<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
INCYTE PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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.
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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
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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
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:
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<PAGE> 2
[LOGO]
INCYTE PHARMACEUTICALS, INC.
3174 PORTER DRIVE
PALO ALTO, CALIFORNIA 94304
(650) 855-0555
April 26, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Incyte Pharmaceuticals, Inc. that will be held on June 8, 1999, at 10:00
A.M., at the Company's new offices at 3160 Porter Drive, Palo Alto, California.
The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return,
at an early date, the enclosed proxy in the enclosed prepaid envelope, to ensure
that your shares will be represented. YOUR SHARES CANNOT BE VOTED UNLESS YOU
SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company's 1998 Annual Report to Stockholders is also
enclosed.
The Board of Directors and management look forward to seeing you at the
meeting.
Sincerely yours,
/s/ Roy A. Whitfield
Roy A. Whitfield
Chief Executive Officer
<PAGE> 3
INCYTE PHARMACEUTICALS, INC.
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999
--------------
To the Stockholders of Incyte Pharmaceuticals, Inc.:
The Annual Meeting of Stockholders of Incyte Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), will be held at the Company's offices at
3160 Porter Drive, Palo Alto, California, on Tuesday, June 8, 1999, at 10:00
A.M., Pacific Daylight Time, for the following purposes:
1. To elect directors to serve until the 1999 Annual Meeting of
Stockholders and thereafter until their successors are elected
and qualified;
2. To consider and vote upon a proposal to amend the Company's 1991
Stock Plan to increase the number of shares available for grant
thereunder from 6,300,000 to 7,400,000 shares;
3. To ratify appointment of Ernst & Young LLP as the Company's
independent auditors; and
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment of the Annual Meeting.
Stockholders of record as of the close of business on April 12, 1999 are
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. A complete list of stockholders entitled to vote at the Annual Meeting
will be available at the Secretary's office, 3174 Porter Drive, Palo Alto,
California for ten days before the meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING. EVEN
IF YOU PLAN TO ATTEND THE MEETING, WE HOPE THAT YOU WILL PROMPTLY MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY. THIS WILL NOT LIMIT YOUR RIGHT TO ATTEND OR
VOTE AT THE MEETING.
By Order of the Board of Directors
/s/ Lee Bendekgey
Lee Bendekgey
Secretary
April 26, 1999
<PAGE> 4
INCYTE PHARMACEUTICALS, INC.
3174 PORTER DRIVE
PALO ALTO, CALIFORNIA 94304
--------------
PROXY STATEMENT
--------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Incyte Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), of proxies in the accompanying form to be used at the Annual
Meeting of Stockholders of the Company to be held at the Company's offices at
3160 Porter Drive, Palo Alto, California, on Tuesday, June 8, 1999, at 10:00
A.M., Pacific Daylight Time, and any adjournment thereof (the "Annual Meeting").
The shares represented by the proxies received in response to this solicitation
and not properly revoked will be voted at the Annual Meeting in accordance with
the instructions therein. A stockholder who has given a proxy may revoke it at
any time before it is exercised by filing with the Secretary of the Company a
written revocation or a duly executed proxy bearing a later date or by voting in
person at the Annual Meeting. On the matters coming before the Annual Meeting
for which a choice has been specified by a stockholder by means of the ballot on
the proxy, the shares will be voted accordingly. If no choice is specified, the
shares will be voted "FOR" the election of the six nominees for director listed
in this Proxy Statement and "FOR" approval of the proposals referred to in Items
2 and 3 in the Notice of Annual Meeting and described in this Proxy Statement.
Stockholders of record at the close of business on April 12, 1999 (the
"Record Date"), are entitled to vote at the Annual Meeting. As of the close of
business on that date, the Company had 27,889,842 shares of common stock, $.001
par value (the "Common Stock"), outstanding. The presence in person or by proxy
of the holders of a majority of the Company's outstanding shares constitutes a
quorum for the transaction of business at the Annual Meeting. Each holder of
Common Stock is entitled to one vote for each share held as of the Record Date.
Directors are elected by a plurality vote. The other matters submitted
for stockholder approval at the Annual Meeting will be decided by the
affirmative vote of the majority of the shares represented in person or by proxy
and entitled to vote on each such matter. Abstentions with respect to any matter
are treated as shares present or represented and entitled to vote on that matter
and thus have the same effect as negative votes. If a broker which is the record
holder of shares indicates on a proxy that it does not have discretionary
authority to vote on a particular matter as to such shares, or if shares are not
voted in other circumstances in which proxy authority is defective or has been
withheld with respect to a particular matter, these non-voted shares will be
counted for quorum purposes but are not deemed to be present or represented for
purposes of determining whether stockholder approval of that matter has been
obtained.
The expense of printing and mailing proxy materials will be borne by the
Company. In addition to the solicitation of proxies by mail, solicitation may be
made by certain directors, officers and other employees of the Company by
personal interview, telephone or facsimile. No additional compensation will be
paid to such persons for such solicitation. The Company will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
materials to beneficial owners of the Common Stock.
This Proxy Statement and the accompanying form of proxy are being mailed
to stockholders on or about April 26, 1999.
IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO
THAT, WHETHER YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OR NOT,
YOUR SHARES CAN BE VOTED. THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR
VOTE AT THE ANNUAL MEETING.
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES
The Board of Directors proposes the election of six directors of the
Company to serve until the next annual meeting of stockholders and thereafter
until their successors are elected and qualified. If any nominee is unable or
declines to serve as director at the time of the Annual Meeting, an event not
now anticipated, proxies will be voted for any nominee designated by the Board
of Directors to fill the vacancy.
