<PAGE> 1
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 ss.240.14a-11(c) or ss.240.14a-12
ARIAD PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------
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:
-------------------------------------------
5) Total fee paid:
-------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing:
1) Amount previously paid:
-------------------------------------------
2) Form, Schedule or Registration Statement No:
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3) Filing party:
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4) Date Filed:
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<PAGE> 2
May 5, 2000
Dear ARIAD Stockholder:
You are invited to attend the Annual Meeting of ARIAD Stockholders to be held on
Thursday, June 8, 2000 at 10:00 a.m., Eastern Time, at our offices at 26
Landsdowne Street, Cambridge, Massachusetts.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe the formal business to be acted upon. We urge you to read this
information carefully.
At the Annual Meeting, four persons will be elected to serve as Class 3
Directors. The Board of Directors unanimously believes that the election of
these nominees as directors is in the best interests of ARIAD and its
stockholders and, accordingly, recommends a vote FOR Item 1 on the enclosed
proxy card.
In addition to the election of Directors, I will make a presentation on our
progress over the past year and our plans for the future. Directors and
management will be available as well to respond to your questions.
If you plan on attending, please contact Ms. Kathy Lawton in our Investor
Relations Office at (617) 494-0400, extension 251 or send her an e-mail at
[email protected]. In either case, she will send you directions to our offices
and register you for the meeting.
It is important that your shares be represented and voted at the meeting,
whether or not you plan on attending the meeting in person. Therefore, please
sign, date and promptly return the enclosed proxy in the envelope provided.
On behalf of all of our employees and directors, I would like to thank you for
your continuing support and confidence.
Sincerely yours,
Harvey J. Berger, M.D.
Chairman and Chief Executive Officer
<PAGE> 3
ARIAD PHARMACEUTICALS, INC.
26 LANDSDOWNE STREET
CAMBRIDGE, MASSACHUSETTS 02139
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 2000
Notice is hereby given that the Annual Meeting of Stockholders of ARIAD
Pharmaceuticals, Inc. (the "Company") will be held on Thursday, June 8, 2000 at
10:00 a.m., Eastern Time, at the Company's offices at 26 Landsdowne Street,
Cambridge, Massachusetts 02139, for the following purposes:
1. To elect four Class 3 Directors to hold office until the 2003 Annual
Meeting of Stockholders and until their successors are duly elected
and qualified,
2. To transact such other business as may properly come before the
Meeting and any adjournments or postponements thereof.
Holders of record of the Company's Common Stock at the close of business
on April 27, 2000 are entitled to notice of and to vote at the Meeting.
For the ten-day period immediately prior to the Meeting, the list of
stockholders entitled to vote at the Meeting will be available for inspection at
the offices of the Company, located at 26 Landsdowne Street, Cambridge,
Massachusetts 02139, for such purposes as are set forth in the General
Corporation Law of the State of Delaware.
By Order of the Board of Directors
Laurie A. Allen, Esq.
Secretary
Dated: May 5, 2000
IMPORTANT
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING OF
STOCKHOLDERS. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU
ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE. IF YOU SO CHOOSE, YOU MAY VOTE YOUR SHARES IN
PERSON AT THE ANNUAL MEETING.
<PAGE> 4
ARIAD PHARMACEUTICALS, INC.
26 LANDSDOWNE STREET
CAMBRIDGE, MASSACHUSETTS 02139
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 8, 2000
This Proxy Statement and the accompanying Notice of Annual Meeting and
form of proxy are furnished in connection with the solicitation of proxies by
the Board of Directors (the "Board of Directors" or the "Board") of ARIAD
Pharmaceuticals, Inc. (the "Company" or "ARIAD") to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") to be held on Thursday,
June 8, 2000 at 10:00 a.m., Eastern Time, at the Company's offices at 26
Landsdowne Street, Cambridge, Massachusetts 02139 and at any adjournments or
postponements thereof for the purposes set forth in the Notice of Annual
Meeting. These proxy materials are being mailed to stockholders on or about May
5, 2000.
Holders of the Company's common stock, par value $0.001 per share (the
"Common Stock"), who are entitled to vote are urged to sign the enclosed form of
proxy and return it promptly in the envelope enclosed for that purpose. Proxies
will be voted in accordance with such holders' directions. If no directions are
given, proxies will be voted "FOR" the election as Class 3 Directors of the
nominees named herein and, as to any other business that may come before the
Meeting, in accordance with the judgment of the person or persons named in the
Proxy. The Board of Directors knows of no other business to be presented at the
Meeting.
The proxy may be revoked at any time prior to the voting thereof by
written notice of revocation to the Company at 26 Landsdowne Street, Cambridge,
Massachusetts 02139, Attention: Jay R. LaMarche, Chief Financial Officer. The
proxy may also be revoked by submission to the Company prior to the Meeting of a
more recently dated proxy or by attending the Meeting and voting in person.
Shares as to which a broker indicates it has no discretion to vote, and which
are not voted, will be considered present at the Meeting for the purpose of
determining the presence of a quorum but will have no effect on the approval of
the proposals described in the immediately preceding paragraph. Proxies marked
as abstaining on any matter to be acted on by the stockholders will be treated
as present at the Meeting for purposes of determining a quorum but will not be
counted as votes cast on such matters. The votes of stockholders present in
person or represented by proxy at the Meeting will be tabulated by an inspector
of elections appointed by the Company. The inspector's duties include
determining the number of shares represented at the Meeting, counting all votes
and ballots and certifying the determination of the number of shares represented
and the outcome of the balloting.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors. The entire cost of soliciting these proxies, including the
costs of preparing, printing and mailing to stockholders this Proxy Statement
and accompanying materials, will be borne by the Company. The Company has
retained D.F. King & Co., Inc. ("D.F. King") to assist in the distribution and
solicitation of proxies. The Company anticipates that it will pay D.F. King
approximately $3,500 in fees, plus reasonable out-of-pocket expenses. In
addition to use of the mails, proxies may be solicited personally or by
telephone or otherwise by officers, directors and employees of the Company, who
will receive no additional compensation for such activities. Arrangements will
also be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of shares
held of record by such institutions and persons. Such parties will be reimbursed
for their reasonable expenses incurred in such connection.
