SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section
240.14a-12
VYREX CORPORATIONVyrex Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee requiredrequired.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-110-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(4) Date Filed:
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[LOGO]
VYREX CORPORATION
2159 Avenida de la Playa
La Jolla, CA 92037
(858) 454-4446
April 30, 20002001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders,
which will be held on Monday, June 12th, 200011th, 2001 at 10:00 a.m., at the offices of
Vyrex Corporation, 2159 Avenida de la Playa, La Jolla, California 92037.
The enclosed materials include a copy of our 19992000 10-KSB, the Proxy
Statement and a proxy card. After reading the Proxy Statement, please mark,
date, sign and return, at an early date, the enclosed proxy card in the prepaid
envelope addressed to Chase/Mellon Stockholder Services, our agent, to ensure
that your shares will be represented. YOUR SHARES CANNOT BE VOTED UNLESS YOU
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD OR ATTEND THE ANNUAL MEETING IN
PERSON.
The Board of Directors and Management look forward to seeing you at the
meeting.
Sincerely yours,
/s/ G. Dale Garlow
--------------------------
G. Dale Garlow
President and Chief Executive Officer
VYREX CORPORATION
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 12, 2000
---------------------------------
Notice of Annual Meeting of Stockholders
to be held June 11, 2001
---------------
The Annual Meeting of Stockholders of Vyrex Corporation (the "Company")
will be held at Vyrex Corporate Offices at 2159 Avenida de la Playa, La Jolla,
California 92037 on Monday, June 12th, 200011th, 2001 at 10:00 a.m., for the following
purposes:
1. To elect threefive directors to the Board.
2. To ratify the selection of J. H. Cohn LLP as the Company's independent
auditors.
3. To approve an increase in the number of shares reserved for the
Company's 1993 Stock Option Plan by one million (1,000,000) shares.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment of the Annual Meeting.
The Board of Directors has fixed the close of business on April 30, 20002001 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof. A complete list of
stockholders entitled to vote will be available at the Secretary's office, 2159
Avenida de la Playa, La Jolla, California, 92037 for ten days prior to the
meeting.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING. WE HOPE
THAT YOU WILL PROMPTLY MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. THIS
WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE MEETING.
By order of the Board of Directors,
/s/ G. Dale Garlow
-------------------------
G. Dale Garlow
President and Chief Executive Officer
April 30, 2000
-2-2001
VYREX CORPORATION
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PROXY STATEMENT
-------------------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Vyrex Corporation, a Nevada corporation (the
"Company"), of proxies in the accompanying form to be used at the Annual Meeting
of Stockholders to be held at Vyrex Corporate Office, 2159 Avenida de la Playa,
La Jolla, California, 92037 at 10:00 a.m. on June 12, 2000,11, 2001, and any adjournment
thereof (the "Annual Meeting"). The shares represented by the proxies received
in response to this solicitation and not revoked will be voted at the Annual
Meeting. A proxy may be revoked at any time before it is exercised by filing
with the Secretary of the Company a written revocation or a duly executed proxy
bearing a later date, or by voting in person at the Annual Meeting. On the
matters coming before the Annual Meeting for which a choice has been specified
by a stockholder by means of the ballot or the proxy, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the nominees for director listed in this Proxy Statement, and FOR the
approval of J. H. Cohn LLP as independent auditors described in the Notice of
Annual Meeting and in this Proxy Statement and FOR approval of increase in the
Authorized Issuance Pursuant to the 1993 Stock Option Plan by one million
(1,000,000) shares described in the Notice of Annual Meeting and in this Proxy
Statement. This Proxy Statement and the accompanying proxy and annual report are
first being mailed to Stockholders on or about May 12, 2000.11, 2001.
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on April 30, 20002001 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 7,542,8678,342,867 shares of Common Stock
outstanding and entitled to vote. Each holder of Common Stock is entitled to one
vote for each share held as of the record date.
Any stockholder or stockholder's representative who, because of a
disability, may need special assistance or accommodation to allow him or her to
participate at the Annual Meeting, may request reasonable assistance or
accommodation from the Company by contacting G. Dale Garlow at Vyrex
Corporation, (858) 454-4446. To provide the Company sufficient time to arrange
for reasonable assistance or accommodation, please submit all requests by May
26, 2000.25, 2001.
