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Preliminary Proxy Statement

(1)

Title of each class of securities to which transaction applies: Global Genomics Capital, Inc. common stock, no par value per share

(2)

Aggregate number of securities to which transaction applies: 11,593,076 shares

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): There is no market for the common stock described above and the issuer of the common stock has an accumulated deficit. In accordance with Rule 0-11, the stated value of the common stock at March 31, 2002 was used to determine the filing fee.

(4)

Proposed maximum aggregate value of transaction: $464,020

(5)

Total fee paid: $93

¨

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount previously paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

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(1)

To approve the issuance of shares of CytRx common stock in the acquisition of Global Genomics Capital by means of the merger of a wholly owned subsidiary of CytRx into Global Genomics Capital, Inc.;

(2)

To approve an amendment to CytRx’s certificate of incorporation to change CytRx’s name to “Global Genomics, Inc.”, if the merger closes;

(3)

To elect two Class II directors to serve until the 2005 Annual Meeting of Stockholders;

(4)

To approve two amendments to the CytRx Corporation 2000 Long-Term Incentive Plan, one which increases the number of shares of common stock available for awards from one million to three million and the other which removes or changes some limitations on awards granted under the plan;

(5)

To ratify the selection of Ernst & Young LLP as CytRx’s independent auditors for the fiscal year ending December 31, 2002; and

(6)

To transact such other business as may properly come before the Annual Meeting or any postponements or adjournments thereof.

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(1)

to approve the issuance of shares of CytRx common stock in the acquisition of Global Genomics Capital, Inc. by means of the merger of a wholly owned subsidiary of CytRx into Global Genomics Capital, Inc.;

(2)

to approve an amendment to CytRx’s certificate of incorporation to change CytRx’s name to “Global Genomics, Inc.”, if the merger closes;

(3)

to elect two Class II directors to serve until the 2005 Annual Meeting of Stockholders;

(4)

to approve two amendments to the CytRx Corporation 2000 Long-Term Incentive Plan;

(5)

to ratify the selection of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2002; and

(6)

such other matters as may properly come before the Annual Meeting or any postponement or adjournment thereof.

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Q:

Why are we proposing the merger?

A:

We are proposing the merger because we believe it will result in several potential benefits, including the following:

·

Expansion of CytRx’s business model into the genomics field;

·

Improvement of investment interest in CytRx;

·

Addition of new management and board members with contacts and experience in pharmaceutical and genomics fields; and

·

Diversification of product and technology base and development.

Q:

Why is Global Genomics Capital proposing the merger?

A:

Global Genomics Capital is proposing the merger because it believes the proposed merger will result in several potential benefits, including the following:

·

Combination with CytRx results in a stronger and more competitive pharmaceutical and genomics company than Global Genomics Capital alone;

·

Creation of opportunity for Global Genomics Capital shareholders to participate in a larger, more diversified company; and

·

Improvement of long-term financial prospects of the combined company may enable opportunities for more favorable corporate partnerships and licensing transactions.

Q:

How will these two companies merge?

A:

A wholly owned subsidiary of CytRx will merge with and into Global Genomics Capital. Following the merger, Global Genomics Capital will be a wholly owned subsidiary of CytRx.

Q:

What will Global Genomics Capital shareholders and holders of warrants receive in the merger?

A:

If the merger is completed, a total of 9,962,881 shares of CytRx common stock will be (1) issued to holders of shares of Global Genomics Capital stock and (2) issuable upon the exercise of outstanding warrants to purchase Global Genomics Capital stock that are converted into warrants to purchase CytRx common stock. As of the date of this proxy statement, there are 11,593,076 shares of Global Genomics Capital stock outstanding and warrants to purchase 1,324,701 shares of Global Genomics Capital stock. The foregoing numbers assume that certain promissory notes made by Global Genomics Capital will fully convert into shares of Global Genomics Capital common stock immediately prior to the effective time of the merger. If those numbers do not change before the effective time of the merger, at the effective time of the merger CytRx will:

·

issue 8,941,201 shares of CytRx common stock to the holders of outstanding shares of Global Genomics Capital common stock, which represent approximately 42.3% of the outstanding shares of CytRx common stock immediately after the merger, excluding the dilutive effect of options and warrants; and

·

reserve the remaining 1,021,680 shares of CytRx common stock for issuance upon exercise of the converted warrants.

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Q:

Will CytRx stockholders receive any shares as a result of the merger?

A:

No. CytRx stockholders will continue to hold the CytRx shares they own at the time of the merger.

Q:

Why is CytRx seeking stockholder approval of the merger?

A:

Approval of the merger by CytRx stockholders is not required under Delaware or other applicable law, or by CytRx’s certificate of incorporation or bylaws. Nasdaq rules require approval of any transaction conducted by a company listed on Nasdaq in which that company issues a number of shares that exceeds 20% of the shares of stock outstanding before the transaction. Such approval requires the affirmative vote of a majority of the votes cast at the Annual Meeting, provided that a quorum is present.

Q:

Will CytRx complete the merger if its stockholders do not approve the issuance of the shares in the merger?

A:

It depends. If the CytRx stockholders do not approve the issuance of the shares in the merger, CytRx may still complete the merger if its board of directors determines that proceeding with the merger is still in the best interests of CytRx and its stockholders and, at that time:

·

CytRx common stock is no longer listed on the Nasdaq National Market or the Nasdaq SmallCap Market;

·

CytRx common stock no longer qualifies for listing on either the Nasdaq National Market or the Nasdaq SmallCap Market and CytRx believes such common stock will be delisted; or

·

CytRx’s board of directors otherwise has reasonable justification to proceed with the merger.