Names of the nominees and certain biographical information about them
are set forth below:
ROY A. WHITFIELD, 45, has been Chief Executive Officer of the Company
since June 1993 and a director since June 1991. Mr. Whitfield served as
President of the Company from June 1991 until January 1997 and as Treasurer of
the Company from April 1991 until October 1995. Previously, Mr. Whitfield served
as the President of Ideon Corporation, which was a majority owned subsidiary of
Invitron Corporation ("Invitron"), a biotechnology company, from October 1989
until April 1991. From 1984 to 1989, Mr. Whitfield held senior operating and
business development positions with Technicon Instruments Corporation, a medical
instrumentation company, and its predecessor company, CooperBiomedical, Inc., a
biotechnology and medical diagnostics company. Prior to his work at Technicon,
Mr. Whitfield spent seven years with the Boston Consulting Group's international
consulting practice. Mr. Whitfield received a B.S. with First Class Honors in
mathematics from Oxford University, and an M.B.A. with Distinction from Stanford
University. Mr. Whitfield is also a director of Aurora Biosciences Corporation.
RANDAL W. SCOTT, Ph.D., 41, has been President of the Company since
January 1997. He has served as Chief Scientific Officer of the Company since
March 1995, a director since June 1991 and Secretary of the Company from April
1991 until June 1998. Dr. Scott served as Executive Vice President of the
Company from March 1995 until January 1997 and as Vice President, Research and
Development of the Company from April 1991 through February 1995. Dr. Scott was
one of Invitron's founding scientists and was employed by Invitron from March
1985 to June 1991. In 1987, Dr. Scott started the Protein Biochemistry
Department at Invitron's California Research Division and became Senior Director
of Research in November 1988. Dr. Scott was responsible for developing
Invitron's proprietary products and discovery programs and is an inventor of
several of the Company's patents. Prior to joining Invitron, he was a Senior
Scientist at Unigene Laboratories, a biotechnology company. Dr. Scott received
his Ph.D. in Biochemistry from the University of Kansas.
BARRY M. BLOOM, Ph.D., 70, has been a director of the Company since
October 1994. Dr. Bloom retired in 1993 from Pfizer Inc. where he was most
recently Executive Vice President, Research and Development, and a member of the
Board of Directors. Dr. Bloom began his career with Pfizer in 1952 as a research
chemist. He was named president of Pfizer Central Research, and elected a
corporate vice president in 1971, a member of the Board of Directors in 1973,
and a member of the Corporate Management Committee in 1984. He was named senior
vice president in 1990 and executive vice president in 1991. Dr. Bloom is a
director of Cubist Pharmaceuticals, Inc., Neurogen Corporation and Vertex
Pharmaceuticals, Inc. and is a scientific adviser to Axiom Venture Partners.
JEFFREY J. COLLINSON, 57, has been a director of the Company since
inception and has served as Chairman of the Board of Directors since April 1991.
Mr. Collinson has served as President of Collinson Howe Venture Partners, Inc.,
a venture capital management firm, since 1990 and was President of Schroder
Venture Managers, Inc., a venture capital firm, from 1983 to 1990. Mr. Collinson
is also President of Collinson Howe & Lennox LLC and a director of Neurogen
Corporation.
FREDERICK B. CRAVES, Ph.D., 53, has been a director of the Company since
July 1993. Since January 1997, Dr. Craves has been Managing Director and
Chairman of The Craves Group, a private merchant bank focused on life science.
He is also a general partner of Burrill & Craves, a private merchant bank
specializing in life science,
2
<PAGE> 6
which he co-founded in 1994, and Managing Director of Bay City Capital. Dr.
Craves has been an independent management consultant since May 1993 and in July
1993, he was appointed Chairman of the Board of NeoRx Corporation and of Epoch
Pharmaceuticals, Inc., each of which is a biotechnology company. From January
1991 to May 1993 he was President and Chief Executive Officer of Berlex
Biosciences, a biotechnology company that is a wholly owned subsidiary of
Schering AG. Dr. Craves was Chairman, Chief Executive Officer and President of
Codon, a biotechnology company, from 1982 until its acquisition by Schering AG
in 1990. Dr. Craves is also a director of Medarex, Inc.
JON S. SAXE, 62, has been a director of the Company since July 1993.
Since January 1995, he has been the President of Protein Design Labs, Inc., a
biotechnology company. From April 1993 through December 1994, he was President
of Saxe Associates, a consultancy. Mr. Saxe served as President and Chief
Executive Officer of Synergen, Inc., a biotechnology company, from October 1989
to April 1993. Mr. Saxe served as Vice President, Licensing and Corporate
Development, for Hoffmann-La Roche Inc., a pharmaceutical company, from August
1984 to September 1989, and as Head, Patent Law from September 1978 to September
1989. Mr. Saxe is also a director of ID Biomedical, Inc., RiboGene, Inc. and
Protein Design Labs, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION AS DIRECTOR OF
THE NOMINEES SET FORTH ABOVE.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held seven meetings during 1998. All directors
attended at least 75% of the aggregate number of meetings of the Board of
Directors and of the committees on which such directors serve.
The Board of Directors has appointed a Compensation Committee, an Audit
Committee and a Management Stock Option Plan Committee (the "Option Committee").
The members of the Compensation Committee are Barry M. Bloom, Jeffrey J.
