<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Protein Design Labs, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Protein Design Labs, Inc.
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No filing fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
PROTEIN DESIGN LABS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
August 21, 1997
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
annual meeting of stockholders of Protein Design Labs, Inc., a Delaware
corporation (the "Company"), to be held on August 21, 1997 at 8:00 a.m. at the
manufacturing facility of the Company, located at 3955 Annapolis Lane,
Plymouth, Minnesota 55447, for the following purposes:
1. To elect two Class II directors to hold office for a three-year term and
until their respective successors are elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on June 30, 1997 are
entitled to notice of, and to vote at, this meeting and any continuation or
adjournments thereof. For ten days prior to the meeting, a complete list of
stockholders entitled to vote at the meeting will be available for examination
by any stockholder for any purpose relating to the meeting during ordinary
business hours at the principal office of the Company.
By Order of the Board of Directors
Douglas O. Ebersole
Secretary
Mountain View, California
June 30, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN THE RETURN ENVELOPE SO THAT
YOUR STOCK MAY BE REPRESENTED AT THE MEETING.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
NOMINATION AND ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . 2
Meetings of the Board of Directors . . . . . . . . . . . . . . . . . . 4
APPOINTMENT OF INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . 5
EXECUTIVE COMPENSATION AND OTHER MATTERS . . . . . . . . . . . . . . . . . 7
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Compensation of Executive Officers. . . . . . . . . . . . . . . . . . . 8
Stock Options Granted in Fiscal 1996. . . . . . . . . . . . . . . . . . 9
Option Exercises and Fiscal 1996 Year-End Values. . . . . . . . . . . . 10
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . 11
Change of Control Arrangements, Termination of Employment Arrangements. 11
Compensation Committee Interlocks and Insider Participation . . . . . . 11
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION . . . . . . 12
Compensation Policies . . . . . . . . . . . . . . . . . . . . . . . . . 12
Compensation Components . . . . . . . . . . . . . . . . . . . . . . . . 12
Chief Executive Officer's Compensation. . . . . . . . . . . . . . . . . 13
COMPARISON OF STOCKHOLDER RETURNS. . . . . . . . . . . . . . . . . . . . . 14
SECTION 16(a) REPORTING. . . . . . . . . . . . . . . . . . . . . . . . . . 15
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING . . . . . . . 15
TRANSACTION OF OTHER BUSINESS . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
<PAGE> 4
PROXY STATEMENT
1997 ANNUAL MEETING OF STOCKHOLDERS
PROTEIN DESIGN LABS, INC.
3955 ANNAPOLIS LANE
PLYMOUTH, MINNESOTA 55447
(612) 551-1778
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of PROTEIN DESIGN LABS, INC., a Delaware
corporation (the "Company"), of Proxies for use at the annual meeting of
stockholders to be held on August 21, 1997, or any adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting. This Proxy
Statement and accompanying Proxy are first being sent to stockholders on
approximately July 7, 1997. The cost of the solicitation of Proxies will be
borne by the Company. The Board may use the services of the Company's
directors, officers and others to solicit Proxies, personally or by telephone.
The Board may also arrange with brokerage houses and other custodians, nominees
and fiduciaries to forward solicitation material to the beneficial owners of
the stock held of record by such persons, and the Company may reimburse them
for the reasonable out-of-pocket expenses incurred in so doing. The Annual
Report to Stockholders for the fiscal year ended December 31, 1996, including
financial statements, is being mailed to stockholders concurrently with the
mailing of this Proxy Statement.
VOTING RIGHTS
The voting securities of the Company entitled to vote at the annual meeting
consist of shares of Common Stock. Only stockholders of record at the close of
business on June 30, 1997 are entitled to notice of and to vote at the annual
meeting. On that date, there were 18,134,038 shares of Common Stock issued and
outstanding. Each share of Common Stock is entitled to one vote. The Company's
Bylaws provide that a majority of all of the shares of the stock entitled to
vote, whether present in person or by proxy, shall constitute a quorum for the
transaction of business at the meeting. If an executed Proxy is submitted
without any instruction for the voting of such Proxy, the Proxy will be voted
in favor of the proposals described.
All shares represented by valid Proxies received prior to the annual meeting
will be voted and, where a stockholder specifies by means of the Proxy a choice
with respect to any matter to be acted upon, the shares will be voted in
accordance with the specifications so made. A stockholder who signs and returns
a Proxy will have the power to revoke it at any time before it is voted. A
Proxy may be revoked by filing with the Secretary of the Company a written
revocation or duly executed Proxy bearing a later date, or by appearing at the
annual meeting and electing to vote in person.
1
<PAGE> 5
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
The Company has a classified Board of Directors (the "Board") consisting of
two Class I, two Class II and three Class III directors who will serve until
the annual meetings of stockholders to be held in 1999, 1997 and 1998,
respectively, and until their respective successors are duly elected and
qualified. At each annual meeting of stockholders, directors are elected for a
term of three years to succeed those directors whose terms expire as of that
annual meeting.
The terms of the current Class II directors will expire on the date of the
upcoming annual meeting. Accordingly, two persons are to be elected to serve as
Class II directors of the Board at the meeting. Management's nominees for
election by the stockholders to those two positions are Stanley Falkow, Ph.D.,
and Cary L. Queen, Ph.D., the current Class II members of the Board. If
elected, the nominees will serve as directors until the Company's annual
meeting of stockholders in 2000 and until their successors are duly elected and
qualified. If any nominee(s) declines to serve or becomes unavailable for any
reason, or if a vacancy occurs before the election (although the Company knows
of no reason to anticipate that this will occur), the Proxies may be voted for
such substitute nominees as the Board may recommend in place of such
nominee(s).
