<PAGE>
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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CYTOCLONAL PHARMACEUTICS 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
CYTOCLONAL PHARMACEUTICS INC.
9000 HARRY HINES BOULEVARD
SUITE 330
DALLAS, TEXAS 75235
(214) 353-2922
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 19, 1998
------------------------
Dear Stockholder:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Cytoclonal
Pharmaceutics Inc., a Delaware corporation (the "Company"), will be held at 9000
Harry Hines Boulevard, Suite 601, Dallas, Texas 75235, on September 19, 1998,
2:00 p.m. local time (the "Annual Meeting").
At the Annual Meeting, the stockholders will act upon the following matters:
1. To elect four (4) directors, each for a term of one (1) year or until
their respective successors are elected and qualify;
2. To approve an amendment to the Company's 1996 Stock Option Plan
increasing the number of options available for grant by 750,000 from
750,000 to 1,500,000 options, and the number shares of common stock, $.01
par value per share (the "Common Stock"), of the Company reserved for
issuance thereunder by 750,000 from 750,000 to 1,500,000 shares of Common
Stock;
3. To ratify the selection by the Board of Directors of Richard A. Eisner &
Company, LLP as the Company's independent accountants for the current
fiscal year; and
4. To transact such other business as may be properly come before the
Annual Meeting or any adjournment thereof.
The close of business on August 3, 1998, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"). The transfer books of the Company will
remain open following the Record Date.
All stockholders are cordially invited to attend the Annual Meeting. Whether
or not you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Stockholders who execute proxies retain the right to
revoke them at any time prior to the voting thereof by filing written notice of
such revocation with the Secretary of the Company, by submission of a duly
executed proxy bearing a later date or by voting in person at the Annual Meeting
of Stockholders. Attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy. Any written notice revoking a proxy should be
sent to Cytoclonal Pharmaceutics Inc., 9000 Harry Hines Boulevard, Suite 330,
Dallas, Texas 75235, Attention: Daniel Shusterman, Secretary. A return envelope
which requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors,
Daniel Shusterman,
SECRETARY
Dallas, Texas
August 5, 1998
<PAGE>
CYTOCLONAL PHARMACEUTICS INC.
9000 HARRY HINES BOULEVARD
SUITE 330
DALLAS, TEXAS 75235
(214) 353-2922
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 19, 1998
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Cytoclonal Pharmaceutics Inc., a Delaware corporation (the
"Company"), of proxies in the enclosed form for the annual meeting of
Stockholders to be held at 9000 Harry Hines Boulevard, Suite 601, Dallas, Texas
75235, on September 19, 1998, at 2:00 P.M. local time (the "Annual Meeting"),
and for any adjournment or adjournments thereof, for the purposes set forth in
the foregoing Notice of Annual Meeting of Stockholders. The persons named in the
enclosed proxy form will vote the shares for which they are appointed in
accordance with the directions of the stockholders appointing them. In the
absence of such directions, such shares will be voted FOR proposals 1 through 3
listed below (the "Proposals") and, in their best judgment, will be voted on any
other matters as may come before the Annual Meeting. Any stockholder giving such
a proxy has the power to revoke the same at any time before it is voted by (i)
filing written notice of such revocation with the Secretary of the Company, (ii)
submission of a duly executed proxy bearing a later date or (iii) voting in
person at the Annual Meeting of Stockholders. Attendance at the Annual Meeting
will not in and of itself constitute revocation of a proxy. Any written notice
revoking a proxy should be sent to Mr. Daniel Shusterman, Secretary, Cytoclonal
Pharmaceutics Inc., 9000 Harry Hines Boulevard, Suite 330, Dallas, Texas 75235.
A return envelope which requires no postage if mailed in the United States is
enclosed for your convenience.
The principal executive offices of the Company are located at 9000 Harry
Hines Boulevard, Suite 330, Dallas, Texas 75235. The telephone number of the
Company is (214) 353-2922. The approximate date on which this Proxy Statement
and the accompanying form of proxy will first be sent or given to the Company's
stockholders is August 5, 1998 (the "Mailing Date").
VOTING SECURITIES
Only holders of shares of Common Stock, par value $.01 per share (the
"Common Stock"), and shares of Series A Convertible Preferred Stock, par value
$.01 per share (the "Preferred Stock" and together with the Common Stock, the
"Shares"), of record as of the close of business on the Record Date, are
entitled to vote at the Annual Meeting. On the Record Date, an aggregate of
10,955,255 Shares were issued and outstanding , consisting of 10,173,352 shares
of Common Stock and 781,903 shares of Preferred Stock. Each outstanding Share is
entitled to one (1) vote upon all matters to be acted upon at the Annual
Meeting.
A majority of the Shares, represented in person or by proxy, constitutes a
quorum. If a quorum is present, a plurality vote of the Shares present, in
person or by proxy, at the Annual Meeting and entitled to vote is required for
the election of any director in Proposal 1. For Proposals 2 and 3, however, a
majority of the Shares present, in person or by proxy, at the Annual Meeting and
entitled to vote is required for approval. Abstentions are considered Shares
present and entitled to vote, and therefore have the same legal effect as a vote
AGAINST a matter presented at the Annual Meeting. Any Shares held in street name
<PAGE>
for which the broker or nominee receives no instructions from the beneficial
owner, and as to which such broker or nominee does not have discretionary voting
authority, will be considered as Shares not entitled to vote and will therefore
not be considered in the tabulation of the votes. Proxy ballots are received and
tabulated by the Company's transfer agent, American Stock Transfer & Trust Co.,
and certified by the inspector of election.
