<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
REGISTRANT [_]
----------------
Check the appropriate box:
[_]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X]Definite Proxy Statement
[_]Definite Additional Materials
[_]Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
----------------
ORGANOGENESIS INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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 the 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, 1998
The Annual Meeting of Stockholders of Organogenesis Inc. (the "Company")
will be held at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, on Friday, May 15, 1998 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 1998 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 20, 1998 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, 1998
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, 1998
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 1998 Annual Meeting of Stockholders to be held on Friday, May 15,
1998 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 20, 1998, the record date for the determination of stockholders
entitled to vote at the Meeting, there were outstanding and entitled to vote
an aggregate of 23,166,524 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, 1997 is
being mailed to the stockholders concurrently with this Notice and Proxy
Statement on or about April 8, 1998.
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>
FIRST
PRINCIPAL OCCUPATION, BECAME A
NAME AND AGE BUSINESS EXPERIENCE AND DIRECTORSHIPS DIRECTOR
------------ ------------------------------------- --------
<C> <S> <C>
Richard S. Cresse............ Consultant; Former Corporate Vice 1986
Age 70 President, Arthur D. Little, Inc.
from 1988 to 1997.
Kenneth J. Novack............ Chairman of the Business and Finance 1998
Age 56 Section of the Boston-based law firm
of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. and serves on
its Executive Committee; Advisor to
the Chairman of America Online, Inc.;
Director of Appleton Partners, Inc.
and Ekco Group, Inc. and Advisory
Director of Gordon Brothers
Companies; as well as Chairman of the
Mintz Levin Foundation.
Bjorn R. Olsen, M.D., Ph.D... Professor of Oral Biology and 1994
Age 57 Chairman, Harvard-Forsyth Department
of Oral Biology, Forsyth Dental
Center, Harvard School of Dental
Medicine since 1998. Hersey Professor
of Cell Biology, Department of Cell
Biology, Harvard Medical School prior
to 1998.
Marguerite A. Piret.......... President of Newbury, Piret & 1995
Age 50 Company, Inc., an investment banking
company, since 1981; Director of the
Pioneer Mutual Funds.
David T. Rovee, Ph.D......... President and Chief Operating Officer 1994
Age 58 of the 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.
Anton E. Schrafl, Ph.D....... Deputy Chairman of "Holderbank" 1987
Age 66 Financiere Glaris Ltd., a Swiss
manufacturer of cement, since July
1984; Director of Apogee Technology,
Inc.
Herbert M. Stein............. Chairman of the Board of Directors of 1986
Age 69 the Company since February 1991;
Chief Executive Officer of the
Company since January 1987; 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 was comprised of Dr. Schrafl,
Messrs. Cresse and Hopke and Ms. Piret. The Audit Committee held one meeting
during 1997. 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 did not hold any meetings
during 1997. 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 was comprised of Dr.
Olsen and Messrs. Cresse and Hopke. The Compensation Committee held two
meetings during 1997. 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 1997, the Board of Directors of the Company held four meetings, one
telephonic meeting, and had one written action in lieu of a meeting. Each
incumbent director, with the exception of William J. Hopke, 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
15,000 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 10,000 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 20, 1998 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
BENEFICIALLY STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OUTSTANDING
- ------------------------------------ ------------ -----------
<S> <C> <C>
North American Management Corp..................... 2,134,545(2) 9.2%
Ten Post Office Square
Boston, MA 02109
Stanmore Associates, L.P........................... 1,957,134(3) 8.4%
41 East 42nd Street
New York, New York 10017
Herbert M. Stein................................... 1,480,174(4) 6.0%
71 Fairlee Road
Waban, MA 02168
David T. Rovee, Ph.D............................... 397,655(5) 1.7%
Richard S. Cresse.................................. 83,203(6) *
William J. Hopke................................... 9,766(5) *
Kenneth J. Novack.................................. 781(7) *
Bjorn R. Olsen, M.D., Ph.D......................... -- *
Marguerite A. Piret................................ 15,938(5) *
Anton E. Schrafl, Ph.D............................. 314,361(8) 1.3%
Robert J. Buehler, Ph.D............................ 47,660(9) *
Nancy L. Parenteau, Ph.D........................... 126,563(10) *
Michael L. Sabolinski, M.D......................... 186,526(5) *
All directors and officers as a group (13
persons).......................................... 2,687,627(11) 10.5%
</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 September 22, 1997 with the
Securities and Exchange Commission.
(4) Includes 1,374,608 shares of Common Stock which are subject to outstanding
options exercisable within the 60-day period following March 20, 1998;
86,132 shares held by H.M. Stein Associates and 19,434
4
<PAGE>
shares owned. Does not include 870,899 of the 957,031 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 20, 1998.
(6) Includes 12,889 shares owned and 70,314 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 20, 1998.
(7) Includes 781 shares owned.
(8) Includes 236,235 shares owned and 78,126 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 20, 1998.
