Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the Appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NaPro BioTherapeutics, Inc.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NAPRO BIOTHERAPEUTICS, INC.
6304 Spine Road, Unit A
Boulder, Colorado 80301
-----------------------------------
Notice of Annual Meeting of Stockholders
to be held on September 13, 2000
-----------------------------------
To the stockholders of NaPro BioTherapeutics, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of NaPro
BioTherapeutics, Inc. ("NaPro" or the "Company"), a Delaware corporation, will
be held on September 13, 2000, at 9:00 A.M. at the Raintree Plaza Conference
Center at the Raintree Plaza Hotel, 1850 Industrial Circle, Longmont, Colorado,
for the following purposes:
1. To elect three Class I directors to serve until the 2003 Annual
Meeting of Stockholders, two Class II directors to serve until the 2001 Annual
Meeting of Stockholders, and one Class III director to serve until the 2002
Annual Meeting of Stockholders.
2. To approve an amendment to NaPro's Certificate of Incorporation
increasing the number of total authorized shares of common stock
issuable thereunder;
3. To approve an amendment to NaPro's 1994 Long-Term Performance
Incentive Plan increasing the number of shares of common stock
issuable thereunder;
4. To ratify the selection by the Board of Directors of Ernst &
Young LLP as NaPro's independent auditors for the year ending
December 31, 2000; and
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.
The Board of Directors has fixed the close of business on July 21, 2000 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournment or postponement thereof.
All stockholders are cordially invited to attend the meeting. TO ENSURE YOUR
REPRESENTATION AT THE MEETING, HOWEVER, YOU ARE ENCOURAGED TO MARK, SIGN, DATE,
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. A postage prepaid
envelope is enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if that stockholder has returned a proxy.
By Order of the Board of Directors
/s/ Patricia A. Pilia
Patricia A. Pilia, Ph.D.
Secretary
Boulder, Colorado
August 16, 2000
<PAGE>
NAPRO BIOTHERAPEUTICS, INC.
6304 Spine Road, Unit A
Boulder, Colorado 80301
Proxy Statement
General
The enclosed proxy is solicited by the Board of Directors of NaPro
BioTherapeutics, Inc. (the "Company" or "NaPro") for use at the Annual Meeting
of Stockholders to be held on September 13, 2000, at 9:00 A.M. at the Raintree
Plaza Conference Center at the Raintree Plaza Hotel, 1850 Industrial Circle,
Longmont, Colorado, and at any adjournment or postponement of that meeting, for
the purposes set forth in the foregoing Notice of Annual Meeting. This Proxy
Statement is being furnished to holders of NaPro's voting common stock, $0.0075
par value per share ("Common Stock"), as of July 21, 2000, the Record Date.
NaPro will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of this Proxy Statement, the proxy and any
additional soliciting materials sent to stockholders. NaPro may reimburse
brokerage firms and other persons representing beneficial owners of shares for
their expenses in forwarding solicitation materials to such beneficial owners.
NaPro has retained the services of MacKenzie Partners to aid in the solicitation
of proxies, deliver proxy materials to brokers, nominees, fiduciaries and other
custodians for distribution to beneficial owners of stock and to solicit proxies
therefrom. MacKenzie Partners will receive a fee of approximately $5000 and
reimbursement of all reasonable out-of-pocket expenses. Proxies may also be
solicited by certain of NaPro's directors, officers and regular employees,
without additional compensation, in person or by telephone.
This Proxy Statement and accompanying proxy will be mailed on or about August
16, 2000 to all stockholders entitled to vote at the meeting. Unless the context
otherwise requires, the terms "Company" and "NaPro" include NaPro and each of
its subsidiaries.
Annual Report
The Annual Report to Stockholders for the year ended December 31, 1999 including
audited financial statements is enclosed. This Annual Report to Stockholders
does not form any part of the material for the solicitation of proxies.
Stockholder Proposals
NaPro intends to hold its 2001 Annual Meeting of Stockholders in June 2001.
Proposals by stockholders that are intended to be presented at that meeting must
be received by NaPro's Secretary not later than January 31, 2001, in order to be
included in the proxy statement and proxy relating to the 2001 Annual Meeting.
Voting Securities, Revocability of Proxy
Only stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the meeting. As of the Record Date, there
were 24,056,404 shares of Common Stock outstanding. Each such share is entitled
to one vote, and there are no other classes of voting securities outstanding.
All votes will be tabulated by the inspector of elections appointed for the
meeting, who will separately
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<PAGE>
tabulate affirmative and negative votes, abstentions and broker non-votes.
Abstentions and broker non- votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions and
broker non-votes will not be taken into account in determining the election of
directors. Approval of Proposal 2 to amend NaPro's Certificate of Incorporation
requires the affirmative vote of a majority of shares of NaPro's outstanding
common stock. Abstentions and broker non-votes will have the same effect as
votes against in determining whether Proposal 2 has been approved. Proposal 3 to
amend NaPro's 1994 Long-Term Performance Incentive Plan (the "1994 Plan"), and
Proposal 4 to ratify the selection of Ernst & Young LLP as NaPro's independent
auditors require the affirmative vote of a majority of the shares of common
stock represented in person or by proxy at the Annual Meeting and entitled to
vote. Abstentions will have the same effect as votes against in determining
whether Proposals 3 and 4 have been approved. Broker non-votes will not be
counted in determining whether Proposals 3 or 4 have been approved to the extent
that brokers are not entitled to vote on the matter without instructions from
beneficial holders.
Any stockholder giving a proxy has the power to revoke it any time before it is
exercised. Proxies may be revoked by filing with NaPro's Secretary at NaPro's
principal executive office, 6304 Spine Road, Unit A, Boulder, Colorado, 80301, a
written notice of revocation, or a duly executed proxy bearing a later date.
Proxies may also be revoked by attendance at the Annual Meeting and an election
to vote in person.
2
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of July 7, 2000 regarding
ownership of the common stock by (1) persons believed by NaPro to be the
beneficial owners of more than five percent of its outstanding common stock; (2)
by each director and nominee for director and by the executive officers of NaPro
named in the Summary Compensation Table; and (3) by all current executive
officers and directors of NaPro as a group. Except where otherwise indicated,
all addresses are in care of: NaPro BioTherapeutics, Inc., 6304 Spine Road, Unit
A, Boulder, CO 80301.
Number of
Name of Director, Officer or Shares of Percent of
Beneficial Owner(1) Common Stock Class
------------------------------- ------------ ------
Leonard Shaykin 1,029,045(2) 4.23%
Sterling K. Ainsworth 1,414,025(3) 5.82%
Patricia A. Pilia 489,928(4) 2.03%
Gordon H. Link, Jr. 151,154(5) *
David L. Denny 101,092(6) *
Arthur H. Hayes, Jr. 40,000(7) *
Seth Rudnick 23,178(8) *
Stanley Knowlton 89,500(9) *
Edward Erickson - *
Marc J. Ostro - *
Richard Perle 10,000 *
Robert Pollack - *
All Directors and Executive Officers 3,520,085(10) 14.11%
as a Group (10 persons)
State of Wisconsin Investment Board 1,504,500(11) 6.26%
P.O. Box 7842
Madison, Wisconsin 53707
Royal Bank Investment Management Inc. 1,363,500(12) 5.67%
Royal Trust Tower, P.O. Box 121
77 King Street West, Suite 3800
Toronto, Ontario, Canada M5K 1H1
---------------
* Less than 1%
(1) Unless otherwise noted, NaPro believes that all persons named in the table
have sole voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
(2) Includes 270,000 shares of Common Stock issuable upon exercise of options
granted to Mr. Shaykin under the 1994 Plan, 35,102 shares of Common Stock
issued to Mr. Shaykin as restricted stock under the 1994 Plan, and 24,728
shares of Common Stock beneficially owned through NaPro's 401(k) and ESOP
plans as of 12/31/99.
(3) Includes 246,000 shares of Common Stock issuable upon exercise of 1994
Plan options; 35,102 shares of Common Stock issued to Dr. Ainsworth as
restricted stock under the 1994 Plan; 22,810 shares of Common Stock
beneficially owned through NaPro's 401(k) and ESOP plans as of 12/31/99;
and 42,550 shares of Common Stock gifted by Dr. Ainsworth to
3
<PAGE>
relatives and certain other persons, which Dr. Ainsworth may be deemed to
beneficially own by virtue of holding powers of attorney to vote and take
certain other actions with respect to such shares. Does not include shares
held by Dr. Pilia, who is engaged to be married to Dr. Ainsworth. Dr.
Ainsworth disclaims beneficial ownership of the shares of Common Stock
beneficially owned by Dr. Pilia as well as of the gifted shares over which
Dr. Ainsworth holds powers of attorney.
(4) Includes 146,750 shares of Common Stock issuable upon exercise of 1994
Plan options; 26,327 shares of Common Stock issued to Dr. Pilia as
restricted stock under the 1994 Plan; 25,172 shares of Common Stock
beneficially owned through NaPro's 401(k) and ESOP plans as of 12/31/99;
and 10,800 shares of Common Stock gifted by Dr. Pilia to relatives and
certain other persons which Dr. Pilia may be deemed to beneficially own by
virtue of holding powers of attorney to vote and take certain other
actions with respect to such shares. Does not include shares held by Dr.
