<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NeoRx Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
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<PAGE> 2
NEORX CORPORATION
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The 1995 Annual Meeting of Shareholders (the "Annual Meeting") of NeoRx
Corporation (the "Company") will be held at The Mountaineers Club, 300 Third
Avenue West, Seattle, Washington 98119, on Tuesday, May 9, 1995, at 9 a.m., for
the following purposes:
1. To elect six members to the Company's Board of Directors;
2. To ratify the appointment of Arthur Andersen LLP as the
Company's independent public accountants for 1995; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
Your attention is directed to the accompanying Proxy Statement for
further information with respect to the matters to be acted upon at the Annual
Meeting. To constitute a quorum for the conduct of business at the Annual
Meeting, it is necessary that holders of a majority of all outstanding shares
of the Company's Common Stock be present in person or be represented by proxy.
To ensure representation at the Annual Meeting, you are urged to complete, sign
and date the enclosed proxy card and return it promptly in the enclosed
postage-prepaid envelope.
The record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting is the close of business on March 27, 1995.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JEFFREY J. MILLER
----------------------------------
JEFFREY J. MILLER, Ph.D., J.D.
Senior Vice President, Business Development and
Legal Affairs, and Secretary
March 31, 1995
Seattle, Washington
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD REGARDLESS OF WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 3
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors") of NeoRx Corporation (the
"Company") of proxies in the accompanying form for use at the Annual Meeting of
Shareholders to be held on Tuesday, May 9, 1995, and any adjournments or
postponements thereof (the "Annual Meeting"). The Annual Meeting will be held
at 9 a.m. at The Mountaineers Club, 300 Third Avenue West, Seattle, Washington
98119.
The Company's principal office is located at 410 West Harrison Street,
Seattle, Washington 98119. The approximate date of mailing this Proxy
Statement and the enclosed proxy card is April 4, 1995.
VOTING
Each share of the Company's Common Stock, $.02 par value per share (the
"Common Stock"), outstanding at the close of business on March 27, 1995, the
record date for determining shareholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"), is entitled to one vote per share at
the Annual Meeting. Under Washington law and the Company's Articles of
Incorporation, if a quorum is present at the Annual Meeting: (a) the six
nominees for election as Directors who receive the greatest number of votes
cast for the election of Directors by the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote shall be
elected directors; and (b) matter 2 listed in the accompanying Notice of 1995
Annual Meeting of Shareholders will be approved if the number of votes cast in
favor of the matter exceeds the number cast against it. The presence in person
or by proxy of holders of record of a majority of all outstanding shares of
Common Stock is required to constitute a quorum for the transaction of business
at the Annual Meeting. In the election of Directors, any action other than a
vote for a nominee will have the practical effect of voting against the
nominee. Abstention from voting or broker nonvotes will have no effect on the
approval of matter 2 since they do not represent votes cast.
The proxy cards also confer discretionary authority to vote the shares
authorized to be voted thereby on any matter that was not known on the date of
this Proxy Statement but may properly be presented for action at the Annual
Meeting.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD REGARDLESS OF WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
REVOCATION
Any shareholder returning a proxy has the power to revoke it at any time
before shares represented thereby are voted at the Annual Meeting. Any shares
represented by an unrevoked proxy will be voted unless the shareholder attends
the Annual Meeting and votes in person. A shareholder's right to revoke a
proxy is not limited by or subject to compliance with a specified formal
procedure, but written notice of such revocation should be given to the
Company's Corporate Secretary at or before the Annual Meeting.
EXPENSES OF SOLICITATION
The Company will bear the expense of printing and mailing proxy
material. In addition to the solicitation of proxies by mail, solicitation may
be made by certain Directors, officers and other employees of the Company in
person or by telephone, facsimile transmission, telegraph or telex. No
compensation will be paid for such solicitation.
Arrangements also will be made with brokerage firms and other
custodians, nominees and fiduciaries to forward proxy solicitation material to
certain beneficial owners of the Company's Common Stock, and the Company will
reimburse such brokerage firms, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in connection therewith.
Voting Securities and Record Date
Holders of issued and outstanding shares of Common Stock on the Record
Date are entitled to vote at the Annual Meeting. At the Record Date, there
were 11,884,382 shares of Common Stock outstanding.
In voting for the election of Directors, holders of shares of Common
Stock are entitled to elect all Directors to be elected at the Annual Meeting.
Each shareholder has the right to cumulate his or her votes and cast as many
votes as are equal to the number of Directors to be elected multiplied by the
number of such shareholder's shares. These votes may be cast for one candidate
or distributed among as many candidates as the shareholder desires. If a
shareholder wishes to cumulate his or her votes, he or she should multiply his
or her shares by the number of Directors to be elected (deriving a cumulative
total) and then write the number of votes for each Director next to each
Director's name on the proxy card. The total votes cast in this manner may not
exceed the cumulative total. If a shareholder does not wish to cumulate votes
for Directors, he or she should indicate the vote for or against each nominee,
as provided on the proxy card. On all other matters, each share of Common
Stock entitles its holder to one vote on each matter to be acted upon at the
Annual Meeting.
