<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
AVANT IMMUNOTHERAPEUTICS, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
AVANT IMMUNOTHERAPEUTICS, INC.
119 FOURTH AVENUE
NEEDHAM, MA 02494
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
The Annual Meeting of Stockholders of AVANT Immunotherapeutics, Inc. (the
"Company") will be held at 2:00 p.m. on May 8, 2000, at the Company's offices
located at 119 Fourth Avenue, Needham, Massachusetts, for the following
purposes:
1. To elect seven Directors to serve until the 2001 Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
2. To transact any other business which may properly come before the
meeting.
Stockholders of record at the close of business on March 24, 2000 will be
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof. Stockholders who are unable to attend the meeting in
person are requested to complete, sign, date and return the enclosed form of
proxy in the envelope provided. No postage is required if mailed in the United
States.
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1999 is being mailed to you with this Notice and Proxy
Statement.
AVERY W. CATLIN
SECRETARY
Needham, Massachusetts
March 31, 2000
YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO DATE,
SIGN AND PROMPTLY RETURN YOUR PROXY.
<PAGE>
AVANT IMMUNOTHERAPEUTICS, INC.
119 FOURTH AVENUE
NEEDHAM, MASSACHUSETTS 02494
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished to the holders of Common Stock, par value
$.001 per share, ("Common Stock") of AVANT Immunotherapeutics, Inc. (the
"Company") in connection with the solicitation of proxies by and on behalf of
the Board of Directors of the Company for the 2000 Annual Meeting of
Stockholders (the "Annual Meeting") to be held at the Company's offices located
at 119 Fourth Avenue, Needham, Massachusetts on May 8, 2000, or at any
adjournment thereof. The solicitation is made on behalf of the Board of
Directors of the Company. This Proxy Statement and the accompanying Notice of
Annual Meeting of Stockholders and Proxy Card are first being mailed to
stockholders on or about March 31, 2000.
The purpose of the Annual Meeting is to (i) elect seven Directors to serve
until the 2001 Annual Meeting of Stockholders and until their successors are
duly elected and qualified, and (ii) transact any other business which may
properly come before the Annual Meeting. The Company is currently not aware of
any other matters which will come before the Annual Meeting. If any other
matters properly come before the Annual Meeting, the persons designated as
proxies intend to vote in accordance with their best judgment on such matters.
Shares represented by executed and unrevoked proxies will be voted FOR the
proposal shown on the form of proxy unless otherwise indicated on the form of
proxy.
Stockholders of record at the close of business on March 24, 2000 (the
"Record Date") will be entitled to vote at the Annual Meeting. The Company had
outstanding on the Record Date 50,084,075 shares of Common Stock, each of which
is entitled to one vote upon each of the matters to be presented at the Annual
Meeting. The presence of holders of a majority of issued and outstanding shares
of Common Stock, whether in person or by proxy, will constitute a quorum at the
Annual Meeting. Abstentions, votes withheld for Director nominees and "broker
non-votes" (shares represented at the Annual Meeting which are held by a broker
or nominee and as to which (i) instructions have not been received from the
beneficial owner or the person entitled to vote such shares and (ii) the broker
or nominee does not have discretionary voting power) shall be treated as shares
that are present and entitled to vote with respect to matters presented at the
Annual Meeting for purposes of determining whether a quorum is present. With
respect to the election of Directors, the by-laws of the Company (the "By-Laws")
provide that such election shall be determined by a plurality of votes cast; all
other questions shall be decided by a majority of votes cast. Shares represented
by a proxy that withholds authority to vote for a particular nominee or nominees
and broker non-votes will have no effect on the outcome of the vote for the
election of Directors.
Stockholders may revoke the authority granted by their execution of proxies
at any time before the proxies are voted by filing with the Secretary of the
Company a written revocation or duly executed proxy, bearing a later date, or by
voting in person at the Annual Meeting. Proxies for the Annual Meeting are being
solicited by the Board of Directors of the Company. Forms of proxies will be
mailed to stockholders with the Proxy Statement on or about March 31, 2000.
Proxies will be solicited chiefly by mail, but additional solicitation may be
made by telephone or telecopy by the officers, regular employees or agents of
the Company. All solicitation expenses, including costs of preparing, assembling
and mailing the proxy material, will be borne by the Company.
