<PAGE> 1
- ------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
THERATECH, INC.
----------------------------------------------
(Name of Registrant as Specified in its Charter)
TheraTech, Inc.
417 Wakara Way
Salt Lake City, Utah 84108
----------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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.
CALCULATION OF FILING FEE
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] 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
THERATECH, INC.
417 Wakara Way
Salt Lake City, Utah 84108
--------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 28, 1997
--------------
The Annual Meeting of Stockholders (the "Annual Meeting") of
TheraTech, Inc. ("TheraTech" or the "Company"), will be held at the University
Park Hotel, 480 Wakara Way, Salt Lake City, Utah 84108, on Wednesday May 28,
1997, at 10:00 a.m. Mountain Daylight Time, for the following purposes:
1. To adopt and approve an Amendment to the Company's Restated
Certificate of Incorporation to establish a classified Board of
Directors composed of three classes, each class to serve for three
years;
2. To elect six (6) directors, two in each class, to hold office
until the Annual Meeting of Stockholders corresponding to the classes
indicated and until their respective successors have been elected or
appointed;
3. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for 1997; and
4. To transact such other business as may properly come before
the Annual Meeting and any adjournment or postponement thereof.
The foregoing matters are described in more detail in the enclosed
Proxy Statement, which is attached and made a part hereof.
The Board of Directors has fixed the close of business on April 14,
1997 as the record date for determining the Stockholders entitled to notice of
and to vote at the Annual Meeting and any postponement or adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE
URGED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD AT YOUR EARLIEST
CONVENIENCE TO ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU
SEND IN YOUR PROXY AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors,
Dinesh C. Patel, Ph.D.
President and Chief Executive Officer
Salt Lake City, Utah
May 1, 1997
<PAGE> 3
MAILED TO STOCKHOLDERS ON OR ABOUT MAY 1, 1997
THERATECH, INC.
417 WAKARA WAY
SALT LAKE CITY, UTAH 84108
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of TheraTech, Inc., a Delaware corporation, of
proxies in the accompanying form for use in voting at the Annual Meeting of
Stockholders to be held on Wednesday May 28, 1997, at 10:00 a.m. Mountain
Daylight Time, at the University Park Hotel, 480 Wakara Way, Salt Lake City,
Utah 84108, and any adjournment or postponement thereof. The shares
represented by the proxies received, properly dated and executed, and not
revoked will be voted at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by delivering to the
Company a written notice of revocation or a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
The solicitation of proxies will be conducted by mail and the Company
will bear all attendant costs. These costs will include the expense of
preparing and mailing proxy materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation
personally, telephonically or by facsimile through its officers, directors and
regular employees, none of whom will receive additional compensation for
assisting with the solicitation.
The close of business on April 14, 1997 has been fixed as the record
date (the "Record Date") for determining the holders of shares of Common Stock
of the Company entitled to notice of and to vote at the Annual Meeting. As of
the close of business on the Record Date, the Company had approximately
20,626,122 shares of Common Stock outstanding and entitled to vote at the
Annual Meeting. The presence at the Annual Meeting of a majority, or
approximately 10,313,062 of these shares of Common Stock of the Company, either
in person or by proxy, will constitute a quorum for the transaction of business
at the Annual Meeting. Each outstanding share of Common Stock on the Record
Date is entitled to one (1) vote on all matters. Directors shall be elected by
a plurality of the votes cast, appointment of the Independent Auditors shall be
ratified by a majority of votes cast and the Amendment to the Company's
Restated Certificate of Incorporation shall be ratified by a majority of the
shares entitled to vote at the Annual Meeting.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy prior to the Annual Meeting, and an employee of
the Company will tabulate votes cast in person at the Annual Meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting, and each is tabulated separately.
However, abstentions and broker non-votes are not counted for purposes of
determining the number of votes cast with respect to a particular proposal. In
determining whether a proposal has been approved, neither abstentions nor
broker non-votes are counted as votes for or against the proposal.
<PAGE> 4
1. AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO
ESTABLISH A CLASSIFIED BOARD OF DIRECTORS
PROPOSAL
The Board of Directors (the "Board") has unanimously approved for
submission to a vote of the Stockholders of the Company (the "Stockholders") an
amendment to its Restated Certificate of Incorporation (the "Amendment") to
provide for division of the Board into three classes, each class to serve
staggered three year terms. Members of all three classes will initially be
elected at the 1997 Annual Meeting. The text of the Amendment is attached
hereto as Exhibit 1, and is by this reference incorporated herein.
The Board currently consists of six (6) directors. Pursuant to the
Amendment, the Board will be divided into three (3) Classes initially
consisting of two directors in each Class. After the initial election of all
six directors at the 1997 Annual Meeting, the directors in Class I will serve
until the 1998 Annual Meeting, those in Class II until the 1999 Annual Meeting
and those in Class III until the 2000 Annual Meeting. Following subsequent
elections in 1998, 1999, and 2000, respectively, directors in each Class will
serve three year terms. Therefore, under the Amendment, while director
elections will be held each year, no more than one Class of directors will be
elected in any one year. If, prior to an election of a certain Class of
directors, a vacancy in that Class occurs, such vacancy may be filled by the
Board; provided that any directors elected to fill a vacancy not resulting from
an increase in the number of directors shall have the same term as the Class of
his or her predecessor.
In addition, the Amendment would also require that any future
amendment to the Certificate of Incorporation or the Company's Bylaws repealing
or circumventing the purpose of the classified nature of the Board would
require the affirmative vote of sixty-six and two-thirds percent (66.67%) of
the shares of the Company's capital stock, entitled to vote, voting as a single
class. Notwithstanding, if such amendment is approved by more than
seventy-five percent (75%) of the entire Board, only an affirmative vote of the
holders of a majority of the then outstanding capital stock would be required
to approve such amendment.
