<PAGE>
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 Rule 14a-11(c) or Rule 14a-12
CADUS PHARMACEUTICAL CORPORATION
------------------------------------------------------------------------
(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:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CADUS PHARMACEUTICAL CORPORATION
777 OLD SAW MILL RIVER ROAD
TARRYTOWN, NEW YORK 10591-6705
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 24, 1999
To the Stockholders of Cadus Pharmaceutical Corporation:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Cadus Pharmaceutical Corporation (the "Company") will be held on
Thursday, June 24, 1999, at the offices of the Company, 777 Old Saw Mill River
Road, Tarrytown, New York 10591-6705, at 10:00 a.m. local time.
The Meeting will be held for the following purposes:
1. To elect twelve directors of the Company to serve until the next annual
meeting of stockholders or until their successors are duly elected and
qualified.
2. To transact such other business as may properly come before the Meeting
or any and all adjournments thereof.
The Board of Directors of the Company fixed the close of business on
May 10, 1999 as the record date for the determination of stockholders entitled
to notice of and to vote at the Meeting and at any and all adjournments thereof.
Consequently, only stockholders of record at the close of business on May 10,
1999 are entitled to notice of and to vote at the Meeting and at any and all
adjournments thereof.
Whether or not you plan to attend the Meeting, please complete, date and
sign the enclosed proxy card, and return it promptly in the enclosed envelope to
ensure your representation at the Meeting. You are cordially invited to attend
the Meeting and, if you do so, you may personally vote, regardless of whether
you have signed a proxy.
Tarrytown, New York
May 17, 1999
By Order of the Board of Directors
JAMES S. RIELLY
Secretary
<PAGE>
CADUS PHARMACEUTICAL CORPORATION
777 OLD SAW MILL RIVER ROAD
TARRYTOWN, NEW YORK 10591-6705
(914) 467-6200
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement and the accompanying proxy card are being furnished in
connection with the solicitation of proxies by and on behalf of the Board of
Directors (the "Board") of Cadus Pharmaceutical Corporation (the "Company"), to
be used at the Annual Meeting of Stockholders of the Company (the "Meeting") to
be held on Thursday, June 24, 1999, at 10:00 a.m. local time, at the offices of
the Company, 777 Old Saw Mill River Road, Tarrytown, New York, 10591-6705, and
at any and all adjournments thereof. This Proxy Statement and the accompanying
proxy card are first being mailed to the holders of record of the Company's
common stock, $.01 par value per share (the "Common Stock"), on or about
May 17, 1999.
Stockholders of the Company represented at the Meeting will consider and
vote upon (i) the election of twelve directors to serve until the next annual
meeting of stockholders or until their successors have been duly elected and
qualified; and (ii) such other business as may properly come before the Meeting
or any and all adjournments thereof. The Company is not aware of any other
business to be presented for consideration at the Meeting.
VOTING AND SOLICITATION OF PROXIES
Only holders of record of shares of Common Stock at the close of business
on May 10, 1999 (the "Record Date") are entitled to vote at the Meeting. As of
the Record Date, 13,068,940 shares of Common Stock were outstanding. Each
stockholder is entitled to one vote for each share of Common Stock held of
record on the Record Date for each proposal submitted for stockholder
consideration at the Meeting. The presence, in person or by proxy, of the
holders of a majority of the shares of Common Stock entitled to vote at the
Meeting is necessary to constitute a quorum for the conduct of business at the
Meeting. The election of each nominee for director requires a plurality of the
total votes cast. Abstentions will be considered shares present for purposes of
determining whether a quorum is present at the Meeting and, therefore, will have
the same legal effect as a vote against a motion presented at the Meeting.
Broker non-votes will be considered as shares not entitled to vote and will,
therefore, not be considered in the tabulation of votes.
All shares represented by properly executed proxies will, unless such
proxies have previously been revoked, be voted at the Meeting in accordance with
the directions on the proxies. A proxy may be revoked at any time prior to final
tabulation of the votes at the Meeting. Stockholders may revoke proxies by
written notice to the Secretary of the Company, by delivery of a proxy bearing a
later date, or by personally appearing at the Meeting and casting a contrary
vote. If no direction is indicated, the shares represented by properly executed
proxies will be voted in favor of the Board's nominees for director. The persons
named in the proxies will have discretionary authority to vote all proxies with
respect to additional matters that are properly presented for action at the
Meeting.
The executive officers and directors of the Company as a group own or may
be deemed to control approximately [63.04]% of the outstanding shares of Common
Stock of the Company. Each of the executive officers and directors has indicated
his or her intent to vote all shares of Common Stock owned or controlled by him
or her in favor of each item set forth herein.
The proxy solicitation is made by and on behalf of the Board. Solicitation
of proxies for use at the Meeting may be made in person or by mail, telephone or
telegram, by officers and regular employees of the Company. Such persons will
receive no additional compensation for any solicitation activities. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Common Stock beneficially owned
by others to forward to such beneficial owners. The Company may reimburse
persons representing beneficial owners of Common Stock for their costs of
forwarding solicitation materials to such beneficial owners. The Company will
bear the entire cost of the solicitation of proxies, including the preparation,
assembly, printing and mailing of this Proxy Statement, the proxy card and any
additional information furnished to stockholders.
