SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.240.14a-12
TRIPOS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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:
<Company Logo>
TRIPOS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 11, 1999
To Our Shareholders:
The Annual Meeting of Shareholders of Tripos, Inc. (the
"Company") will be held at the World Trade Center St. Louis, 121 South
Meramec, 10th Floor, Clayton, Missouri, 63105 at 1:00 p.m. local
time on May 11, 1999 for the following purposes:
1. To elect directors to serve for the ensuing year or until their
successors are elected;
2. 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 2,
1999 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,
/s/ Colleen A. Martin
Colleen A. Martin
Corporate Secretary
St. Louis, Missouri
April 9, 1999
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 11, 1999
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 11,
1999 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, 1999.
VOTING RIGHTS AND SOLICITATION
The close of business on April 2, 1999 was the record date for
shareholders entitled to notice of and to vote at the Annual
Meeting. As of that date, Tripos had 3,256,722 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".
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 judgement.
Any shareholder has the right to revoke his or her proxy at any
time before it is voted. A proxy may be revoked either by written
notice to the Secretary of the Company or by attending the meeting
and voting in person.
A majority of the outstanding shares of Common Stock, present
in person or represented by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. Shares represented
by proxies which are marked to "withhold authority" with respect to
the election of any one or more of the nominees for election of
directors and proxies which are marked to "abstain" with respect to
any other matter will be counted for the purpose of determining the
number of shares represented by proxy at the meeting and the
presence or absence of a quorum.
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, up to the maximum number of
directorships to be filled, will be elected. Consequently, marking
the proxy statement to withhold a vote for one or more nominees does
not have the effect of a vote against that director(s), but will
have an effect on the number of votes cast in the election and could
effect the outcome.
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. 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 ChaseMellon Shareholder Services to provide
routine advice and services. 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
Proposals of Shareholders intended to be presented at the 2000
Annual Meeting must be received by the Company no later than
December 11, 1999, for inclusion in the Company's proxy statement
and proxy relating to that meeting. Upon receipt of any such
proposal, the Company will determine whether or not to include such
proposal in the proxy statement and proxy in accordance with
regulations governing the solicitation of proxies.
In order for a Shareholder to nominate a candidate for director
under the Company's Bylaws, timely notice of the nomination must be
received by the Company in advance of the meeting. Such notice must
be received by the Company no later than March 11, 2000, and no
earlier than February 11, 2000. The Shareholder filing the notice
of nomination must describe various matters regarding the nominee as
set forth in the Company's Bylaws, including such information as
name, address, occupation and shares held.
Under the Company's Bylaws, in order for a Shareholder to bring
other business before a Shareholder meeting, timely notice must be
received by the Company within the time limits described above.
Such notice must include a description of the proposed business, the
reasons therefor, and other matters specified in the Company's
Bylaws. These requirements are separate from and in addition to
requirements a Shareholder must meet to have a proposal included in
the Company's proxy statement and proxy. The foregoing time limits
also apply in determining whether notice is timely for purposes of
rules adopted by the Securities and Exchange Commission relating to
the exercise of discretionary voting authority.
In each case the notice must be given to the Secretary of the
Company, whose address is 1699 South Hanley Road, St. Louis,
Missouri 63144.
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 55 Alfred Alberts 1997 67
Stewart Carrell 1994 65 John P. McAlister,III 1994 50
Gary Meredith 1996 64 Ferid Murad 1996 62
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 in 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, the Inventor of the
Year 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 also serves as Chairman of the Board of Directors of Evans
& Sutherland Computer Corporation and of Seattle Silicon
Corporation. Between 1984 and 1994, Mr. Carrell was Chairman and
Chief Executive Officer of several companies through his association
with the investment banking and venture capital firm of Hambrecht &
Quist. Prior to 1984, Mr. Carrell was employed for 25 years by
Texas Instruments in various capacities, the most recent of which
was Executive Vice President. Mr. Carrell holds an undergraduate
degree from Southern Methodist University and a Masters degree from
Stanford University.
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 named a Director of the Company in January
1996. He presently serves as Senior Vice President of Evans &
Sutherland Computer Corporation ("E&S"). Mr. Meredith has been with
E&S for twenty-one years during which time he held several positions
including Assistant to the President, VP-Administration, President-
Interactive Systems Division, VP-Development and Secretary, 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 Regence Blue
Cross/Blue Shield of Utah.