Ainsworth, who is engaged to be married to Dr. Pilia. Dr. Pilia disclaims
beneficial ownership of shares of Common Stock beneficially owned by Dr.
Ainsworth as well as the gifted shares over which Dr. Pilia holds powers
of attorney.
(5) Includes 13,334 shares of Common Stock issuable upon the exercise of
options granted to Mr. Link under NaPro's 1993 Stock Option Plan; 67,500
shares of Common Stock issuable upon the exercise of options granted to
Mr. Link under the 1994 Plan; 26,327 shares of Common Stock issued as
restricted stock under the 1994 Plan; and 24,826 shares of Common Stock
beneficially owned through NaPro's 401(k) and ESOP plans as of 12/31/99.
(6) Includes 57,725 shares of Common Stock issuable upon exercise of options
granted to Mr. Denny under the 1994 Plan; 22,416 shares of Common Stock
beneficially owned through NaPro's 401(k) and ESOP plans as of 12/31/99;
and 17,551 shares of Common Stock issued as restricted stock under the
1994 Plan.
(7) Includes 40,000 shares of Common Stock issuable upon exercise of options
granted to Dr. Hayes under the 1994 Plan.
(8) Includes 23,178 shares of Common Stock issuable upon exercise of options
granted to Dr. Rudnick under the 1994 Plan.
(9) Includes 10,000 shares of Common Stock issuable upon exercise of options
granted to Mr. Knowlton under the 1994 Plan,
5,000 shares of Common Stock held in a limited partnership, and 31,000
shares of Common Stock held by Mr. Knowlton's spouse.
(10) Includes an aggregate of 981,471 shares of Common Stock issuable upon
exercise of outstanding stock options held by such persons.
(11) Information in the table as to beneficial ownership of Common Stock by the
State of Wisconsin Investment Board is based upon filings on Schedule 13G
made by the State of Wisconsin Investment Board.
(12) Information in the table as to beneficial ownership of Common Stock by
Royal Bank Investment Management, Inc. is based upon filings on Schedule
13G made by Royal Bank Investment Management, Inc. and Royal Canadian
Growth Fund. Royal Bank Investment Management, Inc. includes Royal Bank
Investment Management, Inc, RT Investment Management Holdings, Inc., The
Royal Trust Company, Royal Mutual Funds Inc., and Royal Canadian Growth
Fund, all of which were represented in the Schedule 13G filing.
4
<PAGE>
Proposal 1: Election of Directors
NaPro's Board of Directors currently consists of 10 members: Leonard Shaykin
(Chairman); Sterling Ainsworth, Ph.D. (Vice Chairman); Patricia Pilia, Ph.D.;
Arthur Hayes, Jr., M.D.; Stanley Knowlton, Seth Rudnick, M.D; Marc Ostro, Ph.D.;
Edward Erickson; Robert Pollack, Ph.D., and Richard Perle. These directors are
divided into three classes. Messrs. Shaykin and Knowlton and Drs. Hayes and
Pollack are Class I directors, with terms of office expiring at the 2000 Annual
Meeting. Drs. Pilia and Rudnick and Messrs. Erickson and Perle are Class II
directors, with terms of office expiring at the 2001 Annual Meeting. Drs.
Ainsworth and Ostro are Class III directors, with terms of office expiring at
the 2002 Annual Meeting. Mr. Knowlton is not standing for re-election to the
board, and Dr. Rudnick has resigned from his director position effective
immediately prior to the 2000 Annual Meeting.
Three Class I directors will be elected at the 2000 Annual Meeting for a term
expiring at the 2003 Annual Meeting. Mr. Shaykin and Dr. Hayes and Dr. Robert
Pollack have been nominated for these board seats. Two Class II directors will
be elected at the 2000 Annual Meeting for a term expiring at the 2001 Annual
Meeting. Mr. Richard Perle and Mr. Edward Erickson are nominated for these board
seats. One Class III director will be elected at the 2000 Annual Meeting for a
term expiring at the 2002 Annual Meeting. Dr. Marc Ostro is nominated for this
board seat. All nominees have agreed to serve if elected, and management has no
reason to believe that any nominee will be unavailable for service. Shares
represented by executed proxies will be voted if authority to do so is not
withheld, for the election of the nominees. If a nominee should become
unavailable for election due to an unexpected occurrence, such shares will be
voted for the election of a substitute nominee as the current Board of Directors
may propose. The terms of Drs. Pilia and Ainsworth as directors will continue
until the 2001 and 2002 Annual Meetings, respectively.
Directors Whose Terms will Expire in 2001
Patricia A. Pilia, Ph.D., 50, a co-founder of NaPro, has served as a director of
NaPro since its inception. She has served as Secretary of NaPro from November
1991 to the present, Treasurer of NaPro from October 1992 to the present, Vice
President of BioResearch and Toxicology from March 1993 to the present, and
Executive Vice President from October 1998 to the present. In 1990, she
co-founded, with Dr. Ainsworth, Pacific Biotechnology, Inc. (a predecessor of
NaPro) and served as its Vice President and Director of Biotechnology. From 1983
to 1991, Dr. Pilia was an Assistant Professor of Pathology in the College of
Medicine and Dental Medicine and the College of Graduate Studies at the Medical
University of South Carolina ("MUSC"). Dr. Pilia served as the Assistant
Director of the MUSC Immunopathology Diagnostic and Research Laboratories from
1985 to 1991. Since 1984 she has been a consultant to industry on the design and
development of biomedical devices and treatment modalities and the design and
performance of clinical trials. Dr. Pilia received a Bachelor's degree in 1970
from Boston University, a Master's degree in Immunology/Microbiology in 1978 and
a Doctoral degree in Pathology in 1980 from MUSC. Dr. Pilia is engaged to marry
Dr. Ainsworth, a director and President of NaPro.
5
<PAGE>
Edward L. Erickson, 53, is currently Chairman of the Board, President and Chief
Executive Officer of Immunicon Corporation, a medical products company with
technology for use in diagnostics, life science research, and cell therapy
applications. He was appointed Chairman in April 1998 and Chief Executive
Officer in September 1998. From 1993 to 1998, Dr. Erickson was President, Chief
Executive Officer and director of DepoTech Corporation, a biopharmaceutical
company in the drug delivery field. From 1991 to 1993 he was President, Chief
Executive Officer of Cholestech Corporation, a diagnostic products company in
point-of-care cholesterol testing and screening. Mr. Erickson holds a B.S.
degree with distinction in Mathematics with a minor in Physics and an M.S. in
Mathematics from the Illinois Institute of Technology and an M.B.A. with high
distinction from Harvard University, where he was elected a Baker Scholar.
Richard N. Perle, 58, is currently a fellow at the American Enterprise
Institute. Additionally, Mr. Perle is currently a director of Hollinger
International, Inc., a company that publishes English language newspapers in the
United States, the United Kingdom, Canada, and Israel; and a director of AppNet,
Inc., a company that provides consulting services and business solutions to
e-commerce companies. Furthermore, Mr. Perle is currently a director of
Autonomy, PLC, a company engaged in the development of various software
applications, as well as a director of Morgan Crucible, PLC a company
specializing in the design, development, manufacture and marketing of engineered
products for use in various industries. Mr. Perle is also presently a member of
the United States Defense Policy Board. From 1981 to 1987, Mr. Perle was the
United States Assistant Secretary of Defense for International Security Policy
at the United States Department of Defense. Mr. Perle attended the London School
of Economics with Honors Examinations, received a B.A. in International
Relations from the University of Southern California, an M.A. in Politics from
Princeton University, and completed various fellowships at Princeton University,
the Ford Foundation, and the American Council of Learned Societies.
Directors Whose Terms will Expire in 2002
Sterling K. Ainsworth, Ph.D., 60, a co-founder of NaPro, has served as an
executive officer and director of NaPro since its inception; as Chief Executive
Officer from November 1991 to August 1999; as President since October 1992; and
as Vice Chairman of the Board and Chief Scientific Officer since August 1999. In
1990, he co-founded, with Dr. Pilia, Pacific Biotechnology, Inc. (a predecessor
of NaPro) and served as Chairman and President of such company until NaPro's
inception. From 1972 until 1990, Dr. Ainsworth held various levels of
professorships of Pathology with tenure in the College of Medicine and Dental
Medicine and Graduate Studies at MUSC, where he established, developed and
directed MUSC's Immunopathology Diagnostic Laboratory. Dr. Ainsworth received a
Bachelor's degree from the University of Mississippi in 1963. He received a
Master's degree in Medical Microbiology in 1965 and a Doctoral degree in Medical
Science in 1969 from the University of Mississippi Medical School. He completed
his post-doctoral fellowship in the Department of Pathology at Harvard Medical
School from 1970 to 1972. Dr. Ainsworth is engaged to marry Dr. Pilia, a
director and officer of NaPro.