Collinson, Frederick B. Craves and Jon S. Saxe. The Compensation Committee held
four meetings during 1998. The Compensation Committee's functions are to assist
in the implementation of, and provide recommendations with respect to, general
and specific compensation policies and practices of the Company and to
administer the Company's 1991 Stock Plan (the "Stock Plan") and 1997 Employee
Stock Purchase Plan.
The members of the Option Committee are Barry M. Bloom, Jeffrey J.
Collinson and Jon S. Saxe. The Option Committee's function is to determine
stock-based compensation awards for the Company's management. The Option
Committee held four meetings during 1998.
The members of the Audit Committee are Barry M. Bloom, Jeffrey J.
Collinson and Jon S. Saxe. The Audit Committee held four meetings during 1998.
The Audit Committee's functions are to review the scope of the annual audit,
monitor the independent auditor's relationship with the Company, advise and
assist the Board of Directors in evaluating the independent auditor's
examination, supervise the Company's financial and accounting organization and
financial reporting, and nominate, for approval of the Board of Directors, a
firm of certified public accountants whose duty it is to audit the financial
records of the Company for the fiscal year for which it is appointed.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive any fees for
service on the Board of Directors. Drs. Bloom and Craves and Messrs. Collinson
and Saxe are reimbursed for their expenses for each meeting attended, and
Messrs. Collinson and Saxe and Drs. Craves and Bloom are each compensated $2,500
per diem in connection with their attendance at Board meetings. Pursuant to the
Company's 1993 Directors' Stock Option Plan (the "Directors' Plan"), in June
1998 each of Drs. Bloom and Craves and Messrs. Collinson and Saxe received an
annual automatic grant of an option to purchase 5,000 shares of Common Stock at
an exercise price of $44.25 per
3
<PAGE> 7
share; such options vest in full on the first anniversary of the date of the
grant. Pursuant to the Directors' Plan, each of Drs. Bloom and Craves and
Messrs. Collinson and Saxe will receive, if re-elected as a director at the
Annual Meeting, an additional option to purchase 5,000 shares of Common Stock at
an exercise price equal to the fair market value of the Common Stock on the date
of grant. Such options will vest in full on the first anniversary of the grant.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 1, 1999
as to shares of the Common Stock beneficially owned by: (i) each person who is
known by the Company to own beneficially more than 5% of the Common Stock, (ii)
each of the Company's directors, (iii) each of the Company's executive officers
named under "Executive Compensation--Summary Compensation Table," and (iv) all
directors and executive officers of the Company as a group. Ownership
information is based upon information furnished by the respective individuals or
entities, as the case may be.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED(1)
-------- --------
<S> <C> <C>
Waddell & Reed(2) ............................................. 2,139,000 7.7%
Investment Management Company
P.O. Box 29217
6300 Camar Avenue
Shawnee Mission, KS 66202
Pfizer Inc. ................................................... 1,420,000 5.4%
235 East 42nd Street
New York, NY 10017
Four Partners(3) .............................................. 1,424,600 5.2%
667 Madison Avenue
New York, NY 10021
Roy A. Whitfield(4) ........................................... 683,388 2.4%
Randal W. Scott(5) ............................................ 395,873 1.4%
Denise M. Gilbert(6) .......................................... 247,741 *
Jeffrey J. Collinson(7) ....................................... 239,878 *
Frederick B. Craves(8) ........................................ 125,600 *
Jon S. Saxe(9) ................................................ 100,000 *
Barry M. Bloom(10) ............................................ 69,500 *
All directors and executive officers as a group (7 persons)(11) 1,861,980 6.5%
</TABLE>
- ----------------
* Less than 1%.
(1) To the Company's knowledge, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws
where applicable and the information contained in the notes to this
table.
4
<PAGE> 8
(2) According to Schedule 13G dated February 12, 1999, filed by Waddell &
Reed Investment Management Company ("WRIMCO"), WRIMCO has sole voting
power and shares dispositive power with Waddell & Reed, Inc., Waddell &
Reed Financial Services, Inc. and Waddell & Reed Financial, Inc., with
respect to all shares listed in the table.
(3) According to Schedule 13G dated February 12, 1999, filed jointly by Four
Partners, a New York general partnership ("FP"), and Four-Fourteen
Partners LLC ("4-14P"), a Delaware limited liability company, FP and
4-14P collectively own 1,324,600 shares, with FP the beneficial owner
of, with sole dispositive and voting power for, 1,324,600 shares and
4-14P the beneficial owner of, with sole dispositive and voting power
for, 100,000 shares. Andrew H. Tisch, Daniel R. Tisch, James S. Tisch
and Thomas J. Tisch, as managing trustees of the respective trusts which
are the partners of FP and the members of 4-14P, exercise shared voting
power and shared indirect dispositive power over the 1,324,600 shares
owned by FP and the 100,000 shares owned by 4-14P.
(4) Includes 164,700 shares subject to options exercisable within 60 days of
March 1, 1999.
(5) Includes 185,068 shares subject to options exercisable within 60 days of
March 1, 1999.
(6) Includes 237,500 shares subject to options exercisable within 60 days of
March 1, 1999.
