SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/x/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
SHEFFIELD PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(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):
- --------------------------------------------------------------------------------
<PAGE>
(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>
SHEFFIELD PHARMACEUTICALS, INC.
425 SOUTH WOODSMILL ROAD, SUITE 270
ST. LOUIS, MISSOURI 63017
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1999
-----------------------
To the Stockholders of SHEFFIELD PHARMACEUTICALS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
SHEFFIELD PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), will be
held at the Warwick Hotel, 65 West 54th Street, New York, New York, 10019, on
Tuesday, June 29, 1999 at 10:00 a.m., local time, for the following purposes:
1. To elect six members of the Board of Directors;
2. To amend the Company's Certificate of Incorporation to
increase the number of shares of Common Stock that the
Company is authorized to issue from 50,000,000 shares to
60,000,000 shares.
3. To ratify the appointment of Ernst & Young LLP as
independent auditors of the Company for the fiscal year
ending December 31, 1999; and
4. To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on May 20, 1999
are entitled to notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
Scott A. Hoffmann
Secretary
Dated: ______, 1999
St. Louis, Missouri
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING YOU ARE
URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
THAT IS PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
3
<PAGE>
SHEFFIELD PHARMACEUTICALS, INC.
425 SOUTH WOODSMILL ROAD, SUITE 270
ST. LOUIS, MO 63017
-------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1999
-------------------------
INTRODUCTION
This Proxy Statement is furnished to the stockholders of SHEFFIELD
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), in connection
with the solicitation by the Board of Directors of the Company of Proxies for
the Annual Meeting of Stockholders to be held at the Warwick Hotel, Avenue of
the Americas, 65 West 54th Street, New York, NY 10019, on June 29, 1999, at
10:00 a.m., local time, or at any adjournments thereof. The approximate date on
which this Proxy Statement and the accompanying Proxy will be first sent or
given to stockholders is June 1, 1999.
RECORD DATE AND VOTING SECURITIES
The voting securities of the Company outstanding on May 20, 1999
consisted of _________ shares of Common Stock, $.01 par value (the "Common
Stock"), entitling the holders thereof to one vote per share. Only stockholders
of record as of that date are entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. A majority of the outstanding shares of
Common Stock present in person or by proxy is required for a quorum.
PROXIES AND VOTING RIGHTS
Shares of Common Stock represented by Proxies, in the accompanying form
of Proxy, which are properly executed, duly returned and not revoked, will be
voted in accordance with the instructions contained therein. If no specification
is indicated on the Proxy, the shares represented thereby will be voted (i) for
the election as directors of the persons who have been nominated by the Board of
Directors, (ii) for amendment of the Company's Certificate of Incorporation to
increase the number of shares of Common Stock authorized to be issued by the
Company from 50,000,000 shares to 60,000,000 shares, (iii) to ratify the
appointment of Ernst & Young LLP as independent auditors of the Company for the
fiscal year ending December 31, 1999, and (iv) for any other matter that may
properly come before the Annual Meeting in accordance with the judgment of the
person or persons voting the Proxy.
The execution of a Proxy will in no way affect a stockholder's right to
attend the Annual Meeting and vote in person. Any Proxy executed and returned by
a stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Annual Meeting or by execution of a subsequent Proxy which is
presented to the Annual Meeting, or if the stockholder attends the Annual
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation. Broker "non-votes" and the shares of Common Stock as
to which a stockholder abstains are included for purposes of determining the
presence or absence of a quorum at the Annual Meeting. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received instructions from the beneficial
owner. Broker "non-votes" are not included in the tabulation of the voting
results on the election of directors or issues requiring approval of the
majority of the votes present and, therefore, do not have the effect of votes in
opposition in such tabulations. An abstention from voting on a matter or a Proxy
instructing that a vote be withheld has the same effect as a vote against a
matter since it is one less vote for approval.
All expenses in connection with this solicitation will be borne by the
Company. It is expected that solicitations will be made primarily by mail, but
regular employees or representatives of the Company may also solicit Proxies by
telephone, telegraph or in person, without additional compensation. In addition,
the Company has engaged MacKenzie Partners, Inc., a proxy solicitation firm, to
assist in the solicitation of Proxies and will pay such firm a fee, estimated at
$1,500, plus reimbursement of reasonable out-of-pocket expenses. The Company
will, upon request, reimburse brokerage houses and persons holding shares in the
names of their nominees for their reasonable expenses in sending solicitation
material to their principals.
4
<PAGE>
SECURITY OWNERSHIP
The voting securities of the Company outstanding on March 19, 1999
consisted of 27,083,419 shares of Common Stock. The following table sets forth
information concerning ownership of the Company's Common Stock, as of March 19,
1999, by (i) each director, (ii) each executive officer, (iii) all directors and
executive officers as a group, and (iv) each person who, to the knowledge of
management, owned beneficially more than 5% of the Common Stock.
<TABLE>
<CAPTION>
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER(1) OWNED(2) COMMON STOCK(2)
------------------- -------- ---------------
<S> <C> <C>
Elan International Services, Ltd........................... 14,868,216(3) 39.8%
Inpharzam International S.A................................ 2,646,153(4) 9.8%
Thomas M. Fitzgerald....................................... 166,597(5) *
Loren G. Peterson.......................................... 301,000(6) 1.1%
David A. Byron............................................. 285,500(7) 1.1%
Carl F. Siekmann........................................... 287,000(8) 1.1%
John M. Bailey............................................. 100,000(9) *
Digby W. Barrios........................................... 45,000(10) *
George R. Griffiths........................................ 2,646,153(11) 9.8%
Todd C. Davis.............................................. 14,893,216(12) 39.9%
All Directors and Executive Officers as a Group............ 18,724,466 49.4%
</TABLE>
- --------------------
* Less than 1%.