PROPOSAL 1--ELECTION OF DIRECTORS
Seven Directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting. Each of the nominees listed below has consented
to be nominated and to serve if elected. The Directors
3
<PAGE>
are elected by a plurality of the votes cast at the Annual Meeting. Unless
otherwise specified, the enclosed proxy will be voted in favor of the nominees
named below, all of whom are now Directors of the Company. In the event that a
vacancy may occur during the year, such vacancy may be filled by the Board of
Directors for the remainder of the full term. All nominees will be elected to
serve until the next Annual Meeting of Stockholders and until their successors
are duly elected and qualified. In the event any of these nominees shall be
unable to serve as a Director, the shares represented by the proxy will be voted
for the person, if any, who is designated by the Board of Directors to replace
the nominee.
The following table sets forth the nominees for the Board of Directors,
their ages and the year in which each first became a Director.
<TABLE>
<CAPTION>
YEAR FIRST
NOMINEE AGE BECAME DIRECTOR
- ------- -------- ---------------
<S> <C> <C>
J. Barrie Ward, Ph.D........................................ 61 1998
Una S. Ryan, Ph.D........................................... 58 1996
Frederick W. Kyle........................................... 67 1998
John W. Littlechild......................................... 48 1998
Thomas R. Ostermueller...................................... 51 1994
Harry H. Penner, Jr......................................... 54 1997
Peter A. Sears.............................................. 61 1999
</TABLE>
The following biographical descriptions set forth certain information with
respect to the Nominees for election as Directors at the Annual Meeting, based
on information furnished to the Company by each Nominee.
J. Barrie Ward, Ph.D. has served as Chairman of the Board of Directors of
the Company since August 1998. Currently Dr. Ward is Chief Executive Officer of
KuDOS Pharmaceuticals Ltd. in Cambridge, England. Previously, he was Chairman of
the Board of Directors and Chief Executive Officer of Virus Research
Institute, Inc. ("VRI") from July 1994 to August 1998. From 1984 to 1994,
Dr. Ward was Director of the Microbiology Division of Glaxo Research and
Development Ltd.
Una S. Ryan, Ph.D. has been Chief Executive Officer of the Company since
August 1996 and President, Chief Operating Officer and Director of the Company
since May 1996. Dr. Ryan joined the Company as Vice President, Research and
Chief Scientific Officer in May 1993. She is also Research Professor of Medicine
at the Whitaker Cardiovascular Institute of the Boston University School of
Medicine. Prior to joining the Company, Dr. Ryan was Director of Health Sciences
at Monsanto Company from January 1990 to November 1992 and Research Professor of
Surgery, Medicine and Cell Biology at Washington University School of Medicine
from 1990 to 1993. Dr. Ryan is a member of the Governing Body of Biotechnology
Industry Organization's (BIO) Emerging Companies Section and serves on the Board
of the Massachusetts Biotechnology Council.
Frederick W. Kyle has been a Director of the Company since August 1998. He
was a Director of VRI from July 1996 to August 1998. Currently Mr. Kyle is
Chairman of the Board of Principia Pharmaceutical Corporation. He has been a
consultant to companies in the healthcare field since January 1994. From
December 1991 until January 1994 he was Senior Vice President of the American
Red Cross. For eleven years prior to that he was with SmithKline Beecham
Pharmaceuticals, most recently as President of Worldwide Pharmaceutical
Operations and as a member of the board of directors of SmithKline Beecham plc.
He is currently a director of Computerized Medical Systems, Inc.
John W. Littlechild has been general partner of HealthCare Partners II L.P.
("HCP II"), HealthCare Partners III L.P. ("HCP III"), and HealthCare Partners IV
L.P. ("HCP IV"), the general partners, respectively, of each of HealthCare
Ventures II L.P. ("HCV II"), HealthCare Ventures III L.P. ("HCV III"), and
HealthCare Ventures IV L.P. ("HCV IV"), and Vice Chairman of HealthCare Ventures
LLC ("HIC") since 1992. From 1984 to 1991 he was Senior Vice President of Advent
International Corporation.
4
<PAGE>
Mr. Littlechild serves on the Board of Directors of various healthcare and
biotechnology companies, including Orthofix International N.V. and
Diacrin, Inc.
Thomas R. Ostermueller has been a Management Consultant with A.T.
Kearney, Inc. since March 1998. Previously, he served as President, Chief
Executive Officer and Director of V.I. Technologies, Inc. from February 1995 to
September 1997, and Executive Vice President, Chief Operating Officer and member
of the Board of Trustees of the New York Blood Center from February 1993 to
1995. He was Executive Vice President of the Mead Johnson Nutritional Group,
Bristol-Myers Squibb from 1990 to 1993, and Vice President of Bristol-Myers from
July 1988 until 1990.
