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:

        ------------------------------------------------------------------------
    (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):

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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.

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                                     [LOGO]

                                VYREX CORPORATION
                            2159 Avenida de la Playa
                               La Jolla, CA 92037
                                 (619)(858) 454-4446


April 30, 19992001

Dear Stockholder:

     You are cordially invited to attend the Annual Meeting of Stockholders,
which will be held on FridayMonday, June 11th, 19992001 at 10:00 a.m., at the Sea Lodge
Hotel, 8110 Camino del Oro,offices of
Vyrex Corporation, 2159 Avenida de la Playa, La Jolla, California 92037.

     The enclosed materials include a copy of our 1998 10-K SB,2000 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,


                                         Sheldon S. Hendler, Ph.D., M.D.
                                       Chairman/s/ G. Dale Garlow
                                         --------------------------
                                         G. Dale Garlow
                                         President and Chief Executive Officer



                                VYREX CORPORATION

                                 -----------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD JUNE---------------

                    Notice of Annual Meeting of Stockholders
                            to be held June 11, 1999

                                -----------------2001

                                 ---------------

     The Annual Meeting of Stockholders of Vyrex Corporation (the "Company")
will be held at the Sea Lodge HotelVyrex Corporate Offices at 2159 Avenida de la Playa, La Jolla,
California 92037 on Monday, June 11th, 19992001 at 10:00 a.m., for the following
purposes:

     1. To elect sixfive directors to the board.Board.

     2. To ratify the selection of J.H.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, 19992001 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,


                                        Carl M. Lewis
                                     Secretary/s/ G. Dale Garlow
                                        -------------------------
                                        G. Dale Garlow
                                        President and Chief Executive Officer


April 30,  1999

                                       -2-2001



                                VYREX CORPORATION

                               ------------------------------------

                                 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 The Sea Lodge Hotel,Vyrex Corporate Office, 2159 Avenida de la Playa,
La Jolla, California, 92037 at 10:00 a.m. on June 11, 1999,2001, 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.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 11, 2001.

RECORD DATE AND SHARES OUTSTANDING

     Stockholders of record at the close of business on April 30, 19992001 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 7,423,4558,342,867 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 Carl LewisG. Dale Garlow at Vyrex
Corporation, (619)(858) 454-4446. To provide the Company sufficient time to arrange
for reasonable assistance or accommodation, please submit all requests by May
27, 1999.25, 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

     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 -3-

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.

     This Proxy Statement and the accompanying form of proxy are mailed to 
stockholders on or about May 7, 1999.


                                    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 six (6)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 sixfive nominees named below, all of whom are presently directors of
the Company. The sixfive nominees for director receiving the highest number of
affirmative votes of the shares entitled to be voted for 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.


                                      -2-


     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 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, 1999,2001, and the year in
which each became a director of the Company.

