SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.)

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material pursuant to Section 240.14a-11(c) or Section
240.14a-12

ZONAGEN, INC.
(Name of Registrant as specified in its Charter)

(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
/x/ $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 the transaction
applies:

N\A

(2) Aggregate number of securities to which the transaction
applies:

N\A

(3) Per unit price or other underlying value of the transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):

N\A

(4) Proposed maximum aggregate value of the transaction:

N\A

(5) Total fee paid:

N\A

/ / 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: N\A
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(4) Date Filed: N\A

ZONAGEN, INC.

2408 TIMBERLOCH PLACE, SUITE B-4

THE WOODLANDS, TEXAS 77380

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held June 19, 1996

------------------------

Notice is hereby given that the Annual Meeting (the "Annual Meeting") of
the stockholders of Zonagen, Inc., a Delaware corporation (the "Company"), will
be held at The Woodlands Executive Conference Center, located at 2301 North
Millbend Drive, The Woodlands, Texas 77380, on June 19, 1996, at 1:00 p.m.,
Houston, Texas time, for the following purposes:

1. To elect a board of six directors to serve until the next Annual
Meeting of stockholders or until their successors are elected and
qualified;

2. To consider and act on such other business as may properly be
presented to the meeting.

A record of stockholders has been taken as of the close of business on May
10, 1996, and only those stockholders of record on that date will be entitled to
notice of and to vote at the Annual Meeting. A stockholders' list will be
available commencing May 31, 1996, and may be inspected during normal business
hours prior to the Annual Meeting at the offices of the Company, 2408 Timberloch
Place, Suite B-4, The Woodlands, Texas 77380.

Your participation in the Company's affairs is important. To ensure your
representation, if you do not expect to be present at the meeting, please sign
and date the enclosed proxy and return it promptly in the enclosed stamped
envelope which has been provided for your convenience. The prompt return of
proxies will ensure a quorum and save the Company the expense of further
solicitation.

By Order of the Board of Directors,

/s/ JOSEPH S. PODOLSKI
Joseph S. Podolski
PRESIDENT AND CHIEF EXECUTIVE OFFICER

May 14, 1996

ZONAGEN, INC.
2408 TIMBERLOCH PLACE, SUITE B-4
THE WOODLANDS, TEXAS 77380

PROXY STATEMENT
REGARDING THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD JUNE 19, 1996

This proxy statement is being mailed to stockholders commencing on or about
May 17, 1996, in connection with the solicitation by the Board of Directors of
Zonagen, Inc., a Delaware corporation (the "Company"), of proxies to be voted at
the Annual Meeting of stockholders to be held at The Woodlands Executive
Conference Center located at 2301 North Millbend Drive, The Woodlands, Texas
77380, on June 19, 1996 at 1:00 p.m., Houston, Texas time, and at any
adjournment thereof, for the purposes set forth in the accompanying notice.
Proxies will be voted in accordance with the directions specified thereon and
otherwise in accordance with the judgment of the persons designated as proxies.
A stockholder entitled to vote for the election of directors can withhold
authority to vote for all nominees for director or can withhold authority to
vote for certain nominees for director. Proxies marked as abstaining on any
matter to be acted on by the stockholders will be treated as present at the
Annual Meeting for purposes of determining a quorum. Any proxy on which no
direction is specified will be voted FOR the election of the nominees named
herein, and otherwise in accordance with the judgment of the persons specified
thereon. A stockholder may revoke a proxy by (i) delivering to the Company
written notice of revocation, (ii) delivering to the Company a signed proxy of a
later date or (iii) appearing at the Annual Meeting and voting in person.