6
<PAGE>
Marc J. Ostro, Ph.D., 50, has been a private consultant to the biotechnology
industry since May 2000. From November 1997 to May 2000 he was Senior Managing
Director and Group Leader for KPMG Life Science Corporate Finance (Mergers and
Acquisitions). From June 1997 to November 1997, Dr. Ostro was a Senior Vice
President at Ross Financial Group engaged in portfolio management. From May 1994
to June 1997, he was Managing Director and Senior Biotechnology Analyst at UBS
Securities. Prior thereto, he was a Senior Vice President and Senior
Biotechnology Analyst at Mabon Securities. In July 1981, he co-founded the
Liposome Company (Princeton, N.J.) and held various positions in that company
including President, Vice Chairman, and Chief Scientific Officer until May 1993.
Dr. Ostro received a B.A. in Biology from Lehigh University, a Ph.D. in
Biochemistry from Syracuse University, and was a postdoctoral fellow and
assistant professor at the University of Illinois Medical School.
Directors Whose Terms will Expire in 2003
Leonard P. Shaykin, 56, has served as Chairman of the Board since June 1993, and
Chief Executive Officer since August 1999. In 1995, Mr. Shaykin founded Shaykin
& Co., LLC, a private investment company. Prior to founding Shaykin & Co., Mr.
Shaykin was a managing partner of Adler & Shaykin (1983-1994), an investment
partnership organized to sponsor management leveraged buyouts. Prior thereto,
Mr. Shaykin was Vice President, Director and a member of the Investment
Committee of Citicorp Venture Capital, Ltd. and Citicorp Capital Investors,
Inc., the venture capital and equity investment subsidiaries of Citicorp and
Citibank. Mr. Shaykin is Chairman of the Board and Chief Executive Officer of
iPrivacy LLC, a private, early stage Internet company located in New York City.
He is also a Director of The Jerusalem Post, a subsidiary of Hollinger
International; a Trustee of the Jackson Laboratory, a not- for-profit genetic
research institute; and a Trustee of the University of Chicago Graduate School
of Business. Mr. Shaykin is a graduate of the University of Chicago (B.A.,
M.A.), and the University of Chicago Graduate School of Business (M.B.A.).
Arthur H. Hayes, Jr., M.D., 66, was elected a director of NaPro in March 1996.
He is currently President and Chief Operating Officer of MediScience Associates,
Inc., a pharmaceutical consulting company, and is a Professor of Medicine at New
York Medical College and Pennsylvania State University College of Medicine. From
1981 to 1983, Dr. Hayes served as the Commissioner of the FDA. From 1986 to
1991, he was President and Chief Executive Officer of EM Pharmaceuticals, as
well as a member of the board of directors. Dr. Hayes served as Provost & Dean
at New York Medical College from 1983 to 1986, and served as the Director of the
Institute of Human Values in Medical Ethics, International Health and Biomedical
Sciences, the latter of which he also served as Chairman. Dr. Hayes has held
several posts with Pennsylvania State University which included Professor of
Medicine and Pharmacology from 1977 to 1981, Dean of Admissions from 1976 to
1979 and Associate Professor of Medicine and Pharmacology and Director of the
Division of Clinical Pharmacology from 1972 to 1977. Dr. Hayes currently serves
on the board of directors of Myriad Genetics, Inc. (a genomic research and
pharmaceutical company), Celgene Corporation (a pharmaceutical company), and
Premier Research Worldwide. Dr. Hayes' received his M.D. from Cornell University
Medical College, and also attended Cornell's Graduate School of Medical
Sciences, Department of Pharmacology. He undertook premedical studies, and
attended medical school at Georgetown University. Dr. Hayes received his M.S.
(Philosophy, Politics and Economics) from Oxford University, where he was a
Rhodes Scholar, and his A.B. (Philosophy) from Santa Clara University in 1955.
7
<PAGE>
Robert E. Pollack, Ph.D., 59, is currently Professor of Biological Sciences,
Lecturer in Psychiatry at the Center for Psychoanalytic Training and Research,
and Director of the Center for the Study of Science and Religion, at Columbia
University. He has been a Professor of Biological Sciences at Columbia since
1978, and was Dean of Columbia College from 1982-1989. He received the Alexander
Hamilton Medal from Columbia University, and has held a Guggenheim Fellowship.
He currently serves on Advisory Boards of the John Templeton Foundation,
California Newsreels, The Fred Friendly Seminars, the Program in Religion and
Ecology of the Center for the Study of World Religions at Harvard University,
and as a Senior Consultant for the Director, Program of Dialogue on Science,
Ethics, and Religion, American Association for the Advancement of Science. He is
also currently a director and Chair of the Scientific Advisory Board of AMBI,
Inc., a company focusing on the development and marketing of proprietary
nutritional products. Dr. Pollack graduated from Columbia University with a B.A.
in physics, and received a Ph.D. in biology from Brandeis University.
Management and the Board of Directors recommend a Vote FOR each nominee.
Other Executive Officers
NaPro has the following executive officers in addition to those who serve as
directors:
Gordon H. Link, Jr., 46, a certified public accountant and a certified
management accountant, joined NaPro as Vice President, Finance and Chief
Financial Officer in September 1993. Prior thereto, Mr. Link served concurrently
as Corporate Controller of Synergen, Inc. and Treasurer of the Syntex-Synergen
Neuroscience Joint Venture. From February 1991 until April 1993, Mr. Link was
Treasurer of Synergen Development Corporation. From October 1983 through May
1990, Mr. Link practiced as a certified public accountant, most recently in the
position of Audit Manager with Deloitte & Touche. He received undergraduate
degrees in chemistry from Rensselaer Polytechnic Institute in 1976 and in
accounting from Metropolitan State College in 1983.
David L. Denny, 47, has served as Vice President, Operations of NaPro since
September 1995, except for a nine month period during 1997 when he served as
Vice President, Quality Assurance. From 1991 to 1993, Mr. Denny served as
Vice-President of Operations for Somatogen, Inc. Prior thereto, Mr. Denny served
in manufacturing and quality assurance capacities with Miles Pharmaceutical,
Abbott Laboratories and Kabi-Pharmacia. He received a B.S. in Biological
Sciences from Tennessee Technological University in 1972 and attended graduate
school at the same institution from 1972 to 1974.
James D. McChesney, Ph.D., 60, joined NaPro as Vice-President of Natural
Products Chemistry in January 1996. From 1987 until June 1995, he served as
Director of the Research Institute of Pharmaceutical Sciences at the University
of Mississippi, specializing in natural product pharmaceutical research and
development. In July 1993, Dr. McChesney was named Frederick A.P. Barnard
Distinguished Professor of Pharmacognosy at the University of Mississippi. Dr.
McChesney joined the School of Pharmacy at the University of Mississippi in 1978
as Professor and Chair of the Department of Pharmacognosy. After graduating with
honors from Iowa State University in 1961 with a B.S. in Chemical Technology, he
earned degrees in Botany (M.A. 1964) and Natural Products Chemistry (Ph.D. 1965)
at Indiana University. He has been a Fulbright Lecturer in Brazil and a Visiting
Professor at several South American universities.
8
<PAGE>
Kai P. Larson, Esq., 36, has served as Vice President and General Counsel since
December 1999 and Director of Legal Affairs for NaPro BioTherapeutics, Inc. from
1994 through 1999. Prior to his employment at NaPro, he worked as an attorney in
the New York office of Kirkland & Ellis, a law firm. Mr. Larson received a B.A.
from Brigham Young University, and a J.D. from Columbia University School of
Law.
Board Meetings and Committees
The Board of Directors held six meetings during 1999, including both regularly
scheduled and special meetings. The Board of Directors has established an Audit
Committee, a Compensation Committee, and a Strategic Planning Committee. The
Audit Committee, which currently consists of Dr. Marc Ostro (Chairman), Mr.
Arthur Hayes, Mr. Richard Perle, and Dr. Robert Pollack meets periodically with
representatives of NaPro's independent auditors and NaPro's management to obtain
an assessment of NaPro's financial condition and results of operations, the
results and scope of the annual audit and other services provided by NaPro's
independent auditors, and reports to the full Board of Directors with respect
thereto. The Audit Committee met two times during 1999. The Compensation
Committee, which currently consists of Mr. Perle (Chairman), Mr. Erickson, and
Dr. Pollack meets periodically to review and to recommend to the full Board of
Directors compensation arrangements for senior management and directors. In
addition, the Compensation Committee is responsible for administering NaPro's
stock option plans. The Compensation Committee met five times during 1999. The
Strategic Planning Committee is charged with reviewing NaPro's strategic plans
in connection with potential licensing partners, product development and
marketing, regulatory approvals, and other matters. The Strategic Planning
Committee did not meet in 1999. The Strategic Planning Committee currently
consists of Mr. Shaykin, Dr. Ainsworth, Mr. Erickson, and Dr. Ostro as members.
Each director attended more than 75% of the aggregate number of board and/or
applicable committee meetings in 1999.
