the case of an untimely exercise of an ISO), the option
holder will generally recognize ordinary income for federal income tax purposes
in an amount equal to the excess of the then fair market value of the shares
purchased over the option price. The Company will generally be entitled to a tax
deduction at the time when, and in the amount that, the employee recognizes
ordinary income.
Incentive Stock Options. In the case of an ISO, an option holder will generally
be in receipt of taxable income upon the disposition of the shares acquired upon
exercise of the ISO, rather than upon the grant of the ISO or upon its timely
exercise. If certain holding period requirements have been satisfied with
respect to outstanding shares so acquired, taxable income will constitute
long-term capital gain. The tax consequences of any untimely exercise of an ISO
will be determined in accordance with the rules applicable to NQSOs. The amount
by which the fair market value of the stock on the exercise date of an ISO
exceeds the option price will be an item of tax adjustment for purposes of the
"alternative minimum tax" imposed by Section 55 of the Code. An option holder
who pays the option price upon exercise of an option, in whole or in part, by
delivering already owned shares of the Company's Common Stock will generally not
recognize gain or loss on the shares surrendered at the time of such delivery,
except under certain circumstances relating to ISOs. Rather, such gain or loss
recognition will generally occur upon disposition of the shares acquired in
substitution for the shares surrendered.
- --------------------------------------------------------------------------------
APPROVAL OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors Unanimously Recommends a Vote FOR the Selection of
Coopers & Lybrand L.L.P.
The Board of Directors, at the recommendation of the Audit Committee, has
selected Coopers & Lybrand L.L.P. as the Company's independent accountants for
the fiscal year ending December 31, 1997. This appointment is subject to the
approval of the Company's shareholders. Accordingly, the following resolution
will be offered at the Annual Meeting:
"RESOLVED, that the appointment, by the Board of Directors of Regeneron
Pharmaceuticals, Inc., of Coopers & Lybrand L.L.P. as the independent
accountants of the Company for the year ending December 31, 1997 is hereby
approved."
Coopers & Lybrand L.L.P. been the Company's independent accountants for the past
nine years and has advised the Company that it will have in attendance at the
Annual Meeting a representative who will be afforded an opportunity to make a
statement, if such representative desires to do so, and will respond to
appropriate questions presented at the Annual Meeting.
Proxies solicited by Management will be voted "FOR" ratification of the
selection of Coopers & Lybrand L.L.P. as independent accountants unless
shareholders indicate in their proxies their desire to have their shares voted
"AGAINST" such ratification.
- --------------------------------------------------------------------------------
Other Matters
The Board of Directors of the Company does not intend to present any other items
of business and knows of no other items of business that are likely to be
brought before the Annual Meeting, except those set forth in the accompanying
Notice of the Annual Meeting of Shareholders. However, if any other matters
should properly come before the Annual Meeting, the persons named in the
enclosed proxy will have discretionary authority to vote such proxy on such
matters in accordance with their best judgment.
13
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Proposals for 1998
Annual Meeting of Shareholders
A shareholder wishing to present a proposal at the 1998 Annual Meeting of
Shareholders must submit the proposal in writing and be received by the Company
at its principal executive offices (777 Old Saw Mill River Road, Tarrytown, New
York 10591) by January 23, 1998 in order for such proposal to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
- --------------------------------------------------------------------------------
Cost of Solicitation
This solicitation is made on behalf of the Board of Directors of the Company.
The cost of solicitation of proxies in the accompanying form will be paid by the
Company. The Company will also, pursuant to regulations of the Securities and
Exchange Commission, make arrangements with brokerage houses and other
custodians, nominees, and fiduciaries to send proxies and proxy materials to
their principals and will reimburse them for their reasonable expenses in so
doing. In addition to solicitation by use of the mails, certain directors,
officers, and employees of the Company may solicit the return of proxies by
telephone, telegram, or personal interviews.
By Order of the Board of Directors,
/s/ Paul Lubetkin
PAUL LUBETKIN
Secretary
Tarrytown, New York
May 23, 1997
<PAGE>
Exhibit A
---------
REGENERON PHARMACEUTICALS, INC.
Amended and Restated 1990 Long-Term Incentive Plan
as of June 27, 1997
1. Purpose. The purpose of the Regeneron Pharmaceuticals, Inc. 1990
Long-Term Incentive Plan (the "Plan") is to advance the interests of Regeneron
Pharmaceuticals, Inc., a New York corporation (which, together with its parent,
affiliates, and subsidiaries, if any, shall be termed the "Company"), and its
shareholders by providing for its officers, employees, non-employee directors,
and non-employee service providers an incentive to provide service or continued
service to the Company or any subsidiaries of the Company. By encouraging such
persons to become owners of the capital stock of the Company, the Company seeks
to attract and retain in its employ and service people of training, experience
and ability and to furnish additional incentive to such persons upon whose
judgment, initiative, and efforts the successful conduct of its business largely
depends. It is intended that this purpose will be effected through the granting
of Restricted Share Rights, Incentive Stock Rights, Stock Options, Stock
Appreciation Rights, and Performance Unit Rights (each as defined below), as
provided herein. Except as otherwise provided in Section 21, the committee
established pursuant to Section 6 hereof (the "Committee") shall have full
discretion to grant (a) Incentive Stock Rights alone, (b) Stock Options alone,
(c) Restricted Shares alone, (d) Stock Appreciation Rights in conjunction with
Options, and (e) Performance Unit Rights alone or in conjunction with Options,
with or without Stock Appreciation Rights, each in accordance with the terms and
conditions provided herein.
2. Shareholder Adoption. The Plan was first submitted to the
shareholders of the Company for its approval, and was so approved, on March 11,
1991 (the "Effective Date"). The Plan was most recently submitted to the
shareholders of the Company for the approval of certain amendments, and was so
approved, on June 28, 1996, including certain amendments to comply with Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
Treasury regulations thereunder ("Section 162(m)").
3. Shares of Stock Subject to the Plan.
(a) General Limitation. The shares that may be issued under the Plan
shall not exceed in the aggregate 5,400,000 (as such number may be adjusted
pursuant to Section 11 hereof) shares of Common Stock of the Company (as such
term is defined in the Certificate of Amendment, dated as of March 11, 1991, of
the Certificate of Incorporation of the Company). Such shares may be authorized
and unissued shares or may be "treasury shares" as defined in Section 102(a)(14)
of the New York Business Corporation Law. Any shares subject to an Option or
Right which for any reason expires or is terminated, exchanged, surrendered, or
canceled unexercised as to such shares may again be subject to an Option or
Right under the Plan.
