<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ADVANCED MAGNETICS, INC.
(Name of Registrant As Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / 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> 2
ADVANCED MAGNETICS, INC.
61 MOONEY STREET
CAMBRIDGE, MASSACHUSETTS 02138
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 6, 1996
------------------------
The Annual Meeting of Stockholders of Advanced Magnetics, Inc. (the
"Company") will be held at the offices of the Company, 61 Mooney Street,
Cambridge, Massachusetts 02138 on Tuesday, February 6, 1996 at 10:00 a.m., local
time, to consider and act upon the following matters:
1. To elect seven directors to serve for the ensuing year.
2. To ratify the selection by the Company's Board of Directors of Coopers
& Lybrand L.L.P. as the Company's independent accountants for the 1996
fiscal year.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on December 8, 1995 will be
entitled to vote at the meeting or any adjournment thereof. A list of the
stockholders of record entitled to vote shall be available for inspection at the
principal office of the Company for ten days prior to the Annual Meeting. The
stock transfer books of the Company will remain open.
By Order of the Board of Directors
MARLENE KAPLAN GOLDSTEIN,
Secretary
Cambridge, Massachusetts
December 28, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY
IS MAILED IN THE UNITED STATES.
<PAGE> 3
ADVANCED MAGNETICS, INC.
61 MOONEY STREET
CAMBRIDGE, MASSACHUSETTS 02138
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 6, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Advanced Magnetics, Inc. (the "Company")
for use at the Annual Meeting of Stockholders to be held at the offices of the
Company at 61 Mooney Street, Cambridge, Massachusetts 02138, on Tuesday,
February 6, 1996 and at any adjournment of the Annual Meeting. All proxies will
be voted in accordance with the stockholders' instructions, and if no choice is
specified, the proxies will be voted in favor of the matters set forth in the
accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at any
time before its exercise by delivery of written revocation to the Secretary of
the Company.
December 8, 1995 was the record date for the determination of stockholders
entitled to vote at the meeting. On that date, there were an aggregate of
6,754,328 shares of Common Stock of the Company outstanding and entitled to
vote. Each share is entitled to one vote.
The Company's Annual Report for fiscal 1995 was mailed to the stockholders
with the mailing of this Notice of Meeting and Proxy Statement on or about
December 28, 1995.
VOTES REQUIRED
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the meeting is necessary
to constitute a quorum for the transaction of business. Directors are elected by
a plurality of the votes cast by stockholders entitled to vote at the meeting.
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 for all other
matters being submitted to stockholders at the meeting. Votes withheld from any
nominee, abstentions and broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the meeting. A "non-vote" occurs when a nominee holding shares for a beneficial
owner votes on one proposal, but does not vote on another proposal because, in
respect of such other proposal, the nominee does not have discretionary voting
power and has not received instructions from the beneficial owner. Abstentions
are included in the number of shares present or represented and voting on each
matter. Broker "non-votes" are not so included. Votes will be tabulated by The
First National Bank of Boston as Transfer Agent/Registrar.
<PAGE> 4
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information, as of December 8, 1995,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) the chief executive officer and each
other executive officer of the Company as of September 30, 1995 whose annual
compensation exceeded $100,000, and (iii) all directors and officers of the
Company as a group:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF COMMON STOCK
OF BENEFICIAL OWNER(1) SHARES OUTSTANDING
----------------------- ---------- --------------
<S> <C> <C>
Jerome Goldstein(2)(3)....................... 690,422 10.2%
Marlene Kaplan Goldstein(2)(3)............... 683,137 10.1%
Eiken Chemical Co., Ltd...................... 375,000 5.6%
1-33-8 Hongo
Bunkyo-Ku
Tokyo, Japan
Lee Josephson, Ph.D.(4)...................... 157,980 2.3%
Paula M. Jacobs, Ph.D.(5).................... 23,697 *
Jerome M. Lewis(6)........................... 12,767 *
Leonard M. Baum (7).......................... 5,000 *
All directors and executive officers as a
group (14 persons)(8)...................... 2,294,926 33.3%
<FN>
- - ---------------
* Less than 1%.
(1) Unless otherwise indicated, each stockholder referred to above has sole
voting and investment power with respect to the shares listed and the
address of each stockholder is: c/o Advanced Magnetics, Inc., 61 Mooney
Street, Cambridge, Massachusetts 02138.