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, four (4) directors will be elected by the
stockholders to serve until the next annual meeting or until their successors
are elected and qualified. The accompanying form of proxy will be voted FOR the
election of the nominees listed below, to serve as directors, unless the proxy
contains contrary instructions. Management has no reason to believe that the
nominees will not be candidates or will be unable to serve as directors.
However, in the event that the nominees should become unable or unwilling to
serve as directors, the proxy will be voted FOR the election of such persons as
shall be designated by the directors.
The following table sets forth the name and age of each director-nominee and
the year during which each individual initially began serving as a director of
the Company:
DIRECTOR NOMINEES:
<TABLE>
<CAPTION>
YEAR FIRST
NAME AGE BECAME A DIRECTOR
- - ------------------------------------------------------------------------------- --- -------------------
<S> <C> <C>
Arthur P. Bollon, Ph.D. ....................................................... 55 1991
Ira J. Gelb, M.D. ............................................................. 69 1994
Irwin C. Gerson................................................................ 68 1995
Walter M. Lovenberg, Ph.D. .................................................... 63 1995
</TABLE>
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE ELECTION OF THE ABOVE-NAMED NOMINEES AS DIRECTORS.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
BIOGRAPHICAL INFORMATION:
Certain information about the nominee-directors is set forth below. This
information has been furnished to the Company by the individuals named.
ARTHUR P. BOLLON, PH.D., a director-nominee and founder of the Company, has,
since the Company's inception in 1991, served as Chairman of the Board of
Directors, President, Chief Executive Officer and, until March 1995, Treasurer.
Dr. Bollon received his Ph.D. from the Institute of Microbiology at Rutgers
University and was a Post Doctoral Fellow at Yale University. He has served as
consultant to a number of major companies (including Merck, Sharp & Dohme and
Diamond Shamrock) and has previously served on the Board of Directors and
Advisory Boards of several biotechnology companies, including Viragen, Inc.,
Wadley Biosciences Corp. and American Bio-netics, Inc. From 1987 to 1991, Dr.
Bollon served as President and Chief Executive Officer of the Wadley/Phillips
Partnership. Prior to that time, he
2
<PAGE>
was Director of Genetic Engineering and Chairman of the Department of Molecular
Genetics at Wadley Institutes of Molecular Medicine. In his capacities at the
Wadley/Phillips Partnership and Wadley Institutes, Dr. Bollon has played a
leading role in bringing the technology that forms the basis of CPI from
conception to reality.
IRA J. GELB, M.D., a director-nominee, has been a director of the Company
since April 1994. Dr. Gelb received his M.D. from New York University School of
Medicine in 1951. After finishing his training in cardiology at the Mount Sinai
Hospital in New York City in 1957, he continued his association with that
institution until his retirement in 1992. During this period, he was appointed
Attending Cardiologist and Associate Clinical Professor at the Mount Sinai
School of Medicine. Other appointments included Adjunct Associate Clinical
Professor of Cardiology at Cornell Medical School, Adjunct Clinical Professor of
Cardiology at New York Medical College, Cardiology Consultant at Lawrence
Hospital, Bronxville, N.Y. and United Hospital, Portchester, N.Y. Dr. Gelb is a
former President of the American Heart Association, Westchester-Putnam Chapter
and had served as Senior Assistant Editor to the American Journal of Cardiology
from 1968 to 1983. In 1983, Dr. Gelb was the founded editor of the Journal of
the American College of Cardiology (the "JACC") and continued to serve as Senior
Assistant Editor of JACC until his retirement in 1992. Since that time, Dr. Gelb
has served on the boards of various pharmaceutical companies. Dr. Gelb has been
an Adjunct Professor, Department of Chemistry and Biochemistry at Florida
Atlantic University and a member of its Foundation Board, since October 1996 and
its Steering Committee, since 1997. Since December 1996, he has also been a
member of the Board of Directors of the American Heart Association, Boca Raton
Division. In 1998, the Boca Raton Community Hospital added Dr. Gelb as a Member
to its Foundation Board. Since 1992, Dr. Gelb has been an Honorary Lecturer at
The Mount Sinai School of Medicine.
IRWIN C. GERSON, a director-nominee, has been a director of the Company
since March 1995. Since January 1998, Mr. Gerson has been Chairman Emeritus of
Lowe McAdams Healthcare. Prior thereto, from 1996 until December 1997, Mr.
Gerson served as Chairman of Lowe McAdams Healthcare and prior thereto, had
served, since 1986, as Chairman and Chief Executive Officer of William Douglas
McAdams, Inc., one of the largest advertising agencies in the U.S. specializing
in pharmaceutical communications to healthcare professionals. Mr. Gerson
received his B.S. in pharmacy from Fordham University and an MBA from the New
York University Graduate School of Business Administration. In 1992, Mr. Gerson
received an honorary Doctor of Humane Letters from the Albany College of
Pharmacy. Mr. Gerson serves as a Trustee of Long Island University, Chairman of
The Council of Overseers--Arnold and Marie Schwartz College of Pharmacy, Member
of the Board of Trustees of the Albany College of Pharmacy and, from 1967
through 1974, was a lecturer on sales management pharmaceutical marketing at the
Columbia College School of Pharmacy. Mr. Gerson also serves as a Member of the
Board of Governors, New York Council, American Association of Advertising
Agencies, a Director (and past Chairman) of Business Publications Audit ("BPA"),
a Director of the Connecticut Grand Opera, a Director of the Stamford Chamber
Orchestra, and is a director of Andrx Corp., a NASDAQ listed company. Mr. Gerson
previously served as Director of the foundation of Pharmacists and Corporate
Americans for AIDS Education, the Pharmaceutical Advertising Council, Penn Dixie
Industries, Continental Steel Corporation, the Nutrition Research Foundation and
as a Trustee of the Chemotherapy Foundation.