Harry H. Penner, Jr. has been President, Chief Executive Officer and
Director of Neurogen Corporation since December 1993. Previously, he served as
Executive Vice President of Novo Nordisk A/S and President of Novo Nordisk of
North America, Inc. from 1988 to 1993. From 1985 to 1988 he was Executive Vice
President and General Counsel of Novo Nordisk A/S. He has served as Chairman of
the Board of Directors for the Connecticut Technology Council, Co-Chairman of
Connecticut United for Research Excellence, and Director of the Connecticut
Business and Industry Associates. He currently serves on the Boards of
Genaissance Pharmaceuticals, Inc. and PRA International, Inc.
Peter A. Sears recently retired as Vice President, Business Investments,
SmithKline Beecham Corporation, and President and Founder of S.R. One, Limited,
SmithKline's venture capital fund. He was with SmithKline and S.R. One, Limited
from 1985 to 1999.
The Board of Directors has an Audit Committee and a Compensation Committee.
The members of the Audit Committee were Harry H. Penner, Jr. and Frederick W.
Kyle. The primary function of the Audit Committee is to review the scope and
results of the Company's annual audit, the fee charged by the Company's
independent accountants and matters relating to internal control procedures and
systems.
The members of the Compensation Committee were Thomas R. Ostermueller and
John W. Littlechild. The primary function of the Compensation Committee is to
assist the Board in the establishment of compensation for the Chief Executive
Officer and, upon her recommendation, to approve the compensation of other
officers and senior employees and to approve certain other personnel and
employee benefit matters.
During the year ended December 31, 1999, the Board of Directors held eight
(8) meetings, the Audit Committee held two (2) meetings, and the Compensation
Committee held two (2) meetings. Each Director attended at least 75% of the
meetings held by the Board and the Board committee on which he or she served
during the period he or she was a Director.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are each entitled to receive
a retainer fee of $5,000 each fiscal year. Each Board committee Chairman
receives an additional retainer fee of $5,000. In addition, each non-employee
Director is entitled to receive $1,000 for attendance at each meeting of the
Board of Directors and $500 for attendance at each meeting of a Board committee.
The Company's 1999 Stock Option and Incentive Plan provides for annual automatic
grants to each Independent Director of an option to purchase 10,000 shares of
Common Stock with vesting after one year, a ten year term and with an exercise
price equal to the fair market value of the Common Stock on the day of grant. As
of the Record Date, the current Independent Directors had the following stock
options outstanding: Frederick W. Kyle--28,600; Thomas R. Ostermueller--52,500;
Harry H. Penner, Jr.--40,000; and Peter A. Sears--20,000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who are beneficial owners of
more than 10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and
5
<PAGE>
Exchange Commission (the "SEC"). Officers, directors and greater than 10%
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. To the Company's knowledge, based
solely on review of the copies of such reports furnished to the Company, and
written representations that no other reports were required during the fiscal
year ended December 31, 1999, all Section 16(a) filing requirements applicable
to such persons were satisfied.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Sears, a Director of the Company since May 1999 and current nominee for
Director purchased 50,000 shares of common stock of the Company at $1.92 per
share, having an aggregate value of $96,000, in connection with the Company's
private placement of stock in September 1999. See "Beneficial Ownership of
Common Stock."
MANAGEMENT
EXECUTIVE OFFICERS
The following persons are executive officers of the Company. Officers are
elected annually by the Board of Directors until their successors are duly
elected and qualified.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL AGE POSITION AND OFFICES
- ------------------ -------- --------------------------------------------------------
<S> <C> <C>
Una S. Ryan, Ph.D.................... 58 President and Chief Executive Officer
Fritz Casselman...................... Senior Vice President, Strategy and Corporate
50 Development
Avery W. Catlin...................... 51 Senior Vice President and Chief Financial Officer
Thomas R. Fuerst, Ph.D............... 43 Vice President, Business Development
James L. Levin, D.V.M................ 45 Vice President, Operations
Henry C. Marsh, Jr., Ph.D............ 49 Vice President, Research
Alistair W.E. Wheeler, M.D........... 40 Vice President, Medical Affairs
</TABLE>
For a biographical summary of Dr. Ryan, see "Election of Directors."
Fritz Casselman joined AVANT in January 2000. Prior to joining the Company,
he served as Director, Worldwide Business Development for SmithKline Beecham
Pharmaceuticals from 1997 to 2000, where he was responsible for in-licensing
late stage products, out-licensing technology and products, and negotiating
research collaborations. From 1988 to 1996, Mr. Casselman was with Cambridge
Biotech Corporation, a public biopharmaceuticals company, serving as Vice
President and handling a variety of functions including business development,
regulatory affairs, QA/QC, and legal. Prior to that, Mr. Casselman was a partner
with the law firm of Bromberg, Sunstein & Casselman (1982 to 1988) and Chief
Counsel of the Massachusetts Labor Relations Commission (1975 to 1982).
