SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
NEUROBIOLOGICAL TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
--------------------------------------------------------------------------------
(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:
<PAGE>
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
NEUROBIOLOGICAL TECHNOLOGIES, INC.
3260 Blume Drive, Suite 500
Richmond, California 94806
(510) 262-1730
October 13, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Neurobiological Technologies, Inc. The Annual Meeting will be held at the St.
Francis Yacht Club, On The Marina, in San Francisco, California on November 21,
2000 at 10 a.m..
The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.
At your earliest convenience and after you have read the enclosed Proxy
Statement, please mark, date and sign the enclosed proxy and return in the
enclosed 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
Annual Meeting.
Sincerely yours,
Paul E. Freiman
President and Chief Executive Officer
<PAGE>
NEUROBIOLOGICAL TECHNOLOGIES, INC.
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD TUESDAY, NOVEMBER 21, 2000
---------------
THE STOCKHOLDERS OF NEUROBIOLOGICAL TECHNOLOGIES, INC.:
The Annual Meeting of Stockholders of Neurobiological Technologies,
Inc. ("NTI" or the "Company") will be held at the St. Francis Yacht Club, On The
Marina, San Francisco, California, on November 21, 2000 at 10 a.m., local time,
for the following purposes:
1. To elect six directors to hold office until the next annual meeting of
stockholders and until their successors are elected.
2. To approve an amendment to the Company's Amended and Restated Employee
Stock Purchase Plan to increase the number of shares issuable under the
plan by 150,000 to a total of 300,000 shares.
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of the
Company's common stock by 10,000,000 to a total of 35,000,000 shares.
4. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors.
5. To transact such other business as properly may come before the meeting
or any adjournments or postponements of the meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on October 2, 2000
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements of the meeting. A complete list of stockholders
entitled to notice of and to vote at the Annual Meeting will be available at the
Company's offices, 3260 Blume Drive, Suite 500, Richmond, California, for ten
days before the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the postage
prepaid envelope enclosed for that purpose. Any stockholder attending the
meeting may vote in person even if he or she returned a proxy.
By Order of the Board of Directors,
Paul E. Freiman
President and Chief Executive Officer
Richmond, California
October 13, 2000
--------------------------------------------------------------------------------
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POST-PAID
ENVELOPE. THANK YOU FOR ACTING PROMPTLY.
--------------------------------------------------------------------------------
<PAGE>
NEUROBIOLOGICAL TECHNOLOGIES, INC.
3260 BLUME DRIVE, SUITE 500
RICHMOND, CA 94806
(510) 262-1730
------------
PROXY STATEMENT
------------
The enclosed proxy is solicited on behalf of the Board of Directors
(the "Board") of Neurobiological Technologies, Inc., a Delaware corporation
("NTI" or the "Company"). The proxy is solicited for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the St. Francis Yacht Club,
On The Marina, in San Francisco, California, on November 21, 2000 at 10 a.m.,
local time, and at any and all adjournments or postponements thereof. The
approximate date on which this proxy statement and the accompanying notice and
proxy are being mailed to stockholders is October 13, 2000.
INFORMATION CONCERNING SOLICITATION AND VOTING
Only stockholders of record at the close of business on October 2, 2000
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. At the close of business on October 2,
2000, the Company had outstanding 16,311,278 shares of Common Stock, par value
$.001 per share ("Common Stock") and 2,182,000 shares of Series A Preferred
Stock, par value $.001 per share (the "Preferred Stock"). Holders of Common
Stock are entitled to one vote for each share of Common Stock held. Holders of
Preferred Stock are entitled one vote for each share of Preferred Stock held.
The holders of Common Stock and Preferred Stock will vote together as a single
class on all matters described in this proxy statement. In order to constitute a
quorum for the conduct of business at the Annual Meeting, a majority of the
outstanding shares entitled to vote at the Annual Meeting must be represented at
the Annual Meeting.
All shares represented by each properly executed, unrevoked proxy
received in time for the Annual Meeting will be voted in the manner specified in
the proxy. If the manner of voting is not specified in an executed proxy
received by the Company, the proxy will be voted for the election of the
directors listed in the proxy for election to the Board and for approval of the
other proposals described in this proxy statement.
