CYTOGEN CORPORATION
600 College Road East - CN 5308
Princeton, New Jersey 08540-5308
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD May 16, 2000
To the Stockholders of
Cytogen Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of CYTOGEN
CORPORATION (the "Company) will be held on Tuesday, May 16, 2000 at 9:00 a.m. at
The Holiday Inn Princeton, Route One at Ridge Road, Princeton, New Jersey 08540
for the following purposes:
1. The election of six (6) directors to serve until the next annual
meeting of stockholders;
2. To consider and vote upon a proposal to amend the Company's Restated
Certificate of Incorporation to increase the total number of
authorized shares of capital stock from 95,000,000 shares, which
includes 89,600,000 shares of Common Stock, and 5,400,000 shares of
Preferred Stock, to 255,400,000 shares, consisting of 250,000,000
shares of Common Stock and 5,400,000 shares of Preferred Stock; and
3. To transact such other business as may properly be brought before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 3, 2000, as
the record date for determination of the stockholders entitled to notice of and
to vote at the Annual Meeting, and only holders of record of the Company's
Common Stock on said date will be entitled to receive notice of and to vote at
the meeting.
Stockholders are cordially invited to attend the meeting. Whether or not
you plan to attend the meeting, please mark, sign, date and return the enclosed
Proxy. The giving of your Proxy will not affect your right to vote in person in
the event you find it convenient to attend the meeting. You may revoke the Proxy
at any time before the closing of the polls at the meeting.
Attendance at the annual meeting will be limited to stockholders and
invited guests of the Company.
By Order of the Board of Directors
Donald F. Crane, Jr.
Princeton, New Jersey Corporate Secretary
April 18, 2000
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
CYTOGEN CORPORATION
---------------
PROXY STATEMENT
---------------
General
This Proxy Statement is being mailed to stockholders beginning April 18,
2000 in connection with the solicitation by the Board of Directors of Cytogen
Corporation, a Delaware Corporation (the "Company" or "Cytogen") of proxies to
be voted at the 2000 Annual Meeting of Stockholders to be held at The Holiday
Inn Princeton, Princeton, New Jersey, on May 16, 2000 at 9:00 A.M. (local time),
and at any adjournment thereof, for the purposes set forth in the attached
Notice of Annual Meeting of Stockholders.
When proxies in the enclosed form are returned properly executed, the
shares represented thereby will be voted at the meeting and, where instructions
have been given by the stockholder, will be voted in accordance therewith. If
the stockholder does not otherwise specify, the stockholder's shares will be
voted for the election of the listed nominees and in accordance with the
directors' recommendations on the other proposal listed on the proxy card. If
any other matter is properly presented for action at the meeting, the persons
named in the enclosed form of proxy will vote on such matter in their
discretion. Any proxy may be revoked by the stockholder, either by attending the
meeting and voting in person or by submitting a revocation in writing to the
Company (including a subsequent signed proxy) at any time prior to the closing
of the polls at the meeting.
Stockholder Vote Required
To be elected a director, a nominee must receive the affirmative vote of
a plurality of shares present in person or represented by proxy at the meeting
and entitled to vote in the election of directors. A plurality vote means that
the six individuals who receive the largest number of votes cast will be elected
as directors. Withheld votes will not affect the outcome of the election of
directors. Stockholder approval of the proposed amendment to the Certificate of
Incorporation will require the affirmative vote of the holders of a majority of
the shares of Common Stock outstanding on the record date. Shares held through a
broker, bank, or other nominee which can not be voted by the nominee because
they have not received voting instructions from the beneficial owner are
considered to be broker non-votes. Therefore, abstentions on the proposal to
amend the Certificate of Incorporation and broker non-votes will have the effect
of a vote against the proposal. Properly returned proxies which withhold
authority to vote for directors or abstain (including broker non-votes) will be
counted for purposes of determining if a quorum is present for the annual
meeting.
The Company's auditors are Arthur Andersen LLP. A representative of Arthur
Andersen LLP will be present at the meeting, will have an opportunity to make a
statement if the representative desires to do so, and will be available to
respond to appropriate questions.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 WILL BE PROVIDED
WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN REQUEST. REQUESTS SHOULD BE
DIRECTED TO CORPORATE COMMUNICATIONS, CYTOGEN CORPORATION, 600 COLLEGE ROAD
EAST-CN 5308, PRINCETON, NJ 08540-5308.
OUTSTANDING SHARES, VOTING RIGHTS AND PRINCIPAL STOCKHOLDERS
Holders of record of outstanding shares of the Company's Common Stock $.01
par value ("Common Stock") at the close of business on April 3, 2000 will be
entitled to notice of and to one vote per share so held of record on all
business at the Annual Meeting. On the record date, there were 72,712,816 shares
of Common Stock outstanding. Votes cast in person or by proxy at the Annual
Meeting will be tabulated by the Inspector(s) of Election appointed for the
annual meeting who will determine whether a quorum is present and the results of
the votes with respect to each matter.
<PAGE>
The following table sets forth certain information as of April 10, 2000,
with respect to the beneficial ownership of the Company's Common Stock by each
person known by the Company to be the beneficial owner of more than 5% of its
outstanding Common Stock, by each director and nominee for election as a
director, by each executive officer named in the Summary Compensation Table, and
by all executive officers and directors as a group. Except as indicated in the
footnotes to the table, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them.