QUORUM, ABSTENTION, BROKER NON-VOTES
Directors are elected by a plurality vote. The other matters submitted for
stockholder approval at this Annual Meeting will be decided by the affirmative
vote of a majority of shares present in person or represented by proxy and
entitled to vote on each matter. The required quorum for the transaction of
business at the Annual Meeting is a majority of the shares of common stock
issued and outstanding on the record date. Abstentions with respect to any
matter are treated as shares present or represented and entitled to vote on that
matter and thus have the same effect as negative votes. If shares are not voted
by the broker who is the record holder of such shares, or if shares are not
voted in other circumstances in which proxy authority is defective or has been
withheld with respect to any matter, these non-voted shares are not deemed to be
present or represented for purposes of determining whether stockholder approval
of that matter has been obtained.
VOTING
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Every stockholder voting at the election of directors may cumulate such
stockholders votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which the
stockholder's shares are entitled, or distribute the stockholder's votes on the
same principle among as many candidates as the shareholder thinks fit, provided
that votes cannot be cast for more than six candidates. However, no stockholder
shall be entitled to cumulate votes unless the candidates name has been placed
in nomination prior to the voting and the stockholder, or any other stockholder,
has given notice at the meeting prior to the voting of the intention to cumulate
the stockholder's vote. There are no rights which will accrue to stockholders
dissenting in any matter known to the Company to be raised at the Annual
Meeting.
SOLICITATION
The Company is soliciting the enclosed Proxy and the expense of printing
and mailing proxy materials will be borne by the Company. In addition to the
solicitation of proxies by mail, solicitation may be made by certain directors,
officers and other employees or the Company by personal interview, telephone or
facsimile. No additional compensation will be paid to such persons for such
solicitation. The Company will reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation materials to beneficial owners of
the Company'sCompan's Common Stock.
IMPORTANT
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE SO THAT, WHETHER
YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OR NOT, YOUR SHARES CAN BE VOTED.
THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE ANNUAL MEETING.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's articles of Incorporation provide for a classified Board of
Directors designated as Class I, Class II and Class III. After the initial term
of office of each class, each class shall have a term of three years. At each
annual meeting of stockholders thereafter, directors of one class could be
elected to succeed the directors of that class whose terms have expired, and
each newly elected director will serve a three-year term. While the Company is a
Nevada corporation, it is currently classified as a pseudo-foreign corporation
under California law based on the number of outstanding securities held of
record by persons with addresses in California and the nature of its property,
payroll and sales. Therefore, certain provisions of the California General
Corporation Law are applicable to the Company, including that it cannot have a
classified board of directors until it either (i) is listed on the New York or
American Stock Exchange or on the National Market System of the Nasdaq Stock
Market and has 800 stockholders, or (ii) is no longer a pseudo-foreign
corporation pursuant to California law.
A board of three (3)five (5) directors is to be elected at the Annual Meeting.
Unless otherwise directed, the proxy holders will vote the proxies received by
them for the threefive nominees named below, all of whom are presently directors of
the Company. The threefive nominees for director receiving the highest number of
affirmative votes of the shares entitled to be voted shall be elected as
directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum. The term of office of each
person elected to be a director will continue until the next annual meeting of
stockholders, or until a successor has been elected and qualified.
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Each of the nominees has been nominated as a director by the Company's
Board of Directors. In the event any of such nominees becomes unable or
unwilling to accept nomination or election, the shares
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represented by the
enclosed proxy will be voted for the election of the balance of those named and
such other nominees as the Board of Directors may select. The Board of Directors
has no reason to believe that any such nominee will be unable or unwilling to
serve.
Set forth below is information regarding the nominees including their
principal occupations at present and for the past five years, certain
directorships held by each, their ages as of April 30, 2000,2001, and the year in
which each became a director of the Company.
NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR
AND FOR THE PAST FIVE YEARS; DIRECTORSHIPS SINCE AGE
------------------------------------------- -------- ---------------------------------------------- ----- ---
Sheldon S. Hendler, Ph.D., M.D.M.D Chairman of the Board and Director of 1991 63
Scientific Affairs 1991 64
since 2000. Previous Chief Executive Officer of the Company
through 1999.Company.