Directors are elected by a plurality vote. The proposed amendment to
the Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock requires the approval of a majority of the
shares entitled to vote on the amendment. All other matters submitted for
stockholder approval at the Annual Meeting will be decided by the affirmative
vote of a majority of shares present in person or represented by proxy at the
Annual Meeting and entitled to vote on each such matter. Votes will be tabulated
as follows: (1) abstentions are treated as votes against a proposal; (2)
executed proxies are voted as indicated on the proxy; (3) executed proxies with
no preferences are treated as votes for a proposal; and (4) broker non-votes are
treated as votes against the proposal to increase the authorized number of
shares of Common Stock, but have no effect on the vote on the other proposals. A
broker non-vote occurs when a broker lacks the authority to vote on some
proposals. Abstentions and broker non-votes are counted as present or
represented at the Annual Meeting for purposes of determining whether a quorum
is present.
Any stockholder giving a proxy in the form accompanying this proxy
statement has the power to revoke the proxy prior to its exercise. A proxy can
be revoked by delivering an instrument of revocation prior to the Annual Meeting
to the Company, by presenting at the Annual Meeting a duly executed proxy
bearing a later date or time than the date or time of the proxy being revoked,
or at the Annual Meeting if the stockholder is present and elects to vote in
person. Mere attendance at the Annual Meeting will not serve to revoke a proxy.
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 stock.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
The Board of Directors proposes the election of the following six
directors of the Company. Directors are elected to serve until the next annual
meeting of stockholders and until their successors are elected and qualified.
The nominees securing the highest number of votes, up to the number of directors
to be elected, will be elected as directors. It is intended that proxies
received will be voted FOR the election of the nominees named below unless
marked to the contrary. In the event any such person is unable or unwilling to
serve as a director, proxies may be voted for substitute nominees designated by
the present Board. The Board has no reason to believe that any of the persons
named below will be unable or unwilling to serve as a director if elected.
<TABLE>
All six nominees are currently serving as directors of the Company. The
following table indicates the name and age of each nominee as of the date of
this proxy statement, all positions with the Company held by the nominee, and
the year during which the nominee first was elected or appointed a director.
<CAPTION>
Director Continuously
Name Age Position with NTI Since
---- --- ----------------- -----
<S> <C> <C> <C>
Paul E. Freiman 66 President, Chief Executive Officer
and Director 1997
Abraham E. Cohen 64 Chairman of the Board of Directors 1993
Enoch Callaway, M.D. 76 Director 1987
Theodore L. Eliot, Jr. 72 Director 1992
Abraham D. Sofaer 62 Director 1997
John B. Stuppin 67 Director 1988
</TABLE>
Paul E. Freiman joined the Company as a director in April 1997 and was
elected President and Chief Executive Officer in May 1997. He is the former
chairman and chief executive officer of Syntex Corporation. Mr. Freiman
currently serves as chairman of the boards of Digital GeneTechnologies, Inc., a
private genomics company, and SciGen Pte. Ltd. Mr. Freiman currently serves on
the boards of Penwest Pharmaceutical Co., Calypte Biomedical Corporation,
Omware, Inc., PHYTOS, Inc. and Otsuka America Pharmaceuticals, Inc. He has been
chairman of the Pharmaceutical Manufacturers Association of America (PhARMA) and
has also chaired a number of key PhARMA committees. Mr. Freiman is also an
advisor to Burrill & Co., a San Francisco merchant bank. Mr. Freiman holds a
B.S. degree from Fordham University and an honorary doctorate from the Arnold &
Marie Schwartz College of Pharmacy.
Abraham E. Cohen 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. and from 1977 to
1988 as President of the Merck Sharp & Dohme International Division. Since his
retirement from Merck and MSDI in January 1992, Mr. Cohen has been active as an
international business consultant. He was a director of Agouron Pharmaceuticals,
Inc. until its merger with Warner-Lambert Company. He is currently a director of
seven other public companies: Akzo Nobel N.V., Axonyx, Inc., Chugai
Pharmaceutical Co., Pharmaceutical Product Development, Inc., Smith Barney
Mutual Funds, Teva Pharmaceutical Industries, Ltd. and Vasomedical, Inc.
Additionally, he serves as a Trustee on The Population Council.