Avery W. Catlin joined the Company in January 2000. Prior to joining AVANT,
he served as Vice President, Operations and Finance, and Chief Financial Officer
of Endogen, Inc., a public life science research products company, from 1996 to
1999. From 1992 to 1996, Mr. Catlin held various financial positions at Repligen
Corporation, a public biopharmaceutical company, serving the last two years as
Chief Financial Officer. Earlier in his career, Mr. Catlin held the position of
Chief Financial Officer at MediSense, Inc., a Massachusetts-based medical device
company.
Thomas R. Fuerst, Ph.D. joined AVANT in July 1998. Prior to joining the
Company, he was co-founder, President and Director of Research at
Genetex, Inc., a San Antonio-based, privately held company with interests in
cancer prevention and diagnosis. From 1993 to 1995, Dr. Fuerst served as Vice
President and General Manager of the San Antonio division of Genelabs
Technologies, Inc. From 1988 to 1993, he was Director of Molecular Genetics at
MedImmune, Inc. Prior to entering the biotechnology field, he was senior fellow
in the Laboratory of Viral Diseases at the National Institutes of Health.
6
<PAGE>
James L. Levin, D.V.M. joined the Company as Director of Pharmaceutical
Evaluation in April 1992. Dr. Levin has been Vice President, Operations since
August 1998 and served as Vice President, Development from December 1995 until
August 1998. Prior to joining the Company, Dr. Levin was Vice President,
Technical Operations for TSI Mason Laboratories in Worcester. Dr. Levin received
a D.V.M. from Tufts University School of Veterinary Medicine and an MS in
pharmacology from Tulane University. Dr. Levin is also an Adjunct Assistant
Professor in the Department of Comparative Medicine at Tufts University School
of Veterinary Medicine, as well as member of the Massachusetts Society for
Medical Research.
Henry C. Marsh, Jr., Ph.D. joined the Company as Senior Scientist in 1986
and has been Vice President, Research since May 1998. Prior to joining the
Company, he was employed as a scientist at Abbott Laboratories of North Chicago
and the Research Triangle Institute in North Carolina.
Alistair W.E. Wheeler, M.D. joined AVANT in July 1999. Previously,
Dr. Wheeler was an independent consultant to major pharmaceutical companies and
clinical research organizations from 1997 to 1999. From 1994 to 1997,
Dr. Wheeler was employed by Astra USA as Director of Clinical Research and
Senior Director, Clinical Operations. From 1991 to 1994, Dr. Wheeler was
employed by Hoffman-La Roche as Director, Respiratory Medicine. Prior to that,
Dr. Wheeler was Clinical Research Physician at Glaxo Group Research.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of the Record Date regarding
Common Stock ownership by (i) each person known by the Company to beneficially
own more than 5% of the Company's outstanding Common Stock as of March 10, 2000,
(ii) by each Director and nominee for Director, (iii) the Company's Chief
Executive Officer and the four other most highly compensated executive officers
whose total salary and bonus exceed $100,000 during 1999, and (iv) by all
Directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNERSHIP(1) COMMON STOCK(2)
- ------------------------------------------------------------ ------------ ---------------
<S> <C> <C>
J. Barrie Ward, Ph.D........................................ 601,364(3) 1.2%
Una S. Ryan, Ph.D........................................... 485,095(4) *
Frederick W. Kyle........................................... 31,000(5) *
John W. Littlechild......................................... 4,977,833(6) 9.8%
HealthCare Ventures II, LP
44 Nassau Street
Princeton, New Jersey 08542
Thomas R. Ostermueller...................................... 55,000(7) *
Harry H. Penner, Jr......................................... 45,000(8) *
Peter A. Sears.............................................. 70,000(9) *
Thomas R. Fuerst, Ph.D...................................... 48,750(10) *
James L. Levin, D.V.M....................................... 102,357(11) *
Henry C. Marsh, Jr., Ph. D................................ . 77,139(12) *
All Directors and executive officers as a group
(Consisting of 10 persons)................................ 6,493,538(13) 12.5%
</TABLE>
- ------------------------
* Less than 1%.
(1) Unless otherwise indicated, the persons shown have sole voting and
investment power over the shares listed.
(2) Common Stock includes all outstanding Common Stock plus, as required for the
purpose of determining beneficial ownership (in accordance with
Rule 13d-3(d)(1) of the Securities Exchange Act of 1934,
7
<PAGE>
as amended), all Common Stock subject to any right of acquisition, through
exercise or conversion of any security, within 60 days of the Record Date.
