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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
ENZON, INC.
(Name of Registrant as Specified In Its Charter)
KEVIN T. COLLINS,ESQ.
(Name of Person(s) filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
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Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[LOGO] ENZON, INC.
20 Kingsbridge Road
Piscataway, New Jersey 08854
(732) 980-4500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 1, 1998
To our Stockholders:
You are hereby notified that the annual meeting of stockholders (the
"Annual Meeting") of Enzon, Inc., a Delaware corporation ("Enzon" or the
"Company") will be held at the Embassy Suites Hotel, 121 Centennial Avenue,
Piscataway, New Jersey on Tuesday, December 1, 1998 at 10:00 a.m. local time,
for the following purposes:
1. To elect two Class III directors, each for a term of three years in
accordance with the Company's Certificate of Incorporation and By-Laws
(Proposal No. 1);
2. To vote on a proposal to approve amendments to the Company's
Non-Qualified Stock Option Plan, as amended (Proposal No. 2);
3. To ratify the selection of KPMG Peat Marwick LLP, independent
certified public accountants, to audit the consolidated financial
statements of the Company for the fiscal year ending June 30, 1999
(Proposal No. 3); and
4. To transact such other matters as may properly come before the Annual
Meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock, par value $.01 per
share, and Series A Cumulative Convertible Preferred Stock, par value $.01 per
share, at the close of business on October 27, 1998 are entitled to notice of,
and to vote at the Annual Meeting.
Enzon hopes that as many stockholders as possible will personally attend
the Annual Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOUR
PROXY VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. Sending in your proxy will not prevent you from voting in
person at the Annual Meeting.
By order of the Board of Directors,
John A. Caruso, Secretary
Piscataway, New Jersey
October 28, 1998
ENZON, INC.
-------
PROXY STATEMENT
-------
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the annual meeting of stockholders (the "Annual Meeting ") to
stockholders of record of Enzon, Inc. ("Enzon" or the "Company") to be held on
Tuesday, December 1, 1998 and at any adjournment thereof. The accompanying proxy
is solicited by the Board of Directors of the Company and is revocable by the
stockholder any time before it is voted. For more information concerning the
procedure for revoking the proxy see "General." This Proxy Statement was first
mailed to stockholders of the Company on or about November 2, 1998, accompanied
by the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1998. The principal executive offices of the Company are located at 20
Kingsbridge Road, Piscataway, New Jersey 08854, telephone (732) 980-4500.
OUTSTANDING SHARES AND VOTING RIGHTS
Only holders of the Company's common stock, par value $.01 per share (the
"Common Stock" or "Common Shares") and Series A Cumulative Convertible Preferred
Stock, $.01 per share (the "Series A Preferred Stock" or "Series A Preferred
Shares") outstanding at the close of business on October 27, 1998 (the "Record
Date") are entitled to receive notice of and vote at the Annual Meeting. As of
the Record Date, the number and class of stock that was outstanding and will be
entitled to vote at the meeting were 35,409,969 Common Shares and 107,000 Series
A Preferred Shares. Each Common Share and Series A Preferred Share is entitled
to one vote on all matters. No other class of securities will be entitled to
vote at the Annual Meeting. There are no cumulative voting rights.
To be elected, a director must receive a plurality of the votes of the
Common Shares and Series A Preferred Shares, voting as a single class, present
in person or represented by proxy at the Annual Meeting and entitled to vote on
the election of directors. The affirmative vote of at least a majority of the
Common Shares and Series A Preferred Shares, present in person or represented by
proxy at the Annual Meeting and entitled to vote thereon, voting together as a
single class, is necessary for approval of Proposal No. 2 and Proposal No. 3. A
quorum is representation in person or by proxy at the Annual Meeting of at least
one-third of the combined Common Shares and Series A Preferred Shares
outstanding as of the Record Date.
Pursuant to the Delaware General Corporation Law, only votes cast "For" a
matter constitute affirmative votes. Proxy cards which are voted by marking
"Withheld" or "Abstain" on a particular matter are counted as present for quorum
purposes and for purposes of determining the outcome of such matter, but since
they are not cast "For" a particular matter, they will have the same effect as
negative votes or votes cast "Against" a particular matter. If a validly
executed proxy card is not marked to indicate a vote on a particular matter and
the proxy granted thereby is not revoked before it is voted, it will be voted
"For" such matter. Where brokers are prohibited from exercising discretionary
authority for beneficial owners who have not provided voting instructions
(commonly referred to as "broker non-votes"), such broker non-votes will be
treated as shares that are present for purposes of determining the presence of a
quorum; however, with respect to proposals which require the affirmative vote of
a percentage of shares present at the Annual Meeting for approval, such broker
non-votes will be treated as not present for purposes of determining the outcome
of any such matter. With respect to proposals which require the affirmative vote
of a percentage of the outstanding shares for approval, since such broker
non-votes are not cast "For" a particular matter, they will have the same effect
as negative votes or votes cast "Against" such proposals.
1
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Pursuant to the provisions of the Company's Certificate of Incorporation
and By-laws, the Board of Directors is comprised of three classes of directors,
designated Class I, Class II and Class III. One class of directors is elected
each year to hold office for a three-year term and until successors of such
directors are duly elected and qualified. Two Class III directors will be
elected at this year's Annual Meeting. The nominees for election to the office
of director, and certain information with respect to their backgrounds and the
backgrounds of non-nominee directors, are set forth below. It is the intention
of the persons named in the accompanying proxy card, unless otherwise
instructed, to vote to elect the nominees named herein as Class III directors.
Each of the nominees named herein presently serves as a director of the Company.
In the event any of the nominees named herein is unable to serve as a director,
discretionary authority is reserved to the Board of Directors to vote for a
substitute. The Board of Directors has no reason to believe that any of the
nominees named herein will be unable to serve if elected.