(1) The persons named in the table, to the Company's knowledge, have sole
voting and investment power with respect to all shares shown as
beneficially owned by them, subject to community property laws where
applicable and the information contained in the footnotes hereunder.
(2) Calculations assume that all options and warrants held by each
director, director nominee and executive officer and exercisable within
60 days after March 19, 1999 have been exercised.
(3) Based solely upon the Company's internal records of issuances of Common
Stock and convertible securities to Elan International Services, Ltd.
Includes 10,296,788 shares of Common Stock issuable upon exercise of
warrants and conversion of Series C Cumulative Convertible Preferred
Stock and Convertible Promissory Note. The address of Elan
International Services, Ltd. is 102 St. James Court, Flatts, Smiths
Parish FL04, Bermuda.
(4) Based solely upon information in the Schedule 13D of Inpharzam
International S.A., an affiliate of Zambon Group, SpA, dated June 15,
1998 filed with the Securities and Exchange Commission. The address of
Inpharzam International S.A. set forth in such Schedule 13D is Via
Industria 1, 6814 Cadempino, Switzerland.
(5) Includes 150,000 shares of common stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. Mr.
Fitzgerald's address is c/o Sheffield Pharmaceuticals, Inc., 425 South
Woodsmill Road, Suite 270, St. Louis, Missouri 63017.
(6) Includes 80,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. 4,000 of these
shares are held by Mr. Peterson as custodian for the benefit of his
children. Mr. Peterson disclaims beneficial ownership of such shares.
Mr. Peterson's address is c/o Sheffield Pharmaceuticals, Inc., 425
South Woodsmill Road, Suite 270, St. Louis, Missouri 63017.
5
<PAGE>
(7) Includes 80,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. Mr. Byron's
address is c/o Sheffield Pharmaceuticals, Inc., 425 South Woodsmill
Road, Suite 270, St. Louis, Missouri 63017.
(8) Includes 80,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. Mr. Siekmann's
address is c/o Sheffield Pharmaceuticals, Inc., 425 South Woodsmill
Road, Suite 270, St. Louis, Missouri 63017.
(9) Includes 100,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. Mr. Bailey's
address is c/o Sheffield Pharmaceuticals, Inc., 425 South Woodsmill
Road, St. Louis, Missouri 63017.
(10) Includes 40,000 shares of Common Stock issuable upon exercise of
options exercisable within 60 days after March 19, 1999. Mr. Barrios'
address is c/o Sheffield Pharmaceuticals, Inc., 425 South Woodsmill
Road, St. Louis, Missouri 63017.
(11) Includes 2,646,153 shares held by Inpharzam International S.A. Mr.
Griffiths, an officer of Zambon Corporation, an affiliate of Inpharzam
International S.A., disclaims any beneficial ownership interest in such
shares. Mr. Griffiths address is c/o Zambon Corporation, One Meadowland
Plaza, East Rutherford, New Jersey 07073.
(12) Includes 25,000 of Common Stock issuable upon exercise of options
exercisable within 60 days after March 19, 1999. Also includes
4,571,428 shares held by Elan International Services, Ltd. and
10,296,788 shares of Common Stock issuable upon exercise of warrants
and conversion of Series C Cumulative Convertible Preferred Stock and
Convertible Promissory Note. Mr. Davis, an employee of Elan
Pharmaceutical Research Corporation, an affiliate of Elan International
Services Ltd., a Bermuda corporation, disclaims any beneficial
ownership interest in such shares. Mr. Davis' address is c/o Elan
Pharmaceuticals Research Corp., 1300 Gould Drive, Gainesville, GA
30504.
6
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Directors of the Company hold office until the next annual meeting of
stockholders or until their successors are elected and qualified. Directors
shall be elected by a plurality of the votes cast, in person or by proxy, at the
Annual Meeting. If no contrary instructions are indicated, Proxies will be voted
for the election of Thomas M. Fitzgerald, Loren G. Peterson, John M. Bailey,
Digby W. Barrios, Todd C. Davis and George R. Griffiths, the six nominees of the
Board of Directors. All of the nominees are currently directors of the Company.
The Company does not expect that any of the nominees will be unavailable for
election, but if that should occur before the Annual Meeting, the Proxies will
be voted in favor of the remaining nominees and may also be voted for a
substitute nominee or nominees selected by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ELECTION OF EACH OF THE NOMINEES
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company and their positions
with the Company are set forth below.
NAME AGE DIRECTOR SINCE POSITION
- ---- --- -------------- --------
Thomas M. Fitzgerald 48 September 1996 Chairman and Director
Loren G. Peterson 42 April 1997 President, Chief
Executive Officer, and
Director
John M. Bailey 51 April 1997 Director
Digby W. Barrios 61 April 1997 Director
Todd C. Davis 37 September 1998 Director
George R. Griffiths 51 July 1998 Director
David A. Byron 50 -- Executive Vice President
- Scientific Affairs
Carl F. Siekmann 55 -- Executive Vice President
- Corporate Development
Scott A. Hoffmann 34 -- Vice President - Finance
and Administration,
Treasurer and Secretary,
Chief Financial Officer
THOMAS M. FITZGERALD. Mr. Fitzgerald has been a Director of the Company
since September 1996 and has served as Chairman of the Company since December
1997. From June 1996 to December 1997, Mr. Fitzgerald served as Chief Operating
Officer of the Company and, from February 1997 to December 1997, he served as
President of the Company. From 1989 to 1996 Mr. Fitzgerald was the Vice
President and General Counsel of Fisons Corporation, an operating unit of Fisons
Group plc, a U.K.-based ethical pharmaceutical company ("Fisons"). Mr.
