<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
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted by
[ ] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] 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:
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(4) Date Filed:
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<PAGE> 2
April , 2000
Dear Stockholder:
On behalf of Corixa Corporation, I cordially invite you to attend our
Annual Meeting of Stockholders to be held on May 31, 2000, at 1:00 p.m., in the
Cedar Room at Corixa Corporation, 1124 Columbia Street, Seattle, Washington.
This year you are asked to elect five directors to the Company's Board of
Directors, to approve an increase in the number of shares of common stock the
company is authorized to issue to 100 million and to ratify the appointment of
Ernst & Young LLP as the Company's independent public auditors for fiscal year
2000. Additional details regarding these issues are provided in the attached
Notice of Annual Meeting of Stockholders 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.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in Corixa. We look forward to seeing
you at the meeting.
Sincerely,
/s/ STEVEN GILLIS
Steven Gillis, Ph.D.
Chief Executive Officer
<PAGE> 3
CORIXA CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of Corixa
Corporation, a Delaware corporation (the "Company"), will be held in the Cedar
Room at Corixa Corporation which is located at 1124 Columbia Street in downtown
Seattle, Washington on Wednesday, May 31, 2000, at 1:00 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 approve an amendment to the Company's Certificate of Incorporation to
increase the number of shares of Common Stock that the Company is authorized to
issue to 100,000,000 from 40,000,000;
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are described more fully 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, 2000 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,
/s/ KATHLEEN N. MCKEREGHAN
Kathleen McKereghan
Secretary
Seattle, Washington
April , 2000
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
Cedar Room at Corixa Corporation which is located at 1124 Columbia Street in
downtown Seattle, Washington on Wednesday, May 31, 2000, at 1:00 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, 1999, including financial
statements, were first mailed to stockholders entitled to vote at the meeting on
or about May 4, 2000.
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, 2000 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 18,942,356 shares of
Common Stock outstanding held by approximately 1,177 stockholders of record and
12,500 shares of Series A Preferred Stock held by one stockholder of record.
VOTING AND SOLICITATION
Each outstanding share of Common Stock on the Record Date is entitled to
one vote on all matters. Each outstanding share of Series A Preferred Stock is
entitled to one vote for each share of Common Stock into which such Series A
Preferred Stock could be converted. As of the Record Date, for purposes of
voting, each share of Series A Preferred Stock was convertible into
approximately 118 shares of Common Stock. 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, FOR the recommended increase in
authorized shares, 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
<PAGE> 5
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 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 $5,000, 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
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 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.
2
<PAGE> 6
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 April 10, 2000:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
<S> <C> <C> <C>
Steven Gillis, Ph.D............... 46 Chairman of the Board of Directors 1994
and Chief Executive Officer
Mark McDade....................... 44 President, Chief Operating Officer 1994
and Director
Joseph S. Lacob(1)(2)............. 44 Director 1994
Arnold L. Oronsky, Ph.D.(1)(2).... 59 Director 1994
Andrew E. Senyei, M.D.(1)(2)...... 49 Director 1994
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Steven Gillis, Ph.D. co-founded Corixa in October 1994 and has served as
chief executive officer and as a director of Corixa since that time. Dr. Gillis
has served as the chairman of our board of directors since March 1999. From 1994
to February 1999, Dr. Gillis served as our president. Dr. Gillis was a
co-founder of Immunex, where he held multiple positions, including acting chief
executive officer and chairman of the board. In addition, Dr. Gillis is a
director of Micrologix Biotech, Genesis Research and Development and Rosetta
Inpharmatics. He also serves on the scientific advisory board of Medarex. Dr.
Gillis graduated from Williams College and received his Ph.D. from Dartmouth
College.
Mark McDade, co-founded Corixa in October 1994 and has served as our
president since March 1999. He has served as our chief operating officer and as
a director since 1994. From 1994 to February 1999, Mr. McDade served as our
executive vice president. Prior to co-founding Corixa, Mr. McDade served as the
chief operating officer of Boehringer Mannheim Therapeutics. In addition, Mr.
McDade is a director of LigoCyte Pharmaceuticals. Mr. McDade graduated from
Dartmouth College and received his M.B.A from Harvard University.
Joseph S. Lacob has served as a director of Corixa since 1994. From 1994 to
March 1999, Mr. Lacob served as chairman of the Board. Mr. Lacob has been a
partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since May
1987. In addition, he is currently the chairman of the board of directors
Microcide Pharmaceuticals and Cardima. He also serves on the board of directors
of Heartport, IsoStent and several other privately held biotechnology, medical
device and health care service companies. Mr. Lacob graduated from the
University of California, Irvine, received his M.P.H. from the University of
California, Los Angeles and received his M.B.A. from the Stanford Graduate
School of Business.
Arnold L. Oronsky, Ph.D. has served as a director of Corixa since 1994. He
currently serves as the chairman of the board of directors of Coulter
Pharmaceuticals Inc. and as a director of Signal Pharmaceutical. 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, where he was
responsible for the research of new drugs. Dr. Oronsky graduated from University
College, New York University and received his Ph.D. from Columbia University.
