<PAGE> 1
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [Section]240.14a-11(c) or
[Section]240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
GENOME THERAPEUTICS CORP.
(Name of Registrant as Specified In Its Charter)
GENOME THERAPEUTICS CORP.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
GENOME THERAPEUTICS CORP.
------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
IN LIEU OF AN ANNUAL MEETING
TO BE HELD ON FEBRUARY 7, 1997
To the Shareholders of
GENOME THERAPEUTICS CORP.
NOTICE IS HEREBY GIVEN that a Special Meeting in Lieu of an Annual Meeting
of Shareholders of Genome Therapeutics Corp. (the "Company") will be held on
February 7, 1997 at 10:00 a.m. at Ropes & Gray, One International Place, 36th
floor, Boston, Massachusetts, for the following purposes:
A. To elect five directors.
B. To ratify the selection of Arthur Andersen LLP as the Company's
auditors for the fiscal year ending August 31, 1997.
C. To transact such other business as may properly come before the meeting
or any adjournments of the meeting.
The Board of Directors has fixed the close of business on December 10, 1996
as the record date for the determination of shareholders entitled to notice of
and to vote at this meeting and at any adjourned session(s) thereof.
All shareholders are cordially invited to attend the meeting. However, to
assure your representation at the meeting, you are urged to mark, sign, date and
return the enclosed form of proxy as promptly as possible. Shareholders
attending the meeting may vote in person even if they have returned a proxy.
By Order of the Board of Directors,
DAVID C. CHAPIN, Clerk
January 7, 1997
Boston, Massachusetts
<PAGE> 3
GENOME THERAPEUTICS CORP.
PROXY STATEMENT
------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited by the Board of Directors of Genome
Therapeutics Corp. (the "Company") for use at a Special Meeting in Lieu of an
Annual Meeting of Shareholders to be held on February 7, 1997 (the "Annual
Meeting"), or at any adjourned session(s) of that meeting, for the purposes set
forth in the foregoing Notice. The cost of solicitation of proxies, including
expenses in connection with preparing and mailing this Proxy Statement, will be
borne by the Company. This solicitation of proxies is being made by mail,
although it may be supplemented by telephone, facsimile or personal solicitation
by directors, officers, or other employees of the Company. No additional
compensation will be paid to such individuals for such services. This Proxy
Statement and accompanying proxy will be mailed on or about January 7, 1997, to
all shareholders entitled to vote at the meeting. The address of the Company is
100 Beaver Street, Waltham, Massachusetts, 02154.
Only shareholders of record at the close of business on December 10, 1996,
will be entitled to notice of and to vote at the meeting. As of December 19,
1996, the Company had outstanding 17,517,074 shares of Common Stock, $.10 par
value (the "Common Stock"). Each share of Common Stock is entitled to one vote.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised. It may be revoked by filing with the Clerk of the
Company an instrument of revocation or a duly executed proxy bearing a later
date. It may also be revoked by attending the meeting and electing to vote in
person.
A copy of the Company's 1996 Annual Report to Shareholders, including
financial statements, is being mailed concurrently with this Proxy Statement to
each shareholder entitled to vote at the meeting. THE COMPANY WILL PROVIDE,
WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL
YEAR ENDED AUGUST 31, 1996 AND RELATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES TO EACH SHAREHOLDER ENTITLED TO VOTE AT THIS MEETING WHO
REQUESTS A COPY OF SUCH IN WRITING. REQUESTS SHOULD BE SENT TO GENOME
THERAPEUTICS CORP. 100 BEAVER STREET, WALTHAM MASSACHUSETTS, 02154, ATTENTION:
FENEL M. ELOI, VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER.
QUORUM, REQUIRED VOTES AND METHOD OF TABULATION
Consistent with Massachusetts law and under the Company's by-laws, a
majority of the shares entitled to be cast on a particular matter, present in
person or represented by proxy, constitutes a quorum as to such matter. Votes
cast by proxy or in person at the Annual Meeting will be counted by persons
appointed by the Company to act as election inspectors for the Annual Meeting.
