<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            SCHEDULE 14A INFORMATION
 
                   Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934
                              (Amendment No.    )
 

<TABLE>
      <S>        <C>
      Filed by the Registrant /X/
      Filed by a Party other than the Registrant / /
 
      Check the appropriate box:
      /X/        Preliminary Proxy Statement
      / /        Confidential, For Use of the Commission Only
                 (as permitted by Rule 14a-6(e)(2))
      / /        Definitive Proxy Statement
      / /        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Rule 14a-11(c) or
                 Rule 14a-12
</TABLE>

 

<TABLE>
<C>                                                          <S>
                            CELSION CORPORATION
------------------------------------------------------------
      (Name of Registrant as Specified In Its Charter)
 
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the
                        Registrant)
</TABLE>

 
Payment of Filing Fee (Check the appropriate box):
 

<TABLE>
<S>        <C>  <C>
/X/        No fee required.
/ /        Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
           and 0-11.
           (1)  Title of each class of securities to which transaction
                applies:
                ----------------------------------------------------------
           (2)  Aggregate number of securities to which transaction
                applies:
                ----------------------------------------------------------
           (3)  Per unit price or other underlying value of transaction
                computed pursuant to Exchange Act Rule 0-11 (set forth the
                amount on which the filing fee is calculated and state how
                it was determined):*
                ----------------------------------------------------------
           (4)  Proposed maximum aggregate value of transaction:
                ----------------------------------------------------------
           (5)  Total fee paid:
                ----------------------------------------------------------
/ /        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 no.:
                ----------------------------------------------------------
           (3)  Filing party:
                ----------------------------------------------------------
           (4)  Date filed:
                ----------------------------------------------------------
</TABLE>


<PAGE>
                              CELSION CORPORATION
                           10220-I OLD COLUMBIA ROAD
                            COLUMBIA, MD 21046-1705
 
                            ------------------------
 
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                      TO BE HELD ON         , MAY   , 2000
 
                            ------------------------
 
To the Stockholders:
 
    Notice is hereby given that the annual meeting (the "Meeting") of the
stockholders of Celsion Corporation (the "Company") will be held at 1:00 o'clock
PM on         , May   , 2000 at the Columbia Hilton, 5485 Twin Knolls Road,
Columbia, MD 21045 for the following purposes:
 
    (1) To elect a Board of seven Directors, to hold office until the next
       annual meeting and until their respective successors shall have been
       elected and shall have qualified;
 
    (2) To ratify the selection by the Board of Directors of Stegman & Company
       as the independent public accountants of the Company for the year ending
       September 30, 2000;
 
    (3) To consider a management proposal to change the Company's state of
       incorporation from Maryland to Delaware, and concurrently to increase the
       number of authorized shares of Common Stock from 100,000,000 to
       150,000,000 and to authorize a separate class of 100,000 shares of
       Preferred Stock; and
 
    (4) To transact such other business as may properly come before the Meeting
       or any adjournment or adjournments thereof.
 
    The close of business on April   , 2000 has been fixed as the record date
for the determination of stockholders of the Company entitled to notice of and
to vote at the Meeting and any adjournment or adjournments thereof. Only
stockholders of record at the close of business on such date are entitled to
notice of, and to vote at, the Meeting and any adjournment or adjournments
thereof.
 
    All stockholders are cordially invited to attend the Meeting in person.
However, whether or not you expect to attend the Meeting, you are urged TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD, which is being
solicited on behalf of the Company's management, as promptly as possible in the
postage-prepaid envelope provided. Sending in your proxy card will ensure your
representation and the presence of a quorum at the Meeting. Even if you send in
your proxy card, you may still attend the Meeting and vote your shares in
person, since your proxy is revocable as set forth in the Proxy Statement.
 
                                          By Order of the Board of Directors
                                          JON MON
                                          SECRETARY
 
April   , 2000
Columbia, Maryland
 
         IF YOU CANNOT ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
    AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

<PAGE>
                                PROXY STATEMENT
 
                            ------------------------
 
                 SOLICITATION OF PROXY, REVOCABILITY AND VOTING
 
GENERAL
 
    This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Celsion Corporation (the "Company" or "Celsion") of
proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting"
or "Meeting") to be held at 1:00 o'clock PM on         , May   , 2000 at the
Columbia Hilton, 5485 Twin Knolls Road, Columbia, Maryland 21045, and at any
adjournment or adjournments thereof (the "Meeting"), for the purposes set forth
in the accompanying notice.
 
    Only stockholders of record at the close of business on April   , 2000, the
record date, are entitled to notice of and to vote at the Meeting. As of such
date, there were approximately       shares of Common Stock of the Company
issued and outstanding. If you were a Stockholder as of the record date, you are
entitled to vote at the Meeting and your presence is desired and encouraged. IF
YOU CANNOT BE PRESENT AT THE MEETING, THE BOARD OF DIRECTORS REQUESTS THAT YOU
COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN ORDER TO INSURE A
QUORUM AT THE MEETING. A postage pre-paid return envelope is enclosed for your
convenience.
 
    The Company's offices are located at 1220-I Old Columbia Road, Columbia, MD
21046-1705, and its telephone is 1-410-290-5390 or 1-800-262-0394 (toll free).
The approximate date on which this Proxy Statement and accompanying proxy and
Annual Report on Form 10-K are first being sent to stockholders is April   ,
2000.
 
VOTING PROCEDURES
 
    Each share of Common Stock outstanding on the Record Date will be entitled
to one vote on each matter to come before the Annual Meeting. Outstanding shares
of Series A Preferred Stock will not have any voting rights at the Annual
Meeting.
 
    The proposals to be submitted to the stockholders which concern a change of
the Company's state of incorporation from Maryland to Delaware and a concurrent
increase in the number of authorized shares and the addition of a class of
Preferred Stock, all involve changes in the Company's corporate charter.
Accordingly, each such proposal will require approval by a favorable vote of
two-thirds of all shares present in person or by proxy and entitled to be voted
at the Meeting. Each of the other matters submitted to the stockholders,
including the election of directors, requires the favorable vote of a majority
of the shares of the shares entitled to be voted. The presence in person or by
proxy of a majority of all outstanding shares will constitute a quorum. In the
event that the number of shares represented at the meeting in person or by proxy
is less than a quorum, the persons named in the accompanying proxy will vote FOR
an adjournment of the Meeting
 
    Stockholder votes will be tabulated by American Stock Transfer & Trust
Company, the Company's transfer agent. Shares represented at the Meeting in
person or by proxy but not voted will nevertheless be counted for purposes of
determining whether a quorum exists. Abstentions and broker non-votes (shares as
to which a broker or nominee has indicated that it does not have discretionary
authority to vote) on a particular matter, including the election of directors,
will be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but will be treated as not voted for
purposes of determining the decision of stockholders with respect to such
matter; accordingly, they will have the same effect as a vote against the
proposal.
 
VOTING BY TELEPHONE
 
    Stockholders will be able to vote their shares by telephone instead of
completing and returning the enclosed proxy card, if they so desire. The
toll-free number and instructions for using the "vote-by-phone" option are
included in the proxy card.

<PAGE>
PROXIES
 
    The enclosed proxy is solicited by the Board of Directors. If the proxy is
properly returned by dating, signing and mailing, and if choices are specified
therein and the proxy is not revoked, the shares represented thereby will be
voted at the Meeting in accordance with the instructions indicated on the proxy.
If no choice is specified as to any item, the proxy will be voted as recommended
by the Board of Directors.
 
REVOCABILITY OF PROXIES
 
    Any stockholder of the Company giving a proxy prior to the Meeting may
revoke it either by attending the Meeting and voting his or her shares in person
or by delivering to the Company, not later than the commencement of the Meeting,
a letter or other suitable instrument of revocation or a later dated proxy, duly
executed by the stockholder.
 
SOLICITATION
 
    The Company will bear the entire cost of preparing, assembling, printing and
mailing this Proxy Statement, the accompanying proxy and any additional material
which may be furnished to stockholders. Copies of solicitation material will be
furnished to brokerage houses, fiduciaries and custodians to forward to
beneficial owners of stock held in the names of such nominees. The solicitation
of proxies will be made by the use of the mails and through direct communication
with certain stockholders or their representatives by officers, directors and
employees of the Company, who will receive no additional compensation therefor.
The Company may also engage a professional solicitation firm to solicit proxies
and distribute materials to certain stockholders, brokerage houses, banks,
custodians and other nominee holders at a cost which is not expected to exceed
[$      ].
 
         IF YOU CANNOT ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
    AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
                            AS PROMPTLY AS POSSIBLE.
 
                                       2

<PAGE>
                    INFORMATION ABOUT THE BOARD OF DIRECTORS
                               AND ITS COMMITTEES
 
BOARD OF DIRECTORS
 
    The members of the Company's Board of Directors, and their executive
positions with the Company, are as follows:
 

<TABLE>
<CAPTION>
NAME                                          AGE                       POSITION
----                                        --------   ------------------------------------------
<S>                                         <C>        <C>
Spencer J. Volk...........................     66      President, Chief Executive Officer and
                                                       Director
 
Augustine Y. Cheung.......................     53      Chairman, Chief Scientific Officer and
                                                       Director
 
Max E. Link...............................     59      Director
 
LaSalle D. Leffall, Jr....................     70      Director
 
Claude Tihon..............................     55      Director
 
John Mon..................................     48      Secretary, Treasurer/General Manager
                                                       and Director
 
Walter B. Herbst..........................     61      Director
</TABLE>

 
DIRECTOR COMPENSATION
 
    For the year ended September 30, 1999, the four members of the Board of
Directors who are not officers of the Company were entitled to directors fees at
the annual rate of $20,000 each. In lieu of a cash payment of such directors
fees, each outside director was paid in shares of Common Stock, valued at a
price of $0.88 per share, the closing price on September 30, 1999. Accordingly,
Dr. Max E. Link and Walter B. Herbst each received 22,727 shares, while Dr. La
Salle D. Leffall and Dr. Claude Tihon each received 7,576 shares reflecting
pro-rated compensation for the service of Messrs. Leffall and Tihon as directors
beginning May 27, 1999. In addition, Mr. Herbst received an option to purchase
15,000 shares of Common Stock of the Company at $0.50 per share, exercisable
during the period from October 1, 1999 through September 30, 2004, for prior
service on the Board of Directors. In 1997, the Company granted to Dr. Link an
option to purchase 50,000 shares of Common Stock of the Company, exercisable at
$0.75 per share, which will terminate on December 30, 2004. In the year ended
September 30, 1999, the Company also agreed to grant to each of Dr. Tihon and
Dr. Leffall an option to purchase 50,000 shares, exercisable at $0.74 per share,
which will vest on May 27, 2000 (if each is then serving as a director) and will
terminate May 26, 2005.
 
    Officers of the Company who also act as directors previously received 2000
shares each of Common Stock for a full year of service on the Board, but,
beginning in the current fiscal year, no separate compensation will be paid to
any officer of the Company for service on the Board or any Board committee.
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
    The Board of Directors presently maintains an Audit Committee, a
Compensation Committee, and a Research and Development Oversight Committee. The
Audit Committee's principal responsibilities are to recommend annually a firm of
independent auditors to the Board of Directors, to review the annual audit of
the Company's Financial Statements and to meet with the independent auditors of
the Company from time to time in order to review the Company's general policies
and procedures with respect to audits and accounting and financial controls. The
principal responsibilities of the Compensation Committee are to
 
                                       3

<PAGE>
establish compensation policies for the executive officers of the Company and to
administer the Company's incentive plans. The Research and Development Oversight
Committee is responsible for reviewing the performance, scheduling and
cost-effectiveness of the Company's research and development programs.
 
    Drs. Link, Leffall and Tihon serve on the Audit Committee. Messrs. Herbst
and Volk and Dr. Link comprise the Compensation Committee. Dr. Cheung and
Mr. Herbst are the members of the Research and Development Oversight Committee.
 
MEETINGS OF BOARD AND COMMITTEES
 
    In the fiscal year ended September 30, 1999, there were 11 meetings of the
Board of Directors, and each Committee of the Board met at least       times.
All directors attended at least 75% of the meetings of the Board and of all
committees of which they were members.
 
                     PROPOSAL NO. 1--ELECTION OF DIRECTORS
 
    The Company's Bylaws previously provided for a classified Board election
process, under which the Directors were divided into three separate classes,
each of which were elected for staggered terms of two years. The Company has
found the use of staggered Board elections to be cumbersome and unnecessary, and
the Board has amended the Company's Bylaws to provide for the annual election of
all directors.
 
    Accordingly, the seven nominees whose biographical summaries and ages appear
below, are proposed for election as directors of the Company, to serve until the
next annual meeting and until their successors are elected and shall qualify.
Information with respect to the direct and indirect beneficial ownership by such
persons of shares of the Company's Common Stock appears immediately after the
biographical summaries.
 
    SPENCER J. VOLK.  Mr. Volk has been a director, President, and Chief
Executive Officer of the Company since May 22, 1997. From 1994 to 1996,
Mr. Volk was President and Chief Operating Officer of Sunbeam International.
From 1991 to 1993, Mr. Volk was President and Chief Executive Officer of the
Liggett Group, Inc. From 1989 to 1991, he was President and Chief Operating
Officer of Church and Dwight (Arm and Hammer), and from 1984 to 1986, he was
President and Chief Executive Officer of Tropicana Products, Inc. Prior to that,
he spent thirteen years in various staff and management positions at Pepsico,
ultimately as Senior Vice President for the Western Hemisphere. Mr. Volk holds
an Honors BA in Economics and Math from Queens University in Ontario, Canada and
a BA in Economics from Royal Military College in Ontario, Canada.
 
    AUGUSTINE Y. CHEUNG.  Dr. Cheung is Chairman of the Board of Directors and
has served as a director, principal executive officer and Chief Scientific
Officer of the Company since 1982. Dr. Cheung was the founder of the Company and
served as President from 1982 to 1986 and Chief Executive Officer from 1982 to
1996. From 1982 to 1985, Dr. Cheung was a Research Associate Professor of the
Department of Electrical Engineering and Computer Science at George Washington
University and from 1975 to 1981 was a Research Associate Professor and
Assistant Professor at the Institute for Physical Science and Technology and the
Department of Radiation Therapy at the University of Maryland. Dr. Cheung holds
a Ph.D. and Masters Degree from the University of Maryland. Dr. Cheung is the
brother-in-law of John Mon, a director and officer of the Company.
 
    MAX E. LINK.  Dr. Link has been a director of the Company since
September 23, 1997. Dr. Link currently provides consulting and advisory services
to a number of pharmaceutical and biotechnology companies. From 1993 to 1994,
Dr. Link served as Chief Executive Officer of Corange, Ltd., a medical
diagnostics company acquired by Hoffman-LaRoche. From 1971 to 1993, Dr. Link
served in numerous positions with Sandoz Pharma AG culminating in his
appointment as Chairman of the Board of Directors in 1992. Dr. Link serves on
the Board of Directors of the following publicly held companies: Human Genome
Sciences; Alexion Pharmaceuticals; Cell Therapeutics; Access Pharmaceuticals;
Protein Design
 
                                       4

<PAGE>
Laboratories; Osiris Therapeutics; Procept, Inc.; Discovery Laboratories Inc.
and Cytrx Corp. Dr. Link holds a Ph.D. in economics from the University of St.
Galen (Switzerland).
 
    LA SALLE D. LEFFALL, JR.  Dr. Leffall has served as a director since
May 27, 1999. He has been s Professor of Surgery at Howard University College of
Medicine since 1970, and in 1992 was named the Charles R. Drew Professor of
Surgery. Dr. Leffall also served as Chairman of the College's Department of
Surgery from 1970 to 1985. He is also a Professional Lecturer in Surgery at
Georgetown University. Dr. Leffall holds a B.S. from Florida A&M and a medical
degree from Howard University. Dr. Leffall is a director of Warner Lambert,
Mutual of America, Chevy Chase Bank and the Charles A. Dana Foundation. He is a
former President of the American College of Surgeons and the American Cancer
Society. He is also a consultant for the National Cancer Institute, a diplomat
of the American Board of Surgery and a fellow of the American College of
Surgeons.
 
    CLAUDE TIHON.  Dr. Tihon has served as a director since May 27, 1999, and is
currently President and Chief Executive Officer of Contimed, Inc., a medical
device company for developing urological products to manage women's stress
incontinence and men's prostate obstruction. From 1987 to 1995, Dr. Tihon served
in numerous positions with Pfizer, Inc., culminating in his appointment as Vice
President of Research and Technology Assessment of American Medical
Systems, Inc., a Pfizer Co. subsidiary. From 1983 to 1987, Dr. Tihon served as
Director of Cellular Diagnostics Development of Miles Scientific, a division of
Miles Laboratories. From 1979 to 1983, Dr. Tihon served as Senior Research
Scientist and Assistant Director of Clinical Cancer Research of Bristol
Laboratories, a division of Bristol Myers Squibb Co. Dr. Tihon holds a Ph.D. in
Pathology from Columbia University.
 
    JOHN MON.  Mr. Mon has been employed by the Company since 1986, and has
served as Treasurer and General Manager of the Company since 1989, and also as
Secretary and a director since June 1997. During the first two years of his
employment with the Company, Mr. Mon was responsible for the Company's FDA
filings, which resulted in obtaining pre-marketing approval for the Microfocus
1000. From 1983 to 1986, he was an economist with the U.S. Department of
Commerce in charge of forecasting business sales, inventory and prices for all
business sectors in the estimation of Gross National Product. Mr. Mon holds a
B.S. degree from the University of Maryland. Mr. Mon is the brother-in-law of
Dr. Cheung.
 
