<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GELTEX PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
Filing Fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
<PAGE> 2
GELTEX PHARMACEUTICALS, INC.
303 BEAR HILL ROAD
WALTHAM, MASSACHUSETTS 02154
(617) 290-5888
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 1997
Notice is hereby given that the 1997 annual meeting of stockholders of
GelTex Pharmaceuticals, Inc., a Delaware corporation (the "Company"), will be
held on Thursday, May 22, 1997, at 9:00 a.m. at the Westin Hotel, 70 Third
Avenue, Waltham, Massachusetts, to consider and act upon the following matters:
1. To elect three (3) members of the Board of Directors;
2. To approve an amendment to the Company's 1992 Equity Incentive Plan
to increase the aggregate number of shares of the Company's common
stock as to which awards may be granted under such plan by 275,000
shares;
3. To approve an amendment to the Company's 1995 Director Stock Option
Plan to increase the aggregate number of shares of the Company's
common stock as to which options may be granted under such plan by
35,000 shares; and
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 3, 1997 will
be entitled to vote at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE YOUR PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY
WILL NOT BE USED.
By order of the Board of Directors,
ELIZABETH A. GRAMMER
Secretary
Waltham, Massachusetts
April 23, 1997
<PAGE> 3
GELTEX PHARMACEUTICALS, INC.
303 BEAR HILL ROAD
WALTHAM, MASSACHUSETTS 02154
(617) 290-5888
-------------------------------
PROXY STATEMENT
-------------------------------
GENERAL INFORMATION
This Proxy Statement, with the enclosed proxy card, is being furnished on
behalf of the Board of Directors of GelTex Pharmaceuticals, Inc. (the "Company")
for use at the Company's 1997 Annual Meeting of Stockholders to be held on
Thursday, May 22, 1997, at 9:00 a.m. at the Westin Hotel, 70 Third Avenue,
Waltham, Massachusetts, and at any adjournments thereof (the "Meeting").
When the proxy card of a stockholder is duly executed and returned, the
shares represented thereby will be voted in accordance with the voting
instructions given on the proxy by the stockholder. If no such voting
instructions are given on a proxy card with respect to one or more proposals,
the shares represented by that proxy card will be voted, with respect to the
election of directors, for the nominees named herein, and with respect to other
proposals, in accordance with the recommendations of the Board. Stockholders may
revoke their proxies at any time prior to any vote at the Meeting by written
notice of revocation to the Secretary of the Company at or before the Meeting,
by submission of a duly executed proxy card bearing a later date or by voting in
person by ballot at the Meeting.
This Proxy Statement and the enclosed proxy card are first being mailed or
otherwise furnished to all stockholders of the Company entitled to notice of and
to vote at the Meeting on or about April 23, 1997.
VOTING SECURITIES AND VOTES REQUIRED
Holders of the Company's common stock, $0.01 par value per share ("Common
Stock"), of record on the books of the Company at the close of business on April
3, 1997 (the "Record Date") are entitled to notice of and to vote at the
Meeting. On the Record Date, there were 13,538,002 shares of Common Stock issued
and outstanding, each of which entitles the holder to one vote on each matter
submitted to a vote at the Meeting.
The presence, in person or by proxy, of the holders of a majority of the
Company's Common Stock entitled to vote at the Meeting is necessary to
constitute a quorum at the Meeting. Pursuant to the Delaware General Corporation
Law and the Company's Restated Certificate of Incorporation and Amended and
Restated By-laws (the "By-laws"), the directors are elected by a plurality of
the votes properly cast at the Meeting. Abstentions, votes withheld and broker
non-votes will not be treated as votes cast for this purpose and will not affect
the outcome of the election. A "broker non-vote" occurs when a registered broker
holding a customer's shares in the name of the broker has not received voting
instructions on a matter from the customer, is barred by applicable rules from
exercising discretionary authority to vote on the matter and so indicates on the
proxy.
The affirmative vote of the holders of a majority of the shares of Common
Stock present, or represented, and entitled to vote is required to approve the
proposed amendments to the 1992 Equity Incentive Plan (the "Equity Plan") and
the 1995 Director Stock Option Plan (the "Director Plan"). Broker non-votes will
not be counted as present, or represented, and entitled to vote for these
purposes and, therefore, will not affect the outcome of the voting on these
proposals. Abstentions will be counted as present, or represented, and entitled
to vote and, accordingly, will have the effect of negative votes.
<PAGE> 4
SHARE OWNERSHIP
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of April 3, 1997 by (i) each person known by
the Company to own beneficially 5% or more of the Common Stock, (ii) each Named
Executive Officer (as defined in "Executive Compensation" below), (iii) each
director or nominee for director of the Company and (iv) all directors, nominees
for director and executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY OWNED(1)
---------------------
BENEFICIAL OWNER SHARES PERCENT
- ----------------------------------------------------------- --------- -------
<S> <C> <C>
The Equitable Companies Incorporated(2).................... 2,218,780 16.4%
787 Seventh Avenue
New York, New York 10019
Domain Partners II, L.P.(3)................................ 1,085,953 8.0%
c/o Domain Associates
One Palmer Square, Suite 515
Princeton, New Jersey 08542
West Highland Capital, Inc.(4)............................. 1,000,000 7.4%
300 Drake's Landing Road
Suite 290
Greenbrae, California 94904
Abingworth Bioventures SICAV(5)............................ 793,082 5.9%
231 Val des Bons Malades
Kirchberg 2121
Luxembourg
Norwest Equity Partners IV Limited Partnership(6).......... 729,000 5.4%
2800 Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
Mark Skaletsky(7).......................................... 248,125 1.8%
W. Harry Mandeville, Ph.D.(8).............................. 106,462 *
Dennis Goldberg, Ph.D.(9).................................. 91,562 *
Joseph Tyler(10)........................................... 61,562 *
Jesse Treu, Ph.D.(11)...................................... 1,089,953 8.0%
Ernest Parizeau(12)........................................ 742,077 5.5%
Robert Carpenter(13)....................................... 223,667 1.7%
George Whitesides, Ph.D.(14)............................... 134,000 *
Henri Termeer(15).......................................... 110,505 *
Barbara A. Piette(16)...................................... 4,000 *
J. Richard Crout........................................... 0 --
All directors, nominees for director and executive
officers as a group (11 persons)(17)..................... 2,811,913 20.4%
- ---------------
* Indicates less than 1%.
