<PAGE>
SCHEDULE 14A
===============================================================================
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
CORTEX PHARMACEUTICALS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
--------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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.
<PAGE>
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
CORTEX PHARMACEUTICALS, INC.
15231 Barranca Parkway
Irvine, California 92618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 12, 2000
To the Stockholders of Cortex Pharmaceuticals, Inc.:
The Annual Meeting of Stockholders of Cortex Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), will be held at the offices of the
Company, 15231 Barranca Parkway, Irvine, California, on Tuesday, December 12,
2000 at 9:00 a.m. Pacific Time, to consider and vote on the following matters
described in the attached Proxy Statement:
(1) The election of six (6) directors to serve until the next Annual
Meeting of Stockholders or until their successors are elected and duly qualified
(Proposal 1);
(2) To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 2001 (Proposal 2); and
(3) Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed the close of business on October 25, 2000,
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any postponement and adjournment thereof. The
stock transfer books will not be closed.
The Board of Directors welcomes the personal attendance of stockholders at
the meeting. However, please sign and return the enclosed proxy, which you may
revoke at any time prior to its use, whether or not you expect to attend the
meeting. A self-addressed, postage prepaid envelope is enclosed for your
convenience. Your proxy will not be used if you attend the meeting and choose to
vote in person.
By Order of the Board of Directors
Maria S. Messinger, CPA
Secretary
Irvine, California
November 3, 2000
<PAGE>
CORTEX PHARMACEUTICALS, INC.
15231 Barranca Parkway
Irvine, California 92618
_________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 12, 2000
9:00 a.m.
_________________
Solicitation and Revocation of Proxies
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Cortex Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and the Company will bear the cost of such solicitation.
Solicitation of proxies will be primarily by mail, although some of the
officers, directors and employees of the Company may solicit proxies personally
or by telephone. The Company will reimburse brokerage houses and other
custodians, nominees or fiduciaries for their expenses in sending proxy
materials to their principals.
The persons named as proxies were designated by the Board of Directors and
are directors of the Company. All properly executed proxies will be voted
(except to the extent that authority to vote has been withheld) and where a
choice has been specified by the stockholder as provided in the proxy it will be
voted in accordance with the specification so made. Proxies submitted without
specification will be voted FOR the election as directors of the nominees
proposed by the Board of Directors and FOR the ratification of Ernst & Young LLP
as the Company's independent auditors.
Any stockholder may revoke a proxy at any time before it is voted at the
meeting by a proxy bearing a later date. A proxy may also be revoked by any
stockholder by delivering written notice of revocation to the Secretary of the
Company or by voting in person at the meeting.
This Proxy Statement and proxy are being mailed to stockholders of the
Company on or about November 3, 2000. The mailing address of the executive
offices of the Company is 15231 Barranca Parkway, Irvine, California 92618.
Voting at the Meeting
Only record holders of Common Stock of the Company at the close of business
on October 25, 2000, will be entitled to notice of, and to vote at, the meeting.
As of the record date, there were 16,582,758 shares of the Company's Common
Stock outstanding. Each share is entitled to one vote at the meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions are
counted in tabulating the votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
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PROPOSAL ONE
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect the six (6)
proposed nominees named below unless contrary instructions are given in the
proxy. The election of directors shall be by the affirmative vote of the holders
of a plurality of the shares voting in person or by proxy at the meeting. Each
director is to hold office until the next annual meeting and until his successor
is elected and qualified.