Q:

Is Global Genomics Capital shareholder approval required to complete the merger?

A:

Yes. The affirmative vote of a majority of the outstanding shares entitled to vote is required to approve the merger. Global Genomics Capital shareholders owning approximately 85% of the outstanding common stock of Global Genomics Capital as of the date of this proxy statement have entered into voting agreements with CytRx under which such shareholders have agreed to vote in favor of the merger and have granted irrevocable proxies to vote in favor of the merger to Jack J. Luchese and Mark W. Reynolds of CytRx.

Q:

When do CytRx and Global Genomics Capital expect to complete the merger?

A:

CytRx and Global Genomics Capital are working to complete the merger as quickly as possible. They expect to complete the merger in the third quarter of 2002.

Q:

What are the federal income tax consequences of the merger?

A:

The parties believe the merger qualifies as a tax-free reorganization for federal income tax purposes. If the merger qualifies as a tax-free reorganization, a shareholder of Global Genomics Capital who exchanges his or her shares of Global Genomics Capital common stock for CytRx common stock will not recognize any gain or loss to the extent of the receipt of CytRx common stock in the merger. A shareholder of Global Genomics Capital who receives cash as the result of the exercise of dissenters’ rights will have gain or loss to the extent of the receipt of such cash. There are no direct tax consequences to CytRx stockholders in the merger. We urge Global Genomics Capital shareholders and holders of warrants to purchase Global Genomics Capital stock to consult their tax advisors concerning the United States federal, state, local and foreign tax consequences of the merger to them.

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Q:

Does the CytRx board of directors recommend approval of the issuance of the shares of CytRx common stock in the merger?

A:

Yes. After careful consideration, the CytRx board of directors recommends that its stockholders vote in favor of the issuance of the shares of CytRx common stock in the merger.

Q:

What other matters will be voted on at the Annual Meeting?

A:

In addition to the issuance of shares in the merger, CytRx stockholders will be asked to approve an amendment to CytRx’s certificate of incorporation, to elect two directors, to approve two amendments to the CytRx Corporation 2000 Long-Term Incentive Plan and to ratify the selection of Ernst & Young LLP as CytRx’s independent auditors for 2002. The CytRx board of directors recommends that its stockholders vote in favor of the above matters.

Q:

What do I need to do now?

A:

CytRx urges you to read carefully this proxy statement, including its annexes, and to consider how the merger will affect you as a stockholder of CytRx. You also may want to review the documents referenced under “Where You Can Find More Information” on page 85. After you carefully consider those materials, please respond by completing, signing and dating your proxy card and returning it in the enclosed postage paid envelope as soon as possible so that your shares may be represented at the Annual Meeting.

Q:

How do CytRx stockholders vote?

A:

As a CytRx stockholder, you may indicate how you want to vote on your proxy card and then sign and mail your proxy card in the enclosed envelope as soon as possible so that your shares will be represented at the Annual Meeting. CytRx stockholders also may attend the Annual Meeting and vote in person instead of submitting a proxy. If you fail either to return a proxy card or to vote in person at the Annual Meeting, or mark a proxy card “abstain,” there will be no effect on the approval of the issuance of the shares of CytRx common stock in the merger or any other item described in the proxy statement, except that an abstention on Proposal 2 will have the effect of a vote “against” that proposal. If you sign and send in your proxy without indicating how you want to vote, the proxy will be counted as a vote “for” each proposal, unless your shares are held in a brokerage account and your broker does not have discretionary authority to vote your shares on a particular proposal.

Q:

If shares of CytRx common stock are held in a brokerage account, will the broker vote such shares for the CytRx stockholder?

A:

A broker will not be able to vote a CytRx stockholder’s shares on the proposal to issue shares in the merger without instructions from that stockholder on how to vote. Therefore, it is important that CytRx stockholders follow the directions provided by their brokers regarding how to instruct such brokers to vote their shares. If a CytRx stockholder fails to provide his/her broker with instructions, there will be no effect on the approval of the issuance of shares of CytRx common stock in the merger.

Q:

Can I change my vote after I mail in a signed proxy card?

A:

Yes. You may change your vote at any time before the vote takes place at the Annual Meeting. To do so, you may either complete and submit a later dated proxy card or send a written notice to CytRx’s secretary stating that you would like to revoke your proxy. In addition, you may attend the Annual Meeting and vote in person. However, if you elect to vote in person at the Annual Meeting and your shares are held by a

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Q:

When and where is the CytRx Annual Meeting of Stockholders?

A:

The Annual Meeting will be held at         , local time, on             , 2002 at                                 .

Q:

Am I entitled to appraisal rights in connection with the merger?

A:

No. CytRx stockholders are not entitled to appraisal rights in connection with the merger. Under California law, each shareholder of Global Genomics Capital entitled to vote on the merger may require Global Genomics Capital to purchase for cash at their fair market value the shares owned by such shareholder that were not voted in favor of the merger.

Q:

Who may I contact with any additional questions?

A:

You may call Mark W. Reynolds, CytRx’s Vice President, Finance and Secretary, at (770) 368-9500.

