SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Neurobiological Techonologies, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Neurobiological Technologies, Inc.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or 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 transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date filed:
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<PAGE>
NEUROBIOLOGICAL TECHNOLOGIES, INC.
1387 Marina Way South
Richmond, California 94804
(510) 215-8000
October 10, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Neurobiological Technologies, Inc. which will be held on November 14, 1996,
at 10:00 A.M., at the World Trade Club, Room 300, World Trade Center (adjoining
the Ferry Building at Embarcadero and Market Street), San Francisco, California.
The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return,
at your earliest convenience, the enclosed proxy in the prepaid envelope
addressed to ChaseMellon Shareholder Services, our transfer agent, to ensure
that your shares will be represented. YOUR SHARES CANNOT BE VOTED UNLESS YOU
SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company's Annual Report on Form 10-KSB is also enclosed.
The Board of Directors and Management look forward to seeing you at the
meeting.
Sincerely yours,
Jeffrey S. Price, Ph.D.
President and Chief
Executive Officer
<PAGE>
NEUROBIOLOGICAL TECHNOLOGIES, INC.
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 1996
-------------------
To the Stockholders of Neurobiological Technologies, Inc.:
The Annual Meeting of Stockholders of Neurobiological Technologies,
Inc., a Delaware corporation (the "Company"), will be held at the World Trade
Club, Room 300, World Trade Center (adjoining the Ferry Building at Embarcadero
and Market Street), San Francisco, California on November 14, 1996, at 10:00
A.M., Pacific Standard Time, for the following purposes:
1. To elect the board of directors;
2. To consider and vote upon a proposal to amend and restate the
Employee Stock Purchase Plan of Neurobiological Technologies, Inc.;
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors; and
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment of the Annual Meeting.
Stockholders of record as of the close of business on September 25,
1996 are entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof. A complete list of stockholders entitled to vote will be
available at the Secretary's office, 1387 Marina Way South, Richmond, for ten
days before the meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING. EVEN
IF YOU PLAN TO ATTEND THE MEETING, WE HOPE THAT YOU WILL PROMPTLY MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY. THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR
VOTE AT THE MEETING.
By Order of the Board of Directors,
Jeffrey S. Price, Ph.D.
President and Chief
Executive Officer
Richmond, California
October 10, 1996
<PAGE>
NEUROBIOLOGICAL TECHNOLOGIES, INC.
------------------
PROXY STATEMENT
------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Neurobiological Technologies, Inc., a Delaware
corporation (the "Company"), of proxies in the accompanying form to be used at
the Annual Meeting of Stockholders to be held on November 14, 1996 and any
adjournment thereof (the "Annual Meeting"). The shares represented by the
proxies received in response to this solicitation and not revoked will be voted
at the Annual Meeting. A proxy may be revoked at any time before it is exercised
by filing with the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date or by voting in person at the Annual
Meeting. On the matters coming before the Annual Meeting for which a choice has
been specified by a stockholder by means of the ballot on the proxy, the shares
will be voted accordingly. If no choice is specified, the shares will be voted
FOR the election of the nominees for director listed in this Proxy Statement and
FOR the amendments to the Employee Stock Purchase Plan and FOR ratification of
Ernst & Young LLP as the Company's independent auditors as described in the
Notice of Annual Meeting and in this Proxy Statement and will be voted in the
proxy holders' discretion as to other matters that may properly come before the
Annual Meeting and any adjournment.
Stockholders of record at the close of business on September 25, 1996
are entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 6,515,483 shares of Common Stock
outstanding and entitled to vote. Each holder of Common Stock is entitled to one
vote for each share held as of the record date.
Directors are elected by a plurality vote. The other matters submitted
for stockholder approval at this Annual Meeting will be decided by the
affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote on each such matter. Abstentions with respect to any
matter are treated as shares present or represented and entitled to vote on that
matter and thus have the same effect as negative votes. If shares are not voted
by the broker who is the record holder of the shares, or if shares are not voted
in other circumstances in which proxy authority is defective or has been
withheld with respect to any matter, these non-voted shares are not deemed to be
present or represented for purposes of determining whether stockholder approval
of that matter has been obtained.
The expense of printing and mailing proxy materials will be borne by
the Company. In addition to the solicitation of proxies by mail, solicitation
may be made by certain directors, officers and other employees of the Company by
personal interview, telephone or facsimile. No additional compensation will be
paid to such persons for such solicitation. The Company will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
materials to beneficial owners of the Company's Common Stock.
This Proxy Statement and the accompanying form of proxy are being
mailed on or about October 10, 1996 to all stockholders entitled to vote at the
meeting.
IMPORTANT
Please mark, sign and date the enclosed proxy and return it at your
earliest convenience in the enclosed postage-prepaid return envelope so that,
whether you intend to be present at the Annual Meeting or not, your shares can
be voted. This will not limit your rights to attend or vote at the Annual
Meeting.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
The Board of Directors proposes the election of the following directors
of the Company for a term of one year. Directors are elected to serve until the
next annual meeting of stockholders and until their successors are elected and
qualified. If any nominee is unable or declines to serve as director at the time
of the Annual Meeting, proxies will be voted for any nominee designated by the
Board of Directors to fill the vacancy.