(9) Includes 16,798 shares owned and 30,862 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 20, 1998.
(10) Includes 3,906 shares owned and 122,657 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 20, 1998.
(11) Includes 86,132 shares held by H.M. Stein Associates, 19,434 shares held
by Mr. Stein, 236,235 shares held by Dr. Schrafl, 12,889 shares held by
Mr. Cresse, 781 shares held by Mr. Novack, 16,798 shares held by Dr.
Buehler, 3,906 shares held by Dr. Parenteau and 2,311,452 shares of
Common Stock subject to outstanding stock options held by officers and
directors which are exercisable within the 60-day period following March
20, 1998.
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
--------- --------------------------------
<C> <S>
Donna L. Abelli.............. Vice President, Finance and Administration and Chief
Age 40 Financial Officer, Treasurer and Secretary since
March 1996; Partner, Coopers & Lybrand L.L.P. prior
to March 1996.
Robert J. Buehler, Ph.D...... Vice President, Operations since November 1995;
Age 50 Director, Process Development from August 1994 to
November 1995; Director, Quality Assurance from June
1993 to August 1994.
Nancy L. Parenteau, Ph.D. ... Senior Vice President, Research and Development and
Age 44 Chief Scientific Officer since August 1995; Vice
President, Cell and Tissue Science from February
1994 to August 1995; Director, Cell Biology Research
prior to February 1994.
Michael L. Sabolinski, M.D... Senior Vice President, Medical and Regulatory
Age 42 Affairs since August 1995; Vice President, Medical
and Regulatory Affairs from February 1994 to August
1995; Director of Clinical and Regulatory Affairs
prior to February 1994.
Alan W. Tuck................. Chief Strategic Officer since September 1997;
Age 49 Officer of the Company since March 1998; Strategic
Advisor to Dyax Corp since October 1997; Executive
Vice President and Chief Strategic Officer Biocode
Inc. October 1996--July 1997; Chief Strategic
Officer ImmuLogic Pharmaceutical Corporation August
1996--March 1997; President & CEO T Cell Sciences
Inc. February 1992--May 1996; Vice President
Marketing and Business Development Biogen Inc.
October 1987--November 1991. Director of Genzyme
Transgenics Corporation and Biocode Inc.
</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 March 1 of each year 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 1997 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.
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
7
<PAGE>
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 1997, Mr. Stein's annual base salary
was increased to $316,440 from $293,000 the year before.
In addition, the Committee awarded Mr. Stein a cash bonus of $95,000 and
stock options to acquire an aggregate of 210,938 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.
In May 1997, the Board of Directors voted to amend an option granted to Mr.
Stein in 1987. The option, which was due to expire in May 1997, was extended
for an additional five years. The terms of this fully vested option are to
purchase 585,938 shares of Common Stock at an exercise price of $3.84. The
bonus and stock options awarded reflect achievement of and progress towards
the Company's and Mr. Stein's principal 1996 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
$100,000 during 1997 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
SECURITIES
ANNUAL COMPENSATION UNDERLYING
----------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- --------------------------- ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Herbert M. Stein........... 1997 $315,358 $ 95,000 210,938 $19,594(1)
Chairman and Chief 1996 291,969 95,000 210,938 19,594(1)
Executive Officer
1995 266,200 219,798 117,188 19,594(1)
David T. Rovee, Ph.D....... 1997 263,492 60,000 140,625 900(2)
President, Chief Operating
Officer 1996 243,346 60,000 140,625 900(2)
1995 220,481 86,439 78,125 900(2)
Michael L. Sabolinski,
M.D....................... 1997 168,077 35,000 54,688 900(2)
Senior Vice President, 1996 158,154 35,000 70,313 900(2)
Medical Affairs
and Regulatory 1995 146,385 52,480 58,594 900(2)
Nancy L. Parenteau, Ph.D... 1997 162,116 40,000 62,500 900(2)
Senior Vice President,
Research and 1996 145,385 30,000 70,313 900(2)
Development and Chief
Scientific Officer 1995 122,289 38,480 39,063 900(2)
Robert J. Buehler, Ph.D.... 1997 126,731 40,000 39,062 900(2)
Vice President,
Operations(3) 1996 111,789 15,000 15,625 900(2)
1995 99,216 1,000 15,625 900(2)
</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 $10,000 paid for personal financial consulting services.
(2) Reflects amounts contributed by the Company pursuant to its 401(k) Plan.
