<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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Cubist Pharmaceuticals, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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>
CUBIST PHARMACEUTICALS, INC.
24 Emily Street
Cambridge, MA 02139
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF CUBIST PHARMACEUTICALS, INC.:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
Cubist Pharmaceuticals, Inc. (the "Company") will be held at the Company's
corporate offices, 24 Emily Street, Cambridge, MA 02139, on Tuesday, June 1,
1999, at 9:00 A.M., local time, for the following purposes:
1. To elect three Class III directors of the Company to hold office for a
three year term and until their successors have been duly elected and
qualified;
2. To consider and vote upon a proposal of an amendment to the
Corporation's Restated Certificate of Incorporation to provide for an
increase in the number of shares of Common Stock authorized for issuance
by the Company from 25,000,000 to 50,000,000; and
3. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Directors has fixed April 12, 1999 as the record date for the
determination of stockholders entitled to notice of, and to vote at, the 1999
Annual Meeting of Stockholders. Accordingly, only stockholders of record at the
close of business on April 12, 1999 will be entitled to notice of, and to vote
at, such meeting or any adjournments thereof.
By order of the Board of Directors
JUSTIN P. MORREALE
Secretary
April 16, 1999
- --------------------------------------------------------------------------------
NOTE: THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND PROMPT RETURN OF THE
ACCOMPANYING PROXY. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND MAIL THE ACCOMPANYING PROXY AND
PROMPTLY RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT
PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW ANY PROXY GIVEN BY
YOU AND VOTE YOUR SHARES IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
CUBIST PHARMACEUTICALS, INC.
24 Emily Street
Cambridge, MA 02139
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of the common stock,
$.001 par value per share ("Common Stock"), of Cubist Pharmaceuticals, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company for use at the Annual Meeting of Stockholders to be
held on June 1, 1999 (the "Meeting"), or at any adjournment or postponement
thereof, pursuant to the accompanying Notice of 1999 Annual Meeting of
Stockholders. The purposes of the Meeting and the matters to be acted upon are
set forth in the accompanying Notice of 1999 Annual Meeting of Stockholders. The
Board of Directors knows of no other business that will come before the Meeting.
This Proxy Statement and proxies for use at the Meeting will be first
mailed to stockholders on or about April 16, 1999, and such proxies will be
solicited chiefly by mail, but additional solicitations may be made by telephone
or telegram by the officers or regular employees of the Company. The Company may
enlist the assistance of brokerage houses in soliciting proxies. All
solicitation expenses, including costs of preparing, assembling and mailing
proxy material, will be borne by the Company.
Revocability and Voting of Proxy
A form of proxy for use at the Meeting and a return envelope for the proxy
are enclosed. Stockholders may revoke the authority granted by their execution
of proxies at any time before the effective exercise of such authority by filing
with the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date or by voting in person at the Meeting. Shares represented
by executed and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. If no specifications are given, the proxies
intend to vote the shares represented thereby to approve Proposals No. 1 and 2
as set forth in the accompanying Notice of 1999 Annual Meeting of Stockholders
and in accordance with their best judgment on any other matters that may
properly come before the Meeting.
Record Date and Voting Rights
Only stockholders of record at the close of business on April 12, 1999,
are entitled to notice of, and to vote, at the Meeting or any adjournment or
postponement thereof. The Company had outstanding on April 12, 1999, 17,559,100
shares of Common Stock, each of which is entitled to one vote upon the matters
to be presented at the Meeting. The presence, in person or by proxy, of a
majority of the issued and outstanding shares of Common Stock will constitute a
quorum for the transaction of business at the Meeting. Votes withheld from any
nominee, abstentions and broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the Meeting. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on one or more proposals because the nominee does
not have
<PAGE>
-2-
discretionary voting power and has not received instructions from the beneficial
owner. Abstentions are included in the number of shares present or represented
and voting on each matter. Broker "no-votes" are not so included.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to each
person known to the Company to be the beneficial owner of more than 5% of the
issued and outstanding Common Stock as of April 9, 1999 or other date noted
below. As of April 12, 1999, 17,559,100 shares of Common Stock were outstanding.
<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Outstanding Shares of
of Beneficial Owner of Common Stock (1) Common Stock Owned (1)
------------------- ------------------- ----------------------
<S> <C> <C>
Sofinov Societe Financiere 3,497,335(2) 18.7%
D'Innovation Inc.
1981 Avenue McGill College
7e etage
Montreal, Quebec H3A 3C7
Entities Affiliated with 1,620,505(3) 9.0%
Hambrecht & Quist Capital
Management Incorporated
50 Rowes Wharf
Boston, MA 02110
International Biotechnology 1,449,662(4) 8.2%
Trust plc
c/o Rothschild Asset
Management
Five Arrows House
St. Swithin's Lane
London, UK EC4N8NR
Entities affiliated with 1,472,636(5) 8.2%
Special Situations Funds
153 East 53rd Street
New York, NY 10022
New York Life Insurance 1,333,332(6) 7.4%
Company
51 Madison Avenue
New York, NY 10010
DSV Partners IV 1,143,497(7) 6.5%
221 Nassau Street
Princeton, NJ 08542
</TABLE>
<PAGE>
-3-
<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Outstanding Shares of
of Beneficial Owner of Common Stock (1) Common Stock Owned (1)
------------------- ------------------- ----------------------
<S> <C> <C>
Entities affiliated with: 986,356(8) 5.6%
Burr, Egan, Deleage & Co.
One Post Office Square
Suite 3800
Boston, MA 02109
Entities affiliated with 889,212(9) 5.0%
Interwest Management
Partners
300 Sandhill Road
Building 3, Suite 255
Menlo Park, CA 94025-7112
- ----------
</TABLE>
(1) The shares owned, and the shares included in the total number of shares
outstanding, have been adjusted, and the percentage owned has been
computed, in accordance with Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, as amended, and includes options, to the extent
called for by such rule, with respect to shares of Common Stock that can
be exercised within 60 days following April 9, 1999. Except as set forth
in the footnotes below, such shares are beneficially owned with sole
investment and sole voting power.