-2-
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership, as of March 2, 1995, of the Common Stock by (a) each person known by
the Board of Directors to beneficially own more than 5% of the outstanding
Common Stock, (b) each Director and nominee for Director, (c) each of the
executive officers included in the Summary Compensation Table, and (d) all
executive officers and Directors as a group. Except as otherwise indicated,
the Company believes that the beneficial owners of the shares listed below have
sole investment and voting power with respect to the shares.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF COMMON
NAME OWNED STOCK
---- ------------ ----------
<S> <C> <C>
Ardsley Advisory Partners . . . . . . . . . . . . . . . . . . . . . . . . 1,170,000 9.9%
646 Steamboat Road
Greenwich, Connecticut 06830
Boehringer Ingelheim International GmbH(1) . . . . . . . . . . . . . . . 1,356,534 10.9%
D6507 Ingelheim am Rhein
Germany
Fund Asset Management, L.P.(2) . . . . . . . . . . . . . . . . . . . . . 955,000 8.1%
d/b/a Fund Asset Management
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Paul G. Abrams(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,360 2.2%
James G. Andress(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 *
Jack L. Bowman(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500 *
Fred B. Craves(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,936 *
Lawrence H.N. Kinet(4) . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 *
Carl-Heinz Pommer(6) . . . . . . . . . . . . . . . . . . . . . . . . . . -- *
Robert M. Littauer(7) . . . . . . . . . . . . . . . . . . . . . . . . . . 106,696 *
Jeffrey J. Miller(8) . . . . . . . . . . . . . . . . . . . . . . . . . . 100,812 *
John M. Reno(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,126 *
Robert W. Schroff(10) . . . . . . . . . . . . . . . . . . . . . . . . . . 80,882 *
All executive officers and Directors as a group (11 persons)(11) . . . . 792,924 6.3%
- ------------------
</TABLE>
* Less than 1%.
(1) Includes 625,000 shares issuable upon exercise of warrants.
(2) Fund Asset Management, L.P. d/b/a Fund Asset Management ("FAM") is an
indirectly wholly-owned subsidiary of Merrill Lynch & Co., Inc.
("ML&Co."). The securities positions of FAM reported on Form 13F and
Schedule 13G are also reported on behalf of ML&Co., which may be deemed
to share with FAM investment discretion and voting authority with respect
to such positions.
(3) Includes 186,062 shares subject to options exercisable within 60 days.
-3-
<PAGE> 6
(4) Represents shares subject to options exercisable within 60 days.
(5) Includes 5,000 shares subject to options exercisable within 60 days.
(6) Does not include 1,356,534 shares beneficially owned by Boehringer
Ingelheim International GmbH for which Mr. Pommer serves as
representative on the Board of Directors; Mr. Pommer disclaims beneficial
ownership of such shares.
(7) Includes 77,812 shares subject to options exercisable within 60 days.
Also includes 576 shares held by each of Amanda Littauer and Douglas
Littauer, the children of Robert M. Littauer. Mr. Littauer disclaims
beneficial ownership of the shares held by his children.
(8) Includes 83,562 shares subject to options exercisable within 60 days.
(9) Includes 61,251 shares subject to options exercisable within 60 days.
(10) Includes 65,626 shares subject to options exercisable within 60 days.
(11) Includes 635,186 shares subject to options exercisable within 60 days.
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTOR
Pursuant to the Company's Articles of Incorporation, six Directors are
to be elected by the holders of Common Stock at the Annual Meeting. These
Directors will serve one-year terms that will expire at the 1996 Annual Meeting
of Shareholders and until their successors have been elected and qualified.
Unless a shareholder withholds his or her vote, each proxy will be voted for
the election of the following Directors:
PAUL G. ABRAMS, M.D., age 47, is a co-founder of the Company and has
been a Director since January 1985. He has been the Company's President and
Chief Executive Officer since May 1990 and was Vice President, Medical Affairs
from January 1985 through April 1990. He served as the Company's Secretary
from April 1987 to August 1988, when he was elected Assistant Secretary, which
he served as through May 1990. From 1981 to 1984, Dr. Abrams held the position
of Expert in the Biological Response Modifiers Program of the National Cancer
Institute. Dr. Abrams holds J.D., M.D. and B.A. (Summa Cum Laude with
Exceptional Distinction) degrees from Yale University. He is a board-certified
internist and medical oncologist and is an Affiliate Associate Professor in the
Department of Radiology at the University of Washington.
JAMES G. ANDRESS, age 56, has been a Director since November 1990.
