SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sect. 240.14a-11(c) or Sect. 240.14a-12
PROGENICS PHARMACEUTICALS, 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 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>
PROGENICS PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown, New York 10591
May 1, 1998
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Tuesday, June 9, 1998 at 1:00 p.m. local time at the
Westchester Marriott Hotel, 670 White Plains Road, Tarrytown, New York.
At this meeting, you will be asked to consider and vote upon the
election of directors of the Company, an amendment to the Company's Amended
1996 Stock Incentive Plan, the adoption of the Company's 1998 Employee Stock
Purchase Plan and 1998 Non-Qualified Employee Stock Purchase Plan and the
ratification of the Board of Directors' selection of Coopers & Lybrand L.L.P.
to serve as the Company's independent accountants for the fiscal year ending
December 31, 1998.
The Board of Directors appreciates and encourages stockholder
participation in the Company's affairs and cordially invites you to attend the
meeting in person. It is in any event important that your shares be
represented and we ask that you sign, date and mail the enclosed proxy in the
envelope provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
PAUL J. MADDON, M.D., PH.D.
Chairman of the Board of Directors
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown, New York 10591
________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
________________________________
Tarrytown, New York
May 1, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
PROGENICS PHARMACEUTICALS, INC. (the "Company"), a Delaware corporation, will
be held at the Westchester Marriott Hotel, 670 White Plains Road, Tarrytown,
New York on Tuesday, June 9, 1998 at 1:00 p.m. local time, for the purposes of
considering and voting upon the following matters, as more fully described in
the attached Proxy Statement:
1. To elect seven directors to serve until the next annual meeting
of stockholders and until their respective successors are elected and
qualified;
2. To approve and adopt an amendment to the Company's Amended 1996
Stock Incentive Plan increasing the maximum number of shares of the
Company's Common Stock available thereunder for issuance from 1,050,000 to
2,000,000;
3. To approve and adopt the Company's 1998 Employee Stock Purchase
Plan providing for the issuance of up to 150,000 shares of the Company's
Common Stock thereunder and the Company's 1998 Non-Qualified Employee
Stock Purchase Plan providing for the issuance of up to 50,000 shares of
the Company's Common Stock thereunder;
4. To ratify the Board of Directors' selection of Coopers & Lybrand
L.L.P. to serve as the Company's independent accountants for the fiscal
year ending December 31, 1998; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only those stockholders of record at the close of business on May 1,
1998 will be entitled to receive notice of, and vote at, said meeting. A list
of stockholders entitled to vote at the meeting is open to examination by any
stockholder at the principal offices of the Company, 777 Old Saw Mill River
Road, Tarrytown, New York 10591.
All stockholders are cordially invited to attend the meeting in
person. In any event, please mark your votes, then date, sign and return the
accompanying form of proxy in the envelope enclosed for that purpose (to which
no postage need be affixed if mailed in the United States) whether or not you
expect to attend the meeting in person. Please note that the accompanying form
of proxy must be returned to record your vote. The proxy is revocable by you
at any time prior to its exercise. The prompt return of the proxy will be of
assistance in preparing for the meeting and your cooperation in this respect
will be appreciated.
By order of the Board of Directors
ROBERT A. MCKINNEY
Secretary
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown, New York 10591
________________________________
PROXY STATEMENT
________________________________
This Proxy Statement is furnished to holders of the Common Stock, par
value $.0013 per share (the "Common Stock"), of Progenics Pharmaceuticals, Inc.
(the "Company") in connection with the solicitation of proxies, in the
accompanying form, by the Board of Directors of the Company, for use at the
Annual Meeting of Stockholders to be held at the Westchester Marriott Hotel,
670 White Plains Road, Tarrytown, New York on Tuesday, June 9, 1998, at 1:00
p.m. local time, and at any and all adjournments thereof. Stockholders may
revoke the authority granted by their execution of proxies at any time prior to
their use by filing with the Secretary of the Company a written revocation or
duly executed proxy bearing a later date or by attending the meeting and voting
in person. Solicitation of proxies will be made chiefly through the mails, but
additional solicitation may be made by telephone or telegram by the officers or
regular employees of the Company. The Company may also enlist the aid of
brokerage houses or the Company's transfer agent in soliciting proxies. All
solicitation expenses, including costs of preparing, assembling and mailing
proxy material, will be borne by the Company. This proxy statement and
accompanying form of proxy are being mailed to stockholders on or about May 1,
1998.
Shares of the Common Stock represented by executed and unrevoked
proxies will be voted in accordance with the choice or instructions specified
thereon. It is the intention of the persons named in the proxy, unless
otherwise specifically instructed in the proxy, to vote all proxies received by
them FOR the election of the seven nominees named herein, FOR the approval and
adoption of the amendment to the Company's Amended 1996 Stock Incentive Plan,
FOR the approval and adoption of the Company's 1998 Employee Stock Purchase
Plan and 1998 Non-Qualified Employee Stock Option Plan and FOR ratification of
the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the
Company's independent accountants for the fiscal year ending December 31, 1998.
If a quorum is present at the meeting, those nominees receiving a
plurality of the votes cast will be elected as directors. A majority of the
votes cast (excluding abstentions and broker non-votes) will be required for
the approval and adoption of the amendment to the Company's Amended 1996 Stock
Incentive Plan, for the approval and adoption of the Company's 1998 Employee
Stock Purchase Plan and 1998 Non-Qualified Employee Stock Purchase Plan and for
the ratification of the Board's selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants.
VOTING
Only stockholders of record at the close of business on May 1, 1997
will be entitled to vote at the meeting or any and all adjournments thereof.
As of May 1, 1997 the Company had outstanding 9,003,753 shares of the Common
Stock, the Company's only class of voting securities outstanding. Each
stockholder of the Company will be entitled to one vote for each share of the
Common Stock registered in his or her name on the record date. A majority of
all shares of the Common Stock outstanding constitutes a quorum and is required
to be present in person or by proxy to conduct business at the meeting.
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<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK BY CERTAIN
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information, as of April 20,
1998, except as noted, regarding the beneficial ownership of the Common Stock
by (i) each person or group known to the Company to be the beneficial owner of
more than 5% of the Common Stock outstanding, (ii) each director and nominee
for director of the Company, (iii) each executive officer of the Company named
below and (iv) all directors and executive officers of the Company as a group.
Except as otherwise specified, the named beneficial owner has sole voting and
investment power over the shares listed.
Number of Shares
Beneficially Percent of
Name and Address of Beneficial Owner (1) Owned (2) Class (2)
Entities affiliated with Tudor
Investment Corporation (3)............ 2,384,314 25.9%
600 Steamboat Road with
Greenwich, CT 06830
Paul Tudor Jones, II (4).............. 2,872,939 31.2%
600 Steamboat Road
Greenwich, CT 06830
Paul J. Maddon, M.D., Ph.D.(5)........ 1,425,000 14.7%
Charles A. Baker (6).................. 48,750 *
Mark F. Dalton (7).................... 2,432,314 26.4%
Stephen P. Goff, Ph.D. (8)............ 63,750 *
Elizabeth M Greetham (9).............. 262,500 2.9%
Paul F. Jacobson (10)................. 189,039 2.1%
David A. Scheinberg, M.D., Ph.D.(11).. 127,868 1.4%
Robert J. Israel, M.D.(12)............ 58,126 *
Robert A. McKinney (13)............... 65,000 *
All directors and executive officers
as a group (14)...................... 4,672,347 45.6%
_______________________________
* Less than 1%
(1) Unless otherwise specified, the address of each beneficial owner is c/o the
Company, 777 Old Saw Mill River Road, Tarrytown, New York 10591.
(2) Except as indicated and pursuant to applicable community property laws,
each stockholder possesses sole voting and investment power with respect to
the shares of Common Stock listed. The number of shares of Common Stock
beneficially owned includes the shares issuable pursuant to stock options
and warrants that may be exercised within 60 days after April 30, 1998.
Shares pursuant to such options and warrants are deemed outstanding for
computing the percentage of beneficial ownership of the person holding such
options and warrants but are not deemed outstanding for computing the
percentage of beneficial ownership of any other person.