<PAGE> 5
OUTSTANDING VOTING SECURITIES
Only holders of record of the Common Stock at the close of business on
April 27, 2000 are entitled to notice of and to vote at the Meeting. On that
date, there were 25,968,118 shares of Common Stock outstanding. Each share of
Common Stock is entitled to one vote. Accordingly, a total of 25,968,118 votes
are entitled to be cast on each matter submitted to a vote at the Meeting. One
third of such shares, present in person or represented by proxy at the Meeting,
will constitute a quorum for the transaction of business at the Meeting. Under
the Company's By-laws, the affirmative vote of a majority of the votes cast by
the stockholders present or represented by proxy at the Meeting is required to
elect the nominees for election as Class 3 Directors of the Company, which is to
be considered as Proposal 1. Abstentions and broker non-votes will be considered
present at the Meeting for the purpose of determining the presence of a quorum
but will have no effect on the vote.
INFORMATION REGARDING DIRECTORS
The Board of Directors currently consists of eight members classified into
three classes. At each Annual Meeting of the Stockholders, the term for one
class of directors expires and directors are elected for a full term of three
years to succeed the directors of such class. Set forth below is certain
biographical information for each of the four individuals nominated by the Board
of Directors for election as Class 3 Directors at this Meeting, as well as for
each of the continuing Class 1 and Class 2 Directors whose terms expire either
at the Annual Meeting of the Stockholders in 2001 or 2002, or at such time as
such director's successor is duly elected and qualified. All of the other
companies listed as companies in which certain directors hold directorships are
publicly traded companies.
NOMINEES AS CLASS 3 DIRECTORS
(TERM TO EXPIRE 2003)
Harvey J. Berger, M.D., 49, is the principal founder of ARIAD and has
served as the Company's Chairman of the Board, President and Chief Executive
Officer since April 1991. From 1986 to 1991, Dr. Berger held a series of senior
management positions at Centocor, Inc., a biotechnology company, most recently
as Executive Vice President and President of the Research and Development
Division. He has held senior academic and administrative appointments at Emory
University, Yale University and the University of Pennsylvania and was an
Established Investigator of the American Heart Association.
Vaughn D. Bryson, 61, a Director of ARIAD since February 1995, is
President of Life Science Advisors, Inc., a healthcare consulting company. Mr.
Bryson was a thirty-two year employee of Eli Lilly & Co. from 1961 to 1993 and
served as President and Chief Executive Officer of Eli Lilly from 1991 to 1993.
He served as Executive Vice President of Eli Lilly from 1986 until 1991. He also
served as member of Eli Lilly's Board of Directors from 1984 until his
retirement in 1993. Mr. Bryson was Vice Chairman of Vector Securities
International Inc., an investment banking firm, from April 1994 to December
1996. He also is a Director of Chiron Corporation, a biotechnology company,
Fusion Medical Technologies, Inc., a biotechnology company, Athergenics, Inc. ,
a biotechnology company, Amylin Pharmaceutical, Inc., a biotechnology company
and Quintiles Transnational Corporation, a pharmaceutical services company. He
received a B.S. degree in Pharmacy from the University of North Carolina and
completed the Sloan Program at the Stanford University Graduate School of
Business.
Sandford D. Smith, 53, a Director of ARIAD since October 1991 and our Vice
Chairman since January 1999, is President, Therapeutics International, Genzyme
Corporation. From May 1996 to September 1996, he was Vice President and General
Manager, Specialty Therapeutics and International Group, Genzyme Corporation, a
biotechnology company. Mr. Smith was President and Chief Executive Officer and a
Director of Repligen Corporation, a biotechnology company, from 1986 to March
1996. Mr. Smith previously held a number of positions with Bristol-Myers Squibb
and Company from 1977 to 1986, including, most recently, Vice President of
Corporate Development and Planning for the United States Pharmaceutical and
Nutritional Group. Mr. Smith earned his B.A. degree from the University of
Denver. Mr. Smith is also a Director of CSPI, a software company.
2
<PAGE> 6
Raymond S. Troubh, 74, a Director of ARIAD since October 1991, has been a
financial consultant for more than five years. Prior to this position he was a
general partner of Lazard Freres & Co., an investment banking firm, and a
governor of the American Stock Exchange. Mr. Troubh is a Director of Diamond
Offshore Drilling, Inc., a contract drilling company, Foundation Health Systems,
Inc., a managed healthcare company, General American Investors Company, Inc., an
investment trust company, Gentiva Health Services, Inc., a healthcare provider,
Olsten Corporation, a staffing services company, Petrie Stores Corporation, a
liquidating trust, Starwood Hotels & Resorts, Inc., a hotel operating company,
Triarc Companies, Inc., a food and beverage company and WHX Corporation, a steel
products company. He received his A.B. degree from Bowdoin College and his LL.B.
degree from Yale Law School.
CONTINUING CLASS 1 DIRECTORS
(TERM TO EXPIRE 2001)
John M. Deutch, Ph.D., 61, a Director of ARIAD since March 1997, is an
Institute Professor at the Massachusetts Institute of Technology. From 1992 to
1997, he previously served as Director of Central Intelligence, Deputy Secretary
of Defense, and Undersecretary of Defense (Acquisition and Technology). Prior to
this service, he was Provost of the Massachusetts Institute of Technology, Dean
of the School of Science, Chairman of the Department of Chemistry and the Karl
Taylor Compton Professor of Chemistry. Mr. Deutch received his B.A. degree from
Amherst College and his D.Sc. degree from the Massachusetts Institute of
Technology and was a National Institutes of Health postdoctoral fellow. Mr.
Deutch is a Director of Citicorp, a financial services company, CMS Energy
Corporation, an energy company, Cummins Engine Company, Inc., a manufacturer of
engines and engine components, Raytheon, Inc., a defense and commercial
electronics company, and Schlumberger Ltd., an oil and gas equipment services
company.
Ralph Snyderman, M.D., 60, a Director of ARIAD since June 1998, has been
Chancellor for Health Affairs, Dean, School of Medicine at Duke University, and
President and Chief Executive Officer of Duke University Health System since
March 1989. He was formerly Senior Vice President of Medical Research and
Development at Genentech, Inc., a biotechnology company from January 1987 to May
1989. Dr. Snyderman is a Director of Proctor and Gamble, Inc., a consumer
products and healthcare company. Dr. Snyderman received his M.D. degree from the
State University of New York and his B.S. degree from Washington College,
Chestertown, Maryland.