The Company will count shares represented by proxies that withhold
authority to vote for a nominee for election as a director, or that reflect
abstentions and "broker non-votes" (i.e., shares represented at the meeting held
by brokers and nominees as to which instructions have not been received from the
beneficial owners or persons entitled to vote, and the broker or nominee does
not have the discretionary voting power in the particular matter) on any other
matter, only as shares that are present and entitled to vote for purposes of
determining the presence of a quorum, but none of the withheld votes,
abstentions, or broker non-votes will be counted as "cast" or have any effect on
the outcome of voting on the particular matter, even though persons analyzing
the results of the voting may interpret the results differently.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 19, 1996, certain
information regarding all shareholders known by the Company to be the beneficial
owners of more than 5% of the Company's Common Stock, and the stock ownership of
the Company's current directors and nominees, and of all directors and officers
of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER(1) OWNERSHIP OF CLASS
- -------------------- ---------- --------
<S> <C> <C>
Orrie M. Friedman....................................................... 2,514,742(2) 14.4%
Robert J. Hennessey..................................................... 1,775,000(3) 9.2%
Philip Leder............................................................ 195,000(4) 1.1%
Lawrence Levy........................................................... 20,000(4) *
Donald J. McCarren...................................................... 58,900(4) *
Steven M. Rauscher...................................................... 59,500(4) *
Gerald F. Vovis, Ph.D................................................... 243,160(4) 1.4%
Fenel M. Eloi........................................................... 134,025(4) *
John P. Richard......................................................... 116,250(4) *
All directors and officers as a group (9 persons)....................... 5,116,577(5) 25.7%
</TABLE>
- ---------------
* Less than 1%
(1) The address of all such persons is c/o the Company, 100 Beaver Street,
Waltham, Massachusetts, 02154.
(2) Includes 127,951 shares owned by, or in trust for, certain members of Dr.
Friedman's family. Dr. Friedman disclaims beneficial ownership of these
shares.
(3) Includes 1,773,000 shares which are issuable upon the exercise of vested
options.
(4) Includes 20,000 shares for Mr. Levy, 57,500 shares for each of Dr. McCarren
and Mr. Rauscher, 195,000 shares for Dr. Leder, 29,025 shares for Mr. Eloi,
105,000 shares for Mr. Richard, and 189,510 shares for Dr. Vovis, which
shares are issuable upon the exercise of vested options or options which
are to become vested within 60 days following December 19, 1996. Excludes
options which have been granted to directors and officers but which will
not become vested within 60 days following December 19, 1996.
(5) Includes a total of 2,426,535 shares which may be issuable upon the exercise
of vested options which were granted to certain directors and officers.
Also includes 127,951 shares as to which Dr. Friedman disclaims beneficial
ownership. Excludes options which have been granted to directors and
officers but which will not become vested within 60 days following December
19, 1996.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission and the
National Association of Securities Dealers. Executive officers, directors and
greater than ten percent beneficial owners are required by the Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during fiscal 1996 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
ten percent beneficial owners were complied with.
2
<PAGE> 5
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company to
its Chief Executive Officer and other executive officers who earned more than
$100,000 for the fiscal year ended August 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
AWARDS
------------
STOCK ALL
OPTIONS/ OTHER
FISCAL SALARY BONUS SARS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR $ $ # $
- --------------------------------------------- ------ ------- ------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Robert J. Hennessey.......................... 1996 313,661(2) 50,000 300,000 1,000
Chairman, President/CEO 1995 258,655(3) 25,000 -- 1,000
1994 244,116(4) 15,000 -- 288
Fenel M. Eloi................................ 1996 119,700 30,000 25,100 1,000
Vice President, 1995 108,800 -- 40,500 1,000
CFO & Treasurer 1994 102,600 -- 40,000 1,000
John P. Richard.............................. 1996 152,835(5) 25,000 25,000 1,000
Vice President 1995 126,000 -- 40,000 1,000
Business Development 1994 117,892(6) -- 30,000 1,000
Gerald F. Vovis.............................. 1996 144,900 -- 13,000 1,000
Sr. Vice President 1995 144,900 -- 5,100 1,000
Research & Development 1994 140,000 -- 50,100 1,000
</TABLE>
- ---------------
(1) These amounts represent Company contributions to the Company's 401(k) Plan.