9
<PAGE>
Executive Compensation
The following table sets forth compensation paid to Sterling Ainsworth, Leonard
Shaykin, Patricia Pilia, Gordon Link, Jr. and David Denny (the "Named Executive
Officers") for the years indicated.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
----------------------- ----------------------------
Awards
----------------------------
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year Salary Bonus($) Awards($) Options (#) Compensation
($) (11) (12) ($) (13)
--------------------- ------- ----------- ------------ ------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Leonard Shaykin 1999 189,699 81,977 74,592 200,000 28,534
Chairman of the 1998 159,611 0 0 280,000(1) 20,000
Board, Chief 1997 158,999 0 0 100,000(2) 1,000
Executive Officer
Sterling Ainsworth 1999 208,788 103,453 74,592 200,000 28,534
Vice Chairman of 1998 175,673 0 0 232,000(3) 16,000
the Board, 1997 178,631 0 0 100,000(4) 1,000
President, Chief
Scientific Officer
Patricia Pilia 1999 161,065 56,114 55,945 125,000 28,534
Executive Vice 1998 135,519 0 0 136,000(5) 20,000
President, 1997 137,972 0 0 50,000(6) 1,000
Secretary and
Treasurer
Gordon Link, Jr. 1999 149,135 38,934 55,945 100,000 28,534
Chief Financial 1998 121,733 25,433 0 110,000(7) 19,460
Officer 1997 119,005 0 0 35,000(8) 1,000
David Denny 1999 134,189 28,104 37,296 62,500 28,534
Vice President 1998 110,892 0 0 109,200(9) 15,089
Operations 1997 102,877 0 0 40,000(10) 1,000
</TABLE>
(1) Options to purchase an aggregate of 200,000 shares of common stock were
awarded in exchange for the cancellation of options to purchase 250,000
shares of common stock pursuant to the Option Restructuring Plan (see note
12).
(2) These options were canceled and replaced in 1998 by options to purchase
80,000 shares of common stock granted pursuant to the Option Restructuring
Plan (see note 12). These options on 80,000 shares represent a portion of
the options to purchase 200,000 shares of common stock mentioned in note
1.
(3) Options to purchase an aggregate of 152,000 shares of common stock were
awarded in exchange for the cancellation of options to purchase 190,000
shares of common stock pursuant to the Option Restructuring Plan (see note
12).
(4) These options were canceled and replaced in 1998 by options to purchase
80,000 shares of common stock granted pursuant to the Option Restructuring
Plan (see note 12) . These options on 80,000 shares represent a portion of
the options to purchase 152,000 shares of common stock mentioned in note
3.
(5) Options to purchase an aggregate of 76,000 shares of common stock were
awarded in exchange for the cancellation of options to purchase 95,000
shares of common stock pursuant to the Option Restructuring Plan (see note
12).
10
<PAGE>
(6) These options were canceled and replaced in 1998 by options to purchase
40,000 shares of common stock granted pursuant to the Option Restructuring
Plan (see note 12). These options on 40,000 shares represent a portion of
the options to purchase 76,000 shares mentioned in note 5.
(7) Options to purchase an aggregate of 60,000 shares of common stock were
awarded in exchange for the cancellation of options to purchase 75,000
shares of common stock pursuant to the Option Restructuring Plan (see note
12).
(8) These options were canceled and replaced in 1998 by options to purchase
28,000 shares of common stock granted pursuant to the Option Restructuring
Plan (see note 12). These options on 28,000 shares represent a portion of
the options to purchase 60,000 shares mentioned in note 7.
(9) Options to purchase an aggregate of 59,200 shares of common stock were
awarded in exchange for the cancellation of options to purchase 74,000
shares of common stock pursuant to the Option Restructuring Plan (see note
12).
(10) These options were canceled and replaced in 1998 by options to purchase
32,000 shares of common stock granted pursuant to the Option Restructuring
Plan. These options on 32,000 shares represent a portion of the options to
purchase 59,200 shares mentioned in note 9.
(11) The total number of shares of restricted stock awarded is 140,409. These
shares vest at a rate of half on the grant date of 7/23/99 and the
remaining half vest daily until all are fully vested on 7/23/00.
(12) The Option Restructuring Plan gave holders of NaPro's options the
opportunity to have their existing options with exercise prices over $3.00
(the "Covered Options") amended such that the number of shares of common
stock underlying such options was reduced by 20% or 50%, depending upon
whether the option holder was a NaPro employee or an outsider. If the
option holder was an employee he or she was granted 80% of their
outstanding original options, and if the option holder was an outsider he
or she was granted 50% of the original options. Furthermore, the vesting
period and expiration date were reset with the result that vested Covered
Options became unvested and the time necessary for vesting reset as of
that date. Finally, the period during which the options could be exercised
was shortened for former directors and former consultants. The
restructured option exercise price was determined by the closing price of
the common stock on the national market on March 27, 1998, the day the
Option Restructuring Plan was approved by the Board of Directors.
(13) Represents NaPro's 401(k) plan and Employee Stock Ownership Plan (ESOP)
contributions of common stock (valued at fair market value as of the date
of contribution) for each of the Named Executive Officers.
11
<PAGE>
The following table sets forth each grant of options to purchase common stock
made during the year ended December 31, 1999 to the Named Executive Officers:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed Annual Rates of
Number of % of Total Stock Price Appreciation for
Securities Options Option Terms ($)(4)
underlying Granted to Exercise or Base --------------------
Options Employees in Price Per Share Expiration 5% 10%
Name Granted (#)(1) Year(2) ($/sh) Date(3) ---- ----
------ -------------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Leonard P. Shaykin 200,000 18.76% $2.50 8/17/09 $314,447 $796,871
Sterling K. Ainsworth 200,000 18.76% $2.50 8/17/09 $314,447 $796,871
Patricia A. Pilia 125,000 11.72% $2.50 8/17/09 $196,530 $498,045
Gordon H. Link, Jr. 100,000 9.38% $2.13 7/23/09 $133,955 $339,467
David L. Denny 62,500 5.86% $2.13 7/23/09 $83,722 $212,167
</TABLE>
(1) Each of the options listed on this table was granted under the 1994 Plan.
The options granted to Drs. Ainsworth and Pilia and Mr. Shaykin become
exercisable at the rate of 25% of the shares subject to the option when
the closing price of the common stock on the National Market is equal to
$5.00, $7.50, $10.00, and $12.50 respectively. The options granted to Mr.
Link and Mr. Denny become exercisable at the rate of 25% of the shares
subject to the option one year after the date of grant and 25% of the
shares subject to the option each year thereafter.
(2) Based on the aggregate of 1,066,375 options granted to employees of NaPro,
including the Named Executive Officers, in 1999, and consisting of options
granted under the 1994 Plan, options granted under the 1993 Stock Option
Plan, and options granted under the 1998 Stock Option Plan.
(3) Options granted under the 1994 Plan have a 10-year term and are subject to
earlier termination upon death, disability or termination of employment.
(4) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years) assuming that the stock price on
the date of grant appreciates at the indicated annual rate compounded
annually for the entire term of the option and that the option is
exercised and sold on the last day of its term for the appreciated stock
price.
The following table sets forth information concerning outstanding options held
by the Named Executive Officers as of the year ended December 31, 1999.
12
<PAGE>
<TABLE>
<CAPTION>
Aggregated Options Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Value Options at in-the-Money Options at Year
Name Acquired on Realized Year End(#) End($)(2)
Exercise (#) ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
-------------------------- -------------- -------------- ----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Leonard P. Shaykin 0 0 70,000 / 480,000 $90,625 / $437,500
Sterling K. Ainsworth 16,000 $43,000 58,000 / 432,000 $77,875 / $386,500
Patricia A. Pilia 0 0 34,000 / 261,000 $48,313 / $240,125
Gordon H. Link, Jr. 0 0 40,834 / 223,334 $56,709 / $249,334
David L. Denny 0 0 27,300 / 171,700 $39,163 / $203,213
</TABLE>
(1) Represents the difference between the option exercise price and the
closing price of the common stock as reported by the National Market on
the date of exercise multiplied by the number of shares exercised.
(2) Represents the difference between the option exercise price and the
closing price of the common stock as reported by the National Market on
December 31, 1999 ($2.8750), multiplied by the corresponding number of
underlying shares.
Compensation of Directors
Pursuant to the 1994 Plan, each year non-employee directors are automatically
granted, on the date of NaPro's annual meeting of stockholders, non-qualified
options to purchase 10,000 shares of common stock. In addition, any non-employee
director who is first appointed or elected other than at an annual meeting of
stockholders automatically receives non-qualified options to purchase 10,000
shares of common stock upon such appointment or election. The 1994 Plan also
provides for automatic annual grants of non- qualified stock options to purchase
10,000 shares of common stock to directors who serve as chair of the Audit,
Compensation and Strategic Planning Committees of the Board of Directors. In
addition, the 1994 Plan permits the discretionary grant by the Board of
Directors of non-qualified options to non-employee directors under certain
circumstances. All such options are exercisable at an exercise price equal to
the fair market value of the common stock on the date of grant and are subject
to certain vesting schedules.
Directors are paid $2,000 for each meeting attended in person and $500 for each
meeting attended by telephone. In addition, directors serving on committees of
the Board of Directors are paid for attendance at each committee meeting as
follows: $1,000 for the committee chairperson attending in person and $500 for
non-chair committee members attendance in person or any committee members'
attendance by telephone. Directors are reimbursed for their costs incurred in
attending Board of Directors meetings.
Drs. Hayes provides certain consulting services to NaPro. See "Certain
Relationships and Related Transactions".