(2) Includes 1,111,112 shares of Common Stock which Sofinov Societe Financiere
D'Innovation Inc. has the right to acquire within 60 days following April
9, 1999 upon the exercise of Common Stock Purchase Warrants.
(3) Consists 949,056 shares held by H&Q Healthcare Investors, which includes
200,001 shares of Common Stock which H&Q Healthcare Investors, Inc. has
the right to acquire within 60 days following April 9, 1999 upon the
exercise of Common Stock Purchase Warrants; and 671,449 shares held by H&Q
Life Sciences Investors, which includes 133,333 shares of Common Stock
which H&Q Life Sciences Investors, Inc. has the right to acquire within 60
days following April 9, 1999 upon the exercise of Common Stock Purchase
Warrants. Hambrecht & Quist Capital Management Inc. is the Investment
Adviser of H&Q Healthcare Investors and H&Q Life Sciences Investors and as
such Hambrecht & Quist Capital Management Inc. has voting and investment
power with respect to the shares owned by H&Q Healthcare Investors and H&Q
Life Sciences Investors. Hambrecht & Quist Capital Management Inc. may be
deemed to beneficially own all of the shares owned by H&Q Healthcare
Investors and H&Q Life Sciences Investors although Hambrecht & Quist
Capital Management Inc. disclaims beneficial ownership.
(4) Includes 111,112 shares of Common Stock which International Biotechnology
Trust plc has the right to acquire within 60 days following April 9, 1999
upon the exercise of Common Stock Purchase Warrants. Voting and investment
power is shared with Rothschild Asset Management ("RAM"), IBT's Investment
Manger. RAM has discretionary voting power.
(5) Includes 424,001 shares of Common Stock owned by Special Situations
Private Equity Fund, L.P. ("SSPE"), which includes 133,334 shares of
Common Stock which SSPE has the right to acquire within 60 days following
April 9, 1999 upon the exercise of Common Stock Purchase Warrants; 789,601
shares of Common Stock owned by Special Situations Fund, III, L.P. ("SSF
III"), which includes 233,334 shares of Common Stock which SSF III has the
right to acquire within 60 days following April 9, 1999 upon the exercise
of Common Stock Purchase Warrants; and 259,034 shares of Common Stock
owned by Special Situations Cayman Fund, L.P. ("CAY"), which includes
77,778 shares of Common Stock which CAY has the right to acquire within 60
days
<PAGE>
-4-
following April 9, 1999 upon the exercise of Common Stock Purchase
Warrants. MGP Advisers Limited Partnership ("MGP") is the general partners
of the Special Situations Fund III, L.P.. AWM Investment Company, Inc.
("AWM") is the General partners of MGP and the general Partners of and
investment adviser to the Special Situations Cayman Fund, L.P. MG
Advisers, LLC ("MG") is the general partner of and investment adviser to
the Special Situations Private Equity Fund, L.P. Austin W. Marxe and David
M. Greenhouse are the principal owners of MGP, WM and MG. SSF III, SSPE,
CAY, MGP, MG, and AWM have sole power vote or to direct the vote and to
dispose or to direct the disposition of all shares which are respectively
beneficially owned by each fund and its adviser. Mr. Marxe and Mr.
Greenhouse have shared power to vote or to direct the vote of and to
dispose or to direct the disposition all of the shares reported herein.
The foregoing information is as of February 11, 1999 and based on
information filed on Form 13G/A with the SEC on February 11, 1999.
(6) Includes 444,444 shares of Common Stock which New York Life Insurance
Company has the right to acquire within 60 days following April 9, 1999,
upon the exercise of Common Stock Purchase Warrants.
(7) Includes 1,143,497 shares held by DSV Partners IV ("DSV"). DSV Management
is the general partner of DSV and, as such, shares voting and investment
power with respect to the shares owned by DSV. Mr. Clarke, Chairman of the
Board of Directors of the Company, is a general partner of DSV Management
and, as such, shares voting and investment power with respect to the
shares owned by DSV with the other general partners of DSV Management. DSV
Management disclaims beneficial ownership of the shares owned by DSV
except to the extent of its proportionate partnership interest in DSV.
each of the general partners of DSV Management disclaims beneficial
ownership of the shares owned by DSV except to the extent of its
proportionate indirect partnership interest in DSV.
(8) Includes 976,098 shares held by Alta V Limited Partnership and 10,258
shares held by Customs House Partners. Burr, Egan, Deleage & Co. directly
or indirectly provides investment advisory services to various venture
capital funds, including Alta V Limited Partnership and Customs House
Partners. The respective general partners of these funds exercise sole
voting and investment power with respect to the shares held by such funds.
The principals of Burr, Egan, Deleage & Co. are general partners of Alta V
Management Partners, L.P.. (the general partner of Alta V Limited
Partnership) and customs house partners. As general partners of the funds,
they may be deemed to share voting and investment powers for the shares
held by the funds. These principals disclaim beneficial ownership of all
such shares held by all of the aforementioned funds except to the extent
of their proportionate pecuniary interests therein. The foregoing
information is as of December 31, 1998 and based on information filed on
Form 13G/A with the SEC on February 9, 1999.
(9) Includes 883,360 shares held by Interwest Partners V, L.P. ("Interwest")
and 5,852 shares held by Interwest Investors V. Interwest Management
Partners V is the general partner of Interwest and as such Interwest
Management Partners V has sole voting and investment power with respect to
the shares owned by Interwest. Mr. Oronsky, a consultant to the Company,
is a general partner of Interwest Management Partners V and as such,
together with the other general partners of Interwest Management Partners
V, has shared voting and investment power with respect to the shares owned
by Interwest. Interwest Management Partners V and its general partners
disclaim beneficial ownership of the shares owned by Interwest except to
the extent of their proportionate direct or indirect partnership interests
in Interwest. The individual general partners of Interwest Investors V
have shared voting and investment power over the shares held by Interwest
Investors V.
