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
[X] Filed by the Registrant [ ] Soliciting Material Pursuant to
[ ] Filed by a Party other than Section 240.14a-11(c) of
the Registrant Section 240.14a-12
Check the appropriate box: [ ] Confidential, for use of the
[ ] Preliminary Proxy Statement Commission only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
CELGENE 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:
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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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[ ] Fee paid previously with preliminary materials:
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[ ] 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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CELGENE CORPORATION
7 POWDER HORN DRIVE
WARREN, NEW JERSEY 07059
May 15, 2004
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
2004 Annual Meeting of Stockholders (the "Annual Meeting") of Celgene
Corporation. The Annual Meeting will be held on June 15, 2004, beginning at
1:00 p.m., local time, at the offices of Proskauer Rose LLP, 1585 Broadway,
26th floor, New York, New York 10036. The formal Notice of Annual Meeting is
set forth in the enclosed material.
The matters expected to be acted upon at the meeting are described in the
attached Proxy Statement. During the meeting, stockholders will have the
opportunity to ask questions and comment on our operation.
It is important that your views be represented whether or not you are able
to be present at the Annual Meeting. Please sign and return the enclosed proxy
card promptly.
We appreciate your investment in Celgene and urge you to return your proxy
card as soon as possible.
Sincerely,
John W. Jackson
Chairman of the Board and
Chief Executive Officer
CELGENE CORPORATION
7 POWDER HORN DRIVE
WARREN, NEW JERSEY 07059
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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The Annual Meeting of Stockholders (the "Annual Meeting") of CELGENE
CORPORATION will be held at the offices of Proskauer Rose LLP, 1585 Broadway,
26th floor, New York, New York 10036 on June 15, 2004, at 1:00 p.m., local
time, for the following purposes:
1. to elect ten directors;
2. to approve an amendment to our Certificate of Incorporation to increase
the total number of authorized shares of stock to 280,000,000;
3. to ratify the appointment of KPMG LLP as our independent certified
public accountants for the fiscal year ending December 31, 2004; and
4. to transact any such other business as may properly come before the
Annual Meeting and at any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 28, 2004
as the record date for determining stockholders entitled to notice of and to
vote at the Annual Meeting.
A proxy and return envelope are enclosed for your convenience.
By order of the Board of
Directors
JOHN W. JACKSON
Chairman of the Board and
Chief Executive Officer
May 15, 2004
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| YOUR VOTE IS IMPORTANT |
| Please mark, sign and date the enclosed |
| proxy card and return it promptly |
| in the enclosed self-addressed, stamped envelope. |
---------------------------------------------------------
CELGENE CORPORATION
7 POWDER HORN DRIVE
WARREN, NEW JERSEY 07059
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PROXY STATEMENT
---------------------
This Proxy Statement is furnished to the stockholders of Celgene
Corporation, a Delaware corporation, in connection with the solicitation of
proxies by the Board of Directors for use at our Annual Meeting of Stockholders
(the "Annual Meeting") to be held on June 15, 2004, and at any adjournment or
postponement thereof. A copy of the Notice of Annual Meeting accompanies this
Proxy Statement. It is anticipated that the mailing of this Proxy Statement
will commence on or about May 15, 2004.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on April 28, 2004,
the record date for the Annual Meeting (the "Record Date"), will be entitled to
notice of and to vote at the Annual Meeting. On the Record Date we had
outstanding 81,735,304 shares of common stock, par value $.01 per share (the
"Common Stock"), which are our only securities entitled to vote at the Annual
Meeting, each share being entitled to one vote.
REVOCABILITY OF PROXIES
Stockholders who execute proxies may revoke them by giving written notice
to our Chief Executive Officer at any time before such proxies are voted.
Attendance at the Annual Meeting shall not have the effect of revoking a proxy
unless the stockholder so attending shall, in writing, so notify the Secretary
of the Annual Meeting at any time prior to the voting of the proxy.
OTHER MATTERS
The Board of Directors does not know of any matter that is expected to be
presented for consideration at the Annual Meeting, other than the election of
directors, the approval of an amendment to our Certificate of Incorporation to
increase the number of shares of Common Stock we are authorized to issue and
the ratification of the appointment of our independent certified public
accountants for the current fiscal year. However, if other matters properly
come before the Annual Meeting, the persons named in the accompanying proxy
intend to vote thereon in accordance with their judgment.
SOLICITATION EXPENSES
We will bear the cost of the Annual Meeting and the cost of soliciting
proxies, including the cost of mailing the proxy material. In addition to
solicitation by mail, our directors, officers and regular employees (who will
not be specifically compensated for such services) may solicit proxies by
telephone or otherwise. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxies and proxy
material to their principals, and we will reimburse them for their expenses. In
addition, we have retained ADP, a proxy solicitation organization, to assist in
the solicitation of proxies. ADP's fee is estimated to be $75,000, plus
reasonable out-of-pocket expenses.
VOTING PROCEDURES; ABSTENTIONS
All proxies received pursuant to this solicitation will be voted except as
to matters where authority to vote is specifically withheld and, where a choice
is specified as to the proposal, they will be voted in accordance with such
specification. If no instructions are given, the persons named in the proxy
solicited by our Board of Directors intend to vote FOR the nominees for
election as our directors listed herein, FOR the amendment to our Certificate
of Incorporation to increase the number of shares of Common Stock we are
authorized to issue and FOR the ratification of the appointment of KPMG LLP as
our independent certified public accountants for the fiscal year ending
December 31, 2004.
A majority of the outstanding shares of Common Stock entitled to vote on
the Record Date, whether present in person or represented by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting and
any adjournment or postponement thereof. Abstentions will be counted as present
or represented for purposes of establishing a quorum for the transaction of
business.
Abstentions are counted in tabulations of the votes cast on proposals
presented to stockholders. Abstentions will have no effect on the election of
directors, which is by plurality of the votes cast in person or by proxy, but
abstentions will, in effect, be votes against the amendment to our Certificate
of Incorporation to increase the number of shares of Common Stock we are
authorized to issue and against the ratification of the selection of
independent public accountants. The amendment to our Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of Common Stock entitled to vote on the Record Date whether or not
present in person or represented by proxy. The ratification of the selection of
independent public accountants requires the affirmative vote of a majority of
the shares of Common Stock present and eligible to vote on such matter.
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL ONE: ELECTION OF DIRECTORS
NOMINEES
At the Annual Meeting, ten directors, who have been nominated by the
Nominating and Governance Committee, are to be elected, each to hold office
(subject to our Bylaws) until the next annual meeting and until his or her
successor has been elected and qualified. Each nominee has consented to being
named as a nominee in this Proxy Statement and to serve if elected. If any
nominee listed in the table below should become unavailable for any reason,
which the Board of Directors does not anticipate, the proxy will be voted for
any substitute nominee or nominees who may be selected by the Board of
Directors prior to or at the Annual Meeting, or, if no substitute is selected
by the Board of Directors prior to or at the Annual Meeting, for a motion to
reduce the membership of the Board of Directors to the number of nominees
available. Directors will be elected by an affirmative vote of a plurality of
the votes cast at the Annual Meeting in person or by proxy. There are no family
relationships between any of our directors and executive officers. The
information concerning the nominees and their security holdings has been
furnished by them to us.
NAME AGE POSITION
---- --- --------
John W. Jackson ....................... 59 Chairman of the Board and Chief Executive Officer
Sol J. Barer, Ph.D. ................... 57 President, Chief Operating Officer and Director
Robert J. Hugin ....................... 49 Chief Financial Officer, Senior Vice President and
Director
Jack L. Bowman ........................ 71 Director
Frank T. Cary ......................... 83 Director
Michael D. Casey ...................... 58 Director
Arthur Hull Hayes, Jr., M.D. .......... 71 Director
Gilla Kaplan, Ph.D. ................... 56 Director
Richard C.E. Morgan ................... 59 Director
Walter L. Robb, Ph.D. ................. 75 Director
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John W. Jackson has been our Chairman of the Board and Chief Executive
Officer since January 1996 and is a member of the Executive Committee of our
Board of Directors. From February 1991 to January 1996, Mr. Jackson was
President of Gemini Medical, a consulting firm that he founded which
focused on medical device company strategy and investment advice. Previously,
Mr. Jackson had been President of the worldwide Medical Device Division of
American Cyanamid, a major pharmaceutical company, from February 1986 to
January 1991, and served in various international positions, including
2
Vice President--International for American Cyanamid from 1978 to 1986. Mr.
