SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CELSION CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] 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:
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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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CELSION CORPORATION
10220-I OLD COLUMBIA ROAD
COLUMBIA, MARYLAND 21046-1705
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, FEBRUARY 15, 2002
---------------
To Our Stockholders:
Notice is hereby given that the annual meeting (together with any
adjournments or postponements thereof, the "Meeting") of the stockholders of
Celsion Corporation (the "Company") will be held at ten o'clock AM local time on
Friday, February 15, 2002, at the Other Barn, 5851 Robert Oliver Place,
Columbia, Maryland 21045 for the following purposes:
(1) To elect two Directors, each to serve for a term of three years;
(2) To ratify the selection of Stegman & Company as the Company's
independent public accountants for the fiscal year ending
September 30, 2002; and
(3) To consider any other matters that may properly come before the
Meeting.
The close of business on Monday, December 31, 2001 has been fixed as the
record date for the determination of stockholders of the Company entitled to
notice of and to vote at the Meeting. Only stockholders of record at the close
of business on December 31, 2001 are entitled to notice of, and to vote at, the
Meeting. In the event there are not sufficient votes to constitute a quorum or
to approve or ratify that any of the foregoing proposals at the time of the
Meeting, the Meeting may be adjourned or postponed in order to permit further
solicitation of proxies by the Company.
All stockholders are cordially invited to attend the Meeting in person.
However, whether or not you expect to attend, please complete, sign, date and
return the enclosed Proxy as promptly as possible in the envelope provided for
that purpose. Returning your Proxy will ensure your representation and help to
ensure the presence of a quorum at the Meeting. You may attend the Meeting and
vote your shares in person even if you send in your Proxy, since your proxy is
revocable as set forth in the accompanying Proxy Statement.
By Order of the Board of Directors
/s/ JOHN MON
John Mon
Secretary
JANUARY 3, 2002
Columbia, Maryland
WHETHER OR NOT YOU INTEND TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED PRE-ADDRESSED AND POSTAGE-PAID
ENVELOPE.
CELSION CORPORATION
PROXY STATEMENT
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SOLICITATION OF PROXY, REVOCABILITY AND VOTING
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation, by the Board of Directors of Celsion Corporation (the "Company" or
"Celsion"), of proxies to be used at the Annual Meeting of Stockholders
(together with any adjournments or postponements thereof, the "Meeting") to be
held at ten o'clock AM local time on Friday, February 15, 2002, at the Other
Barn, 5851 Robert Oliver Place, Columbia, Maryland 21045, for the purposes set
forth in the accompanying Notice.
Only stockholders of record at the close of business on Monday, December
31, 2001, the record date, are entitled to notice of and to vote at the Meeting.
As of such date, there were 85,292,249 shares of common stock of the Company
issued and outstanding. Each share of common stock is entitled to one vote on
each matter submitted to the stockholders at the Meeting. If you were a
stockholder as of the record date, you are entitled to vote at the Meeting and
your presence in person at the Meeting is desired and encouraged. IF YOU CANNOT
BE PRESENT AT THE MEETING, THE BOARD OF DIRECTORS REQUESTS THAT YOU COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN ORDER TO ENSURE THE PRESENCE OF
A QUORUM AT THE MEETING. A pre-addressed and postage-paid return envelope is
enclosed for your convenience.
The Company's offices are located at 10220-I Old Columbia Road,
Columbia, Maryland 21046-1705, and its telephone is (410) 290-5390 or (800)
262-0394 (toll free). This Proxy Statement and accompanying Proxy, and Annual
Report on Securities and Exchange Commission Form 10-K are first being sent to
the stockholders on or about JANUARY 11, 2002.
Election of Directors will be by plurality vote. The presence in person
or by proxy of a majority of all outstanding shares will constitute a quorum. In
the event that the number of shares represented at the Meeting in person or by
proxy is less than a quorum, the persons named in the accompanying Proxy will
vote FOR an adjournment of the Meeting.
Stockholder votes will be tabulated by American Stock Transfer & Trust
Company, the Company's transfer agent. Shares represented at the Meeting in
person or by proxy but not voted will nevertheless be counted for purposes of
determining the presence of a quorum. Abstentions and broker non-votes (shares
which a broker or nominee has indicated it does not have discretionary authority
to vote) on a particular matter will be treated as shares that are present and
entitled to vote for purposes of determining the presence of a quorum, but will
be disregarded for purposes of determining the decision of the stockholders with
respect to such matter.
PROXIES
If the enclosed Proxy is properly dated, signed and returned, if choices
are specified therein and the Proxy is not revoked, the shares represented
thereby will be voted at the Meeting in accordance with the instructions
indicated on the Proxy. If no choice is specified as to any matter, the Proxy
will be voted as recommended by the Board of Directors.
REVOCABILITY OF PROXIES
Any stockholder giving a proxy prior to the Meeting may revoke it either
by attending the Meeting and voting his or her shares in person or by delivering
to the Company, not later than the commencement of the Meeting, a letter or
other suitable instrument of revocation or a later dated proxy, duly executed by
the stockholder.
SOLICITATION
The Company will bear the entire cost of preparing, assembling, printing
and mailing this Proxy
Statement, the accompanying Proxy and Annual Report on Form 10-K, as well as any
additional material which may be furnished to stockholders. Copies of the
solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians to forward to beneficial owners of stock held in the names of such
nominees. The solicitation of proxies will be by mail and direct communication
with certain stockholders or their representatives by officers, Directors and
employees of the Company, who will receive no additional compensation therefor.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED PRE-ADDRESSED AND POSTAGE-PAID ENVELOPE
AS PROMPTLY AS POSSIBLE.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding the beneficial ownership of its common stock as of December 20, 2001
by:
- each person or group known by the Company to own beneficially more
than 5% of its outstanding common stock;
- each of its Directors and each executive officer named in the Summary
Compensation Table appearing under the heading "Proposal 1: Election of
Directors - Executive Compensation"; and
- its Directors and executive officers, as a group.
