UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT No. 2)
FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-19635
GENTA INCORPORATED
(Exact name of Registrant as specified
in its certificate of incorporation)
Delaware 33-0326866
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3550 General Atomics Court
San Diego, California 92121
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(619) 455-2700
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to
Section 12(g) of the Act: Common Stock, $.001 par value
Preferred Stock Purchase Rights,
Par Value $.001
(Title of Class)
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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/A or any amendment to
this Form 10-K/A. [ ]
The approximate aggregate market value of the voting common equity held by
non-affiliates of the registrant was 6.0 million as of April 2, 1998. For
purposes of determining this number, 136,202 shares of Common Stock held by
affiliates are excluded.
As of April 2, 1998, the registrant had 5,737,756 shares of Common Stock
outstanding.
Documents Incorporated by Reference
None
2
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GENTA INCORPORATED
FORM 10-K/A
INDEX
Page
----
PART I
Item 3. Legal Proceedings....................................................4
PART II
Item 6. Selected Consolidated Financial Data.................................4
PART III
Item 10. Directors and Executive Officers of the Registrant.................4
Item 11. Executive Compensation.............................................9
Item 12. Security Ownership of Certain Beneficial Owners and Management....14
Item 13. Certain Relationships and Related Transactions....................18
Signatures
3
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AMENDMENT NO. 2
TO THE FORM 10-K FILED BY
GENTA INCORPORATED ON APRIL 15, 1998, AS PREVIOUSLY AMENDED
The following Items were omitted from the Form 10-K filed by Genta
Incorporated on April 15, 1998, as amended by the First Amendment thereto filed
on April 16, 1998. Such Form 10-K, as amended, is hereby amended to include the
information hereinafter set forth.
Capitalized terms used but not defined herein will have the meanings
described for them in the Form 10-K as amended to date.
PART I
ITEM 3. LEGAL PROCEEDINGS
The second paragraph of Item 3(a) is amended to read as follows:
LBC Capital Resources, Inc. ("LBC"), a Philadelphia-based broker/dealer,
has asserted claims against the Company and others, including Paramount Capital
Inc., of which Dr. Rosenwald is the sole stockholder and Mr. Weiss is a Senior
Managing Director, and various related entities and persons. LBC's claims relate
to the alleged breach by the Company of certain letter agreements, allegedly
entered into by LBC and the Company in 1995 and 1996 with respect to brokerage
and/or investment banking services, particularly in connection with a $3 million
investment for which LBC is seeking a fee. On March 30, 1998, the Company
received a Statement of Claim under NASD arbitration rules, and a request that
the Company voluntarily submit to NASD arbitration. LBC's Statement of Claim
sought damages in the form of cash (in excess of $4 million), stock, warrants
and other securities. Subsequently, LBC abandoned the arbitration, and on April
9, 1998, the Company's counsel learned that a Complaint had been filed in the
United States District Court for the Southern District of New York (98 Civ.
2491) by LBC against the Company and the same other parties. However, such
Complaint has not yet been properly served upon the Company. The Company
believes it has valid legal and equitable defenses to LBC's lawsuit. The Company
intends to defend vigorously and possibly to assert counterclaims against LBC.
PART II
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The Consolidated Balance Sheet Data is amended to reflect the amount of $532 as
the 1996 balance sheet item entitled Cash, cash equivalents and short-term
investments.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information regarding the Company's directors
and executive officers, including information furnished by them as to their
principal occupations and business experience for the past five years, certain
directorships held by each, their respective ages as of April 1, 1998 and the
year in which each became a director of the Company. Each director has served
continuously with the Company since his first election as indicated below.
4
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Name Age
---- ---
CLASS I (TERMS EXPIRE IN 1998)
Kenneth G. Kasses, Ph.D......................................................53
Peter Salomon, M.D. .........................................................38
Andrew J. Stein..............................................................53
Harlan J. Wakoff ............................................................31
CLASS II (TERMS EXPIRE IN 1999)
Glenn L. Cooper, M.D.........................................................45
Lawrence J. Kessel, M.D......................................................44
Bobby W. Sandage, Jr., Ph.D..................................................44
CLASS III (TERMS EXPIRE IN 2000)
Donald G. Drapkin ...........................................................50
Michael S. Weiss ............................................................32
Robert E. Klem, Ph.D. .......................................................52
Kenneth G. Kasses, Ph.D., has been Genta's President and Chief Executive Officer
since October 1997 and a member of the Board of Directors since September 1997.
From 1991-1997, Dr. Kasses was affiliated with the Radiopharmaceutical Division
of The Dupont Merck Pharmaceutical Company, serving as Senior Vice President and
General Manager until 1994 when he was appointed President. From 1988 through
1990, he served as Director, Business Development and Planning, for the Medical
Products Department of E.I. DuPont de Nemours & Company, Inc. In that capacity
he played a key role in the formation of The Dupont Merck Pharmaceutical
Company, a joint venture between DuPont and Merck and Co., Inc. Prior to that he
served as Director, U.S. Pharmaceuticals, for DuPont from 1987-1988 and as
President of DuPont Critical Care from 1986-1987. Prior to this, Dr. Kasses held
a variety of executive positions from 1973-1986 at American Critical Care,
CIBA-GEIGY Pharmaceuticals, Ayerst Laboratories and Block Drug Company. Dr.
Kasses received a B.S. in biology from Dickinson College in 1966 and a Ph.D. in
pharmacology from New York Medical College in 1974.
Peter Salomon, M.D., FACG, has been a member of the Genta Board of Directors
since September 1997. His principal employment during the last five years has
been as a Board Certified Gastroenterologist in private practice in Boca Raton
and Delray Beach, Florida with Gastroenterology Consultants of South Florida. In
addition, he is an expert consultant for several insurance companies and law
firms in the areas of gastroenterology and liver diseases. Dr. Salomon graduated
magna cum laude from New York University in 1981. He received his Medical Degree
from New York University in 1985. Following this he received his training in
Internal Medicine and Gastroenterology at The Mount Sinai Hospital in New York
where he also held a grant from the Crohn's and Colitis Foundation to perform
research in inflammatory bowel disease. He was also selected to receive advanced
training in therapeutic endoscopic techniques at Aarhus Kommunehospital in
Aarhus, Denmark. He has been elected to the Phi Beta Kappa society and is a
member of MENSA. He has done extensive research in the field of gastroimmunology
and has published numerous articles and book chapters in various leading
scientific journals and textbooks. He is also currently a director of PolaRx, a
privately-held biotechnology firm.