Dr. Hendler was a founder of the Company and has served as
Chairman of the Board of Directors since its inception in
1991. Dr. Hendler has written books on human aging and has
published widely in biochemistry, virology, immunology,
nutrition and cancer. Dr. Hendler is an inventor on several
patents. Dr. Hendler is Associate Clinical Professor of Medicine in
the School of Medicine at the University of California, San
Diego and an Attending Physician at Mercy Hospital and
Medical Center in San Diego. He received his Ph.D. in
Biochemistry from Columbia University and his M.D. from the
University of California, San Diego.
G. Dale Garlow President and Chief Executive Officer. Mr. 2000 58
Garlow has 35 2000 59
years of experience in the pharmaceutical and biotech
industry. He comes from Integra, LLC a company involved in
the sales and marketing of pharmaceuticals, over-the-counter
products, nutritionals, and medical devices. He currently
serves on the Board of Directors of Nucleic Assays
Corporation and DNA Technologies. Prior key executive
positions include; President and CEO of FHC Corporation,
President and CEO of Whiteworth/Towne Paulsen, and Regional
Director of Administration and Distribution
The Upjohn Company.
Richard G. McKee, Jr. Managing General Partner of Dynamic Value Partners, Ltd., a 2000 4344
Florida investment partnership specializing in small-cap
stocks. Previously he served as a director and portfolio
manager at Fundamental Management Corporation in Miami,
Florida and as Vice President of First Equity Corporation of
Florida, a regional investment banking firm.Managing
General Partner of Dynamic Value Partners, Ltd., a
Florida investment partnership specializing in small-cap
stocks. Previously he served as a director and portfolio
manager at Fundamental Management Corporation in Miami,
Florida and as Vice President of First -5-
Equity Corporation of
Florida, a regional investment banking firm.
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Laurie A. Robinson CEO and part owner of the Robinson Value Group Inc., an 2000 44
investment management business. Previously she served as a
Psychotherapist in Private Practice in Santa Barbara,
California, an advertising executive for Media Graphics,
created and managed a line of women's accessories, author of
'Model Answers', and as a television journalist on Prime
Time Live, Johannesburg, South Africa.
Tom K. Larson, Jr. Previous Vice President, Finance and Administration and CFO 2000 65
of Inamed Corporation, a global surgical and medical device
company. Previous positions included Vice President, Finance
and CFO of a privately held specialty bed manufacturer, Vice
President, Finance and CFO Revell Corporation, and held a
number of key executive financial and administrative
positions at Xerox Corporation. In addition he was an Equity
Owner and Operation Officer of four separate corporations
and is experienced in turnaround situations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTOR NOMINEES LISTED ABOVE.
BOARD OF DIRECTOR MEETINGS
The Board of Directors held twofour meetings during the year ended December
31, 1999. Each of the directors except Gregory Gilbert attended all
the meetings.2000.
COMMITTEES
The company does not currently maintain standing audit, nominating or
compensation committees.
COMPENSATION OF DIRECTORS
Outside directors of the Company will receive $1,000 per Board meetingstock options for their
services as directors. Directors are reimbursed for their expenses for each
meeting attended.
No non-employee directors received stock options during 2000.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 1, 20002001 as to shares
of Common Stock beneficially owned by (i) each of the Company's directors and
nominees for director, (ii) the Company's executive officers named in the
Summary Compensation Table set forth herein, (iii) the Company's directors and
executive officers as a group and (iv) each person known by the Company to be
the beneficial owner of more than 5% of the outstanding shares of the Common
Stock of the Company. Except as otherwise indicated and subject to applicable
community property laws, each person has sole investment and voting power with
respect to the shares shown. Ownership information is based upon information
furnished to or filed with the Securities and Exchange Commission, by the
respective individuals or entities, as the case may be. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting and investment power with respect to
securities. Shares of Common Stock subject to options or warrants currently
exercisable or exercisable within 60 days are deemed to be beneficially owned by
the person holding such options or warrant for computing the
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percentage ownership of such person, but are not treated as outstanding for
computing the percentage of any other person.
