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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ALLIANCE PHARMACEUTICAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(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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ALLIANCE PHARMACEUTICAL CORP.
3040 SCIENCE PARK ROAD
SAN DIEGO, CA 92121
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Alliance Pharmaceutical Corp. (the "Corporation") will be held at 10:00 a.m.
on Wednesday, November 11, 1998, at offices of the Corporation at 6175 Lusk
Boulevard, San Diego, California 92121 for the following purposes:
1. To elect nine directors of the Corporation.
2. To consider and act upon a proposal to amend the Corporation's
Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 shares to
75,000,000 shares, as described in the attached Proxy Statement.
3. To ratify the appointment by the Corporation's Board of
Directors of Ernst & Young LLP as independent auditors of the
Corporation for its fiscal year ending June 30, 1999.
4. To transact such other business as may properly come before the
annual meeting and any adjournments thereof.
Only holders of record of the Corporation's Common Stock, its Series D
Preferred Stock and its Series E-1 Preferred Stock at the close of business
on September 29, 1998, are entitled to notice of, and to vote at, the meeting
and any adjournments thereof. Such shareholders may vote in person or by
proxy. The stock transfer books of the Corporation will not be closed.
Shareholders are urged to attend the meeting in person. If you are not
able to do so and wish that your shares be voted, please sign, date and
return the accompanying proxy in the enclosed envelope. No postage is
required if mailed in the United States.
By Order of the Board of Directors,
DUANE J. ROTH, CHAIRMAN
Dated: October __, 1998
ALLIANCE PHARMACEUTICAL CORP.
3040 SCIENCE PARK ROAD
SAN DIEGO, CA 92121
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
November 11, 1998
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GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Alliance Pharmaceutical Corp. (the
"Corporation") to be voted at the Annual Meeting of Shareholders to be held
on Wednesday, November 11, 1998, at 10:00 a.m. at offices of the Corporation
at 6175 Lusk Boulevard, San Diego, California 92121 and at any adjournment or
adjournments thereof (the "Meeting") for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders.
The mailing address of the principal executive offices of the
Corporation is 3040 Science Park Road, San Diego, CA 92121 (telephone number
619/558-4300). The enclosed Proxy and this Proxy Statement are being first
sent to shareholders of the Corporation on or about October _____, 1998.
The Board of Directors has fixed the close of business on September 29,
1998 as the record date for the determination of shareholders of the
Corporation entitled to receive notice of, and vote at, the Meeting. At the
close of business on the record date, an aggregate of __________ shares of
common stock, par value $.01 per share, of the Corporation (the "Common
Stock") were issued and outstanding, each of which is entitled to one vote on
each matter to be voted upon at the Meeting, 500,000 shares of Series D
Preferred Stock, par value $.01 per share, of the Corporation (the "D
Stock") were issued and outstanding, each of which is entitled to one vote on
each matter to be voted upon at the Meeting, and 100,000 share of Series E-1
Preferred Stock, par value $.01 per share, of the Corporation (the "E-1
Stock") were issued and outstanding, each of which is entitled to ten votes
on each matter to be voted upon at the Meeting. The Common Stock, D Stock and
E-1 Stock vote together as one class.
All votes will be tabulated by the inspector of election appointed for
the Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the shareholders and will
have the same effect as negative votes. Broker non-votes are not counted for
any purpose in determining whether a matter has been approved.
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE SOLICITED BY, OR ON BEHALF OF, THE
BOARD OF DIRECTORS OF THE CORPORATION. THE PERSONS NAMED IN THE PROXY HAVE
BEEN DESIGNATED AS PROXIES BY THE BOARD OF DIRECTORS. Shares represented by
properly executed proxies received by the Corporation will be voted at the
Meeting in the manner specified therein or, if no specification is made, will
be voted FOR the election of the nine directors listed herein, FOR the
adoption of an increase in the number of shares of Common Stock authorized
for issuance, and FOR the ratification of the appointment by the
Corporation's Board of Directors of Ernst & Young LLP as independent auditors
of the Corporation for its fiscal year ending June 30, 1999, all as described
in this Proxy Statement.
Any proxy given by a shareholder pursuant to this solicitation may be
revoked by the shareholder at any time before it is exercised, by written
notification delivered to the Secretary of the Corporation, by voting in
person at the Meeting, or by executing another proxy bearing a later date.
1
Proxies will be solicited by mail. They may also be solicited by
officers and regular employees of the Corporation personally, by telephone or
otherwise, but such persons will not be specifically compensated for such
services. The Corporation may use the services of Shareholder Communications
Corporation to aid in the solicitation of proxies. The Corporation estimates
that the fee payable to Shareholder Communications Corporation for such
services should not exceed $6,000. Banks, brokers, nominees and other
custodians and fiduciaries will be reimbursed for their reasonable
out-of-pocket expenses in forwarding soliciting material to their principals,
the beneficial owners of Common Stock. The costs of soliciting proxies will
be borne by the Corporation.
1. ELECTION OF DIRECTORS
Nine directors are to be elected at the Meeting to hold office until the
next annual meeting of shareholders and until the election and qualification
of their respective successors. The Board of Directors has nominated Duane
J. Roth, Pedro Cuatrecasas, M.D., Carroll O. Johnson, Stephen M. McGrath,
Donald E. O'Neill, Helen M. Ranney, M.D., Theodore D. Roth, Jean G. Riess,
Ph.D., and Thomas F. Zuck, M.D., all of whom are currently directors of the
Corporation. Directors are elected by a plurality vote.