    WALTER B. HERBST.  Mr. Herbst has been a director of the Company since
May 28, 1997. Mr. Herbst is the Chairman and a director of Herbst Lazar
Bell, Inc., the engineering firm he founded in 1962. Mr. Herbst also serves as a
faculty fellow in industrial design at the Northwestern University McCormick
School of Engineering and Applied Sciences, teaching materials and process.
Additionally, he serves on the faculty at Northwestern University's Kellogg
Graduate School teaching a course in product development. Mr. Herbst holds a
Bachelors Degree in Industrial Design from the University of Illinois and a
Masters Degree in Management from the Kellogg Graduate School of Northwestern
University.
 
RECOMMENDATION
 
    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
SEVEN NOMINEES AS DIRECTORS OF THE COMPANY, EACH TO HOLD OFFICE UNTIL THE NEXT
ANNUAL MEETING OF THE STOCKHOLDERS OF THE COMPANY OR UNTIL A SUCCESSOR SHALL
HAVE BEEN CHOSEN AND SHALL HAVE QUALIFIED.
 
                                       5

<PAGE>
                       COMMON STOCK OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT
 
    The following table sets forth information regarding shares of voting
securities of the Company beneficially owned as of [SEPTEMBER 30, 1999],
determined in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, by: (i) each person known by the Company to beneficially own 5% or more of
the outstanding voting securities; (ii) by each current director; (iii) by each
current executive officer; and (iv) by all current directors and executive
officers of the Company as a group.
 

<TABLE>
<CAPTION>
NAME AND ADDRESSES OF OFFICERS,                                 AMOUNT OF        PERCENTAGE OF
DIRECTORS AND PRINCIPAL STOCKHOLDERS                          COMMON SHARES   VOTING SECURITIES(1)
------------------------------------                          -------------   --------------------
<S>                                                           <C>             <C>
Augustine Y. Cheung (2).....................................    7,031,176             13.2%
Spencer J. Volk (3).........................................    2,795,485              5.2%
John Mon (4)................................................    1,008,288              1.9%
Walter B. Herbst (5)........................................      326,595               **
Max E. Link (6).............................................      184,765               **
LaSalle D. Leffall, Jr......................................        7,576               **
Claude Tihon (7)............................................       18,576               **
Executive Officers and Directors as a group (7
  individuals)..............................................   11,346,309             21.3%
</TABLE>

 
------------------------
 
    ** Less than 1%.
 
(1) Except as noted, the percentages shown in the above table do not give effect
    to outstanding options and warrants for the purchase of approximately
                shares of Common Stock. Outstanding options and warrants do not
    carry voting rights.
 
(2) Includes 400,000 shares purchasable under an option exercisable through
    May 16, 2001.
 
(3) Does not include an additional 400,000 shares of Common Stock that may be
    earned by Mr. Volk pursuant to his employment agreement upon the occurrence
    of certain events. See "Management-Executive Employment Agreements."
    Includes 100,000 shares of Common Stock purchasable under a warrant
    exercisable through December 10, 2001.
 
(4) Includes 400,000 shares of Common Stock purchasable under an option
    exercisable through May 16, 2001 and 200,000 shares of Common Stock
    purchasable under an option exercisable through March 31, 2002.
 
(5) Includes options to purchase an aggregate of 115,000 shares of Common Stock
    exercisable during various periods through September 30, 2004. Does not
    include options to purchase 20,000 shares of Common Stock exercisable
    through October 30, 2002, and 1,322,898 shares of Common Stock, both owned
    by Herbst, Lazar, Bell, Inc. ("HLB"), a company of which Mr. Herbst is a
    director. Mr. Herbst disclaims beneficial ownership of the options and
    shares of Common Stock owned by HLB.
 
(6) Includes an option to purchase 50,000 shares of Common Stock exercisable
    through December 31, 2003 and an option which vests as to the purchase of
    50,000 shares of Common Stock on December 31, 1999.
 
(7) Includes options to purchase 11,000 shares of Common Stock exercisable
    through May 15, 2003.
 
    The address of each of the named principal stockholders is c/o Celsion
Corporation, 10220-I Old Columbia Road, Columbia, MD 21046-1705
 
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
 
    Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity
 
                                       6

<PAGE>
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors, and greater than
ten-percent stockholders are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company between October 1, 1998 and September 30, 1999, and on discussions with
directors and officers, the Company believes that during the last fiscal year
all applicable 16(a) filing requirements were met.
 
                                       7

<PAGE>
                             EXECUTIVE COMPENSATION
 
    The following table sets forth the aggregate cash compensation paid for
services rendered to the Company in all capacities during each year of the
three-year periods ended September 30, 1999 to the Company's Chief Executive
Officer and to each of the Company's other executive officers whose annual
combined salary and bonus for the most recent fiscal year exceeded $100,000 (the
"Named Executive Officers").
 
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                 ANNUAL COMPENSATION
                                -----------------------------------------------------
                                                                         OTHER ANNUAL
NAME AND PRINCIPAL               FISCAL                       BONUS      COMPENSATION
POSITION                          YEAR     SALARY ($)          ($)           ($)
------------------              --------   ----------      -----------   ------------
<S>                             <C>        <C>             <C>           <C>
Spencer J. Volk,..............    1999      $240,000
President and Chief Executive     1998      $240,000
Officer                           1997      $ 96,923(3)
 
Augustine Y. Cheung,..........    1999      $180,000
Chairman of the Board of          1998      $125,000
Directors                         1997      $125,000
 
John Mon......................    1999      $ 90,000
Treasurer, Secretary, and         1998      $ 78,000
General Manager                   1997      $ 78,000
 
<CAPTION>
                                         LONG-TERM COMPENSATION AWARDS
                                -----------------------------------------------
                                 RESTRICTED                         ALL OTHER
NAME AND PRINCIPAL              STOCK AWARDS            STOCK      COMPENSATION
POSITION                            ($)              OPTIONS (#)       ($)
------------------              ------------         -----------   ------------
<S>                             <C>                  <C>           <C>
Spencer J. Volk,..............    $  1,760(1)
President and Chief Executive     $700,640(1)(2)
Officer                           $281,995(1)(2)
Augustine Y. Cheung,..........    $  1,760(1)
Chairman of the Board of          $    640(1)
Directors                         $  2,120(1)
John Mon......................    $ 28,760(1)
Treasurer, Secretary, and         $    640(1)
General Manager                   $    844(1)
</TABLE>

 
------------------------------
 
(1) In each of fiscal years 1997, 1998 and 1999, Dr. Cheung received 2,000
    shares of the Common Stock of the Company for his services as a member of
    the Board of Directors of the Company. For his service on the Board,
    Mr. Volk received 701 shares of Common Stock for fiscal year 1997 and 2,000
    shares of Common Stock for fiscal year 1998 and 1999. John Mon received
    2,000 shares of Common Stock of the company for his services as a member of
    the Board of Directors in each of fiscal years 1997,1998, and   1999. In the
    past fiscal year, John Mon also received a one-time bonus of 100,000 shares
    of the Common Stock of the Company for his services as an employee of the
    company.
 
(2) Pursuant to his 1997 employment agreement, Mr. Volk was granted 500,000
    shares of Common Stock in fiscal year 1997. Under that agreement, Mr. Volk
    also had the right to receive up to 1,400,000 additional shares of the
    Common Stock of the Company if the Company met certain financing goals
    during his tenure. As of September 30, 1998, Mr. Volk had received 1,000,000
    shares of such amount. See "Executive Employment Agreements."
 
(3) Reflects compensation for a portion of the fiscal year; Mr. Volk became
    President and Chief Executive Officer of the Company on May 11, 1997.
 
AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES IN 1999
 
    The following table summarizes for each of the Named Executive Officers the
number of stock options held at September 30, 1999 and the aggregate dollar
value of in-the-money unexercised options. The value of unexercised,
in-the-money options at September 30, 1999 is the difference between exercise
price and the fair market value of the underlying stock on September 30, 1999,
which was $0.88 per share based on the closing price of the Common Stock of the
Company on September 30, 1999. The options described have not been and may never
be exercised, and actual gains, if any, on exercise will depend on the value of
the Common Stock of the Company on the actual date of exercise. No options were
exercised by any Named Executive Officer in fiscal 1999.
 
                                       8

<PAGE>
      AGGREGATE OPTION EXERCISES IN FISCAL 1999 AND YEAR-END OPTION VALUES
 

<TABLE>
<CAPTION>
                                                                           NUMBER OF UNEXERCISED         VALUE OF UNEXERCISED
                                                                                OPTIONS AT              IN-THE-MONEY OPTIONS AT
                                                                                  9/30/99                       9/30/99
                                     SHARES ACQUIRED   VALUE REALIZED   ---------------------------   ---------------------------
NAME                                   ON EXERCISE          ($)         EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                                 ---------------   --------------   -----------   -------------   -----------   -------------
<S>                                  <C>               <C>              <C>           <C>             <C>           <C>
Augustine Y. Cheung................         0                $0           400,000           0           $252,000          $0
Spencer J. Volk....................         0                $0                 0           0           $      0          $0
John Mon...........................         0                $0           600,000           0           $378,000          $0
</TABLE>

 
STOCK OPTION PLANS
 
    At the annual meeting held on April 27, 1998, the stockholders approved an
omnibus stock option plan. The plan commits up to 2,000,000 shares for option
grants to directors, employees and consultants. The Company has agreed to allow
Spencer J. Volk to recommend the recipients of options for up to 1,570,000
shares under the option plan, to be reviewed by the Board of Directors. To date,
options for a total of 524,000 of such shares have been granted upon the
recommendation of Mr. Volk.
 
EXECUTIVE EMPLOYMENT AGREEMENTS
 
    Under its agreement with the placement agent which conducted the Company's
private placement offering consummated on January 31, 2000, the Company was
required to enter into three-year employment agreements with Spencer J. Volk,
the Company's President and Chief Executive Officer, and with Augustine Y.
Cheung, the Company's Chairman and Chief Scientific Officer. The new agreements
were entered into in order to encourage continuity of management and are
effective as of January 1, 2000. The terms of the Company's prior executive
employment arrangements and a summary of the new agreements are as described
below.
 
    In May 1997, the Company and Spencer J. Volk, President and Chief Executive
Officer, entered into a one-year executive employment agreement, automatically
renewable annually for additional one-year periods unless terminated by either
party at least 90 days prior to the end of the then current one-year period. The
agreement provided for an initial annual salary of $240,000, which was to be
adjusted to at least $360,000 upon the Company's successful raising of an
aggregate of at least $5,000,000 in additional capital. In addition, Mr. Volk
was awarded incentive compensation of 500,000 shares of Common Stock of the
Company at commencement of his employment. He also had the right to receive up
to 1,400,000 additional shares subject both to an increase in the Company's
capital base and to Mr. Volk's continued employment. Under Mr. Volk's
leadership, the Company achieved the specified capital goals. But, as of
September 30, 1999, Mr. Volk had received only 1,000,000 of the additional
shares. At the request of the Company, he deferred receipt of the remaining
400,000 shares to a later date. Similarly, although the pre-condition for
Mr. Volk's salary adjustment had been met, Mr. Volk agreed, at the further
request of the Company, to waive the salary increase due him for any period
prior to September 30, 1999.
 
    With regard to the deferred 400,000 shares, on November 11, 1999, the
Company requested Mr. Volk to waive his right under his existing employment
agreement to receive such shares. Simultaneously, (i) the Company granted him an
option to purchase 400,000 shares of restricted Common Stock at a price equal to
two-thirds of the average closing price of Common Stock during the prior three
trading days (which closing price amounted to approximately $0.75 per share) and
(ii) the Company agreed to issue 100,000 shares of Common Stock to him no later
than February 15, 2000. Mr. Volk agreed to the Company's proposal.
 
    The new executive employment agreement between the Company and Dr. Cheung
provides for an annual salary of $240,000 per year commencing as of January 1,
2000. As a form of bonus, the agreement grants Dr. Cheung an option to purchase
up to 300,000 shares of Common Stock at intervals until October 1, 2002 at an
exercise price of $1.20 which is equal to the average closing price of the
Company's
 
                                       9

<PAGE>
Common Stock during the Company's fiscal quarter ended December 31, 1999. If
Dr. Cheung continues to be employed by the Company on each exercise date, he
will be entitled to exercise the bonus option in three separate installments of
100,000 shares each. He may exercise the first installment after March 15, 2000,
the next installment after October 1, 2001, and the final installment after
October 1, 2002. Shares purchased under the bonus option will be subject to
restrictions on transfer for a minimum period of two years after purchase.
Dr. Cheung's employment agreement also grants to him performance-based options
to purchase up to a maximum of 700,000 incentive shares of Common Stock, at
exercise prices ranging from a low of $0.80 to a high of $1.60 per share, on
achieving five significant corporate milestones. Those performance objectives
include obtaining final FDA approval for Company products, consummating
alliances with strategic marketing and distribution partners, and attaining
annual pre-tax earnings of at least $1,000,000 for the Company. A
performance-based option may be exercised only after the milestone has been
achieved and during the term of Dr. Cheung's employment. Shares issued on
exercise of performance-based options will be subject to restrictions comparable
to those imposed on the annual bonus option shares.
 
    At the request of the placement agent and the Company, Mr. Volk agreed to
terminate his prior employment agreement and to enter into a new three-year
employment agreement. Mr. Volk's salary in fiscal year 2000 will continue to be
$240,000. His compensation arrangements contain annual bonus and
performance-based option provisions similar to those contained in Dr. Cheung's
employment agreement, except that Mr. Volk will be issued an initial annual
bonus option for the purchase of 250,000 shares in fiscal year 2000 instead of
the 100,000 share bonus option provided for that year in Dr. Cheung's agreement.
(Mr. Volk's annual bonus for each of fiscal 2001 and 2002 will be 100,000
shares, as in Dr. Cheung's agreement.) For the 2001 fiscal year and the balance
of the contract term, Mr. Volk's annual salary will be $360,000, of which only
$240,000 will be paid on a current basis. The salary differential will accrue as
an unpaid obligation to Mr. Volk at the rate of $10,000 per month, and will be
represented by a junior convertible note of the Company, carrying interest at an
annual rate of 8.75%, payable interest only until September 30, 2001. After
October 1, 2001, the outstanding principal amount of the note will be payable in
four quarterly installments of principal and interest. However, the balance of
the note will become payable in full, and regular salary payments will be made
at the annual rate of $360,000 when the Company achieves annual revenues of at
least $2.5 million. At the option of Mr. Volk, the balance payable at any time
under the note will be convertible into shares of Common Stock of the Company at
a price equal to 80% of the average closing price of such Common Stock during
any ten consecutive trading days (as selected by Mr. Volk) within the forty
trading days immediately prior to the date of any conversion of the note.
 
    The new agreements for each executive provide for continued payment of
salary and benefits during the full terms of the agreements in the event of a
change of control of the Company. A change of control is defined as a merger,
asset sale, tender offer or other substantial change in voting control, or the
election of a new majority of the Board of Directors or of three or more
directors whose election is opposed by a majority of the Board. In addition, the
agreements provide for Consumer Price Index adjustments, restrictive covenants
and confidentiality and other protections in the form generally included in
employment agreements for senior management.
 
    Other than as set forth above, there are no employment contracts,
termination of employment or change in control arrangements.
 
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
 
    The Compensation Committee is responsible for establishing and administering
the compensation policies applicable to the Company's officers and key
personnel, for recommending compensation arrangements to the Board of Directors
and for evaluating the performance of senior management.
 
                                       10

<PAGE>
    The Committee and the Board have adopted the following executive
compensation approaches:
 
    EXECUTIVE COMPENSATION PHILOSOPHY
 
    The Company attempts to design executive compensation to achieve two
principal objectives. First, the program is intended to be fully competitive so
that the Company may attract, motivate and retain talented executives. Second,
the program is intended to create an alignment of interests between the
Company's executives and stockholders such that a significant portion of each
executive's compensation varies with business performance.
 
    The Committee's philosophy is to pay competitive annual salaries, coupled
with an incentive system which, through stock compensation, provides more than
competitive total compensation for superior performance reflected in increases
in the Company's stock price.
 
    Based on assessments by the Board and the Committee, the Committee believes
that the Company's compensation program for its senior executive officers has
the following characteristics that serve to align executive interests with
long-term stockholder interests:
 
    - Emphasizes "at risk" pay such as options and grants of restricted stock;
 
    - Emphasizes long-term compensation through options and restricted stock
      awards; and
 
    - Rewards financial results and promotion of Company objectives rather than
      individual performance against individual objectives.
 
    ANNUAL SALARIES
 
    Except where salaries are established under longer term contracts, salary
ranges and increases for executives are established annually based on
competitive data. Within those ranges, individual salaries vary based upon the
individual's work experience, performance, level of responsibility, impact on
the business, tenure and potential for advancement within the organization.
Annual salaries for newly-hired executives will be determined at time of hire
taking into account the above factors other than tenure.
 
    LONG-TERM INCENTIVES
 
    The grant of restricted stock or options to key employees encourages equity
ownership and closely aligns management interests with the interests of
stockholders. The amount and nature of any option or restricted stock award is
determined by the Committee on a case by case basis, depending upon the
individual's perceived future benefit to the Company and the perceived need to
provide additional incentive to align performance with the objectives of the
stockholders.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    No interlocking relationship exists between the Compensation Committee or
the Board of Directors and any other company's board of directors or
compensation committee. Spencer J. Volk, President and Chief Executive Officer,
is party to an employment agreement with the Company and has made loans and
advances to the Company which were repaid through conversion into Common Stock.
See "Certain Relationships and Related Transactions." Mr. Volk's 1997 employment
agreement with the Company was arranged prior to the formation of the
Compensation Committee. New employment agreements with Mr. Volk and Dr. Cheung,
entered into in January, 2000, were reviewed by the Compensation Committee and
approved by the full Board, with neither Messrs. Volk or Cheung participating in
the deliberations concerning their respective agreements. The Compensation
Committee believes that the compensation arrangements for Mr. Volk and
Dr. Cheung serve to align their respective interests with those of the
stockholders.
 