Jackson served in several human health marketing positions at Merck & Company,
a major pharmaceutical company, from 1971 to 1978. Mr. Jackson received a B.A.
degree from Yale University and an M.B.A. from INSEAD, France.
Sol J. Barer, Ph.D. has been our President since October 1993 and our
Chief Operating Officer and one of our directors since March 1994 and is a
member of the Executive Committee of our Board of Directors. Dr. Barer was
Senior Vice President--Science and Technology and Vice President/General
Manager--Chiral Products from October 1990 to October 1993 and our Vice
President--Technology from September 1987 to October 1990. Dr. Barer received a
Ph.D. in organic and physical chemistry from Rutgers University. Dr. Barer is
also a director of Nobex, Inc. and Semorex, Inc. and serves on the New Jersey
Commission of Science and Technology.
Robert J. Hugin has been our Senior Vice President and Chief Financial
Officer since June 1999 and was elected by the Board of Directors to serve as
one of our directors in December 2001. Previously, Mr. Hugin had been a
Managing Director at J.P. Morgan & Co. Inc., which he joined in 1985. Mr. Hugin
received an A.B. degree from Princeton University and an M.B.A. from the
University of Virginia. Mr. Hugin is also a director of The Medicines Company.
Jack L. Bowman has been one of our directors since April 1998, and is the
Chairman of the Nominating and Governance Committee of our Board of Directors
and a member of the Management Compensation and Development Committee. Mr.
Bowman serves as Chairman and Chief Executive Officer of NeoRx Corporation,
having served as Company Group Chairman of Johnson & Johnson from 1987 to 1994.
From 1983 to 1987, Mr. Bowman served as Executive Vice President of American
Cyanamid. Mr. Bowman is also a director of NeoRx Corporation, Cell
Therapeutics, Inc., Targeted Genetics and Reliant Pharmaceuticals LLC.
Frank T. Cary has been Chairman of the Executive Committee of our Board of
Directors since July 1990 and one of our directors since 1987, and is a member
of the Nominating and Governance Committee of our Board of Directors and a
member of the Management Compensation and Development Committee. From 1973 to
1981, Mr. Cary was Chairman of the Board and Chief Executive Officer of
International Business Machines Corporation. Mr. Cary also is a director of
Cygnus Therapeutic Systems Inc., ICOS Corporation, Lincare Inc., Lexmark
International Inc. and Vion Pharmaceuticals Inc.
Michael D. Casey has served as one of our directors since August 2002 and
is a member of the Nominating and Governance Committee and the Audit Committee.
From October 1997 to February 2002, Mr. Casey served as the Chairman,
President, Chief Executive Officer and a director of Matrix Pharmaceutical,
Inc. From November 1995 to December 1996, Mr. Casey was Executive Vice
President at Schein Pharmaceutical, Inc. In December 1996, he was appointed
President of the retail and specialty products division of Schein. From June
1993 to November 1995, he served as President and Chief Operating Officer of
Genetic Therapy, Inc. Mr. Casey was President of McNeil Pharmaceutical (a unit
of Johnson & Johnson) from 1989 to June 1993 and Vice President, Sales and
Marketing for Ortho Pharmaceutical Corp. (a subsidiary of Johnson & Johnson)
from 1985 to 1989. Mr. Casey is also a director of Bone Care International,
Inc., Allos Therapeutics, Inc., Cholestech Corporation, OrthoLogic Corp. and
Durect Corp.
Arthur Hull Hayes, Jr., M.D., one of our directors since 1995 and a member
of the Audit Committee of our Board of Directors, has been President and Chief
Operating Officer of MediScience Associates, a consulting organization that
works with pharmaceutical firms, biomedical companies and foreign governments,
since July 1991, and clinical professor of medicine and pharmacology at the
Pennsylvania State University College of Medicine. From 1986 to 1990, Dr. Hayes
was President and Chief Executive Officer of E.M. Pharmaceuticals, a unit of E.
Merck AG, and from 1981 to 1983 was Commissioner of the U.S. Food and Drug
Administration. Dr. Hayes also is a director of Myriad Genetics, Inc., NaPro
BioTherapeutics, Inc. and eResearch Technology, Inc.
Gilla Kaplan, Ph.D., one of our directors since April 1998 and a member of
the Audit Committee of our Board of Directors, is head of the Laboratory of
Mycobacterial Immunity and Pathogenesis at The Public Health Research Institute
at the International Center for Public Health in Newark, New Jersey,
3
where she was appointed full Member in 2002. Dr. Kaplan has also been appointed
Professor of Medicine and Professor of Microbiology and Molecular Genetics at
UMDNJ. Previously, Dr. Kaplan was an immunologist in the Laboratory at Cellular
Physiology and Immunology at The Rockefeller University in New York where she
was an Associate Professor.
Richard C.E. Morgan has been one of our directors since 1987, and is
Chairman of the Management Compensation and Development Committee and a member
of the Executive Committee of our Board of Directors. Mr. Morgan is the
Chairman and Chief Executive Officer of Amphion Capital Partners LLC and a
Managing Partner of Amphion Capital Management LLC. Mr. Morgan serves on the
Board of Directors of Axcess Inc. and Orbis International, Inc. and several
other private companies.
Walter L. Robb, Ph.D., one of our directors since 1992 and the Chairman of
the Audit Committee of our Board of Directors, has been a private consultant
and President of Vantage Management Inc., a consulting and investor services
company, since January 1993. Dr. Robb was Senior Vice President for Corporate
Research and Development of General Electric Company, and a member of its
Corporate Executive Council from 1986 to December 1992. Dr. Robb is Chairman of
the Board of Directors of Capital District Sports. He is also a director of
Mechanical Technology, Inc. and several private companies.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the beneficial ownership of the Common Stock as
of April 7, 2004 by (i) each director, (ii) each of the named executive
officers, (iii) all of our directors and named executive officers as a group
and (iv) all persons known by the Board of Directors to be beneficial owners of
more than five percent of the outstanding shares of Common Stock. Shares of
Common Stock subject to warrants and/or options that are currently exercisable
or exercisable within 60 days of April 7, 2004 are deemed outstanding for
computing the ownership percentage of the stockholder holding such warrants
and/or options, but are not deemed outstanding for computing the ownership
percentage of any other stockholder. Unless otherwise noted, the address of
each stockholder is Celgene Corporation, 7 Powder Horn Drive, Warren, New
Jersey 07059.
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP OF CLASS
---------------------------------------- -------------------- --------
John W. Jackson ........................ 2,399,428 (1)(2)(3) 2.9%
Sol J. Barer, Ph.D. .................... 1,337,910 (1)(2)(4) 1.6%
Robert J. Hugin ........................ 937,186 (1)(2)(5) 1.1%
Jack L. Bowman ......................... 123,100 (1) *
Frank T. Cary .......................... 453,340 (1)(6) *
Michael D. Casey ....................... 24,000 (1) *
Arthur Hull Hayes, Jr., M.D. ........... 200,000 (1) *
Gilla Kaplan, Ph.D. .................... 95,999 (1) *
Richard C.E. Morgan .................... 105,462 (1) *
Walter L. Robb, Ph.D. .................. 249,500 (1) *
All our directors and current
executive officers as a group
(ten persons) ......................... 5,925,925 (7) 6.9%
FMR Corp. ("FMR") ...................... 12,195,032 (8) 15.0%
82 Devonshire Street,
Boston, MA 02109
----------
* Less than one percent (1%).
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(1) Includes shares of Common Stock that the directors and executive officers
have the right to acquire through the exercise of warrants and/or options
within 60 days of April 7, 2004 as follows: John W. Jackson - 1,591,820;
Sol J. Barer - 1,094,612; Robert J. Hugin - 824,205; Jack Bowman - 120,100;
Frank T. Cary - 85,000; Michael D. Casey - 20,000; Arthur Hull Hayes, Jr. -
200,000; Gilla Kaplan - 95,999; Richard C.E. Morgan - 55,000; and Walter L.