8
<PAGE>
Employment Agreements and Termination of Employment Agreements
NaPro entered into amended employment agreements with Mr. Shaykin and Drs.
Ainsworth and Pilia (collectively, the "Senior Executives") on October 5, 1998
(collectively, the "Amended Employment Agreements"). In addition, on October 5,
1998, NaPro entered into employment agreements (the "Employment Agreements")
with Gordon Link and David Denny (collectively, the "Executive Officers"). The
Amended Employment Agreements and the Employment Agreements are referred to
collectively as the "Executive Agreements," and the Senior Executives and the
Executive Officers are referred to collectively as the "Executives."
Each Amended Employment Agreement provides for an initial three-year employment
term that expires October 5, 2001 (the "Initial Term"), and is automatically
renewed on each anniversary of the date of the agreement for a new three-year
term (each, a "Renewal Term") unless either party gives notice of termination to
the other party at least 180 days prior to the commencement of any Renewal Term.
No such notice of termination has been given by any of the Senior Executives.
Each Employment Agreement provides for an initial three-year employment term
that expires on October 5, 2001 (the "Initial Term") and is automatically
renewed at the end of the Initial Term and on October 5th of each year
thereafter for an additional one-year term (each a "Renewal Term") unless either
party gives notice of termination to the other party at least 180 days prior to
the commencement of any Renewal Term. No such notice of termination has been
given by any of the Executive Officers.
13
<PAGE>
The Amended Employment Agreements provide for initial annual base salaries for
Mr. Shaykin and Drs. Ainsworth, and Pilia of $159,000, $175,000, and $135,000
respectively. Under the Amended Employment Agreements, in the event of a change
of control of NaPro, the Senior Executives are to be granted annual bonuses in
amounts determined by the Board's Compensation Committee, but not less than the
greater of $20,000 or the amount of the highest annual bonus paid to the Senior
Executive for the three prior years. Mr. Shaykin is a part-time employee of
NaPro, and is not required under his Amended Employment Agreement to spend more
than 20 hours in any week or 80 hours per month on NaPro's affairs.
The Employment Agreements provide for initial annual base salaries for Mr. Link
and Mr. Denny of $125,000 and $106,000. Under the Amended Employment Agreements,
the Senior Executives are to be granted annual bonuses in amounts determined by
the Board's Compensation Committee, but not less than the greater of $15,000 or
the amount of the highest annual bonus paid to the Senior Executive for the
three prior years.
Each Executive Agreement provides for certain benefits if, prior to the end of
the Initial Term or any Renewal Term, an Executive's employment is terminated
either by NaPro other than for Cause (as defined in the Executive Agreements) or
by the Senior Executive for Good Reason (as defined in the Executive
Agreements). In general, each Executive would be entitled to receive, subject to
certain limitations, (i) a continuance of their respective salary and bonus, if
any, through the end of the Initial Term or the then current Renewal Term, if
applicable (but in no event for longer than three years or less than two years,
or less than one year in the case of Mr. Denny), and (ii) health and welfare
benefits as in effect immediately prior to termination for a maximum of 18
months following termination. The foregoing benefits would be limited by the
amount deductible for income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code").
In addition, each Executive Agreement provides for payment of a "stay bonus"
equal to one year's then current base salary in the event that a Change in
Control (as defined in the Executive Agreements) occurs and the Executive
remains employed by NaPro (or its successor) and either remains so employed on
the first anniversary of the Change in Control or is terminated by NaPro without
Cause or by the Executive for Good Reason during the first year following the
Change in Control.
The Executive Agreements also contain provisions (i) prohibiting disclosure of
confidential information, (ii) granting to NaPro rights to intellectual property
developed by the Executives that relate to NaPro's business or developed in the
course of employment with NaPro and (iii) prohibiting competition with NaPro
under certain circumstances during and for five years after the Executive's
employment.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, NaPro's directors
and certain of its officers, and persons holding more than ten percent of
NaPro's common stock are required to file forms reporting their beneficial
ownership of NaPro's common stock and subsequent changes in that ownership with
the Securities and Exchange Commission. Such persons are also required to
furnish NaPro copies of forms so filed. Based solely upon a review of copies of
such forms filed with NaPro, Sterling Ainsworth was late in filing one Form 4,
on which he reported one transaction, and no other directors or officers were
late in filing any reports on Forms 3, 4 and 5.
14
<PAGE>
Certain Relationships and Related Transactions
Drs. Hayes provides certain consulting services to NaPro. NaPro and MediScience
Associates are parties to a consulting agreement (the "MediScience Agreement")
whereby Dr. Hayes, who is President and Chief Operating Officer of MediScience,
provides NaPro with consulting services in a variety of areas, including
clinical research planning, strategic positioning and regulatory guidance. NaPro
makes quarterly payments to MediScience under the MediScience Agreement in the
amount of $12,500 for such services. Dr. Hayes is obligated to provide
consulting services to NaPro under the MediScience Agreement indefinitely, but
the MediScience Agreement is terminable by NaPro or MediScience at any time with
90 days prior written notice
Compensation Committee Report on Executive Compensation.
The report of the Compensation Committee of the Board of Directors (the
"Committee") shall not be deemed incorporated by reference by any general
statement incorporating by reference this report into any filing under the
Securities Act of 1933, or under the Securities Exchange Act of 1934, except to
the extent that NaPro specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
Goals. The Committee implements NaPro's executive compensation policies. NaPro
is committed to executive compensation policies that promote and support NaPro's
goals and that inspire executives to make a significant contribution to the
financial success of NaPro. NaPro's overall compensation philosophy for
executive officers has the following objectives: (1) the attraction and
retention of qualified personnel whose participation is important to the
short-term and long-term success of NaPro; and (2) the creation of a mutual
interest between executive officers and stockholders that permits executive
officers to share in the risks and rewards of strategic decision-making.
NaPro has established its executive compensation policies using the above
objectives as its foundation. The Committee's current practice is to review the
compensation of each of the corporate officers. The Committee also administers
all annual bonuses and equity based incentive compensation including grants of
stock options and restricted stock. The following describes the three primary
components of NaPro's current executive compensation program.
Base Salary. For 1999, the base salary compensation of NaPro's Chief Executive
Officer, Mr. Shaykin, and certain other senior executives, was primarily
determined by such officers' employment agreements with NaPro. The Compensation
Committee believes that the current base salaries of NaPro's executive officers
are justified due to NaPro's financial condition.
Annual Bonus. In 1999, a bonus in the form of restricted NaPro common stock and
cash was paid to each executive officer. The bonuses are as follows: Leonard
Shaykin was paid a bonus in the amount of $81,977 and was granted 35,102 shares
of restricted NaPro common stock; Sterling Ainsworth was paid a bonus in the
amount of $103,453 and was granted 35,102 shares of restricted NaPro common
stock; Patricia Pilia was paid a bonus in the amount of $56,114 and was granted
26,327 shares of restricted NaPro common stock; Gordon Link was paid a bonus in
the amount of $38,934 and was granted 26,327 shares of restricted NaPro common
stock; and David Denny was paid a bonus in the amount of $28,104 and was granted
17,551 shares of NaPro common restricted stock.
Equity-based Incentives. NaPro considers equity-based incentives to be an
integral part of executive compensation. The Committee believes that the grant
of restricted stock awards, stock options and other awards pursuant to the 1993
Stock Option Plan, 1994 Long-Term Performance Incentive Plan, and 1998
15
<PAGE>
Stock Option Plan has been, and will continue to be, an effective method for the
creation of a mutual interest between NaPro's employees and NaPro's
stockholders. During 1999, stock options and shares of restricted stock were
granted to seven executive officers. These grants were recommended to the
Committee by the Chairman of the Board and the President. Factors considered in
the grant of restricted stock awards and stock options include recommendations
made to the Committee by the Chairman of the Board and the president of NaPro
and the Committee's own subjective evaluation of the individual executive's
performance and the performance of NaPro, taking into account the goal and
overall compensation philosophy stated above. The recommendations of such grants
to the Committee and the Committee's approval of such recommendations were not
based on any specific formulas.
For 1999, the total compensation (including bonuses and equity-based incentives)
of NaPro's Chief Executive Officer, Mr. Shaykin, and other senior executives,
was assessed in light of such executives' performance and the progress of NaPro.
Factors taken into account included the achievements by NaPro in initiating
clinical studies, steps taken toward securing a marketing partner for the United
States and other steps taken by NaPro to support the manufacture, registration,
and marketing of NaPro's primary product, paclitaxel.
On July 17, 2000, certain members of NaPro Compensation Committee were replaced
by persons designated by NaPro as provided for under NaPro's bylaws. The
preceding description relates to compensation reported by NaPro for 1999 and is
based upon the compensation program implemented by NaPro's previous Board of
Directors and Compensation Committee. NaPro does not expect a significant change
in its present compensation program with the appointment of new members of the
Compensation Committee, although a review of compensation policies by the new
members could result in changes to NaPro's compensation program. The preceding
report is based upon information available to the current members of the
Compensation Committee about NaPro's compensation program as it was implemented
prior to July 17, 2000, by the previous members of the Compensation Committee.