<PAGE>
-5-
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees for Election as Directors
The Board of Directors is divided into three classes, with one class of
directors elected each year at the annual meeting of stockholders for a three
year term of office. All directors of a class hold their positions until the
annual meeting of stockholders at which their terms of office expire and until
their successors have been duly elected and qualified.
The term of office of the Class III directors of the Company will expire
at the Meeting. The Board of Directors has nominated Dr. Rocklage, Mr. Clarke
and Dr. Schimmel (the "Nominees") for reelection as Class III directors of the
Company to hold office until the annual meeting of stockholders to be held in
2002 and until their respective successors have been duly elected and qualified.
In the event either of the Nominees shall be unable or unwilling to serve as a
director, discretionary authority is reserved to vote for a substitute or
substitutes. The Board of Directors has no reason to believe that either of the
Nominees will be unable or unwilling to serve. Proxies cannot be voted for any
persons other than the Nominees.
The affirmative vote of a plurality of the shares of Common Stock present
at the Meeting, in person or by proxy, is required for the election of the Class
III directors.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 1 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
Unless authority to do so is withheld, the persons named in each proxy will vote
the shares represented thereby "FOR" the election of the Nominees.
Information as to Directors and Nominees for Director
The names of the directors of the Company (including the Nominees for
reelection as Class III directors at the Meeting), their ages, their position(s)
with the Company, the year in which each first became a director, the expiration
of the term of office of each, the class of director of each, the principal
occupation and employment of each over at least the last five years, and other
directorships, if any, of each are listed below.
<TABLE>
<CAPTION>
Director Term
Name Age Position(s) Held Since Expires Class of Director
---- --- ---------------- ----- ------- -----------------
<S> <C> <C> <C> <C> <C>
Scott M. Rocklage, Ph.D. 44 President, Chief Executive Officer
and Director 1994 1999 III
John K. Clarke 45 Chairman of the Board of Directors 1992 1999 III
Paul R. Schimmel, Ph.D. 58 Director 1992 1999 III
Barry Bloom, Ph.D. 70 Director 1993 2001 II
George H. Conrades 60 Director 1996 2001 II
David W. Martin, Jr., M.D. 58 Director 1997 2000 I
</TABLE>
Dr. Rocklage has served as President and Chief Executive Officer and as a
member of the Board of Directors of the Company since July 1994. From 1990 to
1994, Dr. Rocklage served as President and Chief Executive Officer of Nycomed
Salutar, Inc., a diagnostic imaging company. From 1992 to 1994, he also served
as President and Chief Executive Officer and Chairman of Nycomed
<PAGE>
-6-
Interventional, Inc., a medical device company. From 1986 to 1990, he served in
various positions at Nycomed Salutar, Inc., a diagnostic imaging company and was
responsible for designing and implementing research and development programs
that resulted in three drug products in human clinical trials, including the
approved drugs Omniscan and Teslascan. Dr. Rocklage received his B.S. in
Chemistry from the University of California, Berkeley and his Ph.D. in Chemistry
from the Massachusetts Institute of Technology.
Mr. Clarke is a founder of the Company and has served as Chairman of the
Board of Directors since its incorporation. From May 1992 to June 1994, Mr.
Clarke served as acting President and Chief Executive Officer of the Company.
Since 1982, he has been a general partner of DSV Management in Princeton, New
Jersey, the general partner of DSV Partners IV ("DSV"). He is a founder and
director of Alkermes, Inc. and a director of Plastic Surgeons of America Inc.
Mr. Clarke is the Managing General Partner for Cardinal Health Partners, founded
in 1997. Mr. Clarke received his B.A. in Biology and Economics from Harvard
College and his M.B.A. from The Wharton School of the University of
Pennsylvania.
Dr. Schimmel is a scientific founder of the Company and has served as a
director of the Company since its incorporation. From 1967 to 1998 Dr. Schimmel
served as a Professor of Biochemistry and Biophysics at the Massachusetts
Institute of Technology and as the John D. and Catherine T. MacArthur Professor
of Biochemistry and Biophysics at the Massachusetts Institute of Technology from
1992 to 1997 and currently is Professor and member of the Skaggs Institute for
Chemical Biology of the Scripps Research Institute. Dr. Schimmel is an expert in
molecular biology, protein translation and aminoacyl-tRNA synthetases. He is a
member of the National Academy of Sciences and the American Academy of Arts and
Sciences. Dr. Schimmel was a founder and is a director of Repligen Corporation
and Alkermes, Inc., biotechnology companies. Dr. Schimmel received his A.B. in
Pre-Medicine from Ohio Wesleyan University and his Ph.D. in Biochemistry from
the Massachusetts Institute of Technology.
Dr. Bloom has served as a director of the Company since September 1993.
Dr. Bloom has more than 40 years experience in the pharmaceutical industry. From
1952 to 1993, Dr. Bloom served in various positions at Pfizer Inc., including
Executive Vice President of Research & Development. He is a director of Vertex
Pharmaceuticals, Inc. and Neurogen Corp., biotechnology companies, Microbia
Diagnostics, a medical diagnostic company, Catalytica Pharmaceuticals, Inc., a
chemical manufacturer and supplier, and Incyte Pharmaceuticals, Inc., a genomics
company. Dr. Bloom received his S.B. in Chemistry and his Ph.D. in Organic
Chemistry from the Massachusetts Institute of Technology.