Andrew E. Senyei, M.D. has served as a director of Corixa since 1994. Dr.
Senyei has served as managing partner of Enterprise Partners, a venture capital
firm, since 1999 and a general partner of Enterprise Partners since 1988. Dr.
Senyei was a founder of Molecular Biosystems, 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 and received his M.D. from
Northwestern University.
3
<PAGE> 7
BOARD OF DIRECTORS COMMITTEES, COMPENSATION OF DIRECTORS AND OTHER INFORMATION
All directors hold office until the next annual meeting of stockholders of
the Company or until their successors have been elected and qualified. The
officers of the Company are appointed annually and serve at the discretion of
the Board.
The Board held a total of four (4) regular meetings during the year ended
December 31, 1999, as well as a special meeting in connection with the
acquisition of Ribi ImmunoChem Research and a special meeting in connection with
the stock purchase transaction and license and collaborative research agreement
between LigoCyte Pharmaceuticals and the Company. The Board has an Audit
Committee and a Compensation Committee (see below). Each incumbent director
attended at least 75% of the aggregate number of meetings of the Board 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 consists of Mr. Lacob, Dr. Oronsky and Dr.
Senyei, the Company's three non-employee directors, and acted two times by
written consent in January 1999 and December 1999. 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 regarding such matters.
The Audit Committee consists of Mr. Lacob, Dr. Oronsky, and Dr. Senyei, the
Company's three non-employee directors. The Audit Committee met once during the
year ended December 31, 1999, at which time the Audit Committee comprised Dr.
Oronsky and Dr. Senyei. 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 regarding such matters. The
Audit Committee has scheduled a meeting for April 24, 2000 to perform such
review and make such recommendations for the year ended December 31, 1999. The
Audit Committee adopted a charter in April 2000, which is included in this proxy
statement as Appendix A.
Non-employee directors currently receive no cash fees for services provided
in that capacity. Corixa adopted the 1997 Directors' Stock Option Plan (the
"Directors' Plan") on July 25, 1997. As of December 31, 1999, a total of 300,000
shares of Corixa's Common Stock were reserved for issuance under the Directors'
Plan. The number of authorized shares is subject to automatic increase, on the
first trading day of each of the five calendar years beginning in 1998 and
ending in 2002 in an amount equal to 50,000 shares of Common Stock or such
lesser amount as the Board may establish. The Directors' Plan provides for the
grant of nonqualified stock options to non-employee directors of Corixa. The
Directors' Plan provides that each person who first became a non-employee
director of Corixa shall be granted nonqualified stock options to purchase
15,000 shares of Common Stock (the "First Option"). Thereafter, on the first day
of each fiscal year, commencing fiscal year 1998, each non-employee director
shall be automatically granted an additional option to purchase 5,000 shares of
Common Stock (a "Subsequent Option") if, on such date, he or she shall have
served on Corixa's Board of Directors for at least six months. The First Options
and Subsequent Options generally vest over 36 and 12 months, respectively, and
have 10-year terms. The exercise price of such options shall be equal to the
fair market value of the Corixa's Common Stock on the date of grant of the
option. The Directors' Plan has a 10-year term unless terminated earlier.
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.
Recommendation of the Board:
The Board of Directors recommends a vote IN FAVOR OF all nominees named
above.
4
<PAGE> 8
PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
The Board has determined that it is in the best interests of the Company
and its stockholders to amend the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock of the Company to
100,000,000 shares from 40,000,000 shares. Accordingly, the Board has
unanimously approved the proposed Certificate of Amendment to the Amended and
Restated Certificate of Incorporation of the Company, in the form attached
hereto as Exhibit A (the "Certificate of Amendment"), and hereby solicits the
approval of the Company's stockholders to such proposed Certificate of
Amendment. If the stockholders approve the proposed Certificate of Amendment,
the Board currently intends to file the Certificate of Amendment with the
Secretary of State of the State of Delaware as soon as practicable following
such stockholder approval. If the Certificate of Amendment is not approved by
the stockholders, the existing Certificate of Incorporation will continue in
effect.
The Company currently has 40,000,000 authorized shares of Common Stock, of
which approximately 18,627,225 were outstanding as of December 31, 1999. In
addition, the Company has reserved up to approximately 8,636,426 shares of
Common Stock for issuance in connection with the Company's 1994 Stock Option
Plan, outstanding warrants, conversion of the Company's Series A Preferred
Stock, the Company's 1997 Employee Stock Purchase Plan, the Company's 1997
Directors' Stock Option Plan and shares issuable to certain of the Company's
corporate partners. The Company also issued an additional 1,900,00 shares of its
Common Stock on April 12, 2000 in relation to the Company's secondary offering.
The Board of Directors believes that it is prudent to increase the
authorized number of shares of Common Stock to the proposed level in order to
provide a reserve of shares available for issuance to meet business needs as
they arise. Such business needs may include, without limitation, financings,
establishing strategic relationships with corporate partners, providing equity
incentives to employees, officers or directors, or effecting stock splits. The
additional shares of Common Stock may also be used to acquire or invest in
complementary businesses or products or to obtain the right to use complementary
technologies.