If a quorum is present and voting, the two nominees for Class II directors
receiving the highest number of votes will be elected as Class II directors.
Abstentions and shares held by brokers that are present but not voted because
the brokers were prohibited from exercising discretionary authority, i.e.,
"broker non-votes", will be counted as present in determining if a quorum is
present.
Certain information concerning the current directors, including the Class II
nominees to be elected at this meeting, is set forth below.
<TABLE>
<CAPTION>
Positions with the Director
Nominee/Director Company Age Since
---------------- ------------------ --- --------
<S> <C> <C> <C>
Class II directors nominated for election at the 1997 Annual Meeting of
Stockholders
Stanley Falkow, Ph.D. Distinguished Investigator 63 1991
(consultant), Director
Cary L. Queen, Ph.D. Senior Vice President, 47 1987
Vice President, Research,
Director
Class III directors whose terms expire at the 1998 Annual Meeting of
Stockholders
Jurgen Drews, M.D. Director 63 1997
Laurence Jay Korn, Ph.D. Chief Executive Officer, 47 1986
Chairperson of the Board
Max Link, Ph.D. Director 56 1993
Class I directors whose terms expire at the 1999 Annual Meeting of Stockholders
George M. Gould, Esq. Director 60 1989
Jon S. Saxe, Esq. President, Director 60 1989
</TABLE>
2
<PAGE> 6
Jurgen Drews, M.D., has been a director of the Company since February 1997.
Dr. Drews has been President, Global Research for Hoffmann-La Roche Inc.
("Roche") since January 1996, and also serves as a member of the Executive
Committee of the Roche Group. From January 1991 to December 1995, Dr. Drews
served as President, International Research and Development and as a Member of
the Executive Committee for Roche. Prior to that time Dr. Drews served as
Chairman of the Research Board and Member of the Executive Committtee for Roche
from April 1986 to December 1990. Dr. Drews served as Head of International
Pharmaceutical Research and Development for Sandoz Ltd. (now known as Novartis
Ltd.) from January 1982 to July 1985. Dr. Drews is also a director of Genentech,
Inc.
Stanley Falkow, Ph.D., has been a director of the Company since December
1991, a consultant to the Company since 1987 and a Distinguished Investigator
for the Company since 1991. Dr. Falkow has served as a Professor of
Microbiology, Immunology and Medicine at the Stanford University School of
Medicine since 1981. Dr. Falkow is a recipient of the Paul Erlich Prize from the
German Federal Republic and the Squibb Award of the Infectious Diseases Society
of America and is a member of the U.S. National Academy of Sciences and the
American Academy of Arts and Sciences. Dr. Falkow is also a director of GalaGen
Inc.
George M. Gould, Esq., has been a director of the Company since October
1989. Mr. Gould is of counsel to the law firm Crummy, Del Deo, Dolan, Griffinger
& Vecchione. From May 1996 to December 1996, Mr. Gould was a Senior Vice
President of PharmaGenics, Inc., a biotechnology company. Prior to that time Mr.
Gould served as Vice President of Licensing & Corporate Development and Chief
Patent Counsel for Roche from October 1989 to May 1996.
Laurence Jay Korn, Ph.D., has served as a director and Chairperson of the
Board since July 1986 and Chief Executive Officer since January 1987.
Previously, Dr. Korn headed a research laboratory and served on the faculty of
the Department of Genetics at the Stanford University School of Medicine from
March 1981 to December 1986. Dr. Korn received his Ph.D. from Stanford
University and was a Helen Hay Whitney Postdoctoral Fellow at the Carnegie
Institution of Washington and a Staff Scientist at the MRC Laboratory of
Molecular Biology in Cambridge, England, before becoming an Assistant Professor
at Stanford.
Max Link, Ph.D., has been a director of the Company since June 1993. Dr.
Link served as the Chief Executive Officer of Boehringer Mannheim --
Therapeutics from October 1993 to May 1994 and as the Chief Executive Officer of
Corange Ltd. from May 1993 to May 1994. Dr. Link served as the Chairman of
Sandoz Pharma Ltd. (now known as Novartis Pharma Ltd.) from April 1992 to April
1993. Dr. Link served in various management positions at Sandoz Ltd. and Sandoz
Pharmaceuticals Corporation (now known as Novartis Ltd. and Novartis
Pharmaceuticals Corporation, respectively) from October 1971 to April 1992. Dr.
Link is also a director of Access Pharmaceuticals, Inc., Alexion Pharmaceutical
Inc., CytRx Corp., Human Genome Sciences, Inc. and Procept, Inc.
Cary L. Queen, Ph.D., has served as a director since January 1987, as Vice
President, Research, since April 1989 and as Senior Vice President since June
1993. Previously, Dr. Queen held positions at the National Institutes of Health
from 1983 to 1986, where he studied the regulation of genes involved in the
synthesis of antibodies. Dr. Queen received his Ph.D. in Mathematics from the
University of California at Berkeley and subsequently served as an Assistant
Professor of Mathematics at Cornell University.
Jon S. Saxe, Esq., has been a director of the Company since March 1989 and
has served as President of the Company since January 1995. Mr. Saxe was a
consultant to the Company from June 1993 to December 1994. He has served as
President of Saxe Associates, a biotechnology consulting firm, since May 1993.
