<PAGE> 1
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
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Guilford Pharmaceuticals Inc.
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(Name of Registrant as Specified In Its Charter)
Guilford Pharmaceuticals Inc.
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(Name of Person(s) Filing Proxy Statement)
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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1/
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4) Proposed maximum aggregate value of transaction:
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1/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Notes:
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<PAGE> 2
GUILFORD PHARMACEUTICALS INC.
6611 TRIBUTARY STREET
BALTIMORE, MARYLAND 21224
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH __, 1997
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Special Meeting") of Guilford Pharmaceuticals Inc. ("Guilford" or the
"Corporation") will be held on _______, March __, 1997 at 10:00 a.m. (Eastern
time) at the Corporation's headquarters located at 6611 Tributary Street,
Baltimore, Maryland, for the following purpose:
To consider and act upon an amendment to the Corporation's Amended and
Restated Certificate of Incorporation increasing the authorized number
of shares of common stock from 20,000,000 to 40,000,000.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE REQUESTED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED STAMPED ENVELOPE. THIS WILL NOT LIMIT YOUR RIGHT TO ATTEND OR VOTE AT
THE MEETING.
By Order of the Board of Directors
/s/ Thomas C. Seoh
-----------------------------------
THOMAS C. SEOH
Vice President, General Counsel
and Secretary
Baltimore, Maryland
_______ __, 1997
<PAGE> 3
GUILFORD PHARMACEUTICALS INC.
6611 TRIBUTARY STREET
BALTIMORE, MARYLAND 21224
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
MARCH __, 1997
GENERAL
This Proxy Statement is being furnished on or about _________, 1997,
to the stockholders of Guilford Pharmaceuticals Inc. (the "Corporation" or
"Guilford"), in connection with the solicitation of proxies by the Board of
Directors of the Corporation to be voted at a Special Meeting of Stockholders
of the Corporation (the "Special Meeting") to approve an amendment to the
Company's Amended and Restated Certificate of Incorporation to increase the
number of shares of Common Stock authorized for issuance thereunder from
20,000,000 shares to 40,000,000 shares (the "Amendment"). The Special Meeting
will be held on _______, March __, 1997 at 10:00 a.m. (Eastern time) at the
Corporation's headquarters located at 6611 Tributary Street, Baltimore,
Maryland. The stockholder giving the proxy has the power to revoke the proxy
at any time before it is exercised. Such right of revocation is not limited by
or subject to compliance with any former procedures and any adjournment
thereof.
The cost of soliciting proxies will be borne by the Corporation.
Copies of solicitation material may be furnished to brokers, custodians,
nominees and other fiduciaries for forwarding to beneficial owners of shares of
the Corporation's Common Stock, and normal handling charges may be paid for
such forwarding services. Solicitation of proxies will be made by mail, in
person, telephone, telecopier or other means by the proxy solicitation firm of
D. F. King & Co., Inc. at an anticipated cost of $5,000. Solicitation of
proxies may also be made by the Corporation by mail, in person, telephone,
telecopier or other means by officers and other management employees of the
Corporation, who will receive no additional compensation for their services.
The Board of Directors has fixed the close of business on February __,
1997 as the record date (the "Record Date") for the determination of
stockholders entitled to vote at the Special Meeting. At that date, there were
14,029,582 shares of Common Stock of the Corporation outstanding and entitled
to vote at the meeting. Each share will have one vote. All share amounts and
per share prices set forth in this Proxy Statement, including the share amounts
set forth in the Beneficial Ownership Table below, have been restated to
reflect a 3-for-2 split of the Corporation's Common Stock effected on November
12, 1996.
