<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ORGANOGENESIS
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
ORGANOGENESIS INC.
150 DAN ROAD
CANTON, MASSACHUSETTS 02021
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 15, 1996
The Annual Meeting of Stockholders of Organogenesis Inc. (the "Company")
will be held at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, on Wednesday, May 15, 1996 at 10:00 A.M., local time, to
consider and act upon the following matters:
1. To elect seven directors to serve for the ensuing year;
2. To approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, increasing the number of authorized shares of
Common Stock from 20,000,000 to 40,000,000 shares;
3. To ratify the selection by the Board of Directors of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the 1996 fiscal year;
and
4. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Stockholders of record at the close of business on March 22, 1996 will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
A complete list of stockholders entitled to vote at the meeting will be
available for examination by stockholders during business hours at the
Company's principal office beginning on May 8, 1996. The stock transfer books
of the Company will remain open for the purchase and sale of the Company's
Common Stock.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ Steven D. Singer, Secretary
Steven D. Singer, Secretary
Canton, Massachusetts
April 1, 1996
RETURN ENCLOSED PROXY CARD
WHETHER OR NOT YOU EXPECT TO ATTEND THIS MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF THE PROXY IS MAILED IN THE UNITED STATES.
<PAGE>
ORGANOGENESIS INC.
150 DAN ROAD
CANTON, MASSACHUSETTS 02021
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Organogenesis Inc. (the "Company") for
use at the 1996 Annual Meeting of Stockholders to be held on Wednesday, May
15, 1996 at 10:00 a.m. at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts and at any adjournment of that meeting (the "Meeting"). All
proxies will be voted in accordance with the instructions contained therein,
and if no choice is specified, the proxies will be voted in favor of the
proposals set forth in the accompanying Notice of Meeting. You have the right
to revoke your proxy and change your vote at any time prior to its exercise at
the Meeting by giving written notice to that effect to the Secretary of the
Company.
On March 22, 1996, the record date for the determination of stockholders
entitled to vote at the Meeting, there were outstanding and entitled to vote
an aggregate of shares of Common Stock of the Company, $.01 par value (the
"Common Stock"). Each share is entitled to one vote.
The Company's Annual Report for the fiscal year ended December 31, 1995 is
being mailed to the stockholders concurrently with this Notice and Proxy
Statement on or about April 1, 1996.
VOTING SECURITIES AND VOTES REQUIRED
The holders of a majority of the number of shares of Common Stock issued,
outstanding and entitled to vote on any matter shall constitute a quorum with
respect to that matter at the Meeting. Shares of Common Stock present in
person or represented by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum is present.
The affirmative vote of the holders of a plurality of the votes cast at the
Meeting is required for the election of directors. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock is required
for the approval of the proposed amendment to the Company's Certificate of
Incorporation. The affirmative vote of the holders of a majority of the shares
of Common Stock present or represented and voting at the Meeting is required
to ratify the selection of Coopers & Lybrand L.L.P. as the Company's
independent auditors.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that
they do not have discretionary authority to vote such shares as to a
particular matter, will not be counted as votes in favor of such matter.
<PAGE>
ITEM NO. 1
ELECTION OF DIRECTORS
Unless otherwise instructed, the persons named in the enclosed proxy will
vote to elect as directors the seven nominees named below. All of the nominees
have indicated their willingness to serve, if elected, but if any would be
unable to serve, the proxies may be voted for a substitute nominee designated
by management. Each director will be elected to hold office until the next
annual meeting of stockholders or until his successor is elected and qualified.
If a nominee becomes unavailable, the person acting under the proxy may vote
the proxy for the election of a substitute. It is not presently contemplated
that any of the nominees will be unavailable.
The following table sets forth the name and age of each nominee and the
positions and offices held by him or her, his or her principal occupation and
business experience during the past five years, when he or she first became a
director of the Company and the names of other publicly held companies of which
he or she serves as a director:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, FIRST
BUSINESS EXPERIENCE BECAME A
NAME, AGE AND DIRECTORSHIPS DIRECTOR
--------- --------------------- --------
<S> <C> <C>
Richard S. Cresse....... Corporate Vice President -- Sales at Arthur D. 1986
Age 68 Little, Inc. since November 1988.