                                       11

<PAGE>
                               PERFORMANCE GRAPH
 
    Federal regulation requires inclusion in this Proxy Statement of a line
graph comparing cumulative total stockholder return on Common Stock with the
cumulative total return of (1) NASDAQ Combined Index and (2) a published
industry or line-of-business index. This performance comparison appears below.
The Board of Directors recognizes that the market price of shares is influenced
by many factors, only one of which is Company performance. The stock performance
shown on the graph is not necessarily indicative of future price performance.
 

<TABLE>
<CAPTION>
TOTAL RETURN ANALYSIS                          9/30/94    9/29/95    9/30/96    9/30/97    9/30/98    9/30/99
---------------------                          --------   --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>        <C>
Celsion Corp.................................  $100.00    $472.73    $300.00    $309.09    $ 93.09    $256.00
Nasdaq Health................................  $100.00    $558.31    $698.80    $701.54    $504.35    $479.35
Nasdaq Composite (US)........................  $100.00    $136.51    $160.50    $220.52    $221.59    $359.25
</TABLE>

 
------------------------
 
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data from
Bloomberg Financial Markets.
 
                                       12

<PAGE>
            PROPOSAL NO. 2--RATIFICATION OF INDEPENDENT ACCOUNTANTS
 
    The Board of Directors, upon the recommendation of the current Audit
Committee, has appointed Stegman & Company as the independent public accountants
of the Company to audit its financial statements for the fiscal year ending
September 30, 2000 and requests stockholder ratification of such selection.
Stegman & Company served as the Company's independent accountants for the 1999
fiscal year, and has advised the Company that neither Stegman & Company nor any
of its members has, or has had in the past three years, any financial interest
in the Company or any relation to the Company other than their duties as
auditors and accountants.
 
    If the appointment is not ratified, the Board of Directors will select other
independent public accountants for the Company. Representatives of Stegman &
Company are expected to be present at the Meeting, will be given the opportunity
to make a statement if they so desire and are expected to be available to
respond to appropriate questions.
 
RECOMMENDATION
 
    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
RATIFY THE SELECTION OF STEGMAN & COMPANY AS INDEPENDENT PUBLIC ACCOUNTANTS OF
THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2000.
 
                       PROPOSAL NO. 3--REINCORPORATION IN
                    DELAWARE AND CHANGE IN AUTHORIZED SHARES
 
INTRODUCTION
 
    For the reasons set forth below, the Board of Directors believes that it is
in the best interests of the Company and its stockholders to change the state of
incorporation of the Company from Maryland to Delaware (the "Reincorporation
Proposal" or the "Proposed Reincorporation").
 
    STOCKHOLDERS SHOULD READ CAREFULLY THIS SECTION OF THE PROXY STATEMENT,
INCLUDING THE RELATED EXHIBITS ATTACHED AS APPENDIX A, B AND C HERETO, BEFORE
VOTING ON THE REINCORPORATION PROPOSAL. Throughout this Proxy Statement, the
term "the Company" or "Celsion" refers to Celsion Corporation, the existing
Maryland corporation, and the term "Celsion Delaware" refers to the new Delaware
corporation, a wholly owned subsidiary of the Company, which is the proposed
successor to the Company in the Proposed Reincorporation.
 
    As discussed below, the principal reasons for the Proposed Reincorporation
are the greater flexibility of Delaware corporate law and the substantial body
of case law interpreting that law. The Company believes that its stockholders
will benefit from the well-established principles of corporate governance that
Delaware law affords. The proposed Certificate of Incorporation and Bylaws for
Celsion Delaware are comparable in many respects to those currently in effect
for Celsion, with the significant exceptions that (i) the Celsion Delaware
Certificate of Incorporation will include an increase in authorized
capitalization and will provide for an authorized class of Preferred Stock as
described below, and (ii) the Bylaws for Celsion Delaware contain requirements
concerning advance notice for the nomination of director candidates and the
introduction of new business at stockholder meetings.
 
    The Reincorporation Proposal is not being proposed in order to prevent an
unsolicited takeover attempt, and the Board of Directors is not aware of any
present attempt by any person to acquire control of the Company, obtain
representation on the Board of Directors or take any action that would
materially affect the governance of the Company.
 
    The Reincorporation Proposal will be effected by merging (the "Merger") the
Company into Celsion Delaware, which is presently an inactive, wholly-owned
subsidiary of the Company. Upon completion of
 
                                       13

<PAGE>
the Merger, the corporate entity with a legal domicile in Maryland will cease to
exist and Celsion Delaware will continue to operate the business of the Company
under the Company's current name, Celsion Corporation.
 
    Pursuant to the Plan and Agreement of Merger, in substantially the form
attached to this Proxy Statement as Appendix A (the "Merger Agreement"), each
presently outstanding share of Celsion Common Stock, par value $.01 per share,
will be automatically converted into one share of Celsion Delaware Common Stock,
par value $0.01 per share, and each outstanding share of Series A Preferred
Stock will similarly be converted into one share of Series A Preferred Stock of
Celsion Delaware, upon the effective date of the Merger and without any further
required action by stockholders. Each stock certificate representing issued and
outstanding shares of Celsion will continue to represent the same number of
issued and outstanding shares of Celsion Delaware. IT WILL NOT BE NECESSARY FOR
STOCKHOLDERS TO EXCHANGE THEIR EXISTING STOCK CERTIFICATES FOR STOCK
CERTIFICATES OF CELSION DELAWARE. Furthermore, each validly outstanding Company
warrant or option exercisable for the purchase of shares of Common Stock will
continue to be exercisable or convertible for the purchase of the number of
shares indicated in such warrant, option or preferred share. However,
stockholders may exchange their certificates if they so choose. The Common Stock
of Celsion is quoted on the OTC Electronic Bulletin Board maintained by the
National Association of Securities Dealers, and the shares of Celsion Delaware
are expected to continue to be so quoted under the same symbol, "CELN."
 
    The Proposed Reincorporation has been unanimously approved by the Company's
Board of Directors. If approved by the stockholders, it is anticipated that the
Merger will become effective as soon as practicable (the "Effective Date")
following the Meeting. However, pursuant to the Merger Agreement, the Merger may
be abandoned or the Merger Agreement may be amended by the Board of Directors
(except that the principal terms may not be amended without stockholder
approval) either before or after stockholder approval has been obtained and
prior to the Effective Date if, in the opinion of the Board of Directors of the
Company, circumstances arise which make it inadvisable to proceed under the
original terms of the Merger Agreement. Stockholders of Celsion will have no
appraisal rights with respect to the Merger.
 
    The discussion set forth below is qualified in its entirety by reference to
the Merger Agreement, the Certificate of Incorporation of Celsion Delaware and
the Bylaws of Celsion Delaware, copies of which are attached to this Proxy
Statement as Appendices A, B and C, respectively.
 
VOTE REQUIRED FOR THE REINCORPORATION PROPOSAL
 
    Approval of the Reincorporation Proposal will require the affirmative vote
of the holders of two-thirds of the outstanding shares of Common Stock of the
Company entitled to vote at the Meeting. APPROVAL BY STOCKHOLDERS OF THE
PROPOSED REINCORPORATION WILL CONSTITUTE APPROVAL OF THE MERGER AGREEMENT, THE
CERTIFICATE OF INCORPORATION AND THE BYLAWS OF CELSION DELAWARE AND ALL
PROVISIONS THEREOF.
 
    No vote is required from the holders of Celsion's Series A Preferred Stock
since no provision in the Merger Agreement would have entitled the holders of
the Series A Preferred Stock to vote as a class if the Reincorporation Proposal
had been presented in the form of a proposed amendment to Celsion's Certificate
of Incorporation.
 
RECOMMENDATION
 
    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE REINCORPORATION
PROPOSAL. THE EFFECT OF AN ABSTENTION OR A BROKER NON-VOTE IS THE SAME AS THAT
OF A VOTE AGAINST THE REINCORPORATION PROPOSAL.
 
                                       14

<PAGE>
PRINCIPAL REASONS FOR THE PROPOSED REINCORPORATION
 
    As the Company plans for the future, the Board of Directors and management
believe that it is essential to be able to draw upon well-established principles
of corporate governance in making legal and business decisions. The prominence
and predictability of Delaware corporate law provide a reliable foundation on
which the Company's governance decisions can be based, and the Company believes
that stockholders will benefit from the responsiveness of Delaware corporate law
to their needs and to those of the corporation they own, as follows:
 
    PROMINENCE, PREDICTABILITY AND FLEXIBILITY OF DELAWARE LAW.
 
    For many years Delaware has followed a policy of encouraging incorporation
in that state and, in furtherance of that policy, has been a leader in adopting,
construing and implementing comprehensive, flexible corporate laws responsive to
the legal and business needs of corporations organized under its laws. Many
corporations have chosen Delaware initially as a state of incorporation or have
subsequently changed their corporate domicile to Delaware in a manner similar to
that proposed by the Company. Because of Delaware's prominence as the state of
incorporation for many major corporations, both the legislature and the courts
in Delaware have demonstrated an ability and a willingness to act quickly and
effectively to meet changing business needs. The Delaware courts have developed
considerable expertise in dealing with corporate issues, and a substantial body
of case law has developed construing Delaware law and establishing public
policies with respect to corporate legal affairs.
 
    INCREASED ABILITY TO ATTRACT AND RETAIN QUALIFIED DIRECTORS.
 
    Delaware law permits a corporation to include a provision in its certificate
of incorporation which reduces or limits the personal liability of directors,
and provides indemnification to them, for breaches of fiduciary duty in certain
circumstances. The increasing frequency of claims and litigation directed
against directors and officers has greatly expanded the risks facing directors
and officers of corporations in exercising their respective duties. The amount
of time and money required to respond to such claims and to defend such
litigation can be substantial. It is the Company's desire to reduce these risks
to its directors and officers and to limit situations in which monetary damages
can be recovered against directors so that the Company may continue to attract
and retain qualified directors who otherwise might be unwilling to serve because
of the risks involved. The Company believes that, in general, Delaware law
provides greater protection to directors than the law of Maryland and that
Delaware case law regarding a corporation's ability to limit director liability
is more developed and provides more guidance than Maryland law.
 
    WELL-ESTABLISHED PRINCIPLES OF CORPORATE GOVERNANCE.
 
    There is substantial judicial precedent in the Delaware courts as to the
legal principles applicable to measures that may be taken by a corporation and
as to the conduct of the Board of Directors under the business judgment rule and
other standards. The Company believes that its stockholders will benefit from
the well established principles of corporate governance that Delaware law
affords.
 
NO CHANGE IN NAME, BOARD MEMBERS, BUSINESS, MANAGEMENT, LOCATION, ETC.
 
    The Reincorporation Proposal will effect only a change in the legal domicile
of the Company and certain other changes of a legal nature which are described
in this Proxy Statement and Appendices A, B and C. The Proposed Reincorporation
will NOT result in any change in the name, business, management, fiscal year,
assets or liabilities, location of the facilities or the business and strategic
plans of the Company. The seven directors who will be elected at the Meeting
will become the directors of Celsion Delaware. The Company believes that the
Proposed Reincorporation will not affect any of its material contracts with any
third parties and that Celsion's rights and obligations under such material
contractual arrangements will continue and be assumed by Celsion Delaware.
 
                                       15

<PAGE>
    Furthermore, all options and warrants to acquire common stock of the Company
will be unchanged, will be assumed and continued by Celsion Delaware, and will
automatically be converted into an option or right to purchase the same number
of shares of Celsion Delaware Common Stock, at the same price per share, upon
the same terms and subject to the same conditions. All shares of Series A
Preferred Stock of the Company will automatically become shares of Series A
Preferred Stock of Celsion Delaware, and will be unaffected by the Proposed
Reincorporation.
 
ANTITAKEOVER IMPLICATIONS
 
    Delaware, like many other states, permits a corporation to adopt a number of
measures designed to reduce a corporation's vulnerability to unsolicited
takeover attempts through amendment of the corporate charter or bylaws or
otherwise. The Reincorporation Proposal is NOT being proposed in order to
prevent such a change in control, and the Board of Directors is not aware of any
present attempt to acquire control of the Company or to obtain representation on
the Board of Directors.
 
    In the discharge of its fiduciary obligations to its stockholders, the Board
of Directors may evaluate the Company's vulnerability to potential unsolicited
bidders. In the course of such evaluation, the Board of Directors of the Company
may consider in the future certain defensive strategies designed to enhance the
Board's ability to negotiate with an unsolicited bidder. These strategies
include, but are not limited to, the adoption of a stockholder rights plan and
the adoption of a severance plan for its management and key employees which
becomes effective upon the occurrence of a change in control of the Company.
 
    The Board of Directors believes that unsolicited takeover attempts may be
unfair or disadvantageous to the Company and its stockholders because, among
other reasons: (i) a non-negotiated takeover bid may be timed to take advantage
of temporarily depressed stock prices; (ii) a non-negotiated takeover bid may be
designed to foreclose or minimize the possibility of more favorable competing
bids or alternative transactions; and (iii) a non-negotiated takeover bid may
involve the acquisition of only a controlling interest in the corporation's
stock, without affording all stockholders the opportunity to receive the same
economic benefits.
 
    By contrast, in a transaction in which a potential acquiror must negotiate
with an independent board of directors, the board can take account of the
underlying and long-term values of the Company's business, technology and other
assets, the possibilities for alternative transactions on more favorable terms,
possible advantages from a tax-free reorganization, anticipated favorable
developments in the Company's business not yet reflected in the stock price and
equality of treatment of all stockholders.
 
THE CHARTERS AND BYLAWS OF CELSION AND CELSION DELAWARE
 
    The provisions of the Celsion Delaware Certificate of Incorporation and
Bylaws are comparable in many respects to those of the Celsion Articles of
Incorporation and Bylaws. The material differences relate to the authorized
shares of the Company's Common Stock and the creation of an authorized class of
Preferred Stock as well as to the nomination and business procedures used for
annual meetings, as discussed below. This discussion of the Certificate of
Incorporation and Bylaws of Celsion Delaware is qualified by reference to
Appendices B and C hereto.
 
    The Articles of Incorporation of Celsion currently authorize the Company to
issue up to 100,000,000 shares. The Certificate of Incorporation of Celsion
Delaware provides that it will have 150,000,000 authorized shares of Common
Stock, par value $0.01 per share, and 100,000 shares of Preferred Stock, par
value $0.01 per share. Through its recent filing in Maryland of Articles
Supplementary, the Company set aside and designated, from its authorized shares,
only 7,000 shares of a new Series A Convertible Preferred Stock, 4,852.5 shares
of which were issued in the Company's private placement offering consummated
January 31, 2000. As noted below, the Celsion Delaware Certificate of
Incorporation will permit the Board of Directors to create additional series of
Preferred Stock and to determine the powers, preferences and rights, and the
qualifications, limitations or restrictions of such series.
 
                                       16

<PAGE>
    MONETARY LIABILITY OF DIRECTORS.
 
    The Articles of Incorporation of Celsion and the Certificate of
Incorporation of Celsion Delaware both provide for the elimination of personal
monetary liability of directors to the fullest extent permissible under the law
of the Maryland and Delaware, respectively. Because of Delaware's status as a
leader in developing the law of corporate governance as noted above, the Board
believes that present and future Delaware provisions on the limitation of
directors' liability will be interpreted to be potentially more expansive than
the corresponding provisions in the Company's present Articles of Incorporation.
For a more detailed explanation of the foregoing, see discussion below under
"Comparison Between the Corporation Laws of Delaware and Maryland."
 
    NOMINATIONS OF DIRECTOR CANDIDATES AND INTRODUCTION OF BUSINESS AT
STOCKHOLDER MEETINGS.
 
    The Bylaws of Celsion Delaware include an advance notice procedure with
regard to the nomination, other than by or at the direction of the Board or
Directors, of candidates for election as directors (the "Nomination Procedure")
and with regard to certain matters to be brought before an annual meeting or
special meeting of stockholders (the "Business Procedure"). The Certificate of
Incorporation and Bylaws of the Company contain no such procedures, which, in
the Board's view, are important to prevent sudden and ill-considered actions
from being proposed and voted on at stockholder meetings.
 
    The Nomination Procedure provides that only persons nominated by or at the
direction of the Board of Directors or by a stockholder who has given timely
written notice to the Secretary of the Company prior to the meeting will be
eligible for election as directors. The Business Procedure provides that at an
annual or special meeting, and subject to any other applicable requirements,
only such business may be conducted as has been brought before the meeting by or
at the direction of the Board of Directors or by a stockholder who has given
timely written notice to the Secretary of the Company of such stockholder's
intention to bring such business before the meeting. In all cases, to be timely,
notice must be received by the Company not fewer than 120 days prior to the
meeting.
 
    Under the Nomination Procedure, a stockholder's notice to the Company must
contain certain information about the nominee, including name, address, the
consent to be nominated and such other information as would be required to be
included in a proxy statement soliciting proxies for the election of the
proposed nominee, and certain information about the stockholder proposing to
nominate that person, including name, address, a representation that the
stockholder is a holder of record of stock entitled to vote at the meeting and a
description of all arrangements or understandings between the stockholder and
each nominee. Under the Business Procedure, notice relating to the conduct of
business at a meeting other than the nomination of directors must contain
certain information about the business and about the stockholder who proposes to
bring the business before the meeting. If the meeting chairman or other officer
presiding at the meeting determines that a person was not nominated in
accordance with the Nomination Procedure, such person will not be eligible for
election as a director, or if the chairman or other officer presiding determines
that other business was not properly brought before such meeting in accordance
with the Business Procedure, such other business will not be conducted at such
meeting. Nothing in the Nomination Procedure or the Business Procedure will
preclude discussion by any stockholder of any nomination or business properly
made or brought before an annual or special meeting in accordance with the
above-described procedures.
 
