<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a party other than the
Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Com-
[X] Definitive Proxy Statement mission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
CORIXA CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
April 20, 1998
Dear Shareholder:
On behalf of Corixa Corporation, I cordially invite you to attend our
Annual Meeting of Shareholders to be held on Wednesday, June 3, 1998, at 2:00
p.m., in the Senate Room at the Four Seasons Olympic Hotel, 411 University
Street, Seattle, Washington.
This year you are asked to elect five directors to the Company's Board and
to ratify the appointment of Ernst & Young LLP as the Company's independent
public auditors for fiscal year 1998. Additional details regarding these issues
are provided in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement.
It is important that your shares are represented, whether or not you plan
to attend the meeting. Please sign, date and promptly return the enclosed proxy
card in the enclosed postage-paid envelope to insure that your vote is counted.
If you attend the meeting, you will, of course, have the right to vote your
shares in person.
We look forward to seeing you at the meeting.
Sincerely,
Steven Gillis, Ph.D.
Chief Executive Officer and President
<PAGE> 3
CORIXA CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 1998
The Annual Meeting of Stockholders (the "Annual Meeting") of Corixa
Corporation, a Delaware corporation (the "Company"), will be held in the Senate
Room at The Four Seasons Olympic Hotel which is located at 411 University Street
in downtown Seattle, WA on Wednesday, June 3, 1998, at 2:00 p.m. local time, for
the following purposes:
1. To elect five (5) directors of the Company to serve until the next
Annual Meeting of Stockholders or until their respective successors are
elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998;
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement, which is attached and made a part
of this Notice.
The Board of Directors has fixed the close of business on April 10, 1998 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
William W. Ericson
Secretary
Seattle, Washington
April 20, 1998
IMPORTANT
----------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE> 4
CORIXA CORPORATION
1124 COLUMBIA STREET, SUITE 200
SEATTLE, WASHINGTON 98104
------------------------
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Corixa Corporation, a Delaware
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held in the
Senate Room at The Four Seasons Olympic Hotel which is located at 411 University
Street in downtown Seattle, Washington on Wednesday, June 3, 1998, at 2:00 p.m.
local time, and any adjournment or postponement thereof.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Stockholders for the year ended December 31, 1997, including financial
statements, were first mailed to stockholders entitled to vote at the meeting on
or about April 28, 1998.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Michelle Burris) a written notice of revocation or a duly executed proxy bearing
a later date, or by attending the Annual Meeting and voting in person.
RECORD DATE; VOTING SECURITIES
The close of business on April 10, 1998 has been fixed as the record date
(the "Record Date") for determining the holders of shares of Common Stock of the
Company entitled to notice of and to vote at the Annual Meeting. At the close of
business on the Record Date, the Company had approximately 11,783,304 shares of
Common Stock outstanding and held by approximately 107 stockholders of record.
VOTING AND SOLICITATION
Each outstanding share of Common Stock on the Record Date is entitled to
one vote on all matters. Shares of Common Stock may not be voted cumulatively.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. The nominees for election as directors at the Annual Meeting
will be elected by a plurality of the votes of the shares of Common Stock
present in person or represented by proxy at the meeting. All other matters
submitted to the stockholders will require the affirmative vote of a majority of
shares present in person or represented by proxy at a duly held meeting at which
a quorum is present as required under Delaware law for approval of proposals
presented to stockholders. In general, Delaware law also provides that a quorum
consists of a majority of the shares entitled to vote and present in person or
represented by proxy. The Inspector will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and as negative votes for purposes of determining the approval of any
matter submitted to the stockholders for a vote. Any proxy which is returned
using the form of proxy enclosed and which is not marked as to a particular item
will be voted FOR the election of directors and FOR the ratification of the
appointment of the designated independent auditors, and as the proxy holders
deem advisable on other matters that may come before the meeting, as the case
may be with respect to the item not marked. If a broker indicates on the
enclosed proxy or its substitute that it does not have discretionary authority
as to certain shares to vote on a particular matter ("broker non-votes"), those
shares will not be considered as present with respect to that matter. The
Company believes that the tabulation
<PAGE> 5
procedures to be followed by the Inspector are consistent with the general
statutory requirements in Delaware concerning voting of shares and determination
of a quorum.
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
solicitation materials regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally,
telephonically or by facsimile through its officers, directors and employees,
none of whom will receive additional compensation for assisting with the
solicitation The Company has retained W.F. Doring and Company to solicit proxies
from individuals, brokers, bank nominees and other institutional holders. W.F.
Doring and Company will be paid fees of approximately $3,000, and will be
reimbursed for their reasonable expenses in connection with this solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
At the Annual Meeting, the stockholders will elect five (5) directors to
serve until the next Annual Meeting or until their respective successors are
elected and qualified, or until their death, resignation or removal. The Board
of Directors will vote all proxies received by them IN FAVOR of the five (5)
nominees listed below unless otherwise instructed in writing on such proxy. In
the event any nominee is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies may be voted for a substitute nominee who
will be designated by the current Board of Directors to fill such vacancy or for
the balance of the nominees without nomination of a substitute, or the size of
the Board may be reduced in accordance with the Bylaws of the Company. As of the
date of this Proxy Statement, the Board of Directors is not aware of any nominee
who is unable or will decline to serve as a director.
Assuming a quorum is present, the five (5) nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as directors of the Company for the ensuing year. Unless marked
otherwise, proxies received will be voted FOR the election of each of the five
(5) nominees named below. The Board of Directors will consider nominations for
directors from stockholders submitted by stockholders in accordance with Section
2.5 of the Company's bylaws. In the event that additional persons are nominated
for election as directors, the proxy holders intend to vote all proxies received
by them in such a manner as will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxy holders.
