SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __ )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
ImClone Systems Incorporated
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person)s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
------------------------------------------------
<PAGE>
[LOGO]
IMCLONE SYSTEMS INCORPORATED
180 Varick Street
New York, NY 10014
(212) 645-1405
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1998
----------------------------
To The Stockholders of ImClone Systems Incorporated:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of ImClone Systems Incorporated (the "Company") will be held at 10:00
a.m., local time, on Wednesday, May 27, 1998 at the Company's principal
executive offices at 180 Varick Street, Seventh Floor, New York, New York 10014,
for the following purposes:
1. To elect ten Directors.
2. To vote upon a proposal to approve the Company's 1998 Employee Stock
Purchase Plan.
3. To ratify the appointment by the Board of Directors of KPMG Peat
Marwick LLP to serve as the Company's independent certified public
accountants for the fiscal year ending December 31, 1998.
4. To consider and act upon such other business as may properly come
before the Meeting or any adjournment thereof.
Only holders of Common Stock of record at the close of business on April 7,
1998 are entitled to notice of and to vote at the Meeting or any adjournment
thereof.
By Order of the Board of Directors
/s/ John B. Landes
----------------------------------
New York, NY JOHN B. LANDES
April 22, 1998 Secretary
Whether or not you expect to attend the Meeting, please complete, sign and date
the enclosed proxy and promptly return it in the envelope provided to the
Company's transfer agent, Boston EquiServe, 150 Royall Street, Mail Stop
45-02-62, Canton, MA 02021, to be received no later than May 25, 1998. In order
to avoid the additional expense to the Company of further solicitation, we ask
your cooperation in sending in your proxy promptly. Sending in your proxy will
not prevent you from voting in person at the Meeting.
<PAGE>
IMCLONE SYSTEMS INCORPORATED
180 Varick Street
New York, New York 10014
---------------------------------
PROXY STATEMENT
---------------------------------
This proxy statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of ImClone Systems
Incorporated (the "Company") to be held at 10:00 a.m., local time, on Wednesday,
May 27, 1998, at the Company's principal executive offices at 180 Varick Street,
Seventh Floor, New York, New York 10014, and at any adjournments thereof (the
"Meeting"). The accompanying proxy is solicited by the Board of Directors of the
Company (the "Board") and is revocable by the stockholders any time before it is
voted. The purpose of the Meeting and the matters to be acted upon are set forth
in the accompanying Notice of Annual Meeting of Stockholders.
OUTSTANDING SHARES AND VOTING RIGHTS
The close of business on April 7, 1998 has been fixed as the record date
(the "Record Date") for the determination of stockholders entitled to notice of,
and to vote at, the Meeting. On the Record Date, the Company had 24,334,885
shares of common stock, par value $.001 per share (the "Common Stock"),
outstanding and entitled to vote. Such shares of Common Stock are the only
outstanding voting securities of the Company. Each share held of record on the
Record Date will be entitled to one vote at the Meeting. There are no cumulative
voting rights. It is expected that the Notice of Annual Meeting, Proxy Statement
and form of proxy will first be mailed to stockholders on or about April 24,
1998.
To be elected as a Director under Proposal No. 1, a Director must receive a
plurality of the votes of the shares of Common Stock present in person or
represented by proxy at the Meeting and entitled to vote on the election of
Directors. Broker non-votes will not be counted as present for the purposes of
determining the outcome of the election of Directors and will thereby have the
effect of decreasing the number of votes needed to gain a plurality. Abstentions
will be counted as present for the purposes of determining the outcome of the
election of Directors and will thereby have the effect of increasing the number
of votes needed to gain a plurality. The affirmative vote of a majority of the
shares of Common Stock, present in person or represented by proxy at the Meeting
and entitled to vote on the subject matter, is necessary for approval of
Proposal Nos. 2 and 3. Abstentions will count as votes "Against" Proposal Nos. 2
and 3 and broker non-votes will not be treated as present for determining the
outcome of Proposal Nos. 2 and 3 and thereby will act to decrease the number of
votes needed to gain a majority. The holders of a majority of the outstanding
shares of stock entitled to vote on a matter at the Meeting present in person or
represented by proxy shall constitute a quorum. Broker non-votes are not counted
for the purposes of a quorum for the item to which they apply. Broker non-votes
occur where brokers are prohibited from exercising discretionary authority for
beneficial owners who have not provided voting instructions.
Pursuant to the Delaware General Corporation Law, only votes cast "For" a
matter constitute affirmative votes. Proxies which are voted by marking
"Withheld" or "Abstain" on a particular matter are counted as present for quorum
purposes. If a validly executed proxy card is not marked to indicate a vote on a
particular matter and the proxy granted thereby is not revoked before it is
voted, it will be voted "For" such matter. The Board knows of no matters which
are to be presented for consideration at the Meeting other than those
specifically described in the Notice of Annual Meeting of Stockholders, but, if
other matters are properly presented, it is the intention of the persons
designated as proxies to vote on them in accordance with their judgment.
<PAGE>
PROPOSAL NO. 1
ELECTION OF BOARD OF DIRECTORS
It is proposed that the ten nominees named below will be elected at the
Meeting to serve as Directors of the Company for one-year terms. It is the
intention of the persons named in the accompanying proxy, unless otherwise
instructed, to vote for the nominees named herein. All such persons are
currently members of the Board of Directors (the "Board"). No proxy may be voted
for more persons than the number of nominees listed below. The Board has no
reason to believe that any of the nominees will become unavailable to serve,
but, if that should occur before the Meeting, proxies will be voted for such
other persons as the Board may nominate. The nominees for election as Director,
and certain information with respect to their backgrounds are set forth below.
Nominees For Director
Current Position Director of
Name Age with Company Company Since
- ---- --- ------------ -------------
Richard Barth (1)(2) 66 Director 1996
Jean Carvais, M.D. 71 Director 1993
Vincent T. DeVita, Jr., M.D.(2) 63 Director 1992
Robert F. Goldhammer (2)(3)(4) 67 Chairman of the Board 1984
David M. Kies (1)(4) 54 Director 1996
Paul B. Kopperl (1)(2)(4) 64 Director 1993
John Mendelsohn, M.D. 61 Director 1998
William R. Miller (1)(4) 69 Director 1996
Harlan W. Waksal, M.D. (3)(4) 45 Executive Vice President, 1984
Chief Operating Officer
and Director
Samuel D. Waksal, Ph.D. (3) 50 President, Chief Executive 1985
Officer and Director
(1) Member of Audit Committee
(2) Member of Compensation and Stock Option Committee
(3) Member of Executive Committee
(4) Member of Nominating and Corporate Governance Committee
BUSINESS EXPERIENCE OF DIRECTORS
Richard Barth, has been a Director of the Company since October 1996. Mr.
Barth served as Chairman of the Board of Ciba-Geigy Corporation, United States
("Ciba-Geigy") from 1990 until December 1996, and was President and Chief
Executive Officer of Ciba-Geigy from 1986 until April 1996. Mr. Barth is a
member of the Board of Directors of numerous organizations, including Novartis
Corporation, United States, The Bank of New York and Bowater, Inc., and serves
as Chairman of the Board of Trustees of New York Medical College.
Jean Carvais, M.D., has been a Director of the Company since July 1993, and
has since 1984 been an independent consultant to companies in the pharmaceutical
industry. Prior to that time, Dr. Carvais was President of The Research
Institute of Roger Bellon, S.A., now a division of Rhone-Poulenc Rorer, Inc.
("Rhone-Poulenc"). As such, he was involved in the development of a line of
anti-cancer drugs, including Bleomycin and Adriamycin, as well as a new line of
antibiotics and quinolones. Following the acquisition of Roger Bellon, S.A. by
Rhone-Poulenc, Dr. Carvais became a member of Rhone-Poulenc's central research
committee which directs the company's worldwide research and development
activities. Dr. Carvais is a director of Columbia Laboratories, Inc.
Vincent T. DeVita, Jr., M.D., has been a Director of the Company since
February 1992. Dr. DeVita is Director of the Yale Cancer Center as well as
Professor of Medicine and Professor of Epidemiology and Public Health at Yale
University School of Medicine, New Haven, Connecticut. From September 1988
through June 1995,
2
<PAGE>
Dr. DeVita served as Attending Physician at Memorial Sloan-Kettering Cancer
Center ("Sloan-Kettering"), New York, and through June 1991 as
Physician-in-Chief. From 1980 to 1988, he served under Presidential appointment
as Director of the National Cancer Institute ("NCI"), where he had held various
positions since 1966. During his years with the NCI, Dr. DeVita was instrumental
in developing the first successful combination cancer chemotherapy program. This
work ultimately led to effective regimes of curative chemotherapy for a variety
of cancers. Dr. DeVita's numerous awards include the 1990 Armand Hammer Cancer
Prize and the 1982 Albert and Mary Lasker Medical Research Award for his
contribution to the cure of Hodgkin's disease. Dr. DeVita received his M.D. from
the George Washington University School of Medicine, Washington, DC, in 1961.
Robert F. Goldhammer, has served as the Company's Chairman of the Board
since February 1991 and has been a Director of the Company since October 1984.
Mr. Goldhammer has been a partner of Concord International Investment Group,
L.P. since 1991. He was a partner of Rohammer Corporation, a private investment
company, from 1989 to 1991. He was a managing director of Kidder, Peabody Group
Inc., an investment banking firm, from May 1988 to January 1989. He is a
director of E.G.&G, Inc. and Esterline Technologies Corporation.