POSSIBLE ADVANTAGES
The Board believes that classification of the Board will promote
continuity of membership and stability of management and policies. Absent the
removal or resignation of directors, two annual elections will be required to
replace a majority of the Board and to effect a forced change in the business
and affairs of the Company. Thus, classification of the Board may discourage a
person or an entity from acquiring a significant position in the Company with
the intention of obtaining immediate control of the Board. Notwithstanding,
however, a person or entity could immediately effect a change of control by
garnering the affirmative vote of sixty-six and two-thirds percent (66.67%) of
the votes necessary to amend the Company's most recent Certificate of
Incorporation to eliminate classification of the Board.
In the opinion of the Board, in addition to making it more difficult
for any one person or entity to take immediate control of the Company,
providing for classification of the Board will also serve to assure continuity
and stability in leadership and policy of the Company. Inasmuch as
approximately two-thirds of the directors at any time will have had prior
experience on the Board, the Company's management will remain relatively stable
through each year's election.
The Board is currently unaware of any efforts to obtain control of the
Company.
2
<PAGE> 5
POSSIBLE DISADVANTAGES
Notwithstanding the possible advantages discussed above, the Amendment
may also result in certain disadvantages for the Stockholders. First,
classification of the Board may make it difficult to immediately effect the
removal of one or more directors not up for election in a given year, who in
the opinion of the Stockholders and in the best interest of the Company should
be removed. In particular, Stockholders may be precluded from replacing a
director by simply voting for an alternative candidate at an annual election,
because each director will stand for election only once every three years.
Accordingly, a classified Board limits Stockholder participation in determining
the management of the Company and modifies the present ability of Stockholders
to replace board members each year.
As noted above, the Amendment may also have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from attempting to acquire control of the Company. This effect could
discourage bids for the Company's capital stock at a premium over its market
price or otherwise limit the price that certain investors might be willing to
pay in the future for shares of such capital stock.
STOCKHOLDER VOTE NECESSARY FOR APPROVAL
Under Delaware corporation law, the affirmative vote of the holders of
a majority of all the Company's issued and outstanding shares of capital stock,
entitled to vote at the 1997 Annual Meeting, is required to adopt the
Amendment. Assuming requisite Stockholder approval, the Amendment will become
effective upon the filing of a Certificate of Amendment to the Company's
Restated Certificate of Incorporation with the Delaware Secretary of State.
Unless marked otherwise, proxies received will be voted FOR the
Amendment to the Company's Restated Certificate of Incorporation to establish a
classified Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO ESTABLISH A CLASSIFIED BOARD
OF DIRECTORS
2. ELECTION OF DIRECTORS
The Board has nominated the six (6) persons listed in the table below
to serve as directors of the Company. If the proposal to classify the Board of
Directors is adopted, the six (6) directors to be elected at the Annual Meeting
will serve terms as noted below and until their respective successors are
elected or appointed or until their earlier resignation or removal. If the
proposal to classify the Board of Directors is not adopted, the directors to be
elected will serve until the next Annual Meeting and until their respective
successors are elected or appointed or until their earlier resignation or
removal. In the event any nominee is unable or unwilling to serve as a
nominee, the proxies may be voted for the balance of those nominees named and
for any substitute nominee designated by the present Board or the proxy holders
to fill such vacancy, or for the balance of those nominees named without
nomination of a substitute. The Board has no reason to believe that any of the
persons named will be unable or unwilling to serve as a nominee or as a
director if elected.
3
<PAGE> 6
Directors are to be elected to fill each class and to serve terms as
indicated below:
<TABLE>
<CAPTION>
NAME CLASS TERM
- ---- ----- ----
<S> <C> <C>
Dinesh C. Patel Class III 2000 Annual Meeting
William I. Higuchi Class I 1998 Annual Meeting
Gary L. Crocker Class II 1999 Annual Meeting
Jay J. Pisik Class I 1998 Annual Meeting
James T. O'Brien Class II 1999 Annual Meeting
Boyd J. Poulsen Class III 2000 Annual Meeting
</TABLE>
Unless marked otherwise, proxies received will be voted FOR the
election of each of the nominees named above.
Certain information about the nominees who are continuing directors is
furnished below:
Dinesh C. Patel, Ph.D., age 46, a founder of the Company, has served
as President and Chief Executive Officer and as a director of the Company since
its inception in 1985. Prior to founding the Company, from 1981 to 1985, Dr.
Patel established and managed the drug delivery group at Alcon Laboratories
where he was responsible for developing ocular and transdermal drug delivery
systems. Dr. Patel received his B.S. from Gujarat University, India, in 1973,
his M.S. from Philadelphia College of Pharmacy & Science in 1975 and his Ph.D.
in Pharmaceutics from the University of Michigan in 1978.
William I. Higuchi, Ph.D., age 66, a founder of the Company, has
served as Chairman of the Board of Directors since the Company's inception in
1985. Dr. Higuchi has been Distinguished Professor and Chairman of the
Department of Pharmaceutics and Pharmaceutical Chemistry at the University of
Utah since 1982, and is the current Editor-in-Chief of the Journal of
Pharmaceutical Sciences. He received his B.A. from San Jose State University
in 1952 and his Ph.D. in Chemistry from the University of California, Berkeley
in 1956.
Gary L. Crocker, age 45, has served as a director of the Company since
1985. Since 1983 he has been President and Chief Executive Officer of Research
Medical, Inc., a manufacturer of cardiovascular hospital supplies and specialty
pharmaceuticals, which in early 1997 was acquired by Baxter International. Mr.
Crocker served as Vice President of Marketing and Business Development of
Abbott Laboratories' Critical Care Division from 1979 to 1983. Mr. Crocker
earned his B.A. from Harvard College in 1976 and his M.B.A. from Harvard
Business School in 1978.