</TABLE>
(1) Unless otherwise indicated in these footnotes, each stockholder has sole
voting and investment power with respect to the shares listed in the table.
Share ownership information includes shares of Common Stock issuable
pursuant to outstanding options that may be exercised within the 60-day
period following April 3, 1997.
(2) Includes shares held by The Equitable Life Assurance Society of the United
States ("ELAS") and Alliance Capital Management L.P. ("ACM"). ELAS and ACM
are subsidiaries of The Equitable Companies Incorporated. This information
is based on a Schedule 13G dated February 6, 1997 filed with the Securities
and Exchange Commission for the aforementioned entities.
2
<PAGE> 5
(3) One Palmer Square Associates II, L.P. is the General Partner of Domain
Partners II, L.P. James Blair, Brian Dovey, Richard Schneider and Jesse
Treu are the General Partners of One Palmer Square Associates II, L.P. and
share voting and investment control over the shares held by Domain Partners
II, L.P.
(4) Includes shares held by West Highland Capital, Inc. ("WHC"), Estero
Partners, LLC ("EP"), West Highland Partners, L.P. ("WHP") and Buttonwood
Partners, L.P. ("BP"). Lang H. Gerhard is the sole director and executive
officer of WHC and the sole manger of EP. WHC, EP and Mr. Gerhard are the
general partners of WHP and BP, which are investment limited partnerships,
and have voting and dispositive authority over shares held by WHP and BP.
WHC has voting and dispositive authority over shares held by its various
investment advisory clients. This information is based on a Schedule 13D
dated January 9, 1997 filed with the Securities and Exchange Commission for
the aforementioned entities and person.
(5) This information is based on a Schedule 13G dated February 8, 1996 filed
with the Securities and Exchange Commission.
(6) Itasca Partners is the General Partner of Norwest Equity Partners IV
Limited Partnership. Robert F. Zicarelli and Daniel J. Haggerty are the
managing partners of Itasca Partners and share voting and investment
control over the shares held by Norwest Equity Partners IV Limited
Partnership.
(7) Includes 163,125 shares subject to options exercisable within the 60-day
period following April 3, 1997. Of such shares, 83,250 shares are unvested
and would be subject to repurchase by the Company if Mr. Skaletsky's
employment terminated before such shares are vested. Also includes 10,000
shares held by Mr. Skaletsky's wife and 6,000 shares held by Mr.
Skaletsky's children. Mr. Skaletsky disclaims beneficial ownership of the
shares held by his wife and children.
(8) Includes 12,780 shares subject to a right of repurchase granted to the
Company, which will terminate as such shares vest. Also includes 26,562
shares subject to options exercisable by Dr. Mandeville within the 60-day
period following April 3, 1997. Of such shares, 16,584 shares are unvested
and would be subject to repurchase by the Company if Dr. Mandeville's
employment terminated before such shares are vested. Also includes 3,600
shares held by Dr. Mandeville's children. Dr. Mandeville disclaims
beneficial ownership of the shares held by his children.
(9) Includes 26,250 shares subject to a right of repurchase granted to the
Company, which will terminate as such shares vest. Also includes 16,562
shares subject to options exercisable by Dr. Goldberg within the 60-day
period following April 3, 1997. Of such shares, 10,750 shares are unvested
and would be subject to repurchase by the Company if Dr. Goldberg's
employment terminated before such shares are vested.
(10) Includes 10,834 shares subject to a right of repurchase granted to the
Company, which will terminate as such shares vest. Also includes 31,562
shares subject to options exercisable by Mr. Tyler within the 60-day period
following April 3, 1997. Of such shares, 20,000 shares are unvested and
would be subject to repurchase by the Company if Mr. Tyler's employment
terminated before such shares are vested.
(11) Consists of 1,085,953 shares held by Domain Partners II, L.P. and 4,000
shares subject to options exercisable by Dr. Treu within the 60-day period
following April 3, 1997. Dr. Treu is a General Partner of One Palmer Square
Associates II, L.P., which is the General Partner of Domain Partners II,
L.P. Dr. Treu shares voting and investment power with respect to such
shares and may be deemed to be the beneficial owner of such shares.
(12) Includes of 729,000 shares held by Norwest Equity Partners IV Limited
Partnership and 4,000 shares subject to options exercisable by Mr. Parizeau
within the 60-day period following April 3, 1997. Mr. Parizeau is a Partner
of Itasca Partners, the General Partner of Norwest Equity Partners IV
Limited Partnership. Mr. Parizeau disclaims beneficial ownership of shares
held by Norwest Equity Partners IV Limited Partnership except to the extent
of his pecuniary interest therein.
(13) Includes 4,000 shares subject to options exercisable by Mr. Carpenter
within the 60-day period following April 3, 1997.
(14) Includes 4,000 shares subject to options exercisable by Dr. Whitesides
within the 60-day period following April 3, 1997.
3
<PAGE> 6
(15) Includes 4,000 shares subject to options exercisable by Mr. Termeer within
the 60-day period following April 3, 1997.