David M. Kies, has been a Director of the Company since June 1996. Mr. Kies
is a Partner of the New York based law firm Sullivan & Cromwell, specializing in
mergers and acquisitions, securities and general corporate matters. Mr. Kies
joined Sullivan & Cromwell in 1968, and was elected a partner of the firm in
1976. From 1991 until 1995, he was the managing partner of the firm's London
office, the largest office of U.S. lawyers in London and the largest office of
U.S. securities lawyers in Europe. He has had extensive experience in many
complex international and U.S. financial transactions, principally representing
non-U.S. entities or their financial advisors.
Paul B. Kopperl, has served on the Board since December 1993. He is
President of Pegasus Investments, Inc., Boston, a private investment management
firm established in 1994. He has served as President of Delano & Kopperl, Inc.,
a financial advisory firm in Boston and its predecessor firms from 1976 to the
present. From 1967 through 1975 he was Vice President and a principal of Kidder,
Peabody & Co. Incorporated, New York, an investment banking firm. From 1959 to
1967 he was an associate with Goldman, Sachs & Co., New York. Mr. Kopperl is a
Trustee and Governor of the Dana-Farber Cancer Institute, Boston, and over the
years has served as a trustee of numerous not-for-profit educational, performing
arts and social welfare organizations.
John Mendelsohn, has been a Director of the Company since February 1998. He
has served as the President of M.D. Anderson Cancer Center, University of Texas,
where he has also been Professor of Medicine since 1996. From 1985 to 1996 he
was Chairman of the Department of Medicine at Sloan-Kettering, New York, as well
as holder of the Winthrop Rockefeller Chair in Medical Oncology at
Sloan-Kettering. He was also Professor and Vice-Chairman of Medicine at Cornell
University Medical College and an attending physician at both Memorial and New
York Hospitals. Dr. Mendelsohn served on the faculty of the University of
California, San Diego and was instrumental in the creation of the University's
Cancer Center, where he served as Director from 1976 to 1985. Dr. Mendelsohn's
work has focused on growth factors and their role in regulating the
proliferation of cancer cells through cell surface receptors. Dr. Mendelsohn was
responsible for developing specific monoclonal antibodies that block receptors,
including epidermal growth factor receptors, which mediate growth factor
activation of cell and growth and division. Dr. Mendelsohn is currently a board
member of the Richard Lounsbery Foundation and the Greater Houston Partnership,
and a fellow of the New York Academy of Medicine. In 1997, Dr. Mendelsohn was
elected to the Institute of Medicine of the National Academy of Sciences.
William R. Miller, has been a Director of the Company since June 1996. Mr.
Miller served as Vice Chairman of the Board of Directors of the Bristol-Myers
Squibb Company from 1985 until 1991, at which time he retired. Mr. Miller is a
director of Isis Pharmaceuticals, Inc., St. Jude Medical, Inc., Transkaryotic
Therapies, Inc., Westvaco Corporation and Xomed Surgical Products, Inc. He is
Chairman of the Board of Vion Pharmaceuticals, Inc. and SIBIA Neurosciences,
Inc. He is Vice Chairman of the Board of Trustees of the Cold Spring Harbor
Laboratory and is a past Chairman of the Board of the Pharmaceutical
Manufacturers Association. Mr. Miller is a Trustee of the Manhattan School of
Music, Metropolitan Opera Association and Opera Orchestra of New York. He is a
member of Oxford University Chancellor's Court of Benefactors, Honorary Fellow
of St. Edmund Hall and Chairman of the English-Speaking Union of the United
States.
3
<PAGE>
Harlan W. Waksal, M.D., is a founder of the Company and has been a Director
since April 1984. He has directed the Company's research and development since
April 1985, and has served as the Company's Executive Vice President and Chief
Operating Officer since March 1987. From 1985 to March 1987, Dr. Waksal served
as the Company's President. Dr. Waksal received his training in Internal
Medicine from Tufts-New England Medical Center Hospital and in Pathology from
Kings County Hospital in Brooklyn, New York from 1982 to 1987. From 1984 to
1985, Dr. Waksal was Chief Resident in Pathology at Kings County Hospital. He
received his Medical Degree from Tufts University School of Medicine in 1979. He
is currently Adjunct Assistant Professor in the Department of Pathology at
Downstate Medical Center, New York. Dr. Harlan Waksal and Dr. Samuel Waksal are
brothers.
Samuel D. Waksal, Ph.D., President of the Company, is a founder of the
Company and has been its Chief Executive Officer and a Director since August
1985 and President since March 1987. From 1982 to 1985, Dr. Waksal was a member
of the faculty of Mt. Sinai School of Medicine as Associate Professor of
Pathology and Director of the Division of Immunotherapy within the Department of
Pathology. He has served as visiting Investigator of the National Cancer
Institute, Immunology Branch, Research Associate of the Department of Genetics,
Stanford University Medical School, Assistant Professor of Pathology at Tufts
University School of Medicine and Senior Scientist for the Tufts Cancer Research
Center. Dr. Waksal was a scholar of the Leukemia Society of America from 1979 to
1984. Dr. Waksal currently serves on the Executive Committee of the New York
Biotechnology Association, the Board of Directors of Cadus Pharmaceutical
Corporation and is Chairman of the New York Council for the Humanities. Dr.
Samuel Waksal and Dr. Harlan Waksal are brothers.
All Directors of the Company hold office until the next Annual Meeting of
Stockholders and until their successors have been duly elected and qualified.
The Board recommends a vote "FOR" each of the nominees named above
(Proposal No. 1 on the proxy card).
DIRECTORS' COMPENSATION
Cash Compensation
Each Director of the Company who is not an employee of the Company or who
does not otherwise provide consulting services to the Company receives
compensation of $10,000 per year, or a pro rata portion thereof for persons not
serving the full fiscal year, for such person's services as a Director as well
as reimbursement of the Director's reasonable out-of-pocket expenses incurred in
connection with his Board and Board committee activities. In addition, subject
to the preceding sentence, the Chairman of each of the Audit Committee,
Compensation and Stock Option Committee and Nominating and Corporate Governance
Committee receives $5,000 per year as compensation for the services of each as
Chairman.
Directors' Stock Options
Pursuant to the Company's 1996 Non-Qualified Stock Option Plan, as amended
(the "Non-Qualified Plan"), Directors who are not full-time employees of the
Company automatically receive on each February 15th an option to purchase 2,500
shares of Common Stock, or a pro rata portion thereof for persons not serving
the full fiscal year. Such options vest after one full year of service on the
Board from the date of grant and have an exercise price equal to the fair market
value of the Common Stock on the date of grant. Directors newly joining the
Board who are not full-time employees of the Company are made a one-time option
grant under the Non-Qualified Plan to purchase 25,000 shares of Common Stock.
Such options vest as to 25% of the shares of Common Stock over the four-year
period commencing one-year after the date of grant, subject to such individual's
continued service on the Board on the scheduled date of vesting, and have an
exercise price equal to the fair market value of the Common Stock on the date of
grant. From time to time, non-employee Directors are granted additional options
in consideration for providing services on the Board.
4
<PAGE>
The table below sets forth option grants to non-employee Directors during
the year ended December 31, 1997 in consideration for such Directors serving on
the Board:
Name Number of Options
---- -----------------
Richard Barth 2,500(1)
10,000(2)
Jean Carvais 2,500(1)
10,000(2)
Vincent T. DeVita, Jr. 2,500(1)
10,000(2)
Robert F. Goldhammer 2,500(1)
75,000(2)
David M. Kies 2,500(1)
10,000(2)
Paul B. Kopperl 2,500(1)
10,000(2)
John Mendelsohn 0(3)
William R. Miller 2,500(1)
10,000(2)
(1) These options were granted automatically pursuant to the terms of the
Non-Qualified Plan on February 15, 1997 at a per share exercise price of $8.125
which is equal to the fair market value of the Common Stock on the date of
grant. They vested and became exercisable in their entirety on February 15, 1998
and terminate February 14, 2007.
(2) These options were granted under the Non-Qualified Plan on November 26, 1997
at a per share exercise price of $6.00 which is equal to the fair market value
of the Common Stock on the date of grant. They vest and become exercisable in
their entirety on November 26, 1998 and terminate November 25, 2007, subject to
the respective individual's continued service on the Board.
(3) Dr. Mendelsohn joined the Board in February 1998,
INFORMATION CONCERNING BOARD AND COMMITTEE
MEETINGS AND COMMITTEES OF THE BOARD
The Company has an Executive Committee of the Board composed of Dr. Samuel
D. Waksal (Chairman), Robert F. Goldhammer and Dr. Harlan W. Waksal. The
Executive Committee acts for the Board when formal Board action is required
between Board meetings. The Executive Committee has all the power of the full
Board in the management of the business and affairs of the Company, except those
powers that by law cannot be delegated by the Board. The Executive Committee did
not meet during the year ended December 31, 1997.
The Company has an Audit Committee of the Board composed of Paul B. Kopperl
(Chairman), David M. Kies, Richard Barth and William R. Miller. The Audit
Committee considers matters relating to the adequacy of the Company's internal
financial controls and the objectivity of the Company's financial reporting,
reviews the Company's annual financial statements and the performance of the
Company's auditors and makes recommendations to the Board with respect to these
matters. The Audit Committee met three times during the year ended December 31,
1997.
The Company has a Compensation and Stock Option Committee (the
"Compensation Committee") of the Board composed of Robert F. Goldhammer
(Chairman), Paul B. Kopperl, Vincent T. DeVita, Jr. and Richard Barth. The
Compensation Committee is responsible for developing executive compensation
policies. The Compensation Committee (i) determines on an annual basis the base
salary to be paid to the Chief Executive Officer and determines bonuses and
incentive awards to be paid from time to time to the Chief Executive Officer;
and (ii)
5
<PAGE>
approves on an annual basis a salary plan for other senior officers on the
recommendation of the Chief Executive Officer in conjunction with other senior
personnel and approves bonuses and incentive awards to be paid from time to time
to such senior officers on the recommendation of the Chief Executive Officer in
conjunction with other senior personnel. The Compensation Committee also
administers the Company's various stock option plans, including the granting of
options thereunder. The Compensation Committee met one time during the year
ended December 31, 1997.