(b) Individual Limitation. The maximum number of shares of Common Stock
which may be subject to any Stock Option that may be granted to an eligible
employee (as determined pursuant to Section 5 herein) shall not exceed 500,000
shares of Common Stock (subject to any increase or decrease pursuant to Section
11 or 12) for each fiscal year during the entire term of the Plan other than the
fiscal year in which an eligible employee initially commences employment with
the Company or any subsidiary of the Company. With respect to the fiscal year in
which an eligible employee (as determined pursuant to Section 5 herein)
initially commences employment with the Company or any subsidiary of the
Company, the maximum number of shares of Common Stock which may be subject to
any stock option that may be granted to such eligible employee shall not exceed
1,000,000 shares of Common Stock (subject to any increase or decrease pursuant
to Section 11 or 12). The maximum number of Stock Appreciation Rights that may
be granted to an eligible employee (as determined pursuant to Section 5 herein)
shall not exceed 500,000 (subject to any increase or decrease pursuant to
Section 11 or 12) for each fiscal year
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during the entire term of the Plan other than the fiscal year in which an
eligible employee initially commences employment with the Company or any
subsidiary of the Company. With respect to the fiscal year in which an eligible
employee (as determined pursuant to Section 5 herein) initially commences
employment with the Company or any subsidiary of the Company, the maximum number
of shares of Common Stock which may be subject to any Stock Appreciation Right
that may be granted to such eligible employee shall not exceed 1,000,000 shares
of Common Stock (subject to any increase or decrease pursuant to Section 11 or
12). The maximum number of Restricted Shares for which the lapse of the relevant
Restriction Period is subject to the attainment of preestablished performance
goals in accordance with Section 22 herein that may be granted to an eligible
individual (as determined pursuant to Section 5 herein) shall not exceed 200,000
(subject to any increase or decrease pursuant to Section 11 or 12) for each
fiscal year during the entire term of the Plan. The aggregate maximum unit value
of Performance Unit Rights that may be granted to an eligible individual (as
determined pursuant to Section 5 herein) shall not exceed $500,000 for each
fiscal year during the entire term of the Plan.
4. Awards Under the Plan. Awards under the Plan may be "Restricted
Share Rights", "Incentive Stock Rights", "Stock Options" (both unqualified
options and Incentive Stock Options), "Stock Appreciation Rights", and
"Performance Unit Rights". "Restricted Share Rights" are grants of shares of
Common Stock which are subject to such restrictions as may be determined by the
Committee, which restrictions lapse as determined by the Committee. Such
restrictions may, in the sole discretion of the Committee, lapse upon the
achievement of certain performance goals established pursuant to Section 22 or
over time periods or other criteria established by the Committee. "Incentive
Stock Rights" are composed of Incentive Stock Units which give the holder the
right to receive shares of Common Stock, subject to the terms, conditions, and
restrictions described in Section 9. A "Stock Option" is a right to purchase
Common Stock, at not less than 50% of the fair market value as of the date the
Option is granted. A "Stock Appreciation Right" is a right to receive, without
payment to the Company, a number of shares of Common Stock, and/or cash,
determined pursuant to a formula in lieu of the purchase of shares under a
related Option. Stock Options and Stock Appreciation Rights may be granted in
conjunction with each other under terms whereby the exercise of an Option or
Right reduces proportionately the number of shares for which the other Option or
Right can be exercised. "Performance Unit Rights" are rights to receive, without
payment to the Company, a number of Performance Units provided that the
specified performance objectives are achieved and certain other conditions are
met. A Performance Unit is an award unit which shall have a dollar value as
determined by the Committee. A Performance Unit Right may be issued alone or in
conjunction with Stock Options and Stock Appreciation Rights. If issued in
conjunction with Options and Rights, election to pay the Performance Units will
proportionately reduce the number of shares available under the related Stock
Option and Stock Appreciation Right.
5. Eligible Participants. Options and/or Rights may be granted only to
salaried employees (which shall include persons who have entered into an
employment contract with the Company whether or not the employment term
thereunder has commenced at the time of grant) who are officers or who are
employed in an executive, administrative, or professional capacity by the
Company or by its subsidiaries and to non-employee service providers and members
of the Board of Directors of the Company (the "Board").
6. Administration of the Plan. Within the limitations described herein,
a Committee appointed from time to time by the Board shall administer the Plan,
select the persons to whom and the types of awards that will be granted,
determine the number of shares of Common Stock that will be covered by Options
and Rights, and determine the number and type of Incentive Stock Units,
Restricted Share Rights, and Performance Units to be awarded to each
participant. The Committee shall have authority to adopt rules and regulations
for carrying out the Plan and to interpret, construe, and implement the
provisions of the Plan. With respect to participants who are not subject to the
reporting requirements of Section 16(a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Committee may, in its discretion, delegate
to an officer of the Company its duties hereunder, including the grant of
awards. The Committee shall consist of not less than two non-employee directors,
each of whom shall be, to the extent required by Rule 16b-3 under Section 16 of
the Exchange Act, and for the exception for performance-based compensation under
Section 162(m), a "non-employee
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director" as defined in Rule 16b-3 and an "outside director" as defined in
Section 162(m). Decisions of the Committee shall be final, conclusive and
binding on the Company and on all employees, officers, non-employee directors,
non-employee service providers, and their respective heirs, executors,
administrators, and assigns. This Plan is intended to comply with the exception
for performance-based compensation under Section 162(m) with regard to Stock
Options, Stock Appreciation Rights, Performance Units, and Restricted Shares (to
the extent the lapse of the relevant Restriction Period is subject to attainment
of preestablished performance goals) granted to eligible employees hereunder and
shall be limited, construed, and interpreted in such manner as to comply
therewith.
Notwithstanding the foregoing, if and to the extent that the Board so
determines, the functions of the Committee shall be exercised by the Board. As
used herein, reference to the Committee shall mean such Committee or the Board,
whichever is then acting.
In no event may Incentive Stock Options be granted to any participant
who is not at the time of such grant an employee of the Company or its
subsidiaries.
7. Duration of the Plan. The Plan shall remain in effect until all
Options and Rights granted under the Plan have been satisfied by the issuance of
shares or the payment of cash, or terminated under the terms of the Plan,
provided that Options and Rights under the Plan must be granted within ten years
from date of the 1991 Annual Meeting of Shareholders of the Company.
8. Restricted Share Rights.
(a) Valuation Date and Price. The Committee shall designate a date (the
"Valuation Date") with respect to each award of Restricted Share Rights and may
prescribe restrictions, terms, and conditions applicable to the vesting of such
Restricted Share Rights in addition to those provided in this Plan. The
Committee shall determine the price, if any, to be paid by the holder of such
award for the Restricted Share Rights. Each such award shall be evidenced by a
Restricted Share Rights agreement ("Restricted Share Rights Agreement"), which
shall specify the number of Restricted Shares to which it pertains.
