<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GENE LOGIC INC.
------------------------
(Name of Registrant as Specified In Its Charter)
-------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box)
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
- -------------------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
5. Total fee paid:
- -------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
6. Amount Previously Paid:
- -------------------------------------------------------------------------------
7. Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------------
8. Filing Party:
- -------------------------------------------------------------------------------
9. Date Filed:
- -------------------------------------------------------------------------------
<PAGE>
GENE LOGIC INC.
708 QUINCE ORCHARD ROAD
GAITHERSBURG, MARYLAND 20878
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 1998
TO THE STOCKHOLDERS OF GENE LOGIC INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of GENE
LOGIC INC., a Delaware corporation (the "Company"), will be held on Friday,
June 5, 1998 at 3:00 p.m. local time at the Company's executive offices, 708
Quince Orchard Road, Gaithersburg, Maryland 20878, for the following purposes:
1. To elect two directors to hold office until the 2001 Annual Meeting of
Stockholders.
2. To ratify the selection of Arthur Andersen LLP as independent auditors of
the Company for its fiscal year ending December 31, 1998.
3. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on
April 15, 1998, as the record date for the determination of stockholders
entitled to notice of and to vote at this Annual Meeting and at any adjournment
or postponement thereof.
By Order of the Board of Directors
/s/ Mark D. Gessler
Mark D. Gessler
SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT, CHIEF
FINANCIAL OFFICER AND SECRETARY
Gaithersburg, Maryland
May 8, 1998
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID
IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU
HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
GENE LOGIC INC.
708 QUINCE ORCHARD ROAD
GAITHERSBURG, MARYLAND 20878
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 1998
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
GENE LOGIC INC., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on Friday, June 5, 1998, at 3:00
p.m. local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at the Company's executive
offices, 708 Quince Orchard Road, Gaithersburg, Maryland 20878. The Company
intends to mail this proxy statement and accompanying proxy card on or about
May 8, 1998, to all stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy
statement, the proxy card and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares of
Common Stock beneficially owned by others to forward to such beneficial
owners. The Company may reimburse persons representing beneficial owners of
Common Stock for their costs of forwarding solicitation materials to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, telegram or personal solicitation by directors,
officers or other regular employees of the Company. No additional
compensation will be paid to directors, officers or other regular employees
for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on April
15, 1998 will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on April 15, 1998 the Company had outstanding and
entitled to vote 13,902,107 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards
a quorum, but are not counted for any purpose in determining whether a matter
has been approved.
1.
<PAGE>
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 708
Quince Orchard Road, Gaithersburg, Maryland 20878, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be
revoked by attending the meeting and voting in person. Attendance at the
meeting will not, by itself, revoke a proxy.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1999 Annual Meeting of Stockholders must be received by the Company
no later than the close of business on January 8, 1999 in order to be
included in the business conducted at the 1999 Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation and
By-laws provide that the Board of Directors shall be divided into three
classes, each class consisting, as nearly as possible, of one-third of the
total number of directors, with each class having a three-year term.
Vacancies on the Board may be filled only by persons elected by a majority of
the remaining directors. A director elected by the Board to fill a vacancy
(including a vacancy created by an increase in the Board of Directors) shall
serve for the remainder of the full term of the class of directors in which
the vacancy occurred and until such director's successor is elected and
qualified.
The Board of Directors is presently composed of six members. There are
two directors in the class whose term of office expires in 1998. Each of the
nominees for election to this class is currently a director of the Company
who was previously elected by the stockholders. If elected at the Annual
Meeting, each of the nominees would serve until the 2001 Annual Meeting and
until his or her successor is elected and has qualified, or until such
director's earlier death, removal or resignation.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented
by executed proxies will be voted, if authority to do so is not withheld, for
the election of the two nominees named below. In the event that any nominee
should be unavailable for election as a result of an unexpected occurrence,
such shares will be voted for the election of such substitute nominee as
management may propose. Each person nominated for election has agreed to
serve if elected, and management has no reason to believe that any nominee
will be unable to serve.
The following table sets forth the names of the Board of Directors'
nominees for election as directors and those directors who will continue to
serve after the Annual Meeting. Also set forth is certain other information
with respect to each such person's age, the periods during which he has
served as a director and positions currently held with the Company.
2.
<PAGE>
<TABLE>
<CAPTION>
Director Expiration Positions Held
Nominees for a Three-Year Term Age Since of Term With the Company
- -------------------------------------- --- -------- ---------- --------------------------
<S> <C> <C> <C> <C>
Jules Blake, Ph.D.(1)(2) . . . . . . . 73 1994 1998 Director
Michael J. Brennan, M.D., Ph.D.. . . . 40 1995 1998 President, Chief Executive
Officer and Director
Continuing Directors
- --------------------------------------
Jeffrey D. Sollender . . . . . . . . . 38 1997 1999 Director
Alan G. Walton, Ph.D., D.Sc.(2). . . . 62 1994 1999 Chairman of the Board of
Directors
Charles L. Dimmler III(1)(2) . . . . . 56 1996 2000 Director
G. Anthony Gorry, Ph.D.. . . . . . . . 57 1997 2000 Director
</TABLE>
- -------------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
Set forth below is certain biographical information regarding the
directors of the Company.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2001 ANNUAL MEETING
JULES BLAKE, PH.D. Dr. Blake has served as a director of the Company
since its inception. From 1973 until his retirement in 1989, Dr. Blake
served as Vice President of Research and Development and Vice President,
Corporate Scientific Affairs, for Colgate-Palmolive, Inc., a consumer
products company. Dr. Blake was appointed as an Industrial Research
Institute Fellow at the United States Office of Science and Technology
Policy, Executive Office of the President, where he served until 1991. Dr.