Andrew J. Stein has been a member of the Genta Board of Directors since
September 1997. In addition, he is President of Benake Corporation, Equity
Partner in Metromedia Asia and a member of the Board of Directors of News
Communications. Mr. Stein is also a member of the New York State Commission of
Privatization and the New York State Research Council on Privatization. He was
the Chairman of the Commission for the Study of
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Youth Crime and Violence and Reform of the Juvenile Justice System from
1993-1995. From 1986 to 1993, he was President of the Council, New York City.
From 1978 to 1985, he was President of the Borough of Manhattan and from 1969 to
1977, he was a member of the New York State Assembly where he served on the
Health Committee and was appointed by Gov. Nelson Rockefeller as Chairman of the
Commission on Living Costs and the Economy, which reformed the nursing home
industry in New York State. He was also Chairman of the New York City Commission
on Public Information and Communication, and has been a Trustee of the New York
City Employees Retirement System and an ex officio member of The Museum of The
City of New York, The New York Public Library, The Metropolitan Museum of Art
and The Queens Borough Public Library.
Harlan J. Wakoff has been a member of the Genta Board of Directors since
September 1997. Mr. Wakoff has been a Vice President of the Media and
Entertainment Investment Banking Group at Furman Selz L.L.C. since June 1996. He
was previously affiliated with the investment banking groups at NatWest Markets
from January 1995 to June 1996 and Kidder Peabody & Co. from August 1993 to
January 1995. Mr. Wakoff received an M.B.A. from The Wharton School at the
University of Pennsylvania in May 1993 and a B.S. in accounting, summa cum
laude, from the State University of New York at Albany.
Glenn L. Cooper, M.D., has been a member of the Genta Board of Directors since
September 1997. He has also been President, Chief Executive Officer and a
director of Interneuron Pharmaceuticals, Inc. since May 1993. From September
1992 to June 1994 Dr. Cooper was President, Chief Executive Officer and a
director of Progenitor, Inc. and is currently Chairman at Progenitor. He is also
Chairman of Intercardia, Inc., Chairman and Acting President of Transcell
Technologies, Inc. and a director of InterNutria, Inc., all of which are
subsidiaries of Interneuron. In addition, Dr. Cooper serves as a director of
Aeolus Pharmaceuticals, Inc., a subsidiary of Intercardia. Dr. Cooper also
served as President and Chief Executive Officer of Intercardia from March 1994
to January 1995. Prior to joining Progenitor, Dr. Cooper was Executive Vice
President and Chief Operating Officer of Sphinx Pharmaceuticals Corporation
since August 1990. Dr. Cooper had been associated with Eli Lilly since 1985,
most recently, from June 1987 to July 1990, as Director, Clinical Research,
Europe, of Lilly Research Center Limited; from October 1986 to May 1987 as
International Medical Advisor, International Research Coordination of Lilly
Research Laboratories; and from June 1985 to September 1986 as Medical Advisor,
Regulatory Affairs, Chemotherapy Division at Lilly Research Laboratories. Dr.
Cooper received his M.D. from Tufts University School of Medicine, performed his
postdoctoral training in Internal Medicine and Infectious Diseases at the New
England Deaconess Hospital and Massachusetts General Hospital and is a magna cum
laude graduate of Harvard College.
Lawrence J. Kessel, M.D., FACP, CMD, has been a member of the Genta Board of
Directors since September 1997. Dr. Kessel is a physician in private practice in
Philadelphia and a diplomate in both internal medicine and geriatric medicine,
as well as a Fellow of the American College of Physicians and a Certified
Medical Director of Long-Term Nursing Facilities. Dr. Kessel is affiliated with
Chestnut Hill Hospital, Roxborough Memorial Hospital and Chestnut Hill
Rehabilitation Hospital and serves as a clinical instructor at Jefferson Medical
College. He is also a medical director at Integrated Health Services (IHS) and a
staff physician at Fairview Paper Mill, Green Acres Ivy Hill and St. Joseph's
Villa. Dr. Kessel is a director of PolaRx, a privately held biotechnology
company.
Bobby W. Sandage, Jr., Ph.D., has been a member of the Genta Board of Directors
since September 1997. Dr. Sandage joined Interneuron Pharmaceuticals, Inc. in
November 1991 as Vice President, Medical and Scientific Affairs. Since December
1995 he has been Executive Vice President, Research and Development and Chief
Scientific Officer of Interneuron. From February 1989 to November 1991 he held
management positions in the Cardiovascular Research and Development division of
The DuPont Merck Pharmaceutical Company. From May 1985 to February 1989 he was
affiliated with the Medical Department of DuPont Critical Care. Dr. Sandage is
an adjunct professor in the Department of Pharmacology at the Massachusetts
College of Pharmacy. Dr. Sandage received his Ph.D. in Clinical Pharmacy from
Purdue University and his B.S. in Pharmacy from the University of Arkansas. Dr.
Sandage is a director of Aeolus Pharmaceuticals, Inc., a subsidiary of
Intercardia, Inc.
6
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Donald G. Drapkin has been Chairman of the Genta Board of Directors since
September 1997. Mr. Drapkin has been a director and Vice Chairman of MacAndrews
& Forbes Holdings, Inc. and various of its affiliates since March 1987. Prior to
joining MacAndrews & Forbes, Mr. Drapkin was a partner in the law firm of
Skadden, Arps, Meagher & Flom in New York for more than five years. Mr. Drapkin
also is a director of the following corporations which file reports pursuant to
the Securities Exchange Act of 1934: Algos Pharmaceutical Corporation,
Anthracite Capital, Inc., BlackRock Asset Investors, Cardio Technologies, Inc.,
The Cosmetic Center, Inc., Playboy Enterprises, Inc., Revlon, Inc., Revlon
Consumer Products Corporation, VIMRx Pharmaceuticals Inc. and Weider Nutrition
International.