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of May 10, 1999, with respect to (i) each
person known by the Company to be the beneficial owner of more than 5% of the
Common Stock, (ii) each of the Company's directors and nominees for director,
(iii) each Named Executive Officer (as defined below under "EXECUTIVE
COMPENSATION--Summary Compensation") and (iv) all directors and executive
officers as a group. All information is based upon ownership filings made by
such persons with the Securities and Exchange Commission (the "Commission") or
upon information provided by such persons to the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AMOUNT AND NATURE PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OWNED(2)
- ------------------------------------------------------------------- -------------------- -------------------------
<S> <C> <C>
Carl C. Icahn** ................................................... 3,367,216(3) 25.75%
767 Fifth Avenue
New York, New York 10153
Bristol-Myers Squibb .............................................. 2,061,673 15.78%
P.O. Box 4000
Route 206 and Province Line Road
Princeton, New Jersey 08543-4000
Physica B.V. (4) .................................................. 1,599,942 12.24%
C.J. van Houtenlaan 36
1381 CP Weesp
The Netherlands
International Biotechnology Trust plc ............................. 850,000(5) 6.50%
c/o Rothschild Asset Management Limited
Five Arrows House
St. Swithins Lane
London EC4N 8NR
United Kingdom
SmithKline Beecham Corporation .................................... 660,962(6) 5.06%
One Franklin Plaza
Philadelphia, PA 19102
Charles Woler** ................................................... * *
Philip N. Sussman.................................................. 137,363(7) 1.04%
David R. Webb, Ph.D................................................ 72,917(8) *
Arlindo L. Castelhano, Ph.D........................................ 22,334(9) *
James S. Rielly.................................................... 15,618(10) *
Jeremy M. Levin, D. Phil., MB. BCHIR............................... 290,071(11) 2.17%
Theodore Altman**.................................................. 6,000(12) *
James R. Broach**.................................................. 203,668(13) 1.55%
Harold First**..................................................... 16,834(14) *
Russell D. Glass**................................................. -- *
William H. Koster, Ph.D............................................ 2,061,673(15) 15.78%
Peter S. Liebert, M.D.**........................................... 14,334(16) *
Robert J. Mitchell**............................................... 6,000(17) *
Siegfried G. Schaefer, Ph.D.**..................................... 1,599,942(18) 12.24%
Nicole Vitullo**................................................... 8,500(19) *
Samuel D. Waksal, Ph.D.**.......................................... 6,000(20) *
Jack G. Wasserman**................................................ 8,500(21) *
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
AMOUNT AND NATURE PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OWNED(2)
- ------------------------------------------------------------------- ---------- -----
<S> <C> <C>
All executive officers and directors as a group (17 persons)....... 7,836,970 56.93%
</TABLE>
- ------------------
* Less than one percent
** Nominee for election to the Board
(1) Except as otherwise indicated above, the address of each stockholder
identified above is c/o the Company, 777 Old Saw Mill River Road,
Tarrytown, NY 10591-6705. Except as indicated in the other footnotes to
this table, the persons named in this table have sole voting and investment
power with respect to all shares of Common Stock.
(2) Share ownership in the case of each person listed above includes shares
issuable upon the exercise of options held by such person as of May 10,
1999, that may be exercised within 60 days after such date for purposes of
computing the percentage of Common Stock owned by such person, but not for
purposes of computing the percentage of Common Stock owned by any other
person.
(3) Includes 2,258,790 shares of Common Stock held by High River Limited
Partnership. Mr. Icahn is the sole shareholder of the sole general partner
of High River Limited Partnership. Also includes 6,000 shares of Common
Stock that Mr. Icahn currently has the right to acquire upon the exercise
of stock options.
(4) Physica B.V. is an affiliate of Solvay Pharmaceuticals B.V.
(5) Consists of 850,000 shares of Common Stock held by the International
Biotechnology Trust plc ("IBT"). Rothschild Asset Management acts as the
investment manager to IBT and therefore may be deemed to share beneficial
ownership of these shares.
(6) Includes 330,481 shares of Common Stock held by SmithKline Beecham p.l.c.,
an affiliate of SmithKline Beecham Corporation.
(7) Consists of 137,363 shares of Common Stock which Mr. Sussman currently has
the right to acquire upon the exercise of stock options.
(8) Consists of 72,917 shares of Common Stock which Dr. Webb currently has the
right to acquire upon the exercise of stock options.
(9) Includes 15,668 shares of Common Stock which Dr. Castelhano currently has
the right to acquire upon the exercise of stock options.
(10) Includes 15,418 shares of Common Stock which Mr. Rielly currently has the
right to acquire upon the exercise of stock options.
(11) Consists of 290,071 shares of Common Stock which Dr. Levin currently has
the right to acquire upon the exercise of stock options.
(12) Consists of 6,000 shares of Common Stock which Mr. Altman currently has the
right to acquire upon the exercise of stock options.
(13) Includes 110,667 shares of Common Stock which Dr. Broach currently has the
right to acquire upon the exercise of stock options.
(14) Includes 8,500 shares of Common Stock which Mr. First currently has the
right to acquire upon the exercise of stock options.
(15) Consists of 2,061,673 shares of Common Stock held by Bristol-Myers Squibb.
Dr. Koster is Senior Vice President, Drug Discovery of Bristol-Myers Squibb
Pharmaceutical Research Institute. Dr. Koster may be deemed the beneficial
owner of the 2,061,673 shares of Common Stock held by Bristol-Myers Squibb,
but disclaims such beneficial ownership.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
(16) Includes 6,000 shares of Common Stock which Dr. Liebert currently has the
right to acquire upon the exercise of stock options.
(17) Consists of 6,000 shares of Common Stock which Mr. Mitchell currently has
the right to acquire upon the exercise of stock options.
(18) Consists of 1,599,942 shares of Common Stock held by Physica B.V., an
affiliate of Solvay Pharmaceuticals. Professor Schaefer is the head of
worldwide research at Solvay Pharmaceuticals. Professor Schaefer may be
deemed the beneficial owner of the 1,599,942 shares of Common Stock held by
Physica B.V., but disclaims such beneficial ownership.
(19) Consists of 8,500 shares of Common Stock which Ms. Vitullo currently has
the right to acquire upon the exercise of stock options.
(20) Consists of 6,000 shares of Common Stock which Dr. Waksal currently has the
right to acquire upon the exercise of stock options.
(21) Consists of 8,500 shares of Common Stock which Mr. Wasserman currently has
the right to acquire upon the exercise of stock options.