Dr. Ferid Murad was named a Director of the Company in November
1996. Dr. Murad received his M.D. and Ph.D. from Case 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 1998 co-recipient of the Nobel Prize for Physiology or
Medicine as well as the 1996 recipient of the prestigious Albert
Lasker Medical Research award and is a member of the National
Academy of Science. He is currently Professor and Chairman of the
Department of Integrative Biology, Pharmacology and Physiology at
the University of Texas Medical School in Houston.
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, 1998, the Board of
Directors of the Company held a total of ten (10) meetings. During
this period, a quorum of directors attended or participated in all
of (i) the meetings of the Board that were held 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, Alfred Alberts, Gary
Meredith and Ferid Murad, held two (2) meetings during fiscal 1998.
The Compensation Committee reviews and approves the Company's
compensation arrangements for management. This Committee,
consisting of Ralph Lobdell, Alfred Alberts, Stewart Carrell, Gary
Meredith and Ferid Murad, held three (3) meetings during fiscal
1998.
The Executive Committee receives investment proposals from
within and without the Company and decides whether they merit
consideration. This Committee, consisting of Ralph Lobdell, Alfred
Alberts, Stewart Carrell, Gary Meredith and Ferid Murad, held two
(2) meetings during fiscal 1998.
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, Alfred Alberts, Ferid Murad and several key employees,
did not meet during fiscal 1998.
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 currently 240,000 shares reserved for issuance of
options under the 1994 Director Option Plan, as amended. The
exercise price for the options granted under the 1994 Director
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.
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.
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
Brown Capital Management 359,700 (2) 11.0%
809 Cathedral Street
Baltimore, Maryland 21201
State of Wisconsin 303,334 (2) 9.3%
Investment Board
121 East Wilson Street
Madison, Wisconsin 53707
Dimensional Fund Advisors, Inc. 205,165 (2) 6.3%
1299 Ocean Avenue
Santa Monica, California 90401
Casdin Capital Partners LLC 192,700 (3) 5.9%
230 Park Avenue
New York, New York 10169
Directors and Named Executive Officers:
Amount and
Nature of (1)
Name of Beneficial Owner Beneficial Percent
Ownership of
Class
Ralph S. Lobdell 52,578 1.6%
Alfred Alberts 6,415 *
Stewart Carrell 47,446 1.5%
Gary Meredith 10,571 *
John P. McAlister III 140,375 4.3%
Ferid Murad 14,756 *
Martin Bohl 14,680 *
Richard D. Cramer III 54,371 1.7%
Martin Stuart 27,635 *
Paul L. Weber 32,960 1.0%
All directors and named
executive officers
as a group (10 persons) 401,787 12.3%
* Less than one percent of the outstanding Common Stock.
(1) Percentage of beneficial ownership is calculated assuming
3,256,722 shares of Common Stock were outstanding on April 2,
1999. This percentage also includes Common Stock of which such
individual or entity has the right to acquire beneficial ownership
within sixty days of April 2, 1999, 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 shared voting and
investment power over their reported shares of Common Stock.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten
percent of the Company's Common Stock, to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no year-
end reports on Forms 5 were required for those persons, the Company
believes that, during fiscal 1998, all filing requirements applicable
to its officers, directors, and greater than ten-percent beneficial
owners were complied with except that Dr. Ferid Murad failed to file
a monthly report of a transaction but he did report the transaction
in his year-end report on Form 5, which was timely filed.
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 56 Vice President, European Operations
Richard D. Cramer, III 57 Vice President, Scientific Activities
Robert C. Glen 45 Vice President, ADS Research US and Asia
Peter Hecht 36 Vice President, European Research Operations
Trevor Heritage 32 Vice President, Software Research and
Development
Colleen A. Martin 38 Vice President, Chief Financial Officer, and
Secretary
David E. Patterson 47 Senior Fellow
Martin Stuart 42 Vice President, Sales and Marketing
Paul L. Weber 40 Vice President, Software Consulting Services
Mary P. Woodward 53 Vice President, Strategic Development
John D. Yingling 42 Corporate Controller and 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 Software Operations
in October 1996. In January 1999, Dr. Bohl assumed the
responsibility of sales manager for all products and services in
Europe.
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 previously served
on the Board of Directors of STATS, Inc.
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 70 scientific
papers in drug discovery and holds a number of patents on drugs in
the clinic, including Zomig (Zolmitriptan) 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. He was named Vice
President, ADS Research US and Asia in November 1997.
Dr. Peter Hecht received a degree in pharmacy from Vienna
University, Austria in 1987. From 1987 to 1990 he worked at the
Sandoz Research Institute in Vienna on the design of anti-fungal
compounds as part of his Ph.D. thesis, which he completed in 1990.
