UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
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Filed
by the Registrant þ
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Filed
by a Party other than the Registrant o
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Check
the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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Neurologix,
Inc.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title
of each class of securities to which transaction
applies:
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Aggregate
number of securities to which transaction
applies:
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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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Proposed
maximum aggregate value of
transaction:
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Total
fee paid:
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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.
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement
No.:
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Filing
Party:
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Date
Filed:
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As
filed with the Commission on April 10, 2008
April 10,
2008
Dear
Stockholder:
You are
cordially invited to attend the Annual Meeting of Stockholders of Neurologix,
Inc. to be held at Montammy Golf Club, Route 9W & Montammy Drive, Alpine,
New Jersey 07620 on Thursday, May 8, 2008, at 10:00 a.m. At this
meeting, we will ask you to consider and vote upon the election of three Class
II directors and an amendment to the 2000 Stock Option Plan of the Corporation
which would increase the number of shares of the Corporation’s common stock
available for issuance under the Plan.
Your vote
is important. Whether or not you plan to attend the annual meeting,
we recommend that you complete, sign, date and return the enclosed proxy card to
ensure that your shares are represented at the annual meeting. The
enclosed proxy statement provides you with detailed information about the
proposals submitted for your consideration. We urge you to read it
carefully.
On behalf
of your Board of Directors, I thank you for your support and appreciate your
consideration.
Very
truly yours,
/s/ John E. Mordock
John E.
Mordock
Chief
Executive Officer
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be held on May 8, 2008
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Stockholders of Neurologix, Inc., a
Delaware corporation (the “Corporation”), will
be held at Montammy Golf Club, Route 9W & Montammy Drive, Alpine, New Jersey
07620 on Thursday, May 8, 2008, at 10:00 a.m., Eastern time, for the following
purposes:
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1.
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To
elect three Class II directors to hold office for a term of three
years.
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2.
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To
approve an amendment to the 2000 Stock Option Plan of the Corporation (the
“2000 Stock
Option Plan” or the “Plan”) to
increase the number of shares of the Corporation’s common stock available
for issuance under the Plan from 3,800,000 to
6,000,000.
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3.
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To
transact such other business as may properly come before the meeting or
any adjournment thereof.
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YOUR
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS PRESENTED
IN THE PROXY STATEMENT.
The Board
of Directors has fixed the close of business on April 1, 2008 as the record date
for the determination of stockholders who are entitled to notice of and to vote
at the meeting.
A copy of
the Corporation’s Annual Report on Form 10-KSB for the year ended December 31,
2007 is enclosed.
To assure
your representation at the meeting, please sign, date and return your proxy in
the enclosed envelope, which requires no postage if mailed in the United
States.
By
Order of the Board of Directors,
/s/ Marc L.
Panoff
Marc
L. Panoff
Chief
Financial Officer, Secretary and Treasurer
One
Bridge Plaza
Fort Lee,
New Jersey 07024
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS – MAY 8, 2008
This
Proxy Statement is furnished by the Board of Directors (the “Board”) of
Neurologix, Inc., a Delaware corporation (the “Corporation”). The
Proxy Statement is being sent to the Corporation’s stockholders in connection
with the solicitation of proxies by the Board, on behalf of the Corporation, to
be used at the Annual Meeting of Stockholders, which will be held at Montammy
Golf Club, Route 9W & Montammy Drive, Alpine, New Jersey 07620 on Thursday,
May 8, 2008, at 10:00 a.m., Eastern time. The Corporation’s offices
are located at One Bridge Plaza, Suite 605, Fort Lee, New Jersey
07024.
This
Proxy Statement and the accompanying Notice of Annual Meeting of Stockholders
and proxy card are being mailed to the Corporation’s stockholders on or about
April 10, 2008. A copy of the Corporation’s Annual Report to
Stockholders on Form 10-KSB for the year ended December 31, 2007 is also
enclosed.
You are
requested to complete, date and sign the accompanying proxy and return it to the
Corporation in the enclosed envelope. The proxy may be revoked at any
time prior to the meeting by written notice to the Corporation bearing a later
date than the date on the proxy or by attending the meeting and voting in
person. The Corporation may solicit proxies in person, by mail,
telephone, facsimile, e-mail or other similar means. Where
instructions are indicated, proxies will be voted in accordance
therewith. Where no instructions are indicated, proxies will be voted
for the proposals set forth below.
The Board
has fixed the close of business on April 1, 2008 as the record date (the “Record Date”) for the
determination of stockholders who are entitled to notice of and to vote at the
meeting. As of the Record Date, the outstanding number of voting
securities of the Corporation was 28,517,913 shares, consisting of 27,632,808
shares of common stock, par value $0.001 per share (“Common Stock”), 645
shares of Series A convertible preferred stock, par value $0.10 per share
(“Series A Preferred
Stock”), 292,419 shares of Series C convertible preferred
stock, par value $0.10 per share (“Series C Preferred
Stock”), and 592,041 shares of Series D convertible preferred stock, par
value $0.10 per share (“Series D Preferred
Stock”). Holders of a majority of our outstanding shares of
Common Stock, Series A Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock, considered as a single class, on an as-converted basis, must be
present or represented by proxy at the meeting to constitute a
quorum. For each share held as of the Record Date, each holder of
Common Stock is entitled to one vote per share of Common Stock, each holder of
Series A Preferred Stock is entitled to one vote per share of Series A Preferred
Stock, each holder of Series C Preferred Stock is entitled to approximately
21.47 votes per share of Series C Preferred Stock and each holder of Series D
Preferred Stock is entitled to approximately 30.17 votes per share of Series D
Preferred Stock.
A
plurality of the votes of the total number of the shares of Common Stock, Series
A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock present
at the meeting will be necessary to approve Proposal 1 regarding the election of
three Class II directors of the Corporation. A majority of the votes
of the total number of the shares of Common Stock, Series A Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock present at the meeting
will be necessary for the approval of Proposal 2 regarding the amendment to
increase the number of shares of Common Stock authorized for issuance under the
2000 Stock Option Plan. Under applicable Delaware law, in tabulating
votes, abstentions (including broker non-votes) will be disregarded and will
have no effect on the outcome of the vote.
SECURITY
OWNERSHIP OF PRINCIPAL STOCKHOLDERS
As of the
Record Date, the persons and entities listed below were, to the knowledge of the
Corporation, the only beneficial owners of more than five percent of the
outstanding shares of Common Stock.
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Name
and Address of Beneficial Owner
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Amount
and Nature Of Beneficial Ownership
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Percentage
of Outstanding Shares
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Palisade
Private Partnership, L.P.
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6,801,890 | (1 | ) | 13.14 | % | |||||
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Warwick
J. Greenwood, Trustee ATEC Trust
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3,432,608 | (2 | ) | 6.63 | % | |||||
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Chrysler
LLC Master Retirement Trust
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4,811,128 | (3 | ) | 9.46 | % | |||||
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Trustees
of General Electric Pension Trust
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13,517,003 | (4 | ) | 25.02 | % | |||||
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Corriente
Master Fund, L.P.
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10,775,853 | (5 | ) | 19.99 | % | |||||
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(1)
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Based
on information provided in the Schedule 13D/A filed on March 7, 2008,
Palisade Private Partnership, L.P. (“PPP”) is an
investment limited partnership formed under the laws of
Delaware. Palisade Private Holdings, LLC, a Delaware limited
liability company, is the general partner of PPP and is deemed to
beneficially own the shares owned by PPP. PPP’s address is
Palisade Private Holdings, LLC, One Bridge Plaza, Suite 695, Fort Lee, New
Jersey 07024.
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(2)
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Based
on information provided in the Form 4 filed on January 29, 2008 by ATEC
Trust (“ATEC”), a trust
organized under the laws of New Zealand. Warwick
Greenwood is the trustee of ATEC. ATEC’s address is Auckland
Technology Enabling Corporation Limited, P.O. Box 10-359, 8th Floor,
Lumley House, 93 The Terrace, Wellington, New
Zealand.
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(3)
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Consists
of warrants to purchase 926,966 shares of Common Stock and 180,891 shares
of Series C Preferred Stock (presently convertible into 3,884,162 shares
of Common Stock). Based on information provided in the Form 4
filed on December 3, 2007 by Chrysler LLC Master Retirement Trust (“Chrysler
LLC”). Chrysler LLC’s address is c/o State Street
Corporation, 225 Liberty Street, 24th Floor, New York, New York
10281.
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(4)
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Consists
of warrants to purchase 2,257,262 shares of Common Stock, 93,940 shares of
Series C Preferred Stock (presently convertible into 2,017,120 shares of
Common Stock), and 306,327 shares of Series D Preferred Stock (presently
convertible into 9,242,621 shares of Common Stock). Based on
information provided in the Schedule 13G/A filed on February 13, 2008 by
the Trustees of General Electric Pension Trust (“GEPT”). GEPT’s
address is 3001 Summer Street, Stamford, Connecticut
06905.
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(5)
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Consists
of warrants to purchase 2,155,172 shares of Common Stock and 285,714
shares of Series D Preferred Stock (presently convertible into 8,620,681
shares of Common Stock). Based on information provided in the
Schedule 13D filed on November 29, 2007, Corriente Master Fund, L.P.
(“CMF”)
is an investment limited partnership formed under the laws of
Delaware. Corriente Advisors, LLC (“CA”) is an
investment advisory and management services limited liability company
formed under the laws of Delaware. CA acts as an investment
advisor to, and manages investment and trading accounts of, other persons,
including CMF. CA is deemed to beneficially own the shares
owned by CMF. CMF’s address is 201 Main Street, Suite 1800,
Fort Worth, Texas 76102.
