SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement |_| Confidential, For use of the
|X| Definitive proxy statement Commission only (as permitted
|_| Definitive additional materials by Rule 14a-6(e)(2))
|_| Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12
TITAN PHARMACEUTICALS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
TITAN PHARMACEUTICALS, INC.
------------------------------------------------------------------------
(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:(1)
----------------------------------------------------------------------------
(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:
----------------------------------------------------------------------------
- ------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
TITAN PHARMACEUTICALS, INC.
400 Oyster Point Boulevard
Suite 505
South San Francisco, California 94080
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 24, 1998
----------
To the Shareholders of
Titan Pharmaceuticals, Inc.
Notice is hereby given that the Annual Meeting of the Shareholders of Titan
Pharmaceuticals, Inc. (the "Company") will be held on July 24, 1998 at 9:00 a.m.
local time at the offices of the Company, 400 Oyster Point Boulevard, Suite 505,
South San Francisco, California 94080. The meeting is called for the following
purpose:
1. To elect a board of eight directors;
2. To approve and ratify the Company's 1998 Stock Option Plan;
3. To approve the appointment of Ernst & Young LLP as the independent
auditors of the Company; and
4. To consider and take action upon such other matters as may properly
come before the meeting or any adjournment or adjournments thereof.
The close of business on June 22, 1998 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
meeting. The stock transfer books of the Company will not be closed. A list of
the shareholders entitled to vote at the meeting may be examined at the
Company's offices during the ten-day period preceding the meeting.
All shareholders are cordially invited to attend the meeting. Whether or
not you expect to attend, you are respectfully requested by the Board of
Directors to sign, date and return the enclosed proxy promptly. Shareholders who
execute proxies retain the right to revoke them at any time prior to the voting
thereof. 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,
Louis R. Bucalo, M.D.
President and Chief Executive Officer
Dated: June 29, 1998
TITAN PHARMACEUTICALS, INC.
400 Oyster Point Boulevard
Suite 505
South San Francisco, California 94080
----------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
----------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Titan Pharmaceuticals, Inc. (the "Company")
for the Annual Meeting of Shareholders to be held at the offices of the Company,
400 Oyster Point Boulevard, Suite 505, South San Francisco, California 94080 on
July 24, 1998, at 9:00 a.m. and for any adjournment or adjournments thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. Any shareholder giving such a proxy has the power to revoke it at
any time before it is voted. Written notice of such revocation should be
forwarded directly to the Secretary of the Company, at the above stated address.
If the enclosed proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the directions thereon and
otherwise in accordance with the judgment of the persons designated as proxies.
Any proxy on which no direction is specified will be voted in favor of the
actions described in this Proxy Statement and for the election of the nominees
set forth under the caption "Election of Directors."
The approximate date on which this Proxy Statement and the accompanying
form of proxy will first be mailed or given to the Company's shareholders is
June 29, 1998.
Your vote is important. Accordingly, you are urged to sign and return the
accompanying proxy card whether or not you plan to attend the meeting. If you do
attend, you may vote by ballot at the meeting, thereby cancelling any proxy
previously given.
VOTING SECURITIES
Only holders of shares of Common Stock, $.001 par value per share (the
"Shares"), and the holders of shares of Series D Convertible Preferred Stock,
$.001 par value per share (the "Preferred Shares"), of record at the close of
business on June 22, 1998 are entitled to vote at the meeting. On the record
date, the Company had outstanding and entitled to vote 13,118,508 Shares and
606,061 Preferred Shares. For purposes of voting at the meeting, each Share and
each Preferred Share are entitled to one vote upon all matters to be acted upon
at the meeting. A majority in interest of the outstanding Shares and Preferred
Shares represented at the meeting in person or by proxy shall constitute a
quorum. The affirmative vote of a plurality of the Shares and Preferred Shares
so represented is necessary to elect the nominees for election as directors and
the affirmative vote of a majority of the Shares and Preferred Shares so
represented, excluding broker non-votes, is necessary to approve and ratify the
1998 Stock Option Plan and the appointment of Ernst & Young, LLP, independent
certified public accountants as the independent auditors of the Company.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. If a
shareholder, present in person or by proxy, abstains on any matter, the
shareholder's shares will not be voted on such matter. Thus, an abstention from
voting on any matter has the same legal effect as a vote "against" the matter
even though the shareholder may interpret such action differently. Except for
determining the presence or absence of a quorum for the transaction of business,
broker non-votes are not counted for any purpose in determining whether a matter
has been approved.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of June 22, 1998, certain information
concerning the beneficial ownership of the Shares by (i) each shareholder known
by the Company to own beneficially five percent or more of the outstanding
Shares; (ii) each director of the Company; (iii) each executive officer of the
Company; and (iv) all executive officers and directors of the Company as a
group, and their percentage ownership and voting power.
Shares
Beneficially Percent of Shares
Name and Address of Beneficial Owner (1) Owned (2) Beneficially Owned
- ---------------------------------------- ------------ ------------------
Louis R. Bucalo, M.D. (3) .............. 449,668 (4) 3.4%
Ernst-Gunter Afting, M.D., Ph.D. ....... 5,500 (5) *
Richard C. Allen, Ph.D.(3) ............. 70,897 (6) *
Victor J. Bauer, Ph.D. ................. 2,500 (5) *
Sunil R. Bhonsle (3) ................... 152,429 (7) 1.1%
Robert E. Farrell (3) .................. 10,000 *
Michael K. Hsu ......................... 27,846 (8) *
Hubert Huckel, M.D. .................... 8,000 (5) *
Marvin E. Jaffe, M.D. .................. 8,000 (5) *
Lindsay A. Rosenwald, M.D. ............. 665,534 (9) 5.0%
Konrad M. Weis, Ph.D. .................. 79,352 (10) *
Kenneth J. Widder, M.D. ................ 20,737 (8) *
Invesco Trust Company .................. 1,220,538 (11) 9.3%
7800 E. Union Avenue
Denver, CO 80237
Wisdom Tree Capital, Inc. .............. 964,825 7.4%
1633 Broadway, 38th Floor
New York, NY 10019
All executive officers and directors
as a group (12 persons) ............ 1,500,463 10.8%
- ----------
* Less than one percent.
(1) Unless otherwise indicated, the address of such individual is c/o Titan
Pharmaceuticals, Inc., 400 Oyster Point Boulevard, Suite 505, South San
Francisco, California 94080.
(2) In computing the number of Shares beneficially owned by a person and the
percentage ownership of a person, shares of common stock of the Company
subject to options held by that person that are currently exercisable or
exercisable within 60 days are deemed outstanding. Except as indicated in
the footnotes to this table and pursuant to applicable community property
laws, the persons named in the table have sole voting and investment power
with respect to all Shares.
(3) On June 19, 1998, in an option repricing transaction, Dr. Bucalo, Dr.
Allen, Mr. Bhonsle and Mr. Farrell exchanged 433,088, 61,961, 175,086 and
150,000 of their options, respectively, for new options. Although the new
options vest on a comparable basis to the old options, the new options are
not exercisable for six months and are therefore now excluded from such
individuals' holdings.
(4) Includes 149,437 Shares issuable upon exercise of outstanding options.
(5) Represents Shares issuable upon exercise of outstanding options.
(6) Includes 65,897 Shares issuable upon exercise of outstanding options.
(7) Includes 140,429 Shares issuable upon exercise of outstanding options.
(8) Includes 13,117 Shares issuable upon exercise of outstanding options.