Number of Shares
Name and Address of of Common Stock Percent
Beneficial Owner(1) Beneficially Owned of Class
- ------------------- ------------------ --------
State of Wisconsin Investment Board
121 E. Wilson Street
Madison, WI 53702..................................... 3,590,000 5.0%
Directors and Executive Officers
- --------------------------------
S. Leslie Misrock (2) (3).............................. 727,500 1%
John D. Rodwell (2).................................... 378,700 *
H. Joseph Reiser (2)................................... 305,000 *
Donald F. Crane, Jr. (2)............................... 196,427 *
Jane M. Maida (2)..................................... 122,084 *
Ronald J. Brenner (2) (4)............................. 104,200 *
James A. Grigsby (2)................................... 102,867 *
John E. Bagalay, Jr. (2)............................... 97,467 *
Robert F. Hendrickson (2).............................. 30,600 *
Stephen K. Carter (2)................................. 4,600 *
Graham S. May (5)...................................... 0 *
All executive officers
and directors as a group (13 persons)(1).............. 2,069,445 2.89%
- -----------------
*Indicates amount is less than 1%.
(1) All information with respect to beneficial ownership of shares is based upon
filings made by the respective beneficial owners with the Securities and
Exchange Commission or information provided by such beneficial owners to the
Company. Percent of class for each person and all executive officers and
directors as a group is based on shares of Common Stock outstanding on April 10,
2000 and includes shares subject to options held by the individual or the group,
as applicable, which are exercisable or become exercisable within 60 days
following such date.
(2) Includes shares of Common Stock which the named persons have the right to
acquire upon the exercise of stock options, within sixty days of April 10, 2000,
as follows: Dr. Reiser: 300,000; Dr. Rodwell: 318,700; Dr. Brenner: 16,000; Dr.
Bagalay: 84,467; Mr. Grigsby: 27,867; Mr. Hendrickson: 20,600; Mr. Misrock:
7,500; Dr. Carter: 1,600; Mr. Crane: 177,649; and Ms. Maida: 108,093 . The group
number includes the shares of Common Stock which the named persons and other
executive officer have the right to acquire upon the exercise of stock options,
within sixty days of March 15, 2000.
(3) Mr. Misrock was elected to the Board of Directors in August, 1999.
(4) Dr. Brenner is retiring from the Board of Directors at the Annual Meeting of
Stockholders. He has served Cytogen in a number of capacities since 1984.
(5) Dr. May's employment with the Company was terminated in November, 1999.
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PROPOSAL ONE. ELECTION OF DIRECTORS
Nominees for Directors
The persons named in the accompanying form of proxy intend, except as
otherwise directed, to vote for the election as directors of the six nominees
listed below, each for a term expiring at the next Annual Meeting or until his
or her successor is duly elected and qualified. All nominees are now serving as
directors of the Company, and all have informed management that they are willing
to serve as directors of the Company. If any of the nominees should decline or
be unable to act as a director, the persons named as proxies in the form of
proxy will vote in accordance with their best judgment and shall have
discretionary authority to vote for a substitute nominee. The Board of Directors
has fixed its present size at, and for the purposes of this meeting authorized
the election of, six directors.
The following sets forth certain information as to the nominees for
directors of the Company.
James A. Grigsby, 57, Chairman of the Board of Directors, has been a
director of the Company since May 1996 and Chairman since June 1998. Since
April, 1999, Mr. Grigsby has been affiliated with the consulting firm of
Nachman, Hays & Associates. Previously, since 1994, Mr. Grigsby was president of
Cancer Care Management LLC, a consulting firm providing consulting services
regarding cancer disease management issues. From 1989 to 1994, Mr. Grigsby was
President of CIGNA Corporation's International Life and Employee Benefits
Division, which operated in over 20 countries worldwide, and during that period
also served as the head of CIGNA's national health care sales force. Prior to
that time, since 1978, he held a number of executive positions with CIGNA
Corporation. Mr. Grigsby received a B.A. degree in Mathematics from Baylor
University and is a Fellow of the Society of Actuaries.
John E. Bagalay, Jr., 66, has been a director of the Company since October
1995. Dr. Bagalay was a director of Cellcor, Inc. prior to the Company's
acquisition of Cellcor in October 1995. He was interim President, CEO and Chief
Financial Officer of the Company from January - August, 1998. He has been Senior
Advisor to the Chancellor, Boston University since January, 1998. He has been a
director, Chief Operating Officer and Chief Financial Officer of Eurus
Technologies, Inc. since January, 1999. He served as the Managing Director of
Community Technology Fund, the venture capital affiliate of Boston University,
from September 1989 until January 1998. Dr. Bagalay has also served as General
Counsel for Texas Commerce Bancshares and for Lower Colorado River Authority, a
regulated electric utility. Dr. Bagalay currently also serves on the boards of
directors of Wave Systems Corporation and UAE, Inc. Dr. Bagalay holds a B.A. in
Politics, Philosophy and Economics and a Ph.D. in Political Philosophy from Yale
University, and a J.D. from the University of Texas.
Stephen K. Carter, 62, has been a director of the Company since September,
1998. Dr. Carter was Senior Vice President of Research and Development at
Boehringer Ingelheim Pharmaceuticals, Inc. from 1995 to 1997. Prior to joining
Boehringer, Dr. Carter was Senior Vice President of Worldwide Clinical Research
and Development at Bristol-Myers Squibb Company. From 1976 to 1982, Dr. Carter
served as Director of the Northern California Cancer Institute. Dr. Carter was
also appointed to President Clinton's panel for AIDS drug development. Dr.
Carter also is a director of Allos Therapeutics and Alfacell Corporation. Dr.
Carter received an A.B. in History from Columbia College and an M.D. from New
York Medical College. He completed a medical internship and residency at Lenox
Hill Hospital.