Names of the nominees and certain biographical information about them
are set forth below:
Jeffrey S. Price, Ph.D., age 54, has been President and a director of
the Company since he joined the Company in October 1990 and has been Chief
Executive Officer since April 1991. Dr. Price also served as Chief Operating
Officer of the Company from October 1990 until April 1991. Before joining NTI,
he was employed for 14 years with Cetus Corporation ("Cetus"), which merged with
Chiron Corporation in 1991, serving as Vice President from 1982 until 1986, and
as Senior Vice President of Research and Development from 1986 until April 1990,
in which positions he held responsibility for Cetus' corporate research and
development operation and organization. This organization engaged in discovery
research into novel therapeutics and diagnostics using the tools and insights
gained from modern molecular biology, and in the design of novel manufacturing
processes for finished products. Dr. Price's group managed the development of
several investigational new drugs, two of which have been subsequently approved
for commercial sale, and also developed PCR, a powerful gene-amplification
technology with applications in discovery research and diagnostics. Dr. Price
holds a B.A. degree from The Colorado College and M.A. and Ph.D. degrees in
Biology from Rice University.
Abraham E. Cohen, age 60, has been a director of the Company since
March 1993 and has been Chairman of the Board of Directors since August 1993.
From 1982 to 1992, Mr. Cohen served as Senior Vice President of Merck & Co.
("Merck") and from 1977 to 1988 as President of the Merck Sharp & Dohme
International Division ("MSDI"). While at Merck, he played a key role in the
development of Merck's international business, initially in Asia, then in Europe
and, subsequently, as President of MSDI, which manufactures and markets human
health products outside the United States. Since his retirement from Merck and
MSDI in January 1992, Mr. Cohen has been active as an international business
consultant. He is a director of six public companies: Agouron Pharmaceuticals,
Inc., Akzo N.V., Immunomedics, Teva Pharmaceutical Industries, Ltd.,
Vasomedical, Inc., and Vion Pharmaceuticals, Inc.
Enoch Callaway, M.D., age 72, is a founder of the Company and has
served as a director of the Company since September 1987. Dr. Callaway
previously served as Chairman of the Board of Directors of the Company from
September 1987 to November 1990, as Co-Chairman of the Board from November 1990
until August 1993, as Vice President from September 1988 until August 1993 and
as Secretary from September 1988 until September 1991. Dr. Callaway has been
Emeritus Professor of Psychiatry at the University of California, San Francisco
since 1986, where he also served as Director of Research at the Langley Porter
Psychiatric Institute from 1959 to 1988. He holds A.B. and M.D. degrees from
Columbia University.
Theodore L. Eliot, Jr., age 68, served as a director of the Company
from September 1988 until April 1992 and as a Vice President from September 1988
until September 1991. He subsequently has served as a director of the Company
since August 1992. Mr. Eliot retired from the United States Department of State
in 1978 with the rank of Ambassador. He served as the Dean of the Fletcher
School of Law and Diplomacy from 1979 to 1985 and as Secretary General for the
United States of the Bilderberg Meetings from 1981 to October 1993. Mr. Eliot is
a director of two publicly-held companies, Raytheon Company, Inc. and
Fiberstars, Inc. Mr. Eliot holds B.A. and M.P.A. degrees from Harvard
University.
Lawrence G. Mohr, Jr., age 51, has been a director of the Company since
April 1992. He is a general partner of Mohr, Davidow Ventures, a venture capital
firm that he founded in 1983. Previously, Mr. Mohr was a general partner of
Hambrecht & Quist and a Vice President of BankAmerica Capital Corporation. Mr.
Mohr holds a B.S. degree in engineering from Cornell University and an M.S.
degree in engineering and an M.B.A. degree from Stanford University. Mr. Mohr is
a director of 3 publicly held companies, Cardiac Pathways Corporation, Fusion
Medical, Inc., and VitaMed, Inc.
-2-
<PAGE>
John B. Stuppin, age 63, is a founder of the Company and has been a
director of the Company since September 1988 and Treasurer from April 1991 until
July 1994. From September 1987 until October 1990, Mr. Stuppin served as
President of the Company, from November 1990 to August 1993, as Co-Chairman of
the Board of Directors and, from October 1990 until September 1991, as Executive
Vice President. He also served as the acting Chief Financial Officer of the
Company from the Company's inception through December 1993. Mr. Stuppin is an
investment banker and a venture capitalist. He has over 25 years experience in
the start up and management of companies active in emerging technologies and has
been the president of a manufacturing company. He is a director of Fiberstars,
Inc. Mr. Stuppin holds an A.B. degree from Columbia College.
The Board of Directors recommends a vote FOR election for director of
the nominees set forth above.
Board Meetings and Committees
The Board of Directors held nine meetings during the fiscal year ended
June 30, 1996. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and of the committees on which such directors
serve.
The Board of Directors has appointed a Compensation and Stock Option
Committee, an Audit Committee and a Nominating Committee.
The members of the Compensation and Stock Option Committee are Theodore
L. Eliot, Jr. and Lawrence G. Mohr, Jr. The Compensation and Stock Option
Committee held three meetings during fiscal 1996. The Compensation and Stock
Option Committee's functions are to assist in the implementation of, and provide
recommendations with respect to general and specific compensation policies and
practices of the Company, including the administration of and granting of
options under the Company's 1993 Stock Plan.