Celsion has determined beneficial ownership in accordance with the rules of
the Securities and Exchange Commission. Unless otherwise indicated, the persons
included in the table have sole voting and investment power with respect to all
shares beneficially owned thereby. Shares of common stock subject to options
that are currently exercisable or that become exercisable within 60 days of
December 20, 2001 are treated as outstanding and beneficially owned by the
holder of such options. However, these shares are not treated as outstanding for
purposes of computing the percentage ownership of any other person.
NUMBER OF
COMMON SHARES PERCENT OF
BENEFICIALLY COMMON SHARES
NAME AND ADDRESS* OF BENEFICIAL OWNER OWNED(1) OUTSTANDING(2)
------------------------------------------- ------------- --------------
Augustine Y. Cheung(3) 7,137,176 8.31
John Mon(4) 1,178,288 1.37
Max E. Link 282,186 **
LaSalle D. Leffall, Jr.(5) 154,997 **
Claude Tihon(6) 170,997 **
Kris Venkat(7) 210,959 **
Anthony P. Deasey(8) 565,667 **
Daniel S. Reale(9) 167,000 **
Dennis Smith(10) 209,500 **
Directors and Executive officers, as a group 10,076,770 11.74
(9 individuals)
- ----------
* The address of each of the persons named is c/o Celsion Corporation,
10220-I Old Columbia Road, Columbia, MD 21046-1705.
** Less than 1%.
(1) Except as noted above, this share ownership information does not give
effect to outstanding options and warrants, shares reserved for
issuance under the Company's stock option plans, or shares of
preferred stock which are convertible into shares of common stock.
Outstanding options, warrants and shares of preferred stock do not
carry voting rights.
(2) Based on 85,292,249 shares of common stock outstanding as of December
20, 2001.
(3) Includes 1,000,000 shares of common stock owned through the Augustine
Y. Cheung and Fee-Wah Cheung 2001 Family Trust and 600,000 shares of
common stock underlying currently exercisable options to purchase
common stock.
(4) Includes currently exercisable options to purchase 800,000 shares of
common stock.
(5) Includes currently exercisable options to purchase 100,000 shares of
common stock.
(6) Includes currently exercisable options to purchase 111,000 shares of
common stock.
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(7) Includes currently exercisable options to purchase 200,000 shares of
common stock.
(8) Includes currently exercisable options to purchase 414,000 shares of
common stock.
(9) Includes currently exercisable options to purchase 167,000 shares of
common stock.
(10) Includes currently exercisable options to purchase 192,000 shares of
common stock.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
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 in ownership of such equity securities with the Securities
and Exchange Commission. Officers, Directors, and greater than 10% stockholders
are required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file. Based solely on a
review of the copies of such reports and certain representations which may have
been furnished to the Company during or with respect to the Company's fiscal
year ended September 30, 2001, the Company believes that, during such fiscal
year, all applicable Section 16(a) filing requirements were met by the Company's
officers and Directors.
PROPOSAL 1:
ELECTION OF DIRECTORS
GENERAL
The Certificate of Incorporation of the Company provides that the number
of Directors that constitutes the whole Board of Directors is to be fixed by, or
in the manner provided in, the Company's Bylaws. The Certificate of
Incorporation also provides that the Board of Directors is to be divided into
three classes, designated as Class I, Class II and Class III. The Bylaws of the
Company provide that the Board of Directors is to consist of between three and
nine Directors, with the exact number to be fixed by action of the Board. The
Board has fixed the current number of directors at seven. There is presently one
vacancy on the Board, due to the retirement, in October 2001, of Mr. Spencer J.
Volk. Pursuant to the Bylaws of the Company, the Board of Directors expects to
fill this vacancy as promptly as possible.
The terms of the Class I Directors, Mr. John Mon and Dr. Claude Tihon,
will expire with the election and qualification of Directors at the Meeting. The
terms of the Class II Director (Dr. LaSalle Leffall) and the Class III Directors
(Drs. Augustine Y. Cheung, Max E. Link and Kris Venkat) will expire with the
election and qualification of Directors at the annual meetings of stockholders
in 2003 and 2004, respectively. At each annual meeting of stockholders, the
Directors elected to succeed those whose terms are expiring succeed to the same
class as the directors they replace and such new directors are elected for a
term to expire at the third annual meeting of stockholders after their election
and when their successors are duly elected and qualified. A Director of any
class who is elected to fill a vacancy resulting from an increase in the number
of Directors would hold office for the remaining term of the class to which he
or she is elected and a Director who is elected to fill a vacancy arising in any
other manner would hold office for the remaining term of his or her predecessor.
The Board of Directors has nominated Mr. John Mon and Dr. Claude Tihon
to stand for re-election to the Board of Directors as Class I Directors, with
terms expiring at the 2005 annual meeting of stockholders. The proxies named in
the Proxy provided with this Proxy Statement intend to vote for the election of
Mr. Mon and Dr. Tihon unless otherwise instructed. If a stockholder does not
wish his or her shares to be voted for a particular nominee, the stockholder
must identify the exception in the appropriate space provided on the Proxy, in
which event the shares will be voted only for the other listed nominee. In the
event that either of the nominees becomes unavailable, which is not expected,
the designated proxies will vote in their discretion for a substitute nominee,
or the Board may reduce the number of directors.
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RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" EACH OF THE NOMINEES LISTED ABOVE.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information regarding the Company's current
Directors and nominees, as well as its non-Director executive officers.
NAME AGE POSITION(s)
--------------------------- ------- -----------------------------------------------------------
Max E. Link............... 61 Chairman
Augustine Y. Cheung....... 54 President, Chief Executive Officer, Chief Scientific
Officer and Director
LaSalle D. Leffall, Jr.... 71 Director
John Mon.................. 49 Vice President--New Business Development, Secretary,
Treasurer, General Manager and Director
Claude Tihon.............. 57 Director
Kris Venkat............... 55 Director
Anthony P. Deasey......... 52 Senior Vice President--Finance and Chief Financial Officer
Daniel S. Reale........... 47 Senior Vice President and President--BPH Division
Dennis Smith.............. 48 Vice President--Engineering
Each executive officer is elected by, and serves at the pleasure of, the
Board of Directors.
Following are the biographical summaries for the two nominees proposed
for election as Class I Directors of the Company at the Meeting, and for each of
the continuing Class II and Class III Directors. Each of the nominees for
election as a Class I Director has consented to serve if elected.
