[BIOTIME LETTERHEAD]
April 23, 1997
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders
of BioTime, Inc. which will be held on Friday, May 23, 1997 at 10:00 a.m. at the
Ritz-Carlton Hotel, 600 Stockton Street, San Francisco, California.
The Notice and Proxy Statement on the following pages contain details
concerning the business to come before the Meeting. Management will report on
current operations and there will be an opportunity for discussion concerning
the Company and its activities. Please sign and return your proxy card in the
enclosed envelope to ensure that your shares will be represented and voted at
the meeting even if you cannot attend. You are urged to sign and return the
enclosed proxy card even if you plan to attend the meeting.
I look forward to personally meeting all shareholders who are able to
attend.
Paul Segall, Ph. D.
President and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of BioTime,
Inc. (the "Company") will be held at the Ritz-Carlton Hotel, 600 Stockton
Street, San Francisco, California, on May 23, 1997 at 10:00 a.m. for the
following purposes:
1. To elect seven (7) directors of the Company to hold office until the
next Annual Meeting of Shareholders and until their respective successors are
duly elected and qualified;
2. To amend the Company's 1992 Employee Stock Option Plan by increasing
the number of shares available under the Plan.
3. To amend the Company's Articles of Incorporation to increase the
number of authorized common shares, no par value, available for issuance in the
future.
4. To ratify the appointment of Deloitte & Touche LLP as the independent
accountants of the Company for the fiscal year ending June 30, 1997; and
5. To transact such other business as may properly come before the
meeting or any adjournments of the meeting.
The Board of Directors has fixed the close of business on Wednesday, April
16, 1997, as the record date for determining shareholders entitled to receive
notice of and to vote at the Annual Meeting or any postponement or adjournment
thereof.
Whether or not you expect to attend the meeting in person, you are urged to
sign and date the enclosed form of proxy and return it promptly so that your
shares of stock may be represented and voted at the meeting. If you should be
present at the meeting, your proxy will be returned to you if you so request.
By Order of the Board of Directors,
Judith Segall
Vice President and Secretary
Berkeley, California
April 23, 1997
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 23, 1997
The accompanying proxy is solicited by the Board of Directors of
BioTime, Inc., a California corporation (the "Company" or "BioTime") having its
principal offices at 935 Pardee Street, Berkeley, California 94710, for use at
the Annual Meeting of Shareholders of the Company (the "Meeting") to be held at
10:00 a.m. on Friday, May 23, 1997 at the Ritz-Carlton Hotel, 600 Stockton
Street, San Francisco, California. Properly executed proxies in the accompanying
form that are received at or before the Meeting will be voted in accordance with
the directions noted on the proxies. If no direction is indicated, such shares
will be voted FOR (i) each nominee for election as director, (ii) amending the
Company's 1992 Employee Stock Option Plan to increase the number of shares
available under the Plan, (iii) amending the Company's Articles of Incorporation
to increase the number of authorized common shares, no par value, and (iv)
approval of the appointment of Deloitte & Touche LLP as independent accountants
for the Company for the fiscal year ending June 30, 1997.
The enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the Meeting: (1)
matters that the Company's Board of Directors does not know a reasonable time
before the Meeting are to be presented at the Meeting; and (2) matters
incidental to the conduct of the Meeting. Management does not intend to present
any business for a vote at the Meeting other than the matters set forth in the
accompanying Notice of Annual Meeting of Shareholders, and as of the date of
this Proxy Statement, no shareholder has notified the Company of any other
business that may properly come before the Meeting. If other matters requiring
the vote of the shareholders properly come before the Meeting, then it is the
intention of the persons named in the attached form of proxy to vote the proxy
held by them in accordance with their judgment on such matters.
Only shareholders of record at the close of business on April 16, 1997
are entitled to notice of and to vote at the Meeting. On that date, there were
3,203,193 of the Company's Common Shares issued and outstanding, which
constitutes the only class of voting securities of the Company outstanding. Each
of the Company's Common Shares is entitled to one vote in the election of
directors and in all other matters that may be acted upon at the Meeting, except
that shareholders may elect to cumulate votes in the election of directors.
