<PAGE>
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 Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
IMMUNEX 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 transaction 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:
------------------------------------------------------------------------
<PAGE>
[LOGO]
March 24, 1999
Dear Immunex Shareholders:
I am pleased to invite you to Immunex's Annual Meeting of Shareholders. The
meeting will be at 9:00 a.m. on Thursday, April 29, 1999 at Benaroya Hall,
Illsley Ball Nordstrom Recital Hall, 200 University Street, Seattle, Washington.
At the meeting, you will vote upon proposals to approve the 1999 Employee
Stock Purchase Plan and the 1999 Stock Option Plan, and a proposal to approve an
amendment to the Articles of Incorporation to increase the number of authorized
shares of common stock. In addition, you will elect nine directors to the
Immunex Board of Directors and transact any other business properly presented at
the meeting. You also will have the opportunity to hear what has happened in our
business in the past year and to ask questions. You will find other detailed
information about Immunex and our operations, including our audited financial
statements, in the enclosed 1998 Annual Report to Shareholders.
We hope you can join us on April 29. Whether or not you can attend, please
read the enclosed Proxy Statement. When you have done so, please mark your votes
on the enclosed proxy, sign and date the proxy, and return it to us in the
enclosed envelope. Your vote is important, so please return your proxy promptly.
Sincerely,
Scott G. Hallquist
SECRETARY
<PAGE>
[LOGO]
51 UNIVERSITY STREET
SEATTLE, WASHINGTON 98101
March 24, 1999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, APRIL 29, 1999
------------------------
Dear Immunex Shareholders:
On Thursday, April 29, 1999, Immunex Corporation will hold its Annual
Meeting of Shareholders at Benaroya Hall, Illsley Ball Nordstrom Recital Hall,
200 University Street, Seattle, Washington. The Annual Meeting will begin at
9:00 a.m. Only shareholders who owned stock at the close of business on the
record date, March 9, 1999, can vote at this meeting or any adjournments that
may take place. At the Annual Meeting we will ask you to:
- Elect a Board of Directors;
- Approve the 1999 Employee Stock Purchase Plan;
- Approve the 1999 Stock Option Plan;
- Approve an amendment to our Articles of Incorporation to increase the
number of authorized shares of common stock by 100,000,000; and
- Transact any other business properly presented at the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOUR
PROPOSALS OUTLINED IN THIS PROXY STATEMENT.
At the meeting we will also report on Immunex's 1998 business results and
other matters of interest to shareholders.
To ensure your representation at the Annual Meeting, you are urged to
complete, sign, date, and return the enclosed proxy card as soon as possible in
the enclosed postage-prepaid envelope. Your stock will be voted in accordance
with the instructions you give on your proxy card. You may, of course, attend
the Annual Meeting and vote in person even if you have previously returned your
proxy card.
The approximate date of mailing for this Proxy Statement and accompanying
proxy card(s) is March 24, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
Scott G. Hallquist
SECRETARY
PLEASE NOTE THAT ATTENDANCE AT THE ANNUAL MEETING WILL BE LIMITED TO
SHAREHOLDERS AS OF THE RECORD DATE, OR THEIR AUTHORIZED REPRESENTATIVES, AND
GUESTS OF IMMUNEX. YOUR ADMITTANCE TICKET IS INCLUDED IN THIS MAILING.
<PAGE>
CONTENTS
<TABLE>
<S> <C> <C>
INFORMATION CONCERNING SOLICITATION AND VOTING.............................................. 1
General.......................................................................... 1
Record Date and Outstanding Shares............................................... 1
Quorum........................................................................... 1
Revocability of Proxies.......................................................... 1
Solicitation of Proxies.......................................................... 1
Voting........................................................................... 1
PRINCIPAL SHAREHOLDERS...................................................................... 2
SECURITY OWNERSHIP OF MANAGEMENT............................................................ 3
PROPOSAL 1: ELECTION OF DIRECTORS........................................................... 4
Information on Committees of the Board of Directors and Meetings................. 6
Compensation of Directors........................................................ 7
PROPOSAL 2: APPROVAL OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN............................... 7
PROPOSAL 3: APPROVAL OF THE 1999 STOCK OPTION PLAN.......................................... 9
PROPOSAL 4: APPROVAL OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION......................
12
RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION AND AMERICAN CYANAMID COMPANY..........
13
Background....................................................................... 13
Governance Agreement............................................................. 14
Designation of Candidates for Board.............................................. 14
Certain Approval Rights.......................................................... 15
Subscription Rights of American Home Products.................................... 16
Standstill Provisions............................................................ 16
Transfer Of Immunex Common Stock By American Home Products....................... 16
Material Transactions With American Home Products................................ 17
Registration Rights.............................................................. 17
Guaranty Payments by American Home Products...................................... 17
Termination...................................................................... 17
Product Rights Agreement......................................................... 18
TACE Agreement................................................................... 19
TNFR License and Development Agreement........................................... 20
ENBREL Promotion Agreement....................................................... 20
EXECUTIVE OFFICERS.......................................................................... 21
EXECUTIVE COMPENSATION...................................................................... 22
Summary Compensation Table....................................................... 22
Option Grants in Fiscal 1998..................................................... 23
Option Exercises in Fiscal 1998 and Year-End Values.............................. 23
Change in Control and Employment Agreements...................................... 23
Compensation Committee Interlocks and Insider Participation...................... 24
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE AND THE STOCK OPTION PLAN
ADMINISTRATION COMMITTEE................................................................... 24
PERFORMANCE GRAPH........................................................................... 27
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..................................... 27
INDEPENDENT PUBLIC ACCOUNTANTS.............................................................. 28
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING............................................... 28
OTHER MATTERS............................................................................... 28
</TABLE>
<PAGE>
[LOGO]
------------------------
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The Board of Directors of Immunex Corporation is sending you this Proxy
Statement in connection with its solicitation of proxies for use at Immunex's
1999 Annual Meeting of Shareholders. The Annual Meeting will be held at Benaroya
Hall, Illsley Ball Nordstrom Recital Hall, 200 University Street, Seattle,
Washington, on Thursday, April 29, 1999 at 9:00 a.m. Immunex intends to give or
mail to shareholders definitive copies of this Proxy Statement and accompanying
proxy card(s) on or about March 24, 1999.
RECORD DATE AND OUTSTANDING SHARES
Only those shareholders who owned common stock at the close of business on
March 9, 1999, the record date for the Annual Meeting, can vote. At that date,
there were 40,418,354 issued and outstanding shares of common stock.
QUORUM
A quorum for the Annual Meeting is a majority of the outstanding shares of
common stock entitled to vote and present, whether in person or by proxy, at the
Annual Meeting.
REVOCABILITY OF PROXIES
If you give your proxy to Immunex, you have the power to revoke it at any
time before it is exercised. Your proxy may be revoked by:
- notifying the Secretary of Immunex in writing before the Annual Meeting;
- delivering to the Secretary of Immunex before the Annual Meeting a signed
proxy with a later date; or
- attending the Annual Meeting and voting in person.
SOLICITATION OF PROXIES
Immunex retained MacKenzie Partners, Inc., 156 Fifth Avenue, New York, New
York, to help solicit proxies. Immunex will pay the cost of their services,
which is estimated at approximately $5,000 plus expenses. Proxies will be
solicited by personal interview, mail and telephone. In addition, Immunex may
reimburse brokerage firms and other persons who represent beneficial owners of
common stock for their expenses in forwarding solicitation materials to
beneficial owners. Proxies may also be solicited by certain Immunex directors,
officers and regular employees, without additional compensation, personally or
by telephone or facsimile.
VOTING
You are entitled to one vote for each share of common stock you hold. For
the election of directors, the directors who receive the greatest number of
affirmative votes cast by holders of common stock present, in person or by
proxy, and entitled to vote at the Annual Meeting will be elected to the Board.
You are not entitled to cumulate votes in the election of directors. To approve
the adoption of the 1999 Employee Stock Purchase Plan and the 1999 Stock Option
Plan, the affirmative vote of the holders of a majority of the common stock
present, in person or by proxy, and entitled to vote at the Annual
<PAGE>
Meeting is required. To approve the amendment to the Articles of Incorporation,
the affirmative vote of holders of a majority of the outstanding common stock is
required.
If your shares are represented by proxy, they will be voted in accordance
with your directions. If your proxy is signed and returned without any direction
given, your shares will be voted in accordance with our recommendations. Immunex
is not aware, as of the date of this Proxy Statement, of any matters to be voted
on at the Annual Meeting other than as stated in the Proxy Statement and the
accompanying Notice of Annual Meeting of Shareholders. If any other matters are
properly brought before the Annual Meeting, the enclosed proxy gives
discretionary authority to the persons named in it to vote the shares in their
best judgment.
Except for the proposal to approve the amendment to the Articles of
Incorporation, abstention and broker non-votes will have no effect on any of the
proposals to be voted on at the Annual Meeting since they will not represent
votes cast at the Annual Meeting for the purpose of voting on such proposals.
For the proposal to approve the Articles of Incorporation, abstention and broker
non-votes will have the effect of a "NO" vote.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of December 31, 1998, certain information
regarding all shareholders known by Immunex to be the beneficial owners of more
than 5% of the outstanding voting securities of Immunex, based on publicly
available information. To Immunex's knowledge, the beneficial owners listed
below have sole voting and investment power with respect to the shares shown as
beneficially owned. The information is adjusted to reflect the 2-for-1 split of
the common stock effected March 25, 1999.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP CLASS
- -------------------------------------------------------------- ------------------ ------------------ -----------
<S> <C> <C> <C>
American Cyanamid Company(1).................................. Common Stock 43,206,516 54.1%
c/o American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
Wellington Management Company, LLP............................ Common Stock 8,031,520 10.0%
75 State Street
Boston, Massachusetts 02109
</TABLE>
- ------------------------
(1) American Cyanamid Company is a wholly owned subsidiary of American Home
Products Corporation.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 9, 1999, the number of
outstanding voting securities of Immunex beneficially owned by (1) each director
and each director nominee, (2) each executive officer for whom compensation is
reported in this Proxy Statement, and (3) all current directors and executive
officers as a group. The information is adjusted to reflect the 2-for-1 split of
the common stock effected March 25, 1999.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP CLASS
- --------------------------------------- -------------- --------------------- ------------
<S> <C> <C> <C>
Edward V. Fritzky...................... Common Stock 371,852(1) *
Scott G. Hallquist..................... Common Stock 215,164(2) *
Douglas G. Southern.................... Common Stock 154,048(3) *
Peggy V. Phillips...................... Common Stock 109,553(4) *
Douglas E. Williams.................... Common Stock 89,100(5) *
John E. Lyons.......................... Common Stock 30,000(6) *
Edith W. Martin........................ Common Stock 22,000(7) *
Kirby L. Cramer........................ Common Stock 10,000(8) *
Robert I. Levy......................... Common Stock -- --
Joseph J. Carr......................... Common Stock -- --
Joseph M. Mahady....................... Common Stock -- --
All current directors and executive
officers as a group (12 persons)...... Common Stock 1,080,932(9) 1.3%
</TABLE>
- ------------------------
* Less than 1% of the outstanding shares of common stock.
(1) Includes 356,000 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(2) Includes 181,640 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(3) Includes 145,180 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(4) Includes 107,300 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(5) Includes 89,100 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(6) Includes 30,000 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(7) Includes 20,000 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(8) Includes 10,000 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
(9) Includes 79,215 shares held by an executive officer of Immunex, which
includes 73,700 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
3
<PAGE>
The following table sets forth as of March 9, 1999, the number of
outstanding voting securities of American Home Products Corporation ("American
Home Products" or "AHP") beneficially owned by (1) each director and each
director nominee, (2) each executive officer for whom compensation is reported
in this Proxy Statement, and (3) all current directors and executive officers as
a group. The information is adjusted to reflect the 2-for-1 split of the common
stock effected March 25, 1999.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF OF
NAME OF BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP CLASS
- ---------------------------------------------------------------------- -------------- -------------------- ---------
<S> <C> <C> <C>
Edward V. Fritzky..................................................... Common Stock -- --
Scott G. Hallquist.................................................... Common Stock -- --
Douglas G. Southern................................................... Common Stock -- --
Peggy V. Phillips..................................................... Common Stock -- --
Douglas E. Williams................................................... Common Stock -- --
John E. Lyons......................................................... Common Stock -- --
Edith W. Martin....................................................... Common Stock -- --
Kirby L. Cramer....................................................... Common Stock -- --
Robert I. Levy........................................................ Common Stock 399,315(1) *
Joseph J. Carr........................................................ Common Stock 219,957(2) *
Joseph M. Mahady...................................................... Common Stock 30,480(3) *
All current directors and executive officers as a group (12
persons)............................................................. Common Stock 649,868 *
</TABLE>
- ------------------------
* Less than 1% of the outstanding shares of common stock.
(1) Includes 339,199 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(2) Includes 150,266 shares that are issuable upon exercise of stock options
that are currently exercisable or are exercisable within 60 days.
(3) Includes 26,666 shares that are issuable upon exercise of stock options that
are currently exercisable or are exercisable within 60 days.
PROPOSAL 1: ELECTION OF DIRECTORS
The shareholders will elect a Board of Directors of nine directors, each of
whom will hold office until the next annual meeting of shareholders and until
his or her successor is elected and qualified to serve.
Under the Amended and Restated Governance Agreement dated as of December 15,
1992, AHP is entitled to designate three Investor Directors (as defined below)
and one Independent Director (as defined below) for election to the Board. While
AHP has not yet designated a candidate to serve as an Independent Director, it
may do so at any time. See "RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION
AND AMERICAN CYANAMID COMPANY -- Governance Agreement -- Designation of
Candidates for Board of Directors." Proxies may not be voted for a greater
number of persons than the number of nominees named.
The Board has approved the nominees named below, who were designated in
accordance with the Governance Agreement. Unless otherwise instructed, persons
named in the accompanying proxy will vote for these nominees. Although Immunex
anticipates that all the nominees will be available to serve as directors,
should any of them not accept the nomination, or otherwise be unable to serve,
the proxies will be voted for the election of such substitute nominees in
accordance with the Governance Agreement.
4
<PAGE>
The following table sets forth the name and age of each nominee for election
as a director, the positions and offices held by the nominee with Immunex and
the period during which the nominee has served as a director of Immunex:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITIONS AND OFFICES WITH IMMUNEX SINCE
- ------------------- --- -------------------------------------------------- --------
<S> <C> <C> <C>
Edward V. Fritzky 48 Chief Executive Officer and Chairman of the Board 1994
Joseph J. Carr 56 Director 1995
Kirby L. Cramer 62 Director 1987
Robert I. Levy 61 Director 1998
John E. Lyons 73 Director 1993
Joseph M. Mahady 46 Director 1998
Edith W. Martin 53 Director 1993
Peggy V. Phillips 45 Senior Vice President, Pharmaceutical Development 1996
and Director
Douglas E. Williams 40 Senior Vice President, Discovery Research and 1996
Director
</TABLE>
Mr. Fritzky has been Chief Executive Officer and Chairman of the Board since
January 1994. Mr. Fritzky served as President of Lederle Laboratories
("Lederle"), a division of American Cyanamid Company ("Cyanamid"), from 1992 to
1994 and as Vice President of Lederle from 1989 to 1992. Prior to joining
Lederle, Mr. Fritzky was an executive of Searle Pharmaceuticals, Inc.
("Searle"), a subsidiary of Monsanto Company. During his tenure at Searle, Mr.
Fritzky was Vice President, Marketing and later President and General Manager of
Searle Canada, Inc. and Lorex Pharmaceuticals, a joint venture company.
Mr. Carr has been a director since January 1995. He joined AHP in 1982, and
served in various executive capacities prior to being named Vice President in
1989. In April 1991, Mr. Carr was appointed Group Vice President of AHP and, in
May 1993, Senior Vice President. See "RELATIONSHIP WITH AMERICAN HOME PRODUCTS
CORPORATION AND AMERICAN CYANAMID COMPANY."
Mr. Cramer has been a director since October 1987. Mr. Cramer is Chairman
Emeritus of Hazleton Laboratories Corporation and a Trustee Emeritus and former
President of the University of Virginia's Colgate Darden Graduate School of
Business Administration. Mr. Cramer is also past Chairman of the Advisory Board
of the School of Business Administration of the University of Washington. He
also serves on the board of directors of Landec Corporation, Ragen MacKenzie
Group Incorporated, SonoSite, Inc., Unilab, Inc. and certain privately held
companies. Mr. Cramer is the Chair of the Compensation Committee and the Stock
Option Plan Administration Committee.
Dr. Levy has been a director since April 1998. Dr. Levy has served since
March 1998 as Senior Vice President, Science and Technology of AHP. From March
1992 to March 1998, he served as the President of the Wyeth-Ayerst Research
division of AHP. See "RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION AND
AMERICAN CYANAMID COMPANY."