                                       -4-



NAME AND PRINCIPAL OCCUPATION AT PRESENT DIRECTOR AND FOR THE PAST FIVE YEARS; DIRECTORSHIPS SINCE AGE ------------------------------------------- -------------------------------------------------- ----- --- Dennis J. Carlo, Ph.D. A co-founder of The Immune Response 1995 55 Corporation, Dr. Carlo is the President and Chief Executive Officer. From 1987-1994, he served as Chief Scientific Officer and Chief Operating Officer of the Company. He was formerly Vice President of Research and Development and Therapeutic Manufacturing at Hybritech, Inc., a biotechnology company acquired in 1986 by Eli Lilly & Co. Previously, Dr. Carlo held various positions at Merck & Co. Inc., a pharmaceutical company, including director of developmental and basic cellular immunology and director of bacterial vaccines and immunology. He has co-authored over 100 articles and abstracts in the field of immunology. He was named Biotechnology 1991 Entrepreneur of the Year. He is currently a member of the Board of Directors for The Immune Response Corporation and for Vyrex Corporation. In addition, he is on the Advisory Council of the Sidney Kimmel Cancer Center, a Sharp HealthCare affiliate. He received his bachelor's, master's and doctoral degrees from Ohio State University. Gregory F. Gilbert, Esq. President of Biophile, USA, Inc., since 1993 51 1981 and President of Hamilton-Clarke Industries since 1996. Mr. Gilbert holds a J.D. from the University of the Pacific, a B.S. in Engineering from the University of Arizona and a B.S. in Business from Grand Canyon University. Joyce M. Hendler, Ph.D. A clinical psychologist and media 1991 60 consultant since 1972. She has held a number of teaching positions, worked in executive training and development at Revlon Corporation, and edited a psychology textbook with the late Dr. Stanley Milgram. She is a member of the American Psychological Association. Joyce M. Hendler is the wife of Sheldon S. Hendler. Sheldon S. Hendler, Ph.D., M.D.M.D Chairman of the Board and Director of Scientific Affairs 1991 64 since 2000. Previous Chief Executive Officer of the Company 1991 62 since 1991.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 -5- 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. Dr. Hendler is the husband of Dr. Joyce Hendler. Carl M. Lewis, Esq. Executive ViceG. Dale Garlow President and Chief Executive Officer. Mr. 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 Richard G. McKee, Jr. Managing General 1991 47 Counsel since 1997. From 1996 to 1997, Mr. Lewis wasPartner of Dynamic Value Partners, Ltd., a 2000 44 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 Business DevelopmentFirst 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 Legal Affairs,portfolio manager at Fundamental Management Corporation in Miami, Florida and since 1991 has been Secretary, General Counselas Vice President of First Equity Corporation of Florida, a regional investment banking firm. -3- Laurie A. Robinson CEO and a Directorpart owner of the Company. Mr. Lewis has practiced lawRobinson Value Group Inc., an 2000 44 investment management business. Previously she served as a Psychotherapist in San Diego since 1985. Nolan E. Penn, Ph.D. Associate Chancellor (retired)Private Practice in Santa Barbara, California, an advertising executive for Media Graphics, created and managed a line of the 1995 70 Univer- sitywomen's accessories, author of California, San Diego. Professor'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 Psychiatry Emeritus at the School of Medicine, University of California, San Diego. Former memberInamed Corporation, a global surgical and medical device company. Previous positions included Vice President, Finance and CFO of a task force panel forprivately held specialty bed manufacturer, Vice President, Carter's Commission on Mental Health, the former PresidentFinance and CFO Revell Corporation, and held a number of the National Congresskey executive financial and administrative positions at Xerox Corporation. In addition he was an Equity Owner and Operation Officer of Black Faculty,four separate corporations and was a Consulting Editor of the Journal of Consulting and Clinical Psychiatry. Dr. Penn was founding Chairman of the Urban and Rural Studies program at the Thurgood Marshall College, University of California, San Diego, and founder and chair of the Department of Afro-American Studies at the University of Wisconsin, Madison.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 sixfour meetings during the year ended December 31, 1998. Each of the directors except Gregory Gilbert attended all the meetings, and Gregory Gilbert attended two of the six meetings.2000. COMMITTEES The Board of Directors includes a Compensation Committee and an Audit Committee. The Members of the Compensation Committee are Dennis Carlo and Nolan Penn. The Compensation Committee held one meeting during 1998. The Compensation Committee's functions are to assist in the administration of, and grant options under, the 1993 Stock Plan and to assist in the implementation of, and provide recommendations with respect to, general and specificcompany does not currently maintain standing audit, nominating or compensation policies and practices of the Company. The members of the Audit Committee are Nolan Penn and Dennis Carlo. The Audit Committee's functions are to review the scope of the annual audit, monitor the independent auditor's report, supervise the Company's financial and accounting organization and financial reporting and nominate for stockholder approval at the annual meeting, with the approval of the Board of Directors, a firm of certified public accountants whose duty it is to audit the financial records of the Company for the fiscal year for which it is appointed. One meeting was held during 1998. -6- committees. COMPENSATION OF DIRECTORS Outside directors of the Company will receive $1,000 per Board meetingstock options for their services as directors, plus an additional $500 for each committee meeting attended.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 AprilMarch 1, 19992001 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 -4- 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) 3,068,661 41.5% 8575 La Jolla Shores Drive La Jolla, CA 92037 Biophile USA 500,000 6.7% 8776 Killdee, Suite 100 Orangevale, CA 95662 Carl M. Lewis, Esq. (1)(3) 282,491 3.8% Martin Malk (2)(3) 45,833 .6% Gregory F. Gilbert, Esq. (2)(3) 25,839 .35% Dennis J. Carlo, Ph.D. (2)(3) 25,839 .35% Nolan E. Penn, Ph.D. (2)(3) 25,839 .35% Joyce M. Hendler, Ph.D. (4) 1,500 .02% Directors and Executive Officers as a Group (7) persons) 3,488,003 46.9%
1. Includes options to purchase 32,491 shares of common stock exercisable within 60 days from April 1, 1999. 2. Consists solely of options to purchase common stock all of which are exercisable within 60 days from April 1, 1999. 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 G. 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 of common stock. 2. Includes options to purchase 65,625 shares of common stock. 3. Became a member of the Board of Directors January 11, 2000 to fill a vacancy. 4. Excludes 3,048,170Includes 10,000 shares beneficially owned by Sheldon S. HendlerWendy J. McKee and voting rights of 75,973 shares controlled by Dynamic Value Partners, Ltd. 5. Became a member of the Board of Directors December 8, 2000 to which she disclaims beneficial ownership.fill a vacancy. There are no arrangements known to the Company which couldmay result in a change of control. -7--5- EXECUTIVE COMPENSATION The following table sets forth the compensation for services to the Company in all capacities for the fiscal year ended December 31, 1998,2000, by those persons who were, respectively, at December 31, 19982000 the Company's Chairman and the Company's Chief Executive Officer and the other four most highly compensated executive officers of the Company whose total annual salary and bonus for fiscal year 1998 exceeded $100,000 (the "Named Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM ANNUAL COMPENSATION COMPENSATION -------------------------------------------------------COMP. ------------------------------------------ AWARDS ----------------------- OTHER RESTRICTED SECURITIES ALL OTHER ANNUAL STOCK UNDERLYING LTIP COMPENSATIONALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION$COMP. AWARDS OPTIONS(#)OPTIONS (#) PAYOUTS COMP. - ---------------------------- ---------------------------------- ---- ---------- --------- ------------- ------ ---------- PAYOUTS TION ($)----------- ------- ------------------- Sheldon SS. Hendler 1998 $235,529 $ 50,5622000 -- -- -- -- -- -- -- Chairman and 1997 $206,303 $ 51,250 -- -- -- -- $ 2,359(1) Chief Executive Officer 1996 $164,675 -- -- -- -- -- $ 51,820(2)1999 $226,013(2) -- -- -- -- -- -- Carl M. Lewis 1998 $165,815 $ 35,834$235,529(1) $50,562 -- -- -- -- -- Executive Vice President 1997 $143,764 $ 33,750G. Dale Garlow 2000 -- -- -- -- -- and General Counsel 1996 $101,275 -- -- -- -- -- $ 8,000(3) Martin Malk 1998 $ 67,441(4) -- -- -- --350,000 -- -- Chief FinancialExecutive Officer
(1) Consists of amounts contributed to the individual'sindividua's 401(k) plan by the Company. (2) Includes $16,000 paid to Dr. Hendler as reimbursement for certain administrative costs during 1996 and $35,820 due from 1995. (3) Paid to Mr. Lewis as a consultant prior to his employment by Vyrex. (4) Consists of salary from July 16, 1998, commencement date of employment.deferred pay. All deferred pay was forgiven January 11th 2000. PENSION AND LONG-TERM INCENTIVE PLANS The Company has no pension or long-term incentive plans. -8- STOCK OPTIONS The following tables summarize option grants to and exercises by the Company's Chief Executive Officer and the Named Officers during fiscal 1998.2000. The Company does not grant Stock Appreciation Rights. OPTION GRANTS IN FISCAL YEAR 1998
OPTION GRANTS IN FISCAL YEAR 2000 INDIVIDUAL GRANTS ----------------------------------------------------------------------------------------------------------------------------------------------------------------- NUMBER OF % OF SECURITIES TOTAL OPTIONS EXERCISE UNDERLYING GRANTED TO OR BASE OPTIONS EMPLOYEES IN PRICE EXPIRATION NAME GRANTED (#) FISCAL YEAR ($/SH) DATE - ----------------------------------- ----------- ----------- ------ ---------- ------------- -------- --------- Sheldon S. Hendler............. 40,000(1) 4.16% $5.75 4/25/2008G. Dale Garlow................. 350,000(1) 100% $0.37 5/15/2010 Chief Executive Officer Carl M. Lewis.................. 40,000(1) 4.16% $5.75 4/25/2008 Executive Vice President and General Counsel Martin Malk.................... 200,000(1) 20.79% $0.406 9/14/2008 Chief Financial Officer
(1) Options vest 1/48 per month over 48 months, with 3/48 vesting after the first 90 day period of employment. The exercise price is based on the fair market value on the date the options were granted. -6- AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES The following table sets forth information concerning exercise of options and the fiscal year end option values during the fiscal year 1998,2000, with respect to the Company's Chief Executive Officer and each of the named officers.