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Receipt of approval from the CytRx stockholders of the issuance of shares of CytRx common stock in the merger;

•

Less than 5% of all shares of Global Genomics Capital common stock outstanding immediately prior to the effective time of the merger shall have dissented to the merger;

•

Full conversion of certain promissory notes made by Global Genomics Capital into shares of Global Genomics Capital common stock, or payment in full by Global Genomics Capital of all principal and accrued but unpaid interest under such notes;

•

All required consents of, filings and registrations with, and notifications to all regulatory authorities shall have been filed, occurred or obtained;

•

Absence of any law or order making the merger illegal or otherwise restricting the merger;

•

Absence of any action taken, or statute, regulation or order enacted or enforced, in connection with the grant of any required regulatory approval that would materially adversely impact the economic or business benefits of the merger or would require CytRx to dispose of any material asset prior to the completion of the merger;

•

Accuracy of each party’s respective representations and warranties in the merger agreement in all material respects;

•

Material compliance by each party with its covenants in the merger agreement; and

•

Absence of a material adverse effect on CytRx or Global Genomics Capital from February 11, 2002 to the completion of the merger.

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•

The merger is not completed by September 30, 2002;

•

The approval of CytRx stockholders of the issuance of shares of CytRx common stock in the merger has not been obtained at the Annual Meeting of CytRx stockholders;

•

A final, non-appealable order of a court or other action of any governmental authority has the effect of permanently prohibiting completion of the merger;

•

The consent of any governmental authority required to complete the merger has been denied by final non-appealable action;

•

The other party materially breaches it representations, warranties or covenants in the merger agreement such that the conditions to the merger would be incapable of being satisfied by September 30, 2002; or

•

The other party consents to termination.

•

to approve an amendment to CytRx’s certificate of incorporation to change CytRx’s name to “Global Genomics, Inc.”, if the merger closes;

•

to elect two Class II directors to serve until the 2005 Annual Meeting of Stockholders;

•

to approve two amendments to the CytRx Corporation 2000 Long-Term Incentive Plan;

•

to ratify the selection of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2002; and

•

such other matters as may properly come before the Annual Meeting or any postponement or adjournment thereof.

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by delivering to the secretary of CytRx a signed notice of revocation or a later-dated, signed proxy; or

•

by attending the Annual Meeting and voting in person.

•

CytRx common stock is no longer listed on the Nasdaq National Market or the Nasdaq SmallCap Market at such time,

•

CytRx common stock no longer qualifies for listing on either the Nasdaq National Market or the Nasdaq SmallCap Market at such time, and CytRx believes its common stock will be delisted, or

•

CytRx’s board of directors otherwise has reasonable justification to proceed with the merger.

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the approval of the amendment to CytRx’s certificate of incorporation,

•

the nominees for election as Class II directors,

•

the approval of the amendments to the CytRx Corporation 2000 Long-Term Incentive Plan, and

•

the ratification of Ernst & Young LLP as CytRx’s independent auditors for the fiscal year ending December 31, 2002.

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Steven A. Kriegsman as a director and the Chief Executive Officer of CytRx, and

•

Louis Ignarro, Ph.D. and Joseph Rubinfeld, Ph.D. as directors of CytRx,

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•

Reviewed CytRx’s Corporate Overview presentation dated September 21, 2001;

•

Reviewed CytRx’s Non-confidential Portfolio Overview of Key Technologies dated May 2000;

•

Reviewed CytRx’s U.S. corporation income tax returns for the years ended December 31, 1996 through 2000;

•

Reviewed CytRx’s Annual Reports for the years ended December 31, 1996 through 2000;

•

Reviewed CytRx’s U.S. growth projections from 2002 to 2011;

•

Reviewed CytRx’s public filings with the SEC, including reports on Forms 10-K, 10-Q and 8-K;

•

Reviewed CytRx’s license agreements;

•

Reviewed the historical market prices and trading volumes of the common stock of CytRx;

•

Engaged in conference calls with Jack J. Luchese, President, Chief Executive Officer and a director of CytRx, to discuss CytRx’s operations, historical financial statements, and future prospects;

•

Engaged in conference calls with Mark W. Reynolds, Vice President, Finance and Secretary of CytRx, to discuss CytRx’s operations, historical financial statements, and future prospects;

•

Interviewed Steven A. Kriegsman, Chairman of the Board and a director of Global Genomics Capital, to discuss Global Genomics Capital’s operations, historical financial statements, and future prospects;

•

Interviewed and engaged in conference calls with Elliott J. Cody, Chief Financial Officer of Global Genomics Capital, to discuss Global Genomics Capital’s operations, historical financial statements, and future prospects;

•

Engaged in a conference call with Leonard P. Ruiz, Jr., President, Chief Operating Officer and a director of Global Genomics Capital, to discuss Global Genomics Capital’s operations, historical financial statements, and future prospects;

•

Engaged in conference calls with James V. Adam, President of Blizzard Genomics, to discuss Blizzard Genomics’ operations, historical financial statements, and future prospects;

•

Engaged in conference calls with Martin Blumenfeld, Ph.D., Chief Executive Officer of Blizzard Genomics, to discuss the merits of Blizzard Genomics’ technology and to assist in Sanli Pastore & Hill’s competitive and industry analyses;

•

Reviewed publicly available financial data and stock market performance data of public companies that Sanli Pastore & Hill deemed generally comparable to CytRx, Global Genomics Capital and Blizzard Genomics;

•

Reviewed Business Overview for Global Genomics Capital, Inc. provided by Global Genomics Capital;

•

Reviewed and analyzed Blizzard Genomics’ projected income statements, balance sheets and tatements of cash flow for the years 2001 to 2006. These projections were performed by James V. Adam, President of Blizzard Genomics;

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Reviewed List of Shareholders, Blizzard Genomics, dated January 18, 2002;

•

Reviewed Blizzard Genomics’ 2000 U.S. corporation income tax return;

•

Reviewed the articles of incorporation and internally prepared documents of Blizzard Genomics and Global Genomics Capital;

•

Reviewed Blizzard Genomics’ internally prepared balance sheet as of December 31, 2001 and internally prepared income statement for the twelve months ending December 31, 2001;