<PAGE> 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of February 14, 1997, of each person
known by the Corporation to be the beneficial owner of more than five percent
of the outstanding Common Stock, the Corporation's Chief Executive Officer and
certain executive officers, each of the directors of the Corporation, and all
officers and directors of the Corporation as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES BENEFICIALLY PERCENTAGE
OF BENEFICIAL OWNERS OWNED (1) OWNERSHIP
-------------------- --------------------- ---------
<S> <C> <C>
Scios Inc. .............................................. 1,450,000 10.3%
2450 Bayshore Parkway
Mountain View, CA 94043
The Abell Foundation, Inc. .............................. 937,500(2) 6.3%
111 South Calvert Street
Baltimore, MD 21202
FMR Corp. ............................................... 738,250(3) 5.3%
82 Devonshire Street
Boston, Massachusetts 02109
Arnold H. Snider
Deerfield Capital, L.P.. ............................. 703,575(4) 5.0%
Deerfield Management Company ......................... 46,425(4) 0.3%
450 Lexington Avenue, Suite 1930
New York, NY 10017
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202 ............................ 813,450(5) 5.8%
Craig R. Smith, M.D...................................... 460,897(6) 3.3%
Andrew R. Jordan......................................... 188,109(7) 1.3%
John P. Brennan.......................................... 120,234 *
Ross S. Laderman......................................... 54,038 *
Earl W. Henry............................................ 45,170(8) *
Solomon H. Snyder, M.D. ................................. 605,217(9) 4.3%
Richard L. Casey ........................................ 1,519,900(10) 10.8%
George L. Bunting, Jr. .................................. -- --
Elizabeth M. Greetham.................................... 225,950(11) 1.6%
W. Leigh Thompson, M.D., Ph.D. .......................... 15,000 *
All directors and officers as a group (13 persons) ...... 3,283,378 22.9%
</TABLE>
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* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of the Corporation's
Common Stock subject to options or warrants currently exercisable within
60 days of February 14, 1997 are deemed outstanding for purposes of
computing the percentage ownership of the person holding such option or
warrant but are not deemed outstanding for purposes of computing the
percentage ownership of any other person. Except where indicated
otherwise, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power
with respect to all shares of the Corporation's Common Stock shown as
beneficially owned by them.
2
<PAGE> 5
(2) Consists of 750,000 shares of Common Stock which the Abell Foundation has
the right to acquire pursuant to an agreement with the Corporation in
addition to 187,500 shares held directly.
(3) A Schedule 13G was filed by this holder on February 14, 1997 disclosing
that various persons have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the
Common Stock.
(4) Based on a Schedule 13D dated July 16, 1996, Arnold H. Snider has reported
beneficial ownership of 750,000 shares of Common Stock, 703,575 of which
are held by Deerfield Capital, L.P. ("DCLP"), and 46,425 of which are held
by Deerfield Management Company ("DMC"). According to the Schedule 13D,
Mr. Snider is the President, Director and sole shareholder of Snider
Capital Corp., which is the general partner of DCLP, and the President,
Director and sole shareholder of Snider Management Corporation, which is
the general partner of DMC.
(5) These securities are owned by various individual and institutional
investors including the T. Rowe Price New Horizons Fund, Inc. (which
owns 700,500 shares of Common Stock representing 5.0% of the shares
outstanding as of February 14, 1997), which T. Rowe Price Associates, Inc.
("Price Associates") serves as investment advisor with the power to direct
investments and/or sole power to vote securities. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities, however,
Price Associates expressly disclaims that it is in fact, the beneficial
owner of such securities.
(6) Includes 1,578 shares of Common Stock and options to acquire 3,583 shares
of Common Stock held by Dr. Smith's spouse, an employee of the
Corporation. Dr. Smith disclaims beneficial ownership of the securities
held by his spouse.
(7) Includes 900 shares owned by a child sharing Mr. Jordan's household, of
which Mr. Jordan disclaims beneficial ownership.
(8) Includes 9,375 shares of Common Stock and options to acquire 719 shares of
Common Stock held by Dr. Henry's wife, an employee of the Corporation.
Dr. Henry disclaims beneficial ownership of the securities held by his
spouse.
(9) Does not include 1,450,000 shares owned by Scios. Dr. Snyder is a member
of the Board of Directors of Scios and may be deemed to have shared voting
and investment power over these shares. Dr. Snyder disclaims beneficial
ownership of the shares owned by Scios.
(10) Mr. Casey is an executive officer and Chairman of the Board of Directors
of Scios. He may be deemed to have voting and investment power over the
shares held by Scios. Mr. Casey disclaims beneficial ownership of these
shares. Mr. Casey has direct ownership over an additional 9,900 shares
and options to acquire 60,000 shares exercisable within 60 days of
February 14, 1997.
(11) Represents shares held by WPG-Life Sciences Fund, L.P. (the "Fund") and
WPG-Institutional Life Sciences Fund, L.P. (the "Institutional Fund").