CONTINUING AS CLASS 2 DIRECTORS
(TERM TO EXPIRE 2002)
Philip Felig, M.D., 63, a Director of ARIAD since October 1991, has been
in medical practice specializing in endocrinology and diabetes as an Attending
Physician on the Senior Medical Staff at Lenox Hill Hospital since 1987. Prior
to this position, from 1986 to 1987, he was Chief Executive Officer of Sandoz
Pharmaceuticals Corporation, a pharmaceutical company, and from 1984 to 1987,
President of the Sandoz Research Institute. Prior to this service, Dr. Felig
held a series of academic positions at the Yale University School of Medicine,
including Professor and Vice-Chairman of the Department of Medicine and Chief of
Endocrinology. Dr. Felig received his B.A. degree from Princeton University and
his M.D. degree from the Yale University School of Medicine and did further
medical training at the Yale-New Haven Hospital, the Joslin Laboratory at
Harvard Medical School and the Peter Bent Brigham Hospital. Dr. Felig also holds
an Honorary Doctor of Medicine from the Karolinska Institute.
Jay R. LaMarche, 53, has served as Chief Financial Officer, Treasurer and
a Director of ARIAD since January 1992. Mr. LaMarche has served as Executive
Vice President since March 1997 and as Senior Vice President, Finance from
January 1992 to February 1997. Prior to joining ARIAD, he was Chief Financial
Officer and a Director of ChemDesign Corporation, a fine chemicals manufacturer,
where he served in several capacities, most recently as Executive Vice
President.
3
<PAGE> 7
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, the Board of Directors
held nine meetings. The Board of Directors has three committees, the Executive
Committee, the Compensation and Stock Option Committee and the Audit Committee.
The Board does not have a nominating committee. Except for Dr. Felig, no
director attended fewer than 75% of the aggregate number of meetings held during
such fiscal year by the Board of Directors and the committees of the Board on
which he served.
The members of the Executive Committee are Dr. Berger and Messrs. Bryson,
LaMarche and Smith. The Executive Committee has and may exercise certain powers
and authority of the Board of Directors in connection with the management and
affairs of the Company. The Executive Committee held three meetings (including
actions taken by written consent) during the fiscal year ended December 31,
1999.
The members of the Compensation and Stock Option Committee are Dr. Felig
and Messrs. Smith and Troubh. The Compensation and Stock Option Committee
establishes compensation levels for executive officers, evaluates the
performance of executive officers, considers management succession and related
matters and administers the Company's stock option plans and executive
compensation plan. Such committee reviews with the Board of Directors all
aspects of compensation for the executive officers, except that decisions with
respect to awards under the ARIAD Pharmaceuticals, Inc. 1991 Stock Option Plan
for Employees and Consultants (the "1991 Employee Plan") are made solely by the
committee. The Compensation and Stock Option Committee held six meetings
(including actions taken by written consent) during the fiscal year ended
December 31, 1999.
The members of the Audit Committee are Messrs. Bryson and Troubh. The
responsibilities of the Audit Committee include, with the assistance of
management, the selection and engagement of the Company's independent auditors,
the review of the scope of the audit proposed by the auditors, a post-audit
review of the Company's financial statements and general oversight of the
Company's financial reporting and the adequacy of internal controls. The Audit
Committee held two meetings during the fiscal year ended December 31, 1999.
Except as set forth below for Mr. Sandford Smith, Directors do not receive
any cash compensation for service on the Board of Directors or its committees.
Directors are reimbursed for their expenses for each meeting attended. On
December 1, 1999, each of Dr. Felig and Messrs. Bryson, Deutch, Smith and Troubh
was awarded options to purchase 10,000 shares of Common Stock at $1.50 per
share, pursuant to the ARIAD Pharmaceuticals, Inc. 1994 Stock Option Plan for
Non-Employee Directors (the "1994 Director Plan"). Such options were exercisable
on the grant date. For the fiscal year ended December 31, 1999, Drs. Felig and
Snyderman and Mr. Deutch each received advisory fees aggregating $5,000 in
connection with their membership on the Board of Scientific and Medical
Advisors. Commencing February 1, 1999, the Company compensated Mr. Smith at a
rate of $4,000 per month for his services as Vice Chairman of the Board of
Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In November 1995, the Company entered into an agreement with Hoechst
Marion Roussel S.A., an affiliate of a former greater than 5% holder of the
Company's voting securities, to collaborate on the discovery and development of
drugs to treat osteoporosis and related bone diseases, (the "1995 HMR
Osteoporosis Agreement"). Under the 1995 HMR Osteoporosis Agreement, the Company
granted to HMR exclusive rights to develop and commercialize these drugs
worldwide. Under the terms of this Agreement, HMR made an initial cash payment
to the Company of $10,000,000, agreed to provide research funding in equal
quarterly amounts of $1,000,000 up to an aggregate of $20,000,000 over a
five-year period and agreed to provide an aggregate of up to $10,000,000 upon
the attainment of certain research milestones. This Agreement further provided
for the payment of royalties to the Company based on product sales. Revenue
recognized under the 1995 HMR Osteoporosis Agreement amounted to $6,000,000,
$6,778,000 and $7,333,000 for 1999, 1998 and 1997, respectively, including
$2,000,000 for the achievement of a milestone in 1999.
4
<PAGE> 8
In March 1997, the Company entered into an agreement which established
a 50/50 joint venture with Aventis Pharmaceuticals, Inc. (formerly a greater
than 5% holder of the Company's voting securities and formerly known as Hoechst
Marion Roussel, Inc.) ("Aventis") to pursue functional genomics (the "1997 HMR
Genomics Agreement") with the goal of identifying genes that encode novel
therapeutic proteins and small-molecule drug targets. The joint venture, named
the Hoechst-ARIAD Genomics Center, LLC (the "Genomics Center"), was located at
the Company's facility in Cambridge, Massachusetts. Under the terms of the 1997
HMR Genomics Agreement, the Company and Aventis agreed to commit $85,000,000 to
the establishment of the Genomics Center and its first five years of operation.