Mr. Conrades has served as a director of the Company since June 1996. As
of August 1998, Mr. Conrades became a general partner with Polaris Venture
Partners, a venture capital firm specializing in early stage high technology
companies. Formerly, he was GTE Executive Vice President and President, GTE
Internetworking upon acquisition of BBN Corp. by GTE in July 1997. From 1994 to
1997, he served as President and Chief Executive Officer of BBN Corporation, a
corporation providing Internet services and research and development and he
served as Chairman since 1995. From 1961 to 1992, Mr. Conrades served in various
positions at IBM, including Senior Vice President and member of IBM's Corporate
Management Board. He is a member of the Board of Directors of CBS, Infinity
Broadcasting and Concentra Managed Care. Mr. Conrades received his B.A. in
Physics and Mathematics from Ohio Wesleyan University and his M.B.A. from the
University of Chicago.
Dr. Martin has served as a director of the Company since October 1997.
Since July 1997, Dr. Martin has served as President, Chief Executive Officer and
a founder of Eos Biotechnology, Inc. Dr. Martin was a Professor of Medicine,
Professor of Biochemistry and an Investigator of the Howard Hughes Medical
Institute at the University of California San Francisco until 1983 when he
became the first Vice President and subsequently Senior Vice President of
Research and
<PAGE>
-7-
Development at Genentech, Inc., a position he held until 1990. He was Executive
Vice President of DuPont Merck Pharmaceutical Company from 1991 through 1993 and
then returned to California in 1994 where he was Senior Vice-president of Chiron
Corp. and President of Chiron Therapeutics. In May 1995, he assumed the position
of President and Chief Executive Officer of Lynx Therapeutics, Inc. and served
until November of 1996. Dr. Martin is also a Director of Varian Associates,
Inc., a medical equipment supplier.
Julius Rebek resigned his position as a Class II Director, effective May
20 1998; Ellen M. Feeney resigned her position as a Class I Director, effective
as of December 31, 1998, and Terrance McGuire resigned his position as a Class I
Director, effective February 5, 1999. The Board of Directors has not appointed
any successors to fill these vacancies at this time.
Ownership of Equity Securities by Management
The table below sets forth information as of April 12, 1999, as reported
to the Company, with respect to the beneficial ownership of the Common Stock of
the Company by each director and each named executive officer, and by all
directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Beneficial Outstanding Shares
Ownership of of Common Stock
Name Common Stock (1) Owned (1)
---- ---------------- ---------
<S> <C> <C>
Scott M. Rocklage, Ph.D. 377,171(2) 2.1%
Francis P. Tally, M.D. 124,530(3) *
Dennis D. Keith, Ph.D. 48,184(4) *
Frederick B. Oleson, Jr.,D.Sc. 37,500(5) *
Thomas A. Shea 36,578(6) *
John K. Clarke 1,178,442(7) 6.7%
Paul R. Schimmel, Ph.D. 314,450(8) 1.7%
Barry Bloom, Ph.D. 20,165(9) *
George H. Conrades 47,281(10) *
David W. Martin, Jr., M.D. 3,675(11) *
All directors and executive 2,187,976(12) 12.2%
officers as a group (10 persons)
</TABLE>
- ----------
* Less than 1% of the issued and outstanding shares of Common Stock.
(1) Except as set forth in the footnotes below, each stockholder has sole
investment and voting power with respect to the shares beneficially owned.
Includes options with respect to shares of Common Stock that can be
exercised within 60 days following April 9, 1999.
(2) Includes 133,548 shares of Common Stock which Dr. Rocklage has the right
to acquire within 60 days following April 9, 1999 upon the exercise of
stock options.
(3) Includes 21,657 shares of Common Stock which Dr. Tally has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
(4) Includes 32,501 shares of Common Stock which Dr. Keith has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
(5) Includes 27,500 shares of Common Stock which Dr. Oleson has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
<PAGE>
-8-
(6) Includes 29,436 shares of Common Stock which Mr. Shea has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
(7) Includes 1,143,497 shares held by DSV. Mr. Clarke, Chairman of the Board
of Directors of the Company, is a general partner of the general partner
of DSV. Mr. Clarke, together with the other general partners of DSV
Management, share voting and investment control with respect to the shares
owned by DSV. Mr. Clarke may been deemed to beneficially own the share
held by DSV although he disclaims beneficial ownership except to the
extent of his proportionate partnership interest therein. Also includes
5,881 shares of Common Stock which Mr. Clarke has the right to acquire
within 60 days following April 9, 1999 upon the exercise of stock options
and 29,064 shares of Common Stock held directly by Mr. Clarke for which he
has sole voting and investment power.
(8) Includes 18,737 shares of Common Stock which Dr. Schimmel has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options and 65,714 shares held by the Paul R. Schimmel Profit-Sharing
Plan.
(9) Includes 13,023 shares of Common Stock which Dr. Bloom has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
(10) Includes 5,881 shares of Common Stock which Mr. Conrades has the right to
acquire within 60 days following April 9, 1999 upon the exercise of stock
options.
(11) Includes 3,675 shares of Common Stock which Dr. Martin has the right to
acquire within 60 days following April 9, 1999.
(12) Includes 301,839 shares of Common Stock which all directors and named
executive officers have the right to acquire within 60 days following
April 9, 1999 upon the exercise of stock options.
The Board of Directors and Committees of the Board
The Board of Directors has an Audit Committee, which met one time during
the 1998 fiscal year. The functions of the Audit Committee include (1) making
recommendations to the Board of Directors with respect to the engagement of the
independent auditors; (2) reviewing the audit plans developed by the independent
auditors for the annual audit of the Company's books and records and the results
of such audit; (3) reviewing the annual financial statements; (4) reviewing the
professional services provided by the independent auditors and the auditors'
independence; and (5) reviewing the adequacy of the Company's system of internal
controls and the responses to management letters issued by the independent
auditors. The members of the Audit Committee during the 1998 fiscal year were
Dr. Barry Bloom, Ms. Ellen Feeney and Mr. Terrance McGuire. Ellen Feeney
resigned her position as Director, effective as of December 31, 1998, and
Terrance McGuire resigned his position as Director, effective February 5, 1999.
