<PAGE> 1
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
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 sec. 240.14a-11(c) or sec. 240.14a-12
ANESTA CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2), or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(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:
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 28, 1996
TO THE STOCKHOLDERS OF ANESTA CORP:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ANESTA CORP., a Delaware corporation (the "Company"), will be held on Friday,
June 28, 1996 at 2:00 p.m. local time at the Red Lion, 255 South West Temple,
Salt Lake City, Utah 84101 for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
auditors of the Company for its fiscal year ending December 31, 1996.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 29,
1996, as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ THEODORE H. STANLEY, M.D.
Theodore H. Stanley, M.D.
Secretary
Salt Lake City, Utah
May 31, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO
ENSURE YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF
YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
INVESTORS MAY REQUEST ADDITIONAL INFORMATION REGARDING ANESTA CORP.,
INCLUDING A COPY OF THE FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, FREE OF CHARGE. PLEASE ADDRESS YOUR REQUEST TO: INVESTOR
RELATIONS, ANESTA CORP., 4745 WILEY POST WAY, SUITE 650, SALT LAKE CITY, UTAH
84116.
<PAGE> 3
ANESTA CORP.
4745 WILEY POST WAY, SUITE 650
SALT LAKE CITY, UT 84116
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
ANESTA CORP., a Delaware corporation (the "Company") for use at the Annual
Meeting of Stockholders to be held on June 28, 1996 at 2:00 p.m. local time
(the "Annual Meeting"), or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Annual Meeting will be held at the Red Lion, 255 West Temple, Salt Lake
City, Utah 84101. The Company intends to mail this proxy statement and
accompanying proxy card on or about May 24, 1996, to all stockholders entitled
to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or
other regular employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
April 29, 1996 will be entitled to notice of and to vote at the Annual Meeting.
At the close of business on April 29, 1996 the Company had outstanding and
entitled to vote 7,225,331 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office,
Anesta Corp., 4745 Wiley Post Way, Suite 650, Salt Lake City, Utah 84116, a
written notice of revocation or a duly executed proxy bearing a later date, or
it may be revoked by attending the meeting and voting in person. Attendance at
the meeting will not, by itself, revoke a proxy.
STOCKHOLDER PROPOSALS
The Company intends to holds its 1996 Annual Meeting in or around May
15, 1997. Thus, proposals of stockholders that are intended to be presented at
the Company's 1997 Annual Meeting of Stockholders must be received by the
Company not later than November 15, 1996 in order to be included in the proxy
statement and proxy relating to that Annual Meeting.
2.
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
There are seven nominees for the seven Board positions presently
authorized by the Board of Directors in accordance with the Company's
Certificate of Incorporation and Bylaws. Each director to be elected will hold
office until the next annual meeting of stockholders and until his successor is
elected and has qualified, or until such director's earlier death, resignation
or removal. Each nominee listed below is currently a director of the Company.
Shares represented by executed proxies will be voted, if authority to
do so is not withheld, for the election of the seven nominees named below. In
the event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected and management has no reason to believe
that any nominee will be unable to serve.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The names of the nominees and certain information about them are set
forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/
NAME AGE POSITION HELD WITH THE COMPANY
<S> <C> <C>
William C. Moeller 57 President, Chief Executive Officer and Treasurer
Thomas B. King 41 Executive Vice President and Chief Operating Officer
Theodore H. Stanley, M.D. 56 Chairman of the Board and Secretary
Edwin M. Kania, Jr. (1)(2) 38 Managing General Partner of Morgan, Holland Partners II, L.P.
Richard H. Leazer (1)(2) 54 Managing Director of the Wisconsin Alumni Research Foundation
Emanuel M. Papper, M.D., Ph.D. (1) 80 Professor of Anesthesiology at the University of Miami, School
of Medicine
Daniel L. Kisner, M.D. (2) 48 President and Chief Operating Officer of Isis Pharmaceuticals,
Inc.
</TABLE>
- -----------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
William C. Moeller has been President and Chief Executive Officer of
the Company since he co-founded the Company in 1985. Prior to joining Anesta,
Mr. Moeller held senior management positions with several medical companies
that manufactured products for orthopedic and cardiovascular surgery and for
anesthesiology. These positions included general management responsibilities
in the large multinational companies of Howmedica, Inc., a medical devices
company, from 1964 to 1973 and The BOC Group, from 1973 to 1981, in its medical
division. Mr. Moeller was Chief Operating Officer of Symbion, Inc., a company
in the field of artificial organs, from 1982 to 1985. He received an M.B.A.
degree from Harvard Graduate School of Business Administration in 1964.