The members of the Audit Committee are Theodore L. Eliot, Jr. and
Lawrence G. Mohr, Jr. The Audit Committee held one meeting during fiscal 1996.
The Audit Committee's functions are to review the scope of the annual audit,
monitor the independent auditor's relationship with the Company, advise and
assist the Board of Directors in evaluating the auditor's examination, supervise
the Company's financial and accounting organization and financial reporting and
nominate for stockholder approval at the annual meeting, with the approval of
the Board of Directors, a firm of certified public accountants whose duty it is
to audit the financial records of the Company for the fiscal year for which it
is appointed.
The members of the Nominating Committee are Dr. Enoch Callaway and
Messrs. Lawrence G. Mohr, Jr. and John B. Stuppin. The Nominating Committee held
no meetings during fiscal 1996. The Nominating Committee is responsible for
matters relating to the composition of the Board of Directors, including
recruitment, nomination and succession. Stockholders wishing to submit a
proposal for nominee(s) for director must submit such proposals to the Secretary
of the Company 120 calendar days prior to the date of the Company's proxy
statement in connection with the previous years annual meeting.
-3-
<PAGE>
Directors' Compensation
Other than Mr. Cohen, who receives $30,000 per year for his service as
a director, directors do not receive any fees for service on the Board of
Directors. Mr. Cohen is also reimbursed for his expenses for each meeting
attended. In January 1995, Mr. Cohen was granted an option to purchase 20,000
shares of Common Stock at an exercise price of $2.88 per share which vests
monthly over a four-year period from the date of grant. Non-employee directors
are currently eligible to participate in the Company's 1993 Stock Plan pursuant
to which they will receive automatic annual grants of options to purchases
shares of the Company's Common Stock. Subject to the 1993 Stock Plan, each new
non-employee director of the Company will receive an option to purchase 5,000
shares of Common Stock on the date of his or her election to the Board at the
fair market value on the date of grant. Thereafter, upon the conclusion of each
regular annual meeting of the Company's stockholders, each non-employee director
continuing to serve on the Board of Directors will receive an option to purchase
1,000 shares of the Company's Common Stock. In November 1995, Messrs. Cohen,
Eliot, and Mohr each received an option to purchase 1,000 shares of the
Company's common stock, which vest one year from the date of grant.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors consists of
Messrs. Eliot and Mohr, who are outside directors. Between September 1988 and
September 1991, Mr. Eliot served as a Vice President of the Company.
-4-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 25,
1996 as to shares of the Company's Common Stock beneficially owned by: (i) each
person who is known by the Company to own beneficially more than 5% of the
Company's Common Stock, (ii) each of the Company's directors, (iii) each of the
Company's officers named under "Executive Compensation -- Summary Compensation
Table," and (iv) all directors and executive officers of the Company as a group.
Shares Percentage
Name of Beneficially Beneficially
Beneficial Owner Owned(1) Owned(1)
----------------------- ---------------- --------------
Mohr, Davidow Ventures II and III(2)..... 643,910 9.6%
3000 Sand Hill Road
Building One, Suite 240
Menlo Park, CA 94025
Enoch Callaway, M.D.(3).................. 105,827 1.6
Abraham E. Cohen(4)...................... 47,248 *
Theodore L. Eliot, Jr.(5)................ 25,744 *
Ronald Goldblum, M.D.(6)................. 32,063 *
Behzad Khosrovi(7)....................... 84,999 1.3
Lawrence G. Mohr, Jr.(2)................. 652,052 9.7
Michael S. Ostrach (8)................... 79,882 1.2
Jeffrey S. Price(9)...................... 192,828 2.9
John B. Stuppin(10)...................... 212,865 3.3
All directors and executive officers
as a group (12 persons)(11)........... 1,563,610 21.4
----------------
* Less than 1%.
(1) To the Company's knowledge, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws
where applicable and the information contained in the footnotes to this
table.
(2) Includes an aggregate of 200,900 shares of Common Stock issuable upon
the exercise of warrants held by Mohr, Davidow Ventures ("Mohr,
Davidow"). Lawrence G. Mohr, Jr., a director of the Company, is a
General Partner of Mohr, Davidow. Mr. Mohr disclaims beneficial
ownership of shares held by or issuable to Mohr, Davidow, except to the
extent of his pecuniary interest therein. Mr. Mohr's individual
holdings include 4,000 shares of Common Stock and options to purchase
4,142 shares of Common Stock exercisable within 60 days of September
25, 1996 held directly by Mr. Mohr.
(3) Includes 79,444 shares of Common Stock held by Enoch Callaway and
Dorothy C. Callaway, Trustees or Successor Trustees of the Callaway
1989 Trust, Executed May 20, 1989 (the "Callaway Trust"). Also includes
669 shares of Common Stock issuable upon exercise of a warrant held by
the Callaway Trust and options to purchase 25,714 shares of Common
Stock exercisable within 60 days of September 25, 1996 held by Dr.
Callaway, a director of the Company. Dr. Callaway may be deemed to have
a beneficial interest in the shares held by the Callaway Trust.
(4) Includes 41,048 shares subject to stock options exercisable within 60
days of September 25, 1996.