•

Reviewed Blizzard Genomics’ DNA Chip Reader Project History;

•

Reviewed various patents and patent applications filed by Martin Blumenfeld, Ph.D. and others. It is Sanli Pastore & Hill’s understanding that those patents and patent applications are the property of Mr. Blumenfeld and the University of Minnesota. However, the patents and patent applications have been exclusively licensed to Blizzard Genomics;

•

Reviewed Office Lease between Great Lakes REIT, L.P., Landlord, and Blizzard Genomics, Inc., Tenant;

•

Reviewed various consulting agreements between Blizzard Genomics and outside consultants;

•

Reviewed Stock Option Plan of Blizzard Genomics;

•

Reviewed and analyzed Global Genomics Capital’s unaudited income statements for 2001 and projected income statements for the years 2002 to 2006;

•

Reviewed and analyzed Global Genomics Capital’s unaudited income statements, balance sheets and statements of cash flow for the year ended December 31, 2000 and the eleven months ended November 30, 2001;

Ÿ

Reviewed and analyzed comparable private transactions in various databases, including Done Deals, Mergerstat, Pratt Stats, and Hambrecht & Quist;

•

Reviewed and analyzed publicly available financial data and stock market performance data for companies engaged in DNA analysis and/or DNA chip technology;

•

Reviewed and analyzed the following securities analysts’ reports:

•

Standard & Poor’s analyst report on CytRx, dated January 26, 2002;

•

Ford Investor Services, Inc.’s industry value graphs, including data for CytRx, dated January 25, 2002;

•

RBC Capital Markets analyst report on Affymetrix, Inc., dated December 24, 2001;

•

Robertson Stephens analyst report on Affymetrix, Inc., dated December 24, 2001;

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RBC Capital Markets analyst report on Affymetrix, Inc., dated December 10, 2001;

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Thomas Weisel Partners analyst report on Affymetrix, Inc., dated November 28, 2001;

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Robertson Stephens analyst report on Affymetrix, Inc., dated November 14, 2001;

•

Robertson Stephens analyst report on Celera Genomics Group, dated December 20, 2001;

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Robertson Stephens analyst report on Celera Genomics Group, dated December 14, 2001;

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UBS Warburg analyst report on Celera Genomics Group, dated December 13, 2001;

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Morgan Stanley analyst report on Celera Genomics Group, dated December 13, 2001;

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RBC Capital Markets analyst report on Celera Genomics Group, dated December 13, 2001;

•

Baird analyst report on Gene Logic, Inc., dated January 2, 2002;

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RBC Capital Markets analyst report on Gene Logic, Inc., dated December 31, 2001;

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Robertson Stephens analyst report on Gene Logic, Inc., dated December 31, 2001;

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Baird analyst report on Gene Logic, Inc., dated December 19, 2001;

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Lehman Brothers analyst report on Human Genome Sciences, dated December 11, 2001;

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Thomas Weisel Partners analyst report on Human Genome Sciences, dated December 10, 2001;

•

Robertson Stephens analyst report on Human Genome Sciences, dated December 10, 2001;

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US Bancorp Piper Jaffray analyst report on Human Genome Sciences, dated December 10, 2001;

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Wells Fargo Van Kasper analyst report on Incyte Genomics, Inc., dated December 24, 2001;

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Wells Fargo Van Kasper analyst report on Incyte Genomics, Inc., dated November 27, 2001;

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Deutsche Banc Alex Brown analyst report on Incyte Genomics, Inc., dated November 27, 2001;

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Dain Rauscher Wessels analyst report on Incyte Genomics, Inc., dated September 17, 2001;

•

UBS Warburg analyst report on Sequenom Inc., dated November 20, 2001;

•

Robertson Stephens analyst report on Sequenom Inc., dated November 1, 2001;

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Robertson Stephens analyst report on Sequenom Inc., dated October 25, 2001;

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Conducted competitive analyses, industry analyses, economic and market analyses.

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To the extent not already vested, all stock options and some warrants held by our executive officers and directors will fully accelerate and become immediately exercisable upon the closing of the merger, regardless of whether the merger constitutes a “change in control” under the terms of the option and the plan under which we granted such option, or under the terms of the warrant. The table set forth below summarizes the effects of the acceleration of the options and warrants on each executive officer and director:

•

Under his employment agreement, Jack J. Luchese was entitled to a payment of $435,150 upon the execution of the merger agreement by CytRx and Global Genomics Capital and is entitled to an additional $435,150 upon the closing of the merger. In order to reduce the amount of cash that CytRx had to pay to Mr. Luchese, CytRx and Mr. Luchese agreed that approximately $325,200 of the first $435,150 payment would be satisfied by CytRx granting a stock award to Mr. Luchese under the CytRx Corporation 2000 Long-Term Incentive Plan under which CytRx would issue Mr. Luchese 558,060 shares of CytRx common stock. As an inducement for Mr. Luchese to accept shares of stock in lieu of cash, those shares of stock were issued at a value equal to 85% of the volume weighted average price of CytRx common stock for the 20 trading days prior to February 11, 2002. The remainder of the first payment was paid in cash.