INFORMATION WITH RESPECT TO NOMINEES
Set forth below is information regarding the nominees, including
information furnished by them as to their principal occupation at present and
for the last five years, certain other directorships held by them, the year in
which each became a director of the Company and their ages as of December 31,
1997:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
<S> <C> <C> <C>
Steven Gillis, Ph.D. 44 President, Chief Executive Officer and 1994
Director
Mark McDade 42 Executive Vice President, Chief Operating 1994
Officer and Director
Joseph S. Lacob(2) 41 Chairman of the Board of Directors 1994
Arnold L. Oronsky, Ph.D.(1) 57 Director 1994
Andrew E. Senyei, M.D.(1)(2) 47 Director 1994
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
2
<PAGE> 6
Steven Gillis, Ph.D. has served as President and Chief Executive Officer of
the Company since 1994. From 1996 to the present, Dr. Gillis has also served as
Acting Chief Executive Officer and a director of GenQuest, Inc. ("GenQuest").
Dr. Gillis was a founder of Immunex Corporation ("Immunex"), a biotechnology
company. From 1981 to 1994, Dr. Gillis served as Executive Vice President and
Director of Research and Development of Immunex, and from 1993 to 1994, served
as Acting Chief Executive Officer and Chairman of the Board of Immunex. From
1990 to 1994, Dr. Gillis also served as President and Chief Executive Officer of
Immunex Research and Development Corporation, a wholly owned subsidiary of
Immunex, and Chief Scientific Officer of Immunex. In addition, Dr. Gillis is a
director of Micrologix Biotech, Inc. Dr. Gillis serves on the Scientific
Advisory Board of Medarex Corporation. Dr. Gillis graduated from Williams
College with a B.A. in Biology and English in 1975 and received his Ph.D. in
Biological Sciences form Dartmouth College in 1978.
Mark McDade has served as Executive Vice President and Chief Operating
officer of the Company since 1994. From 1996 to the present, Mr. McDade has also
served as Acting Vice President and a director of GenQuest. From 1993 to 1994,
Mr. McDade served as Chief Operating Officer of Boehringer Mannheim
Therapeutics, a pharmaceutical company, heading its worldwide pharmaceutical
operations. From 1991 to 1992, Mr. McDade was an independent consultant
providing business development and strategic consulting to a number of
biopharmaceutical and pharmaceutical companies. From 1983 to 1991, Mr. McDade
held various positions with Sandoz, Ltd., a pharmaceutical company. Mr. McDade
graduated from Dartmouth College with a B.A. in History in 1977 and received his
M.B.A. from Harvard University in 1984.
Joseph S. Lacob has served as Chairman of the Board of the Company since
1994. Mr. Lacob has been a general partner of Kleiner Perkins Caufield & Byers,
a venture capital firm, since 1992, and was a venture partner from 1987 to 1992.
Mr. Lacob serves as Chairman of the Board of three public companies, Cardima,
Inc., Cellpro, Incorporated and Microcide Pharmaceuticals, Inc., and a director
of two additional public companies, Heartport, Inc. and Pharmacyclics, Inc. Mr.
Lacob graduated from the University of California, Irvine in 1978 with a B.S. in
Biological Sciences and received his M.P.H. from the University of California,
Los Angeles in 1979. Mr. Lacob also received his M.B.A. from the Stanford
Graduate School of Business in 1983.
Arnold L. Oronsky, Ph.D. has served as a director of the Company since
1994. He is currently Chairman of the Board of Directors of Coulter
Pharmaceuticals Inc. ("Coulter"), a biopharmaceutical company and a director of
Signal Pharmaceutical Inc. From 1995 to 1996, Dr. Oronsky served as President
and Chief Executive Officer of Coulter. From 1994 to the present, Dr. Oronsky
has been a general partner at InterWest Partners, a venture capital firm. From
1984 to 1994, Dr. Oronsky served as Vice President for Discovery Research at
Lederle Laboratories, a pharmaceutical division of American Cyanamid, Inc.,
where he was responsible for the research of new drugs. Since 1988, Dr. Oronsky
has served as a senior lecturer in the Department of Medicine at Johns Hopkins
Medical School. Dr. Oronsky graduated from University College, New York
University with a B.A. in History in 1962 and received his Ph.D. in Biochemistry
from Columbia University in 1968.
Andrew E. Senyei, M.D. has served as a director of the Company since 1994.
Dr. Senyei has been a general partner of Enterprise Partners, a venture capital
firm, since 1988. Dr. Senyei was a founder of Molecular Biosystems, Inc. and
serves on the board of directors of several private technology companies. Prior
to joining Enterprise Partners, Dr. Senyei was a practicing clinician and
Adjunct Associate Professor of Obstetrics, Gynecology and Pediatrics at the
University of California, Irvine. Dr. Senyei graduated from Occidental College
with a B.A. in Biology in 1972 and received his M.D. from Northwestern
University in 1979.
BOARD OF DIRECTORS COMMITTEES, COMPENSATION OF DIRECTORS AND OTHER INFORMATION
All directors hold office until the next annual meeting of stockholders of
the Company and until their successors have been elected and qualified. The
officers of the Company are appointed annually and serve at the discretion of
the Board of Directors.
3
<PAGE> 7
The Board of Directors held a total of four (4) meetings during the year
ended December 31, 1997. The Company has an Audit Committee and a Compensation
Committee of the Board of Directors (see below). Each incumbent director
attended at least 75% of the aggregate number of meetings of the Board of
Directors and meetings of the committees of the Board on which he serves. There
are no family relationships among any of the directors or executive officers of
the Company.
The Compensation Committee consisted of Mr. Lacob and Dr. Senyei, two of
the Company's non-employee directors, and acted one time by written consent
during the year ended December 31, 1997. Its functions are to review and approve
the compensation and benefits for the Company's executive officers, administer
the Company's stock purchase and stock option plans and make recommendations to
the Board of Directors regarding such matters.
The Audit Committee consists of Dr. Oronsky and Dr. Senyei, two of the
Company's non-employee directors, and met once during the year ended December
31, 1997. Its functions are to review the scope and results of financial audits
and other services performed by the Company's independent accountants and to
make recommendations to the Board of Directors regarding such matters. The Audit
Committee is currently comprised of Dr. Oronsky and Dr. Senyei.