The Company has a Nominating and Corporate Governance Committee composed of
David M. Kies (Chairman), Paul B. Kopperl, William R. Miller, Robert F.
Goldhammer and Harlan W. Waksal. The Nominating and Corporate Governance
Committee considers and makes recommendations to the Board regarding Board and
committee nominees and membership, director performance and officer candidates.
The Nominating and Corporate Governance Committee also considers and makes
recommendations to the Board with respect to corporate organizational and
governance matters. The Corporate Governance Committee did not meet during the
year ended December 31, 1997. The Nominating and Corporate Governance Committee
considers nominations for Director made by stockholders of the Company in
accordance with the procedures for submission of proposals at annual or special
meetings of stockholders set forth in the Company's Amended and Restated
By-laws.
During the year ended December 31, 1997, there were five meetings of the
Company's Board. No incumbent Director attended fewer than 75% of the total
number of meetings of the Board and of the Committees of the Board on which he
served.
INFORMATION CONCERNING OFFICERS
Certain information concerning each officer of the Company is provided
below.
Samuel D. Waksal, Ph.D., is the President and Chief Executive Officer of
the Company. Certain information concerning Dr. Waksal appears on pages 2 and 4.
Harlan W. Waksal, M.D., is the Executive Vice President and Chief Operating
Officer of the Company. Certain information concerning Dr. Waksal appears on
pages 2 and 4.
Peter Bohlen, Ph.D., 55, has been Vice President, Research of the Company
since September 1996. From November 1995 to July 1996 he was Senior Director of
IXSYS, a privately-held biotechnology company. From October 1987 to June 1996 he
was department head of the Molecular Biology Section of American Cyanamid's
Medical Research Division and director of the company's angiogenesis program. He
also has held a variety of managerial and professorial positions at the Salk
Institute, San Diego and the University of Zurich, Switzerland. Dr. Bohlen
received his Ph.D. in chemistry from the University of Berne in Switzerland. In
1983, he received the Cloetta Award in Switzerland for his contributions in the
field of protein analysis.
Michael Feldman, Ph.D., 72, became Vice President, Discovery Research for
the Company in May 1995. Prior thereto he served as Director of Basic Research
for the Company since 1993. Dr. Feldman is former head of the Department of Cell
Biology at the Weizmann Institute of Science in Rehovot, Israel, and a former
dean of its graduate school. He has done pioneering work in the areas of
transplantation immunology, differentiation of lymphocytes and cancer
immunology. In 1984, he received the Griffuel Award in France for his work in
cancer metastasis, and in 1986 received the Rothschild Award for his work in
immunology. Dr. Feldman is a member of the Israeli Academy of Sciences and
Humanities and the World Academy of Arts and Sciences.
John A. Gilly, Ph.D., 40, joined the Company as its Vice President, Product
and Process Development in May 1992. Since March 1995, he has been Vice
President, Biopharmaceutical Operations. From February 1980 until joining the
Company, Dr. Gilly was employed by Connaught Laboratories, Inc., working in
various product development and research capacities. From October 1990 until May
1992, Dr. Gilly was the Director of Product Development for Connaught
Laboratories, Inc., directing all laboratory activities for new product
development. Dr.
6
<PAGE>
Gilly is a member of the Board of Trustees for the Biotechnology Council of New
Jersey, the United Way of Somerset County (New Jersey) and the Somerset
Partnership for Economic Development and Enterprise.
Carl S. Goldfischer, M.D., 39, has served as Vice President, Finance and
Chief Financial Officer since May 1996. From June 1994 until joining the
Company, Dr. Goldfischer served as a healthcare analyst with Reliance Insurance
Company. From June 1991 until June 1994, Dr. Goldfischer was Director of
Research for D. Blech & Co. Dr. Goldfischer received a doctorate of medicine
from Albert Einstein College of Medicine in 1988 and served as a resident in
radiation oncology at Montefiore Hospital of the Albert Einstein College of
Medicine until 1991. Dr. Goldfischer is a director of Immulogic Pharmaceutical
Corporation.
John B. Landes, 50, has served as Vice President, Business Development and
General Counsel since November 1992. Prior thereto, he was Vice President,
Administration and Legal since December 1984. He also has been Secretary of the
Company since April 1985 and served as its Treasurer from April 1984 through
September 1991, except for an interim period from December 1988 to February
1991. From 1978 to 1984, Mr. Landes was an associate attorney with the Boston
law firm of Mahoney, Hawkes and Goldings.
Section 16(a) Beneficial Ownership Reporting Compliance
Ownership of and transactions in the Company's securities by Executive
Officers and Directors of the Company and owners of 10% or more of the Company's
outstanding Common Stock are required to be reported to the Securities and
Exchange Commission (the "Commission") pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). During the
year ended December 31, 1997, based on information received by the Company, all
reports required to be filed under ss.16(a) were timely filed.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of March 27, 1998 (unless otherwise
noted), certain information with respect to the beneficial ownership of the
Company's voting stock as to (i) each person known by the Company to own
beneficially more than five percent of the Company's outstanding voting stock,
(ii) each Director and Director nominee of the Company, (iii) each Named Officer
specified in the Summary Compensation Table below, and (iv) all Directors and
Executive Officers of the Company as a group. Except as otherwise noted, the
named beneficial owner has sole voting and investment power.
Shares
Beneficially Percent
Name and Address(1) Owned Owned(2)
- ------------------- ----- --------
The Oracle Group ........................ 2,182,100(3) 8.6%
712 Fifth Avenue, NY, NY 10019
Amerindo Investment Advisors ............ 1,762,500(4) 7.2%
One Embarcadero Center, Suite 2300,
San Francisco, CA 94111
Samuel D. Waksal, Ph.D .................. 917,583(5) 3.7%
Harlan W. Waksal, M.D ................... 898,380(6) 3.6%
Robert F. Goldhammer .................... 769,890(7) 3.1%
John B. Landes .......................... 154,500(8) *
John Mendelsohn, M.D. ................... 123,750(9) *
Carl S. Goldfischer, M.D ............... 108,333(10) *
David M. Kies ........................... 95,147(11) *
Vincent T. DeVita, Jr., M.D ............ 59,342(12) *
Paul B. Kopperl ......................... 58,960(13) *
John A. Gilly,Ph.D ...................... 33,750(14) *
Jean Carvais, M.D ....................... 36,042(15) *
William R. Miller ...................... 11,147(16) *
Richard Barth ........................... 10,250(17) *
All Directors and Executive Officers .... 3,088,824(18) 11.9%
as a group (11 persons)
* Less than 1%.
(1) Unless otherwise noted, each person's address is in care of ImClone Systems
Incorporated, 180 Varick Street, Seventh Floor, New York, New York 10014.
8
<PAGE>
(2) The percentage of voting stock owned by each stockholder is calculated by
dividing (i) the number of shares deemed to be beneficially held by such
stockholder as of March 27, 1998, as determined in accordance with Rule
13d-3 of the Exchange Act, by (ii) the sum of (A) 24,327,685 which is the
number of shares of Common Stock outstanding as of March 27, 1998 plus (B)
the number of shares of Common Stock issuable upon exercise of currently
exercisable options or warrants held by such stockholder. For purposes of
this security ownership table "currently exercisable options" and
"currently exercisable warrants" consist of options and warrants
exercisable as of March 27, 1998 or within 60 days after March 27, 1998.
Shares of the Company's Series A Convertible Preferred Stock are not
included because they do not have voting rights.
(3) Includes 925,000 shares issuable upon the exercise of currently exercisable
warrants. This information is as of March 4, 1998 and was obtained from a
Schedule 13G filed with the Commission. The Oracle Group is comprised of
various investment partnerships and managed accounts controlled by Larry N.
Feinberg.
(4) These shares are beneficially owned by Amerindo Investment Advisors Inc., a
California corporation ("Amerindo"), Amerindo Investment Advisors, Inc. a
Panama corporation ("Amerindo Panama"), Alberto W. Vilar and Gary A.
Tanaka. This information is as of December 31, 1997 and was obtained from a
Schedule 13G filed with the Commission. Amerindo and Amerindo Panama are
investment advisors and all of such shares are held of record by them.
Messrs. Vilar and Tanaka are the sole shareholders and directors of
Amerindo and Amerindo Panama.
(5) Includes 350,000 shares issuable upon the exercise of currently exercisable
warrants and 45,000 shares issuable upon the exercise of currently
exercisable options.
(6) Includes 40,000 shares issuable upon the exercise of currently exercisable
options; 340,680 shares issuable upon the exercise of currently exercisable
warrants; and 2,600 shares owned by Dr. Waksal's sons, as to which he
disclaims beneficial ownership.
(7) Includes 36,042 shares issuable upon the exercise of currently exercisable
options; 379,990 shares issuable upon the exercise of currently exercisable
warrants; and 13,314 shares held in trust, as to which Mr. Goldhammer
disclaims beneficial ownership.
(8) Includes 7,500 shares issuable upon the exercise of currently exercisable
options and 127,000 shares issuable upon the exercise of currently
exercisable warrants.
(9) Consists of 123,750 shares issuable upon the exercise of currently
exercisable options.
(10) Consists of 108,333 shares issuable upon exercise of currently exercisable
options.
(11) Includes 10,147 shares issuable upon the exercise of currently exercisable
options and 6,000 shares held by Mr. Kies as custodian for his son as to
which he disclaims beneficial ownership.
(12) Includes 59,042 shares issuable upon the exercise of currently exercisable
options.
