(Company logo)
TRIPOS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 9, 1997
To Our Shareholders:
The Annual Meeting of Shareholders of Tripos, Inc. (the
"Company") will be held at the World Trade Center St. Louis, 121 S.
Meramec, 10th Floor, Clayton, Missouri, 63105 at 1:00 p.m. local
time on May 9, 1997 for the following purposes:
1. To elect directors to serve for the ensuing year or until
their successors are elected;
2. To amend the 1994 Stock Option Plan to increase the number
of shares reserved thereunder from 704,000 to 1,100,000 shares;
3. To act upon such other business as may properly come before the
Annual Meeting or at any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 4,
1997 as the record date for determining those shareholders who
will be entitled to notice of and to vote at the Annual Meeting.
Representation of at least a majority of all outstanding shares
of Common Stock of the Company is required to constitute a quorum.
Accordingly, it is important that your shares be represented at the
meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT
IN THE ENCLOSED ENVELOPE. You may revoke your proxy at any time
prior to the time it is voted. If you attend the Annual Meeting and
vote by ballot, your proxy will be revoked automatically and only
your vote at the Annual Meeting will be counted.
Sincerely,
Colleen A. Martin
Corporate Secretary
St. Louis, Missouri
April 9, 1997
Shareholders Should Read the Entire Proxy Statement
Carefully Prior to Returning Their Proxy Forms
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS OF
TRIPOS, INC.
To Be Held May 9, 1997
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Tripos, Inc. ("Tripos" or
the "Company") of proxies to be voted at the Annual Meeting of
Shareholders which will be held at 1:00 p.m. local time on May 9,
1997 at the World Trade Center St. Louis, 121 S. Meramec, 10th
Floor, Clayton, Missouri 63105, or at any adjournments or
postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. This Proxy
Statement and the accompanying proxy form are first being mailed to
shareholders on or about April 9, 1997.
VOTING RIGHTS AND SOLICITATION
The close of business on April 4, 1997 was the record date for
shareholders entitled to notice of and to vote at the Annual
Meeting. As of that date, Tripos had 3,049,175 shares of Common
Stock, $.01 par value per share (the "Common Stock"), issued and
outstanding. All of the shares of the Company's Common Stock
outstanding on the record date are entitled to vote at the Annual
Meeting, and shareholders of record entitled to vote at the meeting
will have one (1) vote for each share so held on the matters to be
voted upon.
Shares of the Company's Common Stock represented by proxies in
the accompanying form that are properly executed and returned to
Tripos will be voted at the Annual Meeting of Shareholders in
accordance with the shareholders' instructions contained therein.
In the absence of contrary instructions, shares represented by such
proxies will be voted FOR the election of each of the directors as
described herein under "Proposal 1 -- Election of Directors" and FOR
the amendment to the 1994 Stock Option Plan as described herein
under "Proposal 2 -- Amendment to the 1994 Stock Option Plan".
Management does not know of any matters to be presented in this
Annual Meeting other than those set forth in this Proxy Statement
and in the Notice accompanying this Proxy Statement. If other
matters should properly come before the meeting, the proxy holders
will vote on such matters in accordance with their best judgment.
Any shareholder has the right to revoke his or her proxy at any time
before it is voted. A majority of the outstanding shares of Common
Stock, present in person or by proxy, will constitute a quorum for
the transaction of business at the Annual Meeting. The affirmative
vote of a plurality of the shares present, in person or by proxy, at
the Annual Meeting, is required to elect directors. "Plurality"
means that the nominees who receive the largest number of votes cast
are elected as directors up to the maximum number of directors to be
elected at the Annual Meeting. Consequently, any shares represented
at the Annual Meeting but not voted for any reason, have no impact
on the election of directors. The affirmative vote of the holders
of a majority of the shares which are present in person or by proxy
at the Annual Meeting is required to approve Proposal 2 and to act
on any other matters properly brought before this meeting. Shares
represented by proxies which are marked "withhold authority" with
respect to the election of any one or more of the nominees for
election of directors will be counted for the purpose of determining
the number of shares represented by proxy at the meeting. Such
proxies will thus have the same effect as if the shares represented
thereby were voted against such nominee or nominees. If no
specification is made on a duly executed proxy, the proxy will be
voted FOR election of the directors nominated by the Board of
Directors and FOR Proposal 2. Abstentions and broker non-votes are
each included in the determination of the number of shares present
for quorum purposes. Abstentions are counted in tabulations of the
votes cast on proposals presented to shareholders, whereas broker
non-votes are not counted for purposes of determining whether a
proposal has been approved.
The entire cost of soliciting proxies will be borne by Tripos.
Proxies will be solicited principally through the use of the mails,
but, if deemed desirable, may be solicited personally or by
telephone, telefax or special letter by officers and regular Tripos
employees for no additional compensation. The Board of Directors of
the Company has engaged Boatmen's Trust Company to provide routine
advice and services and D.F. King & Co., Inc. to assist in the
solicitation proxies for an estimated fee of $5,000 plus expenses.
Arrangements have been made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy
materials to the beneficial owners of the Company's Common Stock,
and such persons shall be reimbursed for their reasonable expenses.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be considered at the 1998
Annual Meeting of Shareholders must be received by Tripos no later
than December 5, 1997. The proposal must be mailed to the Company's
principal executive offices, 1699 South Hanley Road, St. Louis,
Missouri 63144, Attention: Corporate Secretary. Such proposals may
be included in next year's proxy statement if they comply with
certain rules and regulations promulgated by the Securities and
Exchange Commission.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL 1:
ELECTION OF DIRECTORS
The nominees for the Board of Directors are set forth below.