(2) This amount includes $67,123 for temporary housing and relocation expenses.
(3) This amount includes $34,031 for temporary housing.
(4) This amount includes $36,608 for relocation expenses.
(5) This amount includes $16,918 for relocation expenses.
(6) This amount includes $2,507 for relocation expenses.
EXECUTIVE EMPLOYMENT AGREEMENT
Robert J. Hennessey, Chairman of the Board, President and Chief Executive
Officer of the Company, has an employment agreement with the Company which
commenced March 15, 1996. The agreement is subject to automatic extension
annually thereafter unless prior written notice of nonrenewal is given. Mr.
Hennessey's current base salary is $260,000, and is subject to increase each
year, as determined by the Board of Directors or Stock Option and Compensation
Committee. The percentage of the increase must be at least equal to the
percentage increase, if any, during the preceding year in the Consumer Price
Index -- Boston Region. On March 15, 1996, Mr. Hennessey received a bonus of
$50,000 for his efforts in the Company's achieving operating and financial goals
from March 15, 1995 to March 15, 1996. Mr. Hennessey was awarded non-qualified
stock options to purchase 1,600,000 shares of Common Stock upon hiring, all of
which were vested as of August 31, 1996. Mr. Hennessey was also awarded
non-qualified stock options to purchase up to 300,000 shares of Common Stock, at
an exercise price of $8.87 per share, the fair market value of the Common Stock
on the date of the grant. As of August 31, 1996, 175,000 options have vested and
the balance of the 125,000 options by their terms vest on December 21, 2005 or
earlier if the average closing price of the Common Stock for a period of 10 out
of 20 consecutive trading days is $14.25 or higher.
3
<PAGE> 6
The following table reflects the stock options granted by the Company to
the named executive officers for the fiscal year ending August 31, 1996:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
RATES OF STOCK PRICE
OPTIONS/ % OF TOTAL OPTIONS/ EXERCISE APPRECIATION FOR
SARS SARS GRANTED TO OR BASE OPTION TERM(1)
GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME # FISCAL YEAR ($/SHARE) DATE 5% 10%
- ---- -------- ------------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert J.
Hennessey......... 300,000 -- $ 8.875 03/25/06 $1,675,932 $4,244,839
Gerald F. Vovis..... 500(2) -- 7.25 11/16/05 2,280 5,777
12,500(3) 1.0% 1.56 09/27/03 128,119 215,558
Fenel M. Eloi....... 100(2) -- 7.25 11/16/05 456 1,155
25,000(4) 2.0% 7.44 07/11/06 116,935 296,336
John P. Richard..... 25,000(4) 2.0% 7.44 07/11/06 116,935 296,336
</TABLE>
- ---------------
(1) The amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5%
and 10%, compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other expenses
associated with the exercise. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock, the
optionholders' continued employment through the option period, and the date
on which the options are exercised.
(2) These incentive stock options were granted on November 16, 1995 and have a
term of ten years. The options vest in four equal installments over the
next four years on the anniversary of the date of grant.
(3) These non-incentive stock options were granted on April 1, 1996 and have a
term of ten years. The options vest in twelve equal installments over the
next twelve months on the monthly anniversary of the date of grant.
(4) These incentive stock options were granted on July 11, 1996 and have a term
of ten years. The options vest in four equal installments over the next
four years on the anniversary of the date of grant.