Mr. Saxe served as the President, Chief Executive Officer and a director of
Synergen, Inc., a biopharmaceutical company, from October 1989 to April 1993.
Mr. Saxe served as Vice President, Licensing & Corporate Development for Roche
from August 1984 through September 1989, and Head Patent Law from September 1978
through September 1989. Mr. Saxe is also a director of InSite Vision
Incorporated, Incyte Pharmaceuticals Inc. and ID Biomedical Corporation. Mr.
Saxe received his J.D. from George Washington University School of Law and his
LL.M. from New York University School of Law.
3
<PAGE> 7
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1996, the Board held seven meetings. During that period, the
Audit Committee of the Board held four meetings and the Compensation Committee
of the Board held five meetings. The Company does not have a Nominating
Committee of the Board. The attendance among the directors at all meetings of
the Board and committees was 100% in the Company's 1996 fiscal year.
The members of the Audit Committee during the Company's 1996 fiscal year
were George M. Gould and Stanley Falkow. The functions of the Audit Committee
include (i) recommending the independent auditors to the Board, (ii) reviewing
and approving the planned scope of the annual audit, proposed fee arrangements
and the results of the annual audit, (iii) reviewing the accounting and
reporting principles applied by the Company in preparing its financial
statements, (iv) reviewing the internal financial, operating and accounting
controls and finance and accounting personnel of the Company with the
independent auditors, (v) overseeing compliance with the Foreign Corrupt
Practices Act, (vi) reviewing the Company's financial press releases with the
auditors and management, and (vii) reviewing and approving (or rejecting) any
transaction that may present potential for conflict of interest, such as with
the Company's officers, directors or significant stockholders.
The members of the Compensation Committee during fiscal 1996 were George M.
Gould and Max Link. The functions of the Compensation Committee include (i)
designing and implementating competitive compensation policies to attract and
retain key personnel, (ii) reviewing and formulating policy and making
recommendations to the Board regarding compensation of the Company's executive
officers with respect to salaries, bonuses, and other compensation, (iii)
administering the Company's 1991 Stock Option Plan, as amended (the "Option
Plan") and 1986 Stock Purchase Plan, as amended (the "Stock Purchase Plan") and
recommending grants of stock options and shares of stock to the Company's
executive officers and directors under the Option Plan and Stock Purchase Plan
and (iv) establishing and reviewing Company policies in the area of management
perquisites.
PROPOSAL TWO
APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP to serve as independent auditors to
audit the financial statements of the Company for fiscal 1997. Ernst & Young
LLP (or its predecessors) has acted in such capacity since its appointment for
fiscal 1986. Representatives of Ernst & Young LLP will be present at the annual
meeting, will be given the opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL. In the event that
ratification by the stockholders of the appointment of Ernst & Young LLP as the
Company's independent auditors is not obtained, the Board will reconsider such
appointment.
The affirmative vote of a majority of the votes cast at the annual meeting
of stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person
or by proxy, is required to ratify the appointment of Ernst & Young LLP as the
Company's independent auditors. Abstentions and broker non-votes will each be
counted as present for purposes of determining the presence of a quorum, but
will not be counted as having been voted on the proposal.
4
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 31, 1997 by (i) each person
who is known by the Company, based on the records of the Company's transfer
agent and relevant documents filed with the U.S. Securities and Exchange
Commission ("SEC"), to own beneficially more than 5% of the outstanding shares
of the Company's Common Stock, (ii) each member of the Company's Board of
Directors, (iii) the Chief Executive Officer of the Company and the four other
most highly compensated executive officers of the Company as of December 31,
1996 as well as a former executive officer who is required to be identified
herein ("Named Executive Officers"), and (iv) all members of the Board of
Directors and executive officers of the Company as a group who served in that
capacity as of March 31, 1997. Except as set forth below, the address of each
named individual is the address of the Company.
<TABLE>
<CAPTION>
Name of Beneficial Owner or Group and Nature Amount of Beneficial Percent of Common
of Beneficial Ownership(1) Ownership Stock Outstanding
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
LGT Asset Management, Inc.(2) 1,989,500 10.98%
Chancellor LGT Asset Management, Inc.
Chancellor LGT Trust Company
50 California St., 27th Floor
San Francisco, CA 94111
Corange International Limited 1,682,877 9.29
22 Church Street
P.O. Box HM2026
Hamilton HM HX
Bermuda
Hoffmann-La Roche Inc. 1,321,418 7.29
340 Kingsland Street
Nutley, NJ 07110
FMR Corp.(2) 860,300 4.75
82 Devonshire Street
Boston, MA 02109
Jurgen Drews, M.D.(3) 1,322,918 7.30
Cary L. Queen, Ph.D.(4) 886,750 4.85
Laurence Jay Korn, Ph.D.(5) 860,199 4.70
Jon S. Saxe(6) 129,188 *
Stanley Falkow, Ph.D.(7) 71,785 *
Douglas O. Ebersole(8) 68,444 *
Mark D. Young, Ph.D.(9) 40,603 *
George M. Gould(10) 23,917 *
Max Link, Ph.D.(11) 19,584 *
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C> <C>
Paul I. Nadler, M.D.(12) 250 *
All directors and executive officers as a 3,458,222 19.09%
group (11 persons) (4,5,6,7,8,9,10,11,13)
</TABLE>
- - ---------------
* Less than 1%
(1) Except as indicated in the footnotes to this table, 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.
(2) Based solely on information provided in Schedule 13G as filed with the SEC
at www.sec.gov.