Nominees for Election to the Office of Director
at the 1998 Annual Meeting
Director
Nominee Age Since Position with the Company
- ------- --- ----- -------------------------
Rolf A. Classon(2) 53 1997 Director
Robert LeBuhn(2)(3) 66 1994 Director
Non-Nominee Directors Continuing to Serve
in the Office of Director After the 1998 Annual Meeting
Director
Nominee Age Since Position with the Company
- ------- --- ----- -------------------------
Peter G. Tombros(1)(4) 56 1994 President and Chief
Executive Officer
Randy H. Thurman(1)(5) 49 1993 Chairman of the Board
Dr. Rosina B. Dixon(2)(4) 55 1994 Director
Dr. David W. Golde(5) 58 1998 Director
A.M. "Don" MacKinnon(1)(3)(5) 73 1990 Director
(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
(4) Class I director serving until the 1999 Annual Meeting
(5) Class II director serving until the 2000 Annual Meeting
2
BUSINESS EXPERIENCE OF DIRECTORS
Nominee Class III Directors for Election at the 1998 Annual Meeting
Rolf A. Classon has served as a Director of the Company since January 1997.
Mr. Classon is currently an Executive Vice President of Bayer Corporation and
President of Bayer Diagnostics. From 1991 to 1995, Mr. Classon was an Executive
Vice President in charge of Bayer Diagnostics' Worldwide Marketing, Sales and
Service operations. From 1990 to 1991, Mr. Classon was President and Chief
Operating Officer of Pharmacia Biosystems A.B. Prior to 1991, Mr. Classon served
as president of Pharmacia Development Company Inc. and Pharmacia A.B. Hospital
Products Division.
Robert LeBuhn has served as a Director of the Company since August 1994.
Mr. LeBuhn was chairman of Investor International (U.S.), Inc., a subsidiary of
Investor A.B., part of Sweden's Wallenberg Group from June 1992 until his
retirement in September 1994, and was its president from August 1984 through
June 1992. Mr. LeBuhn is a director of US Airways Group, Inc., Acceptance
Insurance Companies, Inc. and Cambrex Corporation. He is president and a trustee
of the Geraldine R. Dodge Foundation.
The Board of Directors recommends a vote FOR Mr. Classon and Mr. LeBuhn as
Class III Directors (Proposal No. 1 on the Proxy Card).
Non-Nominee Class I Directors Serving Until the 1999 Annual Meeting
Peter G. Tombros has served as President and Chief Executive Officer of the
Company and a member of the board since April 1994. Prior to joining Enzon, Mr.
Tombros spent 25 years with Pfizer Inc., a research based, global healthcare
company headquartered in New York City. From 1986 to March 1994, he served as a
vice president of Pfizer Inc. in the following areas: executive vice president
of Pfizer Pharmaceuticals, a division of Pfizer Inc., corporate strategic
planning and investor relations. From 1980 to 1986, Mr. Tombros served as senior
vice president of Pfizer Pharmaceuticals and general manager for the Roerig
division of Pfizer Inc. Mr. Tombros currently serves on the Board of Trustees of
Cancer Care and the National Cancer Care Foundation, Dominican College and Fisk
University. From 1980 to 1992, he was a director of the American Foundation of
Pharmaceutical Education and served as Chairman for three of those years. Mr.
Tombros serves on the Board of Directors of NPS Pharmaceuticals Inc. and
Alpharma Inc.
Dr. Rosina B. Dixon has served as a Director of the Company since August
1994. Dr. Dixon has been a consultant to the pharmaceutical industry since 1987.
Prior to such time she held senior positions at Ciba-Geigy Pharmaceuticals, a
division of Ciba-Geigy Corporation, and Schering-Plough Corporation. She
received her M.D. from Columbia University, College of Physicians and Surgeons
and is certified by the National Board of Medical Examiners and the American
Board of Internal Medicine. She is a member of the American College of Clinical
Pharmacology, American Society for Clinical Pharmacology and Therapeutics and
the National Association of Corporate Directors and currently serves as a
director of Church & Dwight Co., Inc. and Cambrex Corporation.
Non-Nominee Class II Director Serving Until the 2000 Annual Meeting
Randy H. Thurman has served as the Chairman of the Board of the Company
since April 1996 and as a Director of the Company since April 1993. Mr. Thurman
is Chairman and Chief Executive Officer of Strategic Reserves, LLC, a company he
founded in 1996. Mr. Thurman is the founder and has been Chairman of the Board
of Health Care Strategies 2000, a global healthcare consulting firm, since 1995.
During 1996, Mr. Thurman also served as a principal of Spencer Stuart Inc. From
1993 to 1995, Mr. Thurman served as Chairman and Chief Executive Officer of
Corning Life Sciences. From 1985 to 1993, Mr. Thurman served as Corporate
Executive Vice President and a Director of Rhone-Poulenc Rorer, Inc. and
President of Rhone-Poulenc Rorer Pharmaceuticals, Inc. He also serves on the
Board of Directors of Closure Medical, Inc.
3
A.M. "Don" MacKinnon has served as a Director of the Company since 1990.
Mr. MacKinnon was president and chief operating officer of Ciba-Geigy
Corporation from 1980 until his retirement in 1986. He was a member of the Board
of Directors of Ciba-Geigy Corporation from 1970 until he reached the mandatory
retirement age in December 1994. Over the last nine years, Mr. MacKinnon has
served on the Board of Directors of several biopharmaceutical companies.
Dr. David W. Golde has served as a Director of the Company since March
1998. Dr. Golde has been the Physician-In-Chief at Memorial Sloan-Kettering
Cancer Center since 1996. From 1991 to 1996, Dr. Golde served as Head of the
Division of Hematology and Oncology at Memorial Sloan-Kettering Cancer Center.
Prior to 1991, Dr. Golde was a professor of medicine and Chief of the Division
of Hematology and Oncology at UCLA, Director of the UCLA AIDS Center and
Director of the UCLA Clinical Research Center.
DIRECTORS' COMPENSATION
Directors' Cash Compensation
During the fiscal year ended June 30, 1998, the Company paid Randy H.
Thurman $100,000 in consideration for serving as Chairman of the Board. The
Company did not pay cash compensation to its remaining directors for acting as
directors or as members of committees of the Board of Directors, other than
reimbursement of reasonable expenses incurred by the directors in attending
board and committee meetings.
Directors' Stock Options
In December 1993, the Board of Directors adopted, and the stockholders
approved, an amendment to the Non-Qualified Stock Option Plan, as amended, (the
"Plan") providing for automatic grants of options ("Automatic Grants") under a
formula (the "Formula") to non-executive members of the Board of Directors
("Independent Directors").