William J. Hopke........ Executive Vice President and Chief Operating 1990
Age 40 Officer of Trilon Dominion Partners L.L.C. since
August 1995; Senior Vice President from June
1993 to August 1995 and Treasurer from June 1985
to May 1993 of Dominion Capital, Inc.; Vice
President of Dominion Capital Inc. from June
1985 to May 1993; President of Dominion
Financing, Inc. since January 1988; Assistant
Treasurer of Dominion Resources, Inc. since
1988. Director of Petersburg Long Distance,
Inc., Caldera Environmental Corp., Wilshire
Technologies, Inc., EPL Technologies, Inc. and
Advanced Materials, Inc.
Dr. Anton E. Schrafl.... Deputy Chairman of "Holderbank" Financiere 1987
Age 62 Glaris Ltd., a Swiss manufacturer of cement,
since July 1984; Director of Holnam, Inc.
Herbert M. Stein........ Chairman of the Board of Directors of the 1986
Age 67 Company since February 1991; Chief Executive
Officer of the Company since January 1987; Vice
Chairman of the Board of Directors of the
Company from January 1987 to February 1991;
Director of Ekco Group, Inc.
Dr. David T. Rovee...... President and Chief Operating Officer of the 1994
Age 56 Company since February 1994; Vice President of
Research and Development of the Company from
November 1991 to February 1994; employed by
Johnson & Johnson for the prior 25 years, most
recently as Vice President of Research and
Development for J&J Patient Care, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, FIRST
BUSINESS EXPERIENCE BECAME A
NAME, AGE AND DIRECTORSHIPS DIRECTOR
--------- --------------------- --------
<S> <C> <C>
Dr. Bjorn R. Olsen...... Hersey Professor of Anatomy, Department of 1994
Age 55 Anatomy and Cellular Biology, Harvard Medical
School from 1985 to 1993; Hersey Professor of
Cell Biology, Department of Cell Biology,
Harvard Medical School since 1993.
Marguerite A. Piret..... President of Newbury, Piret & Company, Inc., an 1995
Age 48 investment banking company, since 1981; Director
of BioSafe International, Inc. and the Pioneer
Mutual Funds.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTING THE SEVEN NOMINEES
ABOVE.
INFORMATION RELATIVE TO THE
BOARD OF DIRECTORS AND CERTAIN OF ITS COMMITTEES
The Audit Committee of the Board of Directors is comprised of Dr. Schrafl
and Messrs. Cresse and Hopke. The Audit Committee held one meeting during
1995. The responsibilities of the Audit Committee are (1) to make
recommendations to the Board of Directors regarding the engagement of the
Company's independent accountants (2) to review the arrangements for the scope
of the independent audit and the results of the audit and to report on the
same to the Company's Board of Directors; (3) to establish and monitor policy
relative to non-audit services performed by the independent accountants; and
(4) to assure that the accountants are in fact independent.
The Nominating Committee of the Board of Directors is currently comprised of
Dr. Schrafl and Mr. Stein. The Nominating Committee held one meeting during
1995. The Committee identifies and recommends candidates for nomination to the
Board of Directors. The Nominating Committee does not consider nominees
recommended by stockholders.
The Compensation Committee of the Board of Directors is comprised of Dr.
Olsen and Messrs. Cresse and Hopke. The Compensation Committee held three
meetings during 1995. The Committee provides recommendations to the Board of
Directors as to compensation arrangements with executive officers of the
Company and grants options to the Company's executive officers.
During 1995, the Board of Directors of the Company held four meetings. Each
incumbent director attended at least 75% of the Board of Directors meetings
which were held during his or her tenure, and of all committees of the Board
on which he or she served.
COMPENSATION OF DIRECTORS
Directors who are also officers of the Company do not receive compensation
for their services to the Company as directors. Directors who are not also
officers of the Company receive $500 for each Board of Directors meeting
attended, $300 for each committee meeting attended and $1,750 per quarter.