WALTER M. LOVENBERG, PH.D., a director-nominee, has been a director of the
Company since August 1995. Dr. Lovenberg was an Executive Vice President and
member of the Board of Directors of Marion Merrell Dow Inc. from 1989 through
August 1993. Dr. Lovenberg served as the President of the Marion Merrell Dow
Research Institute from 1989 to 1993 and Vice President from 1986 through 1989.
3
<PAGE>
Prior to joining Marion Merrell Dow (1958-1985), he was a Senior Scientist and
Chief of Biochemical Pharmacology at the National Institutes of Health. Dr.
Lovenberg has been President of Lovenberg Associates, Inc. since 1993. He is
currently Chief Executive Officer of Helicon Therapeutics Inc., a private
company, and also a member of the Board of Directors of OSI Pharmaceuticals,
Inc., a NASDAQ listed company, Xenometrix Inc. and Inflazyme Pharmaceutics,
Inc., a company traded on the Vancouver Exchange. Dr. Lovenberg received his
Ph.D. from George Washington University and his B.S. and M.S. from Rutgers
University. Dr. Lovenberg, who serves as Executive Editor of Analytical
Biochemistry and Editor (USA) of Neurochemistry International, is a consulting
editor to several other scientific journals. He has been the recipient of many
awards, including a Fulbright-Hays Senior Scholar Award and a Public Health
Service Superior Service Award. Dr. Lovenberg is a member of the American
College of Neuropsychopharmacology, the American Society of Neurochernistry and
the American Society of Biochemistry and Molecular Biology.
MEETINGS OF THE BOARD:
During the fiscal year ended December 31, 1997, there were four (4) formal
meetings of the Board of Directors, several actions by unanimous consent and
several informal meetings. The Board of Directors has an Audit Committee and
Compensation Committee. During the fiscal year ended December 31, 1997, there
were four (4) formal meetings of the Audit Committee and four (4) formal
meetings of the Compensation Committee. Each director of the Company attended
all Board meetings of which he was a member during the fiscal year ended
December 31, 1997.
COMMITTEES OF THE BOARD OF DIRECTORS:
The Audit Committee, serves at the pleasure of the Board of Directors, is
authorized to review proposals of the Company's auditors regarding annual
audits, recommend the engagement or discharge of the auditors, review
recommendations of such auditors concerning accounting principles and the
adequacy of internal controls and accounting procedures and practices, to review
the scope of the annual audit, to approve or disapprove each professional
service or type of service other than standard auditing services to be provided
by the auditors, and to review and discuss the audited financial statements with
the auditors. Its members are Arthur P. Bollon, Ph.D., Ira J. Gelb, M.D., and
Irwin C. Gerson.
The Compensation Committee, serves as the pleasure of the Board of
Directors, is authorized to establish salaries, incentives and other forms of
compensation for officers, directors and certain key employees and consultants,
administer the Company's various incentive compensation and benefit plans,
including the 1992 Plan and 1996 Plan, and recommend policies relating to such
plans. Its members are Ira J. Gelb, M.D., Irwin C. Gerson and Walter Lovenberg,
Ph.D.
The Company does not have a formal Stock Option Committee, Nominating
Committee or Executive Committee of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE:
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange"), requires the Company's executive officers, directors and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities to file with the Securities and Exchange Commission (the
"Commission") initial reports of ownership and reports of changes in ownership
of common stock and other equity securities of the Company. Such executive
officers, directors and greater than 10% beneficial
4
<PAGE>
owners are required by the Commission's regulation to furnish the Company with
copies of all Section 16(a) forms filed by such reporting persons.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that Company's executive officers, directors and greater than 10% beneficial
owners have complied with all applicable filing requirements.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the aggregate
compensation paid by the Company to its chief executive officer and to the
Company's four (4) other most highly compensated executive officers whose annual
compensation exceeded $100,000 for the fiscal year ended December 31, 1997
(collectively, the "Named Executive Officers") for services during the fiscal
years ended December 31, 1997, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------
AWARDS
ANNUAL COMPENSATION -----------------
------------------------------------------------------------ SECURITIES
NAME AND OTHER COMPENSATION UNDERLYING STOCK
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (1) OPTIONS #
- - --------------------------------------------- --------- ----------- ------------- --------------------- -----------------
<S> <C> <C> <C> <C> <C>
Arthur P. Bollon, Ph.D. 1997 $ 180,856 -- $ 6,000 95,000
--CHAIRMAN AND CHIEF EXECUTIVE OFFICER 1996 $ 165,951 -- $ 6,000 150,000
1995 $ 140,019 -- $ 6,000 --
</TABLE>
- - ------------------------------
(1) Consisting of car allowances.
During the fiscal year ended December 31, 1997, deliberations concerning
executive officer compensation were made by the Company's Compensation Committee
which committee includes Ira J. Gelb, M.D., Irwin C. Gerson and Walter D.
Lovenberg, Ph.D.