Enoch Callaway, M.D. is a founder and former employee 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 of the Company from
November 1990 until August 1993, as Vice President of the Company from September
1988 until August 1993 and as Secretary of the Company 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
1986. Dr. Callaway was Staff Psychiatrist, SFVAMC from 1996 to 1997. He is a
member of the IRB for SAM Technologies, Inc. and Abratek, Inc. Dr. Callaway is a
director of Phytos, Inc. He holds A.B. and M.D. degrees from Columbia
University.
2
<PAGE>
Theodore L. Eliot, Jr. has served as a director of the Company since
August 1992. Previously, he served as a director of the Company from September
1988 until April 1992, and as a Vice President of the Company from September
1988 until September 1991. Mr. Eliot retired from the United States Department
of State in 1978, after a 30-year career in which he held senior posts in
Washington and was Ambassador to Afghanistan. He was Dean of the Fletcher School
of Law and Diplomacy from 1978 to 1985 and a director of Raytheon Co. from 1983
to 1998. He is currently a director of Fiberstars, Inc. and of several
non-profit organizations. Mr. Eliot holds B.A. and M.P.A. degrees from Harvard
University.
Abraham D. Sofaer has served as a director of the Company since April
1997. Mr. Sofaer is the first George P. Shultz Distinguished Scholar & Senior
Fellow at the Hoover Institution, Stanford University, appointed in 1994. He has
also been a Professor of Law (by courtesy) at Stanford Law School since 1997.
From 1990 to 1994, Mr. Sofaer was a partner at the legal firm of Hughes, Hubbard
and Reed in Washington, D.C., where he represented several major U.S. public
companies. From 1985 to 1990, he served as the Legal Adviser to the United
States Department of State, where he was principal negotiator on several
international disputes. From 1979 to 1985, he served as a federal judge in the
Southern District of New York. Mr. Sofaer is registered as a qualified
arbitrator with the American Arbitration Association and is a member of the
National Panel of the Center for Public Resolution of Disputes (CPR), a leading
organization in the area of resolution of disputes outside litigation. He has
mediated major commercial cases. Additionally, he acts regularly as an
arbitrator in merger-acquisition disputes, commercial cases involving valuation
of technology, and securities class action suits. Mr. Sofaer is on the
International Advisory Board of Chugai Biopharmaceuticals, Inc., a director of
Koret Israel Economic Development Fund and a trustee of the National Museum of
Jazz. Mr. Sofaer holds a B.A. degree from Yeshiva College and a L.L.B. from New
York University.
John B. Stuppin is a founder and employee of the Company and has served
as a director of the Company since September 1988. 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, from October 1990 until
September 1991 as Executive Vice President, and from April 1991 until July 1994
as Treasurer. He also served as 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 chairman of the board of Fiberstars,
Inc. Mr. Stuppin holds an A.B. degree from Columbia College.
The Board of Directors recommends a vote "FOR" election of the nominees
set forth above.
Board Meetings and Committees
The Board of Directors held nine meetings during the fiscal year ended
June 30, 2000. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and of committees on which such directors
serve.
The Board of Directors has appointed a Compensation Committee, an Audit
Committee and a Nominating Committee.
The members of the Compensation Committee are Theodore L. Eliot, Jr.
and Abraham D. Sofaer. The Compensation Committee held four meetings during
fiscal 2000. The Compensation 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
and Amended and Restated Employee Stock Purchase Plan.
The members of the Audit Committee are Theodore L. Eliot, Jr., Abraham
E. Cohen, and Abraham D. Sofaer. Each member is "independent" under the National
Association of Securities Dealers' listing standards. The Board of Directors has
adopted a charter for the Audit Committee in the form attached to this proxy
statement as Appendix B. The Audit Committee held one meeting during fiscal
2000. 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 recommend for approval by the Board of Directors and ratification
at the Annual Meeting a firm of certified public accountants whose duty it is to
audit the financial records
3
<PAGE>
of the Company for the fiscal year for which it is appointed. The Audit
Committee has reviewed and discussed the audited financial statements with the
Company's management team, discussed with the Company's independent auditors all
matters pursuant to SAS 61 (Codification of Statements on Auditing Standards, AU
ss. 380) and received a report from the Company's independent auditors with
respect to the financial statements and disclosures. The Audit Committee has
also received and reviewed the letter from the Company's independent auditors
required by Independence Standards Board Standard No. 1 and discussed with the
auditors their independence from the Company. Based upon all such reviews and
discussions, recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2000 for filing with the Securities and Exchange
Commission.