Mr. Lyons has been a director since June 1993. Mr. Lyons retired as Vice
Chairman of the Board of Merck & Company ("Merck") in 1991. He joined Merck in
1950 as a Research Chemist and held a number of senior marketing and sales
positions in the Merck, Sharp & Dohme division of Merck, serving as its
President from 1975 to 1985. He was appointed Corporate Senior Vice President of
Merck in 1982, Executive Vice President in 1985, and Vice Chairman of the Board
in 1988. Mr. Lyons also serves on the board of directors of Matrix
Pharmaceutical Company and Synaptic Pharmaceutical Company.
5
<PAGE>
Mr. Mahady has been a director since February 1998. Mr. Mahady has held
various positions with AHP and its Wyeth-Ayerst Laboratories division since
1979. He has been the President of Wyeth-Ayerst North America since September
1997. Previously, he was President of Wyeth-Ayerst Pharmaceutical Business
Division from August 1995 through September 1997, having previously been
promoted to Senior Vice President in February 1995 and Vice President in October
1991. See "RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION AND AMERICAN
CYANAMID COMPANY."
Dr. Martin has been a director since June 1993. Dr. Martin was a Vice
President and Chief Information Officer of Eastman Kodak Company, a position she
held from January 1996 to December 1997. Between September 1994 and February
1996, Dr. Martin was the Executive Vice President and Chief Technology Officer
of the Student Loan Marketing Association ("Sallie Mae"). Prior to joining
Sallie Mae, Dr. Martin had been Vice President and Chief Information Officer of
the International Telecommunications Satellite Organization ("INTELSAT") from
1992. Prior to joining INTELSAT, Dr. Martin was Vice President, High Technology
Center, The Boeing Company. Dr. Martin also serves on the board of directors of
Information Resources, Inc. and Pharmacopeia, Inc. Dr. Martin is the Chair of
the Audit Committee.
Ms. Phillips has been a director since July 1996. She joined Immunex in
1986, was named Senior Vice President, Pharmaceutical Development in September
1994, and was elected an executive officer of Immunex in July 1995. From 1991
until its dissolution in January 1995, Ms. Phillips was Senior Vice President
and Chief Operating Officer of Immunex Research and Development Corporation,
Immunex's former wholly owned research and development corporation. Ms. Phillips
received an M.S. in microbiology from the University of Idaho.
Dr. Williams has been a director since April 1996. He joined Immunex in 1988
and served as Vice President of Research and Development from 1992 until
September 1994, when he was appointed to his current position of Senior Vice
President, Discovery Research. Dr. Williams was elected an executive officer of
Immunex in July 1995. Dr. Williams received a Ph.D. in physiology from the State
University of New York at Buffalo, Roswell Park Memorial Institute Division.
INFORMATION ON COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
During the last fiscal year there were six meetings of the Board. All
incumbent directors except Dr. Levy and Dr. Martin attended at least 75% of the
Board meetings held. All incumbent directors except Dr. Levy attended at least
75% of the meetings held by all committees on which they served.
In accordance with the Governance Agreement, the Board maintains an Audit
Committee, a Compensation Committee, a Nominating Committee and a Stock Option
Plan Administration Committee.
The Audit Committee, currently composed of Messrs. Cramer and Lyons and Dr.
Martin, is responsible, among other things, for recommending to the Board the
selection of certified public accountants to the Board, reviewing the scope and
results of the audits and reviewing Immunex's accounting policies and
procedures, system of internal controls and the oversight of Immunex's Year 2000
Committee, which is an internal committee and not a committee of the Board that
is charged with responsibility for any modifications and replacements of
Immunex's systems and applications likely to be affected by the Year 2000 issue.
During the past year, there were two Audit Committee meetings.
The Compensation Committee, currently composed of Messrs. Carr, Cramer and
Lyons and Dr. Martin, is responsible among other things, for recommending to the
Board the adoption and amendment of employee benefit plans and arrangements and
the engagement of, and terms of any employment agreements and arrangements with,
and terminations of, all corporate executive officers. During the past year,
there were two Compensation Committee meetings.
6
<PAGE>
The Nominating Committee, currently composed of Mr. Carr and Dr. Williams,
is responsible for the nomination of directors and the solicitation of
shareholder proxies. Under the Governance Agreement, designation of directors
for nomination is to be made exclusively by Immunex and AHP. During the past
year, there were no Nominating Committee meetings.
The Stock Option Plan Administration Committee, currently composed of
Messrs. Carr, Cramer, Lyons and Mahady and Drs. Levy and Martin, is responsible,
among other things, for recommending to the Board the adoption and amendment of
all stock option plans of Immunex and for administering such plans. During the
past year, there were four Stock Option Plan Administration Committee meetings.
COMPENSATION OF DIRECTORS
Each Independent Director receives $6,000 per quarter and, if the
Independent Director is a Chair of a committee, an additional $1,000 per
quarter. In addition, each Independent Director receives $1,000 for each Board
meeting and each committee meeting attended in person and $500 for each such
meeting attended telephonically. Management Directors (as defined below) and
Investor Directors receive no additional compensation for attending Board or
committee meetings.
Under Immunex's Stock Option Plan for Nonemployee Directors, each
Independent Director receives a one-time grant of an option to purchase 10,000
shares of common stock on the day such director is initially elected or
appointed to the Board. Each Independent Director receives an annual grant of an
option to purchase 5,000 shares of common stock immediately following each
year's Annual Meeting of Shareholders. However, as a consequence of a 1999
amendment to the Stock Option Plan for Nonemployee Directors and the 2-for-1
split of the common stock effected March 25, 1999, each Independent Director
will receive an option to purchase a total of 10,000 shares of common stock
immediately following the 1999 Annual Meeting of Shareholders. Such options vest
at the rate of 20% per year over a five-year period.
PROPOSAL 2: APPROVAL OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
The Board unanimously recommends that you vote "FOR" adoption of the 1999
Employee Stock Purchase Plan (the "ESPP"). On February 23, 1999, the Board
unanimously approved the adoption of the ESPP subject to approval by the
shareholders at the Annual Meeting. The Board believes that since most of
Immunex's competitors offer an employee stock purchase plan, the ESPP will
enable Immunex to fill a significant gap in its stock-based employee benefit
plans offered to prospective and current employees. The Board also believes that
the ESPP will help Immunex attract and retain the services of certain employees
and provide added incentive to them by encouraging stock ownership in Immunex.
The proposed ESPP is attached to this Proxy Statement as Appendix A.
DESCRIPTION OF THE ESPP. Under the ESPP, qualified employees may purchase
shares of common stock through payroll deductions at a 15% discount from market
price, without incurring broker commissions. A maximum of 500,000 shares of
common stock will be available for purchase under the ESPP. To participate, an
individual employee must have a position with regular hours of 20 hours or more
per week, have been employed for at least three months (which may be changed by
the administrator of the ESPP for any future offering so long as such employment
period does not exceed two years) and not be a highly compensated employee with
a base salary greater than $175,000 per year. An employee may not continue his
or her participation in the ESPP in the event he or she is voluntarily or
involuntarily terminated, or if he or she owns or will own, as a result of
participating in the ESPP, 5% or more of the combined voting power or value of
Immunex capital stock or any related corporation. Non-employee directors of
Immunex are not eligible to participate in the ESPP. Approximately 1,000
employees are eligible to participate in the ESPP.
7
<PAGE>
The ESPP is divided into two six-month offering periods beginning on May 1
and November 1 of each year, provided that the first offering period after the
ESPP is adopted will begin on July 1, 1999 and end on October 31, 1999. During
these periods, participating employees accumulate funds in an account used to
buy common stock through payroll deductions at a rate of not less than 1% nor
more than 15% of such employee's base pay during each payroll period in the
purchase period. At the end of each six-month offering period, the market price
is determined and the participating employees' accumulated funds are used to
purchase the appropriate number of whole shares of common stock. No employee may
purchase more than $15,000 worth of common stock (based on the fair market value
of the common stock on the first day of an offering period) during any calendar
year under the ESPP.
In the ESPP, the purchase price per share of common stock is 85% of the
lesser of (1) the fair market value of the common stock on the offering date of
such offering and (2) the fair market value of the common stock on the purchase
date. On March 9, 1999, the closing price for Immunex's common stock on the
Nasdaq National Market was $157 1/4 per share.
Employees have no right to acquire shares under the ESPP upon termination of
their employment. Upon termination of employment for any reason prior to the
last business day of an offering period, Immunex will pay the balance in the
employee's account to the employee or to his or her estate. Neither payroll
deductions credited to an employee's account nor any rights with regard to the
purchase of shares under the ESPP may be assigned, transferred, pledged or
otherwise disposed of in any way by the employee, other than by will or the laws
of descent and distribution. Immunex may treat any such act as an election to
withdraw from the ESPP.
The common stock issued under the ESPP will be authorized but unissued
common stock.
ADMINISTRATION. The Board or the Compensation Committee will administer the
ESPP. If designated by the Board or the Compensation Committee, an executive
officer of Immunex may administer the ESPP. The Compensation Committee is
authorized to administer and interpret the ESPP and to make such rules and
regulations as it deems necessary to administer the ESPP, so long as such
interpretation, administration or application regarding purchases under the ESPP
corresponds to the requirements of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
AMENDMENT OF THE ESPP. The Board has the power to amend, suspend or
terminate the ESPP, except that the Board may not amend the ESPP without
shareholder approval if such approval is required by Section 423 of the Code.
FEDERAL INCOME TAX CONSEQUENCES. Immunex intends that the ESPP qualify as
an "employee stock purchase plan" under Section 423 of the Code. The following
discussion summarizes the material federal income tax consequences to Immunex
and the participating employees in connection with the ESPP under existing
applicable provisions of the Code and the accompanying regulations. The
discussion is general in nature and does not address issues relating to the
income tax circumstances of any individual employee. The discussion is based on
federal income tax laws in effect on the date of this Proxy Statement and is,
therefore, subject to possible future changes in the law. The discussion does
not address the consequences of state, local or foreign tax laws.
Under the Code, Immunex is deemed to grant employee participants in the ESPP
an "option" on the first day of each offering period to purchase as many shares
of common stock as the employee will be able to purchase with the payroll
deductions credited to his or her account during the offering period. On the
last day of each six-month offering period, the market price is determined and
the employee is deemed to have exercised the "option" and purchased the number
of shares of common stock his or her accumulated payroll deductions will
purchase at the market price.
The required holding period for favorable tax treatment upon disposition of
common stock acquired under the ESPP is the later of (1) two years after the
deemed "option" is granted (the first day of an offering period) and (2) one
year after the deemed "option" is exercised and the common
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stock is purchased (the last day of an offering period). Thus, the common stock
generally must be held for at least one and one-half years after it is purchased
to gain favorable tax treatment. When the common stock is disposed of after this
period, the employee realizes ordinary income to the extent of the lesser of (a)
the amount by which the fair market value of the common stock at the time the
deemed "option" was granted exceeded the "option price" and (b) the amount by
which the fair market value of the common stock at the time of the disposition
exceeded the "option price." "Option price" is equal to 85% of the lesser of the
fair market value of the common stock as of the first day of the offering period
and the fair market value of the common stock as of the last day of the offering
period. Thus, the maximum amount of gain taxable as ordinary income is the
amount of the 15% discount measured as of the last day of an offering period.
Any further gain is taxed at capital gain rates. If the sale price is less than
the option price, there is no ordinary income and the employee recognizes
long-term capital loss.
When an employee sells the common stock before the expiration of the
required holding period, the employee recognizes ordinary income to the extent
of the difference between the price actually paid for the common stock and the
fair market value of the common stock at the date the option was exercised (the
last day of an offering period), regardless of the price at which the common
stock is sold. If the sale price is less than the fair market value of the
common stock at the date of exercise, then the employee will also have a capital
loss equal to such difference.
Even though an employee who meets the requisite holding period must treat
part of his or her gain on a disposition of the common stock as ordinary income,
Immunex may not take a business deduction for such amount. However, if an
employee disposes of common stock before the end of the requisite holding
period, the amount of income that the employee must report as ordinary income
qualifies as a business deduction for Immunex for the year of such disposition.
PROPOSAL 3: APPROVAL OF THE 1999 STOCK OPTION PLAN
The Board unanimously recommends that you vote "FOR" adoption of the 1999
Stock Option Plan (the "1999 Plan"). On February 23, 1999, the Board unanimously
approved the adoption of the 1999 Plan subject to approval by the shareholders
at the Annual Meeting. The Board believes that the 1999 Stock Plan will help
Immunex attract and retain the services of individuals and provide added
incentive to them by encouraging stock ownership in Immunex. The proposed 1999
Plan is attached to this Proxy Statement as Appendix B.
DESCRIPTION OF THE 1999 PLAN. Options may be granted under the 1999 Plan to
those employees, directors, and officers of Immunex and its related corporations
that the 1999 Plan Administrator (as defined below) selects from time to time.
Approximately 1,000 individuals are expected to be eligible to participate in
the 1999 Plan.
Subject to adjustment as provided in the 1999 Plan, a maximum of 6,000,000
shares of common stock will be available for issuance under the 1999 Plan. The
Board believes that the 6,000,000 shares of common stock will adequately
replenish the pool of shares of common stock available for future use, since
Immunex currently has less than 550,000 shares of common stock available for
future stock grants under Immunex's 1993 Stock Option Plan (the "1993 Plan").
The Board also believes that the 6,000,000 shares of common stock available for
issuance under the 1999 Plan is an appropriate competitive amount. This amount
would place Immunex below the 50th percentile among its competitors when the
total number of stock options outstanding, plus the total number of shares
remaining in Immunex's stock option pool, is compared to the total number of
shares of common stock outstanding. Shares issued under the 1999 Plan will be
drawn from authorized but unissued shares.
Subject to adjustment as provided in the 1999 Plan, no more than 200,000
shares of common stock may be awarded in the aggregate to any one participant in
a single fiscal year, except that an additional 200,000 shares may be granted to
a newly hired individual. The above limits apply to the
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extent required for compliance with Section 162(m) of the Code. Section 162(m)
precludes Immunex from taking a tax deduction for compensation payments to
certain executives in excess of $1,000,000, unless such payments qualify for the
"performance-based" exemption from the $1,000,000 limitation.
Any shares of stock covered by an option that subsequently cease to be
subject to the option (other than by reason of exercise of the option) will
again be available for issuance under the 1999 Plan.
ADMINISTRATION. The Board, the Stock Option Plan Administration Committee
or another committee appointed by the Board will administer the 1999 Plan (the
"1999 Plan Administrator") and will have the authority to determine all matters
relating to options under the 1999 Plan, including the persons to whom options
are granted, the type of options, the number of shares of common stock subject
to an option, and all terms, conditions, restrictions and limitations of
options. The 1999 Plan Administrator will also have the exclusive authority to
interpret the 1999 Plan and may from time to time adopt, and change, rules and
regulations of general application for the 1999 Plan's administration.
OPTIONS. Options granted under the 1999 Plan may be either incentive stock
options ("ISOs") or nonqualified stock options ("NSOs"). The exercise price for
all ISOs granted under the 1999 Plan will not be less than 100% of the common
stock's fair market value on the date of grant and for NSOs will not be less
than 85% of the common stock's fair market value on the date of grant. "Fair
market value," for purposes of the 1999 Plan, means the closing price for the
common stock as reported by the Nasdaq National Market for a single trading day.
As mentioned previously, on March 9, 1999, the closing price for common stock on
the Nasdaq National Market was $157 1/4 per share.
The 1999 Plan Administrator has broad discretion to determine the terms and
conditions under which options are exercisable, but under no circumstances may
an option have a term exceeding ten years from the date it is granted. The
exercise price for shares purchased under options may be paid in cash or by
check, or, unless the 1999 Plan Administrator determines otherwise at the time
of grant before the option is exercised, by a combination of cash, check, shares
of common stock that have been held for at least six months, delivery of a
properly executed exercise notice, together with irrevocable instructions to a
broker to deliver to Immunex the amount of sale or loan proceeds necessary to
pay the exercise price, or any other type of consideration permitted by the 1999
Plan Administrator.
Each option will be exercisable according to a vesting schedule determined
by the 1999 Plan Administrator. If no vesting schedule is set forth in the
instrument evidencing the option, the option will become exercisable in five
equal annual installments beginning one year after the date of grant. The 1999
Plan Administrator will also determine the circumstances under which an option
will be exercisable in the event the optionee ceases to provide services to
Immunex or one of its related corporations. If not so established, options
generally will be exercisable for one year after termination of services as a
result of retirement, disability or death and for three months after all other
terminations, but in no event later than the remaining term of the option. An
option will terminate automatically if the optionee's services are terminated
for cause, as that term is defined in the 1999 Plan.