OPTION GRANTS IN FISCAL 1997:
The following table sets forth certain information with respect to options
granted during the year ended December 31, 1997 to the Named Executive Officer:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN FISCAL BASE PRICE
NAME GRANTED(#) YEAR ($/SH) EXPIRATION DATE
- - --------------------------------------------- ------------- ------------------- ----------- ---------------------
<S> <C> <C> <C> <C>
Arthur P. Bollon, Ph.D. ..................... 50,000 16.7% $ 2. 375 January 3, 2007
20,000 6.7% $ 2.6875 June 28, 2007
25,000 8.3% $ 4.3125 September 9, 2007
</TABLE>
5
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
FY-END(#) SARS AT FY-END (#)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE (1)
- - ------------------------------------------- ----------------- ----------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Arthur P. Bollon, Ph.D. ................... 0 0 318,000/127,000 $ 1,528,500/$489,313
</TABLE>
- - ------------------------
(1) Based on the fair market value of the Company's Common Stock on December 31,
1997, as determined by the Company's Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
A person is deemed to be a "beneficial owner" of securities of which that
person has the right to acquire ownership of such securities within 60 days. The
following table sets forth certain information regarding the beneficial
ownership of the capital stock of the Company as of the Record Date by (i) each
person deemed to be the beneficial owner of more than 5% of any class of capital
stock of the Company, (ii) each director of the Company, (iii) the Named
Executive Officers, and (iv) all directors and executive officers as a group.
Information as to (A) Kinder Investments, L.P. ("Kinder"), (B) Peyser
Associates, L.L.C., the general partner of Kinder ("Peyser"), and (C) Brian A.
Wasserman, the managing partner of Peyser, was derived from the Schedules 13G,
as amended, filed by such stockholders with the Commission on April 8, 1998,
and, except for the percentage ownership, reflects the information contained
therein as of the date such Schedules 13G, as amended, were filed. Except as
otherwise indicated, each of the persons named has sole voting and investment
power with respect to the shares shown below.
<TABLE>
<CAPTION>
COMMON STOCK SERIES A PREFERRED STOCK
---------------------------- --------------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF PERCENT OF ALL
BENEFICIAL PERCENT OF BENEFICIAL PERCENT OF VOTING SECURITIES
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNERSHIP (2) CLASS (2) OWNERSHIP (3) CLASS (3) (4)
- - --------------------------------------------- ------------- ------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Janssen-Meyers Associates, L.P.(5)........... 2,241,688 21.5% 22,000 2.8% 20.0%
Bruce Meyers(6).............................. 1,505,843 14.4% 22,000 2.8% 13.5%
Peter W. Janssen(7).......................... 937,160 9.0% -- -- 8.4%
Kinder Investments, L.P.(8).................. 708,000 6.9% -- -- 6.5%
Peyser Associates, L.L.C.(9)................. 708,000 6.9% -- -- 6.5%
Brian A. Wasserman(10)....................... 708,000 6.9% -- -- 6.5%
Arthur P. Bollon, Ph.D.(11).................. 541,400 5.1% -- -- 4.0%
Ira Gelb, M.D.(12)........................... 79,200 * -- -- *
Irwin Gerson(13)............................. 75,200 * -- -- *
Walter Lovenberg, Ph.D.(14).................. 75,200 * -- -- *
Directors and executive officers as a group
(5 persons)(15)............................ 811,000 7.5% -- -- 7.0%
</TABLE>
- - ------------------------------
* less than 1%
6
<PAGE>
Except as otherwise indicated, each of the persons named has sole voting and
investment power with respect to the shares shown below.
(1) Except as otherwise indicated, the address of each beneficial owner is c/o
the Company, 9000 Harry Hines Boulevard, Suite 330, Dallas, Texas 75235.
(2) Calculated on the basis of 10,173,352 shares of Common Stock outstanding
except that shares of Common Stock underlying options or warrants
exercisable within 60 days of the date hereof are deemed to be outstanding
for purposes of calculating the beneficial ownership of securities of the
holder of such options or warrants. This calculation excludes shares of
Common Stock issuable upon the conversion of Series A Preferred Stock.
(3) Calculated on the basis of 781,903 shares of Series A Preferred Stock
outstanding.
(4) Calculated on the basis of an aggregate of 10,955,255 shares of Common Stock
and Series A Preferred Stock outstanding except that shares of Common Stock
underlying options and warrants exercisable within 60 days of the date
hereof are deemed to be outstanding for purposes of calculating beneficial
ownership of securities of the holder of such options or warrants. This
calculation excludes shares of Common Stock issuable upon the conversion of
Series A Preferred Stock.
(5) The address for Janssen-Meyers Associates, L.P. ("JMA") is 17 State Street,
New York, New York 10004. Messrs. Bruce Meyers and Peter Janssen are each
50% stockholders and the sole officers and directors of the corporate
general partner of JMA. Includes 201,315 shares of Common Stock issuable
upon the exercise of currently exercisable warrants and the aggregate amount
of shares of Common Stock and Series A Preferred Stock beneficially owned by
Messrs. Meyers and Janssen.
(6) Mr. Meyers' address is c/o JMA referenced in note (5) above. Consists of
1,251,965 shares of Common Stock, 22,000 shares of Common Stock issuable
upon the conversion of 22,000 shares of Series A Preferred Stock, 30,563
shares of Common Stock issuable upon the exercise of currently exercisable
warrants, 201,315 shares of Common Stock issuable upon the exercise of
currently exercisable warrants held by JMA. Does not include an aggregate
amount of 505,353 shares of Common Stock issuable upon the exercise of
warrants not exercisable within 60 days hereof. See note (5) above.
(7) Mr. Janssen's address is c/o JMA referenced in note (5) above. Consists of
720,563 shares of Common Stock, 15,282 shares of Common Stock issuable upon
the exercise of currently exercisable warrants and 201,315 shares of Common
Stock issuable upon the exercise of currently exercisable warrants held by
JMA. Does not include an aggregate amount of 505,563 shares of Common Stock
issuable upon the exercise of warrants not exercisable within 60 days
hereof. See note (5) above.
(8) The address for Kinder Investments, L.P. is 779 CR403, Greenville, New York
12083. Consists of 668,000 shares of Common Stock and Class A Warrants to
acquire 40,000 shares of Common Stock, all of which are currently
exercisable.