COMPENSATION COMMITTEE
Edward Erickson
Richard Perle
Robert Pollack
16
<PAGE>
Stock Price Performance Graph
The Stock Price Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this report into
any filing under the Securities Act of 1933, or under the Securities Exchange
Act of 1934, except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
The graph below compares the cumulative return of the Company's Common
Stock against the Total Return Index for the Nasdaq Market (U.S.) and a peer
group which is comprised of the companies listed on the Nasdaq Pharmaceutical
Stock Index. The cumulative return presented is based upon an initial investment
of $100 over the period August 1, 1994 (the date of the Company's initial public
offering) through December 31, 1999. The stock price performance on the graph is
not necessarily an indicator of future price performance. The cumulative return
of the Company's Common Stock is based upon its initial public offering price of
$5.00 and the last reported sale price of the Common Stock as reported on the
Nasdaq National Market on December 31, 1999, the last trading day of 1999
($2.875). The indices assume the reinvestment of all dividends.
[GRAPHIC_OMITTED]
<TABLE>
<CAPTION>
August December December December December December December
1, 1994 30, 1994 29, 1995 31, 1996 31, 1997 31, 1998 31, 1999
<S> <C> <C> <C> <C> <C> <C> <C>
NaPro (NPRO) $100 $120.00 $187.50 $212.50 $50.00 $28.12 $57.50
Nasdaq Market $100 $104.39 $147.54 $181.54 $222.43 $313.64 $581.38
(U.S.)
Peer Group $100 $102.46 $187.92 $188.50 $194.68 $247.68 $459.23
(Nasdaq
Pharmaceutical
Index)
</TABLE>
17
<PAGE>
Proposal 2: Increase in the Number of Authorized Shares
Background
NaPro's Board of Directors has determined that amending NaPro's Amended and
Restated Certificate of Incorporation in the manner described below is advisable
and is in the best interest of shareholders and recommends that NaPro's
shareholders approve and adopt the proposed amendment. The proposed amendment
would increase the number of authorized shares of the common stock from 30.0
million shares to 45.0 million shares.
The proposed amendment is being recommended because the Board of Directors
believes having shares authorized and available for issuance will provide NaPro
with greater flexibility in pursuing funding to meet NaPro's capital needs in
the future.
Description of the Proposal
The proposed amendment to the Amended and Restated Certificate of Incorporation
will increase the number of authorized shares of NaPro's Common Stock from 30.0
million to 45.0 million. As of July 21, 2000, 24,056,404 shares of Common Stock
were outstanding, and 5,125,751 shares are reserved for issuance pursuant to
NaPro's existing employee stock option plans, pursuant to the conversion of non-
voting common stock, pursuant to certain stock warrant agreements, and pursuant
to a contractual stock purchase agreement. The total amount of shares of common
stock NaPro currently has outstanding and reserved for issuance is insufficient
to permit the full issuance of the shares to be authorized pursuant to the
amendment to the 1994 Plan represented by Proposal 3, and for issuance in
connection with NaPro's future capital needs including funding for possible
acquisitions. The proposed amendment would permit additional shares of common
stock to be reserved and issued for these purposes.
If Proposal 2 is approved, the newly authorized shares of common stock would
have all of the rights and privileges as the shares of common stock now
authorized. The common stock has no preemptive rights. Once shares of Common
Stock are authorized, the Board of Directors can issue shares of common stock
without stockholder approval, except as may be required by law or regulations or
by the rules of the Nasdaq Stock Market or any stock exchange on which NaPro's
securities may then be listed.
Although the board of directors would issue additional shares based on its
judgment as to the best interests of NaPro and its shareholders, the issuance of
additional shares would have the effect of diluting the relative voting power
per share. It also could have the effect of diluting a shareholder's interest in
NaPro on an economic basis to the extent shares are issued at a price less than
their fair value.
If Proposal 2 is approved, Section I of Article Four of the Amended and Restated
Certificate of Incorporation will be amended, in pertinent part, to read as
follows:
18
<PAGE>
ARTICLE FOUR
I. AUTHORIZED SHARES
The Corporation shall have authority to issue 48,000,000 shares of capital
stock, 45,000,000 of which shall be Common Stock, with a par value of
$.0075 per share, 1,000,000 of which shall be Nonvoting Common Stock, with
a par value of $.0075 per share, and 2,000,000 of which shall be Preferred
Stock, with a par value of $.001 per share.
Vote Required and Board Recommendation
The affirmative vote of holders of a majority of the shares of common stock
outstanding as of the record date is required to approve the proposed amendment
to NaPro's Amended and Restated Certificate of Incorporation.
If the amendment is not approved by the shareholders, NaPro's Amended and
Restated Articles of Incorporation, which authorizes the issuance of 30.0
million shares of common stock, will remain unchanged.
The Board of Directors recommends a vote FOR this Proposal to approve an
amendment to NaPro's Certificate of Incorporation.
Proposal 3: Amendments to the 1994 Long-Term Incentive Plan
Description of Proposed Amendments
Contingent upon approval by the stockholders, the Board of Directors has adopted
an amendment to the 1994 Plan to increase the maximum number of shares of Common
Stock issuable as awards under the 1994 Plan from 2,675,000 to 3,875,000.
Reasons for Proposed Amendments
As of July 21, 2000, stock options have been granted under the 1994 Plan to
purchase a total of 2,675,000 shares. With grants made during 1999 and 2000
(some of which are subject to stockholder approval of the amendment), the shares
in the 1994 Plan have been exhausted. The Board believes that it is in the best
interest of NaPro to increase the number of shares available for awards under
the 1994 Plan in order to allow NaPro to grant awards to attract and retain new
employees and to further compensate, where appropriate, existing employees
whether or not they have previously been granted options under the 1994 Plan.
Failure to attract and retain new employees or to compensate existing employees
could create a situation in which NaPro is unable to attract and retain
sufficiently competent, skilled personnel, and could have a material adverse
effect.
1994 Long-Term Incentive Plan.
In May 1994, NaPro's Board of Directors adopted the 1994 Plan which was
subsequently approved by the stockholders of NaPro prior to NaPro's initial
public offering in August 1994 and amended with the approval of stockholders in
1998. The 1994 Plan, as amended, provides for granting to employees and other
key individuals who perform services for NaPro ("Participants") the following
types of incentive awards: stock options, stock appreciation rights ("SARs"),
restricted stock, performance grants and other types of awards that the
Compensation Committee deems to be consistent with the purposes of the 1994
Plan. The 1994 Plan also provides non-employee directors with stock option
grants according to an established formula and permits the discretionary grant
of non-qualified options by the Compensation Committee to non-employee directors
under certain circumstances.
19
<PAGE>
The 1994 Plan affords NaPro latitude in tailoring incentive compensation to
support corporate and business objectives, to anticipate and respond to a
changing business environment and competitive compensation practices and, in the
case of options granted to non-employee directors, to strengthen further the
non-employee directors' linkage with stockholder interests.
Shares subject to Plan. The 1994 Plan currently allows for the issuance of
2,675,000 shares of Common Stock as awards. Stockholder approval of Proposal 3
would increase the number of shares of Common Stock issuable as awards under the
1994 Plan to 3,875,000.
Administration. The Compensation Committee has exclusive discretion to select
the Participants and to determine the type, size and terms of each award, to
modify the terms of awards, to determine when awards will be granted and paid,
and to make all other determinations which it deems necessary or desirable in
the interpretation and administration of the 1994 Plan except that the maximum
number of shares subject to one or more Awards that can be granted to any
participant in one taxable year of the Corporation is 200,000 shares. The
decisions of the Committee will be final and binding on all parties. The
Committee must be structured at all times so that all of its members are
"disinterested directors" as defined in Securities and Exchange Commission Rule
16b-3 and "outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended. With limited exceptions, including
termination of employment as a result of death, disability or retirement, or
except as otherwise determined by the Compensation Committee, rights to these
forms of contingent compensation will be forfeited if a Participant's employment
or performance of services terminates within a specified period following the
award. Generally, a Participant's rights and interest under the 1994 Plan will
not be transferable except by will or by laws of descent and distribution.
Awards. Under the 1994 Plan, Participants are granted incentive awards
consisting of stock options, SARs, restricted stock, performance grants and
other types of awards.
Stock Options. Participants are granted stock options which may be non-qualified
stock options or incentive stock options. Incentive stock options may be granted
only to employees. Stock options are rights to purchase a specified number of
shares of Common Stock at a price fixed by the Compensation Committee. The
option price may not be less than the fair market value of the underlying shares
of Common Stock on the date of grant provided that the option price for
incentive options granted to an employee who owns more than 10% of the Common
Stock must be at least 110% of fair market value of the underlying Common Stock
on the date of the grant. In the case of purchased stock options, a specified
number of non-qualified stock options (with an option price as described above)
will be offered for grant to selected Participants in exchange for a purchase
price, specified by the Compensation Committee, which is payable at the time of
grant. Options generally will expire not later than ten years after the date on
which they are granted provided that an incentive option granted to an employee
who owns more than 10% of the Common Stock must expire no more than 5 years
after the date of grant. Options will become exercisable at such times and in
such installments as the Compensation Committee shall determine. Payment of the
option price must be made in full at the time of exercise in such form
(including, but not limited to, cash, Common Stock or the surrender of another
outstanding award or any combination thereof) as the Compensation Committee may
determine. Federal income tax payable as a consequence of the exercise of such
options is borne by the grantee.