    By requiring advance notice of nominations by stockholders, the Nomination
Procedure affords the Board of Directors an opportunity to consider the
qualifications of the proposed nominees and, to the extent deemed necessary or
desirable by the Board, to inform the stockholders about such qualifications. By
requiring advance notice of proposed business, the Business Procedure provides
the Board with an opportunity to inform stockholders of any business proposed to
be conducted at a meeting and the Board's position on any such proposal,
enabling stockholders to better determine whether they desire to attend the
meeting or grant a proxy to the Board of Directors as to the disposition of such
business. Although the Celsion Delaware Bylaws, like the existing Company
Bylaws, do not give the Board any power to approve
 
                                       17

<PAGE>
or disapprove stockholder nominations for the election of directors or any other
business desired by stockholders to be conducted at a meeting, the Celsion
Delaware Bylaws, unlike the Celsion Bylaws, may have the effect of precluding a
nomination for the election of directors or of precluding any other business at
a particular meeting if the proper procedures are not followed. In addition, the
procedures may discourage or deter a third party from conducting a solicitation
of proxies to elect its own slate of directors or otherwise attempting to obtain
control of the Company, even if the conduct of such business or such attempt
might be deemed to be beneficial to the Company and its stockholders.
 
COMPARISON BETWEEN THE CORPORATION LAWS OF DELAWARE AND MARYLAND
 
    STOCKHOLDER APPROVAL OF CERTAIN BUSINESS COMBINATIONS
 
    DELAWARE.  Under Section 203 of the Delaware General Corporation Law, a
Delaware corporation is prohibited from engaging in a "business combination"
with an "interested stockholder" for three (3) years following the date that
such person or entity becomes an interested stockholder. With certain
exceptions, an interested stockholder is a person or entity who or which owns,
individually or with or through certain other persons or entities, fifteen
percent (15%) or more of the corporation's outstanding voting stock (including
any rights to acquire stock pursuant to an option, warrant, agreement,
arrangement or understanding, or upon the exercise of conversion or exchange
rights, and stock with respect to which the person has voting rights only). The
three-year moratorium imposed by Section 203 on business combinations of
Section 203 does not apply if 1) prior to the date on which such stockholder
becomes an interested stockholder the Board of Directors of the subject
corporation approves either the business combination or the transaction that
resulted in the person or entity becoming an interested stockholder; 2) upon
consummation of the transaction that made him or her an interested stockholder,
the interested stockholder owns at least eighty-five percent (85%) of the
corporation's voting stock outstanding at the time the transaction commenced
(excluding from the 85% calculation shares owned by directors who are also
officers of the subject corporation and shares held by employee stock plans that
do not give employee participants the right to decide confidentially whether to
accept a tender or exchange offer); or 3) on or after the date such person or
entity becomes an interested stockholder, the Board approves the business
combination and it is also approved at a stockholder meeting by sixty-six and
two-thirds percent (66 2/3%) of the outstanding voting stock not owned by the
interested stockholder. Section 203 will encourage any potential acquiror to
negotiate with the a Delaware corporation's Board of Directors. Section 203 also
might have the effect of limiting the ability of a potential acquiror to make a
two-tiered bid for a Delaware corporation in which all stockholders would not be
treated equally. Stockholders should note, however, that the application of
Section 203 to a Delaware corporation will confer upon the Board the power to
reject a proposed business combination in certain circumstances, even though a
potential acquiror may be offering a substantial premium for the corporation's
shares over the then-current market price. Section 203 would also discourage
certain potential acquirors unwilling to comply with its provisions. Although a
Delaware corporation to which Section 203 applies may elect not to be governed
by Section 203, the Board of Directors of the Company intends that the Company
be governed by Section 203. The Company believes that most Delaware corporations
have availed themselves of this statute and have not opted out of Section 203.
 
    MARYLAND.  Under Maryland law, a corporation may not engage in any business
combination with any interested stockholder or any affiliate of the interested
stockholder for a period of five (5) years following the most recent date on
which the interested stockholder became an interested stockholder. An
"interested stockholder" is any person (other than the corporation or any
subsidiary) that is the beneficial owner of ten percent (10%) or more of the
voting power of the outstanding voting stock of the corporation after the date
on which the corporation had 100 or more beneficial owners of its stock; or is
an affiliate or associate of the corporation and was the beneficial owner,
directly or indirectly, of ten percent (10%) or more of the voting power of the
then outstanding stock of the corporation at any time within the two-year period
immediately prior to the date in question and after the date on which the
corporation had 100 or
 
                                       18

<PAGE>
more beneficial owners of its stock. An "affiliate" means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, a specified person. An
"associate" is: 1) any corporation or organization (other than the corporation
or a subsidiary of the corporation) of which such person is an officer,
director, or partner, or is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of equity securities; 2) any trust or other
estate in which such person has a substantial beneficial interest or as to which
such person serves as trustee or in a similar fiduciary capacity; or 3) any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person or who is a director or officer of the corporation or
any of its affiliates.
 
    In addition to any vote otherwise required by law or the charter of the
corporation, a business combination that is not prohibited shall be recommended
by the Board of Directors and approved by the affirmative vote of at least:
1) eighty percent (80%) of the votes entitled to be cast by outstanding shares
of voting stock of the corporation, voting together as a single voting group;
and 2) two-thirds (66 2/3%) of the votes entitled to be cast by holders of
voting stock other than voting stock held by the interested stockholder who will
(or whose affiliate will) be a party to the business combination or by an
affiliate or associate of the interested stockholder, voting together as a
single voting group.
 
    The prohibition on such business combinations shall not apply to business
combinations that specifically, generally, or generally by types, as to
specifically identified or unidentified existing or future interested
stockholders or their affiliates, have been approved or exempted therefrom, in
whole or in part, by resolution of the Board of Directors of the corporation:
1) prior to September 1, 1983, or such earlier date as may be irrevocably
established by resolution of the Board of Directors; or 2) if involving
transactions with a particular interested stockholder or its existing or future
affiliates, at any time prior to the determination date. Unless by its terms a
resolution adopted by the Board of Directors under this provision is made
irrevocable, it may be altered or repealed by the Board, but this shall not
affect any business combinations that have been consummated, or are the subject
of an existing agreement entered into, prior to the alteration or repeal. The
"determination date" means the most recent date on which the interested
stockholder became an interested stockholder.
 
    Additionally, unless the charter or bylaws of the corporation specifically
provides otherwise, the prohibition on such business combinations shall not
apply to business combinations of a corporation that, on July 1, 1983, had an
existing interested stockholder, whether a business combination is with the
existing stockholder or with any other person that becomes an interested
stockholder after July 1, 1983, or their present or future affiliates, unless,
at any time after July 1, 1983, the board elects by resolution to be subject to
the prohibition.
 
    Finally, unless the charter or bylaws of the corporation specifically
provides otherwise, the prohibition does not apply to any business combination
of: 1) a close corporation; 2) a corporation having fewer than 100 beneficial
owners of its stock; 3) a corporation whose original articles of incorporation
have a provision, or whose stockholders adopt a charter amendment after
June 30, 1983 by a vote of at least 80% entitled to be cast by outstanding
shares of voting stock of the corporation and two-thirds of the votes entitled
to be cast by persons who are not interested stockholders of the corporation or
affiliates or associates or interested stockholders, expressly electing not to
be governed by the prohibition; or 4) a corporation with an interested
stockholder that became an interested stockholder inadvertently, if the
interested stockholder as soon as practicable divests itself of a sufficient
amount of the voting stock of the corporation so that it no longer is the
beneficial owner of ten percent (10%) or more of the outstanding voting stock;
and would not at any time within the five (5) year period preceding the
announcement date with respect to the business combination have been an
interested stockholder except by inadvertence.
 
    CLASSIFIED BOARD OF DIRECTORS
 
    A classified board is one on which a certain number, but not all, of the
directors are elected on a rotating basis each year.
 
                                       19

<PAGE>
    DELAWARE.  Delaware law permits, but does not require, a classified Board of
Directors, pursuant to which the directors can be divided into as many as three
(3) classes with staggered terms of office, with only one class of directors
standing for election each year. The Celsion Delaware Corporation Certificate of
Incorporation and Bylaws do not provide for a classified board.
 
    MARYLAND.  Under Maryland law, a corporation generally may provide for a
classified Board of Directors, but the terms of at least one class must expire
each year. The Company's Bylaws previously provided for three classes of
directors, but now provide for the election of all directors at an annual
meeting.
 
    REMOVAL OF DIRECTORS
 
    Delaware and Maryland law are virtually identical regarding the removal of
members of the Board of Directors.
 
    DELAWARE.  Under Delaware law, any director or the entire Board of Directors
of a corporation that does not have a classified Board of Directors or
cumulative voting may be removed with or without cause with the approval of a
majority of the outstanding shares entitled to vote at an election of directors.
In the case of a Delaware corporation having cumulative voting, if less than the
entire board is to be removed, a director may not be removed without cause if
the number of shares voted against such removal would be sufficient to elect the
director under cumulative voting.
 
    MARYLAND.  Maryland law states that unless the corporation's charter
provides otherwise, the stockholders of a corporation may remove any director,
with or without cause, by the affirmative vote of a majority of all the votes
entitled to be cast for the election of directors. Again, however, if the
corporation has cumulative voting, a director may not be removed without cause
if the votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire board, or, if there is more than
one class of directors, at an election of the class of which he is a member.
Finally, if the directors are divided into classes, then a director may not be
removed without cause.
 
    INDEMNIFICATION AND LIMITATION OF LIABILITY
 
    DELAWARE.  A corporation may indemnify any person who was, is, or could be a
party to any suit by reason of the fact that such person is or was a director,
officer, employee, or agent of the corporation, or serving at such person's
request for another corporation or entity, against expenses, claims and
judgments reasonably incurred by the person in connection with the matter, if
the person acted in good faith, and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation. Additionally,
the corporation may indemnify any person who was, is, or could be a party to any
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director, officer, employee, or
agent of the corporation, against expenses, claims and judgments reasonably
incurred, except that no indemnification shall be provided where the person
shall have been adjudged to be liable to the corporation. To the extent that a
present or former director or officer of a corporation has been successful on
the merits or otherwise, such person shall be indemnified against expenses
actually and reasonably incurred by such person in connection therewith. The
determination of indemnification with respect to directors or officers is to be
made by: 1) majority vote of the directors who are not parties to such action,
even though less than a quorum; 2) a committee of such uninvolved directors
designated by a majority vote of such directors, even though less than a quorum;
3) independent legal counsel in a written opinion if there are no uninvolved
directors, or if the uninvolved directors so direct; or 4) the stockholders. The
expenses incurred by an officer or director in defending any suit may be paid by
the corporation in advance of the final disposition, upon receipt of an
undertaking by or on behalf of such director or officer to repay such expenses
to the corporation if it is ultimately determined that the expenses should not
have been paid.
 
                                       20

<PAGE>
    MARYLAND.  A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established that:
1) the act or omission of the director was material to the matter giving rise to
the proceeding and was either committed in bad faith or was the result of active
and deliberate dishonesty; 2) the director received improper personal benefits;
or 3) in the case of any criminal proceeding, the director had reasonable cause
to believe that the act or omission was unlawful. The indemnification may be
against claims, judgments and reasonable expenses actually incurred by the
director in connection with the proceeding, but if the proceeding was one by or
in the right of the corporation, indemnification will not be provided where the
director was adjudged to be liable to the corporation. A director may not be
indemnified in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received. Unless limited by the corporation's
charter, a director who is successful on the merits or in defense in any
proceeding shall be indemnified against any related expenses. The determination
of whether a director is entitled to indemnification shall be made by: 1) the
board by a majority vote of a quorum of non-party directors, or if quorum cannot
be reached, then by a majority vote of a non-party committee of at least two
(2) directors chosen to act on that particular matter; 2) special legal counsel
selected by the board or the committee, and if the requisite quorum by either
uninvolved directors or the committee cannot be reached, then the full board may
decide upon counsel; or 3) the stockholders. Reasonable expenses may be paid by
the corporation in advance of the final disposition upon receipt by the
corporation of a written affirmation of the director's good faith belief in his
standard of conduct, and a written undertaking by or on behalf of the director
to repay the full amount if it is ultimately determined that the standard of
conduct has not been met. Indemnification shall apply to officers, employees, or
agents of the corporation who are not officers of the corporation. Any
indemnification, or advances of expenses, if arising out of a proceeding by or
in the right of the corporation, shall be reported in writing to the
stockholders with the notice of the next stockholders' meeting or prior to the
meeting.
 
    INSPECTION OF STOCKHOLDER LIST
 
    DELAWARE.  Delaware law allows any stockholder to inspect the stockholder
list for a purpose reasonably related to such person's interest as a
stockholder. It also provides for inspection rights as to a list of stockholders
entitled to vote at a meeting within the ten-day period preceding a stockholders
meeting for any purpose germane to the meeting.
 
    MARYLAND.  Under Maryland law, there is no customary right to inspection of
the stockholders list. In Maryland, one or more persons who together are and for
at least six months have been stockholders of record or holders of voting trust
certificates of at least five percent of the outstanding stock of any class of a
corporation may in the case of any corporation which does not maintain the
original or a duplicate stock ledger at its principal office, present to any
officer or resident agent of the corporation a written request for a list of its
stockholders. Such request shall be granted within 20 days.
 
    DIVIDENDS AND REPURCHASES OF SHARES
 
    DELAWARE.  Delaware law permits a corporation to declare and pay dividends
out of surplus or, if there is no surplus, out of net profits for the fiscal
year in which the dividend is declared and/or for the preceding fiscal year as
long as the amount of capital of the corporation following the declaration and
payment of the dividend is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. In addition, Delaware law generally
provides that a corporation may redeem or repurchase its shares only if the
capital of the corporation is not impaired and such redemption or repurchase
would not impair the capital of the corporation.
 
    MARYLAND.  Under Maryland law, a corporation may make distributions to its
stockholders, which shall be authorized by the corporation's Board of Directors
and subject to any restrictions within its
 
                                       21

<PAGE>
charter. If a stock dividend is payable in a corporation's own stock with par
value, the shares shall be issued at par value and, at the time the stock
dividend is paid, the corporation shall transfer from surplus to stated capital
an amount at least equal to the aggregate par value of the shares to be issued.
If a stock dividend is payable in a corporation's own stock without par value,
the board of directors shall adopt at the time the stock dividend is declared a
resolution which sets the aggregate amount to be attributed to stated capital
with respect to the shares that constitute the stock dividend and, at the time
the stock dividend is paid, the corporation shall transfer at least that amount
from surplus to stated capital. In addition, no distribution may be made if,
after giving effect to the distribution, the corporation would not be able to
pay indebtedness of the corporation as the indebtedness becomes due in the usual
course of business, or the corporation's total assets would be less than the sum
of the corporation's total liabilities plus, unless the charter permits
otherwise, the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights on dissolution are
superior to those receiving the distribution.
 
    STOCKHOLDER VOTING ON CERTAIN MERGERS
 
    DELAWARE.  Delaware law does not require a vote of the stockholders of a
surviving Delaware corporation in a merger (unless the corporation provides
otherwise in its certificate of incorporation) if: 1) the merger agreement does
not amend the existing certificate of incorporation; 2) each share of stock of
the surviving corporation outstanding immediately before the effective date of
the merger is an identical outstanding share after the merger and; 3) either no
shares of common stock of the surviving corporation and no shares, securities or
obligations convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized unissued shares or shares of common stock of
the surviving corporation to be issued or delivered under the plan of merger
plus those initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed twenty
percent (20%) of the shares of common stock of such constituent corporation
outstanding immediately prior to the effective date of the merger.
 
    MARYLAND.  In a merger between a Maryland corporation and a Delaware
corporation where the Delaware entity will be the surviving corporation, the
merger must be approved by the stockholders of the Maryland corporation by the
affirmative vote of two-thirds of all the votes entitled to be cast on the
matter.
 
    APPRAISAL RIGHTS
 
    Under both Delaware and Maryland law, a stockholder of a corporation
participating in certain major corporate transactions may, under varying
circumstances, be entitled to appraisal rights pursuant to which such
stockholder may receive cash in the amount of the fair market value of his or
her shares in lieu of the consideration he or she would otherwise receive in the
transaction.
 
    DELAWARE.  Under Delaware law, such fair market value is determined
exclusive of any element of value arising from the accomplishment or expectation
of the merger or consolidation, and such appraisal rights are not available:
1) with respect to the sale, lease or exchange of all or substantially all of
the assets of a corporation; 2) with respect to a merger or consolidation by a
corporation the shares of which are either listed on a national securities
exchange or are held of record by more than 2,000 holders if such stockholders
receive only shares of the surviving corporation or shares of any other
corporation that are either listed on a national securities exchange.
 