(2) Jerome Goldstein and Marlene Kaplan Goldstein are husband and wife, and each
disclaims control or beneficial ownership of shares held by the other.
(3) Includes 7,500 shares issuable to Jerome Goldstein pursuant to options
exercisable on or before February 6, 1996 and 14,500 shares held by the
Kaplan Goldstein Family Foundation, a charitable foundation whose trustees
are Jerome Goldstein, Marlene Kaplan Goldstein and their two adult children.
Excludes 124,930 shares held by the children of Jerome Goldstein and Marlene
Kaplan Goldstein, as to which shares each of Jerome Goldstein and Marlene
Kaplan Goldstein disclaims beneficial ownership.
(4) Includes 7,500 shares issuable to Dr. Josephson pursuant to options
exercisable on or before February 6, 1996. Excludes 16,074 shares, as to
which shares Dr. Josephson disclaims beneficial ownership, held by the
children of Dr. Josephson.
(5) Includes 12,750 shares issuable to Dr. Jacobs pursuant to options
exercisable on or before February 6, 1996 and 2,443 shares held in custodial
accounts for her children.
(6) Includes 9,940 shares issuable to Dr. Lewis pursuant to options exercisable
on or before February 6, 1996.
(7) Includes 5,000 shares issuable to Mr. Baum pursuant to options exercisable
on or before February 6, 1996.
(8) Includes 81,193 shares held in family trusts and custodial accounts for
various directors' and officers' children and 146,940 shares issuable under
options exercisable on or before February 6, 1996.
</TABLE>
2
<PAGE> 5
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect as directors the
seven nominees named below, all of whom are now directors of the Company, unless
authority to vote for the election of any or all of the directors is withheld by
marking the proxy to that effect.
Each director will be elected to hold office until the next annual meeting
of stockholders and until his successor is elected and qualified, or until his
earlier death, resignation or removal. Each of the nominees has indicated his
willingness to serve, if elected, but if a nominee should be unable to serve,
the proxies may be voted for a substitute nominee designated by management.
The following table sets forth the name and age of each nominee and the
positions and offices held by him, his principal occupation and business
experience during the past five years, the year of the commencement of his term
as a director of the Company, the number of shares of Common Stock of the
Company beneficially owned by him on December 8, 1995 and the percentage of all
outstanding shares of Common Stock owned by him.
<TABLE>
<CAPTION>
COMMENCEMENT NUMBER OF PERCENTAGE OF
OF SHARES COMMON
NAME, AGE, PRINCIPAL OCCUPATION TERM AS A BENEFICIALLY STOCK
AND BUSINESS EXPERIENCE DIRECTOR OWNED(1) OUTSTANDING
- - ---------------------------------------------------------- ------------ ------------ -------------
<S> <C> <C> <C>
Thomas Coor............................................... 1983 27,000(2) *
Dr. Coor, age 73, is a consultant. Dr. Coor is also a
director of Aston Inc., a developer of specialty
biochemicals.
Jerome Goldstein.......................................... 1981 690,422(3) 10.2%
Mr. Goldstein, age 56, is a founder of the Company and
has been Chairman of the Board of Directors, President,
Chief Executive Officer and Treasurer since the
Company's organization in November 1981.
Leslie Goldstein.......................................... 1981 330,250(2)(4) 4.9%
Mr. Goldstein, age 61, has been engaged in investment
analysis as an associate of SRG Associates since June
1977. SRG Associates is a division of Fahnestock &
Company, Inc, a security broker-dealer. Mr. Goldstein is
the brother of Jerome Goldstein.
Richard L. McIntire....................................... 1982 110,500(2)(5) 1.6%
Mr. McIntire, age 61, is Chairman of the Board of
Marketing Information Services, Inc., a developer of
computer software. He has been the Chairman of Vantage
Capital Group, an investment and consulting firm, since
November 1990.
Edward B. Roberts......................................... 1982 109,500(2)(6) 1.6%
Professor Roberts, age 60, has been Professor at the
Sloan School at the Massachusetts Institute of
Technology since 1961. He is a co-founder and the
Chairman of Pugh-Roberts Associates, Inc., a management
consulting firm that is now a division of PA Consulting
Group, Inc. He is also a general partner of Zero Stage
Capital Management, L.P., a venture capital limited
partnership.
