<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GENELABS TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
GENELABS TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE> 2
April 17, 1998
To Our Shareholders:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders of Genelabs Technologies, Inc. to be held at the Company's offices
at 505 Penobscot Drive, Redwood City, California, on Thursday, May 21, 1998 at
10:00 a.m. local time.
The matters expected to be acted upon at the meeting are described in
detail in the following Notice of Annual Meeting of Shareholders and Proxy
Statement.
In the proxy you will be asked to elect six current members to the Board
of Directors and approve an increase in the number of authorized shares of
Common Stock.
I would like to thank you for your support as a Genelabs Technologies,
Inc. shareholder and urge you to please complete, date, sign and return the
enclosed proxy as soon as possible. We look forward to seeing you at the
meeting.
Sincerely,
Irene A. Chow, Ph.D.
President and Chief Executive Officer
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
1
<PAGE> 3
GENELABS TECHNOLOGIES, INC.
505 PENOBSCOT DRIVE
REDWOOD CITY, CALIFORNIA 94063
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 21, 1998
TO THE SHAREHOLDERS OF GENELABS TECHNOLOGIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Genelabs Technologies, Inc., a California corporation (the "Company"), will be
held at the Company's offices located at 505 Penobscot Drive, Redwood City,
California, on Thursday, May 21, 1998, at 10:00 a.m. local time, for the
following purposes:
1. To elect directors of the Company, each to serve until the next
Annual Meeting of Shareholders and until his or her successor
has been elected and qualified or until his or her earlier
resignation or removal. The Company's Board of Directors intends
to present the following nominees for election as directors:
Irene A. Chow
Frank L. Douglas
Edgar G. Engleman
Arthur Gray, Jr.
H.H. Haight
Nina K. Wang
2. To approve an increase in the number of authorized shares of
Common Stock by 10,000,000 shares.
3. To ratify the selection of Ernst & Young LLP as independent
auditors for the Company for its fiscal year ending December 31,
1998.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 31,
1998, as the record date for the determination of shareholders entitled to
notice of and to vote at this Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors
Melinda Griffith
Secretary
Redwood City, California
April 17, 1998
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
2
<PAGE> 4
GENELABS TECHNOLOGIES, INC.
505 PENOBSCOT DRIVE
REDWOOD CITY, CALIFORNIA 94603
----------------------
PROXY STATEMENT FOR THE 1998 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON THURSDAY, MAY 21, 1998
----------------------
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of Genelabs Technologies, Inc., a California corporation (the
"Company" or "Genelabs"), for use at the Annual Meeting of Shareholders of the
Company to be held at Genelabs' principal office located at 505 Penobscot Drive,
Redwood City, California 94063, on May 21, 1998 at 10:00 a.m. P.D.T. (the
"Meeting"). Only holders of record of the Company's Common Stock and Series A
Convertible Preferred Stock ("Preferred Stock") at the close of business on
March 31, 1998 (the "Record Date") will be entitled to vote at the Meeting. At
the close of business on March 31, 1998, the Company had 39,518,511 shares of
Common Stock outstanding and 42,851,845 shares of Common Stock and Preferred
Stock on an as-converted basis entitled to vote. A majority of the shares
entitled to vote on the Record Date will constitute a quorum for the transaction
of business. This Proxy Statement and the accompanying form of proxy were first
mailed to shareholders on or about April 17, 1998.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Holders of the Company's Common Stock are entitled to one vote for each
share held as of the above Record Date, except that in the election of directors
each shareholder has cumulative voting rights and is entitled to a number of
votes equal to the number of shares held by such shareholder multiplied by the
number of directors to be elected. The shareholder may cast these votes all for
a single candidate or distribute the votes among any or all of the candidates.
No shareholder will be entitled to cumulate votes for a candidate, however,
unless that candidate's name has been placed in nomination prior to the voting
and the shareholder, or any other shareholder, has given notice at the Meeting
prior to the voting of an intention to cumulate votes. In such an event, the
proxy holder may allocate among the Board of Directors' nominees the votes
represented by proxies in the proxy holder's sole discretion.
Holders of the Company's Preferred Stock are entitled to one vote for
each share of Common Stock into which such Preferred Stock could be converted,
in accordance with a pre-determined formula. Under this formula, the holders of
the Preferred Stock are entitled to vote an aggregate of 3,333,334 shares at the
Meeting.
In the election of directors, the nominees receiving the highest number
of affirmative votes will be elected as directors. Proposal No. 2 requires for
approval the affirmative vote of the majority of outstanding shares of Common
and Preferred Stock on an as-converted basis voting together as a class. As a
result, for Proposal No. 2 abstentions and broker non-votes will have the same
effect as negative votes. Proposal No. 3 requires for ratification the
affirmative vote of the majority of the shares of Common and Preferred Stock on
an as-converted basis voting together as a class present in person or
represented by proxy at the Meeting. All votes will be tabulated by the
Inspector of Elections appointed for the Meeting who will separately tabulate,
for each proposal, affirmative and negative votes, abstentions and broker
non-votes. Abstentions will be counted towards a quorum but will not be counted
in determining whether Proposal No. 3 has been ratified. Broker non-votes will
be counted towards a quorum but are not counted for any purpose in determining
whether a matter has been approved.