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SECURITY
OWNERSHIP OF BOARD AND MANAGEMENT
The
following table shows: (i) the number of shares of Common Stock that each of the
Corporation’s directors, nominees and executive officers beneficially owned or
had the right to acquire beneficial ownership of as of, or within sixty days of,
the Record Date; and (ii) the percentage ownership of the outstanding shares of
Common Stock represented thereby. The address for each of such
persons is the address of the Corporation.
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Name
and Address of Beneficial Owner
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Amount
and Nature of Beneficial Ownership
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Percent
of Class
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William
J. Gedale
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20,000 | (1 | ) | * | ||||||
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Cornelius
E. Golding
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65,555 | (2 | ) | * | ||||||
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Clark
A. Johnson
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676,508 | (3 | ) | 1.30 | % | |||||
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Martin
J. Kaplitt, M.D.
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2,413,001 | 4.66 | % | |||||||
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Austin
M. Long, III
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183,333 | (4 | ) | * | ||||||
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Craig
J. Nickels
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197,275 | (5 | ) | * | ||||||
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Jeffrey
B. Reich, M.D.
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101,000 | (6 | ) | * | ||||||
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Elliott
H. Singer
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118,333 | (7 | ) | * | ||||||
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John
E. Mordock
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418,333 | (8 | ) | * | ||||||
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Marc
L. Panoff
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180,000 | (9 | ) | * | ||||||
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Christine
V. Sapan
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143,333 | (10 | ) | * | ||||||
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Officers
and Directors as a Group (11 persons)
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4,516,671 | 8.49 | % | |||||||
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* Represents
less than 1% of the outstanding shares.
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(1)
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Includes
20,000 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(2)
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Includes
55,555 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(3)
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Includes
90,000 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(4)
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Includes
183,333 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(5)
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Includes
176,666 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(6)
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Includes
100,000 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(7)
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Includes
78,333 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(8)
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Includes
398,333 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(9)
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Includes
170,000 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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(10)
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Includes
133,333 shares of Common Stock which may be acquired upon the exercise of
options which are or become exercisable within sixty days of the Record
Date.
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PROPOSAL
NUMBER 1: ELECTION OF THREE CLASS II DIRECTORS
The
Corporation’s certificate of incorporation and by-laws provide that the Board is
divided into three classes: Class I directors, Class II directors and Class III
directors. The members of one of the three classes of directors are
elected each year for a three-year term. The stockholders will elect
three Class II directors at the meeting, each to serve for a three-year term
expiring at our Annual Meeting of Stockholders in 2011 or until his successor
has been elected and qualified, or until the earliest of his death, resignation
or retirement. The Corporation’s certificate of incorporation
provides that the total number of directors constituting the entire Board shall
not be less than three nor more than twelve, with the then authorized directors
being fixed from time to time by the Board. Currently, the Board is
comprised of nine directors.
Nominees
For Election As Class II Directors
Unless
instructed otherwise, the proxies named on the enclosed proxy card intend to
vote the shares that they represent to elect Cornelius E. Golding, Elliott H.
Singer and Martin J. Kaplitt, M.D. to serve as Class II directors.
CORNELIUS E.
GOLDING – Mr. Golding, age 60, has been a director of the
Corporation since August 2006. From 1981 to 2003, Mr. Golding served
in various financial roles at Atlantic Mutual Insurance Company (“Atlantic Mutual”), a
property and casualty insurance company in Madison, New
Jersey. During his tenure with Atlantic Mutual, Mr. Golding first
served as vice president of internal audit and comptroller before being
appointed as senior vice president. Mr. Golding was promoted to chief
financial officer in 1994 and served in this role until his retirement in
2003. Mr. Golding is currently a financial consultant to various
property and casualty insurance companies and serves on the boards of directors
of National Atlantic Holdings Corporation, a property and casualty insurance
company, and the Somerset Hills Bank Corp., a holding company for the Bank of
Somerset Hills, a New Jersey bank, and various private companies, including the
United Auto Insurance Group of North Miami Beach, Florida. Mr.
Golding is a Certified Public Accountant and holds a B.B.A. in accounting from
Saint John Fisher College and an M.B.A. in finance from Fairleigh Dickenson
University.
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ELLIOTT H. SINGER – Mr.
Singer, age 67, has been a director of the Corporation since November 14,
2005. Mr. Singer is a Managing Director of FairView Advisors, a
financial services firm that he founded in September 2001. Mr. Singer
founded and served as the Chief Executive Officer of A+ Network (formerly A+
Communications). Mr. Singer holds a B.A. from Tulane University and
an MBA from the Leonard R. Stern School of Business at NYU.
MARTIN J. KAPLITT, M.D. – Dr.
Kaplitt, age 69, has been the Chairman of the Board of the Corporation since
February 2004. Dr. Kaplitt served as the Executive Chairman of the
Corporation from September 2004 until February 23, 2007. He also
served as President of the Corporation from February 2004 to September 2004 and
was previously a director and president of Neurologix Research, Inc., the
Corporation’s predecessor, from August 1999 to February 2004. Dr.
Kaplitt has been associated with North Shore University Hospital for over 30
years and has held a variety of positions including: Chief of Thoracic and
Cardiovascular Surgery from 1971 to 1978, Associate Attending in Cardiovascular
Surgery from 1978 to 2001 and Adjunct Associate Attending in Surgery from 2001
to present. He was also a clinical associate professor of surgery at
Cornell University Medical College. Dr. Kaplitt was a director of the
Trust Company of New Jersey from 1985 through May 2004, when it was acquired by
North Fork Bankcorp of Long Island, NY. Dr. Kaplitt attended Cornell
University and the State University of New York, Downstate Medical
Center. Dr. Kaplitt is a fellow of the American College of Surgeons
and the American College of Cardiology.
Election
of the Class II directors of the Corporation will require the affirmative vote
of a plurality of voting shares held by stockholders present in person or
represented by proxy at the meeting and entitled to vote thereat.
THE
BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF ITS NOMINEES FOR
CLASS II DIRECTORS.
PROPOSAL
NUMBER 2: APPROVAL OF AMENDMENT TO THE 2000 STOCK OPTION
PLAN
The 2000
Stock Option Plan was approved by the stockholders of the Corporation on
September 12, 2000 and currently provides for the granting of stock options to
purchase up to a maximum of 3,800,000 shares of Common Stock (subject to
adjustment in the event of certain capital changes). A copy of the
amendment to the Plan, as proposed, is attached hereto as Exhibit
A.
The Board
has approved an amendment to the Plan, subject to the stockholders’ approval, to
increase the number of shares covered by, and reserved for issuance under, the
Plan from 3,800,000 shares to 6,000,000 shares, to enable the Corporation to
make grants under the Plan, principally to its current and future
employees.
Stockholders
are being asked to approve the proposed amendment at this meeting. If the
stockholders approve such amendment, there will be a balance of 2,214,852 shares
available for grant under the Plan. Of those, 320,000 shares will be
used for the 2008 annual grant to directors.
The
following is a summary of the terms of the 2000 Stock Option Plan as currently
in effect.
Purpose. The purpose
of the Plan is to provide a means through which the Corporation and its
affiliates may attract able persons to enter and remain in the employ of the
Corporation and affiliates and to provide a means whereby employees, directors
and consultants of the Corporation and its affiliates can acquire and maintain
the Corporation’s Common Stock, thereby strengthening their commitment to the
welfare of the Corporation and its affiliates and promoting an identity of
interest between stockholders and these directors, employees and
consultants.
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Administration. The
Plan is administered by the Compensation Committee of the Board.
Eligible
Participants. Any employee, director or consultant of the
Corporation or an affiliate of the Corporation is eligible to participate in the
Plan. However, the Corporation does not presently allow holders of
warrants of the Corporation to participate in the Plan. The
Compensation Committee has the sole and complete authority to determine the
participants in the Plan (a “Participant” or the
“Participants”). The
Plan currently has approximately 27 participants, of which 8 are employees, 8
are directors and 12 are consultants.
Shares of the Corporation’s
Common Stock Authorized Under the Plan. The Plan authorizes
the grant of stock options to Participants with respect to a maximum of
3,800,000 shares of Common Stock, which awards may be made in the form of (a)
non-qualified stock options and (b) stock options intended to qualify as
incentive stock options (“ISOs”) under Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”). In
any calendar year, a Participant may not receive stock options in a manner that
will cause the stock options granted under the Plan to fail to qualify as
“performance-based compensation” for purposes of Section 162(m) of the
Code.
To the
extent that the aggregate fair market value (determined as of the date of grant)
of stock for which incentive stock options are exercisable for the first time by
any Participant during any calendar year (under all plans of the Corporation)
exceeds $100,000, such excess incentive stock options shall be treated as
non-qualified stock options. If any award granted under the Plan is
forfeited, or if an award has expired, terminated or been canceled for any
reason whatsoever (other than by reason of exercise or vesting), then the shares
of Common Stock covered by such award may be granted to another Participant
pursuant to the terms of the Plan, to the maximum extent permitted under Section
162(m) of the Code.
Effective Date and Duration
of the Plan. The effective date of the Plan is March 28,
2000. The Plan was amended on May 9, 2005 to increase the available
shares under the Plan from 800,000 to 1,300,000 and again amended on May 9, 2006
to increase the available shares under the Plan from 1,300,000 to 3,800,000. The
term during which awards may be granted under the Plan expires on March 28,
2010.
Exercise
Price. The exercise price per share of Common Stock for each
stock option is set by the Compensation Committee at the time of grant, but in
no case shall be less than (i) in the case of an ISO, the fair market value per
share of Common Stock on the date of the grant and (ii) in the case of a
non-qualified stock option, the par value of a share of Common Stock; provided,
however, that all stock options granted which are intended to qualify as
“performance-based compensation” under Section 162(m) of the Code shall have a
stock option price per share of Common Stock no less than the fair market value
of a share of Common Stock on the date of the grant.
Manner of Exercise and Form
of Payment. No shares of Common Stock may be delivered pursuant to any
exercise of an option until payment in full of the aggregate exercise price
therefor is received by the Corporation. Stock options which have
become exercisable may be exercised by delivery of written notice of exercise to
the Compensation Committee accompanied by payment of the stock option
price. The stock option price shall be payable in cash and, if the
Compensation Committee so permits, partially or completely in shares of Common
Stock valued at the fair market value at the time of exercise; provided,
however, that such shares are not subject to any pledge or other security
interest and have either been held by the Participant for six months, previously
acquired by the Participant on the open market or meet such other requirements
as the Compensation Committee may determine necessary in order to avoid an
accounting earnings charge in respect of the stock option or, in the discretion
of the Compensation Committee, shall be payable either (i) in other property
having a fair market value on the date of exercise equal to the stock option
price, or (ii) by such other method as may be permitted by the Compensation
Committee.
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Vesting, Stock Option Period
and Expiration. Stock options vest and become exercisable in
such manner and on such date or dates determined by the Compensation Committee
and expire after such period, not to exceed ten years, as may be determined by
the Compensation Committee, all as set forth in an applicable stock option
agreement; provided, that the Compensation Committee has the authority to
accelerate the exercisability of any outstanding option at such time and under
such circumstances as it, in its sole discretion, deems
appropriate. If a stock option is exercisable in installments, such
installments or portions thereof which become exercisable shall remain
exercisable until expiration of the stock option. If an ISO is
granted to a Participant who owns stock representing more than ten percent of
the voting power of all classes of stock of the Corporation, the stock option
period may not exceed five years from the date of grant of such option and the
stock option price shall be at least 110 percent of the fair market value (on
the date of grant) of the stock subject to the stock option.
Change of Control or
Reorganization. Except to the extent reflected in a particular
stock option agreement:
(a) In
the event of a Change in Control (as defined in the Plan), all stock options,
notwithstanding any vesting schedule, shall become immediately exercisable with
respect to all shares subject to such stock option. In addition, the
Compensation Committee, in the event of a Change in Control, may in its
discretion and upon at least 10 days’ advance notice to the affected persons,
cancel any outstanding stock options and pay to the holders thereof, in cash or
stock, or any combination thereof, the value of such stock options based upon
the price per share of Common Stock received or to be received by other
stockholders of the Corporation in the event.
(b) The
obligations of the Corporation under the Plan are binding upon any successor
corporation or organization resulting from a merger, consolidation or other
reorganization of the Corporation, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Corporation.
Transferability. Each
award, and each right under any award, is exercisable only by the Participant
during the Participant’s lifetime, or, if permissible under applicable law, by
the Participant’s guardian or legal representative. No award may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant other than by will or by the laws of descent and distribution and
any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Corporation or any of
its affiliates; provided, that the designation of a beneficiary will not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance. The Plan provides for limited exceptions to the
non-transferability of awards (and the rights attached thereto) received under
the Plan.
Amendment. The
Board may amend, alter, suspend, discontinue, or terminate the Plan or any
portion thereof at any time; provided, that no such amendment, alteration,
suspension, discontinuation or termination shall be made without approval of the
stockholders if such approval is necessary to comply with any tax or regulatory
requirement applicable to the Plan (including as necessary to prevent the stock
options granted under the Plan from failing to qualify as “performance-based
compensation” for purposes of Section 162(m) of the Code); and provided, further
that any such amendment, alteration, suspension, discontinuance or termination
that would impair the rights of any Participant or any holder or beneficiary of
any stock option theretofore granted shall not to that extent be effective
without the consent of the affected Participant, holder or
beneficiary.
7
Federal Income Tax
Consequences Relating to the Plan. The following summary of
the federal income tax consequences of the grant and exercise of stock options,
both ISOs and non-qualified stock options, awarded under the Plan, and the
disposition of Common Stock purchased pursuant to the exercise of such stock
options, is intended to reflect the current provisions of the Code and the
regulations thereunder. The summary is not intended to be a complete
statement of applicable laws, it does not address state and local tax
considerations nor does it address the tax consequences of options granted to
individual tax payers located outside the U.S. and is not intended as tax advice
to any person. Moreover the U.S. Federal income tax consequences to
any particular individual may differ from those described herein by reason of
the particular circumstances of such individual.
No income
is realized by an optionee upon grant of a non-qualified stock
option. Upon exercise of a non-qualified stock option, the optionee
recognizes ordinary compensation income in an amount equal to the excess, if
any, of the fair market value of the underlying stock over the option exercise
price (the “Spread”) at the time
of exercise. The Spread is deductible by the Corporation for federal
income tax purposes subject to the possible limitations on deductibility under
Sections 280G and 162(m) of the Code of compensation paid to executives
designated in those Sections. The optionee’s tax basis in the underlying shares
acquired by exercise of a non-qualified stock option equals the exercise price
plus the amount taxable as compensation to the optionee. Upon sale of
the shares received by the optionee upon exercise of the non-qualified stock
option, any gain or loss is generally long-term or short-term capital gain or
loss, depending on the holding period. The optionee’s holding period
for shares acquired pursuant to the exercise of a non-qualified stock option
will begin on the date of exercise of such option.
The Code
requires that, for ISO treatment, shares acquired through exercise of an ISO
cannot be disposed of before two years from the date of grant of the option and
one year from the date of exercise. ISO holders generally incur no federal
income tax liability at the time of grant or upon exercise of such
options. However, the Spread at exercise will be an “item of tax
preference” which may give rise to “alternative minimum tax” liability for the
taxable year in which the exercise occurs at the time of exercise. If
the optionee does not dispose of the shares before two years following the date
of grant and one year following the date of exercise, the difference between the
exercise price and the amount realized upon disposition of the shares will
constitute long-term capital gain or loss, as the case may
be. Assuming both holding periods are satisfied, no deduction is
permitted to be taken by the Corporation for federal income tax purposes in
connection with the grant or exercise of the option. If, within two
years following the date of grant or within one year following the date of
exercise, the holder of shares acquired through the exercise of an ISO disposes
of such shares, the optionee will generally realize ordinary taxable
compensation at the time of such disposition equal to the difference between the
exercise price and the lesser of the fair market value of the stock on the date
of initial exercise or the amount realized on the subsequent disposition, and
such amount is generally deductible by the Corporation for federal income tax
purposes, subject to the possible limitations on deductibility under Sections
280G and 162(m) of the Code for compensation paid to executives designated in
those Sections.
The
payment by an optionee of the exercise price, in full or in part, with
previously acquired shares will not affect the tax treatment of the exercise
described above. No gain or loss generally will be recognized by the
optionee upon the surrender of the previously acquired shares of the
Corporation, and shares received by the optionee, equal in number to the
previously surrendered shares, have the same tax basis as the shares surrendered
to the Corporation and have a holding period that includes the holding period of
the shares surrendered. The value of shares received by the optionee
in excess of the number of shares surrendered to the Corporation is taxable to
the optionee. Such additional shares have a tax basis equal to the
fair market value of such additional shares as of the date ordinary income is
recognized and have a holding period that begins on the date ordinary income is
recognized.
8
In
general, Section 162(m) of the Code denies a publicly held corporation a
deduction for federal income tax purposes for compensation in excess of
$1,000,000 per year per person to its chief executive officer and the four other
officers whose compensation is disclosed in its proxy statement, subject to
certain exceptions. Options will generally qualify under one of these
exceptions if they are granted under a plan that states the maximum number of
shares with respect to which options may be granted to any employee during a
specified period, the exercise price is not less than the fair market value of
the common stock at the time of grant and the plan under which the options are
granted is approved by stockholders and is administered by a compensation
committee comprised of outside directors. The Plan is intended to
satisfy these requirements with respect to grants of options to covered
employees.
Pursuant
to currently applicable rules under Section 16(b) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), the
grant of an option (and not its exercise) to a person who is subject to the
reporting and short-swing profit provisions under Section 16 of the Exchange Act
(a “Section 16
Person”) begins the six-month period of potential short-swing
liability. The taxable event for the exercise of an option that has
been outstanding at least six months ordinarily will be the date of
exercise. Under current rules promulgated under Section 16(b), the
six-month period of potential short-swing liability may be eliminated if the
option grant (i) is approved in advance by the Board (or a committee composed
solely of two or more non-employee directors) or (ii) approved in advance, or
subsequently ratified, by the Corporation’s stockholders no later than the next
annual meeting of stockholders. If the grant satisfies either of the
conditions described in clause (i) or (ii) above, the taxable event will
ordinarily be the date of exercise. However, if an option is
exercised by a Section 16 Person within six months after the date of grant and
neither of the conditions described in clause (i) or (ii) above are satisfied,
taxation will be deferred until the date which is six months after the date of
grant, unless the person has filed a timely election pursuant to section 83(b)
of the Code to be taxed on the date of exercise.
Approval
of an amendment to the Plan will require the affirmative vote of a majority of
the voting shares held by stockholders present in person or represented by proxy
at the meeting and entitled to vote thereon.