Abraham E. Cohen, Chairman
Thomas L. Eliot, Jr.
Abraham D. Sofaer
The members of the Nominating Committee are Dr. Enoch Callaway and John
B. Stuppin. The Nominating Committee held no meetings during fiscal 2000. The
Nominating Committee is responsible for matters relating to the composition of
the Board of Directors, including recruitment, nomination and succession. No
nominations were received from stockholders, and no procedures have been
established for any such nominations.
Directors' Compensation
Dr. Callaway was paid $15,000 during fiscal 2000 for consulting
services rendered to the Company pursuant to a consulting agreement. Mr. Stuppin
was paid $13,008 during fiscal 2000 as an employee of the Company. Mr. Cohen is
reimbursed for his expenses for each meeting attended.
Non-employee directors are currently eligible to participate in the
Company's 1993 Stock Plan. 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 with an exercise
price equal to the fair market value of the Common Stock on the date of grant.
In addition, each non-employee director continuing to serve on the Board will
also receive an automatic annual grant of an option to purchase 1,000 shares of
Common Stock after each annual meeting of the Company's stockholders.
In December 1999, Mr. Freiman was granted a nonqualified stock option
to purchase 150,000 shares of Common Stock at an exercise price of $0.80 per
share. The option vests in full on December 2004 or earlier, in whole or inpart,
in the event of a change of control of the Company.
In May, 2000, Dr. Callaway and Messrs. Cohen, Eliot and Sofaer were
each granted an option to purchase 20,000 shares of Common Stock and Mr. Stuppin
was granted an option to purchase 50,000 shares of Common Stock, all at an
exercise price of $6.188 per share. The options vest over four years in
accordance with the Company's standard vesting policy and become fully
exercisable in the event of a change of control as defined in the Company's
Amended and Restated 1993 Stock Plan.
4
<PAGE>
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the Company's
outstanding shares of each class of equity securities beneficially owned as of
October 2, 2000 by: (1) each person who is known to the Company to own
beneficially more than five percent of each class of the outstanding equity
securities; (2) each of the Company's directors; (3) the officers named in the
Summary Compensation Table below; and (4) all directors and executive officers
as a group. The information relating to share ownership is based upon
information furnished to the Company. The number of shares of Common Stock
beneficially owned by an individual as reported in the second column below, as
well as the number of shares of Common Stock deemed outstanding in computing
such individual's percentage ownership as reported in the fourth column below,
includes shares of Common Stock issuable upon conversion of shares subject to
warrants or options exercisable within 60 days after October 2, 2000 as if such
shares were outstanding on October 2, 2000, but does not include shares subject
to any other warrants or options. The Company believes that the beneficial
owners of each class of equity securities, based on information supplied by such
owners, have sole investment and voting power with respect to the shares of each
class of equity securities shown as being beneficially owned by them, except as
otherwise set forth in the footnotes to the table.
<CAPTION>
Number Subject
to Options and Number of Percentage
Number of Warrants Percentage of Shares of of Series A
Shares of Exercisable Common Series A Preferred
Name and Address Common Stock Within 60 days Stock Preferred Stock Stock
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lindsay A. Rosenwald, M.D. (1)........ 1,759,500 500,000 10.5% -- --
787 Seventh Avenue, 48th Floor
New York, NY 10019
Arthur Rock (2)....................... 1,185,997 436,071 7.1 500,000 22.9%
One Maritime Plaza, #1220
San Francisco, CA 94111
New York Life Insurance Company (3)... 553,750 -- 3.4 400,000 18.3
51 Madison Avenue, Room 206
New York, NY 10010
Clipper Bay ........................... 900,000 -- 5.5 -- --
55 Water Street, 3rd Floor
New York, NY 10041
Paul E. Freiman (4)................... 380,075 324,375 2.3 -- --
Enoch Callaway, M.D. (5).............. 136,990 37,742 * 4,000 *
Abraham E. Cohen ..................... 576,391 306,554 3.5 100,000 4.6
Theodore L. Eliot, Jr. (6)............ 86,660 59,116 * -- --
Abraham D.Sofaer ..................... 569,431 291,504 3.4 100,000 4.6
John B. Stuppin (7)................... 675,431 6,250 4.1 100,000 4.6
Lisa U. Carr, M.D., Ph.D ............. 43,658 32,021 * -- --
All directors and executive officers
(as a group 7 persons)(8)............. 2,468,546 1,057,562 14.2 304,000 13.9
<FN>
---------------------------
*Less than 1%
(1) According to Schedule 13G dated February 8, 2000 and Form 4 dated June 2000
filed by Lindsay A. Rosenwald, M.D.