Thomas B. King has been Executive Vice President, Chief Executive
Officer and a Director of the Company since December 1994. Prior to joining
Anesta, he was employed by Somatogen, Inc., a biotechnology company, from
January 1990 to December 1994 as Vice President of Marketing and Business
Development. Prior to joining Somatogen, he was director of the Cardiovascular
Business Unit at Abbott Laboratories ("Abbott"), a pharmaceutical company, from
January 1988, to December 1989, and held various marketing and business
development positions at Anaqust, the pharmaceutical, division of BOC
Healthcare, a producer of medical gases and
3.
<PAGE> 5
manufacture of medical devices and pharmaceuticals, from June 1982 to December
1987. Mr. King received an M.B.A. in finance and marketing from the University
of Kansas in 1982.
Theodore H. Stanley, M.D. has been Chairman of the Board of Directors
of the Company since he co-founded the Company in 1985. Dr. Stanley served as
Medical Director of the Company from 1985 to April 1994. He also has been
Professor of Anesthesiology and Professor of Surgical Research at the
University of Utah School of Medicine since 1978. Dr. Stanley has also been an
Adjunct Professor of Anesthesiology at the University of Texas (Houston) since
1985. He is internationally known for his work in the clinical testing of
intravenous anesthetic drugs and has been a clinical research investigator for
numerous pharmaceutical companies in the investigation of new anesthetic drugs.
Dr. Stanley received an M.D. degree from Columbia University, College of
Physicians and Surgeons in 1965.
Edwin M. Kania, Jr. has served as director of the Company since April
1987. Since 1985, Mr. Kania has been a special limited partner of Morgan,
Holland Partners, L.P., the general partner of Morgan, Holland Fund, L.P., a
venture capital firm, ("Morgan, Holland"), which is a major stockholder of the
Company. He also serves as Managing General Partner of Morgan, Holland Fund
II, L.P., a venture fund organized in 1988 and as Managing General Partner of
One Liberty Fund III, L.P., a venture fund organized in 1995. Mr. Kania is
currently also a director of PerSeptive Biosystems, Inc., a supplier to the
pharmaceutical and biotechnical industries, and Cytyc Corporation, a diagnostic
company. Mr. Kania received an M.B.A. degree from Harvard Graduate School of
Business Administration in 1982.
Richard H. Leazer has served as Managing Director of the Wisconsin
Alumni Research Foundation, a not-for-profit corporation supporting research at
the University of Wisconsin, since March 1993. Prior to such time, he was
President of Ohmeda, an anesthesia device and equipment manufacturer and a
division of BOC HealthCare, from 1988 to September 1992 and was President of
Anaquest, an anesthesia pharmaceutical company and a division of BOC
HealthCare, from 1981 to 1988. Mr. Leazer received an M.B.A. degree from
Drexel University in 1966.
Emanuel M. Papper, M.D., Ph.D. has been a director of the Company
since July 1990. He has been Professor of Anesthesiology at the University of
Miami since 1969 and was Professor of Pharmacology there from 1974 to 1981.
Dr. Papper also served as the Vice President for Medical Affairs and the Dean
of the University of Miami School of Medicine from 1969 to 1981. Prior to that
time, Dr. Papper was a Professor of Anesthesiology and Chairman of the
Department of Anesthesiology at Columbia University from 1949 to 1969. Dr.
Papper served as a director of Abbott from 1971 to 1984. He received an M.D.
degree from New York University in 1938 and a Ph.D. degree in English
Literature from the University of Miami in 1990. In addition, Dr. Papper holds
numerous honorary degrees.
Daniel Kisner, M.D. has served as a director of the Company since
February 1996. Dr. Kisner has served as Chief Operating Officer of Isis
Pharmaceuticals, Inc., a biotechnology company, since February 1993, as a
Director since March 1991 and as President since May 1994. From March 1991
until February 1993, he was Executive Vice President of Isis. From December
1988 until March 1991, he was Division Vice President of Pharmaceutical
Development for Abbott. From March 1988 until November 1988, Dr. Kisner served
as the Vice President, International Clinical Research and Development for
Smith Kline & French Laboratories and from May 1985 until March 1988 he served
as Vice President, Clinical Research R & D, Continental Europe for the same
company. Dr. Kisner was an Associate Professor of Oncology at the University
of Texas and an acting Associate Director at the National Cancer Institute.
Dr. Kisner received an M.D. degree from Georgetown University in 1972.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
4.
<PAGE> 6
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1995 the Board of Directors
held six meetings. The Board has an Audit Committee and a Compensation
Committee, the Audit Committee held two meetings and the Compensation Committee
held two meetings during the fiscal year ended December 31, 1995.
The Audit Committee meets with the Company's independent auditors to
review the results of the annual audit and discuss the financial statements;
recommends to the Board the independent auditors to be retained; and receives
and considers the accountants' comments as to controls, adequacy of staff and
management performance and procedures in connection with audit and financial
controls. The Audit Committee is composed of three non-employee directors:
Messrs. Kania and Leazer and Dr. Kisner.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board
may delegate. The Compensation Committee is composed of three non-employee
directors: Messrs. Kania and Leazer and Dr. Papper.