Under cumulative voting, each shareholder may give one candidate or may
distribute among two or more candidates, a number of votes equal to the number
of directors to be elected multiplied by the number of Common Shares owned.
Shareholders may not cumulate votes unless at least one shareholder gives notice
of his or her intention to cumulate votes at the Meeting. The enclosed proxy
confers discretionary authority to cumulate votes.
Any shareholder giving a proxy has the power to revoke that proxy at any
time before it is voted. A proxy may be revoked by filing with the Secretary of
the Company either a written
1
revocation or a duly executed proxy bearing a date subsequent to the date of the
proxy being revoked, or by voting in person at the meeting. Any shareholder may
attend the Meeting and vote in person, whether or not such shareholder has
previously submitted a proxy, but attendance at the Meeting will not revoke a
proxy unless the shareholder votes in person.
The Company will bear all of the costs of the solicitation of proxies
for use at the Meeting. In addition to the use of the mails, proxies may be
solicited by a personal interview, telephone and telegram by directors, officers
and employees of the Company, who will undertake such activities without
additional compensation. Banks, brokerage houses and other institutions,
nominees or fiduciaries will be requested to forward the proxy materials to the
beneficial owners of the Common Shares held of record by such persons and
entities and will be reimbursed for their reasonable expense incurred in
connection with forwarding such material.
This Proxy Statement and the accompanying form of proxy are first being
sent or given to the Company's shareholders on or about April 23, 1997.
ELECTION OF DIRECTORS
At the Meeting, seven directors will be elected to hold office for a
one-year term until the 1997 Annual Meeting of Shareholders, and until their
successors have been duly elected and qualified. All of the nominees named below
are incumbent directors. Since the last Annual Meeting of Shareholders, Lawrence
Cohen retired from the Board of Directors. The Board would like to extend its
thanks to Mr. Cohen for his years of dedicated, hard work. Jeffrey B. Nickel has
been appointed to the Board of Directors to fill the vacancy created by the
retirement of Mr. Cohen. Dr. Nickel has served as a product development and
marketing consultant to the Company for more than two years and will bring to
the Board nearly 25 years of experience in the pharmaceutical industry.
It is the intention of the persons named in the enclosed proxy, unless
such proxy specifies otherwise, to vote the shares represented by such proxy FOR
the election of the nominees listed below. In the unlikely event that any
nominee should be unable to serve as a director, proxies may be voted in favor
of a substitute nominee designated by the Board of Directors.
Directors and Nominees
Paul Segall, Ph.D., 54, is Chairman, President and Chief Executive
Officer of BioTime and has served as a director of the Company since 1990. He
was a research scientist for Cryomedical Sciences, Inc. ("CMSI") and a member of
its Board of Directors from 1987 to December 1990, serving as Director of
Research and Vice President of Research for CMSI, from
2
April 1988 until 1989. Dr. Segall received a Ph.D. in Physiology from the
University of California at Berkeley in 1977.
Ronald S. Barkin, 51, has been Executive Vice President of BioTime since
April 1997, and has been a director of the Company since 1990. Mr. Barkin is an
attorney who has practiced civil and corporate law and has been a negotiator for
over 25 years and is an active member of the California Bar. Mr. Barkin has most
recently concluded negotiatinos with Abbott Laboratories on behalf of BioTime.
Mr. Barkin received a Juris Doctorate from Boalt Hall, University of California
at Berkeley in 1970.
Victoria Bellport, 31, is Chief Financial Officer and Executive Vice
President of BioTime and has been a director of the Company since 1990. Ms.
Bellport received a B.A. in Biochemistry from the University of California at
Berkeley in 1988.
Hal Sternberg, Ph.D., 43, is Vice President of Research of BioTime and
has been a director of the Company since 1990. He was a research scientist for
CMSI from 1987 to December 1990, serving as Vice President of Biochemistry for
CMSI from November 1987 to 1989. Dr. Sternberg was a visiting scientist and
research Associate at the University of California at Berkeley from 1985-1988,
where he supervised a team of researchers studying Alzheimer's Disease. Dr.
Sternberg received his Ph.D. from the University of Maryland in Biochemistry in
1982.