(b) Issuance of Restricted Shares. Restricted Shares, when issued, will
be represented by a stock certificate or certificates registered in the name of
the holder to whom such Restricted Shares shall have been awarded. During the
Restriction Period, certificates representing the Restricted Shares and any
securities constituting Retained Distributions (as defined in Section 8(c))
shall bear a restrictive legend to the effect that ownership of the Restricted
Shares (and such Retained Distributions) and the enjoyment of all rights
appurtenant thereto are subject to the restrictions, terms, and conditions
provided in the Plan and the applicable Restricted Share Rights Agreement. Such
certificates shall be deposited by such holder with the Company, together with
stock powers or other instruments of assignment, each endorsed in blank, which
will permit transfer to the Company of all or any portion of the Restricted
Shares and any securities constituting Retained Distributions that shall be
forfeited or that shall not become vested in accordance with the Plan and the
applicable Restricted Share Rights Agreement. Based on service, attainment of
objective performance goals established pursuant to Section 22, and/or such
other factors or criteria as the Committee may determine in its sole discretion,
the Committee may provide for the lapse of the restrictions in installments in
whole or in part, or may accelerate the vesting of all or any part of any
Restricted Shares.
(c) Restrictions. Restricted Shares shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The holder will
have the right to vote such Restricted Shares, to receive and retain all regular
cash dividends, and such other distributions as the Committee may in its sole
discretion designate, paid, or distributed on such Restricted Shares and to
exercise all other rights, powers, and privileges of a holder of Common Stock
with respect to such Restricted Shares, with the exception that (i) the holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Shares until the Restriction Period shall have
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expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Shares during the
Restriction Period; (iii) other than regular cash dividends and such other
distributions as the Committee may in its sole discretion designate, the Company
will retain custody of all distributions ("Retained Distributions") made or
declared with respect to the Restricted Shares (and such Retained Distributions
will be subject to the same restrictions, terms, and conditions as are
applicable to the Restricted Shares) until such time, if ever, as the Restricted
Shares with respect to which such Retained Distributions shall have been made,
paid, or declared shall have become vested, and such Retained Distributions
shall not bear interest or be segregated in separate accounts; (iv) the holder
may not sell, assign, transfer, pledge, exchange, encumber, or dispose of the
Restricted Shares or any Retained Distributions during the Restriction Period;
and (v) a breach of any restrictions, terms, or conditions provided in the Plan
or established by the Committee with respect to any Restricted Shares or
Retained Distributions will cause a forfeiture of such Restricted Shares and any
Retained Distributions with respect thereto.
(d) Completion of Restriction Period. On the Valuation Date with
respect to each award of Restricted Shares, and the satisfaction of any other
applicable restrictions, terms and conditions (i) all or part of such Restricted
Shares shall become vested and (ii) any Retained Distributions with respect to
such Restricted Shares shall become vested to the extent that the Restricted
Shares related thereto shall have become vested, all in accordance with the
terms of the applicable Restricted Share Rights Agreement. Any such Restricted
Shares and Retained Distributions that shall not have become vested shall be
forfeited to the Company and the holder shall not thereafter have any rights
(including dividend and voting rights) with respect to such Restricted Shares
and Retained Distributions that shall have been so forfeited; that any
consideration paid by the holder to the Company for such Restricted Share Rights
at the time such award was made shall be paid to the holder, without interest,
at the time such Restricted Shares are forfeited.
9. Incentive Stock Rights.
(a) Incentive Stock Rights. The Committee, in its discretion, may grant
to eligible employees Incentive Stock Rights composed of Incentive Stock Units.
Incentive Stock Rights shall be evidenced by Incentive Stock Rights Agreements
in such form and not inconsistent with the Plan as the Committee shall approve
from time to time, which agreements shall contain in substance the following
terms and conditions:
(i) Incentive Stock Units. An Incentive Stock Rights Agreement
shall specify the number of Incentive Stock Units to which it pertains. Each
Incentive Stock Unit shall be equivalent to one share of Common Stock. Each
Incentive Stock Unit shall entitle the holder to receive, one share of Common
Stock in consideration for services performed for the Company or for its benefit
by the person receiving the right, subject to the lapse of the Incentive Periods
(as defined below).
(ii) Incentive Period. The holder of Incentive Stock Rights
shall be entitled to receive shares of Common Stock only after the lapse of such
incentive periods, and in such manner, as shall be fixed by the Committee at the
time a decision is made to grant Incentive Stock Rights to a participant. (Such
period or periods so fixed is herein referred to as an "Incentive Period".) To
the extent the holder of Incentive Stock Rights receives shares of Common Stock
on the lapse of an Incentive Period, an equivalent number of Incentive Stock
Units shall be canceled.
(iii) Death. In the event that a participant to whom Incentive
Stock Rights have been issued under the Plan terminates his employment or
service with the Company, as the case may be, due to death, each Incentive
Period established by section 9(a)(ii) shall lapse on the date of such
termination as to the number of full Incentive Stock Units determined by
multiplying the total number of Incentive Stock Units applicable to such
Incentive Period by a fraction, the numerator of which shall be the number of
full calendar months between the date of grant of the Incentive Stock Rights and
the date of such termination and the denominator of which shall be the number of
full calendar months between the date of grant of the Incentive Stock Rights and
the date such Incentive
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Period for such Units would, but for such termination, have lapsed. Units upon
which the Incentive Period does not lapse pursuant to the foregoing sentence
shall terminate on the termination date of employment or service with the
Company, as the case may be.
(iv) Termination of Employment or Service with the Company for
Any Other Reason. In the event that a participant to whom Incentive Stock Rights
have been issued under the Plan terminates his employment or service with the
Company, as the case may be, for any reason, other than death or long-term
disability, such Right as to which the Incentive Period has not lapsed shall
terminate on termination of employment or service with the Company, as the case
may be. Cessation of active employment or service with the Company due to
commencement of long-term disability as determined by the Committee shall not be
deemed to constitute a termination of employment or service with the Company and
during the continuance of such long-term disability the individual shall be
deemed to continue active employment or service with the Company; provided,
however, that the Committee may in its sole discretion determine that a
participant's long-term disability constitutes a permanent disability and may
deem such permanent disability to be a termination of employment or service due
to retirement for any or all purposes under this Plan.