The names and certain information concerning the persons nominated by the
Board of Directors to become directors at the meeting are set forth below. The
Company's Board of Directors recommends that you vote FOR the election of each
---
of the nominees named below. It is intended that shares represented by the
proxies will be voted FOR the election to the Board of Directors of the persons
named below unless authority to vote for nominees has been withheld in the
proxy. Although each of the persons named below has consented to serve as a
director if elected and the Board of Directors has no reason to believe that any
of the nominees named below will be unable to serve as a director, if any
nominee withdraws or otherwise becomes unavailable to serve, the persons named
as proxies will vote for any substitute nominee designated by the Board of
Directors. The following information regarding the nominees is relevant to your
consideration of the slate proposed by the Board of Directors:
Nominees for Director
Robert F. Allnutt, 65, has been a director since December 1995 and Chairman
of the Board since February 1999. Since February 1995, Mr. Allnutt has been a
senior counselor for APCO Worldwide, Inc., a public affairs and strategic
communications company. Mr. Allnutt was Executive Vice President of the
Pharmaceutical Manufacturers Association from May 1985 until February 1995 and
was Vice President for Governmental Relations of Communications Satellite
Corporation from May 1984 until May 1985. Prior to 1985, Mr. Allnutt held
numerous positions in the Federal Government for 25 years, including 15 years at
NASA, where his positions included Associate Deputy Administrator, the third
ranking position in the agency. Mr. Allnutt is a director of QuestCor
Pharmaceuticals, Inc., a developer and marketer of prescription pharmaceuticals.
He also serves as a member of the Boards of Directors of the Partnership for
Caring and of the National Medals of Science and Technology Foundation. Mr.
Allnutt holds a B.S. in Industrial Engineering from the Virginia Polytechnic
Institute and J.D. and L.L.M. degrees from George Washington University.
Charles J. Casamento, 55, was elected to the Board of Directors of the
Company in July 1997. Since June 1993, Mr. Casamento has been Chairman,
President and Chief Executive Officer of QuestCor Pharmaceuticals, Inc., a
biopharmaceutical company based in Hayward, California. Prior to that, he was
President and Chief Executive Officer of Interneuron Pharmaceuticals, a
neuropharmaceutical company, from its founding in March 1989 until May 1993.
From January 1986 to March 1989, he was Senior Vice President and General
Manager, Pharmaceuticals & Biochemicals at Genzyme Corp., a biotechnology
company. From 1970 through 1985, Mr. Casamento held senior management positions
in marketing, finance and business development at Sandoz, Johnson & Johnson and
American Hospital Supply Corp., where he was Vice President, Business
Development and Strategic Planning for the Critical Care Division. He holds a
B.S. in Pharmacy and an M.B.A. from Fordham University and is a licensed
pharmacist.
2
<PAGE>
Carl W. Cotman, Ph.D., 60, is a co-founder of the Company. He has been a
Scientific Director of and consultant to the Company since October 1987, served
as a director of the Company from March 1989 to October 1990, and was reelected
as a director in November 1991. Dr. Cotman has been a Professor of
Psychobiology, Neurology, and Psychiatry at the University of California, Irvine
since 1985. He was a Professor of Psychobiology and Neurology at that University
from 1983 to 1985, and has held various other teaching and research positions at
that University since 1968. He chaired the Scientific Advisory Council of the
American Paralysis Association and is a member of numerous professional
associations and committees, including the Council of the American Society for
Neurochemistry, the National Institute of Aging Task Force, the American
Association for the Advancement of Science and the International Society for
Neurochemistry. Dr. Cotman has served on the editorial boards of numerous
scientific journals and has authored or co-authored seven books and over 400
articles in the fields of neurobiology, memory and cognition, and the recovery
of function after brain injury. Dr. Cotman holds a B.A. in Chemistry from
Wooster College, an M.A. in Analytical Chemistry from Wesleyan University, and a
Ph.D. in Biochemistry from Indiana University.
Michael G. Grey, 47, has been a director of the Company since September
1994. Since January 1999, Mr. Grey has been President and Chief Executive
Officer of Trega Biosciences, Inc., a company developing and commercializing
products that improve the drug discovery process. From November 1994 until
August 1998, Mr. Grey served as President of BioChem Therapeutic Inc., a wholly-
owned subsidiary of BioChem Pharma, an international biopharmaceutical company.
From January 1994 to October 1994, Mr. Grey was Senior Vice President, Corporate
Development of Titan Pharmaceuticals, Inc., a biopharmaceutical holding company
and President and Chief Operating Officer at Ansan, Inc., an early stage
biopharmaceutical company. From 1991 until 1993, Mr. Grey served as Vice
President, Corporate Development of Glaxo, Inc., and from 1989 until 1991, Mr.
