================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AMGEN INC.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
[LOGO OF AMGEN(R)]
Gordon M. Binder
Chairman and Chief Executive Officer
April 3, 1997
DEAR STOCKHOLDER:
You are invited to attend the Annual Meeting of Stockholders of Amgen Inc.
to be held on Thursday, May 8, 1997, at 10:30 A.M., PDT, at the Regent Beverly
Wilshire, 9500 Wilshire Boulevard, Los Angeles, California.
At this year's meeting, you will be asked to elect two directors and to
ratify the selection of the independent auditors. The accompanying Notice of
Meeting and Proxy Statement describe these proposals. We urge you to read this
information carefully.
Your Board of Directors unanimously believes that election of its nominees
for directors and ratification of its selection of independent auditors are in
the best interests of Amgen and its stockholders, and, accordingly, recommends
a vote FOR Items 1 and 2 on the enclosed proxy card.
In addition to the formal business to be transacted, management will make a
presentation on developments of the past year and respond to comments and
questions of general interest to stockholders.
I personally look forward to greeting those Amgen stockholders able to
attend the meeting. If you plan to attend the Annual Meeting, please complete
and return the reply card enclosed with the Proxy Statement. We will then send
you a map with directions to the Regent Beverly Wilshire and an admission
badge to the Annual Meeting.
It is important that your shares be represented and voted whether or not you
plan to attend the Annual Meeting. THEREFORE, PLEASE SIGN, DATE AND PROMPTLY
MAIL THE ENCLOSED PROXY IN THE PREPAID ENVELOPE PROVIDED.
Thank you.
Sincerely,
/s/ Gordon M. Binder
Gordon M. Binder
Chairman of the Board and Chief
Executive Officer
Amgen Inc., 1840 DeHavilland Drive, Thousand Oaks, California 91320-1789
Telephone 805 447-1000
AMGEN INC.
AMGEN CENTER
1840 DEHAVILLAND DRIVE
THOUSAND OAKS, CALIFORNIA 91320-1789
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 8, 1997
---------------------
TO THE STOCKHOLDERS OF AMGEN INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Amgen
Inc., a Delaware corporation (the "Company"), will be held on Thursday, May 8,
1997, at 10:30 A.M., PDT, at the Regent Beverly Wilshire, 9500 Wilshire
Boulevard, Los Angeles, California 90212, for the following purposes:
1. To elect two directors to hold office until the Annual Meeting of
Stockholders in the year 2000;
2. To ratify the selection of Ernst & Young LLP as independent auditors of
the Company for the year ending December 31, 1997; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 13, 1997, as
the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any continuation or adjournment
thereof.
By Order of the Board of Directors
/s/ George A. Vandeman
George A. Vandeman
Secretary
Thousand Oaks, California
April 3, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A PREPAID ENVELOPE IS ENCLOSED FOR THAT
PURPOSE. EVEN IF YOU HAVE VOTED YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF
YOU ATTEND THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF
RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO ATTEND AND VOTE AT
THE MEETING, YOU MUST OBTAIN FROM SUCH BROKER, BANK OR OTHER NOMINEE, A PROXY
ISSUED IN YOUR NAME.
AMGEN INC.
AMGEN CENTER
1840 DEHAVILLAND DRIVE
THOUSAND OAKS, CALIFORNIA 91320-1789
---------------------
PROXY STATEMENT
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board of Directors" or the "Board") of Amgen Inc., a Delaware corporation
(the "Company" or "Amgen"), for use at the Annual Meeting of Stockholders to
be held on Thursday, May 8, 1997, at 10:30 A.M., PDT, (the "Annual Meeting"),
or at any continuation or adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting. The Annual Meeting
will be held at the Regent Beverly Wilshire, 9500 Wilshire Boulevard, Los
Angeles, California 90212.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly and mailing of this proxy statement, the proxy and any
additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding shares of the Company's common stock (the "Common Stock")
in their names which are beneficially owned by others to forward to such
beneficial owners. The Company may reimburse persons representing beneficial
owners for their costs of forwarding the solicitation material to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, telegram or personal solicitation by directors,
officers or other regular employees of the Company. No additional compensation
will be paid to directors, officers or other regular employees for such
services.
The Company intends to mail this proxy statement and accompanying proxy card
on or about April 3, 1997, to all stockholders entitled to vote at the Annual
Meeting.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1998 Annual Meeting of Stockholders (the "1998 Annual Meeting") must be
received by the Secretary of the Company not later than December 4, 1997, in
order to be included in the proxy statement and proxy relating to the 1998
Annual Meeting. The Company's Amended and Restated Bylaws (the "Bylaws")
provide that stockholders desiring to nominate persons for election to the
Board of Directors or to bring any other business before the stockholders at
an annual meeting must notify the Secretary of the Company thereof in writing
and such notice must be delivered to or received by the Secretary no later
than 90 days prior to such meeting (provided, however, that in the event that
less than 100 days' notice or prior public disclosure of the date of the
meeting is made to stockholders, the notice must be received not later than
the close of business on the tenth day following the date on which the notice
of the date of such meeting was mailed or the public disclosure was made).
Such notice must include (a) the name and address of the stockholder who
intends to make the nominations or propose the business and, as the case may
be, of the person or persons to be nominated or of the business to be
proposed; (b) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and, if
1
applicable, intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (c) if applicable, a
description of all arrangements or understandings between the stockholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee or each matter
of business to be proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission (the "SEC") had the nominee been nominated,
or intended to be nominated, or the matter been proposed, or intended to be
proposed by the Board of Directors; and (e) if applicable, the consent of each
nominee to serve as director of the Company if so elected.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on March 13,
1997, will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on March 13, 1997, there were outstanding and entitled to
vote 265,853,973 shares of Common Stock. Stockholders of record on such date
are entitled to one vote for each share of Common Stock held on all matters to
be voted upon at the meeting. A majority of the outstanding shares of Common
Stock, represented in person or by proxy, will constitute a quorum at the
Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Under the Company's Bylaws and Delaware law:
(1) shares represented by proxies that reflect abstentions or "broker non-
votes" (i.e., shares held by a broker or nominee which are represented at the
meeting, but with respect to which such broker or nominee is not empowered to
vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum; (2)
there is no cumulative voting and the director nominees receiving the highest
number of votes, up to the number of directors to be elected, are elected and,
accordingly, abstentions, broker non-votes and withholding of authority to
vote will not affect the election of directors; and (3) proxies that reflect
abstentions as to a particular proposal will be treated as voted for purposes
of determining the approval of that proposal and will have the same effect as
a vote against that proposal, while proxies that reflect broker non-votes will
be treated as unvoted for purposes of determining approval of that proposal
and will not be counted as votes for or against that proposal.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, Amgen
Center, 1840 DeHavilland Drive, Thousand Oaks, California 91320-1789, Mail
Stop 10-1-B, a written notice of revocation or a duly executed proxy bearing a
later date, or it may be revoked by attending the meeting and voting in
person. Attendance at the meeting will not, by itself, revoke a proxy.