Robert F. Hendrickson, 67, became a director of the Company in March 1995.
Since 1990, Mr. Hendrickson has been a consultant to the pharmaceutical and
biotechnology industries on strategic management and manufacturing issues with a
number of leading biotechnology companies among his clients. Prior to his
retirement in 1990, Mr. Hendrickson was Senior Vice President, Manufacturing and
Technology for Merck & Co., Inc. He is a director of Envirogen, Inc., The
Liposome Company, Inc. and Unigene, Inc., and a trustee of the Carrier
Foundation, Inc. Mr. Hendrickson received an A.B. degree from Harvard College
and an M.B.A. from the Harvard Graduate School of Business Administration.
3
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S. Leslie Misrock, 72, became a director of the Company in August 1999. Mr.
Misrock has been a Partner of the Law Firm of Pennie & Edmonds, a New York based
intellectual property firm since 1964 and a Senior Partner since 1971. Mr.
Misrock holds an SB degree in Chemistry, from the Massachusetts Institute of
Technology, an A.M. degree in Chemistry from Columbia University and an LLB
degree from Fordham University. Mr. Misrock is a member of the Visiting
Committees of the Departments of Biology and Chemistry at MIT, The Association
for the Cure of Prostate Cancer (CaP CURE), the Board of Visitors at Fordham Law
School, the Health Sciences Board of Columbia University's College of Physicians
and Surgeons, and the National Prostate Cancer Coalition.
H. Joseph Reiser, 53, joined the Company in August 1998 as President and
Chief Executive Officer and as a member of the Board of Directors. Most
recently, Dr. Reiser was Corporate Vice President and General Manager,
Pharmaceuticals, for Berlex Laboratories Inc., the U.S. subsidiary of Schering
AG. During his 17 year tenure at Berlex, Dr. Reiser held positions of increasing
responsibility, serving as the first President of Schering Berlin's Venture
Corporation, Vice President, Technology and Industry Relations, and Vice
President, Drug Development and Technology. Dr. Reiser received his Ph.D. in
Physiology from Indiana University School of Medicine, where he also earned his
Master and Bachelor of Science degrees.
Meetings and Committees
During 1999, the Board of Directors met ten times. Each of the incumbent
directors attended at least 75% of the aggregate of all meetings of the Board of
Directors and committees of which he was a member held during the period he
served on the Board of Directors or such committee.
The standing committees of the Board of Directors are the Audit and Finance
Committee, the Compensation Committee, the Finance Committee, and the Nominating
Committee.
The Audit and Finance Committee recommends the selection of a firm of
independent auditors to the Board of Directors for purposes of auditing the
Company's financial statements; reviews the audit with the auditors and
management; and consults with the auditors and management regarding risk
management and the adequacy of financial and accounting procedures and controls.
The Audit Committee met three (3) times during 1999 when it functioned solely as
an audit committee. Recently, the Nasdaq Stock Market has adopted requirements
relating to the independence of members of the audit committees of companies
traded on that market. The committee members meet the requirements of that rule,
except that members may not have been employees of the Company within the three
prior years. Dr. Bagalay served at the request of the Board as interim Chief
Executive Officer from January through August, 1998, pending recruitment of a
permanent Chief Executive Officer, and was deemed to be an employee during this
period. The new rules permit one member of an audit committee to remain on the
committee even if the independence criteria are not met in certain
circumstances. In accordance with these rules, the Board of Directors determined
that, given his financial expertise and judgment, and the brief period of time
which he served as an employee on the Board's request, Dr. Bagalay's continued
service on the Audit Committee is in the best interest of the Company and its
stockholders. The Audit and Finance Committee also reviews and monitors the
financial planning and financial structure of the Company to accommodate the
operating requirements and strategic objectives. The Finance Committee (prior to
a joint Audit and Finance Committee) met one (1) time during 1999. The Audit and
Finance Committee members are John E. Bagalay, Jr. (Chairman), Robert F.
Hendrickson and Stephen K. Carter.
The Compensation Committee evaluates the performance of the Company's Chief
Executive Officer and recommends his compensation to the Board annually;
oversees the administration of the Company's stock option plans; recommends to
the Board of Directors compensation for executive officers and other key
employees of the Company; and reviews the Company's compensation policy
generally. The Compensation Committee met four (4) times during 1999. Its
current members are Robert F. Hendrickson (Chairman), and S. Leslie Misrock.
The Nominating Committee is responsible for investigating, recruiting and
interviewing potential candidates for election to the Board of Directors and for
formally nominating for consideration by the full Board of Directors those
individuals deemed worthy by the Nominating Committee of election to the Board
of Directors. The Nominating Committee met in connection with approval of the
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slate of nominees for election as directors at the 1999 Annual Meeting of
Stockholders and in connection with the election of Mr. Misrock to the Board of
Directors. Its current members are James A. Grigsby (Chairman) and H. Joseph
Reiser. The Nominating Committee will consider nominees for the Board of
Directors suggested by stockholders whose names are submitted in writing to the
Nominating Committee in care of the Office of the Corporate Secretary of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES LISTED ABOVE
5
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Directors' Compensation
Each director who is not also an officer of the Company is paid an annual
retainer of $8,000, plus $1,000 for each Board meeting attended ($500 if
participation was by telephone). Any non-employee director who also chaired a
Board committee received an additional annual fee of $1,000. Non-employee
directors receive $250 for each committee meeting attended, but receive no
additional retainer for committee membership. Members of the Nominating
Committee do not receive any compensation for serving on that committee. The
Chairman of the Board (who is not an employee of the Company) currently
receives, based upon significant time spent on Company business, an additional
annual retainer of $50,000 and an annual option grant for the purchase of 15,000
shares of the Company's common stock. The additional retainer contemplates four
days per month substantially given to Company business by the Chairman; an
amount of $1,500 per day is paid to the Chairman for additional days in which
the significant part of the day is devoted to Company matters. During 1999, the
Chairman was paid $136,000, including his base annual retainer of $50,000 under
this arrangement.
