<PAGE>
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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 the Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive proxy statement
[_] Definitive 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)
--------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting Fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ORGANOGENESIS INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: Monday, May 22, 2000
Time: 10:00 a.m.
Place: Regal UN Plaza Hotel
1 United Nations Plaza
East 44th Street
New York, NY 10017-3575
Dear Stockholders:
You are cordially invited to attend our Annual Meeting of Stockholders and
to vote on the following proposals:
Item 1. To elect ten (10) directors to serve for the ensuing year;
Item 2. To ratify the selection by the Board of Directors of
PricewaterhouseCoopers LLP as our independent accountants for the 2000
fiscal year; and
Item 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 27, 2000 will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
By Order of the Board of Directors,
/s/ DONNA ABELLI-LOPOLITO
Donna Abelli Lopolito, Secretary
150 Dan Road
Canton, Massachusetts 02021
April 14, 2000
RETURN ENCLOSED PROXY CARD
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THIS MEETING,
PLEASE COMPLETE, SIGN AND DATE 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 22, 2000
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Organogenesis Inc. for use at the 2000
Annual Meeting of Stockholders. This meeting will be held on Monday, May 22,
2000 at 10:00 a.m. at Regal UN Plaza Hotel, 1 United Nations Plaza, East 44th
Street, New York, NY 10017.
Voting Rights and Votes Required
All properly signed and returned 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 Annual 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.
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 majority of the shares present, in
person or represented by proxy, and voting on the matter is required for
approval of each proposal, other than for the election of directors, which
requires a plurality of the votes cast at the meeting. Each director will be
elected to hold office until the next annual meeting of stockholders or until
his or her 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. We do not presently contemplate that any of the
nominees will be unavailable. With respect to the tabulation of votes,
abstentions and broker non-votes will not be counted.
Record Date and Other Information
March 27, 2000 is the record date for the determination of stockholders
entitled to vote at the meeting. On this date, an aggregate of 32,424,055
shares of common stock (excluding treasury shares) were outstanding and
entitled to vote. Each share is entitled to one vote.
Our Annual Report for the year ended December 31, 1999 is being mailed to
stockholders concurrently with this Notice and Proxy Statement on or about
April 14, 2000.
On the following pages, we have provided information relating to the Board
of Directors, principal stockholders, and executive officers, as well as other
information required to be disclosed to stockholders, including a comparative
stock performance graph. Following this information are the proposals, items
one through three, as set forth in the Notice of Annual Meeting.
Information About the Board of Directors
The Board of Directors
The Board of Directors oversees the business and affairs of Organogenesis
Inc. and monitors the performance of management. In accordance with corporate
governance principles, the Board does not involve
<PAGE>
itself in day-to-day operations. The directors keep themselves informed
through discussions with the Chief Executive Officer, other key executives,
and our principal external advisors (legal counsel and external auditors), by
reading reports and other materials that we send them, and by participating in
Board and committee meetings.
During 1999, the Board of Directors held six meetings and five telephonic
meetings. Each incumbent director attended at least 75% of the Board of
Directors meetings that were held during his or her tenure and of committees
meetings on which he or she served.
The Committees of the Board
The Audit Committee is currently comprised of Dr. Schrafl (chairman), Mr.
Cresse, Mr. Gardner and Ms. Piret. Mr. Gardner joined the committee in
November 1999. The Audit Committee held two meetings during 1999. The
responsibilities of this committee are to: (1) make recommendations to the
Board of Directors regarding the engagement of independent accountants; (2)
review the arrangements for the scope of the independent audit and the results
of the audit and to report on the same to the Board of Directors; (3)
establish and monitor policy relative to non-audit services performed by the
independent accountants; and (4) assure that the accountants are in fact
independent.
The Compensation Committee is currently comprised of Mr. Cresse (chairman),
Mr. Erani, Mr. Gardner, Dr. Olsen and Ms. Piret. Mr. Erani and Mr. Gardner
joined the committee in November 1999. The Compensation Committee held two
meetings during 1999. This committee provides recommendations to the Board of
Directors as to all elements of compensation arrangements with executive
officers. It also administers the 1986 and 1995 Employee Stock Option Plans
and the 1999 Nonqualified Stock Option Plan.