The proxy holders intend to vote all proxies received by them in the
accompanying form for the nominees for directors listed below. In
the event any nominee is unable or declines to serve as a director
at the time of the Annual Meeting, either the size of the Board will
be reduced or the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy.
In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by
them for the nominees listed below. As of the date of this Proxy
Statement, the Board of Directors is not aware of any nominee who is
unable or will decline to serve as a director. The directors will
serve for a one year term, or until their respective successors are
duly elected and qualified. Directors are elected by a plurality of
the votes present in person or represented by proxy and entitled to
vote at the meeting.
Nominees to Board of Directors
Name Director Age Name Director Age
Since Since
Ralph S. Lobdell 1994 53 Alfred Alberts 1997 65
Stewart Carrell 1994 63 John P. McAlister,III 1994 48
Gary Meredith 1996 62 Ferid Murad 1996 60
Ralph S. Lobdell has served as Chairman of the Board of
Directors of the Company since June 1994. Mr. Lobdell received his
Bachelor of Science degree from the U.S. Naval Academy in 1965 and
his Master of Business Administration from Stanford University in
1972. Mr. Lobdell worked for First Chicago Corporation from 1972
through 1977, initially on the parent company staff and then its
venture capital subsidiaries. In 1977, Mr. Lobdell joined Abbott
Laboratories in Chicago as Manager of Corporate Planning and
Development. Mr. Lobdell worked for the Harbour Group, a St. Louis
based investment company, from 1979 to 1991 and was appointed
President in 1987. He served on the Board of Directors of virtually
all of Harbour's portfolio companies acquired during his tenure.
Alfred Alberts was named a Director of the Company in February
1997. Mr. Alberts is currently serving on the Board of Directors of
Inflazyme Pharmaceuticals, Ltd., Vancouver, and is a scientific
consultant to several major pharmaceutical companies. He served as
the Vice President of Biochemistry and Natural Product Discovery at
Merck Research Laboratories prior to his retirement in 1995. Prior
to joining Merck, Mr. Alberts was a member of the faculty of the
Department of Biochemistry at Washington University, St. Louis. Mr.
Alberts has co-authored six patents and received several prestigious
awards including the Thomas Alva Edison Award as well as an Honorary
Doctor of Science degree from the University of Maryland.
Stewart Carrell has been a Director of the Company since May
1994. He currently serves as Chairman of the Board of Directors of
Evans & Sutherland Computer Corporation. Until October 1993, he was
Chairman and Chief Executive Officer of Diasonics, Inc., a medical
imaging company. From November 1983 to 1987, he was also a General
Partner of Hambrecht & Quist, an investment banking and venture
capital firm. Prior to November 1983, Mr. Carrell was employed for
25 years by Texas Instruments in various capacities, the most recent
of which was Executive Vice President. Mr. Carrell also serves as
Chairman of Seattle Silicon Corporation.
Dr. John P. McAlister, III has served as Chief Executive
Officer and Director since May 1994. Dr. McAlister obtained his
B.S. in Chemistry from Tarleton State College in 1971 and his Ph.D.
in Biochemistry and X-Ray Crystallography from the University of
Wisconsin, Madison, in 1978. After a two-year post-doctoral
appointment, Dr. McAlister joined the staff of the Computer Systems
Laboratory at Washington University, St. Louis, in 1980, where he
served first as Associate Director of the MMS-X National
Collaborative Research Program and then as Research Associate in
Computer Science. Dr. McAlister began working for Tripos in 1982
under contract to supervise software development for molecular
graphics applications. In 1984, he joined Tripos as Director of
Software Research and Development. In 1987, Dr. McAlister was named
Vice President, Research and Development, and in 1988 was promoted
to President.
Gary Meredith was appointed a Director of the Company in
January 1996. He currently serves as Senior Vice President and
Secretary of Evans & Sutherland Computer Corporation ("E&S"). Mr.
Meredith has been with E&S for nineteen years where he has held
several positions including Assistant to the President, VP-
Administration, President-Interactive Systems Division, VP-
Development, and Chief Financial Officer. Prior to joining E&S, he
was President of Interwest General Corporation and Windsor
Industries. Mr. Meredith also was Chairman and President of Reid-
Meredith, Inc., a company he founded in 1962. Mr. Meredith received
his B.S. degree from Brigham Young University. In addition to his
position on the Board of Directors of Tripos, Mr. Meredith is a
Director of Blue Cross/Blue Shield of Utah and Strata, Inc.
Dr. Ferid Murad was appointed a Director of the Company in
November 1996. Dr. Murad received his M.D. and Ph.D. from Western
Reserve University. Dr. Murad is the former Vice President of
Pharmaceutical Research and Development at Abbott Laboratories, and
formerly, the President and CEO of Molecular Geriatrics Corporation,
a bio-pharmaceutical company. Dr. Murad has held a number of
notable positions during his career including Chairman of the
Department of Medicine at Stanford University, Chief of Medicine at
Palo Alto Veterans Administration Hospital, and Director of Clinical
Research at the University of Virginia School of Medicine. Dr.
Murad was the 1996 recipient of the prestigious Albert Lasker
Medical Research award for achievement in medical science.
Dr. Robert Pearlman The Board of Directors regretfully accepted
the resignation of board member Professor Robert Pearlman of the
University of Texas in November 1996. As an important scientific
and commercial collaborator with Tripos, Professor Pearlman believed
that his board position might be inconsistent with the University of
Texas conflict of interest policy. Professor Pearlman will continue
to serve as a scientific advisor and will continue his strong
collaborative product development relationship with Tripos.