(22) Includes (a) 697,604 shares of Common Stock issuable upon exercise of
options, (b) 2,061,673 shares of Common Stock held by Bristol-Myers Squibb,
and (c) 1,599,942 shares of Common Stock held by Physica B.V. See footnotes
(3), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18),
(19), (20) and (21).
4
<PAGE>
ELECTION OF DIRECTORS
The directors to be elected at the Meeting will serve until the next Annual
Meeting of Stockholders or until their successors are duly elected and
qualified. Proxies not marked to the contrary will be voted "FOR" the election
to the Board of each nominee. Management has no reason to believe that any of
the nominees will not be a candidate or will be unable to serve. However, in the
event that any of the nominees should become unable or unwilling to serve as a
director, the proxy will be voted for the election of such person or persons as
shall be designated by the current directors. The nominees for the Board of the
Company are as follows:
Carl C. Icahn Robert J. Mitchell
Theodore Altman Siegfried G. Schaefer
James R. Broach Nicole Vitullo
Harold First Samuel D. Waksal
Russell D. Glass Jack G. Wasserman
Peter S. Liebert Charles Woler
Information about the foregoing nominees is set forth under "MANAGEMENT"
below.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION TO THE BOARD OF ALL
NOMINEES NAMED ABOVE.
BOARD MEETINGS AND COMMITTEES
The Board held eight meetings in 1998. Each director other than Peter S.
Liebert, Robert J. Mitchell and Samuel D. Waksal (during the period in which
each such director served) attended at least seventy-five percent (75%) of the
aggregate of (i) the total number of meetings of the Board, plus (ii) the total
number of meetings held by all committees of the Board on which the director
served.
The Board has two committees, an Audit Committee and a Compensation
Committee. It does not have a Nominating Committee or any committee performing a
similar function. The Audit Committee is composed of Harold First, Robert J.
Mitchell and Samuel D. Waksal. The duties of the Audit Committee include
recommending the engagement of independent auditors, reviewing and considering
actions of management in matters relating to audit functions, reviewing with
independent auditors the scope and results of their audit engagement, reviewing
reports from various regulatory authorities, reviewing the system of internal
controls and procedures of the Company, and reviewing the effectiveness of
procedures intended to prevent violations of law and regulations. The Audit
Committee held two meetings in 1998. The Company's Compensation Committee is
composed of Harold First, Nicole Vitullo and Jack G. Wasserman. The duties of
this committee are to recommend to the Board remuneration for officers of the
Company and to determine the number, issuances and types of options and/or stock
appreciation rights pursuant to the Company's 1996 Incentive Plan. The
Compensation Committee held two meetings in 1998.
The non-employee directors receive $1,000 for each meeting of the Board
attended and $500 for each meeting of a committee of the Board attended.
5
<PAGE>
MANAGEMENT
Information with respect to the executive officers, directors and nominees
for director, key employees and consultants of the Company as of May 10, 1999 is
set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------ --- ------------------------------------------------
<S> <C> <C>
Charles Woler**................................. 50 President, Chief Executive Officer and Director
Philip N. Sussman............................... 47 Senior Vice President of Finance and Corporate
Development and Chief Financial Officer.
David R. Webb, Ph.D............................. 54 Vice President of Research and Chief Scientific
Officer
James S. Rielly................................. 36 Vice President of Finance, Treasurer and
Secretary
Arlindo L. Castelhano, Ph.D..................... 46 Executive Director of Chemistry
James R. Broach, Ph.D**......................... 51 Director of Research and Director
Algis Anilionis, Ph.D........................... 48 Director of Intellectual Property
O. Prem Das, Ph.D............................... 45 Director of Business Development
Carl C. Icahn**................................. 63 Director
Theodore Altman**............................... 57 Director
Harold First (1)(2)**........................... 62 Director
Russell D. Glass**.............................. 36 Director
William H. Koster, Ph.D......................... 54 Director
Peter S. Liebert, M.D**......................... 63 Director
Robert J. Mitchell (2)**........................ 52 Director
Professor Siegfried G. Schaefer**............... 50 Director
Nicole Vitullo (1)**............................ 42 Director
Samuel D. Waksal, Ph.D. (2)**................... 51 Director
Jack G. Wasserman (1)**......................... 62 Director
</TABLE>
- ------------------
** Nominee for Election to the Board.
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Charles Woler, Ph.D., M.D., President and Chief Executive Officer, joined
the Company in September1998. From late 1994 to July 1998, he was General
Manager of the Bouchara Group, a French based pharmaceutical company
specializing in bronchopulmonary disease and dermatology. From July 1993 to
September 1996, he was Vice Chairman of Pierre Fabre Pharma, a $1.0 billion
private pharmaceutical company based in France with operations in 26 countries
and was directly in charge of international operations. From January 1993 to
June 1998, he also served as Associate Professor of Strategy, Management, and
Organization at Paris University. From March 1992 to June 1993, Dr. Woler was
Chairman of Europe Pharmaceuticals at SmithKline Beecham p.l.c. in London and
from 1985 to 1991 he was at Hoffman la Roche-France, serving initially as
Director of Pharma Operations and General Manager of the Pharma Division and
then as Chairman of Pharma, Diagnostic, Vitamines and Fine Chemicals. From 1980
to 1985, he was Medical and Scientific Director and then Marketing and Sales
Director at Riom Laboratories, a division of Akzo Pharma France. From 1976 to
1979 he was Medical Director at Warner Lambert Parke Davis France. Dr. Woler
holds a Doctor of Medicine and a Master's degree in Pharmacokinectics and
Clinical Pharmacology from Paris University, a Ph.D. in Clinical Pharmacology
and Methodology from Lyon University, and an M.B.A. from Paris Trade
Chamber/Paris University.