VALUE REALIZED MARKET PRICE AT EXERCISE NUMBER OF UNEXERCISED VALUE OF UNEXERCISED EXERCISESHARES LESS OPTIONS/SAR'S AT FISCAL IN-THE-MONEY OPTIONS/SAR'S SHARES LESSACQUIRED ON EXERCISE YEAR-END (#) AT FISCAL YEAR-END ($) ACQUIRED EXERCISE ----------------------------- -------------------------------- NAME EXERCISE (#) PRICE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - -------------------- ------------ --------- ----------- ------------- ----------- ------------- Sheldon Hendler 0 0 16,663 63,33791,250 38,750 0 0 Carl LewisG. Dale Garlow 0 0 16,663 63,337 0 0 Martin Malk 0 0 25,000 175,00065,625 284,375 0 0
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 $235,529 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. -9- agreements at this time. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On December 23, 1996,During 2000 the Company loaned $50,000 to its Vice PresidentBoard was reconstituted and is now comprised of Chemistry. The loan is in the form of a secured note carrying 7% interest, whose principalSheldon S. Hendler Ph.D., M.D., as Chairman, G. Dale Garlow, Richard G. McKee, Jr., Laurie A. Robinson and interest is payable on demand. The loan was repaid in full in January 1999.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 1998.2000. 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, 1999,2001, 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. -7- 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. REPORT OF THE BOARD OF DIRECTORS Since there is not an audit committee of the Board of Directors, the entire Board conducts the functions of an audit committee. As such, the Board reviews and evaluates the Company's audited financial statements and monitors and oversees the Company'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 with management and has discussed with the independent 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 Compan's Annual Report on Form 10-KSB for the year ended December 31, 2000 filed with the Securities 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 can continue to grant stock options to officers, directors, employees and consultants in amounts deemed necessary by the Board of Directors and the Compensation Committee. Stockholders are requested in this Proposal to approve an increase in the authorized 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 represented by proxy and entitled to vote at the meeting will be required to approve this Proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3. STOCKHOLDER PROPOSALS No stockholder proposals were received.NO STOCKHOLDER PROPOSALS WERE RECEIVED. DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR THE 19992002 ANNUAL MEETING ProposalsUnder 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 2002 Annual Meeting must submit such proposals to the Company no later than January 31, 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 2002 annual meeting is held on a date which is not within 30 days of June 12, then such proposals must 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 2002 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 that are intended to be presented by such stockholdersand received at the Company's 1999 Annual Meetingexecutive office of Stockholders must be received by the Company no later than March 30, 1999 in order to be eligible for inclusion in the proxy statement and form of proxy relating to that meeting.28, 2002 ANNUAL REPORT The Company's Annual Report which includes audited statements for the Company's fiscal year ended December 31, 1998,2000, is being mailed with this Proxy Statement to stockholders of record on or about May 7, 1999.11, 2001. Any stockholder may request a copy of the Company's 19982000 Form 10-KSB by writing to Martin Malk, Chief Financial Officer,G. Dale Garlow, President and CEO, Vyrex Corporation, 2159 Avenida de la Playa, La Jolla, CA 92037. -10- . 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. 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. Carl M. Lewis Secretary -11-/s/ G. Dale Garlow ------------------------------ G. Dale Garlow President and 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 Carl M. Lewis,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, 1999,2001 at the Annual Meeting of Stockholders to be held on June 11, 19992001 or any adjournment or postponement thereof. THIS PROXY WHEN PROPERLYPROPERTY 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(Continued and to be signed on the reverse side) FOLD AND DETACH HERE ANNUAL MEETING OF STOCKHOLDERS FRIDAY JUNE 11TH, 1999 AT 10:00 A.M. THE SEA LODGE HOTEL 8110 CAMINO DEL ORO LA JOLLA, CA 92037 PLEASE MARK- -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 2. YOUR VOTE AS / / INDICATED IN THIS EXAMPLE3. Please mark your vote as [X] indicated in this example 1. ELECTION OF FIVE DIRECTORS: Dennis J. Carlo, Ph.D., Gregory F. Gilbert, Esq., Joyce M. Hendler, Ph.D., SheldonG. DALE GARLOW, SHELDON S. Hendler, Ph.D.HENDLER, PH.D., M.D., Carl M. Lewis, Esq.RICHARD G. MCKEE, JR., Nolan E. Penn, Ph.D.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 listed (except as AUTHORITY vote for any individual indicated to the to vote for all nominee, write that right) nominees nominee's name in the listed space provided below.) --------------------------------------------------------------------------------------- 2. Proposal to ratify the selection ofPROPOSAL TO RATIFY THE SELECTION OF J.H. CohnCOHN LLP as the Company's independent auditors of the Company.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, 199831,2000 is hereby acknowledged. Please vote my shares on the face of this proxy. When shares are heldhold 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 _________, 1999, 2001 -------------------- ---------------------- ---- PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE FOLD AND DETACH HEREENVELOPE.