Michael S. Weiss has been Vice Chairman of the Genta Board of Directors since
May 1997. Mr. Weiss is currently Senior Managing Director of Paramount Capital,
Inc., an investment banking firm and serves in a similar capacity for certain
affiliated entities. He joined the companies in 1993. Prior to that, Mr. Weiss
was an attorney with Cravath, Swaine & Moore. Mr. Weiss also serves on the Board
of Directors of Pacific Pharmaceuticals, Inc., Palatin Technologies, Inc., AVAX
Technologies, Inc., as Secretary of Atlantic Pharmaceuticals, Inc. and as
Chairman of the Board of Procept Inc., all publicly-traded biotechnology
companies. Additionally, Mr. Weiss is a member of the board of directors of
several privately-held biopharmaceutical companies. Mr. Weiss received his J.D.
from Columbia University School of Law and a B.S. in Finance from the State
University of New York at Albany.
Robert E. Klem, Ph.D., has been a member of the Genta Board of Directors since
February 1991, a Vice President of the Company since October 1991 and is
currently the Company's Principal Accounting Officer and Principal Financial
Officer. Dr. Klem co-founded JBL Scientific, Inc. ("JBL"), a wholly-owned
subsidiary of the Company, in 1973 and, since then, has been Chairman of the
Board and Chief Technical Officer of JBL with responsibility for research,
development and marketing activities. Previously, Dr. Klem was the Plant Manager
for E.I. DuPont in Victoria, Texas from 1970 to 1974. Dr. Klem received his
Ph.D. in Organic Chemistry from the University of California at Riverside.
Lauren R. Brown, Ph.D., has been Vice President of the Company since October
1991. He co-founded JBL Scientific in 1973 and since then has been President of
JBL. Dr. Brown received his Ph.D. in Organic Chemistry from the University of
California at Riverside. He is active in community affairs in San Luis Obispo
and presently serves on the board of directors of the YMCA and the Chamber of
Commerce.
David Hale resigned as a Class III director effective January 28, 1997. On
May 5, 1997, Thomas Adams resigned as a Class I director. On September 11, 1997,
Sharon B. Webster resigned as a Class I director and Paul O.P. Ts'o resigned as
a Class II director.
The Board of Directors held 17 meetings during the year ended December 31,
1997. All directors attended at least 75% of the aggregate number of meetings of
the Board of Directors, except that Dr. Cooper did not attend one of the two
meetings held during the time he served as a director. Directors receive no fees
for their services, but non-employee directors are eligible for stock options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the directors and executive officers of the Company and persons who beneficially
own more than ten percent of the Company's Common Stock (collectively, the
"Reporting Persons") to report their ownership of and transactions in the
Company's Common Stock to the Securities and Exchange Commission (the
"Commission"). Copies of these reports are also required to be supplied to the
Company. The Company believes, upon a review of the copies of such reports
received by the Company and written representations furnished by the Reporting
Persons to the Company, that during the year ended December 31, 1997 the
Reporting Persons complied with all applicable Section
7
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16(a) reporting requirements, except as follows: Mr. Weiss did not file a Form 3
on a timely basis to report his appointment as a director of the Company.
8
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ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth compensation for services in all capacities
to the Company, for the fiscal years ended December 31, 1995, 1996 and 1997, of:
(i) those persons who were, respectively, the Company's Chief Executive Officer
for any time period during 1997 and up to four of the other most highly
compensated executive officers of the Company who were serving as executive
officers at December 31, 1997 whose total annual salary and bonus for the fiscal
year ending December 31, 1997 exceeded $100,000; and (ii) two additional
individuals who would have been two of such other four most highly compensated
executive officers if such individuals had served as executive officers for the
entire fiscal year (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------------------------------------------- ---------------------
Name and Other Annual Securities Underlying
Principal Position Year Salary ($) Bonus ($) Compensation Options (#)
- ------------------ ---- ---------- --------- ------------ ----------------------
<S> <C> <C> <C> <C> <C>
Thomas H. Adams, Ph.D. 1997 $285,000(1) -- -- 100,000(2)
Chairman of the Board and 1996 285,000(3) -- -- 2,799(3)
Chief Executive Officer 1995 285,000(3) -- -- 20,000(4)
Kenneth G. Kasses, Ph.D. 1997 62,500(5) -- -- --
President and
Chief Executive Officer
Zofia E. Dziewanowska 1997 $216,601(6) -- -- --
Ph.D., M.D., Senior Vice 1996 235,000(3) -- -- 1,574(3)
President, Global Clinical 1995 235,000(3) -- 14,759(7) 12,000(4)
Affairs
Guy Van de Winckel 1997 $170,000(8) -- -- --
Vice President, European 1996 170,000 -- -- --
Operations and President of 1995 170,000 -- -- --
Genta Pharmaceuticals
Europe, S.A.
Robert E. Klem, Ph.D. 1997 $170,000(9) -- -- --
Vice President, Chairman of 1996 155,000(3) -- 2,580(10) 853(3)
the Board of JBL 1995 161,458(3)(11) -- 2,580(10) 4,500(4)
Lauren Brown, Ph.D. 1997 144,000(9) -- -- --
President JBL 1996 131,000(3) -- 3,000(10) 1,285(3)
1995 131,000(3) -- 3,000(10) 2,000(4)
</TABLE>
9
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(1) Dr. Adams resigned as Chief Executive Officer and Chairman of the
Board and a Director on May 5, 1997. Pursuant to a severance and
consulting arrangement with the Company (which has not yet been
reflected in a written agreement), the Company agreed to continue to
pay Dr. Adam's salary at the then-current rate of $285,000 per year
for a one-year period, agreed to continue eligibility for coverage
under the Company's health insurance plan for a one-year period and
agreed to grant options to purchase 100,000 shares of Common Stock
(exercisable at 100% of the fair market value of such stock on May 5,
1997) as consideration for consulting services of at least 24 days.