TRANSFERABILITY. Unless the 1999 Plan Administrator determines otherwise,
and except to the extent permitted by Section 422 of the Code, no option will be
assignable or otherwise transferable by the optionee other than by will or the
laws of descent and distribution and, during the optionee's lifetime, the option
may be exercised only by the optionee.
CORPORATE TRANSACTION. Unless the outstanding options will be replaced with
a comparable option by the successor corporation, immediately prior to certain
types of mergers, consolidations or similar events, as a result of which the
shareholders of Immunex receive cash, stock or other property in exchange for
their shares of common stock, the outstanding options will automatically
accelerate
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and become 100% vested. All such outstanding options will then terminate upon
such merger, consolidation or similar event.
WITHHOLDING. Immunex may require an optionee to pay to Immunex any
applicable withholding taxes that Immunex is required to withhold with respect
to the exercise of an option. The withholding tax may be paid in cash or,
subject to applicable law, the 1999 Plan Administrator may permit the optionee
to satisfy such obligations by delivering shares of common stock or by having
Immunex withhold such shares.
AMENDMENT AND TERMINATION. The 1999 Plan may be amended or terminated at
any time by the Board of Directors, provided that, to the extent required by
Section 422 of the Code or any applicable law or regulation, any amendment that
would increase the number of shares available under the 1999 Plan, modify the
class of persons eligible to receive options or otherwise require shareholder
approval must be approved by Immunex's shareholders. The 1999 Plan has no fixed
termination date; however, ISOs may not be granted more than ten years after the
later of the Board's adoption of the Plan and any amendment to the 1999 Plan
that is treated as the adoption of a new plan under Section 422 of the Code.
1999 PLAN BENEFITS. Since awards under the 1999 Plan will be discretionary,
awards that may be granted for the 1999 fiscal year are not presently
determinable. For purposes of comparison and adjusting for the 2-for-1 split of
the common stock effected March 25, 1999, during 1998 options to purchase an
aggregate of 290,000 shares of common stock were granted under Immunex's 1993
Stock Option Plan (the "1993 Plan") to all executive officers of Immunex as a
group at an exercise price of $31.125, and options to purchase 2,506,540 shares
of common stock were granted under the 1993 Plan to all other employees of
Immunex as a group (including officers who are not executive officers) at an
average exercise price of $31.55. Options granted under the 1993 Plan during
1998 to the named executive officers are set forth under "EXECUTIVE COMPENSATION
- -- Option Grants in Fiscal 1998." No options were granted under the 1993 Plan
during 1998 to directors or nominees for director who are not also executive
officers of Immunex.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion summarizes the
federal income tax consequences of the 1999 Plan based on current provisions of
the Code, which are subject to change. Any such changes could be applied on a
retroactive basis and could adversely alter the consequences discussed herein.
The summary does not cover any state or local tax consequences of participating
in the 1999 Plan and does not address issues related to the tax consequences of
any individual participant. Participants are urged to consult with their tax
advisors regarding the effect of participating in the 1999 Plan based on their
particular circumstances.
INCENTIVE STOCK OPTIONS ("ISOS"). An optionee will not have any income at
the time an ISO is granted. When an optionee exercises an ISO while employed by
Immunex or one of its related corporations or within three months (one year in
case of disability) after termination of employment, no ordinary income will be
recognized by the optionee at that time. However, the excess (if any) of the
fair market value of the shares acquired upon such exercise over the option
price is a preference item that may cause the optionee to be subject to an
"alternative minimum tax." If the shares acquired upon exercise are not disposed
of within either one year from the date of exercise or two years from the date
of grant of the option, the excess (if any) of the sales proceeds over the
aggregate option price of such shares will be long-term capital gain eligible
for favorable rates under the Code. If the shares are sold prior to the
expiration of such periods (a "disqualifying disposition"), the optionee will
recognize ordinary income in the year of the disqualifying disposition equal to
the excess of the fair market value of the shares at the time the ISO is
exercised (or, if less, the sales proceeds) over the option price. Any
additional gain will be capital gain. If an ISO is exercised by the optionee
more than three months (one year in the case of disability) after termination of
employment, the tax consequences are the same as those described below for
nonqualified stock options.
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Immunex is not entitled to a tax deduction as the result of the grant or
exercise of an ISO. If the optionee has ordinary income taxable as compensation
as a result of a disqualifying disposition, Immunex will be entitled to a
deduction at the same time and in the same amount as the optionee, assuming that
the deduction is not otherwise disallowed by the Code.
NONQUALIFIED STOCK OPTIONS ("NSOS"). An optionee will not have any income
at the time an NSO is granted. When an optionee exercises an NSO, the difference
between the option price and the fair market value of the shares on the date of
exercise will be ordinary income (subject to payroll taxes and tax withholding)
to the optionee and will be allowed as a deduction to Immunex for federal income
tax purposes, assuming that the deduction is not otherwise disallowed by the
Code. When an optionee disposes of shares acquired by exercise of the option,
any amount received in excess of the market value of the shares on the date of
exercise will be treated as long-term or short-term capital gain, depending on
how long the shares have been held. If the amount received is less than the
market value of the shares on the date of exercise, the loss will be treated as
a long-term or short-term capital loss, depending on how long the shares have
been held.
STOCK-FOR-STOCK EXCHANGES. Special rules apply if the exercise price for an
option is paid for with shares previously owned by the optionee rather than in
cash. Participants considering the use of previously owned shares to pay the
exercise price of an option should consult their tax advisors.
PROPOSAL 4: APPROVAL OF THE AMENDMENT TO THE ARTICLES OF INCORPORATION
The Board unanimously recommends that you vote "FOR" the proposed amendment
to Article 2 of the Articles of Incorporation that increases the number of
authorized shares of common stock by 100,000,000, from 100,000,000 to
200,000,000. On February 23, 1999, the Board unanimously adopted the amendment,
subject to approval by the shareholders at the Annual Meeting.
We believe that the proposed amendment is desirable because it will provide
Immunex with sufficient authorized but unissued common stock for valid corporate
purposes, such as stock dividends. On February 23, 1999, the Board approved a
2-for-1 split of the common stock, which will be effected on March 25, 1999. The
availability of the newly authorized shares of common stock will permit Immunex
to take timely advantage of market conditions and favorable opportunities
without the delay and expense associated with holding a special meeting of its
shareholders when such additional shares are needed.
DESCRIPTION OF THE PROPOSED AMENDMENT. Section 1 of Article 2 of Immunex's
Articles of Incorporation currently provides that Immunex shall have the
authority to issue up to 105,000,000 shares, consisting of 100,000,000 shares of
common stock having par value of $.01 per share and 5,000,000 shares of
preferred stock having a par value of $.01 per share. On the record date, there
were 40,418,354 shares of common stock issued and outstanding and no shares of
preferred stock issued and outstanding. In addition, as of the record date,
Immunex had outstanding employee stock options for 6,633,775 shares. Immunex has
reserved an additional 520,022 shares of authorized but unissued common stock
for future issuance of stock options. After giving effect to the March 25, 1999
stock split, Immunex will have only 4,855,698 reserved shares of authorized but
unissued common stock for future issuance.
Under the proposed amendment, the number of authorized shares of common
stock would increase by 100,000,000. Based on shares outstanding on the record
date and assuming the shareholders approve the ESPP and the 1999 Plan, Immunex
would have 98,355,698 shares of common stock authorized, unissued and not
reserved for issuance as a result of the proposed amendment. The number of
authorized shares of preferred stock would remain at 5,000,000 shares. The
holders of common stock do not presently have preemptive rights to subscribe for
the additional common stock proposed to be authorized. If the proposed amendment
is approved, it will be effective upon the filing
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of Articles of Amendment with the Washington Secretary of State, which will be
done as soon as practicable after approval of the proposal by the shareholders.
EFFECT OF PROPOSED AMENDMENT. If approved, the amendment will not, by
itself, have any effect on the rights of holders of presently issued and
outstanding shares of common stock. However, most issuances of the additional
common stock would dilute earnings per share and voting rights of the current
holders of common stock. The additional common stock would have rights identical
to the currently outstanding common stock.
RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION
AND AMERICAN CYANAMID COMPANY
BACKGROUND
On June 1, 1993, Immunex's predecessor ("Predecessor Immunex") was merged
(the "Merger") into Lederle Oncology Corporation, a previously nondistinct
operating unit of Cyanamid, pursuant to an Amended and Restated Agreement and
Plan of Merger dated as of December 15, 1992 among Predecessor Immunex, Cyanamid
and Lederle Oncology Corporation (the "Merger Agreement"). Cyanamid received
53.5% of the common stock outstanding immediately following the effective time
of the Merger (the "Effective Time"), on a fully diluted basis.
Simultaneously with entering into the Merger Agreement, Predecessor Immunex
and Cyanamid entered into the Governance Agreement. AHP assumed the rights and
obligations of Cyanamid under the Governance Agreement, which includes, among
other things, certain agreements of the parties relating to:
- the corporate governance of Immunex, including the Board's composition;
- AHP's rights to purchase additional shares of common stock from Immunex if
certain events occur;
- future purchases and sales of Immunex's securities by AHP;
- rights of Board members designated by AHP to approve certain corporate
actions;
- the requirement that a supermajority of the Board members approve certain
corporate actions; and
- payments to be made by AHP to Immunex in the event that the products of
the Lederle Oncology Business (as defined below) and certain other new
products of Immunex did not achieve specified revenue targets.
In addition, under the Merger Agreement, Immunex, Cyanamid and certain of
their respective subsidiaries entered into certain agreements at the closing of
the Merger relating to cooperation in research and development, supply and
manufacture of certain products, and other matters.
In late 1994, all the outstanding shares of common stock of Cyanamid were
acquired by AHP. Cyanamid is currently a wholly owned subsidiary of AHP. Under
an agreement dated September 20, 1994 between Immunex and AHP, AHP agreed not to
take any action to cause Cyanamid or its subsidiaries to violate any of their
obligations to Immunex. AHP also agreed that if it causes the separate existence
of Cyanamid or any of Cyanamid's subsidiaries having obligations to Immunex to
cease, or causes such entity to transfer all or substantially all of its assets,
AHP will make appropriate provision so that any successor to such entity or
transferee of such assets that is an affiliate of AHP will be bound by and
required to perform its obligations to Immunex. In addition, AHP agreed it will
not take any action to cause Cyanamid or its subsidiaries to violate their
obligations to Immunex. All references to AHP in this Proxy Statement include
AHP and its subsidiaries, divisions or affiliates that have assumed the
obligations of Cyanamid.
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GOVERNANCE AGREEMENT
DESIGNATION OF CANDIDATES FOR BOARD
The Board following the Annual Meeting will consist of nine directors. Under
the Governance Agreement, three directors are designated for election by Immunex
(the "Management Directors"), three are designated for election by AHP (the
"Investor Directors"), three independent directors are designated for election
by agreement of Immunex and AHP, and AHP has the right to designate a fourth
independent director for election (the "Independent Directors").
At all times during the term of the Governance Agreement, the number of
directors that AHP and the management of Immunex have the right to designate
will be determined by the percentage interest of Immunex beneficially owned by
AHP. If AHP's interest is:
- below 20%, AHP will have no right to designate any directors, and the
management of Immunex will have the right to designate six Management
Directors;
- 20% or above but less than 35%, AHP will have the right to designate one
Investor Director, and the management of Immunex will have the right to
designate five Management Directors;
- 35% or above but less than 45%, AHP will have the right to designate two
Investor Directors, and the management of Immunex will have the right to
designate four Management Directors;
- 45% or above but less than 65%, AHP will have the right to designate three
Investor Directors, and the management of Immunex will have the right to
designate three Management Directors; and
- 65% or above, AHP will have the right to designate four Investor
Directors, by adding an additional Investor Director to the Board, and the
management of Immunex will have the right to designate three Management
Directors.
In the event that AHP's interest is such that there are more Investor Directors
on the Board than AHP has the right to designate, AHP will promptly cause to
resign, and take all other action reasonably necessary to cause the prompt
removal of, that number of Investor Directors as required to make the remaining
number of Investor Directors conform with the above formula. Similarly, in the
event that AHP's interest is such that there are more Management Directors on
the Board than the management of Immunex has the right to designate, the
management of Immunex will promptly cause to resign, and take all other action
reasonably necessary to cause the prompt removal of, that number of Management
Directors as required to make the remaining number of Management Directors
conform with the above formula.
With certain exceptions, AHP and the Management Directors will have the
right to designate replacements for directors designated under the Governance
Agreement by AHP or the Management Directors, at the termination of such
director's term or upon death, resignation, retirement, disqualification,
removal from office or other cause. The Board will elect each person so
designated upon nomination by the Nominating Committee, which consists of an
equal number of directors designated by each of Immunex and AHP. No individual
who is an officer, director, partner or principal shareholder of any competitor
of Immunex or any of its subsidiaries (other than AHP and its affiliates) may be
designated to serve as a director of Immunex.
In any election of directors or any meeting of the shareholders of Immunex
called expressly for the removal of directors, AHP and its affiliates will vote
their shares of common stock for all nominees in proportion to the votes cast by
the other shareholders of Immunex, except that AHP and its affiliates may cast
any or all of their votes, in their sole discretion, (1) in favor of any nominee
designated by AHP under the Governance Agreement and (2) in connection with any
election contest to which Rule 14a-11 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"),
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applies. With certain limited exceptions, in all other matters submitted to a
vote of shareholders of Immunex, AHP may vote any or all of its shares in its
sole discretion.
CERTAIN APPROVAL RIGHTS
So long as AHP has the right to designate at least two Investor Directors,
the approval of at least one of the Investor Directors will be required for the
Board to approve and authorize certain corporate actions. Such actions include,
without limitation:
- the entry by Immunex or any of its subsidiaries into any merger or
consolidation or the acquisition by Immunex or any of its subsidiaries of
any business or assets that would constitute more than 10% of the fair
market value of the total assets of Immunex and its subsidiaries;
- the sale, lease, pledge, grant of security interest in, license, transfer
or other disposal by Immunex or any of its subsidiaries of more than 10%
of the fair market value of the total assets of Immunex and its
subsidiaries;
- with certain exceptions, the issuance of any debt or equity securities or
other capital stock of Immunex or any of its subsidiaries;
- a reclassification, split, redemption or other acquisition of any of the
debt or equity securities of Immunex or any of its subsidiaries (subject
to certain exceptions);
- any amendment to Immunex's Articles of Incorporation or Bylaws or any
change in the size or composition of the Board or a committee thereof,
except in accordance with the Governance Agreement;
- the establishment of any committee of the Board not specifically described
in the Governance Agreement;
- any change in accounting policies or procedures of Immunex or any of its
subsidiaries;
- the payment or discharge of any claim, liability or obligation other than
in the ordinary course of business, except where such claim, liability or
obligation does not exceed $350,000;
- the commencement or termination of any suit, litigation or proceeding with
respect to patent rights, and any other suit, litigation or proceeding
that involves a claim, liability or obligation in excess of $350,000 or
that is material to Immunex's business or assets;
- any (a) incurrence of indebtedness for borrowed money other than as
provided for in Immunex's annual operating plans (the "Annual Operating
Plans") provided to AHP or its affiliates from time to time or (b) capital
expenditure by Immunex or any of its subsidiaries that is greater than
both (1) $350,000 and (2) the amount provided for such expenditure in the
Annual Operating Plans;
- the institution by Immunex or any of its subsidiaries of any shareholder
rights plan or similar plan or device;
- the acquisition by Immunex or any of its subsidiaries of technology or
products under any license or similar arrangement if the payments under
all such licenses that are not contingent on sales of licensed technology
or products would exceed $500,000 during any year; or
- the dissolution of Immunex or any of its subsidiaries, the adoption of a
plan of liquidation for Immunex or any of its subsidiaries or any action
by Immunex or any of its subsidiaries to commence any bankruptcy or
similar proceeding.
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The approval of seven directors (or, if the Board consists of more than nine
persons, that number of directors that represents 70% of the total number of
directors, rounded up), will be required for the Board to approve any of the
following:
- the employment of the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer or Chief Scientific Officer of Immunex (each, a
"Senior Officer");
- Annual Operating Plans for Immunex and its subsidiaries, which shall
include all material capital expenditures and borrowing plans applicable
to the year in question;
- Immunex's five-year product development and facility plans; and
- amendment of the Governance Agreement or provisions of Immunex's Articles
of Incorporation or Bylaws implementing the provisions of the Governance
Agreement (this act also requires the additional approval of two
Independent Directors).
The approval of six directors, which six directors must include each of the
Independent Directors, will be required to authorize and approve the termination
of any Senior Officer.
SUBSCRIPTION RIGHTS OF AMERICAN HOME PRODUCTS
So long as AHP has the right to designate at least one Investor Director,
AHP must be offered the right to purchase a pro rata share of new securities
prior to any issuance of securities by Immunex. The foregoing right does not
apply, however, to securities issued upon exercise of outstanding options or
warrants and to certain other issuances specified in the Governance Agreement.
So long as AHP has the right to designate at least one Investor Director,
AHP has the option to purchase from Immunex on a quarterly basis additional
shares of common stock or other voting stock of Immunex to the extent necessary
to permit AHP to maintain the percentage of shares of common stock or other
voting stock of Immunex, as the case may be, owned by AHP and its affiliates as
of the immediately preceding quarter. The per share purchase price of such
shares of common stock or other voting stock of Immunex, as the case may be,
will be equal to the fair market value of such shares, as determined in
accordance with the Governance Agreement, on the date of AHP's purchase.
STANDSTILL PROVISIONS
AHP had agreed, subject to certain exceptions, not to directly or indirectly
purchase or otherwise acquire, or propose or offer to purchase or otherwise
acquire, any equity securities of Immunex, whether by tender offer, market
purchase, private negotiated purchase, Business Combination (as defined in the
Governance Agreement) or otherwise if, immediately after such purchase or
acquisition, AHP's beneficial interest in Immunex would exceed 53.5% on a fully
diluted basis. This provision expired on June 1, 1998.
TRANSFER OF IMMUNEX COMMON STOCK BY AMERICAN HOME PRODUCTS
AHP has agreed that AHP and its wholly owned subsidiaries may transfer (an
"Acquisition Sale") all (but not less than all) the shares of common stock of
Immunex beneficially owned by them to any other person other than an affiliate
of AHP, provided that such other person has offered to acquire all outstanding
shares of common stock of Immunex on the same terms and conditions as such
Acquisition Sale. In addition, if AHP intends to engage in an Acquisition Sale
it is required to notify Immunex of such intent and, for three months subsequent
to such notice, Immunex will have the opportunity to present to AHP a potential
buyer willing to purchase all (but not less than all) the shares of common stock
of Immunex beneficially owned by AHP and its wholly owned subsidiaries. In the
event that a potential buyer is presented, AHP may not consummate an Acquisition
Sale on terms less favorable to AHP than those proposed by such potential buyer.
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MATERIAL TRANSACTIONS WITH AMERICAN HOME PRODUCTS
Immunex may not enter into any contract, agreement or transaction with AHP
or any of its affiliates that is material to Immunex's business, taken as a
whole, unless two-thirds of the members of the Board, excluding the Investor
Directors and including at least two Independent Directors, approve such
contract, agreement or transaction.
REGISTRATION RIGHTS
The holders of at least 25% of the Registrable Securities (as defined in the
Governance Agreement) (the "Initiating Holders") may request that Immunex file a
registration statement under the Securities Act covering the registration of any
or all Registrable Securities held by such Initiating Holders. Immunex will not
be obligated to effect more than two such registrations. The Governance
Agreement, however, does not limit the number of registrations on Form S-3 that
may be requested and obtained if Immunex is eligible to use Form S-3, provided
that the estimated aggregate offering price to the public exceeds $25,000,000
and the other provisions of the Governance Agreement are satisfied.
Subject to certain conditions, if Immunex proposes to file a registration
statement under the Securities Act on any form (other than on Form S-4 or S-8)
that also would permit the registration of Registrable Securities, and such
filing is to be on behalf of Immunex or selling holders of its securities for
the general registration of shares of common stock for cash, Immunex must give
notice thereof to the holders of the registration rights and permit such holders
to include Registrable Securities in the registration.
AHP's registration rights are subject to certain conditions set forth in the
Governance Agreement. In addition, the Governance Agreement sets forth specific
procedures relating to such registration rights and detailed obligations of the
parties relating thereto. All expenses incident to the performance by Immunex of
its obligations relating to the registration of AHP's shares of common stock
will be paid by Immunex, except that the Initiating Holders will pay all
expenses incident to the second registration. In addition, the holders of
Registrable Securities will pay the underwriting commissions and discounts
applicable to securities offered for their account in connection with any
registrations, filings and qualifications made pursuant to the Governance
Agreement, as well as related attorneys' fees. Immunex and the holders of
Registrable Securities each have agreed to indemnify the other, in certain
instances, for liabilities incurred in connection with such registrations.
GUARANTY PAYMENTS BY AMERICAN HOME PRODUCTS
Until December 31, 1997, AHP was obligated to make certain payments to
Immunex if revenues from products from those assets and contractual obligations
of Cyanamid's oncology business in the United States and Canada that Cyanamid
contributed to Lederle Oncology Corporation just prior to the Effective Time
(the "Lederle Oncology Business") and certain other products of Immunex did not
achieve certain annual targets (the "Target Revenue"). The final payment by AHP
was $60,000,000 in February 1998 for the 1997 sales year.
TERMINATION
The Governance Agreement will terminate on the earlier of such time as AHP
and its affiliates (1) beneficially own 95% of all classes and series of common
stock and (2) no longer own any such shares.
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<PAGE>
PRODUCT RIGHTS AGREEMENT
On July 1, 1998, Immunex entered into a Product Rights Agreement with AHP,
acting through its Wyeth-Ayerst Research division, and Cyanamid, acting through
its Lederle division. Under the Product Rights Agreement, certain prior
agreements among the parties were terminated (as discussed below), and Immunex
granted AHP an option to obtain exclusive royalty-bearing worldwide licenses to
certain Immunex products for all indications (the "Product Calls").
The Product Rights Agreement terminated all provisions of the Research
Agreement, dated as of July 1, 1996, among Immunex, AHP and Cyanamid, with the
exception of certain rights of first refusal held by AHP (as discussed below).
As a result, Immunex's $16,000,000 (adjusted annually for inflation) annual
research payment obligation to Wyeth-Ayerst under the Research Agreement was
canceled. Immunex fully satisfied its 1998 and final research payment obligation
to AHP by the payment of $8,258,033 through June 30, 1998. In addition,
Immunex's exclusive North American rights to certain oncology products resulting
from research and development by Wyeth-Ayerst Research, and AHP's exclusive
rights outside North America to certain oncology products resulting from Immunex
research and development, were both terminated. In addition, because AHP has
returned to Immunex the rights held by AHP and its affiliates outside North
America to LEUKINE-Registered Trademark- (sargramostim, GM-CSF), MOBIST-TM-
(FLT-3 ligand), and Interleukin-15 (IL-15), Immunex holds worldwide rights to
these products and will pay certain royalties to AHP on any future sales outside
North America of these products.
AHP retains certain rights of first refusal which had been set forth in the
Research Agreement. AHP may exercise these rights of first refusal if the Board
determines that Immunex will not market a product or technology by itself in any
part of the world where Immunex has or acquires marketing rights. AHP's right of
first refusal applies to Immunex products and technologies in all fields,
including NUVANCE-TM- (IL-4 receptor), but does not apply to LEUKINE, MOBIST,
IL-15, CD40 ligand and certain other products.
The Product Rights Agreement provides AHP with a Product Call for up to four
Immunex products over a period discussed below. The Product Rights Agreement
also provides that AHP must exercise a Product Call for an Immunex product, if
at all, within certain time periods. Certain Immunex products are excluded from
Product Calls, including, but not limited to, ENBREL-Registered Trademark-
(etanercept), LEUKINE, NUVANCE, MOBIST, CD40 ligand, IL-15, any product marketed
by Immunex as of July 1, 1998, and certain other products.
Upon exercising a Product Call for an Immunex product, AHP and Immunex will
enter into an "Elected Product Agreement" granting AHP exclusive worldwide
rights (or if less than exclusive worldwide rights are held by Immunex, all of
Immunex's rights) to such product for all indications. Under the Elected Product
Agreement, AHP will commit to pay Immunex an initial fee, milestone payments and
certain royalties on any eventual worldwide net sales of the product subject to
the Product Call after regulatory approvals. The initial fee, milestone payments
and royalties are determined by the development stage of the product when the
Product Call is exercised. In the aggregate, the initial fees and milestone
payments range from $25,000,000 if Immunex has formally accorded the product
U.S. IND status to $70,000,000 after notice by Immunex to AHP that data from the
first positive Phase II clinical trial results are available for the product.
The royalties payable to Immunex also increase based on the development stage of
the product subject to the Product Call and based upon such product attaining
certain annual net sales thresholds.
Immunex has the right to retain all rights to up to two products for which
AHP has exercised Product Calls (each, a "Conversion Right") in exchange for
Immunex's commitment to pay certain milestone payments and royalties to AHP and,
in the case of a second Conversion Right only, an initial fee. The milestone
payments payable by Immunex are fixed at one-half the amount otherwise payable
by AHP, and the royalties paid by Immunex are in all cases fixed at the lowest
of the four levels of
18
<PAGE>
royalties otherwise payable by AHP. In the event Immunex exercises one of its
Conversion Rights for an Immunex product, which rights must be exercised, if at
all, within 30 days after AHP exercises one of its Product Calls, Immunex and
AHP will enter into a "Converted Product Agreement" with respect to such product
providing for such payments to AHP, unless AHP has exercised its option to
obtain a replacement Product Call (as discussed below).
Immunex may not exercise its Conversion Rights on both of the first two
Product Calls exercised by AHP. If Immunex exercises a Conversion Right, AHP may
within 30 days elect to obtain one replacement Product Call from Immunex and, by
so electing, AHP waives its right to receive an initial fee (if applicable),
milestone payments and royalties from Immunex on such converted product. If
either Immunex or AHP exercises its rights under the Product Rights Agreement
and acquires or retains rights to a product, as applicable, the exercising party
will assume independent development responsibility for the product, including
all funding related thereto.
The Product Rights Agreement terminates the New Oncology Product License
Agreement, dated as of June 1, 1993 and amended as of July 1, 1996, between
Immunex and Cyanamid, pursuant to which Immunex had granted to Cyanamid an
exclusive license to make, have made, use and sell outside North America certain
oncology products resulting from the research and development efforts of
Immunex. As a result of the termination, the applicable oncology product rights
outside North America previously granted to Cyanamid return to Immunex in
exchange for royalty payments from Immunex to AHP on future sales of LEUKINE,
MOBIST and IL-15 outside North America. The Product Rights Agreement also
terminated the FLT-3 Ligand License and Development Agreement, effective as of
July 1, 1996, between Immunex and AHP, pursuant to which Immunex granted AHP
exclusive rights to FLT-3 ligand outside North America and AHP committed to
paying Immunex a royalty equal to 5% of the net sales outside North America.
AHP's rights to exercise additional Product Calls will terminate upon the
first to occur of the following events: (1) AHP has exercised Product Calls and
entered into Elected Product Agreements with respect to four Immunex products,
subject to Immunex's two Conversion Rights and AHP's replacement Product Call,
(2) June 30, 2008, with an additional year if Immunex exercises both of its
Conversion Rights, or (3) upon the later of June 30, 2003 or the date by which
AHP has been provided with an aggregate of eight Candidate Product Opportunities
(as defined in the Product Rights Agreement) to exercise a Product Call, which
number increases to nine Candidate Product Opportunities in certain
circumstances. AHP's rights of first refusal to Immunex products and
technologies will terminate upon the later of June 30, 2003 or the date that AHP
or its affiliates cease to be a majority shareholder of Immunex.
TACE AGREEMENT
In December 1995, Immunex and AHP entered into a License Agreement and a
Research Collaboration, Development and License Agreement relating to tumor
necrosis factor converting enzyme (the "TACE Agreements"). Pursuant to the TACE
Agreements, Immunex has granted AHP a worldwide exclusive license under Immunex
intellectual property relating to TACE, and agreed to collaborate with AHP in
developing TACE inhibitors, in consideration of certain fixed payments for
research services, and contingent additional payments that are payable upon
achievement of specified research and clinical milestone events. In 1997,
Immunex recognized $6,000,000 in revenues under the TACE Agreements. In
September 1997, in conjunction with the Promotion Agreement discussed below, AHP
and Immunex amended one of the TACE Agreements in order to substantially
increase the royalty payable by AHP to Immunex on the first TACE molecule
approved by the United States Food and Drug Administration (the "FDA"), if any.
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<PAGE>
TNFR LICENSE AND DEVELOPMENT AGREEMENT
On July 1, 1996, Immunex and AHP entered into a TNFR License and Development
Agreement (the "TNFR License Agreement"), which restates AHP's exclusive rights
to ENBREL (etanercept) outside North America and addresses joint project
management, cost sharing, manufacturing responsibilities, intellectual property
protection and disposition of rights upon relinquishment or termination of
product development. Previously, AHP's rights in ENBREL had been stated in the
superseded Research and Development Agreement between Immunex and Cyanamid.
AHP's shared development costs totaled $10,184,704 during 1998.
ENBREL PROMOTION AGREEMENT
On September 25, 1997, Immunex and AHP entered into the ENBREL Promotion
Agreement, under which AHP, acting through its Wyeth-Ayerst Laboratories
division, has the rights to promote ENBREL to all appropriate customer segments
in North America for all approved indications other than oncology. Under the
terms of the ENBREL Promotion Agreement, which is a long-term agreement, Immunex
may receive up to $100,000,000 from AHP in nonrefundable scheduled payments for
the North American promotion rights to ENBREL. In September 1997, Immunex
received a $15,000,000 scheduled payment from AHP upon the signing of the ENBREL
Promotion Agreement. In June 1998, Immunex received a $20,000,000 scheduled
payment from AHP when Immunex's biologics license application was accepted for
review by the FDA, and in December 1998 Immunex received a $30,000,000 scheduled
payment from AHP upon FDA approval of ENBREL. The ENBREL Promotion Agreement
also addresses (1) the formation of a joint ENBREL Management Committee, (2)
payment to AHP of a certain percentage of any gross profits of ENBREL in North
America, (3) an allocation of each party's commercial expenses associated with
marketing and sales activities with respect to ENBREL, (4) Immunex's retained
rights to promote ENBREL in North America for any approved oncology indications
and to co-promote ENBREL in North America for any approved indications promoted
by AHP, (5) AHP's reimbursement of certain clinical and regulatory expenses
associated with obtaining certain new indications for ENBREL, (6) an allocation
of certain intellectual property expenses, (7) certain protections for Immunex
in the event AHP markets a product in North America that is directly competitive
with ENBREL, and (8) the payment of certain residual royalties to AHP in the
three years following completion of AHP's activities under the ENBREL Promotion
Agreement.
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EXECUTIVE OFFICERS
The following persons are executive officers of Immunex who will serve in
the capacities noted until April 29, 1999, or until the election and
qualification of their successors. Each officer named below is expected to be
reelected at the Board meeting to be held on April 29, 1999.
<TABLE>
<CAPTION>
OFFICER
NAME AGE POSITIONS AND OFFICES WITH IMMUNEX SINCE
- --------------------------- --- ---------------------------------------------------------------------- -----------
<S> <C> <C> <C>
Edward V. Fritzky 48 Chief Executive Officer 1994
Scott G. Hallquist 45 Senior Vice President; General Counsel; Secretary 1987
Peggy V. Phillips 45 Senior Vice President, Pharmaceutical Development 1995
Douglas G. Southern 56 Senior Vice President; Chief Financial Officer; Treasurer 1991
Leonard R. Stevens 49 Senior Vice President, Marketing 1994
Douglas E. Williams 40 Senior Vice President, Discovery Research 1995
</TABLE>
For the biographical summaries of Mr. Fritzky, Ms. Phillips and Dr.
Williams, see "PROPOSAL 1: ELECTION OF DIRECTORS."
Mr. Hallquist has been Senior Vice President, General Counsel and Secretary
since October 1990. Mr. Hallquist joined Immunex in June 1986, initially as
Director, Legal Affairs. He was elected to serve as Secretary in May 1987 and as
Vice President and General Counsel in January 1989. Prior to joining Immunex, he
was employed by E.I. du Pont de Nemours & Co. as patent counsel. Mr. Hallquist
is a director of Qual-Med Washington Health Plan, Inc., a health maintenance
organization and subsidiary of Health Systems International, Inc. Mr. Hallquist
received an M.B.A. and a J.D. from the University of North Carolina in 1981.
Mr. Southern has been Senior Vice President, Chief Financial Officer and
Treasurer since January 1991. Prior to joining Immunex, Mr. Southern was Senior
Vice President, Chief Financial Officer, Treasurer and Secretary of Pay 'N Pak
Stores, Inc., a retail firm headquartered in Seattle, Washington, and a partner
in the accounting firm of Arthur Young & Company (now Ernst & Young LLP). Mr.
Southern received a Masters of Accounting degree from the University of Southern
California in 1965.
Mr. Stevens has been Senior Vice President, Marketing since February 1997.
Mr. Stevens joined Immunex in July 1993 as Senior Vice President, Strategic and
New Product Planning, and was elected an executive officer in 1994. From May
1996 until February 1997, Mr. Stevens served as Senior Vice President, Marketing
and Business Development. Mr. Stevens had been employed by Lederle since
December 1989, where he served in several capacities, including Director of
Medical Education and Programs, Hospital District Sales Manager and Director of
Oncology Marketing, prior to being appointed as Vice President and General
Manager of Oncology in June 1992. Mr. Stevens received an M.B.A. from the
University of Pittsburgh in 1977.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation information as to (1)
Immunex's Chief Executive Officer and (2) Immunex's four other most highly
compensated executive officers for services rendered in all capacities for
Immunex during the fiscal years ended December 31, 1996, 1997 and 1998. This
information is adjusted to reflect the 2-for-1 split of the common stock
effected March 25, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------
---------------------------------------- SHARES ALL OTHER
OTHER ANNUAL UNDERLYING COMPENSATION($)
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) (1)
- ---------------------------------------- --------- ---------- ---------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Fritzky....................... 1998 $ 525,000 $ 525,000 -- 90,000 $ 40,992
Chief Executive Officer 1997 468,000 409,500 -- 80,000 23,929
1996 450,000 59,061 -- 120,000 27,452
Scott G. Hallquist...................... 1998 280,392 196,837 -- 40,000 23,497
Senior Vice President; 1997 245,960 150,930 -- 42,500 15,236
General Counsel; 1996 258,000 33,860 -- 54,400 36,227
Secretary
Peggy V. Phillips....................... 1998 269,179 311,025 -- 40,000 25,386
Senior Vice President, 1997 228,690 214,397 -- 90,000 12,594
Pharmaceutical 1996 207,900 27,287 -- 59,500 6,000
Development
Douglas G. Southern..................... 1998 227,185 146,194 -- 40,000 20,298
Senior Vice President; Chief 1997 217,402 122,289 -- 34,000 14,057
Financial Officer; Treasurer 1996 209,040 27,437 -- 49,300 30,130
Douglas E. Williams..................... 1998 238,140 193,489 -- 40,000 20,292
Senior Vice President, 1997 226,800 141,750 -- 40,000 13,608
Discovery Research 1996 210,000 27,563 -- 59,500 25,947
</TABLE>
- ------------------------
(1) Consists of matching contributions to a 401(k) savings plan of $37,380,
$21,566, $24,179, $17,474 and $18,995, payment of excess life insurance
premiums of $1,827, $978, $351, $2,052 and $488 and payment of long-term
disability premiums of $1,785, $953, $855, $772 and $810 for Mr. Fritzky,
Mr. Hallquist, Ms. Phillips, Mr. Southern and Dr. Williams, respectively, in
1998. All dollar amounts are rounded to the nearest whole dollar.
22
<PAGE>
OPTION GRANTS IN FISCAL 1998
The following table sets forth certain information regarding options granted
during the fiscal year ended December 31, 1998 to Immunex's Chief Executive
Officer and the other officers for whom compensation is reported in this Proxy
Statement. This information is adjusted to reflect the 2-for-1 split of the
common stock effected March 25, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
---------------------------------------------------------- AT ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO TERM(3)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE)(1) DATE(2) 5%($) 10%($)
- ------------------------------------- ----------- -------------- -------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Fritzky.................... 90,000 4% $ 31.125 2/25/08 $ 1,761,691 $ 4,464,471
Scott G. Hallquist................... 40,000 2% 31.125 2/25/08 782,974 1,984,209
Peggy V. Phillips.................... 40,000 2% 31.125 2/25/08 782,974 1,984,209
Douglas G. Southern.................. 40,000 2% 31.135 2/25/08 782,974 1,984,209
Douglas E. Williams.................. 40,000 2% 31.125 2/25/08 782,974 1,984,209
</TABLE>
- ------------------------
(1) The exercise price of the options is equal to the fair market value of the
underlying common stock on the date of grant.
(2) All options granted in 1998 terminate 10 years from the date of grant.
(3) Future value of current year grants assuming appreciation of 5% and 10% per
year over the 10-year option period. The actual value realized may be
greater or less than the potential realizable values set forth in the table.
OPTION EXERCISES IN FISCAL 1998 AND YEAR-END VALUES
The following table sets forth certain information as of December 31, 1998
regarding options held by Immunex's Chief Executive Officer and the other
officers for whom compensation is reported in this Proxy Statement. Mr. Williams
acquired, and subsequently sold, 8,000 shares on exercise of his options during
the fiscal year ended December 31, 1998. No other officers exercised any options
during the fiscal year. This information is adjusted to reflect the 2-for-1
split of the common stock effected March 25, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL MONEY OPTIONS AT FISCAL
SHARES VALUE YEAR-END (#) YEAR-END ($)
ACQUIRED ON REALIZED -------------------------- ------------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ------------ ----------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Edward V. Fritzky............... -- -- 267,000 278,000 $ 14,515,969 $ 12,903,564
Scott G. Hallquist.............. -- -- 153,260 108,640 7,782,730 4,902,806
Peggy V. Phillips............... -- -- 86,600 152,900 4,303,519 5,149,247
Douglas G. Southern............. -- -- 119,520 98,780 6,087,079 4,389,289
Douglas E. Williams............. 16,000 $ 510,000 60,600 112,900 3,161,706 5,149,247
</TABLE>
CHANGE IN CONTROL AND EMPLOYMENT AGREEMENTS
Messrs. Fritzky, Hallquist and Southern, Ms. Phillips and Dr. Williams are
each covered under Immunex's Leadership Continuity Policy. The Leadership
Continuity Policy provides that, if such executive officer's employment is
terminated under certain circumstances within two years of the
23
<PAGE>
occurrence of a specified change in control of Immunex, then such executive
officer will be entitled to receive (1) an amount equal to two years of his or
her then-current salary and then-current annual incentive opportunity assuming
the target has been achieved at the 100% level for the two-year period following
termination of employment, less applicable withholdings required by law; (2)
continued participation in Immunex's medical, dental, employee assistance and
life insurance plans for two years following such termination; and (3) certain
outplacement services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Messrs. Carr, Cramer and
Lyons and Dr. Martin. Mr. Carr is a Senior Vice President of AHP. See
"RELATIONSHIP WITH AMERICAN HOME PRODUCTS CORPORATION AND AMERICAN CYANAMID
COMPANY."
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE AND THE
STOCK OPTION PLAN ADMINISTRATION COMMITTEE
Immunex's compensation policy as established by the Board is intended to
provide competitive compensation to all employees, giving consideration to the
relative contribution and performance of each employee on an individual basis.
It is Immunex's policy to compensate its executive officers at levels consistent
with industry norms, primarily in the form of base salary, together with
incentive bonuses. In addition, it is Immunex's policy to grant stock options to
each of its executive officers to align their interests with shareholder value.
The biotechnology industry is extremely competitive with respect to recruitment
and retention of qualified executives; accordingly, Immunex uses independently
published surveys of biotechnology industry compensation levels to ensure that
Immunex's compensation practices are comparable to other biotechnology
companies.
Determining the compensation of Immunex's executive officers is the
responsibility of the Board, through its Compensation Committee, which has
overall responsibility for Immunex's compensation policies for senior
management. Its Stock Option Plan Administration Committee is responsible for
administering Immunex's stock option plans. The Compensation Committee makes
recommendations to the Board as to the salaries of, and incentive bonuses
awarded to, Immunex's Chief Executive Officer and other executive officers. The
Stock Option Plan Administration Committee determines the number and terms of
options granted to Immunex's Chief Executive Officer, other executive officers
and all other employees.
Executive compensation consists of three major components: base salary,
annual incentive bonus and stock options. The determination of base salaries of
the Chief Executive Officer and other executive officers is based on annual
surveys of similar positions at other biotechnology companies (described below
as the Comparison Group), together with assessments of individual performance
and Immunex's achievement of predetermined operating goals that are established
annually by the Board (the goals for 1998 are described below). Relative weights
are assigned to the factors used to determine base salaries for individual
executives. Assessments of individual performance include objective standards
and subjective evaluations of the value of individual executives to Immunex. The
surveys employed include some, but not all, of the companies in the Nasdaq
Pharmaceutical Index, one of the indices used in Immunex's performance graph
that appears below.
The Compensation Committee meets each December to determine the annual
salary component of executive compensation to be paid in the following calendar
year, and the amount of cash incentive bonus compensation to be awarded
executives for performance in the current year. The salaries paid to executives
in 1998 were determined by reference to 1997 compensation survey data, adjusted
upwards for inflation during the term between July 1997 and December 1997. The
survey data considered by the Compensation Committee in determining executive
salaries included salary information provided by 39 biotechnology companies
having more than 500 employees (the "Comparison Group"), as well as a subgroup
of 15 of the largest biotechnology companies (the "Comparison
24
<PAGE>
Subgroup"). The Compensation Committee believes that the Comparison Group and
the Comparison Subgroup were representative of industry norms in late 1997; each
group is weighted approximately equally by the Compensation Committee. The
Comparison Subgroup consisted of Agouron Pharmaceuticals, Inc., ALZA
Corporation, Amgen, Inc., Biogen, Inc., Chiron Corporation, Centocor, Inc.,
Genentech, Inc., Genetics Institute, Genzyme Corporation, Gilead Sciences, Inc.,
MedImmune, Inc., Millennium Pharmaceuticals, Inc. and biotechnology affiliates
or subsidiaries of Baxter Biotech Group, Bayer Corporation, and Scios Nova, Inc.
In the case of Mr. Fritzky, the Compensation Committee established a base salary
of $525,000 for 1998, which represented approximately 122% of average
compensation for chief executive officers included in the Comparison Subgroup
and 128% of the average compensation for chief executive officers included in
the Comparison Group. The Compensation Committee established 1998 base salaries
for Immunex's other executive officers ranging from 90% to 115% of the average
compensation for executives performing similar functions in companies included
in the Comparison Subgroup and from 97% to 153% of the average compensation for
executives performing similar functions in companies included in the Comparison
Group. Because of the difficulty of making precise job comparisons for Immunex's
executive officers with the Comparison Group and Comparison Subgroup, the
Compensation Committee utilized other data sources in determining the annual
salary of executive officers for 1998, including the 1997 Towers Perrin
Pharmaceutical Industry Executive Compensation survey.
From time to time, the Compensation Committee considers survey data in
establishing new annual bonus incentive targets for Immunex's executive
officers, including annual bonus information provided for executive officers by
a representative group of selected biotechnology companies, as well as from
proprietary sources obtained by the external compensation consultant. The annual
bonus incentive targets most recently approved by the Compensation Committee for
Immunex's executive officers represented approximately the 50th percentile from
these sources. The Compensation Committee has decided that annual bonus
incentive awards for Immunex's executive officers should be driven by Immunex's
overall achievements. Company objectives are established at the beginning of
each year and approved by the Board. On an annual basis, the Compensation
Committee conducts an assessment of Immunex's overall performance as measured
against Immunex objectives for the applicable year, and at that time the
Compensation Committee determines the maximum percentage of the annual bonus
incentive targets payable to Immunex's executive officers. The annual bonus
targets can be increased by the Compensation Committee if Immunex has exceeded
its objectives for the year or decreased if Immunex has failed to meet its
objectives for the year. An annual bonus award can be modified upward (up to
150% of the annual bonus incentive target) or downward (to 0%) by the
Compensation Committee, depending on the strength of the individual executive
officer's performance.
At its February 1997 meeting, the Compensation Committee approved the
following annual incentive targets for Immunex's executive officers, which
targets are subject to modification based on the individual executive officer's
performance and based on whether Immunex has met its objectives for the year. In
1998, the Chief Executive Officer, Mr. Fritzky, is eligible for an annual
incentive target of 70% of base salary. In addition, the other officers for whom
compensation is reported in this Proxy Statement are eligible in 1998 for an
annual incentive target of 45% of base salary or 50% of base salary. At its July
1998 meeting, the Compensation Committee increased the annual salary and also
increased the annual incentive target from 50% to 55% of base salary for the
Senior Vice President, Pharmaceutical Development, since she had taken on
significant additional responsibilities as the General Manager for ENBREL.
At its December 1998 meeting, the Compensation Committee elected to
establish incentive targets for Mr. Fritzky and the other executive officers for
whom compensation is reported in this Proxy Statement of 130% of the annual
incentive target amount for which each officer was eligible (i.e., 130% of 70%
of base salary for Mr. Fritzky, 130% of 55% for Ms. Phillips and Dr. Williams,
and 130% of 45% for Mr. Hallquist and Mr. Southern). The Compensation
Committee's decision took into
25
<PAGE>
account Immunex's overall performance against established 1998 objectives, which
had been assigned relative weights by the Board. All of Immunex's 1998
objectives previously established by the Board had been met or exceeded,
including achievement of budgeted goals for revenue growth and improvement in
the net operating results for Immunex; FDA submission of a biologics license
application for ENBREL; completion of certain clinical trials of ENBREL in
juvenile rheumatoid arthritis and the achievement of certain timeline goals
regarding the clinical trial of ENBREL in early rheumatoid arthritis; initiation
of the clinical trial program for ENBREL in congestive heart failure; completion
of a multi-dosing efficacy clinical trial for NUVANCE; completion of a Phase II
clinical trial of MOBIST in peripheral blood stem cell mobilization in cancer
patients; and completion of a CD40 ligand safety study. To qualify compensation
for deductibility for federal income tax purposes, it is Immunex's policy to
meet the requirements for exclusion from the limit on deduction imposed by
Section 162(m) of the Code, by paying performance-based compensation if possible
and, with respect to cases in which it is not possible to meet the requirements
for exclusion from Section 162(m) of the Code, Immunex intends to minimize any
award of compensation in excess of the limit.
In addition, the Compensation Committee elected to increase the annual bonus
award of Mr. Fritzky and the other executive officers discussed above based on
the strength of their individual performance in 1998. In the case of Mr. Fritzky
as Chief Executive Officer, the Compensation Committee increased his annual
bonus award to 110% of 70% of his base salary based on his very strong
individual performance in 1998. Thus, when both adjustments to Mr. Fritzky's
annual bonus award are combined (i.e., 130% of 70% of base salary for Immunex's
overall performance against 1998 objectives, and 110% of 70% of his base salary
based on his 1998 individual performance), Mr. Fritzky received approximately
143% (130% multiplied by 110%) of 70% of his 1998 base salary of $525,000, which
amounted to a annual bonus award of $525,000.
Options to purchase shares of Immunex stock were granted to the officers
named in this report, as well as other employees, during 1998. The option grant
was undertaken pursuant to Immunex's long-term incentive performance award
program, initially implemented in 1993, wherein employees are eligible to
receive a grant of stock options dependent on individual performance and
position held. Under this program, in 1998 Mr. Fritzky received a grant to
purchase 90,000 shares of stock; other officers named in this Proxy Statement
received grants to purchase 40,000 shares.
COMPENSATION COMMITTEE
Joseph J. Carr
Kirby L. Cramer
John E. Lyons
Edith W. Martin
STOCK OPTION PLAN ADMINISTRATION COMMITTEE
Joseph J. Carr
Kirby L. Cramer
Robert I. Levy
John E. Lyons
Joseph M. Mahady
Edith W. Martin
26
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PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN(1)
AMONG IMMUNEX, S&P 500 INDEX AND NASDAQ PHARMACEUTICAL INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FIVE YEAR CUMULATIVE RETURN INDEX
Pharmaceutical S&P 500 Immunex
<S> <C> <C> <C>
12/31/93 $100.00 $100.00 $100.00
12/30/94 $75.26 $101.37 $91.54
12/29/95 $138.04 $139.51 $101.54
12/31/96 $138.47 $172.01 $120.00
12/31/97 $142.98 $229.60 $332.31
12/31/98 $183.02 $295.72 $774.23
</TABLE>
- ------------------------
(1) Assumes $100 invested at the close of trading on December 31, 1993 in the
common stock, in the S&P 500 Index and in the Nasdaq Pharmaceutical Index.
NOTE: Stock price performance shown above for the common stock is historical and
not necessarily indicative of future price performance.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Immunex's officers, directors and
persons who own more than 10% of a registered class of Immunex's equity
securities to file reports of ownership and changes in ownership with the
Commission. Officers, directors and greater-than-10% shareholders are required
by Commission regulation to furnish Immunex with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms it received, or
written representations from certain reporting persons that no forms were
required for those persons, Immunex believes that during 1998 all filing
requirements required by Section 16(a) applicable to its officers, directors and
greater-than-10% beneficial owners were complied with by such persons with the
exception of AHP which filed a late Form 5 for 1998.