Pursuant to the 1999 Stock Option Plan for Non-Employee Directors (the
"Directors Plan"), on the day following each Cytogen Corporation annual meeting
of shareholders, each individual who is elected or re-elected as a Non-Employee
Director shall automatically be granted a Stock Option to purchase 10,000 Shares
of Cytogen common stock. Each Non-Employee Director appointed other than at an
annual meeting receives an initial grant, on the date of appointment, equal to a
pro rata portion of 10,000 shares of Cytogen common stock, based upon the number
of months remaining from the date of election until the one year anniversary of
the preceding annual meeting. In addition, the Chairman of the Board, unless the
Committee determines otherwise, receives an additional grant of 15,000 shares of
Cytogen Common Stock on the date of each annual meeting. Options granted under
the Directors Plan are exercisable at a price equal to the average of the high
and low sale prices of the Common Stock as reported on the Nasdaq Stock Market
on the date of grant, and vest (i.e., first become exercisable) at the first
anniversary of the option grant date. Each director's outstanding options become
immediately exercisable in full (i) upon the occurrence of a change of control
of the Company, (ii) upon death or disability or (iii) upon resignation or
retirement after age 55. Options granted under the Directors Plan are granted
automatically and without the need for further action by the Company, the Board
of Directors or the Company's stockholders.
Compensation Committee Interlocks And Insider Participation
The members of the Compensation Committee during 1999 were Ronald J.
Brenner (Chairman), and Robert F. Hendrickson. Neither of these gentlemen were
officers or employees of the Company while serving on the Compensation
Committee. Dr. Brenner served as the Company's President and Chief Executive
Officer from 1984 to 1988.
PROPOSAL TWO. APPROVAL OF AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED NUMBER OF SHARES.
On March 21, 2000, the Board of Directors approved, subject to stockholder
approval, an amendment to Cytogen's Restated Certificate of Incorporation (the
"Certificate") increasing the number of shares of Common Stock that the Company
is authorized to issue from 89,600,000 to 250 million (the "Amendment").
The Board has determined that an increased number of authorized shares of
Cytogen Common Stock is in the best interest of the Company and its
stockholders.
The proposed increase in the number of shares of authorized common stock
will ensure that shares will be available, if needed, for issuance in connection
with stock splits, acquisitions, and other corporate purposes. The Board of
Directors believes that the availability of the additional shares for such
purposes without delay or the necessity for a special shareholders' meeting
would be beneficial to the Company. The Company does not have any immediate
plans, arrangements, commitments or understandings with respect to the issuance
of any of the additional shares of common stock which would be authorized by the
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proposed amendment. No further action or authorization by the Company's
shareholders would be necessary prior to the issuance of the additional shares
of common stock unless required by applicable law or regulatory agencies or by
the rules of any stock market on which the Company's securities may then be
listed.
The holders of any of the additional shares of common stock issued in the
future would have the same rights and privileges as the holders of the shares of
common stock currently authorized and outstanding. Those rights do not include
preemptive rights with respect to the future issuance of any additional shares.
The increased authorized shares of common stock could be used to make a
takeover attempt more difficult such as by using the shares to make a
counter-offer for the shares of the bidder or by selling shares to dilute the
voting power of the bidder. As of this date, the Board is unaware of any effort
to accumulate the Company's shares or to obtain control of the Company by means
of a merger, tender offer, solicitation in opposition to management or
otherwise. On June 21, 1998, the Company adopted a Stockholder Rights Plan (the
"Plan"). Under the Plan, all shareholders received, for each share owned, one
preferred stock purchase right ("Right") which becomes exercisable if a person
or group acquires beneficial ownership of 20% or more of the Company's common
stock and can be made exercisable by the Board of Directors if a person or group
commences a tender offer which would result in such person or group beneficially
owning 20% or more of the Company's common stock. If the Rights become
exercisable, each Right entitles the holder to purchase, at the specified
exercise price, common shares having a market value of twice the exercise price.
The Rights expire on June 19, 2008.
As of March 13, 2000, there were 72,649,046 shares of Common Stock
outstanding. In addition, the Company has filed a registration statement with
the Securities and Exchange Commission relating to the offering and sale of up
to 6,828,363 shares of the Company's Common Stock, including shares which could
be sold under an over-allotment option. An additional 6,828,363 shares of
Cytogen Common Stock have been reserved for issuance upon exercise of
outstanding stock options, warrants and upon conversion of a note presently
convertible into Cytogen Common Stock.
If this proposal is adopted by the stockholders, the FIFTH Article of the
Restated Certificate of Incorporation of the Corporation would be amended in its
entirety to be and read as follows:
FIFTH
A. Total Capital Stock. The total number of shares of all classes of
capital stock which the corporation shall have the authority to issue is
two hundred fifty five million four hundred thousand (255,400,000) shares,
of which two hundred fifty million (250,000,000) shall be shares of Common
Stock, the par value of which is one cent ($.01) per share, amounting in
the aggregate to two million five hundred thousand dollars ($2,500,000) and
five million four hundred thousand (5,400,000) shall be shares of Preferred
Stock, the par value of which is one cent ($.01) per share, amounting in
the aggregate to fifty four thousand dollars ($54,000).