Robb - 203,000. Does not include shares of Common Stock that the directors
and executive officers have the right to acquire through the exercise of
options not exercisable within 60 days of April 7, 2004, as follows: John
W. Jackson - 0; Sol J. Barer - 0; Robert J. Hugin - 0; Jack L. Bowman -
11,250; Frank T. Cary - 11,250; Michael D. Casey - 26,250; Arthur Hull
Hayes, Jr. - 11,250; Gilla Kaplan - 11,250; Richard C.E. Morgan - 11,250;
and Walter L. Robb - 11,250.
(2) Includes shares of Common Stock reflecting matching contributions under our
401(k) Plan in which the executive officers will vest within 60 days of
April 7, 2004.
(3) Includes with respect to Mr. Jackson, 100,000 shares owned by Mr. Jackson's
spouse, as to which shares Mr. Jackson disclaims beneficial ownership, and
50,000 shares owned by a foundation in which Mr. Jackson is a trustee.
(4) Includes with respect to Dr. Barer, 125,000 shares and 45 shares owned by
the spouse and daughter of Dr. Barer respectively, as to which shares Dr.
Barer disclaims beneficial ownership.
(5) Includes with respect to Mr. Hugin, 21,200 shares owned by a family
foundation in which Mr. Hugin is a trustee.
(6) Includes with respect to Mr. Cary, 75,000 shares owned by a trust in which
Mr. Cary is one of the trustees, and 37,994 shares owned by a family
limited liability company of which Mr. Cary is a member.
(7) Includes or excludes, as the case may be, shares of Common Stock as
indicated in the preceding footnotes and shares of Common Stock subject to
warrants and/or options that are currently exercisable or exercisable
within 60 days of April 7, 2004.
(8) Information regarding FMR was obtained from a Schedule 13G, filed by FMR
with the Securities and Exchange Commission on February 17, 2004. Such
Schedule 13G states that, through two wholly owned subsidiaries (Fidelity
Management & Research Company and Fidelity Management Trust Company), FMR
beneficially owns 12,195,032 shares of Common Stock, and has sole
dispositive power over all 12,195,032 shares and sole voting power over
73,000 of such shares.
DIRECTOR COMPENSATION
All members of the Board of Directors who are not our employees
("NON-EMPLOYEE DIRECTORS") receive an annual fee of $10,000 a year and an
additional $10,000 a year upon attendance of 75% of the total number of meetings
of the Board of Directors. In addition, all Non-Employee Directors receive
$2,000 for each Board Meeting attended in person (and are reimbursed for their
expenses for each meeting attended) and $500 for each telephonic Board Meeting
attended, and are eligible to receive stock options pursuant to the 1995
Non-Employee Directors' Plan (the "DIRECTORS' OPTION PLAN"). Each Non-Employee
Director serving on a committee of the Board of Directors receives $500 for each
committee meeting attended in person or by telephone. In addition, each of the
Chairmen of the Management Compensation and Development Committee, the Executive
Committee and the Nominating and Governance Committee receives $2,500 in annual
cash compensation, and the chairman of the Audit Committee receives $5,000 in
annual cash compensation.
The Directors' Option Plan was adopted by the Board of Directors on April
5, 1995, and approved by our stockholders at the 1995 annual meeting of
stockholders. At our annual meeting held in 1997, the Directors' Option Plan was
amended to increase the number of shares of our Common Stock that may be issued
upon exercise of options granted thereunder from 750,000 shares to 1,050,000
shares. At our annual meeting held in 1999, the Directors' Option Plan was
amended to increase the number of shares of our Common Stock that may be issued
upon exercise of options granted thereunder from 1,050,000 shares to 1,800,000
shares. The Directors' Option Plan currently provides for the granting to
Non-Employee Directors of non-qualified options to purchase an aggregate of not
more than 1,800,000 shares (subject to adjustment to reflect changes in
capitalization) of Common Stock.
Under the Directors' Option Plan, each new Non-Employee Director upon the
date of his or her election or appointment will be granted a non-qualified
option to purchase 20,000 shares of Common Stock. These initial options vest in
four equal annual installments commencing on the first anniversary of the date
of grant, assuming the Non-Employee Director remains a director of our company.
Each Non-Employee Director currently also receives non-qualified options
to purchase 3,750 shares of Common Stock per quarter (15,000 shares annually).
These options vest in full on the first anniversary of the date of the grant,
assuming the Non-Employer Director is a director of our company on that date.
5
The Directors' Option Plan also provides for a discretionary grant upon
the date of each annual meeting of an additional option to purchase up to 5,000
shares to a non-employee director who serves as a member (but not a chairman)
of a committee of the Board of Directors and up to 10,000 shares to a
non-employee director who serves as the chairman of a committee of the Board of
Directors.
All options granted pursuant to the Directors' Option Plan will expire no
later than 10 years from the date of grant and no options may be granted after
June 16, 2005. If a Non-Employee Director terminates his or her service on the
Board of Directors for any reason, options that were exercisable on the date of
termination and that have not expired may be exercised at any time until the
date of expiration of such options. In addition, if there is a change of
control and within two years after such change of control a director ceases to
be a Non-Employee Director for any reason, or is not nominated for election by
our stockholders, all unvested portions of a stock option will automatically
vest.
In 2003, pursuant to the Directors' Option Plan, each of Messrs. Bowman,
Cary and Morgan and Dr. Robb received options to purchase a total of 27,500
shares of Common Stock. Such options were granted: 20,000 on June 10; 3,750 on
September 15 and 3,750 on December 15, 2003, at exercise prices of $33.62,
$45.11 and $44.83 per share, respectively, the fair market value of the stock
on the dates of the grants. In 2003, pursuant to the Directors' Option Plan,
each of Mr. Casey and Drs. Kaplan and Hayes received options to purchase a
total of 22,500 shares of Common Stock. Such options were granted: 15,000 on
June 10; 3,750 on September 15 and 3,750 on December 15, 2003, at exercise
prices of $33.62, $45.11 and $44.83 per share, respectively, the fair market
value of the stock on the dates of the grants.
BOARD INDEPENDENCE
No director will be deemed to be independent unless the Board of Directors
affirmatively determines that the director has no material relationship with
our company, directly or as an officer, stockholder or partner of an
organization that has such a relationship. The Board of Directors observes all
criteria for independence established by the National Association of Securities
Dealers, Inc. ("NASD"). In its annual review of director independence, the
Board of Directors has determined that all of our Non-Employee Directors, and a
majority of all of the directors, of our company may be classified as
"independent" within the meaning of Rule 4200 of the NASD Marketplace Rules.
BOARD MEETINGS; COMMITTEES AND MEMBERSHIP
The Board of Directors held eight meetings during 2003. During 2003, each
of the directors attended more than 75% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings of all committees of the Board on which such director served. Our
policy is to encourage our Board members to attend the Annual Meeting of
stockholders, and a majority of our directors attended the 2003 Annual Meeting
of stockholders.
We maintain the following committees of the Board of Directors: the
Executive Committee (the "EXECUTIVE COMMITTEE"), the Management Compensation
and Development Committee (the "COMPENSATION COMMITTEE"), the Nominating and
Governance Committee (the "NOMINATING COMMITTEE") and the Audit Committee (the
"AUDIT COMMITTEE"). Except for the Executive Committee, each of the committees
are comprised entirely of directors who may be classified as "independent"
within the meaning of Rule 4200 of the NASD Marketplace Rules. Other than the
Executive Committee, each of the committees acts pursuant to a separate written
charter, and each such charter has been adopted and approved by the Board of
Directors. A copy of the Audit Committee Charter is attached to this Proxy
Statement as Appendix A and is available on our website at
http://www.celgene.com. A copy of the Nominating Committee Charter is attached
to this Proxy Statement as Appendix B.
The Executive Committee
The Executive Committee's current members are Frank T. Cary, Chairman, Sol
J. Barer, John W. Jackson and Richard C.E. Morgan. The Executive Committee held
no meetings in 2003. The Executive Committee has and may exercise all of the
powers and authority of our full Board of Directors, subject to certain
exceptions.
6
The Compensation Committee
The Compensation Committee's current members are Richard C.E. Morgan,
Chairman, Frank T. Cary and Jack L. Bowman. The Compensation Committee annually
reviews the total compensation package for all executive officers, including
the Chief Executive Officer; considers modification of existing compensation
and benefit programs and the adoption of new plans; administers the plans and
reviews the compensation of non-employee members of the Board of Directors. The
Compensation Committee has (i) the full power and authority to interpret the
provisions and supervise the administration of our 1986 Stock Option Plan, the
1992 Long-Term Incentive Plan and the 1998 Stock Incentive Plan, (ii) the full
power and authority to administer and interpret our Deferred Compensation Plan,
(iii) the full power and authority to administer and oversee our Long-term
Incentive Plan and (iv) the authority to review all matters relating to our
personnel. The Compensation Committee met four times during 2003.