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•

Under executive involuntary termination agreements between each executive officer of CytRx, other than Jack J. Luchese, and CytRx, each such executive officer will be entitled to a cash payment upon his termination subsequent to the closing of the merger. The table below sets forth the approximate amounts to which each executive officer is entitled. Prior to the date of this proxy statement, CytRx advanced part of these amounts to Messrs. Fleck, Emanuele and Grindel. In order to reduce the amount of cash that CytRx will have to pay to these executive officers, they have been offered, subject to certain stockholder approval, stock awards in lieu of cash for all or any portion of the amounts set forth below that have not been previously advanced to them. If any officer accepts the offer and the stockholders approve the amendment to the 2000 Long-Term Incentive Plan increasing the number of shares subject to that plan, that officer will receive a stock award under which CytRx will issue him a number of shares that when multiplied by 85% of the volume weighted average price of CytRx common stock for the 20 trading days prior to February 11, 2002, equals the amount of cash that the officer has elected to forego. As an additional inducement for an executive officer to accept, in full or in part, this offer, CytRx has agreed to amend all outstanding options held by such officer to allow those options to be exercised for the entire remainder of their original terms.

•

Upon the closing of the merger, CytRx will issue Cappello Capital Corp. 448,330 shares of CytRx common stock as Cappello Capital’s fee for the services it provided in connection with the merger. Alexander L. Cappello, a director of CytRx, is Chairman and Chief Executive Officer of Cappello Group, Inc., an affiliate of Cappello Capital Corp. Gerard K. Cappello, brother of Alexander L. Cappello, is Chief Executive Officer and President of Cappello Capital Corp. In addition, as contemplated in the merger agreement, Cappello Capital Corp. and CytRx have entered into an extension of their existing agreement, which will expire on the first anniversary of the date of the extension. See “CytRx Management—Certain Relationships and Related Transactions” on page 60.

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Enter into any new material line of business or incur or commit to any significant capital expenditure or other obligations or liabilities not previously disclosed;

•

Declare or pay dividends on or make any other distributions in respect of their respective capital stock;

•

Split, combine or reclassify any of their respective capital stock or issue or authorize the issuance of any other securities in respect of or in substitution for shares of their respective common stock;

•

Repurchase, redeem or otherwise acquire any shares, or any securities convertible into or exercisable for any shares, of their respective capital stock;

•

With some exceptions set forth in the merger agreement, including the issuance of Global Genomics Capital common stock pursuant to the exercise of warrants and stock options outstanding as of the date of the merger agreement, issue, deliver, sell or authorize or propose the issuance, delivery or sale of any additional shares of their respective common stock or any other rights, warrants or options to acquire any additional shares of their respective common stock;

•

Amend in any materially adverse way their respective articles or certificate of incorporation, bylaws or other governing instruments;

•

Acquire or agree to acquire by merger, consolidation or purchase of a substantial equity interest or a substantial portion of the assets of any corporation, partnership, association or other business;

•

Acquire or agree to acquire any material assets other than in the ordinary course of business;

•

Sell, lease, encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of any assets (including, with respect to Global Genomics Capital, any shares of capital stock of Blizzard Genomics owned by Global Genomics Capital) outside the ordinary course of business, except as previously disclosed;

•

Incur any indebtedness for borrowed money or guarantee any indebtedness or issue or sell any debt securities or warrants or rights to acquire or guarantee any long-term debt securities or enter into or amend any contract or agreement with respect to the foregoing, except in replacement of existing or maturing debt or other borrowing under existing lines of credit;

•

Make any loans, advances or capital contributions to any person;

•

Take any action that would, or might reasonably be expected to, result in their respective representations and warranties becoming untrue in any material respect or any conditions to the merger not being satisfied or would adversely affect the ability of any of the parties to obtain any required regulatory approval;

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Make changes in accounting methods, except, with respect to CytRx, changes required by GAAP concurred on by CytRx’s independent auditors;

•

Adopt any new employee benefit plan or make any material changes to any existing employee compensation or benefit plan;

•

Enter into or renew any agreement or arrangement with any director, officer or employee for compensation or benefits contingent upon the occurrence of any of the transactions contemplated by the merger agreement;

•

Make any material tax election or settle or compromise any material tax claim or liability or amend any previous tax return; or

•

With respect to Global Genomics Capital, acquire any shares of CytRx common stock prior to the effective time of the merger.

•

four directors who were members of CytRx’s board of directors at any time during the three year period immediately preceding the effective time of the merger, who initially will be Max Link, Herbert H. McDade, Jr., Raymond C. Carnahan, Jr. and Alexander L. Cappello; and

•

three directors appointed by Global Genomics Capital, who initially will be Steven A. Kriegsman, Louis Ignarro, Ph.D. and Joseph Rubinfeld, Ph.D.

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An employment agreement with Steven A. Kriegsman;

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Consulting agreements with each of Leonard P. Ruiz, Jr. and Elliott J. Cody;

•

A letter agreement with Global Genomics Capital and Wasserman, Comden, Casselman & Pearson LLP, pursuant to which Wasserman, Comden, Casselman & Pearson LLP has agreed to receive, promptly after the effective time of the merger, 100,000 shares of CytRx common stock in lieu of cash to satisfy all fees, expenses and costs owed to it by Global Genomics Capital at the effective time of the merger; and

•

A letter agreement with Kriegsman Capital Group, LLC regarding certain rent and other overhead expenses to be paid by CytRx after the merger.

•

A registration rights agreement among CytRx and the shareholders of Global Genomics Capital common stock (other than dissenting shareholders);

•

An escrow agreement among CytRx, as the escrow agent, and Dean Ader, as the Global Genomics Capital shareholder representative; and

•

An extension of the existing investment banking agreement between CytRx and Cappello Capital Corp.

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The holders of CytRx common stock must approve the issuance of shares of CytRx common stock in the merger;

•

All consents of, filings and registrations with, and notifications to all regulatory authorities that are necessary for the consummation of the merger shall have been filed, occurred or obtained and all waiting periods required by law shall have expired;

•

The absence of any law or order or any action taken by any court, governmental or regulatory authority of competent jurisdiction prohibiting or restricting the merger or making it illegal;

•

The representations and warranties of the other parties to the merger agreement as set forth in the merger agreement must be accurate in all material respects as of the date of the merger agreement and as of the date the merger becomes effective; and

•

The other parties to the merger agreement must perform all agreements and comply with all covenants set forth in the merger agreement.

