<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:
[_] 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 (S)240.14a-11(c) or (S)240.14a-12
ORGANOGENESIS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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>
ORGANOGENESIS INC.
150 DAN ROAD
CANTON, MASSACHUSETTS 02021
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1997
The Annual Meeting of Stockholders of Organogenesis Inc. (the "Company")
will be held at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, on Tuesday, May 13, 1997 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 ratify the selection by the Board of Directors of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the 1997 fiscal year;
and
3. 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 21, 1997 will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
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/ Donna L. Abelli
Donna L. Abelli, Secretary
Canton, Massachusetts
April 8, 1997
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 13, 1997
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 1997 Annual Meeting of Stockholders to be held on Tuesday, May 13,
1997 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 21, 1997, the record date for the determination of stockholders
entitled to vote at the Meeting, there were outstanding and entitled to vote
an aggregate of 14,346,155 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, 1996 is
being mailed to the stockholders concurrently with this Notice and Proxy
Statement on or about April 8, 1997.
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 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.
With respect to tabulation of votes on any matter, abstentions are treated
as votes against a proposal, while broker non-votes have no effect on the
vote.
<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. 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 AND AGE AND DIRECTORSHIPS DIRECTOR
------------ --------------------- --------
<C> <S> <C>
Richard S. Cresse..... Corporate Vice President, Arthur D. Little, 1986
Age 69 Inc. since November 1988.
William J. Hopke...... President, Insightful Ventures and 1990
Age 41 Consultant of Investment Banking S.W. Ryan
and Co. Inc. since 1996. Executive Vice
President and Chief Operating Officer of
Dominion Capital Inc. from 1985 to 1996.
Served as Director of EPL Technologies,
Petersburg Long Distance, Inc., Columbia
Labs, Advanced Materials, Inc. and Dominion
Capital.
Dr. Bjorn R. Olsen.... Hersey Professor of Cell Biology, Department 1994
Age 56 of Cell Biology, Harvard Medical School
since 1993; Hersey Professor of Anatomy,
Department of Anatomy and Cellular Biology,
Harvard Medical School from 1985 to 1993.
Marguerite A. Piret... President of Newbury, Piret & Company, Inc., 1995
Age 49 an investment banking company, since 1981;
Director of BioSafe International, Inc. and
the Pioneer Mutual Funds.
Dr. David T. Rovee.... President and Chief Operating Officer of the 1994
Age 57 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 Johnson &
Johnson Patient Care, Inc.
Dr. Anton E. Schrafl.. Deputy Chairman of "Holderbank" Financiere 1987
Age 63 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 68 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. and
Apogee Technology, Inc.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTING THE SEVEN NOMINEES
ABOVE.
2
<PAGE>
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,
Messrs. Cresse and Hopke and Ms. Piret. The Audit Committee held one meeting
during 1996. 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
1996. 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 five
meetings during 1996. 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 1996, 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 any
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 a retainer of
$1,750 per quarter.
Under the 1994 Director Stock Option Plan approved by the Company's
shareholders in 1994 (the "1994 Director Plan"), stock options to purchase
18,750 shares of the Company's Common Stock may be granted to non-employee
directors of the Company upon their initial election as a director. In
addition, the 1994 Director Plan provides for the grant of options to purchase
an additional 12,500 shares to each eligible non-employee director on the
second Wednesday of March in each even numbered calendar year commencing in
1996. The 1994 Director Plan provides that the option price be at fair market
value on the date of grant and vest in equal annual installments over a five-
year period beginning one year from the date of grant. All options expire ten
years from the date of grant.
3
<PAGE>
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of March 21, 1997 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 PERCENT OF
COMMON STOCK COMMON
NAME AND ADDRESS OF BENEFICIALLY STOCK
BENEFICIAL OWNER OWNED(1) OUTSTANDING
------------------- ------------ -----------
<S> <C> <C>
North American 1,400,731(2) 9.8%
Management Corp. ......
Ten Post Office Square
Boston, MA 02109
Stanmore Associates, 1,025,900(3) 7.2%
L.P. ..................