(v) Leave of Absence. In the case of any participant on an
approved leave of absence, the Committee may make such provision respecting
continuance of the Incentive Stock Right while in the service of the Company or
a subsidiary as it may deem equitable.
(vi) Issuance of Shares. Upon the lapse of an Incentive
Period, the Company shall, without transfer or issue tax to the person entitled
to receive the shares, deliver to such person a certificate or certificates for
a number of shares of Common Stock equal to the number of Incentive Stock Units
as to which an Incentive Period has lapsed.
(b) Dividend Equivalents. The holder of an Incentive Stock Right shall
be entitled to receive from the Company cash payments, at the same time and in
the same amounts, that the holder of record of a number of shares of Common
Stock equal to the number of Incentive Stock Units covered by such Right would
be entitled to receive as dividends on such Common Stock. Such Right to cash
payment on an Incentive Stock Unit shall apply to all dividends the record date
for which occurs at any time during the period commencing on the date the
Incentive Stock Unit is granted and ending on the date that the holder of such
Incentive Stock Unit becomes a shareholder of record with respect to such Unit
as a result of the lapse of an Incentive Period, or the date the Incentive Stock
Right otherwise terminates, whichever occurs first.
10. Options and Rights.
(a) Options. Options shall be evidenced by Stock Option Agreements
("Stock Option Agreements") in such form and not inconsistent with this Plan as
the Committee shall approve from time to time, which agreements shall contain in
substance the following terms and conditions:
(i) Price. The purchase price per share of Common Stock
deliverable upon the exercise of an Option shall not be less than 50% of the
Fair Market Value of the Common Stock on the day the Option is granted, as
determined by the Committee but in no event less than the par value of such
Common Stock. The extension of the Exercise Period (as defined below) or other
modifications of an outstanding option (other than a change in the exercise
price) shall not be deemed a grant of a new option for purposes of this Section
10.
(ii) Number of Shares. The Stock Option Agreement shall
specify the number of shares to which it pertains. The number of shares subject
to an Option shall be reduced (A) on a share for share basis to the extent that
shares under such Option are used to calculate the shares or cash to be received
by exercise of a related Stock Appreciation Right or (B) on a one for one basis
to the extent that the Committee elects pursuant to subsection 10(c)(ii) to pay
the Performance Unit Rights.
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<PAGE>
(iii) Exercise Dates. Unless otherwise determined by the
Committee, the shares subject to the Option may be purchased by the Optionee as
follows: 20% of such shares commencing on the first day of each of the first,
second, third, fourth, and fifth anniversaries of the date of grant on a
cumulative basis. At the time an Option is granted, the Committee shall fix the
period within which it may be exercised which shall not be longer than ten years
from the date of grant. (Such Period is referred to herein as the "Exercise
Period".)
To the extent that an Option to purchase shares is not
exercised by an optionee when it becomes initially exercisable, it shall not
expire but shall be carried forward and shall be exercisable until the
expiration of the Exercise Period. Partial exercise will be permitted from time
to time within the percentage limitation described heretofore, provided that no
partial exercise may be for less than one hundred full shares of Common Stock,
or its equivalent.
(iv) Medium and Time of Payment. Common Stock purchased
pursuant to a Stock Option Agreement shall be paid for in full and either in
cash or by an exchange of shares of Common Stock previously owned by the
optionee that, unless the Committee determines otherwise, shall have been owned
for at least six months prior to the date of exercise, or by the withholding of
shares that would otherwise be issued pursuant to the option exercise, or a
combination thereof, in the amount or having a combined value equal to the
aggregate purchase price for the shares subject to the option. The value of the
previously owned or withheld shares of Common Stock exchanged in full or partial
payment for the shares purchased upon the exercise of an options shall be equal
to the aggregate Fair Market Value of such shares on the date of the exercise of
such options. The previously owned or withheld shares of Common Stock received
by the Company in the exchange shall be added to the number of shares otherwise
available for the granting of other awards under this Plan during that or any
succeeding year.
(v) Effect of Termination of Employment or Service or Death.
In the event that an optionee during his or her lifetime terminates his or her
employment or service with the Company for any reason, including retirement
(except death), any Option or unexercised portion thereof which was otherwise
exercisable on the date of termination of employment or service shall remain
exercisable for such period as may be provided in the Stock Option Agreement (or
as may be otherwise determined by the Committee), but in no event after the
expiration of the Exercise Period. In the event of the death of an optionee
during this period, the Option shall be exercisable by his or her personal
representatives, heirs, or legatees to the same extent and during the same
period that the optionee could have exercised the Option if he or she had not
died (or as may be otherwise determined by the Committee). In the event of the
death of an optionee while in employment or service of the Company or any
subsidiary of the Company, the total Option granted to the optionee, shall be
exercisable by his or her personal representatives, heirs, or legatees for such
period as may be provided in the Stock Option Agreement (or as may be otherwise
determined by the Committee), but in no event after the expiration of the
Exercise Period. Cessation of active employment or service due to commencement
of long-term disability as determined by the Committee shall not be deemed to
constitute a termination of employment or service and during the continuance of
such long-term disability the individual shall be deemed to continue active
employment or service with the Company; provided, however, that the Committee
may in its sole discretion determine that a participant's long-term disability
constitutes a permanent disability and may deem such permanent disability to be
a termination of employment or service due to retirement for any or all purposes
under this Plan.
(vi) Leave of Absence. In the case of any participant on an
approved leave of absence, the Committee may make such provision respecting
continuance of the Option while in the employ or service of the Company or a
subsidiary of the Company as it may deem equitable, except that in no event
shall an Option be exercised after the expiration of the Exercise Period.
(vii) Incentive Stock Options.
(A) Options issued under this Section 10(a) may, in
the discretion of the Committee,
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constitute Incentive Stock Options within the meaning of Section 422 of the
Code, and the regulations thereunder or corresponding provisions of subsequent
revenue laws and regulations in effect at the time such Options are granted
("Incentive Stock Options"). In no event may Incentive Stock Options be granted
to any participant who is not at the time of such grant an employee of the
Company or its subsidiaries.