The expenses of soliciting proxies to be voted at the Meeting will be
paid by the Company. Following the original mailing of the proxies and other
soliciting materials, the Company and/or its agents may also solicit proxies by
mail, telephone, or in person. Following the original mailing of the proxies and
other soliciting materials, the Company will request that brokers, custodians,
nominees and other record holders of the Company's Common Stock and Preferred
Stock forward copies of the proxy and other soliciting materials to persons for
whom they hold shares of Common Stock and Preferred Stock and request authority
for the exercise of proxies. In such cases, the Company, upon the request of the
record holders, will reimburse such holders for their reasonable expenses.
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<PAGE> 5
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to the Meeting or at the Meeting prior to the
vote pursuant to the proxy. A proxy may be revoked by a writing delivered to the
Company stating that the proxy is revoked, by a subsequent proxy that is signed
by the person who signed the earlier proxy and is presented at the Meeting or by
attendance at the Meeting and voting in person.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
At the Meeting, shareholders will elect the Company's Board of Directors
(the "Board") to hold office until the next Annual Meeting of Shareholders and
until his or her successor has been elected and qualified or until his or her
earlier resignation or removal. Six persons have been nominated for election at
the Meeting to the six positions approved by the Board pursuant to the Company's
By-laws. Shares represented by the accompanying proxy will be voted for the
election of the six nominees unless the proxy is marked in such a manner as to
withhold authority so to vote. If any nominee for any reason is unable to serve
or for good cause will not serve, the proxies may be voted for such substitute
nominee as the Board may determine. The Company is not aware of any nominee who
will be unable to or for good cause will not serve as a director.
DIRECTORS/NOMINEES
The names of the nominees and certain information about them as of March
31, 1998 are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
--------------- --- -------------------- -----
<S> <C> <C> <C>
Irene A. Chow, Ph.D. 59 President and Chief Executive Officer 1993
Frank L. Douglas, M.D. Ph.D. (1) 54 Executive Vice President, Drug Innovation 1997
and Approval, Hoechst Marion Roussel AG
Edgar G. Engleman, M.D. (1) 52 Professor of Pathology and Medicine at 1984
Stanford University School of Medicine
Arthur Gray, Jr. (2) 75 Managing Director of Cowen Investment 1991
Counselors
H.H. Haight (2) 64 Managing Director of Advent International 1989
Corporation
Nina K. Wang (2) 60 Chairlady, Chinachem Group 1997
</TABLE>
- ------------------------
(1) Member of the Human Resources Committee.
(2) Member of the Audit and Finance Committee.
Each of the directors listed above, with the exception of Dr. Douglas, was
elected to be a director at the Company's Annual Meeting of Shareholders held on
May 22, 1997. Dr. Douglas was appointed to the Board on June 30, 1997.
4
<PAGE> 6
Irene A. Chow has been Chief Executive Officer and President since July 1995.
Before being appointed President and Chief Operating Officer of Genelabs in May
1995, she served the Company as President of the Biopharmaceutical Division
beginning in August 1993 when she also became a Director. In addition to her
duties at the Company, Dr. Chow also chairs GBL's Board of Directors. From 1975
to 1993, Dr. Chow held several positions at Ciba-Geigy Corporation, USA, a
pharmaceutical company, most recently as Senior Vice President of Drug
Development for the pharmaceuticals division. In this capacity, she directed all
scientific, medical, technical and regulatory activities related to the
development of new drugs. During her last 8 years at Ciba-Geigy, Dr. Chow was
responsible for overseeing the approval of 10 NDA's by the FDA and submission of
an additional 26 IND's to the FDA. She holds a B.A. degree in Literature from
National Taiwan University, and both an M.A. and a Ph.D. in Biostatistics from
the University of California, Berkeley.
Frank L. Douglas has been a director of Genelabs since 1997. He is Executive
Vice President, Drug Innovation and Approval of Hoechst Marion Roussel AG and a
member of its Board of Directors. Dr. Douglas was Executive Vice President,
Research and Development, at Marion Merrell Dow, Inc., prior to its merger with
Hoescht Roussel in 1995. Previously, he spent seven years at Ciba-Geigy
Pharmaceutical Corp., most recently as Senior Vice President and Director of
Research, and Vice President and Partner of the Biocine Company, a joint venture
between Ciba-Geigy and Chiron Corporation. Dr. Douglas has held professorial
appointments at the University of Chicago, Robert Wood Johnson Medical School
and University of Kansas. Dr. Douglas is currently a member of the Executive
Committee Science & Regulatory Section, Pharmaceutical Research and
Manufacturers of America; FDA Science Board; Board of Scientific Counselors,
National Institute of Mental Health; Scientific Advisory Board of Healthcare
Ventures; and a Director of the National Association for Biomedical Research. He
received his Ph.D. in Physical Chemistry from Cornell University, Ithaca, and
his M.D. from Cornell University Medical College, New York City.
Edgar G. Engleman has been a director of Genelabs since its organization in
1984. Dr. Engleman is Professor of Pathology and Medicine, Director of the Blood
Center and Attending Physician of Rheumatology at the Stanford University School
of Medicine. During his sabbatical, from June 1991 to May 1992, Dr. Engleman
spent the majority of his time at Genelabs as its Chief Scientific Officer.
