<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 sec.240.14a-11(c) or sec.240.14a-12
ImmunoGen, Inc.
(Name of Registrant as Specified In Its Charter)
ImmunoGen, Inc.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously by written 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> 2
[IMMUNOGEN, INC. LOGO]
October 13, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of ImmunoGen, Inc. to be held at 10:00 a.m., Boston time, on Tuesday, November
10, 1998 at the offices of the Company, 333 Providence Highway, Norwood,
Massachusetts.
The accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement describe the matters that will be presented at the Annual Meeting. At
the Annual Meeting, five members will be elected to the Board of Directors. The
Board of Directors recommends the election of the five nominees named in the
enclosed Proxy Statement.
Whether you plan to attend the Annual Meeting or not, please complete, sign
and date the enclosed Proxy and return it in the envelope enclosed for this
purpose. This will ensure your proper representation at the Annual Meeting.
Sincerely,
/S/ MITCHEL SAYARE
MITCHEL SAYARE
President, Chief Executive Officer
and Chairman of the Board
YOUR VOTE IS IMPORTANT. PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE> 3
IMMUNOGEN, INC.
333 PROVIDENCE HIGHWAY
NORWOOD, MASSACHUSETTS 02062
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 10, 1998
To Shareholders of
ImmunoGen, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of
ImmunoGen, Inc. (the "Company") will be held at the offices of the Company, 333
Providence Highway, Norwood, Massachusetts, on Tuesday, November 10, 1998 at
10:00 a.m., Boston time, for the following purposes:
1. To fix the number of directors at five and to elect five directors to
hold office until the next annual meeting of shareholders and until
their successors are elected and qualified.
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on September 22, 1998
will receive notice of the Annual Meeting and be entitled to vote at the Annual
Meeting or any adjournment(s) thereof. The transfer books will not be closed.
You are cordially invited to attend the Annual Meeting in person, if
possible. WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE ENCLOSED FOR THIS
PURPOSE. The Proxy is revocable by the person giving it at any time prior to the
exercise thereof by written notice received by the Company, by delivery of a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
By order of the Board of Directors
/S/ JONATHAN L. KRAVETZ, ESQ.
JONATHAN L. KRAVETZ, ESQ.
Clerk
October 13, 1998
<PAGE> 4
IMMUNOGEN, INC.
333 PROVIDENCE HIGHWAY
NORWOOD, MASSACHUSETTS 02062
-------------------------------
PROXY STATEMENT
-------------------------------
------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------------
TO BE HELD ON NOVEMBER 10, 1998
GENERAL INFORMATION
Introduction. This Proxy Statement is furnished in connection with the
solicitation by and on behalf of the Board of Directors (the "Board") of
ImmunoGen, Inc. (the "Company") of Proxies for use at the Annual Meeting of
Shareholders of the Company to be held at the offices of the Company, 333
Providence Highway, Norwood, Massachusetts on Tuesday, November 10, 1998 at
10:00 a.m., Boston time, and at any adjournments thereof (the "Meeting"), and,
together with the enclosed Proxy and Annual Report to Shareholders for the
Fiscal Year ended June 30, 1998, is being mailed to the shareholders on or about
October 13, 1998. The Annual Report does not form any part of this Proxy
Statement.
Voting and Revocability of Proxies. When the Proxy of a shareholder is
duly executed and returned, the shares represented thereby will be voted in
accordance with the voting instructions given on the Proxy by the shareholder.
If no such voting instructions are given on a Proxy with respect to one or more
proposals, the shares represented by that Proxy will be voted, with respect to
the election of Directors, for the nominees named herein, and with respect to
other proposals, in accordance with the recommendations of the Board. Any Proxy
given pursuant to this solicitation may be revoked by the person giving it at
any time before its use by delivering to the Company a written notice of
revocation or a duly executed Proxy bearing a later date, or by attending the
Meeting and voting in person.