THE BOARD RECOMMENDS THAT
YOU VOTE “FOR” APPROVAL OF THE AMENDMENT TO THE PLAN TO INCREASE THE NUMBER OF
AVAILABLE SHARES FROM 3,800,000 TO 6,000,000.
BOARD
OF DIRECTORS AND COMMITTEES
Other
Directors
The terms
of the Class III and Class I directors expire in 2009 and 2010,
respectively. Accordingly, these directors are not up for re-election
at the meeting.
9
Class
III Directors Continuing in Office with Terms Expiring at the 2009 Annual
Meeting of Stockholders
AUSTIN M. LONG, III – Mr.
Long, age 63, has been a director of the Corporation since June
2003. Mr. Long has worked as an investment professional in private
markets since 1987, when he co-founded the University of Texas Management
System’s private investment group. Mr. Long left the University of
Texas in March 2000 to co-found Alignment Capital Partners, LLC, a private
market portfolio management advisory operation based in Austin, Texas, that was
reorganized in October 2001 as Alignment Capital Group, LLC (“Alignment Capital”),
where he serves as a member and manager. Alignment Capital
specializes in alternative asset consulting. Mr. Long holds a Masters
in Professional Accounting from the University of Texas at Austin and a Juris
Doctor from DePaul University. He is also a Certified Public
Accountant.
JOHN E. MORDOCK – Mr.
Mordock, age 62, has been a director of the Corporation since November
2005. Mr. Mordock was appointed as the President and Chief Executive
Officer of the Corporation on July 17, 2006. Mr. Mordock was a
Partner of Red Bird Capital, LLC, a private equity firm focusing on early stage
medical technology companies, from January 2001 until July 2006. From
1996 to 2001, Mr. Mordock was President and Chief Executive Officer and a
director of Teleflex Instruments & Surgical Services. Mr. Mordock
was also President, Chief Operating Officer and a director of Cabot Medical
Corporation from 1981 to 1996. Mr. Mordock holds a B.S. and an MBA
from La Salle University and an E.P.S.M. from the Graduate School of Business at
Stanford University.
CRAIG J. NICKELS – Mr.
Nickels, age 54, has been a director of the Corporation since June
2003. Since June 2007, Mr. Nickels has been serving as the Director
of Private Markets for Washington University in St. Louis,
Missouri. From March 2000 until October 2001, he was a partner and
co-founder with Austin Long, a director of the Corporation, of Alignment Capital
Partners, LLC, a private investment management firm based in Austin, Texas,
specializing in alternative asset consulting. Following the October
2001 reorganization of Alignment Capital Partners, LLC, Mr. Nickels was a
co-founder of Alignment Capital, where he served as a member and manager until
June 2007. Mr. Nickels received his B.B.A. from the University of
Texas at Austin and is a holder of the Chartered Financial Analyst
designation.
Class
I Directors Continuing in Office with Terms Expiring at the 2010 Annual Meeting
of Stockholders
WILLIAM J. GEDALE – Mr.
Gedale, age 65, has been a director of the Corporation since May
2007. He is the co-founder of NGN Capital and has been a Managing
General Partner thereof since 2003. Mr. Gedale was the President and Chief
Executive Officer of Mount Everest Advisors, an investment counseling firm which
he founded in 1996. He also served as an investment advisor to
individuals and as a consultant to Warburg-Pincus Capital Management, the
world's largest venture capital firm, between 1999 and 2001. Before
founding Mount Everest Advisors, he was a Managing Director at John W. Bristol
& Co., a privately owned, independent investment advisor, in
1995. From 1969 to 1995, Mr. Gedale was with General American
Investors, one of the nation’s oldest closed-end funds, and held various
positions, including President and Chief Executive Officer from 1989 to
1995. He is currently Chairman of Promosone, a privately held
bioproduction and biopharmaceutical company, and Vice Chairman of Enzybiotics, a
privately held biopharmaceutical company working to combat various infectious
disease pathogens. He was previously a director of Gamco (Gabelli
Holding), General American Investors, Allied Clinical Laboratories, U.S. Home
Health Care, Unilab Corporation, and BioReliance Corporation. Mr.
Gedale holds an M.B.A. from New York University, a J.D. from Fordham Law School
and an A.B. from Syracuse University.
10
CLARK A. JOHNSON – Mr.
Johnson, age 76, has been a director of the Corporation since February
2004. He has been the Chairman of PSS World Medical, Inc., a national
distributor of medical equipment and supplies to physicians, hospitals, nursing
homes, and diagnostic imaging facilities since October 2000. From
August 1985 to June 1998, Mr. Johnson served as Chief Executive Officer of Pier
1 Imports, a specialty retailer of imported decorative home furnishings, gifts
and related items, also becoming Chairman in 1988. Currently, Mr.
Johnson serves on the board of directors of various private companies, including
REFAC Optical Group, a provider of managed vision and professional eye care
products and services and an affiliate of Palisade Capital Management, LLC
(“PCM”),
MetroMedia International Group, an international telecommunications company,
World Factory, Inc., an international sourcing and product development company
specializing in outdoor living and hardware products and Brain Twist Inc., a
specialty drink development company. Mr. Johnson owns 5% of the
preferred, non-voting equity interest in PCM.
JEFFREY B. REICH, M.D. – Dr.
Reich, age 45, has been a director of the Corporation since February
2005. Since January 2007, Dr. Reich has served as a healthcare
analyst at Cramer Rosenthal McGlynn, a New York City-based investment and asset
management firm. From 2002 through 2007, Dr. Reich served as a senior
analyst and portfolio manager at Merlin Biomed Group, a New York City-based
asset management firm that invests globally in public and private healthcare
companies. Dr. Reich has also served as an assistant professor of
clinical neurology at Weill Medical College of Cornell University since
1995. He received his medical degree from Weill Medical College of
Cornell University in 1987. Dr. Reich was initially elected to the
Board pursuant to the Stock Purchase Agreement, dated as of February 4, 2005 by
and among the Corporation, Merlin Biomed Long Term Appreciation Fund LP and
Merlin Biomed Offshore Master Fund LP. (collectively, “Merlin”). This
agreement originally gave Merlin the right to appoint Dr. Reich to the Board but
has since been amended to eliminate this right.
Board
and Committee Meetings
During
2007, the Board met six times. Each director attended at least 75% of
the meetings of the Board. The Audit Committee met five times during
2007, with all members in attendance at three meetings and two members in
attendance at two meetings. The Compensation Committee met three
times during 2007 with all members in attendance.
It is the
Corporation’s policy that directors are invited and encouraged to attend the
Annual Meeting of Stockholders. At the time of the 2007 Annual
Meeting of Stockholders, the Corporation had nine directors, all of whom
attended the meeting.
Committees
The Board
currently maintains an Audit Committee established in accordance with Section
3(a)(58)(A) of the Exchange Act, and a Compensation Committee. The
Corporation does not have a Nominating Committee.
Nominating
Process
The Board
does not consider it necessary to have a Nominating Committee or written charter
since the size of the Board enables all directors to participate in the
nominating process and to address the need to attract and retain qualified
directors and to fill any vacancies in the Board. Qualifications for
consideration as a board nominee may vary according to the particular areas of
expertise being sought as a complement to the existing board
composition. However, the Board, in making its
nominations, considers, among other things, an individual’s business
experience, industry experience, breadth of knowledge about issues affecting the
Corporation, time available for meetings and consultation regarding company
matters and other particular skills and experience possessed by the
individual. The Board recommended all of the current nominees for
Class II directors.
11
The Board
consists of nine directors. The Board has determined that William J.
Gedale, Cornelius E. Golding, Austin M. Long, III, Craig J. Nickels, Jeffrey B.
Reich, M.D. and Elliott H. Singer are independent directors. Although
the Corporation is not listed on any exchange or automated quotation system, in
making this independence determination, the Board considered the independence
standards for directors set forth in the American Stock Exchange Company Guide
for its listed companies (the “AMEX
Rules”).
The Board
does not have a formal policy that requires it to consider any director
candidates that might be recommended by stockholders. The need for
such a policy has not arisen since, to date, the Corporation has not received
any recommendations from stockholders requesting that the Board of Directors
consider a candidate for inclusion among the Board’s slate of nominees in the
Corporation’s proxy statement. The absence of a formal policy does
not mean, however, that a recommendation would not have been considered had one
been received. The Corporation will consider director candidates recommended by
stockholders. Any stockholder desiring to make such a recommendation
should send the recommendation, in writing, to the Corporate Secretary at the
address of the Corporation set forth on the first page of this Proxy Statement,
by no later than the date by which stockholder proposals for action must be
submitted. The recommendation should include the recommended
candidate’s biographical data, and should be accompanied by the candidate’s
written consent to nomination and to serving as a director, if
elected.
Compensation
Committee
The
Compensation Committee consists of Messrs. Singer (Chair), Long and
Nickels. Messrs. Singer, Long and Nickels were determined by the
Board to be independent directors. The principal responsibilities of
the Compensation Committee are to evaluate the performance of executive
officers, establish policies and determine matters involving executive
compensation, recommend changes in employee benefit programs, approve the grant
of stock options and stock awards under the Corporation’s stock plans and
provide assistance to management regarding key personnel
selection. In order to determine the elements and levels of the
Corporation’s executive compensation and to gain an understanding of any trends
impacting compensation generally, the Compensation Committee from time to time
gathers information on executive compensation, including salaries, stock
options, bonuses and other benefits, from similarly situated biotechnology
companies. The Compensation Committee weighs this information and
reviews the Corporation’s overall performance and makes recommendations
regarding compensation to the full Board. To date, no compensation
consultant has been engaged to assist the Compensation Committee or the Board in
connection with establishing executive compensation. The Board
adopted a written charter of the Compensation Committee on February 23, 2007, a
copy of which is available on the Corporation’s website www.neurologix.net
under the heading “Investors/Corporate Governance/Compensation Committee
Charter.”
Audit
Committee
The
members of the Audit Committee in 2007 were Messrs. Long (Chair), Golding and
Nickels. Each of Messrs. Long, Golding and Nickels have been
determined by the Board to be independent. In making this decision,
the Board considered Rule 10A-3 of the Exchange Act, and the AMEX
Rules. The Board has determined that Messrs. Long and Golding are
“financial experts”, as that term is defined under Item 407(d)(5) of Regulation
S-B under the Exchange Act. The Board adopted a written charter of
the Audit Committee on March 23, 2004 which is reviewed annually and pursuant
thereto was restated on March 25, 2005 and was amended, in minor respects, on
February 23, 2007. A copy of the charter is available on the
Corporation’s website www.neurologix.net
under the heading “Investors/Corporate Governance/Audit Committee
Charter.”
12
The Audit
Committee is responsible for the appointment, compensation and oversight of the
work of the Corporation’s independent registered public accounting firm and, in
this regard, it meets periodically with the independent registered public
accounting firm to review plans for the audit and the audit results, reviews
financial statements, accounting policies, tax and other matters for compliance
with the requirements of the Financial Accounting Standards Board and government
regulatory agencies.
Directors’
Compensation
The Board
has a policy of paying quarterly fixed retainers of $1,500, to each director who
is not also an employee of the Corporation plus an additional quarterly retainer
of $1,000 for directors who serve on the Audit Committee and for the Chair of
the Compensation Committee. The Board’s director compensation policy also
provides for annual stock option grants of 30,000 shares with an additional
20,000 shares to directors who serve on the Audit Committee and for the Chair of
the Compensation Committee. Annual stock option grants for 2008 will
be made to directors immediately following the annual meeting.
The
following table sets forth the compensation received by the Corporation’s
directors in 2007.
|
Name
(1)
|
Fees
Paid
in
Cash ($)
|
Option
Awards
($) (3)
|
Total
($)
|
|||||||||
|
William
J. Gedale(2)
|
2,250 | 16,563 | 18,813 | |||||||||
|
Cornelius
E. Golding
|
10,000 | 46,005 | 56,005 | |||||||||
|
Clark
A. Johnson
|
6,000 | 30,767 | 36,767 | |||||||||
|
Austin
M. Long, III
|
10,000 | 51,273 | 61,273 | |||||||||
|
Craig
J. Nickels
|
10,000 | 48,707 | 58,707 | |||||||||
|
Jeffrey
B. Reich, M.D.
|
6,000 | 32,603 | 38,603 | |||||||||
|
Elliott
H. Singer
|
7,578 | 44,775 | 51,775 | |||||||||
_____________
|
(1)
|
John
E. Mordock, a director and the Corporation’s President and Chief Executive
Officer, is an officer of the Corporation and is not included in this
table. Mr. Mordock’s compensation is included in the Summary
Compensation Table.
|
Martin J.
Kaplitt, M.D., the current Chairman and the Corporation’s former Executive
Chairman, was an officer of the Corporation until February 23, 2007 and is not
included in this table. Dr. Kaplitt’s compensation is included in the
Summary Compensation Table.
|
(2)
|
Mr.
Gedale was elected as a director in May
2007.
|
|
(3)
|
The
amounts in the Option Awards column reflect the dollar amounts recognized
for financial statement reporting purposes for the fiscal year ended
December 31, 2007, in accordance with FAS 123(R), for awards
pursuant to the Corporation’s 2000 Stock Option Plan, and thus may include
amounts attributable to awards granted during and before
2007. For a discussion of the valuation assumptions, see the
footnotes to the Corporation’s financial statements included in its 2007
Annual Report on Form 10-KSB. Aggregate total numbers of stock
option awards outstanding, as of December 31, 2007, are shown
below.
|
13
|
Name
|
Grant
Date
|
Expiration
Date
|
Exercise
Price
|
Outstanding
Stock Options
|
||||||
|
William
J. Gedale
|
5/9/07
|
5/9/17
|
$1.15
|
30,000
|
||||||
|
Cornelius
E. Golding
|
5/9/07
|
5/9/17
|
$1.15
|
83,333
|
||||||
|
|
||||||||||
|
Clark
A. Johnson
|
3/23/04
|
3/23/14
|
$1.50
|
10,000
|
|
|||||
|
|
5/16/05
|
5/16/15
|
$1.94
|
30,000
|
||||||
|
5/9/06
|
5/9/16
|
$1.80
|
30,000
|
|||||||
|
5/9/07
|
5/9/17
|
$1.15
|
30,000
|
|||||||
|
Subtotal:
|
100,000
|
|||||||||
|
Austin
M. Long, III
|
3/23/04
|
3/23/14
|
$1.50
|
50,000
|
||||||
|
5/16/05
|
5/16/15
|
$1.94
|
50,000
|
|||||||
|
5/9/06
|
5/9/16
|
$1.80
|
50,000
|
|||||||
|
5/9/07
|
5/9/17
|
$1.15
|
50,000
|
|||||||
|
Subtotal:
|
200,000
|
|||||||||
|
|
||||||||||
|
Craig
J. Nickels
|
3/23/04
|
3/23/14
|
$1.50
|
50,000
|
||||||
|
5/16/05
|
5/16/15
|
$1.94
|
50,000
|
|||||||
|
5/9/06
|
5/9/16
|
$1.80
|
30,000
|
|||||||
|
12/1/06
|
12/1/16
|
$0.72
|
20,000
|
|||||||
|
5/9/07
|
5/9/17
|
$1.15
|
50,000
|
|||||||
|
Subtotal:
|
200,000
|
|||||||||
|
Jeffrey
B. Reich, M.D.
|
5/16/05
|
5/16/15
|
$1.94
|
50,000
|
||||||
|
5/9/06
|
5/9/16
|
$1.80
|
30,000
|
|||||||
|
5/9/07
|
5/9/17
|
$1.15
|
30,000
|
|||||||
|
Subtotal:
|
110,000
|
|||||||||
|
Elliott
H. Singer
|
5/9/06
|
5/9/16
|
$1.80
|
45,000
|
||||||
|
5/9/07
|
5/9/17
|
$1.15
|
50,000
|
|||||||
|
Subtotal:
|
95,000
|
|||||||||
Policy
on Stockholder Communication with Directors
The Board
has a written policy on stockholder and interested party communications with
directors, a copy of which is available on the Corporation’s corporate website
at www.neurologix.net,
under the heading “Investors/Corporate Governance/Stockholder Communication with
Directors Policy.”
Under the
policy, stockholders and other interested parties may contact any member (or all
members) of the Board, any Board committee or any chair of any such committee by
mail. To communicate with the Board, any individual director or any
group or committee of directors, correspondence should be addressed to the Board
or any such individual director or group or committee of directors by either
name or title. All such correspondence should be sent to the
Secretary, Neurologix, Inc., One Bridge Plaza, Fort Lee, NJ 07024.
All
communications received as set forth in the preceding paragraph will be opened
by the Corporation’s Executive Officers for the sole purpose of determining
whether the contents represent a message to our directors. Any
contents that are not in the nature of advertising, promotions of a product or
service, or patently offensive material will be forwarded promptly to the
addressee. In the case of communications to the Board or any group or
committee of directors, the executive officers will make sufficient copies of
the contents to send to each director who is a member of the group or committee
to which the envelope is addressed.
14
CODES
OF ETHICS
The Board
has adopted an Amended and Restated Code of Ethics for its Chief Executive and
Senior Financial Officers (the “Financial Code of
Ethics”). The Corporation’s Chief Executive Officer and Chief
Financial Officer have signed the Financial Code of Ethics and will be held to
the standards outlined therein. The Board has also adopted an Amended
and Restated Code of Ethics and Conduct applicable to all employees, officers,
scientific advisors and directors of the Corporation (together with the
Financial Code of Ethics, the “Codes of
Ethics”). Copies of each of these Codes of Ethics are
available at the Corporation’s website at www.neurologix.net
under the heading “Investors - Corporate Governance.”
EXECUTIVE
OFFICERS
The
Corporation’s current executive officers are: (i) John E. Mordock,
President and Chief Executive Officer, appointed on July 17, 2006, (ii) Marc L.
Panoff, Chief Financial Officer, Treasurer and Secretary, appointed on January
23, 2006, and (iii) Christine V. Sapan, Executive Vice President, Chief
Development Officer, appointed on July 10, 2006. Dr. Martin J.
Kaplitt served as Executive Chairman from February 10, 2004 to February 23,
2007. For purposes of this proxy statement, the term “Named
Executives” shall mean Messrs. Mordock and Panoff and Drs. Sapan and Martin
Kaplitt. Set forth below is a brief description of our executive
officers who are not described above.
MARC PANOFF – Mr. Panoff, age
37, was appointed as the Chief Financial Officer and Treasurer of the
Corporation on January 23, 2006 and appointed as the Corporation’s Secretary on
May 9, 2006. Mr. Panoff was the Chief Financial Officer at Nephros,
Inc., a publicly traded medical device company, from July 2004 to January
2006. From August 2001 to July 2004, Mr. Panoff was the Vice
President, Finance, at Walker Digital Companies, a privately held research and
development company. He also served as Corporate Controller at
Medicis Pharmaceutical Corporation, a publicly traded specialty pharmaceutical
company, for over seven years. Mr. Panoff received his Bachelor of
Science in Business Administration from Washington University in St. Louis and
his Masters in Business Administration from Arizona State
University. He is also a Certified Public Accountant in the state of
New York.