Unless otherwise specified in the accompanying proxy, the shares voted
pursuant thereto will be cast for these nominees. If, for any reason, any of
the nominees should be unable to accept nomination or election, it is
intended that such proxy will be voted for the election, in his or her place,
of a substituted nominee who would be recommended by management. Management,
however, has no reason to believe that any nominee will be unable to serve as
a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
Set forth below is certain information with respect to each nominee as
of September 4, 1998:
DUANE J. ROTH. Mr. Roth is 48 and has served as a director of the
Corporation since 1985. He has served as Chief Executive Officer of the
Corporation since 1985, and has served as Chairman since October 1989. Prior
to joining the Corporation, Mr. Roth served as President of Analytab
Products, Inc., an American Home Products company involved in manufacturing
and marketing medical diagnostics, pharmaceuticals and devices. For the
previous ten years, he was employed in various sales, marketing and general
management capacities with Ortho Diagnostic Systems, Inc., a Johnson &
Johnson company, which is a manufacturer of diagnostic and pharmaceutical
products. Mr. Roth's brother, Theodore D. Roth, is President and Chief
Operating Officer of the Corporation.
THEODORE D. ROTH. Mr. Roth is 47 and served as Executive Vice President
and Chief Financial Officer of the Corporation since November 1987, and was
appointed President and Chief Operating Officer in May 1998. For more than
ten years prior to joining the Corporation, he was General Counsel of SAI
Corporation, a company in the business of operating manufacturing concerns,
and General Manager of Holland Industries, Inc., a manufacturing company.
Mr. Roth received his J.D. from Washburn University and an LL.M. in Corporate
and Commercial Law from the University of Missouri in Kansas City. He is the
brother of Duane J. Roth, the Chairman and Chief Executive Officer of the
Corporation.
PEDRO CUATRECASAS, M.D. Dr. Cuatrecasas is 64 and was elected as a
director of the Corporation in August 1996. He has over 20 years of
experience in the pharmaceutical industry. Dr. Cuatrecasas retired from the
positions of Vice President of Warner-Lambert Company and President,
Parke-Davis Pharmaceutical Research on December 31, 1996, positions he had
held since 1989. During the previous four years, he had been Senior Vice
President of Research and Development and Director of Glaxo, Inc. For the
prior ten years, he was Vice President of Research, Development and Medical
at Burroughs Wellcome Company. Dr. Cuatrecasas is a member of the National
Academy of Sciences and the Institute of Medicine. He is currently a
director of Mitokor Corp. and an independent consultant in pharmaceutical
research. He received his M.D. from Washington University School of Medicine.
CARROLL O. JOHNSON. Mr. Johnson is 65 and has served as a director of
the Corporation since 1989. He has been President of Research Management,
Inc. ("RMI") since 1985, an independent contract research organization which
provides services to the pharmaceutical industry in the implementation of
clinical trials. Previously, he served for 25 years in various research,
sales and marketing positions with several pharmaceutical companies,
including Pharmacia Laboratories, Inc., where he created a national sales
force which introduced three major products.
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STEPHEN M. MCGRATH. Mr. McGrath is 62 and has served as a director of
the Corporation since 1989. On May 1, 1998 he retired as Executive Vice
President of CIBC Oppenheimer & Co., Inc. ("Oppenheimer") and as the Director
of its Corporate Finance Department. For the eleven years prior to his
employment by Oppenheimer in 1983, he held various executive positions with
Warner-Lambert Company. Before joining Warner-Lambert Company, Mr. McGrath
was Controller and Assistant Treasurer of Sterling Drug, Inc. and a certified
public accountant for Price Waterhouse & Co. He is a director of PetroCorp,
Inc.
DONALD E. O'NEILL. Mr. O'Neill is 72 and has served as a director of
the Corporation since 1991. He retired from Warner-Lambert Company in 1991
after 20 years of service. During his tenure, he held various managerial
positions, including President of the Parke-Davis Group, President of the
Health Technologies Group and President - International Operations. At the
time of his retirement from Warner-Lambert Company, he held the offices of
Executive Vice President of the Company, and President and Chairman of its
International Operations, and was a member of Warner-Lambert's board of
directors. He is a director of Fuisz Technologies.
HELEN M. RANNEY, M.D. Dr. Ranney is 78 and has served as a director of
the Corporation since 1991. She is Professor EMERITA, Department of
Medicine, University of California at San Diego, having served as Chairman of
the Department from 1973 through 1986. From 1986 through 1991, she was
Distinguished Physician of the U.S. Department of Veterans Affairs. She
formerly was Professor of Medicine at Albert Einstein College of Medicine
(New York) and at the State University of New York, Buffalo. Dr. Ranney is a
member of many professional societies, including the National Academy of
Sciences, the Institute of Medicine, the Association of American Physicians
(past President), and the American Society of Hematology (past President).
She has more than 150 publications, primarily relating to blood and blood
disorders. Dr. Ranney served on the Board of Directors of Squibb Corp. prior
to its merger with Bristol-Myers. She received her M.D. from the College of
Physicians and Surgeons, Columbia University.
JEAN G. RIESS, PH.D. Professor Riess is 61 and has served as a
director of the Corporation since 1989. Until his retirement in 1996, he had
been the Director of Laboratoire de Chimie Moleculaire at the University of
Nice for over 20 years. He has been an active researcher since receiving a
Ph.D. from the University of Strasbourg, with numerous patents and over 300
publications. For more than 20 years, Dr. Riess has focused on chemistry
related to perfluorochemical emulsions for medical application. He has
directed research in synthesis of tailored perfluorochemicals, in emulsion
technology, in synthesis of fluorinated surfactants, in the physical
chemistry of emulsion stabilization, and in surfactant self-aggregation.