The Company has no current plans to issue any portion of the additional
authorized shares that would result from the Certificate of Amendment, if
approved.
Possible Effects of the Proposed Amendment to the Certificate of Incorporation
If the stockholders approve the Certificate of Amendment, the Board of
Directors will have the right to authorize the issuance of additional shares of
Common Stock without further vote of the stockholders of the Company, except as
provided under Delaware corporate law or under the rules of any securities
exchange on which shares of Common Stock of the Company are then listed. Current
holders of Common Stock have no preemptive or similar rights, which means that
such holders do not have a prior right to purchase any new issue of Common Stock
of the Company in order to maintain their percentage ownership of the Company.
The issuance of additional shares of Common Stock would decrease the
proportionate equity interest of the Company's current stockholders and,
depending upon the price paid for such additional shares, could result in
dilution to the Company's current stockholders.
Recommendation of the Board:
The Board of Directors recommends a vote IN FAVOR OF the Certificate of
Amendment.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors for the
year ended December 31, 1999. 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
5
<PAGE> 9
independent auditors, to audit the accounts and records of the Company for the
year ending December 31, 2000, 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.
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 April 10, 2000 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(1) BENEFICIAL OWNERSHIP(2) COMMON STOCK(2)
------------------- ----------------------- ---------------
<S> <C> <C>
Castle Gate, L.L.C.(3).................. 3,067,221 13.9
2365 Carillon Point
Kirkland, WA 98033
Kleiner Perkins Caufield & Byers(4)..... 2,214,845 10.9
2750 Sand Hill Road
Menlo Park, CA 94025
InterWest Investors(5).................. 1,196,797 5.9
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
SmithKline Beecham(6)................... 1,118,779 5.5
New Horizons Court
Brentford, Middlesex TWB 9EP
United Kingdom
Directors and named executive officers
Steven Gillis, Ph.D.(7)............... 390,157 1.9
Mark McDade(8)........................ 263,888 1.3
Steven Reed, Ph.D.(9)................. 263,594 1.3
Kenneth Grabstein, Ph.D.(10).......... 230,690 1.1
Martin Cheever, M.D.(11).............. 143,056 *
Joseph Lacob(12)...................... 2,240,261 11.0
Arnold Oronsky, Ph.D.(13)............. 1,222,213 6.0
Andrew Senyei, M.D.(14)............... 82,690 *
All directors and officers as a group
(14 persons)(14)...................... 4,991,914 23.7
</TABLE>
- ---------------
* Less than 1%
(1) Unless otherwise indicated, the address of each of the individual named
above is Corixa Corporation, 1124 Columbia Street, Suite 2000, Seattle,
Washington 98104.
(2) The applicable percentage of beneficial ownership is based on 18,942,356
shares of our common stock outstanding as of April 10, 2000 and 12,500
shares of Series A Preferred Stock which have the right to
6
<PAGE> 10
vote with the Common Stock on an as-converted basis and are convertible
into an aggregate of 1,470,588 shares of our Common Stock, together with
applicable options and warrants for such stockholder. 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 our
common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of April 10, 2000. Shares
issuable pursuant to those options are deemed outstanding for computing the
percentage ownership of the person holding the options but are not deemed
outstanding for the purposes of computing the percentage ownership of each
other person.
To our knowledge, the 13 persons named in this table have sole voting and
investment power with respect to all shares of our common stock shown as
owned by them, subject to community property laws where applicable and
except as indicated.
(3) Castle Gate, L.L.C. holds 12,500 shares of Series A Preferred Stock which
are convertible into an aggregate of 1,470,588 shares of our Common Stock
and has warrants to purchase an additional 1,596,633 shares of our Common
Stock.
(4) 2,114,294 shares are held by Kleiner Perkins Caufield & Byers VII, 62,673
shares are held by Kleiner Perkins Caufield & Byers VI and 37,878 shares
are held by Cynthia Healy, Director Life Science Research at Kleiner
Perkins Caufield & Byers. Joseph Lacob, a director, 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 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.
(5) InterWest Partners V, L.P., holds 1,183,357 shares, InterWest Investors V,
L.P. holds 7,440 shares, and Arnold Oronsky holds 6,000 shares. Dr.
Oronsky, one of our directors, 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 these shares. Dr. Oronsky disclaims beneficial ownership of
shares held by InterWest Partners V, L.P., except to the extent of his
pecuniary interest in the shares, and disclaims beneficial ownership to all
shares held by InterWest Investors V, L.P., except to the extent of his
pecuniary interest in the shares.
(6) S.R. One Ltd., a wholly-owned subsidiary of SmithKline Beecham, holds
505,051 shares and SmithKline Beecham holds 613,728 shares.
(7) The information regarding Steven Gillis includes 115,052 shares issuable
upon the exercise of outstanding options held by him exercisable within 60
days of April 10, 2000.
(8) The information regarding Mark McDade includes 172,979 shares issuable upon
the exercise of outstanding options held by him exercisable within 60 days
of April 10, 2000.