Blake serves on the boards of directors of the public companies Martek
Biosciences Corporation and ProCyte Corporation. Dr. Blake holds a Ph.D. in
organic chemistry from the University of Pennsylvania.
MICHAEL J. BRENNAN, M.D., PH.D. Dr. Brennan has served as President,
Chief Executive Officer and a director of the Company since December 1995.
From October 1993 to November 1995, he was Vice President, Business
Development for Corange International Limited's worldwide therapeutics
business, Boehringer Mannheim Therapeutics. From June 1990 to October 1993,
Dr. Brennan was a director and the general manager of Boehringer Mannheim
South Africa. Dr. Brennan received a Ph.D. in neurobiology and a M.D. from
the University of the Witwatersrand, Johannesburg, South Africa. In 1985, he
completed his residency in neurology at Boston City Hospital.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 1999 ANNUAL MEETING
JEFFREY D. SOLLENDER. Mr. Sollender has served as a director of the
Company since July 1997. Mr. Sollender is a founder of and adviser to
Biotechvest L.P., a venture capital investment firm formed in 1993. From
1994 through December 1995, Mr. Sollender served as an adviser to Forward
Ventures, a venture capital investment firm. Mr. Sollender became a venture
partner of Forward Ventures in 1996 and a general partner in September 1997.
Mr. Sollender co-founded Triangle Pharmaceuticals, Inc., a biopharmaceutical
company, in 1995, CombiChem Inc., a combinatorial chemistry company, in 1994
and GenQuest, Inc., a functional genomics company, in 1995. He served as
Vice President of Operations and
3.
<PAGE>
Business Development for CombiChem Inc. and GenQuest, Inc. until January 1995
and February 1996, respectively. Mr. Sollender co-founded AriZeke
Pharmaceuticals, an oral drug delivery company, in 1997 and continues to
serve as Chairman and Chief Executive Officer of the company. Mr. Sollender
received his MBA from the University of Chicago Graduate School of Business.
ALAN G. WALTON, PH.D., D.SC. Dr. Walton has served as Chairman of the
Board of Directors of the Company since its inception in September 1994. He
has been a General Partner of Oxford Bioscience Partners, a private equity
investment firm, since 1991 and a member of the Board of Directors of
Collaborative Clinical Research since 1994. In 1981, Dr. Walton co-founded
University Genetics Co., a public corporation specializing in technology
transfer from academic institutions to industry and in the seed financing of
high-technology start-ups, and served as President and Chief Executive
Officer until 1987. He has lectured extensively at various universities,
including Harvard Medical School, Indiana University and Case Western Reserve
University where he was Professor of Macromolecular Science and Director of
the Laboratory for Biological Macromolecules. Dr. Walton received a Ph.D. in
chemistry and a D.Sc. in biological chemistry from Nottingham University,
England.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL MEETING
CHARLES L. DIMMLER III. Mr. Dimmler has served as a director of the
Company since May 1996. Since 1988, Mr. Dimmler has been a General Partner
of Hambro International Equity Partners, an equity investment firm, and is
currently also the principal investment officer of Cross Atlantic Partners
Funds, an equity investment firm, and an operating officer of Hambro Health
International, Inc., an affiliate of Hambros Bank Limited, a global merchant
bank based in London. Mr. Dimmler serves as a director of SunPharm, Inc., a
public company, and various private companies. He holds an honors degree from
the University of California at Davis.
G. ANTHONY GORRY, PH.D. Dr. Gorry, has served as a director of the
Company since January 1997. Since April 1992, Dr. Gorry has been Vice
President for Information Technology and Professor of Computer Science at
Rice University. He is the Chairman and a founder of The Forefront Group,
Inc., a public information technology company. From 1975 to April 1992, he
served as Vice President for Information Technology and Professor of Medical
Informatics and Neuroscience at Baylor College of Medicine, as well as
Director of the W. M. Keck Center for Computational Biology and Adjunct
Professor of Computer Science at Rice University. Dr. Gorry holds a M.S. in
chemical engineering from the University of California at Berkeley and a
Ph.D. in computer science from Massachusetts Institute of Technology. He is
a fellow of the American College of Medical Informatics and a member of the
Institute of Medicine and of the National Academy of Sciences.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1997 the Board of
Directors held seven meetings. The Board has an Audit Committee and a
Compensation Committee.
The Audit Committee meets with the Company's independent auditors at
least annually to review the results of the annual audit and discuss the
financial statements; recommends to the Board the independent auditors to be
retained; and receives and considers the accountants' comments as to
controls, adequacy of staff and management performance and procedures in
connection with audit and financial controls. The Audit Committee is
composed of two non-employee directors: Dr. Blake and Mr. Dimmler. It met
one time during such fiscal year.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants
under the Company's stock option
4.
<PAGE>
plans and otherwise determines compensation levels and performs such other
functions regarding compensation as the Board may delegate. The Compensation
Committee is composed of three non-employee directors: Dr. Walton, Dr. Blake
and Mr. Dimmler. It met eight times during such fiscal year.