(2) See Footnote 1 above. As of the date hereof, none of these options had
been granted to Dr. Adams because no consulting agreement with Dr.
Adams has yet been entered into.
(3) Options were granted to Named Officers during the year ended December
31, 1996 to compensate them for accepting deferral of the payment of a
portion of base salary in 1995 and 1996. The portions of salaries so
deferred are included in the 1995 salary figures in this table,
consisting of $23,750, $9,792, $6,458 and $10,916 for Drs. Adams,
Dziewanowska, Klem and Brown, respectively, and in the 1996 salary
figures in this table, consisting of $11,875, $9,791, $6,458 and
$5,458 for Drs. Adams, Dziewanowska, Klem and Brown, respectively.
(4) These options (the "New Options") were granted in exchange for
unexercised options granted prior to April 20, 1995 with an exercise
price above $2.25 per share (the "Old Options"). The New Options were
granted at fair market value at the date of grant and have the same
vesting schedule as the Old Options. However, the New Options were not
exercisable until after April 20, 1997, regardless of the Old Options'
vesting schedule, unless the holder is terminated involuntarily
without cause prior to April 20, 1997. None of these options have been
exercised to date.
(5) Salary payments commenced on October 1, 1997. See "Compensation of
President and Chief Executive Officer" below.
(6) Dr. Dziewanowska resigned as Senior Vice President of Global Clinical
Affairs on July 31, 1997. Pursuant to a severance agreement with the
Company, the Company agreed to continue to pay Dr. Dziewanowska's
salary at the then-current rate of $235,000 per year for the first
month and at one-half the then-current rate for the next ten months.
In addition, the Company agreed to continue eligibility for coverage
under the Company's dental insurance plan and to pay Dr. Dziewanowska
monthly dollar amounts equal to the group medical premiums under the
Company's health insurance plan for an eleven-month period.
(7) Represents payments for expenses incurred in connection with
relocation including applicable tax gross-ups.
(8) Mr. Van de Winckel resigned as Vice President of European Operations
and President of Genta Pharmaceuticals Europe, S.A. on April 15, 1997.
Pursuant to a severance arrangement with the Company, the Company
continued to pay Mr. Van de Winckel's salary at the then-current rate
of $170,000 per year and agreed to continue eligibility for coverage
under the Company's health insurance plan for a nine-month period.
(9) This amount does not include the payment in 1997 of the full salary
amounts deferred from 1995 and 1996, as discussed in Footnote 3 above.
(10) Represents payments for insurance policies covering Drs. Klem and
Brown.
(11) Represents 25 bimonthly pay periods during 1995 that resulted from Dr.
Klem's having been transferred from the Company's payroll calendar to
JBL's payroll calendar.
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COMPENSATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to a Letter Agreement, dated September 4, 1997, between Michael
Weiss, then the Interim Chairman of the Board of the Company (and presently the
Vice Chairman), and Dr. Kasses (the "Letter Agreement"), Dr. Kasses was
appointed President and Chief Executive Officer of the Company, effective
October 1, 1997, subject to Board ratification. Among other items, the Letter
Agreement provided the following:
1. Dr. Kasses would receive a base salary of $300,000 per annum, subject
to semi-annual review commencing on October 1, 1998. In the event Dr. Kasses is
terminated without cause or terminates his employment for cause, Dr. Kasses
would become entitled to receive this amount as severance for one year following
such termination, subject to set-off for amounts earned from alternative
employment. At the end of Dr. Kasses' first year of employment, he would become
entitled to a bonus of $100,000, assuming he is then employed by the Company.
Dr. Kasses would also be entitled to an additional bonus of up to $100,000,
subject to achievement of agreed-upon milestones.
2. Dr. Kasses would be entitled to receive, subject to stockholder
approval, a grant of stock options to purchase 5% of the fully diluted Common
Stock of the Company outstanding as of an agreed-upon date, with quarterly
vesting over four years (assuming continued employment).
3. Dr. Kasses and his dependents would receive such medical, long-term
disability, life insurance and such other health benefits as the Company makes
available to its other senior officers and directors.
The Letter Agreement contemplated that these and certain other provisions
would be incorporated into an employment agreement between Dr. Kasses and the
Company.
The Company expects to seek stockholder approval of a stock option plan at
its next Annual Meeting of Stockholders pursuant to which the stock options
referred to in the Letter Agreement would be granted. (The Company's current
stock option plan has insufficient shares to permit such grant.)
COMPENSATION OF DIRECTORS
Directors of the Company receive no fees for their services as directors
or committee members. Non-employee directors are reimbursed by the Company for
their out-of-pocket expenses incurred in attending meetings of the Board of
Directors and its committees. The Company expects to seek stockholder approval
of a stock option plan at its next Annual Meeting of Stockholders pursuant to
which directors will be eligible to receive stock option grants.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the Company's fiscal year ended December 31, 1997, the Company had no
Compensation Committee. The entire Board of Directors participated in
discussions regarding compensation matters. None of the directors or executive
officers of the Company had any "interlock" relationship to report during the
Company's fiscal year ended December 31, 1997.
See "Certain Relationships and Related Transactions" for a description of
certain arrangements between the Company and Genta Jago. Genta's Vice Chairman
of the Board is a managing director of Genta Jago.
PENSION AND LONG-TERM INCENTIVE PLANS
The Company has no pension or long-term incentive plans.
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STOCK OPTIONS
No stock options were issued to any Chief Executive Officer, Named
Executive Officer or Director by the Company in 1997. See Footnotes 1 and 2 to
the Summary Compensation Table.