Cost of Solicitation. The entire cost of this solicitation will be paid by
the Company. In addition, the Company may reimburse brokerage firms and other
persons representing beneficial owners of shares for their reasonable expenses
in forwarding solicitation material to such beneficial owners. Solicitation of
Proxies by mail may be supplemented by telephone, telegram, telex, telecopy and
personal solicitation by Directors, officers or employees of the Company. No
additional compensation will be paid for such solicitation.
Quorum and Voting. Only shareholders of record of the Company's 25,419,552
shares of Common Stock, $.01 par value per share (the "Common Stock"),
outstanding as of the close of business on September 22, 1998 will be entitled
to vote. Each share of Common Stock is entitled to one vote at the Meeting. The
presence, in person or by Proxy, of the holders of a majority of the outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
the Meeting. No appraisal rights exist for any action to be taken at the
Meeting.
<PAGE> 5
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock as of September 11, 1998 by (i) each person
or entity known by the Company to be a beneficial owner of more than 5% of the
outstanding shares of Common Stock, (ii) each Director and nominee for Director
of the Company, (iii) each executive officer of the Company named in the Summary
Compensation Table below, and (iv) all current executive officers and Directors
of the Company as a group. Except as otherwise indicated, each shareholder has
sole voting and investment power with respect to the shares beneficially owned.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF SHARES OF SHARES
NAME AND ADDRESS OF BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER* OWNED(1) OWNED(1)
------------------- ---------------- ------------
<S> <C> <C>
Capital Ventures International(2)........................... 2,347,117 8.5%
One Capital Place, P.O. Box 1787 GT
Grand Cayman, Cayman Island, BWI
Mitchel Sayare(3)........................................... 591,000 2.3%
Walter A. Blattler(4)....................................... 315,894 1.2%
David W. Carter(5).......................................... 2,500 **
Michael R. Eisenson(6)...................................... 0 --
Stuart F. Feiner(7)......................................... 2,100 **
John M. Lambert(8).......................................... 142,258 **
All current executive officers and Director as a group
(7 persons)(9)............................................ 1,093,036 4.2%
</TABLE>
- ---------------
* Addresses are given for beneficial owners of more than 5% of the outstanding
Common Stock only.
** Represents beneficial ownership of less than 1% of the Common Stock.
(1) Share ownership includes shares of Common Stock issuable upon exercise of
certain outstanding options and warrants as described in the footnotes
below.
(2) Consists of 2,347,117 shares of Common Stock which Capital Ventures
International ("CVI") may acquire upon the exercise of warrants to purchase
Common Stock. The Restated Articles of Organization, as amended, of the
Company and the warrants held by CVI (the "CVI Warrants") limit the right of
CVI to exercise the CVI Warrants such that the maximum number of shares of
the Common Stock which may at any time be deemed to be beneficially owned by
CVI upon the exercise of the CVI Warrants may not, together with any other
shares of Common Stock then owned by CVI, exceed 9.9% of the then issued and
outstanding shares of Common Stock.
(3) Includes 427,000 shares of Common Stock which Mr. Sayare may acquire upon
the exercise of options within 60 days after September 11, 1998.
(4) Includes 232,833 shares of Common Stock which Dr. Blattler may acquire upon
the exercise of options within 60 days after September 11, 1998.
(5) Includes 2,500 shares of Common Stock which Mr. Carter may acquire upon the
exercise of options within 60 days after September 11, 1998.
(6) Michael R. Eisenson, a Director of the Company, is President and Chief
Executive Officer of Charlesbank Capital Partners, LLC, the successor to
Harvard Private Capital Group, Inc. and the investment advisors to Aeneas
Venture Corporation ("Aeneas"). Mr. Eisenson owns no shares of Common Stock
and disclaims beneficial ownership of the shares owned by Aeneas. Pursuant
to an
2
<PAGE> 6
agreement among the Company, Aeneas and Mr. Eisenson, grants of stock
options in respect of Mr. Eisenson's service as a Director are granted
directly to Aeneas. Pursuant to such grants, 15,000 shares of Common Stock
may be acquired by Aeneas within 60 days after September 11, 1998.