There are no family relationships among executive officers or
directors of the Company. No related party transactions occurred
between the Company and any of the directors or their affiliates.
Board Meetings and Committees
During the fiscal year ended December 31, 1996, the Board of
Directors of the Company held a total of nine (9) meetings. During
this period, each director attended or participated in all of (i)
the meetings of the Board that were held while they were members and
(ii) the meetings held by all committees of the Board of which they
were members.
The Company has an Audit Committee, a Compensation Committee,
an Executive Committee, and a Technical Review Committee of the
Board of Directors. There is no nominating committee or committee
performing the functions of such committee.
The Audit Committee meets with the Company's financial
management and its independent accountants at various times during
each year and reviews internal control conditions, audit plans and
results, and financial reporting procedures. This Committee,
consisting of Stewart Carrell, Ralph Lobdell, Gary Meredith, Ferid
Murad and formerly, Robert Pearlman, held two (2) meetings during
fiscal 1996. Alfred Alberts will join the Audit Committee at its
next meeting.
The Compensation Committee reviews and approves the Company's
compensation arrangements for management. This Committee,
consisting of Ralph Lobdell, Stewart Carrell, Gary Meredith, Ferid
Murad, and formerly, Robert Pearlman, held two (2) meetings during
fiscal 1996. Alfred Alberts has been added to the Compensation
Committee.
The Executive Committee receives investment proposals from
within and without the Company and decides whether they merit
consideration. This Committee, consisting of Ralph Lobdell, Stewart
Carrell, Gary Meredith, Ferid Murad, and formerly, Robert Pearlman,
held five (5) meetings during fiscal 1996. Alfred Alberts has
joined the Executive Committee.
The Technical Review Committee reviews and approves the
mechanisms by which scientific and software development decisions
are made by the Company. This Committee, consisting of John
McAlister, Ferid Murad, Robert Pearlman, as a scientific advisor,
and several key employees, did not meet during fiscal 1996. Alfred
Alberts will join the Technical Review Committee at its next
meeting.
Director Remuneration
Non-employee members of the Board, except for Mr. Lobdell, are
each paid an annual retainer of $10,000, and are reimbursed for all
out-of-pocket costs incurred in connection with their attendance at
all Board meetings and applicable committee meetings. The annual
retainer is paid quarterly in the form of 50% cash and 50% stock
valued at the then market rate. Employee members of the Board
receive no additional compensation for their service on the Board.
Under the Tripos, Inc. 1994 Director Option Plan, an individual
who first becomes a non-employee member of the Board will receive an
automatic option grant for 10,000 shares of the Company's Common
Stock upon commencement of Board service, and each individual with
six or more months of Board service will receive an automatic option
grant for an additional 2,500 shares on January 1 of each year.
Options issued under the Tripos, Inc. 1994 Director Option Plan
become exercisable at a rate of twenty-five percent (25%) of the
shares under such option on each anniversary of the grant of the
option. There are 300,000 shares reserved for issuance of options
under the 1994 Director Option Plan, as amended. The exercise price
for the options granted under the 1994 Directors Option Plan is
equal to the fair market value of the Common Stock as of the last
trading day immediately prior to the date the option is granted.
The options have a term of ten years. However, each option
automatically terminates 90 days after the optionee ceases to be a
director of the Company except by reason of the optionee's death,
disability, or employment by the Company or a subsidiary, and
terminates within twelve (12) months after the occurrence of one of
these stated events.
Dr. Ferid Murad, receives a $1,000 fee for his role as Chairman
of the Technical Review Committee for every meeting he attends, and
is reimbursed for all out-of pocket costs incurred with his
attendance at such meetings.
Mr. Ralph Lobdell receives an annual retainer of $25,000 as
Chairman of the Board for the Company, in lieu of the $10,000 annual
retainer received by other non-employee Board members, and is
reimbursed for all out-of-pocket expenses related to attendance at
meetings of the Board of Directors. Mr. Lobdell's annual retainer
is paid quarterly in the form of 50% cash and 50% stock valued at
the then market rate. The Board of Directors awarded a bonus to Mr.
Lobdell based on the results of 1996 in the amount of $25,000, which
was paid in 1997 in the form of 50% cash and 50% stock.
No other compensation is paid to the non-employee members of
the Board with respect to service on the Board.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote
FOR the election of each of the above nominees.
PROPOSAL 2:
AMENDMENT TO THE 1994 STOCK OPTION PLAN
The Board of Directors of the Company adopted an amendment to
the 1994 Stock Option Plan (the "1994 Plan") on March 17, 1997, and
directed that the amendment be submitted to the shareholders of the
Company for their approval. At the Annual Meeting, the shareholders
are being asked to approve an amendment to the Company's existing
1994 Plan to increase the maximum aggregate number of shares which
may be optioned and sold under the Plan from seven hundred four
thousand (704,000) to one million one hundred thousand (1,100,000).
The 1994 Plan is intended to provide additional compensation
and incentive to key employees whose present and potential
contributions are important to the continued success of the Company,
to afford such employees an opportunity to acquire a proprietary
interest in the Company and to enable the Company to continue to
attract and retain the best available talent.
General. The 1994 Plan was adopted in March 1994 and became
effective upon such date. The 1994 Plan provides for the grant of
nonstatutory stock options to employees of the Company pursuant to a
discretionary grant mechanism.
Administration. The 1994 Plan is designed to work as an incentive
performance plan. Options are granted by the President, with the
approval of the Compensation Committee of the Board of Directors,
typically annually or upon promotions of key individuals.