12
<PAGE>
OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End(#) Fiscal Year End($)(1)
------------------ ---------------------
Shares Acquired Value
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C>
Thomas H. Adams, Ph.D. -- -- 22,799 -- -- --
Kenneth G. Kasses, Ph.D. -- -- -- -- -- --
Zofia E. Dziewanowska,
Ph.D., M.D. -- -- 12,333 1,240 -- --
Guy Van de Winckel -- -- -- -- -- --
Robert E. Klem, Ph.D. -- -- 5,353 -- -- --
Lauren Brown, Ph.D. -- -- 3,285 -- -- --
</TABLE>
(1) Calculated on the basis of the fair market value of the underlying
securities as of December 31, 1997 ($.781 per share), minus the exercise
price.
13
<PAGE>
ITEM 12. STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of April 1, 1998 as to
shares of Common Stock beneficially owned by (i) the Company's directors, (ii)
the Company's executive officers named in the Summary Compensation Table set
forth herein, (iii) the directors and executive officers of the Company as a
group and (iv) each person known by the Company to be the beneficial owner of
more than five percent of the outstanding shares of the Common Stock of the
Company. As of April 1, 1998, each share of Series A Preferred Stock was
convertible at the option of the holder into approximately 7.26 shares of Common
Stock and each share of Series D Preferred Stock is convertible at the option of
the holder into approximately 105.96 shares of Common Stock. Except as required
by law or with respect to the creation or amendment of senior classes of
preferred stock or creation of different series or classes of Common Stock, and
in certain other instances, the holders of Series A Preferred Stock do not have
voting rights until conversion into Common Stock. The conversion price of the
Series A and the Series D Preferred Stock and the numbers of shares of Common
Stock issuable upon conversion thereof may be adjusted in the future, based on
the provisions in the Certificate of Incorporation, as amended.
<TABLE>
<CAPTION>
COMMON STOCK SERIES D PREFERRED STOCK
------------ ------------------------
NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF AMOUNT AND NATURE OF PERCENT
OWNER BENEFICIAL OWNERSHIP(1) CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
<S> <C> <C> <C> <C>
Lindsay A. Rosenwald, M.D. 15,865,232(2) 73.8% 83,826(2) 35.6%
787 Seventh Avenue, 48th Floor
New York, NY 10019
Paramount Capital Asset 15,042,741(3) 72.7% 76,414(3) 33.5%
Management, Inc.
787 Seventh Avenue
New York, NY 10019
United Congregations Mesora 1,109,600(4) 16.2% 10,000(5) 4.4%
c/o Aeta Realty
1 State Street Plaza
New York, NY 10004
Attn: Chana Adelstein
Branco Weiss 619,800(5) 9.9% 5,000(6) 2.2%
Hallwylstrasse 71
CH-8036 Zurich
SWITZERLAND
Diversified Fund Limited 554,800(6) 8.8% 5,000(7) 2.2%
CH-6904 Lugano
Via Zurigo 46
SWITZERLAND
Garo H. Armen 499,320(7) 8.0% 4,500(8) 2.0%
c/o Armen Partners, L.P.
630 Fifth Avenue, Suite 2100
New York, NY 10111
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Mark Bercuvitz 388,360(8) 6.3% 3,500(9) 1.5%
1310 Sreene Ave. Suite 660
Westmount, Quebec
CANADA H3Z 2B2
Michael S. Weiss 148,354(9) 2.5% 1,337(9) 0.6%
Robert E. Klem, Ph.D. 28,711(10) 0.5% 0 0%
Lawrence J. Kessel, M.D. 27,740(11) 0.5% 250(11) 0.1%
Peter Salomon, M.D. 500(12) 0% 0 0%
Glenn L. Cooper, M.D. 0 0% 0 0%
Donald G. Drapkin 0 0% 0 0%
Kenneth G. Kasses, Ph.D. 0 0% 0 0%
Bobby W. Sandage, Jr., Ph.D. 0 0% 0 0%
Andrew J. Stein 0 0% 0 0%
Harlan J. Wakoff 0 0% 0 0%
Thomas H. Adams, Ph.D. 61,132(13) 1.1% 0 0%
Lauren Brown, Ph.D. 23,363(14) 0.4% 0 0%
Zofia E. Dziewanowska 12,333(15) 0.2% 0 0%
Guy Van De Winckel 0 0% 0 0%
All directors and executive 302,133 5.1% 1,587 0.7%
officers as a group (14 persons)
</TABLE>
(1) The number of shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and
also any shares which the individual has the right to acquire within
60 days of April 1, 1998, through the exercise or conversion of any
stock option, convertible security, warrant or other right. The
inclusion herein of such shares, however, does not constitute an
admission that the named stockholder is a direct or indirect
beneficial owner of such shares. Unless otherwise indicated, each
person or entity named in the table has sole voting power and
investment power (or shares such power with his or her spouse) with
respect to all shares of capital stock listed as owned by such person
or entity.
(2) Dr. Rosenwald may be deemed to have shared voting and investment
power over the 15,042,741 shares of Common Stock which may be deemed
to be beneficially owned by Paramount Capital Asset Management, Inc.
("PCAM") of which Dr. Rosenwald is the sole shareholder. See Footnote
3 below. In addition, Dr. Rosenwald may be deemed to have sole voting
and investment power over approximately 822,491 shares of Common
Stock which he may be deemed beneficially to own, consisting of:
approximately 785,429 shares of Common Stock issuable upon conversion
of approximately 7,412 shares of Series D Preferred Stock issuable
upon exercise of Unit Purchase Warrants; and approximately 37,062
shares of Common Stock issuable upon exercise of Class D Warrants
issuable upon exercise of Unit
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<PAGE>
Purchase Warrants. Excludes approximately 1,951,801 and 92,101 shares
of Common Stock issuable, respectively, upon conversion and exercise
of approximately 18,420 shares of Series D Preferred Stock and Class D
Warrants issuable upon exercise of Unit Purchase Warrants, which are
not exercisable within 60 days of April 1, 1998.