Under the Formula, Independent Directors automatically receive an option to
purchase 60,000 shares of Common Stock on each of the following dates: January
2, 1994, January 2, 1997, January 2, 2000 and January 2, 2003 (the "Regular
Grants"). On the date of each Independent Director's initial election to the
board, pursuant to a vote of the Company's stockholders or the board, such
newly-elected Independent Director automatically receives (i) an option to
purchase such Independent Director's pro rata share of the Regular Grant, which
equals the product of 1,666 multiplied by the number of whole months remaining
in the relevant three year period until the next Regular Grant (the "Pro Rata
Grant"); and (ii) an option to purchase 10,000 shares of Common Stock (the
"Initial Election Grant"). Each option granted to an Independent Director
pursuant to a Regular Grant vests and becomes exercisable as follows: as to
20,000 shares one year after the date of grant; as to 20,000 shares two years
after the date of grant, and as to the remaining 20,000 shares three years after
the date of grant. Those options granted pursuant to a Pro Rata Grant vest and
become exercisable as to that number of shares equal to the product of 1,666
multiplied by the number of whole months remaining in the first calendar year in
which the Independent Director is elected initially to the board on the January
1st following such Independent Director's initial election to the board; and as
to any remaining shares in accordance with the schedule for options granted
pursuant to a Regular Grant. Those options granted pursuant to an Initial
Election Grant vest and become exercisable as to 5,000 shares one year after the
date of grant; and as to 5,000 shares two years after the date of grant. The per
share exercise price of options granted pursuant to the Formula is equal to the
fair market value of the Common Stock on the date of grant.
An option granted to an Independent Director pursuant to the Formula will
not become exercisable as to the relevant shares unless such Independent
Director has served continuously on the board during the year preceding the date
on which such options are scheduled to vest and become exercisable, or from the
date such Independent Director joined the board until the end of such year
should such Independent Director have joined the board during such year;
provided, however, that if an Independent Director does not fulfill such
continuous service requirement due to such Independent Director's death or
disability all options granted under the Formula and held by such Independent
Director nonetheless vest and become exercisable as though such Independent
Director fulfilled the continuous
4
service requirement. An option granted to an Independent Director pursuant to
the Formula remains exercisable for a period of ten years from the date of
grant. For a discussion of proposed amendments to the Plan, which will affect
options granted to Independent Directors, see Proposal No. 2
Independent Directors' Stock Plan
The Company's 1996 Independent Directors' Stock Plan (the "Independent
Directors' Stock Plan") provides compensation to Independent Directors serving
on the board which is paid in the form of the Company's Common Stock. Other than
the Chairman of the Board, Independent Directors are not currently entitled to
receive cash compensation. Under the Independent Directors' Stock Plan, each
Independent Director is entitled to compensation in the form of shares of common
stock of the Company with a value equal to $2,500 per quarter and $500 for each
meeting attended by the board member. The number of shares issued will be based
on the last reported sale price of a share of Common Stock on the NASDAQ
National Market at the end of the quarter for which fees are payable. During the
year ended June 30, 1998, the Company recorded $71,834 in Independent Directors'
fees. The following is a summary of compensation paid to the Independent
Directors under the Independent Director's Stock Plan:
Value of Number
Consideration of Shares
------------- ---------
Randy H. Thurman $13,500 2,325
Rolf A. Classon 12,000 2,058
Dr. Rosina Dixon 14,000 2,404
David W. Golde 4,334 672
Robert LeBuhn 14,000 2,404
A.M. "Don" MacKinnon 14,000 2,404
Section 16(a) Beneficial Ownership Reporting Compliance
Ownership of and transactions in the Company's stock by executive officers
and directors of the Company and owners of 10% or more of the Company's
outstanding Common Stock are required to be reported to the Securities and
Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of
1934, as amended. During the year ended June 30, 1998, all such reports were
filed in a timely manner.
INFORMATION CONCERNING BOARD AND COMMITTEE MEETINGS
AND COMMITTEES OF THE BOARD
Eight meetings of the Company's Board of Directors were held during the
fiscal year ended June 30, 1998. Rolf A. Classon attended four of the eight
Board of Directors meetings held. With the exception of Mr. Classon, each
incumbent director attended at least 75% of the total number of meetings of the
Board of Directors. All incumbent directors attended at least 75% of the total
number of meetings of any committees of the Board of Directors, of which such
director was a member, held during the fiscal year.
As of June 30, 1998, the only standing committees of the Company's Board of
Directors were the Audit Committee, Compensation Committee and Executive
Committee.
The Audit Committee is comprised of Robert LeBuhn, Chairman, and A.M. "Don"
MacKinnon. The primary functions of the Audit Committee are to meet with the
Company's independent auditors to discuss and review audit procedures and
issues, meet with management on matters concerning the Company's financial
condition, internal controls and year-end audit and report to the board on such
matters. The Audit Committee held two meetings during the fiscal year ended June
30, 1998.
5
The Compensation Committee is comprised of Dr. Rosina B. Dixon,
Chairperson, Rolf A. Classon and Robert LeBuhn. The primary functions of the
Compensation Committee are to administer the Company's Non-Qualified Stock
Option Plan, determine the compensation of the Company's officers and senior
management and review compensation policy. There were four meetings of the
Compensation Committee during the fiscal year ended June 30, 1998.
The Executive Committee, comprised of A.M. "Don" MacKinnon, Chairman, Peter
G. Tombros, and Randy H. Thurman, was established to review and make decisions
concerning matters which would otherwise come before the Board, as permitted by
Delaware General Corporate Law and the Company's by-laws. Given the relatively
small size of the Company's current Board of Directors, the Company determined
that efficiencies were not being realized from meetings of the Executive
Committee and therefore suspended regular meetings of the Executive Committee in
September 1994. There were no meetings of the Executive Committee during the
fiscal year ended June 30, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
As of the date hereof, the members of the Board of Directors serving on the
Compensation Committee of the Board of Directors are Dr. Rosina B. Dixon,
Chairperson, Dr. Rolf A. Classon and Robert LeBuhn, all of whom are non-employee
directors of the Company.