Prior to co-founding Genelabs, Dr. Engleman participated in the founding of
Cetus Immune Corporation. In 1992, he participated in the founding, and is a
director, of Dendreon Corp, formerly Activated Cell Therapy, Inc. In 1997, Dr.
Engleman became a partner of BioAsia Investments, an international investment
management company and joined the boards of Advanced Pathology Systems, Inc. and
Structural Bioinformatics, Inc. Dr. Engleman holds a B.A. from Harvard
University and an M.D. from Columbia University.
Arthur Gray, Jr. has been a director of Genelabs since March 1991. He has been a
Managing Director of Cowen Investment Counselors, a division of Cowen & Co.
("Cowen"), since July 1993. Prior to joining Cowen, he was President and Chief
Executive Officer of Dreyfus Personal Management, Inc., a subsidiary of the
Dreyfus Corporation, from January 1984 to June 1993. He is a director of Seventh
Generation, an environmental product catalog company.
H.H. Haight has been a director of Genelabs since May 1989. Mr. Haight is a
Managing Director of Advent International Corporation, an adviser and manager of
international venture capital funds, where he has been closely involved in
Advent's Far East activities and responsible for Advent's Far East Group since
1985. Mr. Haight is also President of Argo Global Capital, Inc. Mr. Haight holds
a B.S. in Forestry from the University of California, Berkeley and an M.B.A.
from Harvard University.
Nina K. Wang has been a director of Genelabs since February 1997. Ms. Wang is
the principal shareholder of Veron International Limited ("Veron"), the largest
shareholder of the Company, where she serves as Director, President and
Treasurer. She is the Chairlady of the Chinachem Group, one of Hong Kong's
largest private real estate developers. She is also currently a director of FPB
Bank Holding Company Limited in Hong Kong; Yangming Marine Transport Corporation
in Taiwan; Chesterfield PLC in the United Kingdom, and the University of
International Business and Economics and the Foreign Affairs College in China.
Ms. Wang created the Ruxin Agricultural Award to recognize technological
advancements and achievements in agriculture in China; is the Honorary President
of the Chinese Red Cross Foundation; and is Special Advisor to the World
Federation of United Nations Associations. Ms. Wang is a John Harvard Fellow of
Harvard University and is a Professor at both Peking University and The Foreign
Affairs College.
5
<PAGE> 7
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board met five times during 1997. Ms. Skouras attended fewer than
75% of the total number of meetings of the Board and committees of the Board
held during the period for which she was a director. Additionally, Dr. Douglas
had a previous commitment, of which he had informed the Company prior to his
election, on one of the two meeting dates after his election, resulting in
attendance at less than 75% of the meetings during the period which he was a
director.
The standing committees of the Board are an Audit and Finance Committee
and a Human Resources Committee. The Board does not have a nominating committee
or a committee performing similar functions.
Ms. Wang, Mr. Gray and Mr. Haight are the current members of the Audit
and Finance Committee which met three times during 1997. Dr. Engleman was a
member of the Audit and Finance Committee until May 22, 1997. The Audit and
Finance Committee reviews the Company's accounting practices, internal control
systems, cash investment policy and Securities and Exchange Commission ("SEC")
filings, and meets with the Company's outside auditors concerning the scope and
terms of their engagement and the results of their audits. In addition, the
Audit and Finance Committee is responsible for reviewing significant finance
transactions.
Ms. Skouras, Dr. Douglas and Dr. Engleman are the current members of the
Company's Human Resources Committee which met four times during 1997. Dr. Max
Wilhelm was a member of the Human Resources Committee until he did not stand for
re-election to the Board on May 22, 1997. Dr. Engleman was appointed to the
Committee on May 22, 1997 and Dr. Douglas was appointed to the Committee on
February 6, 1998. The Human Resources Committee is primarily responsible for
reviewing compensation paid to officers of the Company and for administering the
Company's stock option and employee benefit plans.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINATED DIRECTORS.
PROPOSAL NO. 2 -- APPROVAL OF AN INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has adopted, subject to shareholder approval, an
amendment to the Company's Restated Articles of Incorporation to increase the
Company's authorized number of shares of Common Stock from 75,000,000 shares to
85,000,000 shares.
The additional Common Stock to be authorized by adoption of the
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of the holders of currently outstanding Common
Stock of the Company, except for effects incidental to increasing the number of
shares of the Company's Common Stock outstanding, such as dilution of the
earnings per share and voting rights of current holders of Common Stock. If the
amendment is adopted, it will become effective upon filing of a Certificate of
Amendment of the Company's Restated Articles of Incorporation with the Secretary
of State of the State of California.
In addition to the 39,518,511 shares of Common Stock outstanding at
March 31, 1998, the Board has reserved 33,824,653 shares for issuance upon
conversion of convertible preferred stock and exercise of options and rights
granted under the Company's stock option and stock purchase plans, leaving only
1,656,836 shares available for general corporate purposes.
6
<PAGE> 8
Although at present the Board of Directors has no plans to issue the
additional shares of Common Stock, it desires to have such shares available to
provide additional flexibility to use its capital stock for business and
financial purposes in the future. The additional shares may be used, without
further shareholder approval, for various purposes including, without
limitation, raising capital, providing equity incentives to employees, officers
or directors, establishing strategic relationships with other companies and
expanding the company's business or product lines through the acquisition of
other businesses or products.