(3) PCAM may be deemed to have shared voting and investment power over the
5,253,866 and 9,788,875 shares of Common Stock, respectively, which
may be deemed to be beneficially owned by the Aries Domestic Fund,
L.P. (the "Aries Domestic Fund") and The Aries Trust (the "Aries
Trust"), for which PCAM is the General Partner and Investment Advisor,
respectively. Includes: 27,450 and 64,050 shares of Common Stock held
by Aries Domestic Fund and Aries Trust, respectively; 2,833,907 and
5,262,940 shares of Common Stock issuable upon conversion of
approximately 26,745 and 49,669 shares of Series D Preferred Stock
(including 350 and 650 shares of Series D Preferred Stock issuable
upon exercise of Unit Purchase Warrants) held by Aries Domestic Fund
and Aries Trust, respectively; 19,250 and 35,750 shares of Common
Stock issuable upon exercise of Class D Warrants (including 1,750 and
3,250 Class D Warrants issuable upon exercise of Unit Purchase
Warrants) held by Aries Domestic Fund and Aries Trust, respectively;
approximately 130,593 and 261,185 shares of Common Stock issuable upon
exercise of 18,000 and 36,000 shares of Series A Preferred Stock held
by Aries Domestic Fund and Aries Trust, respectively; Bridge Warrants
held by Aries Domestic Fund and Aries Trust to purchase approximately
2,225,166 and 4,132,450 shares of Common Stock, respectively; and Line
of Credit Warrants held by Aries Domestic Fund and Aries Trust to
purchase 17,500 and 32,500 shares of Common Stock, respectively.
(4) United Congregations Mesora's beneficial ownership consists of 10,000
shares of Series D Preferred Stock, which are convertible into
approximately 1,059,600 shares of Common Stock, and Class D Warrants
to purchase up to 50,000 shares of Common Stock. This information is
derived from United Congregations Mesora's Schedule 13D/A, as amended,
dated July 11, 1997, filed with the Commission.
(5) Mr. Branco Weiss' beneficial ownership consists of 5,000 shares of
Series D Preferred Stock, which are convertible into approximately
529,800 shares of Common Stock, Class D Warrants to purchase up to
25,000 shares of Common Stock and 65,000 shares of Common Stock. This
information is derived from Mr. Weiss' Schedule 13D dated October 9,
1997, filed with the Commission.
(6) Diversified Fund Limited's ("Diversified's") beneficial ownership
consists of 5,000 shares of Series D Preferred Stock, which are
convertible into approximately 529,800 shares of Common Stock, and
Class D Warrants to purchase up to 25,000 shares of Common Stock.
Carlo Pagani, in his capacity as President of Diversified, shares
voting and dispositive power with respect to such securities and may
be deemed to be the beneficial owner of such securities. This
information is derived from Diversified's Schedule 13D dated March 2,
1998, filed with the Commission.
(7) Mr. Armen's beneficial ownership consists of 4,500 shares of Series D
Preferred Stock, which are convertible into approximately 476,820
shares of Common Stock, and Class D Warrants to purchase up to 22,500
shares of Common Stock. The Series D Preferred Stock and the Class D
Warrants are held by (a) Armen Partners, L.P., an investment limited
partnership, of which Dr. Armen and Armen Capital Management Corp., a
corporation of which Dr. Armen is the principal, are the general
partners, (b) Armen Partners Offshore Fund, Ltd., an offshore
investment fund to which Armen Capital Management Corp. acts as
investment manager, and (c) GHA Management Corporation, a corporation
wholly-owned by Dr. Armen. This information is derived from Mr.
Armen's Schedule 13D dated July 24, 1997, filed with the Commission.
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<PAGE>
(8) Mr. Bercuvitz's beneficial ownership consists of 3,500 shares of
Series D Preferred Stock, which are convertible into approximately
370,860 shares of Common Stock, and Class D Warrants to purchase up to
17,500 shares of Common Stock. This information is derived from Mr.
Bercuvitz's Schedule 13D dated March 2, 1998, filed with the
Commission.
(9) Mr. Michael Weiss' beneficial ownership consists of approximately
15,894 shares of Common Stock issuable upon conversion of 150 shares
of Series D Preferred Stock held by Mr. Weiss; 750 shares of Common
Stock issuable upon exercise of Class D Warrants held by Mr. Weiss;
and approximately 125,775 and 5,935 shares of Common Stock issuable,
respectively, upon conversion and exercise of approximately 1,187
shares of Series D Preferred Stock and Class D Warrants issuable upon
exercise of Unit Purchase Warrants held by Mr. Weiss. Excludes 502,993
and 23,735 shares of Common Stock issuable, respectively, upon
conversion and exercise of approximately 4,747 shares of Series D
Preferred Stock and Class D Warrants issuable upon exercise of Unit
Purchase Warrants, which are not exercisable within 60 days of April
1, 1998, that are held by an entity of which Mr. Weiss is the managing
member. Mr. Weiss' business address is 787 Seventh Avenue, New York,
NY 10019.
(10) Dr. Klem's beneficial ownership consists of 23,358 shares of Common
Stock and options to purchase 5,353 shares of Common Stock. Dr. Klem's
Common Stock holdings include 1,875 shares of Common Stock held by a
trust for Dr. Klem's children, as to which Dr. Klem has shared voting
and investment power, and 150 shares of Common Stock owned by Dr.
Klem's wife, as to which he disclaims beneficial ownership.
(11) Dr. Kessel's beneficial ownership consists of 250 shares of Series D
Preferred Stock, which are convertible into approximately 26,490
shares of Common Stock, and Class D Warrants to purchase up to 1,250
shares of Common Stock.
(12) Dr. Salomon's beneficial ownership consists of 500 shares of Common
Stock.
(13) Dr. Adams' beneficial ownership consists of 38,333 shares of Common
Stock and options to purchase 22,799 shares of Common Stock. Dr.
Adams' Common Stock holdings include 8,000 shares of Common Stock held
in several trusts for Dr. Adams' children, as to which Dr. Adams has
shared voting and investment power, and 30,333 shares of Common Stock
jointly owned by Dr. Adams and Dr. Adam's wife, as to which Dr. Adams
has shared voting and investment power.
(14) Dr. Brown's beneficial ownership consists of 20,078 shares of Common
Stock and options to purchase 3,285 shares of Common Stock.