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
Set forth below is certain information regarding the executive officers of
the Company who do not serve on the Board of Directors.
John A. Caruso, 53, has served as Vice President, Administration since May
1998, General Counsel of the Company since July 1994 and as Secretary of the
Company since July 1989. From January 1991 to May 1998, Mr. Caruso served as
Vice President of Business Development. From January 1991 to July 1994, Mr.
Caruso served as Vice President, Legal Affairs of the Company. From the time he
joined the Company in September 1987 through December 1990, Mr. Caruso served as
Corporate Counsel to the Company. From 1979 through 1987, Mr. Caruso was
employed at Baxter Travenol Laboratories in Deerfield, Illinois as corporate
counsel.
Kenneth J. Zuerblis, 39, has served as Chief Financial Officer since
January 1996 and as Vice President, Finance since April 1994. From July 1991 to
April 1994, Mr. Zuerblis served as the Company's Controller. From January 1982
to July 1991, Mr. Zuerblis was employed by KPMG Peat Marwick LLP. He became a
certified public accountant in 1985.
6
SUMMARY COMPENSATION TABLE
The following table provides a summary of cash and non-cash
compensation for each of the last three fiscal years ended June 30, 1998, 1997
and 1996 with respect to Enzon's Chief Executive Officer and the other executive
officers serving during the fiscal year ended June 30, 1998 (the "Named
Executive Officers").
Annual Compensation Long-Term
------------------------------- Compensation
Awards
-----------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)(1) Options(#) Compensation($)(2)
------------------ ---- --------- -------- ------------------ ---------- ------------------
Peter G. Tombros 1998 $336,000 $ 70,560 $ -- 78,000(5) $ 5,000
President and Chief 1997 307,626 50,000(4) -- 420,000 4,729
Executive Officer 1996 300,000 -- 36,000(3) 60,000 950
John A. Caruso 1998 171,642 $ 26,025 -- 90,000(5) --
Vice President, Administration, 1997 170,000 25,000 -- 80,000 163
General Counsel and Secretary 1996 163,651 39,100 -- 40,000 --
Kenneth J. Zuerblis 1998 154,692 $ 33,600 -- 110,000(5) 3,775
Vice President, Finance and 1997 148,052 40,000 -- 90,000 5,395
Chief Financial Officer 1996 132,813 24,871 -- 40,000 1,989
(1) Excludes perquisites and other personal benefits that in the aggregate do
not exceed 10% of the Named Executive Officer's total annual salary and
bonus.
(2) Consists of annual Company contributions to a 401(k) plan.
(3) Consists of auto and living allowance. As of April 5, 1997, the Company
ceased paying Mr. Tombros an auto and living allowance.
(4) The payment of Mr. Tombros' bonus, earned for the year ended June 30, 1997,
was deferred at his option.
(5) Includes stock options granted during July 1998, which represent a portion
of the Named Executive Officer's total bonus earned for the year ended June
30, 1998.
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options under the Company's Non-Qualified Stock Option Plan to the Named
Executive Officers during the fiscal year ended June 30, 1998.
Individual Grants
------------------------------------------------
Number of Potential Realizable Value at Assumed
Securities % of Total Annual Rates of Stock Price
Underlying Options Granted Appreciation for Option Term (3)
Options to Employees Exercise or Base Expiration ------------------------------------
Name Granted (1) in Fiscal Year Price ($/Share) Date 0%($) 5%($) 10%($)
- ---- ----------- -------------- --------------- ---- ----- ----- ------
John A. Caruso 40,000(2) 7.07% $6.00 12/02/07 0 $150,935 $382,498
Kenneth J. Zuerblis 40,000(2) 7.07% 6.00 12/02/07 0 150,935 382,498
(1) All options were granted at an exercise price that equaled or exceeded the
fair market value of the Common Stock on the date of grant, as determined
by the last sale price as reported on the NASDAQ National Market. The
options will become exercisable as to all shares immediately upon a "change
in control" of the Company as defined in certain agreements between the
executive officers and the Company. See "Employment and Termination
Agreements".
(2) These options will vest and become exercisable as to 50% of the shares
granted on December 2, 1998 and 50% on December 2, 1999, provided that the
Named Executive Officer is employed by the Company on the vesting date.
(3) The amounts set forth in the three columns represent hypothetical gains
that might be achieved by the optionees if the respective options are
exercised at the end of their terms. These gains are based on assumed rates
of stock price appreciation of 0%, 5% and 10% compounded annually from the
dates the respective options were granted. The 0% appreciation column is
included because the options were granted with exercise prices which
equaled or exceeded the market price of the underlying Common Stock on the
date of grant, and thus will have no value unless the Company's stock price
increases above the exercise prices.
8
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth the information with respect to the Named
Executive Officers concerning the exercise of options during the fiscal year
ended June 30, 1998 and unexercised options held as of June 30, 1998.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)(1)
Shares Acquired Value ----------------------------- ------------------------------
Name On Exercise (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ---------------- ----------- ----------- ------------- ----------- -------------
Peter G. Tombros -- $ -- 909,000 160,000 $2,669,063 $590,000
John A. Caruso 30,000 117,813 190,992 80,000 565,813 162,500
Kenneth J. Zuerblis 30,000 117,813 165,000 85,000 499,375 180,313
(1) Based upon a market value of $6.38 as determined by the last sale price as
reported on the NASDAQ National Market on June 30, 1998. If the exercise
price is equal to or greater than such last sale price, the option is
deemed to have no value.
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has a three-year employment agreement with Mr. Tombros, which
terminates in April 2000, pursuant to which he receives an annual base salary of
$336,000. In the event Mr. Tombros' employment is terminated for any reason,
except if such employment is terminated (i) voluntarily by Mr. Tombros (other
than in response to the Company's prior material breach of the employment
agreement), (ii) by the Company "for cause" (as defined in the employment
agreement) or (iii) as a result of Mr. Tombros' death or disability, Mr. Tombros
will be entitled to receive his base salary for one year after such termination.