Fitzgerald was Assistant General Counsel of SmithKline Beecham prior to joining
Fisons.
LOREN G. PETERSON. Mr. Peterson has been the Chief Executive Officer
and a Director of the Company since April 1997. Mr. Peterson has served as
President of the Company since December 1997. From January 1997 to April 1997,
Mr. Peterson was a principal of Camelot Pharmacal, L.L.C., a privately held
pharmaceutical development company he co-founded. From 1993 to 1996, Mr.
Peterson served as Vice President - Finance and Chief Financial Officer of Bock
Pharmacal Company, a privately held pharmaceutical company. From 1989 to 1993,
Mr. Peterson was a partner of the accounting firm of Coopers & Lybrand LLP.
7
<PAGE>
JOHN M. BAILEY. Mr. Bailey has been a Director of the Company since
April 1997. Mr. Bailey is the founder and majority shareholder of Bailey
Associates, a consultancy specializing in providing companies with strategic
advice and support through mergers, collaborations and divestments. From 1978 to
1996, Mr. Bailey was employed by Fisons, where he held a number of senior
positions. In 1993, Mr. Bailey was appointed to the main board of Fisons and, in
1995, he was appointed Corporate Development Director of Fisons. In that role,
he was directly responsible for worldwide strategic and corporate development
and for all merger, divestment, acquisition and business development activities
of Fisons Group worldwide.
DIGBY W. BARRIOS. Mr. Barrios has been a Director of the Company since
April 1997. Since 1992, Mr. Barrios has been a private consultant to the
pharmaceutical industry. Mr. Barrios served from 1985 to 1987 as Executive Vice
President, and from 1988 to 1992 as President and Chief Executive Officer, of
Boehringer Ingelheim Corporation. Mr. Barrios is a member of the Board of
Directors of Sepracor Inc., Roberts Pharmaceutical Corporation, Cypros
Pharmaceutical Corporation and Ribogene, Inc.
TODD C. DAVIS. Mr. Davis has been a Director of the Company since
September 1998. Since May 1997, Mr. Davis has served as Director of Investments
and Corporate Development of Elan Pharmaceutical Research Corporation, an
affiliate of Elan Corporation plc, an Irish pharmaceutical company. From
September 1995 to May 1997, Mr. Davis was on educational leave from Abbott
Laboratories, a pharmaceutical company, while receiving a Masters in Business
Administration from Harvard University. From October 1993 to September 1995, Mr.
Davis served as diagnostic systems product manager, and from October 1992 to
September 1993 as product specialist of laboratory information systems of Abbott
Laboratories. Mr. Davis serves as a director of the Company pursuant to an
agreement with Elan International Services Ltd. that permits Elan International
Services Ltd. to designate one nominee to the Company's Board.
GEORGE R. GRIFFITHS. Mr. Griffiths has been a Director of the Company
since July 1998. Since June 1996, Mr. Griffiths has served as General Manager of
Zambon Corporation, USA, the North American subsidiary of Zambon Group, SpA, a
private Italian pharmaceutical company. From December 1995 to June 1996, Mr.
Griffiths served as Senior Vice President for Pharmaceuticals of Zambon
Corporation, USA and also from January 1996 to June 1996 he held the position of
Vice President of Business Development. From July 1992 to January 1996, Mr.
Griffiths served as Director of New Products/Specialty Products for Johnson &
Johnson's Company's Janssen Pharmaceutica Division. Mr. Griffiths serves as a
director of the Company pursuant to an agreement with Zambon Group, SpA that
permits Zambon Group, SpA to designate one nominee to the Company's Board.
DAVID A. BYRON. Mr. Byron has been Executive Vice President -
Scientific Affairs of the Company since April 1997. From January 1997 to April
1997, Mr. Byron was a principal of Camelot Pharmacal, L.L.C., a privately held
pharmaceutical development company he co-founded. From 1994 to 1996, Mr. Byron
served as Vice President of Scientific Affairs of Bock Pharmacal Company, a
privately held pharmaceutical company. From 1990 to 1994, Byron served as Senior
Director - New Product Development of Sanofi-Winthrop Pharmaceutical
Corporation.
CARL F. SIEKMANN. Mr. Siekmann has been Executive Vice President -
Corporate Development of the Company since April 1997. From January 1997 to
April 1997, Mr. Siekmann was a principal of Camelot Pharmacal, L.L.C., a
privately held pharmaceutical development company he co-founded. From 1992 to
1996, Mr. Siekmann served as Vice President of Business Development of Bock
Pharmacal Company, a privately held pharmaceutical company.
SCOTT A. HOFFMANN. Mr. Hoffmann has been Chief Financial Officer and
Vice President - Finance and Administration, Treasurer and Secretary of the
Company since November 1998. From March 1995 to November 1998, Mr. Hoffmann was
Assistant Controller of Zeigler Coal Holding Company, a coal mining company.