-2-
(9) Includes (i) 90,084 Shares held by entities owned by Mr. Rosenwald, and
(ii) 272,654 Shares issuable upon exercise of outstanding options and
warrants. Does not include (i) 94,589 Shares held by his wife; (ii) 40,536
Shares held by his wife in trust for the benefit of their children; (iii)
585,718 Shares held by or underlying warrants held by Venturetek L.P., a
limited partnership, the limited partners of which include Dr. Rosenwald's
wife and children; or (iv) Shares underlying Class A Warrants held by The
Aries Trust and The Aries Domestic Fund L.P. as to which Dr. Rosenwald
serves as investment manager and President of the general partner,
respectively. Dr. Rosenwald disclaims beneficial ownership as to all of
such Shares. See "Certain Transactions."
(10) Includes 35,117 Shares issuable upon exercise of warrants and outstanding
options.
(11) Represents Shares held by three mutual funds managed by Invesco Funds
Group, Inc. or Invesco Trust Company.
----------
The following table sets forth, as of June 22, 1998, certain information
concerning the beneficial ownership of the Preferred Shares by the sole
shareholder of the Preferred Shares and such shareholder's percentage ownership
and voting power.
Name and Address of Preferred Shares Percent of Preferred
Beneficial Owner Beneficially Owned Shares Beneficially Owned
---------------- ------------------ -------------------------
Novartis Pharma AG ........... 606,061 (1) 100%
Lichtrasse 35
CH - 4002
Basel, Switzerland
- ----------
(1) Constitutes all of the outstanding Preferred Shares. The Preferred Shares
are convertible into Shares based on a conversion price equal to the market
price during a period to be specified within the first two fiscal quarters
of 1999, subject to a floor of $7.50 and a ceiling of $9.00. Accordingly,
upon conversion of the Preferred Shares, the Company will issue a minimum
of 555,555 and a maximum of 666,666 Shares. Novartis Pharma AG may be
deemed to beneficially own 4.4% of the Shares as of June 22, 1998.
-3-
EXECUTIVE OFFICERS
The following sets forth the names and ages of the executive officers of
the Company, their respective positions and offices, and their respective
principal occupations or employments during the last five years.
Name Age Office
---- --- ------
Louis R. Bucalo, M.D. ............. 39 President, Chief Executive Officer
and Director
Sunil R. Bhonsle .................. 48 Executive Vice President and Chief
Operating Officer
Richard C. Allen, Ph.D. ........... 55 Executive Vice President
Robert E. Farrell ................. 48 Executive Vice President and Chief
Financial Officer
LOUIS R. BUCALO, M.D., is a co-founder of the Company and of each of the
Company's operating companies -- Ingenex, Inc., ProNeura, Inc. ("ProNeura") and
Theracell, Inc. ("Theracell") (the "Operating Companies") -- and has served as
the Company's President and Chief Executive Officer since January 1993. Dr.
Bucalo has served as a director of the Company since March 1993. Dr. Bucalo also
serves as Chairman of the Board of each of the Operating Companies except
Theracell and as Chief Executive Officer of ProNeura. From July 1990 to April
1992, Dr. Bucalo was Associate Director of Clinical Research at Genentech, Inc.,
a biotechnology company. Dr. Bucalo holds an M.D. from Stanford University and a
B.A. in biochemistry from Harvard University.
SUNIL R. BHONSLE joined the Company as Executive Vice President and Chief
Operating Officer in September 1995. Mr. Bhonsle served in various positions,
including Vice President and General Manager, Plasma Supply and Manager,
Inventory and Technical Planning, at Bayer Corporation from July 1975 until
April 1995. Mr. Bhonsle holds an M.B.A. from the University of California at
Berkeley and a B.Tech. in chemical engineering from the Indian Institute of
Technology.
RICHARD C. ALLEN, PH.D., joined the Company as Executive Vice President in
August 1995. He also currently serves as President and Chief Executive Officer
of Theracell, which he joined in January 1995 and President and Chief Operating
Officer of ProNeura. From June 1991 until December 1994, Dr. Allen was Vice
President and General Manager of the Neuroscience Strategic Business Unit of
Hoechst-Roussel Pharmaceuticals, Inc. Dr. Allen holds a Ph.D. in medicinal
chemistry and a B.S. in pharmacy from the Medical College of Virginia.
ROBERT E. FARRELL joined the Company as Executive Vice President and Chief
Financial Officer in September 1996. Mr. Farrell was employed by Fresenius USA,
Inc. from 1991 until August 1996 where he served in various capacities,
including Vice President Administration, Chief Financial Officer and General
Counsel. His last position was Corporate Group Vice President. Mr. Farrell holds
a B.A. from University of Notre Dame and a J.D. from Hastings College of Law,
University of California.
-4-
ELECTION OF DIRECTORS
At the meeting, eight directors will be elected by the shareholders to
serve until the next Annual Meeting of Shareholders or until their successors
are elected and shall qualify. It is intended that the accompanying proxy will
be voted for the election, as directors, of the eight persons named below,
unless the proxy contains contrary instructions. The Company has no reason to
believe that any of the nominees will not be a candidate or will be unable to
serve. However, in the event that any of the nominees should become unable or
unwilling to serve as a director, the persons named in the proxy have advised
that they will vote for the election of such person or persons as shall be
designated by the Management.
The following sets forth the names and ages of the eight nominees for
election to the Board of Directors, their respective principal occupations or
employments during the past five years and the period during which each has
served as a director of the Company.
Name Age Office
---- --- ------
Louis R. Bucalo, M.D.(1) ............... 39 President, Chief Executive
Officer & Director
Victor J. Bauer, Ph.D. ................. 63 Executive Director of Corporate
Development and Director
Michael K. Hsu(2) ...................... 49 Director
Hubert Huckel, M.D.(3) ................. 66 Director
Marvin E. Jaffe, M.D.(2) ............... 61 Director
Konrad M. Weis, Ph.D.(1) ............... 69 Director
Kenneth J. Widder, M.D.(1)(3) .......... 45 Director
Ernst-Gunter Afting, M.D., Ph.D. ....... 55 Director
- ----------
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee
LOUIS R. BUCALO, M.D., see biographical information set forth above under
"Executive Officers."
VICTOR J. BAUER, Ph.D., has served as a director since November 1997. Dr.
Bauer joined the Company in February 1997, and currently serves as Executive
Director of Corporate Development. Since April 1996, Dr. Bauer has served as
Chairman of the Board of Directors of Theracell. From December 1992 until
February 1997, Dr. Bauer was a consultant to several companies in the
pharmaceutical and biotechnology industries. Prior to that time, Dr. Bauer was
with Hoechst-Roussel Pharmaceuticals Inc., where he served as President from
1988 through 1992. Dr. Bauer serves on the Board of Directors of IBAH, Inc.
MICHAEL K. HSU has served as a director of the Company since March 1993.
Mr. Hsu has served as Director-Corporate Finance of National Securities Corp.
since November 1995. From November 1994 through October 1995, he served as
Director-Corporate Finance of Coleman and Company Securities. From April 1992
through October 1994, Mr. Hsu served in the same capacity with RAS Securities.
Mr. Hsu previously held various executive positions with Steinberg and Lyman
Health Care Company, Ventana Venture Growth Fund, Asian Pacific Venture Group
(Thailand) and D. Blech Company.
-5-
HUBERT HUCKEL, M.D. has served as a director of the Company since October
1995. From 1964 until his retirement in December 1992, Dr. Huckel served in
various positions with The Hoechst Group. At the time of his retirement, he was
Chairman of the Board of Hoechst-Roussel Pharmaceuticals, Inc., Chairman and
President of Hoechst-Roussel Agri-Vet Company and a member of the Executive
Committee of Hoechst Celanese Corporation. He currently serves on the Board of
Directors of Royce Laboratories, Inc. and Sano Corporation.
MARVIN E. JAFFE, M.D., has served as a director of the Company since
October 1995. From 1988 until April 1994, Dr. Jaffe served as President of R.W.