Since 1989, he has been President and a Director and, since June 1990, Chief
Executive Officer and, since June 1993, Vice Chairman of Information Resources,
Inc., a marketing research and information services company. From 1988 to
1989, he was Chairman of Pharmaceuticals at the Beecham Group plc in London, a
pharmaceutical company that, due to a merger, has since become SmithKline
Beecham. From 1984 through 1988, Mr. Andress was President and Chief Operating
Officer of Sterling Drug Inc., a pharmaceutical company. Mr. Andress is a
director of Genelabs, Inc., Genetics Institute, Inc., Sepracor Inc., and The
Liposome Company, Inc., each of which is a biotechnology company. Mr. Andress
is also a director of IRI, Inc. and Walsh, Inc., both of which are information
service companies, America Online, an interactive computer network,
-4-
<PAGE> 7
Optioncare, Inc., a provider of home healthcare services, and Allstate
Insurance Corporation. Mr. Andress holds an M.B.A. degree from the Wharton
Graduate School of Business and a B.S. degree from the United States Military
Academy, West Point. Mr. Andress serves on the Compensation Committee of the
Board of Directors.
JACK L. BOWMAN, age 62, has been a Director since January 1994. From
1987 to August 1993, before his retirement, Mr. Bowman was Company Group
Chairman of Johnson & Johnson Company, a multinational pharmaceutical company.
From 1983 to 1987, Mr. Bowman was Executive Vice President of American Cyanamid
Corporation and, from 1981 to 1983, President of its Lederle Laboratories
Division. Mr. Bowman is a director of CytRx, Inc. and PharmaGenics, Inc., both
of which are biotechnology companies, and The Lincoln Group Holding Company.
He holds a B.Ed. degree from Western Washington University. Mr. Bowman serves
on the Compensation Committee of the Board of Directors.
FRED B. CRAVES, Ph.D., age 49, has been the Company's Chairman of the
Board of Directors since July 1993. In January 1994, Dr. Craves co-founded
Burrill & Craves, a merchant bank focused on healthcare companies. From
January 1991 to April 1993, he was Chief Executive Officer and President of
Berlex Biosciences, a research, development and manufacturing organization and
a wholly owned subsidiary of Schering AG, a multinational pharmaceutical
company. Berlex Biosciences was created by merging Codon, a biotechnology
company which he co-founded, and the pharmaceutical business of Triton
Biosciences. From 1982 to 1990, Dr. Craves was Chairman of the Board and Chief
Executive Officer of Codon. In 1981, he co-founded Creative Biomolecules,
Inc., a biotechnology company focused on morphogenic proteins. From 1978 to
1981, he held marketing and sales positions at Millipore Corporation, a medical
device corporation. Dr. Craves is Chairman of MicroProbe Corporation and a
director of Incyte Pharmaceuticals, Inc., each of which is a biotechnology
company. Dr. Craves holds a Ph.D. degree in Pharmacology and Experimental
Toxicology from the University of California San Francisco Medical Center, an
M.S. degree in Pharmacology from Wayne State University and a B.S. degree in
Biology from Georgetown University. Dr. Craves serves on the Audit Committee
of the Board of Directors.
LAWRENCE H.N. KINET, age 47, has been a Director since October 1990. In
January 1995, he was appointed Chairman of the Board of Directors and Chief
Executive Officer of AKSYS, Ltd., a biomedical development company engaged in
the field of artificial kidney dialysis. From January 1991 through December
1994, he served as Chairman of the Board of Directors and Chief Executive
Officer of Oculon Corporation, a pharmaceutical development company engaged in
the field of anti-cataract drugs. He was a Managing Partner of The Kensington
Group, a management consulting partnership, from 1989 to 1992. From 1985
through 1988, he was President and Corporate Group Vice President of Baxter
World Trade Corporation, the international division of Baxter International,
Inc. Mr. Kinet is Chairman of the Board of Directors of Oculon Corporation.
Mr. Kinet holds an M.B.A. degree from the University of Chicago and a B.Sc.
degree from the University of Birmingham, England. Mr. Kinet serves on the
Audit and Compensation Committees of the Board of Directors.
-5-
<PAGE> 8
CARL-HEINZ POMMER, age 48, has been a Director since May 1994. Mr.
Pommer has held various positions with Boehringer Ingelheim International GmbH,
a European pharmaceutical company and shareholder of the Company, since 1967,
most recently as Head of International Hospital Business since August 1993.
From 1991 to August 1993, he was Manager, International Product Marketing, and
from 1987 to 1991, Group Head, International Product Marketing. Mr. Pommer was
designated as a nominee for election as a Director by Boehringer Ingelheim
International GmbH pursuant to an agreement with the Company. Mr. Pommer holds
a degree (Diplom-Kaufmann) from the University of Gottingen (Germany) in
Business Administration, Marketing and Sales. Mr. Pommer serves on the Audit
Committee of the Board of Directors.