41 East 42nd Street
New York, New York
10017
Herbert M. Stein........ 847,688(4) 5.6%
2800 South Ocean
Boulevard
Boca Raton, FL 33432
Dr. David T. Rovee...... 191,500(5) 1.3%
Richard S. Cresse....... 48,750(6) *
William J. Hopke........ 6,250(5) *
Dr. Bjorn R. Olsen...... -- *
Marguerite A. Piret..... 5,100(5) *
Dr. Anton E. Schrafl.... 190,500(7) 1.3%
Joel T. Cademartori..... 15,000(5) *
Dr. Nancy L. Parenteau.. 64,250(8) *
Dr. Michael L. 89,000(5) *
Sabolinski.............
All directors and 1,543,538(9) 10.7%
officers as a group (13
persons)...............
</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) Based upon a Schedule 13D filed as of January 24, 1997 with the Securities
and Exchange Commission.
(4) Includes 780,125 shares of Common Stock which are subject to outstanding
options exercisable within the 60-day period following March 21, 1997;
55,125 shares held by H.M. Stein Associates and 12,438 shares
4
<PAGE>
owned. Does not include 557,375 of the 612,500 shares of Common Stock held
by H.M. Stein Associates as to which Mr. Stein disclaims beneficial
ownership.
(5) Represents shares of Common Stock which are subject to outstanding options
exercisable within the 60-day period following March 21, 1997.
(6) Includes 10,000 shares owned and 38,750 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 21, 1997.
(7) Includes 143,000 shares owned and 47,500 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 21, 1997.
(8) Includes 2,500 shares owned and 61,750 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 21, 1997.
(9) Includes 55,125 shares held by H.M. Stein Associates, 12,438 shares held
by Herbert M. Stein, 143,000 shares held by Dr. Schrafl, 10,000 shares
held by Mr. Cresse, 10,000 shares owned by executive officers and
1,312,975 shares of Common Stock subject to outstanding stock options held
by officers and directors which are exercisable within the 60-day period
following March 21, 1997.
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>
Donna L. Abelli .......... Vice President, Finance and Administration and Chief
Age 39 Financial Officer, Treasurer and Secretary since
March 1996; Partner, Coopers & Lybrand L.L.P. from
October 1992 to February 1996, and Manager from May
1986 to September 1992.
</TABLE>
<TABLE>
<S> <C>
Robert J. Buehler, Vice President, Operations since November 1995;
Ph.D. ................... Director, Process Development from August 1994 to
Age 49 November 1995; Director, Quality Assurance from June
1993 to August 1994; Director, Operations from June
1988 to June 1993.
Joel T. Cademartori....... Vice President, Regulatory Affairs, Quality
Age 54 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.
Nancy L. Parenteau, Senior Vice President, Research and Development and
Ph.D. ................... Chief Scientific Officer since August 1995; Vice
Age 43 President, Cell and Tissue Science from February
1994 to August 1995; Director, Cell Biology Research
from 1989 to February 1994.
Michael L. Sabolinski, Senior Vice President, Corporate Development and
M.D. .................... Medical Affairs since August 1995; Vice President,
Age 41 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.
</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 seven
executive officers in 1996 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.
Accordingly, in March, 1996, Mr. Stein's annual base salary was increased to
$293,000 from $266,900 the year before.
In addition, the Committee awarded Mr. Stein a cash bonus of $95,000 and
stock options to acquire an aggregate of 135,000 shares of the Company's
Common Stock at an exercise price equal to the fair market value on the date
of grant. The stock options vest ratably over five years following the date of
grant, which is subject to Mr. Stein's continued employment with the Company.
The bonus and stock options awarded reflect achievement of and progress
towards the Company's and Mr. Stein's principal 1995 and future goals and
objectives.