(15) Dr. Dziewanowska's beneficial ownership consists of options to
purchase 12,333 shares of Common Stock.
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February 1989, the Company entered into a license agreement with Drs.
Paul Ts'o and Paul Miller (the "Ts'o/Miller Agreement") pursuant to which Drs.
Ts'o and Miller granted an exclusive license to the Company to certain issued
patents, patent applications and related technology regarding the use of nucleic
acids and oligonucleotides, including methylphosphonates, as pharmaceutical
agents. Dr. Ts'o was a Director of the Company until September 11, 1997 and is a
Professor of Biophysics, Department of Biochemistry at Johns Hopkins, and Dr.
Miller is a Professor of Biochemistry at the School of Public Health and
Hygiene, Johns Hopkins. In May, 1990, the Company entered into a license
agreement with Johns Hopkins (the "Johns Hopkins Agreement," and such agreement,
together with the Ts'o/Miller Agreement, being referred to herein as the
"Ts'o/Miller/Hopkins Agreements") pursuant to which Johns Hopkins granted the
Company an exclusive license to its rights in certain issued patents, patent
applications and related technology developed as a result of research conducted
at Johns Hopkins by Drs. Ts'o and Miller and related to the use of nucleic acids
and obligonucleotides as pharmaceutical agents. In addition, Johns Hopkins has
granted the Company certain rights of first negotiation to inventions made by
Drs. Ts'o and Miller in their laboratories in the area of oligonucleotides and
inventions made by investigators at Johns Hopkins in the course of research
funded by the Company, which inventions are not otherwise included in the
Ts'o/Miller/Hopkins Agreements. The Company agreed to pay Dr. Ts'o, Dr. Miller
and Johns Hopkins royalties on net sales of products covered by the issued
patents and patent applications, but not the related technology, licensed to the
Company under the Ts'o/Miller/Hopkins Agreement. The Company also agreed to pay
certain minimum royalties prior to commencement of commercial sales of such
products, which royalties may be credited under certain conditions against
royalties payable on subsequent sales. Subject to certain rights of early
termination, the Ts'o/Miller/Hopkins Agreements remain in effect for the life of
the last-to-expire patent licensed under the respective agreements or until
abandonment of the last-pending patent application licensed under the respective
agreements. On February 14, 1997, the Company received notice from Johns Hopkins
that the Company was in material breach of the Johns Hopkins Agreement. The
Johns Hopkins Agreement provides that, if a material payment default is not
cured within 90 days of receipt of the notice of the breach, Johns Hopkins may
terminate the Johns Hopkins Agreement.
In February 1991, in connection with the acquisition of JBL, the Company
assumed certain leases between JBL and Granada Associates and Sueldo Associates,
both of which are affiliates of Drs. Brown and Klem. Dr. Brown is currently Vice
President of the Company and President of JBL. Dr. Klem is Vice President and a
Director of the Company and Chairman of the Board of JBL. The current aggregate
monthly payment under such leases is approximately $32,000.
Dr. Adams resigned as the Chief Executive Officer and Chairman of the
Board of the Company on May 5, 1997. Severance arrangements with Dr. Adams have
been discussed, as disclosed in Footnote 1 to the Summary Compensation Table
included in Item 11, but no written agreement has been entered into as of the
date hereof.
As of August 1, 1997, the Company entered into a consulting agreement with
Dr. Zofia E. Dziewanowska (a former executive officer of the Company), pursuant
to which Dr. Dziewanowska will be compensated for any work performed at a rate
of $150 per hour through January 31, 1998 and $300 per hour thereafter. In
addition, Dr. Dziewanowska's options will continue to vest until the end of the
90-day post-termination exercise grace period for the options,which will
commence on January 31, 1998 or upon termination of the Agreement by either the
Company or Dr. Dziewanowska, whichever date comes first. See Footnote 6 to the
Summary Compensation Table included in Item 11.
As of August 27, 1997, the Company entered into separate consulting
agreements with each of Drs. Paul Ts'o and Sharon Webster (both former directors
of the Company), pursuant to which the Company issued 15,400 shares of Common
Stock to Dr. Ts'o and 15,500 shares of Common Stock to Dr. Webster, paid
18
<PAGE>
$4,000 to Dr. Webster and retained each of Drs. Ts'o and Webster to serve as
consultants to the Company for a one-year period at a fee of $12,000.
In February 1997, the Company raised gross proceeds of $3 million in a
private placement, to Aries Trust and Aries Domestic Fund (collectively the
"Aries Funds"), of 12% Senior Secured Convertible Notes ("Convertible Notes")
and warrants to purchase Common Stock ("Bridge Warrants"). The Convertible
Notes, together with accrued interest thereon, were converted pursuant to their
terms into an aggregate of 65,415 shares of Series D Preferred Stock, which in
turn are convertible, at $0.94375 per share, into 6,931,391 shares of Common
Stock. The Bridge Warrants permit the purchase of up to an aggregate of
6,357,616 shares of Common Stock at an exercise price of $0.471875 per share
(subject to adjustment upon the occurrence of certain events). Pursuant to a
Note and Warrant Purchase Agreement (the "Purchase Agreement") entered into by
and among the Company and the Aries Funds, dated as of January 28, 1997, in
connection with such private placement, the Aries Funds were granted the right
to designate nominees constituting a majority of the members of the Board of
Directors of the Company, subject to certain conditions. The Aries Funds
designated Michael S. Weiss as a nominee for Director and he was appointed by
the Board and elected Interim Chairman of the Company's Board of Directors. On
September 11, 1997, the Aries Funds designated Glenn L. Cooper, M.D., Donald G.
Drapkin, Bobby W. Sandage, Jr., Ph.D. and Andrew J. Stein as nominees to the
Board of Directors of the Company (the "Board"), such persons were elected as
Directors of the Company, Michael S. Weiss stepped down as Interim Chairman and
the Board elected Mr. Drapkin Chairman and Mr. Weiss Vice Chairman.