During the fiscal year ended December 31, 1997, each Board member
attended 75% or more of the aggregate of the meetings of the Board held
during the period for which he was a director. Each Board member serving on
a committee attended 75% or more of the aggregate meetings of such committee
held during the period for which he was a committee member; however, Dr. Blake
was unable to attend the single Audit Committee meeting.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998 and has
further directed that management submit the selection of independent auditors
for ratification by the stockholders at the Annual Meeting. Arthur Andersen
LLP is currently the Company's independent auditors. Representatives of
Arthur Andersen LLP are expected to be present at the Annual Meeting, will
have an opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
Stockholder ratification of the selection of Arthur Andersen LLP as the
Company's independent auditors is not required by the Company's By-laws or
otherwise. However, the Board is submitting the selection of Arthur Andersen
LLP to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the Audit
Committee and the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Audit Committee and the Board in their
discretion may direct the appointment of different independent auditors at
any time during the year if they determine that such a change would be in the
best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting
will be required to ratify the selection of Arthur Andersen LLP.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
5.
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of April 1, 1998 by: (i) each
director and nominee for director; (ii) each of the Named Executive Officers
in the Summary Compensation Table below under the heading "Executive
Compensation;" (iii) all Named Executive Officers and directors of the
Company as a group; and (iv) all those known by the Company to be beneficial
owners of more than five percent (5%) of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
------------------------
NUMBER OF PERCENT OF
NAME SHARES TOTAL
- --------------------------------------------------- --------- ----------
<S> <C> <C>
Charles L. Dimmler III (2) . . . . . . . . . . . . . . 1,571,074 11.3%
Hambro Health International, Inc.
650 Madison Avenue, 21st Floor
New York, NY 10022
Alan G. Walton, Ph.D., D.Sc. (3) . . . . . . . . . . . 1,569,728 11.3
Oxford Bioscience Partners
315 Post Road West
Westport, CT 06880
Oxford Bioscience Partners (4) . . . . . . . . . . . . 1,560,353 11.2
c/o Alan G. Walton, Ph.D., D.Sc.
315 Post Road West
Westport, CT 06880
Cross Atlantic Partners K/S (5). . . . . . . . . . . . 1,552,399 11.2
c/o Charles L. Dimmler III
Hambro Health International, Inc.
650 Madison Avenue, 21st Floor
New York, NY 10022
Michael J. Brennan, M.D., Ph.D. (6). . . . . . . . . . 595,890 4.3
Gene Logic Inc.
708 Quince Orchard Road
Gaithersburg, MD 20878
Mark D. Gessler (7). . . . . . . . . . . . . . . . . . 300,530 2.2
Keith O. Elliston, Ph.D. (8) . . . . . . . . . . . . . 278,726 2.0
Eric M. Eastman, Ph.D. (9) . . . . . . . . . . . . . . 135,000 1.0
Daniel R. Passeri, J.D. (10) . . . . . . . . . . . . . 91,644 *
Jules Blake, Ph.D. (11). . . . . . . . . . . . . . . . 16,687 *
G. Anthony Gorry, Ph.D. (12) . . . . . . . . . . . . . 9,062 *
Jeffrey D. Sollender (13). . . . . . . . . . . . . . . 8,875 *
All directors and executive officers
as a group (10 persons) (14) . . . . . . . . . . 4,577,216 32.9
</TABLE>
- ------------------
* Represents beneficial ownership of less than 1%.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "SEC"). Beneficial
6.
<PAGE>
ownership is determined in accordance with the rules of the Securities
and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and
subject to community property laws where applicable, the persons named
in the table above have sole voting and investment power with respect to
all shares of Common Stock shown as beneficially owned by them.
Percentage of beneficial ownership is based on 13,900,333 shares of
Common Stock outstanding as of April 1, 1998.
(2) Includes 880,233 shares held of record by Cross Atlantic Partners K/S,
498,832 shares held of record by Cross Atlantic Partners II K/S and 173,334
shares held of record by Cross Atlantic Partners III K/S. Also includes
9,375 shares subject to options held by Mr. Dimmler exercisable within 60
days of April 1, 1998. Mr. Dimmler is the Chief Investment Officer of
Cross Atlantic Partners. Mr. Dimmler disclaims beneficial ownership of the
1,552,399 shares held of record by Cross Atlantic Partners K/S and related
entities.
(3) Includes an aggregate of 1,510,353 shares and warrants to purchase an
aggregate of 50,000 shares held of record by Oxford Bioscience Partners, of
which Dr. Walton is a general partner, and by entities related thereto.
Also includes 9,375 shares subject to options held by Dr. Walton
exercisable within 60 days of April 1, 1998.
(4) Includes 100,000 shares held of record by Oxford Bioscience Management
Partners, 276,119 shares and warrants to purchase 10,859 shares held of
record by Oxford Bioscience Partners (Bermuda) Limited Partnership, 138,952
shares held of record by Oxford Bioscience Partners (Adjunct) L.P. and
warrants to purchase 39,141 shares held of record by Oxford Bioscience
Partners, L.P.
(5) Includes 498,832 shares held of record by Cross Atlantic Partners II K/S
and 173,334 shares held of record by Cross Atlantic Partners III K/S.
(6) Includes 100,000 shares held of record by the Brennan Family Limited
Partnership and 240,890 shares subject to options held by Dr. Brennan
exercisable within 60 days of April 1, 1998.
(7) Includes 30,000 shares held of record by the Gessler Family Limited
Partnership, 450 shares held by Carmen Sauro and 200,080 shares subject to
options held by Mr. Gessler exercisable within 60 days of April 1, 1998.
Mr. Gessler disclaims beneficial ownership of the shares held by his
brother-in-law, Carmen Sauro.
(8) Includes 30,000 shares held of record by the Elliston Family Limited
Partnership and 248,726 shares subject to options held by Dr. Elliston
exercisable within 60 days of April 1, 1998.