Roger E. Travis........................................... 1981 32,361(7) *
Mr. Travis, age 57, is President of Roger E. Travis
Associates, a small business consulting firm founded by
him in 1978.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
COMMENCEMENT NUMBER OF PERCENTAGE OF
OF SHARES COMMON
NAME, AGE, PRINCIPAL OCCUPATION TERM AS A BENEFICIALLY STOCK
AND BUSINESS EXPERIENCE DIRECTOR OWNED(1) OUTSTANDING
- - ---------------------------------------------------------- ------------ ------------ -------------
<S> <C> <C> <C>
George M. Whitesides...................................... 1981 74,500(2) 1.1%
Professor Whitesides, age 56, has been a Professor of
Chemistry at Harvard University since July 1982. He is a
director of Dexter Corporation, a manufacturer of
specialty material products.
<FN>
- - ---------------
* Less than 1%.
(1) Unless otherwise indicated, each person listed above has sole voting and
investment power with respect to the shares listed.
(2) Includes 14,500 shares issuable under currently exercisable options granted
to each non-employee director.
(3) See notes 2 and 3 to the table set forth under the caption "Principal
Stockholders."
(4) Includes 21,750 shares held by Leslie Goldstein for the following charitable
foundation and trusts: 3,750 shares held by him as Trustee of the Allan
Goldstein Children's Trust, 3,000 shares held by him as Trustee for his
children and 15,000 shares held by him as Trustee of the Leslie and Roslyn
Goldstein Foundation. Includes 1,500 shares, as to which Mr. Goldstein
disclaims beneficial ownership, owned by Mr. Goldstein's wife. Does not
include 191,206 shares held in certain investment accounts over which Mr.
Goldstein exercises limited investment discretion. Mr. Goldstein has
relinquished any rights to exercise investment discretion over such shares
and accordingly disclaims beneficial ownership of such shares.
(5) Includes 50,600 shares held in joint tenancy with Mr. McIntire's wife.
(6) Includes 34,500 shares held by Dr. Roberts' wife as trustee for their
children.
(7) Includes 8,000 shares, as to which Mr. Travis disclaims beneficial ownership
of 3,000 shares, held by Mr. Travis as custodian for his children, and
includes 7,000 shares issuable under currently exercisable options granted
to Mr. Travis in his capacity as a non-employee director.
</TABLE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors met four times during the fiscal year ended
September 30, 1995 and each director attended at least 75% of the meetings of
the Board of Directors and all committees of the Board of Directors on which he
then served.
Jerome Goldstein, Roger Travis and Edward Roberts serve as members of the
Audit Committee of the Board of Directors. The Audit Committee oversees
generally the financial controls and practices of the Company. The Audit
Committee conducted three formal meetings apart from Board of Directors meetings
during the 1995 fiscal year.
4
<PAGE> 7
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION SUMMARY
The following table sets forth the annual and long-term compensation of
each of (i) the Company's Chairman of the Board of Directors, President and
Treasurer and (ii) the four other most highly compensated executive officers of
the Company who earned more than $100,000 in salary and bonus in fiscal year
1995 (collectively, the "Named Officers") for each of the fiscal years ended
September 30, 1995, 1994 and 1993:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
AWARDS(2)
ANNUAL -----------------------------------
COMPENSATION(1) SECURITIES
------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) OPTIONS/SARS(#) COMPENSATION($)
- - ---------------------------------------- ---- --------- --------------- ---------------
<S> <C> <C> <C> <C>
Jerome Goldstein........................ 1995 211,102 0 12,875(3)
Chairman of the Board of Directors, 1994 202,075 30,000 10,419(3)
Chief Executive Officer, President and 1993 193,345 0 37,472(3)
Treasurer
Lee Josephson, Ph.D..................... 1995 119,232 4,000 2,000(4)
Senior Vice President - Research 1994 113,846 2,000 2,000(4)
1993 109,038 0 2,000(4)
Paula M. Jacobs, Ph.D................... 1995 113,462 4,000 2,000(4)
Vice President - Development 1994 107,549 2,000 2,000(4)
1993 100,603 1,000 2,000(4)
Jerome M. Lewis, Ph.D................... 1995 107,114 4,000 2,000(4)
Vice President - Scientific Operations 1994 102,118 2,000 2,000(4)
1993 97,314 0 2,000(4)
Leonard M. Baum(5)...................... 1995 177,234 0 2,000(4)
Vice President - Clinical Development
<FN>
- - ---------------
(1) Excludes perquisites and other personal benefits, the aggregate annual amount of which for each
officer was less than the lesser of $50,000 or 10% of the total salary and bonus reported.