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 and any of its 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 cash salary and bonus in excess of
$100,000 during 1996 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND PRINCIPAL ----------------------- STOCK ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
------------------ ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Mr. Herbert M. Stein...... 1996 $ 291,969 $ 95,000 135,000 $19,594(1)
Chairman and Chief 1995 266,200 219,798 75,000 19,594(1)
Executive Officer 1994 266,900 65,000 75,000 19,594(1)
Dr. David T. Rovee........ 1996 243,346 60,000 90,000 900(2)
President, Chief 1995 220,481 86,439 50,000 900(2)
Operating Officer 1994 184,329 30,000 50,000 900(2)
Dr. Michael L. 1996 158,154 35,000 45,000 900(2)
Sabolinski............... 1995 146,385 52,480 37,500 900(2)
Senior Vice President, 1994 114,307 -- 25,000 900(2)
Corporate
Development and Medical
Affairs
Dr. Nancy L. Parenteau.... 1996 145,385 30,000 45,000 900(2)
Senior Vice President, 1995 122,289 38,480 25,000 900(2)
Research and Development 1994 97,769 3,000 25,000 900(2)
and Chief Scientific
Officer
Mr. Joel T. Cademartori... 1996 107,500 30,000 10,000 900(2)
Vice President, 1995 101,581 -- 12,500 635(2)
Regulatory Affairs, 1994 -- -- -- --
Quality Assurance and
Quality Control(3)
</TABLE>
- --------
(1) 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.
(2) Reflects amounts contributed by the Company pursuant to its 401(k) Plan.
(3) Mr. Cademartori joined the Company in October 1994 and was appointed as an
executive officer of the Company in August 1995; his total annual
compensation in 1994 did not exceed $100,000.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding options granted
during the fiscal year ended December 31, 1996 by the Company to the Named
Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------
NUMBER PERCENT OF POTENTIAL REALIZED VALUE
OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OPTION TERM(2)
GRANTED IN FISCAL PRICE(1) EXPIRATION -------------------------
NAME (#) YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ---------- ---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Herbert M. Stein.... 135,000 20.89% $16.25 3/13/06 $ 1,379,633 $ 3,496,271
Dr. David T. Rovee...... 90,000 13.92 16.25 3/13/06 919,755 2,330,847
Dr. Michael L.
Sabolinski............. 45,000 6.96 16.25 3/13/06 459,878 1,165,424
Dr. Nancy L. Parenteau.. 45,000 6.96 16.25 3/13/06 459,878 1,165,424
Mr. Joel T.
Cademartori............ 10,000 1.55 16.25 3/13/06 102,195 258,983
</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. In addition, the options vest fully in
the event of a "Change in Control" of the Company. See "Compensation
Arrangements".
(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, 1996 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END(1) FISCAL YEAR-END($)(1)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Herbert M. Stein.... -- $ -- 723,125 265,000 $11,113,630 $2,724,625
Dr. David T. Rovee...... -- -- 153,500 171,500 2,220,475 1,730,525
Dr. Michael L.
Sabolinski............. -- -- 59,500 101,125 835,850 1,049,306
Dr. Nancy L. Parenteau.. 2,500 46,375(3) 42,750 91,625 685,388 937,206
Mr. Joel T.
Cademartori............ -- -- 13,000 35,750 147,100 365,962
</TABLE>
- --------
(1) Options granted under the 1986 and 1995 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 31, 1996 and the option exercise price.
(3) The value realized represents the difference between the closing price of
the Company's Common Stock on the American Stock Exchange on the date of
exercise and the option exercise price, multiplied by the number of shares
acquired on exercise.
10
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
Based solely on its review of the copies of such forms received by it with
respect to 1996, or written representations from certain reporting person, 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
The Company has agreed to adopt a Severance Benefits Plan (the "Plan") for
all of the executive officers of the Company, including Dr. Rovee and Mr.
Stein, which provides for certain benefit payments in the event that the
officers employment is terminated involuntarily by the Company following a
change in control of the Company. As defined in the Plan, a "Change in
Control" will occur: (i) in the event that any person acquires 30% or more of
the combined voting power of the Company's then outstanding securities, (ii)
if a majority of the Board of Directors changes, unless the change was
approved by a vote of at least a majority of the Board of Directors prior to
such change, (iii) in the event that the stockholders approve a merger or
consolidation of the Company, other than a merger or consolidation which would
result in the voting securities outstanding immediately prior thereto
continuing to represent more than 50% of the combined voting power of the
voting securities of the Company or the surviving entity outstanding
immediately after such merger or consolidation, or a merger or consolidation
effected to implement a recapitalization of the Company in which no person
acquires more than 30% of the combined voting power of the Company's then
outstanding securities, or (iv) in the event that the stockholders of the
Company approve a plan of complete liquidation or the sale of all or
substantially all of the Company's assets.
