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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
INTERLEUKIN GENETICS, INC.
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(Name of Registrant as Specified in its Charter)
INTERLEUKIN GENETICS, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Fee paid previously with preliminary materials:
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[ ] 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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INTERLEUKIN GENETICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Interleukin Genetics, Inc. (the "Company") will be held on Friday, June 15,
2001, at 10:00 a.m., Eastern Time, at the Company's executive offices, located
at 135 Beaver Street, Waltham, Massachusetts 02452, for the following purposes:
1. To elect two (2) directors to serve until the 2004 Annual Meeting or
until their successors are elected and have qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the fiscal year ending December 31, 2001; and
3. To consider and act upon any other matter which may properly come before
the meeting or any adjournment thereof. The Board of Directors is presently
unaware of any other business to be presented to a vote of the stockholders at
the Annual Meeting.
More information regarding the above matters is set forth in the Proxy
Statement that accompanies this Notice.
The Board of Directors of the Company has fixed the close of business on
May 10, 2001, as the record date for determining stockholders entitled to notice
of and to vote at the meeting. A complete list of the stockholders entitled to
vote at the meeting will be maintained at the Company's principal executive
offices during ordinary business hours for a period of ten (10) days prior to
the meeting. The list will be open to the examination of any stockholder for any
purpose germane to the meeting during this time. The list will also be produced
at the time and place of the meeting and will be open during the whole time
thereof.
By Order of the Board of Directors,
PHILIP R. REILLY
Chairman of the Board and Chief
Executive Officer
Waltham, Massachusetts
May 17, 2001
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN IF
YOU PLAN TO BE PRESENT, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT
YOUR EARLIEST CONVENIENCE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY.
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INTERLEUKIN GENETICS, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 15, 2001
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy are furnished to the
stockholders of Interleukin Genetics, Inc., a Delaware corporation (the
"Company", "ILGN", "we", "us" or "our"), in connection with the solicitation by
the Board of Directors of proxies for use at the Annual Meeting of Stockholders
(the "Annual Meeting" or "Meeting") to be held on June 15, 2001, at 10:00 a.m.,
Eastern Time, at the Company's executive offices, located at 135 Beaver Street,
Waltham, Massachusetts 02452. If the Meeting is continued or postponed for any
reason, the proxies can be used at the continuation or new date for the purposes
defined in the preceding Notice of Annual Meeting of Stockholders. Properly
executed proxies received at, or prior to the Meeting will be voted.
Only holders of record of the Company's common stock, $0.001 par value per
share ("Common Stock"), at the close of business on May 10, 2001 (the "Record
Date") are entitled to vote at the Annual Meeting. On that date there were
outstanding and entitled to vote 21,395,773 shares of Common Stock, each of
which is entitled to one vote per share.
The Annual Report to Stockholders for the year ended December 31, 2000, has
been or is being furnished with this Proxy Statement, which is being mailed on
or about May 17, 2001, to the holders of record of Common Stock on the Record
Date. The Annual Report to Stockholders does not constitute a part of the proxy
materials.
VOTING AND PROXY PROCEDURES
Stockholders are urged to specify their choices on the proxy, but if no
choice is specified, eligible shares will be voted FOR the election of the two
nominees for director named in this Proxy Statement and FOR ratification of the
appointment of Arthur Andersen LLP as our independent public accountants for the
fiscal year ending December 31, 2001. At the date of this Proxy Statement, we
know of no other matters which are likely to be brought before the Annual
Meeting. However, if any other matters should properly come before the Annual
Meeting, the persons named in the enclosed proxy card will have discretionary
authority to vote in accordance with their best judgment.
You retain the right to revoke your proxy at any time up to and including
the time of the Annual Meeting by filing a later-dated proxy or by written
notice filed with our Secretary at our executive offices or by voting your
shares in person at the Annual Meeting. Our executive offices are located at 135
Beaver Street, Waltham, Massachusetts 02452.
A quorum of stockholders is required to hold a valid meeting. If the
holders of a majority of the total shares of Common Stock entitled to vote are
either present in person or represented by proxy, then a quorum will exist.
Abstentions and broker non-votes are each included in the number of shares
present at the Annual Meeting for purposes of establishing a quorum. The
affirmative vote of the holders of a plurality of the shares of Common Stock
present in person or represented by proxy and entitled to vote is required for
the election of directors and thus, abstentions and broker non-votes have no
effect on the outcome of the election of directors. The appointment of Arthur
Andersen LLP as the independent public accountants for the fiscal year ending
December 31, 2001 requires the affirmative vote of a majority of the total
shares of Common Stock present in person or represented by proxy and entitled to
vote and, therefore, abstentions will have the same effect as a vote against
that proposal. Broker non-votes will not be included in the vote totals and,
therefore, will have no effect on the outcome of a proposal.
The cost of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, proxies may be solicited by our directors,
officers and employees, without additional compensation (other than
reimbursement of out-of-pocket expenses), by personal interview, telephone,
telegram or otherwise. Arrange-
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ments will also be made with brokerage firms and other custodians, nominees and
fiduciaries who hold the voting securities of record for the forwarding of
solicitation materials to the beneficial owners of Common Stock. We will
reimburse such brokers, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them.