The Company and Aventis agreed to jointly fund $78,500,000 of operating and
related costs, and ARIAD agreed to invest up to $6,500,000 in leasehold
improvements and equipment for use by ARIAD in conducting research on behalf of
the Genomics Center. Through December 31, 1999, the Company had invested
$6,500,000 in leasehold improvements and equipment and funded $14,997,000 in
operating and related costs. Aventis committed to provide ARIAD with capital
adequate to fund ARIAD's share of such costs through the purchase of up to
$49,000,000 of ARIAD Series B Convertible Preferred Stock over the five-year
period, including an initial investment of $24,000,000, which was completed in
March 1997 and $5,747,000 which was completed in January 1999. The Company also
entered into agreements with the Genomics Center to provide research and
administrative services to the Genomics Center on a cost reimbursement basis.
Revenue recognized pursuant to the Services Agreements amounted to $6,468,000,
$4,951,000 and $1,357,000 for the years ended December 31, 1999, 1998 and 1997,
respectively.
On December 31, 1999, the Company completed the sale of its 50% interest
in the Genomics Center to Aventis and received: (i) $40,000,000 in cash, of
which $5,000,000 had been advanced on October 12, 1999, (ii) return of 3,004,436
shares of the Company's Series B Convertible Preferred Stock, (iii) the
forgiveness of $1,857,000 of long-term debt including accrued interest owed by
the Company to Aventis, (iv) drug candidates and related technologies resulting
from the 1995 HMR Osteoporosis Agreement and (v) the right to use certain
genomics and bioinformatics technologies developed by the Genomics Center. In
addition, the Company agreed to (x) sublease to Aventis approximately 35,000
square feet of laboratory and office space, for a period of up to seven years,
(y) assign equipment leases with aggregate rental payments of $1,793,000 to
Aventis, and (z) provide certain transitional laboratory support services. The
Company recorded a net gain on the transaction of $46,440,000.
On November 9, 1998, the Company issued 5,000 shares of the Company's
Series C Convertible Preferred Stock to Brown Simpson Strategic Growth Funds
("Brown Simpson") and HFTP Investments, Inc, LLC, an affiliate of the Promethean
Investment Group ("Promethean") and received proceeds of approximately
$5,000,000. (Both Brown Simpson and Promethean are former greater than 5%
holders of the Company's voting securities.) Each share of Series C Convertible
Preferred Stock had a liquidation value of $1,000, plus an additional amount
equal to a 5% per annum accretion amount, accrued from the date of issue, and
was convertible into Common Stock of the Company, at a conversion price equal to
the lower of a variable conversion price or $2.09 per share. On December 31,
1999, the Company repurchased 2,000 shares of Series C Convertible Preferred
Stock from Brown Simpson for an aggregate cash payment of $3,400,000. On January
14, 2000, the Company completed the repurchase of the remaining 3,000 shares of
Series C Convertible Preferred Stock from Promethean for an aggregate
consideration of $6,925,000 plus 1,078,038 shares of Common Stock. Each
transaction included the cancellation of all rights to purchase additional
shares by the investors and the rights held by the Company to require purchase
of additional shares of Series C Convertible Preferred Stock.
5
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 26, 2000 certain information
with respect to (i) each person (including any "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) known to the Company to own beneficially more than 5% of the Common
Stock, (ii) each director of the Company, (iii) each executive officer named in
the Summary Compensation Table under "Executive Compensation" and (iv) all
directors and executive officers as a group. In accordance with the rules
promulgated by the Securities and Exchange Commission (the "Commission"), such
ownership includes shares currently owned, as well as shares that the named
person has the right to acquire within 60 days, including, but not limited to,
shares that the named person has the right to acquire through the exercise of
any option or warrant. Except as otherwise indicated, the stockholders listed in
the table have sole voting and investment powers with respect to the Common
Stock shown as beneficially owned.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED PERCENTAGE
- ---------------- ------------------ ----------
<S> <C> <C>
Harvey J. Berger, M.D. 1,612,747 (1) 5.6%
Jay R. LaMarche 365,356 (2) 1.3%
Manfred Weigele, Ph.D. 363,534 (3) 1.3%
John Iuliucci, Ph.D. 172,793 (4) *
Vaughn D. Bryson 90,000 (5) *
John M. Deutch, Ph.D. 87,053 (6) *
Philip Felig, M.D. 120,714 (7) *
Sandford D. Smith 106,205 (8) *
Ralph Snyderman, M.D. 110,000 (9) *
Raymond S. Troubh 116,249(10) *
All directors and executive officers 3,144,651(11) 11.0%
as a group (10 persons)
</TABLE>
- ----------
* Indicates less than one percent
(1) Includes 296,500 shares issuable upon exercise of stock options within 60
days of April 26, 2000. Includes 535,714 shares of Common Stock and 235,714
shares issuable upon exercise of stock options within 60 days of April 26,
2000 held of record by The Berger Family Trust and 8,928 shares of Common
Stock held of record by The Wolk Family Trust. Wendy S. Berger and Harvey
J. Berger, as co-trustees of such trusts, have the right to vote and
dispose of the shares held by such trusts; however, in certain
circumstances, Wendy S. Berger as co-trustee will have sole voting power
with respect to the shares held by each such trust. Includes 122,000 shares
held by Edith Berger, Dr. Berger's mother, 40,892 shares held by Wendy S.
Berger, Dr. Berger's spouse, and 11,928 shares held by Dr. Berger's
children. Dr. Berger's address is in care of ARIAD Pharmaceuticals, Inc.,
26 Landsdowne Street, Cambridge, MA 02139.
(2) Includes 203,107 shares issuable upon exercise of stock options within 60
days of April 26, 2000. Includes 6,696 shares held by Carol B. LaMarche,
Mr. LaMarche's spouse.
(3) Includes 213,981 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(4) Includes 165,428 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(5) Includes 47,500 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(6) Includes 70,357 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(7) Includes 120,714 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(8) Includes 102,857 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(9) Includes 74,286 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(10) Includes 60,000 shares issuable upon exercise of stock options within 60
days of April 26, 2000.
(11) Includes 1,590,444 shares subject to the options held by all directors and
executive officers as a group issuable upon exercise of stock options
within 60 days of April 26, 2000.