(2) According to Schedule 13D/A filed by Arthur Rock on November 19, 1999 and
the Company's records.
(3) According to Schedule 13G filed by New York Life Insurance Company on
February 12, 1997.
(4) The number of shares of common stock shown includes 55,700 shares held in
the estate of Paul E. Freiman and Anna Mazzuchi Freiman.
(5) The number of shares of common stock shown includes 99,248 shares held by
Enoch Callaway and Dorothy C. Callaway, Trustees or Successor Trustees of
the Callaway 1989 Trust, executed May 20, 1989. Dr. Callaway may be deemed
to have a beneficial interest in the shares held by the Callaway Trust.
(6) The number of shares of common stock shown includes 27,544 shares held by
Theodore L. Eliot, Jr. and Patricia P. Eliot, Trustees, the Eliot Trust,
February 27, 1987. Mr. Eliot may be deemed to have a beneficial interest in
the shares held by the Eliot Trust.
5
<PAGE>
(7) The number of shares of common stock shown includes 667,681 shares held by
John B. Stuppin and Jane K. Stuppin, Trustees UTD dated March 11, 1991 and
500 shares held by Mrs. Stuppin. Mr. Stuppin may be deemed to have a
beneficial interest in the shares held by the Stuppin Trust and Mrs.
Stuppin.
(8) The number of shares of common stock shown includes shares included pursuant
to notes 4-7.
</FN>
</TABLE>
<TABLE>
Executive Compensation
The following table sets forth information regarding compensation for
the fiscal years ended June 30, 1998, 1999 and 2000 received by the Company's
Chief Executive Officer during fiscal 2000 and the Company's other most highly
compensated executive officer whose total annual salary and bonus for fiscal
year 2000 exceeded $100,000 (the "Named Officers").
<CAPTION>
Summary Compensation Table
Annual Compensation
--------------------------
Long-Term
Compensation Awards
Name and Principal Position as of -------------------
June 30, 2000 Year Salary ($) Bonus($) Options(#)
------------- ---- ---------- -------- ----------
<S> <C> <C> <C> <C>
Paul E. Freiman 2000 155,055 0 225,000
President and Chief Executive Officer 1999 152,527 0 200,000
1998 92,533 0 250,000
Lisa U. Carr, M.D., Ph.D.(1) 2000 102,743 0 52,500
Vice President, Medical Affairs 1999 104,360 0 100,000
1998 8,333 0 0
<FN>
---------------------------
(1) Dr. Carr joined the Company on June 1, 1998. Fiscal 1998 compensation is
for partial year.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
The following table sets forth further information regarding the grants
of stock options during the fiscal year ended June 30, 2000 to the Named
Officers. Since inception, the Company has not granted any stock appreciation
rights.
<CAPTION>
Option Grants in Fiscal 2000
Individual Grant
---------------------------------------------------------------
Percent of
Number of Total Options
Securities Granted
Underlying to Employees in Exercise or
Options Fiscal Base Price Expiration
Name Granted (#)(1) 2000(%)(2) ($/Share)(1) Date
---- -------------- ---------- ------------ ----
<S> <C> <C> <C> <C> <C>
Paul E. Freiman 150,000(3) 38.8 0.80 12/3/09
75,000(4) 19.4 6.188 5/17/10
Lisa U. Carr, M.D., Ph.D. 12,500(4) 3.2 0.891 9/28/09
40,000(4) 10.3 6.188 5/17/10
<FN>
-------------------------
(1) The options were granted under the Company's Amended and Restated 1993
Stock Plan. The exercise price of all the options, other than the option
granted to Mr. Freiman to purchase 150,000 shares, was equal to 100% of the
fair market value on the date of grant. The fair market value of the Common
Stock on December 3, 1999, the date on which Mr. Freiman was granted the
option to purchase 150,000 shares, was $2.56.
(2) Based on a total of 387,000 stock options granted to employees during
fiscal year ended June 30, 2000.
(3) These options become exercisable five years from the date of grant or
earlier, in whole or in part, upon a change of control of the Company.