(16) Consists of shares subject to options exercisable by Ms. Piette within the
60-day period following April 3, 1997.
(17) See footnotes (7)-(16) above.
PROPOSAL 1:
ELECTION OF DIRECTORS
In accordance with Section 2 of Article II of the By-laws, the Board has
fixed the number of directors to constitute the full Board at six for the coming
year. Article SIXTH of the Company's Restated Certificate of Incorporation
provides that the directors are to be divided into three classes, which are to
be as nearly equal in number as the then total number of directors constituting
the entire Board permits. At the Meeting, one Class II director will be elected
to hold office for one year and two Class III directors will be elected to hold
office for three years, each until their respective successors are duly elected
and qualified. The Board has nominated Henri Termeer for election for a term of
office expiring in 1998. The Board has nominated Richard Crout and Mark
Skaletsky for election for a term of office expiring in 2000. Messrs. Termeer
and Skaletsky, who were elected as Class III and Class I directors,
respectively, at the 1996 annual meeting of stockholders, have been nominated
for election at the Meeting as Class II and Class III directors, respectively,
in order to have an equal number of directors in each class as required by
Article SIXTH. Each of the nominees except Dr. Crout is currently a director of
the Company, and each of the nominees has consented to be nominated and to serve
if elected. In the event any of these nominees is unable to serve as a director,
the shares represented by the proxy will be voted for the person, if any, who is
designated by the Board to replace the nominee. In the event that a vacancy
occurs during the year, such vacancy may be filled by the Board for the
remainder of the full term.
The following table contains certain information about the nominees for
election to the Board and the continuing directors.
<TABLE>
<CAPTION>
PRESENT
DIRECTOR TERM
NAME AND AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE EXPIRES
- ------------ ------------------------------------------- -------- -------
<S> <C> <C> <C>
NOMINEES FOR DIRECTORS:
CLASS II DIRECTOR
Henri Termeer#.............. Mr. Termeer joined Genzyme Corporation, a human 1992 1997
(age 51) health care company, in 1983 and holds the
positions of Chief Executive Officer, President
and Chairman. Prior to joining Genzyme, Mr.
Termeer held various management positions at
Baxter Travenol Laboratories, Inc., a
manufacturer of human health care products,
including Executive Vice President of Baxter's
Hyland Therapeutics Division. Mr. Termeer is
also Chairman of the Board of Genzyme
Transgenics Corporation. He is a director of
Abiomed, Inc., AutoImmune, Inc. and Diacrin Inc.
and a trustee of Hambrecht & Quist Healthcare
Investors and Hambrecht & Quist Life Sciences
Investors.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PRESENT
DIRECTOR TERM
NAME AND AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE EXPIRES
- ------------ ------------------------------------------- -------- -------
<S> <C> <C> <C>
CLASS III DIRECTORS
J. Richard Crout, M.D....... Dr. Crout has served as President of Crout N/A N/A
(age 67) Consulting, a firm providing consulting services
to the pharmaceutical and biotechnology
industries, since 1994. From 1984 to 1994, Dr.
Crout served as Vice President, Medical and
Scientific Affairs, of Boehringer Mannheim
Pharmaceuticals Corporation, a pharmaceutical
company. Prior to that, Dr. Crout served as
Associate Director for Medical Applications of
Research at the National Institutes of Health
from 1982 to 1984 and as Director, Bureau of
Drugs, U.S. Food and Drug Administration from
1973 to 1984.
Mark Skaletsky+............. Mr. Skaletsky joined the Company in May 1993 as 1993 1999
(age 48) President, Chief Executive Officer and a
director of the Company and he served as
Treasurer of the Company from August 1993 until
April 1997. Mr. Skaletsky previously served from
1988 to 1993 as Chairman and Chief Executive
Officer of Enzytech, Inc., a biotechnology
company, and President and Chief Operating
Officer of Biogen, Inc, a biotechnology company,
from 1983 to 1988. He is a director of Isis
Pharmaceuticals, Inc.
CONTINUING DIRECTORS:
CLASS I DIRECTORS
Robert Carpenter*+.......... Mr. Carpenter, a co-founder of the Company, is 1991 1999
(age 52) Chairman of the Board of the Company. He is
President and Chief Executive Officer of VacTex,
Inc., a privately held biotechnology company
which he co-founded in November 1995, and
President of Boston Medical Investors, Inc., an
investment firm. Mr. Carpenter served as
President and Chief Executive Officer of the
Company from 1991 to 1993. He served as an
Executive Vice President of Genzyme Corporation,
a human health care company, from 1989 to 1991,
and was Chief Executive Officer and Chairman of
the Board of IG Laboratories, Inc., a genetic
testing service company, from 1989 to 1991.
Prior to that, he was Chairman, President and
Chief Executive Officer of Integrated Genetics,
Inc., a biotechnology company, which he joined
as President in 1981. He is a director of
Genzyme Corporation.
George Whitesides, Ph.D.+... Dr. Whitesides was a co-founder of the Company. 1992 1999
(age 57) He has been affiliated with Harvard University
since 1982, where he is the Mallinckrodt
Professor of Chemistry. He has extensive
experience as a consultant in both research and
research management in the chemical,
pharmaceutical and related industries. Dr.
Whitesides is a director of Dexter Corporation
and Advanced Magnetics, Inc.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
PRESENT
DIRECTOR TERM
NAME AND AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS SINCE EXPIRES
- ------------ ------------------------------------------- -------- -------
<S> <C> <C> <C>
CLASS II DIRECTOR
Jesse Treu, Ph.D.*.......... Dr. Treu has been a General Partner of the 1993 1998
(age 50) venture capital management firm, Domain
Associates, since 1986. Dr. Treu is a director
of Lumisys, Inc. and Biosete Diagnostics, Inc.