(9) Consists of securities beneficially owned by Kinder Investment, L.P. Peyser
Associates, L.L.C. is the general partner of Kinder Investments, L.P. See
note (8) above.
(10) Consists of securities beneficially owned by Kinder Investments, L.P. Mr.
Wasserman is the managing partner of Peyser Associates, L.L.C., and has sole
voting and dispositive control of shares owned by Kinder Investments, L.P.
See note (8) above.
(11) Consists of 184,400 shares of Common Stock and options to purchase 357,000
shares of Common Stock which are currently exercisable or exercisable within
60 days of the date hereof. Does not include options to purchase 88,000
shares of Common Stock not exercisable within 60 days of the date hereof.
(12) Consists of options to purchase 79,200 shares which are currently
exercisable or exercisable within 60 days of the date hereof. Does not
include options to purchase 24,800 shares of Common Stock not exercisable
within 60 days of the date hereof.
(13) Consists of options to purchase 75,200 shares which are currently
exercisable or exercisable within 60 days of the date hereof. Does not
include options to purchase 24,800 shares of Common Stock which are not
exercisable within 60 days of the date hereof.
(14) Consists of options to purchase 75,200 shares which are currently
exercisable or exercisable within 60 days of the date hereof. Does not
include options to purchase 24,800 shares of Common Stock which are not
exercisable within 60 days of the date hereof.
(15) Consists of 189,400 shares of Common Stock and options to purchase an
aggregate of 621,600 shares of Common Stock which are currently exercisable
or exercisable within 60 days of the date hereof. Does not include options
to purchase 182,400 shares of Common Stock not exercisable within 60 days of
the date hereof.
7
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company are identified in the table below.
Each executive officer of the Company serves at the pleasure of the Board of
Directors.
<TABLE>
<CAPTION>
YEAR BECAME AN
NAME AGE EXECUTIVE OFFICER POSITION
- - ------------------------------------ --- ----------------- ---------------------------------------------------
<S> <C> <C> <C>
Arthur P. Bollon, Ph.D. ............ 55 1991 Chairman, President and Chief Executive Officer
Daniel Shusterman................... 34 1994 Secretary, Treasurer, Chief Financial Officer and
Vice President of Operations
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS:
Arthur P. Bollon, Ph.D. is employed by the Company under a 1992 employment
agreement, which has been extended, effective November 7, 1995. As extended by
the Board in March 1995, the agreement provides for the employment of Dr. Bollon
until November 6, 2000, unless terminated earlier pursuant to the agreement, and
the payment to Dr. Bollon of a base salary of $165,000 per year with annual
increases of not less that 5% per year. In addition, in the event Dr. Bollon is
terminated without Cause or due to a Disability (as those terms are defined in
the employment agreement), the employment agreement provides that Dr. Bollon
shall receive severance payments of equal monthly installments at the base rate
until the earlier of the expiration of the term or the expiration of 36 months.
Dr. Bollon also receives a car expense allowance of $500 per month, for an
aggregate of $6,000 per year, under the employment agreement. In November 1992,
the Company granted Dr. Bollon options to purchase 200,000 shares of Common
Stock, at an exercise price of $1.65 per share. In April 1996, the Company
granted Dr. Bollon options to purchase 50,000 shares of Common Stock at an
exercise price of $4.125 per share. In December 1996, the Company granted Dr.
Bollon options to purchase 100,000 shares of Common Stock at an exercise price
of $2.25 per share. In January 1997, the Company granted Dr. Bollon options to
acquire 50,000 shares of Common Stock at an exercise price of $2.375 per share.
In June 1997, the Company granted Dr. Bollon options to acquire 20,000 shares of
Common Stock, at an exercise price of $2.6875 per share and in September 1997,
the Company granted Dr. Bollon options to acquire 25,000 shares of Common Stock,
at an exercise price of $4.3125 per share. All such options are exercisable to
the extent of 40% after six (6) months of continuous employment from the grant
date and to the extent of an additional 20% on and after each of the first three
(3) anniversaries of the grant date.
Each of the Company's executive officers and the Company's principal
scientists have entered into confidentiality and patent assignment agreements
with the Company.
COMPENSATION OF DIRECTORS:
Each director who is not an officer or an employee of the Company (an
"Outside Director") receives $1,000 per month in compensation. During the fiscal
year ended December 31, 1997, three (3) Outside Directors each received options
to purchase 35,000 shares of Common Stock. The exercise price of each share
underlying such options is equal to the fair market value of the Common Stock on
the date of grant. See "Employment Contracts and Termination of Employment and
Change-In-Control Arrangements."
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BOARD OF DIRECTORS COMPENSATION REPORT:
The Company strives to apply a uniform philosophy to compensation for all of
its employees, including the members of its senior management. This philosophy
is based on the premise that the achievements of the Company result from the
combined and coordinated efforts of all employees working toward common goals
and objectives.
The goals of the Company's compensation program are to align remuneration
with business objectives and performance, and to enable the Company to retain
and competitively reward executive officers who contribute to the long-term
success of the Company. The Company's compensation program for executive
officers is based on the following principles, which are applicable to
compensation decisions for all employees of the Company. The Company attempts to
pay its executive officers competitively in order that it will be able to retain
the most capable people in the industry. Information with respect to levels of
compensation being paid by comparable companies is obtained from various
publications and surveys.
During the last fiscal year, the compensation of executive officers
consisted principally of salary. Salary levels have been set based upon
historical levels, amounts being paid by comparable companies and performance.