(7) Stuart F. Feiner, a Director of the Company, is Executive Vice President,
General Counsel and Secretary of Inco Limited, which owns 14,315 shares of
Common Stock. He is also President of Inco Securities Corp., a subsidiary of
Inco Limited, which owns 323,947 shares of Common Stock, and Chairman of the
general partner of North American Partners Limited Partnership II, which
owns 19 shares of Common Stock. Mr. Feiner disclaims beneficial ownership of
the shares of Common Stock held by each of such shareholders. Mr. Feiner
individually owns 2,100 shares of Common Stock as of September 11, 1998. He
is also named as direct owner of non-qualified stock options granted by the
Company in respect of his services as a Director. Pursuant to such grants,
15,000 shares of Common Stock may be acquired by Mr. Feiner within 60 days
after September 11, 1998; however, Mr. Feiner disclaims all beneficial
interest in the derivative securities and underlying shares pursuant to an
arrangement made between Mr. Feiner and Inco Limited, whereby Mr. Feiner
assigned all benefit to that entity.
(8) Includes 129,967 shares of Common Stock which Dr. Lambert may acquire upon
the exercise of options within 60 days after September 11, 1998.
(9) See also footnotes (3) through (8).
INFORMATION ABOUT DIRECTORS AND CURRENT EXECUTIVE OFFICERS
The names of the Directors and certain other information about them as of
the date hereof are set forth below:
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATIONS DURING AT LEAST THE LAST FIVE YEARS
---------------- --- ---------------------------------------------------------
<S> <C> <C>
Mitchel Sayare............................... 50 Mitchel Sayare, Chief Executive Officer, a Director since
1986 and Chairman of the Board since 1989, joined the
Company in 1986. From 1986 until 1992, and currently
since 1994, Mr. Sayare has served as President of the
Company. From 1982 to 1985, Mr. Sayare was Vice President
for Development at Xenogen, Inc., a biotechnology company
specializing in monoclonal antibody-based diagnostic
systems for cancer. From 1977 to 1982, Mr. Sayare was
Assistant Professor of Biophysics and Biochemistry at the
University of Connecticut. He holds a Ph.D. in
Biochemistry from Temple University School of Medicine.
Mr. Sayare serves on the Board of Directors of ImmuCell
Corporation, in addition to a number of private
companies.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATIONS DURING AT LEAST THE LAST FIVE YEARS
---------------- --- ---------------------------------------------------------
<S> <C> <C>
Walter A. Blattler........................... 49 Walter A. Blattler, Ph.D., elected a Director in
September 1995, served as Vice President, Research and
Development from 1987 to October 1994 and as Senior Vice
President, Research and Development from October 1994 to
October 1996. Since 1996, Dr. Blattler has served as
Executive Vice President, Science and Technology. Dr.
Blattler joined the Company in October 1987. From 1981 to
1987, Dr. Blattler was chief scientist for the
ImmunoGen-supported research program at the Dana-Farber
Cancer Institute. Dr. Blattler received his Ph.D. from
the Swiss Federal Institute of Technology in Zurich in
1978.
David W. Carter.............................. 59 David W. Carter, a Director since June 1997, is Co-Chief
Executive Officer and a director of Xenogen, Inc., which
he joined in 1997. From 1991 to 1997, Mr. Carter was the
President and Chief Executive Officer of Somatix Therapy
Corporation. Mr. Carter also serves on the Board of
Directors of Cell Genesys, Inc.
Michael R. Eisenson.......................... 43 Michael R. Eisenson, a Director since 1986, is President
and Chief Executive Officer of Charlesbank Capital
Partners, LLC (the successor to Harvard Private Capital
Group, Inc.,) which he joined in 1986. Between 1981 and
1986, Mr. Eisenson held the position of Manager, Boston
Consulting Group. Mr. Eisenson serves on the Boards of
Directors of CCC Information Services Group, Inc., Harken
Energy Corporation, Playtex Products, Inc., United Auto
Group, Inc. and the WMF Group, Ltd., as well as several
private companies.