From 1992 to 1995, Mr. Hoffmann was Vice President - Finance and Secretary of
Zam's, Inc., a publicly traded retailer.
8
<PAGE>
MEETINGS AND COMMITTEES
The Board of Directors of the Company held five meetings during the
fiscal year ended December 31, 1998. From time to time during such fiscal year,
the members of the Board acted by unanimous written consent. The Company has
standing Stock Option, Compensation, and Audit Committees. The Stock Option
Committee reviews, analyzes and approves grants of stock options and stock to
eligible persons under the Company's 1993 Stock Option Plan and the Company's
1993 Restricted Stock Plan. The current members of the Stock Option Committee
(appointed in June 1997) are Digby W. Barrios and John M. Bailey. The Stock
Option Committee held one meeting in 1998, and approved certain actions by
written consent. The Compensation Committee reviews, analyses and makes
recommendations to the Board of Directors regarding compensation of Company
directors, employees, consultants and others, including grants of stock options
(other than stock option grants under the Company's 1993 Stock Option Plan and
the Company's 1996 Directors Stock Option Plan). The current members of the
Compensation Committee (appointed in June 1997) are Digby W. Barrios and John M.
Bailey. The Compensation Committee held four meetings in 1998, and approved
certain actions by written consent. The Audit Committee reviews, analyzes and
makes recommendations to the Board of Directors with respect to the Company's
compensation and accounting policies, controls and statements, and coordinates
with the Company's independent public accountants. The current members of the
Audit Committee (appointed in June 1997) are Loren G. Peterson, Digby W. Barrios
and John M. Bailey. The Audit Committee held one meeting in 1998. The Company
does not have a standing nominating committee or a committee that serves
nominating functions. These functions are performed by the Board of Directors of
the Company as a whole.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer of the
Company ("CEO") and the executive officers of the Company (other than the CEO)
who were executive officers of the Company during the fiscal year ended December
31, 1998 and whose salary and bonus exceeded $100,000 with respect to the fiscal
year ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------- Awards
------
Other Annual Securities
Name and Compensation Underlying
Principal Position Year Salary($) Bonus ($)(1) Options
------------------ ---- --------- ----- ------ -------
<S> <C> <C> <C> <C> <C>
1998 $175,000 $40,000 -- 255,000
Thomas M. Fitzgerald, 1997 175,000 -- -- 300,000
Chairman................................. 1996 94,792 -- -- --
Loren G. Peterson, President, 1998 $175,000 -- -- 155,000
Chief Executive Officer................... 1997 118,655 -- -- 400,000
David A. Byron, Executive Vice 1998 $160,000 -- -- 105,000
President, Scientific Affairs............. 1997 108,485 -- -- 400,000
Carl F. Siekmann, Executive Vice 1998 $160,000 -- -- 105,000
President, Corporate Development.......... 1997 108,485 -- -- 400,000
Judy Roeske Bullock, former Vice 1998 $149,808 -- -- --
President, Finance & Administration, 1997 18,750 -- -- 130,000
Chief Financial Officer(2)
</TABLE>
- ---------------------
(1) Perquisites and other personal benefits, securities or property
delivered to each executive officer did not exceed the lesser of
$50,000 or 10% of such executive's salary and bonus.
(2) Ms. Bullock resigned from the Company effective November 15, 1998.
9
<PAGE>
The following table sets forth certain information regarding stock
option grants made to Messrs. Fitzgerald, Peterson, Byron, and Siekmann during
the fiscal year ended December 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
NUMBER OF GRANTED
SECURITIES TO
UNDERLYING EMPLOYEES GRANT DATE
OPTIONS IN FISCAL EXERCISE OR BASE PRESENT VALUE
NAME GRANTED (#) YEAR PRICE ($/SH) EXPIRATION DATE $ (1)
---- ----------- ---- ------------ --------------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas M. Fitzgerald,
Chairman........................ 255,000(2) 23.9% $1.2375 - 3.125 August 28, 2008 $235,600
Loren G. Peterson, President,
Chief Executive Officer....... 155,000(2) 14.6% $1.2375 - 3.125 August 28, 2008 139,400
David A. Byron,
Executive Vice President, Vice
President, Scientific Affairs...... 105,000(2) 9.9% $1.2375 - 3.125 August 28, 2008 94,150
Carl F. Siekmann,
Executive Vice President, Corporate
Development....................... 105,000(2) 9.9% $1.2375 - 3.125 August 28, 2008 94,150
</TABLE>
- ----------------------
(1) The present value of options at date of grant was estimated using the
Black-Scholes model with the following assumptions: 1) expected life of
10 years; 2) risk-free interest rate of 4.9%; 3) volatility of 69.4%;
and 4) dividend yield of 0%.
(2) These options were granted under a single option grant with exercise
prices ranging from $1.2375 to $3.125.
10
<PAGE>
The following table sets forth certain information regarding stock
options held by Messrs. Fitzgerald, Peterson, Byron, and Siekmann, and Ms.
Bullock as of December 31, 1998.
AGGREGATED OPTION EXERCISES
DURING THE MOST RECENTLY COMPLETED
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NO. OF SECURITIES
SHARES VALUE (1) OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS AT FY- OPTIONS AT FY-
SHARES END (#) END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Thomas M. Fitzgerald, -- -- 150,000/405,000 --/$171,063
Chairman...............................