The Executive Committee is newly established in November 1999 and is
currently comprised of Mr. Erani (chairman) and Mr. Marden. Mr. Herbert Stein,
who served on the Executive Committee in 1999, resigned from the committee
effective December 31, 1999. The Executive Committee conducts business as
deemed necessary, without the formality of meetings. This committee
participates in discussions and negotiations of contracts or other
arrangements relating to major products of the company and reports to the full
Board of Directors.
The Management Organization Committee is comprised of Dr. Schrafl
(chairman), Mr. Cresse, Dr. Olsen, and Ms. Piret. The Management Organization
Committee conducts business as deemed necessary, without the formality of
meetings. This committee reviews and makes recommendation on the company's
management organization and the appointments of other company employees
referred to the committee.
The Nominating Committee is currently comprised of Mr. Cresse (chairman),
Mr. Erani and Mr. Marden. Dr. Schrafl (former chairman) and Mr. Stein resigned
from the committee effective December 31, 1999. The Nominating Committee held
two meetings during 1999. This committee identifies and recommends candidates
for nomination to the Board of Directors. It does not consider nominees
recommended by stockholders.
The Non-Officer Employee Stock Option Committee during 1999 was comprised of
Mr. Stein and Mr. Laughlin. The Non-Officer Employee Stock Option Committee
held one meeting during 1999. This committee provided recommendations to the
Board of Directors as to granting stock options to employees, who are not
officers, under the 1986 and 1995 Employee Stock Option Plans. This committee
was subsequently dissolved in November 1999 and the Board of Directors granted
the Chief Executive Officer, Mr. Laughlin, the authority to provide
recommendations to the Board of Directors as to granting stock options to
employees, who are not officers, under the 1986 and 1995 Employee Stock Option
Plans.
Compensation of Directors
Directors who are also officers of the company do not receive any
compensation for their services as directors. Directors who are not also
officers of the company receive $500 for each Board of Directors meeting
2
<PAGE>
attended, $300 for each committee meeting attended and a retainer of $1,750
per quarter. Directors are also reimbursed for out-of-pocket expenses that
they incur in connection with the business and affairs of the company.
Under the 1994 Director Stock Option Plan approved by stockholders in 1994,
stock options to purchase 15,000 shares of common stock may be granted to non-
employee directors upon their initial election as a director. In addition, the
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 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.
Information About Principal Stockholders
The following table sets forth certain information as of March 27, 2000 with
respect to the beneficial ownership of common stock by: (1) each person known
to own beneficially more than 5% of the outstanding shares of common stock;
(2) each director and nominee for director; (3) each of the executive officers
listed in the "Summary Compensation Table" contained on page eight of this
proxy; and (4) the directors and executive officers as a group:
<TABLE>
<CAPTION>
Shares of
Common Stock Percent of
Beneficially Common Stock
Name and Address of Beneficial Owner Owned (1) Outstanding
------------------------------------ ------------ ------------
<S> <C> <C>
North American Management Corp. .................. 2,739,002(2) 8.4%
Ten Post Office Square
Boston, MA 02109
Herbert M. Stein.................................. 2,086,597(3) 6.1%
71 Fairlee Road
Waban, MA 02168
Philip M. Laughlin................................ -- *
James J. Apostolakis.............................. 132,105(4) *
Richard S. Cresse................................. 121,701(5) *
Albert Erani...................................... 1,604,595(6) 4.9%
David A. Gardner.................................. 742,730(7) 2.3%
Bernard A. Marden................................. 944,153(8) 2.9%
Glenn Nussdorf.................................... 25,500(4) *
Bjorn R. Olsen, M.D., Ph.D........................ -- *
Marguerite A. Piret............................... 46,322(9) *
Anton E. Schrafl, Ph.D. .......................... 423,949(10) 1.3%
Nancy L. Parenteau, Ph.D.......................... 281,428(11) *
Michael L. Sabolinski, M.D. ...................... 372,166(11) *
Alan W. Tuck...................................... 63,649(12) *
David T. Rovee.................................... 25,000(13)
All directors and officers as a group (15
persons)......................................... 6,918,962(14) 19.2%
</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) Includes 2,625,043 shares based on information provided by North American
Management Corp; 86,207 shares of common stock that are subject to
conversion of the company's 7%, five-year convertible debentures; 25,000
shares of common stock that are subject to warrants granted in connection
with the
3
<PAGE>
company's debenture financing and 2,752 shares issued subsequent to March
27, 2000 related to interest on the debentures. 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.