All stock options held by Company employees, including executive officers,
fully vest upon a Change in Control, as defined above.
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 Harvard Medical School, under
the direction of Dr. Bjorn Olsen, related to the discovery of extracellular
matrix-related therapeutics. The Company expended approximately $203,000 and
$194,000 during 1996 and 1995, respectively, to fund the research
collaboration. Dr. Bjorn Olsen is a member of the Company's Board of
Directors.
During 1996, the Company made an interest-free loan of $108,000 to Dr. Nancy
Parenteau, the Company's Senior Vice President, Research and Development, and
Chief Scientific Officer. The loan is due upon the earlier of the disposition
of underlying shares acquired from the exercise of stock options held or
termination of employment. To date, the entire loan amount remains
outstanding.
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
11
<PAGE>
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 21, 1997, 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.
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, the Coopers & Lybrand Biotech Index and the AMEX
Biotechnology Index during the five years ending December 31, 1996. The graph
and table assume $100 was invested on December 31, 1991 in the Company's
Common Stock and in each of the foregoing indices.
[COMPARATIVE STOCK PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Organogenesis, Inc. .......... $100.00 $ 45.00 $ 45.00 $ 99.00 $115.00 $142.00
S&P 500 Index................. $100.00 $108.00 $118.00 $120.00 $165.00 $203.00
Coopers & Lybrand Biotech
Index........................ $100.00 $ 98.00 $103.00 $ 96.00 $175.00 $182.00
AMEX Biotechnology Index...... $100.00 $ 80.00 $ 54.00 $ 38.00 $ 63.00 $ 68.00
</TABLE>
12
<PAGE>
ITEM NO. 2
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the
Company's independent accountants for the 1997 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.
ITEM NO. 3
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 American
Stock & Transfer 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 1998 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 5, 1997.
By Order of the Board of Directors,
/s/ Donna L. Abelli
Donna L. Abelli, Secretary
Canton, Massachusetts
April 8, 1997
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.
13
<PAGE>
PROXY PROXY
ORGANOGENESIS INC.
Annual Meeting of Stockholders--May 13, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint (s) Herbert M.
Stein, David T. Rovee and Donna L. Abelli and each of them, with full power of
substitution, as proxies to represent and vote, as designated hereon, all shares
of stock of Organogenesis Inc. (the "Company") which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
the Company to be held at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, on Tuesday, May 13, 1997 at 10:00 A.M., local time, and at any
adjournment thereof.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is given, this proxy will be
voted FOR the election of Directors and FOR Proposal 2. Attendance of the
undersigned at the meeting or at any adjournment thereof will not be deemed to
revoke this proxy unless the undersigned shall revoke this proxy in writing.
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POST-PAID RETURN ENVELOPE.
(Continued on the reverse side)
<PAGE>
PLEASE MARK YOUR VOTES AS IN THE EXAMPLE.
[X]
UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS
SET FORTH BELOW
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 & 2.
1. Election of Directors Nominee: Richard S. Cresse
Williams J. Hopke
FOR AGAINST Bjorn R. Olsen
Marguerite A. Piret
[_] [_] David T. Rovee
Anton E. Schrafl
Herbert M. Stein
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):
- -------------------------------------------------------
2. Ratification of Coopers & Lybrand L.L.P. as the Comapany's independent
accountants for the 1997 fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
SIGNATURE DATE
---------------------------------------------- ----------------
SIGNATURE DATE
---------------------------------------------- ----------------
Please sign exactly as name(s) appears hereon. If the stock is registered in
the names of two or more person, each should sign. Executors, administrators,
trustees, guardians, attorneys and corporate officers should add their title.
- -