During the fiscal year ended December 31, 1995, all directors except
Drs. Papper and Samuelson attended at least 75% of the meetings of the Board
held during the period for which they were a director.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year ending December 31, 1996 and
has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting. Coopers &
Lybrand L.L.P. has audited the Company's financial statements since 1986, when
the Company's financial statements were first audited. Representatives of
Coopers & Lybrand L.L.P. are expected to be present at the Annual Meeting, will
have an opportunity to make a statement if they so desire and will be available
to respond to appropriate questions.
Stockholder ratification of the selection of Coopers & Lybrand L.L.P.
as the Company's independent auditors is not required by the Company's By-laws
or otherwise. However, the Board is submitting the selection of Coopers &
Lybrand L.L.P. to the stockholders for ratification as a matter of good
corporate practice. If the stockholders fail to ratify the selection, the
Audit Committee and the Board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee and the Board in
their discretion may direct the appointment of different independent auditors
at any time during the year if they determine that such a change would be in
the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at the Annual
Meeting will be required to ratify the selection of Coopers & Lybrand L.L.P.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
5.
<PAGE> 7
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of March 31, 1996 by: (i) each
nominee for director; (ii) the executive officer named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company
as a group; and (iv) all those known by the Company to be beneficial owners of
more than five percent of its Common Stock.
<TABLE>
<CAPTION>
NUMBER
OF SHARES PERCENT
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED OWNED (1)(2)
- ------------------------ ------------- ------------
<S> <C> <C>
Morgan, Holland Fund, L.P. . . . . . . . . . . . . . . . . . . 1,412,345 19.5%
One Liberty Square, Suite 840
Boston, Massachusetts 02109
Edwin M. Kania, Jr. (3) . . . . . . . . . . . . . . . . . . . 1,418,845 19.6
Morgan, Holland Fund, L.P.
One Liberty Square, Suite 840
Boston, Massachusetts 02109
Abbott Laboratories . . . . . . . . . . . . . . . . . . . . . 1,202,840 16.6
One Abbott Park Road, D-980, AP30
Abbott Park, IL 60064-3500
Theodore H. Stanley and Stanley Research Foundation (4) . . . . 734,514 10.0
4745 Wiley Post Way, Suite 650
Salt Lake City, UT 84116
William C. Moeller (5) . . . . . . . . . . . . . . . . . . . . 651,549 8.9
4745 Wiley Post Way, Suite 650
Salt Lake City, UT 84116
The Capital Group Companies, Inc. (6) . . . . . . . . . . . . . 460,000 6.4
Daniel L. Kisner . . . . . . . . . . . . . . . . . . . . . . . -- --
Thomas B. King (7) . . . . . . . . . . . . . . . . . . . . . . 38,854 **
Richard H. Leazer (8) . . . . . . . . . . . . . . . . . . . . . 5,187 **
Emanuel M. Papper (9) . . . . . . . . . . . . . . . . . . . . . 21,353 **
Michael A. Busch (10) . . . . . . . . . . . . . . . . . . . . . 48,764 **
Dennis L. Coleman (11) . . . . . . . . . . . . . . . . . . . . 59,632 **
Steven A. Shoemaker (12) . . . . . . . . . . . . . . . . . . . 30,051 **
All executive officers and directors as a group
(10 persons) (3)-(5) and (7)-(12) . . . . . . . . . . . . 3,008,749 39.6%
</TABLE>
- -----------------
** Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options or warrants currently exercisable or exercisable
within sixty (60) days of March 31, 1996, are deemed outstanding for
computing the percentage of the person or entity holding such
securities but are not outstanding for computing the percentage of any
other person or entity. Except as indicated by footnote, and subject
to community property laws where applicable, the persons named in the
table above have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them
(2) Percentage of beneficial ownership is based on 7,225,331 shares of
Common Stock outstanding as of March 31, 1996.
6.
<PAGE> 8
(3) Includes 1,412,345 shares held by Morgan, Holland Fund, L.P., 1,000
shares held by Morgan, Holland Venture Corp. Retirement Trust for the
benefit of Edwin M. Kania, Jr., and options to purchase 5,500 shares
of Common Stock held by Mr. Kania but subject to a sharing agreement
with other general partners of Morgan, Holland Ventures Corp. Mr.
Kania, a director of the Company, is a special limited partner of
Morgan, Holland Partners, L.P., the general partner of Morgan,
Holland. Mr. Kania disclaims beneficial ownership of the shares held
by Morgan, Holland except to the extent of his pecuniary interest
therein.