It is intended that votes will be cast pursuant to the enclosed proxy
card for the election as Directors of the foregoing nominees. Executing the
proxy card will give the proxies the authority to vote the shares in the
election of Directors as the proxies shall determine. If any nominee shall not
be a candidate for election as a Director at the Annual Meeting, it is intended
that votes will be cast pursuant to the enclosed proxy for such substitute
nominee as may be nominated by the existing Directors. No circumstances are
presently known that would render any nominee named above unavailable.
Pursuant to the Company's Bylaws, shareholders seeking to nominate other
candidates for election to the Board of Directors at the Annual Meeting must
give written notice to the Company's Corporate Secretary no less than 60 days
nor more than 90 days before the Annual Meeting. Such notice must contain
certain information as to the shareholder giving the notice and each proposed
nominee, including information similar to that required under the federal proxy
rules. If less than 70 days' notice or prior public disclosure of the date of
the scheduled Annual Meeting is given, notice by the shareholder must be given
not later than the tenth day following the earlier of the mailing of notice of
the Annual Meeting and the date public disclosure of the Annual Meeting was
made. The Company's Bylaws provide that no person shall be elected a Director
of the Company unless nominated in accordance with the Bylaws. As of the date
of this Proxy Statement, the Company has not received any Director nominations
by shareholders.
The Board of Directors met eight times during the year ended December
31, 1994. Each of the present Directors, except Mr. Pommer, attended at least
75% of the total number of meetings held by the Board of Directors and by all
committees of the Board of Directors on which they served.
COMMITTEES OF THE BOARD
The Board of Directors has two committees: an Audit Committee and a
Compensation Committee. It does not have a nominating committee.
The Audit Committee currently consists of three nonemployee Directors,
Messrs. Kinet and Pommer, and Dr. Craves. The Audit Committee reviews the
preparation and audit of the
-6-
<PAGE> 9
Company's accounts, considers the engagement of independent public accountants
for the ensuing year and the terms of such engagement, reviews the scope of the
audit proposed by such accountants, and receives and reviews the audit reports.
The Audit Committee met twice during the year ended December 31, 1994.
The Compensation Committee currently consists of three nonemployee
Directors, Messrs. Andress, Bowman and Kinet. The Compensation Committee
recommends to the Board of Directors the salary and certain terms of employment
of the Company's officers and administers the Company's 1994 Stock Option Plan
and the grants of options thereunder. The Compensation Committee met six times
during the year ended December 31, 1994.
Compensation of Directors
Directors of the Company receive no cash compensation for their services
to the Company in such capacity. Nonemployee Directors receive stock option
grants under the Company's 1991 Stock Option Plan for Nonemployee Directors
(the "Directors Plan"). Each new nonemployee Director, upon election or
appointment to the Board of Directors, receives an initial option to purchase
10,000 shares of Common Stock at an exercise price equal to the fair market
value per share of Common Stock on the grant date. Each nonemployee Director
automatically receives an annual grant of options to purchase 5,000 shares of
Common Stock following each annual meeting of shareholders at an exercise price
equal to the fair market value per share of Common Stock on the grant date,
provided that a Director who has received an initial grant for 10,000 shares of
Common Stock within five months prior to any such annual meeting of
shareholders does not receive the annual grant for such annual meeting.
Options granted to nonemployee Directors upon their initial appointment or
election become exercisable in two equal installments beginning with the first
anniversary of the grant date. The options granted as of each annual meeting
of shareholders (including the Annual Meeting) become exercisable in two equal
installments on the dates of the next two succeeding annual meetings of
shareholders.
In 1994, Mr. Bowman and Mr. Pommer joined the Company's Board of
Directors. In January 1994, Mr. Bowman received an option under the Directors
Plan to purchase 5,000 shares of Common Stock at $9.25 per share. In February,
Mr. Bowman received an option to purchase 5,000 shares at $8.38 per share. In
May 1994, Mr. Pommer received an option under the Directors Plan to purchase
10,000 shares of Common Stock at $3.63 per share. Also in May 1994, each of
Messrs. Andress, Bowman and Kinet, and Dr. Craves received options under the
Directors Plan to purchase 5,000 shares of Common Stock at $3.63 per share.
In addition to options granted under the Directors Plan, Dr. Craves
receives compensation under a consulting agreement with the Company. See
"Certain Relationships and Related Transactions".