Non-employee directors currently receive no cash fees for services provided
in that capacity. The Company has adopted the 1997 Directors' Stock Option Plan
(the "Directors' Plan") under which current and future non-employee directors
will be eligible to receive stock options in consideration of their services.
The Directors' Plan provides that each person who first becomes a non-employee
director of the Company after the date of the Company's initial public offering,
shall be granted a non-statutory stock option to purchase 15,000 shares of
Common Stock (the "First Option") on the date on which the optionee first
becomes a non-employee director of the Company. The First Option was granted to
individuals serving as non-employee directors as of the date of the Company's
initial public offering. Thereafter, on the first day of each fiscal year of the
Company on and after 1997, each non-employee director shall be granted an option
to purchase 5,000 shares of Common Stock (a "Subsequent Option") provided that,
on such date, he or she shall have served on the Company's Board of Directors
for at least six (6) months prior to such first day of such fiscal year. The
Directors' Plan provides that the First Option shall become exercisable in
installments cumulatively as to 1/36th of the total number of shares subject to
the First Option each month, commencing on the date of grant of the First
Option; each Subsequent Option shall become exercisable in installments
cumulatively as to 1/12th of the total number of shares subject to the
Subsequent Option each month, commencing on the date of grant of the Subsequent
Option. The exercise price of all stock options granted under the Directors'
Plan shall be equal to the fair market value of a share of the Company's Common
Stock on the date of grant of the option.
REQUIRED VOTE
The five (5) nominees receiving the highest number of affirmative votes of
the Company's Common Stock present at the Annual Meeting in person or by proxy
and entitled to vote shall be elected as directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Genquest, Inc.
In connection with the amended license agreement with GenQuest entered into
in December 1996, the Company entered into a management services agreement under
which the Company will provide financial, legal, administrative, management and
related services to GenQuest. GenQuest will pay the Company a nominal management
fee and will reimburse the Company for its fully-burdened cost in providing such
services. Corixa's Chief Executive Officer, Chief Scientific Officer, Chief
Operating Officer and Chief Financial Officer are required to provide specific
services to GenQuest under the management services agreement, and other members
of the Company's management team are required to provide general support. See
"Compensation of Executive Officers." The management services agreement
terminates upon the earlier of (i) 90 days following the expiration of the
Company's right to purchase substantially all of the outstanding
4
<PAGE> 8
shares of GenQuest's capital stock, as described below, (ii) 90 days following
the date the Company purchases GenQuest's capital stock pursuant to such right,
or (iii) at the option of either Corixa or GenQuest, upon the termination of the
amended license agreement.
The Company, GenQuest and certain stockholders of GenQuest have also
entered into a call option agreement (the "Call Option Agreement") under which
the Company has the right to purchase a significant majority of the outstanding
shares of GenQuest's capital stock in exchange for shares of the Company's
Common Stock at a purchase price determined in accordance with the formula
specified in the Call Option Agreement. The right becomes effective on the
earlier of (i) June 23, 1998, (ii) the completion of a 30-day trading period
following the Company's initial public offering during which the average closing
sale price of a share of the Company's Common Stock is at least $19.80, or (iii)
a merger of Corixa with another entity or a sale of substantially all of
Corixa's assets. Corixa's right to purchase the shares of GenQuest capital stock
terminates on the earlier of (i) January 23, 2000, (ii) the date that the
Company notifies GenQuest that it will not exercise its right, (iii) the closing
of the initial public offering of GenQuest, (iv) ten days following the
termination of the amended license agreement, or (v) ten days following a merger
of, a sale of assets by, or a change in control of Corixa. The number of shares
of Common Stock that Corixa is required to issue in order to exercise the right
is variable as the formula specified in the Call Option Agreement takes into
account the then-current fair market value of the Common Stock and the
capitalization of GenQuest as well as the date of exercise. Under this formula,
the value allocated to a share of Common Stock for the purpose of determining
the number of shares issuable upon exercise of this right is equal to the
greater of (i) the sum of $9.90 plus the quotient obtained by dividing the
difference between (a) the average closing sale price of a share of Common Stock
during the 30 trading days immediately prior to such exercise and (b) $9.90 by
2, and (ii) the product of the average closing sale price of a share of Common
Stock during the 30 trading days immediately prior to such exercise multiplied
by 0.7. The value allocated to the shares of the capital stock of GenQuest for
the purpose of determining the purchase price of such capital stock increases
ratably on a monthly basis, up to a maximum allocated price per share, based on
the length of time the right remains outstanding. The purchase price initially
allocated to the GenQuest Series B preferred stock is $1.00 per share and
increases by approximately $0.04 per month until the right is exercised, up to a
maximum of $2.00 per share. The purchase price allocated to the GenQuest Series
A preferred stock and common stock is equal to 66 2/3% of the purchase price of
the GenQuest Series B preferred stock. For example, if the Company were to
exercise such right on June 23, 1998, assuming the then-current fair market
value of the Common Stock is $8.25 per share and assuming no changes to
GenQuest's capitalization in the interim, the Company would be obligated to
issue an aggregate of approximately 3,991,088 shares of Common Stock in exchange
for such significant majority shares of GenQuest's capital stock, which amount
would represent beneficial ownership of approximately 25% of the Common Stock of
the Company (based upon 11,783,304 shares of Common Stock to be outstanding as
of April 10, 1998). Because the actual number of shares of Common Stock that the
Company is obligated to issue upon exercise of the right is dependent upon the
variables described above, the number of shares of Common Stock that Corixa
would be obligated to issue and the resulting dilution to existing stockholders
of Corixa may be substantially greater or less than that set forth in the
example above. The Call Option Agreement does not obligate the Company to
purchase any shares of GenQuest, nor does it preclude the Company from
purchasing shares of GenQuest or the assets of GenQuest at a price different
from that set forth in the Call Option Agreement. Additionally, in connection
with the relationship between Corixa and GenQuest, Corixa issued warrants to
purchase up to 454,533 shares in the aggregate of Corixa's Series B Preferred
Stock at an exercise price of $9.90 per share none of which have been exercised
as of April 10, 1998. The holders of such warrants or their transferees (subject
to certain conditions) are entitled to certain rights with respect to the
registration of the shares of Common Stock issuable upon exercise of such
warrants.