(3) The number of shares owned by entities affiliated with Tudor Investment
Corporation ("TIC") consists of 1,704,501 shares held of record by Tudor
BVI Futures, Ltd., an international business company organized under the
law of the British Virgin Islands ("Tudor BVI"), 142,851 shares of Common
Stock issuable to Tudor BVI upon the exercise of currently exercisable
warrants, 287,813 shares held of record by TIC, 164,499 shares held of
record by Tudor Arbitrage Partners L.P. ("TAP"), 41,125 shares of Common
Stock issuable to TAP upon the exercise of currently exercisable warrants,
22,500 shares held of record by Tudor Proprietary Trading, L.L.C. ("TPT"),
5,625 shares of Common Stock issuable to TPT upon the exercise of currently
exercisable warrants and 15,400 shares of Common Stock issuable to Tudor
Global Trading LLC ("TGT") upon the exercise of currently exercisable
warrants. In addition, because TIC provides investment advisory services
to Tudor BVI, it may be deemed to beneficially own the shares held by such
entity. TIC disclaims beneficial ownership of such shares. TGT is the
general partner of TAP. TGT disclaims beneficial ownership of shares held
by TAP. The number set forth does not include shares owned of record by
Mr. Jones and Mr. Dalton. See Notes 4 and 7.
-3-
<PAGE>
(4) Includes 2,384,314 shares beneficially owned by entities affiliated with
TIC. Mr. Jones is the Chairman and principal stockholder of TIC, the
Chairman and indirect principal equity owner of TGT, the indirect principal
equity owner of TAP and the Chairman and indirect principal equity owner of
TPT. Mr. Jones may be deemed the beneficial owner of shares beneficially
owned, or deemed beneficially owned, by entities affiliated with TIC. Mr.
Jones disclaims beneficial ownership of such shares. See Note 3.
(5) Includes 675,000 shares subject to stock options held by Dr. Maddon and
exercisable within 60 days of the date hereof.
(6) Includes 3,750 shares of Common Stock issuable to the Baker Family Limited
Partnership ("BFLP") upon the exercise of currently exercisable warrants,
15,000 shares owned by the BFLP, and 30,000 shares subject to stock options
held by Mr. Baker and exercisable within 60 days of the date hereof.
(7) Includes 31,500 shares held of record directly by Mr. Dalton and 16,500
shares of record held by DF Partners, a family partnership of which Mr.
Dalton is the managing general partner with a 5% interest. The remaining
95% partnership interest is held by trusts for the benefit of Mr. Dalton's
children. As to such 95% interest, Mr. Dalton disclaims beneficial
interest. The number set forth includes 2,384,314 shares beneficially
owned by entities affiliated with TIC. Mr. Dalton is President of TIC, TGT
and TPT. Mr. Dalton disclaims beneficial ownership of shares beneficially
owned, or deemed beneficially owned, by entities affiliated with TIC. See
Note 3.
(8) Includes 26,250 shares subject to stock options held by Dr. Goff
exercisable within 60 days of the date hereof.
(9) Consists of 131,250 shares held of record by Weiss, Peck & Greer ("WPG")
Life Sciences Fund, L.P. ("WPGLSF") and 5,625 shares of Common Stock
issuable to WPGLSF upon the exercise of currently exercisable warrants and
116,250 shares held of record by WPG Institutional Life Sciences Fund,
L.P.("WPGILSF") and 9,375 shares of Common Stock issuable to WPGILSF upon
the exercise of currently exercisable warrants. Ms. Greetham, who is the
Portfolio Manager for both WPGLSF and WPGILSF, disclaims beneficial
ownership of all such shares except to the extent of her beneficial
interest in WPGLSF.
(10)Includes 3,750 shares of Common Stock issuable to Mr. Jacobson upon the
exercise of currently exercisable warrants and 27,000 shares subject to
stock options held by Mr. Jacobson exercisable within 60 days of the date
hereof.
(11)Includes 938 shares of Common Stock issuable to Dr. Scheinberg upon the
exercise of currently exercisable warrants and 123,180 shares subject to
stock options held by Dr. Scheinberg exercisable within 60 days of the date
hereof.
(12)Consists of 58,126 shares subject to stock options held by Dr. Israel
exercisable within 60 days of the date hereof.
(13)Consists of 65,000 shares subject to stock options held by Mr. McKinney
exercisable within 60 days of the date hereof.
(14)Includes shares held by affiliated entities as set forth in the above table
and 1,232,995 shares in the aggregate issuable upon the exercise of stock
options or warrants held by officers or directors or entities deemed
affiliates of certain directors.
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<PAGE>
PROPOSAL I: ELECTION OF DIRECTORS
At the meeting, seven directors (constituting the entire Board of
Directors) are to be elected to serve until the next annual meeting of
stockholders and until their respective successors are elected and qualified.
The proxies given pursuant to this solicitation will be voted in favor of the
seven nominees listed below unless authority is withheld. Should a nominee
become unavailable to serve for any reason, the proxies will be voted for an
alternative nominee to be determined by the persons named in the proxy. The
Board of Directors has no reason to believe that any nominee will be
unavailable. Proxies cannot be voted for a greater number of persons than the
number of nominees named. The election of directors requires a plurality vote
of those shares voted at the meeting with respect to the election of directors.
Information Concerning Nominees
The persons nominated as directors of the Company (all of whom are
currently directors of the Company), their respective ages, the year in which
each first became a director of the Company and their principal occupations or
employment during the past five years are as follows:
Year
First
Elected
Name Age Director Position with the Company
Paul J. Maddon, M.D., Ph.D........ 38 1986 Chairman of the Board of
Directors, Chief Executive
Officer, President and
Chief Science Officer
Charles A. Baker(1)............... 65 1994 Director
Mark F. Dalton(1)................. 47 1990 Director
Stephen P. Goff, Ph.D.(2)......... 46 1993 Director
Elizabeth M Greetham(2)........... 48 1994 Director
Paul F. Jacobson(1)............... 43 1990 Director
David A. Scheinberg, M.D., Ph.D.(2) 42 1996 Director
(1) Member of Compensation Committee
(2) Member of Audit Committee
Paul J. Maddon, M.D., Ph.D. is the founder of the Company and has served
in various capacities since its inception, including Chairman of the Board of
Directors, Chief Executive Officer, President and Chief Science Officer. From
1981 to 1988, Dr. Maddon performed research at the Howard Hughes Medical
Institute at Columbia University in the laboratory of Dr. Richard Axel. Dr.
Maddon serves on two NIH scientific review committees and is a member of the
editorial board of the Journal of Virology. He received a B.A. in biochemistry
and mathematics and an M.D. and a Ph.D. in biochemistry and molecular
biophysics from Columbia University. Dr. Maddon has been an Adjunct Assistant
Professor of Medicine at Columbia University since 1989.
Charles A. Baker has been the Chairman, President and Chief Executive
Officer of The Liposome Company, Inc., a biotechnology company located in
Princeton, NJ, since 1989. Mr. Baker is currently a director of Regeneron
Pharmaceuticals, Inc., a biotechnology company. He is a member of the Council
of Visitors of the Marine Biological Laboratory at Woods Hole, MA. Mr. Baker
has more than 30 years of pharmaceutical industry experience, and has held
senior management positions at Pfizer, Abbott Laboratories, Squibb Corporation,
and A.L. Laboratories. Mr. Baker received a B.A. from Swarthmore College and a
J.D. from Columbia University.
Mark F. Dalton has been the President and a director of Tudor Investment
Corporation, an investment advisory company, and its affiliates since 1988.
From 1979 to 1988, he served in various senior management positions at Kidder,
Peabody & Co. Incorporated, including Chief Financial Officer. Mr. Dalton is
currently a director of several private companies in the U.S., Europe and Asia
as well as a closed-end investment fund traded on the Hong Kong Stock Exchange.
Mr. Dalton received a B.A. from Denison University and a J.D. from Vanderbilt
University.
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<PAGE>
Stephen P. Goff, Ph.D. has been a member of the Company's Virology
Scientific Advisory Board since 1988 and has been its Chairman since April
1991. Dr. Goff has been the Higgins Professor in the Departments of
Biochemistry and Microbiology at Columbia University since June 1990. He
received an A.B. in biophysics from Amherst College and a Ph.D. in biochemistry
from Stanford University. Dr. Goff performed post-doctoral research at the
Massachusetts Institute of Technology in the laboratory of Dr. David Baltimore.