CLASS I DIRECTORS (TERMS EXPIRE IN 2005)
JOHN MON. Mr. Mon has been employed by the Company since 1986, and has
served as the Company's Vice President--New Business Development since 2000,
Treasurer and General Manager of the Company since 1989, and Secretary and a
Director since 1997. During the first two years of his employment with the
Company, Mr. Mon was responsible for the Company's filing with the U.S. Food and
Drug Administration (FDA), which resulted in obtaining pre-marketing approval
for the Company's Microfocus 1000 treatment system. From 1983 to 1986, he was an
economist with the U.S. Department of Commerce, in charge of forecasting
business sales, inventory and prices for all business sectors in the estimation
of Gross National Product (GNP). Mr. Mon holds a B.S. degree from the University
of Maryland. Mr. Mon is the brother-in-law of Dr. Augustine Cheung, a Director
and executive officer of the Company.
DR. CLAUDE TIHON. Dr. Tihon has served as a Director since 1999. Since
1995, he has been President and Chief Executive Officer of ContiCare Medical,
Inc., a medical device company engaged in developing urological products to
manage women's stress incontinence and men's prostate obstruction. From 1987 to
1995, Dr. Tihon served in numerous positions with Pfizer Inc., culminating in
his appointment as Vice President of Research and Technology Assessment and
Manager of the Endourology Strategic Business Unit of American Medical Systems,
Inc., a Pfizer Inc. subsidiary. From 1983 to 1987, Dr. Tihon served as Director
of Cellular Diagnostics Development of Miles Scientific, a division of Miles
Laboratories. From 1979 to 1983, Dr. Tihon served as Senior Research Scientist
and Assistant Director of Clinical Cancer Research of Bristol Laboratories, a
division of Bristol-Myers Squibb Company. Dr. Tihon holds a Ph.D. in Pathology
from Columbia University.
5
CLASS II DIRECTOR (TERM EXPIRES IN 2003)
DR. LASALLE D. LEFFALL, JR. Dr. Leffall has been a Director of Celsion
since 1999. He has served as a Professor of Surgery at Howard University College
of Medicine since 1970 and, in 1992, was named the Charles R. Drew Professor of
Surgery. Dr. Leffall also served as Chairman of the College's Department of
Surgery from 1970 to 1995. He is also a Professorial Lecturer in Surgery at
Georgetown University. Dr. Leffall holds a B.S. degree from Florida A&M and a
medical degree from Howard University. Dr. Leffall is a Director of Mutual of
America, Chevy Chase Bank, F.S.B. and the Charles A. Dana Foundation. He is a
former President of the American College of Surgeons and the American Cancer
Society. He is also a consultant for the National Cancer Institute, a diplomate
of the American Board of Surgery and a fellow of the American College of
Surgeons.
CLASS III DIRECTORS (TERMS EXPIRE IN 2004)
DR. AUGUSTINE Y. CHEUNG. Dr. Cheung has been President and Chief
Executive Officer of the Company since October 2001 and has served as a Director
and Chief Scientific Officer since 1982. Dr. Cheung was the founder of the
Company and previously served as President from 1982 to 1986 and Chief Executive
Officer from 1982 to 1996. From 1982 to 1985, Dr. Cheung also was a Research
Associate Professor of the Department of Electrical Engineering and Computer
Science at George Washington University and, from 1975 to 1981, he was a
Research Associate Professor and Assistant Professor at the Institute for
Physical Science and Technology and the Department of Radiation Therapy at the
University of Maryland. Dr. Cheung holds a Ph.D. and a Masters degree from the
University of Maryland. Dr. Cheung is the brother-in-law of John Mon, a Director
and executive officer of the Company.
DR. MAX E. LINK. Dr. Link has served as a Director of the Company since
1997 and has been the Chairman of the Board of Directors since October 2001. Dr.
Link currently provides consulting and advisory services to a number of
pharmaceutical and biotechnology companies. From 1993 to 1994, Dr. Link served
as Chief Executive Officer of Corange, Ltd., a life science company acquired by
Hoffman-LaRoche. From 1971 to 1993, Dr. Link served in numerous positions with
Sandoz Pharma AG, culminating in his appointment as Chairman of the Board of
Directors in 1992. Dr. Link serves on the Boards of Directors of Human Genome
Sciences, Inc., Alexion Pharmaceuticals, Inc., Cell Therapeutics, Inc., Access
Pharmaceuticals, Inc., Protein Design Labs, Inc., Discovery Laboratories, Inc.
and Cytrx Corporation. Dr. Link holds a Ph.D. in economics from the University
of St. Gallen (Switzerland).
DR. KRIS VENKAT. Dr. Venkat has been a Director of Celsion since May
2001. Since 2000, he has been Chief Executive Officer of Sundari Enterprises,
Inc. He has also been Chairman of the Board of Transvivo Inc. (since 1994),
Morphochem, Inc. (since 2000), and Automated Cell, Inc. (since 2000), as well as
two companies based in Germany, Accentua AG (since 2001) and Juelich Enzyme
Products, GmbH (1996). Dr. Venkat is a Director of Sequenom Inc. and LifetecNet
Inc. and a Senior Investment Adviser to TVM Techno Venture Management, Germany.
From 1992 to 2000, he served as Chairman of the Board and Chief Executive
Officer of Phyton, Inc. and, from 1993 to 2000, as Chairman of the Board and
Managing Director of its wholly owned German subsidiary, Phyton, GmbH. From 1990
to 1991, Dr. Venkat was President and Chief Executive Officer of Genmap, Inc.
Dr. Venkat is a Visiting Professor of Chemical and Biochemical Engineering at
Rutgers University. He has held visiting faculty positions at Yale University,
Dartmouth College, Anna University in India and University College, Galway in
Ireland. From 1986 to 1998, Dr. Venkat served as an advisor to the government of
India on biotechnology development.
DIRECTORS' COMPENSATION
For the year ended September 30, 2001, each of the members of the Board
of Directors who was not also an officer of the Company received compensation in
the form of shares of the Company's common stock with a value equal to $20,000
for his service as a Director. The shares were valued at $0.51 per share.