Harold Waitz, Ph.D., 54, is Vice President of Engineering of BioTime and
has been a director of the Company since 1990. He was a research scientist for
CMSI from 1987 to December 1990, serving as Vice President of Technology for
CMSI from November 1987 to 1989. From 1986-1988, Dr. Waitz served as Vice
President of Research at the Winters Institute, a non-profit biomedical research
institution, at which Dr. Waitz studied arteriosclerosis in primates. He
received his Ph.D. in Biophysics and Medical Physics from the University of
California at Berkeley in 1983.
Judith Segall, 42, has been Vice President of Technology and Secretary
of BioTime since 1990 and was a director of the Company from 1990 through 1994,
and from 1995 through the present date. She performed services on a contract
basis as a biochemist for CMSI during 1989, until the formation of BioTime. Ms.
Segall received a B.S. in Nutrition and Clinical Dietetics from the University
of California at Berkeley in 1989.
Jeffrey B. Nickel, Ph.D., 53, is President of Nickel Consulting through
which he has served as a consultant to companies in the pharmaceutical and
biotechnology industries since 1990. Prior to starting his consulting business,
Dr. Nickel served in a number of management positions for Syntex Corporation and
Merck & Company. Dr. Nickel received his Ph.D. in Organic Chemistry from Rutgers
University in 1970.
3
Executive Officers
Paul Segall, Ronald S. Barkin, Victoria Bellport, Hal Sternberg, Harold
Waitz and Judith Segall are the only executive officers of BioTime.
There are no family relationships among the directors or officers of the
Company, except that Paul Segall and Judith Segall are husband and wife.
Directors' Meetings, Compensation and Committees of the Board
The Board of Directors does not have a standing Audit Committee,
Compensation Committee, or Nominating Committee. Nominees to the Board of
Directors are selected by the entire Board.
The Board of Directors has a Stock Option Committee that administers the
Company's 1992 Stock Option Plan and makes grants of options to key employees,
consultants, scientific advisory board members and independent contractors of
the Company, but not to officers or directors of the Company. The members of the
Stock Option Committee are Paul Segall, Ronald S. Barkin, and Victoria Bellport.
The Stock Option Committee was formed during September 1992.
During the fiscal year ended June 30, 1996, the Board of Directors met
three times. No director attended fewer than 75% of the meetings of the Board or
any committee on which they served.
Directors of the Company who are not employees receive an annual fee of
$20,000. Directors of the Company and members of committees of the Board of
Directors who are employees of the Company are not compensated for serving as
directors or attending meetings of the Board or committees of the Board.
Directors are entitled to reimbursements for their out-of-pocket expenses
incurred in attending meetings of the Board or committees of the Board.
Directors who are employees of the Company are also entitled to receive
compensation in such capacity.
Executive Compensation
None of the Company's executive officers received compensation from the
Company in excess of $100,000 during the fiscal year ended June 30, 1996. The
Company has entered into a new five-year employment agreement (the "Employment
Agreement") with Paul Segall, the President and Chief Executive Officer of the
Company. The Employment Agreement will expire on December 31, 2000 but may
terminate prior to the end of the term if Dr. Segall (1) dies, (2) leaves the
Company, (3) becomes disabled for a period of 90 days in any 150 day period, or
(4) is discharged by the Board of Directors for failure to carry out the
reasonable policies of the Board, persistent absenteeism, or a material breach
of a covenant. Under his Employment
4
Agreement, Dr. Segall is presently receiving an annual salary of $85,000. Dr.
Segall will receive a one-time cash bonus of $25,000 if the Company receives at
least $1,000,000 of equity financing from a pharmaceutical company. Dr. Segall
will be entitled to seek a modification of his Employment Agreement before the
expiration of the five year term if the market value of the Company's
outstanding capital stock exceeds $75,000,000.
In the event of Dr. Segall's death during the term of his Employment
Agreement, the Company will pay his estate his salary for a period of six month
or until December 31, 2000, whichever first occurs. In the event that Dr.