(3) Includes 560,974 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date and 4,616
shares issuable with respect to immediately exercisable warrants.
(4) Includes 446,595 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(5) Consists of 28,600 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date and 2,400
shares issuable with respect to immediately exercisable warrants.
(6) In an amended filing on Schedule 13G under the Exchange Act, filed jointly
by HCV II, HCP II, HCV III, HCP III, HCV IV, HCP IV, John W. Littlechild,
James H. Cavanaugh, Ph.D., Harold R. Werner, William Crouse and Mark
Leschly, Messrs. Littlechild, Cavanaugh, Werner and Crouse reported that as
of December 31, 1998, they each had beneficial ownership with respect to
4,966,714 of such shares, consisting of 4,322,757 shares of Common Stock and
immediately exercisable warrants to purchase 643,957 shares of Common Stock,
and shared voting and dispositive power with respect to those 4,966,714
shares, Mr. Leschly reported that he had beneficial ownership of 2,648,008
of such shares, consisting of 2,269,046 shares of Common Stock and
immediately exercisable warrants to purchase 378,962 shares of Common Stock,
and shared voting and dispositive power with respect to those 2,269,046
shares, HCV II and HCP II reported that they each had beneficial ownership
with respect to 2,318,706 of such shares, consisting of 2,053,711 shares of
Common Stock and immediately exercisable warrants to purchase 264,995 shares
of Common Stock, and shared voting and dispositive power with respect to
those 2,318,706 shares, HCV III and HCP III reported that they each had
beneficial ownership with respect to 2,046,908 of such shares, consisting of
1,753,971 shares of Common Stock and immediately exercisable warrants to
purchase 292,937 shares of Common Stock, and shared voting and dispositive
power with respect to those 2,046,908 shares, and HCV IV and HCP IV reported
that they each had beneficial ownership with respect to 601,099 of such
shares, consisting of 515,074 shares of Common Stock and immediately
exercisable warrants to purchase 86,025 shares of Common Stock, and shared
voting and dispositive power with respect to those 601,099 shares.
Messrs. Littlechild, Cavanaugh, Werner and Crouse are general partners of
HCP II, which is the general partner of HCV II. Messrs. Littlechild,
Cavanaugh, Werner, Crouse and Leschly are general partners of each of HCP
III and HCP IV, which are the general partners of HCV III and HCV IV,
respectively.
(7) Includes 52,500 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(8) Includes 40,000 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(9) Includes 20,000 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(10) Includes 46,250 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(11) Includes 101,857 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
(12) Includes 72,654 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date.
8
<PAGE>
(13) Includes 1,369,430 shares of Common Stock issuable upon exercise of options
which are vested or will vest within 60 days of the Record Date and 662,092
shares issuable with respect to immediately exercisable warrants.
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended December 31, 1999,
December 31, 1998 and December 31, 1997, the cash compensation paid by the
Company, as well as other compensation paid or accrued for these fiscal years,
to the Chief Executive Officer and the four other most highly compensated
officers whose total compensation for 1999 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------- SECURITIES ALL OTHER
SALARY BONUS UNDERLYING COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#) ($)
- --------------------------- -------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Una S. Ryan, Ph.D...................... 1999 269,535 60,000 350,000 2,000
President and Chief 1998 263,194 -- 150,000 995
Executive Officer 1997 253,026 37,440 220,000 87,864(2)
Bryan E. Roberts, D. Phil.(3).......... 1999 186,887 -- -- 676
Executive Vice President 1998 63,194 -- 20,000 313
1997 -- -- -- --
Thomas R. Fuerst, Ph.D.(4)............. 1999 155,750 -- 100,000 1,017
Vice President, Business 1998 74,423 -- 85,000 65,000(5)
Development 1997 -- -- -- --
James L. Levin, D.V.M.................. 1999 170,243 23,500 -- 1,440
Vice President, Operations 1998 167,786 -- 34,000 1,425
1997 154,177 15,912 8,000 1,419
Henry C. Marsh, Jr., Ph.D.............. 1999 146,152 20,000 -- 1,258
Vice President, Research 1998 138,865 -- 39,000 1,250
1997 124,715 9,579 13,000 1,149
</TABLE>
- ------------------------
(1) Includes only the Company's matching cash contribution to the 401(k) Savings
Plan of each named executive officer, with the exception of the amounts
provided for Dr. Ryan in 1997 and Dr. Fuerst in 1998 which also include
reimbursement for relocation costs (see Footnotes 2 and 5). Premiums paid
for life insurance under the Company's nondiscriminatory group plan are not
included.