    MARYLAND.  Under Maryland law, an objecting stockholder has the right to
demand and receive payment of the fair value of their stock from a successor
corporation if the corporation merges with another corporation. Fair value of
the stock will be determined as of the close of business on the day the
stockholders voted on the transaction objected to. A stockholder may not demand
the fair value of his stock and is bound by the terms of the transaction if the
stock is listed on a national securities exchange or is designated as a national
market system security on an inter-dealer quotation system by the National
 
                                       22

<PAGE>
Association of Securities Dealers, Inc. on the record date for determining
stockholders entitled to vote on the transaction objected to. An objecting
stockholder must file a written objection with the corporation at or before the
stockholders' meeting at which the transaction will be considered. Additionally,
the objecting stockholder may not vote in favor of the transaction, and within
20 days after the State Department of Assessments and Taxation accepts the
articles of merger, must make a written demand on the successor for payment for
his stock, stating the number and class of shares for which he demands payment.
If the objecting stockholder does not comply with this section, he will be bound
by the terms of the merger. Within 50 days after the State Department of
Assessments and Taxation accepts the articles for record, the successor or
objecting stockholder may petition a court of equity for an appraisal to
determine the fair value of the stock. Finally, if the court finds that the
objecting stockholder is entitled to an appraisal of his stock, it shall appoint
three (3) disinterested appraisers to determine the fair value of the stock on
terms and conditions the court considers proper. Within 60 days, or however long
the court allows, the appraisers shall determine the fair value of the stock as
of the appropriate date and file a report with their conclusions. Within
15 days after the report is filed, any party may object to it and request a
hearing. If the appraisers' report is confirmed or modified by order, judgment
shall be entered against the successor and in favor of each objecting
stockholder party to the proceeding. If the appraisers' report is rejected, the
court may determine the fair value of the stock and enter judgment for the
stockholder, or remit the proceedings to the same or other appraisers on terms
and conditions it considers proper.
 
    DISSOLUTION
 
    DELAWARE.  Under Delaware law, unless the Board of Directors approves the
proposal to dissolve, the dissolution must be unanimously approved by all the
stockholders entitled to vote thereon. Only if the dissolution is initially
approved by the Board of Directors may the dissolution be approved by a simple
majority of the outstanding shares of the corporation's stock entitled to vote.
 
    MARYLAND.  Under Maryland law, a majority of the entire board of directors
must adopt a resolution declaring that dissolution of the corporation is
advisable and directing that the proposed dissolution be submitted for
consideration at either an annual or a special meeting of the stockholders. The
proposed dissolution shall be approved by the stockholders of the corporation by
the affirmative vote of two-thirds of all the votes entitled to be cast on the
matter.
 
    INTERESTED DIRECTOR TRANSACTIONS
 
    DELAWARE.  The material facts must be disclosed to the board, and: 1) a
majority of disinterested directors must authorize the transaction; 2) the
transaction must be approved in good faith by vote of the stockholders; or
3) the transaction must be fair as to the corporation as of the time it is
authorized, approved or ratified by the board of directors, a committee, or the
stockholders.
 
    MARYLAND.  The fact of the common directorship or interest must be disclosed
or made known to the board or the committee, and the board or committee must
authorize the transaction by affirmative vote of a majority of disinterested
directors; or such facts must be disclosed to stockholders and the transaction
must be authorized by a majority of the votes cast by the stockholders entitled
to vote. If the transaction has not been approved in the above manner, then the
person asserting the validity of the transaction bears the burden of proving
that the transaction was fair and reasonable to the corporation at the time it
was authorized.
 
    STOCKHOLDER DERIVATIVE SUITS
 
    DELAWARE.  Under Delaware law, a stockholder may bring a derivative action
on behalf of the corporation only if the stockholder was a stockholder of the
corporation at the time of the transaction in question or if his or her stock
thereafter devolved upon him or her by operation of law. Delaware does not have
a security bonding requirement.
 
                                       23

<PAGE>
    MARYLAND.  The Maryland General Corporation Law does not provide explicitly
for any derivative action available to stockholders.
 
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK AND CREATION OF AUTHORIZED
  PREFERRED STOCK
 
    The Company's Articles of Incorporation currently authorize the Company to
issue up to 100,000,000 shares, $.01 par value. In addition, in connection with
the Company's private placement offering consummated January 31, 2000, the
Company authorized the issuance of up to 7,000 shares of Series A Convertible
Preferred Stock, which shares have been segregated and deducted from the
Company's existing authorized share amount. Accordingly, the Company now has a
total Common Stock authorization of 99,993,000 shares, of which
shares are issued and outstanding as of the record date of April   , 2000. This
amount does not include up to             shares reserved for issuance under
outstanding warrants and options and       shares issuable after conversion
rights of the Series A Preferred Stock become exercisable in 2001, as well as
additional shares which may be issuable in the future. If all potential future
issuances are aggregated, the Company's issued and outstanding shares could
easily approach the limit of its presently authorized capitalization.
 
    In order to provide for future issuances of shares of Common Stock, the
Certificate of Incorporation which the Board has proposed for Celsion Delaware
in accordance with the Proposed Reincorporation contains an authorization for up
to 150,000,000 shares of Common Stock. In addition, such Certificate of
Incorporation authorizes a separate class of 100,000 shares of Preferred Stock,
of which it is intended that 7,000 shares will be designated as Series A
Preferred Stock of Celsion Delaware, and will be the exact equivalent of, and
replace, the Series A Preferred Stock previously issued by the Company in the
private placement offering, without any further action by the holders of such
Series A Preferred Stock.
 
REASONS FOR THE PROPOSAL
 
    The increased number of authorized shares of Common Stock provided for in
the Celsion Delaware Certificate of Incorporation will provide Celsion Delaware
with the ability to (i) meet commitments to issue shares in the future pursuant
to the exercise of outstanding options and warrants and the conversion of
Series A Preferred Stock; (ii) undertake future financing transactions such as a
public or private offering; (iii) have additional shares available for future
issuance in connection with acquisitions of promising technologies or other
entities; (iv) use for other general corporate purposes, such as to attract and
retain key management personnel in the future; and (v) use in connection with
other corporate transactions not yet determined.
 
    In order for the Board of Directors to respond to growth of the business
which may occur in the future, Celsion Delaware must have a sufficient number of
authorized shares to use for the foregoing purposes, and such shares should be
available for issuance without the necessity of calling and holding stockholder
meetings to authorize each such issuance, unless stockholder action is otherwise
required by Delaware law or the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted.
Although there can be no assurance that any subsequent transaction of the type
listed will happen at any particular time in the future or at all, the
additional authorized shares in Celsion Delaware will effectively provide the
Board with the flexibility to respond to opportunities which will arise in the
future.
 
    Additionally, the authorization of a separate class of Preferred Stock, to
be issued from time to time in one or more series as the Board of Directors of
Celsion Delaware deems necessary, will provide Celsion Delaware with a class of
securities to be used in any financings or acquisitions which it might
contemplate in the future. As in the case of the recently completed private
placement offering, there may be instances in which a party to a contemplated
transaction wishes to include, in the terms of a stock-based transaction, such
features as a liquidation preference, separate dividend and conversion rights,
special voting provisions and the like, none of which can be engrafted onto
existing shares of Common Stock. Through the use of a specialized series
designated from a general class of Preferred Stocks, the Board of Directors will
be able
 
                                       24

<PAGE>
to fix the designation, powers, privileges, preferences and relative rights of
the shares of each such series in order to tailor such shares to the needs of a
particular transaction.
 
    The Board of Directors will make any determination to issue future shares of
Common Stock or Preferred Stock based on its judgment as to the bests interests
of Celsion Delaware and its stockholders.
 
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
 
    The following is a discussion of certain federal income tax considerations
that may be relevant to holders of Celsion Common Stock who receive Celsion
Delaware Common Stock in exchange for their Celsion Common Stock as a result of
the Proposed Reincorporation. The discussion does not address all of the tax
consequences of the Proposed Reincorporation that may be relevant to particular
Celsion stockholders, such as dealers in securities, or those Celsion
stockholders who acquired their shares upon the exercise of stock options, nor
does it address the tax consequences to holders of options or warrants to
acquire Celsion Common Stock. Furthermore, no foreign, state, or local tax
considerations are addressed herein. IN VIEW OF THE VARYING NATURE OF SUCH TAX
CONSEQUENCES, EACH STOCKHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR AS
TO THE SPECIFIC TAX CONSEQUENCES OF THE PROPOSED REINCORPORATION, INCLUDING THE
APPLICABILITY OF FEDERAL, STATE, LOCAL OR FOREIGN TAX LAWS.
 
    Subject to the limitations, qualifications and exceptions described herein,
and assuming the Proposed Reincorporation qualifies as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), the following tax consequences generally should result:
 
    (a) No gain or loss should be recognized by holders of Celsion Common Stock
       upon receipt of Celsion Delaware Common Stock pursuant to the Proposed
       Reincorporation;
 
    (b) The aggregate tax basis of the Celsion Delaware Common Stock received by
       each stockholder in the Proposed Reincorporation should be equal to the
       aggregate tax basis of the Celsion Common Stock surrendered in exchange
       therefor; and
 
    (c) The holding period of the Celsion Delaware Common Stock received by each
       stockholder of Celsion should include the period for which such
       stockholder held the Celsion Common Stock surrendered in exchange
       therefor, provided that such Celsion Common Stock was held by the
       stockholder as a capital asset at the time of the Proposed
       Reincorporation.
 
    The Company has not requested a ruling from the Internal Revenue Service
(the "IRS") with respect to the federal income tax consequences of the Proposed
Reincorporation under the Code. A successful IRS challenge to the reorganization
status of the Proposed Reincorporation (in consequence of a failure to satisfy
the "continuity of interest" requirement or otherwise) would result in a
stockholder recognizing gain or loss with respect to each share of Celsion
Common Stock exchanged in the Proposed Reincorporation equal to the difference
between the stockholder's basis in such share and the fair market value, as of
the time of the Proposed Reincorporation, of the Celsion Delaware Common Stock
received in exchange therefor. In such event, a stockholder's aggregate basis in
the shares of Celsion Delaware Common Stock received in the exchange would equal
their fair market value on such date, and the stockholder's holding period for
such shares would not include the period during which the stockholder held
Celsion Common Stock. Even if the Proposed Reincorporation qualifies as a
reorganization under the Code, a stockholder would recognize gain to the extent
the stockholder received (actually or constructively) consideration other than
Celsion Delaware Common Stock in exchange for the stockholder's Celsion Common
Stock.
 
    State, local or foreign income tax consequences to stockholders may vary
from the federal tax consequences described above. The Company should not
recognize gain or loss for federal income tax purposes as a result of the
Proposed Reincorporation, and Celsion Delaware should succeed, without
adjustment, to the federal income tax attributes of Celsion.
 
                                       25

<PAGE>
                             STOCKHOLDER PROPOSALS
                          FOR THE 2001 ANNUAL MEETING
 
    Stockholders may submit proposals appropriate for stockholder action at the
Company's Annual Meeting to be held in 2001 consistent with the regulations of
the Securities and Exchange Commission and the Company's Bylaws. For proposals
to be considered for inclusion in the Proxy Statement for the 2001 Annual
Meeting, they must be received by the Company no later than       , 2000. Such
proposals should be directed to Celsion Corporation, 10220-I Old Columbia Road,
Columbia, Maryland, 21046-1705, Attention: Mr. Jon Mon, Secretary.
 
                                 OTHER BUSINESS
 
    The Directors of the Company are not aware of any other business to be acted
upon at the Meeting other than described herein. It is not anticipated that
other matters will be brought before the Meeting. If, however, other matters are
duly brought before the Meeting, or any adjournments thereof, the persons
appointed as proxies will have discretion to vote or act thereon according to
their best judgment.
 
                 COMPANY REPORTS AND INCORPORATION BY REFERENCE
 
    The Company's Annual Report to Stockholders on Securities and Exchange
Commission Form 10-K for the fiscal year ended September 30, 1999 is being sent
to stockholders along with this Proxy Statement. The Company's report on
Form 10-Q for the quarter ended December 31, 1999 and the Company's interim
reports on Form 8-K filed with the Securities and Exchange in February and March
2000 are incorporated herein by reference. Additional copies of these reports
may be obtained upon written request to the Secretary of the Company, 10220-I
Old Columbia Road, Columbia, MD 21046-1705.
 
                                       26

<PAGE>
                                                                      APPENDIX A
 
                          PLAN AND AGREEMENT OF MERGER
 
                                       OF
 
                              CELSION CORPORATION
                            (A MARYLAND CORPORATION)
 
                                      INTO
 
                         CELSION (DELAWARE) CORPORATION
                            (A DELAWARE CORPORATION)
 
    This Plan and Agreement of Merger provides for the merger of Celsion
Corporation, a Maryland corporation, into its wholly-owned subsidiary, Celsion
(Delaware) Corporation, a Delaware corporation, and is entered into pursuant to
the General Corporation Law of the State of Maryland and the General Corporation
Law of the State of Delaware.
 
    1.  IDENTITY OF CONSTITUENTS
 
        (a)  The name of the corporation to be merged is Celsion Corporation, a
    Maryland corporation (hereinafter the "Merged Corporation"). The Merged
    Corporation was incorporated in Maryland in 1982 as A.Y. Cheung
    Associates, Inc., and changed its name to Cheung Laboratories, Inc. on
    June 21, 1984 and to Celsion Corporation on May 1, 1998.
 
        (b)  The name of the surviving corporation is Celsion (Delaware)
    Corporation, a Delaware corporation (hereinafter the "Surviving
    Corporation"), incorporated on March       , 2000.
 
    2.  OUTSTANDING SHARES
 
        (a)  As of the date hereof, the capital stock of the Merged Corporation
    consists of a total of 100,000,000 authorized shares, $0.01 par value, of
    which 7,000 shares are separately classified as Series A 10% Convertible
    Preferred Stock ("Series A Stock"), and 99,993,000 shares are Common Stock.
    As of the date hereof, there are 4,852.5 issued and outstanding shares of
    Series A Stock, each of which has a liquidation preference of One Thousand
    ($1,000) Dollars, and             issued and outstanding shares of Common
    Stock.
 
        (b)  As of the date hereof, the authorized capital stock of the
    Surviving Corporation consists of (i) 100,000 shares of Preferred Stock,
    $.01 par value, issuable in one or more series from time to time authorized
    by the Board of Directors of the Surviving Corporation, of which 7,000
    shares have been designated as Series A 10% Convertible Preferred Stock, no
    shares of which are presently issued and outstanding, and (ii) 150,000,000
    shares of Common Stock, $.01 par value, of which one (1) share is issued and
    outstanding.
 
    3.  TERMS AND CONDITIONS OF MERGER
 
        (a)  On the Effective Date of the Merger (as defined below), the Merged
    Corporation shall merge with and into the Surviving Corporation.
 
        (b)  On the Effective Date of the Merger, (i) each outstanding share of
    Common Stock of the Merged Corporation shall automatically be converted into
    one share of Common Stock, $0.01 par value, of the Surviving Corporation,
    and (ii) each outstanding share of Series A Stock of the Merged
 
                                      A-1

<PAGE>
    Corporation shall automatically be converted into one share of Series A 10%
    Convertible Preferred Stock of the Surviving Corporation.
 
        (c)  Upon the Effective Date of the Merger, each share of Common Stock,
    par value $0.01 per share, of the Surviving Corporation issued and
    outstanding immediately prior thereto shall, by virtue of the merger and
    without any action by the Surviving Corporation, by the holder of such
    shares or by any other person, be canceled and returned to the status of
    authorized but unissued shares.
 
        (d)  The merger shall be consummated in accordance with the laws of the
    State of Delaware and of the State of Maryland.
 
        (e)  Upon the Effective Date of the Merger, the separate existence of
    the Merged Corporation shall cease and be merged into the Surviving
    Corporation in accordance with the provisions of this Plan of Merger. The
    Surviving Corporation shall survive such merger and shall continue in
    existence under the laws of Delaware and shall, without other actions or
    instruments of transfer (except as may be required by applicable law),
    succeed to and possess all the rights, privileges, immunities, powers and
    purposes of the Merged Corporation, and all rights and property of the
    Merged Corporation of any kind whatsoever, whether real or personal,
    tangible or intangible, including, without limitation, causes of action,
    contractual rights, licenses, and all conditional and unconditional rights
    and privileges whatsoever, and every other asset of the Merged Corporation,
    shall vest in such Surviving Corporation without further act or deed. The
    Surviving Corporation shall assume, succeed to and be liable for all
    liabilities, obligations and penalties of the Merged Corporation, including,
    without limitation, its contractual obligations. No liability or obligation
    due or to become due, or claim or demand for any cause existing against
    either of the Surviving Corporation of the Merged Corporation, or any
    shareholder, officer or director thereof, shall be released or impaired by
    such merger. No action or proceeding, civil or criminal, then pending by or
    against either the Merged Corporation or the Surviving Corporation, or any
    shareholder, officer or director thereof, shall abate or be discontinued by
    such merger, but may be enforced, prosecuted, settled or compromised as if
    such merger had not occurred, or, alternatively, the Surviving Corporation
    may be substituted in any such action in the place and stead of the Merged
    Corporation.
 
        (f)  At the Effective Date of the Merger, the name of the Surviving
    Corporation shall be Celsion Corporation and the Certificate of
    Incorporation of the Surviving Corporation shall be amended by certificate
    of merger or other appropriate instrument to change the name of the
    Surviving Corporation to Celsion Corporation. Except for that change, the
    Certificate of Incorporation of the Surviving Corporation shall continue to
    exist and shall not be deemed otherwise amended by reason of the merger.
 
        (g)  The By-Laws of the Surviving Corporation, as they exist on the
    Effective Date of the Merger, shall be and remain the By-Laws of the
    Surviving Corporation until they shall be altered, amended or repealed as
    provided therein.
 