•

The number of shares of Global Genomics Capital dissenting to the merger must equal less than 5% of all shares of Global Genomics Capital outstanding immediately prior to the effective time of the merger;

•

Certain promissory notes made by Global Genomics Capital must be fully converted into shares of Global Genomics Capital common stock or repaid in full;

•

Global Genomics Capital must receive all other consents that may be required to complete the merger or to prevent any default under or breach of any contract of Global Genomics Capital that would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Global Genomics Capital;

•

The absence of any action taken, or any statute, rule, regulation or order enacted or enforced by any regulatory authority in connection with the grant of any required regulatory approval that imposes any requirement on CytRx or Global Genomics Capital that would materially adversely impact the economic or business benefits of the merger as to render uneconomic the consummation of the merger, or would require CytRx to dispose of any asset that is material to CytRx prior to the effective time of the merger;

•

The absence of any events, facts or circumstances arising after the execution of the merger agreement that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on CytRx or Global Genomics Capital;

•

All proceedings to be taken by Global Genomics Capital in connection with the transactions contemplated by the merger agreement and all documents incidental to such proceedings must be reasonably satisfactory in form and substance to CytRx;

•

The absence of any action, suit or proceeding seeking to restrain or prohibit the consummation of the merger or to obtain from CytRx, GGC Merger Corporation or Global Genomics Capital any damages that would result in a material adverse effect; and

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CytRx must have received the following:

•

an escrow agreement executed by Dean Ader, as the Global Genomics Capital shareholder representative;

•

a closing liabilities certificate;

•

a legal opinion of outside counsel to Global Genomics Capital; and

•

a copy of the business plan for the combined company.

•

by the mutual written consent of CytRx and Global Genomics Capital;

•

by either CytRx or Global Genomics Capital if the other party materially breaches any representation, warranty or covenant in the merger agreement or any representation or warranty of the other party shall have become untrue such that the conditions to the merger would be incapable of being satisfied by September 30, 2002;

•

by either CytRx or Global Genomics Capital if any consent of any regulatory authority required to complete the merger or the other transactions contemplated by the merger agreement has been denied by final nonappealable action, or if any action taken by such authority is not appealed within the time limit for appeal;

•

by either CytRx or Global Genomics Capital if any injunction or action by any regulatory authority permanently restraining, enjoining or otherwise preventing the completion of the merger becomes final and nonappealable;

•

by either CytRx or Global Genomics Capital if CytRx stockholders do not approve the issuance of the shares of CytRx common stock in the merger at the Annual Meeting of CytRx stockholders; or

•

by either CytRx or Global Genomics Capital if the merger is not completed by September 30, 2002, unless the merger is not completed because of a breach of the merger agreement by the party seeking termination.

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The term of the employment agreement is one year and shall be renewed automatically for additional one year terms unless either party provides written notice to the other at least thirty days prior to the end of the current term;

•

Mr. Kriegsman’s engagement may be terminated as follows:

•

by CytRx with cause;

•

by CytRx without cause, in which case Mr. Kriegsman would be entitled to severance in the following amounts:

•

if Mr. Kriegsman is terminated during the first year of employment, Mr. Kriegsman would be entitled to his salary for the remainder of the first year and for 6 months thereafter; or

•

if Mr. Kriegsman is terminated after the first year of employment, Mr. Kriegsman would be entitled to his salary through the termination date and for 6 months thereafter;

•

by Mr. Kriegsman without cause;

•

In addition, after the effective time of the merger, CytRx and Mr. Kriegsman will search for a full-time Chief Executive Officer to replace Mr. Kriegsman. Upon finding such replacement, Mr. Kriegsman will resign his employment and will be entitled to his salary, as discussed above, as if he had been terminated by CytRx without cause;

•

Mr. Kriegsman will devote such time and efforts as are reasonably necessary to implement the business plan and discharge his duties;

•

Mr. Kriegsman’s compensation will be $240,000 per year, plus reasonable business expenses, and he will be eligible to receive a bonus and grants of stock options to purchase CytRx common stock; and

•

During the term of his employment, Mr. Kriegsman will provide CytRx with the first opportunity to take action with respect to any acquisition opportunity or any other potential transaction identified by Mr. Kriegsman within the biotech, pharmaceutical or health care industries and that is within the scope of the business plan adopted by the CytRx board of directors.

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The term of the consulting agreement is one year;

•

Mr. Ruiz’s engagement may be terminated prior to the expiration of the one-year term:

•

upon the death or disability of Mr. Ruiz;

•

by Mr. Ruiz upon the dissolution of CytRx;

•

by CytRx for cause;

•

by CytRx upon material breach of the consulting agreement by Mr. Ruiz; and

•

by mutual agreement between CytRx and Mr. Ruiz;

•

Mr. Ruiz’s compensation will be $10,000 per month and he will be reimbursed up to $100 per month for expenses without CytRx’s prior written authorization;

•

Mr. Ruiz will be reimbursed $15,000 for expenses advanced to Global Genomics Capital during the one year period prior to the effective time of the merger and up to an additional $15,000 for services performed between the date of the merger agreement and the effective time of the merger;

•

Mr. Ruiz will be entitled to a finder’s fee for future transactions with CytRx in which Mr. Ruiz made the initial introduction. The finder’s fee will be equal to five percent of the first $5 million transaction value and two percent of any transaction value over $5 million. The finder’s fee will be payable in shares of CytRx common stock.