Infectious Disease Research Institute
In September 1994, the Company entered into a research services and
intellectual property agreement with Infectious Disease Research Institute, a
not-for-profit, grant-funded private research institute ("IDRI"). Under this
agreement, as amended and restated effective January 1997, the Company has
agreed to provide IDRI with research funding and certain administrative and
facilities support, including use of the Company's research laboratory space.
IDRI pays a services fee for the administrative and facilities support provided
by
5
<PAGE> 9
the Company. The Company's funded research performed by IDRI is in the area of
infectious disease. Under the agreement, IDRI is obligated to disclose to the
Company all significant developments relating to information or inventions
discovered at IDRI, and the Company will own, on a royalty-free basis, all of
IDRI's interest in inventions and patent rights arising out of IDRI's research
during the term of the agreement (other than inventions and patent rights
arising out of research that is or in the future may be funded by certain
governmental or not-for-profit organizations). With respect to such rights
arising out of research funded by governmental and not-for-profit organizations,
the Company has been granted a royalty-bearing, worldwide, perpetual license,
exclusive except as to rights held by such governmental or not-for-profit
organizations.
IDRI is independent of the Company, and the Company does not have the right
to control or direct IDRI's activities. A majority of the members of IDRI's
board of directors are not affiliated with the Company. However, the Company's
Chief Scientific Officer is co-founder and a member of the board of directors of
IDRI. The Company's Chief Operating Officer is also a member of the board of
directors of IDRI and the Company's Vice President, Chief Financial Officer is
treasurer of IDRI.
The research services and intellectual property agreement terminates on
December 31, 1999, subject to renewal for one or more three year terms at the
option of the Company. If IDRI terminates the agreement as a result of the
Company's failure to make required payments, the Company would be obligated to
pay royalties on any product sales.
Cellpro, Incorporated
On November 1, 1995, the Company entered into a research collaboration and
license agreement with CellPro whereby CellPro will make payments to Corixa to
support research activities and the parties will grant licenses to the other.
The agreement was amended effective January 1997 and subsequently amended in the
fourth quarter of fiscal year 1997 and first quarter of fiscal year 1998. Mr.
Lacob, Chairman of the Board of Directors of the Company, is also the Chairman
of the Board of Directors of CellPro.
Genesis Research and Development Ltd.
On April 1, 1995, the Company entered into a research collaboration and
license agreement with Genesis Research and Development Corporation Limited, a
corporation organized and existing pursuant to the laws of New Zealand
("Genesis") whereby Genesis will provide to Corixa research and preclinical
testing related to the discovery of new antigens and vaccine adjuvants. The
agreement was amended and restated effective November 1, 1996. Corixa pays to
Genesis usual and customary fees for the nature of the collaboration. Dr.
Gillis, President and Chief Executive Officer of the Company, is a member of the
Board of Directors of Genesis.
Recommendation of the Board:
The Board of Directors recommends a vote IN FAVOR OF all nominees named
above.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors for the
year ended December 31, 1997. The Board of Directors has selected that firm to
continue in this capacity for the current fiscal year. The Company is asking the
stockholders to ratify the selection by the Board of Ernst & Young LLP, as
independent auditors, to audit the accounts and records of the Company for the
year ending December 31, 1998, and to perform other appropriate services.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting to respond to stockholders' questions, and if he or she so
desires, will be given an opportunity to make a brief statement.
6
<PAGE> 10
Recommendation of the Board:
The Board of Directors recommends a vote IN FAVOR OF the ratification of
the selection of Ernst & Young LLP. In the event that a majority of the shares
voted at the Annual Meeting do not vote for the ratification, the Board of
Directors will reconsider such selection. Under all circumstances, the Board of
Directors retains the corporate authority to change the auditors at a later
date.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to the
Company with respect to beneficial ownership of shares of the Company's Common
Stock as of March 31, 1998 for (i) each person who is known by the Company to
own beneficially more than five percent of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the executive officers
named in the Summary Compensation Table of this proxy statement (the "Named
Executive Officers"), and (iv) all directors and officers of the Company as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP(1) COMMON STOCK
---------------- ----------------------- -----------------------
<S> <C> <C>
Entities affiliated with
Kleiner Perkins Caufield &
Byers(2)........................ 2,464,843 20.9%
2750 Sand Hill Road
Menlo Park, CA 94025
Entities affiliated with
Enterprise Partners(3)............. 1,475,416 12.5
5000 Birch Street, Suite 6200
Newport Beach, CA 92660
Entities affiliated with
InterWest Investors(4)............. 1,390,797 11.8
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
Entities affiliated with
Forward Ventures(5)................ 645,698 5.5
9255 Towne Center Drive, Suite 300
San Diego, CA 92121
Steven Gillis, Ph.D.(6).............. 379,162 3.2
Steven Reed, Ph.D.(7)................ 253,857 2.2
Mark McDade(8)....................... 242,042 2.0
Kenneth Grabstein, Ph.D.(9).......... 219,311 1.9
Syamal Raychaudhuri, Ph.D.(10)....... 166,284 1.4
Joseph S. Lacob(11).................. 2,431,549 20.6
Andrew E. Senyei, M.D.(12)........... 1,480,000 12.6
Arnold L. Oronsky, Ph.D.(13)......... 1,395,381 11.8
All directors and officers as a group
(10 persons)(14)................... 6,798,891 55.2
</TABLE>
- ---------------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. The number of shares beneficially owned
by a person includes shares of Common Stock subject to options held by that
person that are currently exercisable or exercisable within 60 days of
March 31, 1998. Such exercisable options are shown in the footnotes to this
table for each such person. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of each
other person.