3
<PAGE>
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of March 22, 1996 with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known to the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director and nominee for director, (iii) each
of the executive officers listed in the "Summary Compensation Table" below, and
(iv) the directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS OF BENEFICIALLY COMMON STOCK
BENEFICIAL OWNER OWNED(1) OUTSTANDING
------------------- ------------ ------------
<S> <C> <C>
North American Management Corp. ................. [1,308,162](2) [9.4]%
Ten Post Office Square
Boston, MA 02109
H.M. Stein Associates............................ [490,000](3) [3.5]%
c/o Herbert M. Stein
2800 South Ocean Boulevard
Boca Raton, FL 33432
Herbert M. Stein................................. [639,038](4) [4.6]%
Richard S. Cresse................................ [31,250](5) *
William J. Hopke................................. [25,000](6) *
Dr. Bjorn R. Olsen............................... 0(5) *
Dr. Anton E. Schrafl............................. [108,750](7) *
Dr. David T. Rovee............................... [129,000](5) *
Marguerite A. Piret.............................. *
Dr. Michael L. Sabolinski........................ [57,625](5) *
Dr. Nancy L. Parenteau........................... [39,875](5) *
Dr. Paul D. Kemp................................. [39,875](5) *
Donna L. Abelli.................................. *
All directors and officers as a group (11
persons)........................................ [1,096,663](8) [7.8]%
</TABLE>
- --------
* Less than 1%.
(1) Except as otherwise specifically noted, the number of shares stated as
being owned beneficially includes shares believed to be held beneficially
by spouses, minor children and grandchildren. The inclusion of such shares
in this Proxy Statement, however, does not constitute an admission that the
named stockholders are direct or indirect beneficial owners of such shares.
(2) The information reported is solely based on information provided by North
American Management Corp. Under common forms of discretionary account
agreements between investment adviser and client, an investment adviser is
vested with authority to dispose of shares. North American is an investment
adviser and is thus considered, under Securities and Exchange Commission
("SEC") rules, to be a "beneficial owner." An investment adviser need not
have any pecuniary interest to be considered a beneficial owner.
(3) Represents shares held by H.M. Stein Associates, a limited partnership
owned by members of the immediate family of Herbert M. Stein, an officer
and director of the Company. Mr. Stein owns approximately 8% of the
partnership.
4
<PAGE>
(4) Includes 582,500 shares of Common Stock which are subject to outstanding
options exercisable within the 60-day period following March 28, 1996;
44,100 shares held by H.M. Stein Associates and 12,438 shares owned. Does
not include 445,900 shares of Common Stock held by H.M. Stein Associates.
(5) Represents shares of Common Stock which are subject to outstanding options
exercisable within the 60-day period following March 22, 1996.
(6) Excludes shares of Common Stock held by Dominion Capital, Inc. Mr. Hopke
has been an Executive Vice President and Chief Operating Officer of Trilon
Dominion Partners Inc, an investment management company which manages
portfolio investments for Dominion Capital, Inc. Mr. Hopke disclaims
beneficial ownership of the Common Stock and the Preferred Stock held by
Dominion Capital, Inc. Includes shares of Common Stock which are subject
to outstanding options exercisable within the 60-day period following March
22, 1996.
(7) Includes 77,500 shares owned and 31,250 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 22, 1996.
(8) Includes 44,100 shares held by H.M. Stein Associates, 12,438 shares held by
Herbert M. Stein 77,500 shares held by Dr. Schrafl and 962,625 shares of
Common Stock subject to outstanding stock options held by officers and
directors which are exercisable within the 60-day period following March
22, 1996. Excludes shares of Common Stock held by Dominion Capital, Inc.
(see footnote 6 above).
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the name and age and current position of each
of the Company's non-director executive officers and each such officer's
business experience during the past five years.
<TABLE>
<CAPTION>
NAME, AGE POSITION AND BUSINESS EXPERIENCE
--------- --------------------------------
<S> <C>
Michael L. Sabolinski, Senior Vice President, Corporate Development and
M.D. .................... Medical Affairs since August 1995; Vice President,
Age 40 Medical and Regulatory Affairs from February 1994 to
August 1995; Director of Clinical and Regulatory
Affairs from April 1992 to February 1994; Vice
President of Clinical Affairs at Advance Tissue
Sciences from November 1991 to March 1992; Director
of Cardiovascular Products at Sandoz Pharmaceuticals
Corp. from 1989 to November 1991.
Nancy L. Parenteau, Senior Vice President, Cell and Tissue Science and
Ph.D. ................... Chief Scientific Officer since August 1995; Vice
Age 42 President, Cell and Tissue Science from February
1994; Director, Cell Biology Research from 1989 to
February 1994.
Paul D. Kemp, Ph.D. ...... Vice President, Matrix Research since August 1995;
Age 39 Vice President, Connective Tissue Science from
February 1994 to August 1995; Director, Matrix
Engineering from 1990 to February 1994; Director,
Collagen Production from 1990 to 1992.
Joel T. Cademartori....... Vice President, Regulatory Affairs, Quality
Age 53 Assurance and Quality Control since August 1995;
Director, Quality Assurance from October 1994 to
August 1995; independent consultant of medical
products/quality assurance for various companies
from December 1990 to October 1994; general
management, Johnson & Johnson Medical Products from
June 1972 to December 1990.
Robert J. Buehler, Vice President, Operations since November 1995;
Ph.D. ................... Director, Process Development from August 1994 to
Age 48 November 1995; Director, Quality Assurance from June
1993 to August 1994; Director, Operations from June
1988 to June 1993.
Donna L. Abelli........... Vice President, Finance and Administration and Chief
Age 37 Financial Officer, Treasurer and Secretary since
March 1996; Partner, Coopers & Lybrand L.L.P. from
September 1992 to February 1996, and Manager from
May 1986 to September 1992.
</TABLE>
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
comprised of three independent non-employee directors and is responsible for
developing and making recommendations to the Board with respect to the
Company's compensation policies regarding its executive officers. The
Committee also recommends to the Board the base annual cash compensation and
annual cash bonuses to be paid to each executive officer of the Company. The
Committee also grants options to the Company's executive officers.
The Company's overall policy on compensation, as adopted by the Committee,
is to provide competitive compensation to enable the Company to attract and
retain qualified executive officers. The compensation of the executive
officers is structured and administered to promote the achievement of the
Company's business goals, and thereby, to maximize corporate performance and
stockholder returns. The Committee believes that in addition to adequate base
cash compensation it is important to have cash bonuses constitute a
significant portion of each executive officer's compensation package in order
to tie an individual's compensation level to individual and corporate
performance. The Committee also believes it is important to have stock
incentives constitute a significant portion of each executive officer's
compensation package to help align long-term interests of its executive
officers with the interests of its stockholders.
Compensation of Executive Officers
Based upon the foregoing, the compensation of executive officers consists of
a mixture of cash base salary, cash bonuses, fringe benefits and long-term
common stock incentives. The common stock incentives are provided through the
Company's stock option plan. The Company also maintains a contributory 401(k)
program in which executive officers may participate. The 401(k) program became
a contributory plan in April 1994. The maximum contribution which may be paid
in any one year by the Company under the 401(k) program on behalf of any one
employee is $900. In determining the total amount and mixture of the
compensation package for each executive officer, the Committee and the Board,
at least once a year, take into consideration numerous factors such as
(i) compensation of executive officers performing similar functions at
comparable and competitive companies, (ii) individual performance of each
executive officer, including contribution to the Company's goals, and
(iii) the Company's short-term and long-term needs and goals, including
attracting and retaining key management personnel. As a result of this
evaluation, the Committee recommends to the Board for approval for each
executive officer appropriate changes in existing base salary effective upon
the anniversary date of the employee's hiring and an annual cash bonus payable
after the end of the calendar year.
The stock option program is the Company's major long-term incentive plan to
compensate executive officers. The objectives of this program are to align the
executive officers' and stockholders' long-term interests by creating a strong
and direct link between executive pay and stockholder return and to enable the
executive officers to develop and maintain significant long-term stock
ownership in the Company's Common Stock. Stock options generally are granted
at an option price equal to the fair market value of the Company's Common
Stock on the date of grant, have ten year terms, and vest ratably over five
years. The amount of shares granted increases as a function of higher salary
and position in the Company. The Committee granted stock options to six
executive officers in 1995 to make their compensation package fully
competitive with other companies in the Company's industry, as well as with a
broader group of companies of comparable size and complexity.
7
<PAGE>
Compensation of Chief Executive Officer
Mr. Stein, the Company's Chief Executive Officer, is eligible to participate
in the same executive compensation programs available to other executive
officers. The Committee has set Mr. Stein's annual compensation at a level it
believes necessary to retain Mr. Stein in his executive position with the
Company and to be comparable with other companies in the industry. In 1995,
Mr. Stein's annual salary was virtually unchanged. The Committee awarded Mr.
Stein a cash bonus of $219,798 for 1995 performance. The bonus reflects
achievement of his and the Company's principal and individual 1995 performance
goals. Also, in March 1995, the Committee granted Mr. Stein an option, based
upon 1994 performance, to acquire an aggregate of 75,000 shares of the
Company's Common Stock at an exercise price equal to the fair market value on
the date of grant. The option becomes vested ratably over five years following
the date of grant, subject to Mr. Stein's continued employment with the
Company.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), enacted in 1993, generally disallows tax deductions to publicly
traded corporations for compensation over $1 million paid to a corporation's
Chief Executive Officer or any of its other four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to this disallowance if certain requirements are met. The Company
intends to structure its compensation arrangements in a manner that will avoid
disallowances under Section 162(m).
Compensation Committee:
Richard S. Cresse, Chairperson
William J. Hopke
Bjorn R. Olsen
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation for each of the last three fiscal years of the Company's Chairman
and Chief Executive Officer and the Company's four other most highly
compensated executive officers who received compensation in excess of $100,000
during 1995 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(1)
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND PRINCIPAL ---------------------- STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY BONUS SARS COMPENSATION
------------------ ---- -------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Herbert M. Stein.......... 1995 $266,200 $219,798 75,000 $19,594(2)
Chairman and Chief 1994 266,900 65,000 75,000 19,594(2)
Executive Officer 1993 241,238 65,000 46,875 19,594(2)
Dr. David T. Rovee........ 1995 $220,481 $ 86,439 50,000 $ 900(3)
President, Chief 1994 184,329 30,000 50,000 900(3)
Operating Officer 1993 160,687 30,000 22,500 2,214(4)
Dr. Michael L. 1995 $146,385 $ 52,480 37,500 $ 900(3)
Sabolinski............... 1994 114,307 0 25,000 900(3)
Senior Vice President -- 1993 113,025 11,200 6,250 11,332(4)
Corporate Development and
Medical Affairs
Dr. Nancy L. Parenteau.... 1995 $122,289 $ 38,480 25,000 $ 900(3)
Senior Vice President -- 1994 97,769 3,000 25,000 900(3)
Cell and Tissue Science 1993 -- -- 6,250 0
and Chief Scientific
Officer
Dr. Paul D. Kemp.......... 1995 $114,506 $ 10,000 -- $ 900(3)
Vice President -- Matrix 1994 -- -- -- 0
Research(5) 1993 -- -- 6,250 0
</TABLE>
- --------
(1) The Company does not have a long-term compensation program that includes
long-term incentive payouts, stock appreciation rights (SARs) or similar
forms of compensation.
(2) Amounts shown are insurance premiums paid by the Company for a life
insurance policy on Mr. Stein of which the Company is not a beneficiary and
$10,000 paid for personal financial consulting services.
(3) Reflects amounts contributed by the Company pursuant to its 401(k) Plan.
(4) Includes reimbursement for relocation expenses.
(5) Dr. Kemp was appointed as executive officer of the Company in 1994;
however, his total annual compensation in 1994 did not exceed $100,000.
9
<PAGE>
OPTION GRANTS DURING 1995
The following table sets forth certain information regarding options granted
during the fiscal year ended December 31, 1995 by the Company to the Named
Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER AT ASSUMED ANNUAL RATES
OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL APPRECIATION FOR OPTION
UNDERLYING OPTIONS EXERCISE TERM COMPOUNDED
OPTIONS GRANTED TO OR BASE ANNUALLY(2)
GRANTED EMPLOYEES PRICE(1) EXPIRATION ---------------------------
NAME (#) IN 1995 ($/SHARE) DATE 5% ($) 10% ($)
---- ---------- ---------- --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Stein........ 75,000 18.45% $10.80 3/15/05 $ 509,408 $ 1,290,930
Dr. David T. Rovee...... 50,000 12.30 10.80 3/15/05 339,605 860,620
Dr. Michael L.
Sabolinski............. 37,500 9.22 10.80 3/15/05 254,704 645,465
Dr. Nancy L. Parenteau.. 25,000 6.15 10.80 3/15/05 169,803 430,310
Dr. Paul D. Kemp........ -- -- -- -- -- --
</TABLE>
- --------
(1) All options were granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options are
exercisable in five equal annual installments of 20% each year commencing
one year from the date of grant.
(2) Amounts shown under these columns are the results of calculations of the
5% and 10% rates required by the Securities and Exchange Commission and
are not intended to forecast future appreciation of the Company's stock
price. The table does not take into account any appreciation in the price
of the Common Stock to date.
The following table sets forth certain information regarding options held as
of December 31, 1995 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES DURING 1995
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(1) YEAR END ($)(1)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Stein........ -- $ -- 627,500 225,625 $7,032,438 $2,195,904
Dr. David T. Rovee...... -- -- 109,000 126,000 1,105,275 1,232,600
Dr. Michael L.
Sabolinski............. -- -- 37,125 78,500 365,059 721,738
Dr. Nancy L. Parenteau.. -- -- 29,875 62,000 384,416 592,600
Dr. Paul D. Kemp........ -- -- 34,875 37,000 460,291 403,225
</TABLE>
- --------
(1) Options granted under the 1986 Stock Option Plan become exercisable in
five equal annual installments of 20% each year commencing one year from
the date of grant.
(2) The value of unexercised in-the-money options represents the difference
between the closing price of the Company's Common Stock on the American
Stock Exchange on December 29, 1995 and the option exercise price.
10
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Company's Common Stock against the cumulative total return of the Standard &
Poor's 500 Stock Index and the Coopers & Lybrand Biotech Index during the five
years ending December 31, 1995. The graph and table assume $100 was invested
on December 31, 1990 in the Company's Common Stock and in each of the
foregoing indices.
[Performance Graph appears here]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Organogenesis, Inc............ $100.00 $276.00 $124.00 $124.00 $274.00 $319.00
S&P 500 Index................. $100.00 $130.00 $140.00 $155.00 $157.00 $215.00
Coopers & Lybrand Biotech
Index........................ $100.00 $230.00 $290.00 $285.00 $258.00 $392.00
</TABLE>
SECTION 16 REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of the
Company's Common Stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC")
and the American Stock Exchange. Such persons are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms they file.
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Based solely on its review of the copies of such forms received by it with
respect to 1995, or written representations from certain reporting persons, the
Company believes that during the preceding year its directors, officers and
persons who own more than 10% of the Company's Common Stock have complied with
all filing requirements.
COMPENSATION ARRANGEMENTS
Each Named Executive Officer has an employment arrangement with the Company
which provides that in the event of a change in control of the Company, his or
her employment with the Company will be guaranteed for one year from the date
of such change in control and all stock options will become fully vested upon
any such change in control. See Summary Compensation Table; Aggregated Option
Exercises During 1995 and Fiscal Year-End Option Value table.
CERTAIN TRANSACTIONS
In 1995, the Company's wholly owned subsidiary, ECM Pharma Inc. licensed from
Harvard University a compound which has the potential to regulate the breakdown
of extracellular matrix and to modify tissue remodeling. ECM Pharma also
entered into a research collaboration with Dr. Bjorn Olsen of the Harvard
Medical School related to the discovery of extracellular matrix-related
therapeutics. The Company expended approximately $194,000 during 1995 to fund
the research collaboration. Dr. Bjorn Olsen is a member of the Company's Board
of Directors.