THOMAS F. ZUCK, M.D. Dr. Zuck is 64 and has served as a director of the
Corporation since 1990. He is Professor of Transfusion Medicine and Director
of Hoxworth Blood Center at the University of Cincinnati Medical Center and
is President of Ohio Enterprises International, Inc. ("OEI"), a consulting
company. Dr. Zuck formerly was director of the Division of Blood and Blood
Products at the Office of Biologics Research & Review within the U.S. Food
and Drug Administration. He has served in numerous scientific professional
societies, including as President of the American Association of Blood Banks
and the Council of Community Blood Centers. He was Editor-in-Chief of the
journal TRANSFUSION and has more than 100 publications to his credit. Dr.
Zuck is a retired U.S. Army Colonel, where he was a Commander of the
Letterman Army Institute of Research and, for many years, involved with the
Army's blood substitute development program. Dr. Zuck received his LL.B.
from Yale Law School and his M.D. from Hahnemann Medical College.
COMPENSATION OF DIRECTORS
Directors do not receive cash compensation for attendance at Board of
Directors' meetings or committee meetings. Non-qualified stock options are
awarded to nonemployee directors of the Corporation pursuant to the Formula
Stock Option Plan for Nonemployee Directors of the Corporation (the
"Directors' Formula Option Plan"). Options under the Directors' Formula
Option Plan are granted under and subject to the Corporation's 1991 Stock
Option Plan. The options have a term of ten years from the date of grant and
are exercisable at a price per share equal to the fair market value of a
share of Common Stock on the date of grant. Each nonemployee director (i)
upon his or her initial election, shall automatically be granted an option to
acquire 25,000 shares of Common Stock which shall be exercisable in four
installments of 6,250 shares each with the first installment being at his or
her initial election and the remaining installments becoming exercisable on
the date of each annual meeting of the Board of Directors of the Corporation
("Annual Meeting") thereafter that such
4
person is a director, until fully exercisable, and (ii) upon the third Annual
Meeting following his or her initial election and each Annual Meeting
thereafter that such person remains a nonemployee director, shall
automatically be granted an option to acquire 7,500 shares of Common Stock.
Except as otherwise described above, all options are immediately exercisable
in full on the date of grant.
OTHER TRANSACTIONS
The following affiliations exist between the Corporation and certain
directors:
On May 1, 1998, Mr. McGrath retired as Executive Vice President of
Oppenheimer, an investment banking firm which renders financial advice to the
Corporation from time to time. Prior to Mr. McGrath's retirement, the
Corporation retained Oppenheimer to provide financial advice in connection
with the licensing of its ultrasound contrast agent in September 1997 and
paid a fee to Oppenheimer for such services.
In January 1998, the Corporation renewed a one-year research services
agreement with RMI for $2,000 per month, plus $500 per day for each day per
month in excess of four days Dr. Johnson devotes to consulting for the
Corporation. Mr. Johnson is the president and owner of RMI.
In January 1998, the Corporation renewed a one-year consulting agreement
with OEI for $2,000 per month. Dr. Zuck is the president and owner of OEI.
Dr. Ranney receives $2,000 per month and office space for providing
consulting services to the Corporation.
In each of April and August of 1998, the Corporation agreed to pay Dr.
Riess $160,000 for the rights to certain inventions and concepts.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The standing committees of the Board of Directors consist of an
Executive Committee, a Compensation Committee, an Audit Committee, and a
Nominating Committee. The Executive Committee was established to act when
the full Board of Directors is unavailable. It has all the authority of the
Board between meetings of the entire Board as to matters which have not been
specifically delegated to other committees of the Board, except the authority
that by law cannot be delegated by the Board of Directors. The members of
the Executive Committee are Dr. Ranney and Messrs. McGrath and D. Roth. The
Compensation Committee advises and makes recommendations to the Board of
Directors regarding matters relating to the compensation of directors,
officers, and senior management. The members of the Compensation Committee
are Drs. Ranney and Cuatrecasas and Mr. O'Neill. The Audit Committee advises
and makes recommendations to the Board concerning the internal controls of
the Corporation, the independent auditors of the Corporation, and other
matters relating to the financial activities of the Corporation. The members
of the Audit Committee are Messrs. Johnson and McGrath and Dr. Zuck. The
Nominating Committee has the authority to nominate members of the Board of
Directors to the entire Board for consideration. The Nominating Committee
will not consider nominees recommended by shareholders. The members of the
Nominating Committee are Dr. Riess and Messrs. Johnson and D. Roth.
During the fiscal year ended June 30, 1998, there were four regular
meetings and one telephonic meeting of the Board of Directors. The
Compensation Committee held two meetings, the Audit Committee held one
meeting, the Nominating Committee held one meeting, and the Executive
Committee did not meet. Each Board member attended all of the meetings of
the Board and all of the meetings of the committee(s) of which he or she is a
member.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, executive officers and persons who own more than 10%
of a registered class of the Corporation's equity securities to file with the
Securities and Exchange Commission ("SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities
of the Corporation. Officers, directors and greater than 10% stockholders
are required by SEC regulations to furnish the Corporation with copies of all
Section 16(a) forms they file.
4
To the Corporation's knowledge, based solely on a review of the copies of
such reports furnished to the Corporation during the fiscal year ended June 30,
1998, one report, covering one transaction was filed late of behalf of each of
Dr. Riess and Mr. McGrath.