1992 STOCK OPTION PLAN
In October 1992, the Board of Directors of the Company adopted the
Cytoclonal Pharmaceutics Inc. 1992 Stock Option Plan (the "1992 Plan") which
provides for the awarding of incentive stock options and nonqualified stock
options for the Company's Common Stock to selected key employees, directors,
consultants and advisors of the Company. The 1992 Plan authorizes the awarding
of up to an aggregate of 520,000 stock options for the same number of shares of
the Company's Common Stock in the aggregate. The awards under the 1992 Plan are
subject to restrictions on transferability, are forfeitable in certain
circumstances and are exercisable at such time or times and during such period
as shall be set forth in the option agreement evidencing such option. As of
December 31, 1997, 3,000 shares of the Company's Common Stock are available for
future grant and options to acquire 298,500 shares remain outstanding under the
1992 Plan. The Company registered the shares of Common Stock issuable under the
1992 Plan with the Commission on a Registration Statement on Form S-8 pursuant
to the Securities Act of 1933, as amended (the "Act").
1996 STOCK OPTION PLAN
In April 1996, the Board of Directors adopted the 1996 Stock Option Plan
(the "1996 Plan") which provides for the awarding of incentive stock options and
nonqualified stock options for the Company's Common Stock to selected key
employees, directors, consultants and advisors to the Company. The 1996 Plan
authorizes the awarding of up to 750,000 stock options for the same number of
shares of the Company's Common Stock. The awards under the 1996 Plan are subject
to instructions on transferability, are forfeitable in certain circumstances and
are exercisable at such time or times and during such period as shall be set
forth in the option agreement evidencing such option. As of December 31, 1997,
85,000 shares of the Company's Common Stock were available for future grant and
options to acquire 662,200 shares remain outstanding under the 1996 Plan.
Between the Record Date and the Annual Meeting, the Compensation Committee of
the Board of Directors of the Company may decide by resolution to grant
additional options authorized under the 1996 Plan. To the extent, however, such
amount exceeds the amount of authorized options currently available for grant
under the 1996 Plan, such options will be
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conditional upon stockholder approval of the amendment to the 1996 Plan proposed
herein. The Company registered the 750,000 shares of Common Stock issuable under
the 1996 Plan with the Commission on a Registration Statement on Form S-8
pursuant to the Act.
INSURANCE FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has in effect, with Genesis Insurance Company, through
Transamerica Insurance Finance Corporation, under a policy, effective from
September 15, 1995 to September 14, 1997 and which has been extended until
September 15, 1998, insurance covering all of its current directors and officers
against certain liabilities and reimbursing the Company for obligations which it
incurs as a result of its indemnification of such directors and officers. The
annual premium $159,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Ira J. Gelb, M.D., Irwin C. Gerson
and Walter Lovenberg, Ph.D. No member of the Compensation Committee is a current
or former officer or employee of the Company. There are no compensation
committee interlocks between the Company and any other entities involving any of
the executive officers or directors of such other entities.
PROPOSAL 2
PROPOSAL TO APPROVE AMENDMENT
TO THE COMPANY'S 1996 STOCK OPTION PLAN
At the Annual Meeting, the Company's stockholders will be asked to approve
an amendment to the 1996 Plan to increase the number of shares of Common Stock
reserved for issuance from 750,000 to 1,500,000. The Board of Directors believes
that the proposed amendment to the 1996 Plan will help the Company attract and
retain qualified officers, directors and key employees.
SUMMARY OF THE 1996 PLAN:
At the 1996 annual stockholder meeting, the stockholders of the Company
approved the 1996 Plan, as adopted by the Board of Directors. The 1996 Plan
provides for the grant of incentive stock options ("ISOs") (which satisfy the
requirements of Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code")) and nonqualified options ("NQSOs") (which do not qualify such
requirements) to employees (12 as of the Record Date), officers (2 as of the
Record Date) and directors (4 as of the Record Date) of, and consultants or
advisers (5 as of the Record Date) to, the Company who are expected to
contribute to the Company's future growth and success. In September 1996, the
Company registered the 750,000 shares of Common Stock issuable under the 1996
Plan with the Commission on a Registration Statement on Form S-8 pursuant to the
Act.
The 1996 Plan provides that the exercise prices of NQSOs and ISOs granted
under the 1996 Plan shall be determined by the Board of Directors (or authorized
committee) at the time of grant of such options; provided, however, that in the
case of ISOs, the exercise price shall be no less than the fair market value of
the Common Stock on the date of grant (110% in the case of stockholders owning
more than 10% of the Company's voting securities), and requires that options
expire no later than the tenth anniversary of the date of grant (the fifth
anniversary in the case of stockholders owning more than 10% of the Company's
voting securities). Generally, ISOs may be exercised within a period of (i)
sixty (60) days in the event an optionee ceases to be an employee of the
Company, (ii) three (3) months if the optionee dies while in the
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employ of the Company and (iii) one (1) year if the optionee becomes disabled
within the meaning of Section 22(e)(3) of the Code. Generally, NQSOs shall
expire immediately upon the termination of the optionee's employment with the
Company; provided, however, such termination was for cause or was otherwise
attributable to a breach by the optionee of an employment or confidentiality or
not-disclosure agreement. Notwithstanding, an NQSO may be exercised within a
period of (i) three (3) months if the optionee dies while in the employ of the
Company and (ii) one (1) year if the optionee becomes disabled within the
meaning of Section 22(e)(3) of the Code. Pursuant to the 1996 Plan and in
compliance with the Code, to the extent that the aggregate fair market value,
determined by the date or dates of grant, for which ISOs are first exercisable
by an optionee during any calendar year exceeds $100,000, such options shall be
treated as NQSOs.
CERTAIN FEDERAL TAX INFORMATION:
The following is a summary of the U.S. federal income tax consequences that
generally will arise with respect to options granted pursuant to the 1996 Plan
and with respect to the share of Common Stock of the Company issuable upon the
exercise thereof.