(2) The Company did not grant any restricted stock awards or stock appreciation rights or make any
long term incentive plan payouts during the fiscal years ended September 30, 1995, 1994 and 1993.
(3) Includes $10,875, $8,419 and $35,472 in premiums on a term life insurance policy related to
coverage in the fiscal years ended September 30, 1995, 1994 and 1993, respectively, in the event
of the death of Mr. Goldstein and his wife to a trust for the benefit of their children and $2,000
in contributions for Mr. Goldstein's benefit to the Company's 401(k) plan.
(4) Represents amount contributed for the benefit of the Named Officers to the Company's 401(k) plan.
(5) Mr. Baum joined the Company in October 1994.
</TABLE>
5
<PAGE> 8
<TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth grants to the Named Officers of stock
options during the fiscal year ended September 30, 1995:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES
------------------------------------------------------- OF STOCK
NUMBER PERCENT OF PRICE
OF SECURITIES TOTAL APPRECIATION
UNDERLYING OPTIONS/SARS FOR OPTION
OPTIONS/SARS GRANTED TO EXERCISE TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------
NAME (#)(1) FISCAL YEAR ($/SHARE)(1) DATE 5%($) 10%($)
---- ------------- ------------ ------------ ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Lee Josephson, Ph.D...... 2,000 5.7% 14.875 11/09/04 48,456 77,163
2,000 3.9% 22.00 08/01/05 71,666 114,118
Paula M. Jacobs, Ph.D.... 2,000 5.7% 14.875 11/09/04 48,456 77,163
2,000 3.9% 22.00 08/01/05 71,666 114,118
Jerome M. Lewis, Ph.D.... 2,000 5.7% 14.875 11/09/04 48,456 77,163
2,000 3.9% 22.00 08/01/95 71,666 114,118
<FN>
- - ---------------
(1) Stock options were granted under the Company's 1993 Stock Plan at an
exercise price equal to the fair market value of the Company's Common Stock
on the date of grant. The options have a term of ten years from the date of
grant and become exercisable as to 25% of the shares covered on each of the
first four anniversaries of the date of grant until such options are fully
exercisable thereafter.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%) on
the Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurance that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.
</TABLE>
6
<PAGE> 9
<TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information as to the Named Officers with
respect to options to purchase the Company's Common Stock held by each Named
Officer, including (i) the number of shares of Common Stock purchased upon
exercise of options in fiscal 1995, (ii) the net value realized upon such
exercise, (iii) the number of unexercised options outstanding at September 30,
1995 and (iv) the value of such unexercised options at September 30, 1995:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
SEPTEMBER 30, 1995 OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
SHARES VALUE SEPTEMBER 30, 1995(#) SEPTEMBER 30, 1995($)(2)
ACQUIRED ON REALIZED ------------------------------ ------------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerome Goldstein......... -- -- 7,500 22,500 78,550 237,022
Lee Josephson, Ph.D...... -- -- 6,500 5,500 78,813 49,688
Paula M. Jacobs, Ph.D.... 2,718 47,631 11,500 6,500 209,088 81,000
Jerome M. Lewis, Ph.D.... 3,000 37,923 8,940 6,000 147,740 56,625
Leonard M. Baum.......... -- -- 5,000 15,000 46,895 140,625
<FN>
- - ---------------
(1) Amounts disclosed in this column do not reflect amounts actually received by
the Named Officers but are calculated based on the difference between the
fair market value of the Company's Common Stock on the date of exercise and
the exercise price of the options. The Named Officers will receive cash only
if and when they sell the Common Stock issued upon exercise of the options,
and the amount of cash received by such individuals is dependent on the
price of the Company's Common Stock at the time of such sale.
(2) Value is based on the difference between the option exercise price and the
fair market value at September 30, 1995 ($25.75 per share as quoted on the
American Stock Exchange) multiplied by the number of shares underlying the
option.
</TABLE>
7
<PAGE> 10
REPORT ON EXECUTIVE COMPENSATION BY THE BOARD OF DIRECTORS
To Our Stockholders:
The Board of Directors of the Company is responsible for establishing and
administering the Company's executive compensation programs. The Company's
executive compensation policies rely on regular cash salaries and significant
equity incentives in the form of stock options.