Elizabeth M. Greetham has been the Portfolio Manager for Weiss, Peck &
Greer ("WPG") Life Sciences Fund, L.P. and WPG Institutional Life Sciences
Fund, L.P. since 1992 and was a Health Care Analyst at WPG, L.L.C. from 1990 to
1992. Ms. Greetham is also a director of Guilford Pharmaceuticals, a
biopharmaceutical company, and ChiRex Inc. and Pathogenesis Corporation, both
of which are pharmaceutical companies. She received an M.A. (hons) in
Economics from Edinburgh University.
Paul F. Jacobson, a private investor, was a Managing Director of fixed
income securities at Deutsche Bank from January 1996 to November 1997. He was
President of Jacobson Capital Partners from 1993 to 1996. From 1986 to 1993,
Mr. Jacobson was a partner at Goldman, Sachs, where he was responsible for
government securities trading activities. Mr. Jacobson received a B.A. from
Vanderbilt University and an M.B.A. from Washington University.
David A. Scheinberg, M.D., Ph.D. has been a member of the Company's Cancer
Scientific Advisory Board since 1994. Dr. Scheinberg has been associated with
Sloan-Kettering since 1986, where he has held the positions of Associate
Professor (since 1994) and Chief (since 1992), Leukemia Service, Member of the
Clinical Immunology Service (since 1987) and Head, Laboratory of Hematopoietic
Cancer Immunochemistry, Sloan-Kettering Institute (since 1989). He also has
held the position of Associate Professor of Medicine and Molecular
Pharmacology, Cornell University Medical College (since 1994). He received a
B.A. from Cornell University, and an M.D. and a Ph.D. in pharmacology and
experimental therapeutics from The Johns Hopkins University.
Meetings and Committees of the Board of Directors
During the fiscal year ended December 31, 1997, the Board of
Directors of the Company held six meetings. Each of the incumbent directors
except Ms. Greetham and Mr. Jacobson attended more than 75% of the aggregate
number of meetings held by the Board and the Committees thereof on which he or
she served.
The Audit Committee reviews the annual financial statements of the
Company prior to their submission to the Board of Directors, consults with the
Company's independent auditors, and examines and considers such other matters
in relation to the internal and external audit of the Company's account and in
relation to the financial affairs of the Company and its accounts, including
the selection and retention of independent auditors. The Audit Committee held
no meetings during the fiscal year ended December 31, 1997.
The Compensation Committee makes recommendations concerning salaries
and incentive compensation for employees of and consultants to the Company,
establishes and approves salaries and incentive compensation for certain senior
officers and employees and administers and grants stock options pursuant to the
Company's stock option plans. The Compensation Committee met informally by
telephone during the fiscal year ended December 31, 1997 and held no formal
meetings.
The Company has no standing nominating committee and no committee
performing a similar function.
Compensation of Directors
Directors do not receive compensation in their capacities as
directors. All of the directors are reimbursed for their expenses in
connection with their attendance at Board and committee meetings. In addition,
Dr. Goff and Dr. Scheinberg receive annual compensation in the amounts of
$30,000 and $24,000, respectively, for their services as members of the
Company's Virology Scientific Advisory Board and Cancer Scientific Advisory
Board, respectively. See also "Certain Transactions."
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<PAGE>
Voting
Those nominees receiving a plurality of the votes cast will be
elected directors. Abstentions and broker non-votes will not affect the
outcome of the election.
The Board of Directors of the Company deems the election of the seven
nominees listed above as directors to be in the best interest of the Company
and its stockholders and recommends a vote "FOR" their election.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the aggregate
compensation paid by the Company for the two fiscal years ended December 31,
1997 to the Company's Chief Executive Officer and other executive officers
whose total compensation exceeded $100,000 during the last fiscal year:
SUMMARY COMPENSATION TABLE
Stock
Fiscal Annual Compensation(1) Option
Name and Principal Position Year Salary Bonus Grants Other(2)
Paul J. Maddon, M.D., Ph.D 1997 $250,000 $200,000 - $1,662
Chairman of the Board, 1996 165,000 70,000 - 1,662
Chief Executive Officer,
President and Chief
Science Officer
Robert J. Israel, M.D. 1997 185,000 45,000 75,000 shares -
Vice President, Medical 1996 175,000 25,000 18,750 shares -
Affairs
Robert A. McKinney. 1997 105,000 21,000 40,000 shares -
Vice President, Finance 1996 100,000 9,000 15,000 shares -
and Operations and
Treasurer
_______________________________
(1)Annual compensation consists of base salary and bonus. As to each
individual named, the aggregate amounts of all perquisites and other
personal benefits, securities and property not included in the summary
compensation table above or described below do not exceed the lesser of
$50,000 or 10% of the annual compensation.
(2)Other compensation consisted solely of an annual premium paid on a long-term
disability policy.
The following table sets forth certain information relating to stock
option grants to the executive officers named above during the fiscal year
ended December 31, 1997:
STOCK OPTION GRANTS DURING THE FISCAL YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Percent Potential Realizable
of Total Value at Assumed
Number Option Annual Rates of
of Shares Shares Exercise Stock Price
Underlying Granted Price Expir- Appreciation
Options to Em- per ation for Option Term
Name Granted Ployees* Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Paul J. Maddon, M.D., Ph.D - - - - - -
Robert J. Israel, M.D..... 75,000 23.8% $4.00 3/31/07 $188,688 $478,123
Robert A. McKinney........ 40,000 12.7% 4.00 3/31/07 $100,623 $255,000
</TABLE>
_______________________________
* During the 1997 fiscal year options to purchase 315,375 shares were granted
to employees.
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<PAGE>
The following table sets forth information as to the exercises of
options during the fiscal year ended December 31, 1997 and the number and value
of unexercised options held by the executive officers named above as of
December 31, 1997:
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Shares Underlying Value of Unexercised
Unexercised Options In-the-Money Options*
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Paul J. Maddon, M.D., Ph.D. 375,000 375,000 $3,205,228 $3,251,250
Robert J. Israel, M.D..... 38,438 111,562 $ 384,380 $1,115,620
Robert A. McKinney........ 53,250 54,250 $ 544,875 $ 542,500
</TABLE>
_______________________________
* Based on a closing price of $14.00 on December 31, 1997 on the Nasdaq
National Market.
Employment Agreements
The Company has entered into an employment agreement with Paul J.
Maddon, M.D., Ph.D. pursuant to which Dr. Maddon is to serve as Chairman of the
Board, President, Chief Executive Officer and Chief Science Officer of the
Company at an annual salary of $250,000 for 1998 to increase at a rate of 10%
per year and a guaranteed minimum bonus of $15,000 per year. The agreement
expires on December 15, 1998, but it is automatically renewed annually
thereafter for up to five successive one-year periods unless either the Company
or Dr. Maddon gives notice not to renew at least 90 days before the end of the
initial term or any renewal term. Under the agreement, Dr. Maddon was also
granted an option to purchase 750,000 shares of the Common Stock at exercise
prices of $5.33 per share with respect to 664,774 shares and $5.87 per share
with respect to 85,226 shares. The agreement provides that, upon termination
by the Company without cause (as defined in the agreement), the Company will
continue to pay Dr. Maddon's annual salary and minimum bonus through the end of
the then current term.
The Company has in effect an employment arrangement with Robert J.
Israel, M.D. pursuant to which Dr. Israel is to serve as Vice President,
Medical Affairs of the Company at an annual salary of $185,000 and is entitled
to nine months' salary if his employment is terminated by the Company without
cause.
-8-
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee's policies applicable to the compensation
of the Company's executive officers are based on the principle that total
compensation should be set to attract and retain those executives critical to
the overall success of the Company and should reward executives for their
contributions to the enhancement of shareholder value.
The key elements of the executive compensation package are base
salary, employee benefits applicable to all employees, an annual bonus and
long-term incentive compensation in the form of stock options. In general, the
Compensation Committee has adopted the policy that compensation for executive
officers should be competitive with that paid by leading biotechnology
companies for corresponding senior executives. The Compensation Committee also
believes that it is important to have stock options constitute a substantial
portion of executive compensation in order to help executives align their
interests with those of the stockholders.
In determining the compensation for each executive officer, the
Compensation Committee generally considers (i) data from outside studies and
proxy materials regarding compensation of executive officers at comparable
companies, (ii) the input of other directors regarding individual performance
of each executive officer and (iii) qualitative measures of Company performance
such as progress in the development of the Company's technology, the engagement
of corporate partners for the commercial development and marketing of products
and the success of the Company in raising the funds necessary to conduct
research and development. The Compensation Committee's consideration of such
factors is subjective and informal.