(9) The information regarding Steven Reed includes 46,009 shares issuable upon
the exercise of outstanding options held by him exercisable within 60 days
of April 10, 2000. 15,151 shares are held in the name of Steven James N.
Reed, UGMA WA Merrill Lynch and 15,151 shares are held in the name of Sarah
Mariko Reed, UGMA WA Merrill Lynch, both of which accounts name Dr. Reed as
custodian. Dr. Reed disclaims beneficial ownership of such shares, except
to the extent of his pecuniary interest in such shares.
(10) The information regarding Kenneth Grabstein includes 40,101 shares issuable
upon the exercise of outstanding options held by him exercisable within 60
days of April 10, 2000.
(11) The information regarding Martin Cheever includes 54,958 shares issuable
upon the exercise of outstanding options held by him exercisable within 60
days of April 10, 2000.
(12) The information regarding Joseph Lacob includes 25,416 shares issuable upon
the exercise of outstanding options held by him exercisable within 60 days
of April 10, 2000; 2,114,294 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 of Life Science Research at
Kleiner Perkins Caufield & Byers. Mr. Lacob, one of our 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
7
<PAGE> 11
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.
(13) The information regarding Arnold Oronsky includes 25,416 shares issuable
upon the exercise of outstanding options held by him exercisable within 60
days of April 10, 2000; 1,183,357 shares held by InterWest Partners V,
L.P., 7,440 shares held by InterWest Investors V, L.P. and 6,000 shares
held by Dr. Oronsky. Dr. Oronsky, one of our directors, 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) As a group, all directors and officers, totaling 14 individuals, hold
4,991,914 shares, which includes 25,489 shares issuable upon the exercise
of outstanding options held by Kathleen McKereghan, one of our executive
officers, exercisable within 60 days of April 10, 2000; 20,029 shares
issuable upon the exercise of outstanding options held by Maureen Howard,
one of our executive officers, exercisable within 60 days of April 10,
2000; 774 shares held and 11,966 shares issuable upon the exercise of
outstanding options held by Charles Richardson, one of our executive
officers, exercisable within 60 days of April 10, 2000; 8,292 shares
issuable upon the exercise of outstanding options held by Gary
Christianson, one of our executive officers, exercisable within 60 days of
April 10, 2000; 13,750 shares issuable upon the exercise of outstanding
options held by Cindy Jacobs, one of our executive officers, exercisable
within 60 days of April 10, 2000; 57,274 shares held and 25,416 shares
issuable upon exercise of outstanding options held by Andrew Senyei, one of
our directors, exercised within 60 days of April 10, 2000 and 75,065 shares
issuable upon the exercise of outstanding options held by Michelle Burris,
one of our executive officers, exercisable within 60 days of April 10,
2000.
8
<PAGE> 12
EXECUTIVE OFFICERS
The executive officers of the Company and their ages as of April 10, 2000
are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Steven Gillis, Ph.D.......... 46 Chairman, Chief Executive Officer and Director
Mark McDade.................. 44 President, Chief Operating Officer and Director
Steven Reed, Ph.D............ 49 Executive Vice President and Chief Scientific
Officer
Kenneth Grabstein, Ph.D...... 49 Executive Vice President and Director of Immunology
Michelle Burris.............. 34 Vice President and Chief Financial Officer
Kathleen McKereghan.......... 48 Vice President, General Counsel and Secretary
Martin Cheever, M.D.......... 56 Vice President and Director of Medical Affairs
Maureen Howard, Ph.D......... 47 Vice President and Director of Research and
Development -- Redwood City
Cindy Jacobs, Ph.D., M.D..... 42 Vice President and Director of Clinical Research
Charles Richardson, Ph.D..... 48 Vice President and General Manager -- Hamilton
Gary Christianson............ 45 Vice President, Technical Operations
</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. See "Proposal No. 1 Election of
Directors -- Information with respect to Nominees."
Steven Reed, Ph.D. co-founded Corixa in October 1994 and has served as our
executive vice president and chief scientific officer since then. Dr. Reed also
serves as an Associate Professor of Pathobiology at the University of
Washington. Prior to co-founding Corixa, he founded the Infectious Disease
Research Institute and also served as a senior scientist at the Seattle
Biomedical Research Institute. In addition, Dr. Reed is a director of ImmGenics
Pharmaceuticals. Dr. Reed graduated from Whitman College and received his Ph.D.
from the University of Montana.
Kenneth Grabstein, Ph.D. co-founded Corixa in October 1994 and has served
as our director of immunology since that time. He also serves as our executive
vice president, a position he has held since March 1999. From 1994 to February
1999, he served as our vice president. Prior to co-founding Corixa, Dr.
Grabstein was the director of cellular immunology and director of the flow
cytometry facility at Immunex Research and Development Corporation. He has also
served as an affiliate investigator of the Clinical Research Division of the
Fred Hutchinson Cancer Research Center. Dr. Grabstein graduated from the
University of California, Berkeley and received his Ph.D. from the University of
California, Berkely.