(7) Includes 170,000 shares held by Schroders Incorporated, and 200 shares
held by Collinson Howe Venture Partners, Inc. Mr. Collinson, a director
of the Company, shares voting and investment power with respect to such
shares. Mr. Collinson disclaims beneficial ownership of shares held by
Schroders Incorporated, except to the extent of his proportionate
interest therein. Mr. Collinson is the majority shareholder of Collinson
Howe Venture Partners, Inc. and may be deemed to be the beneficial owner
of the shares held by that entity. Also includes 17,656 shares held by
Indian Chase, Inc., over which Mr. Collinson has voting and investment
power. Mr. Collinson disclaims beneficial ownership of shares held by
Indian Chase, Inc. except to the extent of his proportionate interest
therein. Includes 10,000 shares subject to options exercisable within 60
days of March 1, 1999.
(8) Includes 4,000 shares held by Burrill & Craves, a general partnership.
Dr. Craves is a general partner of such partnership and may be deemed to
be the beneficial owner of the shares held by the partnership. Also
includes 4,200 shares held by a trust for which Dr. Craves is a trustee,
7,400 shares held by Dr. Craves' spouse, and 100,000 shares subject to
options exercisable within 60 days of March 1, 1999.
(9) Includes 100,000 shares subject to options exercisable within 60 days of
March 1, 1999.
(10) Includes 69,500 shares subject to options exercisable within 60 days of
March 1, 1999.
(11) Includes shares included pursuant to notes (4), (5), (6), (7), (8), (9)
and (10) above.
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation paid to the Company's
Chief Executive Officer and to the Company's other two executive officers for
services rendered in all capacities to the Company for the fiscal years ended
December 31, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION SECURITIES
NAME AND ------------ UNDERLYING
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#)
------------------ ---- ---------- --------- -----------
<S> <C> <C> <C> <C>
Roy A. Whitfield 1998 $290,000 -- 25,000
Chief Executive Officer 1997 260,000 $100,000 9,000
1996 230,000 75,000 30,000
Randal W. Scott 1998 $270,000 -- 25,000
President and 1997 240,000 $100,000 9,000
Chief Scientific Officer 1996 215,000 75,000 30,000
Denise M. Gilbert 1998 $250,000 -- 25,000
Executive Vice President, 1997 220,000 $100,000 15,000
Chief Financial Officer 1996 180,000 75,000 30,000
and Treasurer
</TABLE>
6
<PAGE> 10
The following tables set forth certain information as of December 31,
1998 and for the fiscal year then ended with respect to stock options granted to
and exercised by the individuals named in the Summary Compensation Table above.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
---------------------------------------------------------- ASSUMED ANNUAL RATES
NUMBER OF % OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(4)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
- ---- ------------- ----------- --------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Roy A. Whitfield 25,000 2.74% $ 35.625 12/16/08 $ 560,109 $1,419,427
Randal W. Scott 25,000 2.74% $ 35.625 12/16/08 $ 560,109 $1,419,427
Denise M. Gilbert 25,000 2.74% $ 35.625 12/16/08 $ 560,109 $1,419,427
</TABLE>
- ------------
(1) Options granted in 1998 vest 25% on the first anniversary of the date of
grant, with the remaining shares vesting monthly over three years. Under
the terms of the 1991 Stock Plan, the committee designated by the Board
of Directors to administer the 1991 Stock Plan retains the discretion,
subject to certain limitations within the 1991 Stock Plan, to modify,
extend or renew outstanding options and to reprice outstanding options.
Options may be repriced by canceling outstanding options and reissuing
new options with an exercise price equal to the fair market value on the
date of reissue, which may be lower than the original exercise price of
such canceled options.
(2) The exercise price on the date of grant was equal to 100% of the fair
market value on the date of grant.
(3) The options have a term of 10 years, subject to earlier termination in
certain events related to termination of employment.
(4) The 5% and 10% assumed rates of appreciation are suggested by the rules
of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future Common Stock price. There
can be no assurance that any of the values reflected in the table will
be achieved.
7
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND 1998 YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1998(#) DECEMBER 31, 1998($)(5)
-------------------- -----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Roy A. Whitfield(2) 13,200 $476,025 161,450/46,750 $4,478,525/295,375
Randal W. Scott(3) -- -- 181,818/46,750 5,202,161/295,375
Denise M. Gilbert(4) 20,000 681,875 233,750/51,250 6,468,750/298,750
</TABLE>
- ------------
(1) Calculated on the basis of the fair market value of the underlying
securities at the exercise date minus the exercise price.
(2) Options to purchase 32,917 shares were exercisable immediately as of the
date of grant, but the shares underlying such options are subject to
rights of repurchase by the Company, which rights lapse as to 25% of the
shares covered by the respective options on the first anniversary of the
date of grant and lapse ratably on a monthly basis thereafter, with the
repurchase right terminating in full on the fourth anniversary of the
date of grant.
(3) Options to purchase 13,750 shares were exercisable immediately as of the
date of grant, but the shares underlying such options are subject to
rights of repurchase by the Company, which rights lapse as to 25% of the
shares covered by the respective options on the first anniversary of the
date of grant and lapse ratably on a monthly basis thereafter, with the
repurchase right terminating in full on the fourth anniversary of the
date of grant.
(4) Options to purchase 43,438 shares were exercisable immediately as of the
date of grant, but the shares underlying such options are subject to
rights of repurchase by the Company, which rights lapse as to 25% of the
shares covered by the respective options on the first anniversary of the
date of grant and lapse ratably on a monthly basis thereafter, with the
repurchase right terminating in full on the fourth anniversary of the
date of grant.
(5) Calculated on the basis of the fair market value of the underlying
securities at December 31, 1998 ($37.375 per share) minus the exercise
price.