        (h)  The directors and officers of the Merged Corporation immediately
    prior to the merger shall be and remain the directors and officers of the
    Surviving Corporation on the Effective Date of the Merger until their
    successors shall have been duly elected and qualified or until as otherwise
    provided by law or by the Certificate of Incorporation or By-Laws of the
    Surviving Corporation.
 
        (i)  The officers of the Merged Corporation and the Surviving
    Corporation, respectively, are authorized and directed to take any and all
    actions and to make, execute, deliver, file and record any and all
    instruments and documents necessary to effect any of the provisions of the
    merger pursuant to this Plan and Agreement of Merger, including certificates
    and articles of merger required by law.
 
        (j)  If, at any time prior to the Effective Date of the Merger, any
    events or circumstances occur which, in the opinion of the Board of
    Directors of the Merged Corporation, render it inadvisable to consummate the
    merger, this Plan and Agreement of Merger shall not become effective.
    However, the
 
                                      A-2

<PAGE>
    filing of a Certificate of Ownership and Merger in the State of Delaware
    shall conclusively establish that no action to terminate this Plan of Merger
    has been taken by the Board of Directors of the Surviving Corporation or of
    the Merged Corporation.
 
        (k)  The Surviving Corporation shall pay all the expenses of carrying
    this Plan and Agreement of Merger into effect and of accomplishing the
    merger.
 
        (l)  For the convenience of the parties and to facilitate approval of
    this Plan and Agreement of Merger, any number of counterparts thereof may be
    executed, and each such executed counterpart shall be deemed to be an
    original and all counterparts together shall constitute one instrument.
 
    4.  EFFECTIVE DATE OF MERGER
 
    The Effective Date of the Merger shall be the date and time of filing of a
Certificate of Ownership and Merger with the Secretary of State of the State of
Delaware.
 
    5.  POST-EFFECTIVE ACTIONS AND FURTHER ASSURANCES.
 
    If at any time after the Effective Date of the Merger the Surviving
Corporation shall consider that any further assurances, agreements, assignments,
deeds or other acts are necessary or desirable to confirm or vest in the
Surviving Corporation the ownership of any property or rights acquired or
intended to be acquired by reason of or as a result of the merger, or to
otherwise effectuate the purposes of this Plan and Agreement of Merger, the
Surviving Corporation and its officers and directors are hereby authorized and
directed to execute and deliver all such assurances, agreements, assignments and
deeds and to take all actions necessary or desirable to carry out the purposes
of this Plan and Agreement of Merger in the name and on behalf of the Merged
Corporation and the Surviving Corporation, as the case may be.
 
    6.  STATUS AND EXCHANGE OF CERTIFICATES
 
        (a)  After the Effective Date of the Merger, each holder of an
    outstanding certificate representing shares of the Merged Corporation may,
    at such stockholder's option, surrender the same for cancellation to
    American Stock Transfer & Trust Company, as transfer agent (the "Agent"),
    and each such holder shall be entitled to receive in exchange therefor a
    certificate or certificates representing the number of shares of the
    Surviving Corporation's Common Stock into which the surrendered shares were
    converted as herein provided. Unless and until so surrendered, each
    outstanding certificate representing shares of the Merged Corporation's
    Common Stock shall be deemed for all purposes to represent the number of
    shares of the Surviving Corporation's Common Stock into which such shares of
    the Merged Corporation's Common Stock were converted in the Merger. The
    registered owner on the books and records of the Surviving Corporation or
    the Agent of any shares represented by such certificate shall, until such
    certificate shall have been surrendered for transfer or conversion, have and
    be entitled to exercise any voting and other rights with respect to the
    shares of Common Stock of the Surviving Corporation represented by such
    outstanding certificate as provided above.
 
        (b)  Each certificate representing Common Stock of the Surviving
    Corporation issued in the Merger shall bear the same legends, if any, with
    respect to restrictions on transferability as may appear on the predecessor
    certificates of the Merged Corporation, unless otherwise determined by the
    Board of Directors of the Surviving Corporation in compliance with
    applicable laws, or other such additional legends as agreed upon by the
    holder and the Surviving Corporation.
 
    7.  GENERAL
 
        (a)  The Boards of Directors of the Merged Corporation and the Surviving
    Corporation may amend this Plan and Agreement at any time prior to the
    filing thereof (or certificate in lieu thereof) with the Secretaries of
    State of the States of Delaware and Maryland, provided that an amendment
    made subsequent to the adoption of this Plan and Agreement by the
    stockholders of either the
 
                                      A-3

<PAGE>
    Merged Corporation or the Surviving Corporation shall not: (i) alter or
    change the amount or kind of shares, securities, cash, property and/or
    rights to be received in exchange for or on conversion of all or any of the
    shares of any class or series thereof of either corporation; (ii) alter or
    change any term of the Certificate of Incorporation of the Surviving
    Corporation to be effected by the Merger; or (iii) alter or change any of
    the terms and conditions of this Agreement if such alteration or change
    would adversely affect the holders of any class or series of capital stock
    of any constituent corporation.
 
        (b)  The registered office of the Surviving Corporation in the State of
    Delaware is c/o United Corporate Services, Inc., 15 East North Street, in
    the City of Dover, County of Kent, State of Delaware 19901, and the name of
    the registered agent at said address is United Corporate Services, Inc.
 
    The foregoing Plan and Agreement of Merger, having been approved and adopted
by resolution of the Board of Directors of both the Surviving Corporation and
the Merged Corporation, is hereby executed in accordance with the laws of the
State of Delaware and the laws of the State of Maryland this       day of April,
2000.
 

<TABLE>
<S>                                                    <C>  <C>
                                                       CELSION CORPORATION.
                                                       (a Maryland corporation)
 
                                                       By:
                                                            -----------------------------------------
                                                            Spencer J. Volk,
                                                            President and Chief Executive Officer
 
                                                       By:
Attest: -------------------------------                     -----------------------------------------
       Secretary                                            Augustine Y. Cheung, Chairman
 
                                                       CELSION (DELAWARE) CORPORATION.
                                                       (a Delaware corporation)
 
                                                       By:
                                                            -----------------------------------------
                                                            Spencer J. Volk,
                                                            President and Chief Executive Officer
 
                                                       By:
Attest: -------------------------------                     -----------------------------------------
       Secretary                                            Augustine Y. Cheung, Chairman
</TABLE>

 
                                      A-4

<PAGE>
                                                                      APPENDIX B

 
                          CERTIFICATE OF INCORPORATION
                                       OF
                         CELSION (DELAWARE) CORPORATION
 
    The undersigned, a natural person of legal age, for the purpose of
organizing a corporation pursuant to the General Corporation Law of the State of
Delaware, hereby certifies that:
 
    FIRST:  The name of the Corporation is
 
                         CELSION (DELAWARE) CORPORATION
 
    SECOND:  The address, including street, number, city, and county, of the
registered office of the Corporation in the State of Delaware is c/o United
Corporate Services, Inc., 15 East North Street, in the City of Dover, County of
Kent, State of Delaware 19901, and the name of the registered agent at said
address is United Corporate Services, Inc.
 
    THIRD:  The nature of the business and the purposes to be conducted and
promoted by the Corporation are to conduct any lawful business, to promote any
lawful purpose, and to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
 
    FOURTH:  The total number of shares of all classes of stock which the
Corporation shall have authority to issue is one hundred fifty million one
hundred thousand (150,100,000) shares, consisting of (i) one hundred fifty
million (150,000,000) shares of Common Stock, par value $0.01 per share ("Common
Stock"), and (ii) one hundred thousand (100,000) shares of Preferred Stock par
value $0.01 per share ("Preferred Stock"). The Preferred Stock may be issued
from time to time in one or more series.
 
    The Corporation shall from time to time in accordance with the laws of the
State of Delaware increase the authorized amount of its Common Stock if at any
time the number of shares of Common Stock remaining unissued and available for
issuance shall not be sufficient to permit the conversion of the Preferred Stock
into Common Stock in accordance with any terms governing such conversion
established by the Board of Directors under applicable law.
 
    The Board of Directors is hereby authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, by resolution to
provide for the issuance of Preferred Stock in one or more series, and to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, privileges, preferences and relative
participating, optional or other rights, if any, of the shares of each such
series and the qualifications, limitations or restrictions thereof.
 
    The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but shall not be limited to, determination of the
following:
 
        (a) The number of shares constituting that series (including an increase
    or decrease in the number of shares of any such series (but not below the
    number of shares in any series then outstanding) and the distinctive
    designation of that series;
 
        (b) Whether a dividend shall be payable on any series, and, if so, the
    dividend rate on the shares in that series, whether dividends shall be in
    cash or in kind, whether dividends shall be cumulative, and, if so, from
    which date or dates, and the relative rights of priority, if any, of payment
    of dividends on shares of that series;
 
        (c) Whether that series shall have voting rights (including multiple or
    fractional votes per share) in addition to the voting rights provided by
    law, and, if so, the terms of such voting rights;
 
                                      B-1

<PAGE>
        (d) Whether that series shall have conversion privileges, and, if so,
    the terms and conditions of such privileges, including provision for
    adjustment of the conversion rate in such events as the Board of Directors
    shall determine;
 
        (e) Whether or not the shares of that series shall be redeemable, and,
    if so, the terms and conditions of such redemption, including the date or
    dates upon or after which they shall be redeemable, and the amount per share
    payable in case of redemption, which amount may vary under different
    conditions and at different redemption rates;
 
        (f) Whether that series shall have a sinking fund or sinking funds for
    the redemption or purchase of shares of that series, and, if so, the terms
    and amount of such sinking fund or funds;
 
        (g) The rights of the shares of that series in the event of voluntary or
    involuntary liquidation, dissolution or winding up of the Corporation, and
    the relative rights of priority, if any, of payment with respect to shares
    of that series; and
 
        (h) Any other relative rights, preferences and limitations of that
    series.
 
    No holder of shares of the Corporation of any class, now or hereafter
authorized, shall have any preferential or preemptive rights to subscribe for,
purchase or receive any shares of the Corporation of any class, now or hereafter
authorized, or any options or warrants for such shares, or any rights to
subscribe for, purchase or receive any securities convertible to or exchangeable
for such shares, which may at any time be issued, sold or offered for sale by
the Corporation, except in the case of any shares of Preferred Stock to which
such rights are specifically granted by any resolution or resolutions of the
Board of Directors adopted pursuant to this Article FOURTH.
 
    FIFTH:  The name and address of the incorporator are as follows:
 

<TABLE>
<CAPTION>
NAME                                     ADDRESS
----                                     -------
<S>                                      <C>
Michael Barr                             10 Bank Street
                                         White Plains, NY 10606
</TABLE>

 
    SIXTH:  The Corporation is to have perpetual existence.
 
    SEVENTH:  Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution of any receiver or receivers appointed for this Corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
indebtedness held by such creditors or class of creditors, and/or three-fourths
of the shares held by the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on the Corporation.
 
    EIGHTH:  For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation, and
regulation of the powers of the Corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
 
        (a) The management of the business and the conduct of the affairs of the
    Corporation shall be vested in its Board of Directors. The number of
    directors which shall constitute the whole Board of Directors shall be fixed
    by, or in the manner provided in, the By-Laws.
 
                                      B-2

<PAGE>
        (b) The Board of Directors shall have power without the assent or vote
    of the stockholders:
 
           (1) To make, alter, amend, change, add to or repeal the By-Laws of
       the Corporation; to fix and vary the amount to be reserved for any proper
       purpose; to authorize and cause to be executed mortgages and liens upon
       all or any part of the property of the Corporation; to determine the use
       and disposition of any surplus or net profits; and to fix the times for
       the declaration and payment of dividends.
 
           (2) To determine from time to time whether, and at what times and
       places, and under what conditions the accounts and books of the
       Corporation (other than the stock ledger) or any of them, shall be open
       to the inspection of the stockholders.
 
        (c) In addition to the powers and authorities hereinbefore or by statute
    expressly conferred upon them, the directors are hereby empowered to
    exercise all such powers and do all such acts and things as may be exercised
    or done by the Corporation; subject, nevertheless, to the provisions of the
    General Corporation Law of the State of Delaware, of this Certificate, and
    to any By-Laws from time to time made by the stockholders; provided,
    however, that no By-Laws so made shall invalidate any prior act of the
    directors which would have been valid if such By-Laws had not been made.
 
    NINTH:
 
        (a) The personal liability of the directors of the Corporation is hereby
    eliminated to the fullest extent permitted by the provisions of the General
    Corporation Law of the State of Delaware, as the same may be amended and
    supplemented from time to time, and, in accordance therewith, no director of
    the Corporation shall be personally liable to the Corporation or its
    stockholders for monetary damages for breach of fiduciary duty as a
    director.
 
        (b) The Corporation may indemnify to the fullest extent permitted by law
    any person made or threatened to be made a party to an action or proceeding,
    whether criminal, civil, administrative or investigative, by reason of the
    fact that he, his testator or intestate is or was a director, officer or
    employee of the Corporation or any predecessor of the Corporation or serves
    or served at any other enterprise as a director, officer or employee at the
    request of the Corporation or any predecessor to the Corporation.
 
        (c) Neither any amendment nor repeal of this Article NINTH, nor the
    adoption of any provision of the Corporation's Certificate of Incorporation
    inconsistent with this Article NINTH, shall eliminate or reduce the effect
    of this Article NINTH with respect to any matter occurring, or any action or
    proceeding accruing or arising or that, but for this Article NINTH, would
    accrue or arise, prior to such amendment, repeal, or adoption of an
    inconsistent provision.
 
    TENTH:  From time to time any of the provisions of the Corporation's
Certificate of Incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted as prescribed by said laws, and all rights at any time
conferred upon the stockholders of the Corporation by this Certificate of
Incorporation are granted subject to the provisions of this Article TENTH.
 
    IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under the penalties of perjury
this       (th) day of March, 2000.
 
                                          s/____________________________________
 
                                                                  --Incorporator
 
                                      B-3

<PAGE>

                                                                      APPENDIX C
 
                                     BYLAWS
 
                                       OF
 
                         CELSION (DELAWARE) CORPORATION
 
                                      C-1

<PAGE>
                                   ARTICLE I
                               CORPORATE OFFICES
 
    1.1  REGISTERED OFFICE.  The registered office of the corporation shall be
fixed in the Certificate of Incorporation of the corporation.
 
    1.2  OTHER OFFICES.  The board of directors may at any time establish the
principal office and any branch or subordinate offices of the corporation at any
place or places deemed advisable.
 
                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS
 
    2.1  PLACE OF MEETINGS.  Meetings of stockholders shall be held at any place
within or outside the State of Delaware designated by the board of directors.
 
    2.2  ANNUAL MEETING.
 
        (a) The annual meeting of stockholders shall be held each year on a date
    and at a time designated by the board of directors. At the meeting,
    directors shall be elected, and any other proper business may be transacted.
 
        (b) At an annual meeting of the stockholders, only such business shall
    be conducted as shall have been properly brought before the meeting. To be
    properly brought before an annual meeting, business must be: (A) specified
    in the notice of meeting (or any supplement thereto) given by or at the
    direction of the board of directors, (B) otherwise properly brought before
    the meeting by or at the direction of the board of directors, or
    (C) otherwise properly brought before the meeting by a stockholder. For
    business to be properly brought before an annual meeting by a stockholder,
    the stockholder must have given timely notice thereof in writing to the
    secretary of the corporation. To be timely, a stockholder's notice must be
    delivered to or mailed and received at the principal executive offices of
    the corporation not less than one hundred twenty (120) calendar days in
    advance of the date specified in the corporation's proxy statement released
    to stockholders in connection with the previous year's annual meeting of
    stockholders; provided, however, that in the event that no annual meeting
    was held in the previous year or the date of the annual meeting has been
    changed by more than thirty (30) days from the date contemplated at the time
    of the previous year's proxy statement, notice by the stockholder to be
    timely must be so received not later than the close of business on the later
    of one hundred twenty (120) calendar days in advance of such annual meeting
    or ten (10) calendar days following the date on which public announcement of
    the date of the meeting is first made. A stockholder's notice to the
    secretary shall set forth as to each matter the stockholder proposes to
    bring before the annual meeting: (i) a brief description of the business
    desired to be brought before the annual meeting and the reasons for
    conducting such business at the annual meeting, (ii) the name and address,
    as they appear on the corporation's books, of the stockholder proposing such
    business, (iii) the class and number of shares of the corporation which are
    beneficially owned by the stockholder, (iv) any material interest of the
    stockholder in such business, and (v) any other information that is required
    to be provided by the stockholder pursuant to Regulation 14A under the
    Securities Exchange Act of 1934, as amended (the "1934 Act"), in his
    capacity as a proponent to a stockholder proposal. Notwithstanding the
    foregoing, in order to include information with respect to a stockholder
    proposal in the proxy statement and form of proxy for a stockholder's
    meeting, stockholders must provide notice as required by the regulations
    promulgated under the 1934 Act. Notwithstanding anything in these Bylaws to
    the contrary, no business shall be conducted at any annual meeting except in
    accordance with the procedures set forth in this paragraph (b), the chairman
    of the annual meeting shall, if the facts warrant, determine and declare at
    the meeting that business was not properly brought before the meeting in
    accordance with the provisions of this paragraph (b), and, if he should
 
                                      C-2

<PAGE>
    so determine, he shall declare at the meeting that any such business not
    properly brought before the meeting shall not be transacted.
 