Jay J. Pisik, age 64, serves as President of Pisik Consulting Group,
which addresses the domestic and international regulatory, quality assurance,
and research and development needs of smaller drug and medical device
companies. Mr. Pisik retired from Abbott Laboratories in 1989 after 21 years
serving in several executive capacities, including Vice President of Quality
Assurance & Regulatory Affairs, and Vice President of Scientific Affairs &
Quality Assurance (International). Mr. Pisik earned his B.S. in Pharmacy from
Fordham University in 1954, and his M.S. in Pharmaceutical Administration from
Long Island University in 1966.
4
<PAGE> 7
James T. O'Brien, age 58, has served as President and Chief Executive
Officer of O'Brien Marketing and Communications since September 1996, and as
Chairman of Access Corporation, an employment data base company, since October
1991. From 1989 through 1991, he served as the President and Chief Operating
Officer of Elan Corporation, plc, a pharmaceutical drug delivery company, where
he was responsible for Elan's worldwide operations and subsidiaries. From 1986
to 1989, Mr. O'Brien was President and Chief Executive Officer of O'Brien
Pharmaceuticals, Inc., a company of which he was the founder. Prior to forming
O'Brien Pharmaceuticals, Inc., Mr. O'Brien held several positions with the
Revlon Health Care Group, most recently as President of its ethical products
division, which included USV Laboratories and the Armour Pharmaceutical
Company. Mr. O'Brien received his B.S. degree in Business Administration from
Benedictine College in 1960.
Boyd J. Poulsen, Ph.D., age 63, is an independent pharmaceutical
management consultant. Prior to retiring from Syntex (U.S.A.) Inc. ("Syntex")
in April 1994, he served for 29 years with the Research Division of Syntex.
From 1989 to 1994, he held the position of Senior Vice President and was
responsible for all pharmaceutical development. He was also a member of the
Syntex Management Committee and operating management for Syntex. Dr. Poulsen
received his B.S. in Pharmacy from Idaho State College in 1956 and his Ph.D.
from the University of Wisconsin, Madison in 1963.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES
NAMED.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors
since 1987 and has been recommended by the Board as the Company's independent
auditors for 1997. In the event that ratification of this selection of auditors
is not approved by a majority of the shares of Common Stock voting at the Annual
Meeting in person or by proxy, management will review its future selection of
auditors. Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of Ernst & Young LLP as the independent auditors
for the current year.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement, if they desire to do
so, and they are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1997.
THE BOARD OF DIRECTORS AND COMMITTEES
If the proposal to classify the Board of Directors is approved, all
directors will hold office until the annual meeting of Stockholders in the year
corresponding to the classes shown above and until their successors have been
duly elected and qualified. Otherwise, all directors will hold office until
the next Annual Meeting of Stockholders or until their earlier resignation or
removal. There are no family relationships among any of the directors or
executive officers of the Company.
The Company's Board of Directors met four times during 1996. None of
the directors attended fewer than 75 percent of all the meetings of the Board
and those committees of the Board on which he served. Each director who is not
an employee of the Company receives a $1,000 fee for each Board meeting
attended and $250 for each Committee meeting attended, plus payment of
out-of-pocket expenses. Directors of the Company who are not employees of the
Company also are eligible to receive certain grants of options under the
TheraTech, Inc. 1992 Directors' Stock Option Plan (the "Directors' Plan").
5
<PAGE> 8
The Audit Committee currently consists of Mr. Crocker and Mr. O'Brien.
The Audit Committee, which met three times in 1996, reviews management's plans
for engaging the Company's independent auditors and recommends to the Board the
engagement of the firm of certified public accountants to audit the financial
statements of the Company for the fiscal year for which they are appointed.
The Audit Committee also monitors the effectiveness of the audit effort and the
Company's financial and accounting organization.
The Compensation and Stock Option Committee (the "Compensation
Committee"), which currently consists of Messrs. Crocker and Pisik and Dr.
Poulsen, met two times in 1996. Its functions are to establish and review the
compensation policies applicable to the Company's executive officers and to
administer the TheraTech, Inc. 1992 Employees' Stock Option Plan (the
"Employees' Plan") and 1993 Employee Stock Purchase Plan (the "Purchase Plan"),
including determining the individuals to receive options and the terms of such
options. The Directors' Plan is administered by the Board of Directors.
The Board of Directors does not have a nominating committee or a
committee performing the functions of a nominating committee. Although there
are no formal procedures for Stockholders to recommend nominations, the Board
of Directors will consider recommendations from Stockholders, which should be
addressed to Alexander L. Searl, Secretary, at the Company's address set forth
above.
EXECUTIVE OFFICERS
Dinesh C. Patel, Ph.D., age 46, a founder of the Company, has served as
President and Chief Executive Officer and as a director of the Company since
its inception in 1985. Prior to founding the Company, from 1981 to 1985, Dr.
Patel established and managed the drug delivery group at Alcon Laboratories
where he was responsible for developing ocular and transdermal drug delivery
systems. Dr. Patel received his B.S. from Gujarat University, India, in 1973,
his M.S. from Philadelphia College of Pharmacy & Science in 1975 and his Ph.D.
in Pharmaceutics from the University of Michigan in 1978.
Charles D. Ebert, Ph.D., age 43, has served as Senior Vice President, Research
and Development of the Company since 1992, and as Vice President, Research and
Development since 1987. Prior to joining TheraTech he was Director of Research
and Development at Cygnus Therapeutic Systems from 1986 to 1987 where he
directed the development of transdermal products. During the period from 1984
to 1986 he was Senior Research Scientist and Manager in the Systems Development
Group of Ciba-Geigy Corporation, responsible for the development of new
transdermal, gastrointestinal and mucosal drug delivery systems. Dr. Ebert
received his B.S. in Biology from the University of Utah in 1977 and his Ph.D.
in Pharmaceutics from the University of Utah in 1981.