The holders of record on May 10, 1996, the record date (the "Record Date")
for the determination of stockholders entitled to vote at the Annual Meeting, of
common stock, par value $.001 per share (the "Common Stock"), of the Company
will be entitled to one vote per share on each matter submitted to a vote of the
stockholders at the Annual Meeting. The holders of record on the Record Date of
Series A preferred stock, par value $.001 per share (the "Preferred Stock"), of
the Company will be entitled to vote as if their shares had been converted into
Common Stock on each matter submitted to a vote of the stockholders at the
Annual Meeting. Currently, each share of Preferred Stock is convertible into
2.7586 shares of Common Stock. At the close of business on the Record Date,
there were issued, outstanding and entitled to vote 4,853,216 shares of the
Company's Common Stock and 318,585 shares of Preferred Stock. The
holders of a majority of the total shares issued and outstanding, whether
present in person or by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting.

The affirmative vote of the holders of a majority of the total shares
entitled to vote at the Annual Meeting, represented in person or by proxy, is
required for (a) the election of the nominees for director, and (b) the approval
of such other matters as may properly come before the Annual Meeting or any
adjournment thereof.

ELECTION OF DIRECTORS

At the Annual Meeting, six directors are to be elected, each director to
hold office until the next Annual Meeting of stockholders or until his successor
is elected and qualifies. The persons named in the accompanying proxy have been
designated by the Board of Directors and unless authority is withheld, they
intend to vote for the election of the nominees named below to the Board of
Directors. If any nominee should become unavailable for election, the proxy may
be voted for a substitute nominee selected by the persons named in the proxy or
the Board may be reduced accordingly; however, the Board of Directors is not
aware of any circumstances likely to render any nominee unavailable.

NOMINEES

Certain information concerning the nominees is set forth below:

COMMON STOCK
BENEFICIALLY OWNED
APRIL 26, 1996 (1)
----------------------
DIRECTOR
NAME POSITION AGE SINCE SHARES PERCENT
---- -------- --- -------- ------ -------

Martin P. Sutter Chairman of the Board 41 1987 683,582(2) 11.0%

Joseph S. Podolski President, Chief
Executive Officer,
and Director 48 1992 100,069(3) 1.6%

David B.
McWilliams Director 53 1989 50,474(4) *

Steven Blasnik Director 38 1990 845,793(5) 13.6%

David W. Ortlieb Director 65 1990 21,842(6) *

Allan D. Rudzik Director 61 1994 7,500(7) *

All directors and
executive officers
as a group
(8 persons)(2) - (7) 1,720,260 27.6%

- -------------------------
* Does not exceed one percent.

(1) Each person has sole voting and investment power with respect to the shares
listed, except as otherwise specified, and is a United States citizen.
Each beneficial owner's shares includes options, warrants and other
convertible securities that are held by such person and that are
exercisable or convertible into shares of Common Stock within 60 days.

(2) Includes (i) 1,002 shares of Common Stock which are held by certain of Mr.
Sutter's family members, (ii) 670,080 shares of Common Stock (including
25,000 shares of Preferred Stock that is convertible into 68,965 shares of
Common Stock) which may be deemed to be beneficially owned by Mr. Sutter by
virtue of his affiliation with The Woodlands Venture Fund, L.P., and (iii)
options to purchase 10,000 shares of Common

Stock. Mr. Sutter disclaims beneficial ownership of the shares owned by
his family members and the shares owned by The Woodlands Venture Fund, L.P.

(3) Includes (i) 200 shares of Common Stock which are held by certain of Mr.
Podolski's family members and (ii) options to purchase 93,959 shares. Mr.
Podolski disclaims beneficial ownership of the shares owned by his family
members. Does not include options to purchase 72,701 shares which are not
yet vested. See "Executive Compensation -- Aggregated Option Exercises in
Last Fiscal Year and Year End Option Values."

(4) Includes options to purchase 10,000 shares of Common Stock.

(5) Includes (i) 835,793 shares of Common Stock (including 22,500 shares of
Preferred Stock that is convertible into 62,068 shares of Common Stock)
which may be deemed to be beneficially owned by Mr. Blasnik by virtue of
his affiliation with Petrus Fund, L.P. and (ii) options to purchase 10,000
shares. Mr. Blasnik disclaims beneficial ownership of the shares owned by
Petrus Fund, L.P.