Michelle Burris has served as our vice president and chief financial
officer 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 served as our director of finance and administration, and from 1995 to 1996,
she was our controller. Ms. Burris served us as a consultant from November 1994
through March 1995. Before working with us, Ms. Burris held several finance and
planning positions at The Boeing Company. In addition, Ms. Burris is a director
of ImmGenics Pharmaceuticals. Ms. Burris is a Certified Public Accountant, and
she graduated from George Mason University and received her M.B.A. from Seattle
University.
Kathleen McKereghan has served as our vice president and general counsel
since January 2000 and as our corporate secretary since June 1998. From January
1998 to January 2000, she served as our director of legal affairs, and from
December 1995 to January 1998 she was our corporate attorney. Prior to joining
us, Ms. McKereghan practiced law at the law firm of Perkins Coie in Seattle,
Washington. She is licensed to practice law in the state of Washington and
admitted to practice before the U.S. Patent and Trademark Office. Ms. McKereghan
graduated from the University of California, Davis and received her J.D. from
the University of Washington.
Martin Cheever, M.D. has served as vice president and director of medical
affairs since joining us in December 1997. Dr. Cheever is also a co-founder of
Corixa. Prior to joining us, he served as an affiliate investigator for the
clinical research division for the Fred Hutchinson Cancer Research Center and
from 1987
9
<PAGE> 13
to December 1997, Dr. Cheever was a clinical professor of medicine and a member
of the division of oncology at the University of Washington School of Medicine.
Dr. Cheever graduated from the University of Michigan and received his M.D. from
the University of Michigan School of Medicine.
Maureen Howard, Ph.D. has served as our vice president and director of
research and development at our Redwood City, California facility since February
1999. From 1997 to 1999, Dr. Howard served as the vice president of research at
Anergen. Prior to working at Anergen, she served as the founding director of the
department of immunology at DNAX Research Institute of Molecular and Cellular
Biology. Dr. Howard's prior experience includes service as a Fulbright and
Fogarty fellow in the laboratory of immunology at the National Institutes of
Health. Dr. Howard graduated from the University of Melbourne, Australia and
received her Ph.D. from the Walter and Eliza Hall Institute in Australia.
Cindy Jacobs, Ph.D., M.D. has served as our vice president and director of
clinical research since joining us in April 1999. Prior to joining us, Dr.
Jacobs served as the of vice president of clinical research at Cytran. From 1993
to 1998, Dr. Jacobs was in charge of clinical research at CellPro, where she
held various positions including vice president of clinical research. Dr. Jacobs
graduated from Montana State University. She received her M.S. from Washington
State University, a Ph.D. from Washington State University and a M.D. from the
University of Washington.
Charles Richardson, Ph.D. has served as our vice president and general
manager at our Hamilton, Montana facility since October 1999. From 1988 to 1999,
Dr. Richardson served in various capacities at Ribi ImmunoChem Research,
including vice president of pharmaceutical discovery. He graduated from Carnegie
Mellon University and received his Ph.D. from the University of Cincinnati.
Gary Christianson has served as our vice president of technical operations
since October 1999. From 1987 to 1999, Mr. Christianson served in various
capacities at Ribi ImmunoChem Research, including director of production and
engineering. He graduated from Montana State University.
10
<PAGE> 14
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows the compensation paid to (a) the individual who
served as the Company's Chief Executive Officer during the fiscal year ended
December 31, 1999, (b) the four other most highly compensated individuals who
served as executive officers of the Company during the fiscal year ended
December 31, 1999 (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................. 1999 330,000 60,000 10,800 88,500
Chief Executive Officer 1998 305,000 61,850 9,200 37,750
1997 289,000 47,000 6,700 17,171
Mark McDade................... 1999 300,000 56,000 10,000 98,500
President and Chief 1998 266,712 52,400 8,300 12,750
Operating Officer 1997 254,000 40,500 6,700 17,171
Steven Reed................... 1999 202,500 41,000 10,000 58,500
Executive Vice President and 1998 192,178 38,200 8,800 12,750
Chief Scientific Officer 1997 181,300 28,700 6,500 17,171
Kenneth Grabstein............. 1999 165,000 35,000 10,000 63,500
Executive Vice President and 1998 150,000 31,100 9,000 12,750
Director of Immunology 1997 142,000 16,100 6,500 17,171
Martin Cheever................ 1999 157,500 25,000 8,000 48,500
Vice President and Director 1998 150,000 19,125 6,600 12,750
of Medical Affairs
</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 consist of: (i) amounts the Company contributed to the
Company's 401(k) Plan with respect to each named Executive Officer 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 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.