OWNERSHIP OF COMMON STOCK
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table outlines certain information regarding stockholders a)
who are known to us to beneficially own at least 5% of our Common Stock, b) who
are our directors, or nominees for director, c) who are named in the Summary
Compensation Table and d) all of our directors and executive officers as a
group. Such persons have sole voting power and sole dispositive power with
respect to all shares set forth in the table unless otherwise specified in the
footnotes to the table.
AMOUNT
AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP PERCENT(2)
--------------------------------------- ------------- ----------
Special Situations Fund..................................... 1,800,000(3) 8.53%
153 E 53rd Street, 55th Floor
New York, NY 10022
Hathaway and Associates LTD................................. 1,743,500 8.50%
119 Rowayton Avenue
Rowayton, CT 06853
Cathy Fine.................................................. 1,641,000(4) 7.70%
131 Talmadge Hill Road
New Canaan, CT 06840
Stephen Garofalo............................................ 1,510,967 7.37%
6 Teal Court
New City, NY 10956
Gary L. Crocker............................................. 1,250,000(5) 6.05%
Kenneth S. Kornman.......................................... 1,110,204(6) 5.39%
The Tailwind Fund Ltd. ..................................... 1,064,407(7) 5.13%
Windemere House
404 E. Bay Street
P. O. Box 555539
Nassau, Bahamas
Edward M. Blair, Jr. ....................................... 470,000(8) 2.29%
Philip R. Reilly............................................ 429,534(9) 2.05%
Thomas A. Moore............................................. 163,054(10) *
Fenel M. Eloi............................................... 38,665(11) *
Paul (Kip) M. Martha........................................ 20,000(12) *
John Garofalo............................................... 25,000(13) *
All executive officers and directors as a group (eight
persons, including the executive officers and directors
listed above)............................................. 3,506,457(14) 16.44%
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* Less than 1%
(1) Except as otherwise noted, the street address of the named beneficial owner
is care of Interleukin Genetics, Inc. 135 Beaver Street, Waltham MA 02452.
(2) Based on a total of 20,500,529 shares of Common Stock issued and
outstanding on March 31, 2001.
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(3) Reflects 990,000 shares beneficially owned by Special Situations Fund III
L.P. of which 330,000 shares are issuable pursuant to warrants; 480,000
shares beneficially owned by Special Situations Private Equity Fund L.P. of
which 160,000 are issuable pursuant to warrants; 330,000 shares
beneficially owned by Special Situations Cayman Fund L.P. of which 110,000
are issuable pursuant to warrants.
(4) Includes 803,000 shares of Common Stock issuable pursuant to a warrant held
by Ms. Fine.
(5) Includes 1,000,000 shares owned by Crocker Enterprises LLC, of which Mr.
Crocker is the President. Mr. Crocker disclaims beneficial ownership of
these shares. Includes 50,000 shares of Common Stock issuable pursuant to
options held by Mr. Crocker.
(6) Includes 918,723 shares of Common Stock held by a limited partnership of
which Dr. Kornman is a general partner. As such, Dr. Kornman may be deemed
the beneficial owner of such shares. Dr. Kornman disclaims beneficial
ownership of such shares. Includes 94,031 shares of Common Stock issuable
pursuant to options held by Dr. Kornman and 20,000 shares of Common Stock
issuable pursuant to warrants held by Dr. Kornman.
(7) Includes 264,407 shares of Common Stock issuable pursuant to warrants.
(8) Includes 100,000 shares of Common Stock held in trusts, of which Mr. Blair
is a co-trustee, and as such may be deemed the beneficial owner of such
shares. Mr. Blair disclaims beneficial ownership of these shares. Includes
50,000 shares of Common Stock issuable pursuant to options held by Mr.
Blair.
(9) Includes 428,534 shares of Common Stock issuable pursuant to options held
by Dr. Reilly.
(10) Includes 85,000 shares of Common Stock issuable pursuant to options and
15,000 shares of Common Stock issuable pursuant to warrants held by Mr.
Moore.
(11) Includes 36,665 shares of Common Stock issuable pursuant to options held by
Mr. Eloi.
(12) Includes 20,000 shares of Common Stock issuable pursuant to options held by
Dr. Martha.
(13) Includes 25,000 shares of Common Stock issuable pursuant to options held by
Dr. Garofalo.
(14) Includes 100,000 shares of Common Stock held in trusts of which an
executive officer or director is a co-trustee, 1,918,723 shares of Common
Stock held by limited partnerships of which an executive officer or
director is a partner, 789,280 shares of Common Stock issuable pursuant to
options, 35,000 shares of Common Stock issuable pursuant to warrants.
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
The two directors assigned to Class I have been nominated to serve for a
three-year term or until their successors are elected and have qualified. Both
of the nominees named below are now directors of the Company. The nominees have
consented to be named and have indicated their intent to serve if elected.
The table below provides information about each nominee and about each
director whose term continues after the meeting.