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board has selected Ernst & Young LLP, certified public accountants, to
act as independent auditors of Immunex for the fiscal year ending December 31,
1999. Ernst & Young LLP has been Immunex's auditor since Immunex's inception.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting, with the opportunity to make a statement, if the representative
so desires, and is expected to be available to respond to appropriate questions
from shareholders.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Under the Commission's proxy rules, shareholder proposals that meet certain
conditions may be included in Immunex's Proxy Statement and form of Proxy for a
particular annual meeting. Shareholders that intend to present a proposal at
Immunex's 2000 Annual Meeting must give notice of the proposal to Immunex no
later than November 26, 1999 to be considered for inclusion in the Proxy
Statement and form of Proxy relating to that meeting. Shareholders that intend
to present a proposal that will not be included in the Proxy Statement and form
of Proxy must give notice of the proposal to Immunex no fewer than 60 or more
than 90 days prior to the date of the 2000 Annual Meeting. Receipt by Immunex of
any such proposal from a qualified shareholder in a timely manner will not
guarantee its inclusion in Immunex's proxy materials or its presentation at the
2000 Annual Meeting because there are other requirements in the proxy rules.
OTHER MATTERS
As of the date of this Proxy Statement, the Board does not intend to
present, and has not been informed that any other person intends to present, any
matters for action at the Annual Meeting other than the matters specifically
referred to in this Proxy Statement. If other matters properly come before the
Annual Meeting, it is intended that the holders of the proxies will act with
respect thereto in accordance with their best judgment.
Copies of the Immunex 1998 Annual Report to Shareholders are being mailed to
shareholders, together with this Proxy Statement, form of Proxy and Notice of
Annual Meeting of Shareholders. Additional copies may be obtained from the
Secretary of Immunex, 51 University Street, Seattle, Washington 98101.
IMMUNEX'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS INCLUDED IN
IMMUNEX'S 1998 ANNUAL REPORT TO SHAREHOLDERS.
BY ORDER OF THE BOARD OF DIRECTORS
Scott G. Hallquist
SECRETARY
Seattle, Washington
March 24, 1999
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APPENDIX A
IMMUNEX CORPORATION
1999 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the Immunex Corporation 1999 Employee Stock Purchase Plan
(the "Plan") are (a) to assist employees of Immunex Corporation, a Washington
corporation (the "Company"), and its designated subsidiaries in acquiring a
stock ownership interest in the Company pursuant to a plan that is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended, and (b) to encourage employees to remain in
the employ of the Company and its subsidiaries.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Company's Compensation Committee.
"COMMON STOCK" means the common stock, par value $0.01 per share, of the
Company.
"COMPANY" means Immunex Corporation, a Washington corporation.
"DESIGNATED SUBSIDIARY" has the meaning set forth under the definition of
"Eligible Employee" in this Section 2.
"ELIGIBLE COMPENSATION" means all salary and wages including overtime.
Regular cash compensation does not include cash bonuses, commissions, severance
pay, hiring and relocation bonuses, pay in lieu of vacations, sick leave, gain
from stock option exercises or any other special payments.
"ELIGIBLE EMPLOYEE" means any employee of the Company or any domestic
Subsidiary Corporation or any other Subsidiary Corporation designated by the
Board or the Committee (each a "Designated Subsidiary"), who is in the employ of
the Company (or any Designated Subsidiary) on one or more Offering Dates and who
meets the following criteria:
(a) the employee does not, immediately after the option is granted, own
stock (as defined by the Code) possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or
of a Parent Corporation or Subsidiary Corporation of the Company;
(b) the employee's customary employment is for 20 hours or more per week;
provided, however, that the Plan Administrator may increase or decrease
this minimum requirement for any future Offering so long as the maximum
number of hours does not exceed 20;
(c) if specified by the Plan Administrator for future Offerings, a minimum
requirement for customary employment of up to a maximum of five months
per year;
(d) the employee has been employed for at least three months as of the
Offering Date; provided, however, if specified by the Plan Administrator
for any future Offering, a minimum employment period that does not
exceed two years; and
(e) the employee is not a highly compensated employee. For purposes of the
Plan, a "highly compensated employee" is any employee of the Company or
a Designated Subsidiary who has
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a base salary in excess of $175,000 per year; provided, however, that
the Plan Administrator may increase or decrease this amount for any
future Offering within the limitations imposed by Code Section 423.
If the Company permits any employee of a Designated Subsidiary to participate in
the Plan, then all employees of that Designated Subsidiary who meet the
requirements of this paragraph shall also be considered Eligible Employees.
"ENROLLMENT PERIOD" has the meaning set forth in Section 7.1.
"ESPP BROKER" has the meaning set forth in Section 10.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"OFFERING" has the meaning set forth in Section 5.1.
"OFFERING DATE" means the first day of an Offering.
"OPTION" means an option granted under the Plan to an Eligible Employee to
purchase shares of Common Stock.
"PARENT CORPORATION" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company, if, at the time of the
granting of the Option, each of the corporations, other than the Company, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"PARTICIPANT" means any Eligible Employee who has elected to participate in
an Offering in accordance with the procedures set forth in Section 7.1 and who
has not withdrawn from the Plan or whose participation in the Plan is not
terminated.
"PLAN" means the Immunex Corporation 1999 Employee Stock Purchase Plan.
"PURCHASE DATE" means the last day of each Purchase Period.
"PURCHASE PERIOD" has the meaning set forth in Section 5.2.
"PURCHASE PRICE" has the meaning set forth in Section 6.
"SUBSCRIPTION" has the meaning set forth in Section 7.1.
"SUBSIDIARY CORPORATION" means any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company, if, at the time of
the granting of the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or the Committee or, if and to
the extent the Board or the Committee designates an executive officer of the
Company to administer the Plan, by such executive officer (each, the "Plan
Administrator"). Any decisions made by the Plan Administrator shall be
applicable equally to all Eligible Employees.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Subject to the provisions of the Plan, the Plan Administrator shall have the
authority, in its sole discretion, to determine all matters relating to Options
granted under the Plan, including all terms, conditions, restrictions and
limitations of Options; provided, however, that all Participants granted
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Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, unless reserved to the Board or the
Committee, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's other officers or employees as the Plan Administrator so determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 20, the
maximum number of shares of Common Stock which shall be available for issuance
under the Plan shall be 500,000 shares. Shares issued under the Plan shall be
drawn from authorized and unissued shares or shares now held or subsequently
acquired by the Company.
SECTION 5. OFFERING DATES
5.1 OFFERINGS
(a) Except as otherwise set forth below, the Plan shall be implemented by a
series of Offerings (each, an "Offering"). Offerings shall commence on May 1 and
November 1 of each year and end on the next October 31 and April 30,
respectively, occurring thereafter; provided, however, that the first Offering
shall begin on July 1, 1999 and shall end on October 31, 1999.
(b) Notwithstanding the foregoing, the Plan Administrator may establish (i)
a different term for one or more Offerings and (ii) different commencing and
ending dates for such Offerings; provided, however, that an Offering may not
exceed five years; and provided, further, that if the Purchase Price may be less
than 85% of the fair market value of the Common Stock on the Purchase Date, the
Offering may not exceed one year.
(c) In the event the first or the last day of an Offering is not a regular
business day, then the first day of the Offering shall be deemed to be the next
regular business day and the last day of the Offering shall be deemed to be the
last preceding regular business day.
5.2 PURCHASE PERIODS
(a) Each Offering shall consist of one or more consecutive purchase periods
(each, a "Purchase Period"). The last day of each Purchase Period shall be the
Purchase Date for such Purchase Period. Except as otherwise set forth below, a
Purchase Period shall commence on May 1 and November 1 of each year and end on
the next October 31 and April 30, respectively, occurring thereafter; provided,
however, that the Purchase Period for the first Offering shall begin on July 1,
1999 and shall end on October 31, 1999.
(b) Notwithstanding the foregoing, the Board may establish (i) a different
term for one or more Purchase Periods and (ii) different commencing and ending
dates for any such Purchase Period.
(c) In the event the first or last day of a Purchase Period is not a regular
business day, then the first day of the Purchase Period shall be deemed to be
the next regular business day and the last day of the Purchase Period shall be
deemed to be the last preceding regular business day.
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5.3 GOVERNMENTAL APPROVAL; SHAREHOLDER APPROVAL
Notwithstanding any other provision of the Plan to the contrary, an Option
granted pursuant to the Plan shall be subject to (a) obtaining all necessary
governmental approvals and qualifications of the Plan and of the issuance of
Options and sale of Common Stock pursuant to the Plan and (b) obtaining
shareholder approval of the Plan.
SECTION 6. PURCHASE PRICE
The purchase price (the "Purchase Price") at which Common Stock may be
acquired in an Offering pursuant to the exercise of all or any portion of an
Option granted under the Plan (the "Offering Exercise Price") shall be 85% of
the lesser of (a) the fair market value of the Common Stock on the Offering Date
of such Offering and (b) the fair market value of the Common Stock on the
Purchase Date. The fair market value of the Common Stock on the Offering Date or
on the Purchase Date shall be the closing price for the Common Stock as reported
for such day by the Nasdaq Stock Market, the New York Stock Exchange or other
trading market on which the Company's Common Stock may then be traded (the
"Exchange"). If no sales of the Common Stock were made on the Exchange on such
day, fair market value shall mean the closing price for the Common Stock as
reported for the next preceding day on which sales of the Stock were made on the
Exchange. If the Common Stock is not listed on an Exchange, the Board shall
designate an alternative method of determining the fair market value of the
Common Stock.
SECTION 7. PARTICIPATION IN THE PLAN
7.1 INITIAL PARTICIPATION
An Eligible Employee shall become a Participant on the first Offering Date
after satisfying the eligibility requirements and delivering to the Plan
Administrator during the enrollment period established by the Plan Administrator
(the "Enrollment Period") a subscription (the "Subscription"):
(a) indicating the Eligible Employee's election to participate in the Plan;
(b) authorizing payroll deductions and stating the amount to be deducted
regularly from the Participant's pay; and
(c) authorizing the purchase of Common Stock for the Participant in each
Purchase Period.
An Eligible Employee who does not deliver a Subscription as provided above
during the Enrollment Period shall not participate in the Plan for that Offering
or for any subsequent Offering unless such Eligible Employee subsequently
enrolls in the Plan by filing a Subscription with the Company during the
Enrollment Period for such subsequent Offering. The Company may, from time to
time, change the Enrollment Period for any future Offering as deemed advisable
by the Plan Administrator, in its sole discretion, for the proper administration
of the Plan.
Except as provided in Section 7.2, an employee who becomes eligible to
participate in the Plan after an Offering has commenced shall not be eligible to
participate in such Offering but may participate in any subsequent Offering,
provided that such employee is still an Eligible Employee as of the commencement
of any such subsequent Offering. Eligible Employees may not participate in more
than one Offering at a time.
7.2 ALTERNATIVE INITIAL PARTICIPATION
Notwithstanding any other provisions of the Plan, the Board or the Committee
may provide for any future Offering that any employee of the Company or any
Designated Subsidiary who first meets the requirements of subparagraphs (a)
through (c) of the paragraph Eligible Employee in Section 2 during the course of
an Offering shall, on a date or dates specified in the Offering which coincides
with
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the day on which such person first meets such requirements or occurs on a
specified date thereafter, receive an Option under that Offering which Option
shall thereafter be deemed to be a part of that Offering. Such Option shall have
the same characteristics as any Options originally granted under that Offering,
except that:
(i) the date on which such Option is granted shall be the "Offering Date" of
such Option for all purposes, including determining the Purchase Price
of such Option; provided, however, that if the fair market value of the
Common Stock on the date on which such Option is granted is less than
the fair market value of Common Stock on the first day of the Offering,
then, solely for the purpose of determining the Purchase Price of such
Option, the first day of the Offering shall be the "Offering Date" for
such Option;
(ii) the Purchase Period(s) for such Option shall begin on its Offering Date
and end coincident with the remaining Purchase Date(s) for such
Offering; and
(iii) the Board or the Committee may provide that if such person first meets
such requirements within a specified period of time before the end of a
Purchase Period for such Offering, he or she will not receive any
Option for that Purchase Period.
7.3 CONTINUED PARTICIPATION
A Participant shall automatically participate in the next Offering until
such time as such Participant withdraws from the Plan pursuant to Section 11.1
or 11.2 or terminates employment as provided in Section 12.
SECTION 8. LIMITATIONS ON RIGHT TO PURCHASE SHARES
8.1 NUMBER OF SHARES PURCHASED
The maximum number of shares of stock that may be offered to a Participant
on any Offering Date shall be equal to $15,000 divided by the fair market value
of one share of Common Stock of the Company on the applicable Offering Date.
Further, no Participant shall be entitled to purchase Common Stock under the
Plan (or any other employee stock purchase plan that is intended to meet the
requirements of Code Section 423 sponsored by the Company, a Parent Corporation
or a Subsidiary Corporation) with a fair market value exceeding $15,000,
determined as of the Offering Date for each Offering (or such other limit as may
be imposed by the Code), in any calendar year in which a Participant
participates in the Plan (or other employee stock purchase plan described in
this Section 8.1). For any future Offering, the Board or the Committee may
specify a maximum number of shares which may be purchased by any Participant as
well as a maximum aggregate number of shares which may be purchased by all
Participants pursuant to such Offering. In addition, for any future Offering
with more than one Purchase Date, the Board or the Committee may specify a
maximum aggregate number of shares which may be purchased by all Participants on
any given Purchase Date under the Offering.
8.2 PRO RATA ALLOCATION
In the event the number of shares of Common Stock that might be purchased by
all Participants in the Plan exceeds the number of shares of Common Stock
available in the Plan, the Plan Administrator shall make a pro rata allocation
of the remaining shares of Common Stock in as uniform a manner as shall be
practicable and as the Plan Administrator shall determine to be equitable.
Fractional shares may not be issued under the Plan unless the Plan Administrator
determines otherwise for any future Offering.
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SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 GENERAL RULES
Subject to Section 9.12, Common Stock that is acquired pursuant to the
exercise of all or any portion of an Option may be paid for only by means of
payroll deductions from the Participant's Eligible Compensation. Except as set
forth in this Section 9, the amount of compensation to be withheld from a
Participant's Eligible Compensation during each pay period shall be determined
by the Participant's Subscription.
9.2 CHANGES IN WITHHOLDING
Unless otherwise determined by the Plan Administrator for any future
Offering, a Participant may not elect to increase or decrease the amount to be
withheld from his or her Eligible Compensation for an Offering; provided,
however, that if such elections are permitted for any future Offering, notice of
such elections must be delivered to the Plan Administrator in such form and in
accordance with such terms as the Plan Administrator may establish for the
Offering.
9.3 PERCENT WITHHELD
The amount of payroll withholding for each Participant for purchases
pursuant to the Plan during any pay period shall be at least 1% but shall not
exceed 15% of the Participant's Eligible Compensation for such pay period, but
in no event shall exceed $15,000 per calendar year. Amounts shall be withheld in
whole percentages only.
9.4 PAYROLL DEDUCTIONS
Payroll deductions shall commence on the first payday following the Offering
Date and shall continue through the last payday of the Offering unless sooner
altered or terminated as provided in the Plan.
9.5 MEMORANDUM ACCOUNTS
Individual accounts shall be maintained for each Participant for memorandum
purposes only. All payroll deductions from a Participant's compensation shall be
credited to such account but shall be deposited with the general funds of the
Company. All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose.
9.6 NO INTEREST
No interest shall be paid on payroll deductions received or held by the
Company.
9.7 ACQUISITION OF COMMON STOCK
On each Purchase Date of an Offering, each Participant shall automatically
acquire, pursuant to the exercise of the Participant's Option, the number of
shares of Common Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that the number of shares of Common Stock
purchased by the Participant shall not exceed the number of whole shares of
Common Stock so determined, unless the Plan Administrator has determined for any
future Offering that fractional shares may be issued under the Plan; and
provided, further, that the number of shares of Common Stock purchased by the
Participant shall not exceed the number of shares for which Options have been
granted to the Participant pursuant to Section 8.1.
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9.8 REFUND OF EXCESS AMOUNTS
Any cash balance remaining in the Participant's account at the termination
of each Purchase Period shall be refunded to the Participant as soon as
practical after the Purchase Date without the payment of any interest; provided,
however, that if the Participant participates in the next Purchase Period, any
cash balance remaining in the Participant's account shall be applied to the
purchase of Common Stock in the new Purchase Period, provided such purchase
complies with Section 8.1.
9.9 WITHHOLDING OBLIGATIONS
At the time the Option is exercised, in whole or in part, or at the time
some or all of the Common Stock is disposed of, the Participant shall make
adequate provision for federal and state withholding obligations of the Company,
if any, that arise upon exercise of the Option or upon disposition of the Common
Stock. The Company may withhold from the Participant's compensation the amount
necessary to meet such withholding obligations.
9.10 TERMINATION OF PARTICIPATION
No Common Stock shall be purchased on behalf of a Participant on a Purchase
Date if his or her participation in the Offering or the Plan has terminated on
or before such Purchase Date.
9.11 PROCEDURAL MATTERS
The Company may, from time to time, establish (a) limitations on the
frequency and/or number of any permitted changes in the amount withheld during
an Offering, as set forth in Section 9.2, (b) an exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, (c) payroll withholding
in excess of the amount designated by a Participant in order to adjust for
delays or mistakes in the Company's processing of properly completed withholding
elections and (d) such other limitations or procedures as deemed advisable by
the Company in the Company's sole discretion that are consistent with the Plan
and in accordance with the requirements of Code Section 423.