In the event Mr. Tombros' employment is terminated due to his death or
disability his base salary will be paid for six months subsequent to such
termination. Pursuant to his employment agreement, Mr. Tombros was granted a
ten-year option under the Company's Non-Qualified Stock Option Plan to purchase
300,000 shares of the Company's Common Stock at a per share exercise price of
$2.69, the fair market value of the Company's Common Stock on the date of grant.
The vesting and exercisability of the options granted accelerated in 100,000
share increments when the closing stock price of the Company's common stock,
exceeded $4, $5 and $6 per share, for at least twenty consecutive trading days
as reported by the NASDAQ National Market. Mr. Tombros' employment agreement
also requires him to maintain the confidentiality of Company information and
assign inventions to the Company. Mr. Tombros is precluded from competing with
the Company during the term of his employment agreement and for two years after
his employment is terminated if his employment is terminated by the Company for
cause or by Mr. Tombros voluntarily (except in response to the Company's prior
material breach of the employment agreement).
The Company has agreements with each of its executive officers which
provide for payment to each executive officer of three years of compensation and
benefits (as defined in such agreements) following a change in control of the
Company (as defined in such agreements), including the provision for such
payment in the event such executive officer's employment with the Company is
terminated under certain circumstances following such change in control. Upon a
change in control of the Company, all options held by such executive officers
shall vest immediately, notwithstanding any vesting provisions in the option
certificates or any plan covering such options. The term of these agreements is
for three years. Prior to a change in control of the Company, the agreements
automatically renew on each successive anniversary for an additional three
years, unless the Company gives the executive officer 60 days notice prior to
the anniversary date that it does not plan to renew such contracts.
9
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors consists of three
non-employee directors and determines all compensation paid or awarded to the
Company's executive officers, including the Named Executive Officers in the
Summary Compensation Table. As with many other biotechnology companies, Enzon's
current level of development and the highly volatile nature of biotechnology
stocks in general makes executive compensation which is based on sales and
earnings goals or stock performance impracticable. The Compensation Committee
believes that an important factor in Enzon's success is the continued
development and maintenance of a culture focused on team-oriented performance.
In this context, compensation has been based on the accomplishment of a blend of
mutually shared and individual goals. The Compensation Committee has reviewed
the executive compensation of other biotechnology companies with comparable
levels of stockholders' equity and development and has designed the Company's
total executive compensation to be targeted at the median of executive
compensation levels of these companies. The compensation of the Company's
executive officers consist of three principal components: (i) base salary and
benefits, (ii) a bonus based on individual contributions evaluated against
annual goals and (iii) long-term incentives in the form of stock option grants.
For the fiscal year ended June 30, 1998, the Compensation Committee
instituted a formal Performance Incentive Program for its executive officers and
other members of senior management. The structure and design of the program was
based on a detailed study of compensation programs provided at comparable
biotechnology companies. Under the program, Mr. Tombros can earn a cash bonus of
up to a maximum of 35% of his base salary and receive stock option grants to
purchase Common Stock of up to a maximum of 130,000 shares. The other executive
officers, Mr. Caruso and Mr. Zuerblis, can each earn a cash bonus of up to a
maximum of 30% of their base salary and stock option grants to purchase Common
Stock of up to a maximum of 100,000 shares of Common Stock. The amount of bonus
paid and options granted under the plan is based upon the achievement of
predetermined corporate and individual objectives. Stock options granted under
the plan are granted with exercise prices equal to the fair market value of the
Company's Common Stock on the date of grant.
The annual salary of $336,000 and the bonus awarded to the Company's
President and Chief Executive Officer for the fiscal year ended June 30, 1998
were based on Mr. Tombros' extensive prior experience as a senior executive of a
major multinational pharmaceutical firm and the compensation paid to chief
executive officers with similar credentials at comparable biotech companies. The
bonus paid to Mr. Tombros under the Company's Performance Incentive Program was
based on many factors including the strengthening of the Company's financial
position, increasing the awareness of the Company to the financial community, as
well as the progress made by the Company and its partners on products in the
Company's development pipeline.
During the fiscal year ended June 30, 1998, the Compensation Committee
awarded cash bonuses under the plan described above to the Company's other
executive officers, Messrs. Caruso and Zuerblis. The bonuses were based on the
executives' contributions to the improvement of the Company's financial
position. The Company also adjusted the salary level of Mr. Caruso and Mr.
Zuerblis. The salary adjustments were based on a detailed compensation study of
executives with similar credentials at comparable biotechnology companies.
In addition to the option granted under the Performance Incentive Program,
described above, during the fiscal year ended June 30, 1998, the Compensation
Committee granted options to purchase an aggregate of 80,000 shares of Common
Stock to Messrs. Caruso and Zuerblis. These options were granted for the purpose
of encouraging these executive officers to remain with the Company and to
provide a long-term performance incentive to such officers. The options were
granted with exercise prices that equaled or exceeded the fair market value of
the Company's Common Stock on the date of grant. The options generally require
the executive officers to remain with the Company for two years in order for the
options to be fully exercisable.