(4) The options vest 12.5% six months after the date of grant and 2.08% monthly
thereafter.
</FN>
</TABLE>
Both of the Named Officers exercised options during fiscal 2000. The
following table sets forth information regarding the number and value of
unexercised options held by the Named Officers at fiscal year-end.
<TABLE>
<CAPTION>
Aggregated Option Exercises and Fiscal Year-End Option Values in Last Fiscal Year
Value of Unexercised
Number of Number of Unexercised Options In-the-Money Options
Shares Held at Fiscal Year End(#) at Fiscal Year End($)(1)
Acquired on Value ---------------------------- ----------------------------
Name Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul E. Freiman 60,000 356,220 760,000 495,000 1,800,250 3,278,730
Lisa U. Carr, M.D., Ph.D. 38,375 229,051 114,125 99,031 118,242 554,648
<FN>
-------------------------
(1) Based on the amount, if any, by which the last per share quote of the
Common Stock on the OTC Bulletin Board on June 30, 2000 ($8.50) exceeds the
exercise price.
</FN>
</TABLE>
7
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Under the Securities Exchange Act of 1934, as amended, 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. During fiscal
2000, Mr. Freiman failed to file a timely Form 5 with respect to the option
granted to him in December 1999. A Form 5 reporting the grant was filed in
September 2000. The Company believes all other required reports have been timely
filed. 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.
PROPOSAL 2
APPROVAL OF AMENDMENT OF THE
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
The Neurobiological Technologies, Inc. Amended and Restated Employee
Stock Purchase Plan (the "ESPP") was adopted by the Board of Directors on
December 15, 1993 and approved by the stockholders in January 1994. As of June
30, 2000, an aggregate of 150,000 shares were authorized for issuance and 33,133
shares remained available for future purchases under the ESPP.
Summary of Amendment
On September 8, 2000, the Board of Directors approved an amendment to
the ESPP to increase the number of shares reserved for purchase under the ESPP
by up to 150,000 to up to 300,000, subject to the approval of the Company's
stockholders at the annual meeting. The ESPP, as amended, is attached to this
proxy statement as Appendix A.
Description of Amended and Restated Employee Stock Purchase Plan
Under the ESPP, an aggregate of 300,000 shares of Common Stock (which
number includes the 150,000-share increase that the stockholders are being asked
to approve) have been reserved for issuance. As of June 30, 2000, nine employees
were eligible to participate in the ESPP. Eligible employees participate in the
ESPP by authorizing payroll deductions of any whole percentage, not less than 1%
nor more than 10%, of their total cash compensation. No employee is permitted to
purchase Common Stock under the ESPP at a rate which exceeds $25,000 of Common
Stock valued at fair market value (determined at the time the participant's
rights are granted) per year. At the end of each six month period, the Company
will apply the amount contributed by the participant during that period to
purchase up to a maximum of 2,500 whole shares of Common Stock.
All employees who have been employed by the Company for three
consecutive months and are customarily employed 20 or more hours a week and five
or more months each year are eligible to participate in the ESPP. Any eligible
employee may enroll in the ESPP by executing the enrollment form no later than
one week prior to the last working day prior to the commencement of the offering
period. The offering period consists of the 24-month period commencing on each
January 1 and July 1. 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 and (ii) the market price of such Common Stock at the
time of the purchase.
The ESPP is administered by the Compensation Committee. The
Compensation Committee has the right to interpret the ESPP, adopt rules
thereunder and to make all other decisions relating to the operation of the
ESPP. The Board of Directors has the right to amend, suspend or terminate the
ESPP at any time and without notice. All expenses incurred in connection with
the implementation and administration of the ESPP are paid by the Company.
Required Approval
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Approval of this proposal requires the affirmative vote of a majority
of the shares present in person or represented by proxy at the Annual Meeting
and entitled to vote on the proposal.
The Board of Directors recommends a vote "FOR" the adoption of the
amendment of the Company's Amended and Restated Employee Stock Purchase Plan.