Salaries of the five highest paid executives are listed on the Executive
Compensation Summary table found on page 5. On an annual basis, the Board
reviews these salaries and, while it is not required to, it may in its
discretion increase the salaries. The Board has typically adjusted each of its
executives' compensation by the same percentage amount. The amount of the annual
increases has historically reflected the Board's subjective assessment of the
salary level necessary for the Company to remain at the approximate median in
compensation levels when compared to other biopharmaceutical companies of
comparable size and geographical location (which together comprise a subset of
the Company's Peer Group Index referred to in the Performance Graph below), and
the Board's subjective judgment as to Company performance. In fiscal 1995, the
Board determined the Company's performance primarily by reference to the
progress of the Company's clinical trials and product development efforts. The
Board determined to grant the Named Officers the compensation disclosed in the
Executive Compensation Summary table found on page 5.
In order to align the interests of executives and other employees with
stockholders and motivate them to work for the long-term growth of the Company,
the Company provides significant stock option grants to its employees.
Executives are typically considered every two years for stock option grants, and
it is the Company's policy to weight total compensation heavily toward equity
compensation through stock options. Options are generally granted at fair market
value and become exercisable ratably over a four year period. The actual number
of stock options granted to executives is not determined pursuant to any
formula, but rather they are awarded subjectively by the Board in its
discretion.
COMPANY PERFORMANCE AND CEO COMPENSATION
The compensation of the Chief Executive Officer has typically been adjusted
annually by the same percentage as the average percentage increase for all the
Company's employees. In exercising its discretion, the Board takes into
consideration, among other things, the Company's progress in achieving the goals
of the Board of Directors (focusing in recent periods on the Company's product
development and clinical trial progress), and the compensation packages of
executive officers of comparable companies of similar size in the
biopharmaceutical industry.
As a result of the Company's performance and his individual contribution,
Jerome Goldstein was awarded the amounts reflected in the Executive Compensation
Summary table on page 5 in fiscal 1995.
Members of the Board of Directors:
<TABLE>
<S> <C>
Thomas Coor Edward B. Roberts
Jerome Goldstein Roger E. Travis
Leslie Goldstein George M. Whitesides
Richard L. McIntire
</TABLE>
COMPENSATION OF DIRECTORS
During the fiscal year ended September 30, 1995, directors received no cash
compensation for their services as directors, except for reimbursement of
expenses incurred in connection with attending meetings.
Under the terms of the 1992 Director Plan, each person who was a member of
the Company's Board of Directors on November 5, 1991, and who was not an
employee or an officer of the Company, was automatically granted on such date an
option to purchase 5,000 shares of the Company's Common Stock, and will receive
an option to purchase an additional 5,000 shares on each successive fifth
anniversary of November 5, 1991 if he or she is then a member of the Board of
Directors. The exercise price of options granted under
8
<PAGE> 11
the 1992 Director Plan is the fair market value of the Company's Common Stock on
the date the option is granted (subject to adjustment for any dividend, stock
split or other relevant change in the Company's capitalization). Each option
granted under the 1992 Director Plan first becomes exercisable with respect to
20% of the shares subject to such option on the day preceding each annual
anniversary of the date of grant, until the option is exercisable with respect
to all of the shares subject thereto.
Under the terms of the 1993 Director Plan, each person who was a member of
the Company's Board of Directors on November 10, 1992, and who was not an
employee or an officer of the Company, was automatically granted on such date an
option to purchase 5,000 shares of the Company's Common Stock, and will receive
an option to purchase an additional 5,000 shares on each successive sixth
anniversary of November 10, 1992 if he or she is then a member of the Board of
Directors. The exercise price of options granted under the 1993 Director Plan is
the fair market value of the Company's Common Stock on the date the option is
granted (subject to adjustment for any dividend, stock split or other relevant
change in the Company's capitalization). Each option granted under the 1993
Director Plan first becomes exercisable with respect to 20% of the shares
subject to such option on the day preceding each annual anniversary of the date
of grant, until the option is exercisable with respect to all of the shares
subject thereto.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not have a Compensation Committee. The Board of Directors
was responsible for determining compensation of executive officers of the
Company. During the fiscal year ended September 30, 1995, Jerome Goldstein, the
Company's Chairman of the Board of Directors, President, Chief Executive Officer
and Treasurer, participated in the establishment and administration of the
Company's executive compensation programs. Mr. Goldstein abstained from voting
with respect to decisions concerning his compensation as an executive officer of
the Company.