On December 31, 2000, the Company granted Dr. Max Link an option to
purchase 50,000 shares of Celsion common stock at $0.75 per share for his
service as a Director from January 1, 2000 to December 31, 2000. On May 18,
2001, the Company granted to each of Dr. Claude Tihon and Dr. LaSalle D.
Leffall, Jr. an option to purchase 50,000 shares of its common stock at $0.92
per share for their service on the Board from May 18, 2000 to May 18, 2001. On
May 18, 2001, the Company granted to Dr. Kris Venkat an option
6
to purchase 50,000 shares of its common stock at $0.92 per share upon his
election as a member of the Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors presently maintains an Audit Committee, a
Compensation Committee and a Research and Development Oversight Committee. The
Company does not have a Nominating Committee or another Board committee
performing similar functions, which are carried out by the full Board of
Directors. The Audit Committee's principal responsibilities are to recommend
annually a firm of independent auditors to the Board of Directors, to review the
annual audit of the Company's financial statements, to assess the independence
of the Company's independent auditors and to meet with the independent auditors
from time to time in order to review the Company's general policies and
procedures with respect to audits, accounting and financial controls. The
principal responsibilities of the Compensation Committee are to establish
compensation policies for the executive officers of the Company and to
administer the Company's incentive plans. The Research and Development Oversight
Committee is responsible for reviewing the performance, scheduling and
cost-effectiveness of the Company's research and development programs.
Drs. Leffall, Link and Tihon serve on the Audit Committee. Drs. Link,
Tihon and Venkat comprise the Compensation Committee. Drs. Cheung and Leffall
are the members of the Research and Development Oversight Committee.
MEETINGS OF THE BOARD AND ITS COMMITTEES
During the fiscal year ended September 30, 2001, there were a total of
five meetings of the Board of Directors. During the fiscal year ended September
30, 2001, the Audit Committee met four times, the Compensation Committee met
twice and the Research and Development Oversight Committee met three times. All
Directors attended at least 75% of the meetings of the Board and of all
committees of which they were members.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed to be filed or incorporated by
reference into any other Company filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this Report by reference
therein.
The Audit Committee operates under a written charter adopted by the
Board on June 1, 2000, which was included in the Company's Proxy Statement
issued in connection with its annual meeting of stockholders in 2000. Copies of
the charter are available upon written request to the Company. All members of
the Audit Committee meet the independence standards established by the American
Stock Exchange.
The Audit Committee assists the Board in fulfilling its responsibility
to oversee management's implementation of the Company's financial reporting
process. In discharging its oversight role, the Audit Committee reviewed and
discussed the audited financial statements contained in the Company's Annual
Report on Form 10-K for the year ended September 30, 2001 with the Company's
management and independent auditor. Management is responsible for the financial
statements and the reporting process, including the system of internal controls.
The independent auditor is responsible for expressing an opinion on the
conformity of those financial statements with accounting principles generally
accepted in the United States.
The Audit Committee met privately with the independent auditor, and
discussed issues deemed significant by the auditor, including those required by
Statements on Auditing Standards No. 61 and No. 90 (Communications with Audit
Committees), as amended. In addition, the Audit Committee discussed with the
independent auditor its independence from the Company and its management,
including the matters in the written disclosures required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and considered whether the provision of non-audit services by the auditor was
compatible with maintaining the auditor's independence.
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In reliance on the reviews and discussions outlined above, the Audit
Committee recommended to the Board that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended
September 30, 2001, for filing with the Securities and Exchange Commission.
Members of the Audit Committee
LaSalle D. Leffall, Jr.
Max E. Link
Claude Tihon
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth the aggregate cash compensation paid,
during each year in the three-year period ended September 30, 2001, to the
Company's Chief Executive Officer and to each of its other executive officers
whose annual salary and bonus for the fiscal year ended September 30, 2001
exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------- -----------------------------
NAME AND PRINCIPAL FISCAL OTHER ANNUAL RESTRICTED STOCK
SEPTEMBER 30, 2001 YEAR SALARY ($) COMPENSATION ($) AWARDS ($) STOCK OPTIONS (#)
------------------ ---- ---------- ---------------- ---------- -----------------
Augustine Y. Cheung...... 2001 $252,000 $25,400 --- ---
Chairman of the Board of Directors 2000 $220,000 $3,600 --- 1,000,000
and Chief Scientific Officer (1) 1999 $180,000 --- $1,760(2) ---
Spencer J. Volk............ 2001 $252,000 $5,400 --- 300,000
President and Chief Executive 2000 $240,000 $3,600 $75,000 1,550,000
Officer (3) 1999 $240,000 --- $1,760(2) (3) ---
Anthony P. Deasey......... 2001 $171,784 $4,500 --- 1,280,000
Senior Vice President-Finance and 2000 --- --- --- ---
Chief Financial Officer (4) 1999 --- --- --- ---
John Mon................... 2001 $114,885 $20,000 --- 150,000
Vice President-New Business 2000 $93,068 --- --- 300,000
Development, Secretary, Treasurer 1999 $90,000 --- $28,760 (1) (2) ---
Daniel S. Reale............ 2001 $119,328 $2,700 --- 900,000
Senior Vice President and 2000 --- --- --- ---
President-BPH Division (5) 1999 --- --- --- ---
Denise Smith............ 2001 $107,115 --- --- 125,000
Vice President-Engineering (6) 2000 $35,890 --- --- 250,000
1999 $62,500 --- --- ---
8
(1) Mr. Volk retired as Chairman, a Director, President and Chief Executive
Officer of the Company effective October 4, 2001. As of that date, Dr.
Cheung assumed the roles of President and Chief Executive Officer and Dr.
Max E. Link assumed the position of Chairman.
(2) In fiscal year 1999, Dr. Cheung received 2,000 shares of the Company's
common stock for his services as a member of its Board of Directors. For
his services on the Board, Mr. Volk received 2,000 shares of common stock
for fiscal year 1999.
(3) See "Executive Employment Agreements" for more information on compensation
to Mr. Volk in the form of shares.
(4) Mr. Deasey joined the Company in November 2000.
(5) Mr. Reale joined the Company in April 2001.
(6) Mr. Smith jointed the Company in May 2000.
OPTION GRANTS IN FISCAL YEAR 2001
The following table sets forth information with respect to stock options
granted to each of the Named Executive Officers in 2001. The Company has not
granted any stock appreciation rights.