Eligibility. Only employees or consultants to the Company are
eligible under the 1994 Plan. Currently, eighty-eight (88)
employees participate in the 1994 Plan.
Terms of Options. The exercise price of options granted to
employees must be 100% of the fair market value of the Tripos Common
Stock on the date of the grant. The consideration for exercising
options granted to employees may only consist of cash, check,
previously owned shares of Tripos Common Stock or cashless exercise.
Options granted to the employees have a ten year term, or shorter
upon termination of their tenure as an employee. Options granted to
the employees vest at the rate of 25% on the first anniversary of
the grant and 1/48th per month for the next 36 months. Outstanding
options will expire on the earlier of ten years from the date of
grant or 90 days after the employee receiving the grant ceases to be
employed by the Company.
Adjustment Upon Changes in Capitalization. In the event any change
is made in the Company's capitalization, such as a stock split or
stock dividend, which results in a greater or lesser number of
shares of Tripos Common Stock, appropriate adjustment shall be made
in the option price and in the number of shares subject to the
options. In the event of the proposed dissolution or liquidation of
the Company, to the extent that an option or right has not been
previously exercised, it will terminate immediately prior to the
consummation of such proposed action. In the event of the merger or
sale of substantially all of the assets of the Company, all
outstanding options shall be assumed or substituted by the successor
corporation, or if they are not assumed or substituted, they shall
become fully vested unless the Board of Directors determines
otherwise.
Amendment and Termination. The Board of Directors may amend the
1994 Plan at any time or may terminate it without approval of the
shareholders. However, no such action by the Board of Directors may
unilaterally alter or impair any option previously granted under the
1994 Plan without the consent of the optionee. In any event, the
1994 Plan will terminate in March 2004.
Federal Income Tax Implications. All options granted under the 1994
Plan are granted at the market price on the date of the grant. As a
result, no Federal income tax is due upon the receipt of the grant
by the employee. Federal taxes will apply at the time the employee
recognizes a gain from the exercise and sale of the underlying
shares.
Reserve - Number of Shares Available. Seven hundred four thousand
shares of Common Stock are currently reserved for issuance pursuant
to the 1994 Plan. As of December 31, 1996, options to purchase
704,000 shares of Common Stock had been granted, of which, options
for 101,810 shares had been exercised. Without taking into account
this proposed amendment to increase the maximum aggregate number of
shares, no shares remained available for future grants as of
December 31, 1996. The amendment to the 1994 Plan will increase the
number of shares of Common Stock available for issuance pursuant to
the 1994 Plan from 704,000 to 1,100,000.
Recommendation of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR the
amendment to the 1994 Stock Option Plan.
OWNERSHIP OF SECURITIES
The following table sets forth, as of the Record Date, the name
of each person who owns of record or is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock,
the number of shares owned by all directors, the executive officers
named in the Summary Compensation Table (the "Named Executive
Officers") and all directors and executive officers as a group, and
the percentage of the outstanding shares represented thereby. The
Company believes that each of the directors and executive officers
has sole voting and investment power over such shares of Common
Stock.
Holders of More than 5%
Amount and
Nature of (1)
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
State of Wisconsin 278,334 (2) 9.1%
Investment Board
P.O. Box 7842
Madison, Wisconsin 53707
J.P. Morgan & Co., Inc. 233,400 (2) 7.7%
60 Wall Street 371,101 (3)
New York, New York 10260
Vanguard//PRIMECAP Fund, Inc. 155,000 (2) 5.1%
P.O. Box 2600
Valley Forge, Pennsylvania 19482
FMR Corporation 127,300 (2) 4.2%
82 Devonshire 201,000 (3)
Boston, Massachusetts 02109
Directors and Named Executive Officers:
Amount and
Nature of (1)
Name of Beneficial Owner Beneficial Percent
Ownership of Class
Ralph S. Lobdell 25,453 *
Alfred Alberts - -
Stewart Carrell 12,240 *
Gary Meredith 2,865 *
John P. McAlister III 65,639 2.2%
Ferid Murad 50 *
Richard D. Cramer III 41,682 1.4%
W. Ward Davidson III 24,784 *
Mark W. Schwartz 24,659 *
All directors and named
executive officers as a
group (9 persons) 197,372 6.5%
* Less than one percent of the outstanding Common Stock.
(1) Percentage of beneficial ownership is calculated assuming
3,049,175 shares of Common Stock were outstanding on April 4, 1997.
This percentage also includes Common Stock of which such individual
or entity has the right to acquire beneficial ownership within sixty
days of April 4, 1997, including but not limited to the exercise of
an option; however, such Common Stock shall not be deemed
outstanding for the purpose of computing the percentage owned by any
other individual or entity. Such calculation is required by Rule
13d-3(d)(1)(i) under the Securities Exchange Act of 1934.
(2) This information is based on Schedules 13G filed with the
Securities and Exchange Commission (the "SEC"). The reporting
entity attests that they have sole voting and investment power over
their reported shares of Common Stock.
(3) This information is based on Schedules 13G filed with the SEC.
The reporting entity attests that they have sole dispositive power
over their reported shares of Common Stock.