        (c) Only persons who are nominated in accordance with the procedures set
    forth in this paragraph (c) shall be eligible for election as directors.
    Nominations of persons for election to the board of directors of the
    corporation may be made at a meeting of stockholders by or at the direction
    of the board of directors or by any stockholder of the corporation entitled
    to vote in the election of directors at the meeting who complies with the
    notice procedures set forth in this paragraph (c). Such nominations, other
    than those made by or at the direction of the board of directors, shall be
    made pursuant to timely notice in writing to the secretary of the
    corporation in accordance with the provisions of paragraph (b) of this
    Section 2.2. Such stockholder's notice shall set forth (i) as to each
    person, if any, whom the stockholder proposes to nominate for election or
    re-election as a director: (A) the name, age, business address and residence
    address of such person, (B) the principal occupation or employment of such
    person, (C) the class and number of shares of the corporation which are
    beneficially owned by such person, (D) 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 nominations
    are to be made by the stockholder, and (E) any other information relating to
    such person that is required to be disclosed in solicitations of proxies for
    elections of directors, or is otherwise required, in each case pursuant to
    Regulation 14A under the 1934 Act (including, without limitation, such
    person's written consent to being named in the proxy statement, if any, as a
    nominee and to serving as a director if elected); and (ii) as to such
    stockholder giving notice, the information required to be provided pursuant
    to paragraph (b) of this Section 2.2. At the request of the board of
    directors, any person nominated by a stockholder for election as a director
    shall furnish to the secretary of the corporation that information required
    to be set forth in the stockholder's notice of nomination which pertains to
    the nominee. No person shall be eligible for election as a director of the
    corporation unless nominated in accordance with the procedures set forth in
    this paragraph (c). The chairman of the meeting shall, if the facts
    warrants, determine and declare at the meeting that a nomination was not
    made in accordance with the procedures prescribed by these Bylaws, and if he
    should so determine, he shall so declare at the meeting, and the defective
    nomination shall be disregarded.
 
    2.3  SPECIAL MEETING.  A special meeting of the stockholders may be called
at any time by the board of directors, the president or the chairman, but such
special meeting may not be called by any other person or persons. Only such
business shall be considered at a special meeting of stockholders as shall have
been stated in the notice for such meeting.
 
    2.4  ORGANIZATION.  Meetings of stockholders shall be presided over by the
president, the chairman or, in his or her absence, by a chairman designated by
the board of directors, or in the absence of such designation, by a chairman
chosen at the meeting by the vote of a majority in interest of the stockholders
present in person or represented by proxy and entitled to vote thereat. The
secretary, or in his or her absence an assistant secretary, or in the absence of
the secretary and any assistant secretary, a person whom the chairman of the
meeting shall appoint, shall act as secretary of the meeting and keep a record
of the proceedings thereof.
 
    The board of directors of the corporation shall be entitled to make such
rules or regulations for the conduct of meetings of stockholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and regulations
of the board of directors, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business, limitations on
the time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting. Unless determined by the board
of directors or the chairman of the meeting, meetings of stockholders shall not
be required to be held in accordance with rules of parliamentary procedure.
 
                                      C-3

<PAGE>
    2.5  NOTICE OF STOCKHOLDERS' MEETINGS.  All notices of meetings of
stockholders shall be sent or otherwise given in accordance with Section 2.6 of
these Bylaws not less than ten (10) nor more than sixty (60) days before the
date of the meeting. The notice shall specify the place, date, and hour of the
meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted or (ii) in the case of the annual meeting, those
matters which the board of directors, at the time of giving the notice, intends
to present for action by the stockholders (but any proper matter may be
presented at the meeting for such action). The notice of any meeting at which
directors are to be elected shall include the name of any nominee or nominees
who, at the time of the notice, the board intends to present for election.
 
    2.6  MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.  Notice of any meeting of
stockholders shall be given either personally or by mail, telecopy, telegram or
other electronic or wireless means. Notices not personally delivered shall be
sent charges prepaid and shall be addressed to the stockholder at the address of
that stockholder appearing on the books of the corporation or given by the
stockholder to the corporation for the purpose of notice. Notice shall be deemed
to have been given at the time when delivered personally or deposited in the
mail or sent by telecopy, telegram or other electronic or wireless means.
 
    An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice or report.
 
    2.7  QUORUM.  The holders of a majority in voting power of the stock issued
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders by the vote of the holders of a majority of
the stock, present in person or represented by proxy shall have power to adjourn
the meeting.
 
    When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the laws of the State of Delaware or
of the Certificate of Incorporation or these Bylaws, a vote of a greater number
or voting by classes is required, in which case such express provision shall
govern and control the decision of the question.
 
    If a quorum be initially present, the stockholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
 
    2.8  ADJOURNED MEETING; NOTICE.  Any stockholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the voting power of the shares represented at
that meeting, either in person or by proxy. In the absence of a quorum, no other
business may be transacted at that meeting except as provided in Section 2.7 of
these Bylaws.
 
    When any meeting of stockholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place are announced at the meeting at which the adjournment is taken.
However, if a new record date for the adjourned meeting is fixed or if the
adjournment is for more than thirty (30) days from the date set for the original
meeting, then notice of the adjourned meeting shall be given. Notice of any such
adjourned meeting shall be given to each stockholder of record entitled to vote
at the adjourned meeting in accordance with the provisions of Sections 2.5 and
2.6 of these Bylaws. At any adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting.
 
                                      C-4

<PAGE>
    2.9  VOTING.  The stockholders entitled to vote at any meeting of
stockholders shall be determined in accordance with the provisions of
Section 2.12 of these Bylaws, subject to applicable provisions of the General
Corporation Law of Delaware.
 
    Except as may be otherwise provided in the Certificate of Incorporation, by
instruments setting forth the voting rights of specific classes or series of
stocks, by these Bylaws or by applicable law, each stockholder shall be entitled
to one vote for each share of capital stock held by such stockholder.
 
    Any stockholder entitled to vote on any matter may vote part of the shares
in favor of the proposal and refrain from voting the remaining shares or, except
when the matter is the election of directors, may vote them against the
proposal; but if the stockholder fails to specify the number of shares which the
stockholder is voting affirmatively, it will be conclusively presumed that the
stockholder's approving vote is with respect to all shares which the stockholder
is entitled to vote.
 
    2.10  VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT.  The transactions
of any meeting of stockholders, either annual or special, however called and
noticed, and wherever held, shall be as valid as though they had been taken at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy.
 
    Attendance by a person at a meeting shall constitute a waiver of notice of
and presence at that meeting, except when the person objects at the beginning of
the meeting to the transaction of any business because the meeting is not
lawfully called or convened.
 
    2.11  ACTION BY WRITTEN CONSENT.  Subject to the rights of the holders of
the shares of any series of Preferred Stock or any other class of stock or
series thereof having a preference over the Common Stock as dividend or upon
liquidation, any action required or permitted to be taken by the stockholders of
the corporation must be effected at a duly called annual or special meeting of
stockholders of the corporation and may not be effected by any consent in
writing by such stockholders.
 
    2.12  RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.  For
purposes of determining the stockholders entitled to notice of any meeting or to
vote thereat, the board of directors may fix, in advance, a record date, which
shall not be more than sixty (60) days nor less than ten (10) days before the
date of any such meeting, and in such event only stockholders of record on the
date so fixed are entitled to notice and to vote, notwithstanding any transfer
of any shares on the books of the corporation after the record date, except as
otherwise provided in the Certificate of Incorporation, by these Bylaws, by
agreement or by applicable law.
 
    If the board of directors does not so fix a record date, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
 
    A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors shall fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
 
    The record date for any other purpose shall be as provided in Section 8.1 of
these Bylaws.
 
    2.13  PROXIES.  Every person entitled to vote for directors, or on any other
matter, shall have the right to do so either in person or by one or more agents
authorized by a written proxy, which may be in the form of a telegram,
cablegram, or other means of electronic transmission, signed by the person and
filed with the secretary of the corporation, but no such proxy shall be voted or
acted upon after three (3) years from its date, unless the proxy provides for a
longer period. A proxy shall be deemed signed if the stockholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the stockholder or the stockholder's
attorney-in-fact. A duly executed proxy shall be
 
                                      C-5

<PAGE>
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
secretary of the corporation.
 
    A proxy is not revoked by the death or incapacity of the maker unless,
before the vote is counted, written notice of such death or incapacity is
received by the corporation.
 
    2.14  INSPECTORS OF ELECTION.  Before any meeting of stockholders, the board
of directors shall appoint an inspector or inspectors of election to act at the
meeting or its adjournment and to determine such matters as quorum, validity of
proxies and ballots, voting eligibility, and the tabulation of votes. The number
of inspectors shall be either one (1) or three (3). If any person appointed as
inspector fails to appear or fails or refuses to act, then the chairman of the
meeting may, and upon the request of any stockholder or a stockholder's proxy
shall, appoint a person to fill that vacancy.
 
    The inspectors of election shall perform their duties impartially, in good
faith, to the best of their ability and as expeditiously as is practical. If
there are three (3) inspectors of election, the decision, act or certificate of
a majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima facie
evidence of the facts stated therein.
 
                                  ARTICLE III
                                   DIRECTORS
 
    3.1  POWERS.  Subject to the provisions of the General Corporation Law of
Delaware and to any limitations in the Certificate of Incorporation or these
Bylaws relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
 
    3.2  NUMBER AND TERM OF OFFICE.  The authorized number of directors shall be
not less than three (3) nor more than nine (9). Within such limits, the number
of directors shall be initially fixed at seven (7), which number may be changed
by resolution of the board of directors. An indefinite number of directors may
be fixed, or the definite number of directors may be changed, by a duly adopted
amendment to the Certificate of Incorporation or by an amendment to this bylaw
duly adopted by the stockholders or the board of directors.
 
    No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires. If for any
cause, the directors shall not have been elected at an annual meeting, they may
be elected as soon thereafter as convenient at a special meeting of the
stockholders called for that purpose in the manner provided in these Bylaws.
 
    3.3  ELECTION AND TERM OF OFFICE OF DIRECTORS.  Except as provided in
Section 3.4 of these Bylaws, directors shall be elected at each annual meeting
of stockholders to hold office until the next annual meeting. Each director,
including a director elected or appointed to fill a vacancy, shall hold office
until the expiration of the term for which elected and until a successor has
been elected and qualified. Directors need not be stockholders unless so
required by the Certificate of Incorporation or by these Bylaws.
 
    3.4  RESIGNATION AND VACANCIES.  Any director may resign on giving written
notice to the president, the chairman, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective.
 
    Unless otherwise provided in the Certificate of Incorporation or by these
Bylaws, vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director. Each director so elected shall hold office until the next annual
meeting of the
 
                                      C-6

<PAGE>
stockholders and until a successor has been elected and qualified. Unless
otherwise provided in the Certificate of Incorporation or these Bylaws:
 
        (i) Vacancies and newly created directorships resulting from any
    increase in the authorized number of directors may be filled by a majority
    of the directors then in office, although less than a quorum, or by a sole
    remaining director.
 
        (ii) Whenever the holders of any class or classes of stock or series
    thereof are entitled to elect one or more directors by the provisions of the
    Certificate of Incorporation, vacancies and newly created directorships of
    such class or classes or series may be filled by a majority of the directors
    elected by such class or classes or series thereof then in office, or by a
    sole remaining director so elected.
 
    If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the Certificate of Incorporation or these Bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
 
    3.5  REMOVAL.  Unless otherwise restricted by statute, by the Certificate of
Incorporation or by these Bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors.
 
    3.6  PLACE OF MEETINGS; MEETINGS BY TELEPHONE.  Regular meetings of the
board of directors may be held at any place within or outside the State of
Delaware that has been designated from time to time by resolution of the board
of directors. In the absence of such a designation, regular meetings shall be
held at the principal executive office of the corporation. Special meetings of
the board of directors may be held at any place within or outside the State of
Delaware that has been designated in the notice of the meeting or, if not stated
in the notice or if there is no notice, at the principal executive office of the
corporation.
 
    Any meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors participating in the
meeting can hear one another; and all such directors shall be deemed to be
present in person at the meeting.
 
    3.7  REGULAR MEETINGS.  Regular meetings of the board of directors may be
held without notice if the times of such meetings are fixed by the board of
directors.
 
    3.8  SPECIAL MEETINGS; NOTICE.  Special meetings of the board of directors
for any purpose or purposes may be called at any time by the president, the
chairman, the secretary or by any two (2) or more of the directors.
 
    Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by mail, telecopy, telegram
or other electronic or wireless means, charges prepaid, addressed to each
director at that director's address as it is shown on the records of the
corporation or if the address is not readily ascertainable, notice shall be
addressed to the director at the city or place in which the meetings of
directors are regularly held. If the notice is mailed, it shall be deposited in
the United States mail at least three (3) days before the time of the holding of
the meeting. If the notice is delivered personally or by telephone, telecopy,
telegram or other electronic or wireless means, it shall be delivered personally
or by telephone or other electronic or wireless means at least twenty-four
(24) hours before the time of the holding of the meeting. Any oral notice given
personally or by telephone may be communicated either to the director or to a
person at the office of the director who the person giving the notice has reason
to believe will promptly communicate it to the director. A notice of special
meeting need not state the purpose of such meeting, and, unless indicated in the
notice thereof, any and all business may be transacted at a special meeting.
 
                                      C-7

<PAGE>
    3.9  QUORUM.  A majority of the authorized number of directors shall
constitute a quorum for the transaction of business, except to fill vacancies in
the board of directors as provided in Section 3.4 and to adjourn as provided in
Section 3.11 of these Bylaws. Every act or decision done or made by a majority
of the directors present at a duly held meeting at which a quorum is present
shall be regarded as the act of the board of directors, subject to the
provisions of the Certificate of Incorporation and applicable law.
 
    A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for that meeting.
 
    3.10  WAIVER OF NOTICE.  Notice of a meeting need not be given to any
director (i) who signs a waiver of notice or a consent to holding the meeting or
an approval of the minutes thereof, whether before or after the meeting, or
(ii) who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such directors. The transactions of any
meeting of the board, however called and noticed or wherever held, are as valid
as though had at a meeting duly held after regular call and notice if a quorum
is present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice. All such waivers shall be filed with
the corporate records or made part of the minutes of the meeting. A waiver of
notice need not specify the purpose of any regular or special meeting of the
board of directors.
 
    3.11  ADJOURNMENT.  A majority of the directors present, whether or not
constituting a quorum, may adjourn any meeting to another time and place.
 
    3.12  NOTICE OF ADJOURNMENT.  Notice of the time and place of holding an
adjourned meeting need not be given if announced unless the meeting is adjourned
for more than twenty-four (24) hours. If the meeting is adjourned for more than
twenty-four (24) hours, then notice of the time and place of the adjourned
meeting shall be given.
 
    3.13  BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.  Any action
required or permitted to be taken by the board of directors may be taken without
a meeting, provided that all members of the board of directors individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof shall be filed with
the minutes of the proceedings of the board.
 
    3.14  ORGANIZATION.  Meetings of the board of directors shall be presided
over by the president, the chairman, or, in his or her absence, by a president
pro tem chosen by a majority of the directors present. The secretary shall act
as secretary of the meeting, but in his or her absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.
 
    3.15  FEES AND COMPENSATION OF DIRECTORS.  Directors and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
board of directors. This Section 3.15 shall not be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee or otherwise and receiving compensation for those services.
 
                                   ARTICLE IV
                                   COMMITTEES
 
    4.1  COMMITTEES OF DIRECTORS.  The board of directors may designate one
(1) or more committees, each consisting of two or more directors, to serve at
the pleasure of the board of directors. The board of directors may designate one
(1) or more directors as alternate members of any committee, who may replace any
absent member at any meeting of the committee. The purposes and authority of any
committee shall be as provided in the resolution of the board, but no such
committee shall have power or
 
                                      C-8

<PAGE>
authority by itself to (i) approve or adopt or recommend to the stockholders any
action or matter that requires the approval of the stockholders or (ii) adopt,
amend or repeal any Bylaw of the corporation.
 
    4.2  MEETINGS AND ACTION OF COMMITTEES.  To the extent feasible, meetings
and actions of committees shall be governed by, and held and taken in accordance
with, the provisions of Article III of these Bylaws, Section 3.6 (place of
meetings), Section 3.7 (regular meetings), Section 3.8 (special meetings and
notice), Section 3.9 (quorum), Section 3.10 (waiver of notice), Section 3.11
(adjournment), Section 3.12 (notice of adjournment), and Section 3.13 (action
without meeting), with such changes in the context of those Bylaws as are
necessary to substitute the committee and its members for the board of directors
and its members, provided, however, that the board of directors may adopt rules
for the government of any committee not inconsistent with the provisions of
these Bylaws.
 
                                   ARTICLE V
                                    OFFICERS
 
    5.1  OFFICERS.  The officers of this corporation shall consist of a
president, a chairman, a chief scientific officer, one or more vice presidents,
a secretary, a treasurer, and such other officers as may be determined from time
to time by the board of directors, all of whom shall be chosen in such manner
and hold their offices for such terms as the board of directors may prescribe.
Any two or more of such offices may be held by the same person. The board of
directors may designate one or more vice presidents as executive vice presidents
or senior vice presidents. The board of directors may from time to time
designate the president or any other officer as the chief operating officer of
the corporation.
 
    5.2  TERMS OF OFFICE AND COMPENSATION.  The term of office and salary of
each of said officers and the manner and time of the payment of such salaries
shall be fixed and determined by the board of directors and may be altered by
said board from time to time at its pleasure, subject to the rights, if any, of
said officers under any contract of employment.
 
    5.3  REMOVAL; RESIGNATION OF OFFICERS AND VACANCIES.  Any officer of the
corporation may be removed at the pleasure of the board of directors at any
meeting or by vote of stockholders entitled to exercise the majority of voting
power of the corporation at any meeting or at the pleasure of any officer who
may be granted such power by a resolution of the board of directors. Any officer
may resign at any time upon written notice to the corporation without prejudice
to the rights, if any, of the corporation under any contract to which the
officer is a party. If any vacancy occurs in any office of the corporation, the
board of directors may elect a successor to fill such vacancy for the remainder
of the unexpired term and until a successor is duly chosen and qualified.
 
