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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 5
ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
[_] Check this box if no longer subject to Section 16. Form 4 or Form 5
obligations may continue. See Instruction 1(b).
[_] Form 3 Transactions Reported
[_] Form 4 Transactions Reported
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1. Name and Address of Reporting Person*
Tsai Huei
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(Last) (First) (Middle)
53 Worth Mills Lane
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(Street)
Princeton, New Jersey 08540
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(City) (State) (Zip)
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2. Issuer Name and Ticker or Trading Symbol
Discovery Laboratories, Inc. (DSCO)
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3. IRS Identification Number of Reporting Person, if an entity (Voluntary)
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4. Statement for Month/Year
12/31/99
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5. If Amendment, Date of Original (Month/Year)
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6. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
[_] Director [_] 10% Owner
[X] Officer (give title below) [_] Other (specify below)
Vice President
_______________________________
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7. Individual or Joint/Group Reporting
(check applicable line)
[X] Form Filed by One Reporting Person
[_] Form Filed by More than One Reporting Person
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Table I -- Non-Derivative Securities Acquired, Disposed of,
or Beneficially Owned
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5.
Amount of 6.
4. Securities Owner-
Securities Acquired (A) or Beneficially ship
Disposed of (D) Owned at the Form: 7.
(Instr. 3, 4 and 5) End of Direct Nature of
2. 3. ----------------------------- Issuer's (D) or Indirect
1. Transaction Transaction (A) Fiscal Year Indirect Beneficial
Title of Security Date (Month/ Code Amount or Price (Instr. 3 (I) Ownership
(Instr. 3) Day/Year) (Instr. 8) (D) and 4) (Instr.4) (Instr. 4)
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Common Stock 11/24/99 J(1) 11,000 $1.5625 -0- D N/A
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Common Stock 11/24/99 J(1) 11,000 $1.5625 42,200(2) I By IRA
and
Dependents
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* If the form is filed by more than one Reporting Person, see Instruction
4(b)(v).
FORM 5 (continued)
Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
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9. 10.
Number Owner-
of ship
2. Deriv- of
Conver- 5. 7. ative Deriv- 11.
sion Number of Title and Amount Secur- ative Nature
or Derivative 6. of Underlying 8. ities Secur- of
Exer- Securities Date Securities Price Bene- ity: In-
cise 3. Acquired (A) Exercisable and (Instr. 3 and 4) of ficially Direct direct
Price Trans- 4. or Disposed Expiration Date ---------------- Deriv- Owned (D) or Bene-
1. of action Trans- of (D) (Month/Day/Year) Amount ative at End In- ficial
Title of Deriv- Date action (Instr. 3, ---------------- or Secur- of direct Owner-
Derivative ative (Month/ Code 4 and 5) Date Expira- Number ity Year (I) ship
Security Secur- Day/ (Instr. ------------ Exer- tion of (Instr. (Instr. (Instr. (Instr.
(Instr. 3) ity Year) 8) (A) (D) cisable Date Title Shares 5) 4) 4) 4)
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Stock Option $1.380 9/30/1999 M(3) A 9/30/1999 9/30/2009 Common 38,000
(right to buy) Stock
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Stock Option $3.00 1/1/1999 M(4) A 1/1/1999 1/1/2009 Common 40,000
(right to buy) Stock
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Stock Option $4.44 6/16/1998 M(5) A 6/16/1998 6/16/2008 Common 20,493
(right to buy) Stock
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Stock Option $4.44 6/16/1998 M(6) A 6/16/1998 6/16/2008 Common 18,400 164,544 D N/A
(right to buy) Stock
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Explanation of Responses:
1. A change in the form of beneficial ownership occurred when the Reporting Person sold 11,000 shares into the market
and the Reporting Person's Individual Retirement Account ("IRA") on the same day immediately repurchased 11,000 shares
at the same price. The amount of shares in which the Reporting Person possessed a pecuniary interest did not change.
2. Includes 31,200 shares of Discovery Common Stock owned equally by each of the Reporting Person's two children and
11,000 shares owned by the Reporting Person's IRA. The Reporting Person disclaims beneficial ownership of such
indirectly beneficially owned securities except to the extent of his pecuniary interest therein.
3. The option grants are subject to repurchase by Discovery upon the occurrence of certain events relating to the market
price of the common stock of Discovery, the failure of Discovery to enter into certain collaboration agreements or a
sale or merger of Discovery.
4. This option becomes vested as to 25% of the option shares on the date of the grant. The remaining 75% of the option
shares are vested in three equal annual installments beginning with the first year anniversary of the date of the grant.
5. The Corporation's repurchase right shall lapse and 100% of the option shares shall vest in the event the market
capitalization of the Corporation exceeds $75 million, determined over a 30 day average.
6. The Corporation's repurchase right shall lapse and 100% of the option shares shall vest in the event that the
Corporation consummates a transaction having a total value of at least $20 million involving the development, clinical
testing, regulatory approval, manufacturing and/or marketing of a portfolio compound.
/s/ Huei Tsai February 11, 2000
By: ---------------------------------------- -----------------------
**Signature of Reporting Person Date
** Intentional misstatements or omissions of facts constitute Federal Criminal
Violations.
See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this form, one of which must be manually signed.
If space provided is insufficient, see Instruction 6 for procedure.