9.12 LEAVES OF ABSENCE
During leaves of absence approved by the Company and meeting the
requirements of the applicable Treasury Regulations promulgated under the Code,
a Participant may elect to continue participation in the Plan by delivering cash
payments to the Plan Administrator on the Participant's normal paydays equal to
the amount of his or her payroll deduction under the Plan had the Participant
not taken a leave of absence. Currently, the Treasury Regulations provide that a
Participant may continue participation in the Plan only during the first 90 days
of a leave of absence unless the Participant's reemployment rights are
guaranteed by statute or contract.
SECTION 10. COMMON STOCK PURCHASED UNDER THE PLAN
10.1 ESPP BROKER
If the Plan Administrator designates or approves a stock brokerage or other
financial services firm (the "ESPP Broker") to hold shares purchased under the
Plan for the accounts of Participants, the following procedures shall apply.
Promptly following each Purchase Date, the number of shares of Common Stock
purchased by each Participant shall be deposited into an account established in
the Participant's name with the ESPP Broker. Each Participant shall be the
beneficial owner of the Common Stock purchased under the Plan and shall have all
rights of beneficial ownership in such Common Stock. A Participant shall be free
to undertake a disposition of the shares of Common Stock in his or her account
at any time, but, in the absence of such a disposition, the shares of Common
Stock must remain in the Participant's account at the ESPP Broker until the
holding period set forth in
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Code Section 423 has been satisfied. With respect to shares of Common Stock for
which the holding period set forth above has been satisfied, the Participant may
move those shares of Common Stock to another brokerage account of the
Participant's choosing or request that a stock certificate be issued and
delivered to him or her. Dividends paid in the form of shares of Common Stock
with respect to Common Stock in a Participant's account shall be credited to
such account. A Participant who is not subject to payment of U.S. income taxes
may move his or her shares of Common Stock to another brokerage account of his
or her choosing or request that a stock certificate be delivered to him or her
at any time, without regard to the Code Section 423 holding period.
10.2 NOTICE OF DISPOSITION
By entering the Plan, each Participant agrees to promptly give the Company
notice of any Common Stock disposed of within the later of one year from the
Purchase Date and two years from the Offering Date for such Common Stock,
showing the number of such shares disposed of and the Purchase Date and Offering
Date for such Common Stock. This notice shall not be required if and so long as
the Company has a designated ESPP Broker.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 WITHDRAWAL FROM AN OFFERING
A Participant may withdraw from an Offering by signing and delivering to the
Company's Plan Administrator a written notice of withdrawal on a form provided
by the Company for such purpose. Such withdrawal must be elected at least 10
days prior to the end of the Purchase Period for which such withdrawal is to be
effective or by any other date specified by the Plan Administrator for any
future Offering. If a Participant withdraws after the Purchase Date for a
Purchase Period of an Offering, the withdrawal shall not affect Common Stock
acquired by the Participant in any earlier Purchase Periods. Unless otherwise
indicated, withdrawal from an Offering shall not result in a withdrawal from the
Plan or any succeeding Offering therein. A Participant is prohibited from again
participating in the same Offering at any time upon withdrawal from such
Offering. The Company may, from time to time, impose a requirement that the
notice of withdrawal be on file with the Plan Administrator for a reasonable
period prior to the effectiveness of the Participant's withdrawal.
11.2 WITHDRAWAL FROM THE PLAN
A Participant may withdraw from the Plan by signing a written notice of
withdrawal on a form provided by the Company for such purpose and delivering
such notice to the Plan Administrator. Such notice must be delivered at least 10
days prior to the end of the Purchase Period for which such withdrawal is to be
effective or by any other date specified by the Plan Administrator for any
future Offering. In the event a Participant voluntarily elects to withdraw from
the Plan, the Participant may not resume participation in the Plan during the
same Offering, but may participate in any subsequent Offering under the Plan by
again satisfying the definition of Eligible Employee. The Company may impose,
from time to time, a requirement that the notice of withdrawal be on file with
the Plan Administrator for a reasonable period prior to the effectiveness of the
Participant's withdrawal.
11.3 RETURN OF PAYROLL DEDUCTIONS
Upon withdrawal from an Offering pursuant to Section 11.1 or from the Plan
pursuant to Section 11.2, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Common Stock shall be
returned as soon as practical after the withdrawal, without the payment of any
interest, to the Participant and the Participant's interest in the Offering
shall terminate. Such accumulated payroll deductions may not be applied to any
other Offering under the Plan.
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SECTION 12. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any reason,
including retirement, death or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan. The payroll deductions credited to the Participant's account since
the last Purchase Date shall, as soon as practical, be returned to the
Participant or, in the case of a Participant's death, to the Participant's legal
representative or designated beneficiary as provided in Section 13.2, and all of
the Participant's rights under the Plan shall terminate. Interest shall not be
paid on sums returned to a Participant pursuant to this Section 12.
SECTION 13. RESTRICTIONS ON ASSIGNMENT
13.1 TRANSFERABILITY
An Option granted under the Plan shall not be transferable and such Option
shall be exercisable during the Participant's lifetime only by the Participant.
The Company will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant of the Participant's
interest in the Plan, of his or her Option or of any rights under his or her
Option.
13.2 BENEFICIARY DESIGNATION
The Plan Administrator may permit a Participant to designate a beneficiary
who is to receive any shares and cash, if any, from the Participant's account
under the Plan in the event the Participant dies after the Purchase Date for an
Offering but prior to delivery to such Participant of such shares and cash. In
addition, the Plan Administrator may permit a Participant to designate a
beneficiary who is to receive any cash from the Participant's account under the
Plan in the event that the Participant dies before the Purchase Date for an
Offering. Such designation may be changed by the Participant at any time by
written notice to the Plan Administrator.
SECTION 14. NO RIGHTS AS SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Common Stock subject to an Option, a Participant
shall not be deemed to be a shareholder of the Company, and he or she shall not
have any of the rights or privileges of a shareholder. A Participant shall have
the rights and privileges of a shareholder of the Company when, but not until, a
certificate or its equivalent has been issued to the Participant for the shares
following exercise of the Participant's Option.
SECTION 15. LIMITATIONS ON SALE OF COMMON STOCK PURCHASED UNDER THE PLAN
The Plan is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence any
Participant in the conduct of his or her own affairs. A Participant, therefore,
may sell Common Stock purchased under the Plan at any time he or she chooses,
subject to compliance with any applicable federal and state securities laws. A
Participant assumes the risk of any market fluctuations in the price of the
Common Stock.
SECTION 16. AMENDMENT OF THE PLAN
The Board may amend the Plan in such respects as it shall deem advisable;
provided, however, that, to the extent required for compliance with Code Section
423 or any applicable law or regulation, shareholder approval will be required
for any amendment that will (a) increase the total number of shares as to which
Options may be granted under the Plan, (b) modify the class of employees
eligible to receive Options, or (c) otherwise require shareholder approval under
any applicable law or regulation.
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SECTION 17. TERMINATION OF THE PLAN
The Plan shall have no fixed termination date. Notwithstanding the
foregoing, the Board may suspend or terminate the Plan at any time. During any
period of suspension or upon termination of the Plan, no Options shall be
granted; provided, however, that suspension or termination of the Plan shall
have no effect on Options granted prior thereto.
SECTION 18. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent or Subsidiary Corporation or to affect the right of the
Company or a Parent or Subsidiary Corporation to terminate the employment of any
person (including any Eligible Employee or Participant) at any time with or
without cause.
SECTION 19. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Parent or Subsidiary
Corporation. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or Subsidiary Corporation to (a) establish any
other forms of incentives or compensation for employees of the Company, a Parent
Corporation or Subsidiary Corporation or (b) grant or assume options otherwise
than under this Plan in connection with any proper corporate purpose, including,
but not by way of limitation, the grant or assumption of options in connection
with the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, firm or association.
SECTION 20. ADJUSTMENTS
20.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend, stock
split (but not including the stock dividend approved by the Board on February
23, 1999), spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or kind of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock, then (subject to any required action
by the Company's shareholders), the Board or the Committee, in its sole
discretion, shall make such equitable adjustments as it shall deem appropriate
in the circumstances in (i) the maximum number and kind of shares of Common
Stock subject to the Plan as set forth in Section 4 and (ii) the number and kind
of securities that are subject to any outstanding Option and the per share price
of such securities. The determination by the Board or the Committee as to the
terms of any of the foregoing adjustments shall be conclusive and binding.
Notwithstanding the foregoing, a dissolution, liquidation, merger or asset sale
of the Company shall not be governed by this Section 20.1 but shall be governed
by Sections 20.2 and 20.3, respectively.
20.2 MERGER OR ASSET SALE OF THE COMPANY
In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, each
outstanding Option shall be assumed or an equivalent option substituted by the
successor corporation or a parent or subsidiary corporation of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Option, the Offering then in progress shall be shortened by
setting a new Purchase Date. The new Purchase Date shall be a specified date
before the date of the Company's proposed sale or
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merger. The Board shall notify each Participant in writing, at least 10 business
days prior to the new Purchase Date, that the Purchase Date for the
Participant's Option has been changed to the new Purchase Date and that the
Participant's Option shall be exercised automatically on the new Purchase Date,
unless prior to such date the Participant has withdrawn from the Offering or the
Plan as provided in Section 11 hereof.
20.3 DISSOLUTION OR LIQUIDATION OF THE COMPANY
In the event of the proposed dissolution or liquidation of the Company, the
Offering then in progress shall be shortened by setting a new Purchase Date and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The new
Purchase Date shall be a specified date before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each Participant in
writing, at least 10 business days prior to the new Purchase Date, that the
Purchase Date for the Participant's Option has been changed to the new Purchase
Date and that the Participant's Option shall be exercised automatically on the
new Purchase Date, unless prior to such date the Participant has withdrawn from
the Offering or the Plan as provided in Section 11 hereof.
20.4 LIMITATIONS
The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 21. REGISTRATION; CERTIFICATES FOR SHARES
The Company shall be under no obligation to any Participant to register for
offering or resale under the Securities Act of 1933, as amended, or register or
qualify under state securities laws, any shares of Common Stock. The Company may
issue certificates for shares with such legends and subject to such restrictions
on transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.
SECTION 22. EFFECTIVE DATE
The Plan's effective date is the date on which it is approved by the
Company's shareholders, which was , 1999.
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APPENDIX B
IMMUNEX CORPORATION
1999 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Immunex Corporation 1999 Stock Option Plan (the "Plan")
is to enhance the long-term shareholder value of Immunex Corporation, a
Washington corporation (the "Company"), by offering opportunities to selected
employees, officers and directors to participate in the Company's growth and
success, and to encourage them to remain in the service of the Company and its
Related Corporations (as defined in Section 2) and to acquire and maintain stock
ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below:
"BOARD" means the Board of Directors of the Company.
"CAUSE" means dishonesty, fraud, misconduct, unauthorized use or disclosure
of confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Plan Administrator, and its determination shall be conclusive and binding.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON STOCK" means the common stock, par value $.01 per share, of the
Company.
"DISABILITY", unless otherwise defined by the Plan Administrator, means a
mental or physical impairment of the Optionee that is expected to result in
death or that has lasted or is expected to last for a continuous period of 12
months or more and that causes the Optionee to be unable, in the opinion of the
Company and one independent physician selected by the Company, to perform his or
her duties for the Company or a Related Corporation or to be engaged in any
substantial gainful activity.
"EFFECTIVE DATE" means the date on which the Plan is adopted by the Board,
so long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE STOCK" has the meaning set forth in Section 11.3.
"FAIR MARKET VALUE" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing per share sales prices for the Common Stock as reported by
the Nasdaq National Market for a single trading day or (b) if the Common Stock
is listed on the New York Stock Exchange or the American Stock Exchange, the
closing sales price for the Common Stock as such price is officially quoted in
the composite tape of transactions on such exchange for a single trading day. If
there is no such reported price for the Common Stock for the date in question,
then such price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.
"GOVERNANCE AGREEMENT" means the Amended and Restated Governance Agreement
among American Cyanamid Company, Lederle Oncology Corporation and Immunex
Corporation dated as of December 15, 1992.
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"GRANT DATE" means the date on which the Plan Administrator completes the
corporate action relating to the grant of an Option and all conditions precedent
to the grant have been satisfied, provided that conditions to the exercisability
or vesting of Options shall not defer the Grant Date.
"INCENTIVE STOCK OPTION" means an Option to purchase Common Stock granted
under Section 7 with the intention that it qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.
"NONQUALIFIED STOCK OPTION" means an Option to purchase Common Stock granted
under Section 7 other than an Incentive Stock Option.
"OPTION" means the right to purchase Common Stock granted under Section 7.
"OPTIONEE" means (a) the person to whom an Option is granted; (b) for an
Optionee who has died, the personal representative of the Optionee's estate, the
person(s) to whom the Optionee's rights under the Option have passed by will or
by the applicable laws of descent and distribution, or the beneficiary
designated in accordance with Section 10; or (c) the person(s) to whom an Option
has been transferred in accordance with Section 10.
"OPTION TERM" has the meaning set forth in Section 7.3.
"PARENT," except as provided in Section 8.3 in connection with Incentive
Stock Options, means any entity, whether now or hereafter existing, that
directly or indirectly controls the Company.
"PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board or any person to whom the Board has delegated authority
to administer the Plan under Section 3.1.
"RELATED CORPORATION" means any Parent or Subsidiary of the Company.
"RETIREMENT" means retirement as of the individual's normal retirement date
under the Company's 401(k) Plan or other similar successor plan applicable to
salaried employees, unless otherwise defined by the Plan Administrator from time
to time for purposes of the Plan.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY", except as provided in Section 8.3 in connection with Incentive
Stock Options, means any entity that is directly or indirectly controlled by the
Company.
"TERMINATION DATE" has the meaning set forth in Section 7.6.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board and/or the Stock Option Plan
Administration Committee or a committee or committees (which term includes
subcommittees) appointed by, and consisting of two or more members of, the Board
(a "Plan Administrator"). If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the members of any committee acting as Plan Administrator, with
respect to any persons subject or likely to become subject to Section 16 of the
Exchange Act, the provisions regarding (a) "outside directors" as contemplated
by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by
Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility for
administering the Plan with respect to designated classes of eligible persons to
different committees consisting of two or more members of the Board, subject to
such limitations as the Board deems appropriate. Committee members shall serve
for such term as the Board may determine, subject to removal by the Board at any
time. To the extent consistent with applicable law, the Board may authorize a
senior executive officer of the Company to grant Options to specified eligible
persons, within the limits specifically prescribed by the Board. All delegations
of authority by the Board
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pursuant to this Section 3.1 shall be subject to the procedural requirements of
Section 4.03 of the Governance Agreement.
3.2 ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Options under the Plan, including the
selection of individuals to be granted Options, the type of Options, the number
of shares of Common Stock subject to an Option, all terms, conditions,
restrictions and limitations, if any, of an Option and the terms of any
instrument that evidences the Option. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 11.1, a
maximum of 6,000,000 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company.
4.2 LIMITATIONS
Subject to adjustment from time to time as provided in Section 11.1, not
more than 200,000 shares of Common Stock may be made subject to Options under
the Plan to any individual in the aggregate in any one fiscal year of the
Company, except that the Company may make additional one-time grants of up to
200,000 shares to newly hired individuals, such limitation to be applied in a
manner consistent with the requirements of, and only to the extent required for
compliance with, the exclusion from the limitation on deductibility of
compensation under Section 162(m) of the Code.
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Option that
cease to be subject to the Option (other than by reason of exercise of the
Option to the extent it is exercised for shares) shall again be available for
issuance in connection with future grants of Options under the Plan; provided,
however, that for purposes of Section 4.2, any such shares shall be counted in
accordance with the requirements of Section 162(m) of the Code.
SECTION 5. ELIGIBILITY
Options may be granted under the Plan to those officers, directors and
employees of the Company and its Related Corporations as the Plan Administrator
from time to time selects.
SECTION 6. ACQUIRED COMPANY OPTIONS
Notwithstanding anything in the Plan to the contrary, the Plan Administrator
may grant Options under the Plan in substitution for awards issued under other
plans, or assume under the Plan awards issued under other plans, if the other
plans are or were plans of other acquired entities ("Acquired Entities") (or the
parent of the Acquired Entity) and the new Option is substituted, or the old
option is
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assumed, by reason of a merger, consolidation, acquisition of property or of
stock, reorganization or liquidation (the "Acquisition Transaction"). In the
event that a written agreement pursuant to which the Acquisition Transaction is
completed is approved by the Board and said agreement sets forth the terms and
conditions of the substitution for or assumption of outstanding options of the
Acquired Entity, said terms and conditions shall be deemed to be the action of
the Plan Administrator without any further action by the Plan Administrator,
except as may be required for compliance with Rule 16b-3 under the Exchange Act,
and the persons holding such awards shall be deemed to be Optionees.