11
<PAGE> 15
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
PERCENT VALUE AT ASSUMED
NUMBER OF OF TOTAL OPTIONS ANNUAL RATES OF 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........ 73,500 4.0% $ 8.69 1/09 $401,600 $1,017,700
15,000 0.8 17.00 12/09 160,400 406,404
83,500 4.5 8.69 1/09 456,200 1,156,100
Mark McDade.......... 15,000 0.8 17.00 12/09 160,400 406,404
43,500 2.4 8.69 1/09 237,700 602,300
Steven Reed.......... 15,000 0.8 17.00 12/09 160,400 406,404
48,500 2.6 8.69 1/09 265,000 671,500
Kenneth Grabstein.... 15,000 0.8 17.00 12/09 160,400 406,404
13,500 0.7 8.69 1/09 73,800 186,900
20,000 1.1 9.50 5/09 119,500 302,800
Martin Cheever....... 15,000 0.8 17.00 12/09 160,400 406,404
</TABLE>
- ---------------
(1) No stock appreciation rights were granted to the Named Executive Officers in
the last fiscal year. Options vest over a four-year period on a monthly
basis after the first year.
(2) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the Securities and Exchange Commission. There is no
assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the
10-year option term will be at the assumed 5% and 10% levels or at any other
defined level.
(3) The Company granted stock options representing 1,835,617 shares in the last
fiscal year.
(4) The exercise price may be paid in cash, in shares of Common Stock valued at
fair market value on the exercise date or through a cashless exercise
procedure involving a same-day sale of the purchased shares. The Company may
also finance the option exercise by loaning the optionee sufficient funds to
pay the exercise price for the purchased shares.
12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information for the Named Executive Officers
with respect to exercises of options to purchase Common Stock in the fiscal year
ended December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY
SHARES YEAR END(#) OPTIONS AT
ACQUIRED ON VALUE VESTED/ FISCAL YEAR END($)
NAME EXERCISE(#) REALIZED($) UNVESTED(1) VESTED/UNVESTED(2)
---- ----------- ----------- ----------------- -------------------
<S> <C> <C> <C> <C>
Steven Gillis............... -0- n/a 98,967/95,968 $1,334,900/$692,900
Mark McDade................. -0- n/a 158,977/90,656 2,425,900/659,300
Steven Reed................. -0- n/a 36,174/59,822 455,400/403,000
Kenneth Grabstein........... -0- n/a 29,745/63,676 338,700/435,000
Martin Cheever.............. -0- n/a 39,717/82,139 560,100/768,100
</TABLE>
- ---------------
(1) No stock appreciation rights were outstanding during fiscal year 1999.
(2) Based on the $17.00 per share closing price of the Company's Common Stock on
The Nasdaq National Market on December 31, 1999, 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
comprises 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.
13
<PAGE> 17
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 plan 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 1999 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 1999 was set in February 1999 at $330,000.
The Compensation Committee awarded Dr. Gillis a cash bonus of $60,000 in
February 1999 for the achievement of the Company's corporate goals for 1998.
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors currently consists of
Joseph S. Lacob, Andrew E. Senyei, M.D., and Arnold L. Oronsky, Ph.D. No member
of the Compensation Committee or executive officer of the Company has a
relationship that would constitute an interlocking relationship with executive
officers or directors of another entity.
14
<PAGE> 18
TRANSACTIONS WITH MANAGEMENT
LigoCyte Pharmaceuticals. In October 1999, we entered into an exclusive
research and development agreement with LigoCyte Pharmaceuticals, an early-stage
biotechnology company, for the development of its proprietary monoclonal
antibodies against the yeast, Candida albicans. Under the agreement, we have
agreed to fund certain of LigoCyte's efforts to develop treatments for
hospital-based systemic Candida infections and a novel vaccine to treat
recurring vaginal candidiasis. The agreement also includes our obligation to
make payments upon achievement of certain milestones, as well as royalty
payments on future product sales. In addition to the research and development
agreement, we invested $1.0 million in exchange for preferred stock in LigoCyte.
Mark McDade, our President, Chief Operating Officer and Director is a member of
LigoCyte's board of directors.
Genesis Research and Development. Effective in January 1998, we entered
into a collaborative research and development agreement with Genesis Research
and Development to develop and commercialize the M. vaccae-derived product, PVAC
treatment, for psoriasis. Under the agreement, we will share the costs of
product development and the revenue received related to that product with
Genesis. In the event one party becomes responsible for more than 50% of product
development costs, that party will also receive a pro rata increased portion of
revenues related to product sales. Under the agreement, Genesis also granted us
the worldwide, exclusive right to develop the M. vaccae-derived product for
certain other autoimmune diseases, including rheumatoid arthritis, multiple
sclerosis and diabetes. We also entered into a separate agreement with Genesis,
effective in January 1998, to research and develop M. vaccae-derived products as
vaccine adjuvants. Under the agreement Genesis granted us an exclusive license
to use these adjuvant products in our proprietary vaccines. Steven Gillis,
Ph.D., our Chairman, Chief Executive Officer and Director is a member of
Genesis' board of directors.
Rosetta Inpharmatics, Inc. Effective in December 1999, we entered into a
collaborative research and development agreement with Rosetta Inpharmatics to
benefit from Rosetta's expertise in utilizing microarrays and analyzing
microarray data to determine gene expression. Under the agreement, we will make
research payments. Steven Gillis, Ph.D., our Chairman, Chief Executive Officer
and Director is a member of Rosetta's board of directors.