(2) Includes 2,364,292 shares held by Kleiner Perkins Caufield & Byers VII,
62,673 shares held by Kleiner Perkins Caufield & Byers VI and 37,878 shares
held by Cynthia Healy, Director Life Science Research at Kleiner Perkins
Caufield & Byers. Joseph S. Lacob, the Chairman of Board of Directors, is a
general
7
<PAGE> 11
partner of Kleiner Perkins Caufield & Byers VII and Kleiner Perkins
Caufield & Byers VI, and, as such, may be deemed to share voting and
investment power with respect to such shares except for the shares held by
Dr. Healy. Mr. Lacob disclaims beneficial ownership of such shares, except
to the extent of his pecuniary interest in such shares.
(3) Includes 1,357,384 shares held by Enterprise Partners III, L.P. and 118,032
shares held by Enterprise Partners III Associates, L.P. Andrew E. Senyei, a
Director, is a general partner of Enterprise Partners III, L.P. and
Enterprise Partners III Associates, and, as such, may be deemed to share
voting and investment power with respect to such shares. Dr. Senyei
disclaims beneficial ownership of such shares, except to the extent of his
pecuniary interest in such shares.
(4) Includes 1,382,107 shares held by InterWest Partners V, L.P. and 8,690
shares held by InterWest Investors V, L.P. Arnold L. Oronsky, a Director,
is a general partner of InterWest Partners V, L.P. and, as such, may be
deemed to share voting and investment power with respect to such shares.
Dr. Oronsky disclaims beneficial ownership of shares held by InterWest
Partners V, L.P., except to the extent of his pecuniary interest in such
shares, and disclaims beneficial ownership to all shares held by InterWest
Investors V, L.P.
(5) Includes 511,958 shares held by Forward Ventures II, L.P., 34,821 shares
held by the Royston Family Trust UTA DTD 2/12/82, whose co-trustee is Ivor
Royston, a general partner of Forward Ventures, 34,821 shares held by
Standish Fleming, a general partner of Forward Ventures and 64,098 shares
issuable upon the exercise of outstanding warrants held by individuals and
entities affiliated with Forward Ventures exercisable within 60 days of
March 31, 1998.
(6) Includes 106,435 shares issuable upon the exercise of outstanding options
held by Dr. Gillis exercisable within 60 days of March 31, 1998, at which
date 42,328 shares were fully vested and 22,727 shares held were subject to
repurchase, at this date.
(7) Includes 37,496 shares issuable upon the exercise of outstanding options
held by Dr. Reed exercisable within 60 days of March 31, 1998, at which
date, 11,363 shares were fully vested, and 15,151 shares held in the name
of Steven James N. Reed, UGMA WA Merrill Lynch and 15,151 shares held in
the name of Sarah Mariko Reed, UGMA WA Merrill Lynch, both of which
accounts Dr. Reed is custodian and 14,595 shares held were subject to
repurchase, at this date. Dr. Reed disclaims beneficial ownership of such
shares, except to the extent of his pecuniary interest in such shares.
(8) Includes 151,133 shares issuable upon the exercise of outstanding options
held by Mr. McDade exercisable within 60 days of March 31, 1998 , at which
date 106,533 shares were fully vested and 7,576 shares held were subject to
repurchase, at this date.
(9) Includes 29,921 shares issuable upon the exercise of outstanding options
held by Dr. Grabstein exercisable within 60 days of March 31, 1998 , at
which date 6,786 shares were fully vested and 14,297 shares held were
subject to repurchase, at this date.,
(10) Includes 52,648 shares issuable upon the exercise of outstanding options
held by Dr. Raychaudhuri exercisable within 60 days of March 31, 1998, at
which date 24,053 shares were fully vested and 9,470 shares held were
subject to repurchase, at this date.
(11) Includes 4,584 shares issuable upon the exercise of outstanding options
held by Mr. Lacob exercisable within 60 days of March 31, 1998, 2,364,292
shares held by Kleiner Perkins Caufield & Byers VII and 62,673 shares held
by Kleiner Perkins Caufield & Byers VI. Mr. Lacob, Chairman of the Board of
Directors, is a general partner of Kleiner Perkins Caufield & Byers VII and
Kleiner Perkins Caufield & Byers VI, and, as such, may be deemed to share
voting and investment power with respect to such shares. Mr. Lacob
disclaims beneficial ownership of such shares, except to the extent of his
pecuniary interest in such shares.
(12) Includes 4,584 shares issuable upon the exercise of outstanding options
held by Dr. Senyei exercisable within 60 days of March 31, 1998, 1,357,384
shares held by Enterprise Partners III, L.P. and 118,032 shares held by
Enterprise Partners III Associates, L.P. Andrew E. Senyei, a Director, is a
general partner of Enterprise Partners III, L.P. and Enterprise Partners
III Associates, and, as such, may be
8
<PAGE> 12
deemed to share voting and investment power with respect to such shares. Dr.
Senyei disclaims beneficial ownership of such shares, except to the extent of
his pecuniary interest in such shares.
(13) Includes 4,584 shares issuable upon the exercise of outstanding options
held by Dr. Oronsky exercisable within 60 days of March 31, 1998, 1,382,107
shares held by InterWest Partners V, L.P. and 8,690 shares held by
InterWest Investors V, L.P. Arnold L. Oronsky, a Director, is a general
partner of InterWest Partners V, L.P. and, as such, may be deemed to share
voting and investment power with respect to such shares. Dr. Oronsky
disclaims beneficial ownership of shares held by InterWest Partners V,
L.P., except to the extent of his pecuniary interest in such shares, and
disclaims beneficial ownership to all shares held by InterWest Investors V,
L.P.
(14) Includes shares referred to in footnotes (6)-(13). Includes 74,617 shares
issuable upon the exercise of outstanding options held by Michelle Burris,
an executive officer of the Company, exercisable within 60 days of March
31, 1998, at which date 26,370 shares were fully vested. Also includes
156,688 shares beneficially owned by Martin Cheever, an officer of the
Company, which includes 73,356 shares issuable upon the exercise of
outstanding options held by Dr. Cheever exercisable within 60 days of March
31, 1998, at which date 1,063 shares were fully vested and 15,264 shares
held were subject to repurchase, at this date.