NOMINEES FOR TERM EXPIRING IN 2004:
Class I
POSITIONS AND OFFICES SERVED AS A
NAME AGE WITH THE COMPANY DIRECTOR SINCE
---- --- --------------------- --------------
Philip R. Reilly.................... 53 Chairman of the Board of Directors 1998
and Chief Executive Officer
John Garofalo....................... 46 Director 2000
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DIRECTORS WHOSE TERM EXPIRES IN 2002:
Class II
POSITIONS AND OFFICES SERVED AS A
NAME AGE WITH THE COMPANY DIRECTOR SINCE
---- --- --------------------- --------------
Kenneth S. Kornman.................. 53 President, Chief Scientific Officer 1986
and Director
Thomas A. Moore..................... 50 Director 1997
DIRECTORS WHOSE TERM EXPIRES IN 2003:
Class III
Edward M. Blair, Jr. ............... 58 Director 1999
Gary L. Crocker..................... 49 Director 1999
Biographical information on the nominees is contained in the section titled
"Further Information -- Board of Directors and Executive Officers" beginning on
page 6. Mr. Garofalo was elected to the Board pursuant to a private placement
the Company conducted in January 2000. Messrs. Blair and Crocker were elected to
the Board pursuant to a private placement the Company conducted in June 1999.
It is the intention of the people named in the enclosed proxy card to vote
the proxy for the election of the nominees. We do not contemplate that either of
the nominees will become unavailable for any reason, but if they did become
unavailable before the meeting, proxies that do not withhold authority to vote
for directors will be voted for another nominee, or other nominees, in
accordance with the best judgment of the person or persons appointed to vote the
proxy.
The enclosed form of proxy provides a means for the holders of Common Stock
to vote for each of the nominees listed, to withhold authority to vote for one
or both of the nominees or to withhold authority to vote for all nominees. Each
properly executed proxy received in time for the Meeting will be voted as
specified, or if a stockholder does not specify in his or her executed proxy how
the shares represented by his or her proxy are to be voted, the shares will be
voted for the nominees listed or for other nominees as provided above. The
director nominees receiving the affirmative vote of a plurality of the total
shares of Common Stock present in person or represented by proxy and entitled to
vote will be elected as directors. Abstentions and broker non-votes will not be
included in the vote totals and, therefore, will not affect the outcome of the
election.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Company is managed under the direction of the Board of Directors. Our
Board of Directors has established two standing committees: Audit and
Compensation.
The Audit Committee recommends to the Board of Directors the engagement of
the independent auditors and reviews the independence of the auditors and the
scope and results of our procedures for the adequacy of the system of internal
accounting controls. The Audit Committee consists of three non-employee
directors: Thomas A. Moore, Edward M. Blair, Jr. and Gary L. Crocker. For more
information regarding our Audit Committee, see the section titled "Further
Information -- Audit Committee Report to the Board of Directors."
The Compensation Committee reviews our compensation philosophy and
programs, exercises authority with respect to the payment of direct salaries and
incentive compensation to our directors and officers and makes recommendations
to the Board of Directors regarding stock option grants under the Company's 2000
Employee Stock Compensation Plan (the "Incentive Plan"). The Compensation
Committee consists of three non-employee directors: Thomas A. Moore, Gary L.
Crocker and John Garofalo.
MEETINGS OF THE BOARD OF DIRECTORS
During 2000, the Board of Directors met six times and took action by
unanimous written consent on six occasions. Both the Compensation Committee and
the Audit Committee met once during 2000. Each of the directors of the Company
attended at least 75% of the aggregate of the meetings of the Board of Directors
and committees of which he was a member.
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COMPENSATION OF DIRECTORS
Directors who are not employees receive $500 in cash compensation for each
meeting of the Board of Directors attended in person and an annual option grant
of 25,000 shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE INDIVIDUALS NOMINATED FOR ELECTION AS DIRECTORS
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
appointed the firm of Arthur Andersen LLP to serve as our independent public
accountants for the fiscal year ending December 31, 2001. Although stockholder
ratification is not required, the Board of Directors has directed that such
appointment be submitted to the stockholders of the Company for ratification at
the Annual Meeting. Arthur Andersen LLP has served as our independent public
accountants for the past three years and is considered to be well qualified by
our management. If the stockholders do not ratify the appointment of Arthur
Andersen LLP, the Board of Directors may reconsider the appointment.
AUDIT FEES. Arthur Andersen LLP billed aggregate fees of $40,000 for
professional services rendered for (i) the audit of the Company's financial
statements for the year ended December 31, 2000 and (ii) the review of the
financial statements included in the Company's quarterly reports on Form 10-Q
filed with the Securities and Exchange Commission.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. No fees were
billed by Arthur Andersen LLP for professional services during 2000 in
connection with financial information systems design and implementation.
ALL OTHER FEES. The aggregate of all other fees billed by Arthur Andersen
LLP for professional services rendered during 2000 was $20,000. Those services
included federal and state income tax compliance and return preparation.
All audit and non-audit services provided by Arthur Andersen LLP are
approved by the Company's Audit Committee, which considers whether the provision
of non-audit services is compatible with maintaining the independence of Arthur
Andersen LLP.
Representatives of Arthur Andersen LLP are expected to be present at the
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 from
stockholders.
Assuming the presence of a quorum, ratification of the appointment of
Arthur Andersen LLP requires the affirmative vote of a majority of the total
shares of Common Stock present in person or represented by proxy and entitled to
vote. Abstentions will have the same effect as votes against this proposal.
Broker non-votes will not be included in the vote totals and, therefore, will
have no effect on the outcome of this proposal. Proxies will be voted for or
against such approval in accordance with specifications marked thereon, and if
no specification is made, the proxies will be voted for such approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2001.
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FURTHER INFORMATION
BOARD OF DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Set forth below is biographical and other information with respect to each
director and executive officer of the Company as of March 31, 2001. The
executive officers are elected by the Board of Directors and serve at the
discretion of the Board.