(5) Includes 21,294 shares of Common Stock held by Theodore L. Eliot, Jr.
and Patricia P. Eliot, Trustees, the Eliot Trust, Executed February 27,
1987 (the "Eliot Trust"). Also includes 334 shares of Common Stock
issuable upon exercise of a warrant held by the Eliot Trust and options
to purchase 4,116 shares of Common Stock exercisable within 60 days of
September 25, 1996 held by Mr. Eliot, a director of the Company. Mr.
Eliot may be deemed to have a beneficial interest in the shares held by
the Eliot Trust.
(6) Includes 32,063 shares subject to stock options exercisable within 60
days of September 25, 1996.
-5-
<PAGE>
(7) Includes 78,199 shares subject to stock options exercisable within 60
days of September 25, 1996.
(8) Includes 74,979 shares subject to stock options exercisable within 60
days of September 25, 1996.
(9) Includes 187,608 shares subject to stock options exercisable within 60
days of September 25, 1996.
(10) Includes 199,057 shares of Common Stock and warrants to purchase 10,380
shares of Common Stock held by John B. Stuppin and Jane K. Stuppin,
Trustees UTD dated March 11, 1991 (the "Stuppin Trust"). Mr. Stuppin
may be deemed to have a beneficial interest in the shares held by the
Stuppin Trust. Also includes 500 shares held by Mr. Stuppin's spouse
and 3,428 shares subject to stock options exercisable within 60 days of
September 25, 1996. Excludes 10,268 shares held in a trust of which Mr.
Stuppin's spouse is a co-trustee and co-beneficiary. Mr. Stuppin
disclaims voting or dispositive control over such shares.
(11) Includes shares included pursuant to notes 2-10, and includes 122,367
additional shares subject to stock options exercisable within 60 days
of September 25, 1996.
EXECUTIVE COMPENSATION
<TABLE>
Summary Compensation Table
The following table sets forth compensation for services rendered in
all capacities to the Company for the fiscal years ended June 30, 1994, 1995 and
1996 of (i) the Company's Chief Executive Officer and (ii) the Company's other
most highly compensated executive officers whose total annual salary and bonus
for fiscal year 1996 exceeded $100,000 (the "Named Officers").
Summary Compensation Table
<CAPTION>
Annual Compensation Long-Term
Compensation Awards
------------------------------------------ -------------------
Fiscal Year Salary($) Bonus ($) Options (#)
------------ ---------- --------- -----------
<S> <C> <C> <C> <C>
Jeffrey S. Price 1996 175,000 -- --
President and 1995 168,000 -- 33,000
Chief Executive Officer 1994 146,667 20,000 214,293 (1)
Michael S. Ostrach 1996 150,000 -- --
Executive Vice President 1995 145,500 -- 21,000
Chief Operating Officer 1994 11,667 -- 125,000
Ronald Goldblum 1996 155,000 -- 8,000
Vice President 1995 71,042 -- 65,000
Medical Affairs
Behzad Khosrovi 1996 125,000 -- 2,000
Vice President 1995 120,500 -- 9,000
Pharmaceuticals Development 1994 105,005 15,000 92,146 (2)
<FN>
- ---------------------
(1) Includes an option grant for 136,076 shares and separate grants for
78,217 shares in return for cancellation of outstanding options for
78,217 shares granted in October 1990.
(2) Includes an option grant for 71,788 shares and a separate grant for
20,358 shares in return for cancellation of outstanding options for
20,358 shares granted in January 1992.
</FN>
</TABLE>
-6-
<PAGE>
<TABLE>
Stock Option Grants in 1996 Fiscal Year
The following tables summarize option grants to, and exercises by, the
Named Officers during fiscal 1996, and the value of the options held by each
such person at the end of fiscal 1996. Jeffrey S. Price and Michael S. Ostrach
were not granted any options during fiscal 1996.
Option Grants in Fiscal 1996
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock
Individual Grants Appreciation for Option
Term(4)
---------------------------------------------------------------- ---------------------------
% of Total
Options
Granted to Exercise
Options Employees in Price Expiration
Granted(#) Fiscal Year ($/Sh)(2) Date(3) 5%($) 10%($)
---------- ------------ --------- ----------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Ronald Goldblum
Vice President 8,000 (1) 11 6.63 06/20/06 33,331 84,468
Medical Affairs
Behzad Khosrovi
Vice President, 2,000 (1) 3 6.63 06/20/06 8,333 21,117
Pharmaceuticals
Development
<FN>
- ------------
(1) Options vest on June 20, 2006, subject to earlier acceleration upon
achievement of performance objectives as determined by compensation
committee.
(2) The exercise price on the date of grant was equal to 100% of the fair
market value on the date of grant.
(3) The options have specified terms, subject to earlier termination in
certain events related to termination of employment.
(4) The 5% and 10% assumed rates of appreciation are mandated by the rules
of the Securities and Exchange Commission and do not represent the
Company's estimate or projection of the future Common Stock price.
</FN>
</TABLE>
-7-
<PAGE>
<TABLE>
Aggregated Option Exercises in Fiscal Year 1996 and Fiscal Year End Option
Values
The following table contains information relating to the exercise of
options by the Named Officers during fiscal 1996.