2
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation, as amended, and Bylaws
provide that the Board of Directors shall be divided into three classes, each
class consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the Board
may be filled only by persons elected by a majority of the remaining
directors. A director elected by the Board to fill a vacancy (including a
vacancy created by an increase in the Board of Directors) will serve for the
remainder of the full term of the class of directors in which the vacancy
occurred and until such director's successor is elected and qualified, or
until such director's earlier death, resignation or removal.
The Board of Directors is presently comprised of nine members. There are
three directors in the class whose term of office expires in 1997, two of whom
are nominees for election to the Board. Dr. Raymond F. Baddour is retiring
from the Board of Directors effective immediately prior to the Annual Meeting,
and the Company's Bylaws have been amended to decrease the authorized number
of directors to eight effective immediately upon Dr. Baddour's resignation.
The Bylaws may be amended in the future to increase the authorized number of
directors. If elected at the Annual Meeting, each of the two nominees, Mr.
Gordon M. Binder and Mr. Franklin P. Johnson, Jr., would serve until the
Annual Meeting in the year 2000 and until his successor is elected and
qualified, or until such director's earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the Annual Meeting. Stockholders
do not have the right to cumulate their votes in the election of directors. It
is the intention of the persons named in the enclosed proxy, unless
authorization to do so is withheld, to vote the proxies received by them for
the election of the two nominees named below. If, prior to the Annual Meeting,
any nominee should become unavailable for election, an event which currently
is not anticipated by the Board, the proxies will be voted for the election of
such substitute nominee or nominees as the Board of Directors may propose.
Each person nominated for election has agreed to serve if elected and
management has no reason to believe that any nominee will be unable to serve.
Set forth below is biographical information for each person nominated and
for each person whose term of office as a director will continue after the
Annual Meeting.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE ANNUAL MEETING OF
STOCKHOLDERS IN THE YEAR 2000
GORDON M. BINDER
Mr. Gordon M. Binder, age 61, has served as a director of the Company since
October 1988. He joined the Company in 1982 as Vice President-Finance and was
named Senior Vice President-Finance in February 1986. In October 1988, Mr.
Binder was elected Chief Executive Officer. In July 1990, Mr. Binder became
Chairman of the Board.
FRANKLIN P. JOHNSON, JR.
Mr. Franklin P. Johnson, Jr., age 68, has served as a director of the
Company since October 1980. He is the general partner of Asset Management
Partners, a venture capital limited partnership. Mr. Johnson has been a
private venture capital investor for more than five years. He is also Chairman
of the Board of Boole & Babbage, Inc. and a director of IDEC Pharmaceuticals
Corporation, Tandem Computers Incorporated and several private companies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
3
DIRECTORS CONTINUING IN OFFICE UNTIL THE 1998 ANNUAL MEETING
STEVEN LAZARUS
Mr. Steven Lazarus, age 65, has served as a director of the Company since
May 1987. Since July 1994, he has been the President of ARCH Venture
Corporation, the managing general partner of ARCH Venture Partners, L.P., an
early stage venture capital partnership. He was President and Chief Executive
Officer of the Argonne National Laboratory/The University of Chicago
Development Corporation and was also dean at the Graduate School of Business,
the University of Chicago, from October 1986 to July 1994. Mr. Lazarus also
serves as a director of Illinois Superconductor Corporation and Primark
Corporation, and as Vice Chairman of the Board of Directors of The
Northwestern Healthcare Network, Chicago, Illinois.
EDWARD J. LEDDER
Mr. Edward J. Ledder, age 79, has served as a director of the Company since
January 1991. In April 1981, Mr. Ledder retired as Chairman and Chief
Executive Officer of Abbott Laboratories, a corporation in the principal
business of developing and providing human healthcare products, where he had
been employed in various executive positions since 1939. Mr. Ledder also
serves as a director of Alliance International Healthcare Fund.
GILBERT S. OMENN
Dr. Gilbert S. Omenn, age 55, has served as a director of the Company since
January 1987. He has been Dean of the School of Public Health and Community
Medicine at the University of Washington for more than five years. Dr. Omenn
also is a director of Immune Response Corporation, Nutraceutix Inc., Ostex
International Inc. and Rohm & Haas Company.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 1999 ANNUAL MEETING
WILLIAM K. BOWES, JR.
Mr. William K. Bowes, Jr., age 70, has served as a director of the Company
since April 1980. He has been a general partner of U.S. Venture Partners, a
venture capital investment entity, since July 1981. Mr. Bowes also serves as a
director of Xoma Corporation and several privately held U.S. Venture Partners
portfolio companies.
JUDITH C. PELHAM
Ms. Judith C. Pelham, age 51, has served as a director of the Company since
May 1995. She has been President and Chief Executive Officer of Mercy Health
Services, a unified system of institutions, programs and services established
to carry out the health ministry sponsored by the Sisters of Mercy Regional
Community of Detroit, since 1993. From 1987 to 1993, she was President and
Chief Executive Officer of Daughters of Charity Health Services, Austin,
Texas.
KEVIN W. SHARER
Mr. Kevin W. Sharer, age 49, has served as a director of the Company since
November 1992. He also has served as President and Chief Operating Officer of
the Company since October 1992. Prior to joining the Company, Mr. Sharer
served as President of the Business Markets Division of MCI Communications
Corporation, a telecommunications company, from April 1989 to October 1992 and
served in numerous executive capacities at General Electric Company from
February 1984 to March 1989. Mr. Sharer also serves as a director of Geotek
Communications, Inc.
4
BOARD COMMITTEES AND MEETINGS
The Board of Directors, which held eight meetings during the year ended
December 31, 1996, has an Audit Committee, a Compensation Committee, an
Executive Committee, a New Hire Stock Option Committee, a Nominating Committee
and a Strategy Committee.
The Audit Committee recommends engagement of the Company's independent
auditors and approves services performed by such auditors, including the
review and evaluation of the Company's accounting system and its system of
internal controls in connection with the Company's annual audit. During the
year ended December 31, 1996, the Audit Committee met three times. Mr. Bowes
serves as Chairman, and Mr. Johnson and Dr. Omenn serve as members of the
Audit Committee.
The Compensation Committee sets guidelines for the administration of all
salaries within the Company, approves recommendations for officers' salaries,
administers incentive compensation and awards stock options to employees and
consultants under the Company's stock option plans and otherwise determines
compensation levels. During the year ended December 31, 1996, the Compensation
Committee met six times. Mr. Ledder serves as Chairman, and Dr. Baddour and
Mr. Lazarus serve as members of the Compensation Committee.
The Executive Committee may exercise, when the Board of Directors is not in
session, all powers of the Board of Directors in the management of the
business and affairs of the Company to the extent permitted by law, the Bylaws
of the Company and as specifically granted by the Board of Directors. During
the year ended December 31, 1996, the Executive Committee met once. Mr. Binder
serves as Chairman, and Messrs. Bowes and Johnson serve as members of the
Executive Committee.
The New Hire Stock Option Committee was established in December 1996
principally to grant stock options to non-officer employees upon commencement
of employment with the Company and its subsidiaries in accordance with the
guidelines established by the Compensation Committee. During the year ended
December 31, 1996, the New Hire Stock Option Committee did not meet, but did
take action by written consent. Mr. Binder is the sole member of the New Hire
Stock Option Committee and Mr. Sharer is an alternate member who may act in
the absence of Mr. Binder.