(6) Does not include options to purchase 9,000 shares of Common Stock which are
not yet vested.

(7) Includes options to purchase 7,500 shares of Common Stock.

MARTIN P. SUTTER. Mr. Sutter, a co-founder of the Company, has served as
Chairman of the Board of Directors since December 1987. Since July 1988, he has
been the Managing General Partner of Woodlands Venture Partners, L.P., the
general partner of The Woodlands Venture Fund, L.P., a principal stockholder of
the Company, a general partner of The Woodlands/Essex Management Partners L.P.,
and the general partner of The Woodlands/Essex Venture Fund III, L.P. From
January 1985 to July 1988 he was the President of The Woodlands Venture Capital
Company. He is a Director of LifeCell Corporation and Chairman of the Board of
Directors of Aronex Pharmaceuticals, Inc. and RGene Therapeutics, Inc., all of
which are biotechnology companies based in The Woodlands, Texas. He has a B.S.
degree from Louisiana State University and an M.B.A. from the University of
Houston.

JOSEPH S. PODOLSKI. Mr. Podolski joined the Company in 1989 and has served
as President of the Company since July 1992. From 1977 to 1989, Mr. Podolski
held several engineering, product development and manufacturing positions with
Monsanto, most recently as Director of Manufacturing for a significant product
line. Before Monsanto, Mr. Podolski spent eight years at Abbott Laboratories,
Dearborn Chemical Company and Baxter Pharmaceuticals in manufacturing,
engineering, quality control and development of fine chemicals, antibiotics,
pharmaceuticals and hospital products. Mr. Podolski has a Bachelor's Degree in
chemistry and a Master's Degree in chemical engineering from Illinois Institute
of Technology.

DAVID B. MCWILLIAMS. Mr. McWilliams has been a Director of the Company
since June 1989, and served as President of the Company from that time until
July 1992. Since July 1992, Mr. McWilliams has been the President and a
Director of Texas Biotechnology Corp., a biotechnology company headquartered in
Houston, Texas. Before joining the Company, Mr. McWilliams was President and
Chief Executive Officer of Kallestad Diagnostics, Inc., an international immuno
diagnostics company. Before that, Mr. McWilliams was President of Harleco
Diagnostics and Executive Vice President of E.M. Science, with responsibility
for E. Merck's domestic diagnostic business. He also held international general
management positions with Abbott Laboratories and was with McKinsey & Co. for
four years as a general management consultant. Mr. McWilliams has a Bachelor of
Arts degree in chemistry from Washington and Jefferson College and an M.B.A.
from the University of Chicago.

STEVEN BLASNIK. Mr. Blasnik has been a Director since April 1990. Since
1987, Mr. Blasnik has been employed by the Perot Group and is currently
President of Perot Investments, Inc., an investment firm owned by Ross Perot.
From 1983 to 1987, Mr. Blasnik was an attorney at Hughes & Luce in Dallas,
Texas. Mr. Blasnik has a B.S.E. degree from Princeton University and a J.D.
degree from Harvard Law School.

DAVID W. ORTLIEB. Mr. Ortlieb has served as a Director of the Company
since August 1990. He served as President, Chief Executive Officer and Director
of Immunomedics, Inc. from July 1992 to February 1994. He served as President
and Chief Executive Officer of Texas Biotechnology Corp. from April 1990 until
July 1992 and as a Director from April 1990 to April 1993. Mr. Ortlieb served
as President and a Director of the American Optical Corporation, a diversified
company principally involved with optics/ophthalmics, from 1987 to 1989. He was
President, Chief Executive Officer and a Director of Erbamont N.V., an
international pharmaceutical and diagnostic products company, from 1983 to 1985.
Mr. Ortlieb was an executive of Abbott Laboratories, a health care and consumer
products company, from 1972 to 1983. Before that, he held various senior
management positions with Mead Johnson & Company, a pharmaceutical and
nutritional company. Mr. Ortlieb received a B.S. degree from Lawrence
University and an M.B.A. and D.B.A. from Indiana University, where he also
served on the faculty. He is a member of Indiana University's Academy of Alumni
Fellows.