(B) The purchase price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option shall not be less
than the Fair Market Value of a share of Common Stock on the day such Incentive
Stock Option is granted. The aggregate Fair Market Value (determined as of the
time the Option is granted) of the stock subject to Incentive Stock Options
which become exercisable as to any optionee for the first time in any calendar
year (under all Plans of the Company and its parent and subsidiary corporations)
shall not exceed $100,000. Notwithstanding anything else herein, in the case of
an Incentive Stock Option granted to a participant who, at the time an Incentive
Stock Option is to be granted to such participant, owns (within the meaning of
Section 422(b))(6) of the Code) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company within
the meaning of Sections 422(e) and 422(f), respectively, of the Code (x) the
option price shall not be less than one hundred ten percent (110%) of the Fair
Market Value of the shares of Common Stock on the date of grant of such
Incentive Stock Option and (y) the Exercise Period shall not exceed five (5)
years from the date of grant of such Incentive Stock Option. Should the
foregoing provision not be necessary in order for the stock option to qualify as
an Incentive Stock Option, or should any additional provisions be required, the
Committee may amend the Plan accordingly, without the necessity of obtaining
approval of shareholders of the Company. To the extent an Option does not meet
the requirements to be an Incentive Stock Option, it shall be treated as an
option that is not an Incentive Stock Option.
(b) Stock Appreciation Rights. The Committee, in its discretion, may
grant Stock Appreciation Rights to participants who are granted Options under
the Plan. Such Rights shall be evidenced by Stock Appreciation Rights agreements
("Stock Appreciation Rights Agreements") in such form and not inconsistent with
this Plan as the Committee shall approve from time to time, which Agreements
shall contain in substance the following terms and conditions:
(i) Grant. Each Right shall relate to a specific Option
granted under the Plan and shall be granted to the optionee either concurrently
with the grant of such Options, or at such later time as determined by the
Committee.
(ii) Exercise. A Right shall entitle an optionee, to the
extent he or she so designates from time to time, to receive a number of shares,
without payment to the Company, cash, or cash and shares as elected by the
Committee as determined under subsection (iii). Such shares and/or cash shall be
issued or paid in consideration of services performed for the Company or for its
benefit by the optionee. Unless otherwise provided by the Committee, a Right
shall be exercisable to the extent and upon the conditions that its related
Option is exercisable under subsection 10(a)(iii). An optionee wishing to
exercise a Right shall give written notice of such exercise to the Company. Upon
receipt of such notice, the Company shall: (a) Without transfer or issue tax to
the optionee or other person entitled to exercise the Right, deliver to the
person exercising the Right a certificate or certificates for shares and/or (b)
pay cash. The date the Company receives written notice of an exercise hereunder
is referred to herein as the Exercise Date.
(iii) Number of Shares or Amount of Cash. The number of shares
which shall be issued pursuant to the exercise of a Right shall be determined by
dividing
(1) that portion, as elected by the optionee, of the
total number of shares which the optionee is eligible to purchase as of the
Exercise Date under the related Option (as determined pursuant to subsection
10(a)(iii) and as adjusted pursuant to subsection 10(a)(ii) and sections 11 and
12), multiplied by the amount (if any) by which the Fair Market Value of a share
of Common Stock on the Exercise Date exceeds the Fair Market Value of such Stock
on the date the related Option was granted to the optionee; by
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(2) the Fair Market Value of a share of Common Stock
on the Exercise Date.
In lieu of issuing shares on the exercise of a Right, the
Committee may elect to pay the cash equivalent of the Fair Market Value on the
date of exercise of any or all the shares which would otherwise be issuable;
provided, however, in its sole discretion, exercised at the time of grant of the
Right, the Committee may adjust the above formula to reduce (1) the number of
shares which may otherwise be issued pursuant to exercise of the Right or (2)
the amount of cash payable pursuant to the exercise of a Right. No fractional
shares shall be issued under this subsection (iii). Instead, the optionee shall
be entitled to receive a cash adjustment equal to the same fraction of the Fair
Market Value per share of Common Stock on the Exercise Date.
(iv) Effect of Exercise. Shares under an Option to which a
Right is related shall be used not more than once to calculate the number of
shares or cash to be received pursuant to an exercise of such Right.
(v) Effect of Termination or Death. In the event that a
recipient of a Right ceases to be an employee or in the service of the Company
or of any subsidiary of the Company for any reason, his or her Right shall be
exercisable only to the extent and upon the conditions that its related Option
is exercisable under subsection 10(a)(v). Cessation of active employment or
service due to commencement of long-term disability as determined by the
Committee shall not be deemed to constitute a termination of employment or
service and during the continuance of such long-term disability the individual
shall be deemed to continue active employment or service with the Company;
provided, however, that the Committee may in its sole discretion determine that
a participant's long-term disability constitutes a permanent disability and may
deem such permanent disability to be a termination of employment or service due
to retirement for any or all purposes under this Plan.
(vi) Each Right granted in relation to an Incentive Stock
Option shall contain no terms which cause such Incentive Stock Option to fail to
qualify as such.
(c) Performance Unit Rights. The Committee, in its discretion, may
grant Performance Unit Rights in Performance Units to eligible participants.
Such Rights may be granted alone, or may be granted in conjunction with, and
related to, a specific Option (other than an Incentive Stock Option) granted
under the Plan. Such Rights shall be evidenced by Performance Unit Rights
agreements ("Performance Unit Rights Agreements") in such form and not
inconsistent with this Plan as the Committee shall approve from time to time,
which Agreements shall contain in substance the following terms and conditions:
(i) Number of Performance Units. The Performance Unit Rights
Agreement shall specify the number of Performance Units to which it pertains.
Unless otherwise provided by the Committee, where Performance Unit Rights are
granted in conjunction with a specific Option granted under the Plan, the
initial number of Units shall be equal to a number of shares which the
participant is granted the right to purchase under such Option. The number of
Performance Units subject to a Performance Unit Right granted in conjunction
with the grant of an Option under the Plan shall be reduced on a one for one
basis to the extent that (1) shares are purchased upon exercise of such Option
or (2) shares under such Option are used to calculate the shares or cash to be
received by exercise of a related Stock Appreciation Right. In the event the
number of shares under a related Option are adjusted pursuant to Sections 11 or
12, the number of Performance Units and value of each Performance Unit shall be
correspondingly adjusted.
(ii) Payments of Units. When a Performance Unit Right is
granted alone, not in conjunction with an Option, payment of the value of the
Performance Units subject to the Right shall be made automatically by the
Company to the extent that the conditions of subsection 10(c)(v) are met and
subject to the other terms and conditions of this Section 10(c). When a
Performance Unit Right is granted in conjunction with an Option, the Performance
Unit Right shall be paid to the extent that the conditions of subsection
10(c)(v) are met and subject to the other terms and conditions of this section
10(c) but only if and to the extent that the Committee determines to make such
payment in lieu of continuance of the related Stock Option. Such determination
by the Committee
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shall be made during the first two months following the end of
the Award Period (as defined below). If the election is not made during such
period, the Performance Unit Right shall terminate.