The Nominating Committee interviews, evaluates, nominates and recommends
individuals for membership on the Company's Board of Directors and committees
thereof and nominates specific individuals to be elected as officers of the
Company by the Board of Directors. During the year ended December 31, 1996,
the Nominating Committee met once. Mr. Bowes serves as Chairman, and Mr.
Johnson and Dr. Omenn serve as members of the Nominating Committee. The
Nominating Committee will consider nominees for directors nominated by
stockholders upon submission in writing to the Secretary of the Company of the
names of such nominees in accordance with the Company's Bylaws.
The Strategy Committee meets with management of the Company to review
research strategies and proposals for collaborations and licensing of
technology. During the year ended December 31, 1996, the Strategy Committee
met three times. Mr. Lazarus serves as Chairman, and Mr. Ledder, Dr. Omenn and
Ms. Pelham serve as members of the Strategy Committee.
During the year ended December 31, 1996, all of the directors attended at
least 75% of the total number of meetings of the Board of Directors and
committees on which they served.
5
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1997, and has further
directed that management submit the selection of independent auditors for
ratification by the stockholders at the Annual Meeting. Ernst & Young LLP has
audited the Company's financial statements since the Company's inception in
1980. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Board will reconsider
whether or not to retain that firm. Even if the selection is ratified, the
Board in its discretion may direct the appointment of a different independent
accounting firm at any time during the year if the Board determines that such
a change would be in the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting will be
required to ratify the selection of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 3, 1997 by: (i) each
director; (ii) the Company's Chief Executive Officer, each of its other four
most highly compensated executives and one former executive (the "Named
Executive Officers") for the year ended December 31, 1996; and (iii) all
directors and executive officers of the Company as a group. The Company is not
aware of any person who is a beneficial owner of more than 5% of its Common
Stock.
COMMON STOCK
BENEFICIALLY OWNED (1) (2)
-----------------------------
NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF TOTAL
---------------- ---------------- ------------
Raymond F. Baddour......................... 178,710 *
Gordon M. Binder........................... 1,602,309 *
William K. Bowes, Jr....................... 2,676,200 1
Franklin P. Johnson, Jr. (3)............... 1,283,100 *
Steven Lazarus............................. 93,500 *
Edward J. Ledder........................... 63,500 *
Gilbert S. Omenn (4)....................... 179,370 *
Judith C. Pelham........................... 6,400 *
Kevin W. Sharer............................ 134,556 *
Robert S. Attiyeh.......................... 62,974 *
N. Kirby Alton (5)......................... 60,576 *
George A. Vandeman......................... 20,105 *
Daniel Vapnek.............................. 224,212 *
All directors and executive officers as a
group
(17 persons) (3) (4)...................... 6,679,416 2.5
- ---------------------
* Less than 1%
6
(1) This table is based upon information supplied by directors, executive
officers, a former executive officer and Schedules 13D and 13G, if any,
filed with the SEC. Unless otherwise indicated in the footnotes and
subject to community property laws where applicable, each of the
stockholders has sole voting and/or investment power with respect to such
shares.
(2) Includes shares which the individuals shown have the right to acquire on
March 3, 1997, or within 60 days thereafter, pursuant to outstanding
options, as follows: Dr. Baddour-43,146 shares; Mr. Binder-1,382,772
shares; Mr. Bowes-144,300 shares; Mr. Johnson-144,300 shares; Mr. Lazarus-
88,379 shares; Mr. Ledder-60,300 shares; Dr. Omenn-120,300 shares;
Ms. Pelham-5,400 shares; Mr. Sharer-131,001 shares; Mr. Attiyeh-57,200
shares; Dr. Alton-38,900 shares; Mr. Vandeman-20,000 shares; Dr. Vapnek-
64,504 shares; and all current directors and executive officers as a
group-2,421,252 shares. Such shares are deemed to be outstanding in
calculating the percentage ownership of such individual (and the group),
but are not deemed to be outstanding as to any other person.
(3) Includes 1,138,800 shares held by Asset Management Partners, a venture
capital limited partnership, of which Mr. Johnson is the general partner.
As the general partner, Mr. Johnson may be deemed to have voting and
investment power as to all of these shares, and therefore may be deemed to
be a beneficial owner of such shares.
(4) Includes 1,240 shares held by one of Dr. Omenn's children.
(5) Excludes 5,802 shares held by trusts established for the benefit of Dr.
Alton's children. Dr. Alton disclaims beneficial ownership of all such
shares.
In 1993, the Company exercised its option to purchase the Class A and Class
B limited partnership interests of Amgen Clinical Partners, L.P. (the
"Partnership"), a limited partnership previously formed to develop and
commercialize products from certain technologies for human pharmaceutical use
in the United States. As a result of the Company exercising such option, each
holder of a limited partnership interest in the Partnership acquired
contractual contingent payment rights based on the number of such holder's
interests. The contractual contingent payment rights are not voting securities
but entitle the holders thereof to receive quarterly payments, subject to
certain adjustments, equal to a stated percentage of the Company's sales of
certain products in specified geographic areas. In 1996, holders received
$60,796 for each contractual contingent payment right held. The following
table sets forth certain information regarding the ownership of the Company's
contractual contingent payment rights as of March 3, 1997 by: (i) each
director; (ii) each of the six Named Executive Officers of the Company; and
(iii) all directors and executive officers of the Company as a group:
CONTRACTUAL CONTINGENT
PAYMENT RIGHTS
BENEFICIALLY OWNED (1)
-------------------------
NUMBER PERCENT
BENEFICIAL OWNER OF RIGHTS OF TOTAL
---------------- ------------ ----------
Raymond F. Baddour............................. 1 *
Gordon M. Binder............................... 1 *
William K. Bowes, Jr........................... 2 *
Franklin P. Johnson, Jr. (2)................... 4 *
Steven Lazarus................................. -0- *
Edward J. Ledder............................... -0- *
Gilbert S. Omenn............................... .5 *
Judith C. Pelham............................... -0- *
Kevin W. Sharer................................ -0- *
Robert S. Attiyeh.............................. -0- *
N. Kirby Alton................................. .25 *
George A. Vandeman............................. -0- *
Daniel Vapnek.................................. .5 *
All directors and executive officers as a group
(17 persons) (2).............................. 8.75 1
- ---------------------
* Less than 1%
7
(1) This table is based upon information supplied by the directors, executive
officers and a former executive officer of the Company. Unless otherwise
indicated in the footnotes and subject to community property laws where
applicable, each holder of a contractual contingent payment right(s) has
sole investment power with respect to such right(s) beneficially owned.
(2) Includes four rights held by Asset Management Partners, a venture capital
limited partnership, of which Mr. Johnson is the general partner. As the
general partner, Mr. Johnson may be deemed to have investment power as to
all of these rights, and therefore may be deemed to be a beneficial owner
of such rights.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
During the year ended December 31, 1996, each non-employee director received
a quarterly retainer of $3,750 (plus $1,500 for a Committee Chairman) and a
per Board meeting fee of $1,250 (plus $750 for Committee members attending a
committee meeting, up to a maximum of $1,500 for all committee meetings held
on the same day). The members of the Board of Directors also are entitled to
reimbursement of their expenses incurred in connection with attendance at
Board and committee meetings in accordance with Company policy. There are no
family relationships among any directors of the Company. Effective January
1997, the quarterly retainer was increased to $5,000.