The following table sets forth the aggregate dollar value of all
Options/SARs exercised and the total number of unexercised Options/SARs held on
August 31, 1996 by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL YEAR-END
FISCAL YEAR-END(#) ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- ---- --------------- ----------- ------------------ ------------------
<S> <C> <C> <C> <C>
Robert J. Hennessey.......... 0 $ 0.00 1,775,000/125,000 $12,044,625/31,875
Gerald F. Vovis.............. 49,200 216,949 176,975/23,125 1,358,919/168,337
Fenel M. Eloi................ 120,000 874,437 13,875/86,725 77,918/427,429
John P. Richard.............. 36,250 226,675 91,250/72,500 671,053/324,697
</TABLE>
- ---------------
(1) The closing price of the Common Stock on August 31, 1996 was $9.125 as
reported by NASDAQ National Market. Value is calculated on the basis of the
difference between the Option/SAR grant price and $9.125 multiplied by the
number of shares of Common Stock underlying the Option/SAR.
4
<PAGE> 7
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934 that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following report and the Performance Graph
on page 6 shall not be incorporated by reference into any such filings.
REPORT OF THE STOCK OPTION AND COMPENSATION COMMITTEE
The Stock Option and Compensation Committee of the Board of Directors (the
"Compensation Committee") of the Company consists of Drs. Friedman and McCarren
and Mr. Levy. The Committee's responsibilities include recommending to the Board
of Directors the compensation of the Company's executive officers, administering
the Company's stock option plans and approving the grant of stock options to
employees of, and consultants to, the Company. No member of the Committee was an
officer or employee of the Company during the year ended August 31, 1996.
The Company's executive compensation programs reflect input and
recommendations from the Company's Chief Executive Officer. The Compensation
Committee reviews his proposals concerning executive compensation and makes a
recommendation to the Board of Directors concerning the scope and nature of
compensation arrangements. It is the Company's current policy to establish,
structure and administer compensation plans and arrangements so that the
deductibility to the Company of such compensation will not be limited under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Company and Mr. Hennessey are parties to an employment agreement.
During the year ended August 31, 1996 Mr. Hennessey received a salary of
$246,538 and a bonus of $50,000 under the agreement. Pursuant to the agreement,
in March 1993 and March 1996 Mr. Hennessey was granted an option to purchase up
to 1,600,000 and 300,000 shares of the Company's Common Stock respectively. See
"Executive Compensation - Executive Employment Agreements."
Mr. Hennessey's base salary and bonus reflect Mr. Hennessey's and the
Company's accomplishments since his employment with the Company during fiscal
1996. During this period, Mr. Hennessey completed two pharmaceutical alliances,
one patent license agreement with Merck and a public offering resulting in net
proceeds to the Company of $42,000,000. No specific weight was assigned to any
of these accomplishments by the Committee in setting Mr. Hennessey's
compensation.
EXECUTIVE OFFICER COMPENSATION
The Company maintains compensation and incentive programs designed to
motivate, retain and attract management. The compensation levels provided for
the Company's executive officers reflect consideration of the compensation
levels of comparable companies, and the performance and potential of the
officer.
Ongoing executive officer compensation is determined subjectively, in that
the Chief Executive Officer provides recommendations to the Compensation
Committee for the proposed remuneration of the Company's officers based on his
evaluation of those individuals' performance against objectives jointly
formulated by the Chief Executive Officer and the officers, any change in their
responsibilities, their potential to contribute to the success of the Company
and the compensation levels of similarly situated employees of comparable
companies. No specific weights have been assigned to these factors by the
Committee.
Officer compensation is generally composed of cash compensation and option
grants under the Company's stock option plans. The Company believes strongly in
the use of stock options to align the interests of its employees, particularly
its executive officers, with the interests of the Company's shareholders.
Options generally vest over a period of years, in order to serve as a future
incentive. There is no formula for the award
5
<PAGE> 8
of stock options to individual executives. Factors considered in making option
awards include the officer's existing equity or stock option position, the
importance to the Company of retaining the officer's services, the officer's
potential to contribute to the success of the Company and the officer's past
contributions to the Company.