ISOS.
In general, an option will not recognize regular income upon the grant or
exercise of an ISO. The basis of shares transferred to an optionee pursuant to
the exercise of an ISO is the price paid for such shares. Instead, an optionee
will recognize taxable income upon the sale of Common Stock issuable upon the
exercise of an ISO. Notwithstanding, the exercise of an ISO may subject the
optionee to the alternative minimum tax.
In general, the tax consequences of selling Common Stock issuable upon the
exercise of an ISO will vary with the length of time that the optionee holds
such Common Stock prior sale. An optionee will recognize long-term capital gain
or loss equal to the difference between the sale price of the Common Stock and
the exercise price if the optionee sells the Common Stock after having had owned
it for at least (i) two (2) years from the date the option was granted (the
"Grant Date") and (ii) one (1) year from the date the option was exercised (the
"Exercise Date").
However, an optionee will recognize ordinary compensation income and capital
gain (if the sale price is greater than exercise price) or loss (if the sale
price is less than the exercise price), if the optionee sells the Common Stock
issuable upon the exercise of an ISO prior to having had owned it for less than
(i) two (2) years from the Grant Date and (ii) one (1) year from the Exercise
Date. The capital gain or loss will be treated as long-term capital gain or loss
if the optionee has held the Common Stock for more than one (1) year prior to
the date of sale.
NQSOS.
As in the case of ISOs, an optionee will recognize no income tax upon the
grant of an NQSO. Unlike an ISO, however, an optionee exercising an NQSO will
recognize ordinary income tax equal to the excess of the fair market value of
the Company's Common Stock on the Exercise Date over the exercise price.
With respect to the Common Stock issuable upon the exercise of an NQSO, a
optionee generally will have a tax basis equal to the fair market value of the
stock on the Exercise Date. Upon the subsequent sale of Common Stock issuable
upon the exercise of an NQSO, an optionee will recognize a capital gain or loss,
assuming the stock was a capital asset in the optionee's hands, equal to the
difference between the tax basis
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of the Common Stock and the amount realized upon disposition; provided, however,
that the optionee has owned the Common Stock for a period of one (1) year.
TAX CONSEQUENCES TO THE COMPANY.
The grant of ISOs and NQSOs under the 1996 Plan will have no tax
consequences to the Company. Furthermore, in the case of ISO, the Company will
no tax consequences relating to the exercise of ISOs granted under the 1996 Plan
nor the exercise thereof. Notwithstanding, the Company generally will be
entitled to a business-expense deduction with respect to any ordinary
compensation income, including a Disqualifying Disposition or a Section 83(b)
Election, upon the exercise of an NQSO; provided, however, that such deduction
will be subject to the limitation of Section 162(m) promulgated under the Code.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE AMENDMENT OF THE 1996 STOCK OPTIONS PLAN
AND THE RESERVATION OF 750,000 SHARES OF COMMON STOCK
FOR ISSUANCE THEREUNDER.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS
STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
NUMBER OF OPTIONS GRANTED
TO CERTAIN INDIVIDUALS AND GROUPS
For each of the executive officers named in the Summary Compensation Table
and the various indicated groups, the following table sets forth for options
granted pursuant to the 1996 Plan during the last completed fiscal year ended
December 31, 1997 the following: (i) if a director, the person's term of office
as a director and the period during which the person has served, (ii) title and
amount of securities underlying options granted to such individuals, (iii)
exercise prices which the options may be exercised and (iv) expiration date of
such options. The term for all directors is one (1) year, subject to re-election
by the stockholders. On the Record Date, the closing bid price of the Common
Stock of the Company as reported on Nasdaq SmallCap Market System (CYPH) was
$7.00.
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1996 PLAN
<TABLE>
<CAPTION>
TERM AND AMOUNT OF
DURATION OF COMMON STOCK
SERVICE AS TYPE OF OPTION ISSUABLE UPON EXERCISE EXPIRATION
NAME AND TITLE DIRECTOR (ISO/NQSO)(1) EXERCISE PRICE DATE
- - ------------------------------------- --------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Arthur P. Bollon, Ph.D. 1991 ISO 50,000 $2.375 1/3/07
--PRESIDENT, CHAIRMAN AND CEO ISO 20,000 $2.6875 6/28/07
ISO 25,000 $4.3125 9/9/07
Ira Gelb, M.D. 1994 NQSO 20,000 $2.6875 6/28/07
--DIRECTOR NQSO 15,000 $4.3125 9/9/07
Irwin Gerson 1995 NQSO 20,000 $2.6875 6/28/07
--DIRECTOR NQSO 15,000 $4.3125 9/9/07
Walter Lovenberg, Ph.D. 1995 NQSO 20,000 $2.6875 6/28/07
--DIRECTOR NQSO 15,000 $4.3125 9/9/07
All Current Executive Officers as a -- ISO 50,000 $2.375 1/3/07
Group (two persons) ISO 40,000 $2.6875 6/28/07
ISO 40,000 $4.325 9/9/07
</TABLE>
- - ------------------------------
(1) Options vest 20 percent (20%) after six (6) months after the date of grant
and in 20% increments on the first, second, third and fourth anniversaries
of the date of grant.
PROPOSAL 3
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors selects the Company's independent auditors on an
annual basis for each ensuing fiscal year, to serve at the discretion of the
Board of Directors, and has engaged Richard A. Eisner & Co., LLP as independent
auditors the consolidated financial statements of the Company for fiscal 1998.