6
<PAGE> 10
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICE OR POSITIONS HELD
- ---- --- ------------------------
<S> <C> <C>
Harvey J. Berger, M.D. 49 Chairman of the Board, President and
Chief Executive Officer
Jay R. LaMarche 53 Executive Vice President and Chief
Financial Officer
John D. Iuliucci, Ph.D. 57 Senior Vice President, Drug Development
Manfred Weigele, Ph.D. 67 Senior Vice President, Chief Scientific
Officer
</TABLE>
For biographical information on Dr. Berger and Mr. LaMarche, see "Information
Regarding Directors."
John D. Iuliucci, Ph.D. has served as Senior Vice President, Drug
Development since January 1999. Dr. Iuliucci also served as Vice President, Drug
Development from October 1996 to December 1998, and Vice President, Preclinical
Development of ARIAD from June 1992 to September 1996. Prior to joining ARIAD,
Dr. Iuliucci was Director of Preclinical Pharmacology and Toxicology at
Centocor, Inc. from 1984 to 1992. From 1975 to 1984, Dr. Iuliucci headed the
Drug Safety Evaluation Department at Adria Laboratories. He was a Senior
Toxicologist at the Warner-Lambert Pharmaceutical Research Institute from 1972
to 1975. Dr. Iuliucci received a B.S. degree in Pharmacy and M.S. and Ph.D.
degrees in Pharmacology from Temple University.
Manfred Weigele, Ph.D. has served as Senior Vice President and Chief
Scientific Officer since March 1999. Dr. Weigele also served as Senior Vice
President, Physical and Chemical Sciences from October 1996 to February 1999 and
as Senior Vice President, Research - Chemistry of ARIAD from October 1991 to
September 1996. Prior to joining ARIAD, from 1985 to 1991, Dr. Weigele was a
Vice President and Group Director of Chemistry Research for Hoffmann-LaRoche
Inc., where he directed chemistry research. He joined Hoffmann-LaRoche, a
worldwide pharmaceuticals company, in 1965. Dr. Weigele received his
undergraduate training at Technische Universitat in Braunschweig, Germany and
his Ph.D. degree from the University of Wisconsin.
7
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth aggregate amounts of compensation paid or
accrued by the Company for the years ended December 31, 1999, 1998 and 1997, for
services rendered in all capacities, by each of the Company's Chief Executive
Officer, the four most highly compensated executive officers other than the
Chief Executive Officer and one additional individual for whom disclosure is
required, even though such individual was not serving as an executive officer at
December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION(1) ----------------------
----------------------- NUMBER OF SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY UNDERLYING OPTIONS COMPENSATION(2)
- --------------------------- ---- ----------------------- --------------------- ---------------
<S> <C> <C> <C> <C>
Harvey J. Berger, M.D. 1999 $330,000 250,000 $3,200
Chairman, President and 1998 300,000 100,000 3,200
Chief Executive Officer 1997 300,000 -- --
Jay R. LaMarche 1999 220,000 143,000 24,113
Executive Vice President 1998 215,000 50,000 3,200
and Chief Financial Officer 1997 215,000 -- --
Manfred Weigele, Ph.D. 1999 174,014 159,500 18,464
Senior Vice President, 1998 173,654 50,000 --
Chief Scientific Officer 1997 215,000 -- --
John D. Iuliucci, Ph.D. 1999 200,000 90,000 15,222
Senior Vice President, 1998 198,654 55,000 3,019
Drug Development 1997 165,000 --
Laurie A. Allen, Esq.(3) 1999 206,731 135,000 2,414
Mark J. Zoller, Ph.D.(4) 1999 210,000 107,000 11,627
1998 165,000 50,000 3,200
1997 165,000 21,000 --
</TABLE>
- ----------
(1) Other annual compensation is not presented, as the cost did not exceed the
lesser of $50,000 or 10% of the total salary reported for any of the named
executive officers.
(2) The amounts listed include the Company's matching contributions of up to
$3,200 under its 401(k) Plan and compensation earned under the ARIAD
Pharmaceuticals, Inc. 1997 Executive Compensation Plan amounting to $20,913
for Mr. LaMarche, $18,464 for Dr. Weigele, $12,172 for Dr. Iuliucci and
$8,752 for Dr. Zoller. See "401(k) Plan" and "Report of the Compensation
and Stock Option Committee - Bonus Awards."
(3) Ms. Allen's employment as Senior Vice President, Corporate Development and
General Counsel terminated January 1, 2000. She continues as Secretary and
a consultant to the Company.
(4) Dr. Zoller's employment as Senior Vice President Genomics and Scientific
Director of the Hoechst-ARIAD Genomics Center, LLC terminated December 31,
1999 as part of the Company's sale of its 50% interest in the Genomics
Center to Aventis.
8
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee is comprised of Dr. Felig and
Messrs. Smith and Troubh. On December 1, 1999, pursuant to the 1994 Director
Plan, the Company granted to each member of the committee an option to purchase
10,000 shares of Common Stock at $1.50 per share.
EMPLOYMENT AGREEMENTS
Dr. Berger, Chief Executive Officer, President and Chairman of the Board of
Directors of the Company, has an employment agreement with the Company which
commenced in January 1992 and terminates in December 2001. The agreement
provides that he shall be employed as the Chief Executive Officer and President
of the Company, shall be nominated for election to the Board of Directors, serve
as Chairman of the Board and receive an annual base salary of $330,000 for 1999,
increasing each year by at least 10% of the preceding year's base salary. Dr.
Berger is eligible each year to receive a discretionary bonus, determined by the
Board of Directors, of up to 50% of his annual base salary. Dr. Berger's
employment agreement is automatically renewable for successive three-year terms
unless terminated by either party. If the Company fails to renew the employment
agreement, it is obligated to pay Dr. Berger, in addition to his compensation
for the remainder of the term, a lump sum payment equal to two times Dr.
Berger's annual salary for the final year of the term and to provide for the
immediate exercisability of all stock options and other equity rights.
Dr. Berger's employment agreement provides that, if the agreement is
terminated by either party upon the occurrence of certain events including, (i)
a sale or merger of the Company (or stockholder approval of a merger agreement)
or an acquisition of a substantial equity interest in the Company by a person or
group of persons, (ii) if Dr. Berger is not elected to membership on the Board
of Directors, named as Chairman or designated as Chief Executive Officer or
ceases to be the highest ranking executive officer of the Company or ceases to
control personnel decisions with respect to the Company's employees, (iii) if
the Company is in material breach of the terms of his employment agreement, (iv)
if the Company is bankrupt or insolvent or (v) if the Company terminates Dr.