Option Exercises in Fiscal 1996
and Fiscal 1996 Year-End Option Values
<CAPTION>
Value of
Number of Unexercised Unexercised
Options at In-the-Money Options at Fiscal
Fiscal Year End(#) Year End($)(1)
Shares ----------------------------- ------------------------------
Acquired on Value
Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
------------ ------------ ----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Jeffrey S. Price
President and Chief
Executive Officer 0 0 173,433 / 73,860 508,359 / 235,769
Michael S. Ostrach
Executive Vice President
Chief Operating Officer 0 0 74,979/ 71,021 52,654 / 88,596
Ronald Goldblum
Vice President
Medical Affairs 0 0 32,063 / 40,937 84,165 / 86,460
Behzad Khosrovi
Vice President,
Pharmaceuticals
Development 0 0 78,199 / 24,947 229,806 / 70,707
<FN>
- ------------
(1) Calculated on the basis of the fair market value of the underlying
securities at June 30, 1996 ($6.63 per share) minus the exercise price.
</FN>
</TABLE>
Employment Agreements
The Company has an agreement with Mr. Ostrach dated June 22, 1996,
which provides that, should Mr. Ostrach's employment with the Company terminate
for any reason, he is entitled to receive his annual base compensation and to
continue to participate, as if he were an employee, in the Company's group
insurance plans, from the date upon which his termination becomes effective
until the earliest of (i) the date twelve months after the date of termination
(ii) the date he commences full time employment with another employer, or (iii)
the date of his death. Further, should Mr. Ostrach's employment be terminated,
his stock options will become exercisable in full on the date of termination.
Pension and Long-Term Incentive Plans
The Company has no pension or long-term incentive plans.
-8-
<PAGE>
PROPOSAL 2
APPROVAL OF THE AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
In order to provide employees of the Company an opportunity to purchase
Common Stock through payroll deductions, the Board of Directors has adopted the
Amended and Restated Neurobiological Technologies, Inc. Employee Stock Purchase
Plan (as amended and restated, the "ESPP") under which 50,000 shares of Common
Stock have been reserved for issuance, subject to anti-dilution provisions. The
stockholders approved the adoption of the ESPP in January 1994. On August 22,
1996, the Board of Directors amended and restated the ESPP to reserve an
additional 50,000 shares for issuance under the ESPP subject to the approval of
the Company's stockholders at the Annual Meeting. As of October 1, 1996, an
aggregate of 7,653 shares were available for issuance under the ESPP.
The full text of the ESPP, substantially in the form in which it will
take effect if the ESPP is approved by the shareholders, is set forth in Exhibit
A to this Proxy Statement. The following description of the ESPP is summary
only. It is subject to, and qualified in its entirety by, Exhibit A.
Under the ESPP, an aggregate of 100,000 shares of Common Stock (which
number includes the 50,000-share increase that the shareholders are being asked
to approve) have been reserved for issuance, subject to anti-dilution
provisions. Any full-time employee will be eligible to participate in the ESPP
after he or she has been continuously employed by the Company for three
consecutive months. The Company currently has 25 employees eligible to
participate in the ESPP. Eligible employees participate in the ESPP by
authorizing payroll deductions up to 10% of their total cash compensation, not
to exceed $25,000 per year. At the end of each six month offering period, the
Company will apply the amount contributed by the participant during the offering
period to purchase whole shares of Common Stock, but not more than 2,500 shares.
Shares of Common Stock are purchased at 85% of the lower of (i) the market price
of Common Stock immediately before the beginning of the applicable offering
period or (ii) the market price of such Common Stock at the time of the
purchase. All expenses incurred in connection with the implementation and
administration of the ESPP will be paid by the Company.
Required Approval
In order to be adopted, a majority of the shares entitled to vote must
vote on this proposal and it must receive the affirmative vote of a majority of
the shares voting.
The Board of Directors recommends a vote FOR the adoption of the
amendment and restatement of the Neurobiological Technologies, Inc. Employee
Stock Purchase Plan.
PROPOSAL 3
RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors
has appointed the firm of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ended June 30, 1997, subject to ratification by the
stockholders. Ernst & Young LLP has audited the Company's financial statements
since fiscal 1992. Representatives of Ernst & Young LLP are expected to be
present at the Company's Annual Meeting. They will have an opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions.
Required Approval
In order to be adopted, a majority of the shares entitled to vote must
vote on this proposal and it must receive the affirmative vote of a majority of
the shares voting.
The Board of Directors recommends a vote FOR ratification of Ernst &
Young LLP as the Company's independent auditors.
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<PAGE>
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 1997 Annual Meeting must be
received by the Secretary of the Company no later than June 12, 1997. Such
proposals may be included in the Company's proxy statement and form of proxy
relating to that meeting if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
OTHER MATTERS
The Company knows of no other business that will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
accordance with the judgment of the persons voting the proxies.
COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's
directors, executive officers and any persons holding more than 10% of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to identify in this Proxy Statement
those persons who failed to timely file these reports. All of the filing
requirements were satisfied for the fiscal year ended June 30, 1996. In making
this disclosure, the Company has relied solely on written representations of its
directors and executive officers and copies of the reports that have been filed
with the Commission.
Whether you intend to be present at the Annual Meeting or not, we urge
you to return your signed proxy promptly.
By order of the Board of Directors.
Jeffrey S. Price, Ph.D.