Additional shares of common stock may be issued to North American for
payment of future interest due on the debentures.
(3) Includes 1,938,139 shares of common stock that are subject to outstanding
options exercisable as of March 27, 2000; 107,666 shares held by H.M.
Stein Associates and 40,792 shares owned by Mr. Stein. Does not include
1,088,623 of the 1,196,289 shares of common stock held by H.M. Stein
Associates as to which Mr. Stein disclaims beneficial ownership. Mr. Stein
retired as Chief Executive Officer and Chairman of the Board effective
December 31, 1999.
(4) Includes shares owned. Mr. Apostolakis and Mr. Nussdorf are Director
nominees as set forth herein.
(5) Includes 23,924 shares owned and 97,777 shares of common stock that are
subject to outstanding options exercisable within the 60-day period
following March 27, 2000.
(6) Includes 1,373,677 shares owned; 3,000 shares of common stock that are
subject to outstanding options exercisable within the 60-day period
following March 27, 2000; 172,414 shares of common stock that are subject
to conversion of the company's 7%, five-year convertible debentures;
50,000 shares of common stock that are subject to warrants granted in
connection with the company's debenture financing and 5,504 shares issued
subsequent to March 27, 2000 related to interest on the debentures. Does
not include 1,500 shares held by Stanmore Associates and 14,000 shares
held by Eureka Partners Pension as to which Mr. Erani disclaims beneficial
ownership.
Additional shares of common stock may be issued to Mr. Erani for payment of
future interest due on the debentures.
(7) Includes 560,395 shares owned; 137,931 shares of common stock that are
subject to conversion of the company's 7%, five-year convertible
debentures; 40,000 shares of common stock that are subject to warrants
granted in connection with the company's debenture financing and 4,404
shares issued subsequent to March 27, 2000 related to interest on the
debentures.
Additional shares of common stock may be issued to Mr. Gardner for payment
of future interest due on the debentures.
(8) Includes 807,402 shares owned; 103,448 shares of common stock that are
subject to conversion of the company's 7%, five-year convertible
debentures; 30,000 shares of common stock that are subject to warrants
granted in connection with the company's debenture financing and 3,303
shares issued subsequent to March 27, 2000 related to interest on the
debentures.
Additional shares of common stock may be issued to Mr. Marden for payment
of future interest due on the debentures.
(9) Includes 1,476 shares owned and 44,846 shares of common stock that are
subject to outstanding options exercisable within the 60-day period
following March 27, 2000.
(10) Includes 306,641 shares owned and 117,308 shares of common stock that are
subject to outstanding options exercisable within the 60-day period
following March 27, 2000.
(11) Represents shares of common stock that are subject to outstanding options
exercisable within the 60-day period following March 27, 2000.
(12) Includes 6,774 shares owned and 56,875 shares of common stock that are
subject to outstanding options exercisable within the 60-day period
following March 27, 2000.
4
<PAGE>
(13) Represents vested shares of common stock that are subject to outstanding
options exercisable as of March 27, 2000. Dr. Rovee retired as President
and Chief Operating Officer effective December 31, 1999.
(14) Includes 1,373,677 shares owned by Mr. Erani; 560,395 shares owned by Mr.
Gardner; 807,402 shares owned by Mr. Marden; 306,641 shares owned by Dr.
Schrafl; 107,666 shares held by H.M. Stein Associates and 40,792 shares
owned by Mr. Stein; 23,924 shares owned by Mr. Cresse; 1,476 shares owned
by Ms. Piret; 20,997 shares owned by Dr. Buehler; 6,774 shares owned by
Mr. Tuck; 3,122,214 shares of common stock subject to outstanding stock
options held by officers and directors that are exercisable within the
60-day period following March 27, 2000; 413,793 shares of common stock
that are subject to conversion of the company's 7%, five-year convertible
debentures; 120,000 shares of common stock that are subject to warrants
granted in connection with the company's debenture financing; and 13,211
shares issued subsequent to March 27, 2000 related to interest on the
debentures.
5
<PAGE>
Information About Executive Officers
General
The following table sets forth the name, age and current position of each
non-director executive officer and each such officer's business experience
during the past five years.