6
<PAGE>
Philip N. Sussman, Senior Vice President of Finance and Corporate
Development and Chief Financial Officer, joined the Company in September 1993 in
the capacity of Vice President of Corporate Development. From December 1990 to
September 1993, Mr. Sussman was Director of Strategy and Business Development
for the Pharmaceuticals Division of Ciba-Geigy Corporation, a public
pharmaceutical company. He is a member of the Review Panel for the Innovative
Technology Research Grant Program, Center for Biotechnology, New York State
Science and Technology Foundation. He is also a member of the New York Venture
Capital Forum, Inc. and a director of the M.I.T. Enterprise Forum of New York.
He is a member of the Board of Directors of Axiom Biotechnologies, Inc., a
private biotechnology company. Mr. Sussman holds an M.S. degree in Biotechnology
from Manhattan College and an S.M., with a concentration in Finance, from the
Sloan School of Management at the Massachusetts Institute of Technology. He also
holds a B.S. in Physics from the State University of New York at Stony Brook.
David R. Webb, Ph.D., Vice President of Research and Chief Scientific
Officer, joined the Company in such capacities in July 1995. From January 1987
to July 1995, Dr. Webb was a Distinguished Scientist at Syntex Inc., a public
pharmaceutical company, in the Department of Molecular Immunology. From April
1990 to January 1995, Dr. Webb was also Director of Syntex Inc.'s Institute of
Immunology and Biological Sciences. Prior to that Dr. Webb was a member of the
Department of Cell Biology at the Roche Institute of Molecular Biology. From
January 1989 to 1996, Dr. Webb was a Consulting Professor of Cancer Biology at
Stanford University. Dr. Webb is a member of the Board of Directors and of the
Scientific Advisory Board of Axiom Biotechnologies, Inc., a private
biotechnology company. Dr. Webb holds a Ph.D. in Microbiology from Rutgers
University, and an M.A. and a B.A. in Biology from California State University
at Fullerton.
James S. Rielly, Vice President of Finance, Treasurer and Secretary, joined
the Company in September 1992 as its Controller, became its Treasurer and
Secretary in September 1993 and became its Vice President of Finance in December
1997. From November 1989 to September 1992, Mr. Rielly was the Controller and
Treasurer of Baring Brothers & Co., Inc., an investment banking firm.
Mr. Rielly is a certified public accountant and holds a B.S.B.A. from Bucknell
University.
Arlindo L. Castelhano, Ph.D., has been Executive Director of Chemistry of
the Company since June 1996 and Director of Chemistry from September 1995 to
June 1996. He was a scientist at Syntex Inc., a public pharmaceutical company,
from 1982 to 1995 and served as Principal Scientist from 1993 to 1995. He
received his Ph.D. in Chemistry from McMaster University and his B.S. from
University of Toronto.
James R. Broach, Ph.D., a scientific founder of the Company and inventor of
the Company's yeast-based drug discovery technology, has been Director of
Research of the Company since its inception. He is and has been since 1984 a
Professor at Princeton University in the Department of Molecular Biology. In
1984, Dr. Broach and his collaborators were the first ones to demonstrate that
human genes could be successfully implanted into yeast cells. He received his
Ph.D. in Biochemistry from University of California at Berkeley and his B.S.
from Yale University.
Algis Anilionis, Ph.D., has been Director of Intellectual Property of the
Company since November 1994. He was Patent Manager at Oncogene Science Inc., a
public biotechnology company, from 1991 to 1994 and Manager of Molecular Biology
and Genetics Research at Praxis Biologics, Inc. (now known as Lederle/Praxis, a
division of American Home Products), a public vaccine manufacturer and research
and development company, from 1986 to 1991. Dr. Anilionis has nine issued U.S.
patents and four granted European patents. He is a registered Patent Agent. He
received his Ph.D. in Molecular Biology from Edinburgh University and a B.A.
Hons. degree from University of Oxford.
O. Prem Das., Ph.D., Director of Business Development, joined the Company
in September 1996. Dr. Das was President of Heartland BioTechnologies, Inc. from
May 1995 to September 1996, and its Vice President from April 1994 to May 1995.
From April 1994 to September 1996, he was also Director of Research at
Heartland. Prior to that, Dr. Das completed several postdoctoral fellowships in
biochemistry, molecular biology and genetics at Rutgers University, the
University of Minnesota and Georgetown University. Dr. Das received his Ph.D.
from MIT, an M.Sc. from the Indian Institute of Technology and a B.Sc. from
Loyola College, Madras University.
7
<PAGE>
Carl C. Icahn became a director of the Company in July 1993. He was a
Co-Chairman of the Board of Directors from May 1995 to May 1996. Mr. Icahn has
been Chairman of the Board and Chief Executive Officer of ACF Industries Inc., a
privately-held railcar leasing and manufacturing company, since 1984, ACF
Industries Holding Corp., a privately-held holding company for ACF Industries
Inc. since August 1993, and, since 1968, Icahn & Co., Inc., a registered
broker-dealer and until 1995 a member firm of the New York Stock Exchange, Inc.
Since November 1990, Mr. Icahn has been Chief Executive Officer and Chairman of
the Board of American Property Investors, Inc., the general partner of American
Real Estate Partners, L.P., a public limited partnership that invests in real
estate. From before 1991 to January 1993, Mr. Icahn was Chief Executive Officer
and Chairman of the Board of Trans World Airlines, Inc., a public airline
company. Mr. Icahn received his B.A. from Princeton University.
Theodore Altman became a director of the Company in May 1996. For the past
five years, Mr. Altman has been a senior partner in the law firm of Gordon
Altman Butowsky Weitzen Shalov & Wein, concentrating his areas of practice in
securities law and litigation. Mr. Altman received a B.A. from Bucknell
University and an LL.B. from New York University.