President and Chief
Executive Officer
Richmond, California
October 10, 1996
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<PAGE>
Exhibit A
AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. PURPOSE OF THE PLAN........................................... 1
SECTION 2. ADMINISTRATION OF THE PLAN.................................... 1
SECTION 3. ENROLLMENT AND PARTICIPATION.................................. 1
SECTION 4. EMPLOYEE CONTRIBUTIONS........................................ 2
SECTION 5. WITHDRAWAL FROM THE PLAN...................................... 3
SECTION 6. TERMINATION OF EMPLOYMENT OR DEATH............................ 3
SECTION 7. PLAN ACCOUNTS AND PURCHASE OF SHARES.......................... 3
SECTION 8. LIMITATIONS ON STOCK OWNERSHIP................................ 5
SECTION 9. RIGHTS NOT TRANSFERABLE....................................... 5
SECTION 10. NO RIGHTS AS AN EMPLOYEE..................................... 6
SECTION 11. NO RIGHTS AS A STOCKHOLDER................................... 6
SECTION 12. STOCK OFFERED UNDER THE PLAN................................. 6
SECTION 13. AMENDMENT OR DISCONTINUANCE.................................. 6
SECTION 14. DEFINITIONS.................................................. 7
SECTION 15. EXECUTION.................................................... 9
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<PAGE>
AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN.
The Plan was adopted by the Company's Board of Directors on December
15, 1993, approved by the Company's stockholders in January 1994 and amended and
restated by the Company's Board of Directors on August 22, 1996, subject to
stockholder approval.
The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions. The Plan is intended to qualify under
section 423 of the Internal Revenue Code of 1986, as amended.
2. ADMINISTRATION OF THE PLAN.
(a) The Committee. The Plan shall be administered by the Committee. The
interpretation and construction by the Committee of any provision of the Plan or
of any right to purchase Stock granted under the Plan shall be conclusive and
binding on all persons.
(b) Rules and Forms. The Committee may adopt such rules and forms under
the Plan as it considers appropriate.
3. ENROLLMENT AND PARTICIPATION.
(a) Offering Periods. While the Plan is in effect, two overlapping
Offering Periods shall commence in each calendar year. The Offering Periods
shall consist of the 24-month periods commencing on each January 1 and July 1.
(b) Accumulation Periods. While the Plan is in effect, two Accumulation
Periods shall commence in each calendar year. The Accumulation Periods shall
consist of the six-month periods commencing on each January 1 and July 1.
(c) Enrollment. Any individual who, on the day preceding the first day
of an Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall be
filed with the Company not later than one week prior to the last working day
prior to the commencement of such Offering Period.
(d) Duration of Participation. Once enrolled in the Plan, a Participant
shall continue to participate until he or she ceases to be an Eligible Employee,
withdraws from the Plan or reaches the end of the Accumulation Period in which
he or she discontinued contributions. A Participant who discontinued
contributions under Section 4(d) or withdrew from the Plan under Section 5(a)
may again become a Participant, if he or she then is an Eligible Employee, by
following the procedure described in Subsection (c) above.
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<PAGE>
(e) Applicable Offering Period. For purposes of calculating the
Purchase Price under Section 7(b), the applicable Offering Period shall be
determined as follows:
(i) Once a Participant is enrolled in the Plan for an Offering
Period, such Offering Period shall continue to apply to him or her
until the earliest of (A) the end of such Offering Period, (B) the end
of his or her participation under Subsection (d) above or (C)
reenrollment in a subsequent Offering Period under Paragraph (ii)
below.
(ii) In the event that the Fair Market Value of Stock on the
last trading day before the commencement of the Offering Period in
which the Participant is enrolled is higher than on the last trading
day before the commencement of any subsequent Offering Period, the
Participant shall automatically be re-enrolled for such subsequent
Offering Period.
(iii) When a Participant reaches the end of an Offering Period
but his or her participation is to continue, then such Participant
shall automatically be re-enrolled for the Offering Period that
commences immediately after the end of the prior Offering Period.
4. EMPLOYEE CONTRIBUTIONS.
(a) Frequency of Payroll Deductions. A Participant may purchase shares
of Stock under the Plan solely by means of payroll deductions. Payroll
deductions, as designated by the Participant pursuant to Subsection (b) below,
shall occur on each payday during participation in the Plan.
(b) Amount of Payroll Deductions. An Eligible Employee shall designate
on the enrollment form the portion of his or her Compensation that he or she
elects to have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee's Compensation, but not less than 1% nor
more than 10%.
(c) Changing Withholding Rate. If a Participant wishes to change the
rate of payroll withholding, he or she may do so by filing a new enrollment form
with the Company not later than one week prior to the last working day prior to
the commencement of the Accumulation Period for which such change is to be
effective.
(d) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new
enrollment form at any time. Payroll withholding shall cease as soon as
reasonably practicable after such form has been received by the Company.
5. WITHDRAWAL FROM THE PLAN.
(a) Withdrawal. A Participant may elect to withdraw from the Plan by
filing the prescribed form with the Company at any time before the last day of
an Accumulation Period. As soon as reasonably practicable thereafter, payroll
deductions shall cease and the entire amount credited to the Participant's Plan
Account shall be refunded to him or her in cash, without interest. No partial
withdrawals shall be permitted.
(b) Re-Enrollment After Withdrawal. A former Participant who has
withdrawn from the Plan shall not be a Participant until he or she re-enrolls in
the Plan under Section 3(b).