(4) Includes options exercisable for 153,749 shares of Common Stock. Of
the 734,514 shares, Dr. Stanley owns 390,649 shares, Mary Ann Stanley,
Dr. Stanley's spouse, owns 236,900 shares, the Stanley Research
Foundation owns 82,065 shares and Dr. Stanley owns 24,900 shares
jointly with Ellen Stanley.
(5) Includes options exercisable for 54,584 shares of Common Stock.
(6) The Capital Group Companies, Inc., Capital Research and Management
Company, and SMALLCAP World Fund, Inc. have together filed a Schedule
13G pursuant to which they report sole or shared voting and
dispositive power over 460,000 shares owned as of December 31, 1995.
Capital Research and Management Company is an Investment Adviser and
is a wholly owned subsidiary of The Capital Group Companies, Inc. and
serves as investment adviser to SMALLCAP World Fund, Inc., a
registered investment company.
(7) Includes options exercisable for 38,071 shares of Common Stock.
(8) Includes options exercisable for 5,187 shares of Common Stock.
(9) Includes options exercisable for 8,853 shares of Common Stock.
(10) Includes options exercisable for 46,180 shares of Common Stock.
(11) Includes options exercisable for 29,484 shares of Common Stock.
(12) Includes options exercisable for 28,956 shares of Common Stock.
7.
<PAGE> 9
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. All such
reports required to be filed during the fiscal year ended December 31, 1995
were filed.
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
Executive Officers of the Company as of March 31, 1996:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William C. Moeller........................... 57 President, Chief Executive Officer and Treasurer
Thomas B. King............................... 41 Executive Vice President and Chief Operating Officer
Theodore H. Stanley, M.D..................... 56 Chairman of the Board and Secretary
Steven A. Shoemaker, M.D..................... 44 Vice President of Medical Affairs
Michael A. Busch, Ph.D....................... 43 Vice President, Clinical Research and Regulatory Affairs
Dennis L. Coleman, Ph.D...................... 49 Vice President, Research and Development
</TABLE>
- -----------------
See "Proposal 1 - Election of Directors" for the biographies of Mr. Moeller,
Mr. King and Dr. Stanley.
Steven A. Shoemaker, M.D. has been Vice President of Medical Affairs
since April 1994. Prior to joining Anesta, he was employed by Somatogen, Inc.,
a biotechnology company, from February 1993 to March 1994 as Senior Vice
President and from June 1989 to February 1993 as Vice President of Drug
Development and Medical Affairs. He was Assistant Professor of Medicine at the
University of Colorado Health Sciences Center from July 1985 to June 1988. He
received an M.D. degree from the University of California at Los Angeles in
1978.
Michael A. Busch, Ph.D. has been Vice President of Clinical Research
and Regulatory Affairs of the Company since March 1992. Prior to joining
Anesta, he was employed at Glaxo, Inc., a pharmaceutical company, where he
served as Senior Clinical Research Scientist from March 1988 to September 1988
and as Assistant Director of Clinical Research and Assistant Director of R&D
Project Management from September 1988 to February 1992. He held several
positions at Abbott from 1983 to 1988, most recently as Senior Clinical
Research Associate. Dr. Busch received a Ph.D. degree in Physiology and
Biophysics from Colorado State University in 1981.
Dennis L. Coleman, Ph.D. has been Vice President of Research and
Development of the Company since March 1992 and served as Director, Technical
Marketing at the Company from April 1991 to February 1992. Prior to joining
Anesta, he was a founder of Albion Instruments, a company specializing in the
analysis of anesthetic gases, where he served as Clinical Director from 1981 to
August 1990. He also served as a consultant to Anesta from September 1990 to
March 1991. He served as Research Associate Professor at the College of
Pharmacy, Department of Pharmaceutics from 1985 to 1987 and as Research
Assistant Professor, Department of Surgery, College of Medicine, Division of
Artificial Organs from 1981 to 1986 at the University of Utah. Dr. Coleman
received a Ph.D. degree in Pharmaceutics from the University of Utah in 1980.
8.
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
The Company's directors do not currently receive any cash compensation
for service on the Board of Directors or any committee thereof, but directors
may be reimbursed for certain expenses in connection with attendance at Board
of Directors and committee meetings.
Each non-employee director of the Company receives stock option grants
under the 1993 Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"). Only non-employee directors of the Company or affiliates of such
directors (as defined in the Internal Revenue Code) are eligible to receive
options under the Directors' Plan. Options granted under the Directors' Plan
do not qualify as incentive stock options under the Code.