CHRISTINE V. SAPAN – Dr.
Sapan, age 60, was appointed as the Executive Vice President, Chief Development
Officer of the Corporation effective July 10, 2006. Dr. Sapan was
previously employed for 18 years at Nabi Biopharmaceuticals, a vertically
integrated biopharmaceutical company that focuses on serious unmet medical needs
including infectious diseases, most recently serving as Vice President, Project
Management from 2001 to 2005. Dr. Sapan has a Ph.D in Experimental
Pathology and an M.S. in Human Physiology from the University of North
Carolina.
The
following table presents the aggregate compensation for services in all
capacities paid by the Corporation and its subsidiaries in respect of the years
ended December 31, 2006 and 2007 to the Corporation’s Named
Executives. Except as set forth herein, the Named Executives did not
receive any compensation from the Corporation during 2006 and 2007.
15
Summary
Compensation Table
|
Name
and Position
|
Year
|
Salary
($)
|
Option
Awards
($) (1)
|
Other
Annual Compensation ($)
|
Total
($)
|
||||||||||||
|
John
E. Mordock, President and Chief Executive Officer
|
2007
|
$250,000
|
$93,806
|
$26,633(2)
|
$370,439
|
||||||||||||
|
2006
|
91,667
|
285,208
|
17,133(3)
|
394,008
|
|||||||||||||
|
Marc
L. Panoff, Chief Financial Officer, Treasurer and
Secretary
|
2007
|
185,000
|
109,606
|
——
|
294,606
|
||||||||||||
|
2006
|
155,692
|
133,466
|
——
|
289,158
|
|||||||||||||
|
Christine
V. Sapan, Executive Vice President, Chief Development
Officer
|
2007
|
225,000
|
143,278
|
2,920(4)
|
371,198
|
||||||||||||
|
2006
|
107,452
|
64,906
|
34,196(5)
|
206,554
|
|||||||||||||
|
Martin
J. Kaplitt, M.D., Chairman of the Board
(6)
|
2007
|
85,000
|
——
|
——
|
85,000
|
||||||||||||
|
2006
|
85,000
|
——
|
——
|
85,000
|
|||||||||||||
_____________
|
(1)
|
The
amounts in the Option Awards column reflect the dollar amounts recognized
for financial statement reporting purposes for the fiscal year ended
December 31, 2006, in accordance with FAS 123(R), for awards
pursuant to the Corporation’s 2000 Stock Option Plan, and thus may include
amounts attributable to awards granted during and before
2006. No stock awards or equity incentive plan awards were
granted to such persons during
2007.
|
|
(2)
|
The
amount shown for Mr. Mordock under Other Annual Compensation for 2007
reflects $26,633 in expenses paid by the Corporation for lodging and
transportation and the related gross up for taxes on income arising out of
such expenses.
|
|
(3)
|
The
amount shown for Mr. Mordock under Other Annual Compensation for 2006
reflects (i) $12,383 in expenses paid by the Corporation for lodging and
transportation and the related gross up for taxes on income arising out of
such expenses, and (ii) $4,750 in director compensation prior to his
appointment as President and Chief Executive Officer in July 2006. For a
discussion of the valuation assumptions, see the footnotes to the
Corporation’s consolidated financial statements included in its Annual
Report on Form 10-KSB for the year ended December 31,
2007.
|
|
(4)
|
The
amount shown for Dr. Sapan under Other Annual Compensation for 2007
reflects a payment for the 2006 gross up for taxes on income arising out
of expenses paid by the Corporation for temporary lodging and
transportation.
|
|
(5)
|
The
amount shown for Dr. Sapan under Other Annual Compensation for 2006
reflects expenses paid by the Corporation for temporary lodging and
transportation pending her relocation to New Jersey as well as a gross up
for taxes on income arising out of such expenses. These
reimbursements were provided under a letter agreement dated June 23, 2006
and were no longer payable on and as of the six-month anniversary of the
date of such letter agreement.
|
|
(6)
|
Dr.
Kaplitt served as the Corporation’s Executive Chairman from September 21,
2004 to February 23, 2007.
|
16
Employment
Agreements
John
E. Mordock
Effective
July 17, 2006, the Corporation hired John E. Mordock to serve as its President
and Chief Executive Officer under a letter agreement dated July 17,
2006. Mr. Mordock was initially paid an annual base salary of
$200,000, which was increased to $250,000 effective January 1,
2007.
On
December 4, 2007, the Corporation entered into an employment agreement with Mr.
Mordock, which superseded his letter agreement. The employment
agreement provides that Mr. Mordock shall be employed by the Corporation for a
period of two years, shall initially receive an annual base salary of at least
$250,000 and shall be eligible to receive an annual bonus in the discretion of
the Board. During the period of his employment, Mr. Mordock will be
reimbursed for reasonable temporary housing and automobile expenses related to
his employment. If Mr. Mordock’s employment is terminated by the
Corporation without “Cause” or by Mr. Mordock for “Good Reason” (including a
“Change in Control”), as those terms are defined in his employment agreement, he
shall be entitled to a cash payment equal to the lesser of (i) one year of base
salary or (ii) the base salary payable for the remaining term of the employment
agreement. In addition, all of his options shall immediately vest and
be exercisable for up to one year following the date of any such
termination. As of December 31, 2007, total unrecognized compensation
cost related to Mr. Mordock’s stock option awards was approximately
$43,000.
Christine
V. Sapan
Effective
July 10, 2006, Dr. Christine V. Sapan was appointed as Executive Vice President,
Chief Development Officer of the Corporation under a letter agreement dated June
23, 2006. Dr. Sapan’s base annual salary was $225,000 and
she is eligible to receive a discretionary annual bonus, with a target bonus of
40% of her annual base salary. In the event of her relocation, Dr.
Sapan will be reimbursed by the Corporation for all reasonable moving expenses
in connection with such relocation. During the first six months of
her employment, Dr. Sapan was reimbursed for temporary housing and automobile
expenses. If Dr. Sapan’s employment is terminated by the Corporation
without “Cause” (as defined in her letter agreement), or by Dr. Sapan as a
result of a demotion of her position or diminution in her duties or a “Change of
Control” (as defined in the 2000 Stock Option Plan), she will be entitled to
receive a payment of twelve months’ base salary. All of her options
shall immediately vest and be exercisable for up to one year following the date
of any such termination. As of December 31, 2007, total unrecognized
compensation cost related to Dr. Sapan’s stock option awards was approximately
$81,000.
Marc
L. Panoff
On
January 23, 2006, the Corporation hired Marc L. Panoff as its Chief Financial
Officer and Treasurer under a letter agreement dated December 15,
2005. Mr. Panoff was also appointed as the Corporation’s Secretary on
May 9, 2006. Mr. Panoff initially received an annual base salary of
$165,000, which was increased to $185,000 effective January 1,
2007.
On
December 4, 2007, the Corporation entered into an employment agreement with Mr.
Panoff, which superseded his letter agreement. The employment
agreement provides that Mr. Panoff shall be employed by the Corporation for a
period of two years, shall initially receive an annual base salary of at least
$185,000 and shall be eligible to receive an annual bonus in the discretion of
the Board. If Mr. Panoff’s employment is terminated by the
Corporation without “Cause” or by Mr. Panoff for “Good Reason” (including a
“Change in Control”), as those terms are defined in his employment agreement, he
shall be entitled to a cash payment equal to the lesser of (i) one year of base
salary or (ii) the base salary payable for the remaining term of the employment
agreement. In addition, all of his options shall immediately vest and
be exercisable for up to one year following the date of any such
termination. As of December 31, 2007, total unrecognized compensation
cost related to Mr. Panoff’s stock option awards was approximately
$53,000.
17
Deductibility
of Compensation
Section
162(m) of the Code generally limits to $1,000,000 the Corporation’s federal
income tax deduction for compensation paid in any year to each of its chief
executive officer and the four other highest paid executive officers, to the
extent such compensation is not “performance-based” within the meaning of
Section 162(m). The Compensation Committee will, in general, seek to
qualify compensation paid to its executive officers for deductibility under
Section 162(m), although the Compensation Committee believes it is appropriate
to retain the flexibility to authorize payments of compensation that may not
qualify for deductibility if, in the Compensation Committee’s judgment, it is in
the Corporation’s best interest to do so.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth the outstanding equity awards to the Named Executive
Officers as of December 31, 2007. No stock awards or equity incentive
plan awards were granted to such persons during 2007.