PROPOSAL 3
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED COMMON STOCK
On September 8, 2000, the Board of Directors unanimously approved an
amendment to the Company's Restated Certificate of Incorporation to increase the
number of shares of authorized Common Stock from 25,000,000 shares to 35,000,000
shares. Of the 25,000,000 currently authorized shares of Common Stock, as of
October 2, 2000, 16,311,278 were issued and outstanding. Of the remaining
8,688,722 authorized shares of Common Stock, 7,920,857 were reserved for
issuance in connection with the Company's stock option plan and stock purchase
plan and for issuance upon the exercise of outstanding warrants and Preferred
Stock. If Proposal 2 amending the ESPP is approved by stockholders at the Annual
Meeting, an additional 150,000 shares will be reserved for issuance under the
ESPP.
Except for the increase in shares authorized for issuance under the
ESPP, Company does not have any current plan, understanding or agreement to
issue additional shares of Common Stock. However, the Board believes that the
proposed increase in authorized shares of Common Stock is desirable to enhance
the Company's flexibility in connection with possible future actions, such as
stock splits, stock dividends, corporate mergers and acquisitions, financings,
acquisitions of property, use in employee benefit plans, or other corporate
purposes. The Board will determine whether, when, and on what terms the Company
should issue shares of Common Stock in connection with any of the foregoing
purposes.
The Company is subject to restrictions on its ability to issue
additional shares of Common Stock in some situations. The Nasdaq Stock Market
requires that the Company obtain stockholder approval before it issues Common
Stock in certain circumstances, including when the number of shares to be issued
equals or exceeds 20% of the voting power outstanding. There are many other
situations, however, where the Board can issue shares of Common Stock without
seeking the approval of the stockholders. The issuance of additional shares of
Common Stock, other than in connection with a stock split, could have a dilutive
effect on the stock ownership of current stockholders. Stockholders do not have
pre-emptive rights to purchase any such Common Stock. Additionally, the issuance
of shares in certain instances may have the effect of forestalling a merger,
tender offer, proxy contest, assumption of control by a holder of a large block
of the Company's stock or the removal of its incumbent management. The Board
does not intend or view the increase in authorized Common Stock as an
anti-takeover measure, nor is the Company aware of any proposed or contemplated
takeover transactions.
Other than increasing the authorized shares of Common Stock from
25,000,000 to 35,000,000, the proposed amendment in no way changes the Company's
Restated Certificate of Incorporation. The Board has unanimously adopted
resolutions setting forth the proposed amendment to the Certificate, declaring
its advisability and directing that the proposed amendment be submitted to the
stockholders for their approval at the annual meeting on November 21, 2000. If
adopted by the stockholders, the amendment will become effective upon filing as
required by the General Corporation Law of Delaware.
Required Approval
Approval of this amendment requires the affirmative vote of a majority
of the stockholders eligible to vote at the meeting, whether present at the
meeting or not.
The Board of Directors recommends a vote "FOR" the adoption of the
amendment to the Company's Restated Certificate of Incorporation to increase the
authorized shares of Common Stock.
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PROPOSAL 4
RATIFICATION OF INDEPENDENT AUDITORS
On 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, 2001, 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
Approval of this proposal requires the affirmative vote of a majority
of the shares present in person or represented by proxy at the Annual Meeting
and entitled to vote on the proposal.
The Board of Directors recommends a vote "FOR" ratification of Ernst &
Young LLP as the Company's independent auditors.
OTHER INFORMATION
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2000 is enclosed with this proxy statement.
STOCKHOLDER PROPOSALS
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the 2001 annual meeting of
stockholders is June 15, 2001, pursuant to Rule 14a-8 of the Securities and
Exchange Commission. The deadline for submitting a stockholder proposal or a
nomination for director that is not to be included in such proxy statement and
proxy is August 29, 2001, pursuant to Rule 14a-4(c)(1) of 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.
BY ORDER OF THE BOARD OF DIRECTORS,
Paul E. Freiman
President and Chief Executive Officer
Richmond, California
October 13, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTPAID ENVELOPE.
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APPENDIX A
AMENDED AND RESTATED
NEUROBIOLOGICAL TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
(as amended through September 2000)
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, and approved by
the stockholders on November 14, 1996.
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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(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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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 of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.
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(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.
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 300,000, subject to adjustment
pursuant to this Section 12.
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(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, commissions 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:
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(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).
(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.
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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/ Paul E. Freiman
-----------------------------------------
President and Chief Executive Officer
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APPENDIX B
AUDIT COMMITTEE CHARTER
Purposes:
The purposes of the audit committee are to:
Monitor the integrity of the financial statements of the company.
Oversee the independence of the company's independent auditor.