(iii) Form of Payment. A Performance Unit Right shall entitle
a participant or his or her personal representatives, heirs, or legatees to
receive payment of the then value of the Performance Units subject to the
Performance Unit Right, in cash, in shares of Common Stock, or partly in cash
and partly in shares of Common Stock, as the Committee shall elect. To the
extent that the value of the Performance Units is to be paid in cash, the
Company shall deliver a check representing such value as to which the Right is
to be paid. To the extent that the value of Performance Units is to be paid in
Common Stock, the Company shall issue a certificate or certificates for such
shares. Such shares or cash shall be issued or paid in consideration of services
performed for the Company or for its benefit by the participant.
(iv) Value of Shares. To the extent that Performance Units are
to be paid in shares of Common Stock, the number of shares shall be determined
by dividing the then aggregate current value of the Performance Units to be paid
in shares by the Fair Market Value of a share of Common Stock on the date the
Committee made the election to make the payment in stock. No fractional shares
shall be issued under this subsection (iv). Instead, the Company shall pay a
cash adjustment equal to the same fraction of the Fair Market Value per share of
Common Stock on the date the Committee made the decision to make the payment in
stock.
(v) Value of Performance Units.
(1) The Performance Unit Rights Agreement shall
specify a maximum unit value. Except as provided in Section 10(c)(i), the value
of Performance Units may not thereafter be increased, but shall be decreased as
provided in subsection (v)(2) below in the event that the applicable maximum
performance target is not achieved during the Award Period. Unless otherwise
determined by the Committee, the Award Period shall be a five calendar year
period commencing as of the beginning of the calendar year in which the
Performance Unit Right is granted.
(2) (a) At the time a Performance Unit Right is
granted, the Committee shall, in accordance with Section 22 hereof, establish
maximum and minimum performance goals to be achieved within the Award Period.
Attainment of the maximum performance goal in respect of an Award Period will
result in a 100% valuation of each Performance Unit. Failure to meet the minimum
performance goal will result in a zero evaluation of each Performance Unit.
Partial values between 100% and zero will be provided as determined by the
Committee in respect of an Award Period for the attainment of performance
between the maximum and minimum performance goals.
(b) Unless otherwise determined by the Committee
at the time of grant, the value of Performance Units shall be paid as soon as
practicable after the end of the Award Period. The Committee may provide at the
time of grant that the value of Performance Units shall be paid either in whole
or in installments following such period of time after the end of the Award
Period as shall be selected by the Committee (the "Vesting Period").
(c) In the event that a participant ceases to be
an employee, director, or service provider of the Company or any subsidiary of
the Company by reason of death, prior to the end of a multi-year award period or
prior to the end of the Award Period or the Vesting Period in the case of a
single-year Award Period, or such employment or service terminates during the
final year of a multi-year Award Period for any other reason (excepting
termination for Cause (as defined and determined by the Committee)) or such
employment or service terminates due to retirement ("Retirement") prior to the
end of the Award Period or the Vesting Period in the case of a single-year award
period, Performance Unit Rights shall, unless otherwise determined by the
Committee, continue to be payable at the end of the multi-year Award Period
pursuant to subsection 10(c)(ii) or (iii), provided, however, the value of each
Performance Unit as determined by subsection 10(c)(v)(2)(a) shall be adjusted as
follows:
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<PAGE>
(y) in the case of multi-year Award Periods, by multiplying
such value by a fraction, the numerator of which shall be the
number of full calendar months between the commencement of the
Award Period and the date the Participant ceased being an
active employee, director or service provider by reason of
death or other termination during the final year of the Award
Period (excepting termination for Cause) and the denominator
of which shall be the number of full calendar months between
the commencement and termination of the Award Period.
(z) in the case of single-year Award Periods, if cessation of
active employment or service occurs due to death or Retirement
during the Award Period, by multiplying such value by a
fraction, the numerator of which shall be the number of full
calendar months between the commencement of the Award Period
and the date the participant ceased being an active employee,
director or service provider for any such reason during the
Award Period and the denominator of which shall be the number
of full calendar months between the commencement and
termination of the Award Period; in the event of any such
cessation of active employment or service after the close of
the Award Period, the full value of each Performance Unit as
determined by subsection 10(c)(v)(2)(a) shall be paid.
Except as otherwise provided in this subsection, upon termination of
employment or service all Performance Unit Rights shall terminate. Cessation of
active employment or service due to commencement of long-term disability as
determined by the Committee shall not be deemed to constitute a termination of
employment or service and during the continuance of such long-term disability
the individual shall be deemed to continue active employment or service with the
Company.
11. Recapitalization. In the event that dividends are payable in Common
Stock or in the event there are splits, subdivisions, or combinations of shares
of Common Stock, or other capital adjustments, unless the Committee determines
otherwise, the number of shares available under the Plan shall be increased or
decreased proportionately, as the case may be, and the number of Restricted
Shares and shares deliverable upon the exercise thereafter of any Option or
Stock Appreciation Right or upon distribution pursuant to Incentive Stock Rights
theretofore granted shall be increased or decreased proportionately, as the case
may be, without change in the aggregate purchase price (where applicable).
12. Reorganization. In the case the Company is merged or consolidated
with another corporation and the Company is not the surviving corporation, or in
case the property or Stock of the Company is acquired by another corporation, or
in case of a separation, reorganization, or liquidation of the Company, the
Committee, or the board of directors of any corporation assuming the obligations
of the Company hereunder, shall:
(a) As to outstanding Restricted Share Rights, Options, Stock
Appreciation Rights, or Incentive Stock Rights either (i) make appropriate
provision for the protection of any such Restricted Share Rights, outstanding
Options, Stock Appreciation Rights, or Incentive Stock Rights by the
substitution on an equitable basis of appropriate stock or other property of the
Company, or of the merged, consolidated or otherwise reorganized corporation
which will be issuable in respect to the shares of Common Stock, provided only
that the excess of the aggregate Fair Market Value of the shares subject to
Options and Rights immediately after such substitution over the purchase price
thereof is not more than the excess of the aggregate Fair Market Value of the
shares subject to such Options or Rights immediately before such substitution
over the purchase price thereof, or (ii) upon written notice to the employee or
service provider provide that the Option or Right must be exercised within sixty
(60) days of the date of such notice or it will be terminated. In any such case
the Committee may, in its discretion, advance the lapse of restrictions on
Restricted Shares, Incentive Periods, and Exercise Dates.
(b) As to outstanding Performance Unit Rights make appropriate
provision for modified or new Performance Unit Rights on an equitable basis
including modification to performance targets or advance of the lapse of Award
Periods.