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OWNERSHIP OF VOTING SECURITIES BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Corporation's voting securities as of August 26,
1998 as to (i) each of the directors and director nominees, (ii) each of the
executive officers listed in the Summary Compensation Table, (iii) each person
known by the Corporation to own more than 5% of any class of the Corporation's
outstanding voting securities, and (iv) all directors and executive officers of
the Corporation as a group:
Common Stock
Amount and Nature of Percentage of
Name and Address Beneficial Ownership(1) Class(2)
- ---------------- ----------------------- -------------
Duane J. Roth 484,373(3) 1.5%
Pedro Cuatrecasas, M.D. 40,500(4) *
Carroll O. Johnson 54,500(5) *
Stephen M. McGrath 123,007(6) *
Donald E. O'Neill 83,000(7) *
Helen M. Ranney, M.D. 63,800(8) *
Jean G. Riess, Ph.D. 142,733(9) *
Thomas F. Zuck, M.D. 65,000(10) *
Theodore D. Roth 152,242(11) *
Harold W. DeLong 129,550(12) *
N. Simon Faithfull, M.D., Ph.D. 93,350(13) *
Gordon L. Schooley, Ph.D. 96,250(14) *
All directors and executive officers as a group (22 persons) 1,897,747 5.7%
Wellington Management Company 3,012,000(15) 9.4%
75 State Street
Boston, MA 02109
Fidelity Management and Research Company 3,435,000(16) 10.7%
82 Devonshire Street
Boston, MA 02109
Series D Preferred Stock
Schering Berlin Venture Corp. 500,000(17) 100%
Schering AG
Muellerstrasse 173
13342 Berlin
Germany
Series E-1 Preferred Stock
Brown Simpson Strategic Growth Fund, Ltd. 28,334(18) 28.3%
152 West 57th Street, 40th Floor
New York, New York 10019
Brown Simpson Strategic Growth Fund, L.P. 13,333(18) 13.3%
152 West 57th Street, 40th Floor
New York, New York 10019
Westover Investments L.P. 11,333(18) 11.3%
300 Crescent Court, Suite 700
Dallas, Texas 75201
Montrose Investments Ltd. 22,000(18) 22%
300 Crescent Court, Suite 700
Dallas, Texas 75201
Bay Harbor Investments, Inc. 25,000(18) 25%
c/o Trippoak Advisors, Inc.
630 Fifth Avenue, Suite 2000
New York, New York 10111
* Indicates ownership of less than 1% of outstanding shares.
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(1) Each person listed or included in the group has sole voting power and
sole investment power with respect to the shares owned by such person,
except as indicated below.
(2) Shares subject to options and warrants exercisable within 60 days have
been deemed to be outstanding for percentage calculations with respect to
the person holding such options and warrants.
(3) Consists of (i) 253,778 shares owned by Mr. D. Roth, (ii) 229,400 shares
subject to options granted by the Corporation under its 1991 Stock Option
Plan ("the 1991 Plan"), and (iii) 1,195 shares owned by Mr. Roth's spouse.
(4) Consists of (i) 18,000 shares owned by Dr. Cuatrecasas, and (ii) 22,500
shares subject to options granted by the Corporation under the 1991 Plan.
(5) Consists of (i) 4,000 shares owned by Mr. Johnson, and (ii) 50,500 shares
subject to options granted by the Corporation under the 1991 Plan.
(6) Consists of (i) 78,000 shares owned by Mr. McGrath, (ii) 12,007 shares
subject to warrants, and (iii) 33,000 shares subject to options granted by
the Corporation under the 1991 Plan.
(7) Consists of (i) 20,000 shares owned by Mr. O'Neill, (ii) 61,000 shares
subject to options granted by the Corporation under the 1991 Plan, and
(iii) 2,000 shares owned by Mr. O'Neill's spouse.
(8) Consists of (i) 2,800 shares owned by Dr. Ranney, and (ii) 61,000 shares
subject to options granted by the Corporation under the 1991 Plan.
(9) Consists of (i) 79,733 shares owned by Dr. Riess, and (ii) 63,000 shares
subject to options granted by the Corporation under the 1991 Plan.
(10) Consists of (i) 2,000 shares owned by Dr. Zuck, (ii) 30,000 shares subject
to options granted by the Corporation under its 1983 Non-Qualified Stock
Option Program ("the 1983 Program"), and (iii) 33,000 shares subject to
options granted by the Corporation under the 1991 Plan.
(11) Consists of (i) 39,492 shares owned by Mr. T. Roth, and (ii) 112,750
shares subject to options granted by the Corporation under the 1991 Plan.
(12) Consists of (i) 20,000 shares owned by Mr. DeLong, (ii) 108,750 shares
subject to options granted by the Corporation under the 1991 Plan, and
(iii) 800 shares owned by Mr. DeLong's minor children.
(13) Consists of (i) 7,000 shares owned by Dr. Faithfull, (ii) 43,000 shares
subject to options granted by the Corporation under the 1983 Program, and
(iii) 43,350 shares subject to options granted by the Corporation under
the 1991 Plan.
(14) Consists of (i) 13,000 shares owned by Dr. Schooley, and (ii) 83,250
shares subject to options granted by the Corporation under the 1991 Plan.
(15) Wellington Management Company ("WMC") in its capacity as investment
advisor may be deemed beneficial owner of these shares which are owned by
many clients. WMC has sole voting power or sole dispositive power over
none of the shares, shared voting power over 1,224,700 shares, and shared
dispositive power over all such shares.
(16) Fidelity Management and Research Company ("Fidelity"), a subsidiary of
FMR Corp., may be deemed the beneficial owner of all such shares, as a
result of acting as investment adviser to various registered investment
companies, one of which, Fidelity Advisor Strategic Opportunities Fund,
owned 2,268,700 of such shares. FMR Corp. (through its control of
Fidelity) and Edward C. Johnson 3rd, Chairman of FMR Corp., and such
investment companies each have sole power to dispose of such shares. The
sole power to vote such shares resides with the Boards of Trustees of such
investment companies, with voting carried out by Fidelity under guidelines
established by such Boards. Mr. Johnson, Abigail P. Johnson, a director of
FMR Corp., and members of the Johnson family and trusts for their benefit
may be deemed to form a controlling group with respect to FMR Corp. under
the Investment Company Act of 1940.