(3) Includes 1,321,418 shares held by Hoffmann-La Roche Inc. with respect to
which Dr. Drews disclaims beneficial ownership. Also includes 1,500 shares
issuable upon the exercise of options which are currently, or which will become,
exercisble within 60 days after March 31, 1997.
(4) Includes 150,000 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997. Also includes 1,600 shares held in trusts for the benefit of certain of
Dr. Queen's relatives with respect to which Dr. Queen disclaims beneficial
ownership.
(5) Includes 187,500 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997. Also includes 12,067 shares held as separate property by Dr. Korn's spouse
with respect to which Dr. Korn disclaims beneficial ownership.
(6) Includes 112,500 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997.
(7) Includes 27,085 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997.
(8) Includes 67,083 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997.
(9) Includes 39,375 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997.
(10) Includes 1,000 shares held for the benefit of Mr. Gould's daughter, with
respect to which Mr. Gould disclaims beneficial ownership. Also includes 22,917
shares issuable upon the exercise of options which are currently, or which will
become, exercisable within 60 days after March 31, 1997.
(11) Includes 1,668 shares issuable upon the exercise of options which are
currently, or which will become, exercisable within 60 days after March 31,
1997.
(12) Dr. Nadler resigned as an officer and employee of the Company effective as
of November 1, 1996.
(13) Includes all directors and officers who served in that capacity as of March
31, 1997 and includes 644,003 shares issuable upon the exercise of options
beneficially owned by directors and officers which are currently, or which will
become, exercisable within 60 days after March 31, 1997.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER MATTERS
EXECUTIVE OFFICERS
Certain information with respect to the Company's executive officers is set
forth below. See "NOMINATION AND ELECTION OF DIRECTORS" for information
regarding Drs. Korn and Queen and Mr. Saxe, three of the Company's executive
officers.
Christine Booker, age 56, has served as the Company's Vice President,
Quality and Compliance since February 1996. Prior to joining the Company, from
February 1995 through January 1996, Ms. Booker served as a consultant to the
Company. From August 1994 to July 1996, Ms. Booker served as the principal
consultant for Booker Associates. From March 1992 to October 1994, Ms. Booker
served as Director, Quality Assurance for Synergen, Inc. From October 1980 to
February 1992, Ms. Booker served in various positions at Genentech, Inc.,
including Associate Director, Technical Operations. Ms. Booker received her B.S.
in Chemistry from DePaul University.
Douglas O. Ebersole, age 41, has served as the Company's Vice President,
Licensing, General Counsel and Secretary since July 1992 and in April 1996 was
appointed to the additional position of Vice President, Corporate Services.
Prior to joining the Company, he served first as Associate General Counsel and
later as General Counsel at NeXT Computer, Inc. Prior to joining NeXT in 1989,
he was a partner in the corporate department of the law firm Ware & Freidenrich
(now known as Gray Cary Ware & Freidenrich). Mr. Ebersole received his J.D. from
Stanford Law School.
Fred Kurland, age 47, has served as the Company's Vice President and Chief
Financial Officer since February 1996. Prior to joining the Company, from May
1995 to January 1996, Mr. Kurland served as the Vice President, Chief Financial
Officer and Secretary of Applied Immune Sciences, Inc., a biotechnology company.
From February 1991 to April 1995, Mr. Kurland served as Vice President and
Controller of Syntex Corporation, a pharmaceutical company ("Syntex"). From 1981
to February 1991, Mr. Kurland served in various senior financial positions in
corporate and operations functions at Syntex. Mr. Kurland received his J.D. and
M.B.A. degrees from the University of Chicago.
Daniel J. Levitt, M.D., Ph.D., age 49, has served as Senior Vice President,
Clinical and Regulatory Affairs of the Company since November 1996. From
February 1995 to October 1996 he served as Vice President of Drug Development
and Chief Medical Officer of Geron Corporation, a biotechnology company. From
1990 until January 1995, Dr. Levitt held various positions at Sandoz Pharma Ltd.
(now known as Novartis Pharma Ltd.), a pharmaceutical company, most recently as
Worldwide Head of Oncology Clinical Research and Development. From 1986 to 1990,
Dr. Levitt held various positions with Roche, including Director of Clinical
Oncology and Immunology. He received post-graduate training at Yale-New Haven
Hospital and the University of Chicago Pritzker School of Medicine. Dr. Levitt
holds an M.D. and Ph.D. from the University of Chicago Pritzker School of
Medicine.
Mark D. Young, Ph.D., age 46, has served as the Company's Vice President,
Technical Operations since September 1995. From February 1995 through August
1995, Dr. Young served as acting Head of Manufacturing of the Company. From 1989
through January 1995, Dr. Young served in various senior management positions at
Synergen Inc. and its successor Amgen, a biotechnology company, including Vice
President, Process Development and Executive Vice President, Technical
Operations. Dr. Young has over 20 years experience in fermentation and
biotechnology-based pharmaceutical process development and manufacturing. Dr.
Young received his Ph.D. in Chemical Engineering from the University of Michigan
and his M.S. in Chemical Engineering from Columbia University.