8
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
This report on executive compensation is provided by the Compensation
Committee (the "Compensation Committee") and the Management Stock Option
Committee (the "Option Committee") of the Board of Directors to assist
stockholders in understanding their objectives and procedures in establishing
the compensation of the Company's executive officers and describes the bases on
which 1998 compensation determinations were made by the Compensation Committee.
The Compensation Committee is comprised of four non-employee directors and the
Option Committee is comprised of three non-employee directors. In making their
determinations, the Compensation Committee and the Option Committee relied, in
part, on independent surveys and public disclosures of compensation of
management of companies in the biotechnology and biopharmaceutical industries.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Compensation Committee believes that compensation of the Company's
executive officers should:
- Encourage creation of stockholder value and achievement of
strategic corporate objectives.
- Integrate compensation with the Company's annual and long-term
corporate objectives and strategy, and focus executive behavior
on the fulfillment of those objectives.
- Provide a competitive total compensation package that enables
the Company to attract and retain, on a long-term basis, high
caliber personnel.
- Provide total compensation opportunity that is competitive with
companies in the biopharmaceutical and biotechnology industries,
taking into account relative company size, performance and
geographic location as well as individual responsibilities and
performance.
- Align the interests of management and stockholders and enhance
stockholder value by providing management with longer term
incentives through equity ownership by management.
- Provide fair compensation consistent with internal compensation
programs.
KEY ELEMENTS OF EXECUTIVE COMPENSATION
The compensation of executive officers is based upon the Company's
financial performance as well as an evaluation of the Company's progress in the
creation and refinement of a unique genomic information business model, the
establishment of additional database collaborations, the Company's achievement
of certain business objectives, including the closing of acquisitions of
businesses and technologies that may expand or enhance the Company's existing
business, the execution of corporate and collaborative agreements, the expansion
of the Company's business and the attainment of certain operational and research
and development milestones in the Company's technology development programs, as
well as the achievement of individual business objectives by each executive
officer. The Company's existing compensation structure for executive officers
generally includes a combination of salary and stock options and may include
cash bonuses for performance determined to be deserving of such bonuses by the
Compensation Committee.
Salary. Salary levels are largely determined through comparisons with
companies of similar headcount and market capitalizations or complexity in the
biopharmaceutical and biotechnology industries. Actual salaries are based on
individual performance contributions within a competitive salary range for each
position that is established through job evaluation of responsibilities and
market comparisons. The Compensation Committee, on the basis of its knowledge of
executive compensation in the industry, believes that the Company's salary
levels for the
9
<PAGE> 13
executive officers are at a level that the Compensation Committee, at the time
such salary determinations were made, considered to be reasonable and necessary
given the Company's financial resources and the stage of its development. In
December 1998, the Compensation Committee set annual salaries for 1999. The
Compensation Committee reviews salaries on an annual basis, with the next annual
review scheduled to occur in December 1999. At such time, the Compensation
Committee may change each executive officer's salary based on the individual's
contributions and responsibilities over the prior 12 months and any change in
median comparable company pay levels.
Stock Options. The Company intends that certain compensation paid to
management in 1998, including stock options, be exempt from the limitations on
deductibility under Section 162(m) of the Internal Revenue Code. Accordingly,
the Board established the Option Committee to administer grants under the
Company's 1991 Stock Plan to members of management. The Compensation Committee
and the Option Committee believe that by providing those persons who have
substantial responsibility for the management and growth of the Company with an
opportunity to increase their ownership of Company stock, the best interest of
stockholders and executive officers will be closely aligned. Therefore,
executive officers are eligible to receive stock options when the Compensation
Committee performs its annual salary review; although the Option Committee, at
its discretion, may grant options at other times in recognition of exceptional
achievements. The number of shares underlying stock options granted to executive
officers is based on competitive practices in the industry as determined by
independent surveys and the Option Committee's knowledge of industry practice.
CHIEF EXECUTIVE OFFICER COMPENSATION
Roy A. Whitfield is the Company's Chief Executive Officer. In December
1997, the Compensation Committee set Mr. Whitfield's annual base salary for 1998
at $290,000. The Compensation Committee increased Mr. Whitfield's salary for
1998 in recognition of his performance in advancing the development and growth
of the Company and the Company's achievement of specific corporate objectives,
which included the following: the achievement of additional collaborations; the
financial performance of the Company, including achievement of profitability in
each quarter of 1997 (prior to the effects of acquisitions); the performance of
the Company's Common Stock; elucidation of strategies for future Company growth
in revenues and profitability; efforts in connection with acquisitions of
technologies and businesses that might expand or enhance the Company's business;
the further establishment and development of the Company's database business and
the expansion thereof; and the compensation of the Company's management relative
to biotechnology industry norms and to other employees in the Company. The
Committee determined that these achievements were important to the Company's
future growth and could assist the Company in enhancing stockholder value and,
accordingly, determined to reward Mr. Whitfield for his efforts on behalf of the
Company.
In recognition of Mr. Whitfield's accomplishments, and as an incentive
for future performance, the Option Committee in December 1998 granted Mr.
Whitfield options, exercisable at the fair market value on the date of grant, to
purchase 25,000 shares of the Company's Common Stock. The size of Mr.
Whitfield's grant was determined by management's and the Company's performance
in 1998, including the achievement of additional collaborations, the financial
performance of the Company, the performance of the Company's Common Stock, the
further establishment and development of the Company's database and microarray
businesses and expansion thereof, the consummation of the acquisitions of
Synteni and Hexagen and the integration of the respective businesses into the
Company's business, and the Company's efforts to expand its business to include
genomic sequencing, genomic mapping and SNP discovery products and services.