SCIENTIFIC ADVISORY BOARD
The Company has a Scientific Advisory Board ("SAB") comprised of five
physicians, professors and scientists in various fields of medicine and
science. The SAB meets from time to time to advise and consult with management
and the Company's scientific staff. Members of the SAB receive a $1,000 fee for
each meeting attended and are reimbursed for expenses in attending meetings.
Non-statutory stock options have been granted to members of the SAB. As of
March 22, 1996, members of the SAB held options, in connection with their
service as SAB members, to purchase an aggregate of 10,000 shares of the
Company's Common Stock at an average exercise price of $11.48 per share under
the Company's 1986 Stock Option Plan.
ITEM NO. 2
APPROVAL OF AMENDMENT TO THE ARTICLES OF ORGANIZATION
On March 13, 1996, the Board of Directors of the Company unanimously voted to
recommend to the stockholders that the Company's Restated Certificate of
Incorporation be amended to increase the number of authorized shares of Common
Stock from 20,000,000 to 40,000,000 shares. On September 8, 1995, the Board of
Directors also declared a stock split of the issued shares of the Company's
Common Stock. The stock split was affected as a 25% Common Stock dividend paid
by the Company on September 8, 1995 to stockholders of record on September 1,
1995.
The authorized Common Stock of the Company currently consists of 20,000,000
shares, $.01 par value per share, of which shares were outstanding as of
March 22, 1996, approximately 4,062,429 shares were duly authorized and
reserved for issuance pursuant to the Company's stock option plans, stock
purchase plans and other employee benefit plans; and 521,875 shares were
reserved for issuance pursuant to outstanding warrant agreements. The Board of
Directors believes that the authorization of additional shares of Common Stock
is
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desirable to provide shares for issuance in connection with possible future
stock dividends, future financings, joint ventures, acquisitions or other
general corporate purposes. However, there is no existing plan, understanding
or agreement for the issuance of any shares of Common Stock with the exception
of the shares of Common Stock available for issuance described above. If the
amendment is adopted by the stockholders, the Board of Directors will have
authority to issue shares of Common Stock without the necessity of further
stockholder action. Holders of Common Stock have no preemptive rights with
respect to any shares which may be issued in the future.
THE BOARD OF DIRECTORS BELIEVES THAT THE APPROVAL OF THE AMENDMENT TO THE
ARTICLES OF ORGANIZATION IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE FOR THIS PROPOSAL.
ITEM NO. 3
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the Company's
independent accountants for the 1996 fiscal year. Coopers & Lybrand L.L.P. has
served as the Company's independent accountants since 1986. Representatives of
Coopers & Lybrand L.L.P. are expected to be present at the Meeting. They will
have the opportunity to make a statement if they so desire and will also be
available to respond to appropriate questions from stockholders.
OTHER MATTERS
Management does not know of any other matters which may come before the
meeting. However, if any other matters are properly presented to the Meeting,
it is the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
The expenses connected with soliciting proxies will be borne by the Company.
In addition to solicitations by mail, the Company's directors, officers and
regular employees, without additional remuneration, may solicit proxies by
telephone, telegraph and personal interviews. The Company will pay a fee of
approximately $5,000 paid to Georgeson & Company Inc. to assist with the
solicitation of proxies. Brokers, custodians and fiduciaries will be requested
to forward proxy soliciting material to the owners of stock held in their
names, and the Company will reimburse them for their out-of-pocket expenses in
connection with the distribution of proxy materials.
DEADLINE FOR SUBMISSION OF STOCKHOLDERS PROPOSALS
In order to be considered for addition to the agenda for the 1997 Annual
Meeting of Stockholders and to be included in the Proxy Statement and form of
proxy, stockholders' proposals should be addressed to the Secretary of the
Company and must be received at the principal office of Organogenesis in
Canton, Massachusetts no later than December 31, 1996.
By Order of the Board of Directors,
(ART)
Steven D. Singer, Secretary
Canton, Massachusetts
April 1, 1996
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THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING,
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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