The additional shares of Common Stock that would become available for
issuance if the proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further shareholder approval,
the Board could strategically sell shares of Common Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock has been
prompted by business and financial considerations and not by the threat of any
hostile takeover attempt (nor is the Board currently aware of any such attempts
directed at the Company), nevertheless, shareholders should be aware that
approval of proposal could facilitate future efforts by the Company to deter or
prevent changes in control of the Company, including transactions in which the
shareholders might otherwise receive a premium for their shares over then
current market prices.
The affirmative vote of the holders of a majority of the outstanding
shares of the Common Stock and Preferred Stock on an as-converted basis voting
together as a class will be required to approve this amendment to the Company's
Restated Articles of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF AN INCREASE IN THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
PROPOSAL NO. 3 -- RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP as the Company's independent
auditors to perform the audit of the Company's financial statements for its
fiscal year ending December 31, 1998, and the shareholders are being asked to
ratify such selection. Representatives of Ernst & Young LLP will be present at
the Meeting, will have the opportunity to make a statement at the Meeting if
they desire to do so and will be available to respond to appropriate questions.
Shareholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's By-laws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the shareholders for ratification as a matter of good corporate practice. If
the shareholders fail to ratify the selection, the Board will reconsider whether
to retain Ernst & Young LLP. Even if the selection is ratified, the Board in its
discretion, may direct the appointment of different independent auditors at any
time during the year if it determines that such a change would be in the best
interests of the Company and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP.
7
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 31,
1998, with respect to the beneficial ownership of each class of the Company's
voting securities held by (i) each shareholder known by the Company to be the
beneficial owner of more than 5% of either class of the Company's voting
securities, (ii) each director and nominee, (iii) each executive officer named
in the Summary Compensation Table and (iv) all directors and executive officers
as a group.
<TABLE>
<CAPTION>
TITLE OF NAME OF AMOUNT AND NATURE OF PERCENT
CLASS (1) BENEFICIAL OWNER BENEFICIAL OWNERSHIP(2) OF CLASS
--------- ---------------- --------------------- --------
<S> <C> <C> <C>
Common Veron International Limited (3) 5,391,633 13.6%
Common SMALLCAP World Fund, Inc. (4) 2,085,000 5.3
Common Chancellor LGT Asset Management, Inc. (5) 2,055,000 5.2
Common Edgar G. Engleman (6) 841,967 2.1
Common Irene A. Chow (7) 497,411 1.2
Common Cynthia A. Edwards (8) 135,538 *
Common James A.D. Smith (9) 86,742 *
Common Damaris Skouras (10) 64,027 *
Common Arthur Gray, Jr. (11) 52,500 *
Common Melinda Griffith (12) 40,101 *
Common H. H. Haight (13) 27,662 *
Common Nina K. Wang (14) 10,000 *
Common Frank L. Douglas 0
Common All directors and executive officers as a
group (10 persons) (15) 1,755,948 4.3
Preferred Chiron Corporation (16) 5,000 50.0
Preferred Johnson & Johnson Development Corporation (17) 5,000 50.0
</TABLE>
- ---------------------------
* Represents beneficial ownership of less than 1%
(1) The Company has two classes of voting securities, Common Stock and
Series A Convertible Preferred Stock. The two holders of the Company's
Series A Convertible Preferred Stock are entitled to one vote for each
share of Common Stock into which their Convertible Preferred Stock could
be converted, in accordance with a pre-determined formula. Under this
formula, each holder is entitled to vote 1,666,667 shares at this year's
Annual Meeting.
(2) This table is based upon information supplied by executive officers,
directors and principal shareholders and Schedules 13D and 13G, if any,
filed with the SEC. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, each of
the shareholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 39,518,511 shares of Common Stock
and 10,000 shares of Preferred Stock outstanding on March 31, 1998,
adjusted as required by rules promulgated by the SEC.
(3) The address of Veron International Limited ("Veron") is Top Floor
Chinachem Golden Plaza, 77 Mody Road, Tsimshatsui East, Kowloon, Hong
Kong. Veron is an investment holding company whose principal shareholder
is Ms. Nina K. Wang, a Director of the Company.
(4) The address of SMALLCAP World Fund, Inc. is 333 South Hope Street, 52nd
Floor, Los Angeles, California 90071.
(5) Represents shares owned by Chancellor LGT Asset Management, Inc., its
wholly-owned subsidiary Chancellor LGT Trust Company, and LGT Asset
Management, Inc., the holding company for Chancellor LGT Asset
Management, Inc. and an indirect wholly-owned subsidiary of
Liechtenstein Global Trust, AG. The address of Chancellor LGT Asset
Management, Inc. is 1166 Avenue of the Americas, New York, New York,
10036.
8
<PAGE> 10
(6) Represents 732,785 shares held of record by the Engleman Family Trust,
41,266 shares held of record by Dr. Engleman's minor child and 67,916
shares of Common Stock subject to options held by Dr. Engleman that are
exercisable within 60 days of March 31, 1998.
(7) Represents 12,524 shares held of record by Dr. Chow and 484,887 shares
subject to options that are exercisable within 60 days of March 31,
1998.
(8) Represents 19,960 shares held of record by Dr. Edwards (the Company's
Vice President, Research) and 115,578 shares subject to options that are
exercisable within 60 days of March 31, 1998.