Under the Amended and Restated 1987 Directors' Stock Option Plan (the
"Directors' Plan"), in 1996 each non-employee director was automatically
granted an option to purchase shares of Common Stock of the Company. The
number of shares subject to such option was determined by a formula that
provides that in no event will the number of shares subject to such option
exceed 5,000 shares or be less than 2,000 shares. The exercise price of
options granted under the Directors' Plan is equal to 100% of the fair market
value of the underlying stock on the date of the option grant.
A non-employee director optionee is entitled to a reload option ("Reload
Option") in the event the optionee exercises his or her option, in whole or in
part, by surrendering other shares of Common Stock of the Company held by such
non-employee director in accordance with the Directors' Plan and the terms of
the option grant. Any such Reload Option (i) will be for a number of shares of
Common Stock equal to the number of shares of Common Stock surrendered as part
or all of the exercise price of the original option; (ii) will have an
expiration date that is the same as the expiration date of the original
option; and (iii) will have an exercise price that is equal to 100% of the
fair market value of the Common Stock subject to the Reload Option on the date
of exercise of the original option. Any such Reload Option will be subject to
the availability of sufficient shares under the Amended and Restated 1991
Equity Incentive Plan (the "1991 Plan"). There will be no Reload Option on a
Reload Option.
Options granted to a non-employee director under the Directors' Plan may not
be exercised: (a) unless such director has, at the date of grant, provided
three years of prior continuous service as a non-employee director, in which
case such option will vest upon grant but will not be exercisable until six
months after the date of grant, or (b) until the date upon which such director
has provided one year of continuous service as a non-employee director
following the date of grant of such option, whereupon such option will become
fully exercisable. No option under the Directors' Plan is exercisable by the
optionee after the expiration of ten years from the date the original option
is granted.
8
During the year ended December 31, 1996, the Company granted under the
Directors' Plan options covering an aggregate of 19,200 shares at an exercise
price of $58.88 per share that were granted to each of the eight incumbent
non-employee directors in January 1996 and a Reload Option for 725 shares, at
an exercise price of $60.62 per share, that was granted to Mr. Lazarus in
March 1996.
In January 1997 the Directors' Plan expired. Accordingly, effective January
1997, the 1991 Plan was amended to provide automatic annual grants to the non-
employee directors. The number of shares subject to options granted to non-
employee directors under the 1991 Plan is determined by a formula set forth in
the 1991 Plan. In all other respects, grants to non-employee directors
pursuant to the 1991 Plan are on substantially the same terms as were grants
pursuant to the Directors' Plan. The 1991 Plan provides that in no event will
the number of shares granted to a non-employee director in any year exceed
10,000 shares. However, there is no minimum number of shares that must be
granted under to non-employee directors under the 1991 Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the years ended December 31, 1996, 1995 and
1994, respectively, certain compensation awarded or paid to, or earned by the
Named Executive Officers for all services rendered in all capacities to the
Company:
SUMMARY COMPENSATION TABLE
LONG TERM-
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ---------------
AWARDS
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) (1) BONUS ($) COMPENSATION OPTIONS (#) (2) COMPENSATION ($) (3)
- --------------------------- ---- -------------- --------- ------------ --------------- --------------------
Gordon M. Binder, Chief 1996 724,311 900,000 112,600 163,128
Executive Officer and 1995 613,176 900,000 150,000 129,142
Chairman of the Board 1994 533,348 723,267 100,000 55,815
Kevin W. Sharer,
President, 1996 471,669 733,187 55,000 108,259
Chief Operating Officer 1995 427,916 623,265 90,000 66,237
and Director 1994 389,180 424,490 187,265(4) 70,000 35,359
Robert S. Attiyeh, 1996 358,217 341,950 22,100 70,743
Senior Vice President, 1995 341,540 365,866 36,000 36,140
Finance and Corporate 1994 162,600(5) 635,351(6) 200,000(7) 48,905
Development
N. Kirby Alton, 1996 353,957 453,517 28,000 72,341
Senior Vice President, 1995 313,500 345,525 40,000 45,195
Development 1994 277,836 219,159 40,000 24,479
George A. Vandeman, 1996 336,040 432,743 3,137(11) 32,100 51,727
Senior Vice President, 1995 163,846(9) 662,429(10) 868(11) 200,000(12) 49,535
General Counsel and 1994 -- -- -- -- --
Secretary (8)
Daniel Vapnek, 1996 385,996(14) 467,609 -0- 199,280
Former Officer (13) 1995 352,088 467,576 50,000 63,060
1994 317,176 393,900 46,000 29,337
- ---------------------
(1) Includes compensation deferred under the Company's Retirement and Savings
Plan (the "401(k) Plan") otherwise payable in cash during each calendar
year.
(2) For 1995 and 1994, the number of securities underlying options has been
adjusted to reflect the Company's 2 for 1 stock split in the form of a
100% stock dividend to stockholders of record on August 1, 1995.
9
(3) The amounts shown for 1996, except for Dr. Vapnek's amount, are comprised
primarily of Company credits to the Supplemental Retirement Plan (the
"SRP"). Such amounts also include a contribution (the "Company
Contribution") in the amount of $11,538 to the Company's 401(k) Plan for
each of the Named Executive Officers. The SRP is a non-qualified,
unfunded, deferred compensation plan. Participation in the SRP is
available to selected participants in the Company's 401(k) Plan who are
affected by the Internal Revenue Code limits on the amount of employee
compensation that may be recognized for purposes of calculating the
Company's contributions to the 401(k) Plan. Pursuant to the SRP, the
following Named Executive Officers were credited with the following
amounts, including accrued dividends, interest and unrealized gains or
losses (the "SRP Credit") for the year ended December 31, 1996: Mr.
Binder, $151,590; Mr. Sharer, $96,721; Mr. Attiyeh, $59,205; Dr. Alton,
$60,803; Mr. Vandeman, $40,189; and Dr. Vapnek, $69,695. Upon his
retirement from the Company on October 31, 1996, Dr. Vapnek was paid
$186,702 in accumulated contributions from the SRP which includes the
$69,695 SRP Credit for 1996. Dr. Vapnek's amount also includes $1,040 for
health insurance paid pursuant to his consulting agreement. See
"Compensation and Consulting Arrangements."
The amounts shown for 1995 and 1994 include a Company Contribution
pursuant to the 401(k) Plan in the amount of $11,350 for each of the Named
Executive Officers, except for Mr. Vandeman for whom the Company
Contribution for 1995 was $9,850. The amounts for the years ended December
31, 1995 and 1994, respectively, also include the following SRP Credit
amounts pursuant to the SRP: Mr. Binder, $117,792 and $44,465; Mr. Sharer,
$54,887 and $24,009; Mr. Attiyeh, $24,790 and $37,555; Dr. Alton, $33,845
and $13,129; Mr. Vandeman, $39,685; and Dr. Vapnek, $51,710 and $17,987.
(4) Represents payment to Mr. Sharer for taxes payable by him as a result of
payments to or on behalf of Mr. Sharer in connection with his relocation
to the Thousand Oaks vicinity.