Johnson Pharmaceutical Research Institute where he was responsible for the
research and development activities in support of a number of Johnson & Johnson
companies, including ORTHO-McNeil Pharmaceuticals, ORTHO Biotech and CILAG. From
1970 until 1988, he was Senior Vice President of Merck Research Laboratories. He
currently serves on the Board of Directors of Chiroscience, plc and
Immunomedics, Inc.
KONRAD M. WEIS, PH.D., has served as a director of the Company since March
1993. Dr. Weis is Honorary Chairman and former President and Chief Executive
Officer of Bayer Corporation. Dr. Weis serves as a director of PNC Equity
Management Company, Michael Baker Company, and Dravo Company.
KENNETH J. WIDDER, M.D., has served as a director of the Company since
March 1993. Dr. Widder is Chairman of the Board of Molecular Biosystems, Inc.
Dr. Widder serves on the Board of Directors of Wilshire Technologies, Inc. and
Digivision.
ERNST-GUNTER AFTING, M.D., PH.D., has served as a director of the Company
since May 1996. Dr. Afting has served as the President of the GSF-National
Center for Environment and Health, a government research center in Germany since
1995. From 1984 until 1995, he was employed in various capacities by the Hoechst
Group, serving as Divisional Head of the Pharmaceuticals Division of the Hoechst
Group from 1991 to 1993 and as President and Chief Executive Officer of Roussel
Uclaf (a majority shareholder of Hoechst AG) in Paris from 1993 until 1995.
DIRECTOR COMPENSATION
Non-employee directors are entitled to receive $2,000 for each Board and
committee meeting attended, although certain directors forego such fees, and are
reimbursed for their expenses in attending such meetings. Directors are not
precluded from serving the Company in any other capacity and receiving
compensation therefor. In addition, directors are entitled to receive options
("Director Options") pursuant to the Company's 1995 Stock Option Plan (the "1995
Plan"). Director Options are exercisable in four equal annual installments
commencing six months from the date of grant and expire the earlier of 10 years
after the date of grant or 90 days after the termination of the director's
service on the Board of Directors. Dr. Bauer received Director Options to
purchase 10,000 Shares at an exercise price of $5.56 per Share when he joined
the Board of Directors in November 1997. In July 1997, each of the directors
received Director Options to purchase 2,000 Shares at an exercise price of $2.88
per Share.
Directors of the Company will also be entitled to receive automatic grants
of options under the 1998 Stock Option Plan. See "Approval and Ratification of
the Company's 1998 Stock Option Plan."
During 1997, Dr. Huckel received $155,000 in consulting fees for services
rendered in connection with the Company's licensing of Iloperidone from Hoescht
Marrion Roussel, Inc. See "Certain Transactions."
-6-
BOARD COMMITTEES AND DESIGNATED DIRECTORS
The Board of Directors has an Executive Committee, a Compensation Committee
and an Audit Committee. The Executive Committee exercises all the power and
authority of the Board of Directors in the management of the Company between
Board meetings, to the extent permitted by law. The Compensation Committee makes
recommendations to the Board concerning salaries and incentive compensation for
officers and employees of the Company and may administer the Company's stock
option plans. The Audit Committee reviews the results and scope of the audit and
other accounting related matters.
The Board of Directors met six times during 1997 and also took action by
unanimous written consent. The Executive Committee met two times and also took
action by unanimous written consent, and the Compensation Committee and Audit
Committee each met one time. Each of the incumbent directors of the Company
attended at least 75% of the aggregate of (i) the meetings of the Board of
Directors and (ii) meetings of any Committees of the Board on which such person
served which were held during the time such person served.
The Company has agreed, if requested by D.H. Blair Investment Banking
Corp., the underwriter of the Company's initial public offering ("Blair"), to
nominate a designee of Blair to the Company's Board of Directors until January
18, 2001.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the aggregate
compensation awarded to, earned by, or paid to the Chief Executive Officer and
to 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
Annual Compensation
Name and Principal Position Year Salary Bonus
- --------------------------- ---- ------ -----
Louis R. Bucalo .......................... 1997 $231,525 $58,721
President and Chief 1996 $210,000 $42,000(1)
Executive Officer 1995 $188,000(2) $ 0
Sunil R. Bhonsle ......................... 1997 $190,991 $68,370
Executive Vice President and 1996 $185,000 $ 9,250(1)
Chief Operating Officer 1995 $ 50,104 $ 0
Richard C. Allen ......................... 1997 $193,984 $77,096
Executive Vice President(3) 1996 $185,000 $15,500(1)
1995 $166,000 $ 0
Robert E. Farrell ........................ 1997 $186,665 $18,500
Executive Vice President and 1996 $ 53,958 $ 0
Chief Financial Officer
- ----------
-7-
(1) Bonuses pertain to fiscal year 1995 and were paid in 1997.
(2) A portion of the cash compensation paid to Dr. Bucalo during 1995 is
allocable to the Operating Companies.
(3) Dr. Allen also serves as President and Chief Executive Officer of Theracell
and President and Chief Operating Officer of ProNeura. Dr. Allen receives
his entire salary from Theracell. Dr. Allen's bonus included $20,000
paid by the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the stock option grants
made to the named executive officers during the fiscal year ended December 31,
1997. No stock appreciation rights were granted to these individuals during such
year.
Potential
Realizable Value at
Assumed Annual
Number of Individual Grant Rates of
Securities ----------------------------------------------- Stock Price
Underlying % of Total Appreciation For
Options Options Granted Exercise or Option Term (2)
Granted to Employees Base Price Expiration -------------------
Name (#)(1) In Fiscal Year ($/Sh) (1) Date 5% 10%
- ---- ----------- --------------- ----------- ----------- ------ ------
Louis R. Bucalo......... 2,000 0.6% $2.88 07/30/2007 $3,622 $9,180
- ---------
(1) Such options are exercisable in four equal annual installments commencing
January 30, 1998. The exercise price may be paid in cash, in shares of
common stock valued at the fair market value on the exercise date or
through a cashless exercise procedure involving a same-day sale of the
purchase shares.
(2) Calculated by multiplying the exercise price by the annual appreciation
rate shown (as prescribed by Securities and Exchange Commission ("SEC")
rules and compounded for the term of the options), subtracting the exercise
price per share and multiplying the gain per share by the number of shares
covered by the options. These amounts are not intended to forecast possible
future appreciation, if any, of the price of the Company's Shares and the
actual value realized upon exercise of the options will depend on the fair
market value of such Shares on the date of exercise.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning option exercises and
option holdings for the fiscal year ended December 31, 1997 with respect to the
named executive officers. No stock appreciation rights were exercised during
such year or were outstanding at the end of that year.
Number of Securities Value of
Underlying Unexercised Unexercised in-the-Money
Shares Options at FY-End Options at FY-End
Acquired --------------------------- ---------------------------
Name on Exercise(#) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ----------- ------------- ----------- -------------
Louis R. Bucalo ............ -0- 270,876 360,067 $397,477 $ 25,900
Sunil R. Bhonsle ........... -0- 128,061 205,038(2) $222,796 $272,305(2)
Richard C. Allen ........... -0- 77,911 55,656(2) $115,523 $132,025(2)
Robert E. Farrell .......... -0- 37,500 112,500 $ 0 $ 0
- ---------
(1) Based on the fair market value of the Company's common stock at year-end,
$5.625 per share, less the exercise price payable for such shares.
(2) A portion of employees options are immediately exercisable. Upon the
employees cessation of service, the Company has the right to repurchase any
shares acquired pursuant to said grant. The Company's right to repurchase
shares expires in equal monthly installments over the five year period
commencing on the date of grant. Options to which the Company's repurchase
right has not expired are deemed unexercisable for purposes of this table.