Option grants under the Directors' Plan are non-discretionary. Each
person who is, after the effective date of the initial public offering of
shares of the Company's Common Stock, elected for the first time to be a
non-employee director shall, upon the initial election date to be a
non-employee director by the Board of Directors or stockholders of the Company,
be granted an option to purchase 10,000 shares of Common Stock of the Company
under the Directors' Plan. On the first business day of each calendar year
each member of the Company's Board of Directors who is not an employee of the
Company and has served as a non-employee director for at least three months
or, where specified by the non- employee director, an affiliate of such
director, is automatically granted under the Directors' Plan, without further
action by the Company, the Board of Directors or the stockholders of the
Company, an option to purchase 1,500 shares of Common Stock of the Company. No
other options may be granted at any time under the Directors' Plan. The
exercise price of options granted under the Directors' Plan is the fair market
value of the Common Stock subject to the option on the date of the option
grant. Options granted under the Directors' Plan may be exercised: (i) in
installments over a period of three years from the date of grant in three equal
installments commencing on the date one year after the date of grant, provided
that the optionee has, during the entire period prior to such vesting date,
continuously served as a non-employee director, or (ii) until the date upon
which such optionee, or the affiliate of such optionee, as the case may be,
terminates his service as a non-employee director for any reason or for no
reason, the option shall terminate on the earlier of the expiration date of the
option or the date three months following the date of termination of service.
The term of options granted under the Directors' Plan is five years. In the
event of a merger of the Company with or into another corporation or a
consolidation, acquisition of assets or other change-in-control transaction
involving the Company, each option either will continue in effect, if the
Company is the surviving entity, or will be assumed or an equivalent option
will be substituted by the successor corporation, if the Company is not the
surviving entity.
During the last fiscal year, the Company granted options covering
4,500 shares to each non-employee director of the Company, at an exercise price
per share of $5.375, which was equal to the fair market value on the date of
grant (based on the closing sales price reported in the Nasdaq National
Market). As of December 31, 1995, 1,250 options had been exercised under the
Directors' Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth, for the fiscal year ended December 31,
1995, certain compensation, including salary, bonuses, stock options and
certain other compensation, awarded or paid to, or earned by, the Company's
Chief Executive Officer and its four most highly compensated executive officers
at December 31, 1995 (the "Named Executive Officers").
9.
<PAGE> 11
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
---------------------- SECURITIES
SALARY BONUS UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS
- --------------------------- ---- ------- ------ ------------
<S> <C> <C> <C> <C>
William C. Moeller 1995 150,000 28,000 --
President and Chief Executive 1994 131,667 20,000 25,000
Officer 1993 90,865 -- 17,606
Michael A. Busch 1995 120,250 24,000 10,000
Vice President, Clinical Research 1994 101,667 16,000 15,000
and Regulatory Affairs 1993 85,000 -- 14,000
Dennis L. Coleman 1995 126,462 20,400 10,000
Vice President, Research and 1994 100,834 16,000 15,000
Development 1993 87,467 -- 14,600
Thomas B. King 1995 143,001 27,000 42,500
Executive Vice President and Chief 1994 6,050 -- 85,000
Operating Officer (1) 1993 -- -- --
Steven A. Shoemaker 1995 140,000 23,800 10,000
Vice President, Medical Affairs (2) 1994 123,302 15,000 50,000
1993 -- -- --
</TABLE>
- ------------------
(1) Mr. King became an officer and employee of the Company during 1994.
(2) Dr. Shoemaker became an officer and employee of the Company during
1994.
10.
<PAGE> 12
OPTION GRANTS IN 1995
The following table sets forth for the Named Executive Officers
certain information regarding options granted for the year ended December 31,
1995:
<TABLE>
<CAPTION>
PERCENT OF
TOTAL
OPTIONS POTENTIAL REALIZABLE
GRANTED TO VALUE AT
NUMBER OF EMPLOYEES ASSUMED ANNUAL RATES OF
SECURITIES IN STOCK PRICE APPRECIATION
UNDERLYING 1995 EXERCISE FOR OPTION TERM (2)
OPTIONS ----- PRICE EXPIRATION --------------------------
NAME GRANTED (#) (%)(1) ($/SHARE) DATE 5% ($) 10% ($)
- ---- ----------- ---------- --------- ----------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
William C. Moeller................. -- -- -- -- -- --
Michael A. Busch................... 10,000 5% $ 5.25 3/15/2000 $ 14,504 $ 32,051
Dennis L. Coleman.................. 10,000 5 5.25 3/31/2000 14,504 32,051
Thomas B. King..................... 42,500 22 10.25 10/09/2000 120,355 265,953
Steven A. Shoemaker................ 10,000 5 5.25 4/15/2000 14,504 32,051
</TABLE>
- -----------------
(1) Based on 196,750 options granted in 1995.
(2) The potential realizable value is based on the term of the option at
its time of grant (5 years in the case of these options). It is
calculated by 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. No gain
to the optionee is possible unless the stock price increases over the
option term, which will benefit all stockholders.
11.