The Company's policy is generally to qualify compensation paid to
executive officers for deductibility under Section 162(m) of the Internal
Revenue Code. However, the Company reserves the discretion to pay compensation
to its executive officers that may not be deductible.
10
<PAGE> 14
Mr. Whitfield is a member of the Board of Directors, but did not
participate in matters involving the evaluation of his own performance or the
setting of his own compensation.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE OPTION COMMITTEE
<S> <C>
Barry M. Bloom Barry M. Bloom
Jeffrey J. Collinson Jeffrey J. Collinson
Frederick B. Craves Jon S. Saxe
Jon S. Saxe
</TABLE>
11
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of the
Company's Common Stock with the CRSP Total Return Index for the Nasdaq
Pharmaceutical Stocks (the "Nasdaq Pharmaceutical Index") and the CRSP Total
Return Index for the Nasdaq U.S. and Foreign Stocks (the "Nasdaq Composite
Index"), assuming an investment of $100 in each on December 31, 1993. The
Company's Common Stock was traded on the American Stock Exchange from November
4, 1993 until January 16, 1996, at which time it commenced trading on the Nasdaq
National Market. The comparisons in the table are required by the Securities and
Exchange Commission and are not intended to forecast or be indicative of
possible future performance of the Company's Common Stock.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Incyte Pharmaceuticals, Inc. $ 100.00 $ 154.17 $ 312.50 $ 277.78 $ 1,000.00 $ 830.56
Nasdaq Pharmaceutical Index . 100.00 75.26 138.08 138.44 142.94 182.96
Nasdaq Composite Index 100.00 97.75 138.26 170.06 208.66 293.31
</TABLE>
12
<PAGE> 16
PROPOSAL 2
PROPOSAL TO AMEND THE INCYTE PHARMACEUTICALS, INC. 1991 STOCK PLAN
In February 1999, the Board of Directors approved an amendment to the
Company's 1991 Stock Plan (as amended, the "Stock Plan"), subject to the
approval of the Company's stockholders at the Annual Meeting. The following
summary of the principal features of the Stock Plan is qualified by reference to
the terms of the Stock Plan, a copy of which is available without charge upon
stockholder request to Richard Morales, Incyte Pharmaceuticals, Inc., 3174
Porter Drive, Palo Alto, California 94304.
SUMMARY OF AMENDMENTS
The amendment to the Stock Plan approved by the Board of Directors and
submitted for stockholder approval consists of an increase in the number of
shares of Common Stock reserved for issuance under the Stock Plan from 6,300,000
to 7,400,000.
STOCK PLAN
The Stock Plan was adopted by the Board of Directors in November 1991
and first approved by the Company's stockholders in December 1991. The purpose
of the Stock Plan is to assist the Company in the recruitment, retention and
motivation of employees and of independent contractors who are in a position to
make material contributions to the Company's progress. The Stock Plan offers a
significant incentive to the employees and independent contractors of the
Company by enabling such individuals to acquire the Common Stock, thereby
increasing their proprietary interest in the growth and success of the Company.
The Stock Plan provides for the direct award or sale of shares of Common
Stock and for the grant of both incentive stock options ("ISO") to purchase
Common Stock intended to qualify for preferential tax treatment under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
nonstatutory stock options ("NSO") to purchase Common Stock that do not qualify
for such treatment under the Code. All employees (including officers) of the
Company or any subsidiary and any independent contractor who performs services
for the Company or a subsidiary are eligible to purchase shares of Common Stock
and to receive awards of shares or grants of NSOs. Only employees are eligible
to receive grants of ISOs. As of December 31, 1998, 726 employees were eligible
to be considered for the grant of options under the Stock Plan. Options to
purchase more than 400,000 shares may not be granted in a single calendar year
to any participant in the Stock Plan.
A total of 7,400,000 shares of Common Stock (including 1,100,000 shares
subject to stockholder approval at the Annual Meeting) have been reserved for
issuance under the Stock Plan. If any option granted under the Stock Plan
expires or terminates for any reason without having been exercised in full, then
the unpurchased shares subject to that option will once again be available for
additional option grants. As of December 31, 1998, the Company had outstanding
options under the Stock Plan to purchase an aggregate of 3,954,086 shares of
Common Stock at exercise prices ranging from $0.50 to $47.00 per share, or a
weighted average per share exercise price of $19.66. A total of 2,381,447 shares
of Common Stock (including 1,100,000 shares subject to stockholder approval at
the Annual Meeting) are available for future issuance under the Stock Plan.
The Compensation Committee and the Option Committee (collectively, the
"Committee") have not made any determination with respect to future awards under
the Stock Plan, and any allocation of such awards will be made only in
accordance with the provisions of the Stock Plan, including the additional
shares of stock that the stockholders are being asked to approve. The Company
believes that the granting of options is necessary to attract the highest
quality personnel as well as to reward and thereby retain existing key
personnel. Moreover, the attraction and retention of such personnel is essential
to the continued progress of the Company which ultimately is in the interests of
the Company's stockholders.
13
<PAGE> 17
As of December 31, 1998, the following persons or groups had in total,
received options to purchase shares of Common Stock under the Stock Plan as
follows: (i) the Chief Executive Officer and the other executive officers named
in the Summary Compensation Table: Mr. Whitfield, 354,400 shares, Dr. Scott,
344,400 shares, and Dr. Gilbert 325,000 shares; (ii) all current executive
officers of the Company as a group: 1,023,800 shares; (iii) all current
directors who are not executive officers as a group: 20,000 shares; (iv) each
nominee for director (other than the two directors listed in (i) above): Dr.