MANAGEMENT
Set forth below is certain information with respect to additional
executive officers and key employees of the Company not listed in
"Election of Directors":
Name Age Title
Martin Bohl 54 Vice President, European Operations
Richard D. Cramer, III 55 Vice President, Scientific Activities
W. Ward Davidson, III 56 Vice President, Sales
Robert C. Glen 43 Vice President, Collaborative
Discovery Services
John R. Hurst 40 Vice President, Discovery
Software Science
Scott G. Hutton 36 Vice President, Marketing
Colleen A. Martin 36 Vice President, Chief Financial Officer,
Secretary
James H. Munn 44 European Controller
David E. Patterson 45 Senior Fellow
Mark W. Schwartz 41 Vice President, Accelerated
Discovery Services
Gregory B. Smith 37 Fellow
Martin Stuart 40 Vice President, Americas and
Asia Pacific Sales
Paul L. Weber 38 Vice President, Software Development
Mary P. Woodward 51 Vice President, Business and
Strategic Relations
John D. Yingling 40 U. S. Controller and Corporate Treasurer
Dr. Martin Bohl obtained his training at the Friedrich Shiller
University of Jena in Germany, receiving the Diplom-Chemiker degree
in 1974 and a Ph.D. in theoretical chemistry in 1979. After three
years of research and management at the Jenaer Glaswerk Schott &
Gen., Dr. Bohl joined the Academy of Sciences, Central Institute of
Microbiology and Experimental Therapy in Jena. During an eight-year
period, Dr. Bohl's major interests included structure-activity
relationships of steroids. Dr. Bohl joined Tripos in 1989 as an
Application and Sales Support Scientist. Other positions he has
held include: Manager of the Munich Sales Office, European Technical
Manager, and General Manager for Central and Southern Europe. Dr.
Bohl was promoted to Vice President of European Operations in
October 1996.
Dr. Richard D. Cramer, III received his A.B. degree from
Harvard University in Chemistry and Physics in 1963, and his Ph.D.
in Physical Organic Chemistry from the Massachusetts Institute of
Technology in 1967. Dr. Cramer worked for Polaroid Corporation from
1967 through 1969. This was followed by a two year fellowship as a
senior member of the computer synthesis group at Harvard University
under direction of Dr. E. J. Corey. Dr. Cramer joined Smith Kline &
French Laboratories in 1971. He was awarded a succession of titles
culminating in Associate Director and Fellow, Medicinal Chemistry.
Dr. Cramer joined Tripos in 1983 as Vice President of New Products
where he formulated the techniques of Comparative Molecular Field
Analysis (CoMFA), a patented software technology, at Tripos. Dr.
Cramer was named Vice President of Scientific Activities in 1988.
Dr. Cramer also founded and currently serves on the Board of
Directors of STATS, Inc.
Mr. W. Ward Davidson, III obtained his B.S. in Psychology from
the University of Maryland in 1966, and is a graduate of the
Management Development Program at Northeastern University. Mr.
Davidson was a Systems Analyst and a Marketing Representative for
IBM from 1966 through 1972. In 1972, he joined Digital Equipment
Corporation, where he spent 12 years in Senior Sales Management and
Operations Management. From 1984 until 1992 Mr. Davidson was Vice
President, Sales for Culler Scientific, a mini-super computer
manufacturer and Vice President, Sales for Wavefront Technologies, a
3-D animation software company. Mr. Davidson joined Tripos in
January 1992, as Vice President of Sales.
Dr. Robert C. Glen received his B.S. in Chemistry from the
University of Paisley, Scotland in 1978 and his Ph.D. in Chemistry
and X-ray Crystallography from the University of Stirling in 1982.
Dr. Glen was a Senior Physical Chemist with responsibility for
computer-aided molecular design (CAMD) at the Wellcome Research
Laboratories, in London, from 1982 to 1987. After a short period at
ICI Pharmaceuticals, Dr. Glen returned to Wellcome as a Senior
Research Scientist responsible for CAMD, Protein Crystallography,
measured physico-chemical properties and Quantitative Structure
Activity Relationships. Dr. Glen has published over 50 papers in
drug discovery and holds a number of patents on drugs in the clinic,
including 311C90 for the treatment of migraine. Dr. Glen joined
Tripos in June 1995 as Senior Director of Science. In February
1996, Dr. Glen was promoted to Senior Director of Collaborative
Discovery Services and to Vice President Collaborative Discovery
Services in August 1996.
Dr. John R. Hurst received B.S. degrees in Mathematics and
Chemistry from Rose Hulman Institute in 1978 and his Ph.D. in
Physical-Organic Chemistry from the University of Illinois,
Champaign in 1983. Dr. Hurst held a post-doctoral position at the
University of Texas, Austin in Electro-photochemistry under
Professor Marye Anne Fox. In 1984 he joined Monsanto Corporation as
Research Information Systems Manager. Dr. Hurst joined Tripos in
1989 to begin the development of Chemical Information Systems. Dr.
Hurst was promoted to Vice President of Marketing-Discovery Software
in November 1995 and named Vice President Discovery Software Science
in August 1996.
Mr. Scott G. Hutton received his Bachelor of Science degree in
Chemistry from the University of Missouri, Columbia, in 1984. Mr.
Hutton worked as a Chemist at Monsanto Corporation from 1985 to 1988
and subsequently as a Technical Sales and Service Representative at
the Waters Division of Millipore from 1988 to 1990. He joined
Tripos as an Account Executive in 1990 and was promoted to Regional
Sales Manager in 1992. In 1994, Mr. Hutton was named U.S. Sales
Manager and promoted to Vice President of Marketing in August 1996.
Ms. Colleen A. Martin received her Bachelor of Science degree
in Accounting from the University of Missouri, St. Louis, in 1982
and has attended Northwestern University's J.L. Kellogg Graduate
School of Management Executive Programs. Ms. Martin, a Certified
Public Accountant, worked on the audit staff for KPMG Peat Marwick
LLP from 1982 through 1984 and worked for Continental Cablevision as
District Controller from 1984 through 1989. Ms. Martin joined
Tripos in June 1989 as Controller and was promoted to Vice President
and Chief Financial Officer in April 1995.