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
|||||||
|
John
E. Mordock
|
43,334
|
21,666(1)
|
$1.80
|
5/09/16
|
|||||||
|
250,000
|
——
|
$1.30
|
7/19/16
|
||||||||
|
41,667
|
83,333(2)
|
$1.15
|
5/09/17
|
||||||||
|
Marc
L. Panoff
|
60,000
|
120,000(3)
|
$1.70
|
1/23/16
|
|||||||
|
25,000
|
50,000(4)
|
$1.15
|
5/09/17
|
||||||||
|
Christine
V. Sapan
|
83,333
|
166,667(5)
|
$1.20
|
7/10/17
|
|||||||
|
25,000
|
50,000(6)
|
$1.15
|
5/09/17
|
||||||||
|
Martin
J. Kaplitt, M.D.
|
——
|
——
|
|||||||||
_____________
|
(1)
|
These
options vest on May 9, 2008. These options vest and are
exercisable in full upon a termination of Mr. Mordock’s employment by the
Corporation without Cause or by Mr. Mordock for Good Reason (including a
Change in Control).
|
|
(2)
|
41,666
options vest on May 9, 2008 and 41,667 options vest on May 9,
2009. These options vest and are exercisable in full upon a
termination of Mr. Mordock’s employment by the Corporation without Cause
or by Mr. Mordock for Good Reason (including a Change in
Control).
|
18
|
(3)
|
50%
of these options vest on each of January 23, 2008 and January 23,
2009. These options vest and are exercisable in full upon a
termination of Mr. Panoff’s employment by the Corporation without Cause or
by Mr. Panoff for Good Reason (including a Change in
Control).
|
|
(4)
|
50%
of these options vest on each of May 9, 2008 and May 9,
2009. These options vest and are exercisable in full upon a
termination of Mr. Panoff’s employment by the Corporation without Cause or
by Mr. Panoff for Good Reason (including a Change in
Control).
|
|
(5)
|
83,333
options vest on July 10, 2008 and 83,334 options vest on July 10,
2009. These options vest and are exercisable in full upon a
termination of Dr. Sapan’s employment by the Corporation without Cause or
by Dr. Sapan as a result of a demotion of her position or diminution in
her duties or a Change of Control.
|
|
(6)
|
50%
of these options vest on each of May 9, 2008 and May 9,
2009. These options vest and are exercisable in full upon a
termination of Dr. Sapan’s employment by the Corporation without Cause or
by Dr. Sapan as a result of a demotion of her position or diminution in
her duties or a Change of Control.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
Corporation is party to an Amended and Restated Consulting Agreement, dated
April 25, 2005, with Dr. Michael G. Kaplitt (“Michael Kaplitt”), one of the
Corporation’s scientific co-founders and the son of Dr. Martin J. Kaplitt
(“Martin Kaplitt”), the Corporation’s Chairman of the Board. Pursuant
to the terms of this agreement, Michael Kaplitt provides advice and consulting
services on an exclusive basis in scientific research on human gene transfer in
the nervous system and serves as a member of the Corporation’s Scientific
Advisory Board. Michael Kaplitt was paid an annual retainer of
$100,000 in equal quarterly installment payments from October 2005 through
September 2006. Effective October 1, 2006, Michael Kaplitt’s
annual retainer was increased to $175,000 payable in equal quarterly installment
payments, which installment payments commenced in January 2007. The
Corporation paid Michael Kaplitt approximately $119,000 and $175,000 in retainer
fees in 2006 and 2007 respectively thereunder. Under this agreement,
the Corporation granted Michael Kaplitt non-qualified stock options to purchase
160,000 shares of Common Stock at an exercise price of $2.05 per share on April
25, 2005. Michael Kaplitt is also the neurosurgeon who performed the
surgical procedures on the twelve patients required by the protocol for the
Corporation’s sponsored Phase 1 clinical trial for the treatment of Parkinson’s
disease.
In
accordance with The Rockefeller University’s (“Rockefeller”) Intellectual
Property Policy, an aggregate of one-third of all income that it receives from
licensing transactions is paid to the inventors. Michael Kaplitt has
advised the Corporation that he received less than $2,000 in each of 2007 and
2006 from Rockefeller as a result of payments made by the Corporation to
Rockefeller under a non-exclusive license agreement. In December
2002, the Corporation issued to Rockefeller 368,761 shares of Common Stock in
exchange for the cancellation of certain fees under its exclusive patent license
agreement with the Corporation. Rockefeller sold these shares in
2007, and Michael Kaplitt received approximately $75,000 from the proceeds of
the sale. Michael Kaplitt estimates that he will be entitled to
receive approximately one third of the proceeds of future royalties or other
amounts that may become payable by the Corporation to Rockefeller under the
Corporation’s license agreements with Rockefeller and the Corporation’s license
Agreement with Rockefeller and Yale University (the “Rockefeller-Yale
Agreement”).
Dr.
Matthew During, a founder of the Corporation and a member of its Scientific
Advisory Board, has advised the Corporation that in each of 2006 and 2007 he
received approximately $17,000 from Thomas Jefferson University (“TJU”) as a
result of payments made by the Corporation to TJU under two exclusive license
agreements. The amounts received by Dr. During represent
approximately 18% of the total payments made by the Corporation to TJU in each
of 2006 and 2007. Dr. During will also have a similar interest in
future royalties or other amounts that may become payable under the agreement
with TJU.
19
Dr.
During has also advised the Corporation that in each of 2006 and 2007, he
received less than $2,000 from Yale University as a result of payments made by
the Corporation to Yale University under a non-exclusive license
agreement. The amounts received by Dr. During represent approximately
25% of the total payments made by the Corporation to Yale University in each of
2006 and 2007. Dr. During will also have a similar interest in future
royalties or other amounts that may become payable under the Rockefeller-Yale
Agreement.
Dr.
During and the Corporation entered into a consulting agreement in October 1999
which was subsequently amended. The consulting agreement provides for
payments to Dr. During of $175,000 per year through September 2008.
In August
2004, the Corporation subleased 1,185 square feet of space at One Bridge Plaza,
Fort Lee, New Jersey 07024 from Palisade Capital Securities, LLC, an affiliated
company, for use as its corporate offices for a base annual rent of
approximately $36,000 or $3,000 per month and such lease expired on January 31,
2008.
Effective
July 17, 2006, Dr. Michael Sorell (“Dr. Sorell”) resigned as the Corporation’s
President and Chief Executive Officer. In connection with such
resignation, the Corporation and Dr. Sorell entered into a Separation
Agreement. Pursuant to this agreement, the Corporation paid Dr.
Sorell severance of $185,000 payable in equal semi-monthly installments through
September 30, 2007. The agreement also provided for the immediate
vesting of Dr. Sorell’s stock options. Such options, to the extent
not exercised, terminated on December 31, 2007.
Effective
February 23, 2007, the Corporation entered into a consulting agreement with
Martin Kaplitt. Under the terms of this agreement, Martin Kaplitt
provided medical and scientific consulting and advisory services to the
Corporation for a one-year period, and received compensation at an annual rate
of $85,000. Martin Kaplitt’s consulting agreement was extended for an
additional one-year term, effective January 1, 2008, at an annual rate of
$110,000. Effective February 23, 2007, Martin Kaplitt no longer
served as the Executive Chairman of the Corporation, but continues to serve as
Chairman of the Board.
On
November 19, 2007, the Corporation issued and sold 142,857 shares of Series D
Preferred Stock at a price of $35.00 per share, or a total of approximately
$5,000,000, to GEPT, as part of a private placement transaction. As
part of this transaction, GEPT also exchanged 230,184 shares of Series C
Preferred Stock, representing all of such shares of Series C Preferred Stock
then owned by GEPT, for (i) 93,940 newly issued shares of Series C Preferred
Stock and (ii) 163,470 shares of Series D Preferred Stock. At the
time of the transaction, GEPT was a beneficial owner of more than five percent
of the Corporation’s voting securities.
AUDIT
COMMITTEE REPORT
The Board
has an Audit Committee comprised of three directors, each of whom meets the
independence and qualification standards for audit committee membership as set
forth in the listing standards set forth in the AMEX Rules and Rule 10A-3 of the
Exchange Act.
20
The Audit
Committee oversees the Corporation’s financial and accounting processes on
behalf of the Board. Management has the primary responsibility for
the financial statements and the reporting process, including the systems of
internal controls. In fulfilling its oversight responsibilities, the
Audit Committee reviewed the audited financial statements in the 2007 Annual
Report on Form 10-KSB with management, including a discussion of the quality,
not just the acceptability, of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in the financial
statements. The Corporation’s management is responsible for the
preparation, presentation and integrity of the Corporation’s financial
statements, for accounting and financial reporting principles and for internal
controls and procedures designed to assure compliance with accounting standards
and applicable laws and regulations. The independent registered
public accounting firm, BDO Seidman, LLP, is responsible for performing an
independent audit of the consolidated financial statements prepared in
accordance with generally accepted accounting principles.
In
performing its oversight function, the Audit Committee reviewed with the
Corporation’s independent registered public accounting firm such firm’s
judgments as to the quality, not just the acceptability, of the Corporation’s
accounting principles and such other matters as are required to be discussed
with the Committee under generally accepted auditing standards, including
Statement on Auditing Standards Nos. 61 and 90. In addition, the
Committee has discussed with the independent registered public accounting firm
such firm’s independence from management and the Corporation and has received
the written disclosures and the letter from the independent registered public
accounting firm required by the Independence Standards Board, Standard No.
1.
The
Committee discussed with the Corporation’s independent registered public
accounting firm the overall scope and plans for the audit. The
Committee met with the independent registered public accounting firm, with and
without management present, to discuss the results of the examination and the
overall quality of the Corporation’s financial reporting.
The
Corporation’s management, the Audit Committee and the Board are fully committed
to a review and evaluation of the Corporation’s procedures and policies designed
to assure effective internal control over financial reporting. All
steps and disclosures relating to these matters have been and will remain
subject to the oversight of the Audit Committee.
Based on
the reviews and discussions referred to above, and subject to the limitations on
the role and responsibilities of the Audit Committee set forth below and in its
charter, the Audit Committee recommended to the Board (and the Board has
approved) that the audited financial statements be included in the Corporation’s
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 for
filing with the Securities and Exchange Commission. The Audit
Committee also approved the selection of the Corporation’s independent
registered public accounting firm for the fiscal year ended December 31,
2007.