B. Common Stock. Each holder of Common Stock shall be entitled to one
vote for each share of Common Stock held on all matters on which holders of
Common Stock shall be entitled to vote.
C. Preferred Stock. The Board of Directors of the Corporation is
authorized to cause the Preferred Stock to be issued in one or more series,
with such voting powers, full or limited, or no voting powers, and with
such designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions
thereof, as shall be stated and expressed in the resolution or resolutions
providing for the issue of such stock adopted by the Board of Directors.
The Board of Directors of the Corporation is expressly authorized to adopt
such resolution or resolutions and to issue such stock as may be desirable.
D. Residual Rights. All rights accruing to the outstanding shares of
the Corporation not expressly provided for to the contrary herein shall be
vested in the outstanding shares of Common Stock and Preferred Stock pari
passu.
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VOTE REQUIRED FOR APPROVAL OF AMENDMENT TO CYTOGEN CORPORATION RESTATED
CERTIFICATE OF INCORPORATION.
The affirmative vote of a majority of the shares of Common Stock
outstanding is necessary to approve the Amendment to the Company's Restated
Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
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EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
awarded to, earned by or paid to (i) the Company's Chief Executive Officer, and
(ii) the other four most highly compensated executive officers of the Company,
for services rendered to the Company during the Company's fiscal years ended
December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
--------------------------------- -----------------------
Other Restricted Securities
Annual Stock Underlying All Other
Fiscal Salary Bonus Compen- Award Options Compensation(2)
Name and Principal Position Year ($) ($) sation($) ($) (#) ($)
- --------------------------- ------ ------- ------- --------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
H. Joseph Reiser (3) 1999 275,000 80,000 0 0 0 7,005
President and Chief 1998 89,903 150,000 0 0 2,250,000(4) 399
Executive Officer
Graham May (5) 1999 205,200 0 0 0 0 7,669
Vice President, Medical 1998 226,270 10,000 0 0 203,743 7,674
Affairs and Corporate 1997 206,446 31,100 0 0 45,000 6,515
Development
Donald F. Crane, Jr. (6) 1999 196,308 15,728 0 0 90,886 5,304
Vice President, 1998 188,308 12,500 0 0 181,763 3,484
General Counsel 1997 93,462 30,375 0 0 55,000 374
and Corporate Secretary
John D. Rodwell 1999 182,654 14,400 0 0 0 8,610
Acting President 1998 203,000 0 0 0 150,000 8,881
and Chief Technical 1997 202,999 22,800 0 0 0 8,631
Officer, AxCell BioSciences,
a subsidiary
Jane M. Maida (7) 1999 134,996 11,188 0 0 69,187 6,265
Vice President, Finance 1998 127,816 25,000 0 0 122,705 7,330
And Administration 1997 98,539 17,000 0 0 31,000 2,808
</TABLE>
- ------------------------
(1) Perquisites or personal benefits did not exceed the lesser of either
$50,000 or 10% of total annual salary and bonus reported for the named
executive officers.
(2) The amounts disclosed in this column include amounts contributed or accrued
by the Company in the respective fiscal years under the Company's Savings
Plan, a defined contribution plan which consists of a 401(k) portion and a
discretionary contribution portion. In fiscal year 1999, these amounts were
as follows: on behalf of; Dr. Reiser, $6,296; Dr. May, $7,146; Mr. Crane,
$5,015; Dr. Rodwell, $8,200; and Ms. Maida, $6,161. The amounts disclosed
also include insurance premiums paid by the Company with respect to group
term life insurance. In fiscal year 1999, these amounts were as follows: on
behalf of; Dr. Reiser, $709; Dr. May, $523; Mr. Crane, $289; Dr. Rodwell,
$410; and Ms. Maida, $104.
(3) Dr. Reiser joined the Company as President and Chief Executive Officer
effective August 24, 1998.
(4) Pursuant to Dr. Reiser's Employment Agreement, the Company granted to Dr.
Reiser an option to purchase up to 2,250,000 shares of Common Stock at an
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exercise price of $1.0937, vesting 33.3% annually from the date. The
vesting schedule begins as follows: (a) 900,000 shares begin vesting upon
commencing employment; (b) 450,000 shares begin vesting upon completion of
certain performance objectives, to the satisfaction of the Board of
Directors; (c) 900,000 shares begin vesting upon the completion of
additional performance objectives to the satisfaction of the Board of
Directors.
(5) Dr. May's employment with the Company was terminated in November, 1999.
(6) Mr. Crane joined the Company as Vice President, General Counsel and
Corporate Secretary in June, 1997.
(7) Ms. Maida joined the Company as Corporate Controller in March, 1997, and
was promoted to her current position in August, 1999.