NAME AGE POSITION
---- --- --------
Philip R. Reilly.......................... 53 Chairman of the Board of Directors and Chief
Executive Officer
Kenneth S. Kornman........................ 53 President, Chief Scientific Officer and Director
Fenel M. Eloi............................. 42 Chief Operating Officer and Chief Financial
Officer
Paul (Kip) M. Martha...................... 47 Chief Medical Officer
Thomas A. Moore........................... 50 Director(1)(2)
Edward M. Blair, Jr....................... 58 Director(1)
Gary L. Crocker........................... 49 Director(1)(2)
John Garofalo............................. 46 Director(2)
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
PHILIP R. REILLY, M.D., J.D. became Interleukin Genetic's Chief Executive
Officer in December of 1999. In June 1999, Dr. Reilly had accepted the positions
of Chairman of the Board of Directors and Interim Chief Executive Officer of the
Company. He became a Director of the Company in 1998. Prior to joining the
Company as Chief Executive Officer, Dr. Reilly held the position of Executive
Director of the Eunice Kennedy Shriver Center for Mental Retardation, Inc.
("Shriver"), a not-for-profit organization located in Massachusetts, a position
he had held since 1990. Dr. Reilly has held numerous teaching positions,
including Assistant Professor of Neurology at Harvard Medical School and Adjunct
Professor of both Legal Studies and Biology at Brandeis University. He is a Past
President (2000) of the American Society of Law, Medicine, and Ethics. From
1994-1997, he was on the Board of Directors of the American Society of Human
Genetics. He is a current member of the American College of Medical Genetics,
Massachusetts Bar Association, and American Association for the Advancement of
Science. Dr. Reilly has served on many national committees chartered to explore
public policy issues raised by advances in genetics. He is the author of four
books and has published more than 100 articles in scholarly journals. Dr. Reilly
holds a BA from Cornell University, a J.D. from Columbia University and an M.D.
from Yale University.
KENNETH S. KORNMAN, D.D.S., PH.D. is a co-founder, officer and Director of
the Company and currently holds the positions of President and Chief Scientific
Officer. Prior to founding the Company in 1986, he was a Department Chair and
Professor at The University of Texas Health Science Center at San Antonio. He
has also been a consultant and scientific researcher for many of the major oral
care and pharmaceutical companies. Dr. Kornman currently holds academic
appointments at The University of Texas Health Science Center and Harvard
University. Dr. Kornman holds six patents in the pharmaceutical area, has
published two books and more than 100 articles and abstracts and has lectured
and consulted worldwide on the transfer of technology to clinical practice. Dr.
Kornman holds a BA in Economics from Duke University. He obtained a D.D.S. from
Emory University. Dr. Kornman also holds an MS (Periodontics) and a Ph.D.
(Microbiology) from the University of Michigan.
FENEL M. ELOI is currently the Chief Operating Officer and Chief Financial
Officer of the Company, positions he has held since June of 2000. Prior to
joining Interleukin Genetics, Mr. Eloi was Senior Vice President and Chief
Financial Officer for LifeCell Corporation since 1999. Before joining LifeCell,
he was employed at Genome Therapeutics Corporation, where he served as Corporate
Controller from 1989 to 1991, and as Senior Vice President and Chief Financial
Officer from 1991 to 1999. From 1984 to 1989, Mr. Eloi held the position of
Business Unit Financial Manager at GTE/Verizon Corporation. He also held various
positions at Haemonetics Corporation and Simplex Corporation. Mr. Eloi has an
MBA from Anna Maria College in Paxton, Massachusetts, as well as a BA from Lee
University in Cleveland, Tennessee.
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PAUL (KIP) M. MARTHA, JR., M.D., joined the Company in November 2000 as its
Vice President for Clinical R&D and Chief Medical Officer. Prior to joining
Interleukin, Dr. Martha served as Vice President in the Department of Clinical
R&D at PRAECIS Pharmaceuticals, Inc., a position he held for almost three years.
From 1993-1998, he held various senior-level positions at Genentech, Inc.,
including Director of Endocrinology, one of the company's four therapeutic focus
areas. Prior to joining Genentech, Dr. Martha served on the medical school
faculties of the Tufts University School of Medicine, and the University of
Virginia Health Sciences Center. The author or co-author of over 100 published
articles, book chapters and abstracts in the medical literature, Dr. Martha has
also delivered invited presentations and lectures at numerous medical schools,
hospitals, and scientific meetings throughout the United States and Europe. He
received his M.D. from the University of Connecticut School of Medicine and his
BS from Trinity College.
THOMAS A. MOORE became a Director of the Company in 1997. Mr. Moore is the
Chief Executive Officer and President of Nelson Communications Worldwide, one of
the largest providers of health care marketing services globally and a division
of Publicis Groupe, S.A. Prior to joining Nelson Communications as President in
1996, Mr. Moore was President of Procter & Gamble's $3 billion worldwide
prescription and over-the-counter healthcare business and Group Vice President
of the Procter & Gamble Company. He joined Procter & Gamble in 1973 and held
positions of increasing responsibility in the company's cleaning products,
beauty care, Richardson-Vicks and personal care divisions. He is Chairman of the
American Health Foundation -- a non-profit organization that researches the
nutritional and environmental factors in cancer and other diseases. Mr. Moore
holds a BA (History) from Princeton University.