(5) Represents Mr. Attiyeh's salary paid from commencement of his employment
on July 1, 1994.
(6) Includes a signing bonus of $500,000 and a payment of $135,351 under the
Company's performance based Management Incentive Plan.
(7) Represents stock options granted to Mr. Attiyeh upon commencement of his
employment.
(8) The Board elected Mr. Vandeman as Senior Vice President, General Counsel
and Secretary effective June 30, 1995.
(9) Represents Mr. Vandeman's salary paid from commencement of his employment
on June 30, 1995.
(10) Includes a signing bonus of $509,335 and a payment of $153,094 under the
Company's performance based Management Incentive Plan.
(11) Represents payments to Mr. Vandeman for taxes payable by him as a result
of payments to or on behalf of Mr. Vandeman in connection with his
relocation to the Thousand Oaks area.
(12) Represents stock options granted to Mr. Vandeman in connection with his
employment by the Company.
(13) Dr. Vapnek retired effective October 31, 1996, and has entered into a
Consulting Agreement with the Company. See "Compensation and Consulting
Arrangements."
(14) Amounts shown in 1996 include $61,884 for consulting services performed
by Dr. Vapnek under his consulting agreement with the Company. See
"Compensation and Consulting Arrangements."
10
STOCK OPTION GRANTS AND EXERCISES
The Company has granted options to its executive officers under the 1991
Plan and other Company stock option plans (collectively, the "Option Plans").
The following tables show for the year ended December 31, 1996, certain
information regarding options granted to, exercised by, and held at year end
by the Named Executive Officers:
OPTION GRANTS IN FISCAL YEAR 1996
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES PERCENT OF AT ASSUMED ANNUAL RATES
UNDERLYING TOTAL OPTIONS OF STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM (1)
GRANTED EMPLOYEES IN BASE PRICE ---------------------------
NAME (#) (2) (3) (4) FISCAL YEAR ($/SH) EXPIRATION DATE 5% ($) 10% ($)
- ---- --------------- ------------- ----------- --------------- ------------- -------------
Gordon M. Binder........ 110,000 2.39% 55.75 07/01/03 2,496,543 5,818,008
2,600 0.06% 61.38 10/22/03 64,963 151,392
Kevin W. Sharer......... 55,000 1.20% 55.75 07/01/03 1,248,272 2,909,004
Robert S. Attiyeh....... 22,100 .48% 55.75 07/01/03 501,578 1,168,891
N. Kirby Alton.......... 28,000 .61% 55.75 07/01/03 635,484 1,480,948
George A. Vandeman...... 32,100 .70% 55.75 07/01/03 728,537 1,697,800
Daniel Vapnek........... -0- -0- -0- -0- -0- -0-
- ---------------------
(1) The potential realizable value is based on the term of the option at the
time of its grant, which is seven years for the stock options granted to
the Named Executive Officers in the table. The assumed 5% and 10% annual
rates of appreciation over the term of the options are set forth in
accordance with rules and regulations adopted by the SEC and do not
represent the Company's estimates of stock price appreciation. The
potential realizable value is calculated by assuming that the stock price
on the date of grant appreciates at the indicated rate, compounded
annually, for the entire term of the option and that the option is
exercised and the stock sold on the last day of its term at this
appreciated stock price. No valuation method can accurately predict future
stock prices or option values because there are too many unknown factors.
No gain to the optionee is possible unless the stock price increases over
the option term. Such a gain in stock price would benefit all
stockholders.
(2) Under the terms of the Option Plans, the Board of Directors retains
discretion, subject to plan limitations, to modify the terms of
outstanding options and to reprice the options. The Board of Directors has
delegated administration of the Option Plans to the Compensation Committee
of the Board of Directors.
(3) The options were granted to the Named Executive Officers in the table for
a term of seven years, subject to earlier termination if the optionee
ceases employment with the Company. Each option agreement contains a
provision entitling the optionee to a Reload Option in the event the
optionee exercises the option, in whole or in part, by surrendering shares
of Common Stock in accordance with the Option Plans. Any such Reload
Option (i) will be for a number of shares of Common Stock equal to the
number of shares of Common Stock surrendered as part or all of the
exercise price of the original option; (ii) will have an expiration date
that is the same as the expiration date of the original option; and (iii)
will have an exercise price that is equal to 100% of the fair market value
of the Common Stock subject to the Reload Option on the date of exercise
of the original option. There will be no Reload Option on a Reload Option.
(4) Except for the option for 2,600 shares granted to Mr. Binder, such options
represent options granted as part of the annual periodic stock option
grants made to all eligible employees of
11
the Company, and such options become exercisable as to 20% of the shares
covered thereby one year after the grant date and an additional 20% on each
successive anniversary date, with full vesting occurring on the fifth
anniversary date. The option for 2,600 shares granted to Mr. Binder becomes
exercisable as to 25% of the shares covered thereby one year after grant
date and an additional 25% on each successive anniversary date, with full
vesting occurring on the fourth anniversary date. The vesting of all
options issued pursuant to the Option Plans will be automatically
accelerated in the event of a change in control (as defined in the Option
Plans). In addition, the options are subject to accelerated vesting upon
the death of the optionee while in the employ of the Company or within
three months after termination of employment.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FISCAL YEAR-END 1996 OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END (#) AT FY-END ($) (2)
-------------------- --------------------
SHARES
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) (1) UNEXERCISABLE UNEXERCISABLE
- ---- ------------ ---------------------- -------------------- --------------------
Gordon M. Binder........ 182,000 10,671,554 1,402,772/ 66,040,837/
320,112 4,608,218
Kevin W. Sharer......... 96,578 3,392,009 131,001/ 2,764,152/
345,161 7,047,719
Robert S. Attiyeh....... 55,000 2,210,937 12,200/ 274,712/
150,900 3,823,850
N. Kirby Alton.......... 66,368 2,610,086 38,900/ 824,112/
107,212 1,949,018
George A. Vandeman...... 20,000 490,354 20,000/ 361,250/
192,100 2,890,000
Daniel Vapnek........... 143,019(3) 7,512,232(4) 117,381/ 4,555,043/
79,934 1,910,156
- --------------------
(1) Value realized is based on the market value of the Company's Common Stock
on the date of exercise, minus the exercise price, and does not
necessarily indicate that the optionee sold such stock.
(2) Value of unexercised in-the-money options is calculated based on the
market value of the underlying securities, minus the exercise price, and
assumes sale of the underlying securities on December 31, 1996 at the then
current market value of $54.38 per share.
(3) Includes options for 53,019 shares exercised after Dr. Vapnek retired.
(4) Includes $2,413,325 in value realized as a result of the options for
53,019 shares exercised after Dr. Vapnek's retirement as described in
footnote (3) above.
COMPENSATION AND CONSULTING ARRANGEMENTS
Pursuant to a consulting agreement dated November 15, 1996, between the
Company and Dr. Vapnek, former Senior Vice President, Research, Dr. Vapnek
will provide consulting services to the Company for a period commencing
October 31, 1996 and ending July 31, 1998. Dr. Vapnek's service to the Company
shall not exceed nine days per month and he will receive $3,438 for each
eight-hour day that he provides consulting services. The agreement also
provides that unvested stock options for an aggregate of 57,798 shares held by
Dr. Vapnek will continue to vest over their normal vesting schedule and be
exercisable during the term of the consulting agreement, subject to the
scheduled expiration of such options. Pursuant to the agreement, the Company
will pay for
12
the cost of continued health insurance coverage under COBRA for Dr. Vapnek and
his eligible dependents as well as up to $3,000 for certain financial and tax
advice expenses incurred by Dr. Vapnek.