Loren G. Peterson,
President and Chief Executive
Officer................................... -- -- 40,000/515,000 --/$75,063
David A. Byron,
Executive Vice President,
Scientific Affairs..................... -- -- 40,000/465,000 --/$48,563
Carl F. Siekmann,
Executive Vice President,
Corporate Development............. -- -- 40,000/465,000 --/$48,563
Judy Roeske Bullock,
former Vice President, Finance &
Administration,
Chief Financial Officer............... -- -- 25,000/-- $9,375/--
</TABLE>
- -------------------
(1) Represents the total gain that would be realized if all in-the-money options
held at December 31, 1998 were exercised, determined by multiplying the number
of shares underlying the options by the difference between the per share option
exercise price and the closing consolidated sale price of Common Stock of $2.375
per share reported by the American Stock Exchange for December 31, 1998. An
option is in-the-money if the fair market value of the underlying shares exceeds
the exercise price of the option.
BOARD OF DIRECTORS COMPENSATION
The Company does not currently compensate directors who are also
executive officers of the Company or directors who are employees of the
Company's strategic alliance partners for their service on the Board of
Directors. Under current Company policy, each non-employee Director of the
Company receives a fee of $750 for each Board meeting attended and $400 for each
Board committee meeting attended. Directors are reimbursed for their expenses
incurred in attending meetings of the Board of Directors. Under the terms of the
1996 Directors Stock Option Plan, eligible Directors receive a grant of an
option to purchase 25,000 shares of common stock upon initial election, as well
as additional option grants to purchase 15,000 shares of common stock on January
1 of each year thereafter during eligible tenure.
LONG-TERM INCENTIVE AND PENSION PLANS
During the year ended December 31, 1996, the Company adopted a defined
contribution 401(k) plan in accordance with the Internal Revenue Code. Employees
are eligible to participate in the 401(k) plan upon completion of three months
of service provided they are over 21 years of age. Participants may defer up to
15% of eligible compensation. Currently, the Company does not provide matching
contributions under the 401(k) Plan.
11
<PAGE>
OTHER
No director or executive officer is involved in any material legal
proceeding in which he is a party adverse to the Company or has a material
interest adverse to the Company.
EMPLOYMENT AGREEMENTS
In June 1996, the Company entered into a three-year employment
agreement with Thomas M. Fitzgerald pursuant to which Mr. Fitzgerald agreed to
serve as Chief Operating Officer of the Company. The employment agreement
requires Mr. Fitzgerald to devote his full business and professional time in
furtherance of the business of the Company. Such agreement automatically renews
for successive one-year terms unless one party provides written notice to the
other of his or its intent to terminate at least six months prior to the end of
the then current term. If Mr. Fitzgerald's employment is terminated other than
for cause, he is entitled to receive a severance payment of $87,500, payable in
six equal monthly installments. The agreement contains non-compete and
confidentiality provisions. Mr. Fitzgerald's annual base salary under the
agreement is currently $175,000.
In April 1997, the Company entered into a five-year employment
agreement with Loren G. Peterson pursuant to which Mr. Peterson agreed to serve
as Chief Executive Officer of the Company. The term of the agreement is
automatically extended for an additional one year term from year to year unless
one party notifies the other of its intention to terminate at least six months
prior to the end of the then current term. The employment agreement requires Mr.
Peterson to devote his full business and professional time in furtherance of the
business of the Company. If Mr. Peterson's employment is terminated other than
for cause, he is entitled to receive a severance payment of $131,250, payable in
nine equal monthly installments. The employment agreement includes
confidentiality and non-compete provisions. Mr. Peterson's annual base salary
under the employment agreement is currently $175,000.
In April 1997, the Company entered into a five-year employment
agreement with David A. Byron pursuant to which Mr. Byron agreed to serve as
Executive Vice President - Scientific Affairs of the Company. The term of the
agreement is automatically extended for an additional one year term from year to
year unless one party notifies the other of its intention to terminate at least
six months prior to the end of the then current term. The employment agreement
requires Mr. Byron to devote his full business and professional time in
furtherance of the business of the Company. If Mr. Byron's employment is
terminated other than for cause, he is entitled to receive a severance payment
of $120,000, payable in nine equal monthly installments. The employment
agreement includes confidentiality and non-compete provisions. The employment
agreement includes confidentiality and non-compete provisions. Mr. Byron's
annual base salary under the employment agreement is currently $160,000.
In April 1997, the Company entered into a five-year employment
agreement with Carl F. Siekmann pursuant to which Mr. Siekmann agreed to serve
as Executive Vice President - Corporate Development of the Company. The term of
the agreement is automatically extended for an additional one year term from
year to year unless one party notifies the other of its intention to terminate
at least six months prior to the end of the then current term. The employment
agreement requires Mr. Siekmann to devote his full business and professional
time in furtherance of the business of the Company. If Mr. Siekmann's employment
is terminated other than for cause, he is entitled to receive a severance
payment of $120,000, payable in nine equal monthly installments. The employment
agreement includes confidentiality and non-compete provisions. Mr. Siekmann's
annual base salary under the employment agreement is currently $160,000.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
all Section 16(a) forms that were required to be filed during the fiscal year
ended December 31, 1998 were filed in compliance with the applicable
requirements of Section 16(a) except as follows: Form 3's were filed late for
each of Todd C. Davis and George R. Griffiths.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation of the Company's senior management is determined by a
Compensation Committee, presently consisting of Digby W. Barrios and John M.