Berger's employment agreement without cause, (1) the Company will pay Dr. Berger
the greater of (x) any remaining salary payable during the term of the agreement
plus the maximum possible bonus for each year remaining in the term (taking into
account, in both cases, future 10% increases in salary) and (y) an amount equal
to twice his current annual salary and maximum bonus for the current year of
employment (the "Severance Payment") and (2) all of his stock options, stock
awards and similar equity rights will immediately vest and become exercisable.
The Company is not obligated to make the Severance Payment if it discharges Dr.
Berger for cause. If the vesting of certain benefits and the payment of certain
amounts by the Company to Dr. Berger are treated as payments in the nature of
compensation that are contingent on a "change in control" (within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")), the
deductibility of such payments could, depending upon the aggregate amount of
such payments, be disallowed pursuant to Section 280G of the Code and an excise
tax could be imposed on Dr. Berger pursuant to Section 4999 of the Code for
which he would, pursuant to the employment agreement, be indemnified by the
Company on a net after-tax basis. The employment agreement contains a
non-competition provision that is effective during the term of the agreement
and, if Dr. Berger is terminated for cause, for a period of one year following
the date of termination.
The Company has also entered into employment agreements with Mr. LaMarche
and Drs. Weigele and Iuliucci. The agreements provide for employment at each
such executive's present position through December 2001 for Mr. LaMarche and Dr.
Iuliucci and through December 2000 for Dr. Weigele at annual base salaries of
$240,000, $207,500 and $230,000, respectively, increasing each year by an amount
to be determined by the Board of Directors. In addition, each executive is
eligible each year to receive a discretionary bonus, to be determined by the
Board of Directors, of up to 30% of his annual base salary. The agreements are
renewable for successive one-year terms with the mutual consent of the parties.
These agreements provide that: (i) upon a change of control of the Company,
such officers will be entitled to receive, upon termination by the officer
within 90 days after the change in control, any remaining salary payable during
the term or six months' salary whichever is shorter, and all stock options held
by such officers
9
<PAGE> 13
will immediately vest and become exercisable; and (ii) upon termination by the
Company, without cause, such officer will be entitled to receive his current
salary for the remaining period of the applicable term and all outstanding
options that would have vested during such term shall vest immediately.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable Value at
Percent of Assumed Annual
Number of Total Rates of Stock
Securities Options Price Appreciation
Underlying Granted to for Option Term
Options Employees in Exercise Expiration --------------------
Name Granted (1) Fiscal Year Price Date 5%($) 10%($)
- ---- ------------ ------------- -------- ---------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Harvey J. Berger, M.D. 70,000(2) 3.4% $1.38 05/05/09 $68,370 $153,398
180,000(3) 8.7% $ .75 10/04/09 $95,896 $215,155
Jay R. LaMarche 45,000(2) 2.2% $1.34 04/05/09 $42,833 $96,103
98,000(3) 4.8% $ .75 10/04/09 $52,210 $117,140
Manfred Weigele, Ph.D. 60,000(2) 2.9% $1.34 04/05/09 $57,111 $128,137
99,500(3) 4.8% $ .75 10/04/09 $53,009 $118,933
John D. Iuliucci, Ph.D. 20,000(2) 1.0% $1.34 04/05/09 $19,037 $42,712
70,000(3) 3.4% $ .75 10/04/09 $37,293 $83,671
Laurie A. Allen, Esq. 20,000(2) 1.0% $1.34 04/05/09 $19,037 $42,712
35,000(3) 1.7% $ .75 10/04/09 $18,646 $41,836
Mark J. Zoller, Ph.D. 35,000(2) 1.7% $1.34 04/05/09 $33,315 $74,747
72,000(3) 3.5% $ .75 10/04/09 $38,358 $86,062
</TABLE>
(1) Options to purchase shares of Common Stock of the Company.
(2) Exercisable 25% per year commencing on the first anniversary of the award.
(3) Exercisable 25% upon award and 25% every four months thereafter, subject to
the following modifications: (a) 50% of the remaining unexercisable option
shares become exercisable upon the occurrence of certain events including a
change of control of the Hoechst-ARIAD Genomics Center, LLC, and certain
other events, or (b) 100% of the remaining unexercisable option shares
become exercisable upon a change of control of the Company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
No. of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Shares Year End(#) Fiscal Year End($)(4)
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
- ---- ----------- ----------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Harvey J. Berger, M.D. -- -- 467,214/212,500(1)(2) $ 484,174/239,844
178,571/0(3) --
Jay R. LaMarche -- -- 167,106/119,251(1) 186,154/142,061
89,285/0(3) --
Manfred Weigele, Ph.D. -- -- 174,044/134,813(1) 195,363/165,308
89,285/0(3) --
John D. Iuliucci, Ph.D. -- -- 145,428/87,500(1) 167,047/97,642
35,714/0(3) --
Laurie A. Allen, Esq. -- -- 41,875/93,125(1) 57,607/93,990
Mark J. Zoller, Ph.D. -- -- 177,428/99,500(1) 182,185/110,206
</TABLE>
(1) Options to purchase shares of Common Stock of the Company.
(2) Includes options to purchase 235,714 shares held by The Berger Family
Trust.
(3) Options to purchase Common Stock of ARIAD Gene Therapeutics, Inc.
(4) Based upon a fair market value of $2.81 per share of Common Stock, which
was the closing price of a share of Common Stock on the Nasdaq National
Market on December 31, 1999.
10
<PAGE> 14
401(k) PLAN
Effective January 1, 1993, the Board of Directors adopted the ARIAD
Retirement Savings Plan (the "401(k) Plan"), which is intended to qualify under
Section 401(k) of the Code covering all of the Company's eligible employees.