(3) Dr. Buehler joined the Company in December 1987 and was appointed as an
executive officer of the Company in November 1995.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding options granted
during the fiscal year ended December 31, 1997 by the Company to the Named
Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------
NUMBER PERCENT OF
OF TOTAL POTENTIAL REALIZED VALUE
SECURITIES OPTIONS AT ASSUMED ANNUAL RATES
UNDERLYING GRANTED TO OF STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES EXERCISE GRANT DATE FOR OPTION TERM(2)
GRANTED IN FISCAL PRICE(1) EXPIRATION VALUE ----------------------------
NAME (#) YEAR ($/SHARE) DATE 0% ($) 5% ($) 10% ($)
- ---- ---------- ---------- --------- ---------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert M. Stein........ 210,938 14.40% $14.40 3/14/07 $ -- $1,910,272 $4,841,004
Herbert M. Stein (3).... 585,938 41.28% 3.84 5/07/02 6,304,688 8,668,192 11,527,415
David T. Rovee, Ph.D.... 140,625 9.90 14.40 3/14/07 -- 1,273,512 3,227,328
Michael L. Sabolinski,
M.D.................... 54,688 3.85 14.40 3/14/07 -- 495,259 1,255,084
Nancy L. Parenteau,
Ph.D................... 62,500 4.40 14.40 3/14/07 -- 566,005 1,434,368
Robert J. Buehler,
Ph.D................... 39,062 2.75 14.40 3/14/07 -- 353,749 896,469
</TABLE>
- --------
(1) All options were granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options are
exercisable in five equal annual installments of 20% each year commencing
one year from the date of grant. In addition, the options vest fully in
the event of a "Change in Control" of the Company. See "Compensation
Arrangements".
(2) Amounts shown under these columns are the results of calculations of the
5% and 10% rates required by the Securities and Exchange Commission and
are not intended to forecast future appreciation of the Company's stock
price. The table does not take into account any appreciation in the price
of the Common Stock to date.
(3) In May 1997, the Board of Directors voted to amend an option granted to
Mr. Stein in 1987. The option, which was due to expire in May 1997, was
extended for an additional five years. This option is fully vested.
The following table sets forth certain information regarding options held as
of December 31, 1997 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR-END(1) FISCAL YEAR-END($)(1)(2)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Herbert M. Stein........ -- $ -- 1,243,357 511,527 $27,276,982 $8,206,454
David T. Rovee, Ph.D.... -- -- 310,155 338,282 6,551,220 5,407,776
Michael L. Sabolinski,
M.D.................... -- -- 141,993 163,674 2,951,369 2,706,847
Nancy L. Parenteau,
Ph.D................... 24,414 516,311(3) 80,470 167,579 1,671,375 2,733,304
Robert J. Buehler,
Ph.D................... 29,298 613,149(3) 19,924 65,037 371,431 917,075
</TABLE>
- --------
(1) Options granted under the 1986 and 1995 Stock Option Plans 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, 1997 and the option exercise price.
10
<PAGE>
(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.
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 1997, or written representations from certain reporting person, the
Company believes that during the preceding year its directors and officers and
persons who own more than 10% of the Company's Common Stock have complied with
all filing requirements, except that one report was not filed on a timely
basis covering additional shares acquired during one month by Dr. Schrafl, a
director of the Company.
COMPENSATION ARRANGEMENTS
The Company has 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,
and directors 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 $217,691 and
$203,000 during 1997 and 1996, 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 amount was paid in its entirety in December
1997.
11
<PAGE>
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. are legal counsel to the
Company. Mr. Kenneth J. Novack, who joined the Company's Board of Directors in
March 1998, is Chairman of the Business and Finance Section of this firm and
serves on its Executive Committee.
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 20, 1998, members of the SAB held options, in connection with
their service as SAB members, to purchase an aggregate of 8,789 shares of the
Company's Common Stock at an average exercise price of $6.33 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, 1997. The graph
and table assume $100 was invested on December 31, 1992 in the Company's
Common Stock and in each of the foregoing indices.
LOGO
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Organogenesis, Inc................... 100.00 100.00 220.83 255.21 315.97 583.22
S&P 500 Index........................ 100.00 110.03 111.53 153.29 188.39 251.17
Coopers & Lybrand Biotech Index...... 100.00 102.51 98.67 187.40 215.38 237.89
AMEX Biotechnology Index............. 100.00 67.85 48.09 78.39 84.56 95.18
</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 1998 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 1999 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 4, 1998.
By Order of the Board of Directors,
/s/ Donna L. Abelli
Donna L. Abelli, Secretary
Canton, Massachusetts
April 8, 1998
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 IS
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 15, 1998
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 Friday, May 15, 1998 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 and to be signed on reverse side)
<PAGE>
PLEASE MARK YOUR VOTES AS IN THIS 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 AND 2.
1. Election of Directors Nominees: Richard S. Cresse
Kenneth J. Novack
Bjorn R. Olsen, M.D., Ph.D.
Marguerite A. Piret
David T. Rovee, Ph.D.
Anton E. Schrafl, Ph.D.
Herbert M. Stein
FOR AGAINST
[ ] [ ]
FOR, except vote WITHHELD from the following nominee(s):
- -------------------------------------------------------
2. Ratification of Coopers & Lybrand L.L.P. as the Company's independent
accountants for the 1998 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 persons, each should sign. Executors, administrators,
trustees, guardians, attorneys and corporate officers should add their titles.