The Board of Directors has not appointed any new members to the Audit Committee
to fill the vacancies created by their resignations.
The Board of Directors has a Compensation Committee, which met two times
during the 1998 fiscal year. The Compensation Committee's principal functions
are to review and approve salary plans and bonus awards, as well as other forms
of compensation, and to administer the Corporation's 1993 Amended and Restated
Stock Option Plan (the "1993 Plan"), pursuant to the terms of such plan. The
members of the Compensation Committee during the 1998 fiscal year were Mr. John
K. Clarke, Mr. George Conrades and Ms. Ellen Feeney. Ellen Feeney resigned her
position as a Director, effective as of December 31, 1998. The Board of
Directors has not appointed a new member to the Compensation Committee to the
vacancy created by her resignation.
During the 1998 fiscal year, the Board of Directors held four meetings.
Each director attended more than seventy-five percent (75%) of the Board
meetings and the meetings of Board committees on which he or she served, except
for Mr. McGuire who attended fifty percent (50%) of the Board Meetings.
<PAGE>
-9-
Compensation of Directors
Dr. Rocklage is a director who is a full-time officer of the Company; he
receives no additional compensation for serving on the Board of Directors or its
committees. No other director is a full-time officer of the Company. In 1998,
the Company paid $1,000 per meeting to Dr. Bloom, Dr. Martin and Mr. Conrades,
each in connection with their attendance at meetings of the Board of Directors.
No other director received cash compensation during the Company's 1998 fiscal
year for his or her service on the Board of Directors or any committee thereof.
In 1999, Dr. Bloom, Mr. Conrades and Dr. Martin will receive a fee of $1,000 for
each Board meeting attended and will be reimbursed for expenses incurred in
connection with their attendance. No other director will receive cash
compensation during the Company's 1999 fiscal year for his or her service on the
Board of Directors or any committee thereof.
Pursuant to the 1993 Plan, upon first joining the Board of Directors, each
director who is not an officer or employee of the Company is granted
automatically a stock option exercisable for 7,000 shares of Common Stock at
fair market value, and each time that he or she is serving as a director on the
business day immediately following an annual meeting of stockholders, such
director is automatically granted on such business day a stock option
exercisable for 700 shares of Common Stock at fair market value.
Pursuant to a consulting agreement, Dr. Schimmel received $48,000, for
consulting services during 1998.
<PAGE>
-10-
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below sets forth certain compensation information for the
fiscal years ended December 31, 1998, 1997 and 1996 with respect to the
Company's Chief Executive Officer and those other executive officers of the
Company whose 1998 total annual compensation exceeded $100,000 (the "Named
Executive Officers").
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
-----------------------------
Annual Compensation Restricted Securities
Name and ------------------------ Stock Underlying All Other
Principal Position Year Salary($)(1) Bonus($) Awards($) Options(#) Compensation($)(2)
- -------------------------------- ------ ----------- --------- ---------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Scott M. Rocklage, Ph.D. 1998 $ 249,423 $ 73,500 $ __ 175,000 $ 7,966
President, Chief Executive 1997 $ 232,815 $ 80,000 $ __ 70,000 $ 26,640
Officer and Director 1996 $ 206,539 $ 65,000 $ __ 96,038 $ 31,514
Francis P. Tally, MD 1998 $ 220,500 $ 40,000 $ __ 65,398 $ 8,757
Executive Vice President; 1997 $ 220,011 $ 11,000 $ __ 26,898 $ __
Scientific Affairs 1996 $ 220,000 $ 11,770 $ __ 245 $ __
Thomas A. Shea 1998 $ 112,307 $ __ $ __ 44,500 $ 500
Vice President Finance &
Admin. 1997 $ 88,830 $ __ $ __ __ $ 500
Chief Financial Officer,
Treasurer 1996 $ 74,236 $ __ $ __ 16,673 $ 500
Dennis D. Keith 1998 $ 160,500 $ __ $ __ 35,000 $ __
Vice President; 1997 $ 27,802(4) $ __ $ __ __ $ __
Drug Discovery __
Frederick B. Oleson, Jr. 1998 $ 140,500 $ __ $ __ 35,000 $ __
Vice President; 1997 $ 17,313(5) $ __ $ __ __ $ __
Drug Development __
Mark P. Carthy, Vice
President and Chief Business 1998 $ 162,231 (6) $ __ $ __ 20,000 $ 500
Officer (3) 1997 $ 127,485 (7) $ 48,000 $ __ 200,000 __
</TABLE>
(1) Salary includes amounts deferred pursuant to the Company's 401(k) Plan.
(2) All other compensation includes (i) the forgiveness of principal and
accrued interest owed by Dr. Rocklage in 1997 and 1996, (ii) long-term
disability insurance premiums paid by the Company and (iii) the Company's
matching contributions under the Company's 401(k) Plan.
(3) Mr. Carthy's employment ended on October 23, 1998.
(4) Reflects compensation from October 20, 1997 to December 31, 1997. Dr.
Keith's employment commenced on October 20, 1997.
(5) Reflects compensation from November 6, 1997 to December 31, 1997. Dr.
Oleson's employment commenced on November 6, 1997.
(6) Reflects compensation from January 1, 1998 to October 23, 1998.
(7) Reflects compensation from April 11, 1997 to December 31, 1997. Mr.
Carthy's employment commenced on April 11, 1997.
<PAGE>
-11-
Option Grants in Last Fiscal Year
The following table sets forth information regarding grants of stock
options under the 1993 Stock Option Plan to the Named Executive Officers during
the fiscal year ended December 31, 1998.