7
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the compensation of
the Named Executive Officers, whose salary and bonus exceeded $100,000 for the
fiscal year ended December 31, 1996, during the fiscal years ended December 31,
1996, 1995 and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation1 Compensation
----------------------------- ---------------------------------
Awards
---------------------------------
Other
Annual Securities
Salary Compen- Restricted Underlying
Name and Principal Positions Year ($) sation($) Stock ($) Options (#)
- - ---------------------------- ---- ------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Laurence Jay Korn(2) 1996 356,220 -- -- 50,000
Chief Executive Officer 1995 320,300 -- -- --
1994 300,000 -- -- 150,000
Jon S. Saxe(3) 1996 339,915 -- -- 35,000
President 1995 307,610 32,270(4) -- 150,000
1994 -- -- -- --
Cary L. Queen(5) 1996 256,220 -- -- 30,000
Senior Vice President and 1995 240,785 -- -- --
Vice President, Research 1994 225,000 -- -- 120,000
Paul I. Nadler(6) 1996 281,575 -- -- 50,000
Vice President, Medical and 1995 275,675 -- -- --
Regulatory Affairs 1994 265,760 -- -- --
Douglas O. Ebersole(7) 1996 224,255 -- -- --
Vice President, Corporate 1995 201,905 -- -- 70,000
Services and Licensing, 1994 182,500 -- -- --
General Counsel and Secretary
Mark D. Young(8) 1996 218,720 -- -- --
Vice President, Technical 1995 167,640 -- -- 70,000
Operations 1994 -- -- -- --
</TABLE>
- - ---------------
(1) Compensation deferred at the election of the executive officer under the
Company's 401(k) Plan is included in the year earned. Includes life insurance
premiums paid by the Company. No bonuses were paid in 1994, 1995 or 1996 to the
named individuals and the bonus column is omitted from the table.
(2) Stock options granted in 1996 and 1994 to Dr. Korn were granted based on his
reaching his tenth and eighth anniversary dates of employment with the Company
in January 1997 and 1995, respectively.
(3) Stock options were granted in 1994 to Mr. Saxe in connection with his
joining the Company as President in January 1995, and in 1996 based on his
reaching his second anniversary date of employment with the Company in January
1997.
8
<PAGE> 12
(4) Amounts received as compensation in connection with Mr. Saxe's relocation to
the Company's headquarters.
(5) Stock options granted in 1996 and 1994 to Dr. Queen were granted based on
his reaching his tenth and eighth anniversary dates of employment with the
Company in January 1997 and 1995, respectively.
(6) Dr. Nadler resigned as an officer and employee of the Company in November
1996. Stock options granted to Dr. Nadler in 1996 did not vest.
(7) Stock options granted in 1995 to Mr. Ebersole were granted based on his
reaching his third anniversary date of employment with the Company in July 1995.
(8) Stock options were granted in 1995 to Dr. Young in connection with his
joining the Company as Acting Head of Manufacturing in February 1995.
STOCK OPTIONS GRANTED IN FISCAL 1996
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the fiscal year ended
December 31, 1996 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term(4)
- - -------------------------------------------------------------------- -----------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in or Base
Granted Fiscal Year Price Expir.
Name (#)(1)(2) (%) ($/Sh)(3) Date 5%($) 10%($)
- - ---- ---------- ------------ --------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Laurence Jay Korn 50,000 8.57 26.50 12/14/06 833,285 2,111,709
Jon S. Saxe 35,000 6.00 26.50 12/14/06 583,300 1,478,196
Paul I. Nadler(5) 50,000 8.57 25.50 2/1/06 801,841 2,032,022
Cary L. Queen 30,000 5.14 26.50 12/14/06 499,971 1,267,025
Douglas O. Ebersole -- -- -- -- -- --
Mark D. Young -- -- -- -- -- --
</TABLE>
- - ---------------
(1) Options granted vest over a four year period at the rate of one-fourth one
year after the date specified at the time of grant (typically the hire date or
an anniversary of the hire date) and 1/48 per month thereafter for each full
month of the optionee's continuous employment with the Company. Only vested
shares are exercisable. Options granted to date have had terms of either six or
ten years. The Company has never granted any Stock Appreciation Rights and
references to this security are omitted.
(2) Under the Option Plan, the Board retains some discretion to modify the terms
of outstanding options; see "Change of Control Arrangements, Termination of
Employment Arrangements."
(3) All options granted to employees were granted at market value on the date of
grant.
9
<PAGE> 13
(4) Potential gains are based on Exercise or Base Price and net of such price,
but before taxes associated with exercise. These amounts represent certain
assumed rates of appreciation only, based on the Securities and Exchange
Commission's rules. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock, overall market
conditions and the optionholder's continued employment through the vesting
period. Any amounts reflected in this table may not necessarily be achieved. As
an illustration using the December 31, 1996 closing price ($36.50), the effects
of 5% and 10% appreciation on a stockholder's investment of one share of stock
purchased at $36.50 would yield profits of $28.16 per share at 5% appreciation
per year over ten years or $58.17 per share at 10% appreciation per year over
the same period. The "potential realizable values" in this table are calculated
using the exercise price of the stock options and assuming 5% or 10%
appreciation per year from that price over the term of the options granted.
(5) None of Dr. Nadler's shares from this option grant vested prior to his
resignation as an officer and employee of the Company in November 1996.
OPTION EXERCISES AND FISCAL 1996 YEAR-END VALUES
The following table provides the specified information concerning exercises
of options to purchase the Company's Common Stock in the fiscal year ended
December 31, 1996, and unexercised options held as of December 31, 1996, by the
persons named in the Summary Compensation Table:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES(1)
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at 12/31/96(#)(2) 12/31/96($)(3)
-------------------------- ---------------------------
Shares
Aquired
on Value
Exercise Realized
Name (#) ($) Unexercisable Exercisable Unexercisable Exercisable
- - ---- -------- --------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Laurence Jay Korn -- -- 128,125 171,875 2,101,562 3,723,437
Jon S. Saxe -- -- 113,125 101,625 1,863,672 2,236,078
Paul I. Nadler 51,083 674,165 -- -- -- --
Cary L. Queen -- -- 92,500 137,500 1,581,250 2,978,750
Douglas O. Ebersole 13,000 232,375 45,208 59,792 695,078 1,396,172
Mark D. Young -- -- 37,917 32,083 782,031 661,719
</TABLE>
(1) The Company has never granted any Stock Appreciation Rights and references
to this security are omitted.