The compensation of Paul J. Maddon, the Chief Executive Officer of
the Company, for 1997 consisted of $250,000 in annual salary and $200,000 in
bonuses. In approving the bonuses and the increase in Dr. Maddon's annual
salary from $165,000 to $250,000, the Compensation Committee considered the
importance of the collaboration agreement with Bristol-Myers Squibb Company
entered into in 1997 and the success of the Company's initial public offering
in November of 1997 and concluded that Dr. Maddon's leadership contributed
significantly to the Company's achievements and progress in the past and that
Dr. Maddon will continue to make significant contributions to the Company's
performance in the future.
Compensation Committee of the
Board of Directors
Charles A. Baker
Mark F. Dalton
Paul F. Jacobson
Comparative Stock Performance Graph
The graph below compares the cumulative total stockholder return on
the Company's Common Stock with the cumulative total stockholder return of (i)
the Nasdaq Stock Market (U.S.) Index and (ii) the Nasdaq Pharmaceutical Index,
assuming an investment of $100 on November 19, 1997, the date of the Company's
initial public offering, in each of the Company's Common Stock, the stocks
comprising the Nasdaq Market Index and the stocks comprising the Nasdaq
Pharmaceutical Index.
Progenics Nasdaq Market Nasdaq Pharm.
11/19/97 100 100 100
12/31/97 175 98.52 96.71
Section 16(a) Beneficial Ownership Reporting and Compliance
Based solely on a review of the reports under Section 16(a) of the
Exchange Act and representations furnished to the Company during the last
fiscal year, the Company believes that each of the persons required to file
such reports is in compliance with all applicable filing requirements.
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Certain Transactions
In March 1997, the Company entered into a loan guarantee agreement
(the "Loan Guarantee Agreement") with a principal stockholder of the Company,
Tudor BVI Futures, Ltd. ("Tudor BVI"), and with Tudor Group Holdings LLC
("Tudor Group" and, together with Tudor BVI, the "Guarantors"), an affiliate of
Tudor Investment Corporation, a principal stockholder of the Company, wherein
the Guarantors agreed to guarantee the performance of the Company's obligations
under a bank loan agreement that provided for borrowings of up to $2,000,000.
Tudor BVI agreed to provide 78% of the guarantee, and Tudor Group agreed to
provide the remaining 22% of the guarantee. In consideration for these
guarantees, the Company issued to Tudor BVI and Tudor Global Trading LLC
("TGT"), a subsidiary of Tudor Group, warrants to purchase in the aggregate
54,600 shares and 15,400 shares of Common Stock, respectively, at an exercise
price of $4.00 per share. These warrants are immediately exercisable and
expire in March 2002. In July 1997, the Company repaid $2.0 million in
borrowings outstanding under the bank loan agreement, representing all
borrowings thereunder.
Various directors, officers and 5% stockholders of the Company and
their respective affiliates are entitled to certain registration rights with
respect to their securities of the Company.
The Company believes that the transactions described above were
entered into on terms no less favorable to the Company than could be obtained
from third parties on an arm's length basis.
PROPOSAL II: AMENDMENT OF THE COMPANY'S AMENDED 1996 STOCK INCENTIVE PLAN
The Company's Board of Directors has determined that additional
shares of the Common Stock should be made available for awards to the Company's
employees, directors, advisors and consultants who will be responsible for the
financial success and growth of the business of the Company. Accordingly, the
Board has unanimously approved, subject to stockholder approval, an amendment
to the Company's Amended 1996 Stock Incentive Plan (the "Plan") to increase the
maximum number of shares of Common Stock available for grant thereunder from
1,050,000 shares to 2,000,000 shares. If the amendment to the Plan is not
approved by the stockholders, the Company will reevaluate how it will provide
incentives to the Company's existing and future employees, directors, advisors
and consultants.
Summary of the Plan
The following is a brief summary of the Plan as proposed to be
amended.
Purpose The purpose of the Plan is to promote the interests of the
Company and its stockholders by strengthening the Company's ability to attract,
motivate and retain employees, directors, advisors and consultants and to
provide a means to encourage stock ownership and a proprietary interest in the
Company by the employees, directors, advisors and consultants upon whose
judgment, initiative and efforts the financial success and growth of the
business of the Company largely depend.
Eligible Employees The eligible participants in the Plan are the
Company's employees, directors, advisors and consultants, as determined and
designated from time to time by the Company's Compensation Committee in its
sole discretion. At April 30, 1998 there were 32 employees, 6 non-employee
directors and approximately 25 other advisors and consultants eligible to
participate in the Plan.
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Grants Under the Plan The Plan provides for the grant of options to
purchase the Common Stock (including both options intended to qualify as
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and nonqualified options), stock appreciation rights,
restricted stock, performance shares and phantom stock, as described more fully
below.
Administration The Plan is administered by the Compensation
Committee of the Board of Directors of the Company.
Subject to the provisions of the Plan, the Compensation Committee has
the authority and discretion to grant awards under the Plan, to interpret the
provisions of the Plan and the award agreements made thereunder and to take
such other action as may be necessary or desirable in order to carry out the
provisions of the Plan.
Maximum Shares to be Issued The number of shares of Common Stock
which may be issued pursuant to the grant of awards under the Plan may not
exceed 2,000,000 in the aggregate (subject to antidilution adjustments). Any
shares subject to an award granted under the Plan that cease to be issuable
thereunder will thereafter be available for further award grants.
Stock Option Grants The Compensation Committee specifies the terms
and conditions of stock options granted under the Plan including without
limitation the number of shares covered by each option, the exercise price, the
option period, any vesting restrictions with respect to the exercise of the
option and whether each option is intended to qualify as an incentive stock
option. No option under the Plan may have an option exercise period of more
than ten years. Options intending to qualify as incentive stock options must
have an exercise price per share of not less than the fair market value of the
Common Stock on the date of grant. Furthermore, options intending to qualify
as incentive stock options and granted to a person who at the time of the grant
holds more than 10% of the total combined voting power of all classes of stock
of the Company must have an exercise price per share of not less than 110% of
the fair market value of the Common Stock on the date of grant and an option
exercise period of not more than five years.
Stock Appreciation Rights Stock appreciation rights, which may be
granted alone or in tandem with stock options, entitle the participant to
receive in cash or in shares of the Common Stock the difference between the
fair market value of the Common Stock on the date of exercise and a base price
set at the time of grant. The Compensation Committee specifies the terms and
conditions of the stock appreciation rights granted under the Plan including
without limitation the number of shares covered by each grant, the base price,
the exercise period (which may in no event exceed ten years), any vesting
restrictions with respect to exercise and whether payment will be in cash or
shares.
Restricted Stock Awards Restricted stock is issued to participants
pursuant to restrictions on transfer and subject to risk of forfeiture if
certain conditions are not met, such as continuing employment with the Company.
The Compensation Committee specifies the terms and conditions of each
restricted stock award under the Plan including without limitation the number
of shares issued, the price if any to be paid for the shares and the vesting
schedule with respect to the lapse of restrictions.
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Performance Awards Performance awards entitle the participant to
receive cash or shares of the Common Stock upon the achievement of certain
performance goals. The Compensation Committee specifies the terms and
conditions of the performance awards under the Plan including without
limitation the dollar amount and number of shares covered by each award and the
performance goals to be achieved and the period of time to achieve those goals
(which may in no event exceed ten years). The Compensation Committee may also
in its discretion make revisions to the awards subsequent to their initial
grant and will determine the extent to which performance goals have been
reached.
Phantom Stock Phantom stock awards entitle the participant to
receive a cash payment equal to a hypothetical number of shares of the Common
Stock times the difference between the fair market value of the Common Stock on
the date the award becomes vested and the fair market value of the Common Stock
on the date of grant. The Compensation Committee specifies the terms and
conditions of the phantom stock awards under the Plan including without
limitation the number of hypothetical shares covered by each grant, the vesting
period (which may in no event exceed ten years) and the maximum amount if any
to be paid under the award.