Ms. Greetham serves as Portfolio Manager of both the Fund and the
Institutional Fund. Ms. Greetham is a controlling person of Libracorn
Financial Consultants ("Libracorn"), a limited partner of the Fund which,
through its interest in the Fund, has a 1.80% interest in the shares held
by the Fund. Ms. Greetham disclaims beneficial ownership of the shares
held by the Fund and the Institutional Fund except to the extent of her
beneficial interest through Libracorn.
PROPOSAL TO AMEND THE CORPORATION'S AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Corporation has approved, declares it
advisable and in the best interests of the Corporation and its stockholders,
and recommends that the first sentence of Article Fourth of the Corporation's
Amended and Restated Certificate of Incorporation be amended to increase the
authorized shares of Common Stock from 20,000,000 to 40,000,000. The text of
the Amendment is as follows:
FOURTH: The total number of shares of all
classes of stock the Corporation shall have authority
to issue is Forty-Five Million (45,000,000) shares
consisting of Forty Million (40,000,000) shares of
common stock, par value $.01 per share, and Five
Million (5,000,000) shares of preferred stock, par
value $.01 per share.
3
<PAGE> 6
As of February 13, 1997, there were 14,029,582 shares of Common Stock
outstanding. In addition, as of February 13, 1997, options to purchase
1,692,433 shares were outstanding under the 1993 Employee Share Option and
Restricted Share Plan, as amended, options to purchase 97,500 shares were
outstanding under the Corporation's Directors' Stock Option Plan, and options
to purchase another 685,000 shares were outstanding outside of either of these
two plans. As of February 13, 1997, certain Common Stock put/call rights
were outstanding for 750,000 shares of the Corporation's Common Stock and an
additional 312,934 shares of Common Stock of the Corporation are issuable upon
exercise of outstanding warrants. Thus, at February 13, 1997, the Corporation
had outstanding or reserved for issuance 17,567,449 shares of Common Stock.
The authorization of an additional 20,000,000 shares of Common Stock
would give the Board the express authority, without further action of the
Corporation's stockholders, to issue such shares of Common Stock from time to
time as the Board deems necessary or advisable. The Corporation expends
substantial funds on research and development and other commercialization
activities, including possible expansion and development of manufacturing
capacity, conduct of preclinical studies and clinical trials of product
candidates, marketing activities and administrative support of these
activities. In the near future, the Corporation expects to seek additional
equity financing to fund a portion of such research and development and other
commercialization activities. There can be no assurance that the Corporation
will receive commitments for such financing on terms acceptable to it. Such
financing may require the issuance of a portion of the additional shares of
Common Stock to be authorized by the Amendment, although the actual number of
shares issued will depend on, among other things, the structure of any such
financing and future market conditions, neither of which can be predicted at
this time. The Board believes that having the additional shares authorized and
available for issuance will allow the Corporation to have greater flexibility
in considering potential future actions involving the issuance of stock which
may be desirable or necessary to accommodate the Corporation's business plan,
including capital raising transactions. In addition, the Board believes it is
necessary to have the ability to issue such additional shares for general
corporate purposes. Such general corporate uses of the additional authorized
shares of Common Stock may include issuance of shares in connection with
corporate partnering transactions with other companies for the development
and/or commercialization of the Corporation's technologies, acquisition
transactions, stock dividends or distributions, and distributions in connection
with future issuance of Preferred Stock of the Corporation, stock options or
warrants, or in connection with exercise of rights under the Corporation's
Shareholders' Rights Plan. In any case, the additional shares of Common Stock
would be available for issuance by the Board without future action by the
stockholders, unless such action were specifically required by applicable law
or rules of any stock exchange on which the Corporation's securities may be
traded.