-7-
<PAGE> 10
EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth all compensation paid during each of the
last three fiscal years and the period from October 1, 1992 to December 31,
1992 to the Company's Chief Executive Officer and the four other most highly
compensated officers in 1994 (the "named executive officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
--------------------- -------------------------
Restricted Securities All Other
Name and Principal Stock Underlying Compensation
Position Period Salary($) Bonus($) Awards($)(2) Options(#) ($)(3)
------------------ ------------- --------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul G. Abrams 12 mos. ended
President and Chief 12/31/94 $223,660 $ -- $ -- 450,000 $696
Executive 12 mos. ended
Officer 12/31/93 211,304 -- -- -- 390
3 mos. ended
12/31/92 50,720 -- -- -- 84
12 mos. ended
9/30/92 135,604 14,566 -- 63,000 335
Robert M. Littauer 12 mos. ended
Senior Vice President, 12/31/94 185,731 7,210 -- 130,000 696
Chief Financial 12 mos. ended
Officer and 12/31/93 169,522 6,365 -- 20,000 381
Treasurer 3 mos. ended
12/31/92 37,841 -- -- -- 84
12 mos. ended
9/30/92 146,435 5,023 -- 45,000 335
Jeffrey J. Miller 12 mos. ended
Senior Vice President, 12/31/94 191,737 29,552 51,000 130,000 696
Business Development 12 mos. ended
and Legal Affairs, 12/31/93 174,752 6,365 -- 20,000 385
and Secretary 3 mos. ended
12/31/92 39,561 -- -- -- 87
12 mos. ended
9/30/92 146,435 10,000 -- 45,000 349
John M. Reno 12 mos. ended
Vice President, 12/31/94 156,013 7,770 -- 125,000 640
Research and 12 mos. ended
Development 12/31/93 148,384 6,365 -- 18,750 340
3 mos. ended
12/31/92 30,195 -- -- -- 68
12 mos. ended
9/30/92 115,958 4,148 -- 45,000 270
Robert W. Schroff 12 mos. ended
Vice President and 12/31/94 144,522 -- -- 115,000 341
General Manager, 12 mos. ended
Cardiovascular 12/31/93 137,421 -- -- 18,750 314
Products 3 mos. ended
12/31/92 27,436 -- -- -- 62
12 mos. ended
9/30/92 105,750 6,683 -- 45,000 246
- ------------------
</TABLE>
(1) In February 1993, the Board of Directors changed the Company's fiscal
year-end from September 30 to December 31. All compensation for the
period October 1, 1991 through December 31, 1994 included in this Summary
Compensation Table has been presented in the fiscal year in which it was
paid or accrued.
(2) Dr. Miller was awarded 8,000 shares of Common Stock under the Company's
1991 Restricted Stock Plan on October 13, 1994. The price of the
Company's stock on the date of grant was $6.38 per share. Restrictions
on transferability of the shares awarded terminated January 5, 1995.
(3) Consists of premiums paid under group term life insurance policies.
-8-
<PAGE> 11
STOCK OPTIONS
The following table provides details regarding stock options granted to the
named executive officers in 1994. In addition, in accordance with Securities
and Exchange Commission ("SEC") rules, the hypothetical gains or "option
spreads" that would exist for the respective options are shown. These gains
are based on assumed rates of annual compounded stock price appreciation of 0%,
5% and 10% from the date the options were granted over their 10-year term.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term
- ------------------------------------------------------------------------------------ -------------------------------------
Percent of
Number of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price
Name Granted(#)(1) in 1994 ($/Sh) Expiration Date 0%($) 5%($)(2) 10%($)(2)
---- ------------- --------- -------- --------------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul G. Abrams 450,000(3) 18.1% $2.94 7/20/2004 $-- $832,028 $2,108,521
Robert M. Littauer 130,000(3) 5.2% 2.94 7/20/2004 -- 240,364 609,128
Jeffrey J. Miller 130,000(3) 5.2% 2.94 7/20/2004 -- 240,364 609,128
John M. Reno 115,000(3) 4.6% 2.94 7/20/2004 -- 212,629 538,844
10,000(4) 0.4% 6.38 10/13/2004 -- 40,123 101,681
Robert W. Schroff 115,000(3) 4.6% 2.94 7/20/2004 -- 212,629 538,844
- -------------
</TABLE>
(1) All options were granted with an exercise price equal to the fair market
value on the date of grant based on the closing price of the Common
Stock as quoted on the Nasdaq National Market. The options are also
subject to accelerated vesting upon the occurrence of certain events.
See "Employment Agreements, Termination of Employment and Change of
Control Arrangements."
(2) The amounts result from assumed rates of stock price appreciation
required by the SEC and are not intended to forecast actual stock price
appreciation. Optionholders will experience no gain unless the stock
price increases during the option term. Such an increase would benefit
all shareholders.
(3) One-half of the options granted are performance-based options that become
exercisable on the ninth anniversary of the grant date. Exercisability
may be accelerated by the Compensation Committee of the Board of
Directors based on the Committee's assessment of corporate and individual
performance against goals established annually. One-half of the options
granted become exercisable in four equal annual installments beginning
one year from the date of grant. Options granted expire 10 years from
the date of grant.