(2) Includes $86,921 received in 1997 as reimbursement for costs incurred by
Dr. Ryan as a result of her relocation in 1993. Such amounts were received
pursuant to an employment agreement between the Company and Dr. Ryan which
does not require the Company to make further payments for Dr. Ryan's
relocation costs.
(3) Dr. Roberts resigned from the Company as of December 31, 1999.
(4) Dr. Fuerst was employed by the Company starting in July 1998.
(5) Received as reimbursement for costs incurred by Dr. Fuerst as a result of
his relocation.
9
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table sets forth each grant of stock options made during the
1999 fiscal year to each of the executive officers named in the Summary
Compensation Table above:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO PER SHARE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
GRANTED(#) FISCAL YEAR(1) ($/SH)(2) DATE 5% ($) 10% ($)
---------- -------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Una S. Ryan, Ph.D...................... 100,000 17.9% 1.8755 01/04/09 117,949 298,906
250,000 44.8% 1.3125 05/06/09 206,356 522,947
Bryan E. Roberts, D. Phil.............. -- -- -- -- -- --
Thomas R. Fuerst, Ph.D................. 100,000 17.9% 1.8755 01/04/09 117,949 298,906
James L. Levin, D.V.M.................. -- -- -- -- -- --
Henry C. Marsh, Jr., Ph.D.............. -- -- -- -- -- --
</TABLE>
- ------------------------
(1) During 1999, a total of 557,500 options were granted to the Company's
employees. The percentages were calculated as if those options granted in
1999 which were subsequently canceled remained outstanding as of the end of
1999. For a description of each option grant, see "Report of the
Compensation Committee."
(2) Equal to the closing market price of the Common stock on the grant date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table above, the shares of Common Stock acquired and
the value realized in each exercise of stock options during the 1999 fiscal year
and the fiscal year end number and value of unexercised options:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS
ON VALUE END(#) AT FISCAL YEAR END(1)($)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Una S. Ryan, Ph.D.................... -- -- 304,095 526,250 59,545 436,310
Bryan E. Roberts, D. Phil............ -- -- 182,089 -- 198,707 --
Thomas R. Fuerst, Ph.D............... -- -- 21,250 178,750 -- 59,350
James L. Levin, D.V.M................ -- -- 93,857 29,500 7,618 17,605
Henry C. Marsh, Jr., Ph.D............ -- -- 62,154 39,000 10,254 22,234
</TABLE>
- ------------------------
(1) Based on the $2.469 per share closing price of the Company's Common Stock on
December 31, 1999.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL
ARRANGEMENTS
Dr. Ryan entered into an agreement with the Company on August 20, 1998
providing for an annual base salary of at least $259,584 and under which, in the
event that she terminates her employment for Good Reason (as defined in the
agreement) within one year of a Change in Control (as defined in the Company's
1991 Stock Compensation Plan) or she is terminated by the Company other than for
Cause (as defined by the agreement), she is eligible for a lump sum payment of
one year's salary, at the rate then in effect, and continuation of health
insurance benefits for a period of up to twelve (12) months.
Dr. Levin has an agreement with the Company under which he is eligible for a
severance payment of one year's base salary, continuation of health insurance
benefits and 100% vesting of all stock option
10
<PAGE>
grants in the event of his termination following a Change-of-Control, as defined
in the Company's 1991 Stock Compensation Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors was composed of two
non-employee Directors during the year, Messrs. Thomas Ostermueller and John W.
Littlechild. None of these Compensation Committee members has been an officer or
employee of the Company. No Compensation Committee interlocks between the
Company and another entity exist.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee"),
which is comprised of non-employee Directors, is responsible for establishing
and administering the policies governing the compensation of the Company's
employees, including salary, bonus and stock option grants. The policy of the
Committee is to compensate the Company's employees with competitive salaries
based on their level of experience and job performance. All permanent employees
of the Company, including executive officers, are eligible for annual bonus
awards based on achievement of the Company's strategic corporate goals, and
participation in the Company's stock option program. The bonus awards and stock
option grants are made in accordance with the Company's Performance Plan and
1999 Stock Option and Incentive Plan. The Committee is also responsible for the
administration of the Company's 1994 Employee Stock Purchase Plan, in which
employees participate on a voluntary basis.
In order to both attract and retain experienced and qualified executives to
manage the Company, the Committee's policy on executive compensation is to
(i) pay salaries which are competitive with the salaries of executives in
comparable positions in the biotechnology industry, and (ii) allow for
additional compensation upon achievement of goals under the Performance Plan and
through the appreciation of stock-based incentive awards. This policy is
designed to have a significant portion of each executive's total compensation be
tied to the Company's progress in order to incentivize the executive to fully
dedicate himself or herself to achievement of corporate goals, and to align the
executive's interest with those of the Company's stockholders through equity
incentive compensation.