- ---------------
* Member of the Compensation Committee.
+ Member of the Nominating Committee.
# Member of the Audit Committee.
</TABLE>
During the year ended December 31, 1996, the Board held six meetings. Each
of the directors attended at least 75% of the Board meetings and meetings of
committees of the Board of which he or she was a member except George
Whitesides, who attended 50% of the aggregate of such meetings.
The Audit Committee, which currently consists of Ernest Parizeau and Henri
Termeer, reviews with the Company's independent accountants the scope of the
annual audit, discusses the adequacy of internal accounting controls and
procedures, and performs general oversight with respect to the accounting
principles applied in the financial reporting of the Company. The Audit
Committee did not hold any meetings in 1996.
The Compensation Committee currently consists of Robert Carpenter, Barbara
A. Piette and Jesse Treu. The Compensation Committee's functions are to
recommend to the full Board the amount, character and method of payment of
compensation of all executive officers and certain other key employees and
consultants of the Company and to administer the Company's equity incentive,
stock option and stock purchase plans. The Compensation Committee held two
meetings in 1996.
The Nominating Committee currently consists of Robert Carpenter, Mark
Skaletsky and George Whitesides. The function of the Nominating Committee is to
recommend to the full Board individuals to serve on the Company's Board of
Directors. The Nominating Committee will consider persons nominated by
stockholders in accordance with the procedures set forth in the Company's
By-laws. See "Advance Notice Provisions for Stockholder Proposals and
Nominations." The Nominating Committee did not meet in 1996.
DIRECTOR COMPENSATION
Commencing with the first meeting of the Board of Directors following the
Meeting, all directors who are not employees of the Company, except Robert
Carpenter, will receive $1,000 for each meeting of the Board of Directors in
which they participate. Mr. Carpenter will continue to receive $24,000 per year
for his services as Chairman of the Board. None of the directors received cash
compensation for their services as directors in 1996 other than Mr. Carpenter.
All directors who are not employees of the Company (the "Eligible
Directors") are currently eligible to participate in the Director Plan. If the
proposed amendment to the Director Plan is adopted, the Director Plan will
provide for the automatic grant of options to purchase up to an aggregate of
110,000 shares of Common Stock at an exercise price equal to the fair market
value of the Company's Common Stock at the date of grant. Upon his or her
election or re-election at the Company's annual meeting of stockholders, each
Eligible Director will be granted options to purchase 4,000 shares of Common
Stock for each year of the term of office to which the director is elected
(normally 12,000 shares for election to a three year term of office). In
addition, upon the election of an Eligible Director other than at an annual
meeting of stockholders, such director will automatically be granted options to
purchase 4,000 shares of Common Stock for each year or portion thereof for the
term of office to which he or she is elected. The options have a term of ten
years and become exercisable with respect to 4,000 shares on each of the three
annual meetings of stockholders of the Company following the date of grant, so
long as the optionee is then a director of the Company.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The Compensation Committee Report set forth below describes the
compensation policies applicable to executive officers of the Company. The
following graph shows the cumulative stockholder return of the Company's Common
Stock from November 8, 1995 (the first trading day for the Company's Common
Stock) through December 31, 1996 as compared with that of the Nasdaq (U.S.
Companies) Index and the Nasdaq Pharmaceutical Stocks Index. The graph assumes
the investment of $100 in the Company's Common Stock and each of the comparison
groups on November 8, 1995 and assumes the reinvestment of dividends. The
Company has never declared a dividend on the Common Stock of the Company. The
stock price performance depicted in the graph below is not necessarily
indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG GELTEX PHARMACEUTICALS, INC.,
NASDAQ (U.S. COMPANIES) INDEX AND NASDAQ PHARMACEUTICAL STOCKS INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD GELTEX NASDAQ STOCK NASDAQ
(FISCAL QUARTER COVERED) PHARMACEUTICALS, INC. MARKET (U.S.) PHARMACEUTICAL STOCKS
----------------------- -------------------- ------------- ----------------------
<S> <C> <C> <C>
11/8/95 $100 $100 $100
12/31/95 $123 $102 $121
3/31/96 $215 $107 $126
6/30/96 $187 $115 $122
9/30/96 $200 $119 $125
12/31/96 $243 $125 $121
</TABLE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
In 1996, the Compensation Committee of the Board of Directors (the
"Committee") consisted of Mr. Carpenter, Ms. Piette and Dr. Treu. The Committee
evaluates the performance of management and determines compensation policies and
levels. The full Board of Directors reviews the Committee's recommendations
regarding compensation of executive officers. The Committee is also responsible
for setting and administering the Company's policies governing employee
compensation and administering the Company's Equity Plan and 1995 Employee Stock
Purchase Plan.
The Company's executive compensation programs are designed to attract and
retain executives capable of leading the Company to meet its business objectives
and to motivate them to enhance long-term stockholder value. Annual compensation
for the Company's executive officers consists of three elements: base salary, a
cash incentive bonus and stock option grants.
Base Salaries. Base salaries for new executive officers are initially
determined by evaluating the responsibilities of the position held and the
experience of the individual. In making determinations regarding
7
<PAGE> 10
base salaries, the Committee reviews a variety of industry surveys which provide
information about salary, bonus and stock awards. The performance of the
companies surveyed is not considered by the Committee. Based in part on this
information, the Committee generally sets salaries, including that of the Chief
Executive Officer, at levels comparable to competitive companies in similar
industries. Annual salary adjustments are made, based upon the recommendation of
the Company's Chief Executive Officer, to maintain salaries at competitive
levels, taking into account each officer's years of experience and individual
performance, and to maintain an equitable relationship between executive officer
salaries and overall salaries for the Company's other employees.