(4) The option becomes exercisable in four equal annual installments
beginning one year from the date of grant and expires 10 years from the
date of grant.
-9-
<PAGE> 12
OPTION EXERCISES IN 1994 AND YEAR-END VALUE TABLE
The following table sets forth information on option exercises in the
year ended December 31, 1994 by the named executive officers and the value of
such officers' unexercised options at the end of 1994.
AGGREGATED OPTION EXERCISES IN 1994
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-
Unexercised Options at the-Money Options at
Shares December 31, 1994(#) December 31, 1994($)(1)
Acquired on Value ----------------------------- ----------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul G. Abrams -- $ -- 143,500 478,875 $369,688 $873,000
Robert M. Littauer -- -- 59,375 165,625 101,400 252,200
Jeffrey J. Miller -- -- 65,125 165,625 120,835 252,200
John M. Reno -- -- 39,063 159,687 33,800 223,100
Robert W. Schroff -- -- 43,438 149,687 48,588 223,100
</TABLE>
- ------------
(1) The value of unexercised in-the-money options is calculated based on the
market price per share on December 31, 1994 ($4.88), less the exercise
price.
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<PAGE> 13
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Statement of Compensation Philosophy
The Company's executive compensation program primarily consists of two
parts: cash compensation and stock options. The Company's overall philosophy
is to hire individuals who possess the requisite professional skills and
outstanding managerial track records demonstrated from successful experiences
in positions of comparable scope and responsibility in healthcare and other
research and industrial settings, who will help achieve the Company's mission
of developing targeted biopharmaceuticals to treat cancer and cardiovascular
diseases. The Company is committed to recruiting, motivating and retaining
senior executives with demonstrated talent and managerial leadership skills.
The Company's goal for total compensation is to be competitive with
development-stage biotechnology enterprises. The program places significant
emphasis on equity participation by granting stock options which conserves cash
and aligns the interests of senior management with those of the Company's
shareholders.
The Company does not have an established bonus award program. Any cash
bonuses or restricted stock awarded to individuals are discretionary and are
intended to recognize the individuals' outstanding contributions to the
Company, such as accomplishments relating to the completion of particular
transactions and significant projects.
Compensation payments in excess of $1 million to each of the named
executive officers are subject to a limitation on deductibility for the Company
under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain
performance-based compensation is not subject to the limitation on
deductibility. Cash compensation to the Chief Executive Officer or any other
executive officer has never exceeded $1 million and the Compensation Committee
does not expect cash compensation in 1995 to the Chief Executive Officer or any
other executive officer to be in excess of $1 million. The Board of Directors
intends to qualify option awards for the performance-based exception to the $1
million limitation on deductibility of compensation payments.
Cash Compensation
The Company's philosophy is to maintain executive cash compensation at a
competitive level that is sufficient to recruit and retain individuals
possessing the above-mentioned skills. Determinations of appropriate cash
compensation levels are generally made through regular participation in a
variety of industry and industry-related surveys, as well as by monitoring
developments in key industries such as biotechnology and pharmaceuticals. The
Company's cash compensation levels are designed to be approximately equal to
cash compensation paid by other development-stage biotechnology enterprises.
Executive officer base salaries are adjusted annually. The survey data
considered by the Compensation Committee in determining 1994 executive
compensation includes salary information provided by 102 development-stage
biotechnology enterprises having fewer than 100 employees (the "Comparison
Group"),
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<PAGE> 14
approximately 32 of which are publicly traded companies. Approximately 65% of
these publicly traded companies are included in the Nasdaq Pharmaceutical Stock
Index referred to in the Stock Price Performance Graph that appears elsewhere
in this Proxy Statement. Dr. Abrams' salary in 1994 was $223,660, which
represented approximately 94% of the average cash compensation for chief
executive officers in the Comparison Group. Cash compensation for the
Company's other executive officers ranges from 86% to 117% of the average
compensation for executives performing similar functions in companies included
in the Comparison Group. In 1994, executive officer base salaries, including
Dr. Abrams' salary, were increased 5.5%, which was consistent with the
Comparison Group increases.
Stock Options and Restricted Stock
Stock options are viewed as a basic element of the total compensation
program and emphasize long-term Company performance as measured by the creation
of shareholder value. From December 31, 1990 to December 31, 1994, shareholder
value, as measured by the Company's stock price, increased from $2.25 to $4.88,
or 117%. This period coincided with the institution of a revised strategic
plan developed between May and December 1990, during which period Dr. Abrams
became Chief Executive Officer, as discussed below. Options under the
Company's existing stock option plan are granted to all employees. In
determining the size of the grants, the Compensation Committee considers the
amount and value of options currently held, but focuses primarily on the
executive's past and likely continued contribution to the Company, as well as
the executive's relative position within the Company. Although the
Compensation Committee does not have a target ownership level for Common Stock
holdings by executives and key employees, the Compensation Committee's
objectives are to enable such persons to develop and maintain a significant
long-term ownership position in the Common Stock.