(17) The Series D Preferred Stock ("D Stock") was issued to Schering Berlin
Venture Corp. ("SBVC") and has one vote per share. The D Stock votes
together with the Common Stock as one class, except where otherwise
required by law. The D Stock was purchased by SBVC in conjunction with the
Corporation's grant, in September 1997, to Schering AG, Germany
("Schering"), of a worldwide license agreement ("License Agreement") for
the Corporation's drug compounds, drug compositions, and medical
7
devices and systems related to perfluorocarbon-containing ultrasound
imaging products.
(18) In August 1998, the Company sold 100,000 share of Series E-1 Preferred
Stock ("E-1 Stock") to certain investors pursuant to a preferred stock
purchase agreement (the "Purchase Agreement"). The E-1 Stock has
ten votes per share and votes together with the Common Stock as one class,
except where otherwise required by law. Pursuant to the Purchase
Agreement, the Company has the option to sell similar preferred shares to
the investors from time to time through early 1999 in an amount not to
exceed an additional $14 million.
EXECUTIVE COMPENSATION
The following table sets forth information concerning annual and long-term
compensation for the Corporation's Chief Executive Officer and the other four
highest paid executive officers (collectively, the "Named Executive Officers")
for the year ended June 30, 1998, as well as the total compensation paid to
each individual for the Corporation's two previous fiscal years:
Summary Compensation Table
Long-Term
Compen-
Annual Compensation sation
----------
Awards
--------------------------------------------------
Name Other Securities
and Annual Underlying
Principal Salary Bonus Compen- Options/
Position Year ($) ($) sation($)(a) SARs(#)
----------- ---- ------- ------- ------------ -----------
Duane J. Roth 1998 388,000 40,000(b) - 150,000
Chairman and Chief Executive Officer 1997 344,000 80,000 186,300(c) 125,000
1996 323,200 142,500 198,100(d) -
Theodore D. Roth 1998 257,000 60,000(e) [38,800](f) 75,000
President and 1997 190,500 61,500 37,500(g) 50,000
Chief Operating Officer 1996 179,000 70,000 41,800(h) -
Harold W. DeLong 1998 196,600 25,000 30,000
Executive Vice President - 1997 187,300 41,000 - 30,000
Business Development 1996 177,700 59,300 - -
N. Simon Faithfull 1998 194,900 20,000 25,000
Vice President - Medical Affairs 1997 185,700 30,500 - 25,000
Development 1996 177,800 44,500 - -
Gordon L. Schooley 1998 187,500 20,000 25,000
Vice President - Clinical and 1997 176,200 30,500 - 25,000
Regulatory Development 1996 167,100 42,300 - -
(a) Perquisites and other personal benefits for specific officers are only
reported in specific years where such compensation exceeds the lower of
10% of annual salary and bonus, or $50,000.
(b) The bonus was paid to Mr. D. Roth in August 1997 for completion of the
licensing agreement for Imagent-R-, one of the Company's drug products,
to Schering A.G.
(c) Includes tax reimbursement of $184,200 for forgiveness of loan.
(d) Includes forgiveness of $196,300 of principal on a loan made pursuant to
the 1983 Program.
(e) One-half of the bonus was paid to Mr. T Roth in August 1997 for completion
of the licensing agreement for Imagent to Schering A.G.
(f) Includes forgiveness of $35,100 of principal and interest on a relocation
loan.
(g) Includes forgiveness of $36,200 of principal and accrued interest on a
relocation loan.
(h) Includes forgiveness of $40,575 of principal and accrued interest on a
relocation loan.
8
EMPLOYMENT ARRANGEMENTS
During fiscal 1992, in connection with his relocation, the Corporation
loaned Theodore Roth $175,000, which was originally due on August 5, 1994.
The loan bears interest at the prime rate reported in THE WALL STREET JOURNAL
and had an outstanding principal balance of $150,000 as of that date. The
loan is evidenced by a promissory note secured by real estate and an
assignment of Mr. Roth's option to purchase stock of the Corporation. On
February 16, 1994, the Board of Directors authorized the Corporation to
forgive on December 1, 1994 and each December 1 thereafter, through December
1, 1998, $30,000 of principal and all accrued interest through such date;
provided Mr. Roth remains employed by the Corporation. If his termination is
without cause by the Corporation or as a result of a change in control of the
Corporation, the debt will be forgiven in full. Termination of his
employment for any other reason requires the debt to be paid three years from
the termination date, with interest. The largest outstanding balance due
since the beginning of the last fiscal year was $65,100, and the balance
outstanding as of September 4, 1998, is $31,700.
On June 1, 1995, the Corporation loaned Simon Faithfull $70,000. The
loan accrues interest at the rate of nine percent per annum. The loan is due
and payable on demand; provided that unless and until demand is made,
principal and interest shall be payable in biweekly installments of $500
each. The largest outstanding balance due since the beginning of the last
fiscal year was $70,315, and the outstanding balance as of September 4, 1998,
is $64,183. The note is secured by a lien on Dr. Faithfull's primary
residence.
STOCK OPTION GRANTS AND EXERCISES
The Corporation has granted options to its executive officers under its
1983 Incentive Stock Option Plan (which plan expired on October 1, 1993), its
1983 Non-Qualified Stock Option Program, and its 1991 Stock Option Plan. No
stock appreciation rights ("SARs") have been granted by the Corporation.
The following table sets forth certain information concerning options
granted during fiscal 1998 to the Named Executive Officers:
Option/SAR Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term(1)
----------------------------------------------------------------- ------------------------
Securities % of Total
Underlying Options/SARs
Options/ Granted to Exercise or
SARs Employees in Base Price Expiration
Name Granted (#)(2) Fiscal Year ($/Share)(4) Date 5%($) 10%($)
- ----------------- ------------- ----------- ------------ ---------- -------- ---------
Duane J. Roth 150,000 (3) 8.3% 9.375 11/12/07 884,400 2,241,200
Theodore D. Roth 75,000 (3) 4.1% 9.375 11/12/07 442,200 1,120,600
Harold W. DeLong 30,000 (3) 1.7% 9.375 11/12/07 176,900 448,200
N. Simon Faithfull 25,000 (3) 1.4% 9.375 11/12/07 147,400 373,500
Gordon L. Schooley 25,000 (3) 1.4% 9.375 11/12/07 147,400 373,500
9
(1) The dollar amounts under these columns are the result of calculations
assuming that the price of Common Stock on the date of the grants of the
options ($9.375 per share) increases at the hypothetical 5% and 10% rates
set by the Securities and Exchange Commission and therefore are not
intended to forecast possible future appreciation, if any, of the
Corporation's stock price.
(2) All options granted in 1998 to the Named Executive Officers were non-
qualified stock options under the 1991 Plan.
(3) Options are exercisable in increments of 20%, 20%, 20% and 40% commencing
one year after the date of issuance and on each subsequent anniversary,
respectively.
(4) The exercise price per share of the options granted represented the fair
market value of the underlying shares on the date of grant. Options may be
exercised by (i) paying the Corporation at least the par value of the
shares of Common Stock being acquired, allowing the remainder of the
exercise price to be borrowed from the Corporation, or (ii) by surrendering
shares of Corporation Common Stock in payment of the exercise price and
applicable withholding taxes. The 1991 Plan provides that loans to pay the
exercise price shall mature within five years (or earlier, in the event of
a termination of employment or of a consultancy), shall be secured by the
shares of Common Stock purchased, shall provide for quarterly payments of
interest at such rate as the Board of Directors may determine, and shall
be in such form and contain such other provisions as the Board of Directors
may determine from time to time.
The following table summarizes options exercised during fiscal 1998 and
presents the value of unexercised options held by the Named Executive Officers
at fiscal year end:
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Fiscal Year End (#) Fiscal Year End ($)
Shares Acquired on Value Exercisable(E)/ Exercisable(E)/
Exercise (#) Realized ($) Unexercisable(U) Unexercisable(U)
------------ ---------------- ------------------ ------------------
Duane J. Roth - - 288,200 (E) 245,700 (E)
289,000 (U) - (U)
Theodore D. Roth - - 132,417 (E) 82,200 (E)
126,750 (U) - (U)
Harold W. DeLong - - 108,750 (E) - (E)
65,750 (U) - (U)
N. Simon Faithfull - - 86,350 (E) 40,300 (E)
53,900 (U) - (U)
Gordon L. Schooley - - 83,250 (E) - (E)
53,900 (U) - (U)
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
has provided the following report:
The Committee is composed entirely of outside, nonemployee directors.
The Committee determines the base salaries and the amount of bonus awards to
be paid to the executive officers of the Corporation. In addition, the
Committee recommends the number of the Corporation's stock option grants
which should be made to executive officers and other employees of the
Corporation. The following is a summary of policies of the Committee that
affect the compensation paid to executive officers, as reflected in the
tables and text set forth elsewhere in the proxy statement.
EXECUTIVE COMPENSATION POLICY AND COMPONENTS OF COMPENSATION
The Committee's fundamental executive compensation philosophy is to enable
the Corporation to
10
attract and retain key executive personnel and to motivate those executives
to achieve the Corporation's objectives. The Corporation is still in its
research and development phase and has not yet achieved profitability.
Therefore, traditional methods of evaluating executive performance, such as
sales and profit levels, return on equity, and stock price, are
inappropriate. Accordingly, assessment of each executive's performance is
based upon attainment of his or her specific objectives in relation to the
Corporation's overall annual strategic goals. The Committee may in its
discretion apply different measures of performance for future fiscal years.
However, it is presently contemplated that all compensation decisions will be
designed to further the fundamental executive compensation philosophy
described above.
Each executive officer's compensation package is reviewed annually and
is comprised of three components: base salary, bonus, and stock option
grants. In addition, executive officers of the Corporation are eligible to
participate in all benefit programs generally available to other employees.
BASE SALARY
In setting the base salary levels of each executive officer, the
Committee considers the base salaries of executive officers in comparable
positions in other similarly situated biotechnology/pharmaceutical
development companies. In setting levels, the Corporation currently targets
the 75th percentile of the relevant labor market. Factors considered include
company size, stage of development of a company's products, and geographical
location. The Committee also considers the individual experience level and
actual performance of each executive officer in view of the Corporation's
needs and objectives. Salary decisions are determined in a structured annual
review by the Committee with input from the Chief Executive Officer.
BONUSES
Annual bonus, set as a targeted percentage of total cash compensation,
may be earned by each executive officer, based upon the achievement of
performance goals established at the beginning of the fiscal year and
reviewed at least twice during the year.
Performance goals for the Corporation are developed by management, and
reviewed and approved by the Committee and the Board of Directors.
Performance goals for individual executives are developed by the Chief
Executive Officer, and reviewed and approved by the Committee. Bonuses are
awarded to executives based upon the attainment of these goals during the
year, with the Corporation and the executives accomplishing minimum
objectives prior to being eligible to receive bonus. The Committee
considers the amounts of bonuses it expects to pay to executives when it
compares its compensation practices with other companies similarly situated.