EXECUTIVE OFFICERS
The executive officers of the Company are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Steven Gillis, Ph.D. 44 President and Chief Executive Officer
Executive Vice President and Chief Operating
Mark McDade 42 Officer
Executive Vice President and Chief Scientific
Steven Reed, Ph.D. 47 Officer
Kenneth Grabstein, Ph.D. 47 Vice President and Director of Immunology
Michelle Burris 32 Vice President and Chief Financial Officer
Vice President and Director of Vaccine
Syamal Raychaudhuri, Ph.D. 44 Research
</TABLE>
Biographical information with respect to the Company's executive officers
is presented below except for biographies of Dr Gillis and Mr. McDade, who are
also Directors of the Company, which appear above. See "Proposal No. 1 Election
of Directors -- Information with respect to Nominees."
Steven Reed, Ph.D. has served as Executive Vice President and Chief
Scientific Officer of Corixa since 1994. From 1993 to the present, Dr. Reed has
served as an Associate Professor of Pathobiology at the University of
Washington. From 1993 to the present, he served as a director of IDRI, which he
founded. From 1984 to the present, Dr. Reed has served as a Professor (Adjunct)
of Medicine at the Cornell University Medical College. From 1984 to 1993, Dr.
Reed served as a Senior Scientist at the Seattle Biomedical Research Institute.
Dr. Reed graduated from Whitman College with a B.A. in Biology in 1973 and
received his Ph.D. in Microbiology from the University of Montana in 1979.
Kenneth Grabstein, Ph.D. has served as Vice President and Director of
Immunology of Corixa since 1994. From 1992 to 1994, Dr. Grabstein was Director
of Cellular Immunology and Director of the Flow Cytometry Facility at Immunex
Research and Development Corporation. From 1995 to the present, he has served as
Affiliate Investigator of the Clinical Research Division of the Fred Hutchinson
Cancer Research Center. Dr. Grabstein graduated from the University of
California, Berkeley with a B.A. in Zoology in 1973 and received his Ph.D. in
Immunology from the University of California, Berkeley in 1982.
Michelle Burris has served as Vice President and Chief Financial Officer of
Corixa since January 1998. From February 1997 to January 1998, she was Vice
President of Finance and Administration of Corixa. From 1996 to February 1997,
she was Director of Finance and Administration of Corixa. From 1995 to 1996, she
was Controller at Corixa. Ms. Burris held several finance and planning positions
at The Boeing Company, an aerospace company, most recently serving as Manager of
Planning and Performance for the Commercial
9
<PAGE> 13
Airplane Group. Ms. Burris graduated from George Mason University with a B.S. in
Marketing and Statistics in 1987 and received her M.B.A. from Seattle University
in 1991.
Syamal Raychaudhuri, Ph.D. has served as Vice President of Corixa since
February 1997 and has served as Director of Vaccine Research since 1994. From
1993 to 1994, he was Director of Immunology for Actigen, Inc., a biotechnology
company, which merged into Corixa in May 1996. From 1987 to 1993, he was a
Senior Scientist in the Department of Cellular Immunology of IDEC
Pharmaceuticals Corporation, a biopharmaceutical company. Dr. Raychaudhuri
graduated from the University of Calcutta with a B.S. in Chemistry in 1972 and
received his Ph.D. in Biochemistry from the University of Calcutta in 1980.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation earned by (a) the individual who
served as the Company's Chief Executive Officer during the fiscal year ended
December 31, 1997, (b) the four other most highly compensated individuals who
served as executive officers of the Company during the fiscal year ended
December 31, 1997 (together with the Chief Executive Officer, the "Named
Executive Officers"); and (c) the compensation received by each such individual
for the Company's two preceding fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
FISCAL SALARY BONUS COMPENSATION OPTIONS
NAME & PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($)(3) (#)
------------------------- ------ -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Steven Gillis................. 1997 $289,000 $47,000 $6,700 17,171
President and Chief 1996 $250,000 $20,000 $6,800 0
Executive Officer 1995 $250,000 $ 0 $6,800 36,363
Mark McDade................... 1997 $254,000 $40,500 $6,700 17,171
Executive Vice President 1996 $200,000 $14,000 $6,800 0
and Chief Operating Officer 1995 $200,000 $ 0 $4,300 30,303
Steven Reed................... 1997 $181,300 $28,700 $6,500 17,171
Executive Vice President 1996 $147,000 $ 7,000 $6,700 0
and Chief Scientific Officer 1995 $140,000 $ 0 $6,700 7,575
Kenneth Grabstein............. 1997 $142,000 $16,100 $6,500 17,171
Vice President and Director 1996 $126,000 $ 8,400 $6,700 0
of Immunology 1995 $120,000 $ 0 $6,700 0
Syamal Raychaudhuri........... 1997 $112,400 $12,100 $6,500 17,171
Vice President and Director
of Vaccine Research
</TABLE>
- ---------------
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) Include bonuses paid in the indicated year and earned in the preceding year.
(3) Amounts reported for fiscal years 1997, 1996 and 1995 consist of: (i)
amounts paid by the Company to assist with relocations (Mr. McDade $3,900
for fiscal year 1995) and (ii) premiums paid on life and accidental death
and dismemberment and health insurance policies for the officer's benefit.
Dr. Gillis, Mr. McDade, Dr. Reed and Dr. Grabstein each entered into an
agreement with the Company dated September 30, 1994 which provides that their
employment is terminable at any time for any reason, with or without cause, by
either themselves or the Company. In the event that the Company involuntarily
terminates their employment, other than for "good cause", then they will
immediately resign from all positions with the Company and enter into a
consulting arrangement for one (1) year commencing immediately after their
termination date. In consideration for such consulting arrangement, they will
continue to be paid their salary and benefits for one (1) year and will become
vested over such one (1) year in the lesser of (i) an
10
<PAGE> 14
additional one (1) year of shares covered by their respective stock purchase
agreement and/or stock option agreement and (ii) the remaining unvested shares
pursuant to such stock purchase agreement and/or stock option agreement;
provided, however, if they obtain new employment during such one year period,
any salary paid pursuant to such arrangement will be offset from amounts due
under such agreement and vesting of shares covered by their respective stock
purchase agreement will cease as of the date they accept such new employment.