Bailey. None of the members of the Compensation Committee is an executive
officer of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. The Stock Option Committee is responsible for the administration and
awards under the Company's 1993 Stock Option Plan and the 1993 Restricted Stock
Plan. Messrs. Barrios and Bailey are the members of both the Compensation
Committee and the Stock Option Committee. Messrs. Barrios and Bailey are
"non-employee directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended. The Compensation Committee met on four
occasions in 1998 and approved certain actions by unanimous written consent
during the fiscal year ended December 31, 1998. The Stock Option Committee met
on one occasion in 1998 and approved certain actions by unanimous written
consent during 1998. The Compensation Committee and the Stock Option Committee
have reviewed and are in accordance with the compensation paid to executive
offices for the fiscal year ended December 31, 1998.
COMPENSATION POLICIES
The guiding principle of the Company is to establish a compensation
program that aligns executive compensation with Company objectives and business
strategies, as well as financial performance, with the primary objective of
creating shareholder value. In keeping with this principle, the Company seeks
to:
(1) Attract and retain qualified executives who will play a significant
role in, and be committed to, the achievement of the Company's long-term goals.
(2) Reward executives for strategic management, and the creation and
long-term maximization of shareholder value.
(3) Create a performance-oriented environment that rewards performance
with respect to the financial goals of the Company.
An executive officer's performance is reviewed in such areas as
financial results, quality of performance, job and professional knowledge,
decision making and business judgment, initiative, analytical skills,
communication skills, interpersonal and organizational skills, creativity and
leadership.
Executive compensation consists of both cash and equity-based
compensation. Cash compensation is comprised of base salary and bonus. Base
salary is determined with reference to market norms. Bonus compensation is tied
to the Company's success in achieving financial and non-financial performance.
Equity-based compensation is comprised primarily of stock option grants. In
establishing equity-based compensation, the Company places particular emphasis
on the achievement of the Company's long-term performance goals. The Company
believes that equity-based compensation closely aligns the economic interest of
the Company's executive officers with the economic interests of the Company's
shareholders.
The Company's 1993 Stock Option Plan, as amended, is in compliance with
Section 162(m) of the Internal Revenue Code of 1986, as amended. The Company's
1993 Restricted Stock Plan is "grandfathered" under Section 162(m). The Company
has not and does not currently anticipate paying non-performance based
compensation in excess of $1 million per annum to any employee.
CHIEF EXECUTIVE OFFICER
In establishing Mr. Peterson's compensation, the factors described
above are taken into account. The Compensation Committee and the Stock Option
Committee believe that Mr. Peterson's compensation, including salary and stock
options, fall within the Company's compensation philosophy and are within
industry norms.
Submitted by the Compensation Committee and the Stock Option Committee:
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Digby W. Barrios Digby W. Barrios
John M. Bailey John M. Bailey
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COMMON STOCK PERFORMANCE
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The Securities and Exchange Commission ("SEC") requires that the Company
include in this Proxy Statement a line-graph presentation comparing cumulative,
five-year shareholder returns on an indexed basis with a broad-based market
index and either a nationally recognized industry standard or an index of peer
companies selected by the Company. This performance comparison assumes $100 was
invested on December 31, 1993 in the Company's Common Stock and in each of the
indices shown and assumes reinvestment of dividends. The Company has selected
the S & P Midcap 400 Index and the S & P Midcap Biotechnology Index for the
purposes of this performance comparison
[Performance Graph to be Inserted]
INDEXED RETURNS
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
S&P Midcap 400 Index 96.42 126.25 150.49 199.03 237.05
Sheffield Pharmaceuticals, Inc. 84.85 84.85 90.91 33.33 57.58
S&P Midcap Biotechnology Index 105.57 187.42 165.70 163.19 293.52
On May 20, 1999, the record date for the Annual Meeting of
Stockholders, the last reported sales price of the Company's Common Stock as
reported on the American Stock Exchange was $____, which represents a _____%
increase over the last reported sales price of the Company's Common Stock as
reported on the American Stock Exchange on December 31, 1998, which was $2.375.
There can be no assurance that the Company's stock performance will
continue with the same or similar trends depicted in the graph above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1997, the Company entered into a consulting agreement with
John M. Bailey, a director of the Company, pursuant to which Mr. Bailey agreed
to provide certain business and financial consulting advise to the Company. Mr.
Bailey is paid a monthly retainer of 2,000 British Pounds Sterling under such
agreement, which monthly retainer is reduced to 1,500 British Pounds Sterling
for any month during which a Board of Directors meeting is held.
In December 1997, the Company entered into a severance agreement with
Douglas R. Eger, a former Director and executive officer of the Company,
pursuant to which Mr. Eger resigned as an employee of the Company. The severance
agreement provided, among other things, for the principal amount of an $80,000
loan by the Company to Mr. Eger (the "Eger Loan") to be paid in six equal
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quarterly installments commencing on September 30, 1998, with all remaining
principal and interest being paid in full on December 31, 1999, a severance
payment of $135,000 payable in six equal installments of $22,500 each, with
$2,500 of each such installment being applied to repay Mr. Eger's obligations
under the Eger Loan, and the grant by Mr. Eger of a security interest in 30,000
shares of the Company's common stock to secure his obligations under the Eger
Loan. During 1998, $15,000 of principal payments were applied to the Eger Loan.
Pursuant to the Eger severance agreement, the Company was required to forgive
the unpaid balance of $65,000 during 1998 when the Company was unable to make
timely severance payments to Mr. Eger.