GARY L. CROCKER became a Director of the Company in 1999. Mr. Crocker has
served as President of Crocker Ventures, LLC, a private venture capital firm,
since 1997, and as Chairman of the Board of ARUP Laboratories, a privately held
specialty diagnostic testing firm, since January 1999. From 1983 to 1997, Mr.
Crocker served as the President and CEO of Research Medical, Inc., a
manufacturer of cardiovascular specialty devices, which was acquired by Baxter
International in 1997. He also served as a Director of Theratech, Inc. from 1984
until its acquisition by Watson Pharmaceuticals in 1999. Mr. Crocker serves as
Vice-Chairman of the University of Utah Board of Trustees, and on the Budget and
Finance Committee of the University of Utah Hospital Board. Mr. Crocker holds a
BA (Economics) and MBA from Harvard University.
EDWARD M. BLAIR, JR. became a Director of the Company in 1999. Mr. Blair is
a principal with the investment banking firm William Blair & Company, L.L.C.,
Chicago, Illinois. His focus for the last five years has been healthcare where
he has worked on a series of financing transactions in the healthcare industry.
Mr. Blair served as a trustee for Chicago Dock & Canal Trust from 1986 through
1997 and as a director of Research Medical, Inc. from 1984 and 1998. Mr. Blair
is on the Board of the University of Chicago Hospital where he is head of the
audit committee and is Chairman of the Chicago Zoological Society. He also
serves on the Board of the Pullman Foundation. Mr. Blair holds a BA (Political
Science) from Stanford University and an MBA from Harvard University.
JOHN GAROFALO, M.D. became a Director of the Company in June of 2000. Dr.
Garofalo has had a private practice in Obstetrics and Gynecology in Norwalk,
Connecticut for 17 years. He maintains a license to practice in both Connecticut
and New York. Dr. Garofalo did his residency at Beth Israel Medical Center in
New York. He received his M.D. from New York Medical College, and his BA in
Biology from New York University. Dr. Garofalo was certified as a diplomat of
the American Board of Obstetrics and Gynecology in 1985, and has continued on
the Board, having been most recently re-certified in 2000. He has also been a
member of several medical societies including the American Medical Association,
the Fairfield County Medical Society and the Connecticut State Medical Society.
He holds a Senior Attending appointment at Norwalk Hospital in Norwalk,
Connecticut, as well as committee memberships on that hospital's Executive
Committee and Quality Improvement Committee.
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Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934,
the following Report of the Audit Committee shall not be incorporated by
reference into any such filings and shall not otherwise be deemed filed under
such Acts.
AUDIT COMMITTEE REPORT TO THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors of the Company serves as the
representative of the Board for general oversight of our financial accounting
and reporting process, system of internal control, audit process, and process
for monitoring compliance with laws and regulations. The Audit Committee of the
Board is responsible for providing independent, objective oversight of the
Company's accounting functions and internal controls. Our management has primary
responsibility for preparing the financial statements and our financial
reporting process. Our independent accountants, Arthur Andersen LLP, are
responsible for expressing an opinion on the conformity of our audited financial
statements to generally accepted accounting principles. Our Board of Directors,
in its business judgment, has determined that all members of the Audit Committee
are "independent" as required by applicable listing standards of the National
Association of Securities Dealers.
The Audit Committee operates under a written charter approved by the Board
of Directors. A copy of the Audit Committee Charter is attached to this Proxy
Statement as Appendix A.
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board. In fulfilling its responsibilities, the Audit Committee has
reviewed and discussed the audited financial statements contained in the 2000
Annual Report on Form 10-K with management and the independent auditors. The
Audit Committee discussed with the independent auditors matters required to be
discussed by the Statement on Auditing Standards No. 61, "Communication with
Audit Committees". In addition, the Company's independent accountants provided
to the Audit Committee the written disclosures required by the Independence
Standards Board Standard No. 1, "Independence Discussions with Audit
Committees," and the Audit Committee discussed with independent accountants
their independence.
In reliance on the discussions referred to above, the Audit Committee
recommended to the Board (and the Board has approved) that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, for filing with the SEC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
GARY L. CROCKER
THOMAS A. MOORE
EDWARD M. BLAIR, JR.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for making all compensation
decisions for the named executives including determining base salary and annual
incentive compensation amounts and making recommendations to the Board of
Directors regarding stock options and other stock-based compensation under our
2000 Employee Stock Compensation Plan (the "Incentive Plan").
Overall Objectives of the Executive Compensation Program
The purpose of our compensation plan is to attract, retain and motivate key
management employees. It is our philosophy to pay our executives at levels
commensurate with both Company and individual performance. A primary
consideration in developing our executive compensation programs is to link the
long-term financial interests of executives with those of the Company and its
stockholders. The Compensation Committee reviews compensation for comparable
organizations in order to establish the Company's total compensation program and
determine awards under the Incentive Plan.
In 2000, the total compensation program for our top executives, approved by
the Company's Board of Directors, consisted of a base salary for each of such
executives.
Base Salary Program
It is the Company's policy to establish salaries at a level approximating
the average of the competitive levels in comparable organizations and to provide
annual salary increases reflective of the executive's performance, level of
responsibility and position with the Company.
Annual Incentive
Each year, the Compensation Committee evaluates the performance of the
Company as a whole, as well as the performance of each individual executive.
Factors considered include revenue growth, net profitability and cost control.
The Compensation Committee does not utilize formalized mathematical formulae,
nor does it assign weightings to these factors. The Compensation Committee, in
its sole discretion, determines the amount, if any, of incentive payments to
each executive. The Compensation Committee believes that the Company's growth in
revenue and profitability requires subjectivity on the part of the Committee
when determining incentive payments. The Compensation Committee believes that
specific formulae restrict flexibility.
Equity Incentive Plan
In 2000, we adopted the Incentive Plan which permits us to make grants of
stock options, stock appreciation rights or restricted stock awards as part of
our overall incentive compensation program. The Incentive Plan is intended to
attract, retain and motivate key management personnel and to align the interest
of the executives with those of stockholders. The overall long-term incentive
grant levels are established by reviewing the number of shares reserved for such
plans by comparable organizations. Individual long-term incentive grants are
based on the employee's position and responsibility level.
Section 162(m)
Section 162(m) of the Code currently imposes a $1 million limitation on the
deductibility of certain compensation paid to each of our five highest paid
executives. Excluded from this limitation is compensation that is "performance
based." For compensation to be performance based it must meet certain criteria,
including being based on predetermined objective standards approved by
stockholders. In general, we believe that compensation relating to options
granted under the Incentive Plan should be included in the $1 million limitation
calculation. Compensation relating to our incentive compensation awards do not
currently qualify for exclusion from the limitation, given the discretion that
is provided to the Committee in establishing the performance goals for such
awards. The Compensation Committee believes that maintaining the discretion to
evaluate the performance of our management is an important part of its
responsibilities and inures to the
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benefit of our stockholders. The Compensation Committee, however, intends to
take into account the potential application of Section 162(m) with respect to
incentive compensation awards and other compensation decisions made by it in the
future.
CEO Compensation
The Committee established Dr. Reilly's base salary at $325,000, which
approximates the median level of CEOs at comparable companies in the Boston
area. As of December 31, 2000, Dr. Reilly had beneficial ownership of 326,241
shares of stock (including 325,241 shares of which he has a right to receive
pursuant to presently exercisable options).
Conclusion
The Compensation Committee believes these executive compensation policies
serve the interests of the stockholders and the Company effectively. The
Committee believes that the various pay vehicles offered are appropriately
balanced to provide increased motivation for executives to contribute to the
Company's overall future successes, thereby enhancing the value of the Company
for the stockholders' benefit.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
THOMAS A. MOORE
GARY L. CROCKER
JOHN GAROFALO
EXECUTIVE COMPENSATION
The following table summarizes all compensation awarded to, earned by or
paid for services rendered to the Company in all capacities during the years
ended December 31, 1998, 1999 and 2000, by our Chief Executive Officer and our
three other most highly compensated executive officers who received in excess of
$100,000 in salary and bonus from the Company during 2000 (the "named executive
officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
-------------------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION
--------------------------- ------ -------- ------ ------------ ------------ ------------
Philip R. Reilly..................... 2000 $301,250 $ 0 $5,400(1) 0 $ 253(4)
Chief Executive Officer 1999 $ 19,167 $ 0 $ 0 740,000 $ 0
1998 $ 0 $ 0 $ 0 50,000 $81,500(2)
Kenneth S. Kornman................... 2000 $273,964 $9,310 $7,200(1) 0 $77,807(3)
President and Chief Scientific 1999 $148,020 $ 0 $ 0 53,750 $ 2,720(4)
Officer 1998 $163,281 $ 0 $ 0 40,281 $ 2,720(4)
Fenel M. Eloi(5)..................... 2000 $105,625 $ 0 $ 0 200,000 $ 107(4)
Chief Operating Officer, Chief 1999 $ 0 $ 0 $ 0 0 $ 0
Financial Officer, Secretary 1998 $ 0 $ 0 $ 0 0 $ 0
and Treasurer
Paul (Kip) M. Martha(6).............. 2000 $ 23,000 $ 0 $ 0 200,000 $ 30(4)
Chief Medical Officer 1999 $ 0 $ 0 $ 0 0 $ 0
1998 $ 0 $ 0 $ 0 0 $ 0
---------------
(1) Represents auto allowances paid to Drs. Reilly and Kornman.
(2) Represents consulting fees paid by the Company to Dr. Reilly before his
appointment as Chief Executive Officer.
(3) Represents moving expenses paid for by the Company on behalf of Dr. Kornman
in the amount of $74,932 and life insurance premiums in the amount of $2,875
paid for by the Company.
(4) Represents life insurance premiums paid for by the Company.
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(5) Mr. Eloi was appointed Chief Operating Officer, Chief Financial Officer,
Secretary and Treasurer effective June 19, 2000.
(6) Dr. Martha was appointed Chief Medical Officer on November 20, 2000.
STOCK OPTION GRANTS IN FISCAL 2000
The following table provides certain information related to options granted
by the Company to the named executive officers during fiscal 2000.
INDIVIDUAL GRANTS
----------------------------------------
% OF TOTAL
NUMBER OF OPTIONS GRANTED EXERCISE OR
SECURITIES UNDERLYING TO EMPLOYEES BASE PRICE EXPIRATION
NAME OPTIONS GRANTED(#) IN FISCAL 2000 ($/SH) DATE
---- --------------------- --------------- ----------- ----------
Fenel M. Eloi(1).................... 105,828 25.8 3.75 6/19/10
94,172 23.0 4.7195 6/19/10
Paul (Kip) M. Martha(2)............. 113,514 27.7 4.63 11/20/10
86,486 21.7 3.75 11/20/10
---------------
(1) Mr. Eloi received an aggregate of 48.8% of all option grants to employees in
2000.