Restrictions on Transfer Awards under the Plan may not be
transferred by a participant other than by will or by the laws of descent and
distribution and may be exercised during the participant's lifetime only by the
participant. Notwithstanding the foregoing, participants may, to the extent
permitted by the Compensation Committee, transfer nonqualified options to
members of the participant's immediate family or to charitable institutions.
Federal Income Tax Consequences The grant of awards under the Plan
will have no federal income tax consequences to either the Company or the
participant (unless, with respect to the issuance of restricted stock, the
participant files an election to be taxed currently under section 83(b) of the
Code). The exercise of incentive stock options will generally have no federal
income tax consequences to either the Company or the participant, although the
excess of the value of the stock over the exercise price is potentially subject
to the alternative minimum tax under Section 55 of the Code. Upon exercise of
nonqualified options or stock appreciation rights, the vesting of restricted
stock (or the issuance thereof if the participant files a section 83(b)
election) and any payment to the participant with respect to performance awards
and phantom stock, the participant will be subject to federal income tax on the
excess of the value of the stock over the amount paid therefor and the Company
will be entitled to take a corresponding federal income tax deduction (subject
to the limitation on deductibility of executive compensation).
The foregoing is a general description of the federal income tax
consequences relating to the grant and payment with respect to awards under the
Plan. It does not purport to cover the special rules under the Code,
administrative and judicial interpretations, possible changes in the law or
state and local income tax consequences.
Amendment The Board of Directors of the Company may at any time
amend or terminate the Plan, provided that no such amendment may be made
without the approval of the stockholders of the Company to the extent approval
is required by applicable laws, rules or regulations and provided further that
no amendment or termination may adversely affect the rights of a participant
with respect to an outstanding award.
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Grant Information
At December 31, 1997, there were outstanding options with respect to
516,000 shares of the Common Stock granted pursuant to the Plan. It is not
possible to determine the award grants that will be made pursuant to the Plan
in the future. The table below sets forth information regarding award grants,
all of which were in the form of stock option grants, made under the Plan
during the fiscal year ended December 31, 1997.
Number of
Dollar Shares Under-
Name and Position Value* lying Options
Paul J. Maddon, M.D., Ph.D.......... - -
Chairman of the Board, President,
Chief Executive Officer and Chief
Science Officer
Robert J. Israel, M.D............... - 75,000
Vice President, Medical Affairs
Robert A. McKinney.................. - 40,000
Vice President, Finance and
Operations and Treasurer
All current executive officers
as a group......................... - 115,000
All current directors who are not
executive officers as a group ..... - 75,000
All employees, including all current
officers who are not executive
officers, as a group............... - 116,500
_______________
* Based upon the excess of the fair market value of the Common Stock on the
date of grant over the exercise price.
Voting
Under applicable rules of the Nasdaq Stock Market, the amendment must
be approved by the affirmative vote of the holders of a majority of the shares
of the Common Stock present, or represented, and entitled to vote at the
meeting. Abstentions from voting on this proposal will have the effect of a
"no" vote. Broker non-votes are not considered shares present, are not
entitled to vote and therefore will not affect the outcome of the vote on this
proposal.
The Board of Directors of the Company deems the amendment to the
Company's Amended 1996 Stock Incentive Plan to be in the best interest of the
Company and its stockholders and recommends that holders of the Common Stock
vote FOR Proposal II.
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PROPOSAL III: ADOPTION OF THE COMPANY'S 1998 EMPLOYEE STOCK PURCHASE PLAN AND
1998 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
The Company's Board of Directors has determined that it is desirable
to encourage employees of the Company to acquire an equity interest in the
Company's success by making shares of the Common Stock available for purchase
by all employees on favorable terms. Accordingly, the Board has unanimously
approved, subject to stockholder approval, (i) the adoption of the Company's
1998 Employee Stock Purchase Plan (the "ESPP") providing for the grant to
employees of the Company of options to purchase up to 150,000 shares of the
Common Stock and (ii) the adoption of the Company's 1998 Non-Qualified Employee
Stock Purchase Plan (the "Non-Qualified ESPP") providing for the grant to
employees of the Company of options to purchase up to 50,000 shares of the
Common Stock. The texts of the ESPP and the Non-Qualified ESPP (collectively,
the "Plans") are set forth at Appendix A hereto and Appendix B hereto,
respectively.
The Company's Board of Directors has authorized the grant of the
first options under the Plans, subject to stockholder approval, effective July
1, 1998. If the Plans are not approved by the stockholders of the Company, the
Company will rescind the options granted thereunder and will reconsider how it
will encourage employees of the Company to acquire an equity interest in the
Company's success.
Summary of the Plans
The following is a brief summary of the Plans.
Purpose The purpose of the Plans is to aid the Company in
attracting, compensating and retaining well qualified employees by providing
them with an equity interest in the Company's success.
Eligible Employees Substantially all employees of the Company,
including executive officers, are eligible to participate in the Plans. Any
employee holding a beneficial interest in more than 5% of the Common Stock is
not eligible to participate in the ESPP and will participate solely in the Non-
Qualified ESPP. At April 30, 1998 there were 32 employees of the Company
eligible to participate in the Plans.
Options Under the Plans The Plans provide for the grant on a
quarterly basis starting July 1, 1998 of options to purchase the Common Stock
with up to 25% of each employee's pay during such quarter, as such percentage
may be determined by the Board of Directors of the Company. The Board of
Directors has determined that the initial option grants under the Plans will be
for only 10% of each employee's pay during the fiscal quarter from July 1, 1998
to September 30, 1998.
Each option will expire six months after the date of grant and must
be exercised on a date chosen by each employee during the three-month period
prior to the date of expiration. Payment for the shares upon exercise will be
in cash or, at the discretion of the Compensation Committee of the Board of
Directors, in shares of the Common Stock. The Company will not withhold any
amount from any employee's pay prior to exercise of an option.
The ESPP provides that the fair market value of the option shares
subject to a grant on the first day of the quarter may not exceed $6,250. In
the event any employee's pay is such that the applicable percentage thereof
determined by the Board of Directors of the Company results in option shares
having greater than a $6,250 fair market value, such excess will be granted
from the Non-Qualified ESPP.
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Administration The Plans are administered by the Compensation
Committee of the Board of Directors of the Company.
To the extent not otherwise inconsistent with the Plans, the
Compensation Committee has the authority and discretion to amend the terms of
future grants under the Plans and to terminate further grants under the Plans.
Maximum Shares to be Awarded The number of shares of the Common
Stock with respect to which options may be granted under the ESPP may not
exceed 150,000 in the aggregate (subject to antidilution adjustments). The
number of shares of the Common Stock with respect to which options may be
granted under the Non-Qualified ESPP may not exceed 50,000 in the aggregate
(subject to antidilution adjustments). Any shares subject to options granted
under the Plans that are returned to the Plans may thereafter be available for
further grants.
Exercise Price of Options The price at which employees may exercise
options will be the lesser of (i) 100% of the fair market value of the Common
Stock on the first day of each fiscal quarter or (ii) 85% of the fair market
value of the Common Stock on the date of exercise. At April 20, 1998, the
closing price of the Common Stock on the Nasdaq National Market was $19.31 per
share.
Restrictions on Transfer Options under the Plans may not be
transferred by an employee other than by will or by the laws of descent and
distribution and may be exercised during the employee's lifetime only by the
employee.
Federal Income Tax Consequences The ESPP is intended to comply with
the requirements of Section 423 of the Internal Revenue Code of 1986, as
amended. As such, neither the grant of options under the ESPP nor the exercise
of the options by employees will have any federal income tax consequences to
either the Company or the employee. Under the Non-Qualified ESPP, the grant of
options will have no federal income tax consequences to either the Company or
the employee. The exercise of the options granted under the Non-Qualified
ESPP, however, will result in taxable income to the employee in an amount equal
to the difference between the purchase price and the fair market value on the
date of exercise and will result in a corresponding deduction from taxable
income for the Company (subject to the limitation on deductibility of executive
compensation).
Since there is no provision under the Plans for the payment of the
exercise price through payroll withholding, the Company expects that the
majority of employees who exercise options will immediately resell the
underlying shares. In such event, the resale will result in taxable income to
the employee in an amount equal to the difference between the net proceeds from
the resale and the purchase price upon exercise of the option and will result
in a corresponding deduction from taxable income for the Company (subject to
the limitation on deductibility of executive compensation).