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
-------------------------- ------------- --------
Sheldon S. Hendler, Ph.D., M.D. (1) 3,101,503 41.1%
8575 La Jolla Shores Drive
La Jolla, CA 92037
Biophile USA 500,000 6.6%
8776 Killdee, Suite 100
Orangevale, CA 95662
Carl M. Lewis, Esq. (1)(3) 303,333 4.0%
Martin Malk (2)(3) 116,666 1.55%
Gregory F. Gilbert, Esq. (2)(3) 50,521 .66%
Dennis J. Carlo, Ph.D. (2)(3) 50,521 .66%
Nolan E. Penn, Ph.D. (2)(3) 50,521 .66%
-6-
Joyce M. Hendler, Ph.D. (3)(4) 1,500 .02%
Richard G. McKee, Jr. (5)(6) 125,899 1.7%
Directors and Executive Officers as a Group (8) persons) 3,800,464 50.38%
1. Includes options to purchase 53,333 shares of common stock.
2. Consists solely of options to purchase common stock all of which are
exercisable.
3. Address of beneficial owner isNAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
- ------------------- ---------- --------
Sheldon S. Hendler, Ph.D., M.D. (1) 1,640,251 19.7%
2159 Avenida de la Playa
La Jolla, CA 92037
4. Excludes 3,048,170G. Dale Garlow (2) 216,458 2.6%
Richard G. McKee, Jr. (3)(4) 276,734 3.3%
Tom K. Larson, Jr. (5) 10,000 0.1%
Directors and Executive Officers
as a Group (4) persons) 2,143,443 25.7%
1. Includes options to purchase 91,250 shares owned by Sheldon S. Hendler andof common stock.
2. Includes options to which she
disclaims beneficial ownership.
5.purchase 65,625 shares of common stock.
3. Became a member of the Board of Directors January 11, 2000 to fill a
vacancy.
6.4. Includes 10,000 shares beneficially owned by Wendy J. McKee and voting
rights of 75,973 shares controlled by Dynamic Value Partners, Ltd..
7. Includes optionsLtd.
5. Became a member of the Board of Directors December 8, 2000 to purchase 70,833 shares of common stock.fill a
vacancy.
There are no arrangements known to the Company which may result in a change of
control.
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EXECUTIVE COMPENSATION
The following table sets forth the compensation for services to the Company
in all capacities for the fiscal year ended December 31, 1999,2000, by those persons
who were, respectively, at December 31, 19992000 the Company's Chairman and the
Company's Chief Executive Officer and the other two most highly compensated executive officers
of the Company whose total annual salary and bonus for fiscal year 1999 exceeded
$100,000 (the "Named Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMP.
------------------------------------------------------------------------------------------- AWARDS
------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMP. AWARDS OPTIONS (#) PAYOUTS COMP.
- --------------------------- ---- ---------- --------- ----- ------ -------------------------------------
PAYOUTS COMP.
- -------- --------------- ----------- ------- ---------
Sheldon SS. Hendler 1999 $226,013(3)2000 -- -- -- -- -- -- --
Chairman and 1998 $235,529 $50,562 -- -- -- --
Chief Executive Officer 1997 $206,303 $51,250 -- -- -- -- $2,359(1)
Carl M. Lewis 1999 $160,178(3)
Executive Vice President 1998 $165,815 $35,834
and General Counsel 1997 $143,764 $33,750
Martin Malk 1999 $60,462(3)$226,013(2) -- -- -- -- -- --
1998 $235,529(1) $50,562 -- -- -- -- --
G. Dale Garlow 2000 -- -- -- -- 350,000 -- --
Chief FinancialExecutive Officer 1998 $67,441(2)
(1) Consists of amounts contributed to the individual'sindividua's 401(k) plan by the
Company.
(2) Consists of salary from July 14th 1998, commencement date of employment.
(3) Consists of deferred pay. All deferred pay was forgiven January 11th 2000.
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PENSION AND LONG-TERM INCENTIVE PLANS
The Company has no pension or long-term incentive plans.
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STOCK OPTIONS
The following tables summarize option grants to and exercises by the
Company's Chief Executive Officer and the Named Officers during fiscal 1999.2000. The
Company does not grant Stock Appreciation Rights.
OPTION GRANTS IN FISCAL YEAR 1999
OPTION GRANTS IN FISCAL YEAR 2000
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF
SECURITIES TOTAL OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE
- ---- ----------- ------------- ---------------- ------------- ------------------------ ------ ----------
Sheldon S. Hendler............. 50,000(1) 33.33% $0.56 4/25/2009G. Dale Garlow................. 350,000(1) 100% $0.37 5/15/2010
Chief Executive Officer
Carl M. Lewis.................. 50,000(1) 33.33% $0.56 4/25/2009
Executive Vice President
and General Counsel
Martin Malk.................... 50,000(1) 33.33% $0.56 4/25/2009
Chief Financial Officer
(1) Options vest 1/48 per month over 48 months, with 3/48 vesting after the
first 90 day period of employment. The exercise price is based on the fair
market value on the date the options were granted.