<PAGE> 13
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth for the Named Executive Officers the
shares acquired and the value realized on each exercise of stock options during
the fiscal year ended December 31, 1995 and the fiscal year-end number and
value of unexercised options:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT DECEMBER 31,
DECEMBER 31, 1995 1995 ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) (1) UNEXERCISABLE UNEXERCISABLE (2)
- ---- --------------- ---------------- ----------------- -----------------------
<S> <C> <C> <C> <C>
William C. Moeller 30,000 $ 137,250 58,980/15,626 $368,660/$39,065
10,000 35,750
Michael A. Busch -- -- 41,012/23,588 302,699/107,501
Dennis L. Coleman 4,000 18,800 27,836/23,276 192,292/103,934
1,000 4,700
Thomas B. King -- -- 24,790/102,710 78,800/176,200
Steven A. Shoemaker -- -- 23,227/36,773 44,603/82,897
</TABLE>
- -----------------
(1) Based on the fair market value of the Common Stock as of the exercise
date as reported on the Nasdaq National Market, minus the exercise
price, multiplied by the number of shares underlying the option.
(2) Based on the fair market value of the Common Stock as of December 31,
1995 as reported on the Nasdaq National Market, minus the exercise
price, multiplied by the number of shares underlying the option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer
of the Company.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Until 1994, the Board of Directors (the "Board") of the Company was
responsible for establishing the Company's compensation programs for all
executive officers. Beginning in 1994, the Board delegated to the Compensation
Committee (the "Committee") of the Board the authority to establish and
administer the Company's compensation programs. The Committee is currently
composed of three non-employee directors: Mr. Kania, Mr. Leazer and Dr.
Papper. The Committee is responsible for setting and administering the
policies which govern executive salaries, bonuses (if any) and stock ownership
programs. The Committee annually evaluates the performance, and determine the
compensation, of the Chief Executive Officer (the "CEO") and the other
executive officers of the Company, based upon a mix of the achievement of
corporate goals, individual performance and comparisons with other
pharmaceutical and drug delivery companies.
The policies of the Company with respect to compensation of executive
officers, including the CEO, are to provide compensation sufficient to attract,
motivate and retain executives of outstanding ability and potential and to
establish an appropriate relationship between executive compensation and the
creation of stockholder value. To meet these goals, the Committee adopted a
mix among the compensation elements of salary, bonus and stock options, with a
bias toward stock options, to emphasize the link between executive incentives
and the creation of stockholder value as measured by the equity markets. In
general for 1995, the salaries, bonuses and stock option awards of executive
officers were linked to the Company's achievement of corporate performance
criteria with respect to progress in product development programs (particularly
the cancer pain program), the controlled roll-out of Fentanyl Oralet, expanding
the Company's management team through the integration of a Chief Operating
Officer, strengthening the Company's pharmaceutical product development
capabilities, further development of the Company's corporate partnering
strategy, public company matters and stock price performance. In order to
conserve
12.
<PAGE> 14
the Company's financial resources, and in order to reflect the Company's size
and stage of development in relation to the companies included in industry
compensation surveys reviewed by the Committee, the Committee determined to
provide for base salaries at or below the mid-point of the compensation range
for such companies. Bonuses were awarded to certain executive officers based
on the same performance criteria noted above plus the achievement of certain
individual objectives. In general, the bonus program is designed to allow each
executive officer to realize total cash compensation that is slightly below or
meaningfully above industry averages, based on performance. Base salary and
bonus were supplemented by awards under the Company's stock option plan,
designed to provide long-term incentives to all employees of the Company.
Stock option awards were set in the mid-range compared to the companies
included in the industry surveys considered by the Committee. Each of these
components is discussed in turn below.
BASE SALARY
Base salaries for all executive officers of the Company were
established at or below the mid-point of the range for companies included in
the compensation surveys considered by the Committee. In establishing such
salaries, the Committee also considers each officer's level of industry
experience, individual achievement and overall contribution to the achievement
of corporate objectives.
BONUSES
The Company paid bonuses to its CEO and four other executive officers
in 1995, in amounts ranging from $20,400 to $28,000. Such bonuses were based
on the extent to which the corporate goals described above were achieved, and
represented approximately 20% of each such officer's base salary.
OPTION PLANS
The option plans offered by the Company have been established to
provide all executive officers of the Company with an opportunity to share,
along with stockholders of the Company, in the long-term performance of the
Company. Periodic grants of stock options are generally made to all eligible
employees. These grants have been reviewed by the Board on an annual basis.
As the base salaries for executive officers of the Company historically have
been below the mid-point of the range for comparable companies, the Company has
used stock options as the primary incentive to attract and retain its executive
officers. In awarding stock options, the Board considers individual
performance and overall contribution to the Company and also considers the
number of unvested stock options held by the officer and the total number of
stock options available to be awarded under the stock option plans. The
Committee also considers the stock option practices of a self-selected group of
other pharmaceutical, biotechnology and drug delivery companies. After
considering the criteria relating to awarding stock options, the Board
determined that four executive officers would receive option grants in the year
ended December 31, 1995. Stock options granted under the stock option plans
generally have a four-year vesting schedule and generally expire five years
from the date of grant. The exercise price of options granted under the stock
option plans was 100% of fair market value of the underlying stock on the date
of grant for all officers who were granted options during 1995.