(9) Includes 135,000 shares subject to options held by Dr. Eastman exercisable
within 60 days of April 1, 1998.
(10) Includes 91,644 shares subject to options held by Mr. Passeri exercisable
within 60 days of April 1, 1998.
(11) Includes 16,687 shares subject to options held by Dr. Blake exercisable
within 60 days of April 1, 1998.
(12) Includes 9,062 shares subject to options held by Dr. Gorry exercisable
within 60 days of April 1, 1998.
(13) Includes 6,875 shares subject to options held by Mr. Sollender exercisable
within 60 days of April 1, 1998.
(14) See footnotes (2), (3) and (6) through (13) above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended
7.
<PAGE>
December 31, 1997, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with; except that three reports on Forms 4 (Statement of Changes of
Beneficial Ownership), covering an aggregate of four transactions, were filed
late by Messrs. Dimmler, Gessler and Sollender.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
The Company's non-employee directors who are not affiliated with
stockholders of the Company currently receive $12,000 per year and an
additional fee of $1,000 for each meeting they attend (exclusive of
telephonic meetings). All directors are reimbursed for certain expenses in
connection with attendance at Board and committee meetings.
Non-employee directors of the Company also receive automatic grants of
options under the Company's 1997 Non-employee Directors' Stock Option Plan
(the "Directors' Plan"). Only non-employee directors of the Company are
eligible to receive options under the Directors' Plan. Options granted under
the Directors' Plan are intended by the Company not to qualify as incentive
stock options under the Internal Revenue Code of 1986, as amended (the
"Code").
Option grants under the Directors' Plan are non-discretionary. Pursuant
to the terms of the Directors' Plan, first-time non-employee directors of the
Company, other than those currently in place, automatically receive a grant
of 30,000 shares of Common Stock upon the date of his or her initial
appointment or election which vest on an annual basis over four years. Each
non-employee director who is re-elected at or after the Annual Meeting, and
who has continuously served as a non-employee director for the six month
period prior to the Annual Meeting automatically receives an option to
purchase 7,500 shares of Common Stock which vest on the anniversary of the
date of the grant. The exercise price of options granted under the Directors'
Plan is 100% of the fair market value of the Common Stock subject to the
option on the date of the option grant. Options granted under the Directors'
Plan following termination of the optionee's service to the Company vest only
as to that number of shares as to which were exercisable as of the date of
termination of all such service. The term of options granted under the
Directors' Plan is ten years. In the event of a merger of the Company with
or into another corporation or a consolidation, acquisition of assets or
other change-in-control transaction involving the Company, the vesting of
each option will accelerate and the option will terminate if not exercised
prior to the consummation of the transaction. No options granted under the
Director's Plan may be exercised after the expiration of ten years from the
date granted.
During the last fiscal year and prior to the adoption of the Directors'
Plan, the Company granted options under the Company's 1996 Stock Plan
covering 15,000 shares to Dr. Blake and 30,000 shares to each of the other
non-employee directors of the Company, Dr. Walton, Mr. Dimmler, Dr. Gorry and
Mr. Sollender, at an exercise price per share of $0.15. At the time of the
grants, the Board determined the fair market value of such Common Stock was
$0.15 per share. As of April 1, 1998, no options granted to non-employee
directors had been exercised.
8.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF COMPENSATION
The following table shows for the fiscal years ended December 31, 1997
and 1996, compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer and its other four most highly compensated executive
officers who earned more than $100,000 in the fiscal year ended December 31,
1997 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------- ------------
OTHER ANNUAL SECURITIES
COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($) ($)(2) OPTIONS (#)
- ------------------------------------ ---- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Michael J. Brennan, M.D., Ph.D.. . . . . . . . . . 1997 $207,292 $110,000(3) -- 498,962
President, Chief Executive Officer 1996 200,000 30,000(3) -- 245,000
and Director
Keith O. Elliston, Ph.D. . . . . . . . . . . . . . 1997 162,260 75,000 $75,890 446,981
Senior Vice President and Chief
Scientific Officer
Mark D. Gessler. . . . . . . . . . . . . . . . . . 1997 187,917 45,000 54,287(4) 321,981
Senior Vice President, Corporate
Development and Chief Financial Officer 1996 95,353 40,000 97,091 25,000
Eric M. Eastman, Ph.D. . . . . . . . . . . . . . . 1997 160,000 20,000 62,268(5) 60,000
Vice President, Technology Management 1996 38,231 40,000 -- 75,000
Daniel R. Passeri. . . . . . . . . . . . . . . . . 1997 106,875 85,000(7) -- 127,709
Senior Vice President, Technology and
Program Management(6)
</TABLE>
__________________
(1) In accordance with the rules of the Commission, the compensation
described in this table does not include medical, group life insurance
or other benefits received by the Named Executive Officers which are
available generally to all salaried employees of the Company, and
certain perquisites and other personal benefits received by the Named
Executive Officers which do not exceed the lesser of $50,000 or 10%
of any such officer's salary and bonus disclosed in this table.
(2) Except as otherwise noted, represents reimbursements made by the
Company for relocation expenses.
(3) Includes an amount paid to a corporation of which Dr. Brennan is a
stockholder for service rendered by such corporation.
(4) Represents a $50,000 Promissory Note forgiven upon effectiveness of
the initial public offering and $4,287 of accrued interest thereon.
(5) Includes $731 of interest imputed from Dr. Eastman's relocation loan.
(6) Mr. Passeri served as Vice President, Business Development and
Intellectual Property until becoming Senior Vice President,
Technology and Program Management in January 1998.