For purposes of such agreement, "good cause" means gross misconduct or acts or
omission that involve fraud or embezzlement or misappropriation of any property
or proprietary information of the Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides certain information with respect to stock
options granted to the Named Executive Officers in the last fiscal year. In
addition, as required by Securities and Exchange Commission rules, the table
sets forth the hypothetical gains that would exist for the options based on
assumed rates of annual compound stock price appreciation during the option
term.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
------------------------------------------------------- VALUE AT ASSUMED
PERCENT ANNUAL RATES OF
NUMBER OF OF TOTAL OPTIONS STOCK
SECURITIES GRANTED EXERCISE PRICE APPRECIATION
UNDERLYING TO EMPLOYEES OF BASE FOR OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(#) YEAR(%)(3) ($/SH)(4) DATE 5%($) 10%($)
---- ----------- ---------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Steven Gillis........... 17,171 2.4% $0.99 2/07 $10,700 $27,100
Mark McDade............. 17,171 2.4 0.99 2/07 10,700 27,100
Steven Reed............. 17,171 2.4 0.99 2/07 10,700 27,100
Kenneth Grabstein....... 17,171 2.4 0.99 2/07 10,700 27,100
Syamal Raychaudhuri..... 17,171 2.4 0.99 2/07 10,700 27,100
</TABLE>
- ---------------
(1) No stock appreciation rights were granted to the Named Executive Officers in
the last fiscal year. Options vest over a four-year period on a monthly
basis after the first year.
(2) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the Securities and Exchange Commission. There is no
assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the
10-year option term will be at the assumed 5% and 10% levels or at any other
defined level.
(3) The Company granted stock options representing 710,004 shares in the last
fiscal year.
(4) The exercise price may be paid in cash, in shares of Common Stock valued at
fair market value on the exercise date or through a cashless exercise
procedure involving a same-day sale of the purchased shares. The Company may
also finance the option exercise by loaning the optionee sufficient funds to
pay the exercise price for the purchased shares.
11
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information for the Named Executive Officers
with respect to exercises of options to purchase Common Stock in the fiscal year
ended December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY
SHARES VALUE YEAR END(#) OPTIONS AT
ACQUIRED ON REALIZED VESTED/ FISCAL YEAR END ($)
NAME EXERCISE(#) ($) UNVESTED(1) VESTED/UNVESTED(2)
---- ----------- ----------- ----------------- -------------------
<S> <C> <C> <C> <C>
Steven Gillis.......................... -0- n/a 34,110/34,575 $291,000/$288,900
Mark McDade............................ -0- n/a 91,055/47,328 781,200/ 398,600
Steven Reed............................ -0- n/a 7,722/17,024 63,900/ 137,800
Kenneth Grabstein...................... -0- n/a 3,934/13,237 31,300/ 105,200
Syamal Raychaudhuri.................... -0- n/a 18,834/21,064 159,500/ 172,600
</TABLE>
- ---------------
(1) No stock appreciation rights (SARs) were outstanding during fiscal year
1997.
(2) Based on the $8.9375 per share closing price of the Company's Common Stock
on The Nasdaq National Market on December 31, 1997, less the exercise price
of the options.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board has general responsibility for
establishing the compensation payable to the Company's executive officers and
has the sole and exclusive authority to administer the Company's Amended and
Restated 1994 Stock Option Plan under which grants may be made to such
individuals.
GENERAL COMPENSATION POLICY
Under the supervision of the Compensation Committee, the Company's
compensation policy is designed to attract and retain qualified key executives
critical to the Company's growth and long-term success. It is the objective of
the Board of Directors to have a portion of each executive's compensation
contingent upon the Company's performance as well as upon the individual's
personal performance. Accordingly, each executive officer's compensation package
is comprised of three elements: (i) base salary which reflects individual
performance and expertise, (ii) variable bonus awards payable in cash and tied
to the achievement of certain performance goals which the Compensation Committee
establishes from time to time for the Company or the individual and (iii)
long-term stock-based incentive awards which are designed to strengthen the
mutuality of interests between the executive officers and the Company's
stockholders.
The summary below describes in more detail the factors, which the
Compensation Committee considers in establishing each of the three primary
components of the compensation package provided the executive officers.
Base Salary
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies that
compete with the Company for business and executive talent, and the incentives
necessary to attract and retain qualified management. Base salary is adjusted in
January of each year to take into account the individual's performance and to
maintain a competitive salary structure. Company performance does not play a
significant role in the determination of base salary.
12
<PAGE> 16
Cash-Based Incentive Compensation
Cash bonuses are awarded to executive officers on the basis of their
success in achieving designated individual goals and the Company's success in
achieving specific company-wide goals, such as product development milestones
and stock price appreciation.
Long-Term Incentive Compensation
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term stockholder values.
Awards under this plan by the Compensation Committee take the form of stock
options designed to give the recipient a significant equity stake in the Company
and thereby closely align his or her interests with those of the Company's
stockholders. Factors considered in making such awards include the individual's
position in the Company, his or her performance and responsibilities, and
internal comparability considerations. In addition, the Compensation Committee
has established certain general guidelines in making option grants to the
executive officers in an attempt to target a fixed number of unvested option
shares based upon each individual's position with the Company and his or her
existing holdings of unvested options. However, the Compensation Committee does
not adhere strictly to these guidelines and will vary the size of the option
grant made to each executive officer as it believes the circumstances warrant.
Each option grant allows the officer to acquire shares of Common Stock at a
fixed price per share (the fair market value on the date of grant) over a
specified period of time (up to 10 years). The options typically vest in
periodic installments over a four-year period, contingent upon the executive
officer's continued employment with the Company. Accordingly, the option will
provide a return to the executive officer only if he or she remains in the
Company's service, and then only if the market price of the Common Stock
appreciates over the option term.