Mr. James H. Munn received both a B.A. in Biology in 1974 and a
M.S. in Accounting in 1978 from California State University at
Northridge. Mr. Munn, a Certified Public Accountant, worked on the
audit staff of Price Waterhouse from 1979 through 1980. In 1980 he
joined Tiger International as a Senior Financial Analyst and from
1983 through 1985 he was employed at Loral EOS as Supervisor of
Accounting Operations. From 1985 to 1995, Mr. Munn held various
financial management positions at Radio Free Europe/Radio Liberty,
Inc., Munich, Germany. Mr. Munn joined Tripos in July 1995 as
European Controller.
Mr. David E. Patterson received his B.S. in Applied
Mathematics and Computer Science in 1974 and a M.S. in Systems
Science in 1980 from Washington University in St. Louis. Mr.
Patterson worked as a Senior Research Scientist with the Center for
Air Pollution Impact and Trend Analysis from 1976 until joining
Tripos in 1986. His positions have included Product Manager for
QSAR and Senior Director of New Products prior to being promoted to
Senior Fellow in March 1996.
Dr. Mark W. Schwartz received his B.A. degree in Chemistry from
Grinnell College in 1977 and his Ph.D. in Biochemistry from Arizona
State University in 1983. Dr. Schwartz worked for E.I. duPont from
1983 through 1989 in research and development positions for
diagnostic products before moving into a marketing position for
biotechnology products. This was followed by several marketing and
product management positions at Applied Biosystems, before joining
Biosym Technologies in 1991 as Marketing Director, Life Sciences.
Dr. Schwartz joined Tripos as Vice President of Marketing in March
1994. In November 1995 he was named Vice President of Corporate
Marketing and Discovery Services and Vice President Accelerated
Discovery Services in August 1996.
Mr. Gregory B. Smith received his B.S. and M.S. degrees in
Computer Science from Washington University in 1983. As part of his
graduate thesis, he worked on the team which developed the first
SYBYL/VAX prototype under contract to Tripos. Mr. Smith joined
Tripos in 1986 as a member of the technical staff where he was
responsible for all graphics, systems, and quality control related
activities. Mr. Smith was named Director of New Technology in 1990
and in 1994 was named Vice President of Technology and Quality
Standards. In 1996 he became a Fellow, with responsibility for the
corporate databases.
Dr. Martin Stuart received his Bachelor of Science in Physics
and Mathematics from the Council for National Academic Awards in
London in 1982. He was awarded a Ph.D. in the Physics of Thin Films
from the University College of North Wales 1986. Dr. Stuart is a
member of the Institute of Physics and is a Chartered Physicist.
Dr. Stuart joined 3M Company in 1974 and held several scientific
positions, and ultimately, Senior Research Scientist. His work
ranged from optimization of photographic development systems to the
design of highly efficient drug delivery systems. Dr. Stuart joined
Tripos in 1987 to support its products in the United Kingdom and
Scandinavia. He was promoted to Manager of Asia Pacific Sales in
1993. Dr. Stuart was promoted to Vice President of the Americas and
Asia Pacific Sales in February 1996.
Dr. Paul L. Weber obtained his Bachelor of Science degrees in
Chemistry and Honors Biology from the University of Illinois, Urbana
in 1981. He was awarded his Ph.D. in Biochemistry from the
University of Washington, Seattle in 1985. Prior to joining Tripos,
Dr. Weber was employed as Director of Scientific Applications at
Hare Research, Inc. where he was involved with business development,
customer support, sales and program documentation, development and
debugging. Dr. Weber joined Tripos in January 1991 as the NMR
Project Manager. In January 1995, Dr. Weber was promoted to
Director of Software Development. In November 1995, Dr. Weber was
promoted to Vice President of Software Development.
Ms. Mary P. Woodward obtained her B.A. in English from
Creighton University in 1967, her M.A. in English from the
University of Kansas in 1969, and has taken courses in high
technology, international marketing and strategic alliance offered
in the Berkeley, Stanford, and Northwestern J.L. Kellogg Graduate
School of Management Executive Programs. Since joining Tripos in
1983, Ms. Woodward has held a series of sales, legal, and marketing
administration positions, and is currently Vice President, Business
and Strategic Relations.
Mr. John D. Yingling received his Bachelor of Science degree
in Accounting from the University of Missouri, St. Louis, in 1979
and holds certificates as a Certified Public Accountant and a
Certified Cash Manager. Mr. Yingling worked for Storz Instrument
Company, a micro-surgical instrument manufacturer, in a series of
accounting positions from 1979 to 1983 and for Clayton Brokerage
Company from 1983 to 1985. This was followed by several accounting,
tax and treasury positions at Venture Stores, Inc. from 1985 to
1995. Mr. Yingling joined Tripos in May 1995 as U.S. Controller and
assumed the Corporate Treasurer responsibilities in March 1997.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth the compensation earned by the
Named Executive Officers for services rendered in all capacities to
the Company and its subsidiaries for the fiscal years ended December
31, 1996, December 31, 1995, and December 31, 1994.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation
Compensation Awards
Securities All Other
LTIP Underlying Compensation
Name & Principal Year Salary Bonus Payouts Options ($) (5)
Position ($) (1) ($) (2) $ (3) # (4)
John P. McAlister 1996 150,000 - 17,949 15,000 4,500
President and 1995 150,000 20,000 - 15,000 3,465
Chief Executive 1994 149,808 - 30,476 100,000 3,446
Officer 2,667
889
Richard D. Cramer 1996 115,000 - 4,711 5,000 -
Vice President, 1995 106,800 8,000 - 5,000 2,772
Scientific 1994 104,810 15,000 - 55,000 2,772
Activities 700
234
W. Ward Davidson 1996 120,000 76,881 - - 8,750
Vice President, 1995 124,932 70,068 - 2,500 7,723
Sales 1994 118,615 46,262 - 37,500 8,228
Mark W. Schwartz 1996 115,000 27,511 - 2,500 4,275
Vice President, 1995 106,169 12,000 - 22,500 2,279
Accelerated 1994 79,423 - - 15,000 656
Discovery Services
(1) Includes salary deferred under the Company's 401(k) Plan. Dr.