Recommend to the board of directors the selection of the independent auditor,
evaluate the independent auditor and, where appropriate, recommend the
replacement of the independent auditor; it being understood that the independent
auditor is ultimately accountable to the board of directors and the audit
committee, and that the board of directors and the audit committee have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the independent auditor (or to propose the independent
auditor for stockholder approval).
Composition:
The audit committee shall be composed of three or more directors, as determined
by the board of directors, each of whom shall be to meet the independence and
financial literacy requirements of Nasdaq and at least one of whom shall have
past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the individual's financial sophistication, including being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities.
Unless a chair is designated by the board of directors, the committee members
may appoint their own chair by majority vote.
Responsibilities:
Recommend to the board of directors the selection of the independent auditor,
which shall ultimately be accountable to the audit committee and the board of
directors.
Evaluate the written disclosures and the letter that the independent auditor
submits to the audit committee regarding the auditor's independence in
accordance with Independence Standards Board Standard No. 1, discuss such
reports with the auditor and, if so determined by the audit committee in
response to such reports, recommend that the board of directors take appropriate
action to oversee the independence of the independent auditor.
Discuss with the independent auditor the matters required to be discussed by SAS
61, as it may be modified or supplemented.
Meet with management and the independent auditor to review and discuss the
annual financial statements and the report of the independent auditor thereon
and, to the extent the independent auditor or management brings any such matters
to the attention of the audit committee, to discuss significant issues
encountered in the course of the audit work, including restrictions on the scope
of activities, access to required information or the adequacy of internal
controls.
Review the management letter delivered by the independent auditor in connection
with the audit.
Following such reviews and discussions, if so determined by the audit committee,
recommend to the board of directors that the annual financial statements be
included in the company's annual report.
<PAGE>
Meet quarterly with management and the independent auditor to review and discuss
the quarterly financial statements; provided that this responsibility may be
delegated to the chairman of the audit committee.
Meet at least once each year in separate executive sessions with management and
the independent auditor to discuss matters that the committee or either of these
groups believes could significantly affect the financial statements and should
be discussed privately.
Have such meetings with management as the audit committee deems appropriate to
discuss significant financial risk exposures facing the company, and steps
management has taken to monitor and control such exposures.
Review significant changes to the company's accounting principles and practices
proposed by the independent auditor or management.
Evaluate the performance of the independent auditor and, if so determined by the
audit committee, recommend to the board of directors replacement of the
independent auditor.
At the request of company counsel, review with company counsel legal and
regulatory matters that may have a significant impact on the company's financial
statements, compliance policies or programs.
Conduct or authorize such inquiries into matters within the committee's scope of
responsibility as the committee deems appropriate. The committee shall be
empowered to retain independent counsel and other professionals to assist in the
conduct of any such inquiries.
Provide minutes of audit committee meetings to the board of directors, and
report to the board of directors on any significant matters arising from the
committee's work.
At least annually, review and reassess this charter and, if appropriate,
recommend proposed changes to the board of directors.
Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the company's annual proxy statement.
It is not the responsibility of the audit committee to plan or conduct audits,
or to determine whether the company's financial statements are complete and
accurate or in accordance with generally accepted accounting principles. It is
not the responsibility of the audit committee to conduct inquiries, to resolve
disagreements, if any, between management and the independent auditor, or to
assure compliance with laws, regulations or company compliance policies or
programs.
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PROXY NEUROBIOLOGICAL TECHNOLOGIES, INC. PROXY
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul E. Freiman and Stephen C. Ferruolo
proxies, and hereby authorizes each of them 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 21, 2000 or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
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Please mark [X]
your votes
as indicated in
this example
ITEM 1--ELECTION OF WITHHOLD
DIRECTORS FOR FOR ALL FOR AGAINST ABSTAIN
Nominees: [ ] [ ] ITEM 2--APPROVAL OF AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN [ ] [ ] [ ]
Paul E. Freiman,
Theodore L.
Eliot, Jr.,
Abraham E. Cohen, ITEM 3--APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF [ ] [ ] [ ]
Abraham D. Sofaer, INCORPORATION
Enoch Callaway, M.D.,
John B. Stuppin
ITEM 4--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS [ ] [ ] [ ]
WITHHELD FOR: (Write that nominee's name
in the space provided below.)
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Signature(s) --------------------------------------------------------- Dated --------- , 2000
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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