POTENTIAL REALIZABLE VALUE
NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION OF STOCK PRICE APPRECIATION
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE FOR OPTION TERM(5)
- ------------------------------------------------------------------------------------------------------------------------------------
5% 10%
-- ---
Augustine Y. Cheung -- -- -- -- -- --
Spencer J. Volk 300,000 9.8% $1.00 Jan. 1, 2006 $82,884 $183,153
Anthony P. Deasey..... 580,000 41.8% $1.44 Nov. 27, 2010 $524,341 $1,382,783
80,000 $1.58 Nov. 27, 2010 $79,555 $201,608
80,000 $1.73 Nov. 27, 2010 $86,787 $219,936
80,000 $1.87 Nov. 27, 2010 $94,020 $238,264
80,000 $2.01 Nov. 27, 2010 $101,252 $256,593
80,000 $0.60 Aug. 9, 2011 $30,187 $76,500
300,000 $0.70 Aug. 9, 2011 $132,068 $334,686
John Mon 150,000 4.9% $0.92 Apr. 30, 2006 $38,127 $84,250
Dennis Smith 125,000 4.1% $0.92 Apr. 30, 2006 $31,772 $70,209
Daniel S. Reale 500,000 29.4% $1.03 April 9, 2011 $323,880 $820,778
80,000 $1.12 April 9, 2011 $56,349 $142,799
80,000 $1.23 April 9, 2011 $61,883 $156,824
80,000 $1.32 April 9, 2011 $66,411 $168,299
80,000 $1.43 April 9, 2011 $71,946 $182,324
80,000 $1.52 April 9, 2011 $76,474 $193,799
- --------------------------------------------------------------------------------
AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES IN FISCAL YEAR 2001
The following table summarizes, for each of the Named Executive
Officers, the number of stock options held at September 30, 2001 and the
aggregate dollar value of in-the-money unexercised options. The value of
unexercised, in-the-money options at September 30, 2001 is the difference
between (a) the exercise
9
price and (b) the fair market value of the underlying stock on September 28,
2001, which was $0.51 per share, based on the closing price of the Company's
common stock on that date. The options described have not been and may never be
exercised, and actual gains, if any, on exercise would depend on the value of
the common stock on the actual date of exercise.
SHARES VALUE
ACQUIRED ON REALIZED NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
NAME EXERCISE ($) OPTIONS AT IN-THE-MONEY OPTIONS AT
--------------------------- ------------ -------- SEPTEMBER 30, 2001 SEPTEMBER 30, 2001
------------------ ------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Augustine Y. Cheung....... -- -- 500,000 900,000 $104,000 --
Spencer J. Volk........... -- -- 950,000 900,000 -- --
Anthony P. Deasey......... -- -- 247,000 1,033,000 -- --
John Mon.................. -- -- 800,000 250,000 $156,000 --
Daniel S. Reale........... -- -- 167,000 773,000 -- --
Dennis Smith.............. -- -- 159,000 216,000 -- --
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company is party to employment agreements with four of its senior
executives. Certain material terms of each agreement are described in the
sections under the executives' respective names. In addition, all of the
employment agreements contain certain common provisions. First, they provide for
a severance payment of 2.99 times the executive's base salary in the event that
there is a "change of control" of the Company and (i) the executive's employment
is terminated without cause or (ii) there is a material adverse change, without
the executive's consent, in his working conditions or status and he terminates
his employment by notice to the Company. Second, they provide that the
executive's base salary will increase on an annual basis based on the greatest
of 105% of the base salary for the prior year, the annual Consumer Price Index
Adjustment or the sum offered by the Company's Board of Directors after taking
into account corporate and individual performance, the Company's prospects and
general business conditions. Third, they provide that all unvested options under
the agreements vest and become immediately exercisable upon the occurrence of a
"change of control" of the Company. A "change of control" is defined as a
merger, asset sale, tender offer or other substantial change in voting control,
or the election of a new majority of the Board of Directors or of three or more
Directors whose election is opposed by a majority of the Board. Fourth, they
provide that, upon death, disability or termination of employment of the
executive, such executive and/or his heirs and legal representatives have the
option to exercise all stock options vested at the time of death, disability or
termination of employment, for a one-year period thereafter, or until the
expiration of the stated term of such option, whichever period is shorter. Any
stock option not exercisable upon death or disability or the effective date of
termination of employment would be forfeited. Fifth, with the exception of
Daniel Reale's employment agreement, they provide that all incentive and bonus
options under the agreements, to the extent not exercised, expire in 2010.
Finally, the agreements provide for Consumer Price Index (CPI) adjustments,
restrictive covenants and confidentiality and other protections of the type
generally included in employment agreements for members of senior management.
AUGUSTINE Y. CHEUNG
Under its agreement with the placement agent that conducted the
Company's private placement consummated on January 31, 2000, Celsion was
required to enter into a three-year employment agreement with Augustine Y.
Cheung, the Company's President, Chief Executive Officer and Chief Scientific
Officer in order to encourage continuity of management.
The executive employment agreement between the Company and Dr. Cheung,
effective January 1, 2000, provided for an annual salary of $240,000 per year
commencing as of January 1, 2000 renewable annually. In addition, the agreement
granted Dr. Cheung a bonus option (not subject to performance conditions) to
purchase up to 300,000 shares of common stock which vests at intervals until
October 1, 2002 at an exercise price of $1.20, which is equal to the average
closing price of the Company's common stock during the Company's fiscal quarter
ended December 31, 1999.
10
If Dr. Cheung continues to be employed by the Company on each exercise
date, he is entitled to exercise the bonus option in three separate installments
of 100,000 shares each. He became entitled to exercise the first installment
after March 15, 2000 and the next installment after October 1, 2001, and will
become entitled to exercise the final installment after October 1, 2002. Dr.
Cheung's employment agreement also grants to him performance-based options to
purchase up to a maximum of 700,000 incentive shares of common stock, at
exercise prices ranging from $0.80 to $1.60 per share, on achieving five
specified corporate milestones. Those performance objectives include obtaining
final FDA approval for Company products, consummating alliances with strategic
marketing and distribution partners, and attaining annual pre-tax earnings of at
least $1,000,000 for the Company. A performance-based option may be exercised
only after the milestone has been achieved and during the term of Dr. Cheung's
employment. Shares issued on exercise of performance-based options will be
subject to restrictions comparable to those imposed on the annual bonus option
shares.