<TABLE>
<CAPTION>
Name and Age Position and Business Experience
------------ --------------------------------
<C> <S>
Donna Abelli Lopolito......... Vice President, Finance and Administration and
Age 42 Chief Financial Officer, Treasurer and
Secretary since March 1996; Partner,
PricewaterhouseCoopers LLP prior to March 1996.
Nancy L. Parenteau, Ph.D. .... Senior Vice President, Research and Development
Age 46 and Chief Scientific Officer since August 1995;
Vice President, Cell and Tissue Science from
February 1994 to August 1995.
Michael L. Sabolinski, M.D. .. Senior Vice President, Medical and Regulatory
Age 44 Affairs since August 1995; Vice President,
Medical and Regulatory Affairs from February
1994 to August 1995.
Alan W. Tuck.................. Chief Strategic Officer since September 1997;
Age 51 at various times from August 1996 to June 1998:
Strategic Advisor to Dyax Corp, Executive Vice
President and Chief Strategic Officer Biocode
Inc., and Chief Strategic Officer ImmuLogic
Pharmaceutical Corporation; President & CEO T
Cell Sciences Inc. February 1992 to May 1996.
Board of Director member of Genzyme Transgenics
Corporation and Apogee Technology, Inc.
</TABLE>
Compensation Committee Report on Executive Compensation
Overview: The Compensation Committee of the Board of Directors is now
comprised of five independent non-employee directors (and was comprised of
three such directors until November 1999) and is responsible for developing
and making recommendations to the Board of Directors with respect to
compensation policies regarding executive officers. The committee also
recommends to the Board of Directors the base annual cash compensation and
annual cash bonuses to be paid to each executive officer. Additionally, the
committee grants options to executive officers.
The 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 executive officers with the interests of
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 stock option plans. The company
also maintains a contributory 401(k) program in which executive officers may
participate. The maximum contribution that 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, at least once a year, takes into
consideration numerous factors such as: (1) compensation of executive officers
performing similar functions at comparable and competitive companies; (2)
individual performance of each executive officer, including contribution to
the company's goals; and (3) the company's short-term and long-term
6
<PAGE>
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 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. The committee granted stock options to seven executive officers in
1999 to make their compensation package fully competitive with other companies
in the industry, as well as with a broader group of companies of comparable
size and complexity.
Compensation of Chief Executive Officer: Mr. Stein, Chief Executive Officer
during 1999, was eligible to participate in the same executive compensation
programs available to other executive officers. The committee set Mr. Stein's
annual compensation at a level it believes was necessary to retain Mr. Stein
in his executive position and to be comparable with other companies in the
industry. In March 1999, Mr. Stein's annual base salary was set at $340,000,
the same annual rate as the year before.
In addition, the committee awarded Mr. Stein a cash bonus of $125,000 and
stock options to acquire an aggregate of 150,000 shares of 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 and are
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 1999 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.
While the tax impact of any compensation arrangement is one factor to be
considered, such impact is evaluated in light of the Compensation Committee's
overall compensation philosophy. The Compensation Committee intends to
establish executive officer compensation programs which will maximize the
company's tax deduction if the Compensation Committee determines that such
actions are consistent with its philosophy and in the best interests of the
company and its stockholders. However, from time to time, the Compensation
Committee may award compensation which is not fully deductible if the
Compensation Committee determines that such award is consistent with its
philosophy and in the best interests of the company and its stockholders.
Compensation Committee:
Richard S. Cresse, Chairperson
Albert Erani
David A. Gardner
Bjorn R. Olsen, M.D. Ph.D.