ImmGenics Pharmaceuticals. In November 1998, we signed an exclusive
agreement with ImmGenics Pharmaceuticals to utilize ImmGenics' proprietary
Selected Lymphocyte Antibody Method technology to develop therapeutic and
diagnostic monoclonal antibodies specific to our proprietary antigens in cancer
and infectious disease. Under the agreement, we will make research and
development payments and, if certain milestones are achieved, additional
milestone payments and royalty payments on future product sales. In addition to
the agreement, in 1998 we invested $1.75 million in exchange for preferred stock
in ImmGenics, convertible debt and warrants, and, based on ImmGenics having met
certain milestones in accordance with the terms and conditions of the agreement,
we invested an additional $1.25 million in 1999, for a total investment of $3.0
million. In addition, we may obtain additional ownership in ImmGenics over time
under certain terms of the agreement. Michelle Burris, our Vice President and
Chief Financial Officer, and Steven Reed, our Executive Vice President and Chief
Scientific Officer, are members of ImmGenics' board of directors.
15
<PAGE> 19
PERFORMANCE MEASUREMENT COMPARISON
STOCK PERFORMANCE GRAPH
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ
CORIXA CORPORATION MARKET (U.S.) PHARMACEUTICAL
------------------ ------------- --------------
<S> <C> <C> <C>
10/2/97 100.00 100.00 100.00
12/97 66.20 92.68 89.74
3/98 54.63 108.47 98.60
6/98 50.93 111.45 91.25
9/98 45.37 100.57 86.03
12/98 68.52 130.68 114.16
3/99 59.26 146.47 125.26
6/99 131.94 160.27 127.61
9/99 99.54 164.15 145.75
12/99 125.93 241.85 212.42
</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, if any. 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
$125.93 on December 31, 1999 which represents an annual rate of return of
11.52%. The same amount hypothetically invested in the Nasdaq Stock Market index
for U.S. companies, and the Nasdaq Pharmaceutical company index would be worth
$241.85 or $212.42, respectively, which represent an annual rate of return of
63.04% and 49.96%, 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.
FORM 10K
The Company will mail without charge, upon written request, a copy of the
Company's Form 10-K report for the year ended December 31, 1999. Requests should
be sent to Investor Relations, 1124 Columbia Suite 200, Seattle, WA 98104.
16
<PAGE> 20
STOCKHOLDER PROPOSALS
Under the present rules of the Securities and Exchange 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, 2000. 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 Securities and Exchange
Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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 beneficial
ownership ("Form 3") and reports of changes in beneficial ownership of the
Company's Common Stock ("Form 4"). 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, 1999, all Reporting Persons complied with all applicable
filing requirements other than as follows: Chuck Richardson, an executive
officer of the Company, filed an amended Form 3.
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,
/s/ KATHLEEN N. MCKEREGHAN
Kathleen McKereghan
Secretary
April , 2000
Seattle, Washington
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
17
<PAGE> 21
APPENDIX A
CORIXA CORPORATION
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
PURPOSE
The purpose of the Audit Committee established by this charter will be to
make such examinations as are necessary to monitor the corporate financial
reporting and the internal and external audits of Corixa Corporation (the
"Company"), to provide to the Board of Directors (the "Board") the results of
its examinations and recommendations derived therefrom, to outline to the Board
improvements made, or to be made, in internal accounting controls, to nominate
independent auditors, to supervise the finance function of the Company (which
will include, among other matters, the Company's investment activities) and to
provide the Board such additional information and materials as it may deem
necessary to make the Board aware of significant financial matters which require
Board attention.
The Audit Committee will undertake those specific duties and
responsibilities listed below, and such other duties as the Board from time to
time may prescribe.
CHARTER REVIEW
The Audit Committee will review and reassess the adequacy of this charter
at least once per year. This review is initially intended to be conducted at the
first Audit Committee meeting following the Company's Annual Meeting of
Stockholders, but may be conducted at any time the Audit Committee desires to do
so. Additionally, to the extent and in the manner that the Company is legally
required to do by the rules of the Securities and Exchange Commission (the
"SEC"), this charter (as then constituted) shall be publicly filed.
MEMBERSHIP
The Audit Committee must be comprised of at least three members of the
Board. Such members will be elected and serve at the pleasure of the Board. The
members of the Audit Committee will not be employees of the Company. Each member
of the Audit Committee shall be an "independent director," as defined by and to
the extent required by the Rules of the National Association of Securities
Dealers, Inc. ("NASD").
Further, each member of the Audit Committee must be able to read and
understand fundamental financial statements, including the Company's balance
sheet, income statement, and cash flow statement, or must become able to do so
within a reasonable period of time after his or her appointment to the Audit
Committee. Additionally, at least one member of the Audit Committee must have
past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the individual's financial sophistication, including being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities. Notwithstanding the
foregoing, one director who is not independent, as defined in the NASD Rules,
and who is not a current employee or an immediate family member of such
employee, may be appointed to the Audit Committee, if the board, under
exceptional and limited circumstances, determines that membership on the Audit
Committee by the individual is required by the best interests of the Company and
its stockholders, and the Board discloses, in the next annual proxy statement
subsequent to such determination, the nature of the relationship and the reasons
for that determination.