In June 1995, Mr. Vandeman became Senior Vice President, General Counsel and
Secretary of the Company. In connection with Mr. Vandeman's employment, the
Company granted him an option to purchase 200,000 shares of Common Stock with
an exercise price equal to 100% of the fair market value of the Common Stock
on June 1, 1995. This option vests in five equal annual installments
commencing with the first anniversary of grant and will expire in seven years.
The Company has guaranteed that, calculated as if Mr. Vandeman had not sold
any of the underlying shares, the then vested portion of such options will
appreciate in value by at least $2.5 million on at least one day on or before
June 1, 2000. Notwithstanding the forgoing, the Company has not guaranteed
that Mr. Vandeman will realize this profit if Mr. Vandeman does not sell all
of the vested option shares on the date that such value is realizable.
COMPENSATION COMMITTEE REPORT/1/
The Board of Directors has delegated to the Compensation Committee of the
Board of Directors (the "Compensation Committee") the authority to establish
and maintain the Job Grade and Compensation Range Tables and Merit Increase
Guidelines used to establish initial salary guidelines and merit pay increases
throughout the Company and as the basis for making specific recommendations to
the Board concerning the compensation of senior officers, including the Chief
Executive Officer. In addition, the Compensation Committee administers the
performance based Management Incentive Plan (the "MIP"), the Option Plans, the
401(k) Plan, the SRP, the Employee Stock Purchase Plan and all other
compensation and benefit programs currently in place at the Company.
Compensation Committee members are all non-employee directors.
The Compensation Committee intends to design and administer its compensation
plans to support the achievement of the Company's long-term strategic
objectives, to enhance stockholder value and, to the extent possible, to
maximize the deductibility of compensation for tax purposes. The Omnibus
Budget Reconciliation Act of 1993 placed a one million dollar limit on the
amount of non-performance based compensation for Named Executive Officers that
may be deducted by the Company for tax purposes. The Committee has been
advised that based upon prior stockholder approval of the material terms of
the MIP and the 1991 Plan and Section 162(m) transition rules, compensation
under these plans is excluded from this limitation.
The method used by the Compensation Committee to determine executive
compensation is designed to provide for a base salary that, while competitive
with comparable companies, is nevertheless calculated to result in a base
salary that is slightly lower than the middle of the competitive range for
those companies. Base salary is supplemented by two additional compensation
components: first, the MIP, designed to reward participants for individual and
Company-wide performance; and second, the Company's Option Plans, designed to
provide long-term incentives to all employees of the Company. Each of these
components is described below.
Base Salary
Base Salaries for all employees, including executive officers of the
Company, are determined based on an established Job Grade and Compensation
Range Table that is designed to provide a
- ---------------------
/1/The material in this report and in the performance graph is not soliciting
material, is not deemed filed with the SEC, and is not incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), whether made before or after the date of this proxy statement and
irrespective of any general incorporation language in such filing.
13
Base Salary that ensures that salaries, while remaining competitive with
comparable companies, are slightly lower than the middle of the range for
executive officers and at the middle of the range for all other employees of
the companies surveyed. In monitoring the Executive Job Grade and Compensation
Range Table, the members of the Compensation Committee compared compensation
information derived from compensation surveys outlining compensation levels at
major pharmaceutical companies, the majority of which are included in the
Standard & Poor's Drug Index, leading biotechnology companies and other high
technology companies./2/ Adjustments to each individual's Base Salary are made
in connection with annual performance reviews. The amounts of such increases
are calculated using compensation levels at comparable companies and the Merit
Increase Guidelines that provide for percentage salary increases based on the
position in the Compensation Range and the result of each individual's annual
performance review. The recommended percentage increases are adjusted annually
and reflect the Compensation Committee's assessment of appropriate salary
adjustments given the results of competitive surveys and general economic
conditions.
Performance Based Management Incentive Plan
The MIP has been established to reward participants for their contributions
to the achievement of Company-wide performance goals. All executive officers
of the Company and certain other key employees, as determined by the
Compensation Committee, participate in the MIP. MIP payouts are established at
a level designed to ensure that when such payouts are added to a participant's
Base Salary, the resultant compensation for above average performance will
exceed the average cash compensation level of comparable companies.
The structure of the MIP provides for the development of a compensation pool
(the "Pool"). Amounts attributable to the Pool are based upon the achievement
of certain specified performance goals and milestones established by members
of management and approved by the Compensation Committee at the beginning of
each MIP period. As implemented by the Compensation Committee, at least 50% of
the Pool determination will be based upon Return on Capital Employed ("ROCE")
and Growth in Revenue, with the remainder based upon two or three major goals
selected by the Committee from the goals established by management in
connection with the planning process. Target awards for participants are
established pursuant to a percentage formula relating to Base Salary. The MIP
provides for a range of payouts based on actual achievements, with both the
size of the Pool and the individual awards subject to an upside potential of
150% of applicable targets for the achievement of performance that is
significantly above the target levels. No awards are made to the participants,
regardless of the performance achieved on the other goals or by individual
participants, unless either the ROCE or the Growth in Revenue goal is
achieved.
At the beginning of each MIP period, participants in the MIP are required to
work with upper management to define individual performance objectives that
will contribute to the success of the Company. Each participant's payout from
the MIP Pool is based upon the respective supervisor's and the Compensation
Committee's assessment of achievement of the participant's goals. Performance
objectives are stated as a range of possible measured achievements. In order
to be eligible to receive a payout from the MIP, each individual participant
must have achieved his or her individual performance objectives at least at
the minimum threshold. The minimum threshold represents significant, but less
than planned, performance. The payout at the minimum threshold is usually 50%
of the target payout, assuming Pool goals are achieved at target. The maximum
amount payable under the MIP to any participant may not exceed $900,000.
- ---------------------
/2/The Committee utilizes data and summaries provided by Organization
Resources Counselors, Inc. and Towers Perrin, two independent consulting
firms, to determine comparable companies, including major pharmaceutical,
leading biotechnology and other high technology companies, and their
compensation levels.
14
The Pool goals for the MIP period ended December 31, 1996 included goals
related to ROCE, growth in revenue, specific product development objectives
and profit after taxes. The relative weightings of these four factors in
determining the total Pool were 30%, 20%, 25% and 25%, respectively. Based
upon evaluations by management and approved by the Compensation Committee, the
Company achieved 142.2% of the target Pool goals established under the MIP for
the period ended December 31, 1996. For 1996, in order to stimulate increased
effort toward the development of potential products, the Pool included an
incentive equal to 5% of the maximum payable under the Pool goals for the
development and/or acquisition of two novel molecules. The achievement of
these objectives resulted in the inclusion of this incentive in the MIP
payout.
Option Plans
The Option Plans offered by the Company have been established to provide all
employees with an opportunity to share, along with stockholders, in the long-
term performance of the Company.