Segall's employment terminates, voluntarily or involuntarily, after a change in
control of the Company through an acquisition of voting stock, an acquisition of
the Company's assets, or a merger or consolidation of the Company with another
corporation or entity, Dr. Segall will be entitled to severance compensation
equal to the greater of (a) 2.99 times his average annual compensation for the
preceding five years and (b) the balance of his base salary for the unexpired
portion of the term of his Employment Agreement.
The Board of Directors has also approved employment agreements that
contain the same or similar change of control severance benefits for the other
executive officers of the Company.
Dr. Segall has also executed an Intellectual Property Agreement which
provides that the Company is the owner of all inventions developed by Dr. Segall
during the course of his employment.
The following table summarizes certain information concerning the
compensation paid to Dr. Segall during the last three fiscal years.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
Name ------------------- Compensation
and Principal -------------
Position Year Salary($) Bonus Stock Options
- --------------- ---- --------- ----- -------------
Paul Segall 1996 $76,041
Chief Executive 1995 $67,500
Officer 1994 $63,796 $25,000
5
Stock Option Plan
During 1992, the Company adopted the 1992 Stock Option Plan and granted
to Paul Segall options to purchase 21,000 Common Shares at $9.22 per share. The
options granted to Dr. Segall will expire five years after the date of grant,
and will become exercisable in three equal annual installments. No options were
granted to any of the Company's executive officers during the last fiscal year.
The following table provides information with respect to Dr. Segall
concerning the exercise of options during the last fiscal year and unexercised
options held as of June 30, 1996.
Aggregated Options Exercised in Last Fiscal Year,
and Fiscal Year-End Option Values
Number of Number of Value of Unexercised
Shares Unexercised Options at In-the-Money Options at
Acquired Value June 30, 1996 June 30, 1996(1)
on Realized --------------------------- ---------------------------
Name Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ---------- ----- ----------- ------------- ----------- -------------
Paul Segall 0 -- 21,000 0 $239,610 0
(1) Based on the average of the high and low bid prices of a Common Share
($20.63) as reported on the Nasdaq Small Cap Market System on such date.
Certain Relationships and Related Transactions
During the twelve months ended June 30, 1996, $19,940 in fees for
consulting services was paid to Ronald S. Barkin, and $36,000 in fees for
consulting services was paid to Dr. Jeffrey B. Nickel, members of the Board of
Directors.
6
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of April 7, 1997
concerning beneficial ownership of Common Shares by each shareholder known by
the Company to be the beneficial owner of 5% or more of the Company's Common
Shares, and the Company's executive officers and directors. Information
concerning certain beneficial owners of more than 5% of the Common Shares is
based upon information disclosed by such owners in their reports on Schedule
13D.
Number of Percent of
Shares Total
--------- ----------
Alfred D. Kingsley (1) 362,750 11.1%
Gary K. Duberstein
Greenbelt Corp.
Greenway Partners, L.P.
Greenhouse Partners, L.P.
277 Park Avenue, 27th Floor
New York, New York 10017
WisdomTree Associates, L.P. (2) 259,200 8.1
WisdomTree Capital Management, Inc.
1633 Broadway, 38th Floor
New York, New York 10019
WisdomTree Offshore, Ltd. (2)
Zephyr House, 5th Floor
P.O. Box 1561
Mary Street
Grand Cayman, Cayman Islands
British West Indies
Paul and Judith Segall (3) 236,638 7.3
Harold D. Waitz (4) 167,069 5.2
Hal Sternberg (5) 158,379 4.9
Victoria Bellport 65,389 2.0
Ronald S. Barkin (6) 63,337 2.0
Jeffrey B. Nickel -- --
7
All officers and directors
as a group (7 persons)(7) 690,812 20.9
- ---------------------------
(1) Includes 250,000 Common Shares issuable upon the exercise of certain
warrants owned beneficially by Greenbelt Corp. Mr. Kingsley and Mr. Duberstein
may be deemed to beneficially own the warrant shares that Greenbelt Corp.
beneficially owns. Includes 27,500 Common Shares owned by Greenway Partners,
L.P. Greenhouse Partners, L.P. is the general partner of Greenway Partners, L.P.
and Mr. Kingsley and Mr. Duberstein are the general partners of Greenhouse
Partners, L.P. Greenhouse Partners, L.P., Mr. Kingsley and Mr. Duberstein may be
deemed to beneficially own the Common Shares that Greenway Partners, L.P.
beneficially owns. Includes 81,950 Common Shares owned solely by Mr. Kingsley,
as to which Mr. Duberstein disclaims beneficial ownership. Includes 3,300 Common
Shares owned solely by Mr. Duberstein, as to which Mr. Kingsley disclaims
beneficial ownership.