MEETINGS
The Audit Committee will meet separately with the Chief Executive Officer
and separately with the Chief Financial Officer of the Company at least
quarterly to review the financial affairs of the Company. The Audit Committee
will meet with the independent auditors of the Company upon the completion of
the annual audit, and at such other times as it deems appropriate, to review the
independent auditors' examination and management report.
A-1
<PAGE> 22
RESPONSIBILITIES
The responsibilities of the Audit Committee shall include:
1. Nominating the independent auditors for annual approval by the Board and
ratification by the stockholders;
2. Reviewing the plan for the audit and related services at least annually;
3. Reviewing audit results and annual and interim financial statements;
4. Ensuring the receipt of, and reviewing, a written statement from the
Company's auditors delineating all relationships between the auditor and
the Company, consistent with Independence Standards Board Standard 1;
5. Reviewing and actively discussing with the Company's auditors any
disclosed relationship or service that may impact the objectivity and
independence of the auditor;
6. Taking, or recommending that the Board take, appropriate action to
oversee the independence of the outside auditor;
7. Overseeing the adequacy of the Company's system of internal accounting
controls, including obtaining from the independent auditors management
letters or summaries on such internal accounting controls;
8. Overseeing the effectiveness of the internal audit function;
9. Overseeing the Company's compliance with the Foreign Corrupt Practices
Act;
10. Overseeing the Company's compliance with SEC requirements for
disclosure of auditor's services and Audit Committee members and
activities; and
11. Overseeing the Company's finance function, which may include the
adoption from time to time of a policy with regard to the investment of
the Company's assets.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board delegates to it.
Finally, the Audit Committee shall ensure that the Company's auditors
understand both (i) their ultimate accountability to the Board and the Audit
Committee, as representatives of the Company's stockholders, and (ii) the
Board's and the Audit Committee's ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the Company's independent
auditors (or to nominate the outside auditor to be proposed for stockholder
approval in any proxy statement).
REPORTS
The Audit Committee will to the extent deemed appropriate record its
summaries of recommendations to the Board in written form that will be
incorporated as a part of the minutes of the Board. To the extent required, the
Audit Committee will also prepare and sign a Report of the Audit Committee for
inclusion in the Company's proxy statement for its Annual Meeting of
Stockholders.
A-2
<PAGE> 23
EXHIBIT A
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
CORIXA CORPORATION
The undersigned hereby certifies that:
1. She is the duly elected and acting Secretary of Corixa Corporation,
a Delaware corporation.
2. The Certificate of Incorporation of this corporation was originally
filed with the Secretary of State of Delaware on September 8, 1994.
3. Pursuant to Section 242 of the General Corporation Law of the State
of Delaware, this Certificate of Amendment of Certificate of Incorporation
amends the first paragraph of Article IV of this corporation's Certificate
of Incorporation to read in its entirety as follows:
"This corporation is authorized to issue two classes of stock to
be designated common stock ("Common Stock") and preferred stock ("Preferred
Stock"). The total number of shares which the Corporation is authorized to
issue is One Hundred Ten Million (110,000,000) shares. The number of shares
of Common Stock authorized to be issued is One Hundred Million
(100,000,000), par value $0.001 per share, and the number of shares of
Preferred Stock authorized to be issued is Ten Million (10,000,000), par
value $0.001 per share."
4. The foregoing Certificate of Amendment has been duly adopted by
this corporation's Board of Directors and stockholders in accordance with
the applicable provisions of Section 242 of the General Corporation Law of
the State of Delaware.
Executed at Seattle, Washington, , 2000.
--------------------------------------
Kathleen McKereghan, Secretary
A-3
<PAGE> 24
PROXY PROXY
CORIXA CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CORIXA CORPORATION FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 31, 2000
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 ___, 2000, and hereby
appoints _____________ and ___________ 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 Corixa Corporation to be held on May 31, 2000 at 1:00 p.m.,
local time, at 1124 Columbia Street, Seattle, WA 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 below:
PLEASE SIGN ON REVERSE SIDE AND RETURN IMMEDIATELY
FOLD AND DETACH HERE
<PAGE> 25
CORIXA CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. ELECTION OF DIRECTORS: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST
BELOW:
01 Steven Gillis, Ph.D.
02 Joseph S. Lacob
03 Mark McDade
04 Arnold L. Oronsky, Ph.D.
05 Andrew E. Senyei, M.D.
For All
Except as
For Withhold indicated
All All below.
[ ] [ ] [ ]
2. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION INCREASING
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 100,000,000 FROM 40,000,000:
For Against Abstain
[ ] [ ] [ ]
3. PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG, LLP AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000:
For Against Abstain
[ ] [ ] [ ]
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
_____________________________________________________
Signature
_____________________________________________________
Signature
Date:_____________________________________________________
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF DIRECTORS; (2) FOR THE
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION; (3) FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG, LLP AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000; AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE
MEETING.
FOLD AND DETACH HERE