The Nominating Committee
The Nominating Committee's current members are Jack L. Bowman, Chairman,
Frank T. Cary and Michael D. Casey. The Nominating Committee held its first
meeting in 2003. The Nominating Committee determines the criteria for
nominating new directors, recommends to the Board of Directors candidates for
nomination to the Board of Directors and oversees the evaluation of the Board
of Directors. The Nominating Committee's process to identify and evaluate
candidates for nomination to the Board of Directors includes consideration of
candidates for nomination to the Board of Directors recommended by
stockholders. Such stockholder recommendations must be delivered to our
Corporate Secretary, together with the information required to be filed in a
Proxy Statement with the Securities and Exchange Commission regarding director
nominees and each such nominee must consent to serve as a director if elected,
no later than the deadline for submission of stockholder proposals as set forth
in our Bylaws and under the section of this Proxy Statement entitled
"Stockholder Nominations." In considering and evaluating such stockholder
proposals that have been properly submitted, the Nominating Committee will apply
substantially the same criteria that the Nominating Committee believes must be
met by a Nominating Committee-recommended nominee as described below. To date,
we have not received any recommendations from stockholders requesting that the
Nominating Committee consider a candidate for inclusion among the Nominating
Committee's slate of nominees in our proxy statement.
In addition, certain identification and disclosure rules apply to director
candidate proposals submitted to the Nominating Committee by any single
stockholder or group of stockholders that has beneficially owned more than five
percent of the Common Stock for at least one year (a "Qualified Stockholder
Proposal"). If the Nominating Committee receives a Qualified Stockholder
Proposal that satisfies the necessary notice, information and consent
provisions referenced above, the Proxy Statement will identify the candidate
and the stockholder (or stockholder group) that recommended the candidate and
disclose whether the Nominating Committee chose to nominate the candidate.
However, no such identification or disclosure will be made without the written
consent of both the stockholder (or stockholder group) and the candidate to be
so identified. The procedures described in this paragraph are meant to
establish additional requirements and are not meant to replace or limit
stockholders' general nomination rights in any way.
In evaluating director nominees, the Nominating Committee currently
considers the following factors:
o our needs with respect to the particular talents and experience of our
directors;
o the knowledge, skills and experience of nominees, including experience in
business or finance, in light of prevailing business conditions and the
knowledge, skills and experience already possessed by other members of the
Board of Directors;
o familiarity with our business and businesses similar or analogous to ours;
o experience with accounting rules and practices and corporate governance
principles; and
o such other factors as the Nominating Committee deems are in our best
interests and the best interests of our stockholders.
7
The Nominating Committee identifies nominees by first evaluating the
current members of the Board of Directors willing to continue in service. If
any member of the Board does not wish to continue in service or if the
Nominating Committee or the Board of Directors decides not to re-nominate a
member for re-election, the Nominating Committee identifies the desired skills
and experience of a new nominee, and discusses with the Board of Directors
suggestions as to individuals who meet the criteria. The Nominating Committee
may also utilize the services of an outside search firm to assist it in finding
appropriate nominees for the Board of Directors.
The Audit Committee
The Audit Committee's current members are Walter L. Robb, Chairman, Gilla
Kaplan, Arthur Hull Hayes, Jr. and Michael D. Casey. The Audit Committee held
six meetings in 2003. Each of Dr. Robb and Mr. Casey is an "audit committee
financial expert" within the meaning of the rules of the Securities and
Exchange Commission and, as such, both Mr. Casey and Dr. Robb satisfy the
requirements of Rule 4350 of the NASD. The Audit Committee oversees our
financial reporting process on behalf of the Board of Directors. In fulfilling
its responsibility, the Audit Committee pre-approves, subject to stockholder
ratification, the selection of our independent certified public accountants.
The Audit Committee also reviews our consolidated financial statements and the
adequacy of our internal controls. The Audit Committee meets at least quarterly
with our management and our independent certified public accountants to review
and discuss the results of audits or reviews of our consolidated financial
statements, the evaluation of our internal audit controls, the overall quality
of our financial reporting and our critical accounting policies and to approve
any related-party transactions. The Audit Committee meets separately, at least
quarterly, with the independent certified public accountants and our Chief
Executive Officer. In addition, the Audit Committee oversees our existing
procedures for the receipt, retention and handling of complaints. A more
complete description of the Audit Committee and its functions may be found in
the Audit Committee Charter attached to this Proxy Statement as Appendix A.
STOCKHOLDER NOMINATIONS
Our Bylaws provide that nominations for the election of directors may be
made at the Annual Meeting: (a) by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (b) by any stockholder
who (i) is a stockholder of record on the date of the giving of the notice and
on the record date for the determination of stockholders entitled to vote at
such annual meeting and (ii) complies with the notice procedures set forth
below.
In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to our Corporate Secretary.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at our principal executive offices not less than sixty
(60) days nor more than ninety (90) days prior to the date of the annual
meeting; provided, however, that in the event that less than seventy (70) days'
notice or prior public disclosure of the date of the annual meeting is given or
made to stockholders, notice by the stockholder (in order to be timely) must be
so received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs.
To be in proper written form, a stockholder's notice to the Corporate
Secretary must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director: (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares of our capital stock
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filing required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the
rules and regulations promulgated thereunder; and (b) as to the stockholder
giving the notice: (i) the name and record address of such stockholder,
(ii) the class or series and number of shares of our capital stock which are
owned beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
8
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by proxy at
the annual meeting to nominate the persons named in his or her notice and
(v) any other information relating to such stockholder that would be required
to be disclosed in a proxy statement or other filing required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent of each
proposed nominee to being named as a nominee and serving as a director if
elected.
STOCKHOLDER COMMUNICATIONS
Our Board of Directors has determined that, in order to facilitate
communications with the Board of Directors, or any individual members or any
Committees of the Board of Directors, stockholders should direct all
communication in writing to our Corporate Secretary at our principal executive
offices. Our Corporate Secretary will forward all such correspondence to the
Board of Directors, individual members of the Board of Directors or applicable
chair persons of any Committee of the Board of Directors, as appropriate and as
directed in the communication, unless the communication is unduly hostile,
threatening or illegal.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Exchange Act, our directors, executive
officers and any persons holding more than 10 percent of the Common Stock are
required to report their ownership of Common Stock and any changes in that
ownership, on a timely basis, to the Securities and Exchange Commission. All
applicable acquisitions and dispositions of Common Stock, including grants of
options under our Directors' Option Plan, the 1992 Long-Term Incentive Plan and
the 1998 Stock Incentive Plan in 2003, were filed on a timely basis for the
year 2003.
AUDIT COMMITTEE REPORT
Pursuant to rules adopted by the Securities and Exchange Commission
designed to improve disclosures related to the functioning of corporate audit
committees and to enhance the reliability and credibility of financial
statements of public companies, the Audit Committee of the Company's Board of
Directors submits the following report:
AUDIT COMMITTEE REPORT TO STOCKHOLDERS
The Audit Committee of the Board of Directors is responsible for providing
independent, objective oversight of the Company's accounting functions and
internal controls. The Audit Committee is composed of four directors, each of
whom is independent as defined by the National Association of Securities
Dealers' listing standards. The Audit Committee operates under a written
charter approved by the Board of Directors and held six meetings in 2003. A
copy of the charter is attached to this Proxy Statement as Appendix A.
Management is responsible for the Company's internal controls and
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and to
issue a report thereon. The Audit Committee's responsibility is to monitor and
oversee these processes. The Audit Committee has established a mechanism to
receive, retain, and process complaints on auditing, accounting and internal
control issues including the confidential, anonymous submission by employees of
concerns on questionable accounting and auditing matters.
In connection with these responsibilities, the Audit Committee met with
management and the independent auditors to review and discuss the December 31,
2003 consolidated financial statements. The Audit Committee also discussed with
the independent auditors the matters required by Statement on Auditing
Standards No. 61 (Communication with Audit Committees). The Audit Committee
also
9
received written disclosures from the independent auditors required by
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and the Audit Committee discussed with the independent
auditors the firm's independence.