•

The term of the consulting agreement is seven months;

•

Mr. Cody’s engagement may be terminated prior to the expiration of its term:

•

upon the death or disability of Mr. Cody;

•

by Mr. Cody upon the dissolution of CytRx;

•

by CytRx for cause;

•

by CytRx upon material breach of the consulting agreement by Mr. Cody; and

•

by mutual agreement between CytRx and Mr. Cody;

•

Mr. Cody’s compensation will be $7,500 per month and he will be reimbursed for expenses up to $100 per month without CytRx’s prior written authorization;

•

At the effective time of the merger, CytRx will pay Mr. Cody $7,500 for all services rendered by Mr. Cody to Global Genomics Capital from December 1, 2001 until the closing of the merger.

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in favor of the approval and adoption of the merger agreement and in favor of approval of the merger;

•

in favor of adjournment or postponement of any meeting of the shareholders of Global Genomics Capital if a quorum is not present until such time as a quorum is present or, if sufficient votes have not been cast in favor of the approval and adoption of the merger agreement and approval of the merger, until such time as there are sufficient votes to approve and adopt such matters;

•

against the approval or adoption of any proposal made in opposition to, or in competition with, the merger agreement and consummation of the merger; and

•

against any of the following:

•

any merger, consolidation or business combination involving Global Genomics Capital;

•

any sale, lease or transfer of any significant portion of the assets of Global Genomics Capital or any of its subsidiaries;

•

any sale, lease or transfer of any of the shares of capital stock of Blizzard Genomics, Inc. owned by Global Genomics Capital;

•

any reorganization, recapitalization, dissolution, liquidation or winding up of Global Genomics Capital or any of its subsidiaries;

•

any material change in the capitalization of Global Genomics Capital or the corporate structure of Global Genomics Capital; or

•

any other action that is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or adversely affect the consummation of the merger.

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(1)

To reflect the conversion of notes payable and accrued interest into shares of Global Genomics Capital common stock immediately prior to the merger.

(2)

To reflect the issuance of 8,941,201 shares of CytRx common stock, elimination of Global Genomics Capital equity accounts, and allocation of the purchase price.

(3)

To record the estimated remaining transaction costs and reclassification of amounts capitalized by CytRx as deferred transaction costs.

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(1)

To eliminate expense on notes payable assumed converted into Global Genomics Capital common stock.

(2)

To record amortization of acquired developed technology using a ten year useful life.

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To eliminate expense on notes payable assumed converted into Global Genomics Capital common stock.

(2)

To record amortization of acquired developed technology using a useful life of ten years.

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(1)

The pro forma per share data for CytRx is computed as follows:

(a)

In the case of pro forma book value per share, pro forma stockholders’ equity is divided by the pro forma number of common shares of CytRx outstanding as March 31, 2002, assuming the merger had occurred as of that date.

(b)

In the case of pro forma loss per share, pro forma net loss is divided by the pro forma weighted average number of common shares of CytRx outstanding during each period, assuming the merger occurred as of January 1, 2001.

(2)

The equivalent pro forma per share data for Global Genomics Capital is computed by dividing CytRx’s pro forma per share information by the assumed exchange ratio of 0.771254 shares of CytRx common stock for each share of Global Genomics Capital common stock. The assumed exchange ratio may change between the date of this proxy statement and the effective time of the merger, however, the total number of shares of CytRx common stock issuable in the merger will not change.

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CytRx’s 2005 annual meeting of stockholders,

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his successor is elected and qualified, or

•

his death, resignation or removal for cause.

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*

Less than 1%.

(1)

Consists of 438,334 shares subject to options and warrants exercisable within 60 days.

(2)

Includes 25,215 shares subject to options exercisable within 60 days.

(3)

Includes 195,639 shares subject to options exercisable within 60 days.

(4)

Includes 153,416 shares subject to options exercisable within 60 days.

(5)

Includes 15,373 shares subject to options exercisable within 60 days.

(6)

Includes 1,582,427 shares subject to options and warrants exercisable within 60 days. Mr. Luchese’s business address is ^ CytRx Corporation, 154 Technology Parkway, Norcross, GA 30092.

(7)

Includes 33,095 shares subject to options exercisable within 60 days.

(8)

Includes 151,959 shares subject to options exercisable within 60 days.

(9)

Includes 2,719,286 shares subject to options and warrants exercisable within 60 days.

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(1)

Bonuses for 2001 were paid in January 2002.

(2)

Includes 500,000 shares underlying previously issued warrants that were repriced during 2001. See “Ten Year Option Repricings.”

(3)

Consists of 32,500 shares underlying previously issued options that were repriced during 2001. See “Ten Year Option Repricings.”

(4)

Consists of 20,000 shares underlying previously issued options that were repriced during 2001. See “Ten Year Option Repricings.”

(5)

Consists of 32,500 shares underlying previously issued options that were repriced during 2001. See “Ten Year Option Repricings.”

(6)

Represents matching contributions by CytRx under its 401(k) profit sharing plan.

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(1)

These are previously issued options or warrants which were repriced on June 7, 2001. See “Ten Year Option Repricings” below.

(2)

100% vested upon grant date.

(3)

Warrants as to 250,000 shares vest at the rate of 25,000 per calendar quarter, beginning March 31, 2000. The remaining warrants vest upon the achievement of Company performance criteria. As of December 31, 2001, 225,000 of the warrants are vested.

(4)

Options as to 13,000 shares vest over a three year period from the original date of grant (9/1/99). The remaining options vest upon the achievement of Company performance criteria. As of December 31, 2001, 13,541 of the options are vested.