LONG-TERM STOCK-BASED INCENTIVE COMPENSATION
Generally, the Corporation's Board of Directors or, if appointed, a
stock option committee, approves annual grants of stock options to each of
the Corporation's executive officers under the 1991 Plan based upon
recommendations from the Committee. The grants are designed to align the
interest of each executive officer with those of the shareholders and provide
each individual with a significant incentive to manage the Corporation from
the perspective of an owner with an equity stake in the business. Each grant
generally allows the officer to acquire shares of the Corporation's Common
Stock at a fixed price per share (the market price on the grant date) over a
specified period of time (up to ten years), thus providing a return to the
executive officer only if the market price of the shares appreciates over the
option term. The size of the option grant to each executive officer
generally is set as the Committee deems appropriate in order to retain and
motivate key executive officers as well as to provide them with the
perspective of the Corporation's shareholders in assessing corporate results.
The grants also take into account comparable awards to individuals in
similar positions at biotechnology/pharmaceutical development companies as
reflected in external surveys, the individual's potential for future
responsibility and promotion over the option term, the individual's personal
performance in recent periods, and the risk attached to the future growth of
the pharmaceutical industry. In making comparisons in the industry, the
Corporation targets the 75th percentile of the relevant labor market.
The Committee, at its discretion, has the authority to utilize
compensation consultants to assist in defining the relevant labor market for
executive compensation and to recommend annual salary and bonus increases.
11
Duane J. Roth, Chief Executive Officer, although not a member of the
Committee, assisted the Committee in developing the compensation packages
awarded to executive officers other than himself.
CEO COMPENSATION
In setting the compensation payable to the Corporation's Chief Executive
Officer, the Committee sought to be competitive with other
biotechnology/pharmaceutical development companies. In making comparisons,
the Corporation targets the 75th percentile of the relevant labor market.
The Committee established Duane Roth's base salary based on an evaluation of
his personal performance and the objective of having his base salary keep
pace with salaries being paid to similarly situated chief executive officers.
With respect to his base salary, it is the Committee's intent to provide him
with a level of stability and certainty each year and not have this
particular component of compensation affected to any significant degree by
Corporation performance factors. The remaining component of his 1998 fiscal
year compensation, however, was dependent upon performance and provided no
dollar guarantees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer
or employee of the Corporation or any of its subsidiaries.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Donald E. O'Neill, Chairman Dr. Helen M. Ranney
Dr. Pedro Cuatrecasas
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return to
the Corporation's shareholders during the five-year period ended June 30, 1998,
as well as with that of an overall stock market index (Nasdaq) and a published
industry index (Nasdaq Pharmaceutical):
ALLP NASDAQ (US) NASDAQ Pharm
------- ----------- ------------
6/30/93 $100.00 $100.00 $100.00
6/30/94 $109.86 $100.96 $ 83.65
6/30/95 $ 92.96 $134.77 $111.03
6/30/96 $185.92 $173.03 $163.50
6/30/97 $113.38 $210.38 $166.34
6/30/98 $ 47.19 $277.61 $170.69
STOCK
PRICE VALUE VALUE
----- ------- -------
6/30/93 8.875 226.043 244.488
6/30/94 9.75 228.211 204.509
6/30/95 8.25 304.627 271.46
6/30/96 16.50 391.112 399.733
6/30/97 10.06 475.551 406.692
6/30/98 4.188 627.516 417.323
12
2. PROPOSED AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED SHARES OF COMMON STOCK
The shareholders will consider and vote upon an amendment to Paragraph 4
of the Corporation's Certificate of Incorporation, as amended, to increase
the number of authorized shares of Common Stock from 50,000,000 shares to
75,000,000 shares (the "Common Stock Amendment").
Pursuant to its Certificate of Incorporation, as amended, the
Corporation is presently authorized to issue 50,000,000 shares of Common
Stock and 5,000,000, shares of preferred stock, $.01 par value. On August
26, 1998, if all of the shares of Common Stock currently reserved for
issuance upon the exercise of outstanding warrants and options were issued,
the number of shares of Common Stock that would be outstanding is 39,012,356
shares. The Company has also reserved an additional ___________ shares of
Common Stock for issuance upon the conversion or exercise of the D Stock, the
E-1 Stock, outstanding stock options and warrants, and the occurrence of
certain other events.
On August 27, 1998, the Board of Directors approved an amendment to the
Corporation's Certificate of Incorporation providing for an increase in the
authorized shares of Common Stock from 50,000,000 shares to 75,000,000
shares. The Board of Directors deems it to be in the best interest of the
Corporation that the Corporation have available additional authorized shares
of Common Stock for additional public offerings, acquisitions, financings,
stock dividends, personnel recruitment and retention, and for other
opportunities which may arise in the future. The additional shares of Common
Stock would be available for issuance by action of the Board of Directors
without the need for further action by shareholders, unless such action were
specifically required by applicable law or rules of any stock exchange on
which the Corporation's securities may then be listed. Under applicable laws
of the State of New York, shareholders of the Corporation have no pre-emptive
rights with respect to the authorization or issuance of additional shares of
the Corporation's capital stock.
The proposed increase in the authorized number of shares of Common Stock
could have a number of effects on the Corporation's shareholders depending
upon the exact nature and circumstances of any actual issuance of authorized
but unissued shares. The increase could have an anti-takeover effect, in
that additional shares could be issued (within the limits imposed by
applicable law) in one or more transactions that could make a change in
control or takeover of the Corporation more difficult. For example,
additional shares could be issued by the Corporation so as to dilute the
stock ownership or voting rights of persons seeking to obtain control of the
Corporation. Similarly, the issuance of additional shares to certain persons
allied with the Corporation's management could have the effect of making it
more difficult to remove the Corporation's current management by diluting the
stock ownership or voting rights of persons seeking to cause such removal.