SECTION 7. TERMS AND CONDITIONS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole discretion,
to issue Options as Incentive Stock Options or as Nonqualified Stock Options,
which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 85% of the Fair Market Value of the
Common Stock on the Grant Date with respect to Nonqualified Stock Options. For
Incentive Stock Options granted to a more than 10% shareholder, the Option
exercise price shall be as specified in Section 8.2.
7.3 TERM OF OPTIONS
The term of each Option (the "Option Term") shall be as established by the
Plan Administrator or, if not so established, shall be 10 years from the Grant
Date. For Incentive Stock Options, the maximum Option Term shall be as specified
in Sections 8.2 and 8.4.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in which, the Option
shall vest and become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option shall vest and become exercisable according to
the following schedule, which may be waived or modified by the Plan
Administrator at any time:
<TABLE>
<CAPTION>
PERIOD OF OPTIONEE'S CONTINUOUS PERCENT OF
EMPLOYMENT OR SERVICE WITH THE COMPANY TOTAL OPTION
OR ITS RELATED CORPORATIONS FROM THE THAT IS VESTED
OPTION GRANT DATE AND EXERCISABLE
---------------------------------------------- -----------------
<S> <C>
After one year................................................................ 20%
After two years............................................................... 40%
After three years............................................................. 60%
After four years.............................................................. 80%
After five years.............................................................. 100%
</TABLE>
The Plan Administrator may adjust the vesting schedule of an Option held by
an Optionee who works less than "full-time" as that term is defined by the Plan
Administrator.
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by delivery to the Company of a stock
option exercise agreement or notice, in a form and in accordance with procedures
established by the Plan Administrator, setting forth the
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number of shares with respect to which the Option is being exercised, the
restrictions imposed on the shares purchased under such exercise agreement, if
any, and such representations and agreements as may be required by the Company,
accompanied by payment in full as described in Section 7.5. An Option may not be
exercised as to less than a reasonable number of shares at any one time, as
determined by the Plan Administrator.
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, in any combination of
(a) cash or check;
(b) tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Optionee for at least six months (or
any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price;
(c) if and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, delivery of an exercise notice, together with
irrevocable instructions, to a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise and to the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board; or
(d) such other consideration as the Plan Administrator may permit.
In addition, to assist an Optionee (including an Optionee who is an officer
or a director of the Company) in acquiring shares of Common Stock pursuant to an
Option granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Option, (i) the payment by the Optionee of a
full-recourse promissory note, (ii) the payment by the Optionee of the purchase
price, if any, of the Common Stock in installments, or (iii) the guarantee by
the Company of a loan obtained by the Optionee from a third party. Subject to
the foregoing, the Plan Administrator shall in its sole discretion specify the
terms of any loans, installment payments or loan guarantees, including the
interest rate and terms of and security for repayment.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be exercisable, and the
terms and conditions of such exercise, if an Optionee ceases to be employed by,
or to provide services to, the Company or its Related Corporations, which
provisions may be waived or modified by the Plan Administrator at any time. If
not so established in the instrument evidencing the Option, the Option shall be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time:
(a) Any portion of an Option that is not vested and exercisable on the date
of termination of the Optionee's employment or service relationship (the
"Termination Date") shall expire on such date, unless the Plan Administrator
determines otherwise.
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(b) Any portion of an Option that is vested and exercisable on the
Termination Date shall expire upon the earliest to occur of:
(i) the last day of the Option Term;
(ii) if the Optionee's Termination Date occurs for reasons other than
Cause, Disability, death or Retirement, the three-month anniversary of such
Termination Date; and
(iii) if the Optionee's Termination Date occurs by reason of Disability,
death or Retirement, the one-year anniversary of such Termination Date.
Notwithstanding the foregoing, if the Optionee dies after the Termination
Date while the Option is otherwise exercisable, the Option shall expire upon the
earlier to occur of (y) the last day of the Option Term and (z) the first
anniversary of the date of death.
Also notwithstanding the foregoing, in case of termination of the Optionee's
employment or service relationship for Cause, the Option shall automatically
expire upon first notification to the Optionee of such termination, unless the
Plan Administrator determines otherwise. If an Optionee's employment or service
relationship with the Company is suspended pending an investigation of whether
the Optionee shall be terminated for Cause, all the Optionee's rights under any
Option likewise shall be suspended during the period of investigation.
An Optionee's transfer of employment or service relationship between or
among the Company and its Related Corporations, or a change in status from an
employee to a consultant that is evidenced by a written agreement between an
Optionee and the Company or a Related Corporation, shall not be considered a
termination of employment or service relationship for purposes of this Section
7. Employment or service relationship shall be deemed to continue while the
Optionee is on a bona fide leave of absence, if such leave was approved by the
Company or a Related Corporation in writing and if continued crediting of
service for purposes of this Section 7 is expressly required by the terms of
such leave or by applicable law (as determined by the Company). The effect of a
Company-approved leave of absence on the terms and conditions of an Option shall
be determined by the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the Optionee holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
8.2 MORE THAN 10% SHAREHOLDERS
If an individual owns more than 10% of the total voting power of all classes
of the Company's stock, then the exercise price per share of an Incentive Stock
Option shall not be less than 110% of the Fair Market Value of the Common Stock
on the Grant Date and the Option Term shall not exceed five years. The
determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code.
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8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
8.4 TERM
Except as provided in Section 8.2, the Option Term shall not exceed 10
years.
8.5 EXERCISABILITY
An Option designated as an Incentive Stock Option shall cease to qualify for
favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option) (a) more than three months
after the Termination Date for reasons other than death or Disability, (b) more
than one year after the Termination Date by reason of Disability, or (c) after
the Optionee has been on leave of absence for more than 90 days, unless the
Optionee's reemployment rights are guaranteed by statute or contract.
For purposes of this Section 8.5, Disability shall mean "disability" as that
term is defined for purposes of Section 422 of the Code.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, the Optionee must hold the shares issued upon the
exercise of an Incentive Stock Option for two years after the Grant Date and one
year from the date of exercise. An Optionee may be subject to the alternative
minimum tax at the time of exercise of an Incentive Stock Option. The Optionee
shall give the Company prompt notice of any disposition of shares acquired by
the exercise of an Incentive Stock Option prior to the expiration of such
holding periods.
8.7 PROMISSORY NOTES
The amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.
SECTION 9. WITHHOLDING
The Company may require the Optionee to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Option. Subject to the Plan and applicable
law, the Plan Administrator may, in its sole discretion, permit the Optionee to
satisfy withholding obligations (up to the maximum rate), in whole or in part,
by paying cash, by electing to have the Company withhold shares of Common Stock
or by transferring shares of Common Stock to the Company, in such amounts as are
equivalent to the Fair Market Value of the withholding obligation. The Company
shall have the right to withhold from any Option or any shares of Common Stock
issuable pursuant to an Option or from any cash amounts otherwise due or to
become due from the Company to the Optionee an amount equal to such taxes. The
Company may also deduct from any Option any other amounts due from the Optionee
to the Company or a Related Corporation.
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SECTION 10. ASSIGNABILITY
Options granted under the Plan and any interest therein may not be assigned,
pledged or transferred by the Optionee and may not be made subject to attachment
or similar proceedings otherwise than by will or by the applicable laws of
descent and distribution, and, during the Optionee's lifetime, such Options may
be exercised only by the Optionee. Notwithstanding the foregoing, and to the
extent permitted by Section 422 of the Code, the Plan Administrator, in its sole
discretion, may permit such assignment, transfer and exercisability and may
permit an Optionee to designate a beneficiary who may exercise the Option or
receive compensation under the Option after the Optionee's death; provided,
however, that any Option so assigned or transferred shall be subject to all the
same terms and conditions contained in the instrument evidencing the Option.
SECTION 11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
11.1 ADJUSTMENT OF SHARES
The aggregate number and class of shares for which Options may be granted
under the Plan, the number and class of shares covered by each outstanding
Option and the exercise price per share thereof (but not the total price), shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a split-up or consolidation of
shares or any like capital adjustment, or the payment of any stock dividend (not
including the stock dividend approved by the Board on February 23, 1999).
11.2 CASH, STOCK OR OTHER PROPERTY FOR STOCK
Except as provided in Section 11.3, upon a merger (other than a merger of
the Company in which the holders of Common Stock immediately prior to the merger
have the same proportionate ownership of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, any Option
granted hereunder shall terminate, but the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, liquidation or reorganization to exercise such Option in whole or in part
whether or not the vesting requirements set forth in the Option agreement have
been satisfied.
11.3 CONVERSION OF OPTIONS ON STOCK FOR STOCK EXCHANGE
If the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock in
any transaction involving a merger (other than a merger of the Company in which
the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, liquidation
or reorganization (other than a mere reincorporation or the creation of a
holding company), the Company and the corporation issuing the Exchange Stock, in
their sole discretion, may determine that all Options granted hereunder shall be
converted into options to purchase shares of Exchange Stock instead of
terminating in accordance with the provisions of Section 11.2. The amount and
price of converted options shall be determined by adjusting the amount and price
of the Options granted hereunder in the same proportion as used for determining
the number of shares of Exchange Stock the holders of the Common Stock receive
in such merger, consolidation, acquisition of property or stock, liquidation or
reorganization. Unless accelerated by the Board, the vesting schedule set forth
in the Option agreement shall continue to apply to the options granted for the
Exchange Stock.
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11.4 FRACTIONAL SHARES
In the event of any adjustment in the number of shares covered by any
Option, any fractional shares resulting from such adjustment shall be
disregarded and each such Option shall cover only the number of full shares
resulting from such adjustment.
11.5 DETERMINATION OF BOARD TO BE FINAL
All Section 11 adjustments shall be made by the Plan Administrator, and its
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. Unless an Optionee agrees otherwise, any
change or adjustment to an Incentive Stock Option shall be made in such a manner
so as not to constitute a "modification" as defined in Section 424(h) of the
Code and so as not to cause his or her Incentive Stock Option issued hereunder
to fail to continue to qualify as an "incentive stock option" as defined in
Section 422(b) of the Code.
11.6 LIMITATIONS
The grant of Options shall in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 12. AMENDMENT AND TERMINATION OF PLAN
12.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall deem
advisable; provided, however, that to the extent required for compliance with
Section 422 of the Code or any applicable law or regulation, shareholder
approval shall be required for any amendment that would (a) increase the total
number of shares available for issuance under the Plan, (b) modify the class of
persons eligible to receive Options, or (c) otherwise require shareholder
approval under any applicable law or regulation. Any amendment made to the Plan
that would constitute a "modification" to Incentive Stock Options outstanding on
the date of such amendment shall not, without the consent of the Optionee, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only.
12.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan shall have
no fixed expiration date; provided, however, that no Incentive Stock Options may
be granted more than 10 years after the later of (a) the Plan's adoption by the
Board and (b) the adoption by the Board of any amendment to the Plan that
constitutes the adoption of a new plan for purposes of Section 422 of the Code.
12.3 CONSENT OF OPTIONEE
The amendment or termination of the Plan or the amendment of an outstanding
Option shall not, without the Optionee's consent, impair or diminish any rights
or obligations under any Option theretofore granted to the Optionee under the
Plan. Except as otherwise provided in the Plan, no outstanding Option shall be
terminated without the consent of the Optionee. Any change or adjustment to an
outstanding Incentive Stock Option shall not, without the consent of the
Optionee, be made in a manner so as to constitute a "modification" that would
cause such Incentive Stock Option to fail to continue to qualify as an Incentive
Stock Option.
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<PAGE>
SECTION 13. GENERAL
13.1 EVIDENCE OF OPTIONS
Options granted under the Plan shall be evidenced by a written instrument
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
13.2 NO INDIVIDUAL RIGHTS
Nothing in the Plan or any Option granted under the Plan shall be deemed to
constitute an employment contract or confer or be deemed to confer on any
Optionee any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation of the Company to terminate
an Optionee's employment or other relationship at any time, with or without
Cause.
13.3 REGISTRATION
Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless such issuance, delivery
or distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Optionee to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
To the extent that the Plan or any instrument evidencing an Option provides
for issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.
13.4 NO RIGHTS AS A SHAREHOLDER
No Option shall entitle the Optionee to any cash dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Option.
13.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Optionees who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other Optionees.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code.
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<PAGE>
13.6 OPTIONEES IN FOREIGN COUNTRIES
The Plan Administrator shall have the authority to adopt such modifications,
procedures and subplans as may be necessary or desirable to comply with
provisions of the laws of foreign countries in which the Company or its Related
Corporations may operate to assure the viability of the benefits from Options
granted to Optionees employed in such countries and to meet the objectives of
the Plan.
13.7 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Optionee, and no Optionee
shall have any rights that are greater than those of a general unsecured
creditor of the Company.
13.8 SEVERABILITY
If any provision of the Plan or any Option is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Option under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Option, such provision shall be stricken as to such jurisdiction,
person or Option, and the remainder of the Plan and any such Option shall remain
in full force and effect.
13.9 CHOICE OF LAW
The Plan and all determinations made and actions taken pursuant hereto, to
the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving effect to
principles of conflicts of laws.
SECTION 14. EFFECTIVE DATE
The Effective Date is the date on which the Plan is adopted by the Board, so
long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
ADOPTED BY THE BOARD ON FEBRUARY 23, 1999 AND APPROVED BY THE COMPANY'S
SHAREHOLDERS ON , 1999.
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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS SUMMARY PAGE
<TABLE>
<CAPTION>
DATE OF SHAREHOLDER
DATE OF BOARD ACTION ACTION SECTION/EFFECT OF AMENDMENT APPROVAL
- --------------------------- --------------------------- --------------------------- ---------------------------
<S> <C> <C> <C>
February 23, 1999 Initial Plan Adoption , 1999
</TABLE>
B-12
<PAGE>
P
R
O
X
Y
IMMUNEX CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS--APRIL 29, 1999
The undersigned hereby appoint(s) Edward V. Fritzky and Peggy V. Phillips and
each of them as proxies, with full power of substitution, to represent and
vote as designated all shares of Common Stock of Immunex Corporation held of
record by the undersigned on March 9, 1999 at the Annual Meeting of
Shareholders of the Company to be held at Benaroya Hall, Illsley Ball
Nordstrom Recital Hall, 200 University Street, Seattle, Washington at 9:00
a.m. on Thursday, April 29, 1999, with authority to vote upon the following
matters and with discretionary authority as to any other matters that may
properly come before the meeting or any adjournment or postponement thereof.
IMPORTANT--PLEASE DATE AND SIGN ON THE OTHER SIDE.
-------------
SEE REVERSE
SIDE
-------------
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- FOLD AND DETACH HERE -
<PAGE>
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE SHAREHOLDER IN THE SPACES PROVIDED.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS.
Please mark
your votes as /X/
indicated in
this example
The Board of Directors recommends a vote "FOR" the Proposals.
FOR all WITHHOLD AUTHORITY
nominees to vote for all nominees
1. Election of the nine nominees / / / /
to serve as directors until the
next annual meeting of shareholders
and until their successors are elected
and qualify: Joseph J. Carr, Kirby
L. Cramer, Edward V. Fritzky,
Robert I. Levy, John E. Lyons,
Joseph M. Mahady, Edith W. Martin,
Peggy V. Phillips and Douglas E. Williams.
WITHHOLD for the following only* (Write the name of the nominee(s) in the
space below.)
- --------------------------------------------------------------------------------
*Unless otherwise directed, all votes will be apportioned equally among these
persons for whom authority is given to vote.
FOR AGAINST ABSTAIN
2. Approval of the 1999 Employee Stock / / / / / /
Purchase Plan.
FOR AGAINST ABSTAIN
3. Approval of the 1999 Stock Option Plan. / / / / / /
FOR AGAINST ABSTAIN
4. Approval of the Amendment to the Articles / / / / / /
of Incorporation.
Please send me an admittance ticket to the Annual Meeting. / /
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATE.
ATTORNEYS, TRUSTEES, EXECUTORS AND OTHER FIDUCIARIES ACTING IN A
REPRESENTATIVE CAPACITY SHOULD SIGN THEIR NAMES AND GIVE THEIR TITLES. AN
AUTHORIZED PERSON SHOULD SIGN ON BEHALF OF CORPORATIONS, PARTNERSHIPS,
ASSOCIATIONS, ETC. AND GIVE HIS OR HER TITLE. IF YOUR SHARES ARE HELD BY TWO
OR MORE PERSONS, EACH PERSON MUST SIGN. RECEIPT OF THE NOTICE OF MEETING AND
PROXY STATEMENT IS HEREBY ACKNOWLEDGED.
Signature(s) Date
--------------------------------------- ----------------------
NOTE: Please sign as name appears on your stock certificate. Joint owners should
each sign. When signing as attorney, trustee, executor or other fiduciary acting
in a representative capacity, please give full title as such.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