(2) See footnote 1 of the "OPTION GRANTS IN THE LAST FISCAL YEAR" table for
information concerning the vesting and exercisability provisions of these stock
options.
(3) Based on a value of $36.50 which was the closing price of the Company's
Common Stock as of December 31, 1996.
10
<PAGE> 14
COMPENSATION OF DIRECTORS
As of December 31, 1996, each director who is not an employee of the Company
was authorized to receive cash compensation in the amount of $2,500 each fiscal
quarter, or such other amount as the Board may approve, and may be reimbursed
for expenses incurred in attending each Board and committee meeting.
As of December 31, 1996, the Company's Outside Directors Stock Option Plan
(the "Directors Plan") provided for the initial automatic grant of an option to
purchase 25,000 shares of the Company's Common Stock to each director of the
Company who is not an employee of the Company ("Outside Directors"). The
Directors Plan also provides for a subsequent grant to Outside Directors to
purchase 25,000 shares of Common Stock on the date five years from the date of
the initial grant; provided, however, that if the director was granted an option
under the Option Plan prior to February 14, 1992 (the date of adoption of the
Directors Plan), the subsequent grant shall be on the date five years from the
date of such grant. Options under the Directors Plan are granted at the fair
market value of the Company's Common Stock on the date of grant and vest as to
1/60 of the shares subject to the option per month until such time as the
optionee ceases to be a director for any reason. Options granted under the
Directors Plan to date had terms of either 6 or 10 years from the date of grant.
CHANGE OF CONTROL ARRANGEMENTS, TERMINATION OF EMPLOYMENT ARRANGEMENTS
Stock options issued to full-time employees under the Company's Option Plan
contain provisions pursuant to which an additional twenty five percent (25%) of
the total number of options subject to vesting under any outstanding employee
stock option agreement will vest if either (a) in connection with a "transfer of
control," an acquiring corporation fails to assume the outstanding option or to
substitute a substantially equivalent option for the acquiring corporation's
stock, or (b) within one year following a "transfer of control," the option
holder is either terminated by the Company or its successor without cause or
resigns from employment within a reasonable time following "constructive
termination."
Under the terms of the Directors Plan, in the event of the sale,
dissolution, or liquidation of the Company, or a merger or consolidation in
which the Company is not the surviving or resulting corporation or in which the
stockholders of the Company immediately before such event beneficially own,
directly or indirectly, less than 50% of the voting securities of the surviving
corporation immediately after such event, and if the surviving corporation does
not assume or substitute new options for the outstanding options, the Company's
Board may, but is not obligated to, provide that any unexercisable and/or
unvested portion of the outstanding options shall be immediately exercisable and
vested. Any options which are neither assumed nor substituted for by the
acquiring corporation nor exercised as of the date of the transfer of control
shall terminate effective as of the date of the transfer of control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
George M. Gould served as a member of the Board's Compensation Committee
during the entire year ended December 31, 1996. Mr. Gould, a director of the
Company, was a member of the management of Hoffmann-La Roche Inc. until May
1996. In 1989, Roche entered into a stock purchase agreement and licensing
agreement with the Company for certain potential products. In addition, during
1996 the Company retained the law firm of Crummy, Del Deo, Dolan, Griffinger &
Vecchione, a law firm in which Mr. Gould is of counsel, to provide
representation on a small patent matter on behalf of the Company.
Laurence Jay Korn and Cary L. Queen, executive officers and directors of the
Company during the entire year ended December 31, 1996, were both also executive
officers and directors of Advanced Software of California, Inc. (formerly
Advanced Software, Inc.). During 1996, Advanced Software of California, Inc. was
a privately held company in which the Board of Directors performed the same
function as a compensation committee. Drs. Korn and Queen are the only officers
and directors of the Company who served as officers or directors of Advanced
Software of California, Inc. during the fiscal year ended December 31, 1996.
Neither Dr. Korn nor Dr. Queen served on the Compensation Committee of the Board
of Directors of the Company.
11
<PAGE> 15
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") for 1996 was composed of two
non-management directors of the Board of Directors (the "Board"). The Committee
is responsible for administering the policies governing annual compensation of
executive officers, and after considering the performance of the Company's
executive officers, granting or recommending the grant of stock options or
authorizing the sale of Common Stock to executive officers under the Company's
1991 Stock Option Plan and 1986 Stock Purchase Plan, respectively, and
recommending to the Board the salary component of each executive officer's
compensation.
COMPENSATION POLICIES
The goals of the Company's compensation policy are to attract, retain and
reward executive officers who contribute to the overall success of the Company
by offering compensation which is competitive in the industry, to motivate
executives to achieve the Company's business and scientific objectives and to
align the interests of officers with the long-term interests of stockholders.
The Company currently uses salary and stock options to meet these goals.