Alexander L. Searl, age 54, joined TheraTech in March 1995 as Senior Vice
President and Chief Financial Officer. Prior to joining TheraTech, Mr. Searl
was Executive Vice President and Treasurer of Salt Lake City-based American
Stores Company from 1992 to February 1995. Previously, he served 21 years at
Hercules Incorporated. In his more recent positions at Hercules, from 1991 to
1992, Mr. Searl served as Vice President, Finance and Control at Hercules
Chemical Specialties Co., and from 1974 to 1991, in the company's corporate
offices as Vice President and Treasurer. Mr. Searl earned his B.A. in Business
and Sociology from Syracuse University in 1966, as well as his M.B.A. from
Syracuse University in 1972.
Ramesh Acharya, Ph.D., age 55, joined TheraTech in February 1994 as Vice
President, Oral Drug Products Research and Development. Prior to joining
TheraTech, in June 1991 Dr. Acharya founded Oramed, Inc. and served as a
Partner and President through January 1994. In an earlier position he served
as Vice President and General Manager of Ipharm, Inc., a Division of Lyphomed,
Inc. Dr. Acharya received his M.S. in Pharmacy from the University of Pacific
in 1967 and his Ph.D. in Pharmacy from the University of Illinois at Chicago in
1971.
6
<PAGE> 9
Deborah A. Eppstein, Ph.D., age 48, joined TheraTech in March 1992 as Vice
President, Corporate Planning. From 1978 until joining TheraTech, Dr. Eppstein
was employed by Syntex Corporation, most recently as Director of Business
Development for Biotechnology and Drug Delivery. Dr. Eppstein received her
B.A. from Grinnell College in 1970 and her Ph.D. in Biochemistry from the
University of Arkansas in 1975.
William R.. Good, Ph.D., age 56, joined TheraTech in June 1993 as Vice
President, Product Development. From 1970 until joining the Company, Dr. Good
was employed at Ciba-Geigy Corporation, most recently as Executive Director of
Pharmaceutical Research, where he was responsible for the development of
several products including Transderm Nitro(TM) and Estraderm(TM). He has been
Adjunct Professor of Pharmaceutics at the University of Utah since 1983. Dr.
Good received his B.S. in Chemistry and his M.S. in Chemical Physics from the
University of Akron in 1967 and 1970, respectively, and his Ph.D. in Polymer
Physical Chemistry from the University of Freiburg (West Germany) in 1979.
Donald E. Mantle, age 57, has served as Vice President, Quality
Assurance/Quality Control since January 1994 and as Director of Quality
Assurance/Quality Control since September 1992. Prior to joining TheraTech,
Mr. Mantle was employed at Schering Laboratories (Key Pharmaceuticals, Inc.)
from 1980 to 1992 and held several technical positions which included Manager
of Quality Assurance, Manager of Quality Control, and Senior Scientist of
Technical Services. He received his B.S. in Chemistry from Illinois College in
1961.
Norman A. Mazer, MD, Ph.D., age 44, has served as Vice President, Clinical
Research, of the Company since January 1993. Dr. Mazer joined TheraTech in
July 1987 as Principal Scientist, Research and Development and was named
Director of Clinical Research in May 1990. Prior to joining TheraTech, Dr.
Mazer spent more than four years at Sandoz Pharmaceutical Co. (Basle,
Switzerland). Dr. Mazer received his B.S. in Physics from the Massachusetts
Institute of Technology in 1973, his M.D. from Harvard Medical School in 1978
and his Ph.D. in Physics from the Massachusetts Institute of Technology in
1978. In addition to his duties at TheraTech, Dr. Mazer is an Adjunct
Professor in the Department of Pharmaceutics, University of Utah, where he
teaches a graduate course entitled, "A Systems Approach to Drug Delivery."
Ichiro Nakatomi, Ph.D., age 46, joined TheraTech in January 1991 as Vice
President, Business Development. Prior to joining TheraTech, Dr. Nakatomi
served as Licensing Coordinator, responsible for worldwide licensing, and as
Manager of Product Planning and Development of Hisamitsu Pharmaceutical Co.,
Tokyo, Japan. Dr. Nakatomi received his B.S. in Pharmacy from Science
University of Tokyo, Japan in 1974, and his M.S. in Pharmacology and Medicinal
Chemistry from Northeastern University in 1978. He received his Ph.D. in
Pharmacology from the Gifu Pharmaceutical University in 1983.
Raymond S. Varnackas, age 54, has served as Vice President, Technical
Operations of the Company since September 1992. From 1972 until joining
TheraTech, Mr. Varnackas was employed by Ciba-Geigy Corporation in various
management positions relating to the manufacture of a variety of pharmaceutical
dosage forms, including transdermal drug delivery systems. In 1986, Mr.
Varnackas was named Associate Director of Technical Services. Mr. Varnackas
received his B.S. in Biology from the University of Dayton in 1964.
7
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to
the Company with respect to beneficial ownership of the Company's Common Stock
as of March 31, 1997(3) for (i) each person known by the Company to own
beneficially more than five percent of the Company's Common Stock, (ii) each
executive officer named in the Summary Compensation Table below who
beneficially owns shares, (iii) each director and nominee for director of the
Company, and (iv) all directors, nominees for director and executive officers
of the Company who beneficially own shares, as a group. Unless otherwise
indicated, the address of each person or entity listed is TheraTech, Inc., 417
Wakara Way, Salt Lake City, Utah 84108.
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
OF BENEFICIALLY
SHARES OWNED(1)
---------- ------------
<S> <C> <C>
Chancellor LGT Asset Management, Inc.