Stock options to executive officers have been granted at 100% of fair
market value on the date of grant. The Company has generally awarded options
to executives at the time of employment and promotion, and at discretionary
intervals thereafter. The Compensation Committee seeks to keep its executive
stock option compensation competitive with other development-stage
biotechnology companies. During 1994, the Compensation Committee commissioned
a compensation consulting firm to recommend a stock option award consistent
with this goal. Based on this analysis, the stock option grants shown in the
table "Option Grants in 1994" were awarded.
Stock option exercisability is determined by the Compensation Committee.
Options become exercisable in periods generally ranging from one to nine years
after date of grant. In certain cases, exercisability may be accelerated based
on achievement of corporate and individual objectives.
-12-
<PAGE> 15
The Company adopted a restricted stock plan in 1991. During 1994, 8,000
shares of restricted Common Stock were granted to Dr. Miller in recognition of
his contribution to the favorable settlement of litigation and negotiation of a
corporate alliance agreement. At the date of grant, the fair market value of
the Company's Common Stock was $6.38 per share. The restrictions terminated
January 5, 1995.
Chief Executive Officer Compensation
The Board of Directors asked Dr. Abrams to become Chief Executive
Officer in May 1990 in an attempt to reverse a string of corporate setbacks
that had multiple causes. Because of the Company's situation at the time, Dr.
Abrams refused to accept a salary increase until the problems had been
corrected. Consequently, his annual salary remained at $130,000, the amount he
received when he was Vice President. In 1992, the Compensation Committee
determined that the Company's major difficulties -- high cash expenditures,
languishing approval process for its first product, loss of a manufacturer for
the key component of that product, absence of a major corporate collaboration
and legally entangled rights for its follow-on cancer therapeutics products --
had been effectively resolved. Based on these accomplishments, Dr. Abrams'
salary was adjusted in September 1992 to an annual rate of $200,000. In 1993
and 1994, the Compensation Committee awarded Dr. Abrams a 6% and 5.5% increase,
respectively, the same increase provided to all Company employees.
Submitted by the Compensation Committee of the Board of Directors
James G. Andress
Jack L. Bowman
Lawrence H.N. Kinet
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<PAGE> 16
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total shareholder return of the
Nasdaq Stock Market Index (US) and the Nasdaq Pharmaceutical Stock Index, an
index of approximately 180 companies, the stocks of which are quoted on the
Nasdaq National Market, and the Primary Standard Industrial Classification Code
Number (SIC) of which is 283 - Pharmaceutical Companies.
Note: Stock price performance shown below for the Company is
historical, and not necessarily indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG NEORX
CORPORATION, NASDAQ STOCK MARKET INDEX (US) AND
NASDAQ PHARMACEUTICAL STOCK INDEX(1)
NeoRx Corporation $100 $50 $64 $50 $83 $51 $27
Nasdaq Stock
Market Index (US) 100 74 117 131 153 174 170
Nasdaq Pharmaceutical
Stock Index 100 97 253 214 261 233 176
(1) Assumes $100 invested on September 30, 1989 in NeoRx Corporation Common
Stock, the Nasdaq Stock Market Index (US) and the Nasdaq Pharmaceutical
Stock Index. Total return performance for the Nasdaq Stock Market Index
(US) and the Nasdaq Pharmaceutical Stock Index is weighted based on the
market capitalization of the firms included in each index and assumes
that dividends are reinvested. The Nasdaq Stock Market Index (US) and
the Nasdaq Pharmaceutical Stock Index are produced and published by the
Center for Research in Securities Pricing at the University of Chicago.
The Company's stock price decreased from $9.00 at September 30,
1990 to $2.25 at December 31, 1990, the date a revised strategic plan was
adopted by the Company. The stock price subsequently rose to $4.88 at December
31, 1994 and was $6.44 at March 27, 1995.
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<PAGE> 17
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Each of the Company's executive officers has an employment agreement
with the Company that expires March 1, 1996 that provides that such executive
officer would receive up to 12 months' salary as severance pay if such
executive officer is terminated "without cause" (as defined in the agreement).
Upon a merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation of the Company, as a result of which
the shareholders of the Company receive cash, stock or other property in
exchange for or in connection with their shares of Common Stock, any option
granted under any of the Company's stock option plans shall terminate, but the
optionee will have the right, immediately prior to any such merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, to exercise his or her option in whole or in part, whether or not
the vesting requirements set forth in the respective option agreement have been
satisfied. The exercise price and tax withholding obligations relating to
exercise may be paid by delivery of already-owned shares or by offsetting the
underlying shares, subject to certain conditions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 7, 1993, Dr. Fred B. Craves, a Director, entered into a
consulting agreement with the Company that provides that Dr. Craves shall be
retained as a general advisor and consultant to the Company's management on all
matters pertaining to the Company's business and that Dr. Craves shall devote
up to 25% of his time to this purpose. In exchange for such services, Dr.