Marguerite M. Piret
7
<PAGE>
Summary Compensation Table
The following table sets forth information for each of the last three years
relating to the compensation of the former Chairman and Chief Executive
Officer and the four other most highly compensated executive officers who
received cash salary and bonus in excess of $100,000 during 1999
(collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Long-Term
Compensation
Securities
Annual Compensation Underlying
Name and Principal ----------------------- Stock All Other
Position Year Salary($) Bonus($) Options(#) Compensation($)
------------------ ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Herbert M. Stein......... 1999 $340,000 $125,000 150,000 $19,594(1)
Chairman and Chief 1998 351,899 145,000 187,500 19,594(1)
Executive Officer 1997 315,358 95,000 263,672 19,594(1)
(resigned from positions
12/31/99)(4)
David T. Rovee, Ph.D. ... 1999 285,000 75,000 100,000 29,862(2)
President, Chief 1998 292,558 95,000 125,000 10,542(2)
Operating Officer 1997 263,492 60,000 175,781 900(3)
(resigned from positions
10/15/99)(4)
Philip M. Laughlin....... 1999 63,993 -- 500,000 --
President and Chief 1998 -- -- -- --
Executive Officer(4) 1997 -- -- -- --
Michael L. Sabolinski, 1999 188,896 45,000 150,000 900(3)
M.D. ................... 1998 185,000 60,000 62,500 900(3)
Senior Vice President, 1997 168,077 35,000 68,359 900(3)
Medical Affairs
and Regulatory
Nancy L. Parenteau, 1999 188,896 50,000 155,000 900(3)
Ph.D. .................. 1998 184,039 65,000 68,750 900(3)
Senior Vice President, 1997 162,116 40,000 78,125 900(3)
Research and Development
and Chief Scientific
Officer
Alan W. Tuck............. 1999 210,693 45,000 150,000 900(3)
Chief Strategic Officer 1998 165,622 20,000 62,500 900(3)
1997 27,500 -- 54,688 --
</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) Amounts shown includes $28,962 for 1999 and $9,642 for 1998 related to
relocation expenses paid in accordance with Dr. Rovee's employment
agreement and $900 contributed by the company pursuant to its 401(k) Plan.
(3) Reflects amounts contributed by the company pursuant to its 401(k) Plan.
(4) Mr. Laughlin joined the company in October 1999 as President and Chief
Operating Officer. Effective January 1, 2000, he was elected as President
and Chief Executive Officer. Mr. Laughlin is a Board member. His annual
salary for 1999 was set at $325,000.
8
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth information regarding options granted during
the year ended December 31, 1999 to the Named Executive Officers:
<TABLE>
<CAPTION>
Individual Grants
-------------------------------
Number Percent of
Of Total Potential Realized Value
Securities Options at Assumed Annual Rates
Underlying Granted to of Stock Price Appreciation
Options Employees Exercise Grant Date for Option Term(2)
Granted In Fiscal Price(1) Expiration Value ----------------------------
Name (#) Year ($/Share) Date At 0% At 5% At 10%
- ---- ---------- ---------- --------- ---------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Herbert M. Stein........ 150,000 8.71% $13.3125 3/19/09 $ -- $ 1,210,011 $ 3,109,555
David T. Rovee, Ph.D.... 100,000 5.81 13.3125 3/19/09 -- 806,674 2,073,037
Philip M. Laughlin...... 500,000 29.05 6.8750 10/04/09 -- 2,161,825 5,478,490
Michael L. Sabolinski,
M.D.................... 50,000 2.90 13.3125 3/19/09 -- 403,337 1,036,518
100,000 5.81 6.9375 11/12/09 -- 436,296 1,105,659
Nancy L. Parenteau,
Ph.D................... 55,000 3.20 13.3125 3/19/09 -- 443,671 1,140,170
100,000 5.81 6.9375 11/12/09 -- 436,296 1,105,659
Alan W. Tuck............ 50,000 2.90 13.3125 3/19/09 -- 403,337 1,036,518
25,000 1.45 7.6250 8/13/09 -- 119,883 303,807
75,000 4.36 6.9375 11/12/09 -- 327,222 829,244
</TABLE>
- --------
(1) All options were granted at an exercise price equal to the fair market
value of 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. See "Compensation Arrangements".
(2) Amounts shown under these columns are the results of calculations of the
5% and 10% rates required by the SEC and are not intended to forecast
future appreciation of the 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, 1999 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........ -- $ 1,938,139 592,968 $7,993,453 $131,276
David T. Rovee, Ph.D. .. -- -- 640,232 395,315 1,984,254 87,521
Philip M. Laughlin...... -- -- -- 500,000 -- 906,500
Michael L. Sabolinski,
M.D. .................. -- -- 303,766 290,819 897,220 234,185
Nancy L. Parenteau,
Ph.D................... 18,308 161,893(3) 213,708 301,797 508,306 218,760
Alan W. Tuck............ -- -- 34,375 232,813 -- 157,813
</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, 1999 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.
9
<PAGE>
Employment Agreements
The company and Philip M. Laughlin entered into a letter agreement that was
finalized October 4, 1999 pursuant to which Mr. Laughlin served as President,
Chief Operating Officer and member of the Board of Directors. On January 1,
2000, Mr. Laughlin was elected President and Chief Executive Officer.
According to the letter agreement, Mr. Laughlin, as President and Chief
Operating Officer, is entitled to an annual base salary of $325,000, with
annual increases and bonuses to be determined at the discretion of the Board
of Directors. Pursuant to the agreement, Mr. Laughlin was granted an option to
purchase 500,000 shares of the company's common stock with 100,000 shares
vesting on each of the next five anniversaries starting from October 4, 1999.
In the event Mr. Laughlin's employment is terminated by the company for any
reason other than for justifiable cause or good reason, the company will pay
Mr. Laughlin (1) an amount equal to two year's base salary as in effect on the
termination date; (2) an amount equal to two times the amount that would have
been received as a bonus, but in any event no less than $200,000; (3) a
prorated annual incentive amount based on the year prior to termination; (4)
continued health, life and disability insurance for one year following the
termination date; and (5) all stock options which would otherwise have vested
over the next two years from the effective termination date shall vest
immediately.
Compensation Arrangements
The company has a Severance Benefits Plan for certain of its executive
officers that provides for benefit payments in the event that an officer's
employment is terminated involuntarily following a change in control of the
company. As defined in the plan, a change in control will occur: (1) in the
event that any person acquires 30% or more of the combined voting power of the
company's then outstanding securities; (2) 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; (3) in the event that
the stockholders approve a merger or consolidation of the company, other than
a merger or consolidation that 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 (4) 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 employees, including executive officers, and
directors fully vest upon a change in control, as defined above.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, 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 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 a review of the copies of such forms received by us with
respect to 1999, or written representations from certain reporting person, we
believe that, during the preceding year, directors, officers and persons who
own more than 10% of the company's common stock have complied with all filing
requirements, except that one Form 4 for Mr. Erani and two Form 4s for Mr.
Marden were filed late due to delays in preparing the filings by the company.
The information that would have been contained in these forms was subsequently
included in future Forms.
Certain Transactions
As of March 31, 1999, we raised $20,000,000 through the private placement of
7%, five-year convertible debentures and 400,000 warrants to purchase common
stock. The debentures are convertible at a fixed price of
10
<PAGE>
$14.50 per share and mature on March 29, 2004. The warrants grant the right to
purchase one share of common stock at the exercise price of $21.75 for each
$50.00 in face value of the convertible notes at any time before March 30,
2004. Mr. Erani, Mr. Gardner and Mr. Marden, all members of the Board of
Directors, purchased $2,500,000, $2,000,000 and $1,500,000, respectively, of
the convertible notes, and North American Management Corporation, a principal
stockholder, purchased $1,250,000 of the convertible notes.
Scientific Advisory Board
We have a Scientific Advisory Board 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 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 27, 2000, members of the
SAB held options, in connection with their service as SAB members, to purchase
an aggregate of 4,883 shares of common stock at an average exercise price of
$8.32 per share under the 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 and the AMEX Biotechnology Index during the five years
ending December 31, 1999. The graph and table assume $100 was invested on
December 31, 1994 in the company's common stock and in each of the foregoing
indices.
[GRAPHIC OF COMPARATIVE STOCK PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Organogenesis Inc..................... 100.00 115.57 143.08 264.10 135.12 107.48
S&P 500 Index......................... 100.00 137.49 169.01 225.36 289.71 350.53
AMEX Biotechnology Index.............. 100.00 163.01 175.85 197.93 225.60 477.02
</TABLE>
11
<PAGE>
ITEM NO. 1
ELECTION OF DIRECTORS
Unless otherwise instructed, the persons named in the enclosed proxy will
vote to elect as directors the ten nominees named below. Each director will be
elected to hold office until the next annual meeting of stockholders or until
his or her 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. We do not presently contemplate 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>
James J. Apostolakis.......... Vice Chairman, President, and Nominee 2000
Age 57 Director of Columbia
Laboratories Inc. since January
1999; Managing Director at
Poseidon Capital Corporation, an
investment banking firm, since
February of 1998; President of
Lexington Shipping & Trading
Corporation since 1973; from
1982 to 1988 Director for
Macmillan, Inc.; from 1989 to
1992 Director of Grow Group,
Inc.
Richard S. Cresse............. Consultant; Corporate Vice 1986
Age 72 President, Arthur D. Little,
Inc. from 1988 to 1997.