-8-
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
The Company is a party to employment agreements with each of Dr. Bucalo,
President and Chief Executive Officer of the Company, Sunil R. Bhonsle,
Executive Vice President and Chief Operating Officer of the Company, Robert E.
Farrell, Executive Vice President and Chief Financial Officer of the Company,
and Richard C. Allen, Executive Vice President of the Company. All of the
agreements contain confidentiality provisions.
The agreement with Dr. Bucalo expires in February 2001 (as extended during
1997) and provides for a base annual salary of $210,000, subject to annual
increases of 5% and bonuses of up to 25% at the discretion of the Board of
Directors. In the event of the termination of the agreement with Dr. Bucalo,
other than for reasons specified therein, the Company is obligated to make
severance payments equal to his base annual salary for the greater of the
balance of the term of the agreement or 18 months.
The agreement with Mr. Bhonsle provides for a base annual salary of
$185,000, subject to automatic annual increases, based on increases in the
consumer price index, and bonuses of up to 20% at the discretion of the Board of
Directors. In the event Mr. Bhonsle's employment is terminated other than for
"good cause" (as defined), the Company is obligated to make severance payments
equal to his base annual salary for six months. Mr. Bhonsle has also been
granted certain options that vest over five years if he remains employed by the
Company.
The agreement with Mr. Farrell provides for a base annual salary of
$185,000, subject to automatic annual increases, based on increases in the
consumer price index, and bonuses of up to 20% at the discretion of the Board of
Directors. In the event Mr. Farrell's employment is terminated other than for
"good cause" (as defined), the Company is obligated to make severance payments
equal to his base annual salary for six months. Mr. Farrell has also been
granted certain options that vest over four years if he remains employed by the
Company.
Dr. Allen receives no salary from the Company (his primary compensation is
from Theracell) but has been granted certain stock options which vest over five
years if he remains employed by the Company.
In the event of certain transactions, including those which may result in a
change in control, unvested installments of options to purchase Shares pursuant
to the Company's stock option plans may become subject to accelerated vesting.
See "Approval and Ratification of the Company's 1998 Stock Option Plan."
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's 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 SEC 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 owners are required by SEC
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 all filing requirements
-9-
applicable to the Company's executive officers, directors and greater than 10%
beneficial owners were complied with, with the exception of Richard Allen who
filed a Form 4 two months late and Lindsay Rosenwald who filed a Form 5 one
month late.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The goal of the Company's executive compensation policy is to ensure that
an appropriate relationship exists between executive compensation and the
creation of shareholder value, while at the same time attracting, motivating and
retaining executive officers. The Compensation Committee's informal executive
compensation philosophy (which applies generally to all executive officers of
the Company, including the President and Chief Executive Officer) considers a
number of factors, which may include:
o providing levels of compensation competitive with companies in
comparable industries which are at a similar stage of development and
in the Company's geographic area;
o integrating the compensation of the executive officers of the Company
with the achievement of performance goals;
o rewarding above average corporate performance; and
o recognizing and providing incentive for individual initiative and
achievement.
During fiscal 1997, all executive officers received base salaries pursuant
to their employment agreements with the Company. See "Executive Compensation --
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements." Further, during fiscal 1997 the compensation of executive
officers was weighted in part toward bonus compensation contingent upon the
Company achieving certain business and financial objective during the fiscal
year. The Compensation Committee also endorses the position that equity
ownership by the executive officers of the Company is beneficial in aligning
their interests with those of the shareholders, especially in the enhancement of
shareholder value by providing the executive officers with longer-term
incentives. Accordingly, compensation structures for the executive officers of
the Company generally include a combination of salary, bonuses and stock
options. Base salary and bonus awards are determined based on a range of
measures and internal targets set before the start of each fiscal year and in
part by comparison to the compensation of executive officers of comparable
biotechnology and pharmaceutical companies. The Compensation Committee considers
the Company's performance under these measures and uses its subjective judgment
and discretion in approving individual compensation.
The Compensation Committee has implemented its policy on longer-term
compensation to executive officers, including the chief executive officer,
generally by granting to an executive officer upon joining the Company stock
options with vesting over a period of 48 months commencing one year from the
date of grant. During fiscal 1997, the Compensation Committee made a
determination to implement an annual option grant program to executive officers
to be based upon the findings in the Radford Associates-Biotechnology
Compensation Survey, 1997.
Hubert Huckel, M.D.
Kenneth J. Widder, M.D.
Lindsay Rosenwald, M.D.
-10-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1997, the members of the Company's
Compensation Committee were Dr. Huckel, Widder and Rosenwald. Dr. Huckel
received consulting fees from the Company aggregating $155,000. See "Certain
Transactions."
STOCK PRICE PERFORMANCE PRESENTATION
The following chart compares the cumulative total shareholder return on the
Company's Shares with the cumulative total shareholder return of (i) the Nasdaq
Market Index and (ii) a peer group index consisting of companies reporting under
the Standard Industrial Classification Code 2834 (Pharmaceutical Preparations):
[GRAPHICAL REPRESENTATION OF CHART BELOW]
================================================================================
Cumulative Total Return
--------------------------
1/18/96 12/96 12/97
------- ----- -----
TITAN PHARMACEUTICALS, INC. ........................ 100 131 88
NASDAQ STOCK MARKERT (U.S.) ........................ 100 123 151
NASDAQ PHARMACEUTICALS ............................. 100 100 104
- ----------
(1) Assumes $100 invested on January 18, 1996 and assumes dividends reinvested.
Measurement points are at the last trading day of the fiscal years ended
December 31, 1996 and 1997. The material in this chart is not soliciting
material, is not deemed filed with the SEC and is not incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended or the 1934 Act, whether made before or after the date of this
proxy statement and irrespective of any general incorporation language in
such filing.
================================================================================
CERTAIN TRANSACTIONS
In June and July of 1997, Dr. Hubert Huckel, a director of the Company,
received an aggregate of $155,000 in consulting fees for services rendered in
connection with the Company's consummation of the Hoescht Marrion Roussel, Inc.
Agreement. Dr. Huckel was paid pursuant to a consulting agreement which provided
for the payment of fees based upon a percentage of the up-front consideration
paid by the Company upon completion of a licensing transaction with Dr. Huckel's
assistance. The consulting agreement expired by its terms in January 1998.
-11-
APPROVAL AND RATIFICATION OF THE COMPANY'S
1998 STOCK OPTION PLAN
On June 10, 1998, the Board of Directors adopted the Company's 1998 Stock
Option Plan (the "1998 Plan"), a copy of which is attached hereto as Appendix A.
SUMMARY OF THE PLAN
Under the 1998 Plan, pursuant to which 1,000,000 Shares are authorized for
issuance, employees, officers and directors of, and consultants or advisers to,
the Company and any subsidiary corporations are eligible to receive incentive
stock options ("incentive options") within the meaning of Section 422 of the
Code and/or options that do not qualify as incentive options ("non-qualified
options"). The 1998 Plan, which expires in June 2008, is administered by the
Board of Directors or a committee of the Board of Directors. The purposes of the
1998 Plan are to ensure the retention of existing executive personnel, key
employees, directors, consultants and advisors who are expected to contribute to
the Company's future growth and success and to provide additional incentive by
permitting such individuals to participate in the ownership of the Company, and
the criteria to be utilized by the Board of Directors or the committee in
granting options pursuant to the 1998 Plan will be consistent with these
purposes. The 1998 Plan provides for automatic grants of options to certain
directors in the manner set forth below under "Directors' Options."