In February 1998, the Company entered into an agreement (the
"Engagement Agreement") with an unaffiliated individual pursuant to which such
individual was retained by the Company to facilitate an alliance with Zambon.
Pursuant to the Engagement Agreement, the Company agreed to pay such individual
a fee of between 2.5% and 4.0% of any equity investment or other financing
received from Zambon. The Company also agreed to issue such individual warrants
to purchase 150,000 shares of the Company's common stock at 125% of market price
for a financing of $7.5 million or greater, with such warrants to be prorated
proportionally on financing of a lesser amount. The Engagement Agreement also
required the Company pay such individual a fee of 5.0% of amounts actually
received by the Company from Zambon attributable to marketing or other rights to
the Company's Metered Solution Inhaler ("MSI") system (net of any third party
royalty obligations). Douglas R. Eger, a former officer and director of the
Company, advised the Company that he was entitled to receive a portion of the
fees payable by the Company to the individual who is the Company's counterparty
to the Engagement Agreement. In June 1998, the Company formed a strategic
alliance with Zambon for the worldwide development and commercialization of
drugs to treat respiratory disease in the Company's MSI system. In connection
with the Zambon transaction and pursuant to the Engagement Agreement, the
Company paid its counterparty to the Engagement Agreement $86,000.
In June 1998, the Company entered into a sublicense and development
agreement with Inpharzam International, S.A., an affiliate of Zambon Group, SpA,
for the testing and development of the Company's rights in its MSI technology in
respect of therapies for respiratory diseases. The agreement provides, among
other things and subject to the satisfaction of certain conditions, for the
making of loans and the payment of royalties to the Company. George R.
Griffiths, who is a director of the Company, is General Manager of Zambon
Corporation, USA, the North American subsidiary of Zambon Group, SpA.
In June 1998, the Company consummated a license and financing
transaction with Elan International Services Ltd, an affiliate of Elan
Corporation, plc. In connection with this transaction, the Company formed
Systemic Pulmonary Delivery, Ltd ("SPD"), a wholly owned subsidiary, and entered
into several agreements with Elan International Services Ltd., including a
Securities Purchase Agreement and a Joint Development and Operating Agreement.
In addition, Elan International Services Ltd. and the Company have licensed
certain of their intellectual property rights relating to pulmonary drug
delivery systems to SPD. Todd C. Davis, who is a director of the Company, is
Director of Investments and Corporate Development of Elan Pharmaceutical
Research Corporation, an affiliate of Elan International Services Ltd.
During the period January 1, 1998 through April 30, 1998, certain
executive officers provided funds for use by the Company in excess of $60,000 in
the aggregate. These funds were comprised of short-term notes having a 7% annual
interest rate, unpaid salaries and unreimbursed expenses. The largest aggregate
amounts due to certain executives during this period are as follows: Loren G.
Peterson, $85,923; David A. Byron, $80,343; and Carl F. Siekmann, $75,474. As of
December 31, 1998, all outstanding balances of these short-term notes and the
unreimbursed expenses had been paid in full.
PROPOSAL NO. 2
INCREASE AUTHORIZED COMMON STOCK
The Board of Directors recommends an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from fifty million (50,000,000) shares to sixty million
(60,000,000) shares. No increase is proposed in the currently authorized number
of shares of the Company's Preferred Stock. If approved by the stockholders, the
first sentence of Article Four of the Company's Certificate of Incorporation
would be amended to provide as follows:
"Fourth: The total number of shares of stock that the Corporation shall
have authority to issue is (i) sixty million (60,000,000) shares of
Common Stock, $0.01 par value per share ("Common Stock"), and (ii)
three (3,000,000) shares of Preferred Stock, $0.01 par value per share
("Preferred Stock").
The Company is currently authorized to issue 50,000,000 shares of
Common Stock. As of May 20, 1999, the record date for the Annual Meeting,
__________ shares of Common Stock were issued and outstanding and approximately
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an additional _________ shares of Common Stock were reserved for issuance upon
exercise of outstanding stock options, warrants and convertible securities, and
for options that may be granted in the future under the 1993 Stock Option Plan,
as amended, and the 1996 Directors Plan, as amended.
The Board of Directors of the Company believes that it is advisable and
in the best interests of the Company to have available authorized but unissued
shares of Common Stock in an amount adequate to provide for the future needs of
the Company. The additional shares will be available for issuance from time to
time by the Company in the discretion of the Board of Directions, normally
without further stockholder action (except as may be required for a particular
transaction by applicable law, requirements of regulatory agencies or by stock
exchange rules), for any proper corporation purpose including, among other
things, future acquisitions of property or securities of other corporations,
stock dividends, stock splits, convertible debt financing and equity financings.
No stockholder of the Company would have any preemptive rights regarding future
issuance of any shares of Common Stock.
The Company has no present plans, understandings or agreements for the
issuance or use of the proposed additional shares of Common Stock. However, the
Board of Directors believes that if an increase in the authorized number of
shares of Common Stock were to be postponed until a specific need arose, the
delay and expense incident to obtaining the approval of the Company's
stockholders at that time could significantly impair the Company's ability to
meet financing requirements or other objectives.
Issuing additional shares of Common Stock may have the effect of
diluting the stock ownership of persons seeking to obtain control of the
Company. Although the Board of Directors has no present intention of doing so,
the Company's authorized but unissued Common Stock and Preferred Stock could be
issued in one or more transactions that would make more difficult or costly, and
less likely, a takeover of the Company. The proposed amendment to the Company's
Certificate of Incorporation is not being recommended in response to any
specific effort of which the Company is aware to obtain control of the Company,
nor is the Board of Directors currently proposing to stockholders any
anti-takeover measures.