(7) Includes a $30,000 payment made by the Company for Mr. Passeri's
relocation expenses.
9.
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Company adopted its 1996 Stock Plan in January 1996 and amended and
restated the 1996 Stock Plan in September 1997 as the 1997 Equity Incentive
Plan (the "Stock Plan"). The Company grants options to its executive
officers under the Stock Plan. As of April 1, 1998, options to purchase a
total of 2,776,777 shares were outstanding under the Stock Plan and options
to purchase 2,969,197 shares remained available for grant thereunder.
The following tables show for the fiscal year ended December 31, 1997,
certain information regarding options granted to, exercised by, and held at
year end by, the Named Executive Officers:
OPTION GRANTS IN FISCAL YEAR 1997
INDIVIDUAL GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#)(1) Fiscal Year(2) ($/Sh)(3) Date
------------------------------------- ---------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Michael J. Brennan, M.D., Ph.D. . . . 150,000 6.6% $0.15 03/18/07
348,962 15.3 2.50 09/09/07
Keith O. Elliston, Ph.D. . . . . . . 250,000 11.0 0.15 03/18/07
196,981 8.6 2.50 09/09/07
Mark D. Gessler . . . . . . . . . . . 150,000 6.6 0.15 03/18/07
171,981 7.5 2.50 09/09/07
Eric M. Eastman, Ph.D. . . . . . . . 60,000 2.6 0.15 03/18/07
Daniel R. Passeri . . . . . . . . . . 80,000 3.5 0.15 03/18/07
47,709 2.1 2.50 09/09/07
</TABLE>
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term(4)
-------------------------------------
Name 5% ($) 10% ($)
- ------------------------------------- ---------- -----------
<S> <C> <C>
Michael J. Brennan, M.D., Ph.D. . . . $1,932,174 $3,089,991
3,674,974 6,368,535
Keith O. Elliston, Ph.D. . . . . . . 3,220,289 5,149,985
2,074,438 3,594,891
Mark D. Gessler . . . . . . . . . . . 1,932,174 3,089,991
1,811,159 3,138,643
Eric M. Eastman, Ph.D. . . . . . . . 772,869 1,235,996
Daniel R. Passeri . . . . . . . . . . 1,030,493 1,647,995
502,431 870,686
</TABLE>
__________________
(1) Options have a maximum term of 10 years measured from the date of grant,
subject to earlier termination upon the optionee's cessation of service
with the Company. The options generally vest on a monthly basis over a
four-year period. The options expiring in March 2007 accelerated upon
certain performance-based goals, including vesting of 80% of such options
upon completion of the Company's initial public offering in November 1997
and the remaining options 180 days thereafter.
(2) Based on options to purchase 2,281,881 shares granted to employees in
fiscal 1997, including the Named Executive Officers.
(3) The exercise price is equal to the fair market value of the Common Stock on
the date of grant as determined by the Board of Directors on the date of
grant.
(4) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years) and the fair market value per share
of the Company's Common Stock as of December 31, 1997 of $8.00. It is
calculated assuming that the stock price on the date of grant appreciates
at the indicated annual rate, compounded annually for the entire term of
the option and that the option is exercised and sold on the last day of its
term for the appreciated stock price. These amounts represent certain
assumed rates of appreciation only, in accordance with the rules of the
Commission, and do not reflect the Company's estimate or projection of the
future stock price performance. Actual gains, if any, are dependent on the
actual future performance of the Company's Common Stock.
10.
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL YEAR-END MONEY OPTIONS AT FISCAL
SHARES ACQUIRED VALUE REALIZED (#) EXERCISABLE/ YEAR-END ($)(2)
NAME ON EXERCISE (#) ($)(1) UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
-------------------------------------- --------------- -------------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
Michael J. Brennan, M.D., Ph.D. . . . . 105,000 $114,750 145,540/393,422 $1,108,320/2,302,471
Keith O. Elliston, Ph.D. . . . . . . . 30,000 4,500 178,206/238,775 1,379,633/1,430,763
Mark D. Gessler . . . . . . . . . . . . -- -- 147,164/199,817 1,138,402/1,181,244
Eric M. Eastman, Ph.D. . . . . . . . . -- -- 108,000/27,000 847,800/211,950
Daniel R. Passeri . . . . . . . . . . . -- -- 65,986/61,723 513,323/377,077
</TABLE>
- ---------------
(1) Based on the fair market value per share of Common Stock (as determined by
the Board of Directors) at the date of exercise, less the exercise price.
(2) Based on the fair market value per share of Common Stock ($8.00) at
December 31, 1997, less the exercise price, multiplied by the number of
shares underlying the option.
EMPLOYMENT AGREEMENTS
On December 1, 1995, Michael J. Brennan, the President, Chief Executive
Officer and a director and stockholder of the Company, entered into an
employment agreement with the Company. The employment agreement has a five-year
term and provides, among other things, for the payment to Dr. Brennan of annual
bonuses and the acceleration of certain unvested options upon achievement of
certain performance-based goals, including vesting of 80% of such options upon
completion of the Company's initial public offering and the remaining 20% 180
days thereafter. Upon termination of the agreement by the Company without
cause, Dr. Brennan will receive severance pay in the amount equal to Dr.
Brennan's total combined annual base salary and performance bonus for the
calendar year in which the termination becomes effective.