1166 Avenue of the Americas
New York, New York 10036(3) . . . . . . . . . . . . . . . . . . 3,562,650 17.3%
Dinesh C. Patel, Ph.D.(2) . . . . . . . . . . . . . . . . . . . 2,856,078 13.7
William I. Higuchi, Ph.D.(2) . . . . . . . . . . . . . . . . . 2,378,034 11.5
Gary L. Crocker(2) . . . . . . . . . . . . . . . . . . . 568,100 2.8
Charles D. Ebert, Ph.D.(2) . . . . . . . . . . . . . . . . . . 180,500 *
Alexander L. Searl(2) . . . . . . . . . . . . . . . . . . . . . 97,650 *
Norman A. Mazer, M.D., Ph.D.(2) . . . . . . . . . . . . . . . . 90,251 *
William R. Good, Ph.D.(2) . . . . . . . . . . . . . . . . . . . 87,625 *
Jay J. Pisik(2) . . . . . . . . . . . . . . . . . . . . . . . . 38,750 *
James T. O'Brien(2) . . . . . . . . . . . . . . . . . . . . . . 34,250 *
Boyd J. Poulsen, Ph.D.(2) . . . . . . . . . . . . . . . . . . . 32,750 *
All directors and executive officers as a group
(15 persons)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7,328,818 35.3%
</TABLE>
- --------------------------
*Less than one percent.
(1) Percentage beneficially owned is based on 20,612,122 total shares of
Common Stock outstanding as of March 31, 1997.
(2) Includes options, both vested and which will become vested during the
60-day period following March 31, 1997, in the following amounts: Dr.
Patel, 310,002 shares; Dr. Higuchi, 35,000 shares; Mr. Crocker, 35,000
shares; Dr. Ebert, 177,500 shares; Mr. Searl, 92,000 shares; Dr.
Mazer, 90,251 shares; Dr. Good, 83,125 shares; Mr. Pisik, 37,250
shares; Mr. O'Brien, 31,250 shares; Dr. Poulsen, 31,250 shares; and
all directors and executive officers as a group, 1,503,385 shares.
(3) These shares are owned as of December 31, 1996 collectively by (i)
Chancellor LGT Asset Management, Inc., a California Corporation, whose
principle business is providing investment advisory services to
registered investment companies and institutional investors, (ii) its
wholly owned subsidiary, Chancellor LGT Trust Company, a New York
State chartered trust company whose principle business is providing
institutional investment management services and (iii) LGT Asset
Management, Inc., the holding company for Chancellor LGT Asset
Management, Inc. Chancellor LGT Asset Management, Inc. is a wholly
owned subsidiary of LGT Asset Management, Inc. LGT Asset Management,
Inc. is an indirect wholly owned subsidiary of Liechtenstein Global
Trust, AG. Liechtenstein Global Trust, AG which has numerous
worldwide affiliates is controlled by The Prince of Liechtenstein
Foundation, a parent organization for the various business enterprises
of the Princely Family of Liechtenstein.
8
<PAGE> 11
EXECUTIVE COMPENSATION
COMPENSATION TABLES
The following tables set forth certain information concerning
compensation of and stock options held by the Company's Chief Executive Officer
and its four other most highly compensated executive officers (hereinafter
referred to as the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
YEAR SALARY BONUS OPTIONS COMPENSATION
---- ------ ----- -------- -------------
<S> <C> <C> <C> <C> <C>
Dinesh C. Patel, Ph.D. . . . . . 1996 $220,132 $30,000 37,000 $ 29,817(1)(2)
President and Chief 1995 199,894 48,000 37,500 29,296
Executive Officer 1994 178,333 35,000 37,500 27,828
Charles D. Ebert, Ph.D. . . . . . 1996 155,398 30,000 18,500 17,896(1)(2)
Senior Vice President, 1995 142,870 25,000 18,750 17,166
Research and Development 1994 129,149 15,500 18,750 13,940
Alexander L. Searl . . . . . . . 1996 149,612 30,000 18,500 21,376(1)(2)
Senior Vice President and 1995 101,231(3) 20,000 163,502 17,229
Chief Financial Officer 1994 -- -- -- --
Norman A. Mazer, M.D., Ph.D. . . 1996 131,702 20,000 10,000 13,574(1)(2)
Vice President, Clinical 1995 120,955 15,000 10,500 13,017
Research 1994 107,931 12,500 10,500 9,765
William R. Good, Ph.D. . . . . . 1996 126,542 20,000 10,000 13,030(2)
Vice President, Development 1995 116,425 15,000 10,500 12,571
1994 104,562 12,500 10,500 14,389(4)
</TABLE>
(1) Includes matching contributions paid by the Company in 1996 on behalf
of the named executive officers under the Company's qualified 401(k)
Retirement Plan in the following amounts: Dr. Patel, $4,403; Dr.
Ebert, $4,662; Mr. Searl, $1,926; and Dr. Mazer, $4,280.
(2) Includes premiums paid by the Company in 1996 for life and health
insurance policies covering the named executive officers in the
following amounts: Dr. Patel, $25,414; Dr. Ebert, $13,234; Mr. Searl,
$19,450; Dr. Mazer, $9,294; and Dr. Good, $13,030.
(3) Mr. Searl commenced employment at the Company in March 1995.
(4) Includes $4,037 reimbursement of moving costs upon commencement of
employment with the Company.