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AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth information concerning exercise of options and
the fiscal year end option values during the fiscal year 1999,2000, with respect to
the Company's Chief Executive Officer and each of the named officers.
VALUE
REALIZED
MARKET
PRICE AT
EXERCISE NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
EXERCISESHARES LESS OPTIONS/SAR'S AT FISCAL IN-THE-MONEY OPTIONS/SAR'S
SHARES LESSACQUIRED ON EXERCISE YEAR-END (#) AT FISCAL YEAR-END ($)
ACQUIRED ON EXERCISE ----------------------------- ----------------------------
NAME EXERCISE (#) PRICE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------- ---- ------------ --------- ----------- ------------- ----------- -------------
Sheldon Hendler 0 0 53,333 76,66791,250 38,750 0 0
Carl LewisG. Dale Garlow 0 0 53,333 76,667 0 0
Martin Malk 0 0 70,833 179,16765,625 284,375 0 0
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EMPLOYMENT AGREEMENTS
Dr. Sheldon Hendler, the Company's Chairman and CEO entered into a one
year employment agreement on October 1, 1995. The agreement automatically renews
on the anniversary date for an additional year unless previously terminated by
the Company. Dr. Hendler's salary under the agreement is set by the Board of
Directors and is currently $226,013 per year. The Company has the right to
terminate Dr. Hendler'sdoes not have any active employment agreement for cause or as a result of death
or permanent disability. In certain events relating primarily to a merger or
reorganization and similar changes in the nature of the Company, Dr. Hendler is
entitled to continue his employment or voluntarily terminate the agreement and
receive a severance payment of 2.99 times his annual salary and fringe benefits
during the five years preceding the date of termination. Dr. Hendler has agreed
to forgo salary compensation in order to maintain current funds for Marketing
and Reseach and Development.agreements at this time.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January ofDuring 2000 the Board was reconstituted and is now comprised of Sheldon S.
Hendler Ph.D., M.D., as Chairman, and G. Dale Garlow, and Richard G. McKee, Jr., Laurie
A. Robinson and Tom K. Larson, Jr. as directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors,
executive officers and any persons holding more than 10% of the Company's Common
Stock are required to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established
and the Company is required to identify in this Proxy Statement those persons
who failed to timely file these reports. All of the filing requirements were
satisfied in 1999.2000. In making this disclosure, the Company has relied solely on
written representations of its directors and executive officers and copies of
the reports that have been filed with the Commission.
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, theThe Board of Directors has appointed the firm of J. H. Cohn LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000,2001,
subject to ratification by the stockholders. Representatives of J. H. Cohn LLP
are expected to be present at the Company's Annual Meeting. They will have an
opportunity to make a statement, if they desire to do so, and will be available
to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed to the Company by J. H. Cohn LLP for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal year ended December 31, 2000 and the reviews of the financial
statements included in the company's Quarterly Reports on Form 10-QSB for that
fiscal year were $14,000.
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FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by J. H. Cohn LLP for professional services
rendered for information technology services relating to financial information
systems design and implementation for the fiscal year ended December 31, 2000.
ALL OTHER FEES
The aggregate fees billed by J. H. Cohn LLP for services rendered to the
Company, other than the services described above under "Audit Fees", for the
fiscal year ended December 31, 2000 were $5,000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
On April 27, 1999, Vyrex Corporation filed Form 8-K reporting a change
in its independent auditors. On April 29, 1999, Ernst & Young LLP wrote toREPORT OF THE BOARD OF DIRECTORS
Since there is not an audit committee of the SecuritiesBoard of Directors, the entire
Board conducts the functions of an audit committee. As such, the Board reviews
and Exchange Commission taking exception to the description of their
resignation andevaluates the Company's description ofaudited financial statements and monitors and
oversees the opinions given over the past
two (2) years.