ALLAN D. RUDZIK, PH.D. Dr. Rudzik is the Retired Corporate Vice President
and Chief Scientific Officer of Berlex Laboratories, Inc. From 1993 to 1995,
Dr. Rudzik held the positions of Corporate Vice President, President and Chief
Scientific Officer of Berlex Laboratories in Richmond, California. From 1991
to 1993 Dr. Rudzik held the same positions at Berlex Laboratories in Cedar
Knolls, New Jersey. He served as the Executive Vice President, Research and
Development of Berlex Laboratories from 1982 to 1991 and as Chief Scientific
Officer from 1989 to 1991. Prior to joining Berlex Laboratories, Dr. Rudzik
served in various positions with The Upjohn Company. Dr. Rudzik received a B.S.
and M.S. in Pharmacy from the University of Alberta and a Ph.D. in Pharmacology
from the University of Wisconsin.

BOARD AND COMMITTEE ACTIVITY: STRUCTURE AND COMPENSATION

The Company's operations are managed under the broad supervision of the
Board of Directors, which has ultimate responsibility for the establishment and
implementation of the Company's general operating philosophy, objectives, goals
and policies. During 1995, the Board of Directors convened on four regularly
scheduled and one specially scheduled occasions, and each director attended at
least 75% of the aggregate meetings held by the Board and any committee of the
Board on which he served during his tenure in 1995.

Employee directors do not receive additional compensation for service on
the Board of Directors or its committees. The Company pays each non-employee
director a fee of $1,000 plus travel expenses for each Board meeting attended.
Employee directors are eligible to participate in the Company's 1994 Employee
and Consultant Stock Option Plan and Amended and Restated 1993 Employee and
Consultant Stock Option Plan (the "Incentive Plans"). See "Other Information -
Executive Compensation." Non-employee directors are entitled to participate in
the Company's 1993 Non-Employee Director Stock Option Plan (the "Director
Plan"). The Director Plan entitles each newly-elected non-employee director to
receive an option to purchase 5,000 shares of Common Stock, at an exercise price
equal to the market price at the close of business on the date of grant, on the
date of his election. Further, the Director Plan grants each existing non-
employee director (the "Existing Directors") an option to purchase 2,500 shares
of Common Stock on each occasion that the Existing Director is re-elected. Under
the Director Plan, the Company granted to the re-elected Existing Directors
options to acquire an aggregate of 15,000 shares of Common Stock during 1995.

Pursuant to delegated authority, various Board functions are discharged by
the standing committees of the Board. The Board of Directors has appointed four
committees: the Executive Committee, the Option Committee,

the Compensation Committee and the Audit Committee. The Executive Committee,
currently comprised of Messrs. Sutter and Podolski, is authorized to exercise,
to the extent permitted by law, the power of the full Board of Directors when a
meeting of the full Board is not practicable or necessary. The Executive
Committee did not convene for any specially scheduled occasion in 1995. The
Option Committee selects the employees to whom stock options are to be granted
and determines the conditions covered by each option. The Option Committee,
currently comprised of Messrs. Sutter and Blasnik, convened on two occasions in
1995. The Compensation Committee, currently comprised of Messrs. Sutter,
Blasnik and Ortlieb, reviews and recommends to the Board of Directors the amount
of compensation to be paid to all employees. The Compensation Committee
convened on one regularly scheduled occasion in 1995. The Audit Committee,
currently comprised of Messrs. Sutter and McWilliams, recommends to the Board
of Directors the engagement or discharge of independent auditors and approves
each service performed by the independent auditors, including the fee
arrangements and the range of audit and non-audit services. The Audit Committee
also reviews the independence of the auditors, the results of the audit
engagement and the scope and adequacy of the Company's internal accounting
procedures and controls. The Audit Committee convened on one regularly
scheduled occasion in 1995.