In addition, an issuance of additional shares by the Corporation could
have an effect on the potential realizable value of a shareholder's
investment. In the absence of a proportionate increase in the Corporation's
earnings and book value, an increase in the aggregate number of outstanding
shares of the Corporation caused by the issuance of the additional shares
would dilute the earnings per share and book value per share of all
outstanding shares of the Corporation's Common Stock. If such factors were
reflected in the price per share of Common Stock, the potential realizable
value of a shareholder's investment could be adversely affected.
VOTE REQUIRED FOR ADOPTION OF THE AMENDMENT
Under New York law, the affirmative vote of the holders of securities
representing a majority of the voting power entitled to vote at the Meeting
is required to adopt the proposed Common Stock Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
COMMON STOCK AMENDMENT.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Ernst & Young LLP to
serve as the independent auditors for the Corporation for the fiscal year
ending June 30, 1999. Representatives of Ernst & Young LLP are expected to
be present at
13
the Meeting, will have the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
Shareholder ratification of the appointment of Ernst & Young LLP as the
Corporation's independent auditors is not required by the Corporation's
Bylaws or otherwise. If the shareholders fail to ratify the appointment, the
Board will reconsider whether or not to retain that firm. Even if the
appointment is ratified, the Board in its discretion may direct the
appointment of a different independent accounting firm at any time during the
year if the Board determines that such a change would be in the best
interests of the Corporation and its shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
4. OTHER BUSINESS
Management knows of no other matters that may be presented to the
Meeting. However, if any other matter properly comes before the Meeting, it
is intended that proxies in the accompanying form will be voted in accordance
with the judgment of the persons named therein.
14
FUTURE PROPOSALS BY SHAREHOLDERS
Any proposal which a shareholder of the Corporation wishes to have
included in the proxy statement and proxy relating to the Corporation's 1999
Annual Meeting pursuant to the provisions of Rule 14a-8 under the Securities
Exchange Act of 1934 must be received by the Corporation at its executive
offices no later than June 7, 1999, and must otherwise comply with the
requirements of Rule 14a-8. Shareholder proposals submitted outside the
processes of Rule 14a-8 will also be considered untimely if submitted after
June 7, 1999. The address of the Corporation's executive office is 3040
Science Park Road, San Diego, CA 92121.
ANNUAL REPORT ON FORM 10-K
THE CORPORATION WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, TO EACH
PERSON SOLICITED HEREUNDER WHO MAILS A WRITTEN REQUEST THEREFOR TO ALLIANCE
PHARMACEUTICAL CORP., 3040 SCIENCE PARK ROAD, SAN DIEGO, CA 92121,
ATTENTION: LLOYD A. ROWLAND, GENERAL COUNSEL. THE CORPORATION WILL ALSO
FURNISH, UPON THE PAYMENT OF A REASONABLE FEE TO COVER REPRODUCTION AND
MAILING EXPENSES, A COPY OF ALL EXHIBITS TO SUCH ANNUAL REPORT ON FORM 10-K.
It is important that your shares be represented at the Meeting. If you
are unable to be present in person, you are respectfully requested to sign
the enclosed proxy and return it in the enclosed stamped, addressed envelope
as promptly as possible.
By Order of the Board of Directors,
Duane J. Roth, Chairman
Date: October ___, 1998
San Diego, California
15
ALLIANCE PHARMACEUTICAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS --- NOVEMBER 11, 1998
The undersigned, revoking any proxy heretofore given, hereby appoints Carroll
O. Johnson, Stephen M. McGrath and Duane J. Roth, or any one of them, Proxies
of the undersigned with full power of substitution, with respect to all of
the shares of the Common Stock which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of Alliance Pharmaceutical Corp. (the
"Corporation") to be held on November 11, 1998, at offices of the Corporation
at 6275 Lusk Boulevard, San Diego, California 92121 at 10:00 a.m., San Diego
time, or any adjournment thereof.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED FOR ELECTION AS DIRECTORS, FOR AN INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK, AND FOR RATIFICATION OF ERNST & YOUNG LLP
AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1999. If
specific instructions are indicated, this Proxy will be voted in accordance
therewith.
In their discretion, the Proxies are authorized to transact such other
business as may properly come before the meeting or any adjournment thereof.
The Board of Directors has proposed all matters to be voted upon and
recommends a vote FOR all nominees for election as directors, FOR an increase
in the number of authorized shares of common stock, and FOR ratification of
Ernst & Young LLP as independent auditors for the fiscal year ending June 30,
1999. Approval of any matter in this proxy is not related to or conditioned
on the approval of any other matter.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
1. Election of Directors / / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees
listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
DR. PEDRO CUATRECASAS CARROLL O. JOHNSON STEPHEN M. MCGRATH
DONALD E. O'NEILL DR. HELEN M. RANNEY DR. JEAN G. RIESS
DUANE J. ROTH THEODORE D. ROTH DR. THOMAS F. ZUCK
2. Increase in the authorized number shares of common stock
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of Ernst & Young LLP as independent auditors
/ / FOR / / AGAINST / / ABSTAIN
(To be completed and signed on reverse side)
Dated: _______________________________________________, 1998
____________________________________________________________
____________________________________________________________
Please sign exactly as name appears hereon. If the shares are
registered in the names of two or more persons, each should sign.
Executors, administrators, trustees, guardians,
attorneys-in-fact, corporate officers, general partners and other
persons acting in a representative capacity should add their
titles.
The above signed hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders and the Proxy Statement furnished
herewith. PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POST-PAID RETURN ENVELOPE.