(2) Includes 229,200 Common Shares owned by WisdomTree Associates, L.P. and
30,000 Common Shares owned by WisdomTree Offshore, Ltd. WisdomTree Capital
Management, Inc. is the general partner of WisdomTree Associates, L.P. and is
the investment manager of WisdomTree Offshore, Ltd.
(3) Includes 151,559 shares held of record by Paul Segall and 64,179 shares
held of record by Judith Segall. Includes 21,000 Common Shares issuable upon the
exercise of certain options.
(4) Includes 21,000 Common Shares issuable upon the exercise of certain
options.
(5) Includes 21,000 Common Shares issuable upon the exercise of certain
options.
(6) Includes 45,000 Common Shares issuable upon the exercise of certain
options.
(7) Includes 108,000 Common Shares issuable upon the exercise of certain
options.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in ownership of
Common Shares and other equity securities of the Company. Officers, directors
and greater than ten percent beneficial owners are required by SEC regulation to
furnish the Company with copies of all reports they file under Section 16(a).
To the Company's knowledge, based solely on its review of the copies of
such reports furnished
8
to the Company and written representations that no other reports were required,
all Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with during the fiscal
year ended June 30, 1996.
AMENDMENT OF THE 1992 STOCK OPTION PLAN
The Board of Directors proposes and recommends that the shareholders
approve an amendment to the Company's 1992 Stock Option Plan (the "Plan") which
will make an additional 200,000 Common Shares available for issuance upon the
exercise of options that may be granted under the Plan. The Plan currently makes
available a total of 400,000 Common Shares for which options may be granted. As
of April 7, 1997, the Company had granted options to purchase 348,000 of the
Common Shares available under the Plan, of which 103,000 have been exercised and
245,000 remain outstanding. The Board of Directors has no present plan or
commitment to grant any additional options to the present executive officers of
the Company, but the Board strongly believes that the Company's ability to
attract and retain the services of new employees and consultants depends in
great measure upon its ability to provide the kind of incentives that are
derived from the ownership of stock options. The Board believes that unless the
proposed amendment to the Plan is approved by the shareholders, the Company will
be placed at a serious competitive disadvantage in attracting capable employees
and consultants at a critical time in its development.
At April 7, 1997, the total market value of the 297,000 Common Shares
reserved for issuance under the Plan was approximately $9,207,000, based upon
the last sale price on such date on the Nasdaq Small Cap Market. That total
market value would increase to approximately $15,407,000 as of April 7, 1997 if
the shareholders approve the proposed amendment reserving an additional 200,000
Common Shares.
The Plan is administered by the Board of Directors which determines
which officers, directors, employees, consultants, scientific advisory board
members and independent contractors of the Company are to be granted options,
the number of shares subject to the options granted, the exercise price of the
options, and certain other terms and conditions of the options. The Stock Option
Committee (the "Committee") of the Board may grant options under the Plan to
eligible persons other than officers and directors of the Company.
The options exercise price may be payable in cash or in Common Shares
having a fair market value equal to the exercise price, or in a combination of
cash and Common Shares. No options may be granted under the Plan more than ten
years after the date the Plan was adopted by the Board of Directors, and no
options granted under the Plan may be exercised after the expiration of ten
years from the date of grant.
Options granted under the Plan may be either "incentive stock options"
within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified stock
9
options. Incentive stock options may be granted only to employees of the Company
or its subsidiaries. The exercise price of incentive stock options granted under
the Plan must be equal to the fair market of the Company's Common Shares on the
date the option is granted. In the case of an optionee who, at the time of
grant, owns more than 10% of the combined voting power of all classes of stock
of the Company, the exercise price of any incentive stock option must be at
least 110% of the fair market value of the Common Shares on the grant date, and
the term of the option may be no longer than five years. The aggregate fair
market value of the Common Shares (determined as of the grant date of the
option) with respect to which incentive stock options become exercisable for the
first time by an optionee in any calendar year may not exceed $100,000.