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<PAGE>
13. General Restrictions. Each Option and Right shall be subject to the
requirement that, if at any time the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the shares
subject to such Option or Right upon any securities exchange or under any state
or federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Option or Right or the issue or purchase of shares thereunder, such Option
or Right may not be exercised in whole or in part unless such listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
14. Rights as a Shareholder. The holder of an Option or Right shall
have no right as a shareholder with respect to any shares covered by the Option
or Right until the date of issuance of a stock certificate to him or her for
such shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other right for which the record date is prior to
the date such stock certificate is issued.
15. Non-Assignability of Restricted Share Rights, Incentive Stock
Rights, Options, Stock Appreciation Rights, and Performance Unit Rights. Except
as otherwise determined by the Committee, no Restricted Share Right, Incentive
Stock Right, Options, Stock Appreciation Right, and Performance Unit Right shall
be assignable or transferable by the recipient except by will or by the laws of
descent and distribution. Except as otherwise determined by the Committee,
during the life of the recipient, the Restricted Share Right, Incentive Stock
Right, Options, Stock Appreciation Right, and Performance Unit Right shall be
exercisable only by him or her.
16. Subsidiary. As used herein, the term "subsidiary" shall mean any
future or present corporation which would be a "subsidiary corporation" of the
Company as the term is defined in Section 424 of the Code.
17. Withholding Taxes. Whenever under the Plan shares are to be issued
in satisfaction of Options or Rights granted thereunder, the Company shall have
the right (i) to require the recipient to remit to the Company cash in an amount
which, or if the recipient so chooses, previously owned shares the value of
which, is sufficient to satisfy federal, state, and local withholding tax
requirements or (ii) if the participant so directs, to withhold from the shares
otherwise issuable sufficient shares to satisfy such withholding requirements,
or any combination of the foregoing, in each case, prior to the delivery of any
certificate or certificates for such shares.
18. Fair Market Value. As used in the Plan "Fair Market Value", unless
otherwise determined by any applicable provisions of the Code or regulations
thereunder, shall be as determined by the Committee (or as determined by a
method approved by the Committee), but in no case less than par value.
19. Amendment of the Plan. The Plan may at any time or from time to
time be terminated, modified, or amended by the shareholders of the Company, in
accordance with the laws of the State of New York. The Board may at any time,
and from time to time amend, in whole or in part, any or all of the Plan or
suspend or terminate it entirely, retroactively or otherwise; provided, however,
that unless otherwise required by law or specifically provided herein, the
rights of a participant with respect to Awards granted prior to such amendment,
suspension, or termination, may not be impaired without the consent of such
Participant; and further provided, however, without the approval of the
shareholders of the Company in accordance with the laws of the state of New
York, to the extent required by Rule 16b-3, or for the exception for performance
based compensation under Code Section 162(m), or other applicable law of stock
exchange rules, no amendment may be made.
20. Change in Control Provisions. Notwithstanding anything to the
contrary in this Plan, the following provisions shall apply to all outstanding
Restricted Stock Rights, Incentive Stock Rights, non-qualified Stock Options,
Stock Appreciation Rights, and Performance Unit Rights and all such Options and
Rights granted in the future.
(a) Definitions. The following definitions shall apply to this Section:
-A11-
<PAGE>
"Change in Control" shall be deemed to occur if (i) any "person" (as
such term is used in Sections 12(d) and 13(d) of the Securities Exchange Act of
1934 (the "Exchange Act")) other than any officer or director of the Company, is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 20% or
more of the voting power of the Company's then outstanding voting securities; or
(ii) during any period of not more than twenty-four consecutive months
individuals who at the beginning of such consecutive twenty-four month period
constitute the Board, including for this purpose any new director whose election
or the nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such twenty-four month period, cease for any
reason to constitute at least a majority thereof.
"CIC Price" shall mean the higher of (a) the highest price paid for a
share of the Common Stock in the transaction or series of transactions pursuant
to which a Change in Control of the Company shall have occurred, or (b) the
highest price paid for a share of the Common Stock during the 60 day period
immediately preceding the date of exercise of an Option or Right as reported in
The Wall Street Journal in the Nasdaq National Market Issues transactions or
similar successor consolidated transactions reports.
(b) Acceleration of Vesting of Options and Related Rights. Stock Option
and Stock Appreciation Right Agreements may, as determined by the Committee,
provide that upon the occurrence of a Change in Control all outstanding Options
and Stock Appreciation Rights shall become automatically 100% exercisable. Any
Stock Appreciation Right shall be paid solely in cash calculated by multiplying
the number of shares as to which such Right is being exercised by the difference
between the option price per share of the Options as to which such Right is
being exercised and the CIC Price.
(c) Acceleration of Vesting and Payment of Restricted Share Rights,
Incentive Stock Rights, and Performance Unit Rights.
(1) Applicable agreements may provide that upon the occurrence
of an event constituting a Change in Control, all Restricted Share Rights, all
Incentive Stock Units outstanding on such date, all Performance Units
outstanding on such date which are not related to any outstanding Options, and
all Performance Units outstanding on such date shall become 100% vested and
shall be paid in cash as soon as may be practicable. Upon such payment, such
units and any related Stock Options shall be canceled.
(2) The amount of cash to be paid shall be determined by
multiplying the number of Rights or Units by: (i) in the case of Restricted
Share Rights, the CIC Price, (ii) in the case on incentive stock units, the CIC
Price, (iii) in the case of Performance Units, where the Award Period has not
been completed upon the occurrence of a Change in Control, the initial (maximum)
value of such Units as determined by the Committee at the time of grant, without
regard to the performance criteria applicable to such units and (iv) in the case
of Performance Units where the Award Period has been completed on or prior to
the occurrence of a Change in Control, the value of such Units as determined in
accordance with Section 10(c).
(d) Option Surrender Rights. The Committee, in its discretion, may
grant the holders of Stock Options Option Surrender Rights. Option Surrender
Rights may not be granted with respect to non-qualified Stock Options which are
already the subject of Stock Appreciation Rights. Such Option Surrender Rights
shall be evidenced by Option Surrender Right Agreements in such form and not
inconsistent with the Plan as the Committee shall approve from time to time,
which Agreements shall contain in substance the following terms and conditions:
(1) Grant. Each Right shall relate to a specific Option
granted under the Plan and shall be granted to the Optionee either concurrently
with the grant of such Option, or at such later time as determined by the Board.
-A12-
<PAGE>
(2) Exercise. A Right shall entitle an optionee, to the extent
he or she so designates, to receive cash as determined under subsection (3) of
this subsection (d). An optionee wishing to exercise a Right shall give written
notice of such exercise to the Company.