COMPENSATION COMPONENTS
Salaries for executive officers are initially set based on negotiation with
individual executive officers at the time of recruitment and taking into
consideration salaries for comparable positions among companies in the Company's
industry or in industries which employ individuals of similar education and
background to the executive officer being recruited, salaries of the other
executive officers of the Company, the individual's experience, reputation in
his or her industry and expected contributions to the Company. Performance
reviews and salary adjustments are generally performed for each executive
officer at or around the month in which his or her anniversary date of hire
occurs and at such other times as the Committee becomes aware of a significant
variance in an executive officer's current compensation from his or her peers in
the Company or similar industries. The Company's Human Resources staff provides
the Committee with compensation surveys and other data to enable the Committee
to review the reasonableness of compensation paid to executive officers of the
Company and to compare the Company's compensation package with compensation paid
by companies in similar industries. As such, the group of companies used for
compensation comparison purposes is not always limited to the biotechnology
industry and is not necessarily the same group of companies that comprise the
industry group index for comparison of stockholder returns.
The size of annual salary adjustments for individual executive officers are
primarily based on the Committee's determination of the extent to which an
executive officer has met or exceeded individual goals, on information
concerning compensation of individuals with comparable responsibilities at
comparable companies in similar industries and on the compensation of other
executive officers of the Company. Individual goals of executive officers are
determined in consultation with management and generally relate to strategic
goals within the responsibility of the executive officer, such as the
identification of new research targets, the achievement of critical milestones
in the Company's development of its products and capabilities, the ability to
enter into new licensing arrangements using the Company's technology and
relationships necessary to commercialize its products or obtain additional
product rights. The Chief Executive Officer's goals also include goals relating
to the Company's financial performance, measured primarily by the adherence to
budgeted expense levels and maintenance of adequate cash reserves.
The Company's policy is that a significant component of the annual
compensation of each executive officer be related to his or her individual
performance and the performance of the Company. The Company does not award
annual cash bonuses tied to such performance. Rather, the Company believes that
the incentive provided by stock ownership and stock options is currently
sufficient to motivate executive officers. The Committee believes that employee
equity ownership is highly motivating, provides a major incentive to employees
in building stockholder value and serves to align the interest of
12
<PAGE> 16
employees with stockholders. The Committee generally considered stock option
grants to executive officers upon hiring and, until December 31 1996, every
third year thereafter. Effective in 1997, in conjunction with the adoption of a
new merit-based stock option compensation program for all employees of the
Company, the Committee intends to consider stock option grants or recommend
grants to executive officers annually beginning two years following the date of
hire of an executive officer.
During 1996, the Committee considered and recommended to the Board
additional stock option grants to (a) the Chairperson and Chief Executive
Officer, (b) the President and (c) the Senior Vice President and Vice President,
Research of the Company, in accordance with the new program to consider option
grants annually and based on each of them reaching, respectively, their tenth,
second and tenth anniversary dates of employment with the Company. In addition,
the Committee considered and granted an initial employee stock option to the
Senior Vice President, Clinical and Regulatory Affairs of the Company. The grant
to this executive officer was based upon management's negotiations with the
executive officer with particular reference to the Company's history of option
grants to existing executive officers and compensation relative to other
executive officers of the Company as well as such executive officer's position,
responsibilities and expected contribution to the Company. All stock options
granted by the Committee or recommended for grant by the Board had an exercise
price equal to the market price on the date of grant. The Committee believes
that these stock options will provide value to the executive officer only when
the price of the Company's Common Stock increases over the exercise price.
The Committee also considered the potential impact of Section 162(m) of the
Internal Revenue Code enacted under the federal Revenue Reconciliation Act of
1993. This provision disallows a tax deduction for any publicly-held corporation
for individual compensation exceeding $1 million in any taxable year for any of
the named executive officers, unless the compensation is performance-based.
Since the targeted cash compensation of each of the named executive officers is
substantially below the $1 million threshold and the Company believes that any
options granted under the 1991 Stock Option Plan will meet the requirement of
being performance-based, the Committee continues to believe that this provision
will not reduce the tax deduction available to the Company.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Chief Executive Officer's base salary for 1996 was recommended to the
Board of Directors by the Committee based upon the Committee's subjective
weighting and consideration of a number of factors, including the degree to
which he met his individual goals (which related to the financial performance of
the Company, based substantially on the Company's budget for 1996, maintenance
of adequate cash reserves, the Company's ability to successfully enter into and
maintain collaborative and licensing relationships with pharmaceutical and
biotechnology companies, the scientific and clinical success of the Company's
research efforts and the successful recruitment and retention of qualified
individuals as employees of the Company) as reviewed by the Committee, the
relative compensation level of the Chief Executive Officer compared to the
compensation levels of the other executive officers of the Company and the
compensation paid to other chief executive officers of a selected group of
biotechnology companies which the Committee believed to be representative of the
industry. The market value of the Company's stock was not considered in the
determination of the Chief Executive Officer's base salary. The Chief Executive
Officer's base salary was set by the Board of Directors at $355,000 for 1996, an
increase from $320,000 in 1995.