Based upon the Audit Committee's discussions with management and the
independent auditors, and the Audit Committee's review of the representations
of management and the independent auditors, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2003, to be filed with the Securities and Exchange Commission.
Respectfully submitted,
THE AUDIT COMMITTEE
Walter L. Robb, Ph.D., CHAIR
Gilla Kaplan, Ph.D.
Arthur Hull Hayes, Jr., M.D.
Michael D. Casey
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE ELECTION OF EACH OF THE NOMINEES
---
10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information about the compensation paid, or
payable, by us for services rendered in all capacities to our Chief Executive
Officer and each of our most highly paid executive officers who earned more
than $100,000, for each of the last three fiscal years in which such officers
were executive officers for all or part of the year.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- ------------------------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND COMPENSATION STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) AWARD(S) ($) OPTIONS # ($)
------------------ ---- ---------- --------- ------------ ------------ ---------- ------------
John W. Jackson ...... 2003 690,313 1,131,606 15,000 (1) 0 250,000 13,390 (2)
Chairman and 2002 531,562 525,582 18,000 (1) 0 325,000 13,390 (2)
Chief Executive 2001 506,250 230,344 10,200 (1) 0 100,000 13,390 (2)
Officer
Sol J. Barer, Ph.D. .. 2003 552,250 678,964 15,000 (1) 0 157,500 0
President and 2002 425,250 300,333 18,000 (1) 0 192,500 0
Chief Operating 2001 405,000 131,625 10,200 (1) 0 50,000 0
Officer
Robert J. Hugin ...... 2003 483,219 475,275 15,000 (1) 0 113,750 0
Sr. V. P. & Chief 2002 372,094 210,233 16,500 (1) 0 136,200 0
Financial Officer 2001 354,375 92,138 10,200 (1) 0 35,000 0
----------
(1) Reflects matching contributions under our 401(k) plan.
(2) Reflects the imputed value of premiums of life insurance premiums for a
life insurance policy for Mr. Jackson.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
John W. Jackson, Sol J. Barer and Robert J. Hugin (each an "EXECUTIVE")
are employed pursuant to substantially similar employment agreements (the
"EMPLOYMENT AGREEMENTS"). On May 1, 2003 we entered into new three-year
Employment Agreements with each of the Executives (each expiring on May 1,
2006). The Employment Agreements provide Messrs. Jackson, Barer and Hugin with
an initial base salary (which from time to time may be increased by the Board
of Directors, or a committee thereof), and which is currently $750,000,
$600,000 and $525,000, respectively. In addition, each of the Employment
Agreements provides for an annual target bonus which is currently 100%, 75% and
60%, respectively, of Executive's base salary measured against objective
criteria to be determined by the Board of Directors, or a committee thereof.
The Employment Agreements also provide that Messrs. Jackson, Barer and Hugin
are entitled to continue to participate in all group health and insurance
programs (and all other fringe benefit or retirement plans which are generally
available to our employees). Each of the Employment Agreements provides that if
Executive is terminated by us without cause or due to Executive's disability,
he shall be entitled to receive a lump sum payment in an amount equal to
Executive's annual base salary and a pro rata share of Executive's annual
target bonus. Upon the occurrence of a change in control (as defined in the
Employment Agreements) and thereafter, each Employment Agreement provides that
if (a) at any time within one year of a change in control Executive's
employment is terminated by us without cause or for disability or by Executive
for good reason (as defined in the Employment Agreement) or (b) at any time
within 90 days prior to a change in control, Executive's employment is
terminated by us without cause or by Executive for good reason, Executive shall
be entitled to receive: (i) a lump sum payment in an amount equal to (a) three
times Executive's base salary plus (b) three times Executive's highest annual
bonus within the three years prior to the change in control; (ii) any accrued
benefits; (iii) payment of health and welfare premiums for Executive and his
dependants for a maximum of three years; and (iv) full and immediate vesting of
all stock options and equity awards; provided, however, that such payment shall
be reduced by any payments made to Executive prior to the change in control on
account of Executive's termination. Each Employment Agreement also provides
that Executive shall be entitled to receive a gross-up payment on
11
any payments made to Executive that are subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
except that a gross-up will not be made if the payments made to Executive do
not exceed 105% of the greatest amount that could be paid to Executive such
that the receipt of payments would not give rise to the excise tax. Each
Executive is subject to a non-compete provision which applies during the period
Executive is employed and until the first anniversary of the date Executive's
employment terminates (the non-compete provision applies to the second
anniversary of the date Executive's employment terminates if Executive receives
change in control payments and benefits).
STOCK OPTION GRANTS FOR FISCAL 2003
The following table provides information concerning grants of stock
options to the following named executive officers during the 2003 fiscal year.
OPTION GRANTS DURING FISCAL 2003
POTENTIAL REALIZABLE
VALUE
ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
DATE OF OPTIONS EMPLOYEES PRICE PER EXPIRATION -------------------------
NAME GRANT GRANTED(1) IN 2003(2) SHARE DATE 5% 10%
---- ------- ---------- ---------- --------- ---------- ---------- -----------
John W. Jackson ............. 06/10/03 200,000 8.3% $33.62 06/10/13 $4,229,396 $10,718,056
09/15/03 25,000 1.0% $45.11 09/15/13 $ 709,354 $ 1,795,633
12/15/03 25,000 1.0% $44.83 12/15/13 $ 704,951 $ 1,786,475
Sol J. Barer, Ph.D. ......... 06/10/03 127,500 5.3% $33.62 06/10/13 $2,696,239 $ 6,832,760
09/15/03 15,000 * $45.11 09/15/13 $ 425,619 $ 1,078,580
12/15/03 15,000 * $44.83 12/15/13 $ 422,971 $ 1,071,885
Robert J. Hugin ............. 06/10/03 93,750 3.9% $33.62 06/10/13 $1,982,529 $ 5,024,088
09/15/03 10,000 * $45.11 09/15/13 $ 283,741 $ 719,053
12/15/03 10,000 * $44.83 12/15/13 $ 281,980 $ 714,590
----------
* Less than one percent (1%)
(1) All options granted in 2003 were granted pursuant to our 1998 Stock
Incentive Plan. The grants to Mr. Jackson, Dr. Barer and Mr. Hugin are
vested in annual increments of 33 1/3% of each total grant, beginning on
the date of grant. All options were granted at the fair market value of
Common Stock on the effective date of grant.
(2) The total number of options granted to employees in 2003 was 2,424,027.
12
OPTION EXERCISES AND VALUES FOR FISCAL 2003
The following table sets forth information for each of the named executive
officers with respect to the value of options exercised during the year ended
December 31, 2003, and the value of outstanding and unexercised options held as
of December 31, 2003. There were no stock appreciation rights exercised during
2003 and none were outstanding as of December 31, 2003.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 2003 AT DECEMBER 31, 2003(2)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE(3) UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE
---- ------------ --------------- -------------- ------------- ---------------- -------------
John W. Jackson ............. -- -- 1,466,820 -- $31,113,862 --
Sol J. Barer, Ph.D. ......... 10,000 $345,900 1,022,762 -- $24,546,835 --
Robert J. Hugin ............. -- -- 745,800 -- $18,242,272 --
----------
(1) Represents the difference between the average high and low trading price of
the Common Stock on the Nasdaq National Market on the date the shares were
acquired upon exercise and the exercise price of the options exercised
multiplied by the number of shares acquired upon exercise.
(2) Represents the difference between the closing market price of the Common
Stock as reported by Nasdaq on December 31, 2003 of $44.88 per share and
the exercise price per share of the in-the-money options multiplied by the
number of shares underlying the in-the-money options.
(3) Represents vested options under the 1992 Long-Term Incentive Plan and
vested and unvested options under the 1998 Stock Incentive Plan
(collectively, the "Plans") which may be exercised under the provisions of
the Plans. Shares of stock underlying unvested options which may be
acquired upon exercise of such option (with a value of in-the-money
options of $4,101,170 for Mr. Jackson, $2,529,550 for Dr. Barer and
$1,818,060 for Mr. Hugin), however, may not be sold until such options are
fully vested.