THE COMPENSATION COMMITTEE
Dr. Rosina B. Dixon, Chairperson
Rolf A. Classon
Robert LeBuhn
10
STOCKHOLDER RETURN PERFORMANCE GRAPH
The graph below summarizes the total cumulative return experienced by the
Company's stockholders from June 30, 1993 through June 30, 1998, compared to the
NASDAQ National Market Index and a Peer Group index consisting of: Isis
Pharmaceuticals, Inc., Repligen Corp., Celgene Corp., Gensia Pharmaceuticals
Inc., Collagen Corp., Liposome Inc., Cytel Corp., Cytogen Corp., DNAP Holding
Corp., (formerly DNA Plant Technology Corp.) and Cephalon Inc. (the "Peer
Group"). The Company and the companies comprising the Peer Group are
biotechnology companies which are all traded on the NASDAQ National Market. The
Peer Group used for the stockholder return performance graph does not include
Synergen Inc., Cambridge Biotech Corporation, or Calgene, Inc. which were
included in the Peer Group in prior years. Synergen Inc., and Calgene, Inc. were
acquired and are no longer publicly traded. Cambridge Biotech Corporation is no
longer traded on the NASDAQ National Market. The changes for the periods shown
in the graph and table below are based on the assumption that $100 had been
invested in Enzon, Inc. Common Stock and in each index below on June 30, 1993.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ENZON, INC., THE NASDAQ NATIONAL MARKET-US INDEX AND A PEER GROUP
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Fiscal year ending June 30,
------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Enzon, Inc. 100 56 49 72 46 131
Peer Group 100 58 71 96 60 47
NASDAQ Stock
Market-US 100 101 135 173 210 278
11
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning stock
ownership of all persons known by the Company to own beneficially 5% or more of
the outstanding shares of the Company's voting stock, each Director, each
Executive Officer named in the Summary Compensation Table and all Executive
Officers and Directors of the Company as a group as of October 19, 1998:
Percentage of
Directors, Officers or Number of Voting Stock
5% Stockholders(1) Shares(2) Outstanding(3)
------------------ --------- --------------
Peter G. Tombros 1,066,300 (4) 2.9%
Randy H. Thurman 224,937 (5) *
Rolf A. Classon 30,175 (6) *
Dr. Rosina B. Dixon 101,680 (7) *
Dr. David W. Golde 110,272 (8) *
Robert LeBuhn 106,798 (9) *
A.M. "Don" MacKinnon 161,616(10) *
John A. Caruso 231,292(11) *
Kenneth J. Zuerblis 211,600(12) *
Clearwater Fund IV Ltd. 2,832,831(13) 7.9%
P.O. Box 662
Tortola, British Virgin Islands
State of Wisconsin 2,521,000(14) 7.1%
Investment Board
P.O. Box 7842
Madison, Wisconsin 53707
All Executive Officers and Directors 2,244,670(15) 5.9%
as a group (nine persons)
- ----------
* Less than one percent.
(1) The address of all current Executive Officers and Directors listed above is
in the care of the Company.
(2) All shares listed are Common Stock. Except as discussed below, none of
these shares are subject to rights to acquire beneficial ownership, as
specified in Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as
amended, and the beneficial owner has sole voting and investment power,
subject to community property laws where applicable.
(3) Gives effect to 35,409,969 shares of Common Stock and 108,000 shares of
Series A Preferred Stock which were issued and outstanding as of October
19, 1998. Generally, the Series A Preferred Stock and Common Stock will
vote as one class of stock. Each share of Common Stock and each share of
Series A Preferred Stock is entitled to one vote. The percentage of voting
stock outstanding for each stockholder is calculated by dividing (i) the
number of shares deemed to be beneficially held by such stockholder as of
October 19, 1998 by (ii) the sum of (A) the number of shares of Common
Stock outstanding as of October 19, 1998 plus (B) the number of shares of
Series A Preferred Stock outstanding as of October 19, 1998 plus (C) the
number of shares issuable upon exercise of options or warrants held by such
stockholder which were exercisable as of October 19, 1998 or which will
become exercisable within 60 days after October 19, 1998.
(4) Includes 1,039,000 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
12
(5) Consists of 200,000 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
(6) Includes 25,000 shares subject to option which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
(7) Includes 76,664 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
(8) Includes 72,800 shares held by a separate corporation for Dr. Golde's
retirement, 2,800 shares held by three separate trusts for Dr. Golde's
children and 1,000 shares beneficially owned by Dr. Golde's wife.
(9) Includes 76,664 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
(10) Includes 132,000 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998 and 11,800 shares beneficially owned by Mr. MacKinnon's
wife. Mr. MacKinnon disclaims beneficial ownership as to the shares owned
by his wife.
(11) Consists of 230,992 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998.
(12) Includes 210,000 shares subject to options which were exercisable as of
October 19, 1998 or which will become exercisable within 60 days after
October 19, 1998 and 600 shares owned by Mr. Zuerblis' IRA.
(13) Includes warrants to purchase 273,723 shares of the Company's Common Stock
at $4.11 per share and warrants to purchase 200,000 shares at $5.63 per
share. The information concerning the Stock ownership of the Clearwater
Fund IV Ltd. was obtained from a schedule 13D filed with the Securities and
Exchange Commission dated February 28, 1997.
(14) The information concerning the stock ownership of the State of Wisconsin
Investment Board was obtained from a schedule 13F filed by the State of
Wisconsin Investment Board with the Securities and Exchange Commission for
the period ended June 30, 1998.
(15) Includes all shares owned beneficially by the directors and executive
officers named in the Summary Compensation table.
13
PROPOSAL NO. 2 - APPROVAL OF AMENDMENT
TO THE NON-QUALIFIED STOCK OPTION PLAN
In November 1987, the Company's Board of Directors adopted the
Non-Qualified Stock Option Plan (the "Plan") in order to enable the Company to
attract and retain qualified employees, directors and independent consultants.
Subject to stockholder approval, the Board of Directors has approved an
amendment to the Plan to reflect changes described below.
The following summary description of the Plan is qualified in its entirety
by the full text of the Plan which may be obtained by the Company's stockholders
upon request to the Secretary of the Company.
The last sale price of a share of the Company's Common Stock as reported by
the NASDAQ National Market on October 19, 1998 was $6.00.
Basic Terms
Under the Plan, directors, officers and employees of the Company and
independent consultants to the Company have been, and will be, eligible for
grants of options to purchase shares of Common Stock. To date, all options
granted under the Plan have been awarded at the discretion of the Board of
Directors or a committee thereof or pursuant to the formulas described below.
Currently, the Compensation Committee of the Board of Directors determines who
will receive options under the Plan, the number of shares of Common Stock which
will be issuable upon exercise of options which are granted under the Plan and
the terms of the options granted under the Plan to the extent the terms are not
otherwise set forth in the Plan. Currently, no option granted under the Plan may
be transferred by the optionee, otherwise than by will or the laws of descent
and distribution and, generally, during the optionee's lifetime, the option may
be exercised only by the optionee. The exercise price of the options must be at
least equal to the fair market value of the underlying Common Stock as of the
date of grant. Either the Compensation Committee of the Board of Directors or
the Board of Directors may, in its discretion, provide that an option may not be
exercised in whole or in part for any specified period or periods of time. No
option may be exercised prior to six months from the date of grant except
immediately prior to the dissolution or liquidation of the Company or a merger
or consolidation where the Company is not the surviving corporation, in which
case all outstanding options become immediately exercisable. Options expire no
later than the tenth anniversary of the date of grant.