Grey served as Director of International Licensing of Glaxo Holdings p.l.c., and
was responsible for the worldwide licensing activities of Glaxo. Since July
1999, Mr. Grey has also served as a member of the Board of Directors of Epimmune
Inc., a developer of vaccines to treat and prevent infectious diseases and
cancer, and since October 20, 1999, has served as a member of the Board of
Directors of ChemNavigators.com, Inc., a business-to-business Internet company.
Mr. Grey holds a B.Sc. in Chemistry from the University of Notingham.
Vincent F. Simmon, Ph.D., 57, was appointed President and Chief Executive
Officer and a director of the Company in May 1996 and served as the acting Chief
Financial Officer and Secretary of the Company from October 1998 to December
1999. From 1994 to 1995, Dr. Simmon served as Chairman, President and Chief
Executive Officer of Prototek, Inc., a privately-held biopharmaceutical company
focusing on the development of protease inhibitors. From 1990 to 1994, Dr.
Simmon served as President, Chief Executive Officer and a director at Alpha I
Biomedicals, Inc., a biotechnology company. From 1985 to 1990, Dr. Simmon served
as Vice President for Biomedical and Biotechnology Research at W. R. Grace and
Co. From 1979 to 1985, Dr. Simmon served in varying capacities including Senior
Vice President of Research and Development for Genex Corporation, a genetic
engineering company, and from 1973 to 1979 in varying capacities including
Assistant Director, Department of Technology for SRI International, a consulting
company. Dr. Simmon has served as a governor of the Emerging Companies Section
of BIO (Biotechnology Industrial Organization) and a director of the Chemical
Industries Institute for Toxicology (Research Triangle Park). Dr. Simmon holds a
B.A. in Biology and Chemistry from Amherst College, a M.S. from the University
of Toledo in Plant Physiology and a Ph.D. in Molecular Biology from Brown
University. Dr. Simmon was a post-doctoral fellow from 1971 to 1973 at Stanford
University. Dr.
3
<PAGE>
Simmon sits on the Boards of Directors of LINC (Life Sciences Industry Council)
and Thuris Corporation, a privately-held company.
Davis Temple, Jr., Ph.D., 57, has been a director of and consultant to the
Company since March 1994 and served as co-member of the Office of Chief
Executive Officer of the Company from October 1995 to May 1996. In 1997, Dr.
Temple was appointed as Chief Executive Officer of Cognetix, a privately-held
biopharmaceutical drug discovery and development company. Dr. Temple has served
as the Chairman of Cognetix since January 1999. From 1995 until 1998, he was a
Senior Consultant for Kaufman Brothers, a New York investment bank. Prior to
that, from 1994 to 1995 he was Managing Director at Stover Haley Burns, Inc., a
life science advisory group. From 1990 until 1993, Dr. Temple served as Vice
President, CNS Drug Discovery, of Bristol-Myers Squibb and from 1984 to 1990 he
served as Senior Vice President, CNS Research at Bristol-Myers Company. Dr.
Temple holds a B.S. in Pharmacy and a Ph.D. in Medicinal Chemistry and
Pharmacology from the University of Mississippi. Dr. Temple completed post-
doctorate research at Louisiana State University.
Executive Officers
Dr. Simmon is the Chief Executive Officer of the Company. Dr. Simmon's
biographical summary has been presented earlier. As of June 30, 2000, the other
Executive Officers of the Company included Maria S. Messinger and James H.
Coleman.
Maria S. Messinger, 33, was appointed Vice President, Chief Financial
Officer and Corporate Secretary of the Company in December 1999. She has served
as Controller of the Company since September 1994. From August 1989 to September
1994, Ms. Messinger served in a progression of positions at Ernst & Young LLP,
including her most recent position as an Audit Manager. She holds a B.A. from
the School of Business Administration and Economics at California State
University, Fullerton and is a Certified Public Accountant.
James H. Coleman, 59, became Senior Vice President of Business Development
in May 2000. Prior to joining Cortex, Mr. Coleman was President and Senior
Partner of Diversified Healthcare Management, Inc. (DHM), a biopharmaceutical
and biotechnology consulting firm that he founded in 1997. From March 1999 to
May 2000, Cortex was the principal client of DHM. Upon his employment with
Cortex, Mr. Coleman decreased his active consultancy and has not accepted new
clients. During 1996, Mr. Coleman served as Vice President of Commercial
Development at CoCensys, Inc., a biotechnology company, where he directed
strategic planning and external business development. Mr. Coleman was also
employed as an executive at Pharmacia & Upjohn, Inc. for over 25 years, where he
acquired extensive management expertise in new product development, global
strategic marketing, sales, CNS research and clinical research trial
methodologies. Mr. Coleman holds a B.S. in Applied Biology from the University
of Rhode Island.
Other Key Employees
Gary A. Rogers, Ph.D., 55, was appointed Senior Vice President,
Pharmaceutical Research in July 2000 and has served as Vice President,
Pharmaceutical Discovery since June 1995. In February 1994, he founded Ligand
Design, a private contract design and synthesis firm located in Santa Barbara.
From 1987 to 1994, Dr. Rogers served as an Associate Research Biochemist at the
University of California, Santa Barbara. Prior to that, he held a succession of
research and faculty positions at universities in the United States and abroad,
including three years as an Adjunct Professor
4
<PAGE>
of bio-organic chemistry under Dr. Paul Boyer at the University of California,
Los Angeles and four years as an Assistant Professor at the University of Texas.
Dr. Rogers is a co-inventor of the AMPAKINE family of AMPA receptor modulating
compounds. He holds a B.S. degree in organic chemistry from the University of
California, Los Angeles and a Ph.D. in bio-organic chemistry from the University
of California, Santa Barbara.
Ursula V. Staubli, Ph.D., 48, was named Vice President of Biological
Research in June 1999. From June 1993 to May 1999, Dr. Staubli was Associate
Professor at the Center for Neural Science at New York University ("NYU"). While
at NYU, she served as a consultant to the Company. Prior to June 1993, she held
teaching and research positions at McGill University and the University of
California, Irvine. A recipient of numerous pre- and post-doctoral fellowships
and grants, Dr. Staubli has published more than 60 scientific papers. She
received her B.S. in Behavioral Sciences and Ph.D. in Neurobiology from ETH-
Zurich (Swiss Federal Institute of Technology).
Scientific Directors
In addition to Dr. Cotman, the other Scientific Director of the Company is
Gary S. Lynch, Ph.D.
Gary S. Lynch, Ph.D., 57, is a co-founder of the Company. He has been a
Scientific Director of and consultant to the Company since October 1987 and
served as a director of the Company from March 1988 to March 1989 and again from
December 1994 to December 1995. Dr. Lynch has been a Professor in the Department
of Psychology at the University of California, Irvine since 1981, and has held
various other teaching and research positions at that University since 1969. He
is a Professor at the University's Center for the Neurobiology of Learning and
Memory. Dr. Lynch is a member of the Neuroscience Society and the International
Brain Research Organization. He also serves on the Advisory board of the
Cognitive Neurosciences Institute. Dr. Lynch has authored or co-authored over
500 articles and a number of books in the areas of neurobiology, cognition and
memory. Dr. Lynch holds a B.A. in Psychology from the University of Delaware and
a Ph.D. in Psychology from Princeton University. He is a co-founder of Synaptic,
Inc. and Thuris Corporation, both privately-held companies.
Board Committees
The Board of Directors of the Company has a standing Compensation Committee
and Audit Committee. The Board of Directors does not have a standing nominating
committee. The functions of the Compensation Committee include administering the
Company's stock plans and advising the Board of Directors on officer
compensation and on employee compensation generally. The Compensation Committee
held three (3) meetings during fiscal 2000 and is comprised of Dr. Cotman as
Chairman of the Committee, Mr. Grey and Dr. Temple. The Audit Committee has the
responsibility of recommending to the Board of Directors the appointment of the
Company's outside auditors, examining the results of audits and reviewing
internal accounting controls. The Audit Committee held one (1) meeting during
fiscal 2000 and is comprised of Mr. Allnutt, Mr. Grey and Mr. Casamento.
5
<PAGE>
Attendance at Meetings
During the fiscal year ended June 30, 2000, the Board of Directors held a
total of eight (8) meetings. No member of the Board of Directors attended fewer
than 75% of the meetings of the Board and of the committees of which he was a
member.
Executive Compensation
The following table sets forth summary information concerning compensation
paid or accrued by the Company for services rendered during the three fiscal
years ended June 30, 2000, to the Company's Chief Executive Officer, Chief
Financial Officer and Senior Vice President of Business Development
(collectively, the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
--------------------------------------- ----------------------------
Securities
Underlying
Name and Other Annual Options/ All Other
Principal Position Year Salary Bonus Compensation SARs(#) Compensation($)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vincent F. Simmon, Ph.D. 2000 $220,000 $ 75,000 $ -- 150,000 $ --
President, Chief 1999 211,370 100,000(1) -- 330,000(2) --
Executive Officer 1998 203,178 -- -- -- --
Maria S. Messinger, CPA (3) 2000 $106,042 $ 25,000 $ -- 40,000 $ --
Vice President, Chief
Financial Officer and
Corporate Secretary
James H. Coleman (4) 2000 $ 16,048 $ -- $150,000(5) 175,000(6) $ --
Senior Vice President,
Business Development
</TABLE>
______________________
(1) According to Dr. Simmon's employment agreement, he is eligible to receive a
bonus of between 15% to 50% of his annual base salary. Dr. Simmon
voluntarily postponed any bonus for the year ended June 30, 1998. The bonus
for the year ended June 30, 1999 includes an amount to adjust for the bonus
not paid in fiscal 1998.
(2) Includes stock options to purchase 180,000 shares of the Company's Common
Stock that were repriced in December 1998 from an exercise price of $5.625
per share to $0.375 per share, which represented the fair market value of
the Company's Common Stock at the time of repricing.
(3) Ms. Messinger was appointed Vice President and Chief Financial Officer in
December 1999. The table includes the compensation paid by the Company to
Ms. Messinger in her capacity as Controller during the fiscal year ended
June 30, 2000, prior to her appointment.
(4) Mr. Coleman was appointed Senior Vice President, Business Development in
May 2000. Prior to his employment at Cortex, Mr. Coleman served as a
consultant to the Company from March 1999.
(5) Other Annual Compensation to Mr. Coleman represents the consulting fees
paid to Diversified Healthcare Management during the
fiscal year ended June 30, 2000.
(6) Includes options to purchase 50,000 shares of Cortex Common Stock granted
to Diversified Healthcare Management, the firm Mr. Coleman worked for as a
consultant to Cortex prior to his employment at the Company in May 2000.
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<PAGE>
Option Matters
Option Grants. The following table sets forth certain information
concerning grants of stock options to the Company's Named Executive Officers in
the Summary Compensation Table during the fiscal year ended June 30, 2000.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Expiration
Name Granted(#) Fiscal Year Price($/Sh) Date
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Vincent F. Simmon, Ph.D. 150,000 27% $0.75 12/17/09
Maria S. Messinger, CPA 40,000 7% $0.75 12/17/09
James H. Coleman 125,000 22% $3.02 05/17/10
50,000(1) 9% $3.02 05/10/10
</TABLE>
_________________
(1) Represents options granted to Diversified Healthcare Management, the
firm Mr. Coleman worked for as a consultant to Cortex prior to his
employment at the Company in May 2000.
Option Exercises. The following table sets forth certain information
concerning the exercise of options by the Company's Named Executive Officers
during the fiscal year ended June 30, 2000, including the aggregate value of
gains on the date of exercise. In addition, the table includes the number of
shares covered by both exercisable and unexercisable stock options as of June
30, 2000. Also reported are the values for "in the money" options which
represent the positive spread between the exercise prices of any such existing
stock options and $2.52, the closing price of Common Stock on June 30, 2000, as
reported by the OTC Bulletin Board.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Value Realized($)
(market price Number of Securities Value of Unexercised
at exercise Underlying Unexercised In-the-Money
Shares Acquired less exercise Options at FY-End(#) Options at FY-End($)
Name on Exercise(#) price) Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vincent F. Simmon, Ph.D. 30,000 $ 112,575 215,000 235,000 $ 428,725 $ 466,925
Maria S. Messinger, CPA 0 0 18,750 46,250 40,219 84,406
James H. Coleman 0 0 0 175,000(1) 0 0
</TABLE>
___________________
(1) Includes options to purchase 50,000 shares of Cortex Common Stock granted
to Diversified Healthcare Management, the firm Mr. Coleman worked for as a
consultant to Cortex prior to his employment at the Company in May 2000.
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<PAGE>
Employment and Consulting Agreements
Vincent F. Simmon joined the Company as President and Chief Executive
Officer in May 1996. His employment agreement currently calls for a base salary
of $255,000 per year with an annual bonus, at the discretion of the Board of
Directors of the Company, in cash and/or equity equal to between 15% and 50% of
his base salary, subject to annual review by the Compensation Committee. In
connection with his employment, Dr. Simmon was granted options to purchase
180,000 shares of Common Stock at an exercise price of $5.625 per share,
representing 100% of the fair market value as of the date of grant. The options
vested monthly over a three-year period commencing one month from the date of
grant and have a ten-year term. In December 1998, the exercise price of these
options was restated to $0.375 per share. The restated options vest in three
equal installments over a two-year period, with the first installment vested on
the date of grant.
James H. Coleman joined the Company as Senior Vice President, Business
Development in May 2000. His employment agreement calls for a base salary of
$180,000 per year with an annual bonus, at the discretion of the Board of
Directors of the Company, equal to between 15% and 50% of his base salary. In
connection with his employment, Mr. Coleman was granted options to purchase
125,000 shares of Common Stock at an exercise price of $3.02 per share,
representing 100% of the fair market value as of the date of grant. The options
vest in equal annual installments over a three-year period and have a ten-year
term.
The Company has entered into severance agreements with each of the Named
Executive Officers. In the event of a termination of employment, under certain
circumstances, these severance agreements provide defined benefits to the Named
Executive Officers, including compensation equal to 12 months of the Named
Executive Officer's then current annual salary.
Drs. Carl W. Cotman and Gary S. Lynch (both of whom are co-founders and
Scientific Directors of the Company) have each entered into a consulting
agreement with the Company. Dr. Lynch receives a consulting fee of $30,000 per
year and Dr. Cotman receives a consulting fee of $23,000 per year. The term of
each consulting agreement commenced in November 1987 and will continue until
terminated by the respective parties thereto. The consulting agreements obligate
the respective consultants to make themselves available to the Company for
consulting and advisory services for an average of three days per month.
Director Compensation
During the fiscal year ended June 30, 2000, each non-employee director
(other than those who join the Board of Directors to oversee an investment in
the Company) was entitled to receive $1,500 at each Board of Directors meeting
attended, and an additional $750 annual retainer for each committee on which he
or she serves. The Chairman of the Board was entitled to receive $2,500 at each
Board of Directors meeting attended and an additional $750 annual retainer for
each committee on which he or she serves. On September 19, 2000, the Board of
Directors approved certain adjustments to the above-described director
compensation. As of September 19, 2000, each non-employee director (other than
those who join the Board of Directors to oversee an investment in the Company)
is entitled to receive $2,500 at each Board of Directors meeting attended, and
the Chairman of the Board is entitled to receive $3,000 at each Board of
Directors meeting attended.
During the fiscal year ended June 30, 2000, under the Company's 1996 Stock
Incentive Plan, each non-employee director (other than those who serve on the
Board of Directors to oversee an
8
<PAGE>
investment in the Company) was automatically granted options to purchase 15,000
shares of Common Stock upon commencement of service as a director and additional
options to purchase 6,000 shares of Common Stock on the date of each Annual
Meeting of Stockholders. As of September 19, 2000, the Board of Directors
approved an increase in the option grants for the above described non-employee
directors. Currently, each non-employee director (other than those who serve on
the Board of Directors to oversee an investment in the Company) is automatically
granted options to purchase 30,000 shares of Common Stock upon commencement of
service as a director and additional options to purchase 10,000 shares of Common
Stock on the date of each Annual Meeting of Stockholders. Non-employee directors
who serve on the Board of Directors to oversee an investment in the Company
receive options to purchase 7,500 shares of Common Stock upon commencement of
service as a director and additional options to purchase 3,000 shares of Common
Stock on the date of each Annual Meeting of Stockholders. These nonqualified
options have an exercise price equal to 100% of the fair market value of the
Common Stock on the date of grant, have a ten-year term and vest in equal
increments of 33-1/3% on each anniversary date of the dates of grant, and are
otherwise subject to the terms and provisions of the 1996 Stock Incentive Plan.
CERTAIN TRANSACTIONS
The Company's Restated Certificate of Incorporation provides that, pursuant
to Delaware Law, directors of the Company shall not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Company and
its stockholders. This provision does not eliminate the duty of care, and in
appropriate circumstances equitable remedies such as injunctions or other forms
of non-monetary relief remain available under Delaware Law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Company, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware Law. The provision also does not affect a director's
responsibility under any other law, such as the federal securities laws. The
Company has entered into Indemnification Agreements with each of its officers
and directors that obligate the Company to indemnify them as permitted by
applicable law.
See "Employment and Consulting Agreements" for a description of certain
arrangements and transactions with executive officers and directors.
9
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, to the knowledge of the Company, certain
information regarding the beneficial ownership of the Company's Common Stock as
of September 30, 2000, by (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock, (ii) each of
the Company's directors and nominees, (iii) each of the named executive officers
in the Summary Compensation Table and (iv) all of the Company's executive
officers and directors as a group. Except as indicated in the footnotes to this
table, the Company believes that the persons named in this table have sole
voting and investment power with respect to the shares of Common Stock
indicated.
<TABLE>
<CAPTION>
Directors, Shares Percent of
Officers, and 5% Beneficially Common Stock
Stockholders (1) Owned (2) Beneficially Owned (2)
------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert F. Allnutt 55,500(3) *
Charles J. Casamento 21,000(4) *
James H. Coleman 64,217(5) *
Carl W. Cotman, Ph.D. 160,000(6) *
Michael G. Grey 32,000(7) *
Maria S. Messinger, CPA 18,750(8) *
Vincent F. Simmon, Ph.D. 379,600(9) 2.2
Davis L. Temple, Jr., Ph.D. 54,500(10) *
All officers and directors
as a group (8 persons) 785,567(11) 4.6
</TABLE>
_____________________
* Less than one percent
(1) Except as otherwise indicated, the address of such beneficial owner is
at the Company's principal executive offices, 15231 Barranca Parkway,
Irvine, California 92618.
(2) Applicable percentage of ownership at September 30, 2000 is based upon
16,582,758 shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and includes voting and investment power with respect to
shares shown as beneficially owned. Shares of Common Stock subject to
options or warrants currently exercisable or exercisable within 60 days
of September 30, 2000 are deemed outstanding for computing the shares
and percentage ownership of the person holding such options or warrants,
but are not deemed outstanding for computing the percentage ownership of
any other person or entity.
(3) Includes 29,500 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(4) Includes 21,000 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(5) Includes 50,000 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(6) Includes 62,000 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(7) Includes 32,000 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(8) Includes 18,750 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(9) Includes 290,000 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
10
<PAGE>
(10) Includes 54,500 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
(11) Includes 557,750 shares that may be purchased upon exercise of options
within 60 days of September 30, 2000.
The Company is not aware of any arrangements that may at a subsequent date
result in a change of control of the Company.
11
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending June 30, 2001. The Board of Directors recommends that you vote FOR the
---
ratification of such appointment. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection. Ernst &
Young LLP's representatives are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
The persons named in the enclosed proxy will vote to appoint Ernst & Young
LLP unless contrary instructions are given in the proxy. The appointment of
Ernst & Young LLP shall be by the affirmative vote of the holders of a majority
of the shares voting on the proposal in person or by proxy at the meeting.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 2001 Annual
Meeting of Stockholders and presentation in the Company's proxy statement with
respect to such meeting should arrange for such proposal to be delivered to the
Company's offices, 15231 Barranca Parkway, Irvine, California 92618, addressed
to the Secretary, no later than July 6, 2001 in order to be considered for
inclusion in the Company's proxy statement relating to the meeting. Matters
pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer.
Additionally, with respect to the Company's 2001 Annual Meeting of
Stockholders, if the Company is not provided notice of a stockholder proposal,
which the stockholder has not previously sought to include in the Company's
proxy statement, by September 19, 2001, the Company will be allowed to use its
discretionary voting authority when the proposal is raised at the meeting,
without any discussion of the matter in the proxy statement.
12
<PAGE>
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 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 Securities
and Exchange Commission (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 ten-percent stockholders are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on the review of copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended June 30, 2000, all of the Company's
officers, directors and ten-percent stockholders complied with all applicable
Section 16(a) filing requirements, with the exception that a Form 5 reporting an
exempt option grant under a shareholder approved plan during fiscal year 2000
was not timely filed by Dr. Carl Cotman.
TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those set forth herein and in the Notice of Annual
Meeting of Stockholders that will come before the meeting. Should any other
matters arise requiring the vote of stockholders, it is intended that proxies
will be voted in respect thereto in accordance with the best judgment of the
person or persons voting the proxies.
Please return your proxy as soon as possible. Unless a quorum consisting of
a majority of the outstanding shares entitled to vote is represented at the
meeting, no business can be transacted. Therefore, please be sure to date and
sign your proxy exactly as your name appears on your stock certificate and
return it in the enclosed postage prepaid return envelope. Please act promptly
to ensure that you will be represented at this important meeting.
THE COMPANY WILL PROVIDE WITHOUT CHARGE, AT THE WRITTEN REQUEST OF ANY
BENEFICIAL OWNER OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF
STOCKHOLDERS, A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR
ENDED JUNE 30, 2000. REQUESTS SHOULD BE MAILED TO THE SECRETARY, CORTEX
PHARMACEUTICALS, INC., 15231 BARRANCA PARKWAY, IRVINE, CALIFORNIA 92618.
By Order of the Board of Directors
Maria S. Messinger, CPA
Secretary
November 3, 2000
13
<PAGE>
CORTEX PHARMACEUTICALS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
Robert F. Allnutt and Vincent F. Simmon, Ph.D., and each or either of them,
with full power of substitution, are hereby appointed proxies to vote the stock
of the undersigned in Cortex Pharmaceuticals, Inc. at the Annual Meeting of
Stockholders on December 12, 2000, and at any postponement and adjournment
thereof, to be held at 15231 Barranca Parkway, Irvine, California 92618, at
9:00 a.m. Pacific Time.
Management recommends that you vote FOR Proposal 1 and FOR Proposal 2.
---------------------------------------------------------------------
1. PROPOSAL 1 ELECTION OF DIRECTORS.
--------------------------------
[_] FOR all Nominees listed below [_] WITHHOLD AUTHORITY to
(except as indicated to the vote for all Nominees
contrary below) listed below
Robert F. Allnutt, Charles J. Casamento, Carl W. Cotman, Ph.D., Michael G.
Grey, Vincent F. Simmon, Ph.D. and Davis L. Temple, Jr., Ph.D.
INSTRUCTION: To withhold authority to vote for any individual Nominee,
write that Nominee's name in the space provided below.
-----------------------------
2. PROPOSAL 2 RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
------------------------------------------------------------------
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30,
-----------------------------------------------------------------------
2001.
----
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof, including
procedural and other matters relating to the conduct of the meeting.
[Front of Proxy Card]
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE SIX DIRECTOR NOMINEES LISTED ABOVE
AND FOR PROPOSAL 2.
Please sign exactly as name appears hereon.
__________________________________________
__________________________________________
Date: _____________________________, 2000
When shares are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in
full corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE IMMEDIATELY DATE, SIGN AND RETURN THIS CARD IN THE ENCLOSED
ENVELOPE. THANK YOU FOR YOUR PROMPT ATTENTION TO THIS IMPORTANT MATTER.
[Back of Proxy Card]