20
<PAGE>
The following provisions apply in the event of a Participant's termination of
employment or service as a non-employee director. An employee who terminates
employment other than for cause may exercise the option for 90 days (or the
period determined by the Compensation Committee) after termination of
employment. A non-employee director whose service on the Board terminates (other
than for cause) may exercise the option for three years (or the period
determined by the Committee) after termination of service. If a Participant
terminates employment or service on account of disability (as defined in the
Plan) or retires under an approved NaPro retirement program, the individual may
exercise the option for three years (or the period determined by the
Compensation Committee) after the Participant's death. The Plan provides that,
in all cases, an option may be exercised only to the extent that it was vested
at the time of termination of employment or service or death unless the
Compensation Committee provides otherwise and only during the term of the
option. The Plan also provides that if a Participant who terminated employment
on account of disability returns to employment or service within three years,
the vesting determined by the Compensation Committee and the option term will be
extended for a period equal to the period of time the Participant was absent
from employment or service on account of the disability; however, the term of an
incentive option will not be extended.
SARs. SARs may be granted alone, or a holder of an option or other award may be
granted a related SAR, either at the time of grant or by amendment thereafter.
Upon exercise of an SAR, the holder must surrender the SAR and surrender,
unexercised, any related option or other award, and the holder will receive in
exchange, at the election of the Compensation Committee, cash or Common Stock or
other consideration, or any combination thereof, equal in value to (or, in the
discretion of the Compensation Committee, less than) the difference between the
exercise price or option price per share and the fair market value per share of
Common Stock on the last business day preceding the date of exercise, times the
number of shares subject to the SAR or option or other award, or portion
thereof, which is exercised. SARs terminate when the Participant terminates
employment or service except that (1) if the Participant terminates on account
of disability or under an approved NaPro retirement program, the Participant may
exercise the SAR for three years (or the period determined by the Compensation
Committee) after termination and (2) if the Participant dies, the SAR may be
exercised for one year (or other period determined by the Compensation
Committee) after the Participant's death. The SAR may be exercised only to the
extent that it was vested at the time of termination or death unless the
Compensation Committee provides otherwise and only during the term of the SAR.
Restricted Stock Awards. A restricted stock award is an award of a specified
number of shares of Common Stock which are subject to a restriction against
transfer and to a risk of forfeiture during a period set by the Compensation
Committee. During the restriction period, the Participant generally has the
right to vote and receive dividends on the shares. If the Participant's
employment or service terminates prior to the end of the restriction period, the
Participant's rights to the Restricted Stock will terminate, except that if the
termination is on account of death, disability, or retirement under an approved
NaPro retirement program, the Compensation Committee may cancel the restrictions
as to any or all shares of Restricted Stock.
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<PAGE>
Performance Grants and Other Awards. Performance grants are awards with a final
value, if any, that is determined by the degree to which specified performance
objectives have been achieved during an award period set by the Compensation
Committee, subject to such adjustments as the Compensation Committee may approve
based on relevant factors. Performance objectives are based on various measures
of performance, including, without limitation, measures of industry, Company,
unit or Participant performance, or any combination of the foregoing, as the
Compensation Committee may determine. The Compensation Committee may make such
adjustments in the computation of any performance measure as it may deem
appropriate. A target value of an award will be established (and may be amended
thereafter) by the Compensation Committee and may be a fixed dollar amount, an
amount that varies from time to time based on the value of a share of Common
Stock, or an amount that is determinable from other criteria specified by the
Compensation Committee. Payment of the final value of an award will be made as
promptly as practicable after the end of the award period or at such other time
or times as the Compensation Committee may determine. If the Participant
terminates employment or service before the end of the award period, the award
may be canceled or the value of the award may be paid in whole or in part as the
Compensation Committee determines. The 1994 Plan permits the grant of any other
type of incentive compensation award determined by the Compensation Committee to
be consistent with the purposes of the 1994 Plan.
Awards to Non-Employee Directors. The 1994 Plan provides that each person who is
not an employee of NaPro or any of its subsidiaries and who (i) is elected or
re-elected as a director of NaPro at an annual meeting of NaPro's stockholders,
(ii) continues service as a director of NaPro after an annual meeting of NaPro's
stockholders at which the director is not subject to re-election, or (iii) is
appointed as a director of NaPro in accordance with its Bylaws following an
annual meeting of NaPro's stockholders (each, an "Eligible Director"), will
receive, on the next business day following each such election or appointment, a
non-qualified option to purchase a specified number of shares of NaPro's Common
Stock. Currently, non-employee directors are entitled to receive an option for
10,000 shares of Common Stock under such automatic provisions. The 1994 Plan
also provides for automatic annual grants of options to purchase 10,000 shares
of Common Stock to the chair of the Audit, Compensation and Strategic Planning
Committees of the Board of Directors. If elected at an annual meeting of
stockholders, each option then granted to a non-employee director will have an
option price equal to the fair market value of NaPro's Common Stock on the date
of grant, will become exercisable in full on the earlier of the first
anniversary following the grant date or the business day next preceding the date
of the annual meeting of NaPro's stockholders immediately following the date of
the grant, and will have a term of 10 years from the date of grant. The 1994
Plan also provides for the discretionary grant of non-qualified options by the
Compensation Committee to non-employee directors under certain circumstances.
Liquidation; Changes in Control; Mergers. Upon the liquidation or dissolution of
NaPro, all outstanding awards under the 1994 Plan will terminate immediately
prior to the consummation of such liquidation or dissolution, unless otherwise
provided by the Compensation Committee. Upon certain events, including (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
including a "group" as defined in Section 13(d) of the Exchange Act but
excluding NaPro and any subsidiary and any employee benefit plan sponsored or
maintained by NaPro or any subsidiary (including any trustee of such plan acting
as trustee), directly or indirectly, becoming the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act, as amended from time to time), of
securities of NaPro representing 25% or more of the combined voting power of
NaPro's then outstanding securities; (ii) individuals who at the beginning of
any 12-month period constituted the Board ceasing for any reason other than
22
<PAGE>
death to constitute a majority of such Board; or (iii) approval by NaPro's
stockholders of a transaction involving the acquisition of NaPro by an entity
other than NaPro or any subsidiary through purchase of assets, by merger, or
otherwise, (A) any SARs and any options will become immediately exercisable in
full; (B) restrictions and deferral limitations applicable to any restricted
stock and other awards payable in shares of Common Stock will lapse and become
immediately exercisable in full; (C) generally, outstanding performance grants
will become vested and will be paid out based on the prorated target results for
the awards period in question unless the Committee provides otherwise before the
change in control; and (D) generally, the value of all outstanding options,
SARs, restricted stock, performance grants and any other type of award payable
in shares of Common Stock will be cashed out.
Amendment and Termination. The Board may amend or suspend the 1994 Plan in whole
or in part at any time provided that stockholder approval is obtained where
failure to obtain such approval would adversely affect the compliance of the
1994 Plan with Rule 16b-3 under the Exchange Act and with other applicable law.
The 1994 Plan terminates upon the earlier of (1) the adoption of a Board
resolution terminating the Plan, or (2) ten years from June 16, 1994, unless
extended for up to an additional five years by action of the Board of Directors.
No amendment or termination of the Plan may materially affect any rights of a
Participant with respect to any award without the written consent of the
Participant except where, in the Compensation Committee's discretion, it
determines that significant changes in the Participant's position, duties or
responsibilities, or significant changes in economic, legislative, regulatory,
tax, account or cost/benefit conditions have had or will have a substantial
effect on the performance of NaPro or any of its subsidiaries or affiliates.
Federal Income Tax Consequences of the Grant and Exercise of Options Under the
1994 Plan. The tax consequences applicable to NaPro and to a Participant in the
1994 Plan in connection with options granted to a participant are complex and
depend, in large part, on the surrounding facts and circumstances. The following
brief summary of certain significant United States federal income tax
consequences under existing law of the 1994 Plan is not intended to be
exhaustive and, among other things, does not describe state, local or foreign
tax consequences.
Under the Code, the grant of a stock option does not result in taxable income to
the optionee or any tax deduction to NaPro. However, the transfer of common
stock of NaPro to an optionee upon exercise of an option may or may not give
rise to taxable income to the optionee and tax deductions to NaPro, depending
upon whether or not the option is an incentive stock option or non-qualified
option.
In general, a Participant will not recognize any income upon the exercise of an
incentive stock option, and NaPro will not be entitled to a tax deduction on
account of such exercise. However, a Participant could be subject to the
alternative minimum tax upon exercise for the year in which the option was
exercised. If the Code requirements relating to the holding periods for stock
acquired on exercise of an incentive stock option have been satisfied, a
Participant who acquires Company Common Stock upon the exercise of his or her
incentive stock option will recognize any gain or loss realized upon the sale of
23
<PAGE>
such stock as capital gain or loss, but NaPro will not be entitled to any tax
deduction on account of such sale. If such holding period requirements are not
satisfied with respect to such stock acquired on exercise of an incentive stock
option, the sale of the stock or acquired will result in ordinary compensation
income being recognized by the Participant in an amount equal to the excess,
with certain adjustments, of the fair market value of the underlying stock on
the date of exercise, or, if less, the sale price over the option price and
NaPro will be entitled to a tax deduction in the same amount, assuming that the
compensation amounts satisfy the ordinary and necessary expense and reasonable
compensation requirements for deductibility and that the deduction is not
limited by Section 162(m) of the Code. Any additional gain realized by such
Participant on such a sale of his or her stock will be a capital gain. If the
total amount realized upon such a sale is less than the exercise price of the
incentive stock option, the difference will be a capital loss to such
Participant.