Amendment The Board of Directors of the Company may at any time
amend the Plans, provided that no such amendment shall be made without the
approval of the stockholders of the Company to the extent approval is required
by applicable laws, rules or regulations.
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Grant Information
Under the Plans, employees are entitled to apply up to 25% of their
gross pay to the purchase of the Common Stock, with a limit of $25,000 per year
under the ESPP and any remainder under the Non-Qualified ESPP. The table below
sets forth certain information as to annual grants to be made under the ESPP
and the Non-Qualified ESPP if approved, assuming that compensation is at the
same level as at the end of the 1997 fiscal year, that the Board of Directors
authorizes the maximum percentage of pay allowed under the Plans and that all
employees participate in the Plans to the full extent allowed.
Share Value of Annual Grants
Non-Qual- Number
Name and Position ESPP ified ESPP of Shares (1)
Paul J. Maddon, M.D., Ph.D...... (2) $112,500 5,825
Chairman of the Board,
President, Chief Executive
Officer and Chief Science
Officer
Robert J. Israel, M.D........... $25,000 32,500 2,977
Vice President, Medical
Affairs
Robert A. McKinney.............. 25,000 6,500 1,631
Vice President, Finance and
Operations and Treasurer
All current executive officers
as a group..................... 50,000 151,500 10,434
All current directors who are not
executive officers as a group (3) - - -
All employees, including all
current officers who are not
executive officers, as a group. $304,801 - 15,783
_______________
(1)Based on the assumption that the closing price of $19.31 on April 20, 1998
on the Nasdaq National Market will be the exercise price with respect to the
options granted under the Plans.
(2)As the holder of a beneficial interest in more than 5% of the Common Stock,
Dr. Maddon is not eligible for an option grant under the ESPP.
(3)Directors of the Company who are not also employees of the Company are not
eligible to participate in the Plans.
Voting
Under applicable rules of the Nasdaq Stock Market, the Plans must be
approved by the affirmative vote of the holders of a majority of the shares of
the Common Stock present, or represented, and entitled to vote at the meeting.
Abstentions from voting on this proposal will have the effect of a "no" vote.
Broker non-votes are not considered shares present, are not entitled to vote
and therefore will not affect the outcome of the vote on this proposal.
The Board of Directors of the Company deems the adoption of the
Company's 1998 Employee Stock Purchase Plan and 1998 Non-Qualified Employee
Stock Purchase Plan to be in the best interest of the Company and its
stockholders and recommends that holders of the Common Stock vote FOR Proposal
III.
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PROPOSAL IV: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. to serve
as independent accountants for the fiscal year ending December 31, 1998.
Coopers & Lybrand L.L.P. has served as the Company's independent accountants
since 1994.
A representative of Coopers & Lybrand L.L.P. is expected to be
present at the meeting with the opportunity to make a statement if he desires
to do so and is expected to be available to respond to appropriate questions.
Although it is not required to do so, the Board of Directors is submitting the
selection of independent accountants for ratification at the meeting. If this
selection is not ratified, the Board of Directors will reconsider its choice.
A majority of the votes cast (excluding abstentions and broker non-
votes) at the meeting in person or by proxy is necessary for ratification of
the selection of Coopers & Lybrand L.L.P. as independent accountants of the
Company.
The Board of Directors of the Company deems the ratification of the
selection of Coopers & Lybrand L.L.P. as independent accountants of the Company
to be in the best interest of the Company and its stockholders and recommends
that holders of the Common Stock vote FOR Proposal IV.
FORM 10-K
Stockholders may obtain without charge a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December, 31, 1997 by directing
written requests to Investor Relations, Progenics Pharmaceuticals, Inc., 777
Old Saw Mill River Road, Tarrytown, New York 10591.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the
Annual Meeting of Stockholders of the Company contemplated to be held in June
1999 must be received by the Company no later than December 31, 1998, for
inclusion in the Board of Directors' proxy statement and form of proxy relating
to the meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at
the meeting. However, if any other business properly comes before the meeting,
it is the intention of the persons named in the enclosed proxy to vote on such
matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend
the meeting, please sign the proxy and return it in the enclosed envelope.
By order of the Board of Directors
ROBERT A. MCKINNEY
Secretary
Tarrytown, New York
May 1, 1998
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<PAGE>
APPENDIX A
PROGENICS PHARMACEUTICALS, INC.
EMPLOYEE STOCK PURCHASE PLAN
150,000 Shares
1. Purpose
The purpose of the Employee Stock Purchase Plan (the "Plan") of Progenics
Pharmaceuticals, Inc. (the "Company") is to attract, compensate and retain well
qualified employees by providing them with an equity interest in the Company's
success.
2. Stock Subject to the Plan
The Company may issue and sell a total of 150,000 shares of its common
stock, par value $.0013 per share (the "Common Stock"), pursuant to the Plan.
Such shares may be either authorized but unissued shares or treasury shares and
may include shares that have been subject to unexercised options, whether such
options have terminated or expired by their terms, by cancellation or
otherwise.
3. Administration
The Plan shall be administered by a committee (the "Committee") consisting
of the entire Board of Directors of the Company or of two or more non-employee
directors thereof. The Committee shall have the power and authority as may be
necessary to carry out the provisions of the Plan, including the interpretation
and construction of the Plan and the option grants made under the Plan, the
adoption of such rules and regulations as it may deem advisable and the
termination of further option grants under the Plan.
4. Eligibility
Options under the Plan shall be granted only to employees of the Company,
all employees of the Company are eligible to receive option grants and all
employees granted options under the Plan shall have the same rights and
privileges. Notwithstanding the foregoing, (i) no employee shall be granted an
option if such employee, immediately after the option is granted, owns stock
possessing 5% or more of the total combined voting power or value of all
classes of stock of the Company, within the meaning of Section 423(b)(3) of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) no employee
shall be granted an option which permits his rights to purchase stock under the
Plan to accrue at a rate which exceeds $6,250 of the fair market value of such
stock (determined at the time such option is granted) for each fiscal quarter
in which such option is outstanding at any time. Furthermore, the Committee
may in its sole discretion impose such restrictions on eligibility as may be
permitted by Section 423(b)(4) of the Code.
5. Option Grants
Until such time as the Committee in its sole discretion terminates further
option grants under the Plan, all eligible employees of the Company shall, on
July 1, October 1, January 1 and April 1 of each year (the "Date of Grant")
starting July 1, 1998, be granted an option to purchase the Common Stock, each
such option to be subject and pursuant to the following terms and conditions:
(a) Option Term The term of each option shall be from the Date of
Grant to the date six months after the Date of Grant (the "Date of
Expiration").
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(b) Option Price The purchase price per share for each option (the
"Option Price") shall be the lesser of (i) the fair market value of the
Common Stock on the Date of Grant or (ii) 85% of the fair market value of
the Common Stock on the Date of Exercise (as such term is defined below).
As used herein, the fair market value of the Common Stock on the Date of
Grant shall be the closing price of the Common Stock on the Nasdaq
National Market on the date prior to the Date of Grant and the fair market
value of the Common Stock on the Date of Exercise shall be the closing
price of the Common Stock on the Nasdaq National Market on the Date of
Exercise provided, however, that, if the employee exercising the option
resells the shares on the Date of Exercise, the average selling price for
such shares, before the payment of brokerage commissions and expenses,
shall be the fair market value on the Date of Exercise. In the event the
Common Stock ceases at any time to be traded on the Nasdaq National
Market, the fair market value of the Common Stock shall be determined in
such manner as may be set by the Committee.
(c) Number of Option Shares Unless and until the Committee in its
sole discretion determines otherwise, the number of shares subject to each
option shall be the whole number equal to (i) up to 25% of each employee's
total compensation during the fiscal quarter starting with the Date of
Grant, as such percentage shall be determined by the Committee prior to
the Date of Grant, divided by (ii) the lesser of the fair market value of
the Common Stock on the Date of Grant or 85% of the closing price of the
Common Stock on the Nasdaq National Market on the date prior to the Date
of Exercise (or such other manner for determining the fair market value of
the Common Stock on such date if not then traded on the Nasdaq National
Market). In no event, however, shall the number of shares subject to any
option exceed $6,250 divided by the fair market value of the Common Stock
on the Date of Grant.