Periodic grants of stock options are generally made annually to all eligible
employees, with additional grants being made to certain employees upon
commencement of employment and occasionally, following a significant change in
job responsibility, scope or title or a particularly noteworthy achievement.
Stock options granted under the various stock option plans generally have a
three-, four- or five-year vesting schedule and generally expire seven years
from the date of grant. The exercise price of options granted under the stock
option plans is 100% of the fair market value of the underlying stock on the
date of grant.
Guidelines for the number of stock options for each participant in the
periodic grant program generally are determined by a procedure established by
the Compensation Committee based upon several factors including the salary
grade midpoint, the performance of each participant and the approximate market
price of the stock at the time of grant. The size of the grants, as developed
under the procedure, are targeted to be somewhat above competitive levels as a
reflection of both the added incentive to continue the favorable competitive
performance of the Company, as well as the risk attached to the future growth
of the biotech industry.
CEO Compensation
Mr. Binder's Base Salary, MIP payout and grants of stock options were
determined in accordance with the criteria described in the "Base Salary,"
"Management Incentive Plan" and "Option Plans" sections of this report. Mr.
Binder's Base Salary of $724,311 reflects the Board's assessment of his very
favorable performance and his position in the Grade and Range Table.
The MIP target for Mr. Binder for the MIP period ended December 31, 1996 was
set at 90% of Base Salary. The actual award under the MIP for the MIP period
ended December 31, 1996 was $900,000 or 124.3% of Base Salary, the maximum
amount payable under the MIP. Payments made to Mr. Binder as a participant in
the MIP for the period ended December 31, 1996 reflect both the Company's
level of achievement of the Pool goals and Mr. Binder's level of achievement
of his individual performance objectives, which included goals relating to
ROCE; Growth in Revenue; product development objectives; income after taxes;
research; government affairs; and licensing and acquisition of product
candidates. As previously discussed, no awards are made to MIP participants
unless the Company achieves either the ROCE or Growth in Revenue goal.
In July 1996, Mr. Binder was granted a periodic option to purchase 110,000
shares of Common Stock of the Company at 100% of fair market value on the date
of grant, or $55.75 per share. In October 1996 and February 1997, Mr. Binder
was granted options to purchase 2,600 and 17,000 shares of Common Stock of the
Company at 100% of fair market value on the date of grant, or $61.38 and
$57.88 per share, respectively, to reflect Mr. Binder's MIP achievements in
excess
15
of the maximum award permitted thereunder for 1995 and 1996, respectively. All
three grants reflect the Board's assessment of the substantial contributions
made by Mr. Binder to the growth and performance of the Company.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Edward J. Ledder, Chairman
Steven Lazarus
Raymond F. Baddour
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Company's Compensation Committee consisted of Messrs.
Lazarus and Ledder, Mr. Bernard H. Semler and Dr. Baddour, all of whom are
non-employee directors. Mr. Semler retired from the Compensation Committee
effective May 2, 1996. No member of the Compensation Committee has a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity.
16
PERFORMANCE MEASUREMENT COMPARISON
The chart set forth below shows the value of an investment of $100 on
December 31, 1991 in each of Amgen Common Stock, the Nasdaq Pharmaceutical
Index (the "Nasdaq Pharmaceutical"), the Standard & Poor's Drug Index (the
"S&P Drug") and the Standard & Poor's 500 Index (the "S&P 500"). All values
assume reinvestment of the pre-tax value of dividends paid by companies
included in these indices and are calculated as of December 31 of each year.
The historical stock price performance of the Common Stock shown in the
performance graph below is not necessarily indicative of future stock price
performance.
AMGEN STOCK PRICE VS. NASDAQ PHARMACEUTICAL, S&P DRUG, S&P 500 INDEXES
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
Amgen..................... $100.00 $ 93.23 $ 65.35 $ 77.89 $156.77 $143.56
Nasdaq Pharmaceutical..... $100.00 $ 83.22 $ 74.17 $ 55.83 $102.13 $102.24
S&P Drug.................. $100.00 $ 80.23 $ 73.43 $ 85.52 $145.78 $181.72
S&P 500................... $100.00 $107.61 $118.41 $120.01 $164.95 $202.82
17
CERTAIN TRANSACTIONS
The Company has made loans to Mr. Stan M. Benson, Mr. Larry A. May and
Messrs. Sharer and Vandeman, all of whom are executive officers of the
Company. Each such loan is evidenced by a full recourse promissory note
secured by real estate valued in excess of the principal balance of such loan.
The loans to Messrs. Benson, Sharer and Vandeman were made in connection with
their respective relocations to the Thousand Oaks vicinity. The purpose of the
loan to Mr. May was to provide sufficient cash to enable him to satisfy
certain personal objectives and obligations. The annual interest rate on each
such loan was 4.1% during the year ended December 31, 1996 and will be 4.1%
for the year ending December 1, 1997. These interest rates are established and
adjusted annually based on the average introduction rates on adjustable loans
offered by California banks and savings and loans. Including principal and
accrued interest, the largest aggregate indebtedness since January 1, 1996, of
Messrs. Benson, May, Sharer and Vandeman under such loans was $400,000,
$158,000, $200,000 and $1,794,555, respectively. The aggregate outstanding
indebtedness at March 15, 1997 of Messrs. Benson, May, Sharer and Vandeman
under such loans was $400,000, $158,000, $200,000 and $1,714,521,
respectively.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities ("Reporting Persons"), to file reports of
ownership and changes in ownership with the SEC and with The Nasdaq Stock
Market. Reporting Persons are required by SEC regulations to furnish the
Company with copies of all forms they file pursuant to Section 16(a).
Based solely on its review of the copies of such reports received by it, and
written representations from certain Reporting Persons that no other reports
were required for those persons, the Company believes that, during the year
ended December 31, 1996, the Reporting Persons complied with all Section 16(a)
filing requirements applicable to them.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting. If other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
By Order of the Board of Directors
/s/ George A. Vandeman
GEORGE A. VANDEMAN
Secretary
April 3, 1997
18
[LOGO OF AMGEN(R)]
[LOGO
Printed on recycled paper]
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
-------------
BUSINESS REPLY MAIL -------------
FIRST CLASS PERMIT NO. 67 THOUSAND OAKS, CA -------------
-------------
-------------
POSTAGE WILL BE PAID BY ADDRESSEE -------------
-------------
AMGEN INC. -------------
ATTN: Secretary, Mail Stop 10-1-B -------------
1840 DeHavilland Drive -------------
Thousand Oaks, CA 91320-1789
Amgen Inc.
[_] I plan to attend the Annual Stockholders' Meeting on Thursday, May 8, 1997.
- --------------------------------------------------------------------------------
Name (Please print)
- --------------------------------------------------------------------------------
Address
( )
- --------------------------------------------------------------------------------
City State Zip Telephone No.
[_] No, I do not plan to attend the Annual Stockholders' meeting on Thursday,
May 8, 1997, but I have the following comments about the Company:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY/DIRECTION CARD
AMGEN INC.