STOCK OPTION AND COMPENSATION COMMITTEE
Orrie M. Friedman
Donald J. McCarren
Lawrence Levy
PERFORMANCE GRAPH
NOTE: The stock price performance shown on the graph below is not necessarily
indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GENOME THERAPEUTICS CORP., THE S&P 500 INDEX
AND THE AMEX BIOTECHNOLOGY INDEX
The graph below compares the relative cumulative total returns to the
Company's shareholders with the cumulative total of the S&P 500 Index and the
Amex Biotechnology Index over the last five years.
<TABLE>
<CAPTION>
Genome
Measurement Period Therapeutics AMEX BIO-
(Fiscal Year Covered) Corp. S & P 500 TECHNOLOGY
<S> <C> <C> <C>
8/91 100.00 100.00 100.00
8/92 96.00 108.00 90.00
8/93 92.00 124.00 71.00
8/94 133.00 131.00 60.00
8/95 517.00 159.00 69.00
8/96 608.00 189.00 81.00
</TABLE>
* $100.00 invested on 8/31/91 in stock or Index-including reinvestment of
dividends.
6
<PAGE> 9
PROPOSAL A
ELECTION OF FIVE DIRECTORS
The Board of Directors has fixed the number of directors at five. It is
intended that the enclosed proxy will be voted for the election of the five
persons named below unless such authority has been withheld in the proxy. Each
director will hold office until the next annual meeting and until his successor
is elected and shall have been qualified. In order to be elected a majority of
the shares entitled to vote must approve, or be deemed to have approved, the
election of each nominee for director. If any nominee should be unavailable for
election at the time of the meeting (which is not presently anticipated) the
persons named as proxies may vote for another person in their discretion or may
vote for fewer than five directors. All of the nominees are currently directors
of the Company and were elected at the 1996 Annual Meeting. All have agreed to
serve as directors if elected at the meeting.
Directors of the Company who are not also employees receive an annual
retainer of $4,000 and a meeting attendance fee of $1,000 per meeting plus
out-of-pocket expenses.
The nominees for directors of the Company who are proposed for election at
the meeting, their ages, and a description of their principal occupations are
set forth in the following table. The principal occupations and business
experience of the nominees for the past five years have been with the employers
indicated, although in some cases they have held different positions with such
employers.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AGE OTHER DIRECTORSHIPS SINCE
- ------------------------- --- --------------------------------------------------- --------
<S> <C> <C> <C>
Robert J. Hennessey...... 55 Mr. Hennessey became Chief Executive Officer and 1993
President of the Company in March 1993 and was
elected Chairman of the Board in May 1994. From
1990 to March 1993, Mr. Hennessey was President of
Hennessey & Associates, Ltd., a consulting firm.
From 1980 to 1990 he was a Vice President of
Sterling Drug, Inc., a pharmaceutical company.
Philip Leder............. 62 Dr. Leder, a director of the Company, has served as 1994
the John Emery Andrus Professor of Genetics and
Chairman of the Department of Genetics at Harvard
Medical School since 1980. He has also been a
Senior Investigator of the Howard Hughes Medical
Institute since 1986. Dr. Leder is a director of
Monsanto Company Inc.
Lawrence Levy............ 73 Mr. Levy, a director of the Company, is Chairman of 1986
the Board of Directors and President of Northern
Ventures Corporation, international management and
business consulting firm. He has held this position
since 1982.
Donald J. McCarren....... 57 Dr. McCarren, a director of the Company, was the 1993
President and Chief Executive Officer, and director
of Tacora Corp., a drug delivery company, from
October 1994 until May 1996. From 1992 to 1994, Dr.
McCarren was the President and Chief Operating
Officer of ImmunoGen, Inc., a biopharmaceutical
company. From 1990 to 1992 Dr. McCarren was the
President of Adria Laboratories Division of
Erbamont, N.V., a biopharmaceutical company.