APPROVAL

The six nominees for election as Directors at the Annual Meeting who
receive the greatest number of votes cast by the holders of Common Stock,
entitled to vote at the Annual Meeting, shall be the duly elected Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL SIX NOMINEES TO THE
COMPANY'S BOARD OF DIRECTORS.

OTHER INFORMATION

PRINCIPAL STOCKHOLDERS

The following table presents certain information regarding the beneficial
ownership of the Company's equity securities at April 26, 1996 by (i) each
person who owns beneficially more than five percent of the outstanding shares of
Common Stock, (ii) each director of the Company, (iii) each named executive
officer and (iv) all directors and officers as a group.

AMOUNT AND NATURE OF
BENEFICIAL PERCENTAGE OF
NAME OF BENEFICIAL OWNER(1) OWNERSHIP(2) SHARES
- --------------------------- ------------ ------
Petrus Fund, L.P.
12377 Merit Drive, Suite 1700
Dallas, Texas 75251 . . . . . . . 835,793(3) 13.4%

The Woodlands Venture Fund, L.P.
2170 Buckthorne Place, Suite 170
The Woodlands, Texas 77380 . . . 670,080(4) 10.7%

Directors and Named Executive Officers

Martin P. Sutter . . . . . . . . . 683,582(5) 11.0%

Joseph S. Podolski . . . . . . . . 102,069(6) 1.6%

David B. McWilliams. . . . . . . . 50,474(7) *

Steven Blasnik . . . . . . . . . . 845,793(8) 13.6%

David W. Ortlieb . . . . . . . . . 21,842(9) *

Allan D. Rudzik. . . . . . . . . . 7,500(10) *

All directors and executive officers
as a group (8 persons) . . . . . 1,720,260(5)-(10) 27.6%

- ---------------------------------
* Does not exceed one percent.

(1) Each beneficial owner's percentage ownership is determined by assuming
that options, warrants and other convertible securities that are held
by such person and that are exercisable or convertible within 60 days
have been exercised or converted.

(2) Unless otherwise noted, the Company believes that all persons named in
the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by such persons.

(3) Includes 22,500 shares of Preferred Stock that is convertible into
62,068 shares of Common Stock.

(4) Includes 25,000 shares of Preferred Stock that is convertible into
68,965 shares of Common Stock.

(5) Includes (i) 1,002 shares of Common Stock which are held by certain of
Mr. Sutter's family members, (ii) 670,080 shares of Common Stock
(including 25,000 shares of Preferred Stock that is convertible into
68,965 shares of Common Stock) which may be deemed to be beneficially
owned by Mr. Sutter by virtue of his affiliation with The Woodlands
Venture Fund, L.P., and (iii) options to purchase 10,000 shares of
Common Stock. Mr. Sutter disclaims beneficial ownership of the shares
owned by his family members and those shares owned by The Woodlands
Venture Fund, L.P.

(6) Includes (i) 200 shares of Common Stock which are held by certain of
Mr. Podolski's family members and (ii) options to purchase 93,569
shares. Mr. Podolski disclaims beneficial ownership of the shares
owned by his family members. Does not include options to purchase
72,701 shares which are not yet vested. See "Executive Compensation
-- Aggregated Option Exercises in Last Fiscal Year and Year End
Option Values."

(7) Includes options to purchase 10,000 shares of Common Stock.

(8) Includes (i) 835,793 shares of Common Stock (including 22,500 shares
of Preferred Stock that is convertible into 62,068 shares) which may
be deemed to be beneficially owned by Mr. Blasnik by virtue of his
affiliation with Petrus Fund, L.P. and (ii) options to purchase 10,000
shares. Mr. Blasnik disclaims beneficial ownership of the shares
owned by Petrus Fund, L.P.

(9) Does not include options to purchase 9,000 shares of Common Stock
which are not yet vested.

(10) Includes options to purchase 7,500 shares of Common Stock.