COMPENSATION COMMITTEE REPORT
The Compensation Committee annually reviews the performance and total
compensation package and policies for all executive officers, considers the
modification of existing compensation and employee benefit programs and the
adoption of new plans, administers the Plans and reviews the compensation and
benefits of Non-Employee Directors. The Compensation Committee is composed
solely of independent outside directors.
EXECUTIVE COMPENSATION POLICIES AND PROGRAMS
Our executive compensation program is part of a company-wide program
covering all employees. The program's goals are to attract, retain and motivate
employees, and it utilizes incentives such that employees and stockholders
share the same risks. The compensation program is designed to link compensation
to performance.
A portion of each employee's compensation relates to the grant of stock
options, and such grants are based on the successful attainment of strategic
corporate, commercial and individual goals.
We do not have a pension plan (other than the 401(k) Plan) or other
capital accumulation program. Grants of stock options are therefore of great
importance to executives as well as all employees. Any long-term value to be
derived from such grants will be consistent with stockholder gains.
On and after September 19, 2000, stock options granted to executives at
the vice-president level and above contain a reload feature which provides that
if (1) the optionee exercises all or any portion of the stock option (a) at
least six months prior to the expiration of the stock option, (b) while
employed by us or one of our our affiliates and (c) prior to the expiration
date of the 1998 Stock Incentive Plan and (2) the optionee pays the exercise
price for the portion of the stock option so exercised or pays applicable
withholding taxes by using Common Stock owned by the optionee for at least
six months prior to the date of exercise, the optionee shall be granted a new
stock option under the 1998 Stock Incentive Plan
13
on the date all or any portion of the stock option is exercised to purchase the
number of shares of Common Stock equal to the number of shares of Common Stock
exchanged by the optionee to exercise the stock option or to pay withholding
taxes thereon. The reload stock option will be exercisable on the same terms
and conditions as apply to the original stock option except that (x) the reload
stock option will become exercisable in full on the day that is six months
after the date the original stock option is exercised, (y) the exercise price
shall be the fair market value (as defined in the 1998 Stock Incentive Plan) of
Common Stock on the date the reload stock option is granted and (z) the
expiration of the reload stock option will be the date of expiration of the
original stock option. An optionee may not reload the reload stock option
unless otherwise permitted by the Compensation Committee.
Executive and employee compensation includes salary, bonus payments,
employment-related benefits and incentive compensation:
Salary. Salaries are set competitively relative to the biotechnology and
pharmaceutical industries--industries with which we compete for our highly
skilled talent. Individual experience and performance is considered when
setting salaries within the range for each position. Annual reviews are held
and adjustments are made based on attainment of individual goals.
Bonus Plan. Our total cash compensation in addition to base salaries
includes annual bonus eligibility for executives and some employee levels. The
purpose of this compensation component is to provide a variable compensation
component to executives and employees to achieve annual corporate, business
unit and individual goals. Goals are set annually based upon our objectives to
focus on achievement of key business targets and create employee ownership. The
Executive Bonus Plan for officers is based exclusively on achievement of our
key performance measures established and approved by the Compensation Committee
of the Board of Directors.
Deferred Compensation. Certain designated executives may elect to defer
the receipt of a portion of their base salary and bonuses, the receipt of
restricted stock and the delivery of stock option gains to our Deferred
Compensation Plan, an unfunded non-qualified deferred compensation arrangement.
We make a matching contribution to the Deferred Compensation Plan on behalf of
certain executives in the plan at a rate specified by the Compensation
Committee.
Benefits. All employees are eligible for similar benefits, such as
medical, dental, vision, disability and life insurance.
Incentive Compensation. A stock incentive program is established annually.
The purpose of this program is to provide financial incentives to executives
and employees to achieve annual corporate, business unit and individual goals.
The stock incentive program also aligns executive and employee interests with
those of stockholders by using grants of stock options. Such grants vest over
time thereby encouraging continued employment with us. The size of grants is
tied to comparative biotechnology industry practices. To determine such
comparative data, we rely on outside compensation consultants and third-party
industry surveys. Stock option grants are made on a quarterly basis.
Under our 2003 incentive program, it was agreed that we would grant at a
future date options to purchase shares of Common Stock, subject to the
achievement of certain 2003 goals. A similar incentive program has been
designed for 2004 based on attainment of corporate, business unit and
individual goals. The program is open to all regular full-time employees with
at least three months of service, other than our executive officers.
In 2003, we established a performance incentive program under our 1998
Stock Incentive Plan, which is a long-term program, designed to provide key
officers and executives with specified incentive opportunities contingent upon
achievement of pre-established corporate performance objectives and continued
employment. The goals of the program are to create focus on key long-term
objectives over time while creating a retention vehicle to ensure management
continuity in key functional areas. The 2003 performance cycle began on May 1,
2003 and will end on December 31, 2005 (the "2003 CYCLE"). In addition, the
2004 performance cycle began on January 1, 2004 and will end on December 31,
2006 (the "2004 CYCLE") Performance measures for the 2003 Cycle and the 2004
Cycle are based on the following components: 25% on earnings per share, 25% on
net income and 50% on revenue.
14
For the 2003 Cycle and the 2004 Cycle, performance awards are expressed as
a percentage of base salary. While such awards are denominated in cash, it is
anticipated that they will be payable in the form of shares (converted from
cash at the time of payment), although the Compensation Committee reserves the
right to use cash. It is also anticipated that each named Executive Officer
will participate in the performance incentive program.
Chief Executive Officer Compensation. Mr. Jackson received a salary of
$690,313 for 2003. Mr. Jackson also received a bonus of $1,131,606 for 2003.
Mr. Jackson's bonus is based solely on the achievement of key performance
objectives for our company approved and measured by the Compensation Committee
of the Board of Directors. Factors considered in determining Mr. Jackson's
bonus included the successful attainment of certain revenue and earnings
targets, and several important milestones in the development of our products,
as well as comparisons to total compensation packages of chief executive
officers at corporations within our industry that are of comparable size.
Policy with Respect to Compensation Deductibility. Our policy with respect
to the deductibility limit of Section 162(m) of the Code generally is to
preserve the federal income tax deductibility of compensation paid when it is
appropriate and is in the best interest of us and our stockholders. However, we
reserve the right to authorize the payment of non-deductible compensation if we
deem that it is appropriate.
Members of the Compensation Committee:
Richard C.E. Morgan, Chairman
Frank T. Cary
Jack L. Bowman
15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Richard C.E. Morgan,
Chairman, Frank T. Cary and Jack L. Bowman. Each is an independent outside
director. There were no interlocks among any of the members of the Compensation
Committee and any of our executive officers.
PERFORMANCE GRAPH
The following graph shows changes over the past five years in the value of
$100 invested in: 1) our Common Stock; 2) the Standard & Poor's 500 Index;
3) the NASDAQ Stock Market (U.S.) Index; and 4) the NASDAQ Pharmaceutical
Index.
The graph shows the value of $100 invested on December 31, 1998 in our
Common Stock or in one of the indexes, as applicable, including reinvestment of
dividends, at December 31 for each of 1998-2003.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG CELGENE CORPORATION, THE S & P 500 INDEX,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE NASDAQ
PHARMACEUTICAL INDEX
[GRAPHIC OMITTED]
* $100 invested on 12/31/98 in stock or index, including reinvestment of
dividends. Fiscal year ended December 31.
Copyright (Copyright) 2002, Standard & Poor's, a
division of The McGraw-Hill Companies, Inc.
All rights reserved. www.researchdatagroup.com/S&P.htm
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------
12/98 12/99 12/00 12/01 12/02 12/03
CELGENE CORPORATION ................ 100.00 455.28 634.21 622.89 418.97 875.79
S & P 500 .......................... 100.00 121.04 110.02 96.95 75.52 97.18
NASDAQ STOCK MARKET (U.S.) ......... 100.00 190.62 127.67 70.42 64.84 91.16
NASDAQ PHARMACEUTICAL .............. 100.00 199.92 238.75 217.59 140.77 202.79
----------
* $100 INVESTED ON 12/31/98 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
16
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to Regulations 14A and 14C under the Exchange Act or to
the liabilities of Section 18 under the Exchange Act.
PROPOSAL TWO:
AMENDMENT TO CERTIFICATE OF INCORPORATION
On February 19, 2004, the Board of Directors unanimously approved an
amendment to our Certificate of Incorporation, as amended, that would increase
the number of authorized shares of stock from 125,000,000 to 280,000,000 and
directed the submission of the amendment for approval at the Annual Meeting.