CEO Compensation
In setting the compensation payable during fiscal 1997 to the Company's
Chief Executive Officer, Steven Gillis, Ph.D., the Committee used the same
factors as described above for the executive officers. The Compensation
Committee reviewed Dr. Gillis' compensation relative to industry comparables and
his performance over the last twelve (12) months in achieving the Company goals.
Dr. Gillis' annual base salary for 1997 was set in February 1997 at $289,000.
The Compensation Committee awarded Dr. Gillis a cash bonus of $47,000 in
February 1997 for the achievement of the Company's corporate goals for 1996.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code adopted under the Omnibus Budget Reconciliation Act of 1993, which
section disallows a deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for the CEO and four other
most highly compensated executive officers, respectively, unless such
compensation meets the requirements for the "performance-based" exception to
Section 162(m). As the cash compensation paid by the Company to each of its
executive officers is expected to be below $1 million and the Committee believes
that options granted under the Company's Amended and Restated 1994 Stock Option
Plan to such officers will meet the requirements for qualifying as
performance-based, the Committee believes that Section 162(m) will not affect
the tax deductions available to the Company with respect to the compensation of
its executive officers. It is the Committee's policy to qualify, to the extent
reasonable, its executive officers' compensation for deductibility under
applicable tax law. However, the Company may from time to time pay compensation
to its executive officers that may not be deductible.
13
<PAGE> 17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except as set forth below and in "Certain Transactions," no interlocking
relationship exists between the Company's Board or Compensation Committee and
the board of directors or compensation committee of any other company, nor has
any such interlocking relationship existed in the past.
Dr. Gillis is Acting Chief Executive Officer and a director of GenQuest and
Mr. McDade is Acting Vice President and a director of GenQuest Dr. Reed and Mr.
McDade are directors of IDRI. Dr. Gillis is a director of Genesis Ltd. While
there is no specified amount of time that Dr. Gillis and Mr. McDade are required
to devote to their respective duties as officers of GenQuest, Inc., the Company
estimates that at the present time Dr. Gillis and Mr. McDade each devote less
than 20% of their respective time to such duties.
Compensation Committee:
Joseph S. Lacob
Andrew E. Senyei, M.D.
14
<PAGE> 18
STOCK PERFORMANCE GRAPH
PERFORMANCE MEASUREMENT COMPARISON
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) MARKET INDEX INDUSTRY INDEX COMPANY INDEX
<S> <C> <C> <C>
10/2/97 100.00 100.00 100.00
10/31/97 94.80 94.89 93.52
11/30/97 95.27 93.78 81.48
12/31/97 93.78 89.85 66.20
</TABLE>
The preceding graph shows a comparison of cumulative total stockholder
returns for the Company's Common Stock, the Nasdaq Stock Market index for U.S.
companies, and the Nasdaq Pharmaceutical Company (Biotechnology) index. The
graph assumes the investment of $100 on October 2, 1997, the date of the
Company's initial public offering and reinvestment of the full amount of all
dividends. The performance shown is not necessarily indicative of future
performance.
The information presented in the performance graph indicates that $100
invested in the Company's Common Stock on October 2, 1997,the effective date of
the Company's completed initial public offering of Common Stock, would be worth
$66.20 on December 31, 1997 which represents an annual rate of return of
- -80.8%. The same amount hypothetically invested in the Nasdaq Stock Market
index for U.S. companies, and the Nasdaq Pharmaceutical company index would be
worth $93.78 or $89.85, respectively, which represent an annual rate of return
of -22.65% and -34.83%, respectively.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, which might incorporate future filings made by
the Company under those statutes, the preceding Compensation Committee Report on
Executive Compensation and Performance Graph are not to be incorporated by
reference into any of those previous filings; nor is such report or graph to be
incorporated by reference into any future filings which the Company may make
under those statutes.
STOCKHOLDER PROPOSALS
Under the present rules of the Commission, the deadline for stockholders to
submit proposals to be considered for inclusion in the Company's Proxy Statement
and form of proxy for the next year's Annual Meeting of Stockholders is expected
to be December 16, 1998. Such proposals may be included in next year's Proxy
Statement and form of proxy if they comply with certain rules and regulations
promulgated by the Commission.
15
<PAGE> 19
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and changes in
ownership of the Company's Common Stock. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, based solely on its review of the copies of
such reports received or written representations from certain Reporting Persons
that no other reports were required, the Company believes that during its fiscal
year ended December 31, 1997, all Reporting Persons complied with all applicable
filing requirements.
OTHER MATTERS
The Board knows of no other business that will be presented to the Annual
Meeting. If any other business is properly brought before the Annual Meeting,
proxies in the enclosed form will be voted in respect thereof as the proxy
holders deem advisable.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
William W. Ericson
Secretary
April 20, 1998
Seattle, Washington
16
<PAGE> 20
PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS OF CORIXA CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors for the Annual
Meeting of Stockholders to be Held June 3, 1998
The undersigned stockholder of Corixa Corporation, a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 28, 1998, and hereby appoints
Mark McDade and Michelle Burris or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, June 3, 1998, at 2:00 p.m.,
local time, in the Senate Room at The Four Seasons Olympic Hotel which is
located at 411 University Street, Seattle, Washington, and at any adjournment or
postponement thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth in the Notice of Annual Meeting of Stockholders and Proxy
Statement.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF EACH OF THE DIRECTORS; (2) FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998; AND AS SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM USING THE ENCLOSED ENVELOPE.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Directors - Nominees: Steven Gillis, Ph.D., Mark McDade,
Joseph S. Lacob, Arnold L. Oronsky, Ph.D. and Andrew E. Senyei, M.D.
For All [ ] Withhold All [ ] For All Except [ ]
---------------------------------
(Except nominee(s) written above)
2. Proposal to ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998.
For [ ] Against [ ] Abstain [ ]
NOTE: This Proxy should be marked, dated, signed by the stockholder(s) exactly
as his or her name appears hereon, and returned in the enclosed envelope.
Dated: ____________________, 1998
Signature (s) ________________________________________
________________________________________
<PAGE> 21
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signed as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
YOUR VOTE IS IMPORTANT!
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM USING THE ENCLOSED ENVELOPE.