CEO COMPENSATION
Mr. Moeller's base salary and grants of stock options were determined
in accordance with the criteria described above. The base salary of Mr.
Moeller was set at an annual rate of $150,000 commencing January 1, 1995,
which represented an increase from his base salary of $131,667 in 1994. In
setting such salary level, the Committee considered salary surveys prepared by
Radford Associates, Ward Howell and Ernst & Young for other companies in the
pharmaceutical, biotechnology and drug delivery sectors. Mr. Moeller's salary
was set below the mid-point of the range for such companies, reflecting the
Company's size and stage of development in relation to such companies and the
Committee's desire to conserve the Company's financial resources. Mr. Moeller
also received a bonus of $28,000 for 1995. Such salary and bonus were based on
the extent to which the performance objectives described above were achieved.
The Committee determined that certain of such objectives were fully satisfied,
and others were partially satisfied, in 1995.
13.
<PAGE> 15
SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code (the "Code") limits the
Company to a deduction for federal income tax purposes of no more than $1
million of compensation paid to certain Named Executive Officers in a taxable
year. Compensation above $1 million may be deducted if it is
"performance-based compensation" within the meaning of the Code. The statute
containing this law and the applicable proposed Treasury regulations offer a
number of transitional exceptions to this deduction limit, including an
exemption for compensation plans, arrangements and binding contracts in
existence prior to the time the Company became a "publicly held corporation"
within the meaning of the Code. As a result, the Board believes that at the
present time it is quite unlikely that the compensation paid to any Named
Executive Officers in a taxable year which is subject to the deduction limit
will exceed $1 million. Therefore, the Board has not yet established a policy
for determining which forms of incentive compensation awarded to its Named
Executive Officers shall be designed to qualify as "performance-based
compensation." The Board intends to continue to evaluate the effects of the
statute and any final Treasury regulations and to comply with Code Section
162(m) in the future to the extent consistent with the best interests of the
Company.
COMPENSATION COMMITTEE
Edwin M. Kania, Jr.
Emanuel M. Papper, M.D., Ph.D.
Richard H. Leazer
14.
<PAGE> 16
PERFORMANCE CHART
COMPARISON OF 23 MONTH CUMULATIVE TOTAL RETURN*
AMONG ANESTA CORP., NASDAQ STOCK MARKET-US INDEX
AND THE BIOCENTURY DRUG DELIVERY SECTOR INDEX
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
1/28/94 3/94 6/94 9/94 12/94 3/95 6/95 9/95 12/95
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ANESTA CORP. 100 84 64 71 43 40 77 87 74
- -----------------------------------------------------------------------------------------------------------------------
NASDAQ STOCK MARKET-US 100 93 89 96 95 104 119 133 135
- -----------------------------------------------------------------------------------------------------------------------
BIOCENTURY DRUG DELIVERY SECTOR 100 85 72 75 67 70 82 108 118
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* $100 Invested on 01/28/94 in stock or index
including reinvestment of dividends.
Fiscal year ending December 31.
15.
<PAGE> 17
CERTAIN TRANSACTIONS
Relationship with Abbott Laboratories. In December 1989, Anesta
entered into a research and development, license, supply and distribution
agreement with Abbott. Under the agreement, as amended, Anesta granted to
Abbott the exclusive right to make, use and market in the U.S. OT-products
resulting from technology owned or licensed by Anesta consisting of the
OT-fentanyl product line or other central nervous system acting drugs or
intermediates thereof used for pre-medication, sedation, analgesia, diagnostic
procedures, emergency room, post operative pain, burn treatment or
cancer-related pain management. Abbott's exclusive license terminates upon the
expiration of the last U.S. patent relative to such licensed technology. Under
the 1989 Agreement, Abbott has provided development funding and milestone
payments and Abbott is obligated to pay royalties and other payments on product
sales. In 1995, the Company entered into two new funding agreements with
Abbott under which Abbott agreed to provide to the Company $1,500,000 in each
of 1995 and 1996 to further the development of Actiq for cancer pain. Through
March 31, 1996, Abbott had paid a total of $8,250,000 and committed an
additional $1,500,000 to be paid during the remainder of 1996. Abbott is
Anesta's contract manufacturer for the OT-fentanyl product line and sells such
products to Anesta. Anesta resells OT-fentanyl products to Abbott for
marketing in the U.S. under Abbott's trademark Fentanyl Oralet and Anesta's
trademark Actiq.