Options granted under the 1998 Plan may be either incentive options or
non-qualified options. Incentive options granted under the 1998 Plan are
exercisable for a period of up to 10 years from the date of grant at an exercise
price which is not less than the fair market value of the Shares on the date of
the grant, except that the term of an incentive option granted under the 1998
Plan to a shareholder owning more than 10% of the outstanding voting power may
not exceed five years and its exercise price may not be less than 110% of the
fair market value of the shares on the date of grant. To the extent that the
aggregate fair market value, as of the date of grant, of the Shares for which
incentive options become exercisable for the first time by an optionee during
the calendar year exceeds $100,000, the portion of such option which is in
excess of the $100,000 limitation will be treated as a nonqualified option.
Options granted under the 1998 Plan to officers, directors or employees of the
Company may be exercised only while the optionee is employed or retained by the
Company or within 90 days of the date of termination of the employment
relationship or directorship. However, options which are exercisable at the time
of termination by reason of death or permanent disability of the optionee may be
exercised within 12 months of the date of termination of the employment
relationship or directorship. Upon the exercise of an option, payment may be
made by cash, by surrender of Shares having a fair market value equal to the
purchase price, by provisions for cashless exercise or by any other means that
the Board of Directors or the committee determines. No options may be granted
under the 1998 Plan after June 2008.
Options may be granted only to such employees, officers and directors of,
and consultants and advisors to, the Company or any subsidiary of the Company as
the Board of Directors or the committee shall select from time to time in its
sole discretion, provided that only employees of the Company or a subsidiary of
the Company shall be eligible to receive incentive options. An optionee may be
granted more than one option under the 1998 Plan. The Board of Directors or the
committee will, in its discretion, determine (subject to the terms of the 1998
Plan) who will be granted options, the time or times at which options shall be
granted, and the number of Shares subject to each option, whether the options
are incentive options or nonqualified options, and the manner in which options
may be exercised. In making such determination, consideration may be given to
the value of the services rendered by the respective individuals, their present
and potential contributions to the success of the Company and its subsidiaries
and such other factors deemed relevant in accomplishing the purpose of the 1998
Plan.
-12-
The 1998 Plan may be amended or terminated by the Board at any time. No
amendment or termination may adversely affect any outstanding option without the
written consent of the optionee. The foregoing summary of the 1998 Plan is
qualified in its entirety by the specific language of the 1998 Plan.
DIRECTORS' OPTIONS
The 1998 Plan provides for the automatic grant of stock options to purchase
Shares to directors of the Company who beneficially own less than 10% of the
outstanding Shares ("Eligible Directors"). Eligible Directors of the Company
elected after the date hereof will be granted Director Options to purchase
10,000 shares of Common Stock on the date they are first elected or appointed a
director, only in the event and to the extent that such options are not
available under the 1995 Plan (an "Initial Director Option"). Further,
commencing on the day immediately following the date of the annual meeting of
shareholders for the Company's fiscal year ending December 31, 1997, each
Eligible Director, other than directors who received an Initial Director Option
since the last annual meeting, will be granted Director Options to purchase
3,000 shares of Common Stock ("Automatic Grant") on the day immediately
following the date of each annual meeting of shareholders, as long as such
director is a member of the Board of Directors. At such time as there are no
options available under the 1995 Plan, the Automatic Grant shall increase to a
Director Option to purchase 5,000 shares of Common Stock, inclusive of any
portion of an automatic grant of a Director Option received by an Eligible
Director under the 1995 Plan for such year. The exercise price for each Share
subject to a Director Option shall be equal to the fair market value of the
Common Stock on the date of grant. Director Options shall become exercisable in
full twelve months from the date such options are granted and will expire the
earlier of 10 years after the date of grant or 90 days after the termination of
the director's service on the Board of Directors, unless such Director Option is
an incentive option in which case such Director Option shall be subject to
additional terms and conditions.
FEDERAL INCOME TAX CONSEQUENCES
Under current tax law, there are no Federal income tax consequences to
either the employee or the Company on the grant of non-qualified options if
granted under the terms set forth in the 1998 Plan. Upon exercise of a
non-qualified option, the excess of the fair market value of the Shares subject
to the option over the option price (the "Spread") at the date of exercise is
taxable as ordinary income to the optionee in the year it is exercised and is
deductible by the Company as compensation for Federal income tax purposes, if
Federal income tax is withheld on the Spread. However, if the Shares are subject
to vesting restrictions conditioned on future employment or the holder is
subject to the short-swing profits liability restrictions of Section 16(b) of
the 1934 Act (i.e., is an executive officer, director or 10% shareholder of the
Company) then taxation and measurement of the Spread is deferred until such
restrictions lapse, unless a special election is made under Section 83(b) of the
Code to report such income currently without regard to such restrictions. The
optionee's basis in the Shares will be equal to the fair market value on the
date taxation is imposed and the holding period commences on such date.
Holders of incentive options incur no regular Federal income tax liability
at the time of grant or upon exercise of such option, assuming that the optionee
was an employee of the Company from the date the option was granted until three
months before such exercise. However, upon exercise, the Spread must be added to
regular Federal taxable income in computing the optionee's "alternative minimum
tax" liability. An optionee's basis in the Shares received upon exercise of an
incentive stock option for regular income tax purposes will be the option price
of such Shares. No deduction is allowable to the Company for Federal income tax
purposes in connection with the grant or exercise of such option.
-13-
If the holder of Shares acquired through exercise of an incentive option
sell such Shares within two years of the date of grant of such option or within
one year from the date of exercise of such option (a "Disqualifying
Disposition"), the optionee will realize income taxable at ordinary rates.
Ordinary income is reportable during the year of such sale equal to the
difference between the option price and the fair market value of the Shares at
the date the option is exercised, but the amount includable as ordinary income
shall not exceed the excess, if any, of the proceeds of such sale over the
option price. In addition to ordinary income, a Disqualifying Disposition may
result in taxable income subject to capital gains treatment if the sales
proceeds exceed the optionee's basis in the shares (i.e., the option price plus
the amount includable as ordinary income). The amount of the optionee's taxable
ordinary income will be deductible by the Company in the year of the
Disqualifying Disposition.
At the time of sale of Shares received upon exercise of an option (other
than a Disqualifying Disposition of Shares received upon the exercise of an
incentive option), any gain or loss is deemed long-term or short-term capital
gain or loss, depending upon the holding period. The holding period for Federal
income tax purposes for long-term capital gains taxed at 28% is more than one
year but not more than 18 months. The holding period for Federal income tax
purposes long-term capital gains taxed at 20% is more than 18 months. In
general, the holding period for long-term capital losses is more than one year,
subject to rules setting priorities for offsetting such losses against long-term
capital gains taxed at the 20% and 28% rates.
The foregoing is not intended to be an exhaustive analysis of the tax
consequences relating to stock options issued under the 1998 Plan. For instance,
the treatment of options under state and local tax laws, which is not described
above, may differ from the treatment for Federal income tax purposes.
As of June 22, 1998, approximately 24 of the Company's employees were
eligible to participate in the 1998 Plan. On such date, the closing price of the
Company's Shares on the Nasdaq SmallCap Market was $4.75. In June 1998, options
to purchase an aggregate of 157,000 Shares at an exercise price of $5.30 per
Share were granted to executive officers of the Company, of which options to
purchase 26,135 Shares were granted under the 1998 Plan, subject to shareholder
approval, as follows:
Name and Position Number of Shares Dollar Value($)(1)
- ----------------- ---------------- ------------------
Louis R. Bucalo, M.D., President
and Chief Executive Officer ............. 9,855 $32,817/$83,275
Sunil R. Bhonsle, Executive Vice
President and Chief Operating
Officer ................................. 6,925 $23,060/$58,516
Richard C. Allen, Executive Vice
President ............................... 5,543 $18,458/$46,838
Robert E. Farrell, Executive Vice
President and Chief Financial
Officer ................................. 3,812 $12,694/$32,211
All current executive officers as
a group ................................. 26,135 $87,029/$220,840
All current directors who are not
executive officers as a group ........... 0 0
All employees, including all
current officers who are not
executive officers, as a group .......... 0 0
- ---------
(1) Calculated by multiplying the exercise price by an annual appreciation rate
of 5% and 10%, respectively (and compounded for the term of the options),
subtracting the exercise price per Share and multiplying the gain per Share
by the number of Shares covered by the options. These
-14-
amounts are not intended to forecast possible future appreciation, if any,
of the price of the Shares. The actual value realized upon exercise of the
options to purchase Shares will depend on the fair market value of the
Shares on the date of exercise.