9
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted to the named executive officers in 1996. In addition, as
required by Securities and Exchange Commission (the "SEC") rules, the table
sets forth the hypothetical gains that would exist for the respective options
based on assumed rates of annual compound price appreciation during the option
term.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
% OF
TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE
NUMBER OF GRANTED AT ASSUMED ANNUAL RATE OF
SECURITIES TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(1)
OPTIONS IN FISCAL PRICE PER EXPIRATION ----------------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
------------------------------- ---------- --------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dinesh C. Patel, Ph.D. . . . . 8,088 3.01% $ 12.375 9/10/01 $ 27,653 $ 61,105
28,912 10.77 11.25 9/10/01 89,863 198,574
------ ----- ------- -------
37,000 13.78 117,516 259,679
Charles D. Ebert, Ph.D. . . . 18,500 6.89 11.25 9/10/06 130,889 331,698
Alexander L. Searl. . . . . . . 18,500 6.89 11.25 9/10/06 130,889 331,698
Norman A. Mazer, M.D., Ph.D. . 10,000 3.72 11.25 9/10/06 70,751 179,296
William R. Good, Ph.D. . . . . 10,000 3.72 11.25 9/10/06 70,751 179,296
</TABLE>
- -------------------------
(1) Potential realizable value is determined by applying an amount equal
to the fair market value on the date of grant to the
stated annual appreciation rate compounded annually for the remaining
term of the option, subtracting the exercise price at the end of the
period and multiplying the remaining number by the number of shares
subject to the option. Actual gains, if any, on stock option exercise
and Common Stock holdings are dependent upon a number of factors,
including the future performance of the Common Stock, overall stock
market conditions, and the timing of option exercises, if any. There
can be no assurance that the amounts reflected in this table will be
achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information with respect to
stock options exercised by the named executive officers during 1996, including
the aggregate value of gains on the date of exercise. In addition, the table
sets forth the number of shares covered by stock options as of December 31,
1996, and the value of "in-the-money" stock options, which represents the
positive spread between the exercise price of a stock option and the year-end
market price of the shares subject to such option on December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT FY-END MONEY OPTIONS AT FY-END(1)
ACQUIRED VALUE -------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE /UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
---------------------- ----------- ---------- ------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dinesh C. Patel, Ph.D. 157,500 $1,201,250 310,002 -- $ 2,204,142 $ --
Charles D. Ebert, Ph.D. 15,000 215,000 177,500 7,500 1,379,280 72,476
Alexander L. Searl -- -- 62,000 120,002 257,121 750,013
Norman A. Mazer, M.D., Ph.D. 21,000 282,000 90,251 7,500 468,071 24,375
William R. Good, Ph.D. 10,500 78,750 83,125 45,000 321,161 206,253
</TABLE>
- -------------------------
(1) Calculated on the basis of the last reported sale price per share of
$13.25 for the Company's Common Stock on the NASDAQ
National Market on December 31, 1996.
10
<PAGE> 13
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph shall not be deemed to be incorporated by
reference into any such filings.
The Company's executive compensation policies and programs developed
by the Board of Directors seek to achieve two fundamental goals: (i) to
increase continually the Company's performance and Stockholder value by linking
a portion of executive officer compensation to Company financial performance,
and (ii) to reward superior executive officers with pay incentives adequate to
retain them in the future in the face of considerable competition for executive
talent within the drug delivery and biotechnology industries.
Compensation for each of the Company's executive officers consists of
a base salary, an annual bonus and long-term incentive compensation in the form
of stock option grants. Information obtained from available surveys of
executive compensation in the biotechnology industry is used to determine total
compensation levels. Contingent upon the fulfillment of performance factors
discussed below, the Compensation Committee then awards a bonus in the form of
cash and/or stock options at the end of the fiscal year to bring a given
executive officer's compensation to what the Board believes is an appropriate
level.
To ensure a clear and centralized focus on all aspects of executive
compensation for future fiscal years, the Board in March 1992 formed the
Compensation Committee, which is currently composed of Messrs. Crocker and
Pisik and Dr. Poulsen. In addition to administering the Employees' Plan, the
Compensation Committee is authorized by the Board, among other things, to
establish and review annually the general compensation policies applicable to
the Company's executive officers, including the relationship of Company
financial performance to executive compensation and the basis for the Chief
Executive Officer's compensation during each fiscal year. The Compensation
Committee is also authorized to review and approve the level of compensation
paid to the Chief Executive Officer and the Company's other executive officers
during each fiscal year. The focus on bonus and stock option compensation
reflects the Compensation Committee's commitment to reward the accomplishments
of specific goals and contributions.
The Compensation Committee met in September and December 1996 to
evaluate the performance and set the incentive compensation payable to the
Chief Executive Officer and the Company's other executive officers and
employees for the 1997 fiscal year. In general, the performance factors
utilized by the Compensation Committee to evaluate whether bonuses should be
granted to Company executive officers for the 1996 fiscal year are quantifiable
and include, but were not limited to, the following: progress in clinical
trials, regulatory matters and capitalization of the Company; the officer's
overall individual performance in his or her position and relative contribution
during the year; adherence to department budgeted expense plans; earnings
objectives; and the Board's desire to retain the executive officer in the face
of considerable competition for executive talent within the industry. The
Board, and the Compensation Committee on a prospective basis, may modify the
foregoing criteria or select other performance factors with respect to other
executive bonus awards for a given fiscal year.
Based on its evaluation of these factors, the Compensation Committee
believes that the Company's executive officers are committed to achieving
positive long-term financial performance and enhanced Stockholder value, and
that the compensation policies and programs discussed in this report have
motivated the Company's executive officers to work toward these long-term goals
oriented to increasing Stockholder value.
In evaluating the performance and setting the bonus compensation of
the Chief Executive Officer, the Compensation Committee considered specifically
the following factors: Dr. Patel's leading role in 1996 in managing the
Company's relationships with key strategic partners including Procter & Gamble
Pharmaceuticals, Inc., SmithKline Beecham, Eli Lilly, Wyeth-Ayerst and Pfizer
Inc., and the Company's significant progress in product development in
cooperation with those partners; Dr. Patel's continued management
responsibilities as President and Chief Executive Officer of a public company
with over 230 employees; the attainment of specific personal goals on select
corporate objectives as defined by the Compensation Committee; and Dr. Patel's
overall performance as President and Chief Executive Officer during 1996.
11
<PAGE> 14
No member of the Compensation Committee is a former or current officer
or employee of the Company.
Compensation Policy Regarding Deductibility. The Company is required
to disclose its policy regarding qualifying executive compensation for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended, which provides that, for purposes of the regular income tax and the
alternative minimum tax, the otherwise allowable deduction for compensation
paid or accrued with respect to a covered employee of a publicly-held
corporation is limited to no more than $1 million per year. For the fiscal
year ended December 31, 1996, no executive officer of the Company received $1
million in total compensation, nor does the Company anticipate that
compensation payable to any executive officer will exceed $1 million for fiscal
1997.