(13) Includes 35,000 shares issuable upon the exercise of currently exercisable
options; 2,460 shares issuable upon the exercise of currently exercisable
warrants; and 500 shares held by Mr. Kopperl's spouse as to which Mr.
Kopperl disclaims beneficial ownership.
(14) Consists of 33,750 shares issuable upon the exercise of currently
exercisable options.
(15) Consists of 36,042 shares issuable upon the exercise of currently
exercisable options.
(16) Includes 10,147 shares issuable upon the exercise of currently exercisable
options.
9
<PAGE>
(17) Includes 8,750 shares issuable upon exercise of currently exercisable
options.
(18) Includes an aggregate of (i) 512,253 shares issuable upon the exercise of
currently exercisable options; (ii) 1,073,130 shares issuable upon the
exercise of currently exercisable warrants; and (iii) 22,414 shares as to
which beneficial ownership is disclaimed. Shares held by Messrs. Gilly and
Landes have not been included as they are not considered executive officers
of the Company.
CERTAIN TRANSACTIONS
Through March 1995, the Company made miscellaneous non-interest bearing
cash advances to the President and CEO of the Company totaling approximately
$156,000. The officer provided the Company with a demand promissory note
pursuant to which the officer was obligated to repay the debt over a twenty-four
month period ending April 30, 1997. In March 1997, the Company accepted a new
promissory note (the "new promissory note") in the aggregate amount of $110,000
from the officer. The new promissory note was payable as to $15,000 no later
than May 15, 1997 and the remainder upon the earlier of on demand by the Company
or December 31, 1997 and bore interest at the rate of 5% compounded quarterly.
The new promissory note covered the remaining balance of the original note,
interest thereon and additional miscellaneous cash advances made since the date
of the original note totaling $15,000. At December 31, 1997, the new promissory
note was paid in full by the officer.
During the year ended December 31, 1997, the Company paid Dr. Vincent T.
DeVita, Jr., a Director of the Company, a total of $100,000 for scientific
consulting services provided to the Company by Dr. DeVita.
On November 26, 1997, Dr. John Mendelsohn, a Director of the Company, was
granted an option to purchase 25,000 shares of Common Stock in consideration for
his scientific consulting to the Company. The option vests in its entirety one
year after the date of grant and is exercisable at a per share price equal to
$6.00, the fair market value of the Common Stock on the date of grant.
In January 1998, the Company accepted a promissory note totaling
approximately $131,000 from its President and CEO in connection with the
exercise of a warrant to purchase 87,305 shares of the Company's Common Stock.
The note is due no later than two years from issuance and bears annual interest
at the rate of 8.5%.
EXECUTIVE COMPENSATION
Report of Compensation Committee
The Compensation Committee is responsible for developing and making
recommendations to the Board with respect to the Company's executive
compensation policies. Pursuant to authority delegated by the Board, the
Committee determines the executive compensation policy of the Company and
determines on an annual basis the compensation to be paid to the Chief Executive
Officer and approves compensation to other officers of the Company, at the
recommendation of the Chief Executive Officer and other supervising personnel.
Overall Philosophy
The Company's overall executive compensation philosophy is based on the
premise that compensation should be set at levels that support the Company's
business strategies and long-term objectives and should reward executives for
their contributions to the enhancement of shareholder value. The key elements of
the executive compensation package are base salary, annual incentive awards and
stock options. In establishing base salaries, annual incentive awards and awards
of stock options, the Compensation Committee considers periodic compensation
surveys, including those provided by third parties covering the
biopharmaceutical industry. Officers' compensation is compared to that of other
executives in peer group surveys.
10
<PAGE>
In evaluating each senior executive's performance, the Company generally
conforms to the following process:
o Company and individual goals and objectives are set at the beginning
of the performance cycle.
o At the end of the performance cycle, the executive's manager, or in
the case of the Chief Executive Officer, the Compensation Committee,
evaluates the accomplishment of the executive's goals and objectives
and his or her contributions to the Company.
o The executive's performance is then reviewed by the executive's
manager with the executive and consideration is given to goals for the
following performance cycle.
o The comparative results, combined with comparative compensation
practices of other companies in the industry, are then used to
determine salary, bonus, and stock option levels.
The Compensation Committee uses no set formulas in making these
determinations and may afford different weight to different factors for each
senior executive. Such weighting may vary from year to year. In determining
compensation, the Compensation Committee does not attempt to correlate
compensation with specific financial results, such as revenues or profits, for
the current period. This is in large part due to the nature of the
biopharmaceutical industry in which traditional evaluations of corporate
performance may not apply in reviewing the performance of executives. The
Committee looks toward the progress of the Company's research and development
programs, its ability to gain appropriate levels of support for its programs
through its strategic partnering agreements, its ability to attract, motivate
and retain talented employees and its ability to secure capital sufficient for
its product development programs to achieve rapid and effective
commercialization as may be practicable.
Base Salary
At the end of each year, the Compensation Committee reviews and establishes
the base salary of the Chief Executive Officer based on a comparison to national
surveys, taking into consideration the Company's performance and current
circumstances, accomplishment of his goals and objectives and his contributions
to the Company. The Compensation Committee also reviews and approves, or
modifies, a salary plan for the other senior executives prepared by the Chief
Executive Officer in conjunction with other senior personnel.
Annual Incentive Awards
Although the Company does not have a formal bonus plan for its management,
the Compensation Committee determines annual incentive awards to senior
executives from time to time based on individual performance and Company
performance. Specific performance goals of each executive are determined early
each year in direct consultation with the executive's supervisor. These
performance goals include successful and cost efficient management of the
executive's department and specific contributions made by that department to the
immediate and ultimate goals of the Company. For the Chief Executive Officer,
such goals are determined in reference to the CEO's plan for the coming year for
the Company as a whole, as presented to the Board. The awarding of annual
incentive awards takes into consideration individual efforts as well as
performance of the Company as a whole. In evaluating performance of the Company
as a whole, several factors are examined, including productivity of research and
development programs, successful movement of development stage products toward
commercialization, fostering development of successful corporate partnerships,
expense control, financing efforts and progress of the Company toward its
short-term and long-term goals.
Long-Term Incentive Compensation
Stock options and warrants are considered as long-term incentives and are
intended to link the interests of the executive with those of the stockholder.
Such securities will provide value to the grantee when the price of the
Company's stock increases.
11
<PAGE>
The Compensation Committee conducts a formal review from time to time of
the stock option and warrant holdings and vesting schedule of each officer. The
Compensation Committee authorizes stock option grants (and, in some cases,
grants of warrants) to the executives with consideration to the growth and
performance of the Company, individual performance and contribution, total stock
option and warrant and vesting levels and length of service.
For their performance in the year ended December 31, 1997, the CEO and the
other Named Officers (as hereinafter defined) were awarded no warrants and were
awarded options to purchase an aggregate of 435,000 shares of Common Stock.
Additionally, the term of a warrant to purchase 397,000 shares of Common Stock
held by one of the Named Officers was extended for a two year term. See "Option
and Warrant Grants in Last Fiscal Year."
Deductibility of Compensation
The Compensation Committee has reviewed the impact of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which, beginning in
1994, limits the deductibility of certain otherwise deductible compensation in
excess of $1 million paid to the Chief Executive Officer and the other Named
Officers (as hereinafter defined). It is the policy of the Company to attempt to
have its executive compensation plans treated as tax deductible compensation
whenever, in the judgment of the Compensation Committee, to do so would be
consistent with the objectives of that compensation plan.
Chief Executive Officer Compensation
The key elements of the compensation for the Chief Executive Officer are
base salary, annual incentive awards and stock options or warrants. In
evaluating Dr. Samuel Waksal's 1997 performance and in determining Dr. Waksal's
1998 compensation, the Compensation Committee, along with the full Board,
considered the performance of the Company in 1997. In 1997, the Company
continued the progress of C225 toward late stage clinical trials, initiating
clinical trials in renal cell and head and neck cancers. Also the Company's core
area of cancer research, inhibitors to angiogenesis, was broadened with the
signing of a collaboration agreement with CombiChem, Inc. and with the rapid
progress of an anti-angiogenic product toward development. In addition, BEC2,
the Company's lead cancer vaccine candidate, also advanced as the Company
continued preparation for its first Phase III trial of a cancer product.
Important development milestones in the Company's agreement with Merck KGaA
("Merck") based on the advancement of BEC2 were achieved, generating revenues
for the Company. Also, the Company expanded its agreement with Merck for BEC2
and completed an innovative financing in connection with the expansion,
significantly strengthening the Company's financial position.
Compensation and Stock Option Committee
Robert F. Goldhammer, Chairman
Richard Barth
Vincent T. DeVita, Jr.
Paul B. Kopperl
Compensation Committee Interlocks and Insider Participation
As of December 31, 1997, the members of the Compensation Committee were
Richard Barth, Vincent T. DeVita, Jr., Robert F. Goldhammer (Chairman) and Paul
B. Kopperl, none of whom is an employee of the Company. During the year ended
December 31, 1997, the Company paid Dr. Vincent T. DeVita, Jr. a total of
$100,000 for scientific consulting services provided to the Company by Dr.
DeVita. See "Certain Transactions," above.
12
<PAGE>
STOCK PRICE PERFORMANCE
The graph below provides a comparison of the cumulative total return
(assuming reinvestment of dividends) for the Company (which paid no dividends),
The Nasdaq Stock Market (U.S. Companies) Total Return Index, and the Nasdaq
Pharmaceutical Stocks Total Return Index for the period from December 31, 1992
through December 31, 1997. The graph assumes $100 was invested at the beginning
of such period. The Nasdaq Stock Market (U.S. Companies) Total Return Index
comprises all domestic common shares traded on the Nasdaq National Market and
the Nasdaq SmallCap Market. The Nasdaq Pharmaceutical Stocks Total Return Index
represents all companies, including biotechnology companies, trading on Nasdaq
classified under the Standard Industrial Classification Code for
pharmaceuticals.