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The following table sets forth information regarding individual grants
of stock options to the named executive officers during fiscal year 1999:
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1999
Potential Realizable Value at Assumed Annual
Rates of Stock Price Appreciation for Option
Individual Grants Term (2)
---------------------------------------------------------- ---------------------------------------------
Percent of
Number of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted(1) Fiscal Year (per share)(1) Date 5%($) 10%($)
---- ---------- ------------ -------------- ---------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
H. Joseph Reiser 0
Graham S. May 70,000(3) 11.55 1.328 2/6/00 4,648 9,296
John D. Rodwell 0
Jane M. Maida 40,000 7.46 1.328 1/26/09 33,407 84,660
29,187 5.44 2.672 12/31/09 49,046 124,292
Donald F. Crane, Jr. 60,000 11.19 1.328 1/26/09 50,110 126,989
30,886 5.76 2.672 12/31/09 51,901 131,527
</TABLE>
- -----------------------
(1) The exercise price of all stock options granted during the last fiscal year
is equal to the average of the high and low sale prices of the Common Stock
as reported on the Nasdaq National Market on the respective dates the
options were granted. Options generally vest over three years at the rate
of 33.3% per year beginning on the first anniversary of the date of grant,
subject to acceleration under certain conditions. The maximum term of each
option granted is 10 years from the date of grant.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock
market conditions. There is no assurance that the amounts reflected will be
realized.
(3) Dr. May's employment with the Company was terminated in November, 1999.
11
<PAGE>
The following table sets forth information regarding aggregated exercises
of stock options by the named executive officers during fiscal year 1999 and
fiscal year-end values of unexercised options:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at FY-End FY-End(1)(2)
---------------------- -----------------------
(#) ($)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise(#) ($)(1) Unexercisable Unexercisable
---- --------------- -------------- ----------------- -------------------
<S> <C> <C> <C> <C>
H. Joseph Reiser 0 0 350,000/1,900,000 552,405/2,998,770
Graham S. May (3) 103,743 78,656 18,000/0 0/0
John D. Rodwell 0 0 293,700/150,800 35,950/38,481
Donald F. Crane, Jr. 0 0 135,096/192,553 125,378/140,557
Jane M. Maida 0 0 93,906/128,986 110,670/106,932
</TABLE>
- ------------------------
(1) The dollar values in this column were calculated by determining the
difference between the fair market value of the Common Stock underlying the
options at fiscal year-end or the date of exercise, as the case may be, and
the exercise price of the options.
(2) The fair market value of a share of Common Stock (calculated as the average
of the high and low sale prices as reported on the Nasdaq National Market)
on December 31, 1999 was $2.672.
(3) Dr. May's employment with the Company was terminated in November, 1999.
12
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
This report and the Performance Graph contained in this Proxy Statement shall
not be deemed incorporated by reference into any of the Company's filings under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended.
Policy
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for oversight of the Company's executive compensation program. The
Committee is composed entirely of independent, non-employee directors. The
Committee makes recommendations to the full Board of Directors on compensation
policy and as to specific compensation actions, except where independent action
by the Committee is appropriate.
The Company's compensation program, both for its executive officers as well
as for all employees, is based on the philosophy that the interests of the
employees should be closely aligned with those of the Company's stockholders.
The 1999 executive compensation program was based on the following principles:
- compensation opportunities should attract the best talent to the Company;
motivate individuals to perform at their highest levels; reward outstanding
achievement; and retain the leadership and skills necessary for building
long-term stockholder value;
- a portion of total compensation should be at risk of performance; and
- individual executives should be encouraged to manage from the perspective
of owners of the Company.
The Company's 1999 compensation program reflected the Committee's
assessment as to appropriate treatment on an individual basis for the Chief
Executive Officer and the other named executives compared to the prior year
levels. 1998 compensation was determined by reference to published information
and other information as to industry levels of compensation treatment in base
salaries. The comparative companies included, but were not identical to, the
companies included in the peer group with respect to the stock performance graph
set out below. The Company targets its overall compensation program at the
median level of the biotechnology industry. In addition, compensation for the
named (and other) executives, including the Chief Executive Officer(s), took
into account individual responsibility and performance as assessed by the
Committee.
The compensation program includes a combination of competitive base salary
and benefits, annual cash bonus opportunities, and stock option awards. The 1999
executive compensation program and a specific discussion as to the compensation
of the Chief Executive Officer are set out below.
Annual Compensation for 1999
Generally, annual compensation of executive officers under the executive
compensation program for 1999 consisted of salary and bonus components.
Base Salary
In December 1998, the Compensation Committee determined for recommendation
to the full Board base salaries and annual incentive opportunities for 1999 for
its executives, including the Chief Executive Officer and the other named
executives.
Bonus
A portion of 1998 executive officer annual compensation opportunity was
based on corporate and individual performance. The Committee believes that
incentive compensation should be linked to corporate financial results and
corporate goals. The Committee also believes that, while performance goals
should include corporate performance, executives should also be held accountable
for their individual areas of responsibility. Bonus opportunity levels for 1999
performance were set in advance of the year at a percentage of base salary, with
the total amount of the bonus opportunity dependent on the extent to which
individual and corporate objectives were achieved and the amount of cash
available as determined by the Committee. At year-end, the Committee determined
13
<PAGE>
the extent to which the financial and corporate objectives had been achieved
applied to the percentage of base salary for each of the named executive
officers. The amounts approved on the Committee's recommendations were less than
target amounts; in addition, the Company paid a portion of the annual awards by
an additional year-end stock option grant to certain of the named executives
other than the Chief Executive Officer.
Long Term Compensation - Stock Options
The Compensation Committee believes that stock options are an appropriate
means to link its employees' interests with those of the Company's stockholders.
Stock option awards are designed primarily to provide strong incentives for
superior longer-term performance and continued retention by the Company. Because
the Committee believes that corporate performance is one of the principal
factors influencing the market value of the Company's Common Stock, the granting
of stock options to executive officers encourages them to work to achieve
consistent improvements in corporate performance. Options only have value to the
executive when the price of the Company's common stock exceeds the exercise
price, which is not less than the fair market value of the common stock at the
date of grant.