(d) Exercise The date of exercise of each option (the "Date of
Exercise") shall be a date during the three-month period starting with the
date three months after the Date of Grant and ending on the Date of
Expiration, as chosen by each employee. Exercise shall not be made with
respect to less than the total number of shares subject to each option and
shall be effected by delivering to the Company written notice of exercise
at least one day prior to the Date of Exercise. Notwithstanding the
foregoing, each employee who is subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), shall deliver to
the Company written notice of exercise at least six months prior to the
Date of Exercise and, absent such notice, shall be deemed to have made an
irrevocable election to have the Date of Exercise be the Date of
Expiration.
(e) Payment Payment for the shares purchased upon exercise of each
option (including the amount, if any, necessary to satisfy federal, state
or local income tax withholding requirements) shall be in cash within five
business days following the Date of Exercise and, in the event payment is
not received, the Company may withhold the shares and cancel the option.
Notwithstanding the foregoing, the Committee may in its sole discretion
permit employees (i) to pay for shares acquired upon exercise of options
by delivering shares of the Common Stock owned by such employee or (ii) to
forgo payment for the shares and receive instead the net number of shares
that would be received if such employee borrowed shares of the Common
Stock for payment of the purchase price and returned the borrowed shares
from the shares acquired upon exercise of the option.
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<PAGE>
(f) Termination of Employment In the event an employee's employment
with the Company terminates for any reason other than the employee's
death, any option held by such employee shall forthwith terminate without
any further rights on the part of the employee. In the event of an
employee's death, the employee's estate, legal representative or
beneficiary may exercise any option held by such employee at any time
prior to the Date of Expiration with respect to such option. Nothing
herein shall be deemed to confer any right of continued employment with
the Company or to limit the right of the Company to terminate employment
with any employee.
6. Rights as a Stockholder
Until such time as each option has been exercised and the shares acquired
thereby have been issued and delivered to the employee pursuant to such
exercise, the employee shall have no rights as a stockholder with respect to
the shares of the Common Stock subject to the option.
7. Nontransferability of the Option
Any option granted under the Plan may not be assigned or transferred
except by will or by the laws of descent and distribution and is exercisable
during the life of the employee only by the employee.
8. Compliance with Securities Laws
If the shares to be issued upon exercise of any option granted under the
Plan have not been registered under the Securities Act of 1933, as amended, and
any applicable state securities laws, the Company's obligation to issue such
shares shall be conditioned upon receipt of a representation in writing that
the employee is acquiring such shares for his or her own account and not with a
view to the distribution thereof and the certificate representing such shares
shall bear a legend in such form as the Company's counsel deems necessary or
desirable. In no event shall the Company be obligated to issue any shares
pursuant to the exercise of an option if, in the opinion of the Company's
counsel, such issuance would result in a violation of any federal or state
securities laws.
9. Change of Control
In the event of a Change of Control (as such term is defined below), all
outstanding options under the Plan shall immediately become fully exercisable
and all of the rights and benefits relating thereto shall become fixed and not
subject to change or revocation by the Company. As used herein, a Change of
Control shall be deemed to have occurred if (i) any person within the meaning
of Section 13(d) and 14(d) of the Exchange Act, other than the Company or any
officer or director of the Company, becomes the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of 20% or more of the combined
voting securities of the Company or (ii) a change of 20% or more in the
composition of the Board of Directors of the Company occurs without the
approval of the majority of said Board of Directors as it exists at the time
immediately preceding such change in composition.
10. Stock Adjustments
(a) In the event of a stock dividend, stock split, recapitalization,
merger in which the Company is the surviving corporation or other capital
adjustment affecting the outstanding shares of the Common Stock, an appropriate
adjustment shall be made, as determined by the Board of Directors of the
Company, to the number of shares subject to the Plan and the exercise price per
share with respect to any option granted under the Plan.
(b) In the event of the complete liquidation of the Company or of a
reorganization, consolidation or merger in which the Company is not the
surviving corporation, any option granted under the Plan shall continue in full
force and effect unless either (i) the Board of Directors of the Company
modifies such option so that it is fully exercisable with respect to the number
of shares measured by the then current compensation prior to the effective date
of such transaction or (ii) the surviving corporation issues or assumes a stock
option contemplated by Section 424(a) of the Code.
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11. Effectiveness of the Plan
The Plan has been adopted on April 22, 1998 by resolution of the Board of
Directors of the Company and shall become effective upon the approval by the
affirmative votes of the holders of a majority of the Common Stock present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable laws of the State of Delaware.
12. Amendment of the Plan
The Board may at any time alter, amend, suspend or terminate the Plan in
whole or in part, provided, however, that (i) no alteration, amendment,
suspension or termination shall adversely affect the rights of an employee with
respect to any outstanding options granted under the Plan and (ii) any
amendment which must be approved by the stockholders of the Company in order to
ensure that all transactions under the Plan continue to be exempt under
Rule 16b-3 under the Exchange Act or any successor provision or to comply with
any rule or regulation of a governmental authority, applicable securities
exchange or Nasdaq National Market shall not be effective unless and until such
stockholder approval has been obtained in compliance with such rule or
regulation.
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<PAGE>
APPENDIX B
PROGENICS PHARMACEUTICALS, INC.
NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
50,000 Shares
1. Purpose
The purpose of the Non-Qualified Employee Stock Purchase Plan (the "Plan")
of Progenics Pharmaceuticals, Inc. (the "Company") is to provide employees of
the Company with the same equity interest in the Company's success they would
have under the Company's qualified Employee Stock Purchase Plan (the "Qualified
Plan") but for the limitations imposed by Section 423 of the Internal Revenue
Code (the "Code"), which limitations are set forth in Section 4 of the
Qualified Plan.
2. Stock Subject to the Plan
The Company may issue and sell a total of 50,000 shares of its common
stock, par value $.0013 per share (the "Common Stock"), pursuant to the Plan.
Such shares may be either authorized but unissued shares or treasury shares and
may include shares that have been subject to unexercised options, whether such
options have terminated or expired by their terms, by cancellation or
otherwise.
3. Administration
The Plan shall be administered by a committee (the "Committee") consisting
of the entire Board of Directors of the Company or of two or more non-employee
directors thereof. The Committee shall have the power and authority as may be
necessary to carry out the provisions of the Plan, including the interpretation
and construction of the Plan and the option grants made under the Plan, the
adoption of such rules and regulations as it may deem advisable and the
termination of further option grants under the Plan.
4. Eligibility
Options under the Plan shall be granted only to employees of the Company,
all employees of the Company are eligible to receive option grants and all
employees granted options under the Plan shall have the same rights and
privileges. Notwithstanding the foregoing, no employee shall be granted an
option if such employee (i) is eligible to be granted options under the
Qualified Plan and (ii) is granted options under the Qualified Plan which
permit his rights to purchase stock thereunder to accrue at a rate which is
less than $6,250 of the fair market value of such stock (determined at the time
such option is granted) for each fiscal quarter in which such option is
outstanding at any time. Furthermore, the Committee may in its sole discretion
impose such restrictions on eligibility as may be permitted by Section
423(b)(4) of the Code.
5. Option Grants
Until such time as the Committee in its sole discretion terminates further
option grants under the Plan, all eligible employees of the Company shall, on
July 1, October 1, January 1 and April 1 of each year (the "Date of Grant")
starting July 1, 1998, be granted an option to purchase the Common Stock, each
such option to be subject and pursuant to the following terms and conditions:
(a) Option Term The term of each option shall be from the Date of
Grant to the date six months after the Date of Grant (the "Date of
Expiration").
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<PAGE>
(b) Option Price The purchase price per share for each option (the
"Option Price") shall be the lesser of (i) the fair market value of the
Common Stock on the Date of Grant or (ii) 85% of the fair market value of
the Common Stock on the Date of Exercise (as such term is defined below).
As used herein, the fair market value of the Common Stock on the Date of
Grant shall be the closing price of the Common Stock on the Nasdaq
National Market on the date prior to the Date of Grant and the fair market
value of the Common Stock on the Date of Exercise shall be the closing
price of the Common Stock on the Nasdaq National Market on the Date of
Exercise provided, however, that, if the employee exercising the option
resells the shares on the Date of Exercise, the average selling price for
such shares, before the payment of brokerage commissions and expenses,
shall be the fair market value on the Date of Exercise. In the event the
Common Stock ceases at any time to be traded on the Nasdaq National
Market, the fair market value of the Common Stock shall be determined in
such manner as may be set by the Committee.