Bloom, no shares, Mr. Collinson, no shares, Dr. Craves, 10,000 shares, and Mr.
Saxe, 10,000 shares; and (v) all employees of the Company, including all current
officers who are not executive officers, as a group: 3,880,860 shares.
ADMINISTRATION
The Stock Plan is administered by the Compensation Committee, which
consists of two or more disinterested members of the Board of Directors. Subject
to the limitations set forth in the Stock Plan, the Compensation Committee has
the authority to determine, among other things, to whom options will be granted
and shares will be sold, the number of shares, the term during which an option
may be exercised and the rate at which the options may be exercised and the
shares may vest.
TERMS OF OPTIONS AND OF SHARES OFFERED FOR SALE
The maximum term of each option that may be granted under the Stock Plan
is 10 years. Stock options granted under the Stock Plan must be exercised by the
optionee before the earlier of the expiration of such option or the date 90 days
after termination of the optionee's employment, except that the period may be
extended on certain events including death and termination of employment due to
disability.
The exercise price under each option will be established by the
Committee; however, the exercise price of an ISO cannot be lower than the fair
market value of the Common Stock on the date of grant and the exercise price of
a NSO may not be less than the par value per share of the Common Stock. On April
14, 1999, the closing sale price per share for the Common Stock on the Nasdaq
National Market was $23.25. The exercise price must be paid in full at the time
of exercise. Under the Stock Plan, the exercise price is payable in cash or, in
certain circumstances, Common Stock or by promissory note. The Stock Plan also
allows an optionee to pay the exercise price by giving "exercise/sale" or
"exercise/pledge" directions. If exercise/sale directions are given, a number of
option shares sufficient to pay the exercise price and any withholding taxes is
issued to a securities broker selected by the Company, who, in turn, sells the
shares in the open market. The broker remits the exercise price and any
withholding taxes to the Company from the proceeds of the sale, and the optionee
receives any remaining shares or cash. If exercise/pledge directions are given,
the option shares are issued directly to a securities broker or other lender
selected by the Company. The broker or other lender will hold the shares as
security and will extend credit for up to 50% of their market value. The loan
proceeds will be paid to the Company to the extent necessary to pay the exercise
price and any withholding taxes. Any excess loan proceeds may be paid to the
optionee. If the loan proceeds are insufficient to cover the exercise price and
withholding taxes, the optionee will be required to pay the deficiency to the
Company at the time of exercise.
The terms of any sale of shares of Common Stock under the Stock Plan
will be set forth in a common stock purchase agreement to be entered into
between the Company and each purchaser. The Committee will determine the terms
and conditions of such stock purchase agreements, which need not be identical.
The purchase price for shares of Common Stock sold under the Stock Plan may not
be less than the par value of such shares. The purchase price may be paid, at
the Committee's discretion, with a full-recourse promissory note secured by the
shares, except that the par value of the shares must be paid in cash. Shares may
also be awarded under the Stock Plan in consideration of services rendered prior
to the award, without a cash payment by the recipient.
Options may have such terms and be exercisable in such manner and at
such times as the Committee may determine. Common Stock transferred pursuant to
the Stock Plan (including shares acquired upon the exercise of certain options)
may be subject to repurchase by the Company in the event that any applicable
vesting conditions are not satisfied. A holder of shares transferred under the
Stock Plan has the same voting, dividend and other rights as the Company's other
stockholders.
14
<PAGE> 18
AMENDMENT AND TERMINATION
The Stock Plan may be amended at any time by the Board of Directors,
subject to applicable laws. Unless sooner terminated by the Board of Directors,
the Stock Plan will terminate on February 25, 2009, and, following such date, no
further options may be granted or stock sold pursuant to such plan except upon
the exercise of options granted prior to the termination date.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a subdivision of the outstanding Common Stock or a
combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a lesser number of shares, a spinoff or a
similar occurrence, or declaration of a dividend payable in Common Stock or, if
in an amount that has a material effect on the price of the shares, in cash, the
Committee will make adjustments in the number and/or exercise price of options
and/or the number of shares available under the Stock Plan, as appropriate. Such
an adjustment was made in connection with the Company's two-for-one stock split
effected in the form of a 100% stock dividend paid in November 1997.
In the event of a merger or other reorganization, outstanding options
will be subject to the agreement of merger or reorganization. Such agreement
will provide for the assumption of outstanding options by the surviving
corporation or its parent, for their continuation by the Company (if the Company
is the surviving corporation), for payment of a cash settlement equal to the
difference between the amount to be paid for one share under the agreement of
merger or reorganization and the exercise price for each option, or for the
acceleration of the exercis- ability of each option followed by the cancellation
of options not exercised, in all cases without the optionees' consent.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS UNDER THE STOCK PLAN
Neither the optionee nor the Company will incur any federal tax
consequences as a result of the grant of an option. The optionee will have no
taxable income upon exercising an ISO (except that the alternative minimum tax
may apply), and the Company will receive no deduction when an ISO is exercised.