The Audit
Committee of the Board,
Austin M.
Long III, Chair
Cornelius
E. Golding
Craig J.
Nickels
21
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
BDO
Seidman, LLP was the Corporation’s independent registered public accounting firm
for the year ended December 31, 2007. BDO Seidman does not have any
direct or indirect financial interest in the Corporation in any capacity other
than that of independent public accountants. A representative of BDO
Seidman, LLP will be present at the meeting to answer questions by stockholders
concerning the accounts of the Corporation and will have the opportunity to make
a statement, if such representative desires to do so.
Principal
Accounting Firm Fees
The
following table sets forth the aggregate fees billed to the Corporation for the
fiscal years ended December 31, 2007 and 2006 by the Corporation’s independent
registered public accounting firm, BDO Seidman, LLP. BDO Seidman was
appointed as the Corporation’s independent registered public accounting firm
effective September 12, 2006.
|
Description
|
2007
|
2006
|
||||||
|
Audit
fees
|
$ | 166,000 | $ | 155,500 | ||||
|
Audit
related fees
|
25,000 | - | ||||||
|
Tax
fees
|
- | - | ||||||
|
All
other fees
|
- | - | ||||||
|
Total
|
$ | 191,000 | $ | 155,500 | ||||
Audit
fees included fees associated with the audit of the Corporation’s annual
financial statements included in the Corporation’s Form 10-KSB and review of
quarterly financial statements included in the Corporation’s Form 10-QSBs,
consultations concerning financial accounting and reporting standards, including
compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as well as fees
associated with the review of the Corporation’s Quarterly Report for the period
ended September 30, 2006 on Form 10-QSB. The 2007 audit fee amount
includes an estimate of fees to be billed to the Corporation for the 2007 annual
audit.
Audit
related fees are fees for assurance and related services that are reasonably
related to the performance of the audit or review of the financial
statements.
The
following table sets forth the aggregate fees billed to the Corporation for the
fiscal year ended December 31, 2006 by the Corporation’s former independent
registered public accounting firm, J.H. Cohn LLP. J.H. Cohn LLP
was dismissed as the Corporation’s independent registered public accounting firm
effective September 12, 2006. The decision to change accountants was
approved by the Board.
|
Description
|
2006
|
|||
|
Audit
fees
|
$ | 37,030 | ||
|
Audit
related fees
|
4,644 | |||
|
Tax
fees
|
- | |||
|
All
other fees
|
- | |||
|
Total
|
$ | 41,674 | ||
Audit
fees included fees associated with the reviews of the Corporation’s Quarterly
Reports on Form 10-QSB for the first and second quarter of
2006. Audit related fees are fees for assurance and related services
that are reasonably related to the performance of the audit or review of the
financial statements.
22
Through
September 12, 2006, the date of dismissal of J.H. Cohn, the Corporation has had
no disagreement with J.H. Cohn on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure.
Before
our independent registered accounting firm is engaged to render audit or
non-audit services, the engagement must be approved by the Audit Committee or
entered into pursuant to the Audit Committee’s pre-approval policies and
procedures. Pursuant to the requirements of the Sarbanes-Oxley Act of
2002, the Audit Committee had a pre-approval policy in effect, during 2007, for
the approval of service rendered by the Corporation’s independent registered
public accounting firm. All services provided by the Corporation's
independent registered accounting firms during 2007 were approved by the Audit
Committee prior to the commencement thereof.
OTHER
MATTERS
The Board
does not know of any other matters which are likely to be brought before the
meeting. However, in the event that any other matters properly come
before the meeting, the persons named in the enclosed proxy will vote such proxy
in accordance with their judgment on such matters.
PROPOSALS
BY STOCKHOLDERS
Proposals
of stockholders intended to be presented, pursuant to Rule 14a-8 under the
Exchange Act, at the 2009 Annual Meeting of Stockholders of the Corporation,
which is currently scheduled to be held on May 8, 2009, must be received by the
Corporation at the Corporation’s principal executive offices by December 11,
2008 if they are to be included in the Corporation’s proxy statement and proxy
relating to such meeting.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based
solely on its review of Forms 3, 4 and 5 filed under Section 16(a) of the
Exchange Act, the Corporation believes that during fiscal 2007, all Section
16(a) filing requirements applicable to its officers, directors and other
principal stockholders of the Corporation were complied with except that
Chrysler LLC did not timely file its Form 4s with respect to dividends on its
shares of Series C Preferred Stock received on each of June 1, 2007, September
1, 2007 and December 3, 2007.
SOLICITATION
OF PROXIES
The cost
of preparing, assembling and mailing this Proxy Statement, the Notice of Annual
Meeting of Stockholders and the enclosed proxy will be borne by the
Corporation. In addition to the solicitation of proxies by use of the
mails, the Corporation may solicit proxies personally and by telephone and
telegraph.
23
STOCKHOLDER
COMMUNICATIONS WITH DIRECTORS
The Board
has adopted a written policy on stockholder and interested party communications
with directors, a copy of which is available on the Corporation’s corporate
website at http://www.neurologix.net.
WHERE
YOU CAN FIND MORE INFORMATION
The
Corporation files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any reports,
statements or other information we file at the Public Reference Room maintained
by the Securities and Exchange Commission (“SEC”) at 100 F.
Street, N.E., Washington, D.C. 20549. Our SEC filings are also
available to the public from commercial document retrieval services and at the
website maintained by the SEC at http://www.sec.gov. The SEC allows
the Corporation to “incorporate by reference” information into this Proxy
Statement, which means that we can disclose important information by referring
you to another document filed separately with the SEC. A copy of such
report is being mailed to the Corporation’s stockholders with this Proxy
Statement. All documents filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the annual meeting shall also be deemed to be incorporated
by reference into this Proxy Statement.
Our
stockholders may obtain the above-mentioned documents, without charge, by
requesting them in writing or by telephone from the Corporation, by writing to
Neurologix, Inc., One Bridge Plaza, Suite 605, Fort Lee, New Jersey 07024,
attention of Marc L. Panoff, and by telephone to 201-592-6451.
You
should rely only on the information contained in this Proxy Statement or other
documents to which we refer to vote at the annual meeting. We have
not authorized anyone to provide you with information that is different from
what is contained in this Proxy Statement. You should not assume that
the information contained in this Proxy Statement is accurate as of any date
other than the date of the annual meeting, and the mailing of the Proxy
Statement to stockholders shall not create any implication to the
contrary.
By
Order of the Board Of Directors
/s/ Marc L.
Panoff
Marc
L. Panoff
Chief
Financial Officer, Secretary and Treasurer
April 10,
2008
24
EXHIBIT
A – NEUROLOGIX INC. 2000 STOCK OPTION PLAN – AMENDMENT NO. 3
The 2000
Stock Option Plan of Neurologix, Inc., as amended (the “Plan”), is hereby
further amended as follows:
1. Effective May 8, 2007,
Section 5(a) of the Plan is hereby amended in its entirety to read as
follows:
“Subject to Section 9, the aggregate
number of shares of Stock in respect of which Options may be granted under the
Plan is 6,000,000;”
2. Except
for the foregoing amendment set forth in paragraph 1 above, all of the terms and
conditions of the Plan shall remain in full force and effect.
25
NEUROLOGIX,
INC.
PROXY
SOLICITED ON BEHALF OF THE BOARD FOR
ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 8, 2008.
The
undersigned hereby appoints John E. Mordock and Marc L. Panoff as proxies with
full power of substitution to vote all shares of stock of Neurologix, Inc. of
record in the name of the undersigned at the close of business on April 1, 2008,
at the Annual Meeting of Stockholders to be held on May 8, 2008 at 10:00 a.m.
(Eastern time) at the Montammy Golf Club, Route 9W and Montammy Drive, Alpine,
New Jersey 07620 or at any postponements or adjournments, hereby revoking all
former proxies.
IMPORTANT
-- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE. THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ON PROPOSALS 1 AND 2 IN
ACCORDANCE WITH THE SPECIFICATION MADE AND “FOR” SUCH PROPOSALS
IF THERE IS NO SPECIFICATION.
(Continued
and to be voted on reverse side.)
Annual
Meeting Proxy Card
1. Election
of Directors
The
Board of Directors recommends a vote FOR the three directors listed below to the
Corporation’s
Board of Directors:
|
For
|
Withhold
Authority
|
|
|
01–Cornelius
E. Golding
|
____
|
____
|
|
02–Elliott
H. Singer
|
____
|
____
|
|
03–Martin
J. Kaplitt, M.D.
|
____
|
____
|
2. Amendment
of the 2000 Stock Option Plan
The
Board of Directors recommends a vote FOR the following proposal:
|
For
|
Against
|
Abstain
|
|
|
To
approve an amendment to the 2000 Stock Option Plan of the Corporation to
increase the number of available shares from 3,800,000 to
6,000,000.
|
3. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Authorized
Signatures – Sign Here – This section must be completed for your instructions to
be executed.
NOTE:
PLEASE SIGN NAME(S), EXACTLY AS SHOWN ABOVE. WHEN SIGNING AS
EXECUTOR, ADMINISTRATOR OR GUARDIAN, GIVE FULL TITLE AS SUCH. WHEN
SHARES HAVE BEEN ISSUED IN THE NAMES OF TWO OR MORE PERSONS, ALL SHOULD
SIGN.
|
Signature
1:
|
|
Signature
2:
|
|
Date
(mm/dd/yy):
|
26