Harold First became a director of the Company in April 1995. Mr. First has
been since January 1993 an independent financial consultant. From December 1990
through January 1993, Mr. First served as Chief Financial Officer of Icahn
Holding Corp., a privately held holding company, and related entities; served as
a director of Trump Taj Mahal Holding Corp., a public gaming and casino
organization, and a director of Trump Taj Mahal Realty Corp., a privately held
real estate company, from October 1991 until September 1996; a member of the
Supervisory Board of Directors of Memorex Telex N.V., a public technology
company, from February 1992 until February 1997; a director of Tel-Save.Com, a
public long-distance telephone service company, since September 1995; a director
of Panaco, Ltd., an oil and gas drilling firm, since September 1997 and is a
director of Philip Services Corp., a leading integrated provider of industrial
and metals service, since November 1998. Mr. First was a director of Trans World
Airlines, Inc., a public airline company, from December 1990 through January
1993; a director of ACF Industries, Inc., a privately held railcar leasing and
manufacturing company, from February 1991 through December 1992; Vice Chairman
of the Board of Directors of American Property Investors, Inc., the general
partner of American Real Estate Partners, L.P., a public limited partnership
that invests in real estate from March 1991 through December 1992; and a
director of both Marvel Entertainment Group, Inc., a public company that
publishes comic books and develops, sells and licenses comic book and other
characters, and Toy Biz, Inc., a public company that markets and sells toys,
from June 1997 through April 1998. He is a certified public accountant and holds
a B.S. from Brooklyn College.
Russell D. Glass became a director of the Company in June 1998. Mr. Glass
has been President and Chief Investment Officer of Icahn Associates Corp., a
diversified investment firm. Since August 1998 he has also served as
Vice-Chairman and Director of Lowestfare.com, Inc., a leading internet travel
reservations company. Previously, Mr. Glass had been a partner in Relational
Investors LLC, from 1996 to 1998, and in Premier Partners Inc., from 1988 to
1996, firms engaged in investment research and management. From 1984 to 1986 he
served as an investment banker with Kidder, Peabody & Co. Mr. Glass serves as
Director of Automated Travel Systems, Inc., a software development firm;
National Energy Group, Inc., an oil and gas exploration and production company;
and the A.G. Spanos Corporation, a national real estate developer and owner of
the NFL San Diego Chargers Football Club. Mr. Glass earned a B.A. in economics
from Princeton University and an M.B.A. from the Stanford University Graduate
School of Business.
William H. Koster, Ph.D., became a director of the Company in April 1998.
Dr. Koster has been Senior Vice President, Drug Discovery of Bristol-Myers
Squibb Pharmaceutical Research Institute since July 1997. From 1990 until July
1997, he was a Vice President of Bristol-Myers Squibb Pharmaceutical Research
Institute. Dr. Koster received a Ph.D. in Organic Chemistry from Tufts
University and a B.A. from Colby College.
Peter S. Liebert, M.D., became a director of the Company in April 1995.
Dr. Liebert has been a pediatric surgeon in private practice since 1968 and is
affiliated with Babies Hospital of Columbia Presbyterian. He is Clinical
Associate Professor of Surgery, College of Physicians and Surgeons, Columbia
University. He is also Chairman of the Board of Rx Vitamins, Inc. Dr. Liebert
holds an M.D. from Harvard University Medical School and a B.A. from Princeton
University.
8
<PAGE>
Robert J. Mitchell became a director of the Company in May 1996.
Mr. Mitchell has been Senior Vice President--Finance of ACF Industries Inc.
since March 1995 and was Treasurer of ACF Industries Inc. from December 1984 to
March 1995. Mr. Mitchell has also served as President and Treasurer of ACF
Industries Holdings Corp. since August 1993 and as Vice President, Liaison
Officer of Icahn & Co., Inc. since November 1984. From 1987 to January 1993,
Mr. Mitchell served as Treasurer of Trans World Airlines, Inc. Mr. Mitchell has
been a director of National Energy Group, Inc., a public company involved in the
exploration of oil and gas reserves, since August 1996. He received his B.S.
degree in Business Administration from St. Francis college.
Professor Siegfried G. Schaefer became a director of the Company in January
1998. Dr. Schaefer has been head of worldwide research at Solvay Pharmaceuticals
since July 1997 and the head of research at a Dutch division of Solvay
Pharmaceuticals from May 1996 to July 1997. From September 1992 to July 1997
Dr. Schaefer was a department head for project management at an affiliate of
Solvay Pharmaceuticals. Dr. Schaefer has a Ph.D. in Biology from the University
of Bochum and a Doctorate in Pharmacology and Toxicology from the University of
Munich. Dr. Schaefer is currently a Professor at the University of Hamburg in
the Department of Pharmacology and Toxicology.
Nicole Vitullo became a director of the Company in December 1996.
Ms. Vitullo was Senior Vice President of Rothschild International Asset
Management from November 1996 to April 1999, and Vice President thereof from
November 1992 until November 1996. From July 1991 to November 1992, Ms. Vitullo
served as Director of Corporate Communications and Investor Relations at
Cephalon, Inc., a public biotechnology company. From June 1979 to July 1991, she
held various positions at Eastman Kodak, including Manager of Venture Capital
Development of the Healthcare Group. Ms. Vitullo serves as a director of Cytel
Corporation, Onyx Pharmaceuticals, Inc. and Corvas International, public
biotechnology companies. Ms. Vitullo received her M.B.A. from the University of
Rochester's William E. Simon School of Business and her B.S. in
Mathematics/Statistics from the University of Rochester.
Samuel D. Waksal, Ph.D., a founder of the Company, has been a director of
the Company since its inception and was a Co-Chairman of the Board of Directors
from May 1995 to May 1996. Dr. Waksal was Chief Executive Officer of the Company
from June 1992 to December 1992 and was its Chairman of the Board of Directors
from June 1992 to May 1995. Dr. Waksal has been the Chief Executive Officer and
a director of ImClone Systems Incorporated, a public biotechnology company,
since 1985 and President since March 1987. From 1982 to 1985, Dr. Waksal was a
member of the faculty of the Mt. Sinai School of Medicine as Associate Professor
of Pathology and Director of the Division of Immunotherapy within the Department
of Pathology. He has served as visiting investigator of the National Cancer
Institute, Immunology Branch, Research Associate of the Department of Genetics,
Stanford University Medical School, Assistant Professor of Pathology at Tufts
University School of Medicine and Senior Scientist for the Tufts Cancer Research
Center. Dr. Waksal was a scholar of the Leukemia Society of America from 1979 to
1984. He currently serves as Chairman of the New York Council for the
Humanities. Dr. Waksal received his Ph.D. in Immunology from Ohio State
University College of Medicine.