On June 6, 1997, the Aries Funds entered into a Line of Credit Agreement
with the Company pursuant to which the Aries Funds provided the Company with a
line of credit of up to $500,000, which subsequently was repaid, in
consideration for warrants (the "Line of Credit Warrants") to purchase 50,000
shares of Common Stock exercisable at $2.50 per share, subject to adjustment
upon the occurrence of certain events.
On June 30, 1997, the Company sold a total of 161.58 Premium Preferred
UnitsTM ("Units") in a private placement (the "Private Placement") for which
Paramount Capital, Inc. acted as placement agent. Each unit sold in the Private
Placement consisted of 1,000 shares of Series D Preferred Stock and Class D
Warrants to purchase 5,000 shares of Common Stock at any time prior to the fifth
anniversary of the final closing date. A total of $16,158,000 was raised. The
net proceeds to the Company were $14,036,772. The respective conversion and
exercise prices of the Series D Preferred Stock and the Class D Warrants is
$0.94375 per share, subject to adjustment upon the occurrence of certain events.
The Aries Funds purchased, for an aggregate of $870,000, Class D Warrants and
Series D Preferred Stock in the Private Placement presently exercisable and
convertible for an aggregate of 50,000 and 1,059,603 shares of Common Stock. In
connection with the Private Placement, Paramount Capital, Inc. received cash
commissions equal to 9% of the gross sales price and a non-accountable expense
allowance equal to 4% of the gross sales price, and received warrants (the
"Placement Warrants") to purchase up to 10% of the Units sold in the Private
Placement for 110% of the offering price per Unit. Furthermore, the Company has
agreed to enter into a financial advisory agreement with Paramount Capital, Inc.
pursuant to which Paramount Capital, Inc. shall receive certain cash fees and
has received warrants (the "Advisory Warrants" and, together with the Placement
Warrants, the "Unit Purchase Warrants") to purchase up to 15% of the Units sold
in the Private Placement for 110% of the offering price per Unit. Michael S.
Weiss, Vice Chairman of the Board of the Company, is a Senior Managing Director
of Paramount Capital, Inc. David R. Walner, the Secretary of the Company, is an
Associate Director and Secretary of Paramount Capital Asset Management, Inc.
("PCAM"). PCAM is the investment manager and general partner of Aries Trust and
Aries Domestic Fund, respectively. The Aries Funds currently do not hold a
controlling block of voting stock of the Company, although the Aries Funds have
the present right to convert and exercise their securities into a significant
portion of the outstanding Common Stock, as described herein. Dr. Lindsay A.
Rosenwald, the President and sole stockholder of PCAM, is also the President and
sole stockholder of Paramount Capital, Inc., the Company's financial advisor and
the placement agent for the
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<PAGE>
Private Placement. In connection with the Private Placement, Paramount Capital,
Inc. and their designees received Unit Purchase Warrants to purchase an
aggregate of 40,395 shares of Series D Preferred Stock and 201,975 Class D
Warrants as compensation for services as placement agent and financial advisor.
Paramount Capital, Inc. allocated to Mr. Weiss and an entity of which Mr. Weiss
is the managing member, Unit Purchase Warrants to purchase an aggregate of 5,934
shares of Series D Preferred Stock and 29,670 Class D Warrants.
In December 1992, the Company and Jagotec formed Genta Jago Technologies
B.V. ("Genta Jago"), a 50/50 joint venture to develop and commercialize
therapeutic products on a worldwide basis. In 1996, SkyePharma acquired Jagotec.
Michael Weiss is a managing director of Genta Jago. Among other things, the
Company is required to provide loans to Genta Jago pursuant to a working capital
agreement which expires in October 1998. The loans are advanced up to a mutually
agreed upon maximum commitment amount, which amount is established by the
parties on a periodic basis. As of December 31, 1997, the Company had advanced
working capital loans of approximately $15,800,000 to Genta Jago, net of
principal repayments and credits, which amount fully satisfied what the Company
believes is the loan commitment established by the parties through December 31,
1997. Such loans bear interest and are payable in full in October 1998, or
earlier in the event certain revenues are received by Genta Jago from third
parties. There can be no assurance, however, that Genta Jago will obtain the
necessary financial resources to repay such loans to the Company.
Under the terms of the joint venture, Genta Jago has contracted with the
Company to conduct research and development and provide certain other services.
Revenues associated with providing such services, totaling $350,000 in 1997,
were recorded by the Company as related party contract revenue. Terms of the
arrangement also grant the Company an option to purchase Jagotec's interest in
Genta Jago exercisable from December 1998 through 2000.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on this
30th day of April, 1998.
GENTA INCORPORATED
/s/Kenneth G. Kasses, Ph.D.
------------------------------------------
Kenneth G. Kasses, Ph.D.
President, Principal Executive Officer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by Kenneth G. Kasses, Ph.D. and
Robert E. Klem, Ph.D. in their respective individual capacities and by Kenneth
G. Kasses, Ph.D. on behalf of the following persons, pursuant to the Power of
Attorney constituting Exhibit 24.1 to Genta's Form 10-K as amended by the First
Amendment thereto filed on April 16, 1998, in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature(s) On behalf of Capacity Date
- ------------ ------------ -------- ----
<S> <C> <C> <C>
/s/Kenneth G. Kasses, Ph.D.
- --------------------------- Kenneth G. Kasses, Ph.D. President, Principal Executive April 30, 1998
Kenneth G. Kasses, Ph.D. Officer and Director
/s/Robert E. Klem
- -------------------------- Robert E. Klem, Ph.D. Principal Accounting Officer, April 30, 1998
Robert E. Klem, Ph.D. Principal Financial Officer,
Vice President and Director
/s/Kenneth G. Kasses, Ph.D.
- --------------------------- Glenn L. Cooper, M.D. Directors April 30, 1998
Kenneth G. Kasses, Ph.D. Donald G. Drapkin
Lawrence M. Kessel, M.D.
Peter Salomon, M.D.
Bobby W. Sandage, Jr., Ph.D.
Andrew J. Stein
Harlan J. Wakoff
Michael S. Weiss
</TABLE>
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