Pursuant to the 401(k) Plan, employees may elect to defer, in the form of
contributions to the 401(k) Plan, from 1% to 15% of their current compensation
up to the statutorily prescribed annual limit ($10,000 in 1999) and have the
amount of the reduction contributed to the 401(k) Plan. Effective July 1, 1997,
the Company agreed to match 50% of the first 4% of compensation that eligible
employees contribute to the 401(k) Plan, as defined. Employer matching
contributions to the 401(k) Plan amounted to $167,000 for the year ended
December 31, 1999.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
GENERAL
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee") establishes compensation levels for executive officers, evaluates
the performance of executive officers, considers management succession and
related matters, administers the Company's stock option plans and recommends the
grant of stock options under the stock option plans of ARIAD Gene Therapeutics,
Inc. The Committee reviews with the Board of Directors all aspects of
compensation for the executive officers, except that decisions with respect to
awards under the 1991 Employee Plan are made solely by the Committee. The
Committee is composed of three members who are nonemployee directors.
COMPENSATION POLICY
The Committee's fundamental executive compensation philosophy is to enable
the Company to attract and retain key executive personnel and to motivate those
executives to help achieve the Company's objectives. Competition for experienced
senior executive officers in the biotechnology industry is intense. In
furtherance of these objectives, the Company offers executives base salaries and
incentive compensation in amounts and at intervals it believes are competitive
with those offered by other similar companies.
BASE SALARY AND STOCK OPTION AWARDS
The Committee's subjective evaluation, the Company's overall progress and
the individual executive's performance are considered in the Committee's
recommendations concerning base salary, stock option and bonus awards. Stock
options are granted generally on an annual basis to executive officers and
employees as a performance incentive, as well as to create a link between
employee and executive compensation and stockholder return and to enable
executive officers to develop and maintain a significant, long-term stock
ownership position in the Company. In addition to an annual award of stock
options usually awarded in the first quarter of the year in recognition of
performance for the prior year, the Company awarded additional stock options in
October 1999 to all employees and executives to encourage stability during the
critical period when the Company was restructuring its relationship with Aventis
and considering other strategic transactions and to recognize individual
performance for 1999. In making decisions as to the compensation of the
Company's executive officers, the Committee also relies upon compensation
statistics from various sources, including specific industry-wide surveys.
BONUS AWARDS
Because of the Company's desire to conserve cash, discretionary cash
bonuses provided for in the employment agreements of the executive officers have
not been awarded since the formation of the Company.
11
<PAGE> 15
In 1997, the Committee approved the ARIAD Pharmaceuticals, Inc. 1997
Executive Compensation Plan, which provides participants, in lieu of a cash
bonus, an option to purchase certain designated mutual funds at a discount (75%
for 1998 and 1999) equal to the amount of the bonus. The option vests equally
over a four-year period, and an executive will not be taxed on the value of the
mutual funds until the option is exercised. The plan is a non-qualified,
unfunded, deferred compensation plan. In recognition of performance in fiscal
years 1997 and 1998, the Committee made bonus awards in 1998 and 1999 with
aggregate values of $390,000 and $338,500, respectively, to a total of 14
officers and key employees. Through December 31, 1999, $3,000 of the bonus
awards for 1998 had been exercised, none of the awards for 1999 had been
exercised, and $194,750 and $153,500 of the awards for 1998 and 1999,
respectively, had been forfeited, principally due to employee separations,
including those resulting from the sale of the Company's interest in the
Genomics Center. At December 31, 1999, bonus awards aggregating $56,500 were
exercisable and $320,750 were not exercisable. As of the date of this proxy,
bonus awards for 1999 have not been awarded.
COMPENSATION OF CHIEF EXECUTIVE OFFICER FOR FISCAL YEAR 1999
Effective January 1, 1997, the Board of Directors established Dr. Berger's
annual base salary at $300,000. In May and October 1999, Dr. Berger was awarded
options to acquire 70,000 and 180,000 shares respectively, of Common Stock of
the Company in consideration of his performance in 1998 and 1999. The grant of
options was based upon the Committee's subjective evaluation of the progress
made by the Company in identifying and licensing new technologies and products,
developing its lead product candidates, building the Company's technology
platform and managing the Company's partnerships. The option awards were also
made in recognition of Dr. Berger's role in the motivation and retention of the
Company's management team and employees particularly during the period when the
Company was restructuring its relationship with Aventis and considering other
strategic options. The Committee believes that Dr. Berger's annual compensation
is competitive with the compensation of the chief executive officers of
comparable biotechnology companies.
THE COMPENSATION AND STOCK OPTION COMMITTEE
Philip Felig, M.D., Chairman
Sandford D. Smith
Raymond S. Troubh
SECTION 16 FILINGS
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and beneficial owners of more than 10% of the Company's
Common Stock to file reports of ownership and changes of ownership with the
Commission on Forms 3, 4 and 5. The Company believes that during the fiscal year
ended December 31, 1999 its directors, executive officers and beneficial owners
of more than 10% of the Company's Common Stock complied with all applicable
filing requirements. In making these disclosures, the Company has relied solely
on information filed with the Commission.
12
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock since January
1, 1995, with the total cumulative return of the Nasdaq U.S. Stock Market Index
and the Nasdaq Pharmaceutical Stock Index, the latter of which includes
biotechnology companies. The price of a share of Common Stock is based upon the
closing price per share as quoted on the Nasdaq National Market. The graph lines
merely connect year-end dates and do not reflect fluctuations between those
dates.
The comparison assumes $100 was invested on January 1, 1995 in the
Company's Common Stock and in each of the foregoing indices and further assumes
reinvestment of dividends. The Company did not declare or pay any dividends
during the comparison period.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN AMONG THE COMPANY,
NASDAQ U.S. STOCK MARKET INDEX AND NASDAQ PHARMACEUTICAL STOCK INDEX
<TABLE>
<CAPTION>
01-Jan-95 31-Dec-95 31-Dec-96 31-Dec-97 31-Dec-98 31-Dec-99
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ARIAD Pharmaceuticals, Inc. 31.250 84.821 90.357 75.893 30.134 50.223
Nasdaq Pharmaceuticals Stock Index 71.131 115.093 115.217 119.565 152.103 282.980
Nasdaq U.S. Stock Market Index 111.081 177.620 218.487 267.691 377.191 698.443
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP has audited the financial statements of
the Company since 1991. Representatives of Deloitte & Touche LLP are expected to
be present at the Meeting and will be given the opportunity to make a statement,
if they so desire. The representatives also will be available to respond to
appropriate questions raised by those in attendance at the Meeting.
The Company's management has selected Deloitte & Touche LLP as independent
public accountants to audit the books, records and accounts of the Company for
the fiscal year ending December 31, 2000. The Audit Committee of the Board of
Directors is expected to approve the selection.