COMPENSATION COMMITTEE
George M. Gould
Max Link
13
<PAGE> 17
COMPARISON OF STOCKHOLDER RETURNS
Comparison of Cumulative Total Return(1) From January 27, 1992(2) through
December 31, 1996.(3)
[COMPARISON OF STOCKHOLDER RETURNS GRAPH]
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------
1/27/92 3/31/92 6/30/92 9/30/92 12/31/92 3/31/93 6/30/93 9/30/93
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Protein Design Labs $100 $68 $46 $44 $ 79 $ 51 $ 82 $ 94
AMEX-Biotech $100 $80 $64 $64 $ 75 $ 51 $ 51 $ 49
NASDAQ $100 $97 $91 $94 $110 $112 $114 $124
- - ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------
12/31/93 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Protein Design Labs $162 $147 $122 $130 $105 $134 $138 $133
AMEX-Biotech $ 51 $ 41 $ 35 $ 40 $ 36 $ 34 $ 40 $ 50
NASDAQ $126 $121 $115 $125 $123 $134 $154 $172
- - ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------
12/31/95 3/31/96 6/30/96 9/30/96 12/31/96
--------------------------------------------
<S> <C> <C> <C> <C> <C>
Protein Design Labs $154 $164 $150 $168 $243
AMEX-Biotech $ 59 $ 60 $ 62 $ 62 $ 64
NASDAQ $174 $182 $197 $204 $214
- - ---------------------------------------------------------------
</TABLE>
- - ---------------
(1) Annual relative change in the cumulative total return on the Company's
Common Stock with the Center for Research in Securities Prices (CRSP) Total
Return Index for the Nasdaq Stock Market (U.S. Companies) and the American Stock
Exchange Biotechnology Index ("AMEX-Biotech"). AMEX-Biotech is calculated using
equal dollar weighting methodology.
14
<PAGE> 18
(2) For purposes of this presentation, the Company has assumed that its
initial offering price of $15.00 per share would have been the closing sales
price on January 27, 1992, the day prior to commencement of trading. The
Company's initial public offering commenced on January 28, 1992 and the
Company's 1992 fiscal year ended on December 31, 1992.
(3) Assumes that $100.00 was invested on January 27, 1992, in the Company's
Common Stock at the Company's initial offering price of $15.00 per share and
at the closing sales price for each index on that date and that all
dividends were reinvested. No cash dividends have been declared on the
Company's Common Stock. Stockholder returns over the indicated period should
not be considered indicative of future stockholder returns.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Each director and each executive officer of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934 is required by Section 16(a)
of such act to report to the Securities and Exchange Commission by a specified
date his or her transactions in the Company's securities. To the best of the
Company's knowledge, all reports relating to stock ownership and such other
reports required to be filed during 1996 under Section 16(a) by the Company's
directors and executive officers were timely filed, with the exception of the
Initial Statement of Beneficial Ownership of Securities on Form 3 for Dr.
Levitt, which form was filed late.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next annual
meeting of stockholders of the Company (i) must be received by the Company at
its offices at 2375 Garcia Avenue, Mountain View, California 94043 no later than
March 2, 1998, and (ii) must satisfy the conditions established by the
Securities and Exchange Commission for stockholder proposals to be included in
the Company's Proxy Statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board
intends to present or knows that others will present at the annual meeting is as
set forth above. If any other matter or matters are properly brought before the
annual meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of Proxy to vote the Proxy on such matters in
accordance with their best judgment.
By Order of the Board of Directors
Douglas O. Ebersole
Secretary
Dated: June 30, 1997
15
<PAGE> 19
[PROXY]
PROTEIN DESIGN LABS, INC.
Proxy for Annual Meeting of Stockholders
Solicited by the Board of Directors
The undersigned hereby appoints Laurence Jay Korn and Douglas O. Ebersole,
and each of them, as proxies for the undersigned, with full power of
substitution, to represent the undersigned and to vote all of the shares of
stock in Protein Design Labs, Inc. (the "Company") which the undersigned is
entitled to vote at the annual meeting of stockholders of the Company to be
held at the Company's offices, located at 2375 Garcia Avenue, Mountain View,
California on Thursday, June 19, 1997 at 8 a.m. local time, and at any
adjournment thereof (1) as hereinafter specified upon the proposals listed on
the reverse side and as more particularly described in the Company's Proxy
Statement, receipt of which is hereby acknowledged, and (2) in their discretion
upon such other matters as may properly come before the meeting.
The shares represented hereby shall be voted as specified, and if no
specification is made, such shares shall be voted FOR the proposals listed on
the reverse side.
The undersigned hereby further confers upon said proxies, and each of
them, or their substitute or substitutes, discretionary authority to vote in
respect to all other matters which may properly come before the meeting or any
continuation or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Please mark your votes as this [X]
1. ELECTION OF DIRECTORS listed below: FOR WITHHELD
(except as AUTHORITY
Nominees: Stanley Falkow, Ph.D. noted below) for all
Cary L. Queen, Ph.D. [ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
- - ------------------------------------
A VOTE FOR THE FOLLOWING PROPOSAL IS RECOMMENDED BY THE BOARD OF DIRECTORS.
FOR AGAINST ABSTAIN
2. To ratify the appointment of [ ] [ ] [ ]
Ernst & Young LLP as the Company's
independent auditors for the fiscal
year ending December 31, 1997.
EVEN IF YOU ARE PLANNING TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN
AND MAIL THE PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK WILL BE
REPRESENTED AT THE MEETING.
The undersigned hereby acknowledges receipt of (a) the Notice of Annual
Meeting, (b) accompanying Proxy Statement and (c) an Annual Report of the
Company for the fiscal year ended December 31, 1996, and hereby expressly
revokes any and all proxies heretofore given or executed by the undersigned
with respect to the shares of stock represented by this Proxy, and by filing
this Proxy with the Secretary of the Company, gives notice of such revocation.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
Signature(s) ____________________________________________ DATE _________________
Please sign exactly as names appear above. When shares are held by joint
tenants both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full titles as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
- - --------------------------------------------------------------------------------