(9) Represents 4,473 shares held of record by Mr. Smith (the Company's Chief
Operating Officer) and 82,269 shares subject to options that are
exercisable within 60 days of March 31, 1998.
(10) Represents 33,750 shares held of record by Ms. Skouras (a current
Director of the Company), 2,777 shares held of record by Global Reach
Management Company, of which Ms. Skouras is President, and 27,500 shares
subject to options held by Ms. Skouras that are exercisable within 60
days of March 31, 1998.
(11) Represents 10,000 shares held of record by a trust for which Mr. Gray is
the beneficiary, 10,000 shares held by his wife and 32,500 shares
subject to options that are exercisable within 60 days of March 31,
1998.
(12) Represents 4,477 shares held of record by Ms. Griffith (the Company's
Vice President, General Counsel and Secretary) and 35,624 shares subject
to options that are exercisable within 60 days of March 31, 1998.
(13) Represents 162 shares, which reflects Mr. Haight's beneficial ownership
of 5.305% of the 3,062 shares held by Advent International Investors
Ltd., an Advent International Fund, of which Mr. Haight is a general
partner, and 27,500 shares subject to options that are exercisable
within 60 days of March 31, 1998. The amount does not include 1,171,678
shares held of record by other Advent International Funds in which Mr.
Haight does not have any economic interest, voting or investment power.
(14) Represents shares subject to options that are exercisable within 60 days
of March 31, 1998. This amount does not include shares held by Veron
International, Ltd., an investment holding company whose principal
shareholder is Ms. Nina K. Wang.
(15) Represents the shares and shares subject to options described in
footnotes (6) - (14). This amount does not include shares held by Veron
International, Ltd., an investment holding company whose principal
shareholder is Ms. Nina K. Wang, a Director of the Company.
(16) The address of Chiron Corporation is 4560 Horton Street, Emeryville,
California 94608-2916.
(17) The address of Johnson & Johnson Development Corporation is One Johnson
& Johnson Plaza, New Brunswick, New Jersey 08933-7002.
9
<PAGE> 11
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation Awards
------------------------- ----------------------------------------------------------------------
Other Annual Restricted Securities All Other
Name and Principal Compensation Stock Underlying Compensation
Position Year Salary($) Bonus($) ($) (1) ($) (2) Options(#) ($) (3)
- ------------------------------------ --------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Irene A. Chow 1997 276,500 (4) 92,435 79,667 100,000
President and 1996 259,167 (4) 114,000 41,666 60,000
Chief Executive 1995 236,833 125,000 487,000 (5) 553,360(6)
Officer
James A.D. Smith 1997 184,250 39,775 21,934 22,600
Chief Operating 1996 141,000 41,800 8,000 79,000
Officer 1995 107,500 24,000 4,609 24,000
Cynthia Edwards 1997 158,933 31,360 18,087 36,400
Vice President, 1996 145,767 28,262 8,666 44,062 81,000
Research 1995 116,750 26,000 3,688 46,000
Melinda Griffith 1997 157,333 31,600 10,000 24,800
Vice President, 1996 145,833 30,000 26,000
General Counsel 1995 24,410 21,000 35,000
and Secretary
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents vesting in the long-term portion of the Company's Annual and
Long-Term Incentive Based Compensation Program.
(2) Represents grants of:
(a) 2,500 shares of Common Stock to Mr. Smith in 1995, which vested
in 1996 and had a fair market value at December 31, 1997 of
$7,031;
(b) 5,000 shares of Common Stock to Dr. Edwards in 1996, which
vested in 1996 and had a fair market value at December 31, 1997
of $14,063; and
(c) 2,000 shares of Common Stock to Dr. Edwards in 1995, which
vested in 1995 and had a fair market value at December 31, 1997
of $5,625.
(3) Excludes excess group term life insurance premiums which do not exceed,
for any individual, $3,000 and which were paid on the same basis as was
offered to all salaried employees.
(4) Excludes $87,933 and $73,333 in 1997 and 1996, respectively, paid to Dr.
Chow on behalf of Genelabs' affiliate, Genelabs Biotechnology Co., Ltd.
("GBL") located in Taiwan, for her services as Chairwoman of the Board
of GBL.
(5) Includes options to purchase 380,000 shares which were repriced and
required forfeiting 50% of the vesting which had been previously earned
on these grants.
(6) Costs related to relocation and expenses (including forgiveness of a housing
bridge loan and reimbursement of related taxes) incurred by the Company in
connection with Dr. Chow's commencement of employment and related move from
New Jersey.
10
<PAGE> 12
The following table sets forth information regarding individual grants
of stock options pursuant to the Company's 1995 Stock Option Plan during 1997 to
each of the Officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1997
-------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS GRANT DATE
OPTIONS GRANTED TO EXERCISE PRESENT
GRANTED (#) EMPLOYEES PRICE EXPIRATION VALUE
NAME (1) IN 1997 ($/SH) DATE ($) (2)
------------------------- ------------- ------------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Irene A. Chow 50,000 5.7 6.2500 02/06/07 180,666
50,000 5.7 2.9219 12/01/07 84,889
James A.D. Smith 22,600 2.6 2.9219 12/01/07 38,370
Cynthia A. Edwards 36,400 4.1 2.9219 12/01/07 61,799
Melinda Griffith 24,800 2.8 2.9219 12/01/07 42,105
</TABLE>
- ---------------------------------
(1) Stock options are awarded with an exercise price equal to the fair
market value of the Company's Common Stock on the date of award. Stock
options generally become exercisable with respect to 25% of the number
of underlying shares on the first anniversary of the date of grant with
pro-rata monthly vesting thereafter for the remaining three years, so
long as employment with the Company continues. All of the options
granted have a 10-year term.