Compensation and Stock Option Committee
Gary L. Crocker
Jay J. Pisik
Boyd J. Poulsen, Ph.D.
May 1, 1997
12
<PAGE> 15
PERFORMANCE GRAPH
The following chart compares the change in the cumulative total
Stockholder return on the Company's Common Stock since May 13, 1992 through the
fiscal year ended December 31, 1996, with the cumulative total return on the
CRSP Total Return Index for The NASDAQ Stock Market (U.S. Companies) and the
NASDAQ Total Return Industry Index for Pharmaceutical Stocks. The comparison
assumes $100 was invested on May 13, 1992 in the Company's Common Stock and in
each of the foregoing indices and assumes reinvestment of dividends. The stock
price performance shown on the graph below is not necessarily indicative of
future price performance.
<TABLE>
<CAPTION>
THE NASDAQ NASDAQ
STOCK MARKET PHARMACEUTICAL
THERA TECH, INC. (U.S.) STOCKS
--------------- ------------ ----------------
<S> <C> <C> <C> <C>
5/13/92 May 100 100 100
6/30/92 Jun 72 97 102
7/31/92 Jul 77 100 107
8/31/92 Aug 93 97 98
9/30/92 Sep 110 101 96
10/30/92 Oct 140 105 102
11/30/92 Nov 202 113 118
12/31/92 Dec 203 117 117
1/29/93 Jan 190 120 109
2/26/93 Feb 158 116 83
3/31/93 Mar 207 119 84
4/30/93 Apr 183 114 85
5/28/93 May 183 121 88
6/30/93 Jun 170 122 89
7/30/93 Jul 183 122 86
8/31/93 Aug 183 128 91
9/30/93 Sep 190 132 96
10/29/93 Oct 210 135 105
11/30/93 Nov 220 131 102
12/31/93 Dec 200 134 104
1/31/94 Jan 197 139 107
2/28/94 Feb 190 137 98
3/31/94 Mar 180 129 85
4/29/94 Apr 173 127 81
5/31/94 May 190 127 80
6/30/94 Jun 163 123 74
7/29/94 Jul 157 125 76
8/31/94 Aug 183 133 85
9/30/94 Sep 180 133 83
10/31/94 Oct 148 136 81
11/30/94 Nov 153 131 81
12/30/94 Dec 123 131 78
1/31/95 Jan 118 132 83
2/28/95 Feb 140 139 86
3/31/95 Mar 153 143 85
4/28/95 Apr 168 148 87
5/31/95 May 160 152 88
6/30/95 Jun 185 164 98
7/31/94 Jul 203 176 107
8/31/95 Aug 200 180 119
9/29/95 Sep 230 184 123
10/31/95 Oct 250 183 118
11/30/95 Nov 253 187 124
12/29/95 Dec 240 186 143
1/31/96 Jan 223 187 156
2/29/96 Feb 293 194 153
3/29/96 Mar 283 195 149
4/30/96 Apr 307 211 157
5/31/96 May 310 220 162
6/28/96 Jun 257 210 145
7/31/96 Jul 180 192 129
8/30/96 Aug 215 202 139
9/30/96 Sep 205 218 148
10/31/96 Oct 221 216 142
11/29/96 Nov 225 229 139
12/31/96 Dec 265 229 144
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMENSATION DECISIONS
During 1996, the Compensation and Stock Option Committee, established
levels of compensation for the Company's executive officers. Messrs. Crocker
and Pisik and Dr. Poulsen currently serve as members of the Compensation and
Stock Option Committee of the Company's Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company during 1996 was not a party to any transaction, nor did it
have any relationship, requiring disclosure hereunder pursuant to applicable
regulations under the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
13
<PAGE> 16
STOCKHOLDER PROPOSALS
To be considered for presentation to the annual meeting of the
Company's Stockholders to be held in 1998, a Stockholder proposal must be
received by Alexander L. Searl, Secretary, TheraTech, Inc., 417 Wakara Way,
Salt Lake City, Utah 84108, no later than January 1, 1998.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and persons who own more than ten percent of
the Company's Common Stock (collectively, "Reporting Persons") to file reports
of ownership and changes in ownership with the SEC. Reporting Persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received or
written representations from certain Reporting Persons that no Forms 5 were
required, the Company believes that, apart from Dr. William I. Higuchi who filed
late his Form 4 in connection with a sale of shares, during fiscal 1996 all the
Reporting Persons complied with all applicable filing requirements.
OTHER MATTERS
Solicitation Expenses. The expense of printing and mailing proxy
material 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 for such solicitation. The Company
will request brokers and nominees who hold stock in their names to furnish
proxy material to beneficial owners of the shares and will reimburse such
brokers and nominees for their reasonable expenses incurred in forwarding
solicitation material to such beneficial owners.
Other Matters. The Board of Directors knows of no other business
which 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 respect thereof in accordance with the judgments
of the persons voting the proxies.
It is important that the proxies be returned promptly and that your
shares be represented.
Stockholders are urged to fill in, sign and promptly return the
accompanying form in the enclosed envelope.
By Order of the Board of Directors
Dinesh C. Patel, Ph.D.
President and Chief Executive Officer
May 1, 1997
Salt Lake City, Utah
14
<PAGE> 17
Exhibit 1
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF THERATECH, INC.
TheraTech, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by duly
adopted resolutions setting forth a proposed amendment to the Restated
Certificate of Incorporation of the Corporation, declared to the stockholders
of the Corporation (the "Stockholders") that the proposed amendment was
advisable and authorized the officers of the Corporation to submit such
proposed amendment to the Stockholders for their consideration. Such proposed
amendment is set forth as follows:
(____) The number of directors of the corporation shall be determined
in accordance with the Bylaws of the Corporation and may be increased
or decreased from time to time in such a manner as may be described in
the Bylaws.