Although the proposed increase in the authorized capital stock of the
Corporation could be construed as having anti-takeover effects, neither the
Board nor management of the Corporation views this proposal in that
perspective. Nevertheless, the Corporation could use the additional shares to
frustrate persons seeking to effect a takeover or otherwise gain control of the
Corporation by, for example, privately placing shares to purchasers who might
side with the Board in opposing a hostile takeover bid. The Corporation is not
aware of any such hostile takeover bid a this time. In addition, shares of
Common Stock may be issued in the event that the rights issued in connection
with the Corporation's Stockholders' Rights Plan are exercised. Shares of
Common Stock could also be issued to a holder that would thereafter have
sufficient voting power to assure that any proposal to amend or repeal the
By-Laws of the Corporation or certain provisions of the Corporation's Amended
and Restated Certificate of Incorporation would not receive the requisite vote
required. Such uses of the Common Stock could render more difficult or
discourage an attempt to acquire control of the Corporation, if such
transactions were opposed by the Board. Further, an issuance of additional
shares by the Corporation could have the effect on the potential realizable
value of a stockholder's investment in the Corporation. In the absence of a
proportionate increase in the Corporation's earnings and book value, an
increase in the aggregate number of outstanding shares of Common Stock would
dilute the earnings per share and book value per share of all outstanding
shares of the Corporation's Common Stock. The foregoing factors, if reflected
in the price per share of Common Stock, could adversely affect the realizable
value of a stockholder's investment in the Corporation.
4
<PAGE> 7
The affirmative vote of a majority of all shares of the Corporation's
Common Stock outstanding on the Record Date is required for approval of the
Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE CORPORATION'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION INCREASING
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 SHARES TO
40,000,000 SHARES.
VOTING PROCEDURES
Shares can be voted only if the stockholder is present in person or by
proxy. Whether or not you plan to attend in person, you are encouraged to sign
and return the enclosed proxy card. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before its use
by delivering to the Secretary of the Corporation at the above address a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the meeting and voting in person. The representation in person or
by proxy of at least a majority of the outstanding shares entitled to vote is
necessary to provide a quorum at the meeting.
Abstentions and "non-votes" are counted as present in determining
whether the quorum requirement is satisfied. Abstentions and "non-votes" are
treated as votes against the Amendment.
By Order of the Board of Directors
/s/ Thomas C. Seoh
----------------------------------
THOMAS C. SEOH
Vice President, General Counsel
and Secretary
Baltimore, Maryland
_______ __, 1997
5
<PAGE> 8
REVOCABLE PROXY
GUILFORD PHARMACEUTICALS INC.
SPECIAL MEETING OF STOCKHOLDERS MARCH __, 1997
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder hereby appoints Craig R. Smith, M.D.,
Andrew R. Jordan and Thomas C. Seoh, or any of them, attorneys and proxies of
the undersigned, with full power of substitution and with authority in each of
them to act in the absence of the other, to vote and act for the undersigned at
the Special Meeting of Stockholders of the Corporation to be held on _______,
March __, 1997 at 10:00 a.m. (Eastern time) at the Corporation's headquarters
located at 6611 Tributary Street, Baltimore, Maryland, and at any adjournments
thereof, in respect of all shares of the Common Stock of the Corporation which
the undersigned may be entitled to vote, on the following matter:
Approval of an amendment to the Corporation's Amended and
Restated Certificate of Incorporation increasing the
authorized number of shares of Common Stock from 20,000,000 to
40,000,000:
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
(Continued and to be dated and signed on reverse
side.)
6
<PAGE> 9
(continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. HOWEVER, IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE PROPOSED AMENDMENT TO THE CORPORATION'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK FROM 20,000,000 TO 40,000,000.
The undersigned hereby acknowledges prior receipt of a copy of the
Notice of Special Meeting of Stockholders and proxy statement dated __________
__, 1997, and hereby revokes any proxy or proxies heretofore given. This Proxy
may be revoked at any time before it is voted by delivering to the Secretary of
the Corporation either a written revocation of proxy or a duly executed proxy
bearing a later date, or by appearing at the Special Meeting and voting in
person.
If you receive more than one proxy card, please sign and return all
cards in the accompanying envelope.
[ ] I PLAN TO ATTEND THE MARCH __, 1997 SPECIAL STOCKHOLDERS MEETING
Date: , 1997.
--------------------------
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Signature of Stockholder or Authorized
Representative
Please date and sign exactly as name
appears hereon. Each executor,
administrator, trustee, guardian,
attorney-in-fact and other fiduciary
should sign and indicate his or her full
title. In the case of stock ownership
in the name of two or more persons, both
persons should sign.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO ENSURE A QUORUM
AT THE MEETING. IT IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. DELAY IN
RETURNING YOUR PROXY MAY SUBJECT THE CORPORATION TO ADDITIONAL EXPENSE.
7