<TABLE>
<CAPTION>
Number of Percent
Securities of Total
Underlying Options
Options Granted to Exercise Grant Date
Granted Employees in or Base Expiration Present
Name (Shares)(1) Fiscal 1998 Price Date Value(2)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Scott M. Rocklage, Ph.D. 35,000 3.50% $5.370 01/01/08 $132,416
140,000 14.0% $2.406 10/02/08 $233,982
Thomas A. Shea 20,000 2.00% $5.375 01/01/08 $ 75,666
24,500 2.45% $2.406 10/02/08 $ 40,947
Francis P. Tally 26,898 2.69% $5.370 01/01/08 $101,763
38,500 3.85% $2.406 10/02/08 $ 64,345
Dennis D. Keith 35,000 3.50% $2.406 10/02/08 $ 58,495
Frederick B. Oleson 35,000 3.50% $2.406 10/02/08 $ 58,495
Mark P. Carthy (3) 20,000 2.00% $5.375 01/01/08 $ 75,666
</TABLE>
- ----------
(1) Each option is exercisable in 16 equal quarterly installments, and has a
maximum term of 10 years from the date of grant, subject to earlier
termination in the event of the optionee's cessation of service with the
Company. The options are exercisable during the holder's lifetime only by
the holder and they are exercisable by the holder only while the holder is
an employee of the Company and for certain limited periods of time
thereafter in the event of termination of employment.
(2) Based on the Black-Scholes pricing model suggested by the Securities and
Exchange Commission. The estimated values under that model are based on
arbitrary assumptions as to variables such as stock price volatility,
projected future dividend yield and interest rates, discounted for lack of
marketability and potential forfeiture due to vesting schedule. The
estimated values above use the following significant assumptions:
volatility -- 97%; dividend yield -- 0%; the average life of the options --
4 years; risk-free interest rate -- yield to maturity of 10-year treasury
note at grant date -- 4.70%. The actual value, if any, an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised. There is no assurance that the
value realized by an executive will be at or near the value estimated using
a modified Black-Scholes model.
(3) Mr. Carthy's employment ended on October 23, 1998. All options granted to
Mr. Carthy have been cancelled.
<PAGE>
-12-
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The following table sets forth information with respect to the stock
options exercised during the fiscal year ended December 31, 1998, and the
unexercised stock options held at the end of such fiscal year by the Named
Executive Officers.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held At In-The-Money Options
December 31, 1998 December 31, 1998(1)
Shares Acquired ------------------------------ ------------------------------
Name on Exercise Value Realized Exercisable - Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Scott M. Rocklage, Ph.D. __ $ __ 133,564 246,775 $ 200,165 $ 305,016
Thomas A. Shea __ $ __ 28,741 64,379 $ 47,836 $ 41,409
Francis Tally __ $ __ 21,673 85,486 $ 6,772 $ 47,397
Dennis D. Keith __ $ __ 32,501 77,499 $ 6,155 $ 43,089
Frederick B. Oleson __ $ __ 27,500 102,500 $ 6,155 $ 43,089
</TABLE>
- ------------------
(1) Based on the difference between the exercise price of each option and the
last reported sales price of the Company's Common Stock on the NASDAQ-NMS
on December 31, 1998 of $3.813.
Executive Employment Agreements
Dr. Rocklage, the Company's President and Chief Executive Officer, is
employed pursuant to an employment agreement with the Company, dated June 20,
1994 (the "Employment Agreement"). Under the terms of the Employment Agreement,
Dr. Rocklage's annual base salary was set at $175,000 subject to annual review
and increase by the Company's Board of Directors, and he is entitled to a
performance bonus upon the Company's achievement of certain milestones for each
fiscal year that have been mutually agreed upon by Dr. Rocklage and the Board of
Directors prior to the commencement of such fiscal year. Dr. Rocklage received a
base salary in 1998 of $249,423 and a performance bonus of $73,500. Dr.
Rocklage's employment with the Company may be terminated by the Company at any
time by giving written notice of termination and may be terminated by Dr.
Rocklage at any time upon thirty days' written notice of termination. Upon any
termination by the Company of Dr. Rocklage's employment without cause, Dr.
Rocklage is entitled to severance pay in an amount equal to six months of his
then current annual base salary.
None of the Company's other executive officers has entered into an
employment agreement with the Company.
<PAGE>
-13-
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE OFFICER COMPENSATION
Compensation Philosophy and Objectives
The Company's compensation philosophy is that executive officer
compensation should reflect the value created for stockholders, while furthering
the Company's short and long-term strategic goals and values by aligning
compensation with business objectives and individual performance. Short and
long-term compensation should motivate and reward high levels of performance and
are geared to attract and retain qualified executive officers. Accordingly, the
Company's executive officer compensation package consists of three primary
components intended to further the Company's overall compensation philosophy to
achieve the compensation objectives of the Company. The components include: base
salary, annual bonuses and grants of stock options.
In evaluating the Company's executive officers' performance, the Company
generally follows the process outlined below:
o Prior to or shortly after the beginning of each fiscal year, the Company
sets goals and objectives which are reviewed with, and ultimately approved
by, the full Board of Directors. Dr. Rocklage reports to the Board on the
Company's progress toward the achievement of these goals and objectives
throughout the year at Board meetings and at other times as necessary.
o Twice a year, generally in June and December, the Compensation Committee
meets with Dr. Rocklage. The June meeting is to address Dr. Rocklage's
personal goals and objectives in leading the Company along with the
Company's goals and objectives and approves a first half bonus payment
accordingly. The December meeting is a comprehensive review of Dr.
Rocklage's compensation package where his full compensation package is set
accordingly for the next fiscal year.
o In December of each year, Dr. Rocklage evaluates the performance of the
remainder of the Company's executive officers against their goals and
objectives set the prior year and recommends an annual base salary, stock
option grant and bonus to the Compensation Committee commensurate with
performance.