AMGEN CENTER, 1840 DEHAVILLAND DRIVE, THOUSAND OAKS, CA 91320-1789
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS--MAY 8, 1997
Gordon M. Binder and George A. Vandeman (the "Proxy Holders"), or either of
them, each with the power of substitution, hereby are authorized to represent
the undersigned, with all powers which the undersigned would possess if
personally present, to vote the shares of Amgen Inc. Common Stock of the
undersigned at the Annual Meeting of Stockholders of Amgen Inc., to be held at
the Regent Beverly Wilshire, 9500 Wilshire Boulevard, Los Angeles, California
90212, at 10:30 A.M., PDT, on Thursday, May 8, 1997, and at any adjournments of
that meeting upon and in respect of the following matters and in accordance
with the following instructions, with discretionary authority as to any and all
other business that may properly come before the meeting.
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. PLEASE MARK, SIGN AND
DATE THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
Change of Address:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(If you have written in the above space, please
mark the corresponding box on the reverse side of
this card.)
[SEE REVERSE SIDE]
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
1. To elect two
directors to hold WITHHOLD
office until the FOR AUTHORITY
Annual Meeting of [_] [_]
Stockholders in
the year 2000. NOMINEES: Gordon M. Binder and Franklin P.
Johnson, Jr.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE SUCH NOMINEE(S)'
NAME(S) BELOW:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
[_] Please indicate if a change of address was given on the reverse side.
2. To ratify the selection of Ernst & Young LLP as independent auditors of the
Company for the year ending December 31, 1997.
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the Proxy Holders are authorized to vote upon such other
matters as may properly come before the Annual Meeting of Stockholders and at
any adjournments thereof. The Board of Directors at present knows of no other
business to be presented by or on behalf of the Company or the Board of
Directors at the Annual Meeting of Stockholders.
This Proxy/Direction Card will be voted as specified or, if no choice is
specified, will be voted FOR the election of the named nominees and FOR
ratification of the selection of Ernst & Young LLP as the independent auditors
of the Company for the year ending December 31, 1997. This Proxy/Direction Card
also serves to instruct the respective trustees of the Amended and Restated
Amgen Retirement and Savings Plan and of the Amended and Restated Retirement
and Savings Plan for Amgen Puerto Rico, Inc. on how to vote shares held by the
participants of such plans. The Board of Directors recommends a vote FOR
election of the nominees for director and FOR proposal 2.
As of the date hereof, the undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders to be held May 8, 1997, the
accompanying Proxy Statement and the accompanying Annual Report of the Company
for the year ended December 31, 1996.
Signature(s): Date: Signature(s): Date:
--------------- ------ ------------ --------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS
REGISTERED IN THE NAMES OF TWO OR MORE PERSONS, EACH SHOULD SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS AND ATTORNEYS-IN-FACT
SHOULD ADD THEIR TITLES. IF SIGNER IS A CORPORATION, PLEASE GIVE FULL
CORPORATE NAME AND HAVE A DULY AUTHORIZED OFFICER SIGN, STATING TITLE.
IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
[LOGO FOR AMGEN]
MEMORANDUM
To: All Employees Holding Amgen Inc. Common Stock Through Participation
in the Amgen Retirement and Savings Plan and/or in the Retirement and
Savings Plan for Amgen Puerto Rico, Inc.
---------------------------------------------------------------------
From: Armecia S. Medlock
Date: April 3, 1997
Subj: Amgen Inc. - 1997 Proxy Material
Since you have allocated a portion of your contributions in the Amgen Retirement
and Savings Plan and/or in the Retirement and Savings Plan for Amgen Puerto
Rico, Inc. (each referred to individually as the "Plan") toward purchasing
shares of Common Stock of Amgen Inc., you are entitled to vote on the proposals
to be presented at the 1997 Annual Stockholders' Meeting based on the number of
shares of the Company's Common Stock that were allocated to your Plan account as
of March 12, 1997. If more than one Proxy/Direction card is enclosed, the number
of such shares are printed above your name and address on the enclosed Plan
Proxy/Direction card(s) that has "401(K)" next to such number of shares.
Your voting with respect to the Common Stock in your Plan account is held in the
- --------------------------------------------------------------------------------
strictest confidence. No officer or employee of the Company or Amgen Puerto
- --------------------
Rico, Inc. has the right to review your completed Plan Proxy/Direction card(s)
indicating your voting preferences. If you return your completed Plan
Proxy/Direction card(s) to any officer or employee of the Company or Amgen
Puerto Rico, inc., your votes cannot be counted. Please vote, sign, date and
---------------------------
promptly mail the enclosed Plan Proxy/direction card(s) to American Stock
- -------------------------------------------------------------------------
Transfer & Trust Company ("ASTTC") in the envelope provided. If ASTTC does not
- -----------------------------------------------------------
receive your completed Plan Proxy/Direction card(s) in a timely fashion, the
trustee under the Plan will vote your shares in accordance with the voting
instructions that have been received from other Plan participants.
If you held additional Common Stock of the Company as of March 13, 1997 in
certificate form, please check this package to make sure you have removed all of
the Proxy/Direction cards sent to you. If you held additional Common Stock of
the Company as of March 13, 1997 through a bank or broker, you will receive
additional proxy cards for those shares from such bank or broker. In order for
all of your shares to be voted, you should complete and return promptly each
proxy card that you receive.
If you have any questions regarding this memorandum or the enclosures, please
call me at Extension 2409. Thank you for your prompt attention to this matter.
Enclosures
[LOGO OF AMGEN]
MEMORANDUM
To: All Thousand Oaks-Based Employee
Stockholders of Record as of March 13, 1997
From: Armecia S. Medlock
Date: April 3, 1997
Subject: Amgen Inc. - 1997 Proxy Solicitation Material
---------------------------------------------
The Company's Annual Stockholders' Meeting (the "Annual Meeting") will be held
this year on May 8, 1997. As a stockholder of record on March 13, 1997, the
record date for the Annual Meeting, you are entitled to vote on the proposals
included on the agenda for the Annual Meeting. We have included in this mailing
a return envelope and your Proxy/Direction card(s) representing those shares of
Company Common Stock held by you in certificate form. Also enclosed, if
applicable, are Proxy/Direction card(s) representing those shares of the
Company's Common Stock allocated to your account in the Company's Retirement and
Savings Plan and/or in the Retirement and Savings Plan for Amgen Puerto Rico,
Inc. and an accompanying memorandum regarding the confidential voting of such
shares. We have excluded from this mailing paper versions of the Company's 1996
Annual Report and 1997 Proxy Statement (the "proxy solicitation material")
because this year, as with last year, you will be able to access this material
on the internal AmgenWeb under "News."
After you have reviewed the proxy solicitation material, please promptly
complete, sign and date all of the enclosed Proxy/Direction card(s) and return
it/them to American Stock Transfer and Trust Company in the enclosed return
envelope.
We hope that you will take advantage of this opportunity to access the proxy
solicitation material on AmgenWeb and, at the same time, assist the Company in
its VEP effort to reduce distribution and printing costs. If you have any
questions about accessing the proxy solicitation material on the AmgenWeb,
please contact the Corporate Information Systems Service Center at
Extension 4248. If you prefer to receive the printed version of the proxy
solicitation material, please contact Beverly Alexander at Extension 6264.
If you have any questions regarding this memorandum, please call me at Extension
2409.
Thank you.
Enclosures