The affirmative vote of the holders of a majority of outstanding shares
of Common Stock is required for approval of the proposal to amend the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock. If the proposal is approved by the stockholders, the amendment to
the Certificate of Incorporation would become effective upon the filing of the
amendment of the Certificate of Incorporation with the Secretary of State of
Delaware, which would occur as soon as practicable following the approval of the
proposal by the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF
THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has appointed Ernst & Young LLP to be the
independent auditors of the Company for the fiscal year ending December 31,
1999. Although the selection of auditors does not require ratification, the
Board of Directors has directed that the appointment of Ernst & Young LLP be
submitted to stockholders for ratification. If stockholders do not ratify the
appointment of Ernst & Young LLP, the Board of Directors will consider the
appointment of other certified public accountants. A representative of Ernst &
Young LLP is expected to be available at the Annual Meeting to make a statement
if such representative desires to do so and to respond to appropriate questions.
The affirmative vote of the holders of a majority of the Common Stock
present, in person or by proxy, is required for ratification of the appointment
of Ernst & Young LLP as independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS
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STOCKHOLDER PROPOSALS
To the extent required by law, any stockholder proposal intended for
presentation at next year's annual stockholders' meeting must be received at the
Company's principal executive offices prior to February 11, 2000.
OTHER MATTERS
So far as it is known, there is no business other than that described
above to be presented for action by the stockholders at the forthcoming Annual
Meeting, but it is intended that Proxies will be voted upon any other matters
and proposals that may legally come before the Annual Meeting, or any
adjustments thereof, in accordance with the discretion of the persons named
therein.
ANNUAL REPORT
All stockholders of record as of the Record Date have been sent, or
are concurrently herewith being sent, a copy of the Company's 1998 Annual Report
on Form 10-K for the year ended December 31, 1998, which contains certified
financial statements of the Company for the year ended December 31, 1998. The
Company's Annual Report on From 10-K for the year ended December 31, 1998,
including the certified financial statements of the Company, is hereby
incorporated by reference to this Proxy Statement for Annual Meeting of
Stockholders.
ANY STOCKHOLDER OF THE COMPANY MAY OBTAIN WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998
(WITHOUT EXHIBITS), AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITING TO SCOTT HOFFMANN, CHIEF FINANCIAL OFFICER AND SECRETARY AT SHEFFIELD
PHARMACEUTICALS, INC., 425 SOUTH WOODSMILL ROAD, SUITE 270, ST. LOUIS, MISSOURI
63017.
By Order of the Board of Directors
Scott A. Hoffmann
SECRETARY
Dated: ______, 1999
St. Louis, Missouri
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SHEFFIELD PHARMACEUTICALS, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JUNE 29, 1999
The undersigned, a stockholder of Sheffield Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), does hereby appoint Thomas M. Fitzgerald
and Loren G. Peterson, and each of them, the true and lawful attorneys and
proxies with full power of substitution, for and in the name, place and stead of
the undersigned, to vote all of the shares of Common Stock of the Company which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at the Warwick Hotel, 65 West
54th Street, New York, New York 10019, on June 29, 1999, at 10:00 a.m., local
time, or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS:
To vote for the election of the following directors: Thomas M.
Fitzgerald, Loren G. Peterson, John M. Bailey, Digby W. Barrios,
Todd C. Davis and George R. Griffiths.
TO WITHHOLD
AUTHORITY TO WITHHOLD AUTHORITY
TO VOTE TO VOTE FOR ANY INDIVIDUAL
FOR ALL NOMINEE(S), PRINT NAME(S)
FOR ____ NOMINEES ____ BELOW
-------------------------
-------------------------
-------------------------
2. AMENDMENT TO CERTIFICATE OF INCORPORATION:
To amend the Company's Certificate of Incorporation to increase
the number of shares of Common Stock that the Company is
authorized to issue from 50,000,000 shares to 60,000,000 shares.
FOR__________ AGAINST__________ABSTAIN__________
3. RATIFICATION OF APPOINTMENT OF AUDITORS:
To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31,
1999.
FOR ____ AGAINST ____ ABSTAIN ____
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4. DISCRETIONARY AUTHORITY:
To vote with discretionary authority with respect to all other
matters which may come before the Meeting.
FOR ____ AGAINST ____ ABSTAIN ____
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED (I) FOR THE ELECTION
AS DIRECTORS OF THE PERSONS WHO HAVE BEEN NOMINATED BY THE BOARD OF DIRECTORS,
(II) FOR THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION, (III) TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999 AND (IV) IN ACCORDANCE
WITH THE DISCRETION OF THE PROXIES OR PROXY WITH RESPECT TO ANY OTHER BUSINESS
TRANSACTED AT THE ANNUAL MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given
and ratifies and confirms that all the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof. The
undersigned hereby acknowledges receipt of a copy of the Notice of Annual
Meeting and Proxy Statement, both dated ______, 1999.
Dated _______________________, 1999
_____________________________ (L.S.)
_____________________________ (L.S.)
_____________________________
Signature(s)
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. WHEN
SIGNING ON BEHALF OF A CORPORATION, YOU SHOULD BE
AN AUTHORIZED OFFICER OF SUCH CORPORATION, AND
PLEASE GIVE YOUR TITLE AS SUCH.