Compensation for Fiscal 1998
Chief Executive Officer Compensation
In December 1998, the Compensation Committee set Dr. Rocklage's annual
base salary at $286,000, effective on January 1, 1999. This increase represented
a $26,000 increase or 10% over the prior year's base salary. The Committee
performed a comprehensive review of the compensation paid to chief executive
officers in other companies and concluded that this increase moves Dr. Rocklage
into the mid-range of base salaries paid to chief executive officers of
comparable companies.
In August 1998, the Compensation Committee determined that Dr. Rocklage
achieved the majority of milestone objectives for the first six months of 1998
and awarded Dr. Rocklage a bonus in the amount of $30,000. In December 1998, the
Committee awarded Dr. Rocklage an additional bonus of $43,500 and set an
additional $100,000 as the potential bonus amount payable upon achievement of
goals for 1999.
In October 1998, the Board of Directors authorized a company-wide
distribution of stock options to employees based on performance. Dr. Rocklage's
stock options awarded during the year
<PAGE>
-14-
amounted to 175,000 shares of Common Stock; 35,000 stock options with an
exercise price of $5.370 and 140,000 stock options with an exercise price of
$2.406.
Report on Executive Compensation
In December 1998, Dr. Rocklage recommended and the Committee accepted base
salary increases for the executive staff ranging from 0% to 20%. The increases
were determined after reviewing performance against goals and objectives set for
the year and also against salaries of similar positions in comparable companies.
The Compensation Committee authorized three bonuses in the amounts of
$29,040 for Dr. Tally, 18,400 for Dr. Oleson and $15,000 for Dr. Keith.
In October 1998, the Committee authorized a company-wide distribution of
stock options to employees based on performance. Stock options awarded to
executive officers (exclusive of those granted to Dr. Rocklage) amounted to
199,898 shares of Common Stock; 46,898 stock options with an exercise price of
$5.370 and 153,000 stock options with an exercise price of $2.406
Conclusion
The Compensation Committee believes that the total 1998-related
compensation of the Chief Executive Officer and each of the executive officers,
as described above, is fair and is within the range of compensation for
executive officers in similar positions at comparable companies.
Compensation Committee
----------------------
John Clarke
George Conrades
<PAGE>
-15-
CORPORATE PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the Nasdaq Stock Market (U.S. Companies) Index and to the Nasdaq
Pharmaceutical Index since October 25, 1996. The comparison assumes $100 was
invested on October 25, 1996 in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends.
Corporate Performance Graph
[EDGAR Representation of Data Points Used In Printed Graphic]
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------
10/25/96 12/96 12/97 12/98
<S> <C> <C> <C> <C>
CUBIST PHARMACEUTICALS, INC $100 $ 95 $ 90 $ 59
NASDAQ STOCK MARKET (U.S.) $100 $106 $130 $183
NASDAQ PHARMACEUTICAL $100 $100 $103 $132
</TABLE>
<PAGE>
-16-
CERTAIN TRANSACTIONS
On September 23, 1998, the Company completed a private placement financing
with investors and raised approximately $12.8 million (net of financing costs of
$820,000) by issuing 6,065,560 shares at $2.25 per share, along with warrants
exercisable for 3,032,783 shares of Common Stock at $2.25 per share. The
warrants are exercisable at any time from September 23, 1998 until September 23,
2003. In this financing the Company: (i) issued and sold 222,223 shares to
International Biotechnology Trust plc and issued to it warrants exercisable for
111,112 shares of Common Stock; (ii) issued and sold an aggregate 666,667 shares
of Common Stock and issued in the aggregate warrants exercisable for 333,334
shares of Common Stock to H&Q Healthcare Investors and H&Q Life Sciences
Investors; (iii) issued and sold 2,222,223 shares of Common Stock and issued
warrants exercisable for 1,111,112 shares of Common Stock to Sofinov Societe
Financiere D'Innovation; (iv) issued and sold to Special Situations Private
Equity Fund, L.P. 266,667 shares of Common Stock and issued to it warrants
exercisable for 133,334 Shares of Common Stock; (v) issued and sold to Special
Situations Fund III, L.P. 466,667 shares of Common Stock and issued to it
warrants exercisable for 433,334 Shares of Common Stock; (vi) issued and sold to
Special Situations Cayman Fund, L.P. 155,556 shares of Common Stock and issued
to it warrants exercisable for 77,778 Shares of Common Stock; and (vii) issued
and sold to New York Life Insurance Company 888,888 shares of Common Stock and
issued to it warrants exercisable for 444,444 Shares of Common Stock.
The Company believes that the securities issued in the transactions
involving the Company described above were sold by the Company at their then
fair market value and that the terms of the transactions described above were no
less favorable than the Company could have obtained from unaffiliated third
parties.
In December 1997, the Company amended the Promissory Note issued to Dr. Rocklage
in the amount of $131,685, adjusting the term of this note to become due in
equal quarterly installments of $10,000 commencing on March 31, 1998 and a final
payment of $1,685 on June 30, 2001. As of April 12, 1999, the amount outstanding
under the note was $91,685.
The Company has adopted a policy, that all transactions between the
Company and its officers, directors and affiliates must (i) be approved by a
majority of those members of the Company's Board of Directors that are not
parties, directly or indirectly through affiliates, to such transactions and
(ii) be on terms no less favorable to the Company than could be obtained from
unrelated third parties.