As of April 28, 2004, 81,735,304 shares of Common Stock were issued and
outstanding, 1,800,000 shares were reserved for issuance under the Directors'
Option Plan, 12,500,000 shares were reserved for issuance under the 1998 Stock
Incentive Plan and 8,255,920 shares were reserved for issuance under our
$400,000,000 1 3/4% Convertible Notes due 2008.
The Board of Directors considers the proposed increase in the number of
authorized shares of Common Stock desirable because it would give the Board of
Directors the flexibility to issue Common Stock, if it determined to do so, in
connection with stock dividends and splits, future acquisitions, financings,
employee benefits and other appropriate corporate purposes without the delay
and expense that could arise if there were insufficient authorized shares for a
proposed issuance, thereby requiring stockholder approval and a special
stockholders meeting before such issuance could proceed.
Except pursuant to the Director's Option Plan, the 1998 Stock Incentive
Plan and the Convertible Notes, there are no present plans, agreements or
understandings for the issuance of additional shares of Common Stock as of the
date of this Proxy Statement; however, we review and evaluate potential
acquisitions and other corporate actions on an on-going basis to determine if
such actions would be in our best interest and in the best interest of our
stockholders. Depending on the nature and size of any future issuance of Common
Stock, further stockholder authorization may be required under Delaware law or
the rules of the Nasdaq Stock Market or any stock exchange on which the Common
Stock may then be listed.
IF THE PROPOSED AMENDMENT TO OUR CERTIFICATE OF INCORPORATION IS APPROVED
BY OUR STOCKHOLDERS, IT WOULD BECOME EFFECTIVE UPON THE FILING OF A CERTIFICATE
OF AMENDMENT WITH THE DELAWARE SECRETARY OF STATE, WHICH FILING WOULD OCCUR
PROMPTLY AFTER THE ANNUAL MEETING.
REQUIRED VOTE
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the Annual Meeting will be required to approve this
Amendment. Abstentions are not affirmative votes and, therefore, shall have the
same effect as votes against the proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ADOPTION OF THIS PROPOSAL
---
17
PROPOSAL THREE: INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP, independent certified
public accountants, to audit our consolidated financial statements for the
current year. The affirmative vote of a majority of the shares present and
eligible to vote at the Annual Meeting is required for the ratification of the
Board of Directors' selection of KPMG LLP as our independent certified public
accountants for the fiscal year ending December 31, 2004. Representatives of
KPMG LLP are expected to be present at the meeting of stockholders and will be
given an opportunity to make a statement if they so desire. They are expected
to be available to respond to appropriate questions.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table summarizes fees billed to us by our independent
certified public accountants for the fiscal years ended 2003 and 2002.
2003 2002
---- ----
Audit Fees ............................. $447,504 $356,768
Audit-Related Fees ..................... $ 53,540 $ 39,250
Tax Fees ............................... $166,292 $ 52,883
All Other Fees ......................... $ 51,950 $ 0
Audit Fees
Fees to KPMG LLP for audit services totaled approximately $447,504
(including expenses) in 2003, including fees associated with the 2003 annual
audit, as well as a review of our quarterly reports on Form 10-Q for the year
and services rendered in connection with the filing of SEC registration
statements and other offerings of securities. Fees for audit services to KPMG
LLP totaled approximately $356,768 (including expenses) in 2002, including fees
associated with the 2002 annual audit, as well as a review of our quarterly
reports on Form 10-Q for the year and services rendered in connection with the
filing of SEC registration statements and accounting and reporting
consultations.
Audit-Related Fees
Fees to KPMG LLP for audit-related services totaled approximately $53,540
(including expenses) in 2003. In 2003, audit-related services consisted of
audits of employee benefit plans. Fees to KPMG LLP for audit-related services
totaled approximately $39,250 (including expenses) in 2002. In 2002,
audit-related services consisted of audits of employee benefit plans.
Tax Fees
Fees to KPMG LLP for tax services, including tax compliance, tax advice
and tax planning, were approximately $166,292 (including expenses) in 2003.
Fees to KPMG LLP for tax services, including tax compliance, tax advice and tax
planning, were approximately $52,883 (including expenses) in 2002.
All Other Fees
There were no such other fees in 2002. Fees to KPMG LLP for all other
services totaled approximately $51,950 in 2003 and consisted of services
rendered in connection with the Company's filings of Form 5500s for various
employee benefit plans.
AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF
INDEPENDENT AUDITORS
The Audit Committee currently pre-approves all audit and permissible
non-audit services provided by our independent certified public accountants.
These services may include audit services, audit-related services, tax services
and other services.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE ADOPTION OF THIS PROPOSAL
---
18
STOCKHOLDER PROPOSALS
Stockholders wishing to include proposals in the proxy material in
relation to our annual meeting to be held in 2005 must submit the same in
writing to Celgene Corporation, 7 Powder Horn Drive, Warren, New Jersey 07059,
Attention: Corporate Secretary, so as to be received at our executive office on
or before February 16, 2005. Such proposals must also meet the other
requirements and procedures prescribed by Rule 14a-8 under the Exchange Act
relating to stockholders' proposals.
Stockholders who intend to present a proposal at the 2005 annual meeting,
without including such proposal in our Proxy Statement, must provide our
Secretary with written notice of such proposal no later than April 1, 2005. If
the stockholder does not also comply with the requirements of Rule 14a-4 under
the Exchange Act, we may exercise discretionary voting authority under proxies
we solicit to vote in accordance with our best judgment on any such stockholder
proposal or nomination.
DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
Only one copy of this Proxy Statement and the Annual Report is being
delivered to stockholders residing at the same address, unless such
stockholders have notified us of their desire to receive multiple copies of the
Proxy Statement.
We will promptly deliver, upon oral or written request, a separate copy of
the Proxy Statement and Annual Report to any stockholder residing at the same
address as another stockholder and currently receiving only one copy of the
Proxy Statement and Annual Report who wishes to receive his or her own copy.
Requests should be directed to our Corporate Secretary by phone at (732)
271-1001 or by mail to Celgene Corporation, 7 Powder Horn Drive, Warren, New
Jersey 07059.
OTHER MATTERS
Upon written request addressed to our Corporate Secretary at 7 Powder Horn
Drive, Warren, New Jersey 07059 from any person solicited herein, we will
provide, at no cost, a copy of the Form 10-K Annual Report filed with the
Securities and Commission for the fiscal year ended December 31, 2003.
Our Board of Directors does not know of any matters to be brought before
the Annual Meeting other than the matters set forth in the Notice of Annual
Meeting of Stockholders and matters incident to the conduct of the Annual
Meeting. However, if any other matters should properly come before the Annual
Meeting, the persons named in the enclosed proxy card will have discretionary
authority to vote all proxies with respect thereto in accordance with their
best judgment.
By Order of the Board of Directors,
JOHN W. JACKSON
Chairman of the Board and
Chief Executive Officer
May 15, 2004
STOCKHOLDERS ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN
THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. YOUR PROMPT RESPONSE WILL BE HELPFUL, AND YOUR COOPERATION WILL
BE APPRECIATED.
19
APPENDIX A
AMENDED AND RESTATED CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are:
1. Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting and legal
compliance.
2. Directly monitor the independence and performance of the Company's
independent auditors.
3. Provide an avenue of communication among the independent auditors,
management and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to
the independent auditors as well as anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special
legal, accounting or other consultants or experts it deems necessary in the
performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the NASDAQ Stock
Market Inc. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be an "independent
director" as defined by NASDAQ and in the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules promulgated thereunder, and
free from any relationship that would interfere with the exercise of his or
her independent judgment. Additionally, no member of the Committee shall be
an "affiliated person" within the meaning of that term under Section 301 of
the Sarbanes-Oxley Act of 2002, and no member of the Committee may receive
any payment from the Company, other than payment for board or Committee
service. All members of the Committee shall have at least a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements. At least one member of the Committee
shall have financial sophistication as that term is used by NASDAQ and, if
practicable, shall be "an audit committee financial expert" as defined in
the rules of the Securities and Exchange Commission (the "SEC").
Audit Committee members shall be appointed by the Board on recommendation
of the Chairman of the Committee. If the Audit Committee Chair is not
present at any meeting of the Committee, the members of the Committee may
designate a chair by majority vote of the Committee membership.