Schwartz's 1994 compensation reflects his compensation from his
actual date of hire, March 30, 1994.
(2) Bonuses earned were based on an allocation of a discretionary
bonus pool. There were no bonuses earned through the discretionary
bonus pool in 1995. Discretionary bonuses were accrued in fiscal
1994 and paid out in 1995 as was the case with fiscal 1993 bonuses
being accrued and paid out in 1994. Bonuses for fiscal years 1994,
1995 and 1996 for Mr. Davidson were earned based on commissions
payable upon the Company's achievement of targeted revenue levels.
Bonus for 1996 for Mr. Schwartz was earned based on commissions
payable upon the Company's achievement of targeted revenue levels.
(3) LTIP Payouts represent the gain on the sale of stock options
exercised under the Evans & Sutherland Computer Corporation 1985
Stock Option Plan for Key Employees granted and vested prior to the
distribution of the Company's stock by Evans & Sutherland Computer
Corporation ("E&S") to its shareholders on June 1, 1994, the
("Distribution").
(4) The number of shares underlying option grants include options
granted to Tripos employees under the 1994 Stock Option Plan and the
Evans & Sutherland Computer Corporation 1985 Stock Option Plan for
Key Employees.
(5) "All Other Compensation" includes a matching contribution to
the Company's 401(k) Plan and a car allowance for Mr. Davidson.
Stock Options
The following table contains information concerning the grant of
stock options made to the Named Executive Officers in 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
Potential
Realizable
Value
Number % of at Assumed
of Total Annual
Securities Options/ Rates of
Options/ SARs Stock Price
Underlying Granted Exercise Appreciation
Options/ to Price for
SARs Employees Per Expiration Option Term
Name Granted in Fiscal Share Date 5% (3) 10%(3)
Year ($) (2)
John P. McAlister 15,000(1) 7.7% 6.50 5/9/06 $61,300 $155,400
Richard D. Cramer 5,000(1) 2.6% 7.88 3/28/06 $24,800 $ 62,800
W. Ward Davidson - - - - $ - $ -
Mark W. Schwartz 2,500(1) 1.3% 7.88 3/28/06 $12,400 $ 31,400
(1) The options granted under the 1994 Stock Option Plan become
exercisable as to 25% of the option shares on the first anniversary
of the grant date and 1/48th per month for three years thereafter.
The options have a 10-year term, subject to earlier termination in
the event of the optionee's cessation of service with the Company.
(2) The exercise price of each option may be paid in cash, in
shares of Common Stock valued at fair market value on the exercise
date or through a cashless exercise procedure involving a same-day
sale of the purchased shares.
(3) The five percent (5%) and ten percent (10%) assumed annual
rates of compounded stock price appreciation are mandated by the
rules of the Securities and Exchange Commission. There is no
assurance provided to any executive officer or any other holder of
the Company's securities that the actual stock price appreciation
over the 10-year option term will be at the assumed 5% or 10% levels
or at any other defined level.
Option Exercises and Holdings
The following table provides information with respect to the
Named Executive Officers concerning unexercised options held as of
the end of the 1996 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of
Securities
Shares Underlying Value of Unexercised
Acquired Unexercised in-the-Money Options
Options at at
Name on Value Year-End 1996 Fiscal Year-End
Exercise Realized Exercis Unexercis Exercis Unexercis
# $ able able able able
John P. McAlister 889 $1,968 53,750 76,250 $365,625(1) $500,625
2,667 $17,949 0 0 $0(2) $0
Richard D. Cramer 6,234 $75,831 35,510 23,490 $235,240(1) $137,385
700 $4,711 0 0 $0(2) $0
W. Ward Davidson 1,600 $15,800 22,828 15,572 $151,861(1) $101,713
Mark W. Schwartz 1,872 $16,380 18,284 19,844 $130,099(1) $135,549
(1) Based on the fair market value of Tripos Common shares on
December 31, 1996 ($11.75 per share).
(2) Options to purchase shares of E&S Common Stock were granted to
certain key executives prior the spin-off of the Company in June,
1994.
REPORT OF THE COMPENSATION COMMITTEE
The following is the Report of the Compensation Committee of
the Board of Directors ("the Committee"), describing the
compensation policies and rationale applicable to the Company's
executive officers with respect to the compensation paid to such
executive officers for the year ended December 31, 1996. The
Compensation Committee of the Board of Directors is responsible for
setting the general compensation policies of the Company, which
include specific compensation levels for executive officers, bonus
pools, and the 1994 Tripos Employee Stock Option Plan. These
programs and the Committee's compensation philosophy are designed to
attract and retain key executives by providing appropriate
incentives linked to Company performance. The Committee is composed
of all non-employee Directors.
Compensation Philosophy
The Compensation Committee evaluates the performance of the
Chief Executive Officer and other officers of Tripos annually based
upon financial and non-financial performance goals which contribute
to the profitability of the Company. The Compensation Committee has
approved compensation policies that seek to enhance the linkage of
compensation to Company objectives and overall company performance.