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<PAGE>
6. TERMINATION OF EMPLOYMENT OR DEATH.
(a) Termination of Employment. Termination of employment as an Eligible
Employee for any reason, including death, shall be treated as an automatic
withdrawal from the Plan under Section 5(a). (A transfer from one Participating
Company to another shall not be treated as a termination of employment.)
(b) Death. In the event of the Participant's death, the amount credited
to his or her Plan Account shall be paid to a beneficiary designated by him or
her for this purpose on the prescribed form or, if none, to the Participant's
estate. Such form shall be valid only if it was filed with the Company before
the Participant's death.
7. PLAN ACCOUNTS AND PURCHASE OF SHARES.
(a) Plan Accounts. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from the
Participant's Compensation under the Plan, such amount shall be credited to the
Participant's Plan Account. No interest shall be credited to Plan Accounts.
(b) Purchase Price. The Purchase Price for each share of Stock
purchased at the close of an Accumulation Period shall be the lower of:
(i) 85% of the Fair Market Value of such share on the last
trading day before the commencement of the applicable Offering Period
(as determined under Section 3(e)); or
(ii) 85% of the Fair Market Value of such share on the last
trading day in such Accumulation Period.
(c) Number of Shares Purchased. As of the last day of each Accumulation
Period, each Participant shall be deemed to have elected to purchase the number
of shares of Stock calculated in accordance with this Subsection (c), unless the
Participant has previously elected to withdraw from the Plan in accordance with
Section 5(a). The amount then in the Participant's Plan Account shall be divided
by the Purchase Price, and the number of shares that results shall be purchased
from the Company with the funds in the Participant's Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than a maximum of 2,500
shares of Stock with respect to any Accumulation Period nor shares of Stock in
excess of the amounts set forth in Sections 8 and 12(a). The Committee may
determine with respect to all Participants that any fractional share, as
calculated under this Subsection (c), shall be rounded down to the next lower
whole share.
(d) Available Shares Insufficient. In the event that the aggregate
number of shares that all Participants elect to purchase during an Accumulation
Period exceeds the maximum number of shares remaining available for issuance
under Section 12(a), then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for
issuance by a fraction, the numerator of which is the number of shares that such
Participant has elected to purchase and the denominator of which is the number
of shares that all Participants have elected to purchase.
(e) Issuance of Stock. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon
as reasonably practicable after the close of the applicable Accumulation Period,
except that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name
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<PAGE>
of the Participant and his or her spouse as joint tenants with right of
survivorship or as community property.
(f) Unused Cash Balances. An amount remaining in the Participant's Plan
Account that represents the Purchase Price for any fractional share shall be
carried over in the Participant's Plan Account to the next Accumulation Period.
Any amount remaining in the Participant's Plan Account that represents the
Purchase Price for whole shares that could not be purchased by reason of
Subsection (c) above or Section 12(a) shall be refunded to the Participant in
cash, without interest.
8. LIMITATIONS ON STOCK OWNERSHIP.
Any other provision of the Plan notwithstanding, no Participant shall
be granted a right to purchase Stock under the Plan if:
(a) Such Participant, immediately after his or her election to
purchase such Stock, would own stock possessing more than 5% of the
total combined voting power or value of all classes of stock of the
Company or any parent or Subsidiary of the Company; or
(b) Under the terms of the Plan, such Participant's rights to
purchase stock under this and all other qualified employee stock
purchase plans of the Company or any parent or Subsidiary of the
Company would accrue at a rate that exceeds $25,000 of the fair market
value of such stock (determined at the time when such right is granted)
for each calendar year for which such right or option is outstanding at
any time.
Ownership of stock shall be determined after applying the attribution rules of
section 424(d) of the Internal Revenue Code of 1986, as amended. For purposes of
this Section 8, each Participant shall be considered to own any stock that he or
she has a right or option to purchase under this or any other plan, and each
Participant shall be considered to have the right to purchase 2,500 shares of
Stock under this Plan with respect to each Accumulation Period.
9. RIGHTS NOT TRANSFERABLE.
The rights of any Participant under the Plan, or any Participant's
interest in any Stock or moneys to which he or she may be entitled under the
Plan, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or in any other manner other than by beneficiary designation
or the laws of descent and distribution. If a Participant in any manner attempts
to transfer, assign or otherwise encumber his or her rights or interest under
the Plan, other than by beneficiary designation or the laws of descent and
distribution, then such act shall be treated as an election by the Participant
to withdraw from the Plan under Section 5(a).
10. NO RIGHTS AS AN EMPLOYEE.
Nothing in the Plan shall be construed to give any person the right to
remain in the employ of a Participating Company. Each Participating Company
reserves the right to terminate the employment of any person at any time, with
or without cause.
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<PAGE>
11. NO RIGHTS AS A STOCKHOLDER.
A Participant shall have no rights as a stockholder with respect to any
shares that he or she has purchased, or may have a right to purchase, under the
Plan until the date of issuance of a stock certificate for such shares.
12. STOCK OFFERED UNDER THE PLAN.
(a) Authorized Shares. The aggregate number of shares of Stock
available for purchase under the Plan shall be 100,000, subject to adjustment
pursuant to this Section 12.