Each executive officer (except the Chief Executive Officer whose performance
is reviewed by the Committee) has an annual performance review with the Chief
Executive Officer who makes recommendations on salary increases, promotions and
stock option grants to the Compensation Committee. The recommended salary
increases are based on the average salary increases expected in the
biotechnology industry in the Boston, Massachusetts area, with the salaries in
1999 either at or slightly above the average of the salaries paid to persons in
comparable positions using an independently prepared 1999 employee compensation
survey of approximately 400 biotechnology companies.
The bonus award is based on achievement of the Company's strategic goals
which are set at the beginning of each fiscal year and measured against
performance at the end of the year by the Committee in accordance with the
Performance Plan. For 1999 two sets of goals were applicable to all employees,
including the executive officers: (i) overall corporate goals and (ii) goals
applicable to the therapeutic programs. Both sets of goals were allocated
between specific product and financial performance targets. The Compensation
Committee determined that, based on the Company's performance compared to the
stated goals, 70% of the eligible cash payout would be made under the
Performance Plan for 1999. In 1999, the stock option awards for the executive
officers other than the Chief Executive Officer consisted of grants made in
conjunction with a review of the executives' performance during the year. The
Compensation Committee believes the number of underlying shares are consistent
with the stock option grant practices of other companies in the biotechnology
industry.
Dr. Una Ryan, the Company's President and Chief Executive Officer, received
a salary increase of 3% in 1999. Dr. Ryan's current base salary, which reflects
the salary increase, is within the range of base
11
<PAGE>
salaries paid to other Chief Executive Officers in similar sized, publicly
traded companies in the biotechnology industry, based on the previously
referenced 1999 employee compensation survey. As discussed above, the
Compensation Committee determined that Dr. Ryan had met certain milestones in
1999 and that a cash payout of $60,000 would be made to Dr. Ryan under the
Performance Plan for 1999. In addition, Dr. Ryan received a Performance Share
Unit Award totaling 43 shares of the Company's common stock under the
Performance Plan for 1999.
On January 4, 1999, Dr. Ryan was granted an option to purchase 100,000
shares of Common Stock at an exercise price of $1.8755. These options vest over
four years and have a ten year term. On May 6, 1999, Dr. Ryan was granted an
option to purchase 250,000 shares of Common Stock at an exercise price of
$1.3125. These options vest over four years and have a ten year term. On
January 4, 1999, Dr. Fuerst was granted an option to purchase 100,000 shares of
Common Stock at an exercise price of $1.8755.
COMPENSATION COMMITTEE
Thomas Ostermueller, Chairman
John W. Littlechild
12
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below represents a comparison of the cumulative shareholder return
on the Common Stock for the Company's last five fiscal years, including the
fiscal year ended December 31, 1999, with the cumulative total stockholder
return of the Nasdaq Stock Market (U.S.) Index and Nasdaq Pharmaceutical Stock
Index (which is made up of companies quoted on the Nasdaq National Market whose
Primary Industrial Classification Code is 283, Pharmaceutical Companies). The
graph assumes an investment of $100 made on December 30, 1994 in the Company's
Common Stock and in the two indexes.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C> <C> <C> <C>
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
AVANT Immunotherapeutics, Inc. $100 $125 $65 $98 $70 $99
Nasdaq Stock Market (U.S.) Index $100 $142 $174 $213 $301 $543
Nasdaq Pharmaceutical Stock Index $100 $183 $184 $190 $242 $451
</TABLE>
<TABLE>
<CAPTION>
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
AVANT Immunotherapeutics, Inc...................... $100 $125 $ 65 $ 98 $ 70 $ 99
Nasdaq Stock Market (U.S.) Index................... $100 $142 $174 $213 $301 $543
Nasdaq Pharmaceutical Stock Index.................. $100 $183 $184 $190 $242 $451
</TABLE>
INDEPENDENT ACCOUNTANTS
On February 10, 1994, the Board of Directors of the Company approved the
engagement of PricewaterhouseCoopers, LLP as its independent accountants. The
Company expects that a representative from PricewaterhouseCoopers, LLP will be
present at the Annual Meeting to make a statement if he or she desires to do so
and to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The Company expects to hold its 2001 Annual Meeting on May 10, 2001.