Mr. Skaletsky's base salary for 1996 was set at $234,692, an increase of
7.9% over his base salary for 1995, based on the Company's overall progress
during 1995, including its completion of its initial public offering and the
continued progress of clinical trials for the Company's lead product candidates,
RenaGel(R) phosphate binder and CholestaGel(R) non-absorbed cholesterol reducer.
Bonus Compensation. The Company's executive officers are eligible for an
annual cash bonus, based on corporate and individual performance. The Company
achieved several milestones in 1996, including: the successful completion of
Phase II clinical trials and the commencement and progression of Phase III
clinical trials for RenaGel(R); the successful completion of a Phase IIa
clinical trial and the commencement and progression of two additional Phase II
clinical trials for CholestaGel(R); the completion of a follow-on public
offering of the Company's Common Stock with net proceeds to the Company of over
$60.0 million; and the issuance of several key patents covering the Company's
technology. In recognition of his leadership in the achievement of these
milestones and his contributions to the Company in 1996, Mr. Skaletsky was
awarded a bonus in the amount of $60,000.
Stock Options. Under the Equity Plan, stock options are granted to the
Company's executive officers. The Company uses its stock option program to
further align the interests of stockholders and management by creating a mutual
and substantial economic interest in the long-term appreciation of the Company's
Common Stock. New options are granted to existing members of management on an
annual basis to provide continuing financial incentive. Options are granted with
an exercise price equal to the fair market value of the Common Stock on the date
of grant. With respect to options granted prior to January 1, 1996, such options
were exercisable on the date of grant and the standard vesting schedule for each
such option provides that a portion of the shares subject to the option vest
monthly over a five year period. Any unvested shares purchased upon exercise of
options are subject repurchase by the Company if the option holder's employment
terminates before such shares vest. In December 1995, the Company revised its
standard option terms such that options granted on or after January 1, 1996
would not be exercisable on the date of grant; rather, a portion of the shares
subject to each option would vest and become exercisable monthly over a four
year period. Certain options granted under the Equity Plan, including some of
the options granted to the Named Executive Officers (as defined below), are
subject to different vesting schedules that are based on the achievement of
certain milestone events. In determining the size of option grants, the
Committee evaluates the job level of the executive, responsibilities to be
assumed in the upcoming year, responsibilities and performance in prior years
and the size of awards granted to the officer in the past.
In 1996, Mr. Skaletsky received options to purchase 30,000 shares of Common
Stock at an exercise price of $20.50 per share.
In 1995, the Company's executive officers, including Mr. Skaletsky, were
each granted options to purchase 50,000 shares of the Company's Common Stock at
an exercise price of $0.32 per share. The original terms of these options
provided that the shares subject to these options would vest on December 31,
2004, provided that the vesting would be accelerated if the Company both filed a
New Drug Application ("NDA") for RenaGel(R) and completed a successful Phase II
clinical trial for CholestaGel(R) on or before a specified date as determined by
the Committee. In 1996, the Committee decided to revise the vesting schedule of
these options in order to ensure that the option holders receive recognition for
the achievement of one or more corporate milestones. The Committee changed the
vesting provisions of these options to provide that the shares subject to these
option would vest on December 31, 2004, provided that the vesting of a portion
of such shares may be accelerated, at the discretion of the Committee, as
follows: 20% of such shares upon successful
8
<PAGE> 11
completion by a specified date of a Phase II clinical trial for CholestaGel(R);
30% of such shares upon execution by a specified date of an agreement for the
commercialization of CholestaGel(R) that is approved by the Board of Directors;
and 50% of such shares upon approval by a specified date by the U.S. Food and
Drug Administration of an NDA for RenaGel(R). The Committee did not amend any of
the other terms of these options.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits a publicly held company's tax deduction for compensation paid to
the Chief Executive Officer and the other four most highly paid officers.
Generally, amounts paid in excess of $1,000,000 to a covered executive in any
year cannot be deducted. Certain performance based compensation that has been
approved by stockholders is not subject to the limit. In order to maximize the
deductibility of compensation arising from certain awards under the Equity Plan,
the Company has limited the number of shares of Common Stock subject to options
that may be granted to any individual in any fiscal year under the Equity Plan
to 250,000 shares. The Committee will continue to assess the impact of Section
162(m) on its compensation practices and determine what further action, if any,
is appropriate.
By the GelTex Pharmaceuticals, Inc.
Compensation Committee,
Robert Carpenter
Barbara A. Piette
Jesse Treu
The following tables set forth certain compensation information for the
Chief Executive Officer of the Company and the three other executive officers of
the Company whose salary and bonus for the fiscal year ended December 31, 1996
exceeded $100,000 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------ ALL
COMPENSATION SECURITIES OTHER
--------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) ($)
- --------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Mark Skaletsky.......................... 1996 $234,692 $60,000 30,000 $2,200(1)
President, Chief Executive 1995 $217,546 $50,000 105,000 $2,200(1)
Officer and Treasurer 1994 $206,731 $21,000 50,000 --
Dennis Goldberg, Ph.D. ................. 1996 $159,750 $40,000 15,000 --
Vice President, Product Development 1995 $147,000 $30,000 65,000 --
and Regulatory Affairs 1994 $141,723 -- -- --
Joseph Tyler............................ 1996 $144,904 $35,000 15,000 --
Vice President, 1995 $105,000 -- 110,000 --
Manufacturing(2)
W. Harry Mandeville, Ph.D. ............. 1996 $131,865 $33,000 15,000 --
Vice President, 1995 $124,519 $20,000 75,000 --
Chemical Technology 1994 $103,365 $15,000 -- --
</TABLE>
- ---------------
(1) Consists of life insurance premiums paid by the Company.