    5.4  PRESIDENT.  The president shall be the chief executive officer of the
corporation and shall have general direction of the affairs of the corporation
and general supervision over its several officers, subject, however, to the
control of the board of the board of directors. The president shall at each
annual meeting and from time to time report to the stockholders and the board of
directors all matters within his knowledge which the interest of the corporation
may require to be brought to their notice, may sign with the treasurer or an
assistant treasurer, if any, or the secretary or an assistant secretary, if any,
any or all certificates of stock of the corporation. The president shall preside
at all meetings of the stockholders and at all meetings of the board of
directors, may sign and execute in the name of the corporation all contracts or
other instruments authorized by the board of directors, except in cases where
the signing and execution thereof shall be expressly delegated or permitted by
the board of directors or by these Bylaws to some other officer or agent of the
corporation, and in general shall perform such duties and, subject to the other
provisions of these Bylaws and to the control of the board of directors, have
such powers incident to the office of president and perform such other duties
and have such other powers as from time to time may be assigned to him by the
board of directors.
 
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<PAGE>
    5.5  CHAIRMAN OF THE BOARD.  The chairman shall be a senior executive
officer of the corporation and shall exercise and perform such powers and duties
as may from time to time be assigned to him by the board of directors or as may
be prescribed by these Bylaws. The chairman shall report to the board of
directors.
 
    5.6  UNAVAILABILITY OF PRESIDENT.  In case of the absence, disability or
death of the president, the chairman or, if he is not available, a vice
president, shall exercise all the powers and perform all the duties of the
president. If there is more than one elected vice president, the order in which
the elected vice presidents shall succeed to the powers and duties of the
president shall be as fixed by the board of directors.
 
    5.7  SECRETARY.  The powers and duties of the secretary are:
 
        (a) To keep a book of minutes at the principal office of the
    corporation, or such other place as the board of directors may order, of all
    meetings of its directors and stockholders with the time and place of
    holding, whether regular or special, and, if special, how authorized, the
    notice thereof given, the names of those present at directors' meetings, the
    number of shares present or represented at stockholders' meetings and the
    proceedings thereof.
 
        (b) To keep the seal of the corporation and affix the same to all
    instruments which may require it.
 
        (c) To keep or cause to be kept at the principal office of the
    corporation, or at the office of the transfer agent or agents, a share
    register, or duplicate share registers, showing the names of the
    stockholders and their addresses, the number of and classes of shares, and
    the number and date of cancellation of every certificate surrendered for
    cancellation.
 
        (d) To keep a supply of certificates for shares of the corporation, to
    fill in all certificates issued, and to make a proper record of each such
    issuance; provided, that so long as the corporation shall have one or more
    duly appointed and acting transfer agents of the shares, or any class or
    series of shares, of the corporation, such duties with respect to such
    shares shall be performed by such transfer agent or transfer agents.
 
        (e) To transfer upon the share books of the corporation any and all
    shares of the corporation; provided, that so long as the corporation shall
    have one or more duly appointed and acting transfer agents of the shares, or
    any class or series of shares, of the corporation, such duties with respect
    to such shares shall be performed by such transfer agent or transfer agents,
    and the method of transfer of each certificate shall be subject to the
    reasonable regulations of the transfer agent to which the certificate is
    presented for transfer, and also, if the corporation then has one or more
    duly appointed and acting registrars, to the reasonable regulations of the
    registrar to which the new certificate is presented for registration; and
    provided, further that no certificate for shares of stock shall be issued or
    delivered or, if issued or delivered, shall have any validity whatsoever
    until and unless it has been signed or authenticated in the manner provided
    in Section 8.5 hereof.
 
        (f) To make service and publication of all notices that may be necessary
    or proper, and without command or direction from anyone. In case of the
    absence, disability, refusal, or neglect of the secretary to make service or
    publication of any notices, then such notices may be served and/or published
    by the president or a vice president, or by any person thereunto authorized
    by either of them or by the board of directors or by the holders of a
    majority of the outstanding shares of the corporation.
 
        (g) Generally to do and perform all such duties as pertain to the office
    of secretary and as may be required by the board of directors.
 
                                      C-10

<PAGE>
                                   ARTICLE VI
                         INDEMNIFICATION OF DIRECTORS,
                      OFFICERS, EMPLOYEES AND OTHER AGENTS
 
    6.1  INDEMNIFICATION OF DIRECTORS AND OFFICERS.  The corporation shall, to
the maximum extent and in the manner permitted by the General Corporation Law of
Delaware, indemnify each of its directors and officers against expenses
(including attorneys' fees), judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation;
provided, however, that the corporation may modify the extent of such
indemnification by individual contracts with its directors and executive
officers and, provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized in advance by the
board of directors of the corporation, (iii) such indemnification is provided by
the corporation, in its sole discretion, pursuant to the powers vested in the
corporation under the General Corporation Law of Delaware or (iv) such
indemnification is required to be made pursuant to an individual contract. For
purposes of this Section 6.1, a "director" or "officer" of the corporation
includes any person (i) who is or was a director or officer of the corporation,
(ii) who is or was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, or (iii) who was a director or officer of a corporation which was a
predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation.
 
    6.2  INDEMNIFICATION OF OTHERS.  The corporation shall have the power, to
the maximum extent and in the manner permitted by the General Corporation Law of
Delaware, to indemnify each of its employees and agents (other than directors
and officers) against expenses (including attorneys' fees), judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the corporation. For purposes of this Section 6.2, an "employee" or
"agent" of the corporation (other than a director or officer) includes any
person (i) who is or was an employee or agent of the corporation, (ii) who is or
was serving at the request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or
(iii) who was an employee or agent of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.
 
    6.3  INSURANCE.  The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the corporation would have the power to
indemnify him or her against such liability under the provisions of the General
Corporation Law of Delaware.
 
    6.4  EXPENSES.  The corporation shall advance to any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, prior to the final disposition of the
proceeding, promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding, upon receipt of an
undertaking by or on behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be indemnified under
this Bylaw or otherwise; provided, however, that the corporation shall not be
required to advance expenses to any director or officer in connection with any
proceeding (or part thereof) initiated by such person unless the proceeding was
authorized in advance by the board of directors of the corporation.
 
                                      C-11

<PAGE>
    Notwithstanding the foregoing, unless otherwise determined pursuant to
Section 6.5, no advance shall be made by the corporation to an officer of the
corporation (except by reason of the fact that such officer is or was a director
of the corporation in which event this paragraph shall not apply) in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, if
a determination is reasonably and promptly made (i) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
 
    6.5  NON-EXCLUSIVITY OF RIGHTS.  The rights conferred on any person by this
Bylaw shall not be exclusive of any other right which such person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, to the
fullest extent not prohibited by the General Corporation Law of Delaware.
 
    6.6  SURVIVAL OF RIGHTS.  The rights conferred on any person by this Bylaw
shall continue as to a person who has ceased to be a director, officer, employee
or other agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
 
    6.7  AMENDMENTS.  Any repeal or modification of this Bylaw shall only be
prospective and shall not affect the rights under this Bylaw in effect at the
time of the alleged occurrence of any action or omission to act that is the
cause of any proceeding against any agent of the corporation.
 
                                  ARTICLE VII
                              RECORDS AND REPORTS
 
    7.1  MAINTENANCE AND INSPECTION OF RECORDS.  The corporation shall, either
at its principal executive office or at such place or places as designated by
the board of directors, keep a record of its stockholders listing their names
and addresses and the number and class of shares held by each stockholder, a
copy of these Bylaws as amended to date, accounting books and other records.
 
    Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
 
    7.2  INSPECTION BY DIRECTOR.  Any director shall have the right to examine
the corporation's stock ledger, a list of its stockholders and its other books
and records for a purpose reasonably related to his or her position as a
director. The Court of Chancery is hereby vested with the exclusive jurisdiction
to determine whether a director is entitled to the inspection sought. The Court
may summarily order the corporation to permit the director to inspect any and
all books and records, the stock ledger, and the stock list and to make copies
or extracts therefrom. The Court may, in its discretion, prescribe any
limitations or conditions with reference to the inspection, or award such other
and further relief as the Court may deem just and proper.
 
                                      C-12

<PAGE>
                                  ARTICLE VIII
                                GENERAL MATTERS
 
    8.1  RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.  For purposes of
determining the stockholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any other lawful action, the board of
directors may fix, in advance, a record date, which shall not be more than sixty
(60) days before any such action. In that case, only stockholders of record at
the close of business on the date so fixed are entitled to receive the dividend,
distribution or allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date so fixed, except as otherwise provided in the Certificate
of Incorporation, by these Bylaws, by agreement or by law.
 
    If the board of directors does not so fix a record date, then the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
 
    8.2  CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS.  From time to time, the
board of directors shall determine by resolution which person or persons may
sign or endorse all checks, drafts, other orders for payment of money, notes or
other evidences of indebtedness that are issued in the name of or payable to the
corporation, and only the persons so authorized shall sign or endorse those
instruments.
 
    8.3  CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED.  The board of
directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, or agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the corporation; such authority
may be general or confined to specific instances. Unless so authorized or
ratified by the board of directors or within the agency power of an officer, no
officer, agent or employee shall have any power or authority to bind the
corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
 
    8.4  FISCAL YEAR.  The fiscal year of this corporation shall begin on the
first day of October of each year and end on the last day of September of the
following year.
 
    8.5  STOCK CERTIFICATES.  There shall be issued to each holder of fully paid
shares of the capital stock of the corporation a certificate or certificates for
such shares. Every holder of shares of the corporation shall be entitled to have
a certificate signed by, or in the name of the corporation by the president or
the chairman or the president or a vice president, and by the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate has ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
 
    8.6  SPECIAL DESIGNATION ON CERTIFICATES.  If the corporation is authorized
to issue more than one class of stock or more than one series of any class, then
the powers, the designations, the preferences, and the relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights shall be set forth in full or summarized on the face or back of the
certificate that the corporation shall issue to represent such class or series
of stock; provided, however, that, except as otherwise provided in Section 202
of the General Corporation Law of Delaware, in lieu of the foregoing
requirements there may be set forth on the face or back of the certificate that
the corporation shall issue to represent such class or series of stock a
statement that the corporation will furnish without charge to each stockholder
who so requests the powers,
 
                                      C-13

<PAGE>
the designations, the preferences, and the relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
 
    8.7  LOST CERTIFICATES.  The corporation may issue a new share certificate
or new certificate for any other security in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or destroyed, and
the corporation may require the owner of the lost, stolen or destroyed
certificate or the owner's legal representative to give the corporation a bond
(or other adequate security) sufficient to indemnify it against any claim that
may be made against it (including any expense or liability) on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate. The board of directors may adopt such other provisions and
restrictions with reference to lost certificates, not inconsistent with
applicable law, as it shall in its discretion deem appropriate.
 
    8.8  CONSTRUCTION; DEFINITIONS.  Unless the context requires otherwise, the
general provisions, rules of construction, and definitions in the General
Corporation Law of Delaware shall govern the construction of these Bylaws.
Without limiting the generality of this provision, the singular number includes
the plural, the plural number includes the singular, and the term "person"
includes both a corporation and a natural person.
 
    8.9  PROVISIONS ADDITIONAL TO PROVISIONS OF LAW.  All restrictions,
limitations, requirements and other provisions of these Bylaws shall be
construed, insofar as possible, as supplemental and additional to all provisions
of law applicable to the subject matter thereof and shall be fully complied with
in addition to the said provisions of law unless such compliance shall be
illegal.
 
    8.10  PROVISIONS CONTRARY TO PROVISIONS OF LAW.  Any article, section,
subsection, subdivision, sentence, clause or phrase of these Bylaws which upon
being construed in the manner provided in Section 8.9 hereof, shall be contrary
to or inconsistent with any applicable provisions of law, shall not apply so
long as said provisions of law shall remain in effect, but such result shall not
affect the validity or applicability of any other portions of these Bylaws, it
being hereby declared that these Bylaws would have been adopted and each
article, section, subsection, subdivision, sentence, clause or phrase thereof,
irrespective of the fact that any one or more articles, sections, subsections,
subdivisions, sentences, clauses or phrases is or are illegal.
 
    8.11  NOTICES.  Any reference in these Bylaws to the time a notice is given
or sent means, unless otherwise expressly provided, the time a written notice by
mail is deposited in the United States mails, postage prepaid; or the time any
other written notice is personally delivered to the recipient or is delivered to
a common carrier for transmission, or actually transmitted by the person giving
the notice by electronic means, to the recipient; or the time any oral notice is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient who the person giving the notice has
reason to believe will promptly communicate it to the recipient.
 
                                   ARTICLE IX
                                   AMENDMENTS
 
    Subject to Section 6.7 hereof, the original or other bylaws of the
corporation may be adopted, amended or repealed by the stockholders entitled to
vote; provided, however, that the corporation may, in its certificate of
incorporation, confer the power to adopt, amend or repeal bylaws upon the
directors. The fact that such power has been so conferred upon the directors
shall not divest the stockholders of the power, nor limit their power to adopt,
amend or repeal bylaws.
 
    Whenever an amendment or new bylaw is adopted, it shall be copied in the
book of bylaws with the original bylaws, in the appropriate place. If any bylaw
is repealed, the fact of repeal with the date of the meeting at which the repeal
was enacted or the filing of the operative written consent(s) shall be stated in
said book.
 
                                      C-14

<PAGE>

              * Please Detach and Mail in the Envelope Provided *
--------------------------------------------------------------------------------

                              CELSION CORPORATION
                            (A MARYLAND CORPORATION)
                           10220-I OLD COLUMBIA ROAD
                               COLUMBIA, MD 21046

                                     PROXY
                       FOR ANNUAL MEETING OF STOCKHOLDERS
                       TO BE HELD ON FRIDAY, MAY 5, 2000

                   THIS PROXY IS BEING SOLICITED ON BEHALF OF
                 THE BOARD OF DIRECTORS OF CELSION CORPORATION


     The undersigned hereby appoints Spencer J. Volk and Augustine Y. Cheung as
Proxies, each with full powers to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of Celsion Corporation held of record by the undersigned on __________,
2000, at the Annual Meeting of Stockholders to be held on ______, May __, 2000
or at any adjournment or adjournments thereof.

             (Continued, and to be dated and signed on other side)
      

<PAGE>


<TABLE>
<S>                                                                  <C>
                                        * Please Detach and Mail in the Envelope Provided *
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                                   |
 -----                          --                                                                                 |
|     |  Please mark your      |                                                                                   |
|  X  |  votes as indicated                                                                                         -----
|     |  in this example
 -----









       
       
       
                                      
                                               FOR all      Vote     
                                               nominees    WITHHELD 
                                    FOR all     listed     for all 
PROPOSAL(S)                         nominees  the except    nominees 
                                     listed   following     listed                                       FOR    ABSTAIN   AGAINST
(1) To elect a Board of seven        ------     ------      ------   (2) To ratify the selection of      ------   ------   ------ 
    Directors, to hold office        |    |     |    |      |    |       Stegman & Company as the        |    |   |    |   |    | 
    until the next annual meeting    |    |     |    |      |    |       independent public accountants  |    |   |    |   |    | 
    and until their respective       ------     ------      ------       of the Company for the fiscal   ------   ------   ------ 
    successors shall have been                                            year ending September 30, 2000.                       
    elected and shall have                                                                                
    qualified;                                                        (3) To change the Company's state   ------   ------   ------
                                                                          of incorporation from Maryland  |    |   |    |   |    |
01-S.J. Volk, 02-A.Y. Cheung,                                             to Delaware in accordance with  |    |   |    |   |    |
03-M.E. Link, 04-L.D. Lefall, Jr.,                                        the terms and conditions set    ------   ------   ------
05-C. Tihon, 06-J. Mon, 07-W.B. Herbst                                    forth in the Proxy Statement;   
                                                                                                          
                                                                      (4) In their discretion, on all     ------   ------   ------
Instructions: To withhold authority to                                    other business as may properly  |    |   |    |   |    |
vote for any individual nominee(s), write                                 come before the Meeting or any  |    |   |    |   |    |
the name(s) of such nominee(s) on the line below                          adjournment or adjournments     ------   ------   ------
                                                                          thereof.                        

    ______________________________________                             


                                                                                  THIS PROXY WILL BE VOTED AS SPECIFIED.           
                                                                      IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE
                                                                          ADOPTION OF PROPOSALS 1, 2, 3 AND 4, AS SAID PROXIES,    
                                                                                     AND EACH OF THEM, MAY DETERMINE.              
                                         

                                                                                      MAY __, 2000 ANNUAL STOCKHOLDERS MEETING     
                                                                                                 CELSION CORPORATION               
                                                                                                                                   
______________________________  ______________________________ Date: ____, 2000   PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY
Signature(s) of Stockholder(s)  Signature(s) of Stockholder(s)                   PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
Please sign exactly as name appears above. When shares are held by joint                                                           
tenants, both should sign. When signing as attorney, executor, administrator,        AS AN ALTERNATIVE TO COMPLETING THIS FORM,    
trustee or guardian, please give full title as such. If a corporation, please    YOU MAY ENTER YOUR VOTE INSTRUCTIONS BY TELEPHONE.
sign in full corporate name by President or other authorized officer. If a                 CALL TOLL-FREE 1-800-___-____   
partnership, please sign in partnership name by authorized per-                         AND FOLLOW THE RECORDED INSTRUCTIONS.
</TABLE>