The Company granted to Abbott International in February 1991 a license
for OT-fentanyl products for all countries in the world other than the U.S. In
August 1995, the Company and Abbott International amended the February 1991
license agreement to grant the Company an option to either terminate or make
non-exclusive Abbott International's license rights to the OT-fentanyl product
line, including Fentanyl Oralet and Actiq, in any country other than the U.S.
In conjunction with the amendment, Abbott agreed to manufacture and sell to the
Company, its distributors or licensees any OT-fentanyl products the Company
requests from Abbott for distribution into a country for which the Company has
exercised its option to terminate or made non-exclusive Abbott International's
license. The amendment also reduced by $100,000 the Company's unearned advance
royalty obligation to Abbott International, which amount was recognized as
royalty revenue during the year ended December 31, 1995.
Relationship with University of Utah Research Foundation. The Company
has entered into a license agreement with the University of Utah Research
Foundation (the "UURF") with respect to the license by UURF to the Company of
the Company's proprietary OT drug delivery system. Under the license
agreement, the Company is obligated to pay to the UURF royalties based on
Anesta's revenues related to sales of products incorporating the OT system.
Dr. Theodore H. Stanley has been Professor of Anesthesiology and Professor of
Surgical Research at the University of Utah, an affiliate of the UURF, since
1978. As one of the inventors of the OT system, Dr. Stanley may be entitled to
a portion of the royalties obtained by the UURF from the Company in connection
with the license of the technology to the Company pursuant to an unwritten
policy of the University of Utah. In addition, the Company issued to the UURF
6,000 shares of the Company's Common Stock in connection with the issuance of
the license.
Relationship with Stanley Research Foundation. Dr. Stanley is the
sole trustee of the Stanley Research Foundation ("SRF"), a not-for-profit
entity. SRF makes grants to the University of Utah which are used to support
the work of scientists and other employees of the University of Utah. The
Company reimburses SRF for such grants. The Company obtains from SRF certain
materials and services at the same cost as that paid by SRF. Such grants and
purchasing arrangements totaled approximately $321,539 for the year ended
December 31, 1995. Dr. Stanley receives no remuneration from SRF, and
therefore does not benefit directly from the Company's arrangements with SRF.
16.
<PAGE> 18
OTHER MATTERS
The Board of Directors knows of no other matters that will be
presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named
in the accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ THEODORE H. STANLEY, M.D.
Theodore H. Stanley, M.D.
Secretary
May 31, 1996
17.
<PAGE> 19
DETACH HERE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
/ X / Please mark
votes as in
this example.
THE BOARD RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
1. Election of Seven Directors Proposed in the
Accompanying Proxy Statement.
Nominees: Edwin M. Kania, Jr., Thomas B. King, Richard 2. To ratify the appointment of FOR AGAINST ABSTAIN
H. Leazer, William C. Moeller, Emanuel M. Papper, Daniel Coopers & Lybrand L.L.P. as / / / / / /
L. Kisner, Theodore H. Stanley the Company's Independent
FOR WITHHELD Certified Public Accountants
/ / / / for the fiscal year ending
December 31, 1996.
/ / 3. To transact such other business as may properly
-------------------------------------- come before the annual meeting or any adjournments
For all nominees except as noted above or postponements thereof.
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE AT LEFT
Please sign exactly as your name(s) appear(s) on your
stock certificate. If shares of stock are held of record
in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise,
both or all of such should sign the Proxy. If shares
of stock are held of record by a corporation, the Proxy
should be signed by the President or Vice President and
the Secretary or Assistant Secretary, Executors or
administrators or other fiduciaries who execute the
above Proxy for a deceased stockholder should give their
full titles.
Signatures:________________________ Date:___________________ Signature:____________________________ Date:______________________
</TABLE>
DETACH HERE
ANESTA CORP.
P The undersigned hereby appoints William C. Moeller and Theodore H.
Stanley, and either of them, as attorneys of the undersigned with full power
R of substitution, to vote all shares of stock which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of Anesta Corp., to
O be held on June 28, 1996 at 2:00 p.m. local time, at the Red Lion, 255 South
West Temple, Salt Lake City, Utah, and at any continuation or adjournment
X thereof, with all powers which the undersigned might have if personally
present at the meeting.
Y
Where no contrary choice is indicated by the stockholder, this Proxy
when returned, will be voted FOR such nominees and proposals and with
discretionary authority upon such other matters as may properly come before
the meeting. This Proxy may be revoked at any time prior to the time it is
voted.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby acknowledges receipt of: (a) Notice of Annual
Meeting of Stockholders dated May 31, 1996; (b) the accompanying Proxy
Statement and (c) the Annual Report to Stockholders for the fiscal year
ended December 31, 1995 and hereby expressly revokes any and all proxies
heretofore given or executed by the undersigned with respect to the shares
of stock represented by this Proxy and by filing this Proxy with the
Secretary of the Corporation, gives notice of such revocation.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
/ SEE REVERSE SIDE /