Future grants under the 1998 Plan have not yet been determined.
The affirmative vote of the holders of the majority of the Shares present
in person or by proxy at the Annual Meeting and entitled to vote on the matter
is required to approve and ratify the 1998 Plan. In the event stockholder
approval of the 1998 Plan is not obtained by June 1999, any incentive options
granted under the 1998 Plan will become non-qualified stock options and no
future incentive options may be granted under the 1998 Plan. The Board of
Directors recommends a vote FOR the proposed approval and ratification of the
1998 Plan, and the persons named in the accompanying proxy will vote in
accordance with the choice specified thereon or, if no choice is properly
indicated, in favor of the approval and ratification.
APPOINTMENT OF INDEPENDENT AUDITORS
The Management of the Company recommends the appointment of Ernst & Young
LLP, independent certified public accountants, as the Company's independent
auditors. Ernst & Young LLP has been the Company's auditors for the past three
fiscal years and has no direct or indirect financial interest in the Company. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if he or she
desires to do so, and shall be available to respond to appropriate questions.
GENERAL
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
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such other
matters in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such matters is conferred by such proxies
upon the persons voting them.
The Company will bear the cost of preparing, printing, assembling and
mailing the proxy, Proxy Statement and other material which may be sent to
shareholders in connection with this solicitation. It is contemplated that
brokerage houses will forward the proxy materials to beneficial owners at the
request of the Company. In addition to the solicitation of proxies by use of the
mails, officers and regular employees of the Company may solicit proxies without
additional compensation, by telephone or telegraph. The Company does not expect
to pay any compensation for the solicitation of proxies.
The Company will provide without charge to each person being solicited by
this Proxy Statement, on the written request of any such person, a copy of the
Annual Report of the Company on Form 10-K for the year ended December 31, 1997
(as filed with the Securities and Exchange Commission) including the financial
statements thereto. All such requests should be directed to Sunil Bhonsle, 400
Oyster Point Boulevard, Suite 505, South San Francisco, California 94080.
-15-
SHAREHOLDER PROPOSALS
The Annual Meeting of Shareholders for the fiscal year ending December 31,
1998 is expected to be held in July 1999. All proposals intended to be presented
at the Company's next Annual Meeting of Shareholders must be received at the
Company's executive office no later than April 25, 1999, for inclusion in the
Proxy Statement and form of proxy related to that meeting.
By Order of the Board of Directors,
Louis R. Bucalo, M.D.,
President and Chief Executive Officer
Dated: June 29, 1998
-16-
APPENDIX A
TITAN PHARMACEUTICALS, INC.
1998 STOCK OPTION PLAN
1. Purpose.
The purpose of this plan (the "Plan") is to secure for Titan
Pharmaceuticals, Inc. (the "Company") and its shareholders the benefits arising
from capital stock ownership by employees, officers and directors of, and
consultants or advisors to, the Company who are expected to contribute to the
Company's future growth and success. Except where the context otherwise
requires, the term "Company" shall include all present and future subsidiaries
of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code"). Those
provisions of the Plan which make express reference to Section 422 shall apply
only to Incentive Stock Options (as that term is defined in the Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or non-statutory options which are not intended to meet the requirements of
Section 422 of the Code.
(b) Administration. The Plan will be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company, whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive. The delegation of powers to the Committee shall be
consistent with applicable laws or regulations (including, without limitation,
applicable state law and Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3")). The
Committee may in its sole discretion grant options to purchase shares of the
Company's Common Stock, $.001 par value per share ("Common Stock") and issue
shares upon exercise of such options as provided in the Plan. The Committee
shall have authority, subject to the express provisions of the Plan, to construe
the respective option agreements and the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the respective option agreements, which need not be identical, and
to make all other determinations in the judgment of the Committee necessary or
desirable for the administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any option agreement in the manner and to the extent it shall deem expedient to
carry the Plan into effect and it shall be the sole and final judge of such
expediency. No director or person acting pursuant to authority delegated by the
Board of Directors shall be liable for any action or determination under the
Plan made in good faith.
A-1
(c) Applicability of Rule 16b-3. Those provisions of the Plan which make
express reference to Rule 16b-3 shall apply to the Company only at such time as
the Company's Common Stock is registered under the Exchange Act, subject to the
last sentence of Section 3(b), and then only to such persons as are required to
file reports under Section 16(a) of the Exchange Act (a "Reporting Person").
3. Eligibility.
(a) General. Options may be granted to persons who are, at the time of
grant, employees, officers or directors of, or consultants or advisors to, the
Company or any subsidiaries of the Company as defined in Sections 424(e) and
424(f) of the Code ("Participants") provided, that Incentive Stock Options may
only be granted to individuals who are employees of the Company (within the
meaning of Section 3401(c) of the Code). A person who has been granted an option
may, if he or she is otherwise eligible, be granted additional options if the
Committee shall so determine.
(b) Grant of Options to Reporting Persons. The selection of a director or
an officer who is a Reporting Person (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
(ii) by a committee consisting of two or more directors having full authority to
act in the matter, each of whom shall be an "Independent Director" as defined by
Rule 1.62-27 of the Code or (iii) pursuant to provisions for automatic grants
set forth in Section 3(c) below.
(c) Directors' Options. Directors of the Company who are not stockholders
of the Company owning in excess of 10% of the outstanding Common Stock of the
Company ("Eligible Directors") will be granted a Director Option to purchase
10,000 shares of Common Stock on the date that such person is first elected or
appointed a director ("Initial Director Option"), in the event and to the extent
that such options are not available under the Company's 1995 Stock Option Plan
(the "1995 Plan"). Commencing on the day immediately following the date of the
annual meeting of stockholders for the Company's fiscal year ending December 31,
1997, each Eligible Director, other than Eligible Directors who received an
Initial Director Option since the most recent automatic grant ("Automatic
Grant"), will receive an Automatic Grant of a Director Option to purchase 3,000
shares of Common Stock on the day immediately following the date of each annual
meeting of stockholders, as long as such director is a member of the Board of
Directors. At such time as there are no options available under the 1995 Plan,
the Automatic Grant shall increase to a Director Option to purchase 5,000 shares
of Common Stock, inclusive of any portion of an automatic grant of a Director
Option received by an Eligible Director under the 1995 Plan for such year. The
exercise price for each share subject to a Director Option shall be equal to the
fair market value of the Common Stock on the date of grant. Director Options
shall become exercisable in full twelve months from the date such options are
granted and will expire the earlier of 10 years after the date of grant or 90
days after the termination of the director's service on the Board, unless such
Director Option is an Incentive
A-2
Stock Option in which case such Director Option shall be subject to the
additional terms and conditions set forth in Section 11.
4. Stock Subject to Plan.
The stock subject to options granted under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. Subject to adjustment as
provided in Section 15 below, the maximum number of shares of Common Stock of
the Company which may be issued and sold under the Plan is 1,000,000 shares. If
an option granted under the Plan shall expire, terminate or is cancelled for any
reason without having been exercised in full, the unpurchased shares subject to
such option shall again be available for subsequent option grants under the
Plan.