Eligible stockholders may present proposals for inclusion in the proxy statement
and form of proxy for that meeting, provided the proposals comply with
applicable Securities and Exchange Commission regulations and are received by
the Company no later than November 30, 2000. All other proposals intended to be
presented at the Company's 2001 Annual Meeting of Stockholders must be received
by the Company no later than February 23, 2001 and no earlier than January 9,
2001. Any such proposal shall be mailed to: Secretary, AVANT
Immunotherapeutics. Inc., 119 Fourth Avenue, Needham, MA 02494-2725.
OTHER BUSINESS
All stockholders of record at the close of business on March 24, 2000, the
record date for the determination of stockholders entitled to vote at the Annual
Meeting, are concurrently being sent a copy of the Company's Annual Report,
including financial statements for the fiscal year ended December 31, 1999.
The expense of preparing, printing and mailing the Notice of Annual Meeting
of stockholders and proxy material, and all other expenses of soliciting proxies
will be borne by the Company. The Company expects to retain Corporate Investor
Communications, Inc. as agent for soliciting proxies. Officers or other
employees of the Company may, without additional compensation therefor, solicit
proxies in person, by telephone, facsimile, mail or the Internet. The Company
may also reimburse brokerage firms, banks,
13
<PAGE>
trustees, nominees and other persons for their expenses in forwarding proxy
material to the beneficial owners of shares held by them of record.
Under Delaware law, the state of incorporation of the Company, there are no
dissenter's rights available to stockholders who object to the actions set forth
in any of the Proposals to be presented to the Annual Meeting.
Management knows of no business which will be presented for consideration at
the Annual Meeting other than that stated in the Notice of Meeting. However, if
any such matter shall properly come before the meeting, the persons named as
proxies will vote on such matters in accordance with their best judgment.
The prompt return of the proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
Avery W. Catlin
Secretary
Dated: March 31, 2000
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL BE SENT WITHOUT
CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM AVANT
IMMUNOTHERAPEUTICS, INC., ATTENTION: INVESTOR RELATIONS, 119 FOURTH AVENUE,
NEEDHAM, MASSACHUSETTS 02494.
14
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------------------------------
AVANT IMMUNOTHERAPEUTICS, INC.
- ---------------------------------------------
CONTROL NUMBER:
RECORD DATE SHARES:
1. Election of Directors.
(01) J. Barrie Ward For All With- For All
(02) Una S. Ryan Nominees hold Except
(03) Frederick W. Kyle
(04) Peters A. Sears / / / / / /
(05) John W. Littlechild
(06) Thomas R. Ostermueller
(07) Harry H. Penner, Jr.
NOTE: If you do not wish your shares to be voted "For" a particular nominee,
mark the "For All Except" box and draw a line through that nominee(s)
name(s). Your shares will be voted "For" the remaining nominee(s).
Please be sure to sign and date this Proxy. Date
- ------------------------------------------------------------------------------
- ----Stockholder sign here---------------------------Co-owner sign here--------
Mark box at right if an address change or comment has been noted on the
reverse side of this card. / /
DETACH CARD DETACH CARD
AVANT IMMUNOTHERAPEUTICS, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy
Ballot.
Your vote counts, and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares
will be voted. Then sign the card, detach it and return your proxy vote
in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
May 8, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Avant Immunotherapeutics, Inc.
<PAGE>
AVANT IMMUNOTHERAPEUTICS, INC.
Proxy Solicited by the Board of Directors for the
Annual Meeting of Stockholders
on May 8, 2000
The undersigned hereby appoints J. Barrie Ward and Una S. Ryan, and each of
them, as the true and lawful attorneys, agents and proxies of the undersigned,
with full power of substitution, and hereby authorizes them to represent and
to vote, as designated on the reverse, all shares of Common Stock held of
record by the undersigned on March 24, 2000, at the Annual Meeting of
Stockholders (the "Meeting") to be held at 2:00 p.m. on May 8, 2000 at the
Company's offices located at 119 Fourth Avenue, Needham, Massachusetts 02494,
or at any adjournment or postponement thereof. When properly executed, this
proxy will be voted in the manner directed herein by the undersigned
stockholder(s). If no direction is given, this proxy will be voted FOR the
election of the nominees for director listed in Proposal 1 and, in their
discretion, the proxies are each authorized to vote upon such other business
as may properly come before the Meeting and any adjournments or postponements
thereof. Any stockholders wishing to vote in accordance with the Board of
Directors' recommendations need only sign and date this proxy and return it
in the postage paid envelope provided.
- ------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be
that of an authorized officer who should state his or her title.
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_______________________________ ____________________________________
_______________________________ ____________________________________
_______________________________ ____________________________________