The directors shall be divided into three classes as nearly equal in
number as possible, and no class shall include less than one (1)
director. Class I directors shall be elected initially for a term
expiring at the 1998 annual meeting of stockholders, Class II
directors shall be elected initially for a term expiring at the 1999
annual meeting of stockholders and Class III directors shall be
elected initially for a term expiring at the 2000 annual meeting of
stockholders. The foregoing notwithstanding, each director shall
serve until his or her successor is elected and qualified or until he
or she shall resign, become disqualified, disabled or shall otherwise
be removed. Whenever a vacancy occurs on the Board of Directors, a
majority of the remaining directors shall have the power to fill the
vacancy by electing a successor director to fill that portion of the
unexpired term resulting from the vacancy. Directors elected to fill
a vacancy shall hold office until the Class to which they shall have
been elected expires.
At any annual meeting of stockholders, directors chosen to succeed
those whose terms expire at such annual meeting shall be elected for a
term of office expiring at the third succeeding annual meeting of
stockholders following their election. If the number of directors is
increased by the Board of Directors, there shall be no classification
of the additional directors until the next annual meeting of
stockholders. Any newly created directorships or any decrease in
directorships shall be so apportioned among the classes as to make all
classes as nearly equal in number as possible.
Any director may be removed from office at any time, but only for
cause and only by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the voting power of the
then outstanding shares of capital stock of the corporation entitled
to vote generally for the election of directors (the "Voting Stock"),
voting together as a single class.
E-1
<PAGE> 18
Notwithstanding anything contained in this Restated Certificate to the
contrary, the affirmative vote of the holders of at least sixty-six
and two-thirds percent (66 2/3%) of the then outstanding Voting Stock,
voting together as a single class, shall be required to amend or
repeal, or adopt any provision of this Restated Certificate or the
Company's Bylaws, inconsistent with this Paragraph _____ of Article
______. Notwithstanding the foregoing, however, if such amendment,
repeal or adoption of this Restated Certificate or the Company's
Bylaws is approved by an affirmative vote of at least seventy-five
percent (75%) of the entire Board of Directors, an affirmative vote of
the holders of a majority of the then outstanding Voting Stock, voting
as single class, shall be required to adopt such provision, amendment
or to repeal such provision.
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, the proposed amendment was submitted to the stockholders of the
Corporation at its 1997 Annual Meeting of Stockholders and the necessary number
of shares required by statute were voted in favor of such amendment.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware, as amended.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed this ______________ day of May, 1997.
BY:___________________________
Dinesh C. Patel, President
ATTEST:_______________________
E-2
<PAGE> 19
Appendix A
P THERATECH, INC
R 417 WAKARA WAY
O SALT LAKE CITY, UTAH 84108
X THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Y FOR THE ANNUAL MEETING ON MAY 28, 1997
DINESH C. PATEL, Ph.D., WILLIAM I. HIGUCHI, Ph.D. and ALEXANDER L.
SEARL, or any of them, each with the power of substitution, are hereby
authorized to represent and vote all the shares of the Common Stock of
TheraTech, Inc. (the "Company") which the undersigned is entitled to vote,
together with all other powers which the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of the Company to
be held at the University Park Hotel, 480 Wakara Way, Salt Lake City, Utah
84108 on Wednesday, May 28, 1997, and any adjournments or postponements
thereof.
SEE REVERSE SIDE: IF YOU WISH TO VOTE FOR APPROVAL OF THE THREE
PROPOSALS LISTED ON THE REVERSE SIDE, SIGN AND DATE ON THE REVERSE SIDE.
YOU NEED NOT MARK ANY BOXES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-----------
SEE REVERSE
SIDE
------------
[X] Please
mark
votes as
in this
example.
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 all director nominees as set forth in the
table below and FOR proposals 1 and 3. In their discretion, the Proxies are
authorized to vote upon such other business as may properly come before the
annual meeting.
The Board of Directors recommends a vote FOR election of all director
nominees and FOR proposals 1 and 3.
1. To adopt and approve an amendment to the Company's Restated Certificate of
Incorporation to provide for division of the Board of Directors into three
classes, each class to serve staggered three year terms.
FOR_______ AGAINST________ ABSTAIN________
2. To elect the six (6) directors listed in the table below. If the proposal
to classify the Board of Directors is adopted, the six (6) directors
elected at the Annual Meeting will serve terms as noted below and until
their respective successors are elected or appointed or until their earlier
resignation or removal. If the proposal to classify the Board of Directors
is not adopted, the directors elected will serve until the next Annual
Meeting and until their respective successors are elected or appointed or
until their earlier resignation or removal.
<TABLE>
<CAPTION>
NAME CLASS TERM
- ----- ----- ----
<S> <C> <C>
Dinesh C. Patel Class III 2000 Annual Meeting
William I. Higuchi Class I 1998 Annual Meeting
Gary L. Crocker Class II 1999 Annual Meeting
Jay J. Pisik Class I 1998 Annual Meeting
James T. O'Brien Class II 1999 Annual Meeting
Boyd J. Poulsen Class III 2000 Annual Meeting
</TABLE>
FOR all director nominees listed (except as marked to the contrary) _____
Withhold authority to vote for all director nominees listed._____
NOTE: TO WITHHOLD A VOTE FOR ANY INDIVIDUAL DIRECTOR, DRAW A LINE THROUGH SUCH
DIRECTOR'S NAME.
3. To ratify the appointment of Ernst and Young LLP as the Company's
independent auditors for 1997.
FOR_______ AGAINST________ ABSTAIN________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.
Please sign exactly as your name appears herein. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
<TABLE>
<S> <C>
Dated: May, ________, 1997 Dated: May, ________, 1997
SSN or IRS Taxpayer ID #: _____________ SSN or IRS Taxpayer ID #: _____________
Signature: ___________________________ Signature: ___________________________
</TABLE>