ANTHONY P. DEASEY
In November 2000, Celsion entered into a three-year employment agreement
with Anthony P. Deasey, Senior Vice President--Finance and Chief Financial
Officer of the Company. Mr. Deasey's agreement provides for an annual salary of
$200,000. The agreement also provides for performance-based incentive options to
purchase up to 400,000 shares of common stock, exercisable only if certain
corporate milestones are reached during his employment, at exercise prices
ranging from $1.4375 to $2.0125. In addition, the agreement grants Mr. Deasey a
bonus option (not subject to performance conditions) for the purchase of 500,000
shares of common stock at a purchase price of $1.4375 per share, which vest at
intervals until November 27, 2002.
JOHN MON
In June 2000, Celsion entered into a three-year employment agreement
with John Mon, a Director and Vice President--New Business Development,
Secretary, Treasurer and General Manager of the Company. Mr. Mon's agreement
provides for an annual salary of $100,000, renewable annually. Mr. Mon's
agreement also provides for performance-based incentive options to purchase up
to 250,000 shares of common stock, exercisable only if certain corporate
milestones are reached during his employment, on terms similar to those
governing the incentive options provided for Dr. Cheung. In addition, the
agreement grants Mr. Mon a bonus option (not subject to performance conditions)
for the purchase of 50,000 shares of common stock at a price of $2.75 per share.
DANIEL S. REALE
In April 2001, Celsion entered into a three-year employment agreement
with Daniel S. Reale, Senior Vice President and President--BPH Division. Mr.
Reale's agreement provides for an annual salary of $200,000. The agreement also
provides for performance-based incentive options to purchase up to 400,000
shares of common stock, exercisable only if certain corporate milestones are
reached during his employment, at exercise prices ranging from $1.12 to $1.52.
In addition, the agreement grants Mr. Reale a bonus option (not subject to
performance conditions) for the purchase of 500,000 shares of common stock at a
purchase price of $1.03 per share, which vests at intervals until April 9, 2003.
DENNIS SMITH
In May 2000, Celsion entered into a three-year employment agreement with
Dennis Smith, Vice President--Engineering. Mr. Smith's agreement provides for an
annual salary of $100,000. The agreement also provides for performance-based
incentive options to purchase up to 150,000 shares of common stock, exercisable
only if certain corporate milestones are reached during his employment, at
exercise prices ranging from $2.80 to $3.20. In addition, the agreement grants
Mr. Smith a bonus option (not subject to performance conditions) for the
purchase of 100,000 shares of common stock at a purchase price of $2.82 per
share, which vests at intervals until October 1, 2002.
11
SPENCER J. VOLK
In connection with Mr. Volk's retirement from the Board of Directors and
as Chairman and Chief Executive Officer effective October 4, 2001, the Company
entered into an agreement setting forth the terms of such retirement and
replacing the three-year executive employment agreement entered into by the
Company and Mr. Volk effective January 1, 2001. Pursuant to the agreement
governing his retirement, Mr. Volk is entitled to receive an annual salary of
$252,000 through December 31, 2002. In addition, in lieu of all prior grants of
stock options, the Company granted to Mr. Volk non-qualified stock options to
purchase up to 1,850,000 shares of common stock, all of which vested as of
October 4, 2001. The exercise prices for these options are as follows:
# OF STOCK OPTIONS EXERCISE PRICE
------------------ --------------
400,000 $ 0.75
250,000 $ 1.22
300,000 $ 1.00
100,000 $ 1.22
100,000 $ 1.22
700,000 $ 1.17
---------
1,850,000
=========
Under the agreement, Mr. Volk is entitled to continue to receive certain
perquisites, including an automobile or automobile allowance and disability
insurance, and to participate in other employee benefit programs through
December 31, 2002.
In return for the consideration described above, Mr. Volk agreed to
certain noncompetition, nonsolicitation and confidentiality arrangements with
the Company. In addition, the Company and Mr. Volk have entered into a mutual
release in connection with Mr. Volk's retirement.
Other than as set forth above, the Company is not party to any
employment contracts, termination of employment or change in control
arrangements with regard to the Named Executive Officers or other executive
officers of the Company.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The following Report of the Compensation Committee does not constitute
soliciting material and should not be deemed to be filed or incorporated by
reference into any other Company filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this Report or the performance
graph by reference therein.
The Compensation Committee is responsible for establishing and
administering the compensation policies applicable to the Company's officers and
key personnel, for recommending compensation arrangements to the Board of
Directors and for evaluating the performance of senior management.
The Compensation Committee and the Board have adopted the following
executive compensation approaches:
EXECUTIVE COMPENSATION PHILOSOPHY
The Company attempts to design executive compensation to achieve two
principal objectives. First, the program is intended to be fully competitive so
that the Company may attract, motivate and retain talented executives. Second,
the program is intended to create an alignment of interests between the
Company's executives and stockholders such that a significant portion of each
executive's compensation varies with business performance.
The Committee's philosophy is to pay competitive annual salaries,
coupled with an incentive system which, through stock compensation, provides
more than competitive total compensation for superior performance reflected in
increases in the Company's stock price. Based on assessments by the Board and
the Committee, the Committee believes that the Company's compensation program
for its senior executive
12
officers has the following characteristics that serve to align executive
interests with long-term stockholder interests:
- Emphasizes "at risk" pay such as options and grants of restricted
stock;
- Emphasizes long-term compensation through options and restricted
stock awards; and
- Rewards financial results and promotion of Company objectives rather
than individual performance against individual objectives.
ANNUAL SALARIES
Salary ranges and increases for executives are established annually
based on competitive data. Within those ranges, individual salaries vary based
upon the individual's work experience, performance, level of responsibility,
impact on the business, tenure and potential for advancement within the
organization. Annual salaries for newly hired executives will be determined at
the time of hire, taking into account the above factors other than tenure.