If the stockholders, by the affirmative vote of the holders of a majority of
the shares of Common Stock present or represented and entitled to vote at the
Annual Meeting, do not ratify the appointment of Richard A. Eisner & Co., LLP,
the selection of independent auditors will be reconsidered by the Board.
Notwithstanding the selection, the Board, in its discretion, may direct the
appointment of a new independent auditing firm at any time during the year is
the Board feels that such a change would be in the best interests of the Company
and its stockholders.
Richard A. Eisner & Co, LLP audited the financial statements of the Company
since the Company's inception in 1991. A representative of Richard A. Eisner,
LLP will not be present at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY
UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF APPOINTMENT OF
RICHARD A. EISNER & CO., LLP AS INDEPENDENT AUDITORS.
PROPOSAL 4
OTHER BUSINESS
The Board of Directors knows of no business which will be presented at the
Annual Meeting other than as stated herein and in the Notice of Meeting attached
hereto. If, however, other matters are properly
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brought before the Annual Meeting, it is the intention of the persons named in
the accompanying form of proxy to vote the shares represented thereby on such
matters as directed by the Board of Directors.
The management of the Company does not know of any matters other than those
stated in this Proxy Statement which are to be presented for action at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, it is intended that proxies in the accompanying form will be voted on
any such matters in accordance with the judgment of the persons voting such
proxies.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT THE NEXT ANNUAL MEETING
STOCKHOLDER PROPOSALS. Proposals of stockholders intended to be presented
at the Company's 1999 Annual Stockholder Meeting (i) must be received by the
Company at its offices no later than May 7, 1999, 90 days preceding the one year
anniversary of the Mailing Date, (ii) may not exceed 500 words and (iii) must
otherwise satisfy the conditions established by the Commission for stockholder
proposals to be included in the Company's Proxy Statement for that meeting.
DISCRETIONARY PROPOSALS. Stockholders intending to commence their own proxy
solicitations and present proposals from the floor of the 1999 Annual
Stockholder Meeting in compliance with Rule 14a-4 promulgated under the Exchange
Act of 1934, as amended, must notify the Company before June 21, 1999, 45 days
preceding the one year anniversary of the Mailing Date, of such intentions.
After such date, the Company's proxy in connection with the 1999 Annual
Stockholder Meeting may confer discretionary authority on the Board to vote.
GENERAL
The Company will bear the cost of preparing, assembling and mailing the
Proxy, Proxy Statement and other material which may be sent to the stockholders
in connection with this solicitation. In addition to the solicitation of proxies
by use of the mails, officers and regular employees may solicit the return of
proxies. The Company may reimburse persons holding stock in their names or in
the names of other nominees for their expense in sending proxies and proxy
material to principals. In addition, American Stock Transfer & Trust Company,
6201 15th Avenue, Brooklyn, New York 11219, the Company's transfer agent, has
been engaged to mail proxies on behalf of the Company. Proxies may be solicited
by mail, personal interview, telephone and telegraph.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON BEING SOLICITED BY
THIS PROXY STATEMENT, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1997, AS
FILED WITH THE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES
THERETO. ALL SUCH REQUESTS SHOULD BE DIRECTED TO MR. DANIEL SHUSTERMAN,
SECRETARY, CYTOCLONAL PHARMACEUTICS INC., 9000 HARRY HINES BOULEVARD, SUITE 330,
DALLAS, TEXAS 75235.
By Order of the Board of Directors
Daniel Shusterman, J.D.,
SECRETARY
Dated: August 5, 1998
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PROXY
CYTOCLONAL PHARMACEUTICS INC.
9000 HARRY HINES BOULEVARD, SUITE 330, DALLAS, TEXAS 75235
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Arthur P. Bollon, Ph.D. and Daniel
Shusterman, J.D. as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
entitled voting stock of Cytoclonal Pharmaceutics Inc., a Delaware corporation
(the "Company"), held of record by the undersigned on August 3, 1998, at the
Annual Meeting of Stockholders to be held 9000 Harry Hines Boulevard, Suite 601,
Dallas, Texas 75235, on September 19, 1998, 2:00 p.m. local time or any
adjournment thereof.
<TABLE>
<S> <C>
PROPOSAL 1. Election of Directors.
Nominees: Arthur P. Bollon, Ph.D., Ira J. Gelb, M.D., Irwin
C. Gerson, and Walter M. Lovenberg, Ph.D.
/ / FOR all nominees
(except as marked to the contrary below)
(INSTRUCTION: To withhold authority to vote for any
individual nominee, print that nominee's name on the line
provided below.)
Withheld for:
To approve an amendment to the Company's 1996 Stock Option
Plan increasing the number of options available for grant
by 750,000, from 750,000 to 1,500,000 options, and the
PROPOSAL 2.
number shares of common stock, $.01 par value per share
(the "Common Stock"), of the Company reserved for issuance
thereunder by 750,000 from 750,000 to 1,500,000 shares of
Common Stock.
/ / FOR / / AGAINST
/ / ABSTAIN
To ratify the selection by the Board of Directors of
PROPOSAL 3. Richard A. Eisner & Company, LLP as the Company's
independent accountants for the current fiscal year.
/ / FOR / / AGAINST
/ / ABSTAIN
<CAPTION>
PROPOSAL 1.
<S> <C>
/ / WITHHOLDING AUTHORITY
as to all nominees
PROPOSAL 2.
PROPOSAL 3.
</TABLE>
<PAGE>
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder.
If no direction is made, the proxies are authorized to vote upon such other
business as may be properly come before the meeting.
PLEASE SIGN EXACTLY AS NAME APPEARS
BELOW. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN.
Dates: ______________________, 1998
Signature: ________________________
Print Name: _______________________
Signature if held jointly: ________
(When signing as attorney, as executor, as administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.)