Jack G. Wasserman became a director of the Company in May 1996. For the
past five years, Mr. Wasserman has been a senior partner in Wasserman,
Schneider, Babb & Reeds, a New York law firm that concentrates its practice in
legal matters relating to international trade. Mr. Wasserman is a director of
American Property Investors, Inc., the general partner of American Real Estate
Partners, L.P., a public limited partnership that invests in real estate.
Mr. Wasserman is also a director of National Energy Group, Inc., a public
company engaged in oil exploration. Mr. Wasserman received a B.A. from Adelphi
University, a J.D. from Georgetown University and a Graduate Diploma from the
Johns Hopkins University School of Advanced International Studies.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth certain information concerning the
compensation paid or accrued by the Company for services rendered to the Company
in all capacities for the fiscal years ended December 31, 1998, 1997 and 1996,
by its Chief Executive Officer, its former Chief Executive Officer who resigned
in January 1998
9
<PAGE>
and each of the Company's other executive officers whose total salary and bonus
exceeded $100,000 during such fiscal year (collectively, the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION
- --------------------------------------------------- ---- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Charles Woler(1) .................................. 1998 125,000 -- 295,145 53,225(2)
President and Chief Executive Officer
Philip N. Sussman ................................. 1998 191,000 -- 255,000 --
Senior Vice President of Finance and Corporate 1997 160,000 20,000 75,000 --
Development and Chief Financial Officer 1996 149,375 -- 65,000 --
David R. Webb ..................................... 1998 183,750 20,000 20,000 --
Vice President of Research and Chief Scientific 1997 175,000 20,000 45,000 --
Officer 1996 175,000 17,500 17,500 --
Arlindo L. Castelhano, Ph.D ....................... 1998 128,300 7,056 32,500 --
Executive Director of Chemistry 1997 118,800 15,000 1,000 --
1996 105,833 15,000 11,666 --
James S. Rielly ................................... 1998 100,000 20,000 20,000 --
Vice President of Finance 1997 95,000 20,000 15,000 --
1996 100,846 15,000 16,666 --
Jeremy M. Levin(3) ................................ 1998 18,750 -- -- --
1997 225,000 45,000 300,000 231,164
1996 225,000 45,000 25,000 --
</TABLE>
- ------------------
(1) Dr. Woler joined the Company in October 1998 and received a salary at the
rate of $300,000 per annum for 1998.
(2) All other compensation consists of relocation expenses paid by the Company
of behalf of Dr. Woler.
(3) Dr. Levin ceased being the President and Chief Executive Officer of the
Company on January 31, 1998. All Other Compensation consists of $231,164 of
severance.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
AGREEMENTS
Dr. Charles Woler
Dr. Woler is employed as President and Chief Executive Officer under a
three year employment agreement with the Company, which is extendable to four
years at the Company's option, entered into effective as of October 1, 1998.
Pursuant to his agreement, Dr. Woler will receive an annual base salary of
$300,000 for his first year of employment, $330,000 for his second year of
employment and $360,000 for his third year of employment. If the agreement is
extended, Dr. Woler will receive an annual base salary of $400,000 for his
fourth year of employment. Dr. Woler also received a $24,000 housing allowance
for the first six months of his employment with the Company and is eligible to
receive bonuses from time to time at the discretion of the Compensation
Committee. If the Company terminates Dr. Woler's employment without "cause," as
defined in his employment agreement, if Dr. Woler terminates his employment with
the Company within 18 months after a "change of control," as defined in his
employment agreement, and prior to October 1, 2001 and after Dr. Woler's
position or responsibilities are changed, or if Dr. Woler terminates his
employment with the Company within three months of a material change in his
position or principal place of work, the Company will pay to Dr. Woler a lump
sum severance payment equal to the base salary he would have earned for the
balance of his agreement, but not more than two years' base salary, and all
unvested stock options issued to him will immediately vest as of the date of
termination.
10
<PAGE>
Philip N. Sussman
Mr. Sussman is employed as Senior Vice President of Finance and Corporate
Development and Chief Financial Officer under a three year employment agreement
with the Company entered into effective as of September 10, 1998. Pursuant to
his agreement, Mr. Sussman will receive an annual base salary of $225,000 for
his first year of employment, $250,000 for his second year of employment and
$275,000 for his third year of employment. Mr. Sussman is also eligible to
receive bonuses from time to time at the discretion of the Compensation
Committee. If the Company terminates Mr. Sussman's employment without "cause,"
as defined in his employment agreement, or if the Company fails to renew his
employment agreement upon terms as favorable as the terms of his agreement then
in effect and Mr. Sussman terminates his employment with the Company as of
September 9, 2001, the Company will pay to Mr. Sussman a lump sum severance
payment equal to the greater of the base salary he would have earned for the
balance of the agreement or $275,000, and all unvested stock options issued to
him will immediately vest as of the date of termination. If Mr. Sussman
terminates his employment within 18 months after a "change of control," as
defined in his employment agreement, and prior to September 9, 2001 and after
Mr. Sussman's position or responsibilities are changed, or within three months
of a material change in his position or an involuntary relocation, the Company
will pay to Mr. Sussman a lump sum severance payment equal to the greater of the
base salary he would have earned for the balance of the agreement or $275,000,
and all unvested stock options issued to him will immediately vest as of the
date of termination. The Company will provide Mr. Sussman with employee
benefits, at the level in effect on the date of termination, for one year after
the date of termination.