In the case of a non-qualified option, a Participant generally will recognize
ordinary compensation income upon the exercise of such option in the amount
equal to the excess of the fair market value of the underlying stock on the date
of exercise over the option price, and NaPro will be entitled to a tax deduction
in the same amount, assuming that the compensation amounts satisfy the ordinary
and necessary expense and reasonable compensation requirements for deductibility
and that the deduction is not limited to Section 162(m) of the Code. In the case
of employees, the compensation income is subject to wage withholding. If,
however, the sale of Common Stock of NaPro at a profit would subject the
Participant to liability under Section 16(b) of the Exchange Act, the
Participant will recognize compensation income equal to the excess of (i) the
fair market value of such Common Stock on the earlier of the date that is six
months after the date of exercise or the date the Participant can sell the
Common Stock without liability under Section 16(b) over (ii) the exercise price.
The Participant can make an election under Section 83(b) of the Code to measure
the compensation as of the date the non-qualified option is exercised. A
Participant will recognize as capital gain or loss any profit or loss realized
on the sale or exchange of any such shares disposed of or sold.
Under Section 162(m) of the Code, NaPro may be limited as to federal income tax
deductions to the extent that total annual compensation in excess of $1 million
is paid to the chief executive officer of NaPro or any one of the other four
highest paid executive officers employed by NaPro on the last day of the taxable
year. However, certain "performance-based compensation," the material terms of
which are disclosed to and approved by NaPro's stockholders, is not subject to
this limitation on deductibility. The Corporation has structured the stock
option and SAR portions of the 1994 Plan with the intention that compensation
resulting therefrom would be qualified performance-based compensation and would
be deductible without regard to the limitations otherwise imposed by Section
162(m) of the Code. However, certain options granted during 2000 may not satisfy
all of the requirements of Section 162(m) of the Code and may not qualify as
performance-based compensation. The 1994 Plan allows the Committee discretion to
award restricted stock and other stock-based awards that are intended to be
qualified performance-based compensation. Bonuses and other compensation payable
in stock under the 1994 Plan are not intended to qualify as performance-based
compensation.
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<PAGE>
New Plan Benefits
The future benefits or amount that will be received by executive officers and
other employees of NaPro under the 1994 Plan are not determinable, as grants to
such persons are determined in the discretion of the Compensation Committee and
the Board of Directors. However, the Compensation Committee has authorized the
following option grants to be effective upon approval of Proposal 3.
New Plan Benefits
Options to purchase 386,218 shares of Common Stock to be granted effective upon
approval of Proposal 3.
<TABLE>
<CAPTION>
Name/Title Shares Date Granted Price Vesting Expire
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Leonard Shaykin 71,940 6/27/00 current 4 yrs. 6/27/10
Chairman of the Board market
Chief Executive Officer price upon
Director approval
Sterling Ainsworth 59,942 6/27/00 current 4 yrs. 6/27/10
President market
Vice Chairman of the Board price upon
Chief Scientific Officer approval
Director
Patricia Pilia 59,942 6/27/00 current 4 yrs. 6/27/10
Executive Vice President market
Director price upon
approval
Gordon Link 47,967 6/27/00 current 4 yrs. 6/27/10
Chief Financial Officer market
Vice President price upon
approval
David Denny 35,970 6/27/00 current 4 yrs. 6/27/10
Vice President market
price upon
approval
Other Executive Officers 70,457 6/27/00 current 4 yrs. 6/27/10
market
price upon
approval
Non-Executive Directors 40,000 9/13/00 current 1 yr 9/13/10
market
price upon
approval
</TABLE>
25
<PAGE>
Vote Required and Board Recommendation
Proposal 3 requires the affirmative vote of a majority of the shares of common
stock represented in person or by proxy at the Annual Meeting and entitled to
vote. Broker-non votes will not be counted in determining whether Proposal 3 has
been approved to the extent that brokers are not entitled to vote on the matter
without instructions from beneficial owners. If the amendment is not approved by
the shareholders, NaPro's 1994 Plan will continue in effect without the proposed
amendments. Even if Proposal 3 is approved, the number of shares that may be
issued under the amendment to the 1994 Plan will be limited if Proposal 2, which
would increase the number of NaPro's authorized shares, is not approved. Based
upon the number of shares outstanding and reserved for issuance as of July 21,
2000, approximately 382,155 of the shares to be authorized under the 1994 Plan
could not be issued unless the number of NaPro's authorized shares is
appropriately increased, such as would be effected by Proposal 2.
The Board of Directors recommends a vote FOR this Proposal to approve an
amendment to the 1994 Long-Term Performance Incentive Plan.
Proposal 4: Ratification of Selection of Independent Auditors
The Board of Directors has selected Ernst & Young LLP as NaPro's independent
auditors for the year ending December 31, 1999, and has further directed that
management submit this selection of independent auditors for ratification by the
stockholders at the Annual Meeting. Ernst & Young LLP have audited NaPro's
financial statements for 1999. Representatives of Ernst & Young LLP who are
expected to be present at the Annual Meeting will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions. If a majority of the shares voted at the Annual Meeting
do not vote for ratification of the selection of Ernst & Young LLP, the Board of
Directors will reconsider such selection.
Management and the Board of Directors recommend a vote FOR this Proposal to
ratify selection of Ernst & Young LLP as NaPro's independent auditors.
Other Matters
The Board of Directors knows of no other business to be presented at the
meeting, but if other matters do properly come before the meeting, it is
intended that the persons named in the proxy will vote in respect thereof in
accordance with their best judgment.
The Board of Directors encourages you to have your shares voted by signing and
returning the enclosed proxy. The fact that you will have returned your proxy in
advance will not affect your right to vote in person should you find it possible
to attend. However, by signing and returning the proxy, you have assured your
representation at the Annual Meeting. Thank you for your cooperation.
By Order of the Board of Directors,
/s/ Patricia A. Pilia
Patricia A. Pilia
Secretary
Boulder, Colorado
August 16, 2000
26
<PAGE>
Common Stock
NaPro BioTherapeutics, Inc.
Proxy Solicited by the Board of Directors
For the Annual Meeting of Stockholders to Be Held on September 13, 2000
The undersigned hereby appoints Leonard P. Shaykin, Sterling K. Ainsworth
and Patricia A. Pilia, or any of them, with full power of substitution, as a
proxy or proxies to represent the undersigned at the Annual Meeting (the "Annual
Meeting") of Stockholders of NaPro BioTherapeutics, Inc. (the "Company") to be
held on September 13, 2000, at 9:00 a.m. at the Raintree Plaza Conference Center
at the Raintree Plaza Hotel, 1850 Industrial Circle, Longmont, Colorado, and at
any adjournments or postponements thereof, and to vote thereat all the shares of
Common Stock, $.0075 par value per share, held of record by the undersigned at
the close of business on July 21, 2000, with all the power that the undersigned
would possess if personally present, as designated on the reverse side.
Shares will be voted as specified. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR AND APPROVAL OF THE PROPOSALS. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS IN ACCORDANCE WITH THE BOARD OF
DIRECTORS RECOMMENDATIONS. The proxies or substitutes may vote accordingly in
their discretion upon any other business that may properly come before the
Annual Meeting or any adjournments thereof.
X Please mark your votes as in this example
-------
1. ELECTION OF DIRECTORS: Nominees: Leonard Shaykin; Arthur Hull Hayes, Jr;
Edward Erickson; Robert Pollack,
Richard Perle, Marc Ostro.
__________ VOTE FOR ALL NOMINEES _________ VOTE WITHHELD FROM ALL NOMINEES
to withhold authority to vote for any nominee, write that nominees name on the
space below.
---------------------------
AMENDMENT TO NaPro's Certificate of Incorporation to increase the maximum number
of shares of Common Stock issuable thereunder from 30,000,000 to 45,000,000.
FOR ____ AGAINST ____ ABSTAIN ____
<PAGE>
3. AMENDMENTS TO NaPro'S 1994 LONG-TERM PERFORMANCE INCENTIVE PLAN to increase
the maximum number of shares of Common Stock issuable as awards under the Plan
from 2,675,000 to 3,875,000.
FOR ____ AGAINST ____ ABSTAIN ____
4. To ratify the selection by the Board of Directors of Ernst & Young LLP as
NaPro's independent auditors for the year ending December 31, 1999.
FOR ____ AGAINST ____ ABSTAIN ____
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
Signature(s)__________________________________________________Date______________
NOTE: Please sign this proxy as your name appears hereon, including the title
Executor, Trustee, etc. if such is indicated. If joint account, each joint owner
should each sign. If stock is held by a corporation, this proxy should be
executed by a proper officer thereof.
24