Automatic Awards To Independent Directors
The Plan provides that Independent Directors receive option grants pursuant
to a formula (the "Formula"). The Formula provides that on each of January 2,
1994, January 2, 1997, January 2, 2000 and January 2, 2003, each of the
Company's Independent Directors will automatically receive an option to purchase
60,000 shares of Common Stock (the "Regular Grant"). On the date of each
Independent Director's initial election to the board, pursuant to a vote of the
Company's stockholders or the board, such newly-elected Independent Director
will automatically receive (i) an option to purchase such Independent Director's
pro rata share of the Regular Grant, which will equal the product of 1,666
multiplied by the number of whole months remaining in the relevant three year
period until the next Regular Grant (the "Pro Rata Grant"); and (ii) an option
to purchase 10,000 shares of Common Stock (the "Initial Election Grant"). Each
option granted to an Independent Director pursuant to the Formula will vest and
become exercisable as follows: those options granted pursuant to a Regular Grant
will vest and become exercisable as to 20,000 shares one year after the date of
grant; as to 20,000 shares two years after the date of grant; and as to the
remaining 20,000 shares three years after the date of grant. Those options
granted pursuant to a Pro Rata Grant will vest and become exercisable as to that
number of shares equal to the product of 1,666 multiplied by the number of whole
months remaining in the first calendar year in which the Independent Director is
elected initially to the board on the January 1st following such Independent
Director's initial election to the board; and as to any remaining shares in
accordance with the schedule for options granted pursuant to a Regular Grant.
Those options granted pursuant to an Initial Election Grant will vest and become
exercisable as to 5,000 shares one year after the date of grant; and as to 5,000
shares two years after the date of grant.
14
An option granted to an Independent Director pursuant to the Formula will
not become exercisable as to the relevant shares unless such Independent
Director has served continuously on the board during the year preceding the date
on which such options are scheduled to vest and become exercisable, or from the
date such Independent Director joined the board until the end of such year
should such Independent Director have joined the board during such year;
provided, however, that if an Independent Director does not fulfill such
continuous service requirement due to such Independent Director's death or
disability, all options granted under the Formula and held by such Independent
Director shall nonetheless vest and become exercisable as though such
Independent Director fulfilled the continuous service requirement. An option
granted to an Independent Director pursuant to the Formula will remain
exercisable for a period of ten years from the date of grant.
Administration
The Plan is to be administered by either the Board of Directors or a
committee of at least two directors appointed by the board. The Plan is
currently administered by the Compensation Committee.
Amendments and Termination
Currently, no options may be granted under the Plan beyond November 21,
2007. The Compensation Committee or the Board of Directors may terminate, amend,
or revise the Plan with respect to any shares as to which options have not been
granted, but may not alter any previously granted options without the optionee's
consent. Termination of the Plan will not affect previously granted options.
Subject to the foregoing restriction relating to outstanding options, the Board
can amend the Plan without stockholder approval unless stockholder approval is
required by applicable law or the rules of Nasdaq or any stock exchange on which
the Company's shares are then traded.
Capital Adjustments
The aggregate number of shares of Common Stock available for options, the
shares subject to any option, and the price per share, will all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from (1) a subdivision or consolidation of
shares or any other capital adjustment, (2) the payment of a stock dividend on
the Company's Common Stock, or (3) other increase or decrease in such shares
effected without receipt of consideration by the Company. If the Company shall
be the surviving corporation in any merger or consolidation, any option
outstanding under the Plan shall pertain, apply, and relate to the securities to
which a holder of the number of shares of Common Stock subject to the option
would have been entitled after the merger or consolidation. Upon dissolution or
liquidation of the Company, or upon a merger or consolidation in which the
Company is not the surviving corporation, all options outstanding under the Plan
shall terminate; except that each optionee shall have the right, immediately
prior to such dissolution or liquidation, or such merger or consolidation, to
exercise the options that such optionee holds in whole or in part.
Tax Consequences
An optionee will not recognize taxable income for Federal income tax
purposes upon the receipt of an option under the Plan, and the Company will not
be entitled to a deduction upon the grant of an option. Upon exercise of an
option, the optionee will recognize ordinary income equal to the excess of the
fair market value on the date of exercise of the Common Stock received upon
exercise over the exercise price for such Common Stock. However, any such
optionee who is subject to the trading restrictions of Section 16(b) of the
Exchange Act would, unless the optionee elected to recognize ordinary income on
the date of exercise, recognize ordinary income on the date such trading
restrictions terminate (the "Deferred Date"). The amount of such income would
equal the excess of the fair market value on the Deferred Date of the Common
Stock received upon exercise of the option over the exercise price for such
Common Stock, and the holding period for long-term capital gain treatment would
not begin until the Deferred Date. The Company will be entitled to a deduction
equal to the amount of ordinary income recognized by any optionee at the same
time that such optionee recognized such income.
15
Eligible Participants
As of October 19, 1998, there were approximately 100 persons eligible to
participate in the Plan. Of these eligible participants, seven are members of
the Board of Directors (six of whom are Independent Directors), six are members
of the Company's Scientific Advisory Board who are not board members, two are
executive officers who are not board members and the remainder are employees of
the Company who are not executive officers and consultants.
Proposed Amendments to the Plan
The Board is proposing two amendments to the Plan. These amendments are
designed to provide greater flexibility to participants in the Plan, thereby
enhancing the Plan's incentive to participants.
Under the Plan, as currently in force, options may not be transferred other
than under the laws of decent or distribution. This restriction on
transferability of options was required based on previous regulations
promulgated under Section 16(b) of the Securities Exchange Act of 1934, as
amended. Due to changes in such regulations, however, options may now be
transferred by participants in stock option plans. The first proposed amendment
would align the Plan with current regulations and provide greater flexibility to
participants by removing the current restriction on the transferability of
options granted under the Plan, to permit the exercise of options, at the
discretion of the Compensation Committee, by transferees or beneficiaries who
are family members or spouses of an optionee. If approved, this proposed
amendment would permit an optionee to, in a manner established by the
Compensation Committee, transfer options or designate a family member or spouse
as beneficiary or beneficiaries to exercise the rights of the Plan participant
and receive any property distributable with respect to any option granted under
the Plan. Notwithstanding this proposed amendment, no option may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment of encumbrance thereof shall be void and unenforceable
against the Company.