9
<PAGE> 12
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended September 30, 1995 with the cumulative total return on the American
Stock Exchange Market Value Index and the Company's Peer Group based on SIC Code
2835 (in vitro and in vivo diagnostic substances). The comparison assumes $100
was invested on September 28, 1990 in the Company's Common Stock in the American
Stock Exchange Market Value Index and with the Company's Peer Group and assumes
reinvestment of dividends, if any.
<TABLE>
<CAPTION>
Measurement Period Advanced
(Fiscal Year Covered) Magnetics, Inc. Industry Index Broad Market
--------------------- --------------- -------------- ------------
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 253.72 218.97 119.92
1992 174.91 130.53 125.15
1993 199.90 149.72 146.91
1994 251.80 138.45 149.73
1995 395.95 199.55 180.41
</TABLE>
The stock price performance shown on the graph is not necessarily
indicative of future price performance. Information used in the graph was
obtained from Media General Financial Services, a source the Company believes is
reliable. However, the Company is not responsible for any errors or omissions in
such information.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors has
selected the firm of Coopers and Lybrand L.L.P., as the Company's independent
accountants for the 1996 fiscal year. Coopers & Lybrand L.L.P. has served as the
Company's independent accountants since the Company's inception. Representatives
of Coopers & Lybrand L.L.P. are expected to be present at the Annual Meeting.
They will have the opportunity to make a statement if they desire to do so and
will also be available to respond to appropriate questions from stockholders.
The Board of Directors recommends a vote FOR the ratification of this selection.
10
<PAGE> 13
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual 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.
All costs of solicitation of 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. 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 this connection.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Cambridge, Massachusetts not later than August 30, 1996 for inclusion in the
proxy statement for that meeting.
By Order of the Board of Directors
MARLENE KAPLAN GOLDSTEIN,
secretary
December 28, 1995
THE BOARD OF DIRECTORS WELCOMES STOCKHOLDERS WHO WISH TO 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. A 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.
11
<PAGE> 14
ADVANCED MAGNETICS, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 6, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned, revoking all prior proxies, hereby appoint(s) Jerome
O Goldstein and Edward B. Roberts, and each of them, with full power of
X substitution, as proxies to represent and vote as designated herein, all
Y shares of stock of Advanced Magnetics, 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 offices of the
Company, 61 Mooney Street, Cambridge, Massachusetts 02138, on Tuesday,
February 6, 1996 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, FOR THE PROPOSAL IN ITEM
2, AND AUTHORITY WILL BE DEEMED GRANTED UNDER ITEM 3. 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.
-------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-------------
ADVANCED MAGNETICS, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 6, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned, revoking all prior proxies, hereby appoint(s) Jerome
O Goldstein and Edward B. Roberts, and each of them, with full power of
X substitution, as proxies to represent and vote as designated herein, all
Y shares of stock of Advanced Magnetics, 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 offices of the
Company, 61 Mooney Street, Cambridge, Massachusetts 02138, on Tuesday,
February 6, 1996 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, FOR THE PROPOSAL IN ITEM
2, AND AUTHORITY WILL BE DEEMED GRANTED UNDER ITEM 3. 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.
-------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-------------
<PAGE> 15
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
<TABLE>
<S> <C>
1. To Elect Directors. 2. To ratify the selection of FOR AGAINST ABSTAIN
Coopers and Lybrand LLP as the / / / / / /
NOMINEES: Thomas Coor, Jermone Goldstein, Leslie accountants for the fiscal year
Goldstein, Richard L McIntire, Edward B Roberts, Roger ending September 30, 1996
E. Travis and George M. Whitesides
3. To transact such other business as may properly come
FOR WITHHELD before the Meeting.
/ / / /
MARK HERE MARK HERE IF
FOR ADDRESS / / YOU PLAN TO / /
CHANGE AND ATTEND THE
NOTE AT LEFT MEETING
/ /
- - -----------------------------------------
For all nominees expect as noted above Sign as name appears. Joint owners must both sign. Attorney,
executor, administrator, trustee or guardian must give title.
A corporation or partnership must sign in its name by
authorized person.
Signature: Date:
------------------------------- -------------
Signature: Date:
------------------------------- -------------
</TABLE>