(2) Mr. Tyler joined the Company in April 1995.
9
<PAGE> 12
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1996 by the Company to the
Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- -------------------------- ------------- --------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Mark Skaletsky............ 30,000 12.48% $ 20.50 12/11/06 $386,636 $979,735
Dennis Goldberg, Ph.D. ... 15,000 6.24% $ 20.50 12/11/06 $193,318 $489,867
Joseph Tyler.............. 15,000 6.24% $ 20.50 12/11/06 $193,318 $489,867
W. Harry Mandeville,
Ph.D. .................. 15,000 6.24% $ 20.50 12/11/06 $193,318 $489,867
</TABLE>
- ---------------
(1) Options granted under the Equity Plan. Shares subject to the option vest and
become exercisable monthly over a four year period commencing one month from
the date of grant.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and,
therefore, are not intended to forecast possible future appreciation, if
any, in the price of the underlying Common Stock. No gain to the optionees
is possible without an increase in price of the underlying Common Stock,
which will benefit all stockholders proportionately.
The following table sets forth certain information concerning option
exercises during 1996 and exercisable and unexercisable options held by the
Named Executive Officers as of December 31, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL AT FISCAL
YEAR-END(#) YEAR-END($)(1)
SHARES ---------------- --------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE(2) UNEXERCISABLE(2)
- ----------------------------- ----------- ----------- ---------------- --------------------
<S> <C> <C> <C> <C>
Mark Skaletsky............... 35,000 $ 454,525 170,000/80,000 $3,753,875/1,309,000
Dennis Goldberg, Ph.D. ...... 0 -- 15,000/65,000 $ 195,000/1,252,750
Joseph Tyler................. 0 -- 30,000/65,000 $ 717,900/1,252,750
W. Harry Mandeville,
Ph.D. ..................... 0 -- 25,000/65,000 $ 434,300/1,252,750
</TABLE>
- ---------------
(1) Based on the difference between closing price of the underlying shares of
Common Stock on December 31, 1996 as reported by the Nasdaq National Market
($24.25) and the option exercise price.
(2) Certain shares subject to exercisable options are unvested and would be
subject to a repurchase right granted to the Company if such shares are
purchased before they are vested. See footnotes (7)-(10) to the table under
the heading "Share Ownership" and "Executive Compensation -- Compensation
Committee Report on Executive Compensation -- Stock Options."
EMPLOYMENT AGREEMENTS
The Company entered into an at-will employment agreement with Dr. Goldberg
in October 1993. Pursuant to this agreement, Dr. Goldberg currently receives an
annual base salary of $168,000, which may be changed from time to time. The
agreement provides that Dr. Goldberg is eligible to receive his base salary for
six months upon the termination without cause of his employment by the Company.
10
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Carpenter, Ms. Piette and Dr. Treu served as members of the Company's
Compensation Committee during the fiscal year ended December 31, 1996. Mr.
Carpenter served as President and Chief Executive Officer of the Company from
1991 to 1993.
PROPOSAL 2:
AMENDMENT OF 1992 EQUITY INCENTIVE PLAN
GENERAL
In June 1992, the Board of Directors adopted the Equity Plan, which was
approved by the Company's stockholders in May 1993. The Equity Plan was
subsequently amended so that the aggregate number of shares of Common Stock
reserved for issuance thereunder is currently 1,725,000 shares (including shares
subject to options already granted). The Equity Plan is designed to provide the
Company flexibility in awarding equity incentives by providing for multiple
types of incentives that may be awarded. The purpose of the Equity Plan is to
attract and retain key employees of and consultants to the Company and to enable
them to participate in the long-term growth of the Company.
AMENDMENT
In March 1997, the Board of Directors voted, subject to stockholder
approval, to amend the Equity Plan to increase the aggregate number of shares of
Common Stock available thereunder by an additional 275,000 shares to an
aggregate of 2,000,000 shares, subject to adjustment for stock-splits and
similar capital changes. The Company believes that this increase is necessary
and appropriate to enable the Company to attract and retain the quality of
employees and consultants whose services are considered essential to the
Company's future progress, to encourage such employees' and consultants'
ownership in the Company and to provide them with an incentive to remain as
employees or consultants of the Company.
ADMINISTRATION AND ELIGIBILITY
The Equity Plan provides for the grant of stock options (incentive and
nonstatutory), stock appreciation rights, performance shares, restricted stock
or stock units for the purchase of shares of Common Stock. Awards under the
Equity Plan can be granted to officers, employees and other individuals as
determined by the Compensation Committee, each of whose members is a
"disinterested person" within the meaning of Rule 16b-3 under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"). The Compensation
Committee administers the Equity Plan and selects the participants and
establishes the terms and conditions of each option or other equity right
granted under the Equity Plan, including the exercise price, the number of
shares subject to options or other equity rights and the time at which such
options become exercisable. The Compensation Committee has adopted guidelines
for the number of options awarded to each new employee of the Company, other
than executive officers. The guidelines may be changed by the Compensation
Committee at any time. Subject to certain limitations the Compensation Committee
may delegate to one or more executive officers of the Company the power to make
awards to participants who are not subject to Section 16 of the Exchange Act.
The Compensation Committee has authorized Mr. Skaletsky to grant options to
purchase up to 10,000 shares of Common Stock each to such participants. The
exercise price of all "incentive stock options" ("ISOs") within the meaning of
Section 422 of the Code granted under the Equity Plan must be at least equal to
the fair market value of the option shares on the date of grant. The term of any
ISO granted under the Equity Plan may not exceed ten years.