(5)

Options as to 13,000 shares vest over a three year period from the original date of grant (9/1/99). The remaining options vest upon the achievement of Company performance criteria. As of December 31, 2001, 10,416 of the options are vested.

(6)

Options as to 13,000 shares vest over a three year period from the original date of grant (9/1/99). The remaining options vest upon the achievement of Company performance criteria. As of December 31, 2001, 13,541 of the options are vested.

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(1)

Subject to stockholder approval of proposal 4, the number of securities available for future issuance will be 2,000,000 shares.

(2)

Represents warrants to purchase shares of our common stock we have granted to Mr. Luchese pursuant to his employment agreement.

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a monthly base salary equal to or greater than the highest monthly base salary paid to him by us during the previous year;

•

an annual cash bonus at least equal to the highest bonus paid to him in any of the three fiscal years prior to the effective date of the change in control; and

•

the ability to participate in all of the incentive, savings, welfare benefit, fringe benefit and retirement plans of CytRx.

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is terminated by us without cause,

•

resigns voluntarily with good reason, or

•

resigns for any reason during the 30-day period beginning on the first anniversary of the effective date of the change in control, he will receive a lump sum cash payment equal to:

•

his base salary through the date of termination,

•

a pro rata bonus for the year of termination, based upon his actual bonus earned in the prior year,

•

any earned but unpaid amount of the success bonus and change in control payment, and

•

any unpaid deferred compensation and vacation pay.

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Blizzard Genomics, Inc.    Global Genomics Capital holds 40% of the capital stock of Blizzard Genomics outstanding as of the date of this proxy statement. Blizzard Genomics is developing instrumentation, software and consumable supplies for the growing genomics industry. Blizzard Genomics has a technology that allows for cheaper, faster and more portable analysis of DNA, through the use of its own readers and DNA chips, as compared to other currently available technology. Blizzard Genomics has plans to launch its first reader later this year with another launch of its “T-Chip” planned for next year.

•

Psynomics, Inc.    Global Genomics Capital holds approximately 5% of the capital stock of Psynomics outstanding as of the date of this proxy statement. Psynomics is an early stage psychiatric genomics company. Psynomics’ short-term goal is to identify the genes that cause common neuropsychiatric diseases such as bipolar disorder, schizophrenia and depression and to develop diagnostic tests for these diseases. Psynomics’ long-term goal is to provide the tools to the pharmaceutical industry to develop novel drug and gene therapy products for neuropsychiatric diseases.

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Ÿ  options

to purchase shares of common stock, which may be incentive stock options or non-qualified stock options;

Ÿ  stock

appreciation rights, or “SARs”;

Ÿ  performance

units;

Ÿ  restricted

stock;

Ÿ  dividend

equivalents; or

Ÿ  other

stock-based awards.

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*The

activities of the Spectrum Recruitment Research segment were terminated effective February 1, 2002.

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(1)

The July 2000 note for $200,000 matures at the discretion of the holder of the note on the later of October 2000 or upon the infusion of at least $6,000,000 of capital into the Company. On April 3, 2002, the note was modified. The principal and interest will be converted to Company stock immediately prior to the merger with CytRx Corporation. See note 8.

(2)

The Company entered into an agreement on February 1, 2001 to be acquired by a public entity. In April 2001, this entity entered into financing agreements with the Company for $250,000 evidenced by Company debt instruments. Under the terms of the various notes, the notes were to mature in August 2001, however the notes contained a provision specifying that if the Company did not breach the terms of the note, it had the right to convert the principal and all accrued and unpaid interest into shares of Company common stock at its discretion. The acquisition of the Company was eventually cancelled.

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Stock options for 680,000 shares of common stock, which are exercisable at $.43 per share, were issued in September 2000, which vest over a 21 month period commencing December 2000.

•

Stock options for 250,000 shares of common stock, which are exercisable at $1.00 per share, were issued in March 2001 over a 21 month period commencing April 2001.

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Liquidation preferences specifying that each holder of preferred stock receive an amount equal to $20 for each outstanding share of preferred stock plus all accrued and unpaid dividends

•

The right to vote in all actions called by the Company’s Board of Directors, in matters which are other than usual and in the regular course of business, preferred stockholders ratification is needed for approval

•

The holders of preferred stock have the right to convert each share of preferred stock into common stock on a one for one basis

•

In the event of a merger or acquisition, the preferred stock is automatically converted to common stock

•

identifying genes which cause common neuropsychiatic diseases such as bipolar disorder, schizophrenia and depression

•

developing diagnostic tests for the identified neuropsychiatic diseases

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identifying genes which cause common neuropsychiatric diseases such as bipolar disorder, schizophrenia and depression

•

developing diagnostic tests for the identified neuropsychiatric diseases

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1.

Approval of Issuance of Shares in the Merger. On the proposal to approve the issuance of the shares of CytRx common stock in the merger:

2.

Approval of Amendment to Certificate of Incorporation. On the proposal to approve the amendment to CytRx’s certificate of incorporation to change its name to “Global Genomics, Inc.”, if the merger closes:

3.

Election of Directors. On the proposal to elect the following two nominees for Class II directors to serve until the 2005 annual meeting of stockholders of CytRx and until their successors are elected and qualified:

4.

Approval of the Amendments to the CytRx Corporation 2000 Long-Term Incentive Plan. On the proposal to approve the amendments to the CytRx Corporation 2000 Long-Term Incentive Plan:

5.

Selection of Auditors. On the proposal to ratify the selection of Ernst & Young LLP as CytRx’s outside auditors for the fiscal year ending December 31, 2002: