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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 COMMISSION FILE NUMBER 0-19193
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CAMBRIDGE NEUROSCIENCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3319074
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE KENDALL SQUARE, BUILDING 700, CAMBRIDGE, MA 02139
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 225-0600
SECURITIES REGISTERED PURSUANT TO SECTION 12(d) OF THE ACT:
Name of Each Exchange
Title of Each Class On Which Registered
------------------- ---------------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, par value $.001 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of Common Stock held by non affiliates of
the Registrant as of February 15, 2000, was $20,985,143 based on the last
reported sales price of the Common Stock. As of that date, there were issued and
outstanding 18,135,964 shares of Common Stock, par value $.001 per share.
EXPLANATORY NOTE
The purpose of this amendment is to amend and restate Part III of Form
10-K filed on March 17, 2000. The amended and restated items are as follows:
directors of the registrant, executive compensation, security ownership of
beneficial owners and management, and certain relationships and related
transactions. These items were omitted from the Form 10-K in reliance on
instructions included in Form 10-K permitting the Registrant to incorporate such
items by reference to the Registrant's proxy statement, provided such proxy
statement is filed within 120 days of the Registrant's fiscal year-end. As the
Registrant intends to file its proxy statement later than 120 days from its
fiscal year-end, it is providing these items as part of this Form 10-K/A.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The response to this item is contained in part herein and in part under
the caption "Executive Officers of the Company" in Part I, Item 1(a) of the Form
10-K.
The current Directors of the Registrant, together with information
furnished by each of them regarding their respective principal occupation,
business experience and certain other information are as follows.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING PAST FIVE YEARS
NAME (AGE) AND OTHER DIRECTORSHIPS
- --------- -----------------------------------------------
<S> <C>
Paul C. O'Brien Director since May 1992. Chairman of the Board
(60) of Directors since May 1998. Since January
1995, Mr. O'Brien has been President and Chief
Executive Officer of The O'Brien Group, Inc., a
consulting company. From 1993 until December
1994, Mr. O'Brien was Chairman of New England
Telephone and Telegraph Company, a wholly-owned
subsidiary of NYNEX Corporation. He is a
director of Renaissance Worldwide, Inc., an
information technology consulting company,
MangoSoft, Inc., a software technology company,
and is Chairman of View Tech, Inc., a video and
telecommunications systems company. Mr. O'Brien
earned a B.S. degree in electrical engineering
from Manhattan College, an M.B.A. degree from
New York University and holds three honorary
doctorates.
Nancy S. Amer Director since September 1994. Since December
(39) 1996, Ms. Amer has been a General Partner of
Crescent Gate, L.P., a middle-market buyout
fund. From December 1994 through December 1996,
Ms. Amer was a Managing Director of Harvard
Private Capital Group, Inc., a subsidiary of
Harvard Management Company. Ms. Amer earned
B.A. and M.B.A. degrees from Harvard
University.
Burkhard Blank, M.D. Director since July 1995. Dr. Blank joined
(45) Boehringer Ingelheim GmbH, an operating
division of BI, in 1986 and has served as head
of international project management for
Boehringer Ingelheim GmbH since 1993.
Ira A. Jackson Director since May 1992. Since 1999, Mr.
(51) Jackson has been a Joint Fellow at Harvard
University's John F. Kennedy School of
Government. Prior thereto, Mr. Jackson was an
Executive Vice President of BankBoston, a
commercial bank, where he served from 1987 to
1999. Mr. Jackson received an A.B. from Harvard
University and an M.P.A. from the Kennedy
School of Government and attended the Advanced
Management Program at the Harvard Business
School.
Joseph B. Martin, M.D., Ph.D. Director since February 1987. Dr. Martin has
(61) been Dean of Harvard Medical School since July
1997. Prior thereto, Dr. Martin was Chancellor
of the University of California, San Francisco
since July 1993.
Harry W. Wilcox, III Director since May 1998. President and Chief
(46) Executive Officer of Cambridge NeuroScience,
Inc., since May 1998. From December 1995 to May
1998, Mr. Wilcox was the Company's Senior Vice
President, Finance and Business Development and
Chief Financial Officer. Prior to joining the
Company, Mr. Wilcox was employed at Cellcor,
Inc., a biotechnology company, since 1990,
where he was most recently Senior Vice
President of Business Development and Finance
and Chief Financial Officer. Mr. Wilcox earned
a B.A. degree in Finance from the University of
Arizona and an M.B.A. degree from Boston
University. Mr. Wilcox is a Certified Public
Accountant.
</TABLE>
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors are required under Section
16(a) of the Exchange Act to file reports of ownership of the Company's
securities and changes in ownership with the Securities and Exchange Commission.
Copies of these reports must also be furnished to the Company.
Based solely on a review of reports furnished to the Company and written
representation that no other reports were required, the Company believes that
during and with respect to fiscal year 1999 the executive officers and directors
of the Company timely complied with all applicable Section 16(a) filing
requirements.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth certain compensation information for the
Chief Executive Officer of the Company during the year ended December 31, 1999
and each of the other most highly compensated executive officers whose salary
and bonus for 1999 exceeded $100,000 (collectively, the "named executive
officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------- ----------------
SECURITIES ALL OTHER
SALARY BONUS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) (1) ($) (2) OPTIONS (#) (3) ($) (4)
- ----------------------------------- ------- ---------- ---------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Harry W. Wilcox, III 1999 225,000 13,500 100,000 7,335
President and Chief 1998 212,807 22,500 250,000 11,974
Executive Officer 1997 189,578 - 30,000 12,116
Robert N. McBurney 1999 224,700 13,482 100,000 6,280
Sr. Vice Pres., Research, 1998 224,700 22,470 - 11,009
Chief Scientific Officer 1997 224,700 - 15,000 10,694
Laima I. Mathews 1999 121,000 7,260 - 3,340
Vice President, Drug 1998 121,000 12,100 50,000 6,338
Development 1997 119,206 - 1,250 6,774
David I. Gwynne 1999 141,853 8,511 - 5,847
Vice Pres., Biotechnology 1998 136,143 14,185 50,000 8,342
and Business Development 1997 121,993 - 1,250 8,298
</TABLE>
(1) Includes compensation deferred during fiscal years 1999, 1998 and 1997
pursuant to a 401(k) Plan.
(2) Bonuses were earned in the year indicated and paid in the subsequent year.
(3) Consists of options granted under the Equity Plan to acquire shares of the
Company's Common Stock.
(4) The amounts shown in this column for 1999 are derived from the following
figures for Mr. Wilcox, Dr. McBurney, Mrs. Mathews and Dr. Gwynne,
respectively: $5,063, $4,775, $3,340 and $4,377 for match of contributions
to 401(k) Plan; and $2,272, $1,505, $0, and $1,470 for life insurance. The
amounts shown in this column for 1998 are derived from the following figures
for Mr. Wilcox, Dr. McBurney, Mrs. Mathews and Dr. Gwynne, respectively:
$9,600, $9,600, $6,050 and $8,168 for match of contributions to 401(k) Plan;
and $2,374, $1,409, $288 and $174 for life insurance. The amounts shown in
this column for 1997 are derived from the following figures for Mr. Wilcox,
Dr. McBurney, Mrs. Mathews and Dr. Gwynne, respectively: $9,496, $9,500,
$6,630 and $8,154 for match of contributions to 401(k) Plan; and $2,620,
$1,194, $144 and $144 for life insurance.
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The following table provides information regarding stock options granted
during 1999 to the named executive officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM (1)
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------------
NAME GRANTED YEAR ($/SH) DATE 5% ($) 10% ($)
---- ---------- ---------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Harry W. Wilcox, III 100,000 41% 0.69 1/5/09 43,394 109,968
Robert N. McBurney 100,000 41% 0.69 1/5/09 43,394 109,968
David I. Gwynne - - - - - -
Laima I. Mathews - - - - - -
</TABLE>
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term and are not
intended to be a forecast of possible future appreciation, if any, in the
price of the Company's Common Stock. These gains are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually from
the date the respective options were granted.
The following table provides information regarding the number of
securities underlying unexercised options held by the named executive officers
at December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END
------------------------------- -------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------- -------------------------
<S> <C> <C> <C> <C>
Harry W. Wilcox, III 183,125 246,875 $10,378 $28,422
Robert N. McBurney 233,437 91,563 4,172 18,078
David I. Gwynne 66,702 33,048 1,241 2,069
Laima I. Mathews 53,484 32,766 1,241 2,069
</TABLE>
(1) Values are based on the closing price of the Company's common stock as
reported on the OTCBB on December 31, 1999 of $0.91. None of the named
executive officers exercised stock options during the fiscal year ended
December 31, 1999.
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DIRECTOR COMPENSATION
The Company compensates outside directors for attendance at meetings of the
Board of Directors and committees thereof at a rate of $12,000 per year, paid
quarterly.
COMPENSATORY ARRANGEMENT
The Company has adopted a compensatory arrangement pursuant to which
certain current and former executive officers and other members of management
will be compensated in the event of the completion of a sale, merger or
liquidation of the Company. The executive officers covered by this arrangement
are Drs. David Gwynne and Robert N. McBurney, Mr. Harry W. Wilcox, III and Mrs.
Laima I. Mathews. Compensation to be paid to these officers under this
compensatory arrangement includes a success bonus based on a percentage, 2.25%
to 5%, of the incremental value of a transaction beyond $40.0 million. The
allocation of the bonus to eligible individuals is based on a pre-determined
percentage per person. Except as otherwise determined by the Board of Directors,
in the event that any of these individuals voluntarily terminates his or her
employment with the Company prior to the successful completion of such a
transaction, no bonus will be paid to that individual. In the event the Company
terminates the employment of any of these individuals, he or she will receive
severance payments ranging from 25% to 100% of his or her base salary and the
continuation for a prescribed period of all employee benefits currently provided
by the Company. Employees who held the following positions, which were
eliminated in connection with a reduction in workforce in March 1998, remain
eligible to participate in the success bonus: Vice President, Legal Affairs and
Intellectual Property; and Vice President, Drug Discovery.
Other than the arrangement described above, no other employment agreement
or contract exists between the Company and the named executive officers.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of the Company's outstanding Common Stock as of March 31,
2000 by (i) each person who is known by the Company to own beneficially more
than 5% of the Company's Common Stock, (ii) each of the Company's directors,
(iii) the Chief Executive Officer of the Company, (iv) each of the other named
executive officers, and (v) all current directors and executive officers as a
group.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY OWNED (1)
------------------------------
BENEFICIAL OWNER SHARES PERCENT
- ---------------- ---------- ---------
<S> <C> <C>
Boehringer Ingelheim International GmbH 2,487,624 13.7%
Postbox 200
D-55218 Ingelheim, Rhein
Germany
BVF Partners L.P. 2,469,961 13.6%
227 West Monroe Street, Suite 4800
Chicago, Illinois 60606(2)
Burkhard Blank (3) 2,487,624 13.7%
Robert N. McBurney (4) 345,684 1.8%
Harry W. Wilcox, III (5) 269,291 1.4%
David I. Gwynne (6) 91,021 *
Laima I. Mathews (7) 72,793 *
Joseph B. Martin (8) 53,125 *
Paul C. O'Brien (9) 50,625 *
Ira A. Jackson (10) 25,625 *
Nancy S. Amer (11) 15,000 *
All current executive officers and directors (ten persons) (12) 3,460,803 18.1%
</TABLE>
* Less than one percent
(1) Except as otherwise indicated, each owner has sole voting and investment
power of the shares owned. Shares issuable upon the exercise of options
described in the following notes are treated as outstanding solely for
purposes of calculating the percentage ownership of such person or group.
On March 31, 2000, the Company had outstanding 18,135,964 shares of Common
Stock.
(2) Based soley on review of Schedule 13G/A filed February 11, 2000 by BVF
Partners L.P., a Delaware limited partnership.
(3) All of the shares indicated as owned by Dr. Blank are owned directly by
Boehringer Ingelheim International GmbH ("BI") and are included because of
Dr. Blank's affiliation with BI. He is head of international project
management for an operating division of BI. Dr. Blank disclaims "beneficial
ownership" of these shares within the meaning of Rule 13d-3 under the
Exchange Act.
(4) Includes 251,561 shares which may be acquired within 60 days of the date
hereof by Dr. McBurney pursuant to the exercise of stock options and 19,150
shares held in the Company's 401(k) Plan. Also includes 10,000 shares held
in trust for Dr. McBurney's children.
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(5) Includes 230,624 shares which may be acquired within 60 days of the date
hereof by Mr. Wilcox pursuant to the exercise of stock options and 14,337
shares held in the Company's 401(k) Plan.
(6) Consists of 74,514 shares which may be acquired within 60 days of the date
hereof by Dr. Gwynne pursuant to the exercise of stock options and 16,507
shares held in the Company's 401(k) Plan.
(7) Consists of 60,640 shares which may be acquired within 60 days of the date
hereof by Mrs. Mathews pursuant to the exercise of stock options and 12,153
shares held in the Company's 401(k) Plan.
(8) Includes 25,625 shares which may be acquired within 60 days of the date
hereof by Dr. Martin pursuant to the exercise of stock options.
(9) Includes 25,625 shares which may be acquired within 60 days of the date
hereof by Mr. O'Brien pursuant to the exercise of stock options.
(10) Consists of 25,625 shares which may be acquired within 60 days of the date
hereof by Mr. Jackson pursuant to the exercise of stock options.
(11) Consists of 15,000 shares which may be acquired within 60 days of the date
hereof by Ms. Amer pursuant to the exercise of stock options.
(12) See Notes (3) through (11) above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Compensatory Arrangement" in Item 11 regarding an arrangement pursuant
to which certain current and former executive officers and other members of
management will be compensated in the event of the completion of a sale, merger
or liquidation of the Company. The executive officers covered by this
arrangement are Drs. David Gwynne and Robert N. McBurney, Mr. Harry W.
Wilcox, III and Mrs. Laima I. Mathews.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: April 26, 2000 CAMBRIDGE NEUROSCIENCE, INC.
By: /s/ Harry W. Wilcox
-------------------------------------
Harry W. Wilcox, III
President and Chief Executive
Officer
By: /s/ Glenn A. Shane
-------------------------------------
Glenn A. Shane
Controller and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
WITNESS our hands on the dates set forth below:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Harry W. Wilcox President, Chief
- ------------------------------------ Executive Officer and Director April 26, 2000
Harry W. Wilcox, III (Principal Financial Officer)
/s/ Nancy S. Amer Director April 26, 2000
- ------------------------------------
Nancy S. Amer
/s/ Burkhard Blank Director April 26, 2000
- ------------------------------------
Burkhard Blank
Director
- ------------------------------------
Ira A. Jackson
/s/ Joseph B. Martin Director April 26, 2000
- ------------------------------------
Joseph B. Martin
/s/ Paul C. O'Brien Director April 26, 2000
- ------------------------------------
Paul C. O'Brien
</TABLE>
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