13
<PAGE> 17
ANNUAL REPORT ON FORM 10-K; INCORPORATION BY REFERENCE
Upon the written request of any record holder or beneficial owner of
Common Stock entitled to vote at the Meeting, the Company, without charge, will
provide a copy of its Annual Report on Form 10-K for the year ended December 31,
1999, as filed with the Securities and Exchange Commission. Requests should be
directed to Corporate Communications, ARIAD Pharmaceuticals, Inc., 26 Landsdowne
Street, Cambridge, Massachusetts 02139-4234, telephone: (617) 494-0400,
facsimile: (617) 225-2860, email: [email protected].
TO THE EXTENT THIS PROXY STATEMENT HAS BEEN OR WILL BE SPECIFICALLY
INCORPORATED BY REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THE
SECTIONS OF THE PROXY STATEMENT ENTITLED "REPORT OF THE COMPENSATION AND STOCK
OPTION COMMITTEE" AND "PERFORMANCE GRAPH" SHALL NOT BE DEEMED TO BE SO
INCORPORATED UNLESS SPECIFICALLY OTHERWISE PROVIDED IN ANY SUCH FILING.
PROPOSALS
PROPOSAL 1
ELECTION OF CLASS 3 DIRECTORS
The Company's By-laws, as amended (the "By-laws"), provide that the number
of directors shall be fixed by the Board. The Board of Directors has fixed the
number at ten and, at a meeting held on March 30, 2000, nominated the persons
named below to stand for election. All such nominees are currently directors.
The Company's Certificate of Incorporation, as amended, and By-laws
provide that the Board of Directors shall be divided into three classes, as
nearly equal in number as possible, with the directors in each class serving a
term of three years and until their successors are duly elected and qualified.
As the term of one class expires, a successor class is elected at the Annual
Meeting of Stockholders for that year. At this Meeting, four Class 3 Directors
are to be elected to serve until the 2003 Annual Meeting of Stockholders and
until their successors are duly elected and qualified.
It is intended that, if no contrary specification is made, the persons
named as proxies shall vote for the four nominees named below. The Board of
Directors believes that all of the nominees will be available and able to serve
as directors, but if for any reason one or more of the nominees named below
should not be available to stand for election or be able to serve, the proxies
may exercise discretionary authority to vote for a substitute or substitutes
recommended by the Board of Directors. The four nominees receiving the highest
number of votes will be elected to serve as Class 3 Directors.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF HARVEY J. BERGER, M.D.,
VAUGHN D. BRYSON, SANDFORD D. SMITH, AND RAYMOND S. TROUBH AS CLASS 3 DIRECTORS,
AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A
STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
14
<PAGE> 18
STOCKHOLDERS' PROPOSALS FOR 2000 ANNUAL MEETING
In order to be considered for inclusion in proxy materials for the Annual
Meeting to be held in 2001, stockholder proposals must be received by the
Company on or before January 5, 2001. For stockholder proposals which are not to
be included in proxy materials for the Annual Meeting to be held in 2001, in
order for a stockholder to nominate a person or persons for election to the
Board of Directors or to properly bring other business before an Annual Meeting,
notice of such nomination or business proposal must be received by the Company
not earlier than February 19, 2001 and not later than March 21, 2001.
Stockholder proposals must be received marked for the attention of: Secretary,
ARIAD Pharmaceuticals, Inc., 26 Landsdowne Street, Cambridge, Massachusetts
02139.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the Meeting other than that
referred to herein. If any other business should come before the Meeting, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies received and not thereafter revoked in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Laurie A. Allen, Esq.
Secretary
Cambridge, Massachusetts
May 5, 2000
15
<PAGE> 19
ARIAD PHARMACEUTICALS, INC.
26 Landsdowne Street
Cambridge, Massachusetts 02139
Annual Meeting of Stockholders - June 8, 2000
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Harvey J. Berger,
M.D. and Jay R. LaMarche as Proxies, with full power of substitution of each, to
vote for and on behalf of the undersigned at the 2000 Annual Meeting of
Stockholders of ARIAD Pharmaceuticals, Inc. to be held at the Company's offices
at 26 Landsdowne Street, Cambridge, Massachusetts 02139 on Thursday, June 8,
2000 at 10:00 a.m., Eastern Time, and at any adjournment or postponement
thereof. The undersigned hereby directs the said Proxies to vote in accordance
with their judgment on any matters which may properly come before the Annual
Meeting, all as indicated in the Notice of Annual Meeting, receipt of which is
hereby acknowledged, and to act on the matter set forth on the reverse side
hereof, as specified by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" PROPOSAL 1.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.
----------------------------------
Please sign exactly as your name(s) appear(s) on the reverse side. Joint owners
should each sign personally. Trustees and other fiduciaries should indicate the
capacity in which they sign, and where more than one name appears, a majority
must sign. If a corporation, this signature should be that of an authorized
officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
<PAGE> 20
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ARIAD PHARMACEUTICALS, INC.
---------------------------
<TABLE>
<S> <C> <C> <C>
Mark box at right if an address change or comment has been noted on [ ]
the reverse side of this card.
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
----
- ----- Stockholder sign here ----------- Co-owner sign here -----
1. To elect four Class 3 Directors to For All With- For All
hold office until the 2003 Annual Meeting Nominees hold Except
of Stockholders and until their successors [ ] [ ] [ ]
are duly elected and qualified.
Harvey J. Berger, M.D., Vaughn D. Bryson, Sandford D. Smith, Raymond S. Troubh
NOTE: If you do not wish your shares voted "For" a particular nominee,
mark the "For All Except" box and strike a line through the name of the
nominee. Your shares will be voted for the remaining nominee(s).
2. To transact such other business as may properly come before the Meeting and
any adjournments or postponements thereof.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING OF
STOCKHOLDERS. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE. IF YOU CHOOSE, YOU MAY VOTE YOUR SHARES IN
PERSON AT THE ANNUAL MEETING.
</TABLE>
DETACH CARD DETACH CARD
ARIAD PHARMACEUTICALS, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy. There
are a number of issues related to the management and operation of your Company
that require your immediate attention and approval. These are discussed in
detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted, then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders to be
held June 8, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
ARIAD Pharmaceuticals, Inc.
2