COMPARISON OF FIVE YEAR TOTAL RETURN AMONG
IMCLONE, NASDAQ STOCK MARKET (U.S. COMPANIES) TOTAL RETURN INDEX AND NASDAQ
PHARMACEUTICAL STOCKS TOTAL RETURN INDEX
[GRAPH]
Date ImClone Systems Nasdaq Pharmaceutical
---- --------------- ------ --------------
12/31/92 100 100 100
12/31/93 53 115 89
12/31/94 8 112 67
12/31/95 66 159 123
12/31/96 85 195 123
12/31/97 71 240 127
13
<PAGE>
SUMMARY COMPENSATION TABLE
The Summary Compensation Table sets forth the cash and non-cash
compensation awarded to, earned by, or paid to the Company's Chief Executive
Officer and the four most highly compensated officers (other than the Chief
Executive Officer) for the years ended December 31, 1997, 1996 and 1995 who were
serving as officers at December 31, 1997 and whose total salary and bonus
exceeded $100,000 for the year ended December 31, 1997 (the "Named Officers").
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
------------------------------------------------------- ---------------------
Other Annual Securities Underlying
Salary Bonus Compensation Options and Warrants All Other
Year ($)(1) ($)(2) ($)(3) (#)(4) Compensation
---- ------ ------ ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Samuel D. Waksal 1997 $225,000 $280,000(5) -- 250,000(6) $ 10,435(7)
President and Chief 1996 225,000 200,000(5) -- 45,000 10,435(7)
Executive Officer 1995 190,000 150,000 -- 350,000 10,435(7)
Harlan W. Waksal 1997 195,000 250,000(8) -- 497,000(6)(9) --
Executive Vice 1996 195,000 200,000(8) -- 40,000 --
President and Chief 1995 170,000 125,000 -- -- --
Operating Officer
John B. Landes 1997 165,000 90,000 -- 25,000 --
Vice President, 1996 165,000 50,000 -- 30,000 --
Business Development 1995 150,000 30,000 -- -- --
and General Counsel
John A. Gilly 1997 165,000 100,000 -- 35,000 --
Vice President, 1996 165,000 100,000 -- 75,000 --
Biopharmaceutical 1995 137,000 50,000 -- -- --
Operations
Carl S. Goldfischer(10) 1997 175,000 90,000 -- 25,000(6) --
Vice President, Finance 1996 109,000 75,000 -- 225,000 --
and Chief Financial 1995 -- -- -- -- --
Officer
</TABLE>
(1) Amounts shown include compensation deferred pursuant to Section 401(k) of
the Internal Revenue Code of 1986, as amended ("the Code").
(2) Although the Company has no formal bonus plan, the Compensation Committee,
in its discretion, may award bonuses to officers of the Company. The
Company has paid bonuses based on individual and Company performance.
Amounts shown include awards paid relative to services rendered in each of
the last three fiscal years. All bonus awards for each of the last three
fiscal years were paid in cash. Bonuses are recorded for the period in
which they were earned.
14
<PAGE>
(3) Excludes perquisites and other personal benefits for each Named Officer
which did not equal or exceed the lesser of $50,000 or 10% of such
individual's base salary and bonus for the years ended December 31, 1997,
1996 and 1995, respectively.
(4) Options or warrants to purchase the number of shares of Common Stock shown
are recorded for the period in which they were granted, except as discussed
in footnote 6.
(5) During 1996, Dr. Samuel D. Waksal was paid a $100,000 bonus relating to his
1996 performance. During 1996, the Compensation Committee determined to
consider the payment to him of an additional bonus, in an amount to be
determined, subject to the Company's completion by June 30, 1997 of a
corporate partnership, or similar arrangement, with acceptable terms. In
connection with the December 1997 amendment of the Company's Research and
License Agreement with Merck and sale to Merck of $40,000,000 of the
Company's Series A Convertible Preferred Stock, the Compensation Committee
determined to extend the June 30, 1997 period, and Dr. Samuel D. Waksal was
paid a bonus of $100,000. This amount is reflected as a 1996 bonus.
(6) Options to purchase 250,000, 100,000 and 25,000 shares of Common Stock,
respectively, held by Drs. Samuel D. Waksal, Harlan W. Waksal and Carl S.
Goldfischer, respectively, were granted in January 1998 and relate to 1997
performance.
(7) Consists of premium payments on a term life insurance policy for Dr. Samuel
D. Waksal under which his daughters are the beneficiaries.
(8) During 1996, Dr. Harlan W. Waksal was paid a $100,000 bonus relating to his
1996 performance. During 1996, the Compensation Committee determined to
consider the payment to him of an additional $100,000 bonus at the end of
the six month period ending June 30, 1997. In June 1997, the Compensation
Committee determined to award such additional bonus to Dr. Harlan W.
Waksal. This amount is reflected as a 1996 bonus.
(9) In March 1997, the Board extended the term of a warrant to purchase 397,000
shares of Common Stock held by Dr. Harlan W. Waksal which was due to
expire. The term was extended for a period of two years on the same terms
and conditions as the original grant. For purposes of this table, this
extension is treated as a new warrant grant. In April 1997, Dr. Harlan W.
Waksal exercised this warrant.
(10) Dr. Goldfischer commenced employment with the Company on May 20, 1996.
15
<PAGE>
OPTION AND WARRANT GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information relating to stock
option and warrant grants to the Named Officers during the year ended December
31, 1997.
<TABLE>
<CAPTION>
% of Total
Number of Options/
Securities Warrants Potential Realizable
Underlying Granted to Value at Assumed Annual Rates of
Options/ Employees Stock Price Appreciation
Warrants in Fiscal Exercise Price for Option/Warrant Term(3)
Name Granted Year(1) ($/share)(2) Expiration Date 0%($) 5%($) 10%($)
---- ------- ------- ------------ --------------- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Samuel D. Waksal 250,000(4) 24% $ 6.06 January 20, 2008 $ -- $ 953,247 $2,415,715
Harlan W. Waksal 100,000(4) 10% 6.06 January 20, 2008 -- 381,299 966,286
397,000(5) 38% 1.50 March 24, 1999 2,223,125(5) 2,523,059(5) 2,827,136(5)
John B. Landes 25,000(6) 2% 6.00 November 25, 2007 -- 94,334 239,061
John A. Gilly 35,000(6) 3% 6.00 November 25, 2007 -- 132,068 334,686
Carl S 25,000(4) 2% 6.06 January 20, 2008 -- 95,325 241,572
Goldfischer
</TABLE>
(1) The Company granted options to purchase a tot al of 643,900 shares of
Common Stock to employees during 1997. This numbe r includes the options
granted to each of Drs. Samuel D. Waksal, H arlan W. Waksal and Carl S.
Goldfischer in January 1998 because they relate to 1997 performance. All of
these options were granted pursuant to th e Company's 1996 Incentive Stock
Option Plan, as amended, (the "1996 ISO Plan) at an exercise price that
equaled or exceeded the fair m arket value of the Common Stock on the date
of grant. The Company granted no warrants to employees during 1997;
however, the term of a warrant to purchase 397,000 shares of Common Stock
held by Dr. Harlan W. Waksal was extended for a period of two years on the
same terms and conditions as the original grant and is treated for purposes
of this table as a new grant in 1997.
(2) Except as discussed in Footnote 5, all options and warrants were granted to
purchase Common Stock at an exercise price that equaled or exceeded the
fair market value of the Common Stock on the date of grant.
(3) The amounts set forth in the three columns represent hypothetical gains
that might be achieved by the holders if the respective options and
warrants are exercised at the end of their terms. These gains are based on
assumed rates of stock price appreciation of 0%, 5% and 10% compounded
annually from the dates the respective options and warrants were granted.
The 0% appreciation column is included because, except as discussed in
footnote 5, the options and warrants were granted with exercise prices
which equaled or exceeded the fair market value of the underlying Common
Stock on the date of grant, and thus will have no value unless the
Company's stock price increases above the exercise prices.
(4) These options vest and become exercisable in their entirety on January 21,
1999, subject to the respective holders continued employment with the
Company on the relevant vesting date. They were granted in January 1998 and
relate to 1997 performance.
(5) This warrant was due to expire in March 1997. The term of the warrant was
extended by the Board for a two year period in March 1997 on the same terms
and conditions as the original grant, including the exercise price of
$1.50, and is treated for purposes of this table as a new warrant grant. In
April 1997, Dr.
16
<PAGE>
Harlan W. Waksal exercised this warrant. See "Option and Warrant Exercises
and Fiscal Year-End Values", below.
(6) These options vest and become exercisable in their entirety on November 26,
1998, subject to the respective holders continued employment with the
Company on the relevant vesting date.
OPTION AND WARRANT EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth option and warrant exercises during the year
ended December 31, 1997 by the Named Officers and the value of the options and
warrants held by such persons on December 31, 1997, whether or not exercisable
on such date.
<TABLE>
<CAPTION>
Shares Number of Shares Underlying Value of Unexercised
Acquired Unexercised Options/Warrants In-The-Money Options/Warrants
on Value at December 31, 1997(#) at December 31, 1997($)(2)
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samuel D. Waksal 100,000 $ 662,500 482,305 250,000(3) $ 1,497,146 $ 515,500
Harlan W. Waksal 397,000 1,786,500 380,680 100,000(3) 2,259,158 206,200
John B. Landes 28,500 130,378 134,500 47,500 841,375 53,125
John A. Gilly ---- ---- 33,750 91,250 103,125 74,375
Carl S. Goldfischer ---- ---- 108,333 141,667(4) ----- 51,550
</TABLE>
(1) The values realized were calculated by multiplying the closing market price
of the Common Stock on the date of exercise by the respective number of
shares exercised and subtracting the aggregate exercise price. Accordingly,
such values realized assume a sale of such Common Stock on the date of
exercise, which may not necessarily have occurred.