5. Forms of Option Agreements.
As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors. Such option agreements
may differ among recipients.
6. Purchase Price.
(a) General. The purchase price per share of stock deliverable upon the
exercise of an option shall be determined by the Board of Directors at the time
of grant of such option; provided, however, that in the case of an Incentive
Stock Option, the exercise price shall not be less than 100% of the Fair Market
Value (as hereinafter defined) of such stock, at the time of grant of such
option, or less than 110% of such Fair Market Value in the case of options
described in Section 11(b). "Fair Market Value" of a share of Common Stock of
the Company as of a specified date for the purposes of the Plan shall mean the
closing price of a share of the Common Stock on the principal securities
exchange (including the Nasdaq National Market) on which such shares are traded
on the day immediately preceding the date as of which Fair Market Value is being
determined, or on the next preceding date on which such shares are traded if no
shares were traded on such immediately preceding day, or if the shares are not
traded on a securities exchange, Fair Market Value shall be deemed to be the
average of the high bid and low asked prices of the shares in the
over-the-counter market on the day immediately preceding the date as of which
Fair Market Value is being determined or on the next preceding date on which
such high bid and low asked prices were recorded. If the shares are not publicly
traded, Fair Market Value of a share of Common Stock (including, in the case of
any repurchase of shares, any distributions with respect thereto which would be
repurchased with the shares) shall be determined in good faith by the Board of
Directors. In no case shall Fair Market Value be determined with regard to
restrictions other than restrictions which, by their terms, will never lapse.
(b) Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company
A-3
in an amount equal to the exercise price of such options, by surrender of shares
having a Fair Market Value equal to the purchase price, or by any other means,
including pursuant to provisions for cashless exercise, which the Board of
Directors or Committee determines are consistent with the purpose of the Plan
and with applicable laws and regulations (including, without limitation, the
provisions of Rule 16b-3 and Regulation T promulgated by the Federal Reserve
Board).
7. Option Period.
Subject to earlier termination as provided in the Plan, each option and all
rights thereunder shall expire on such date as determined by the Board of
Directors and set forth in the applicable option agreement, provided, that such
date shall not be later than 10 years after the date on which the option is
granted.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the option agreement evidencing such option, subject to the provisions
of the Plan. Subject to the requirements in the immediately preceding sentence,
if an option is not at the time of grant immediately exercisable, the Board of
Directors may (i) in the agreement evidencing such option, provide for the
acceleration of the exercise date or dates of the subject option upon the
occurrence of specified events, and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option.
9. Nontransferability of Options.
No option granted under this Plan shall be assignable or otherwise
transferable by the optionee except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder. An option may be exercised during the lifetime of the optionee only
by the optionee. In the event an optionee dies during his employment by the
Company or any of its subsidiaries, or during the three-month period following
the date of termination of such employment, his option shall thereafter be
exercisable, during the period specified in the option agreement, by his
executors or administrators to the full extent to which such option was
exercisable by the optionee at the time of his death during the periods set
forth in Section 10 or 11(d).
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock Options
and except as otherwise determined by the Committee at the date of grant of an
Option, and subject to the provisions of the Plan, an optionee may exercise an
option at any time within three months following the termination of the
optionee's employment or other relationship with the Company
A-4
or within one year if such termination was due to the death or disability of the
optionee but, except in the case of the optionee's death, in no event later than
the expiration date of the Option. If the termination of the optionee's
employment is for cause or is otherwise attributable to a breach by the optionee
of an employment or confidentiality or non-disclosure agreement, the option
shall expire immediately upon such termination. The Board of Directors shall
have the power to determine what constitutes a termination for cause or a breach
of an employment or confidentiality or non-disclosure agreement, whether an
optionee has been terminated for cause or has breached such an agreement, and
the date upon which such termination for cause or breach occurs. Any such
determinations shall be final and conclusive and binding upon the optionee.
11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the Plan
shall, at the time of grant, be specifically designated as such in the option
agreement covering such Incentive Stock Options.
(b) 10% Shareholder. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market Value
of one share of Common Stock at the time of grant; and
(ii) The option exercise period shall not exceed five years from the
date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate Fair Market Value, as of the
respective date or dates of grant, of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive Stock
Option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant of his or her option, employed
by the Company, except that:
A-5
(i) an Incentive Stock Option may be exercised within the period of
three months after the date the optionee ceases to be an employee of the
Company (or within such lesser period as may be specified in the applicable
option agreement), provided, that the agreement with respect to such option
may designate a longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a non-statutory
option under the Plan;
(ii) if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an employee, the
Incentive Stock Option may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution within the
period of one year after the date of death (or within such lesser period as
may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of Section
22(e)(3) of the Code or any successor provisions thereto) while in the
employ of the Company, the Incentive Stock Option may be exercised within
the period of one year after the date the optionee ceases to be such an
employee because of such disability (or within such lesser period as may be
specified in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in its sole
discretion, include additional provisions in option agreements covering options
granted under the Plan, including without limitation restrictions on transfer,
repurchase rights, rights of first refusal, commitments to pay cash bonuses, to
make, arrange for or guaranty loans or to transfer other property to optionees
upon exercise of options, or such other provisions as shall be determined by the
Board of Directors; provided, that such additional provisions shall not be
inconsistent with any other term or condition of the Plan and such additional
provisions shall not cause any Incentive Stock Option granted under the Plan to
fail to qualify as an Incentive Stock Option within the meaning of Section 422
of the Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 (if applicable).
A-6
13. General Restrictions.
(a) Investment Representations. The Company may require any person to whom
an Option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option or award, for
his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock,
including any "lock-up" or other restriction on transferability.
(b) Compliance With Securities Law. Each Option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
upon any securities exchange or automated quotation system or under any state or
federal law, or the consent or approval of any governmental or regulatory body,
or that the disclosure of non-public information or the satisfaction of any
other condition is necessary as a condition of, or in connection with the
issuance or purchase of shares thereunder, such option may not be exercised, in
whole or in part, unless such listing, registration, qualification, consent or
approval, or satisfaction of such condition shall have been effected or obtained
on conditions acceptable to the Board of Directors. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification, or to satisfy such condition.
14. Rights as a Stockholder.
The holder of an option shall have no rights as a stockholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations, Reorganizations and Related
Transactions.
(a) Recapitalizations and Related Transactions. If, through or as a result
of any recapitalization, reclassification, stock dividend, stock split, reverse
stock split or other similar transaction, (i) the outstanding shares of Common
Stock are increased, decreased or exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under or otherwise referred to in the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to
A-7
any then outstanding options under the Plan, without changing the aggregate
purchase price as to which such options remain exercisable. Notwithstanding the
foregoing, no adjustment shall be made pursuant to this Section 15 if such
adjustment (i) would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 or (ii) would be considered as the adoption of a new
plan requiring stockholder approval.