On May 16, 1996, Mark D. Gessler, the Senior Vice President, Corporate
Development and Chief Financial Officer of the Company and a stockholder of the
Company, entered into an employment agreement with the Company. The employment
agreement has a four-year term and provides, among other things, for the payment
to Mr. Gessler of annual bonuses and the acceleration of certain unvested
options upon achievement of certain performance-based goals, including vesting
of 80% of such options upon completion of the Company's initial public offering
and the remaining 20% 180 days thereafter. Upon termination of the agreement by
the Company without cause, Mr. Gessler will receive severance pay in the amount
of one-half of his salary for the calendar year in which the termination becomes
effective.
In September 7, 1996, Eric M. Eastman, the Vice President, Technology
Management, entered into an employment agreement with the Company. The
employment agreement has a four-year term and provides, among other things, for
the payment to Dr. Eastman of annual bonuses and the acceleration of certain
unvested options upon achievement of certain performance-based goals, including
vesting of 80% of such options upon completion of the Company's initial public
offering and the remaining 20% 180 days thereafter. Upon termination of the
agreement by the Company without cause, Dr. Eastman will receive severance pay
in the amount of three months of his then current salary.
On February 5, 1997, Keith Elliston, the Senior Vice President and Chief
Scientific Officer and a stockholder of the Company, entered into an employment
agreement with the Company. The
11.
<PAGE>
employment agreement has a four-year term and provides, among other things,
for the payment to Dr. Elliston of annual bonuses and the acceleration of
certain unvested options upon achievement of certain performance-based goals,
including vesting of 80% of such options upon completion of the Company's
initial public offering and the remaining 20% 180 days thereafter. Upon
termination of the agreement by the Company without cause, Dr. Elliston will
receive severance pay in the amount of one-half of his salary for the
calendar year in which the termination becomes effective.
On February 17, 1997, Daniel R. Passeri, the Senior Vice President,
Technology and Program Management, entered into an employment agreement with the
Company. The employment agreement has a four-year term and provides, among
other things, for the payment to Mr. Passeri of annual bonuses and the
acceleration of certain unvested options upon achievement of certain
performance-based goals, including vesting of 80% of such options upon
completion of the Company's initial public offering and the remaining 20% 180
days thereafter. Upon termination of the agreement by the Company without
cause, Mr. Passeri will receive severance pay in the amount of three months of
his then current salary.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION (1)
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is composed of Dr. Walton, Dr. Blake and Mr. Dimmler, none of whom
are currently officers or employees of the Company. The Compensation Committee
is responsible for setting and administering the Company's policies governing
employee compensation and administering the Company's equity incentive plans, as
well as evaluating the performance of the Company's management and determining
all compensation matters concerning the Company's executive officers.
COMPENSATION PHILOSOPHY
The compensation policies adopted by the Compensation Committee are
designed to (i) align compensation with business objectives and performance;
(ii) attract, retain and reward executive officers and other key employees who
contribute to the long-term success of the Company; and (iii) motivate the
Company's executive officers and other key employees to enhance long-term
stockholder value. Key elements of this philosophy are:
- The Company's salaries must be competitive with comparable
biotechnology companies with which the Company competes for highly
qualified and experienced executives. To date, the Compensation
Committee has relied on its members' experience in working with other
comparable companies to ensure executive salaries are competitive.
- The Company has a cash bonus program for executive officers to provide
motivation to achieve specific operating goals and to generate rewards
that bring total compensation to competitive levels.
- The Company provides equity-based incentives for executives and other
key employees to ensure that they are motivated over the long term to
respond to the Company's business challenges and opportunities as
stockholders as well as employees.
- -------------------------
(1) The material in this report is not "soliciting material," is not deemed
filed with the SEC, and is not to be incorporated by reference into any
filing of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, whether made before or after the
date hereof and irrespective of any general incorporation language
contained in such filing.
12.
<PAGE>
The Committee's objective is to set executive compensation within a range
which the Compensation Committee believes is comparable to the range of
compensation set by companies of similar size in the biotechnology industry.
The group of comparable companies is not necessarily the same as the companies
included in the market indices included in the performance graph on page 16 of
this Proxy Statement. The primary components of executive compensation are base
salary, cash incentives and long-term equity incentives. Each year, the
Compensation Committee reviews the criteria upon which all aspects of employee
compensation are based.
BASE SALARY. In 1997, base salaries for executive officers, other than the
Chief Executive Officer, were set at competitive levels based primarily on
the recommendation of the Chief Executive Officer and assisted by the
Compensation Committee's analysis of published compensation surveys
reflecting compensation data for biotechnology companies. Annual adjustments
were made to maintain base salaries at levels competitive with comparable
companies and to maintain an equitable relationship between the base salaries
of executive officers and overall merit increases for the Company's other
employees. In the case of any executive officer joining the Company, base
salary was also determined as one component of a total compensation package
that had to be competitive with compensation granted by the executive's prior
employer and/or other opportunities that might be available to the executive.
ANNUAL BONUS COMPENSATION. The amount of the bonus component in the total
compensation plan for executive officers is established at the beginning of
each year (or upon employment, in the case of newly hired executives). The
actual incentive award depends on the extent to which Company performance
objectives are achieved. At the start of each year, the Compensation
Committee approves the annual performance objectives for the Company which
are based upon overall strategic goals set by the Board of Directors. In
1997, each officer's bonus component was based on operating, strategic and
financial goals that were considered to be critical to the Company's
fundamental long-term goal of building stockholder value. These goals
included establishing strategic alliances with pharmaceutical companies for
drug target and drug lead discovery programs and achieving certain revenue
targets and financing objectives. Awards are paid in cash and distributions
were made upon achievement of such objectives in the performance year. The
bonus component for 1998 will be based on similar performance goals.