For a description of certain transactions and certain employment and other
arrangements between the Company and certain of its directors and executive
officers, see "Compensation of Directors" and "Executive Employment Agreements."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
the Company's directors, its executive (and certain other) officers, and any
persons holding more than ten percent of the Common Stock are required to report
their ownership of the Common Stock and any changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to report in this proxy statement
any failure to
<PAGE>
-17-
file by these dates during 1998. To the Company's knowledge, all of these filing
requirements were satisfied by its directors, officers and ten percent holders,
except for the purchase of 2,222,223 shares in September 1998 by Sofinov Societe
Financiere D'Innovation Inc. In making these statements, the Company has relied
upon the written representations of its directors, officers and its ten percent
holders and copies of the reports that they have filed with the Commission.
<PAGE>
-18-
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO CERTIFICATE OF
INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF CUBIST COMMON STOCK
On February 3, 1999, the Company's Board of Directors, subject to
stockholder approval, adopted and approved an amendment to the Company's
Restated Certificate of Incorporation (the "Certificate") for the purpose of
increasing the number of shares of Common Stock authorized for issuance by the
Company under the Certificate from 25,000,000 shares to 50,000,000 shares.
As of April 12, 1999, the number of shares of Cubist Common Stock issued
or reserved for issuance totaled approximately 22,198,000. Thus out of the
25,000,000 shares currently authorized, Cubist has only approximately 2,802,000
shares of Common Stock available for future issuance.
The increase in authorized shares, in the opinion of the Board of
Directors of the Company, is desirable to provide the Company with the ability
to meet future business needs and opportunities. The increased number of
authorized shares will be available for issuance from time to time, without
further action or authorization by the stockholders (except as required under
applicable law or by an applicable national stock exchange or market), in
connection with potential acquisitions of other companies or for other corporate
purposes as determined by the Company's Board of Directors. These other purposes
might include raising additional capital funds through offerings of shares of
Cubist Common Stock, the issuance of shares of Cubist Common Stock in connection
with the declaration of stock dividends, and the issuance of shares in
connection with employee benefit plans and incentive compensation plans of
Cubist.
If such additional authorized shares are issued to persons other than
existing stockholders, the percentage interest of existing stockholders in the
Company will be reduced.
If the amendment is approved, as soon as practicable after the Meeting,
the Company will file with the Delaware Secretary of State's Office, a
Certificate of Amendment to the Company's Certificate reflecting the increase in
authorized shares.
Approval of this proposal requires the affirmative vote of the holders of
at least a majority of the outstanding shares of the Company's Common Stock.
Abstentions and broker "non-votes" have the effect of votes against this
proposal. If the proposal to ratify the amendment to the Certificate is not
approved at the Meeting, the Certificate, as previously adopted by the Board of
Directors and ratified by the shareholders, will remain in full force and
effect.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
Unless authority to do so is withheld, the persons named in each proxy will vote
the shares represented thereby "FOR" the ratification of the adoption and
approval by the Board of Directors of the amendment to the Certificate.
<PAGE>
-19-
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at the 2000
Annual Meeting of Stockholders of the Company must be received by the Company
not later than December 31, 1999, for inclusion in the Board of Directors' proxy
statement and form of proxy relating to the Meeting.
OTHER BUSINESS
Representatives of PricewaterhouseCoopers LLP are expected to be present
at the Meeting and will have the opportunity to make a statement if they desire
to do so and to respond to appropriate questions.
The Board of Directors knows of no other business to be acted upon at the
Meeting. However, if any other business properly comes before the Meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Meeting, please sign the proxy and return it in the enclosed envelope.
<PAGE>
-20-
[Back Cover]
[Code for Boston EquiServe]
1596PS99
<PAGE>
-21-
[FORM OF PROXY CARD]
CUBIST PHARMACEUTICALS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
1999 ANNUAL MEETING OF STOCKHOLDERS ON JUNE 1, 1999
The undersigned hereby appoints Scott M. Rocklage and Justin P. Morreale
and each of them proxies, each with power of substitution, to vote at the 1999
Annual Meeting of Stockholders of CUBIST PHARMACEUTICALS, INC. to be held on
June 1, 1999 (including any adjournments or postponements thereof), with all the
powers the undersigned would possess if personally present, as specified on the
ballot below on the matters listed below and, in accordance with their
discretion, on any other business that may come before the meeting, and revokes
all proxies previously given by the undersigned with respect to the shares
covered hereby.
Proposal No. 1: ELECTION OF DIRECTORS:
Nominees for Class III Directors:
Scott M. Rocklage, Ph.D.
Paul R. Schimmel, Ph.D.
John K. Clarke
Instruction:
To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below.
___ FOR all nominees listed above (except as withheld in the space below)
__________________________
(Name of nominee)
___ WITHHOLD AUTHORITY (to vote for nominee listed immediately above)
Proposal No. 2: APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF CUBIST COMMON STOCK
The Board of Directors recommends a vote FOR the proposal to: Approve the
amendment to the Corporation's Certificate of Incorporation to Increase the
Number of Authorized Shares of Cubist Common Stock.
___FOR ___AGAINST ___ABSTAIN
<PAGE>
-2-
This proxy when properly executed will be voted in the manner directed
herein by the stockholder. If no contrary specification is made, this proxy will
be voted FOR the election of the nominees of the Board of Directors and FOR the
ratification of adoption and approval of the amendment to the Corporation's
Certificate of Incorporation to increase the number of Cubist Common Stock and
upon such other business as may properly come before the meeting in the
appointed proxies' discretion.
Please date, sign as name appears below, and return this proxy in the
enclosed envelope, whether or not you expect to attend the meeting. You may
nevertheless vote in person if you do attend.
The undersigned hereby acknowledge(s) receipt of a
copy of the accompanying Notice of 1999 Annual
Meeting of Stockholders and related Proxy Statement
Date:_________________________, 1999
Please
Sign
Here:_____________________________________
__________________________________________
(Executors, administrators, trustees, custodians,
etc., should indicate capacity in which signing.
When stock is held in the name of more than one
person, each person should sign the proxy.)