(2) The estimated "grant date present value" of options granted in 1997 is
based on a Black-Scholes option pricing model, a model that reflects
certain assumptions regarding variable factors such as interest rates
and stock price volatility. Stock options have value only as a result of
appreciation in the price of the Company's Common Stock. If, at the time
of exercise, the price of the Company's Common Stock is the same as or
lower than the option exercise price, there will be no gain to the
optionee. Because changes in the subjective input assumptions can
materially affect the fair value estimate, it is the Company's belief
that this model does not necessarily provide a reliable single measure
of the fair value of the options granted. For the purposes of
establishing the "grant date present value" shown in the table, the
model assumed a dividend yield of zero, risk-free interest rate of 5.6%,
volatility factor of the expected market price of the Company's Common
Stock of .81, and an expected life of the options of one year subsequent
to vesting.
During 1997 there were no stock option exercises by any of the Officers
listed in the Summary Compensation Table. The following table sets forth certain
information concerning the number and value of unexercised options held by each
of these Officers at December 31, 1997.
<TABLE>
<CAPTION>
DECEMBER 31, 1997 OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT YEAR-END YEAR-END
(#) ($) (1)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Irene A. Chow 449,679 179,226 121,117 23,384
James A.D. Smith 69,852 80,748 31,014 391
Cynthia Edwards 100,828 99,172 24,258 1,353
Melinda Griffith 28,395 57,405 0 0
</TABLE>
(1) These values have not been realized and may never be, and are based on
the positive spread between the respective exercise prices of
outstanding stock options and the fair market value of the Company's
Common Stock at December 31, 1997 ($2.8125).
11
<PAGE> 13
COMPENSATION OF DIRECTORS
Each director of the Company who is neither an employee nor consultant
is eligible to receive $1,000 per board meeting attended. In addition, directors
are reimbursed for actual business expenses incurred in attending each board
meeting. Each non-employee director, upon his or her first election to the
Board, will be granted an option to purchase 20,000 shares of the Company's
Common Stock. At the Company's Annual Meeting of Shareholders following the
second anniversary of his or her election to the Board, and at each subsequent
Annual Meeting of Shareholders, each non-employee director will be granted an
additional option to purchase 10,000 shares. Prior to 1998, the annual grant to
Directors was 5,000 shares. Directors who are also employees or consultants of
the Company have been granted options under the Stock Option Plan in accordance
with the general compensation policy of the Company.
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION (1)
Decisions regarding executive compensation and stock option grants to
executives are made by the Human Resources Committee of the Board of Directors
(the "Committee") subject to the review and, in certain cases, approval by the
Board. The Committee is currently composed of three non-employee directors.
Although Dr. Chow attended the meetings of the Committee during 1997, she did
not vote on any matters that relate to compensation and was excused from
meetings when matters concerning her compensation were discussed.
COMPENSATION POLICY
The Committee acts on behalf of the Board to establish the general
compensation policy of the Company for all employees of the Company. The primary
goal of the Company's compensation policy is to align compensation with the
Company's business objectives and performance. The Committee's primary aim is to
attract, reward, and retain executive officers and other employees who
contribute to the long-term success of the Company. The Committee typically
reviews base salary levels and target bonuses for the Chief Executive Officer
("CEO"), other executive officers of the Company and key employees at or about
the beginning of each year. The Committee has adopted a total compensation
package comprised of base salary, bonus, long-term incentive awards, stock
options and stock grant awards.
SALARY AND VARIABLE COMPENSATION
The base salaries, incentive compensation and stock option grants of the
executive officers are determined by the Committee in part by reviewing the
Radford Survey and other published surveys for similar positions in the
biopharmaceutical industry. These surveys are nationally known for their data
bases of high technology and biopharmaceutical companies compensation practices.
The Radford Survey itself includes over 1,500 high technology companies and 335
biopharmaceutical companies. In addition, custom survey data is also reviewed on
a case by case, position by position basis. The compensation of the Company's
executive officers is evaluated against comparable positions and competitive
market compensation levels to determine base salary, target bonuses and target
total cash compensation. The Committee attempts to target total cash
compensation at competitive rates and percentiles of the survey companies.
Practices of such companies with respect to stock option grants are also
reviewed and compared.
- -------------------------------
(1) The Report of the Human Resources Committee shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed soliciting material or filed under such Acts.
12
<PAGE> 14
In addition to their base salaries, the Company's executive officers,
including the CEO, are each eligible to receive an annual cash bonus under the
Incentive Bonus Program ("IBC Program"). The Committee's philosophy in
compensating executive officers, including the CEO, is to relate compensation
principally to corporate and executive performance. Thus, a portion of the cash
compensation paid to the Company's executive officers, including the CEO, is in
the form of discretionary bonus payments that are paid on an annual basis. Under
the IBC Program, cash bonuses are awarded only if an executive officer achieved
predetermined individual performance objectives and the Company met certain
corporate objectives that were approved by the Committee. Bonus payments are
expressly linked to the attainment of goals established for each executive
officer, as well as overall corporate goals, and are limited by the target bonus
amount established for each executive officer which is a percentage of the
officer's base salary.