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AGE OTHER DIRECTORSHIPS SINCE
- ------------------------- --- --------------------------------------------------- --------
<S> <C> <C> <C>
Steven M. Rauscher....... 44 Mr. Rauscher is a director of the Company and has 1993
been the Chief Executive Officer and a director of
Affiliated Research Centers, Inc. since 1995. From
1993 to 1995 Mr. Rauscher was President and Chief
Executive Officer of Pharmedic Company, a
biopharmaceutical company. From 1976 to 1993 he was
Vice President of Abbott Laboratories, a
biopharmaceutical company.
</TABLE>
The Board of Directors held six meetings during fiscal 1996. Each member of
the Board of Directors attended at least 75% of the meetings of the Board of
Directors and of each committee on which they serve.
The Board of Directors has established an Audit Committee consisting of Mr.
Rauscher, Dr. McCarren, and Mr. Levy which held one meeting during fiscal 1996.
The duties of the Audit Committee consist of reviewing with the Company's
independent auditors and its management the scope and results of the annual
audit, the scope of other services provided by the Company's auditors, proposed
changes in the Company's financial and accounting standards and principles, the
Company's policies and procedures with respect to its internal accounting,
auditing and financial controls, and making recommendations to the Board of
Directors on the engagement of independent auditors.
The Board of Directors has established a Stock Option and Compensation
Committee, consisting of Drs. Friedman and McCarren and Mr. Levy. The duties of
the Stock Option and Compensation Committee consist of determining the
compensation of the Company's executive officers, and administering the
Company's stock option plans and determining the grant of stock options to
employees of, and consultants to, the Company. During fiscal 1995, the Stock
Option and Compensation Committee held four meetings.
The Board of Directors has established a Nominating Committee, consisting
of Mr. Levy and Drs. Friedman and Leder. The duties of the Nominating Committee
consist of considering and making recommendations to the Board of Directors.
During fiscal year 1996, the Nominating Committee had no meetings. The
Nominating Committee does not consider nominees recommended by shareholders.
THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF THE FIVE NOMINEES DESCRIBED ABOVE.
EXECUTIVE OFFICERS
The executive officers of the Company who are not also directors of the
Company are as follows.
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Fenel M. Eloi...................... Vice President, Treasurer and Chief
Financial Officer
John P. Richard.................... Vice President - Business
Development
Bernd R. Seizinger................. Executive Vice President and Chief
Scientific Officer
</TABLE>
Fenel M. Eloi joined the Company in September 1989 as Corporate Controller
and was promoted to his current position in 1991. Between 1984 and 1989, Mr.
Eloi held various financial management positions at GTE. Prior to 1984, he held
various financial positions, both domestic and international, with Haemonetics
and Simplex Time Recorder Co.
8
<PAGE> 11
John P. Richard became Vice President - Business Development of the Company
in June, 1993. From 1991 to June 1993, Mr. Richard served the Company as Vice
President, Sales and Marketing for Collaborative Diagnostics, a start-up genetic
reference laboratory wholly owned by the Company. In 1987, Mr. Richard founded
IMPATH Laboratories, a cancer pathology laboratory, located in New York City. He
served as President of IMPATH from 1987 to 1990. Prior to this, he held
positions in operations, corporate planning and marketing at Microbiological
Associates and Biogenex.
Bernd R. Seizinger, M.D., Ph.D., joined the Company on September 1, 1996 as
Executive Vice President and Chief Scientific Officer. Prior to joining the
Company, Dr. Seizinger held various positions at Bristol-Myers Squibb
Pharmaceutical Research Institute including Vice President, Molecular Genetics,
Oncology of Bristol-Myers from 1992 to 1995 and Vice President, Corporate and
Academic Alliances from 1995 to September 1996. Prior to this, Dr. Seizinger
served as an Associate Professor of Neuroscience at Harvard Medical School as
well as Associate Geneticist in the Department of Neurology and Neurosurgery and
Director of the Molecular Neuro-Oncology Laboratory at Massachusetts General
Hospital. Dr. Seizinger also serves as an Associate Faculty Member of the
Department of Molecular Biology at Princeton University.