From 1990 to 1992 he served as a post-doctoral researcher at Tripos
St. Louis, funded initially by Sandoz then by the Erwin Schroedinger
scholarship. From 1992 to 1995 he worked at the Sandoz Research
Institute in Vienna as head of the local computational chemistry
group. In 1995, he joined Tripos in Munich and has been
establishing the drug discovery efforts of Tripos as well as the
consultancy service business in Europe. Dr. Hecht was promoted to
Vice President, European Research Operations and additionally,
General Manager of Tripos Receptor Research, in November 1997.
Dr. Trevor Heritage received his Ph.D. in Organic Chemistry
from University of Reading, England in 1990. Dr. Heritage joined
Shell Research Ltd. in 1990 as a computational chemist working on
the design of agrochemical products, catalysts and petroleum
additives. Dr. Heritage joined Tripos in 1994, where he has held
scientific research, marketing, and software development positions.
Dr. Heritage has played a leading role in the design and
implementation of Tripos' UNITY, EVA/QSAR, and patented HQSAR
technology. Dr. Heritage was promoted to Vice President, Software
Research and Development in April 1998.
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. David E. Patterson received his B.S. in Applied
Mathematics and Computer Science in 1974 and an 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. 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 in 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. In November 1997, he was
promoted to Vice President and General Manager, ADS Products. Dr.
Stuart was promoted to Vice President, Sales and Marketing in
November 1998.
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 Senior
Director, Product Development and in November 1995 to Vice
President, Product Development. In 1997, Dr. Weber initiated the
Software Consulting Services effort and was named Vice President,
Software Consulting Services.
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, Strategic
Development.
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
was promoted to Corporate Controller & Treasurer in January 1999.
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, 1998, December 31, 1997, and December 31, 1996.
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation Awards
Securities
Underlying All Other
Name & Principal Salary Bonus LTIP Options Compensation
Position Year ($) (1) ($) (2) Payouts $ # (3) ($) (4)
John P. McAlister,III
President and Chief 1998 202,083 - - - 4,656
Executive Officer 1997 170,833 100,000 - 12,000 10,902
1996 150,000 - - 15,000 4,500
Martin Bohl 1998 101,826 31,625 - 2,000 8,473
Vice President, 1997 # 100,000 67,465 - 5,000 15,972
European Operations
Richard D. Cramer, III
Vice President, 1998 128,750 - - 10,000 -
Scientific 1997 115,000 38,669 - 5,000 2,588
Activities 1996 115,000 - - 5,000 -
Martin Stuart 1998 130,894 74,280 - 5,000 6,080
Vice President, 1997 # 89,167 85,222 - 22,500 15,027
Sales & Marketing
Paul L. Weber 1998 122,854 9,916 - 5,000 13,031
Vice President, 1997 99,000 35,000 - 5,000 4,020
Software 1996 94,551 - - - 2,837
Consulting
Services
W. Ward Davidson,III
Former 1998 + 45,859 58,490 - - 3,797
Vice President, 1997 120,000 101,580 - 5,000 30,757
Sales 1996 120,000 76,881 - - 8,750
(1) Includes salary deferred under the Company's 401(k) Plan.
(2) Bonuses earned were based on an allocation of a discretionary
bonus pool. Bonuses for fiscal years 1996, 1997 and 1998 for Mr.
Davidson were earned based on commissions payable upon the
Company's achievement of targeted revenue levels. The 1998
bonuses paid to Messrs. Bohl, Stuart and Weber included a
commission related to achieving targeted revenue goals.
(3) The number of shares underlying option grants include options
granted to Tripos employees under the 1994 Stock Option Plan.
(4) "All Other Compensation" includes a matching contribution to the
Company's 401(k) Plan. It also includes a car allowance for Mr.
Davidson ($1,600), Mr. Stuart ($1,200) and Mr. Bohl ($5,238) and a
relocation allowance for Mr. Weber ($9,211).
+ Mr. Davidson's 1998 compensation reflects the period up until
his resignation from the Company on May 3, 1998.
# Mr. Stuart and Mr. Bohl became named executive officers of the
Company during 1997.