(2) The values were calculated by multiplying the closing market price of the
Common Stock on December 31, 1997 ($8.125 per share as reported by the
Nasdaq National Market on that date) by the respective number of shares and
subtracting the aggregate exercise price, without making any adjustments
for vesting, termination contingencies or other variables. If the exercise
price of an option or warrant is equal to or greater than $8.125 the option
or warrant is deemed to have no value.
(3) These options were granted in January 1998 and relate to 1997 performance.
(4) Includes options to purchase 25,000 shares of Common Stock granted in
January 1998 which relate to 1997 performance.
Other Benefit Plans
The Company has no defined benefit or defined contribution retirement plans
other than the ImClone Systems Incorporated 401(k) Employee Savings Plan (the
"Plan") established under Section 401(k) of the Code. Contributions to the Plan
are voluntary, and substantially all full-time employees are eligible to
participate. For 1998, the Company has elected to make voluntary matching
contributions equal to 25% of the first 4% of an employee's eligible
compensation contributed by the employee, limited to $2,500 per employee. The
Company has not previously made matching contributions under the Plan. The
Company anticipates evaluating the level of its matching contribution, if any,
on an annual basis.
17
<PAGE>
EMPLOYMENT AGREEMENTS
In May 1996, the Company entered into an employment agreement with Dr. Carl
S. Goldfischer to serve as the Company's Vice President, Finance and Chief
Financial Officer. The employment agreement is for an initial term of two years,
subject to certain earlier termination provisions, and may be extended upon the
mutual agreement of the parties. Pursuant to the agreement, Dr. Goldfischer
receives an annual salary equal to $175,000, is entitled to a bonus equal to
$75,000 at the end of his first year (which was paid in January 1997) and is
entitled to a bonus for his second year of employment as may be determined by
the Board. In January 1998 the Board awarded Dr. Goldfischer a $90,000 bonus. In
the event Dr. Goldfischer's employment is terminated by the Company during the
initial or any extended term of the agreement (i) without cause (as defined
therein), (ii) as a result of the Company's disposition of substantially all its
property, business or assets, or (iii) as a result of a merger resulting in a
shift of voting control of more than 75% of the Company's stock, Dr. Goldfischer
is entitled to receive a pro rata portion of his annual salary and cost of
comparable benefits for a period of twelve months should his termination be
effective prior to the expiration date of the agreement in May 1998. Pursuant to
the agreement, Dr. Goldfischer received an option to purchase an aggregate of
225,000 shares of Common Stock at a per share exercise price equal to $8.30
which was the average of the closing prices of the Common Stock for the sixty
day period ending on the date of grant. The option vested and became exercisable
as to 50,000 shares on the date of grant, as to 58,333 shares on June 10, 1997
and will vest and become exercisable as to 58,333 shares on June 10, 1998 and
the remaining 58,334 shares on June 10, 1999. The option terminates in its
entirety upon termination of Dr. Goldfischer's employment. Dr. Goldfischer's
employment agreement further requires him to maintain the confidentiality of
Company information and prohibits him from competing with the Company during the
term of the employment agreement, any extensions thereof and for a period of one
year after the agreement's termination.
18
<PAGE>
PROPOSAL NO. 2
APPROVAL OF THE COMPANY'S 1998 EMPLOYEE STOCK PURCHASE PLAN
On April 20, 1998, the Board of Directors approved the 1998 Employee Stock
Purchase Plan (the "Purchase Plan"), subject to stockholder approval of the
Purchase Plan. A description of the Purchase Plan is set forth below and is
qualified by the full text of the Purchase Plan attached hereto as Appendix A.
MATERIAL FEATURES OF THE PURCHASE PLAN
Stock Subject to the Purchase Plan
The number of shares of Common Stock which may be purchased by eligible
employees under the Purchase Plan is 500,000 shares. Such shares of Common Stock
may be newly issued shares or shares reacquired in private transactions or open
market purchases.
Eligibility
All employees of the Company or an affiliate who have been employed for at
least six months by the Company or an affiliate and whose customary employment
with the Company or an affiliate is at least 20 hours per week and at least five
months per calendar year are eligible to participate in the Purchase Plan,
except for persons who are deemed under Section 423(b)(3) of the Code to own
five percent (5%) or more of the voting stock of the Company. Officers of the
Company are eligible to participate in the Purchase Plan, except that the Board
may provide in any offering period that certain highly compensated employees
within the meaning of the Code are ineligible to participate. As of April 21,
1998, approximately 100 persons would be eligible to participate in the Purchase
Plan.
Participation
The Purchase Plan provides for a series of four three-month offering
periods within each year commencing on July 1, October 1, January 1 and April 1,
with the first offering period commencing on a date to be determined by the
Board. The Board may change the duration of the offering periods; provided, that
such offering periods comply with the provisions of Section 423(b)(7) of the
Code. Eligible employees may elect to become participants in the Purchase Plan
by enrolling during specified enrollment periods. During each offering period,
eligible employees who enroll in the Purchase Plan for the offering period are
granted an option to purchase shares through the accumulation of payroll
deductions of not less than 1% nor more than 15% of each participant's
compensation (up to a maximum of $25,000 per calendar year, based on the fair
market value of the shares determined as of the date the option to purchase such
shares is granted). The number of shares to be purchased will be determined by
dividing the participant's balance in the Purchase Plan account on the last day
of the offering period by the purchase price per share for the Common Stock. The
purchase price per share will be 85% of the fair market value of the Common
Stock on the last day of the offering period. If a fractional number of shares
results, the number will be rounded down to the next whole number and the excess
funds shall be carried forward to the next offering period. Unless a participant
withdraws from the Purchase Plan, such participant's option will be exercised
automatically on the last day of the offering period. No interest shall accrue
on a participant's contributions under the Purchase Plan.
The closing price of the Common Stock on April 21, 1998, was $10.00 per
share, as reported by The Nasdaq National Market.
Withdrawal
An employee may withdraw all but not less than all the contributions
credited to his or her account under the Purchase Plan at any time prior to the
last day of the offering period. Upon termination of a participant's continuous
status as an employee prior to the last day of an offering period for any
reason, including retirement or
19
<PAGE>
death, the contributions credited to such participant's account will be returned
to such participant or such participant's beneficiary in the case of death. In
the event a participant fails to remain employed for at lest 20 hours per week
during an offering period, such participant will be deemed to have withdrawn and
the contributions credited to such participant's account returned to such
participant. A participant's withdrawal from any offering period will not have
any effect upon his or her eligibility to participate in a succeeding offering
period.
Administration; Amendment; Termination
The Board or a committee thereof shall supervise and administer the
Purchase Plan. They shall have full power to adopt, amend and rescind any rules
deemed desirable and appropriate for administration of the Purchase Plan and not
inconsistent with the Purchase Plan, to construe and interpret the Purchase Plan
and to make all other determinations necessary or advisable for the
administration of the Purchase Plan. The Board or a committee may at any time
terminate or amend the Purchase Plan, except that no such termination may affect
options previously granted, nor may an amendment make any change in any option
granted which adversely affects the rights of any participant. In addition, to
the extent necessary to comply with Section 423 of the Code or any other
applicable law or regulation, the Company must obtain stockholder approval as
required.
Term of Purchase Plan
The Purchase Plan shall become effective upon adoption by the stockholders
of the Company and shall terminate ten years thereafter, unless earlier
terminated as provided above. In the event the stockholders do not approve the
Purchase Plan, the Purchase Plan will not become effective.
Nontransferability
Neither contributions credited to a participant's account nor any rights
with respect to the exercise of an option or to receive shares under the
Purchase Plan may be assigned, transferred, pledged or otherwise disposed of in
any way other than by will or the laws of descent and distribution. A
participant may file a written designation of a beneficiary who is to receive
any shares of Common Stock and cash, if any, from the participant's account
under the Purchase Plan in the event of such participant's death subsequent to
the end of an offering period, but prior to the delivery of such participant's
shares of Common Stock and cash. A participant may file a written designation of
a beneficiary who is to receive any cash from the participant's account in the
event of such participant's death prior to the end of the offering period.
Adjustments Upon Changes in Stock
If any change is made in the shares of Common Stock subject to the Purchase
Plan or subject to any option granted under the Purchase Plan (through merger,
consolidation, reorganization, distribution of substantially all of the assets
of the Company, spin-off of a subsidiary's voting securities to its
stockholders, recapitalization, stock dividend, split-up, combination of shares,
exchange of shares, issuance of rights to subscribe, or change in capital
structure), appropriate adjustments shall be made by the Board or a committee
thereof as to the maximum number of shares subject to the Purchase Plan and the
number of shares and price per share subject to outstanding options as shall be
equitable to prevent dilution or enlargement of Option rights. Any such
determination made by the Board or a committee thereof shall be final, binding
and conclusive upon each participant.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of certain U.S. Federal income tax
consequences of the issuance and exercise of options to purchase shares under
the Purchase Plan. The options granted under the Purchase Plan are intended to
constitute qualified stock options in an "employee stock purchase plan" under
Section 423 of the Code. No taxable income is realized at the time options are
granted to participants under the Purchase Plan or at the time of purchase of
shares pursuant to the Purchase Plan. Upon the death of a participant owning
Purchase Plan shares or upon the disposition of shares two years or more after
the date of the grant of the option to purchase such shares and
20
<PAGE>
at least one year after acquiring such shares, the participant will recognize as
ordinary compensation income an amount equal to the lesser of:
(i) the excess of the fair value of the shares on the date of disposition
or death over the amount paid for such shares, or
(ii) 15% of the fair market value of the shares at the time of grant of the
option.