9
<PAGE> 12
PROPOSAL B
RATIFICATION OF SELECTION OF AUDITORS
Arthur Andersen LLP, Boston, Massachusetts, has been selected by the Board
of Directors of the Company as auditors of the Company for the fiscal year
ending August 31, 1997. Unless otherwise indicated, proxies will be voted in
favor of ratifying the selection of Arthur Andersen as auditors. A
representative of Arthur Andersen will be present at the Annual Meeting if
requested by a shareholder (either in writing or by telephone) in advance of the
Annual Meeting. Such requests should be directed to the Clerk of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL B.
SHAREHOLDER PROPOSALS
In order for any proposal that a shareholder intends to present at next
year's annual meeting of shareholders to be eligible for inclusion in the
Company's proxy material for that meeting, it must be received by the Clerk of
the Company at the Company's offices in Waltham, Massachusetts, no later than
September 20, 1997.
OTHER MATTERS
The Board of Directors knows of no other business to be presented at the
meeting, but if other matters do properly come before the meeting, it is
intended that the persons named in the proxy will vote in respect thereof in
accordance with their best judgment.
In the event that sufficient votes in favor of any of the proposals set
forth in the accompanying Notice are not received by the time scheduled for the
meeting, the persons named as proxies may propose one or more adjournments of
such meeting for a period of not more than 60 days in the aggregate to permit
further solicitation of proxies with respect to any of such proposals. Any such
adjournments will require the affirmative vote of a majority of the votes cast
on the question in person or by proxy at the session of the meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment
those proxies that they are entitled to vote in favor of such proposals. They
will vote against any such adjournment those proxies required to be voted
against any of such proposals. The costs of any such additional solicitation and
of any adjourned session will be borne by the Company.
The Board of Directors encourages you to have your shares voted by signing
and returning the enclosed form of proxy. The fact that you will have returned
your proxy in advance will in no way affect your right to vote in person should
you find it possible to attend. However, by signing and returning the proxy you
have assured your representation at the meeting. Thank you for your cooperation.
10
<PAGE> 13
DETACH HERE GEN 2
GENOME THERAPEUTICS CORP.
SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS,
FEBRUARY 7, 1997
P
R The undersigned hereby appoints Robert J. Hennessey and Fenel M. Eloi or
O either of them, proxies with power of substitution to each, to vote at the
X Special Meeting in Lieu of an Annual Meeting of Stockholders of Genome
Y Therapeutics Corp., to be held on February 7, 1997, at Ropes & Gray, One
International Place, 36th Floor, Boston, Massachusetts at 10:00 a.m., local
time, or at any adjournments thereof, all of the shares of Common Stock, par
value $.10 per share, of Genome Therapeutics Corp. that the undersigned would
be entitled to vote if personally present. The undersigned instructs such
proxies or their substitutes to act on the following matters as specified by
the undersigned, and to vote in such manner as they may determine on any
other matters that may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-----------
DETACH HERE GEN 1
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1 (ELECTION OF DIRECTORS) AND PROPOSAL 2
(RATIFICATION OF SELECTION OF AUDITORS).
1. To Elect five directors.
NOMINEES: Philip Leder, Robert J. Hennessey,
Lawrence Levy, Donald J. McCarren, Steven M.
Rauscher
FOR WITHHELD
ALL [ ] FROM ALL [ ]
NOMINEES NOMINEES
[ ]
--------------------------------------
For all nominees except as noted above
2. To ratify the selection of Arthur Andersen FOR AGAINST ABSTAIN
LLP as the Company's auditors for the fiscal [ ] [ ] [ ]
year ending August 31, 1997.
3. In their discretion, the proxies are
authorized to vote upon such other business as
may properly come before the meeting or any
adjournments of the meeting.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
PLEASE SIGN AND DATE:
NOTE: Please sign exactly as name appears on
this card. All joint owners should sign. When
signing as executor, administrator, attorney
or guardian or as custodian for a minor,
please give full title as such. If a
corporation, please sign in full corporate
name and indicate the signer's office. If a
partner, sign in the partnership name.
Signature: Date: Signature: Date:
---------------- ---------- --------------- ---------