On April 21, 1999, Ernst & Young LLP resigned as independent auditors
of Vyrex Corporation. On April 22, 1999, Vyrex Corporation engaged J. H. Cohn
LLP to succeed Ernst & Young LLP as independent auditors.
-10-
Ernst & Young's report onCompany's internal control system, its accounting and financial
reporting process, its audit function and its compliance with applicable laws
and regulations.
The Board has reviewed and discussed the financial statements forwith
management and has discussed with the past two
years, includedindependent accountants matters required
to be discusses by Statement on Auditing Standards No. 61, Communications with
Audit Committees.
The Board has also received the written disclosures and the letter from the
Company's independent accountants required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees.
Based upon the Board's discussions and reviews described above, the Board
consents to the inclusion of the audited financial statements in the financial statements filed with the Company'sCompan's
Annual Report on Form 10-KSB for the year endingended December 31, 1998, includes limitations based on2000 filed with the
assumptionSecurities and Exchange Commission.
PROPOSAL 3
INCREASE THE AUTHORIZED ISSUANCE PURSUANT TO THE 1993 STOCK OPTION PLAN BY ONE
MILLION (1,000,000) SHARES
In November of 1993, the Board of Directors adopted, and the stockholders
subsequently approved, the Company's 1993 Stock Option Plan (the "1993 Plan"),
which provides for the authorized issuance of Incentive Stock Options as
described in Section 422A of the Internal Revenue Code to key management and
employees to those individuals responsible for the management, growth and
financial success of the Company. The 1993 Plan also provides for the authorized
issuance of Nonqualified Stock Options which are not intended to qualify under
any provisions of the Internal Revenue Code to provide incentives to eligible
employees, officers, directors, and consultants whose present and potential
contributions are important to the continued success of the Company, and to
afford those individuals the opportunity to acquire a proprietary interest in
the Company and enable the Company to enlist and retain in its employment
qualified personnel for the successful conduct of its business. The number of
shares initially authorized for issuance under the 1993 Plan was 1,875,000. In
October, 1995, the shareholders approved an increase in the number of shares
authorized for issuance under the 1993 Plan of 1,000,000 shares so that a total
of 2,875,000 shares are currently authorized for issuance under the 1993 Plan.
In an effort to conserve cash, the Board of Directors has determined that
it is in the best interest of the Company to offer options under the 1993 Plan
to its officers, directors, employees and consultants in lieu of, or as a
supplement for cash compensation. Options to purchase a total of 2,180,259
shares are currently outstanding under the 1993 Plan and the remaining balance
of 694,471 shares is not sufficient to meet the anticipated compensation
requirements of the Company. The Board has therefore approved a
-8-
resolution increasing the authorized shares pursuant to the 1993 Plan to
3,875,000, an increase of 1,000,000 shares, to ensure that the Company willcan
continue as a going concern. Other thanto grant stock options to officers, directors, employees and
consultants in amounts deemed necessary by the uncertainty inherentBoard of Directors and the
Compensation Committee.
Stockholders are requested in this Proposal to approve an increase in the
going concern assumption, such financial statements
did not contain an adverse opinionauthorized number of shares pursuant to the 1993 Stock Option Plan by 1,000,000
shares. The affirmative vote of the holders of a majority of the shares present
in person or a disclaimer of opinion nor was it
modified asrepresented by proxy and entitled to uncertainty, audit scope or accounting principles. The prior
financial statement report of Ernst & Young, included invote at the financial
statements filed with the Company's Form 10-KSB for the year ending December 31,
1997, did not contain any limitation based on the Company's abilitymeeting will be
required to continue
as a going concern.
The board of directors of Vyrex Corporation approved the change in
independent auditors.