(2) Dr. Martha received an aggregate of 48.8% of all option grants to employees
in 2000.
There were no other grants to executive officers during 2000.
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised by
the named executive officers of the Company during fiscal 2000 and the number
and value of options held at fiscal year end.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY-OPTIONS
ACQUIRED OPTIONS AT FY-END(#) AT FY-END($)(1)
UPON OPTION VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
Philip R. Reilly......... 37,000 73,938 325,241 427,759 462,513 361,675
Kenneth S. Kornman....... 0 0 94,031 0 77,184 0
Fenel M. Eloi............ 0 0 20,000 180,000 0 0
Paul (Kip) M. Martha..... 0 0 0 200,000 0 0
---------------
(1) Represents the product of (a) the number of shares underlying options
granted multiplied by (b) the difference between (i) the fair market value
of Common Stock on December 31, 2000 ($3.1875), and (ii) the exercise price
of the options.
(2) Represents the number of shares exercised multiplied by the difference
between the exercise price and the fair market value of the Common Stock on
December 31, 2000 ($3.1875).
EMPLOYMENT AGREEMENTS AND CHANGE-OF-CONTROL ARRANGEMENTS
In December 1999, the Company entered into an employment agreement with
Kenneth S. Kornman which provides for a three-year initial term. This employment
agreement is subject to early termination by Dr. Kornman upon one (1) month's
prior written notice and by the Company with cause. The employment agreement
provides for a minimum base salary of $276,250 per year.
In April 2000, the Company entered into an employment agreement with Dr.
Philip R. Reilly which provides for a minimum annual base salary of $325,000 and
an award of options to purchase 500,000 (awarded in fiscal 1999) shares of
Common Stock at a per share exercise price of $2.875. These options vest over a
period of 36 months in equal increments commencing December 1, 1999, unless Dr.
Reilly's employment is terminated prior to expiration of such 36 month period.
This employment agreement is terminable by Dr. Reilly upon one (1) month's prior
written notice and by the Company with cause.
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In June 2000, the Company entered into an employment agreement with Fenel
Eloi which provides for a minimum annual base salary of $195,000 and an award of
options to purchase 200,000 shares of Common Stock at per share exercise prices
of $3.175 and $4.72. These options vest over a period of 48 months unless Mr.
Eloi's employment is terminated prior to the end of the 48 month period. This
employment agreement is terminable by Mr. Eloi upon one (1) month's prior
written notice and by the Company with cause.
In November 2000, the Company entered into an employment agreement with Dr.
Paul (Kip) Martha which provides for a minimum annual base salary of $195,000
and an award of options to purchase 200,000 shares of Common Stock at per share
exercise prices of $3.75 and $4.63. These options vest over a period of 48
months unless Dr. Martha's employment is terminated prior to the end of the 48
month period. This employment agreement is terminable by Dr. Martha upon one (1)
month's prior written notice and by the Company with cause.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Thomas A. Moore, Gary
L. Crocker and John Garofalo. None of our executive officers serve on the board
of directors or compensation committee of any entity that has one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee. There is no family relationship between or among the
Directors and Executive Officers.
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PERFORMANCE GRAPH
Our Common Stock has been traded publicly since November 26, 1997. Prior to
such date, there was no established market for our Common Stock. The following
Performance Graph compares the Company's cumulative total stockholder return on
its Common Stock from November 26, 1997, through December 31, 2000, to the
NASDAQ Stock Market Index and to the Hambrecht & Quist Biotechnology Index over
the same period. The following graph is based on historical data and is not
necessarily indicative of future performance. This graph shall not be deemed to
be "soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Exchange Act or to the liabilities of Section
18 under the Exchange Act.
COMPARISON OF 37 MONTH CUMULATIVE TOTAL RETURN*
AMONG INTERLEUKIN GENETICS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE JP MORGAN H & Q BIOTECHNOLOGY INDEX
COMPARISON CUMULATIVE TOTAL RETURN INDEX
CUMULATIVE TOTAL RETURN
---------------------------------------------------------------------------------
11/26/97 12/97 12/98 12/99 12/00
---------------------------------------------------------------------------------
Interleukin Genetics,
Inc. 100.00 62.50 11.11 69.10 35.42
Nasdaq Stock Market
(U.S.) 100.00 98.65 139.12 258.53 155.55
JP Morgan H & Q
Biotechnology 100.00 98.90 150.60 321.92 346.10
* $100 INVESTED ON 11/26/97 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that our directors, executive
officers and persons who own more than 10 percent of a registered class of the
Company's equity securities file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Directors, executive officers and greater than 10
percent stockholders are required by Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
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To the Company's knowledge, based solely on a review of the copies of the
Section 16(a) reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 2000,
all Section 16(a) filing requirements applicable to its directors and executive
officers were complied with, with the exception of the following: Gary Crocker
filed a Form 5 late reporting option grants in 1999; Paul Martha and John
Garofalo each filed a Form 3 late; Thomas A. Moore reported late an option
granted in July 1999; and Dr. Reilly reported late two option exercises
occurring in May 2000.