(b) Reorganization, Merger and Related Transactions. All outstanding
Options under the Plan shall become fully exercisable for a period of sixty (60)
days following the occurrence of any Trigger Event, whether or not such Options
are then exercisable under the provisions of the applicable agreements relating
thereto. For purposes of the Plan, a "Trigger Event" is any one of the following
events:
(i) the date on which shares of Common Stock are first purchased
pursuant to a tender offer or exchange offer (other than such an offer by
the Company, any Subsidiary, any employee benefit plan of the Company or of
any Subsidiary or any entity holding shares or other securities of the
Company for or pursuant to the terms of such plan), whether or not such
offer is approved or opposed by the Company and regardless of the number of
shares purchased pursuant to such offer;
(ii) the date the Company acquires knowledge that any person or group
deemed a person under Section 13(d)-3 of the Exchange Act (other than the
Company, any Subsidiary, any employee benefit plan of the Company or of any
Subsidiary or any entity holding shares of Common Stock or other securities
of the Company for or pursuant to the terms of any such plan or any
individual or entity or group or affiliate thereof which acquired its
beneficial ownership interest prior to the date the Plan was adopted by the
Board), in a transaction or series of transactions, has become the
beneficial owner, directly or indirectly (with beneficial ownership
determined as provided in Rule 13d-3, or any successor rule, under the
Exchange Act), of securities of the Company entitling the person or group
to 30% or more of all votes (without consideration of the rights of any
class or stock to elect directors by a separate class vote) to which all
shareholders of the Company would be entitled in the election of the Board
of Directors were an election held on such date; and
(iii) the date of approval by the stockholders of the Company of an
agreement (a "reorganization agreement") providing for:
(A) The merger of consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to the
merger or consolidation, do not beneficially own, immediately after the
merger or consolidation, shares of the corporation issuing cash or
securities in the merger or consolidation entitling such shareholders to
80% or more of all votes (without consideration of the rights of any class
of stock to elect directors by a separate
A-8
class vote) to which all stockholders of such corporation would be entitled
in the election of directors or where the members of the Board of Directors
of the Company, immediately prior to the merger or consolidation, do not,
immediately after the merger or consolidation, constitute a majority of the
Board of Directors of the corporation issuing cash or securities in the
merger or consolidation; or
(B) The sale or other disposition of all or substantially all the
assets of the Company.
(c) Board Authority to Make Adjustments. Any adjustments under this Section
15 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under the Plan on account of
any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. In the event of any sale, merger, transfer or acquisition of
the Company or substantially all of the assets of the Company in which the
Company is not the surviving corporation, and provided that after the Company
shall have requested the acquiring or succeeding corporation (or an affiliate
thereof), that equivalent options shall be substituted and such successor
corporation shall have refused or failed to assume all options outstanding under
the Plan or issue substantially equivalent options, then any or all outstanding
options under the Plan shall accelerate and become exercisable in full
immediately prior to such event. The Committee will notify holders of options
under the Plan that any such options shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the options will terminate
upon expiration of such notice.
(b) Substitute Options. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
17. No Special Employment Rights.
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
A-9
18. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
19. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect; provided, however, that if at any time the
approval of the stockholders of the Company is required under Section 422 of the
Code or any successor provision with respect to Incentive Stock Options, the
Board of Directors may not effect such modification or amendment without such
approval; and provided, further, that the provisions of Section 3(c) hereof
shall not be amended more than once every six months, other than to comport with
changes in the Code, the Employer Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
(b) The modification or amendment of the Plan shall not, without the
consent of an optionee, affect his or her rights under an option previously
granted to him or her. With the consent of the optionee affected, the Board of
Directors may amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to amend or modify
(i) the terms and provisions of the Plan and of any outstanding Incentive Stock
Options granted under the Plan to the extent necessary to qualify any or all
such options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code and (ii) the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the qualification of the
Plan under Rule 16b-3.
20. Withholding.
(a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a Fair
Market Value equal to such withholding obligation as of the date that the amount
of tax to be withheld is to be determined. An optionee who has made an election
pursuant to this Section 20(a) may only satisfy his or her
A-10
withholding obligation with shares of Common Stock which are not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(b) The acceptance of shares of Common Stock upon exercise of an Incentive
Stock Option shall constitute an agreement by the optionee (i) to notify the
Company if any or all of such shares are disposed of by the optionee within two
years from the date the option was granted or within one year from the date the
shares were issued to the optionee pursuant to the exercise of the option, and
(ii) if required by law, to remit to the Company, at the time of and in the case
of any such disposition, an amount sufficient to satisfy the Company's federal,
state and local withholding tax obligations with respect to such disposition,
whether or not, as to both (i) and (ii), the optionee is in the employ of the
Company at the time of such disposition.
(c) Notwithstanding the foregoing, in the case of a Reporting Person whose
options have been granted in accordance with the provisions of Section 3(b)
herein, no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3.
21. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
22. Effective Date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's stockholders. If such stockholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no Incentive Stock Options shall be granted thereafter. Amendments to the
Plan not requiring stockholder approval shall become effective when adopted by
the Board of Directors; amendments requiring shareholder approval (as provided
in Section 21) shall become effective when adopted by the Board of Directors,
but no Incentive Stock Option granted after the date of such amendment shall
become exercisable (to the extent that such amendment to the Plan was required
to enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's stockholders. If such stockholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted
A-11
on or after the date of such amendment shall terminate to the extent that such
amendment to the Plan was required to enable the Company to grant such option to
a particular optionee. Subject to this limitation, options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with Section 16,
the Plan shall terminate upon the earlier of (i) the close of business on the
day next preceding the tenth anniversary of the date of its adoption by the
Board of Directors, or (ii) the date on which all shares available for issuance
under the Plan shall have been issued pursuant to the exercise or cancellation
of options granted under the Plan. If the date of termination is determined
under (i) above, then options outstanding on such date shall continue to have
force and effect in accordance with the provisions of the instruments evidencing
such options.
23. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
24. Governing Law.
The provisions of this Plan shall be governed and construed in accordance
with the laws of the State of Delaware without regard to the principles of
conflicts of laws.
Adopted by the Board of Directors on June 10, 1998.
A-12
PROXY
TITAN PHARMACEUTICALS, INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dr. Louis R. Bucalo or Sunil Bhonsle as
proxy to represent the undersigned at the Annual Meeting of Shareholders to be
held at 400 Oyster Point Boulevard, Suite 505, South San Francisco, California
94080 on July 24, 1998 at 9:30 a.m., local time, and at any adjournments
thereof, and to vote the shares of Common Stock or Preferred Stock the
undersigned would be entitled to vote if personally present, as indicated below.
1. Election of Directors
FOR all nominees listed below |_| WITHHOLDING AUTHORITY |_|
(except as marked to the to vote for all nominees
contrary below) listed below
Louis R. Bucalo, M.D., Ernst-Gunter Afting, Victor J. Bauer,
Ph.D., Michael K. Hsu, Hubert Huckel, M.D., Marvin E. Jaffe,
M.D., Konrad M. Weis, Ph.D. and Kenneth J. Widder, M.D.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name on the line provided below.)
- --------------------------------------------------------------------------------
2. Approval and ratification of the adoption of the Company's 1998 Stock
Option Plan
FOR |_| AGAINST |_| ABSTAIN |_|
3. Approval of the appointment of Ernst & Young LLP as independent
auditors.
FOR |_| AGAINST |_| ABSTAIN |_|
THE SHARES OF COMMON STOCK OR PREFERRED STOCK REPRESENTED BY THIS PROXY
WILL BE VOTED AS DIRECTED; HOWEVER, IF NO DIRECTION IS GIVEN, THE SHARES OF
COMMON STOCK OR PREFERRED STOCK WILL BE VOTED FOR THE ELECTION OF THE NOMINEES,
FOR THE APPROVAL AND RATIFICATION OF THE 1998 STOCK OPTION PLAN AND FOR THE
APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF
THE COMPANY.
If any other business is presented at the meeting, this proxy will be voted
by those named in this proxy in their best judgment. At the present time, the
Board of Directors knows of no other business to be presented at the meeting.
DATED:______________________, 1998
____________________________________
Signature
____________________________________
Signature if held jointly
(Please date, sign as name appears
at the left, and return promptly. If
the shares are registered in the
names of two or more persons, each
person should sign. When signing as
Corporate Officer, Partner,
Executor, Administrator, Trustee or
Guardian, please give full title.
Please note any changes in your
address alongside the address as it
appears in the proxy.)