Options granted under the Plan are nontransferable (except by will or
the laws of descent and distribution) and may vest in annual installments or
upon the occurrence of certain events. Incentive stock options may be exercised
only during employment or within three months after termination of such
employment, subject to certain exceptions in the event of the death or
disability of the optionee.
The number of Common Shares covered by the Plan, and the number of
Common Shares and exercise price per share of each outstanding option, shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Common Shares resulting from a subdivision or consolidation of
shares or the payment of a stock dividend, or any other increase or decrease in
the number of issued and outstanding Common Shares effected without receipt of
consideration by the Company.
In the event of the dissolution or liquidation of the Company, or in the
event of a reorganization, merger or consolidation of the Company as a result of
which the Common Shares are changed into or exchanged for cash or property or
securities not of the Company's issue, or upon a sale of substantially all the
property of the Company to, or the acquisition of stock representing more than
eighty percent 80% of the voting power of the stock of the Company then
outstanding by, another corporation or person, the Plan and all options granted
under the Plan shall terminate, unless provision can be made in writing in
connection with such transaction for either the continuance of the Plan and/or
for the assumption of options granted under the Plan, or the substitution for
such options by options covering the stock of a successor corporation, or a
parent or a subsidiary of a successor corporation, with appropriate adjustments
as to the number and kind of shares and prices.
The approval of the amendment of the Plan requires the affirmative vote
of the holders of a majority of the Common Shares present and voting at the
Meeting.
The Board of Directors Recommends A Vote "FOR" the
Approval of the Amendment to the Plan
10
Federal Income Tax Consequence of Participation in the Plan
The following discussion summarizes certain federal income tax
consequences of participation in the Plan. Although the Company believes the
following statements are correct based on existing provisions of the Code and
the regulations thereunder, the Code or regulations may be amended from time to
time, and future judicial interpretations may effect the veracity of the
discussion.
Under Section 422(a) of the Code, the grant and exercise of an incentive
stock option pursuant to the Plan is entitled to the benefits of Section 421(a)
of the Code. Under Section 421(a), an optionee will not be required to recognize
income at the time the option is granted or at the time the option is exercised.
If the applicable holding periods described below are met, when the shares of
stock received upon exercise of an incentive stock option are sold or otherwise
disposed of in a taxable transaction, the option holder will recognize
compensation income (taxed as ordinary income), for the taxable year in which
disposition occurs, in an amount equal to the excess of the fair market value of
the Common Shares at the time of such disposition over the amount paid for the
shares.
The Company will not be entitled to any business expense deduction with
respect to the grant or exercise of an incentive stock option, except in
connection with a disqualifying disposition as discussed below. No portion of
the amount received by the optionee upon the sale of Common Shares acquired
through the exercise of an incentive stock option will be subject to withholding
for federal income taxes, or be subject to FICA or state disability taxes,
except in connection with a disqualifying disposition.
In order for a participant to receive the favorable tax treatment
provided in Section 421(a) of the Code, Section 422 requires that the
participant make no disposition of the option shares within two years from the
date the option was granted, nor within one year from the date such option was
exercised and the shares were transferred to the participant. In addition, the
participant must, with certain exceptions for death or disability, be an
employee of the Company (or of a parent or subsidiary of the Company, as defined
in Section 424(e) and (f) of the Code, or a corporation, or parent or subsidiary
thereof, issuing or assuming the option in a merger or other corporate
reorganization transaction to which Section 424(a) of the Code applies) at all
times within the period beginning on the date of the grant of the option and
ending on a date within three months before the date of exercise. In the event
of the death of the participant, the holding periods will not apply to a
disposition of the option or option shares by the participant's estate or by
persons receiving the option or shares under the participant's will or by
intestate succession.