In addition, under the current Plan, participants who exercise stock
options must pay the Company such exercise price in cash on the delivery of the
underlying shares of Common Stock then owned by the optionee. The second
amendment would permit, at the discretion of the Compensation Committee, the
"cashless exercise" of options under the Plan by permitting optionees who
exercise an option to surrender that number of shares of Common Stock of the
Company subject to such option with an aggregate fair market value equivalent to
the aggregate exercise price of the exercised option in lieu of cash payment of
the exercise price.
For information concerning options granted under the Plan to directors, the
Chief Executive Officer and the Named Executive Officers see "Directors'
Compensation - Directors' Stock Options," "Summary Compensation Table" and
"Option Grants In Last Fiscal Year."
The Board of Directors recommends a vote FOR approval of the proposed
amendments to the Non-Qualified Stock Option Plan (Proposal No. 2 on the Proxy
Card).
PROPOSAL NO. 3 - RATIFICATION OF AUDITORS
On October 20, 1998, the Audit Committee of the Board of Directors,
pursuant to authority granted by the Board of Directors, approved the retention
of KPMG Peat Marwick LLP ("KPMG"), independent certified public accountants, to
audit the consolidated financial statements of the Company for the fiscal year
ending June 30, 1999. KPMG served as auditor of the consolidated financial
statements of the Company for the fiscal years ended June 30, 1998, June 30,
1997, and June 30, 1996. Representatives of KPMG are expected to be present at
the Annual Meeting and will have the opportunity to make a statement should they
desire to do so. Such representatives are also expected to be available to
respond to questions.
The Board of Directors recommends a vote FOR ratification of the selection
of KPMG Peat Marwick LLP, independent certified public accountants, to audit the
consolidated financial statements of the Company for the fiscal year ending June
30, 1999 (Proposal No. 3 on the Proxy Card).
16
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders for the fiscal year ended June
30, 1998 accompanies this Proxy Statement.
STOCKHOLDERS' PROPOSALS
It is anticipated that the Company's fiscal 1999 Annual Meeting of
Stockholders will be held on or about December 7, 1999. Stockholders who intend
to present proposals at such Annual Meeting of Stockholders must submit their
proposals to the Secretary of the Company on or before July 3, 1999.
GENERAL
The cost of soliciting proxies will be borne by the Company. In addition to
mailing, proxies may be solicited by personal interview, telephone and
telegraph, and by directors, officers and regular employees of the Company,
without special compensation therefor. The Company expects to reimburse banks,
brokers and other persons for their reasonable out-of-pocket expenses in
handling proxy materials for beneficial owners of the Company's Common Stock.
Unless contrary instructions are indicated on the proxy card, all Common
Shares or Series A Preferred Shares represented by valid proxies received
pursuant to this solicitation (and not revoked before they are voted) will be
voted FOR the election of the nominees for directors named herein and FOR
Proposal No. 2 and Proposal No. 3.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by filing with
the Secretary of the Company written notice of revocation bearing a later date
than the proxy, by duly executing a subsequent proxy relating to the same Common
Shares or Series A Preferred Shares or by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy unless the stockholder votes his or her Common
Shares or Series A Preferred Shares in person at the Annual Meeting. Any notice
revoking a proxy should be sent to the Secretary of the Company, John A. Caruso,
at Enzon, Inc., 20 Kingsbridge Road, Piscataway, New Jersey 08854.
The Board of Directors knows of no business other than that set forth above
to be transacted at the meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the Common
Shares or Series A Preferred Shares represented by the proxies in accordance
with their judgment on such matters. If a stockholder specifies a different
choice on the proxy, his or her Common Shares or Series A Preferred Shares will
be voted in accordance with the specification so made.
Please complete, sign and date the enclosed proxy card, which is revocable
as described herein, and mail it promptly in the enclosed postage-paid envelope.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN,
SIGN AND RETURN THE ACCOMPANYING PROXY CARD, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
By order of the Board of Directors,
John A. Caruso, Secretary
Piscataway, New Jersey
October 28, 1998
17
Proxy Card
ENZON, INC.
Annual Meeting of Stockholders December 1, 1998
This Proxy Is Solicited on Behalf of the Board of Directors
Peter G. Tombros and John A. Caruso and each of them, as
proxies, with full power of substitution in each of them, are hereby authorized
to represent and to vote, as designated below and on the reverse side, on all
proposals and in the discretion of the proxies on such other matters as may
properly come before the annual meeting of stockholders of Enzon, Inc. (the
"Company") to be held on December 1, 1998 or any adjournment(s),
postponement(s), or other delay(s) thereof (the "Annual Meeting"), all shares of
stock of the Company to which the undersigned is entitled to vote at the Annual
Meeting.
UNLESS OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2
and 3 AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING. THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSALS 1, 2 and 3.
(1) Election of the following nominees as Class III Directors to serve in such
capacities until their successors are duly elected and qualified:
ROLF A. CLASSON ROBERT LEBUHN
(Authority to vote for any nominee(s) may be withheld by lining through the
name(s) of any such nominee(s).)
/ / FOR all nominees / / WITHHOLD authority for all
(2) Proposal to approve amendments to the Company's Non-Qualified Stock Option
Plan, as set forth in the Company's Proxy Statement dated October 28, 1998.
/ / FOR / / AGAINST / / ABSTAIN
(3) Ratification of the selection of KPMG Peat Marwick LLP to audit the
consolidated financial statements of the Company for the fiscal year ending
June 30, 1999.
/ / FOR / / AGAINST / / ABSTAIN
/ / Please check this box if you expect to attend the Annual Meeting in
person.
(Please sign exactly as name appears to the left, date and
return. If shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator,
trustees 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.)
Date:
-------------------------------------------------------
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Sign Here
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Signature (if held jointly)
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Capacity (Title or Authority, i.e. Executor, Trustee)
PLEASE SIGN, DATE AND MAIL YOUR PROXY TODAY.