In the biopharmaceutical industry, traditional measures of corporate
performance, such as earnings per share or return on equity, may not readily
apply in evaluating the performance of executives. Because the Company has been
engaged primarily in research and development activities, the Company's
objectives are based on other financial and strategic measures, such as the
progress of the Company's research and development programs, the establishment
of cooperative development and marketing relationships with corporate partners,
the recruitment of management personnel, and the securing of capital resources
sufficient to enable the Company to further research and product development
plans. General corporate goals for 1997 included submitting data to the FDA on
the first Phase III trial of GL701 for treatment of lupus, attaining specified
enrollment levels of patients in the second Phase III trial, the hiring of
qualified scientists for key research positions, identification of gene targets
for internal and collaborative drug discovery programs, establishment of
external funding for principal research programs and establishment of high
throughput screening capabilities to determine DNA-binding properties of
molecular libraries.
Under the IBC Program, for certain key management positions there is a
long-term compensation element which is in addition to the annual bonus
described above. If a person in this category should be eligible for and receive
an annual bonus, the amount of the bonus will also be awarded in the long-term
portion of the Incentive Program. This long-term element is designed to defer
payments to the executive over a three-year period with vesting in the award
taking place at the rate of one-third per year. In doing so, the goal of the
plan is to encourage the executive to remain with the Company on a long-term
basis by committing the payment of additional compensation if employment
continues throughout the vesting period.
LONG-TERM EQUITY INCENTIVES
The Company's equity incentive plans include a Stock Option Plan,
Restricted Stock Plan and Employee Stock Purchase Plan.
Long-term equity incentives for executive officers are provided through
the granting of stock options under the Stock Option Plan. The exercise price of
options granted under this Plan is equal to the fair market value of the
Company's Common Stock on the date of award. These options have value only if
the price of the Company's stock increases above the fair market value on the
award date and the executive remains an employee for the period required for the
shares to vest. These options generally become exercisable with respect to 25%
of the number of underlying shares on the first anniversary of the date of grant
with pro-rata monthly vesting thereafter for the remaining three years.
Stock options typically have been granted to executive officers and
other employees when they first join the Company, in connection with a
significant change in responsibilities and, occasionally, to achieve parity
within a peer group. The Committee may, however, grant additional stock options
to executives for other reasons. Generally, the number of shares subject to each
stock option granted may also be based on anticipated future contribution and
ability to impact corporate and/or business unit results, past individual or
corporate performance or consistency within the executive's peer group. In
making its decisions, the Committee considers these factors, as well as the
number of options held by such executive officers as of the date of grant that
remained unvested. In the discretion of the Committee, executive officers may
also be granted stock options under the Stock Option Plan to provide greater
incentives to continue their employment with the Company and to strive to
increase the value of the Company's Common Stock.
13
<PAGE> 15
1997 EXECUTIVE COMPENSATION
For each of the executive officers, base salaries were increased in
February based on their previous base salary as well as the surveys noted above
and other information available to the Committee. Under the Company's IBC
Program, for 1997 performance, the CEO determined that the executive officers
individually achieved their objectives in various ranges. Based upon the CEO's
recommendations and review of the supporting data for such, the Committee
concluded that the Company's overall performance for 1997 justified awarding
cash bonuses to all continuing executive officers. The Committee awarded bonuses
based on the percentage of base salary for which a bonus was available after
giving effect to the degree to which the Committee believed each such executive
officer realized his or her objectives. In addition, stock options were granted
as part of the annual review of performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
In February 1998, Dr. Chow, the Company's President and CEO, received a
performance merit increase in her base salary. Dr. Chow's 1998 bonus and salary
were set by the Committee with due regard to her industry experience,
competitive salary information and current market conditions. As with other
executive officers, the amount of Dr. Chow's total compensation was based on the
Company's 1997 results and her individual performance with respect to meeting
previously established performance objectives. The Committee recommended that a
bonus of $92,435 be paid to Dr. Chow based upon an evaluation of the completion
of her objectives. In particular, the Committee considered the submission to the
FDA of clinical data for the first Phase III trial of GL701 for treatment of
lupus, the timely enrollment of the first 300 patients in the second Phase III
trial, successful hiring of qualified scientists for key research positions,
identification of gene targets for internal and collaborative drug discovery
programs, establishment of DARPA grant funding and screening the DuPont Merck
Pharmaceutical Company molecular library for DNA-binding properties. The
Committee made an additional stock option grant to Dr. Chow. In doing so, the
Committee considered Dr. Chow's unvested options, the survey noted above and
other information available to the Committee. With respect to both the cash and
equity compensation awarded to Dr. Chow, the Committee noted the significant
dependence of the Company on her efforts historically and going forward.
COMPLIANCE WITH SECTION 162(m) OF THE INTERNAL REVENUE CODE OF 1986
The Company's Stock Option Plan meets the requirements of Section 162(m)
of the Internal Revenue Code of 1986. None of the Company's Executive Officers
have received cash compensation exceeding the statutory limit under Section
162(m).