Any loss on such a disposition or the balance of any gain will be long-term
capital loss or gain. The Company will not be entitled to a deduction
corresponding to the participant's compensation income.
Upon disposition of the shares within two years after the date when a
participant was granted an option to purchase such shares or within one year
after the date the participant acquired such shares, the participant generally
will then recognize compensation income, and the Company will have a
corresponding deduction, to the extent of the excess of the fair market value of
the shares on the date of exercise over the amount paid for the shares. The
amount recognized as compensation income is added to the basis of the shares.
The Board recommends a vote "FOR" approval of the Company's 1998 Employee
Stock Purchase Plan (Proposal No. 2 on your proxy card).
21
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board has selected KPMG Peat Marwick LLP as independent certified
public accountants for the Company for the year ending December 31, 1998. KPMG
Peat Marwick LLP has served as the Company's auditor since 1988. The
ratification of the selection of independent certified public accountants is to
be voted upon at the Meeting, and it is intended that the persons named in the
accompanying proxy will vote for KPMG Peat Marwick LLP. Representatives of KPMG
Peat Marwick LLP are expected to attend the Meeting, to have an opportunity to
make a statement if they desire to do so and to be available to respond to
appropriate questions.
The Board recommends a vote "FOR" the ratification of the selection of KPMG
Peat Marwick LLP to act as the Company's certified public accountants for the
year ending December 31, 1998 (Proposal No. 3 on your proxy card).
STOCKHOLDERS' PROPOSALS
A stockholder proposal intended to be presented at the Company's Annual
Meeting of Stockholders to be held in 1999 must be received by the Company on or
before December 22, 1998 in order to be included in the Company's proxy
statement and form of proxy relating to that meeting.
GENERAL
The cost of soliciting proxies will be borne by the Company. In addition to
the use of mails, proxies may be solicited by personal interview, telephone and
telegraph, and by directors, officers and regular employees of the Company,
without special compensation therefor. The Company expects to reimburse banks,
brokers and other persons for their reasonable out-of-pocket expenses in
handling proxy materials for beneficial owners of the Company's Common Stock.
Additionally, the Company has retained Corporate Communications Investors, Inc.
to assist in the solicitation of proxies for a fee of approximately $5,000, plus
reasonable out-of-pocket expenses.
Unless contrary instructions are indicated on the proxy card, all shares of
Common Stock represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR the election of the
nominees for Directors named herein, and FOR Proposals No. 2 and 3.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by the filing
with the Secretary of the Company written notice of revocation bearing a later
date than the proxy, by duly executing a subsequent proxy relating to the same
shares of Common Stock or by attending the Meeting and voting in person.
Attendance at the Meeting will not in and of itself constitute revocation of a
proxy unless the stockholder votes his or her shares of Common Stock in person
at the Meeting. Any notice revoking a proxy should be sent to the Secretary of
the Company, John B. Landes, Esq. at ImClone Systems Incorporated, 180 Varick
Street, Seventh Floor, New York, New York 10014.
The Board knows of no business other than that set forth above to be
transacted at the Meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his or
her shares of Common Stock will be voted in accordance with the specification so
made.
22
<PAGE>
Please complete, sign and date the enclosed proxy card, which is revocable
as described herein, and mail it promptly in the enclosed postage-paid envelope.
By Order of the Board of Directors
/s/ John B. Landes
----------------------------------
John B. Landes
Secretary
New York, New York
April 22, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN,
SIGN AND RETURN THE ACCOMPANYING PROXY CARD, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
23
<PAGE>
Appendix A
IMCLONE SYSTEMS INCORPORATED
1998 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the 1998 Employee Stock
Purchase Plan of ImClone Systems Incorporated.
1. PURPOSE.
The purpose of the Plan is to provide employees of the Company and its
Affiliates with an opportunity to purchase Common Stock of the Company. It
is the intention of the Company that the Options granted under the Plan be
considered options issued under an "Employee Stock Purchase Plan" as that
term is defined under Section 423(b) of the Code. The provisions of the
Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
(a) "AFFILIATE" as used in the Plan means any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e)
and (f), respectively, of the Code.
(b) "BOARD" shall mean the Board of Directors of the Company, or a committee of
the Board of Directors named by the Board to administer the Plan.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(d) "COMMON STOCK" shall mean the Common Stock, $0.001 par value, of the
Company.
(e) "COMPANY" shall mean ImClone Systems Incorporated, a Delaware corporation.
(f) "COMPENSATION" shall mean all compensation that is taxable income for
federal income tax purposes, including, payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, commissions
and other compensation.
(g) "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an employee of the Company or any
Affiliate. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the
Company or any Affiliate, provided that such leave is for a period of not
more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(h) "CONTRIBUTIONS" shall mean all amounts credited to the account of a
participant pursuant to the Plan.
(i) "EXERCISE DATE" shall mean the last day of each Offering Period of the
Plan.
(j) "OFFERING DATE" shall mean the first business day of an Offering Period
under the Plan.
(k) "OFFERING PERIOD" shall mean any of the three month periods commencing on
each of July 1, October 1, January 1 and April 1 of each year (or such
other periods as may be determined by the Board which shall comply with
Section 423(b)(7) of the Code); provided that the initial offering period
shall commence at a time to be determined by the Board.
(l) "OPTION" shall mean an option granted under Section 6 of this Plan.
(m) "PLAN" shall mean this ImClone Systems Incorporated 1998 Employee Stock
Purchase Plan.
<PAGE>
3. ELIGIBILITY.
(a) Options may be granted only to employees of the Company or any Affiliate.
An employee of the Company or any Affiliate shall not be eligible to
participate in an Offering Period, unless on the Offering Date of such
Offering Period, such employee has maintained Continuous Status as an
Employee for a period of six (6) months preceding such Offering Date. In
addition, no employee of the Company or any Affiliate shall be eligible to
be granted an Option under the Plan, unless, on the Offering Date, such
employee's customary employment with the Company or such Affiliate is at
least twenty (20) hours per week and at least five (5) months per calendar
year.
(b) No employee shall be eligible for the grant of an Option under the Plan if,
immediately after any such grant, such employee owns stock possessing five
percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 3(b), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such
employee may purchase under all outstanding rights and options shall be
treated as stock owned by such employee.
(c) An eligible employee may be granted an Option under the Plan only if such
Option, together with any other options granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase
stock of the Company or any Affiliate to accrue at a rate which exceeds
twenty-five thousand dollars ($25,000) of fair market value of such stock
(determined at the time such Options are granted) for each calendar year in
which such Options are outstanding at any time. Any Option granted under
the Plan shall be deemed to be modified to the extent necessary to satisfy
this paragraph 3(c).
(d) Officers of the Company shall be eligible to participate in the Plan;
provided, however, that the Board may provide in an Offering Period that
certain employees who are highly compensated employees within the meaning
of Section 423(b)(4)(D) of the Code shall not be eligible to participate.
4. OFFERING PERIODS.
The Plan shall be implemented by a series of Offering Periods, with a new
Offering Period commencing on July 1, October 1, January l and April 1 of
each year (or such other periods as may be determined by the Board which
shall comply with Section 423(b)(7) of the Code); provided that the initial
Offering Period shall commence at a time to be determined by the Board. The
Plan shall continue until terminated in accordance with paragraph 17 or
paragraph 21 hereof. In addition, employees shall not be entitled to enroll
in the Plan or exercise any Options granted under the Plan during any
period in which the Company has restricted the purchase or sale of its
securities by its employees.
5. PARTICIPATION; CONTRIBUTIONS.
(a) An eligible employee may become a participant in the Plan by completing an
enrollment form ("Enrollment Form") provided by the Company and filing it
with the Company prior to the applicable Offering Date, unless a later time
for filing the Enrollment Form is set by the Board for all eligible
employees with respect to a given Offering Period. The Enrollment Form
shall set forth the percentage of the participant's Compensation (which
shall be a whole percentage not less than 1% and not more than 15%) to be
paid as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll following the
Offering Date and shall end on the last payroll paid on or prior to the
Exercise Date of the Offering Period to which the Enrollment Form is
applicable, unless sooner terminated by the participant as provided in
paragraph 8. All payroll deductions made by a participant shall be credited
to such participant in an account under the Plan. A participant may not
make payments into such account.
2
<PAGE>
(c) A participant may discontinue his or her participation in the Plan as
provided in paragraph 8.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and paragraph 3(c) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such
Offering Period and any other Offering Period ending within the same
calendar year equals $21,250. Payroll deductions shall recommence at the
rate provided in such participant's Enrollment Form at the beginning of the
first Offering Period which is scheduled to end in the following calendar
year, unless terminated by the participant as provided in paragraph 8.
6. GRANT OF OPTION.
(a) On the Offering Date of each Offering Period, each eligible employee
participating in such Offering Period shall be granted an Option to
purchase on the Exercise Date of such Offering Period a number of shares of
Common Stock determined by dividing such employee's Contributions
accumulated prior to such Exercise Date and retained in the participant's
account as of the Exercise Date by 85% of the fair market value of a share
of the Common Stock on the Exercise Date; provided however, that such
purchase shall be subject to the limitations set forth in Sections 3(b), 3
(c), 3(d) and 10 hereof. The fair market value of a share of the Common
Stock shall be determined as provided in Section 6(b) below.