(c) Number of Option Shares Unless and until the Committee in its
sole discretion determines otherwise, the number of shares subject to each
option shall be the whole number equal to (i) up to 25% of each employee's
total compensation during the fiscal quarter starting with the Date of
Grant, as such percentage shall be determined by the Committee prior to
the Date of Grant, divided by (ii) the lesser of the fair market value of
the Common Stock on the Date of Grant or 85% of the closing price of the
Common Stock on the Nasdaq National Market on the date prior to the Date
of Exercise (or such other manner for determining the fair market value of
the Common Stock on such date if not then traded on the Nasdaq National
Market) minus (iii) the number of shares subject to an option granted
under the Qualified Plan with the same Date of Grant.
(d) Exercise The date of exercise of each option (the "Date of
Exercise") shall be a date during the three-month period starting with the
date three months after the Date of Grant and ending on the Date of
Expiration, as chosen by each employee. Exercise shall not be made with
respect to less than the total number of shares subject to each option and
shall be effected by delivering to the Company written notice of exercise
at least one day prior to the Date of Exercise. Notwithstanding the
foregoing, each employee who is subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), shall deliver to
the Company written notice of exercise at least six months prior to the
Date of Exercise and, absent such notice, shall be deemed to have made an
irrevocable election to have the Date of Exercise be the Date of
Expiration.
(e) Payment Payment for the shares purchased upon exercise of each
option (including the amount, if any, necessary to satisfy federal, state
or local income tax withholding requirements) shall be in cash within five
business days following the Date of Exercise and, in the event payment is
not received, the Company may withhold the shares and cancel the option.
Notwithstanding the foregoing, the Committee may in its sole discretion
permit employees (i) to pay for shares acquired upon exercise of options
by delivering shares of the Common Stock owned by such employee or (ii) to
forgo payment for the shares and receive instead the net number of shares
that would be received if such employee borrowed shares of the Common
Stock for payment of the purchase price and returned the borrowed shares
from the shares acquired upon exercise of the option.
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<PAGE>
(f) Termination of Employment In the event an employee's employment
with the Company terminates for any reason other than the employee's
death, any option held by such employee shall forthwith terminate without
any further rights on the part of the employee. In the event of an
employee's death, the employee's estate, legal representative or
beneficiary may exercise any option held by such employee at any time
prior to the Date of Expiration with respect to such option. Nothing
herein shall be deemed to confer any right of continued employment with
the Company or to limit the right of the Company to terminate employment
with any employee.
6. Rights as a Stockholder
Until such time as each option has been exercised and the shares acquired
thereby have been issued and delivered to the employee pursuant to such
exercise, the employee shall have no rights as a stockholder with respect to
the shares of the Common Stock subject to the option.
7. Nontransferability of the Option
Any option granted under the Plan may not be assigned or transferred
except by will or by the laws of descent and distribution and is exercisable
during the life of the employee only by the employee.
8. Compliance with Securities Laws
If the shares to be issued upon exercise of any option granted under the
Plan have not been registered under the Securities Act of 1933, as amended, and
any applicable state securities laws, the Company's obligation to issue such
shares shall be conditioned upon receipt of a representation in writing that
the employee is acquiring such shares for his or her own account and not with a
view to the distribution thereof and the certificate representing such shares
shall bear a legend in such form as the Company's counsel deems necessary or
desirable. In no event shall the Company be obligated to issue any shares
pursuant to the exercise of an option if, in the opinion of the Company's
counsel, such issuance would result in a violation of any federal or state
securities laws.
9. Change of Control
In the event of a Change of Control (as such term is defined below), all
outstanding options under the Plan shall immediately become fully exercisable
and all of the rights and benefits relating thereto shall become fixed and not
subject to change or revocation by the Company. As used herein, a Change of
Control shall be deemed to have occurred if (i) any person within the meaning
of Section 13(d) and 14(d) of the Exchange Act, other than the Company or any
officer or director of the Company, becomes the beneficial owner, within the
meaning of Rule 13d-3 under the Exchange Act, of 20% or more of the combined
voting securities of the Company or (ii) a change of 20% or more in the
composition of the Board of Directors of the Company occurs without the
approval of the majority of said Board of Directors as it exists at the time
immediately preceding such change in composition.
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<PAGE>
10. Stock Adjustments
(a) In the event of a stock dividend, stock split, recapitalization,
merger in which the Company is the surviving corporation or other capital
adjustment affecting the outstanding shares of the Common Stock, an appropriate
adjustment shall be made, as determined by the Board of Directors of the
Company, to the number of shares subject to the Plan and the exercise price per
share with respect to any option granted under the Plan.
(b) In the event of the complete liquidation of the Company or of a
reorganization, consolidation or merger in which the Company is not the
surviving corporation, any option granted under the Plan shall continue in full
force and effect unless either (i) the Board of Directors of the Company
modifies such option so that it is fully exercisable with respect to the number
of shares measured by the then current compensation prior to the effective date
of such transaction or (ii) the surviving corporation issues or assumes a stock
option contemplated by Section 424(a) of the Code.
11. Effectiveness of the Plan
The Plan has been adopted on April 22, 1998 by resolution of the Board of
Directors of the Company and shall become effective upon the approval by the
affirmative votes of the holders of a majority of the Common Stock present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable laws of the State of Delaware.
12. Amendment of the Plan
The Board may at any time alter, amend, suspend or terminate the Plan in
whole or in part, provided, however, that (i) no alteration, amendment,
suspension or termination shall adversely affect the rights of an employee with
respect to any outstanding options granted under the Plan and (ii) any
amendment which must be approved by the stockholders of the Company in order to
ensure that all transactions under the Plan continue to be exempt under
Rule 16b-3 under the Exchange Act or any successor provision or to comply with
any rule or regulation of a governmental authority, applicable securities
exchange or Nasdaq National Market shall not be effective unless and until such
stockholder approval has been obtained in compliance with such rule or
regulation.
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<PAGE>
PROGENICS PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown, New York 10591
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul J. Maddon, M.D., Ph.D. and Robert A.
McKinney, and each of them, as Proxies each with the power to appoint his
substitute and hereby authorizes them to represent and to vote, as designated
below, all of the shares of Common Stock of Progenics Pharmaceuticals, Inc.
held of record by the undersigned on May 1, 1998 at the Annual Meeting of
Stockholders to be held on June 9, 1998 or any adjournments or postponements
thereof.
1. ELECTION OF DIRECTORS
Nominees:
Paul J. Maddon, M.D., Ph.D. STOCKHOLDERS MAY WITHHOLD AUTHORITY TO
Charles A. Baker VOTE FOR ANY NOMINEE BY DRAWING A LINE
Mark F. Dalton THROUGH OR OTHERWISE STRIKING OUT THE NAME
Stephen P. Goff, Ph.D. OF SUCH NOMINEE. ANY PROXY EXECUTED IN
Elizabeth M Greetham SUCH MANNER AS NOT TO WITHHOLD AUTHORITY
Paul F. Jacobson TO VOTE FOR THE ELECTION OF ANY NOMINEE
David A. Scheinberg, M.D., Ph.D. SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
_ GRANT authority to vote for _ WITHOLD authority to
the seven nominees as a vote for the seven
group nominees as a group
2. Approval and adoption of an amendment to the Company's Amended 1996 Stock
Incentive Plan increasing the maximum number of shares of the Company's
Common Stock available thereunder for issuance from 1,050,000 to 2,000,000
shares
_ FOR _ AGAINST _ ABSTAIN
3. Approval and adoption of the Company's 1998 Employee Stock Purchase Plan
providing for the issuance of up to 150,000 shares of the Company's Common
Stock and 1998 Non-Qualified Employee Stock Purchase Plan providing for
the issuance of up to 50,000 shares of the Company's Common Stock
_ FOR _ AGAINST _ ABSTAIN
4. Ratification of the Board of Directors' selection of Coopers & Lybrand
L.L.P. to serve as the Company's independent accountants for the fiscal
year ending December 31, 1998
_ FOR _ AGAINST _ ABSTAIN
5. Authority to vote in their discretion on such other business as may
properly come before the meeting
_ FOR _ AGAINST _ ABSTAIN
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted for each of the proposals named above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Dated , 1998
(Signature)
(Signature if held jointly)
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