(b) Anti-Dilution Adjustments. The aggregate number of shares of Stock
offered under the Plan, the 2,500-share limitation described in Section 7(c) and
the price of shares that any Participant has elected to purchase shall be
adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares, the payment of a stock dividend, any other increase or
decrease in such shares effected without receipt or payment of consideration by
the Company or the distribution of the shares of a Subsidiary to the Company's
stockholders.
(c) Reorganizations. In the event of a dissolution or liquidation of
the Company, or a merger or consolidation to which the Company is a constituent
corporation, the Plan shall terminate unless the plan of merger, consolidation
or reorganization provides otherwise, and all amounts that have been withheld
but not yet applied to purchase Stock hereunder shall be refunded, without
interest. The Plan shall in no event be construed to restrict in any way the
Company's right to undertake a dissolution, liquidation, merger, consolidation
or other reorganization.
13. AMENDMENT OR DISCONTINUANCE.
The Board of Directors shall have the right to amend, suspend or
terminate the Plan at any time and without notice. Except as provided in Section
12, any increase in the aggregate number of shares of Stock to be issued under
the Plan shall be subject to approval by a vote of the stockholders of the
Company. In addition, any other amendment of the Plan shall be subject to
approval by a vote of the stockholders of the Company to the extent required by
an applicable law or regulation.
14. DEFINITIONS.
(a) "Accumulation Period" means a six-month period during which
contributions may be made toward the purchase of Stock under the Plan, as
determined pursuant to Section 3(b).
(b) "Board of Directors" means the Board of Directors of the Company,
as constituted from time to time.
(c) "Committee" means a committee of the Board of Directors, consisting
of one or more directors appointed by the Board of Directors.
(d) "Company" means Neurobiological Technologies, Inc., a Delaware
corporation.
(e) "Compensation" means the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, com-
-5-
<PAGE>
missions and overtime pay, but excluding moving or relocation allowances, car
allowances, imputed income attributable to cars or life insurance, taxable
fringe benefits and similar items, all as determined by the Committee.
(f) "Eligible Employee" means any employee of a Participating Company:
(i) Whose customary employment is for more than five months
per calendar year and for more than 20 hours per week; and
(ii) Who has been an employee of a Participating Company for
not less than three consecutive months.
(g) "Fair Market Value" shall mean the market price of Stock,
determined by the Committee as follows:
(i) If Stock was traded over-the-counter on the date in
question but was not traded on the Nasdaq Stock Market or the Nasdaq
National Market, then the Fair Market Value shall be equal to the mean
between the last reported representative bid and asked prices quoted
for such date by the principal automated inter-dealer quotation system
on which Stock is quoted or, if the Stock is not quoted on any such
system, by the "Pink Sheets" published by the National Quotation
Bureau, Inc.;
(ii) If Stock was traded over-the-counter on the date in
question and was traded on the Nasdaq Stock Market or the Nasdaq
National Market, then the Fair Market Value shall be equal to the
last-transaction price quoted for such date by the Nasdaq Stock Market
or the Nasdaq National Market;
(iii) If the Stock was traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite transactions report for such
date; and
(iv) If none of the foregoing provisions is applicable, then
the Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of The Wall Street
Journal. Such determination shall be conclusive and binding on all persons.
(h) "Offering Period" means a 24-month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to
Section 3(a).
(i) "Participant" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 3(c).
(j) "Participating Company" means the Company and each present or
future Subsidiary, except Subsidiaries excluded by the Committee.
(k) "Plan" means this Neurobiological Technologies, Inc. Employee Stock
Purchase Plan, as amended from time to time.
(l) "Plan Account" means the account established for each Participant
pursuant to Section 6(a).
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<PAGE>
(m) "Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7(b).
(n) "Stock" means the Common Stock of the Company.
(o) "Subsidiary" means a corporation, 50% or more of the total combined
voting power of all classes of stock of which is owned by the Company or by
another Subsidiary.
15. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors, the Company has caused its duly authorized officer to affix the
corporate name and seal hereto.
NEUROBIOLOGICAL TECHNOLOGIES,
INC.
By /s/ Shawn K. Johnson
------------------------------
Director of Finance
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<PAGE>
APPENDIX A
NEUROBIOLOGICAL TECHNOLOGIES, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey S. Price proxy, and hereby
authorizes him to represent and vote as designated on the other side, all the
shares of stock of Neurobiological Technologies, Inc. standing in the name of
the undersigned with all powers which the undersigned would possess if present
at the Annual Meeting of Stockholders of the Company to be held November 14,
1996 or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
Please mark ---
your votes X
as this ---
WITHHELD
FOR FOR ALL
ITEM 1-ELECTION OF DIRECTORS [ ] [ ]
Nominees:
Jeffrey S. Price Theodore L. Eliot, Jr
Abraham E. Cohen Lawrence G. Mohr, Jr
Enoch Gallaway John B. Stuppin
WITHHELD FOR: (Write that nominee's name in the
space provided below.)
- -----------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2-APPROVAL OF [ ] [ ] [ ]
AN AMENDMENT
TO EMPLOYEE
STOCK
PURCHASE PLAN
FOR AGAINST ABSTAIN
ITEM 3-APPOINTMENT [ ] [ ] [ ]
OF INDEPEN-
DENT AUDITORS
Signature(s)______________________________________________ Date___________, 1996
Please date and 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.
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-FOLD AND DETACH HERE-