LONG-TERM INCENTIVE COMPENSATION. The long-term incentive element of the
Company's executive compensation program provides for the grant of stock
awards under the Company's Stock Plan, which may include incentive stock
options, nonstatutory stock options, stock bonuses or rights to purchase
restricted stock. The Company has used the grant of options under its Stock
Plan to align the interests of stockholders and management. Options granted
to executive officers are intended to provide a continuing financial
incentive to maximize long-term value to stockholders and to help make the
executive's total compensation opportunity competitive. Initial stock option
awards for executive officers are individually determined at or prior to
employment at levels which are designed to attract qualified executives and
in certain cases to be competitive with options granted by their prior
employers. Employees from within the Company who are promoted to positions
as executive officers typically receive additional option grants to bring
their total option grants up to the level that would have been granted to a
person hired for such executive officer position from outside the Company.
For additional information regarding options awards, see the compensation
tables preceding this report.
Executive officers receive value from option grants only if the Common
Stock appreciates over the long term. The amount of individual option grants is
determined based in part on competitive practices at comparable companies and on
the Company's philosophy of significantly linking executive compensation with
stockholder interests. In determining the size of individual grants, the
Committee also considers the number of shares subject to options previously
granted to each executive officer, including the number of shares that have
vested and that remain unvested and the potential reward to the officer if the
stock price
13.
<PAGE>
appreciates in the public market. The Committee believes that option grants
by the Company to its executive officers and employees are comparable to the
average range for comparable companies.
CHIEF EXECUTIVE OFFICER COMPENSATION
The total compensation program for the Chief Executive Officer is largely
based upon the same policies and criteria used for other executive officers.
Each year the Compensation Committee reviews the Chief Executive Officer's
existing compensation arrangement, the individual performance for the calendar
year under review, as well as the Company's performance relative to its peers.
In setting the base salary for Dr. Brennan, the Compensation Committee
considered industry reports as well as compensation data compiled by members of
the Compensation Committee.
Michael J. Brennan, M.D., Ph.D. was appointed as Chief Executive Officer
in December 1995. Dr. Brennan's base salary for 1997 was $200,000. In 1997,
the Company also paid an amount of $110,000 to a corporation of which Dr.
Brennan is a stockholder for service rendered by such corporation. In
addition, in March 1997, Dr. Brennan was granted an option to purchase an
aggregate of 150,000 shares of the Company's Common Stock under the Company's
Stock Plan at an exercise price of $0.15, the fair market value of the stock
on the date of grant. The vesting of such option accelerated upon
achievement of certain performance-based goals, including vesting of 80% of
such option upon completion of the Company's initial public offering and the
remaining 20% 180 days thereafter. In September 1997, Dr. Brennan was
granted an option to purchase 348,962 shares of the Company's Common Stock
under the Company's Stock Plan, at an exercise price of $2.50 per share, the
fair market value of the stock on the date of grant. The number of shares
included in the later option was determined by the number of shares necessary
to maintain Dr. Brennan's percentage of ownership in the Company following
the initial public offering. Commencing in the month of completion of the
Company's initial public offering, such option vests monthly over four years.
In determining Dr. Brennan's cash compensation and the size of the option
grants, the Compensation Committee considered Dr. Brennan's contribution to the
performance of the Company and his leadership in implementing strategic and
financial initiatives designed to augment the Company's development efforts. In
particular, the Committee took into account the successful completion of the
Company's initial public offering in November 1997, the closing of a private
financing in July 1997, acquisition of rights to additional core technologies
and the multiple corporate alliances established during 1997. The Compensation
Committee also considered industry reports as well as industry compensation
data. The Compensation Committee believes the size of the stock option grants
were appropriate in order to align Dr. Brennan's total compensation with the
performance of the Company and, ultimately, the interests of the stockholders.
SECTION 162(m) OF THE CODE
Section 162(m) of the Code limits the Company to a deduction for federal
income tax purposes of no more than $1 million of compensation paid to
certain Named Executive Officers in a taxable year. Compensation above $1
million may be deducted if it is "performance-based compensation" within the
meaning of the Code.
The Compensation Committee has not yet established a policy for
determining which forms of incentive compensation awarded to its Named
Executive Officers shall be designed to qualify as "performance-based
compensation." However, pursuant to Section 162(m), the Company's Stock Plan
permits compensation from options granted thereunder at no less than 100% of
fair market value to be excluded from the Section 162(m) limitations.
14.
<PAGE>
CONCLUSION
Through the programs described above, a significant portion of the
Company's compensation program and the compensation of the Company's Chief
Executive Officer are contingent on Company performance, and realization of
benefits is closely linked to increases in long-term stockholder value. The
Company remains committed to this philosophy of pay for performance, recognizing
that the competitive market for talented executives and the volatility of the
Company's business may result in highly variable compensation for a particular
time period.
COMPENSATION COMMITTEE
Alan G. Walton, Ph.D., D.Sc.
Jules Blake, Ph.D.
Charles L. Dimmer III
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
As stated above, the Compensation Committee consists of Alan G. Walton,
Ph.D., D.Sc., Jules Blake, Ph.D. and Charles Dimmler III. No member of the
Compensation Committee was at any time during the fiscal year ended December 31,
1997 an officer or employee of the Company.
15.