There were no disagreements between the Company and Ernst & Young LLP,
within the two year period ended December 31, 1998, and the interim period of
January 1, 1999 through April 21, 1999, on matters of accounting principles of
practice, financial statement disclosure or auditing scope of procedure.approve this Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
STOCKHOLDER PROPOSALS
NO STOCKHOLDER PROPOSALS WERE RECEIVED.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Under Regulation Section 240.14a-8 adopted pursuant to Section 14(a) of the
securities Exchange Act of 1934, stockholders who intend to submit proposals at
the 20012002 Annual Meeting must submit such proposals to the Company no later than
January 12, 200131, 2002 in order for them to be included in the Proxy Statement and the
form of Proxy to be distributed by the Board in connection with that meeting. If
the 20012002 annual meeting is held on a date which is not within 30 days of June
12, then such proposals must be be submitted a reasonable time before the Company
begins to print and mail its proxy materials If a stockholder wishes to have a
proposal considered at the 20012002 Annual Meeting but does not utilize the process
set forth in Regulation Section 240.14a-8, a stockholder proposal is not timely
unless delivered to or mailed to the Secretary of the Company and received at
the executive office of the Company no later than March 28, 2001.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 2000 Annual Meeting of
Stockholders must be received by the Company no later than March 30, 2000 in
order to be eligible for inclusion in the proxy statement and form of proxy
relating to that meeting.2002
ANNUAL REPORT
The Company's Annual Report which includes audited statements for the
Company's fiscal year ended December 31, 1999,2000, is being mailed with this Proxy
Statement to stockholders of record on or about May 12, 2000.11, 2001. Any stockholder
may request a copy of the Company's 19992000 Form 10-KSB by writing to G. Dale
Garlow, President and CEO, Vyrex Corporation, 2159 Avenida de la Playa, La
Jolla, CA 92037.
.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
accordance with the judgment of the persons voting the proxies.
-11-
Whether you intend to be present at the Annual Meeting or not, we urge you
to return your signed proxy card promptly.
By order of the Board of Directors.
/s/ G. Dale Garlow
------------------------------
G. Dale Garlow
President and CEO
-12-Chief Executive Officer
-9-
VYREX CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all other proxies previously given, hereby appoints
Sheldon S. Hendler and Dale Garlow, and each of them, as Proxies, each with the
power to appoint his substitute, and hereby authorizes each of them to represent
and to vote, all the shares of common stock of Vyrex Corporation held of record
by the undersigned on April 30, 20002001 at the Annual Meeting of Stockholders to be
held on June 12, 200011, 2001 or any adjournment or postponement thereof.
THIS PROXY WHEN PROPERTY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 2.3. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING, PROXIES WILL VOTE ON THESE MATTERS AS THE PROXIES NAMED HEREIN
MAY DETERMINE IN THEIR SOLE DISCRETION.
(Continued and to be signed on the reverse side)
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. Please mark / X /
your vote as
indicated in
this example
1. ELECTION OF THREE DIRECTORS: G. DALE GARLOW, SHELDON S. HENDLER, PH.D., M.D.,
RICHARD G. MCKEE, JR.
FOR all nominees WITHHOLD
listed (except as AUTHORITY (INSTRUCTION: To withhold authority to vote for any individual nominee,
indicated to the right to vote for all write that nominee's name in the space provided below.)
nominees listed
/ / / / ------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF J.H. COHN LLP AS To transact such other business
THE COMPANY'S INDEPENDENT AUDITORS OF THE COMPANY. as may properly come before the
Annual Meeting.
FOR AGAINST ABSTAIN
/ / / / / / Receipt of the Vyrex Corporation Proxy Statement
10-KSB for the year ended December 31, 1999 is
hereby acknowledged. Please vote my shares on the
face of this proxy.
When shares are heldTHE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
Please mark
your vote as [X]
indicated in
this example
1. ELECTION OF FIVE DIRECTORS: G. DALE GARLOW, SHELDON S. HENDLER, PH.D., M.D.,
RICHARD G. MCKEE, JR., LAURIE A. ROBINSON,
TOM K. LARSON, JR.
FOR all nominees WITHHOLD
listed (except as AUTHORITY
indicated to the right) to vote for all
nominees listed
[ ] [ ]
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
--------------------------------------------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF J.H. COHN LLP AS THE
COMPANY'S INDEPENDENT AUDITORS OF THE COMPANY.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. PROPOSAL TO APPROVE AN INCREASE IN THE NUMBER OF SHARES RESERVED FOR
THE COMPANY'S 1993 STOCK OPTION PLAN BY ONE MILLION (1,000,000) SHARES.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
To transact such other business as may properly come before the Annual Meeting.
Receipt of the Vyrex Corporation Proxy Statement and 10-KSB for the year ended
December 31,2000 is hereby acknowledged. Please vote my shares on the face of
this proxy.
When shares are hold by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please sign 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.
Signature(s)________________Signature(s)________________Date_____________, 2000 Signature(s) Date , 2001
-------------------- ---------------------- ----
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.