If a participant disposes of stock acquired pursuant to the exercise of
an incentive stock option before the expiration of the holding period
requirements set forth above, the participant will realize, at the time of the
disposition, ordinary income to the extent the fair market value of the Common
Shares on the date the shares were purchased exceeded the purchase price. The
difference between the fair market value of the Common Shares on the date the
shares were purchased and the amount realized on disposition is treated as
long-term or short-term capital gain or loss, depending on the participant's
holding period of the Common Shares. The amount treated as ordinary income may
be subject to the income tax withholding requirements of the Code and FICA
withholding requirements. The participant
11
will be required to reimburse the Company, either directly or through payroll
deduction, for all withholding taxes that the Company is required to pay on
behalf of the participant. At the time of the disposition, the Company will be
allowed a corresponding business expense deduction under Section 162 of the Code
to the extent of the amount of the participant's ordinary income. The Company
may adopt procedures to assist it in identifying such deductions, and may
require a participant to notify the Company of his or her intention to dispose
of any such shares.
The Plan also permits the Company to grant options that do not qualify
as incentive stock options. These "non-qualified" stock options may be granted
to employees or non-employees, such as members of the Company's scientific
advisory board and other persons performing consulting or professional services
for the Company. A Plan participant who receives a non-qualified option will not
be taxed at the time of receipt of the option, provided that the option does not
have an ascertainable value, but the participant will be taxed at the time the
option is exercised.
The amount of taxable income that will be earned upon exercise of a
non-qualified option will be the difference between the fair market value of the
Common Shares on the date of the exercise and the exercise price of the option.
The Company will be allowed a business expense deduction to the extent of the
amount of the participant's taxable income recognized upon the exercise of a
non-qualified option. Because the option holder is subject to tax immediately
upon exercise of the option, there are no applicable holding periods for the
stock. The option holder's tax basis in the Common Shares purchased through the
exercise of a non-qualified option will be equal to the exercise price paid for
the stock plus the amount of taxable gain recognized upon the exercise of the
option. The option holder may be subject to additional tax on sale of the stock
if the price realized exceeds his or her tax basis. The Plan is not subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended, and is not qualified under Code Section 401(a).
Options Previously Granted Under the Plan
The following table shows certain information concerning options
previously granted under the Plan to (i) the Company's Chief Executive Officer,
(ii) all current executive officers, as a group, (iii) all current directors who
are not executive officers, as a group, (iv) each nominee for election as a
director, (v) each other person who received 5% or more of the options, and (vi)
all employees, including all current officers who are not executive officers, as
a group:
Number of Options Granted
Paul E. Segall 21,000
Hal Sternberg 21,000
Harold Waitz 21,000
Judith Segall 0
Victoria Bellport 0
Ronald S. Barkin 45,000
12
Jeffrey B. Nickel 5,000
All current executive officers, as a group 78,000
All current directors who are not executive
officers, as a group 5,000
Ronald Leonardi(1) 30,000
Michael Powanda(1) 30,000
All employees, including all current officers
who are not executive officers, as a group 17,000
- ---------------------------
(1) Dr. Leonardi and Dr. Powanda are consultants who provide advice and
assistance to the Company in regulatory (FDA) affairs and product development
matters.
AMENDMENT OF ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED
NUMBER OF COMMON SHARES
The Board of Directors has approved an amendment to the Company's
Articles of Incorporation to increase the number of authorized Common Shares
from 5,000,000 shares to 25,000,000. The purpose of this amendment is to give
the Company the flexibility to raise additional capital through the issuance of
additional shares, and to obtain and maintain the services of consultants by
issuing warrants to purchase Common Shares. Common Shares could also be issued
in connection with the acquisition of another business or business assets or
technology. There are presently 3,203,193 Common Shares issued and outstanding.
An additional 340,000 Common Shares are reserved for issuance under outstanding
warrants, and 297,000 Common Shares are reserved for issuance under the Plan. If
the proposed amendment to the Plan is approved by the shareholders, an
additional 200,000 Common Shares will be reserved for issuance under the Plan.
Accordingly, only 1,159,807 authorized Common Shares would be available to the
Company.