(b) The fair market value of the Common Stock on a given date shall be
determined by the Board in its discretion; provided that (i) if the Common
Stock is listed on a stock exchange, the fair market value per share shall
be the closing price on such exchange on such date as reported in the Wall
Street Journal (or, (A) if not so reported, as otherwise reported by the
exchange, and (B) if not reported on such date, then on the last prior date
on which a sale of the Common Stock was reported); or (ii) if not listed on
an exchange but traded on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") National Market, the fair market value per
share shall be the last reported sale price on such date as reported in the
Wall Street Journal (or (A) if not so reported, as otherwise reported by
the Nasdaq National Market and (B) if not reported on such date, then on
the last prior date on which a sale of the Common Stock was reported) or
(iii) if traded on Nasdaq SmallCap and not the National Market the fair
market value per share shall be the mean of the closing bid and asked price
per share of the Common Stock on such date, as reported in the Wall Street
Journal (or, (A) if not so reported, as otherwise reported by Nasdaq, and
(B) if not so reported on such date, then on the last prior date on which a
sale of the Common Stock was reported); or (iv) if the Common Stock is
otherwise publicly traded, but not listed on a stock exchange or traded on
Nasdaq, the fair market value per share shall be determined in good faith
by the Board in its discretion.
7. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Plan as provided in paragraph 8,
such participant's Option for the purchase of shares of Common Stock will
be exercised automatically on the Exercise Date of the Offering Period and
the maximum number of full shares of Common Stock subject to the Option
will be purchased for such participant at the applicable purchase price
with the accumulated Contributions in such participant's account. If a
fractional number of shares of Common Stock results, then such number shall
be rounded down to the next whole number and the excess Contributions shall
be carried forward to the next Exercise Date, unless such participant
withdraws the Contributions pursuant to paragraph 8(a) or is no longer
eligible to participate in the Plan, in which case such amount shall be
distributed to the participant without interest. The shares purchased upon
exercise of an Option hereunder shall be deemed to be transferred to the
participant on the Exercise Date. During a participant's lifetime, a
participant's Option to purchase shares hereunder is exercisable only by
such participant.
(b) Shares shall not be issued with respect to an Option unless the exercise of
such Option and the issuance and delivery of such shares of Common Stock
pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of
1933, as amended, the
3
<PAGE>
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon
which the shares of Common Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the
time of any such exercise that the shares of Common Stock are being
purchased only for investment and without any present intention to sell or
distribute such shares of Common Stock if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
8. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all but not less than all the Contributions
credited to his or her account under the Plan at any time prior to the
Exercise Date of the Offering Period by written notice to the Company. All
of the participant's Contributions credited to such participant's account
will be paid to such participant promptly after receipt of such
participant's notice of withdrawal and such participant's Option for the
current Offering Period will be automatically terminated, and no further
Contributions for the purchase of shares of Common Stock will be made
during the Offering Period.
(b) Upon termination of the participant's Continuous Status as an Employee,
prior to the Exercise Date of the Offering Period for any reason, including
retirement or death, the Contributions credited to such participant's
account will be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under paragraph 12, and
his or her Option will be automatically terminated.
(c) In the event an employee fails to remain in Continuous Status as an
Employee of the Company for at least 20 hours per week during the Offering
Period in which the employee is a participant, such participant will be
deemed to have elected to withdraw from the Plan and the Contributions
credited to such participant's account will be returned to such participant
and the Option terminated.
(d) A participant's withdrawal from an Offering Period will not have any effect
upon his or her eligibility to participate in a succeeding Offering Period
or in any similar plan which may hereafter be adopted by the Company.
9. INTEREST.
No interest shall accrue on the Contributions of a participant in the Plan.
10. STOCK.
The maximum number of shares of Common Stock which shall be made available
for sale under the Plan shall be 500,000 shares subject to adjustment upon
changes in capitalization of the Company as provided in paragraph 16.
Shares sold under the Plan may be newly issued shares or shares reacquired
in private transactions or open market purchases, but all shares sold under
the Plan regardless of source shall be counted against the 500,000 share
limitation. If the total number of shares of Common Stock which would
otherwise be subject to Options granted pursuant to Section 6(a) hereof on
the Offering Date of an Offering Period exceeds the number of shares of
Common Stock then available under the Plan (after deduction of all shares
of Common Stock for which Options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares of
Common Stock remaining available for Option grant in as uniform a manner as
shall be reasonably practicable and as it shall determine to be equitable.
Any amounts remaining in an employee's account not applied to the purchase
of Common Stock pursuant to this Section 10 shall be refunded on or
promptly after the Exercise Date. In such event, the Company shall give
written notice of such reduction of the number of shares of Common Stock
subject to the Option to each employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.
4
<PAGE>
11. ADMINISTRATION.
The Board shall supervise and administer the Plan and shall have full power
to adopt, amend and rescind any rules deemed desirable and appropriate for
the administration of the Plan and not inconsistent with the Plan, to
construe and interpret the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan.
12. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the participant's
account under the Plan in the event of such participant's death subsequent
to the end of the Offering Period but prior to delivery of such
participant's shares of Common Stock and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash
from the participant's account under the Plan in the event of such
participant's death prior to the Exercise Date of the Offering Period. If a
participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant (and his
or her spouse, if any) at any time by written notice. In the event of the
death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's
death, the Company shall deliver such shares of Common Stock and/or cash to
the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
13. TRANSFERABILITY.
Neither Contributions credited to a participant's account nor any rights
with regard to the exercise of an Option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any
way other than by will, the laws of descent and distribution or as provided
in paragraph 12 hereof by the participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect, except that
the Company may treat such act as an election to withdraw Contributions in
accordance with paragraph 8.
14. USE OF FUNDS.
All Contributions received or held by the Company under the Plan may be
used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such Contributions.
15. REPORTS.
Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participants, the per share purchase
price, the number of shares purchased and the remaining cash balance, if
any.
16. ADJUSTMENTS UPON CHANGES IN STOCK.
If any change is made in the shares of Common Stock subject to the Plan or
subject to any Option granted under the Plan (through merger,
consolidation, reorganization, distribution of substantially all of the
assets of the Company, spin-off of a subsidiary's voting securities to the
Company's shareholders, recapitalization, stock dividend, split-up,
combination of shares, exchange of shares, issuance of rights to subscribe,
or change in capital structure), appropriate adjustments shall be made by
the Board as to the maximum number of shares subject to the Plan and the
number of shares and price per share subject to
5
<PAGE>
outstanding Options as shall be equitable to prevent dilution or
enlargement of Option rights. Any determination made by the Board hereunder
shall be final, binding and conclusive upon each participant.
17. AMENDMENT OR TERMINATION.
The Board may at any time terminate or amend the Plan. Except as provided
in paragraph 16, no such termination may affect Options previously granted,
nor may an amendment make any change in any Option therefore granted which
adversely affects the rights of any participant. In addition, to the extent
necessary to comply with Section 423 of the Code (or any successor rule or
provision or any applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as so required.
18. NOTICES.
All notices or other communications by a participant to the Company under
or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
19. RIGHT TO TERMINATE EMPLOYMENT.
Nothing in the Plan or in any agreement entered into pursuant to the Plan
shall confer upon any participant the right to continue in the employment
of the Company or any Affiliate, or affect any right which the Company or
any Affiliate may have to terminate the employment of such participant.
20. RIGHTS AS A STOCKHOLDER.
Neither the granting of an Option nor a deduction from payroll shall
constitute a participant the owner of shares covered by an Option. No
participant shall have any right as a stockholder unless and until an
Option has been exercised, and the shares of Common Stock underlying the
Option have been registered in the Company's share register.
21. TERM OF PLAN.
The Plan shall become effective upon its adoption by each of the Board and
the stockholders and shall continue in effect for a term of ten (10) years
unless sooner terminated earlier under paragraph 17.
22. APPLICABLE LAW.
This Plan shall be governed in accordance with the laws of Delaware.
6
<PAGE>
IMCLONE SYSTEMS INCORPORATED
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
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 shall 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 Shareholders, May 27,
1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
ImClone Systems Incorporated
<PAGE>
IMCLONE SYSTEMS INCORPORATED
Proxy for the Meeting of Stockholders, May 27, 1998
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Robert F. Goldhammer, John B. Landes and Samuel
D. Waksal as Proxies each with power of substitution and hereby authorizes each
of them to represent and to vote, as designated below, all the shares of Common
Stock of ImClone Systems Incorporated held of record by the undersigned on April
7, 1998 at the Annual Meeting of Stockholders to be held on May 27, 1998 or any
adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY TO STATE STREET BANK AND TRUST
COMPANY. THE COMPANY'S TRANSFER AGENT, TO BE RECEIVED NO LATER THAN MAY 25,
1998.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1,2 AND 3.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
NOTE: Please sign exactly as your name(s) appear(s) on this card. All joint
owners should sign. When signing as executor, administrator, attorney, trustee
or guardian or as custodian for a minor, please give full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, sign the partnership name.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________________ _____________________________________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
<PAGE>
PLEASE MARK VOTES AS IN
_X_ THIS EXAMPLE
ImClone Systems Incorporated
Mark box at right if an address change or comment has been noted on the reverse
side of this card. ______
RECORD DATE SHARES:
1.) ELECTION OF DIRECTORS. For: _____ Withhold: _____ For All Except: _____
Nominees:
Richard Barth Jean Carvais
Vincent T. DeVita, Jr. Robert F. Goldhammer
David M. Kies Paul B. Kopperl
John Mendelsohn William R. Miller
Harlan W. Waksal Samuel D. Waksal
NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
Your shares shall be voted for the remaining nominee(s).
2.) To vote upon a proposal to approve the Company's 1998 Employee Stock
Purchase Plan.
For: _____ Against: _____ Abstain: _____
3.) To ratify the appointment by the Board of Directors of KPMG Peat Marwick LLP
to serve as the Company's independent certified public accountants for the
fiscal year ending December 31, 1998.
For: _____ Against: _____ Abstain: _____
4.) To consider and act upon any other business as may come before the meeting
or any adjournment thereof.
Please be sure to sign and date this Proxy. Date:
________________________________________________________________
Stockholder sign here Co-owner sign here
Detach Card