Albert Erani.................. Founder and Principal of A&E 1998
Age 59 Stores, Inc.
David A. Gardner.............. President, Gardner Capital 1999
Age 52 Corporation
Philip M. Laughlin............ Chief Executive Officer of 1999
Age 53 Organogenesis Inc. since January
2000; President and Chief
Operating Officer since October
1999; President of Cardiac
Surgery, Medtronic, Inc. from
1995 to September 1999;
President of Clintec Nutritional
Company from 1989 to 1995.
Bernard A. Marden............. Founder and Chairman of Oakdale 1999
Age 80 Foundation; Director of Medical
Manager Corporation.
Glenn Nussdorf................ Chairman and Chief Executive Nominee 2000
Age 45 Officer of QK Healthcare since
1999; President and Chief
Executive Officer of Quality
King since 1996, and Senior Vice
President from 1994 to 1996.
Bjorn R. Olsen, M.D., Ph.D. .. Professor of Cell Biology, 1994
Age 59 Harvard Medical School;
Chairman, Harvard-Forsyth
Department of Oral Biology,
Harvard School of Dental
Medicine.
Marguerite A. Piret........... President of Newbury, Piret & 1995
Age 52 Company, Inc., an investment
banking company, since 1981;
Trustee of the Pioneer Mutual
Funds.
Anton E. Schrafl, Ph.D. ...... Deputy Chairman of "Holderbank" 1987
Age 68 Financiere Glaris Ltd., a Swiss
manufacturer of cement, since
July 1984; Director of Apogee
Technology, Inc.
</TABLE>
The Board of Directors Recommends a Vote "For" Electing These Ten Nominees.
12
<PAGE>
ITEM NO. 2
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent accountants for the 2000 fiscal year. PricewaterhouseCoopers LLP
has served as our independent accountants since 1986. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Annual 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.
Stockholders are being asked to ratify this selection at the Annual Meeting.
The Board of Directors Recommends a Vote "FOR" Ratification of the Selection
of the Independent Accountants
ITEM NO. 3
OTHER MATTERS
We do not know of any other matters that may come before the meeting.
However, if any other matters are properly presented to the Annual 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, directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews. We 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 will be reimbursed for out-of-pocket expenses in
connection with the distribution of proxy materials.
13
<PAGE>
Deadline for Submission of Stockholders Proposals
In order to be considered for addition to the agenda for the Annual Meeting
of Stockholders in the year 2001 and to be included in the Proxy Statement and
form of proxy, stockholders' proposals must be received by the company no
later than December 4, 2000. In order to be considered for presentation at the
Annual Meeting of Stockholders in the year 2001, although not included in the
proxy statement, a stockholder proposal must comply with the requirements of
the company's Restated By-Laws and be received by us no later than February
28, 2001 and no earlier than January 26, 2001. Stockholder proposals should be
delivered in writing to the Secretary, Organogenesis Inc., 150 Dan Road,
Canton, Massachusetts 02021. A copy of the company's Restated By-Laws may be
obtained from us upon written request to the Secretary.
By Order of the Board of Directors,
/s/ Donna Abelli Lopolito
Donna Abelli Lopolito, Secretary
Canton, Massachusetts
April 14, 2000
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL
MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT
RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING AND YOUR
COOPERATION IS APPRECIATED. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY
VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
14
<PAGE>
PROXY PROXY
ORGANOGENESIS INC.
Annual Meeting of Stockholders--May 22, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, hereby appoint(s) Philip M.
Laughlin and Albert K. Federico 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. that the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders to be held at
Regal UN Plaza Hotel, 1 United Nations Plaza, East 44th Street, New York, NY
10017 on Monday, May 22, 2000 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 Item 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 ITEMS SET
FORTH BELOW.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C>
1.Election of Directors Nominees James J. Apostolakis Philip M. Laughlin Bjorn R. Olsen, M.D., Ph.D.
Richard S. Cresse Bernard A. Mard Marguerite A. Piret
Albert Erani Glenn Nussdorf Anton E. Schrafl, Ph.D.
David A. Gardner
</TABLE>
FOR [_] AGAINST [_]
FOR, except vote WITHHELD from the following nominee(s): _______________________
2. Ratify the selection by the Board of Directors of PricewaterhouseCoopers LLP
as independent accountants for the 2000 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 offi-
cers should add their titles.