Upon exercising a NSO, the optionee generally must recognize ordinary income
equal to the "spread" between the exercise price and the fair market value of
Common Stock on the date of exercise; the Company will be entitled to a
deduction for the same amount. In the case of an employee, the option spread at
the time a NSO is exercised is subject to income tax withholding, but the
optionee generally may elect to satisfy the withholding tax obligation by having
shares of Common Stock withheld from those purchased under the NSO. The tax
treatment of a disposition of option shares acquired under the Stock Plan
depends on how long the shares have been held and on whether such shares were
acquired by exercising an ISO or by exercising a NSO. The Company will not be
entitled to a deduction in connection with a disposition of option shares,
except in the case of a disposition of shares acquired under an ISO before the
applicable ISO holding periods have been satisfied.
The above description of tax consequences is based upon federal tax laws
and regulations and does not purport to be a complete description of the federal
income tax aspects of the Stock Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" AMENDMENT OF THE COMPANY'S
1991 STOCK PLAN.
15
<PAGE> 19
PROPOSAL 3
RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
has appointed the firm of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 1999, subject to ratification
by the stockholders. Ernst & Young LLP has audited the Company's financial
statements since the Company's inception in 1991. Representatives of Ernst &
Young LLP are expected to be present at the Company's Annual Meeting. They will
have an opportunity to make a statement, if they desire to do so, and will be
available to respond to appropriate questions.
Ratification will require the affirmative vote of a majority of the
shares present and voting at the meeting in person or by proxy. In the event
ratification is not provided, the Board of Directors will review its future
selection of the Company's independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 2000 Annual Meeting must be
received by the Secretary of the Company no later than December 28, 1999 in
order that they may be included in the Company's proxy statement and form of
proxy relating to that meeting.
A stockholder proposal not included in the Company's proxy statement for
the 2000 Annual Meeting will be ineligible for presentation at the meeting
unless the stockholder gives timely notice of the proposal in writing to the
Secretary of the Company at the principal executive offices of the Company and
otherwise complies with the provisions of the Company's Bylaws. To be timely,
the Company's Bylaws provide that the Company must have received the
stockholder's notice not less than 60 days nor more than 90 days prior to the
scheduled date of such meeting. However, if notice or prior public disclosure of
the date of the annual meeting is given or made to stockholders less than 70
days prior to the meeting date, the Company must receive the stockholder's
notice by the earlier of (i) the close of business on the 10th day after the
earlier of the day the Company mailed notice of the annual meeting date or
provided such public disclosure of the meeting date and (ii) two days prior to
the scheduled date of the annual meeting.
OTHER MATTERS
The Company knows of no other business that will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
accordance with the judgment of the persons voting the proxies.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
executive officers and any persons holding more than 10% of the Company's Common
Stock are required to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established
and the Company is required to identify in this Proxy Statement those persons
who failed to timely file these reports. Dr. Craves failed to file a Form 4
reporting a stock purchase in August 1998. Subsequently, he reported the
transaction on an amended Form 5 filed on March 12, 1999. Mr. Whitfield failed
to file a Form 4 reporting an option exercise on April 28, 1998. Subsequently,
he reported the transaction on an amended Form 5 filed on March 12, 1999.
William Delaney was elected Principal Accounting Officer for the Company on June
15, 1998 and thus became required to file a Form
16
<PAGE> 20
3 within ten days of such election. However, Mr. Delaney filed the Form 3 on
January 7, 1999. In making this disclosure, the Company has relied solely on
written representations of its directors and executive officers and copies of
the reports that have been filed with the Commission.
Whether you intend to be present at the Annual Meeting or not, we urge
you to return your signed proxy promptly.
By order of the Board of
Directors.
/s/ Roy A. Whitfield
Roy A. Whitfield
Chief Executive Officer
April 26, 1999
17
<PAGE> 21
PROXY
INCYTE PHARMACEUTICALS INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
For Annual Meeting -- June 8, 1999
ROY A. WHITFIELD, RANDAL W. SCOTT and DENISE M. GILBERT, or any of them, each
with the power of substitution, are hereby authorized to represent as proxies
and vote all shares of stock of Incyte Pharmaceuticals, Inc. (the "Company")
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
the Company to be held at the Company's offices at 3160 Porter Drive, Palo
Alto, California on Tuesday, June 8, 1999 at 10:00 a.m. or at any postponement
or adjournment thereof, and instructs said proxies to vote as follows:
Shares represented by this proxy will be voted as directed by the stockholder.
If no such directions are indicated, the proxies will have authority to vote
FOR the election of directors and FOR Items 2 and 3.
(continued and to be signed on reverse side)
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE Please mark
ELECTION OF DIRECTORS AND FOR ITEMS 2 AND 3. your vote as /X/
indicated
in this example
FOR Withhold
all nominees Authority to FOR AGAINST ABSTAIN
listed below vote for all 2. To approve the amendment / / / / / /
(except as nominees of the Company's 1991
marked to listed Stock Plan:
1. ELECTION OF DIRECTORS the contrary) below
FOR AGAINST ABSTAIN
Nominees Roy A. Whitfield Randal W. Scott 3. To ratify the appointment / / / / / /
Barry M. Bloom Jeffrey J. Collinson / / / / of Ernst & Young LLP
Frederick B. Cravas Jon S. Saxe as the Company's
independent auditors:
(INSTRUCTION: To withhold authority to vote for any FOR AGAINST ABSTAIN
individual nominee, write that nominee's name in the 4. In their discretion, / / / / / /
space provided below.) upon such other business
as may properly come
before the meeting.
--------------------------------
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD
PROMPTLY, USING THE ENCLOSED ENVELOPE.
Signature(s) Dated , 1999
--------------------------------------------------------------------------------------- --------------
Please sign exactly as name(s) appear on this proxy. When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If shares are held jointly, each holder should sign.
- ------------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