HUMAN RESOURCES COMMITTEE
Damaris Skouras, Chair
Frank L. Douglas
Edgar G. Engleman
14
<PAGE> 16
COMPANY STOCK PRICE PERFORMANCE (1)
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the five-year period from December 31, 1992
through December 31, 1997 with the cumulative total return on the NASDAQ Stock
Market Index (U.S. companies) and the NASDAQ Pharmaceuticals Stock Index over
the same period (assuming the investment of $100 in the Company's Common Stock
and in each of the indexes on December 31, 1992, and reinvestment of all
dividends).
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Legend
Index Description 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
----------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Genelabs Technologies, Inc. 100.0 62.0 17.6 72.2 90.7 41.7
NASDAQ Stock Market 100.0 114.8 112.2 158.7 195.2 239.6
NASDAQ Pharmaceuticals 100.0 89.1 67.1 122.7 122.9 127.2
</TABLE>
(1) Company Stock Price Performance shall not be deemed to be incorporated
by reference by any general statement incorporating by reference this
Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed soliciting
material or filed under such Acts.
15
<PAGE> 17
CERTAIN TRANSACTIONS
From January 1, 1997 to the present, there have been no transactions in
which the amount involved exceeded $60,000 to which the Company or any of its
subsidiaries was a party and in which any executive officer, director, 5%
beneficial owner of the Company's Common Stock or member of the immediate family
of any of the foregoing persons had or have a direct or indirect material
interest, except certain transactions identified below.
In connection with the Company's employment of Dr. Marc Gurwith, Vice
President, Drug Development and Chief Medical Officer, on September 11, 1997,
the Company provided Dr. Gurwith loan of $72,000. The loan is secured by a deed
of trust on his principal residence, has a term of five years and accrues
interest at 8% per year. On February 15 of each year, beginning in 1998, accrued
interest and $14,400 of the loan principal will be forgiven by the Company
provided that Dr. Gurwith is still employed full time. In the event of
termination by the Company of Dr. Gurwith's employment, other than for cause,
the loan shall be forgiven in its entirety.
The Company has entered into an agreement dated as of January 26, 1996
with Edgar G. Engleman, pursuant to which Dr. Engleman shall receive a fee based
on the Company's net sales of DHEA for the treatment of lupus. There have been
no such sales to date nor are any anticipated in 1998.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 1999
Annual Meeting of Shareholders must be received by the Company at its principal
executive offices no later than December 16, 1998 in order to be included in the
Company's Proxy Statement and form of proxy relating to the meeting.
COMPLIANCE UNDER SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who own
more than 10% of the Company's Common Stock, to file initial reports of
ownership and reports of changes in ownership with the SEC. Such persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements were met.
OTHER BUSINESS
The Board does not presently intend to bring any other business before
the Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the Notice of the Meeting. As to any
business that may properly come before the Meeting, however, it is intended that
proxies, in the form enclosed, will be voted in respect thereof in accordance
with the judgment of the persons voting such proxies.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES, IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
16
<PAGE> 18
GENELABS TECHNOLOGIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
The undersigned hereby appoints Irene A. Chow and Melinda Griffith, and each of
them, with power of substitution, to represent the undersigned at the Annual
Meeting of Shareholders of Genelabs Technologies, Inc. (the "Company") to be
held at the Company's principal executive offices located at 505 Penobscot
Drive, Redwood City, California 94063 on May 21, 1998 at 10:00 a.m. P.D.T., and
any adjournment thereof, and to vote the number of shares the undersigned would
be entitled to vote if personally present at the meeting on the following
matters:
-------------
SEE REVERSE
SIDE
-------------
FOLD AND DETACH HERE
<PAGE> 19
WITHHELD
1. ELECTION OF DIRECTORS FOR FOR ALL
Nominees: Irene A. Chow Arthur Gray, Jr. / / / /
Frank L. Douglas H. H. Haight
Edgar G. Engleman Nina K. Wang
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
___________________________________________
FOR AGAINST ABSTAIN
2. APPROVAL OF AN INCREASE IN THE NUMBER / / / / / /
OF AUTHORIZED SHARES OF COMMON STOCK
FOR AGAINST ABSTAIN
3. RATIFICATION OF SELECTION OF ERNST & / / / / / /
YOUNG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS.
I PLAN TO ATTEND THE MEETING / /
The Board of Directors recommends a vote FOR all nominees for election and FOR
Proposals 2 and 3.
THIS PROXY WILL BE VOTED AS DIRECTED ABOVE, IN THE ABSENCE OF DIRECTION, THIS
PROXY WILL BE VOTED FOR THE COMPANY'S NOMINEES FOR ELECTION AND FOR PROPOSALS 2
AND 3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof to
the extent authorized by Rule 14a-4(c) promulgated by the Securities and
Exchange Commission.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT
YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
Signature(s)_______________________________________ Date:_____________________
Please sign exactly as your name(s) appear(s) on your stock certificate. If
shares of stock are held of record in the names of two or more persons or in
the name of husband and wife, whether as joint tenants or otherwise, both or
all of such persons should sign the proxy. If shares of stock are held of
record by a corporation, the proxy should be executed by the president or vice
president and the secretary or assistant secretary. Executors, administration,
or other fiduciaries who exercise the above proxy for a deceased shareholder
should give their full title. Please date the proxy.
FOLD AND DETACH HERE