(3) Amount of Cash. The amount of cash payable upon exercise
of a Right shall be determined by multiplying the number of shares as to which
the Right is being exercised by the difference between the option price of the
shares as to which the Right is being exercised and the CIC Price. The date the
Company receives written notice of an exercise hereunder is referred to as the
date of exercise for purposes of determining the CIC Price.
(4) Applicability of Other Sections. Subsections (iv), (v),
and (vi) of Section 10(b) of the Plan shall apply to Option Surrender Right
under this Section.
(5) Limitation on Officers and Directors. Upon the grant of
Stock Appreciation Rights to an officer or director containing terms and
provisions as permitted under subsections (b) or (d) of this Section, any then
outstanding Option Surrender Rights shall be automatically canceled.
21. Grants to Outside Directors.
(a) On the first business day following the 1991 annual meeting of
shareholders of the Company, each member of the Board who is not then an
employee of the Company or any subsidiary of the Company shall automatically be
issued an Option pursuant to this Plan to purchase 5,000 shares of the Common
Stock. Thereafter, on March 1 of each year to and including March 1, 1995, each
such member of the Board who is not then an employee of the Company or any
subsidiary of the Company (collectively, with the members of the Board referred
to in the preceding sentence, "Outside Directors") shall automatically be issued
an Option pursuant to this Plan to purchase 5,000 shares of the Common Stock.
(b) On March 1 of each year following the 1995 annual meeting of
shareholders of the Company, each Outside Director shall automatically be issued
an Option pursuant to this Plan to purchase a total of 10,000 shares of Common
Stock. In the event that such date shall in any year fall on a day on which the
Common Stock is not publicly traded, Options shall instead be issued pursuant to
this Section 21 on the next preceding trading day.
(c) Options granted pursuant to subparagraphs (a) and (b) of this
Section 21 shall have an exercise price per share equal to the Fair Market Value
of the Common Stock on the date of grant and shall become exercisable as to
one-third of the shares subject to the Option on each of the first, second, and
third anniversary dates of the date of grant. The Exercise Period for such
Option shall be ten years following the date of grant. Such Option shall not be
an Incentive Stock Option.
(d) If for any reason during the term of an unexercised and unexpired
Option issued pursuant to this Section 21, the Outside Director shall cease to
be a voting member of the Board, such Option may be exercised for such period as
may be specified in the agreement evidencing such Option (but in no event later
than the expiration of the Exercise Period), provided, however, that any Option
or portion of any Option not exercisable on the date of such termination shall
expire on such date.
(e) Options issued pursuant to this Section 21 shall be subject to
adjustment pursuant to Section 11 and 12 hereof.
22. Objective Performance Goals, Formulae, or Standards. The Committee
shall establish the objective performance goals, formulae, or standards and the
applicable vesting percentage of the Restricted Shares and achievement
percentage for valuation of Performance Units applicable to each Participant or
class of Participants in writing prior to the beginning of the applicable fiscal
year or at such later date as permitted
-A13-
<PAGE>
under Section 162(m) and while the outcome of the performance goals are
substantially uncertain. Such performance goals may incorporate, if and only to
the extent permitted under Section 162(m), provisions for disregarding (or
adjusting for) changes in accounting methods, corporate transactions (including,
without limitation, dispositions and acquisitions), and other similar events or
circumstances. To the extent any such provision would create impermissible
discretion under Section 162(m) or otherwise violate Section 162(m), such
provision shall be of no force or effect. These performance goals shall be based
on one or more of the following criteria: (i) the attainment of certain target
levels of, or a percentage increase in after-tax or pre-tax profits of the
Company including, without limitation, that attributable to continuing and/or
other operations of the Company (or in any case a subsidiary, division, or other
operational unit of the Company); (ii) the attainment of certain target levels
of, or a specified increase in, operational cash flow of the Company (or a
subsidiary, division, or other operational unit of the Company); (iii) the
achievement of a certain level of, reduction of, or other specified objectives
with regard to limiting the level of increase in, all or a portion of, the
Company's bank debt or other long-term or short-term public or private debt or
other similar financial obligations of the Company, which may be calculated net
of such cash balances and/or other offsets and adjustments as may be established
by the Committee; (iv) the attainment of a specified percentage increase in
earnings per share or earnings per share from continuing operations of the
Company (or a subsidiary, division, or other operational unit of the Company);
(v) the attainment of certain target levels of, or a specified percentage
increase in, revenues, net income or earnings before income tax of the Company
(or a subsidiary, division, or other operational unit of the Company); (vi) the
attainment of certain target levels of, or a specified increase in return on
capital employed or return on investment; (vii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax return on
shareholders' equity of the Company (or any subsidiary, division, or other
operational unit of the Company); (viii) the achievement of certain target
levels of discovery and/or development of products, including, without
limitation, the regulatory approval of new products; (ix) the achievement of
certain target levels of sales of new products or licensing in or out of new
drugs; and (x) the formation of joint ventures, research or development
collaborations, or the completion of other corporate transactions.
In addition, such performance goals may be based upon the attainment of
specified levels of Company performance under one or more of the measures
described above relative to the performance of other corporations. To the extent
permitted under Section 162(m) (including, without limitation, compliance with
any requirements for shareholder approval, the Committee may: (i) designate
additional business criteria on which the performance goals may be based on (ii)
adjust, modify, or amend the aforementioned business criteria.
-A14-
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
REGENERON PHARMACEUTICALS, INC.
The undersigned hereby appoints Leonard S. Schleifer and Paul Lubetkin as
proxies, with power to act with the other and with power of substitution, and
hereby authorizes them to represent and vote, as designated on the other side,
all the shares of stock of Regeneron Pharmaceuticals, Inc. standing in the
name of the undersigned with all powers which the undersigned would possess if
present at the Annual Meeting of Shareholders of the Company to be held June
27, 1997 or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED, AND SIGNED, ON THE OTHER SIDE)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3, AND 4.
Please mark
your vote as /X/
indicated in
the example
<TABLE>
<S> <C>
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
Item 1- ELECTION OF DIRECTORS Item 2- Approval of amendment and / / / / / /
Nominees: / / / / restatement of the Regeneron
Charles A. Baker Pharmaceuticals, Inc. 1990
Michael S. Brown, M.D. Long-Term Incentive Plan
George L. Sing
Item 3- Appointment of Coopers & Lybrand FOR AGAINST ABSTAIN
WITHHELD FOR: (Write that nominee's name L.L.P. as independent accountants / / / / / /
in the space provided below).
Item 4- In their discretion, upon any other FOR AGAINST ABSTAIN
_________________________________________ matters as may properly come / / / / / /
before the meeting
</TABLE>
Signature: ____________________ Signature: ____________________ Date: ________
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNED AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