Craves is compensated $25,000 for each calendar quarter of services, plus
reasonable travel and other expenses. In addition, on July 7, 1993, the
Company granted Dr. Craves an option to purchase a total of up to 125,000
shares of Common Stock. The Company has also agreed to indemnify Dr. Craves
against certain liabilities, losses and expenses. If Dr. Craves is terminated
"without cause" (as defined in the consulting agreement), his entire stock
option may be exercised, and he is entitled to a pro rata portion of the
quarterly fee for services up to the date of termination, all expenses incurred
up to such date and a payment equal to three months of service.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and executive officers, and persons who own
more than 10% of a registered class of the Company's securities, to file with
the SEC the initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors, executive
officers and greater-than-10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations, no other
reports were required during the
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<PAGE> 18
fiscal year ended December 31, 1994, and all Section 16(a) filing requirements
applicable to its Directors, executive officers and greater- than-10%
shareholders were complied with.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP, independent
public accountants, to continue as the Company's auditors for 1995. The Board
of Directors is submitting its selection of Arthur Andersen LLP to the
shareholders for ratification. Representatives from Arthur Andersen LLP are
expected to be present at the Annual Meeting to make a statement if they so
desire and to respond to appropriate questions.
PROPOSALS OF SHAREHOLDERS
Under the Company's Bylaws, shareholders seeking to propose business to
be conducted at an annual meeting of shareholders must give written notice to
the Company no later than the date shareholder nominations for Directors must
be received. The notice must contain certain information as to the proposal
and the shareholder, including the shareholder's share ownership and any
financial interest of the shareholder in the proposal. Any proposal not made
in compliance with the Bylaws may be rejected by the Board of Directors. No
shareholder proposals for the Annual Meeting had been received by the Company
as of the date of this Proxy Statement.
A shareholder who intends to present a proposal at the 1996 Annual
Meeting of Shareholders and desires that information regarding the proposal be
included in the 1996 proxy statement and form of proxy must ensure that such
information is received by the Company no later than December 6, 1995.
OTHER BUSINESS
The Company knows of no other business to be presented at the Annual
Meeting. If any other business properly comes before the Annual Meeting, it is
intended that the shares represented by proxies will be voted with respect
thereto in accordance with the best judgment of the persons named in the
accompanying form of proxy.
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<PAGE> 19
FORM 10-K ANNUAL REPORT
Upon written request from any person solicited herein addressed to the
Company's Corporate Secretary at the Company's principal offices, the Company
will provide, at no cost, a copy of the Company's Form 10-K Annual Report as
filed with the SEC for the fiscal year ended December 31, 1994.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey J. Miller
-----------------------------------------------
JEFFREY J. MILLER, Ph.D., J.D.
Senior Vice President, Business Development and
Legal Affairs, and Secretary
March 31, 1995
Seattle, Washington
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<PAGE> 20
NEORX CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey J. Miller and Robert M. Littauer, and
each of them, as Proxies, with full power of substitution, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Common Stock of NeoRx Corporation held of record by the undersigned on March
27, 1995, at the Annual Meeting of Shareholders to be held on May 9, 1995, or
any adjournment or postponement thereof.
(Continued and to be signed on reverse side.)
1. ELECTION OF DIRECTORS:
Election of the following six nominees to serve as Directors for the ensuing
year or until their successors are elected and qualified:
Nominees: Paul G. Abrams, Jack L. Bowman, Lawrence H. N. Kinet, James G.
Andress, Fred B. Craves and Carl-Heinz Pommer
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the names(s) of the nominee(s) below:
- ----------------------------------------------------------------------------
Unless otherwise directed, all votes will be apportioned equally among those
persons for whom authority is given to vote.
FOR all nominees [ ]
WITHHOLD AUTHORITY to vote for all nominees [ ]
WITHHOLD AUTHORITY for the following only [ ]
2. Ratification of Independent Public Accountants. Ratify the appointment of
Arthur Andersen LLP as independent public accountants for NeoRx Corporation for
the fiscal year 1995.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. This Proxy, when properly
executed, will be voted in the manner directed herein by the undersigned. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" IN ITEM 2.
YOUR VOTE IS IMPORTANT. PROMPT RETURN OF THIS PROXY CARD WILL HELP SAVE THE
EXPENSE OF ADDITIONAL SOLICITATION EFFORTS.
Please sign below exactly as your name appears on your stock certificate. When
shares are held jointly, each person should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
An authorized person should sign on behalf of corporations, partnerships and
associations and give his or her title.
Dated:________________________________, 1995
___________________________________________
Signature
__________________________________________
Signature if held jointly