LONG-TERM INCENTIVES
The grant of restricted stock or options to key employees encourages
equity ownership and closely aligns management interests with the interests of
stockholders. The amount and nature of any option or restricted stock award is
determined by the Committee on a case by case basis, depending upon the
individual's perceived future benefit to the Company and the perceived need to
provide additional incentive to align performance with the objectives of the
stockholders.
Members of the Compensation Committee
Max E. Link
Claude Tihon
Kris Venkat
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Until the resignation of Walter Herbst as a Director of the Company on
October 11, 2000, Mr. Herbst, together with Dr. Max E. Link and Mr. Spencer J.
Volk, constituted the Compensation Committee. Subsequent to Mr. Herbst's
resignation, Dr. Tihon became a member of the Compensation Committee. Mr. Volk
resigned as a member of the Board of Directors effective October 4, 2001. He has
been replaced as a member of the Compensation Committee by Dr. Kris Venkat.
No interlocking relationships exist between the members of the
Compensation Committee or the Board of Directors and the members of any other
company's board of directors or compensation committee. However, Spencer J.
Volk, who, until October 4, 2001, served as President and Chief Executive
Officer, was, prior to that date, party to an employment agreement with the
Company. Mr. Volk previously had made loans and advances to the Company, which
were repaid through conversion into common stock. New employment agreements with
Dr. Cheung and Mr. Volk, entered into in January, 2000 and amended in March
2001, were reviewed by the Compensation Committee and approved by the full
Board, with neither Dr. Cheung nor Mr. Volk participating in the deliberations
concerning his respective agreement. The Compensation Committee believes that
the compensation arrangements for Dr. Cheung serve and, while in effect the
compensation arrangements with Mr. Volk served, to align their respective
interests with those of the stockholders.
CERTAIN TRANSACTIONS
In August 2001, the Company entered into an Advisory Agreement with Dr.
Kris Venkat, one of its Directors, pursuant to which Dr. Venkat is to provide at
least 60 days of consulting services per year to the Company for an initial term
of two years. Such consulting services will be provided to the Company in
13
addition to Dr. Venkat's services as a Director and will include providing (i)
strategic business and tactical advice to the Company regarding its development,
management and personnel, (ii) assistance with the Company's heat-activated
liposome business, (iii) assistance with developing a financial strategy and
securing additional capital and/or financing, and (iv) identifying potential
investors that meet the Company's objectives.
As compensation for his consulting services, the Company will pay Dr.
Venkat a fee of $60,000 per year during term of the agreement. Upon prior
approval by the Company, he will be paid an additional $1,000 per day for any
time expended beyond 60 days. In addition to the fees, the agreement provides
for performance-based incentive options to purchase up to 400,000 shares of
common stock, exercisable only if certain corporate milestones are reached
during the term of Dr. Venkat's consulting arrangement with the Company. The
exercise price of such options ranges from $0.85 to $1.36 per share. The
agreement also grants Dr. Venkat an option, not subject to performance
conditions, for the purchase of 300,000 shares of common stock at a price of
$0.68 per share, 150,000 of which were vested as of the date of the agreement
and the other 150,000 of which will vest on August 1, 2002.
All of Dr. Venkat's unvested options (other than the performance-based
options) would become immediately vested if the Company terminates the agreement
for any reason other than his breach of the agreement, his substantial failure
to perform his duties under the agreement due to disability or his death. All of
his unvested options (including the performance-based options) would also
immediately vest upon a change of control of the Company. For purposes of Dr.
Venkat's agreement, a change of control is defined as the change in beneficial
ownership of 25% or more of the outstanding common stock of the Company, the
change in a majority of the members of the Board, with none of the new members
being approved by at least 75% of the members of the Board as of August 2000,
the sale of substantially all of the assets of the Company, a transfer of all or
substantially all of the Company's liposome business to a person that is not a
subsidiary of the Company, or the Company's entry into a joint venture with
regard to the liposome business in which the Company does not retain voting
control.
PERFORMANCE GRAPH
The information provided in the performance graph below does not
constitute soliciting material and should not be deemed to be filed or
incorporated by reference into any other Company filing under the Securities Act
of 1933, as amended or the Securities Exchange Act of 1934, as amended, except
to the extent that the Company specifically incorporates such information by
reference therein.
The rules and regulations of the Securities and Exchange Commission
require inclusion in this Proxy Statement of a line graph comparing the
cumulative total stockholder return on the Company's common stock with the
cumulative total return of (1) a broad equity market index that includes
companies whose equity securities are traded on the same exchange as the
Company's stock and (2) a published industry or line-of-business index.
Commencing May 31, 2000, the Company's common stock has been listed on
the American Stock Exchange (the "Amex"). Prior to that time it had traded on
the Electronic Bulletin Board operated by The Nasdaq Stock Market, Inc. In light
of this change, the performance graph compares the cumulative stockholder return
on the Company's common stock, assuming an investment of $100 on September 30,
1996 and reinvestment of any dividends or other distributions, to cumulative
returns, on a comparable basis, for the Amex Major Market Index, AMEX Healthcare
Index and the S&P Healthcare Index.
The Board of Directors recognizes that the market price of shares is
influenced by many factors, only one of which is Company performance. The stock
performance shown on the graph is not necessarily indicative of future price
performance.
14
TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 9/30/96)
[LINE GRAPH]
------------------------------------------------------------------------------------------------------------------
TOTAL RETURN ANALYSIS
9/30/96 9/30/97 9/30/98 9/30/99 9/30/00 9/30/01
------------------------------------------------------------------------------------------------------------------
CELSION CORPORATION $ 100.00 $ 103.03 $ 31.03 $ 85.33 $ 239.33 $ 50.02
------------------------------------------------------------------------------------------------------------------
AMEX HEALTHCARE INDEX $ 100.00 $ 104.86 $ 82.80 $ 90.41 $ 200.13 $ 131.78
------------------------------------------------------------------------------------------------------------------
S&P HEALTHCARE INDEX $ 100.00 $ 134.79 $ 184.00 $ 187.20 $ 232.43 $ 220.50
------------------------------------------------------------------------------------------------------------------
AMEX MAJOR MARKET $ 100.00 $ 134.20 $ 141.91 $ 178.17 $ 171.11 $ 154.74
------------------------------------------------------------------------------------------------------------------
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data
from BRIDGE Information Systems, Inc.