The Committee shall meet a minimum of four times a year or as often as
circumstances dictate. The Audit Committee Chair shall prepare and/or
approve an agenda in advance of each meeting. The Committee shall meet
privately in executive session at least quarterly with management, the
independent auditors and as a committee to discuss any matters that the
Committee or each of these groups believes should be discussed. In
addition, the Committee, or at least its Chair, should meet with management
and the independent auditors quarterly to review the Company's financial
statements.
III. Audit Committee Responsibilities and Duties
Review Procedures
-----------------
1. Review and reassess the adequacy of this Charter at least annually.
Submit the Charter to the Board of Directors for approval and have the
document published at least every three years in accordance with
regulations of the SEC.
2. Review the Company's periodic and annual financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices and judgments. Discuss certain matters
required to be communicated to audit committees in accordance with
Statement on Auditing Standards No. 61 ("SAS No. 61").
3. In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting processes
and controls. Discuss significant financial risk exposures and the
steps management has taken to monitor, control and report such
exposures. Review significant findings prepared by the independent
auditors together with management's responses. Discuss with the
independent auditors and management their observations relative to the
quality and appropriateness of the Company's accounting principles and
significant estimates as applied in its financial reporting.
Independent Auditors
--------------------
4. The independent auditors are accountable solely to, and shall report
directly to, the Audit Committee. The Audit Committee shall review the
independence and performance of the auditors and shall have sole
authority to appoint the independent auditors or approve any discharge
of auditors when circumstances warrant.
5. Approve, in advance, all auditing and non-auditing services provided by
the independent auditors and the fees and other significant
compensation to be paid to the independent auditors.
6. Confirm and assure the independence of the independent auditors, and on
an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
7. At least annually, obtain and review a report by the independent
auditors addressing: (i) the audit firm's internal quality-control
procedures; and (ii) any material issues raised by the most recent
internal quality-control review, or peer review, of the audit firm, or
by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the firm and any steps taken to deal
with any such issues.
8. Review the independent auditors' audit plan; discuss scope, staffing,
locations, reliance upon management and general audit approach.
9. Discuss the annual audited financial statements and quarterly financial
statements, including the assessment of the integrity of such financial
statements, with management and the independent auditors, including the
Company's disclosures in the "Management's Discussion Analysis of
Financial Condition and Results of Operations" in each Form 10-Q and
10-K to be filed with the SEC. Assure that the auditor's reasoning is
described and documented in determining the appropriateness of changes
in accounting principles and disclosure practices.
10. Conduct discussions with the Company and the independent auditors
regarding the auditor's evaluation about the quality of the Company's
accounting principles and essential estimates in its financial
statements.
11. Review reports from the independent auditors concerning critical
accounting policies, all alternative treatments of financial
information under generally accepted accounting principles ("GAAP")
that were discussed with management and other material written
communications between the auditors and management. Also review with
the independent auditors any audit problems or difficulties as well as
management's response to those issues.
A-2
12. Review and approve reports from the independent auditors as required by
Independence Standards and current Statements on Auditing Standards.
Review and Assessment of Internal Controls
------------------------------------------
13. Discuss with management policies and programs with respect to risk
management and risk assessment.
14. Review management's annual Internal Control Report which (i)
acknowledges management's responsibility for establishing and
maintaining an adequate internal control structure and procedures for
financial reporting; and (ii) contains an assessment, as of the end of
the most recent fiscal year, of the internal control structure and
procedures for financial reporting.
15. Establish and maintain procedures for the (i) receipt, retention and
treatment of complaints received by the Company regarding accounting,
internal accounting controls and auditing matters and (ii)
confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters.
16. Consider and review with the independent auditor (i) the adequacy of
the internal controls of the Company and its subsidiaries, including
computerized information system controls and security; and related
findings and recommendations of the independent auditor together with
management's responses.
17. Coordinate the Board of Directors' oversight of the Company's internal
control over financial reporting, disclosure controls and procedures
and code of conduct. Receive and review the reports of the Chairman and
CEO and the CFO required by Rule 13a-14 of the Exchange Act.
Legal Compliance
----------------
18. On at least an annual basis, review with the Company's outside counsel
any legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations and inquiries received from regulators
or governmental agencies.
Other Audit Committee Responsibilities
--------------------------------------
19. Perform any other activities consistent with this Charter, the
Company's by-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
20. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
21. Review and approve all related-party transactions.
A-3
APPENDIX B
CHARTER OF THE
NOMINATING AND GOVERNANCE COMMITTEE
PURPOSE:
This document sets forth the policy of Celgene Corporation (the "Company")
concerning the establishment and operation of the Nominating and Governance
Committee of the Company's Board of Directors (the "Committee").
COMPOSITION:
The Committee must be comprised entirely of "independent directors" as such
term is defined by NASDAQ and shall consist of no fewer than 3 members;
provided, however, that with the approval of the Board, not more than one
member of the Committee may satisfy one or more of the exceptions permitted by
NASDAQ. A majority of the members of the Committee shall constitute a quorum.
RESPONSIBILITIES:
The Committee has responsibility for identifying individuals qualified to
become Board members and considering candidates to fill positions on the Board.
In identifying candidates, the Committee shall consider all factors the
Committee deems appropriate. The Committee shall recommend to the Board such
director nominees as it deems qualified.
The Committee also has responsibility for overseeing the periodic evaluation of
the performance of the Board and its committees in such manner as the Committee
deems appropriate.
The Committee also has responsibility for developing and recommending to the
Board such corporate governance guidelines as the Committee deems appropriate.
The Committee has the authority to retain search firms and/or consultants to
assist it in the performance of its responsibilities, including the authority
to approve such search firms' and consultants' fees.
The Committee shall report to the Board at least once annually.
The Committee shall assess its charter at least annually and shall recommend to
the Board any changes to the charter the Committee deems appropriate.
COMMITTEE MEETINGS:
The Committee shall meet at least once annually and will have such other
meetings each year as it deems appropriate. The Committee may ask members of
management or others to attend meetings and provide pertinent information, as
necessary. The Committee shall maintain a high degree of independence both in
establishing its agenda and in accessing various members of management. Minutes
shall be prepared of all meetings.
The Committee may delegate authority to individuals or subcommittees when it
deems appropriate. However, in delegating authority, it shall not absolve
itself from the responsibilities it bears under the terms of this Charter.
--------------------------------------------------------------------------------
CELGENE CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints John W. Jackson, Sol J. Barer and
Robert J. Hugin, and each of them, with power of substitution and
resubstitution, to represent and to vote on behalf of the undersigned
all of the shares of Celgene Corporation (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held at the offices of Proskauer Rose LLP, 26th floor, 1585
Broadway, New York, New York 10036 on Tuesday, June 15, 2004, at 1:00
p.m., local time, and at any adjournment or adjournments thereof,
hereby revoking all proxies heretofore given with respect to such
stock, upon the following proposals more fully described in the notice
of and proxy statement for the meeting (receipt of which is hereby
acknowledged).
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF ALL NOMINEES FOR
DIRECTOR LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS (1), (2) AND (3)
1. PROPOSAL TO ELECT TEN DIRECTORS
[ ] For [ ] Withhold [ ] For All To withhold authority to any
All All Except individual, Mark "for all Except"
and write the nominees number on
the line below.
-----------------------------------
01) John W. Jackson 06) Michael D. Casey
02) Sol J. Barer, Ph.D. 07) Arthur Hull Hayes, Jr., M.D.
03) Robert J. Hugin 08) Gilla Kaplan, Ph.D.
04) Jack L. Bowman 09) Richard C.E. Morgan
05) Frank T. Cary 10) Walter L. Robb, Ph.D.
2. PROPOSAL TO APPROVE AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO
INCREASE THE TOTAL NUMBER OF SHARES OF STOCK THAT WE ARE AUTHORIZED TO ISSUE
TO 280,000,000
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
2004
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, upon such other matters as may properly come before the
meeting.
Please indicate if you plan to attend this meeting
[ ] YES [ ] NO
Note: Please sign exactly as names appear on this proxy. Where shares are
held by joint tenants, both should sign. If signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president
or other authorized person. If a partnership, please sign in
partnership name by an authorized person.
Dated:
-----------------
-------------------------------------------
(Signature)
-------------------------------------------
(Signature)
-------------------------------------------
(Signature)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
2