Stock option grants were made to the named executive officers in 1999, as
follows: Dr. May, 70,000; Mr. Crane, 90,886; and Ms. Maida, 69,187. These grants
consisted of two years' grants; one grant during the beginning of 1999 with
respect to 1998, and a grant at the end of 1999 with respect to 1999. Dr. Reiser
was not awarded additional options in view of the significant grant he received
upon joining the Company. Dr. Rodwell was not awarded a grant of options for
Cytogen; he has assumed responsibilities solely for a business unit and the
Committee believed that it was more important to provide him with incentives as
to development of that subsidiary. These option grants were set taking into
account the comparison of practices at peer groups (in the survey noted above),
an individual's level of responsibility and furtherance of corporate objectives,
and the amount and terms of past stock option awards. The Committee also took
into account in its review of option grants the fact that the Company has no
other long term incentive program, and believes that options are important to
retain executives and promote steps to build long term value. Option grants in
addition to the annual option grant described above were made in December, 1999,
to certain of the named executive officers, as disclosed, as payment in lieu of
part of the cash bonus awards deemed appropriate for these individuals for
performance during the year.
Compensation of the Chief Executive Officer
Dr. Reiser's salary for 1999 was set on the recommendation of the Committee
and was believed to be an appropriate level of base compensation in view of
compensation levels paid by the industry, in view of Dr. Reiser's experience,
and considering the continuing accomplishments of the Company under his
leadership during the year. The year end bonus in the amount of $80,000 was
based on the Committee's judgment as to achievement of his objectives compared
to a target amount set by the Committee in advance of the year.
Tax Considerations
Federal tax laws impose a limit on deductions for each of the executives
named in the summary compensation table to $1 million. Certain compensation,
including compensation based on performance, is not subject to this limit if
certain conditions are met, primarily, that the compensation is based on
objective performance criteria approved by the stockholders. The compensation
payments must also be made pursuant to a plan administered by a committee of
outside directors. The Committee must certify that the performance goals were
achieved before payments can be awarded.
The Committee believes that its executive compensation program is
consistent with the intent of this legislation. The Company's regular stock
option plans under which options may be granted to executive officers have been
approved by the stockholders and qualify for the exclusion from the deduction
limits. Base salary, annual bonuses, and certain other compensation amounts
disclosed in the summary compensation table do not qualify for the exclusion
from the $1 million limit but such amounts of compensation are not expected to
exceed the deduction limits. The Committee will consider appropriate steps in
the future, including stockholder approval, to maintain deductions for its
incentive compensation plans to the greatest extent practical while maintaining
flexibility to take actions which it deems in the best interests of the Company
and its stockholders but which may result in certain compensation not qualifying
for tax deductions.
14
<PAGE>
The Committee believes that performance should be rewarded, that the financial
interests of the executive officers should be aligned with the stockholders, and
that compensation should be competitive. We have structured compensation at the
Company to meet these criteria.
* * * * *
The foregoing report on compensation is provided by the following outside
directors, who constituted the Compensation Committee during 1999:
Ronald J. Brenner, Chairman
Robert F. Hendrickson
15
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
stockholder return on the Common Stock for a five-year period (December 31, 1994
to December 31, 1999) with the cumulative total return of the Nasdaq U.S. Stocks
Index and the Nasdaq Pharmaceutical Index, a broad index of biopharmaceutical
and pharmaceutical companies similar in capitalization and stage of corporate
development to the Company.*
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
- ------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cytogen Corporation $100.00 $129.23 $135.38 $40.00 $20.77 $63.85
- ------------------------------------------------------------------------------------------------
NASDAQ Pharmaceutical Index $100.00 $183.41 $183.98 $189.98 $241.95 $450.29
- ------------------------------------------------------------------------------------------------
NASDAQ Market Index-U.S. Cos. $100.00 $141.33 $173.89 $213.07 $300.18 $545.67
- ------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
Employment And Severance Arrangements
The Company entered into an employment agreement with the President and
Chief Executive Officer, H. Joseph Reiser, Ph.D., which provides for bonuses and
vesting of options for the purchase of shares of common stock based on continued
employment and on the achievement of performance objectives defined by the Board
of Directors. Dr. Reiser is also entitled to one year's severance pay equal to
his base salary, along with medical and insurance benefits for the same period,
if he is dismissed for reasons other than cause.
Under the terms of severance agreements, Drs. Rodwell, May and Mr. Crane
will also be entitled to receive twelve months of salary if their employment
with the Company is terminated without cause. The Company is currently engaged
in litigation with Dr. May, whose employment was terminated by the Company in
November, 1999, as to whether he is entitled to any salary under the agreement.
Related Party Transactions
In June 1999, Cytogen entered into an agreement with S. Leslie Misrock, and
others, to reacquire rights for immunotherapy to its PSMA technology by
acquiring Prostagen, Inc., of which Mr. Misrock was a principal holder. Mr.
Misrock was elected to the Board of Directors of the Company in August 1999. In
connection with the acquisition, Mr. Misrock received shares of the Company's
common stock. The Company may also issue additional shares upon completion of
certain objectives, including up to 450,000 shares of Cytogen common stock upon
the satisfactory termination of lease obligations assumed in the acquisition; up
to 500,000 shares upon beneficial resolution of other contractual arrangements
entered by Prostagen; and up to an additional $4.0 million in shares of Cytogen
common stock (calculated at the time of issuance) if certain milestones are
achieved in development of the PSMA technology. Mr. Misrock would receive a
portion of these shares. Mr. Misrock is also a senior partner in the law firm of
Pennie & Edmonds, LLP, which serves as the Company's patent counsel.