With respect to options granted prior to January 1, 1996, such options were
exercisable on the date of grant and the standard vesting schedule for each such
option provides that a portion of the shares subject to the option vest monthly
over a five year period. In December 1995, the Company revised its standard
option terms such that options granted on or after January 1, 1996 would not be
exercisable on the date of grant; rather, a portion of the shares subject to
each option would vest and become exercisable monthly over a four
11
<PAGE> 14
year period. Certain options granted under the Equity Plan, including some of
the options granted to the Named Executive Officers, are subject to different
vesting schedules that are based on the achievement of certain milestone events.
See "Executive Compensation -- Compensation Committee Report on Executive
Compensation -- Stock Options."
As of April 3, 1997, approximately 43 employees were eligible to
participate in the Equity Plan. The closing price of the Company's Common Stock
as reported on the Nasdaq National Market on April 3, 1997 was $20.25.
EQUITY PLAN ACTIVITY
As of April 3, 1997, options to purchase an aggregate of 1,566,050 shares
of Common Stock had been granted under the Equity Plan, of which options to
purchase 56,319 shares had been cancelled. Options to purchase 540,534 shares
had been exercised as of such date, 3,900 of which have been repurchased by the
Company. As of such date, 494,169 shares remained available for the granting of
awards under the Equity Plan, including the 275,000 shares added by the
amendment for which stockholder approval is being requested. No stock
appreciation rights or awards other than option grants have been granted under
the Equity Plan to date.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO STOCK OPTIONS
Incentive Stock Options. An optionee does not realize taxable income upon
the grant or exercise of an ISO under the Equity Plan. If no disposition of
shares issued to an optionee pursuant to the exercise of an ISO is made by the
optionee within two years from the date of grant or within one year from the
date of exercise, then (a) upon sale of such shares, any amount realized in
excess of the option price (the amount paid for the shares) is taxed to the
optionee as long-term capital gain and any loss sustained will be a long-term
capital loss and (b) no deduction is allowed to the Company for Federal income
tax purposes. The exercise of ISOs gives rise to an adjustment in computing
alternative minimum taxable income that may result in alternative minimum tax
liability for the optionee.
If shares of Common Stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition") then (a) the optionee realizes
ordinary income in the year of disposition in an amount equal to the excess (if
any) of the fair market value of the shares at exercise (or, if less, the amount
realized on a sale of such shares) over the option price thereof and (b) the
Company is entitled to deduct such amount. Any further gain realized is taxed as
a short-term or long-term capital gain and does not result in any deduction to
the Company. A disqualifying disposition in the year of exercise will generally
avoid the alternative minimum tax consequences of the exercise of an ISO.
Nonstatutory Stock Options. No income is realized by the optionee at the
time a nonstatutory option is granted. Upon exercise, (a) ordinary income is
realized by the optionee in an amount equal to the difference between the option
price and the fair market value of the shares on the date of exercise and (b)
the Company receives a tax deduction for the same amount. Upon disposition of
the shares, appreciation or depreciation after the date of exercise is treated
as a short-term or long-term capital gain or loss and will not result in any
deduction by the Company.
VOTES REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock present, or represented, and entitled to vote at the Meeting is required
for the approval of the proposed amendment to the Equity Plan.
BOARD RECOMMENDATION
The Board of Directors of the Company believes that the amendment to the
Equity Plan is in the best interest of the Company and its stockholders and
recommends a vote FOR the proposal to approve the amendment to the Equity Plan.
12
<PAGE> 15
PROPOSAL 3:
AMENDMENT OF 1995 DIRECTOR STOCK OPTION PLAN
GENERAL
In December 1995, the Board of Directors of the Company adopted the
Director Plan, which was approved by the Company's stockholders in May 1996. The
aggregate number of shares of Common Stock reserved for issuance under the
Director Plan is currently 75,000 shares (including shares subject to options
already granted). The purpose of the Director Plan is to attract and retain
qualified persons who are not also officers or employees of the Company to serve
as directors of the Company and to encourage stock ownership in the Company by
such directors. For a description of the Director Plan, see "Proposal 1:
Election of Directors -- Director Compensation."
AMENDMENT
In March 1997, the Board of Directors voted, subject to stockholder
approval, to amend the Director Plan to increase the aggregate number of shares
of Common Stock available thereunder by an additional 35,000 shares to an
aggregate of 110,000 shares, subject to adjustment for stock-splits and similar
capital changes.
DIRECTOR PLAN ACTIVITY
As of April 3, 1997, options to purchase an aggregate of 52,000 shares of
Common Stock had been granted under the Director Plan, of which options to
purchase 8,000 shares had been cancelled. In accordance with the terms of the
Director Plan, Dr. Crout and Mr. Termeer will automatically be granted options
to purchase 12,000 shares and 4,000 shares of Common Stock, respectively,
subject to their election by the stockholders at the Meeting. The exercise price
of these options will be equal to the closing price of the Company's Common
Stock as reported by the Nasdaq National Market on the date of grant. See
"Proposal 1: Election of Directors -- Director Compensation."
FEDERAL INCOME TAX CONSEQUENCES
No taxable income will be recognized by the optionee upon the grant of a
stock option under the Director Plan. The optionee must recognize as ordinary
income in the year in which the option is exercised the amount by which the fair
market value of the purchased shares on the date of exercise exceeds the
exercise price. The Company will be entitled to a business expense deduction
equal to the amount of ordinary income recognized by the optionee. Any
additional gain or loss recognized upon the subsequent disposition of the
purchased shares will be a capital gain or loss, and will be a long-term gain or
loss if the shares are held for more than one year.
VOTES REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock present, or represented, and entitled to vote at the Meeting is required
for the approval of the amendment to the Director Plan.
BOARD RECOMMENDATION
The Board of Directors of the Company believes that the amendment to the
Director Plan is in the best interest of the Company and its stockholders and
recommends a vote FOR the proposal to approve the amendment to the Director
Plan.