Dr. David R. Webb
Dr. Webb is an employee at will but has a severance agreement with the
Company which provides that if he is terminated without cause he will receive
severance equal to whatever is deemed appropriate for other officers of the
Company at the time of termination.
James S. Rielly
Mr. Rielly is an employee at will but has a severance agreement with the
Company that provides that if he is terminated without cause (i) the Company
will continue to pay him his then salary and provide him with medical benefits
until the earlier of six months from the date of termination or his commencement
of new employment and (ii) all unvested stock options issued to him will
immediately vest as of the date of termination.
11
<PAGE>
OPTION GRANTS
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1998 by the Company to the
Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OF STOCK PRICE
UNDERLYING OPTIONS APPRECIATION FOR OPTION
OPTIONS GRANTED TO EXERCISE TERMS ($)
GRANTED EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ----------------------------------- ---------- ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Charles Woler...................... 295,145 31.36 2.75 10/1/08 1,322,090 2,105,208
Philip N. Sussman.................. 100,000 10.63 2.75 9/10/08 172,946 438,279
95,000 10.09 2.75 9/10/08 164,299 416,365
20,000 2.13 2.75 9/10/08 34,589 87,655
20,000 2.13 2.75 9/10/08 34,589 87,655
20,000 2.13 2.75 9/10/08 34,589 87,655
David R. Webb...................... 20,000 2.13 2.688 11/16/08 33,809 85,680
Arlindo L. Castelhano.............. 25,000 2.66 8.563 3/16/08 134,631 341,180
7,500 0.8 2.688 11/16/08 12,679 32,130
James S. Rielly.................... 20,000 2.13 2.688 11/16/08 33,809 85,680
Jeremy M. Levin.................... -- -- -- -- -- --
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning each exercise
of stock options, during the fiscal year ended December 31, 1998 by the Named
Executive Officers and unexercised stock options held by the Named Executive
Officers as of the end of such fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES AGGREGATE DECEMBER 31, 1998 (#) DECEMBER 31, 1998 ($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles Woler.................. -- -- -- 295,145 -- --
Philip N. Sussman.............. -- -- 117,918 343,750 -- --
David R. Webb.................. -- -- 56,250 82,917 -- --
Arlindo L. Castelhano.......... -- -- 9,418 42,416 -- --
James S. Rielly................ -- -- 15,418 41,248 -- --
Jeremy M. Levin................ 12,500 4,688 290,071 -- 137,668 --
</TABLE>
- ------------------
(1) Based on the difference between the closing price of the underlying shares
of Common Stock on December 31, 1998 as reported by the NASDAQ National
Market ($1.938) and the option exercise price.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is composed of Harold First, Nicole
Vitullo and Jack G. Wasserman. Neither Mr. First, Ms. Vitullo nor Mr. Wasserman
is or was an officer or employee of the Company.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Introduction
The Compensation Committee of the Board is responsible for determining and
administering the Company's compensation policies for the remuneration of the
Company's officers. The Compensation Committee annually evaluates individual and
corporate performance from both a short-term and long-term perspective.
Philosophy
The Company's executive compensation program seeks to encourage the
achievement of business objectives and superior corporate performance by the
Company's executives. The program enables the Company to reward and retain
highly qualified executives and to foster a performance-oriented environment
wherein management's long-term focus is on maximizing stockholder value through
equity-based incentives. The program calls for consideration of the nature of
each executive's work and responsibilities, unusual accomplishments or
achievements on the Company's behalf, years of service, the executive's total
compensation and the Company's financial condition generally.
Components of Executive Compensation
Historically, the Company's executive employees have received cash-based
and equity-based compensation.
Cash-Based Compensation. Base salary represents the primary cash component
of an executive employee's compensation, and is determined by evaluating the
responsibilities associated with an employee's position at the Company and the
employee's overall level of experience. In addition, the Committee, in its
discretion, may award bonuses. The Compensation Committee and the Board believe
that the Company's management and employees are best motivated through stock
option awards and cash incentives.
Equity-Based Compensation. Equity-based compensation principally has been
in the form of stock options. The Compensation Committee and the Board believe
that stock options represent an important component of a well-balanced
compensation program. Because stock option awards provide value only in the
event of share price appreciation, stock options enhance management's focus on
maximizing long-term stockholder value and thus provide a direct relationship
between an executive's compensation and the stockholders' interests. No specific
formula is used to determine stock option awards for an employee. Rather,
individual award levels are based upon the subjective evaluation of each
employee's overall past and expected future contributions to the success of the
Company.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The philosophy, factors and criteria of the Compensation Committee
generally applicable to the Company's officers are also applicable to the Chief
Executive Officer and are reflected in the employment agreement between the
Chief Executive Officer and the Company. The Chief Executive Officer's salary
for 1998 was based on his existing employment agreement with the Company. The
Chief Executive Officer did not receive a cash bonus for 1998 since he was
employed by the Company for only three months during 1998. The stock options to
purchase an aggregate of 295,145 shares of Common Stock granted to the Chief
Executive Officer on October 1, 1998, vest over time and were granted in
anticipation of his significant contributions to the Company.
Harold First
Nicole Vitullo
Jack G. Wasserman
13
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return*
for the Nasdaq U.S. Stock Market Index, the Nasdaq Pharmaceutical Index and the
Company since the Company's initial public offering on July 17, 1996.
COMPARISON OF CUMULATIVE TOTAL RETURN
among Cadus Pharmaceutical Corporation, the Nasdaq U.S. Stock Market Index
and the Nasdaq Pharmaceutical Index
[CHART]
* $100 invested July 17, 1996 in the Company's Common Stock or in the index
indicated, including reinvestment of dividends.