EXECUTIVE OFFICERS

The executive officers of the Company serve at the pleasure of the Board of
Directors and are subject to annual appointment by the Board at its first
meeting following the Annual Meeting of stockholders. All of the Company's
executive officers are listed in the following table and certain information
concerning those officers who are not also members of the Board of Directors
follows the table:

NAME AGE POSITION
---- --- --------
Joseph S. Podolski. . . 48 President and Chief Executive Officer; Director
Louis Ploth . . . . . . 42 Vice President of Business Development and Chief
Financial Officer
Tommy L. Lee. . . . . . 45 Vice President of Corporate Development

LOUIS PLOTH. Mr. Ploth has served as the Company's Vice President of
Business Development and Chief Financial Officer since October 1993. From
February 1991 to April 1993, Mr. Ploth served as the Chief Financial Officer of
Unisyn Technologies and served as its Vice President of Finance and
Administration from July 1992 to April 1993. Mr. Ploth served as the Corporate
Controller of Synbiotics Corporation (a biotechnology company) from January 1986
to February 1991. Mr. Ploth has a B.S. degree from Montclair State College.

TOMMY L. LEE. Mr. Lee joined the Company in February 1996 as Vice
President of Corporate Development. Mr. Lee also serves as the general manager
of Fertility Technologies, Inc. From 1994 to January 1995, Mr. Lee served as
Vice President of Marketing of Positron Corporation. Mr. Lee served as Vice
President of Marketing of Optex Biomedical, Inc. from 1989 to 1994. During
1988, Mr. Lee held the position of Director of Corporate Accounts with
Kardiother, Inc. Mr. Lee has also held various sales and marketing positions
with Mallinckrodt, Inc. and with A. H. Robbins Pharmaceutical Company. Mr. Lee
has a B.A. degree from the University of Texas.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The following table provides certain summary
information concerning compensation paid or accrued during the fiscal years
ended December 31, 1995, 1994 and 1993 to the Company's Chief Executive Officer:

ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------------------------------ -----------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD OPTIONS
- --------------------------- ---- ------ ----- ------------ ---------- ----------

Joseph S. Podolski 1995 $150,000 $35,000 -- -- --
President and 1994 149,271 26,236 -- -- 100,000
Chief Executive Officer 1993 132,504 25,687 -- -- 10,000

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES.
The following table provides certain information with respect to options
exercised by the Chief Executive Officer during the last fiscal year ended
December 31, 1995 and options owned by the Chief Executive Officer at December
31, 1995:

SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
ON VALUE FISCAL YEAR-END YEAR-END(1)
--------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------

Joseph S. Podolski -- -- 78,868 87,402 $688,034 $402,819

- ---------------

(1) Value of in-the-money options is equal to the excess of the fair market
value of a share of Common Stock at fiscal year-end ($10.875 per share)
over the exercise price multiplied by the number of options. Any value
realized by an owner of these options will be dependent upon the fair
market value of the Common Stock at the time of exercise. There is no
assurance that an owner of these options will realize any value upon their
exercise.

EMPLOYMENT AGREEMENTS. The Company has entered into employment agreements
with Messrs. Podolski, Ploth and Lee which provide for a current annual salary
of $150,000, $98,000 and $110,000, respectively. The agreements provide that
the Company will pay Messrs. Podolski, Ploth and Lee an annual incentive bonus
as may be approved by the Board of Directors and that Messrs. Podolski, Ploth
and Lee are entitled to participate in all employee benefit plans sponsored by
the Company. Mr. Podolski's employment agreement provides for a primary term
expiring in January 1998, with automatic annual renewals unless terminated by
either party. If terminated for reasons other than cause, Mr. Podolski is
entitled to receive his annual base salary and certain employment benefits for
one year following termination. The employment agreements for Messrs. Ploth
and Lee expire in September 1996 and January 1997, respectively, with automatic
annual renewals unless otherwise terminated by either party. If terminated for
reasons other than cause, Messrs. Ploth and Lee are entitled to salary and
certain employment benefits for six months following termination.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's compensation program for officers (including the Chief
Executive Officer) is administered by the Compensation and Option Committees of
the Board of Directors (the "Committees"), which are composed of three and two
non-employee directors, respectively. Both members of the option committee are
also members of the compensation committee. Following review and approval by
the Committees, all issues pertaining to officer compensation are submitted to
the full Board for approval. The objective of the Company's compensation
program is to provide a total compensation package that will enable the Company
to attract, motivate and retain outstanding individuals and align their success
with that of the Company's stockholders.