SECURITIES EXCHANGE ACT REPORTING
The Company's executive officers and directors are required under Section
16(a) of the Securities Exchange Act of 1934, as amended, to file reports of
ownership of the Company's securities and changes in
13
<PAGE> 16
ownership with the Securities and Exchange Commission. Copies of those reports
must also be furnished to the Company.
Based solely on a review of the copies of reports furnished to the Company
and written representations that no other reports were required, the Company
believes that during 1996 the executive officers and directors of the Company
complied with all applicable Section 16(a) filing requirements.
INFORMATION CONCERNING AUDITORS
The firm of Ernst & Young LLP, independent auditors, examined the Company's
financial statements for the fiscal year ended December 31, 1996. The Board of
Directors has appointed Ernst & Young LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997. Ernst & Young LLP has
served as the Company's independent accountants since its inception in 1991.
Representatives of Ernst & Young LLP are expected to be present at the Meeting
to respond to appropriate questions and will be given the opportunity to make a
statement should they desire to do so.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials
for the 1998 Annual Meeting of Stockholders, stockholder nominations of persons
for election to the Board and proposals of business to be considered by the
stockholders must be received by the Company no later than December 24, 1997.
Proposals should be sent to the attention of the Secretary at the Company's
offices at 303 Bear Hill Road, Waltham, Massachusetts 02154 if mailed prior to
August 31, 1997 or at the Company's new offices at 9 Fourth Avenue, Waltham,
Massachusetts 02154 if mailed thereafter.
ADVANCE NOTICE PROVISIONS FOR
STOCKHOLDER PROPOSALS AND NOMINATIONS
The By-laws of the Company provide that in order for a stockholder to bring
business before or propose director nominations at an annual meeting, the
stockholder must give written notice to the Secretary of the Company not less
than 50 days nor more than 75 days prior to the meeting. The notice must contain
specified information about the proposed business or each nominee and the
stockholder making the proposal or nomination. If less than 65 days notice or
prior public disclosure of the date of the annual meeting is given or made to
stockholders, the notice given by the stockholder must be received not later
than the 15th day following the day on which the notice of such annual meeting
date was mailed or public disclosure made, whichever first occurs.
EXPENSES OF SOLICITATION
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company.
Proxies may be solicited by directors, officers or regular employees of the
Company by mail, by telephone, in person or otherwise. No such person will
receive additional compensation for such solicitation. In addition, the Company
will request banks, brokers and other custodians, nominees and fiduciaries to
forward proxy material to the beneficial owners of Common Stock and to obtain
voting instructions from such beneficial owners. The Company will reimburse such
firms for their reasonable expenses in forwarding proxy materials and obtaining
voting instructions.
OTHER MATTERS
The Meeting is called for the purposes set forth in the notice. The Board
of Directors does not know of any matter for action by the stockholders at the
Meeting other than the matters described in the notice. However, the enclosed
proxy confers discretionary authority on the persons named therein with respect
to matters which are not known to the directors at the date of printing hereof
and which may properly come
14
<PAGE> 17
before the Meeting. It is the intention of the persons named in the proxy to
vote in accordance with their best judgment on any such matter.
Copies of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 as filed with the Securities and Exchange Commission are
available to stockholders upon written request addressed to the President at the
Company's offices at 303 Bear Hill Road, Waltham, Massachusetts 02154 if mailed
prior to August 31, 1997 or at the Company's new offices at 9 Fourth Avenue,
Waltham, Massachusetts 02154 if mailed thereafter.
Whether or not you intend to be present at the Meeting, you are urged to
fill out, sign, date and return the enclosed proxy at your earliest convenience.
15
<PAGE> 18
(front of card)
GELTEX PHARMACEUTICALS, INC.
303 Bear Hill Road, Waltham, Massachusetts 02154
PROXY FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
May 22, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint Mark Skaletsky, Elizabeth Grammer and
Maureen Manning, and each of them acting singly, the attorneys and proxies of
the undersigned, with full power of substitution, with all the powers which the
undersigned would possess if personally present, to vote all of the shares of
capital stock of GelTex Pharmaceuticals, Inc. (the "Company") that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Westin Hotel, 70 Third Avenue, Waltham, Massachusetts
on Thursday, May 22, 1997 at 9:00 a.m., and at any and all adjournments thereof,
hereby acknowledging receipt of the Proxy Statement for such meeting and
revoking any proxy heretofore given with respect to such shares.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. IN THEIR DISCRETION, THE PROXIES ARE ALSO
AUTHORIZED TO VOTE UPON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
See Reverse
Side
(CONTINUED AND TO BE SIGNED REVERSE SIDE.)
<PAGE> 19
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
GELTEX PHARMACEUTICALS, INC.
May 22, 1997
Please Detach and Mail in the Envelope Provided
(back of card)
[X] Please mark your votes as
in this example using
dark ink only.
1. Proposal to elect directors.
Nominees: J. Richard Crout
Mark Skaletsky
Henri Termeer
[ ] FOR all nominees [ ] WITHHELD for all nominees
FOR, except vote withheld from the following nominee(s):
[ ]
--------------------------------------------------------------
2. Proposal to amend the Company's 1992 Equity Incentive Plan to increase the
aggregate number of shares of the Company's common stock as to which
awards may be granted under such plan by 275,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to amend the Company's 1995 Director Stock Option Plan to
increase the aggregate number of shares of the Company's common stock as
to which options may be granted under such plan by 35,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN, DATE AND MAIL THIS PROXY TODAY
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Date:___________________________________
________________________________________
Signature
Date:___________________________________
________________________________________
Signature (if held jointly)
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS ON
STOCK CERTIFICATE. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME
BY AUTHORIZED PERSON.