Corresponding index values and the Company's Common Stock price values are
given below:
<TABLE>
<CAPTION>
7/17/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Cadus......................................... $100.000 125.000 203.571 91.071 110.714 27.686
Nasdaq........................................ 100.000 118.547 132.667 145.437 175.098 204.446
Nasdaq Pharmaceutical Index................... 100.000 110.603 113.399 114.202 116.352 146.187
Cadus Closing Stock Price..................... 7.000 8.750 14.250 6.375 7.750 1.938
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For the year ended December 31, 1998, the Company received $4,387,017 in
cash for research funding from Bristol-Myers Squibb, which constituted 35% of
the Company's gross revenues in 1998. William H. Koster, a director of the
Company, is Senior Vice President, Drug Discovery of Bristol-Myers Squibb
Pharmaceutical Research Institute.
For the year ended December 31, 1998, the Company received $2,645,842 in
cash for research funding from Solvay Pharmaceuticals, an affiliate of Physica
B.V., which constituted 21% of the Company's gross revenues in 1998. Siegfried
G. Schaefer, a director of the Company, is the head of worldwide research at
Solvay Pharmaceuticals.
For the year ended December 31, 1998, the Company received $3,543,610 in
cash for research funding and $2.0 million in cash as a one-time technology
development fee from SmithKline Beecham which constituted 44%
14
<PAGE>
of the Company's gross revenues in 1998. In May 1998, the Company sold 660,962
shares of its Common Stock to SmithKline Beecham p.l.c. and SmithKline Beecham
Corporation for approximately $7.56 per share or an aggregate consideration of
$5.0 million.
During 1998, the Company loaned $15,000 to Dr. Charles Woler, the Chief
Executive Officer of the Company. The loan bears interest at 5.5% per annum.
Principal and interest are repayable in monthly installments of $453 over 3
years. At December 31, 1998, the outstanding balance of the loan was $13,452.
In September 1998, Dr. James Broach, a director of the Company, entered
into a five-month employment arrangement with the Company pursuant to which he
worked full-time at the Company and was compensated at the rate of $20,000 per
month. The Company also granted Dr. Broach an option to purchase 50,000 shares
of Common Stock at an exercise price of $2.75 per share. The option vests in
increments of 10,000 or 20,000 shares upon the achievement of specific
milestones. In connection with the employment arrangement, the Company
guaranteed the payment of a $286,000 loan made to Dr. Broach by a third party
and secured its guarantee obligation with cash collateral of $286,000.
Dr. Broach indemnified the Company from any liabilities arising from its
guarantee and pledged securities owned by him to secure his indemnification
obligation.
INDEPENDENT AUDITORS
The Board selected KPMG Peat Marwick LLP as the Company's independent
auditors for its fiscal year ending December 31, 1999. Representatives of KPMG
Peat Marwick LLP will be present at the Meeting, will be afforded an opportunity
to make a statement, and will be available to respond to appropriate inquiries
from stockholders.
COMPLIANCE WITH 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and persons who own more than ten
percent of the Common Stock to file with the Securities and Exchange Commission
initial reports of beneficial ownership on Form 3 and reports of changes in
beneficial ownership on Form 4 or Form 5. Reporting persons are required to
furnish the Company with copies of all such forms that they file. To the
Company's knowledge, based solely on a review of copies of such filed reports
furnished to the Company, all of the Company's directors, officers and greater
than ten percent beneficial owners made all required filings during fiscal year
1998 in a timely manner, except that the Form 3 for Mr. Charles Woler was filed
five weeks late.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholders who wish to present proposals at the 2000 annual meeting of
stockholders and who wish to have their proposals presented in the proxy
statement distributed by the Board in connection with such annual meeting must
submit their proposals in writing, to the attention of the Secretary of the
Company, on or before February 24, 2000.
ADDITIONAL INFORMATION
The Company's Annual Report, including certain financial statements, is
being mailed concurrently with this Proxy Statement to all persons who were
stockholders of record at the close of business on May 10, 1999, which is the
record date for voting purposes. The Annual Report does not constitute a part of
the proxy soliciting material.
Upon the written request of any stockholder, the Company will provide,
without charge, a copy of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998. Written requests for such report should be
directed to the Investor Relations Department of the Company, 777 Old Saw Mill
River Road, Tarrytown, New York 10591-6705.
15
<PAGE>
GENERAL
The Board knows of no other matters which are likely to be brought before
the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the enclosed proxy or their substitutes shall vote
thereon in accordance with their judgment pursuant to the discretionary
authority conferred by the form of proxy.
By Order of the Board of Directors
JAMES S. RIELLY
Secretary
Tarrytown, New York
May 17, 1999
16
<PAGE>
CADUS PHARMACEUTICAL CORPORATION
777 Old Saw Mill River Road, Tarrytown, New York 10591
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
PROXY
The undersigned hereby appoints Charles Woler and/or Philip N. Sussman as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of the Common
Stock of Cadus Pharmaceutical Corporation held of record by the undersigned on
May 10, 1999, at the Annual Meeting of Stockholders to be held on June 24, 1999
or at any adjournment thereof
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
PRE-PAID ENVELOPE OR DELIVER TO: American Stock Transfer & Trust Company, 40
Wall Street, New York, New York 10005. Facsimile copies of the Proxy, properly
completed and duly executed, will be accepted at (718) 236-4588. If you have any
questions, please call American Stock Transfer & Trust Company at (212)
936-5100.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
<PAGE>
/X/ Votes must be indicated, as in
example to the left, in Black or
Blue ink.
1. Election of Carl C. Icahn, Theodore Altman, James R. Broach, Harold First,
Russell D. Glass, Peter S. Liebert, Robert J. Mitchell, Siegfried G. Schaefer,
Nicole Vitullo, Samuel D. Waksal, Jack G. Wasserman and Charles Woler as
directors.
FOR all twelve nominees listed WITHHOLD
(except as marked to the contrary) AUTHORITY
(INSTRUCTION: To withhold authority to vote for any of the nominees, strike a
line through the nominee'S name in the list above.)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
stockholder. If no direction is given, this proxy will be voted FOR the
foregoing proposal.
Receipt of Notice of Annual Meeting and Proxy Statement dated May 17, 1999 is
hereby acknowledged.
Dated , 1999
---------------------------------
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