Base salaries for new management employees are determined initially by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for management
talent, including a comparison of base salaries for comparable positions at
comparable companies within the biotechnology industry. In July 1992, the
Committees approved, and recommended that the Board approve, the terms of the
employment contract of Joseph Podolski, the Company's President and Chief
Executive Officer. Mr. Podolski's employment agreement provides for a
primary term expiring in January 1998, with automatic renewals unless
terminated by either party. In furtherance of their goals, the Company has
also entered into employment contracts with its key management personnel. See
"-Employment Agreements."

The employment agreements with key personnel establish annual base salary
amounts that the committee may increase from time to time. Annual salary
adjustments are determined by evaluating the competitive marketplace, the
perfomance of the Company, the performance of the executive, and any increased
responsibilities assumed by the executive. Based on these criteria and the
success of the Company's recent private placement, the Committee approved a
bonus for the Chief Executive Officer in the amount of $35,000.

The 1993 Tax Act restricts the ability of a publicly held corporation to
deduct compensation in excess of $1,000,000 paid to its chief executive officer
and the four most highly compensated officers. The Committee intends to
maintain executive compensation packages below this threshold, and based on its
current compensation structure, the Company does not anticipate that any of its
relevant officers will reach the $1,000,000 threshold in the near future.

The principal methods for long-term incentive compensation are the
Company's Amended and Restated 1993 Employee and Consultant Stock Option Plan
(the "1993 Plan"), the 1993 Non-Employee Director Stock Option Plan (the
"Director Plan") and the 1994 Employee and Consultant Stock Option Plan (the
"1994 Plan"). Compensation under these plans principally takes the form of
incentive and non-qualified stock option grants. In this manner, key
individuals are rewarded commensurate with increases in shareholder value.
Moreover, these plans provides a significant non-cash form of compensation,
which is intended to benefit the Company by enabling it to continue to attract
and to retain qualified personnel.

Based on these criteria, during the fiscal year ended December 31, 1995,
the Company granted no options to the Chief Executive Officer. At December 31,
1995, the Chief Executive Officer held options covering an aggregate 166,270
shares of Common Stock. Of those, options covering an aggregate of 78,868
shares were vested and exercisable. See "Executive Compensation--Summary
Compensation Table."

Martin P. Sutter
Steven Blasnik
David Ortlieb

COMMON STOCK PERFORMANCE GRAPH

The following graph illustrates the yearly change in the cumulative total
shareholder return on the Company's Common Stock compared with the cumulative
total return on the NASDAQ-Composite stock Index and a Peer Group, which is
referred to as the MG Industry Group 151 - Drug Manufacturers Group, for the
period from the date of the Company's Initial Public Offering, March 25, 1993,
throughDecember 31, 1993 and the two years ended December 31, 1995. The
graph assumes that the value of the investment in the Company's Common Stock
and each index was $100.00 at March 25, 1993 and that all dividends were
reinvested.

COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET

FISCAL YEAR ENDING
------------------------------------------------
COMPANY 1993 1993 1994 1995

ZONAGEN INC 100.00 160.87 126.09 189.13
INDUSTRY INDEX 100.00 109.32 117.61 187.63
BROAD MARKET 100.00 113.70 119.37 154.84

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company enters into transactions with related parties only with the
approval of a majority of the independent and disinterested Directors and only
on terms the Company believes to be comparable to or better than those that
would be available from unaffiliated parties. In the Company's view, all of the
transactions described herein meet that standard.