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the total stockholder return of an investment of
$100 in cash on November 21, 1997 for (i) the Company's Common Stock, (ii) CRSP
Total Return Index for the Nasdaq Stock Market (US) ("Nasdaq US") and (iii)
Nasdaq Pharmaceutical Stocks ("Nasdaq PH"). All values assume reinvestment of
the full amount of all dividends and are calculated as of the end of the last
day of each month the Company's Common Stock was publicly traded in 1997:
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT
Assumes $100 invested on November 21, 1997
Assumes reinvestment of all dividends
Fiscal year ended December 31, 1997
<TABLE>
<CAPTION>
Date Gene Logic Inc. Nasdaq US Nasdaq PH
----------- --------------- --------- ---------
<S> <C> <C> <C>
11/21/97 100.00 100.00 100.00
11/30/97 99.23 101.00 97.00
12/31/97 100.00 98.92 94.69
</TABLE>
- ------------------
(1) This Section is not "soliciting material," is not deemed "filed" with
the SEC and is not to be incorporated by reference in any filing of the
Company under the Securities Act or the Exchange Act, whether made
before or after the date hereof and irrespective of any general
incorporation language contained in such filing.
16.
<PAGE>
CERTAIN TRANSACTIONS
In July 1997, the Company sold 4,444,443 shares of Series C Convertible
Preferred Stock ("Series C") for net proceeds of approximately $19.1 million and
issued warrants to purchase an additional 48,889 shares of Series C. All
Preferred Stock automatically converted into Common Stock upon the closing of
the initial public offering. The holdings of such Common Stock (issued upon
conversion of the Series C Preferred Stock) by affiliates of the Company's
Directors are described below.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
PURCHASER COMMON STOCK
- ---------- --------------
<S> <C>
Biotechvest L.P. (1). . . . . . . . . . . . . . . . . 333,334
Fruit of the Loom Senior Executive Officer
Deferred Compensation Trust (1) . . . . . . . . . . 333,333
Cross Atlantic Partners K/S(2). . . . . . . . . . . . 182,222
Cross Atlantic Partners II K/S(2) . . . . . . . . . . 88,889
Cross Atlantic Partners III K/S(2). . . . . . . . . . 173,334
Oxford Bioscience Partners (Adjunct) L.P.(3). . . . . 11,111
Oxford Bioscience Partners (Bermuda) Limited 27,717
Partnership(3). . . . . . . . . . . . . . . . . . .
Oxford Bioscience Partners L.P.(3). . . . . . . . . . 78,283
</TABLE>
- ------------------
(1) Affiliated with Jeffrey D. Sollender, a Director.
(2) Affiliated with Charles L. Dimmler III, a Director.
(3) Affiliated with Alan G. Walton, Ph.D., D.Sc., a Director.
In 1997, the Company also paid an amount of $110,000 to a corporation of
which Dr. Brennan is a stockholder for service rendered by such corporation.
The Company has granted options to certain of its directors and executive
officers. The Company has entered into an Indemnity Agreement with certain of
its directors and executive officers, which provides, among other things, that
the Company will indemnify such officers and directors under the circumstances
provided for therein, for expenses (including attorneys' fees), witness fees,
damages, judgments, fines and amounts paid in settlement and any other amounts
such director or executive officer may be required to pay in actions or
proceedings which such director or officer is or may be a party by reason of
such position, and otherwise to the full extent permitted under Delaware law and
the Company's By-laws.
17.
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Mark D. Gessler
Mark D. Gessler
SENIOR VICE PRESIDENT, CORPORATE DEVELOPMENT,
CHIEF FINANCIAL OFFICER AND SECRETARY
May 8, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 IS
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, GENE
LOGIC INC., 708 QUINCE ORCHARD ROAD, GAITHERSBURG, MARYLAND 20878.
18.
<PAGE>
GENE LOGIC INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 5, 1998
The undersigned hereby appoints Michael J. Brennan, M.D., Ph.D. and Mark
D. Gessler, and each of them, as attorneys and proxies of the undersigned,
with full power of substitution, to vote all of the shares of stock of Gene
Logic Inc. (the "Company") which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders of the Company to be held at the offices
of the Company, located at 708 Quince Orchard Road, Gaithersburg, Maryland
20878, on Friday, June 5, 1998, at 3:00 p.m. local time, and at any and all
continuations, adjournments or postponements thereof, with all powers that
the undersigned would possess if personally present, upon and in respect of
the following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly
come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
BOTH NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED,
THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
Proposal 1: To elect two directors to hold office for a three-year term
expiring at the 2001 Annual Meeting of Stockholders.
/ / FOR both nominees listed below (except as marked to the
contrary below).
/ / WITHHOLD AUTHORITY to vote for both nominees listed below.
Nominees: Jules Blake, Ph.D. and Michael J. Brennan, M.D., Ph.D.
To withhold authority to vote for either nominee(s), write such
nominee(s)' name(s) below:
- -----------------------------------------------------------------------------
(Continued and to be signed on other side)
<PAGE>
(Continued from other side)
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2.
Proposal 2: To ratify the selection of Arthur Andersen LLP as independent
auditors of the Company for its fiscal year ending December 31,
1998.
/ / FOR / / AGAINST / / ABSTAIN
DATED: ______________, 1998 _____________________________________
Signature(s)
_____________________________________
Name of stockholder (if other than
individual)
Please sign exactly as your name appears hereon.
If the stock is registered in the names of two or
more persons, each should sign. Executors,
administrators, trustees, guardians and
attorneys-in-fact should add their titles. If
signer is a corporation, please give full
corporate name and have a duly authorized officer
sign, stating title. If signer is a partnership,
please sign in partnership name by authorized
person.
Please vote, date and promptly return this proxy
in the enclosed return envelope which is postage
prepaid if mailed in the United States.