General Information
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
On the basis of reports and representations submitted by or on behalf of
the directors, executive officers and ten percent stockholders of the
Corporation, all Forms 3, 4 and 5 showing ownership of and change of ownership
in the Corporation's equity securities during 1999 were timely filed with the
Securities and Exchange Commission as required by Section 16(a) of the
Securities Exchange Act of 1934.
Other Business
The Board of Directors does not intend to present any business other than
the matters described in this Proxy Statement at the Annual Meeting. If any
other matter is presented at the Annual Meeting which under applicable proxy
regulations need not be included in this Proxy Statement or which the Board of
Directors did not know a reasonable time before this solicitation would be
presented, the persons named in the accompanying proxy have discretionary
authority to vote proxies with respect to such matter in accordance with their
best judgment.
17
<PAGE>
Expenses Of Solicitation
The expense of this proxy solicitation will be paid by the Company. Some of
the officers and regular employees of the Company may solicit proxies personally
and by telephone. Management may also request banks, brokerage houses,
custodians, nominees and fiduciaries to obtain authorization for the execution
of proxies and may reimburse them for expenses incurred by them in connection
therewith. The Company plans to use Corporate Investor Communications, Inc.,
which will receive $4,000 plus certain expenses, for any proxy solicitation that
may be necessary.
Other Matters
The persons named in the enclosed form of proxy have no present intention
of bringing before the meeting for action any matters other than those
specifically referred to above, nor has management or the Board of Directors any
such intention, and none of such persons, management or the Board of Directors
is aware of any matters which may be presented by others. If any such business
should properly come before the meeting, the persons named in the form of proxy
intend to vote thereon in accordance with their best judgment.
FUTURE STOCKHOLDER PROPOSALS
The Company must receive at the Office of the Corporate Secretary any
proposal which a stockholder wishes to submit to the 2001 Annual Meeting of
Stockholders before December 13, 2000, if the proposal is to be considered by
the Board of Directors for inclusion in the proxy material for that meeting.
By Order of the Board of Directors
April 18, 2000
Donald F. Crane, Jr.
Corporate Secretary
18
<PAGE>
PROXY CARD
----------
CYTOGEN CORPORATION
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
H. Joseph Reiser, Donald F. Crane, Jr., and Jane M. Maida, and each of
them, with full power of substitution, are hereby appointed the Proxies of, and
authorized to represent, the undersigned and to vote all of the shares of Common
Stock of CYTOGEN CORPORATION entitled to be voted by the undersigned as of April
3, 2000 as directed on the reverse side and, in their discretion, on all other
matters which may properly come before the Annual Meeting of Stockholders to be
held on May 16, 1999, and at any adjournment therof as if the undersigned were
present and voting at the meeting.
Wherther or not you expect to attend the meeting, you are urged to execute
and return this proxy, which you may revoke at any time prior to its use.
The shares represented by this proxy will be voted as directed by the
stockholders. Where no direction is given when the duly executed proxy is
returned, such shares will be voted FOR all items.
TO BE VOTED, YOU MUST SIGN ON THE REVERSE SIDE
(CONTINUED ON THE REVERSE SIDE)
<PAGE>
Please mark
your votes as
indicated in [ X ]
this example
The Board of Directors recommends a Vote FOR all items.
1. Election of directors duly nominated: Nominees: John E. Bagalay, Jr.,
Stephen K. Carter,
James A. Grigsby,
Robert F. Hendrickson
S. Leslie Misrock and
H. Joseph Reiser
FOR WITHHELD
[ ] [ ] To withold authority to vote for any
individual nominees write such nominee's
name in the space provided below.)
-----------------------------------------
2. Approval of Amendment to Restated 3. To transact such other business
Certificate of Incorporation to as may properly come before the
Increase Authorized Number of Shares. meeting.
FOR WITHHELD ABSTAIN
[ ] [ ] [ ]
DATED: 1999
--------------------------,
---------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S)
---------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S)
NOTE: The signature(s) should appear
the same as it appears on the address
label on this proxy. When signing as
executor, administrator, trustee,
guardian, or attorney, please give full
title as such. For joint accounts or
co-fiduciaries, all joint owners or co-
fiduciaries, should sign.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
<PAGE>
FROM NORTHERN N.J.
Take the NJ Turnpike South to Exit 9. Follow Rt. 18 North approximately 1/2 mile
to Route 1 South. Stay on Route 1 South approximately 20 minutes to Princeton
Holiday Inn.
FROM PHILADELPHIA AREA
Take I-95 North until becomes I-295. Take Exit 67 (Rt. 1 North). Follow Route 1
North approximately 7 miles. Take the Ridge Road jug handle across Route 1 to
Princeton Holiday Inn.
HIGHTSTOWN AREA
Take 571 West (Princeton-Hightstown Road) to Route 1 North. Follow Route 1 North
approximately 3 miles. Take the Ridge Road jug handle across Route 1 to
Princeton Holiday Inn.
FROM ATLANTIC CITY AREA
Take the Garden State Parkway, North to Exit 98 (Route I-195 West). Follow I-195
West until it becomes I-295. Follow I-295 to Exit 67A (Route 1 North, New York).
Follow Route 1 North approximately 7 miles. Take the Ridge Road jug handle
across Route 1 to Princeton Holiday Inn.
Princeton Holiday Inn
4355 Rt. 1 & Ridge Road
Princeton, NJ 08540
(609)452-2400
(609)452-2494 Fax
[MAP TO HOLIDAY INN APPEARS HERE]