On October 13, 1994, in connection with the acquisition of Fertility
Technologies, Inc. ("FTI"), currently a wholly-owned subsidiary of the Company,
the Company assumed two note agreements with J. Tyler Dean, the current
president and the former sole shareholder of FTI. The first note agreement
required the payment of four equal quarterly installments of $62,500 beginning
December 31, 1994. The second note agreement requires the payment of a number
of shares of Common Stock payable on January 31, 1997 to be determined based
upon the market price of Common Stock at that date and the achievement of
certain earnings milestones.

On March 20, 1995, the Company issued 16,000 shares of Common Stock to The
Woodlands Venture Fund, L.P. for a purchase price of $16.00 or $.001 per share.
The shares were issued in consideration for providing additional financing
pending the completion of the Company's initial public offering in April 1993.
On the date of this transaction the Company's stock was trading at $4.75 per
share. As a result, the Company recorded compensation expense of $75,984
relating to this transaction.

On October 4, 1995, The Woodlands Venture Fund, L.P., The Woodlands Venture
Capital Corporation and The Petrus Fund, L.P. purchased 25,000, 25,000, and
22,500 shares, respectively, of the Company's Series A Preferred Stock for cash
consideration of $250,000, $250,000 and $225,000, respectively.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange Commission.
Officers, directors and greater than 10% stockholders are required to furnish
the Company with copies of all Section 16(a) reports they file.

Based solely on its review of the forms received by it, the Company
believes that during the year ended December 31, 1995 all filing requirements
applicable to the Company's officers, directors and greater than 10%
stockholders were met except that Joseph Podolski was late in filing one report
covering one transaction.

MISCELLANEOUS MATTERS

The annual report on Form 10-K covering the fiscal year ended December 31,
1995 has been mailed to each stockholder entitled to vote at the Annual Meeting.
Any stockholder who wishes to submit a proposal for action to be included in the
proxy statement and form of proxy relating to the Company's 1997 Annual Meeting
of stockholders is required to submit such proposals to the Company on or before
January 24, 1997. The cost of soliciting proxies in the accompanying form will
be borne by the Company. In addition to solicitations by mail, a number of
regular employees of the Company may, if necessary to assure the presence of a
quorum, solicit proxies in person or by telephone. The persons designated to
vote shares covered by Board of Directors' proxies intend to exercise their
judgment in voting such shares on other matters that may properly come before
the meeting. Management does not expect that any matters other than those
referred to in this proxy statement will be presented for action at the meeting.

By Order of the Board of Directors,

Joseph S. Podolski,
PRESIDENT AND CHIEF EXECUTIVE OFFICER

May 14, 1996

ZONAGEN, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ITS ANNUAL MEETING TO BE HELD JUNE 19, 1996
P
The undersigned hereby constitutes and appoints each of Martin P. Sutter,
Joseph S. Podolski and Louis Ploth, attorney and proxy with full power of
R substitution, to vote all the shares of Common Stock
beneficially held by the undersigned at the Annual Meeting of
Stockholders of Zonagen, Inc. to be held at The Woodlands Executive
Conference Center in The Magnolia Room, at 2301 North Millbend Drive, The
O Woodlands, Texas 77380, on June 19, 1996 at 1:00 p.m. Houston, Texas
time, and at any adjournments thereof, on all matters presented at said
meeting.
X
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
Y

(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)

1. Election of Directors. Nominees:

Martin P. Sutter, Joseph S. Podolski, David B. McWilliams, Steven Blasnik, David
W. Ortlieb and Allan D. Rudzik.

/ / FOR all nominees listed herein
/ / WITHHOLD Authority to vote for ALL nominees
/ / WITHHOLD Authority to vote for ONLY the nominees written on the line
provided below
________________________________________________________________________________

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AND IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
NAMED HEREIN.
SIGNATURE(S) ________ DATE _________
SIGNATURE(S) ________ DATE _________

NOTE Please sign exactly as name
appears hereon. Joint owners
should also sign. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such and provide
power of attorney, if
applicable.