Stock Options
The following table contains information concerning the grant of
stock options made to the Named Executive Officers in 1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Potential Realizable
Number of % of Total Value at Assumed
Securities Options/ Annual Rates of
Underlying SARs Exercise Stock Price
Options/ Granted to Price Appreciation for
SARs Employees Per Expiration Option Term
Name Granted in Fiscal Share Date 5% (3) 10% (3)
Year (2)
John P. McAlister - - - - $- $-
Martin Bohl 2,000(1) 1.3% $12.375 3/16/08 $15,565 $39,445
Richard D. Cramer 10,000(1) 6.7% $12.375 3/16/08 $77,826 $197,226
Martin Stuart 5,000(1) 3.4% $12.375 3/16/08 $38,913 $98,613
Paul L. Weber 5,000(1) 3.4% $12.375 3/16/08 $38,913 $98,613
(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 1998 fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of
Shares Securities
Acquired Underlying Value of Unexercised
on Value Unexercised Options in-the-Money Options
Name Exercise Realized at Year-End 1998 at Fiscal Year-End
Un- Un-
# $ Exercisable exercisable Exercisable exercisable
John P. McAlister 0 $0 128,626 13,374 $322,971 (1) $7,029
Martin Bohl 0 $0 11,563 10,437 $7,875 (1) $0
Richard D. Cramer 0 $0 48,788 15,312 $104,317 (1) $195
Martin Stuart 0 $0 17,397 25,103 $7,875 (1) $0
Paul L. Weber 0 $0 28,074 11,926 $65,217 (1) $6,033
(1) Based on the fair market value of Tripos Common shares on
December 31, 1998 ($7.625 per share).
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, 1998. 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 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 nor in 1998 for fiscal 1997 or in 1999 for 1998.
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. 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
1998, 1997 and 1996 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.
The Internal Revenue Code, and the regulations promulgated
thereunder, limit the tax deduction the Company may recognize for
compensation paid to its executive officers whose compensation is
listed in this Proxy Statement, to $1.0 million per person, per year.
This deduction limit does not apply to compensation that complies
with applicable provisions of such regulations. Because the
Committee did not expect the compensation to be paid to such persons
to exceed $1.0 million per person in 1998, the Committee did not take
any action prior to or during 1998 which would have been required to
comply with the aforementioned regulations so that the deduction
limit would not apply. The Committee will continue to evaluate the
other components of the Company's executive compensation program and
will take the necessary actions with respect to such regulations if
it is deemed appropriate to do so with respect to compensation to be
paid to executive officers in future years.
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 biotechnology
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 Pharmaceutical Companies
<Graph of the following table>
6/1/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
NASDAQ 100.00 103.13 145.86 179.37 220.06 309.34
Pharmaceuticals 100.00 97.46 178.76 179.31 185.15 237.00
Tripos, Inc. 100.00 86.36 154.55 213.64 265.91 138.64
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 Pharmaceutical 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, 1998. 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, 1998 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, 1999. 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.
/s/ Colleen A. Martin
Colleen A. Martin
Corporate Secretary
April 9, 1999
St. Louis, Missouri
PROXY CARD
Tripos, Inc.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
April 9, 1999
Dear Shareholder:
The undersigned hereby appoints Colleen A. Martin and John D.
Yingling as proxies, each with full power to appoint her/his
substitute, and hereby authorizes them to vote all the shares of
Common Stock of Tripos, Inc. held of record by the undersigned at the
annual meeting of shareholders to be held on May 11, 1999, at 1:00
p.m., local time, at the World Trade Center St. Louis, 121 S.
Meramec, 10th Floor, Clayton, Missouri, 63105, or at any adjournment
thereof.: (1) as hereinafter specified upon the proposals listed on
the reverse and as more particularly described in the Company's proxy
statement, receipt of which is hereby acknowledged; and (2) in their
discretion upon such other matters as may properly come before the
Annual Meeting of Shareholders.
PLEASE DETACH AND MARK THE PROXY, SIGN IT ON THE REVERSE SIDE,
AND RETURN IT IN THE ENVELOPE PROVIDED BEFORE THE BEFORE THE MEETING
- ------------------------------------------------------------------------------
(Detach Proxy Form Here)
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD.
1. Election of Directors
FOR O all nominees listed below WITHHOLD AUTHORITY O
(except as marked to the contrary below) to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below)
Ralph Lobdell, Alfred Alberts, Stewart Carrell,
John McAlister, Gary Meredith, Ferid Murad
2. In their discretion, the proxies are authorized to vote on such
other business as may properly come before this meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1.
Dated: ________________________,
1999
________________________________
Signature *
________________________________
Signature, if held jointly *
*Please sign exactly as name
appears on this form. When signing
as attorney, executor,
administrator, trustee, or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PRIOR TO THE MEETING.