CERTAIN TRANSACTIONS
The Company did not have any transactions in 2000 with any of its executive
officers or directors having a value of $60,000.
PROPOSALS FOR NEXT ANNUAL MEETING
The deadline for submission of stockholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended ("Rule 14a-8"), for
inclusion in the Company's proxy statement for its 2002 Annual Meeting of
Stockholders is January 10, 2002. After April 16, 2002, notice to the Company of
a stockholder proposal submitted otherwise than pursuant to Rule 14a-8 will be
considered untimely, and the person named in proxies solicited by the Board of
Directors of the Company for its 2002 Annual Meeting of Stockholders may
exercise discretionary authority voting power with respect to any such proposal
as to which the Company does not receive timely notice.
OTHER MATTERS
As of the date of this Proxy Statement, management does not intend to
present any other items of business and is not aware of any matters to be
presented for action at the Annual Meeting other than those described above.
However, if any other matters should come before the Annual Meeting, it is the
intention of the persons named as proxies in the accompanying proxy card to vote
in accordance with their best judgment on such matters.
By order of the Board of Directors,
PHILIP R. REILLY
Chairman of the Board and Chief
Executive Officer
Waltham, Massachusetts
May 17, 2001
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APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist in
fulfilling its oversight responsibilities. The Audit Committee's primary duties
and responsibilities are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
- Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Company's expense, special legal, accounting,
or other consultants or experts it deems necessary in the performance of its
duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the NASD Exchange.
The Audit Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent nonexecutive directors, free
from any relationship that would interfere with the exercise of his or her
independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board on recommendation
of the Nominating Committee. If an audit committee Chair is not designed or
present, the members of the Committee may designate a Chair by majority vote of
the Committee membership.
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare and/or approve
an agenda in advance of each meeting. The Committee should meet privately in
executive session at least annually with management, the director of the
internal auditing department, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe should be
discussed. In addition, the Committee, or at least its Chair, should communicate
with management and the independent auditors quarterly to review the Company's
financial statements and significant findings based upon the auditors limited
review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the document
published at least every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior to filing
and distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting principles,
practices and judgments.
3. In consultation with the management, the independent auditors, and the
internal auditors, consider the integrity of the Company's financial reporting
process and controls. Discuss significant financial risk exposures and the steps
management has taken to monitor, control, and report such exposures. Review
significant
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findings prepared by the independent auditors and the internal auditing
department together with management's responses.
4. Review with financial management and the independent auditors the
company's quarterly financial results prior to the release of earnings and/or
the company's quarterly financial statements prior to filing or distribution.
Discuss any significant changes to the Company's accounting principles and any
items required to be communicated by the independent auditors in accordance with
SAS 61 (see item 9). The Chair of the Committee may represent the entire Audit
Committee for purposes of this review.
Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review the
independence and performance of the auditors and annually recommend to the Board
of Directors the appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the Company
that could impair the auditors' independence.
8. Review the independent auditors audit plan -- discuss scope, staffing,
locations, reliance upon management, and internal audit and general audit
approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required to be
communicated to audit committees in accordance with AICPA SAS 61.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
11. Annually prepare a report to stockholders as required by the Securities
and Exchange Commission. The report should be included in the Company's annual
proxy statement.
12. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board deems
necessary or appropriate.
13. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
Other Optional Charter Disclosures
14. Establish, review, and update periodically a Code of Ethical Conduct
and ensure that management has established a system to enforce this Code.
15. Periodically perform self-assessment of audit committee performance.
16. Review financial and accounting personnel succession planning within
the company.
17. Annually review policies and procedures as well as audit results
associated with directors' and officers expense accounts and perquisites.
Annually review a summary of director and officers' related party transactions
and potential conflicts of interest.
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INTERLEUKIN GENETICS, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- JUNE 15, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark, sign, date and return in the enclosed envelope.
The undersigned stockholder of Interleukin Genetics, Inc. (the "Company")
hereby appoints Kenneth S. Kornman and Philip R. Reilly, or each of them,
proxies of the undersigned with full power of substitution to vote at the Annual
Meeting of Stockholders of the Company to be held on Friday, June 15, 2001, at
10:00 a.m., Eastern Time, at the Company's executive offices, located at 135
Beaver Street, Waltham, Massachusetts and at any adjournment thereof, the number
of votes which the undersigned would be entitled to cast if personally present:
1. ELECTION OF DIRECTORS
[ ] FOR [ ] WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees listed below
(except as marked below)
Philip R. Reilly John Garofalo
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, DRAW A
LINE THROUGH OR STRIKE OUT THAT NOMINEE'S NAME AS SET FORTH ABOVE.
2. TO CONSIDER AND ACT UPON A PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR
ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2001
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To consider and act upon any other matter which may properly come before
the meeting or any adjournment thereof; all as more particularly described in
the Proxy Statement dated May 17, 2001, relating to such meeting, receipt of
which is hereby acknowledged.
(Continued, and to be signed on reverse side)
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This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the nominees listed in Proposal 1, FOR Proposal 2 and, at the
discretion of the proxies, upon such other business as may properly come before
the Annual Meeting.
----------------------------------
Signature of Stockholder(s)
----------------------------------
Signature of Stockholder(s)
Please sign your name exactly as
it appears hereon. Joint owners
must each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title as it appears
hereon.
Dated ___________________, 2001.