PROPOSAL 2:
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the current Audit
Committee, has appointed Stegman & Company as the independent public accountants
of the Company to audit its financial statements for the fiscal year ending
September 30, 2002, and requests stockholder ratification of such selection.
Stegman & Company served as the Company's independent accountants for the 2001
fiscal year, and has advised the Company that neither Stegman & Company nor any
of its members has, or has had in the past three years, any financial interest
in the Company or any relation to the Company other than as auditors and
accountants.
Stockholder ratification of the selection of Stegman & Company as the
Company's independent public accountants is not required by the Company's Bylaws
or other applicable legal requirements. However, the Board is submitting the
selection of Stegman & Company to the stockholders for ratification as a matter
of good corporate practice. If the stockholders fail to ratify the selection of
Stegman & Company, the Audit Committee and the Board will reconsider whether or
not to retain that firm. Even if the selection is ratified, the Board, in its
discretion, may direct the appointment of a different independent accounting
firm at any time during the year if it determines that such a change would be in
the best interests of the Company and its stockholders.
AUDIT FEES
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements and for reviews of the
quarterly financial statements included in the Company's Forms 10-Q during the
Company's fiscal year ended September 30, 2001 were $34,852.
15
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed to the Company for financial information
systems design and implementation services by Stegman & Company to the Company
for the Company's fiscal year ended September 30, 2001 because no such services
were rendered by Stegman & Company.
ALL OTHER FEES
The aggregate fees billed by Stegman & Company for services to the
Company, other than the audit and review services described above for the
Company's fiscal year ended September 30, 2001, were $6,875 for the preparation
of the Company's federal and state tax returns.
AUDIT COMMITTEE DETERMINATION
Because the services other than audit services rendered by Stegman were
not material in nature or amount of fees, the Audit Committee believes that the
provision of these services is compatible with maintenance of Stegman's
independence from the Company.
SERVICES BY EMPLOYEES OF STEGMAN & COMPANY
No part of Stegman's engagement to audit the Company's financial
statements for the fiscal year ended September 30, 2001 was attributable to work
performed by persons other than Stegman's full-time permanent employees.
Representatives of Stegman & Company are expected to be present at the
Meeting, will be given the opportunity to make a statement if they so desire and
are expected to be available to respond to appropriate questions.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO RATIFY THE SELECTION OF STEGMAN & COMPANY AS INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2002.
STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
Stockholders may submit proposals appropriate for stockholder action at
the Company's annual meeting to be held in 2003, consistent with the regulations
of the Securities and Exchange Commission and the Company' Bylaws. For proposals
to be considered for inclusion in the Proxy Statement for the 2003 annual
meeting, stockholder proposals must be received by the Company no later than
September 12, 2002. Such proposals should be directed to Celsion Corporation,
10220-I Old Columbia Road, Columbia, Maryland, 21046-1705, Attention: Mr. John
Mon, Secretary.
OTHER BUSINESS
The Directors of the Company are not aware of any business to be acted
upon at the Meeting, other than described herein. It is not anticipated that
other matters will be brought before the Meeting. If, however, other matters are
duly brought before the Meeting, or any adjournments or postponements thereof,
the persons appointed as proxies will have discretion to vote or act thereon
according to their best judgment.
COMPANY REPORTS
The Company's Annual Report on Securities Exchange Commission Form
10-K for the fiscal year ended September 30, 2001, which contains audited
financial statements for that fiscal year, is being sent to stockholders of
record with this Proxy Statement. That Annual Report on Form 10-K does not form
a part of the proxy solicitation materials.
Any stockholder of record as of December 31, 2001 may obtain additional
copies of the Company's Annual Report on Form 10-K, as filed with the Securities
and Exchange Commission (but excluding exhibits), without charge, upon written
request directed to the Corporate Secretary, Celsion Corporation, 10220-I Old
Columbia Road, Columbia, Maryland 21046-1705.
By Order of the Board of Directors of Celsion Corporation.
/s/ John Mon
Secretary
January 3, 2002
16
PROXY CARD
IN CONNECTION WITH 2002 ANNUAL MEETING OF STOCKHOLDERS
CELSION CORPORATION
10220-I OLD COLUMBIA ROAD
COLUMBIA, MARYLAND 21046-1705
THE UNDERSIGNED HEREBY APPOINTS AUGUSTINE Y. CHEUNG AND JOHN MON, AND
EITHER OF THEM, AS PROXIES WITH FULL POWERS OF SUBSTITUTION AND RESUBSTITUTION,
TO VOTE ALL SHARES OF THE COMMON STOCK OF CELSION CORPORATION (THE "COMPANY")
WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS
OF THE COMPANY TO BE HELD ON FRIDAY, FEBRUARY 15, 2002 AND AT ANY ADJOURNMENT OR
POSTPONEMENT THEREOF (THE "ANNUAL MEETING"), UPON THE ITEMS DESCRIBED IN THE
PROXY STATEMENT. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF NOTICE OF THE ANNUAL
MEETING AND THE PROXY STATEMENT.
A. ELECTION OF DIRECTORS (PROPOSAL NO. 1)
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY for
(except as marked to the contrary all nominees listed below
below)
Nominees: John Mon, Claude Tihon
INSTRUCTION: To withhold authority to vote for either individual nominee, strike
through that nominee's name listed above.
B. PROPOSAL TO RATIFY THE APPOINTMENT OF STEGMAN & COMPANY AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2002 (PROPOSAL NO. 2)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
C. DISCRETIONARY AUTHORITY
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment,
postponement or rescheduling thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN. IF NO
INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "IN
FAVOR" OF PROPOSALS NO. 1 AND NO. 2 AND IN THE DISCRETION OF THE PROXY HOLDERS
AS TO OTHER MATTERS.
PLEASE DATE AND SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS HEREON.
- --------------------------- ------------------------------------------------
Date Signature of Owner
------------------------------------------------
Additional Signature of Joint Owner (if any)
If stock is jointly held, each joint owner
should sign. When signing as attorney-in-fact,
executor, administrator, trustee, guardian,
corporate officer or partner, please give full
title.
TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS, JUST
SIGN, DATE AND RETURN THIS PROXY--NO BOXES NEED BE CHECKED.