The executive officers' compensation package is comprised of (i)
base salary, (ii) annual incentive opportunity tied to achievement
of Operating Income and other goals, and (iii) long-term incentives
established to align management with shareholders, in the form of
stock options. The Chief Executive Officer recommends annual
increases for other executives for review and approval by the Board.
Base Salaries -- Individual salary increases
are likely to be based on a variety of factors including,
but not limited to: competitive salary levels, individual
job responsibilities, results versus target objectives,
and Company financial performance.
Annual Incentives -- Effective for fiscal 1995
and later years, the Company's officers were eligible to
participate in an annual incentive compensation plan.
Annual incentive targets are set as a percent of salary
for each officer based on attainment of financial goals
including Operating Income and individual performance
goals. Weighting of goals varies by participant. Over
120% of the Operating Income goal was achieved in fiscal
1996, therefore a payout related to financial goals was
made in early 1997. No payout was made in 1996 for fiscal
1995.
Long-term Incentives -- The Company has adopted
the 1994 Tripos Stock Option Plan to attract and retain
the best available personnel for positions of substantial
responsibility, to provide additional incentive to
employees, and to promote the success of the Company's
business. Awards under the 1994 Tripos Stock Option Plan
are designed to give the recipient a significant equity
stake in the Company and thereby closely align their
interests with those of the Company's shareholders. In
fiscal year 1994, the Board and Committee granted stock
options to officers and other employees under the 1994
Tripos Stock Option Plan subsequent to the distribution of
the Company's stock by Evans & Sutherland Computer
Corporation ("E&S") to its shareholders on June 1, 1994,
the ("Distribution"). The Committee has established
certain general guidelines in making option grants to
executive officers in an attempt to target a fixed number
of unvested option shares based upon the individual's
position with the Company and his or her existing holdings
of unvested options. The number of shares granted to each
executive officer in fiscal years 1996, 1995 and 1994 was
based upon the officer's tenure, level of responsibility,
and relative position in the Company. However, the
Committee does not adhere strictly to these guidelines and
will occasionally vary the size of the option grant made
to each executive officer as circumstances warrant.
Chief Executive Officer Compensation
The Chairman and other members of the Compensation Committee
meet semi-annually with Dr. McAlister to discuss his personal
performance during the fiscal year. The Committee's objective is to
have Dr. McAlister's base salary keep pace with the salaries being
paid to similarly situated CEOs in the software and high technology
industries, and reflect individual performance and achievement of
Tripos corporate goals. Dr. McAlister's base salary is reviewed
annually by the Compensation Committee based on these discussions
and other criteria mentioned above.
Notwithstanding anything to the contrary set forth in any of
the Company's previous filing under the Securities Exchange Act of
1934 that might incorporate future filings, including this Proxy
Statement, in whole or in part, the foregoing report and the
Performance Graph which follows shall not be deemed to be
incorporated by reference into any such filing.
Compensation Committee
Mr. Ralph S. Lobdell, Chairman
Mr. Stewart Carrell
Mr. Gary Meredith
Dr. Ferid Murad
Mr. Alfred Alberts
COMPARISON OF SHAREHOLDER RETURN
Indexed Comparison of Total Return since Distribution
Total Return Index for the NASDAQ National Market and
Total Return for NASDAQ Computer and Data Processing Companies
(Stock performance graph inserted here)
6/1/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
NASDAQ 100.00 103.12 128.59 145.83 165.10 179.39
Data
Processing 100.00 114.64 152.95 174.59 203.17 215.61
Tripos, Inc 100.00 86.36 113.64 154.55 159.09 213.64
Note: Assumes $100 invested on 6/1/94 in the Company, the total
return index for the NASDAQ National Market and the total return
index for NASDAQ Computer and Data Processing Companies. Assumes
reinvestment of dividends on a daily basis.
The graph covers the period from June 1, 1994, the date the
Company's distribution of Common Stock to holders of record of the
Common Stock of E&S commenced, through the fiscal year ended
December 31, 1996. The graph assumes that $100 was invested on June
1, 1994 in the Company's Common Stock and in each index and that all
dividends were reinvested. No cash dividends have been declared on
the Company's Common Stock. Shareholder returns over the indicated
period should not be considered indicative of future shareholder
returns.
ANNUAL REPORT
A copy of the Annual Report of the Company for the fiscal year
ended December 31, 1996 has been mailed concurrently with this Proxy
Statement to all shareholders entitled to notice of and to vote at
the Annual Meeting. The Company filed a Form 10-K with the SEC.
Shareholders may obtain a copy of the Form 10-K without charge, by
writing to Colleen Martin/Corporate Secretary, at the Company's
executive offices at 1699 South Hanley Road, St. Louis, Missouri
63144.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, independent certified public accountants,
has been selected by the Board of Directors as the firm to audit the
accounts and to report on the financial statements of the Company
for the current fiscal year ending December 31, 1997. Neither Ernst
& Young LLP, nor any of its members has any financial interest,
direct or indirect, in the Company, nor has Ernst & Young LLP, nor
any of its members ever been connected with the Company as promoter,
underwriter, voting trustee, director, officer or employee. It is
anticipated that a representative of Ernst & Young LLP will attend
the meeting and shall be available to respond to appropriate
questions. It is not anticipated that the representative from Ernst
& Young LLP will make any statement or presentation.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented at this Annual Meeting other than those set forth herein
and in the Notice accompanying this Proxy Statement.
TRIPOS INC.
Colleen A. Martin
Corporate Secretary
April 9, 1997
St. Louis, Missouri