Although the Company has no present agreement, arrangement or commitment
to issue or sell any Common Shares for cash or in connection with the
acquisition of any business, assets or technology, the Board of Directors
believes that it is in the best interest of the Company and its shareholders to
have a sufficient number of authorized but unissued shares available for
issuance in the future for such purposes or other opportunities that may come
along. Although the Company recently raised approximately $5,600,000 through a
subscription rights offering, additional capital will be required in the future
for the Company to complete its plans to develop and market its products. It is
likely that the sale of Common Shares will be the principal means by which the
Company would raise additional capital until such time as it is able to generate
earnings sufficient to finance its operations.
The approval of the amendment of the Company's Articles of
Incorporation requires the affirmative vote of the holders of a majority of the
issued and outstanding Common Shares.
The Board of Directors Recommends A Vote "FOR" the
Approval of the Amendment to the Articles of Incorporation
13
RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors proposes and recommends that the shareholders
ratify the selection of the firm of Deloitte & Touche LLP to serve as
independent accountants of the Company for the fiscal year ending June 30, 1997.
Deloitte & Touche LLP has served as the Company's independent accountants since
1991. Unless otherwise directed by the shareholders, proxies will be voted FOR
approval of the selection of Deloitte & Touche LLP to audit the Company's
consolidated financial statements. A representative of Deloitte & Touche LLP
will attend the Meeting, and will have an opportunity to make a statement if he
or she so desires and may respond to appropriate questions from shareholders.
The Board of Directors Recommends a Vote "FOR" Ratification of the Selection of
Deloitte & Touche LLP as the Company's Independent Accountants
PROPOSALS OF SHAREHOLDERS
Shareholders of the Company who intend to present a proposal for action
at the 1997 Annual Meeting of Shareholders of the Company must notify the
Company's management of such intention by notice received at the Company's
principal executive offices not later than January 23, 1998 for such proposal to
be included in the Company's proxy statement and form of proxy relating to such
meeting.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1996 is
being mailed to shareholders with this Proxy Statement. The Annual Report is not
to be regarded as proxy soliciting material. A copy of the Company's Annual
Report on Form 10-K filed with the Securities and Exchange Commission for the
fiscal year ended June 30, 1996, without exhibits, may be obtained by a
shareholder without charge, upon written request to the Secretary of the
Company.
By Order of the Board of Directors,
Paul Segall, Ph.D.
President and Chief Executive Officer
April 23, 1997
14
APPENDIX
PROXY FOR BIOTIME, INC.
ANNUAL MEETING OF SHAREHOLDERS
May 23, 1997
This Proxy is Solicited by the Board of Directors
The undersigned appoints Paul E. Segall and Ronald S. Barkin, and each
of them, with full power of substitution, as the undersigned's lawful agent and
proxy to attend the Annual Meeting of Shareholders of BioTime, Inc. on May 23,
1997 and any adjournment thereof and to represent and vote all BioTime, Inc.
Common Shares standing in the name of the undersigned upon the books of the
corporation.
DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS NUMBERED 1, 2, 3 AND 4
1) ELECTION OF [] FOR all nominees listed [] WITHHOLD AUTHORITY
DIRECTORS below (except as marked to vote for all
to the contrary below) nominees listed below
RONALD S. BARKIN; VICTORIA BELLPORT; JUDITH SEGALL; JEFFREY B. NICKEL;
PAUL SEGALL; HAL STERNBERG; HAROLD WAITZ
** To withhold authority to vote for any individual nominee, draw a line through
that person's name**
FOR AGAINST ABSTAIN
2) APPROVAL OF AMENDMENT OF
1992 STOCK OPTION PLAN [ ] [ ] [ ]
3) APPROVAL OF AMENDMENT OF ARTICLES [ ] [ ] [ ]
OF INCORPORATION
4) RATIFYING APPOINTMENT OF INDEPENDENT [ ] [ ] [ ]
ACCOUNTANTS
The persons named as proxy may also vote on such
other business as may properly come before
the Meeting or any adjournment thereof.
[ ] WISH TO ATTEND AND
VOTE SHARES AT MEETING
Please sign exactly as
your shares are registered. _______________________ __________________
Persons signing as a corporate Signature Date
officer or in a fiduciary
capacity should indicate their _______________________ __________________
title or capacity. Signature if Held Jointly Date
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