Stuart F. Feiner............................. 50 Stuart F. Feiner, a Director since 1984, has been
Executive Vice President, General Counsel and Secretary
of Inco Limited since August 1993, after having served as
Vice President, General Counsel and Secretary of Inco
Limited from April 1992 to August 1993. From January 1984
until April 1992, Mr. Feiner was President of Inco
Venture Capital Management, the venture capital unit of
Inco Limited. Mr. Feiner serves on the Board of Directors
of The Liposome Company, Inc., in addition to a number of
private companies.
</TABLE>
4
<PAGE> 8
The names of, and certain other information as of the date hereof
regarding, each current executive officer of the Company who is not a member of
the Board is set forth below. Executive officers serve at the pleasure of the
Board.
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATIONS DURING AT LEAST THE LAST FIVE YEARS
- ------------------------- --- ---------------------------------------------------------
<S> <C> <C>
John M. Lambert, Ph.D........................ 47 John M. Lambert, Ph.D., Vice President, Research and
Development, joined the Company in 1987. Dr. Lambert
served as Senior Director of Research from October 1994
to November 1996. Prior to joining ImmunoGen, Dr. Lambert
was Assistant Professor of Pathology at the Dana-Farber
Cancer Institute, where he worked on the research program
supported by ImmunoGen. Dr. Lambert received his Ph.D. in
Biochemistry from Cambridge University in England.
Kathleen A. Carroll.......................... 46 Kathleen A. Carroll, Vice President, Finance and
Administration, Treasurer and Assistant Secretary, joined
the Company in 1987. Ms. Carroll served as Controller
from October 1990 to October 1996 and has served as Vice
President, Finance and Administration since October 1996,
Assistant Secretary since April 1997 and Treasurer since
June 1997. Prior to joining ImmunoGen, Ms. Carroll held
various positions in both private industry and public
accounting. Ms. Carroll received her B.S. in Finance from
Boston University and a J.D. from Suffolk University Law
School.
</TABLE>
5
<PAGE> 9
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION((1))
The Compensation Committee of the Board (the "Committee") is composed
entirely of non-employee Directors. The Committee determines the base salaries
of the Company's executive officers and the amount of annual bonus awards, if
any, to be paid to the executive officers. In addition, the Committee
administers the Company's Restated Stock Option Plan, as amended, (the "Plan")
under which stock options may be granted to executive officers and other
employees of the Company, as well as to non-employee Directors.
COMPENSATION POLICY AND COMPONENTS OF COMPENSATION
The ability to attract, motivate and retain senior-level executives is
crucial to achieving any company's short and long-term objectives, and is the
fundamental goal of the Committee. The continued growth of the biotechnology
industry, particularly within the New England area, has given rise to a very
aggressive recruiting environment within such industry and makes this goal
particularly challenging.
The past year has seen significant accomplishment by the Company. In July
1997, a research and collaboration agreement between the Company's
majority-owned subsidiary, Apoptosis Technology, Inc. ("ATI"), and BioChem
Pharma Inc., a major Canadian pharmaceutical company, was consummated. This
agreement funds the ongoing operations of ATI and also provides for potential
milestone and royalty payments to ATI. Moreover, in December 1997, the Company
entered into an agreement to sell $3.0 million of a series of its preferred
stock to an institutional investor; all $3.0 million was received by July 1998.
The Company has also continued to move its lead product candidate, huC242-DM1,
along its proposed timeline for the filing of an Investigational New Drug
application with the U.S. Food and Drug Administration, and management has been
aggressively pursuing a collaborative partnership to fund further development
and commercialization of this product candidate with the aim of securing
substantial, long-term cash inflows to the Company.
Because the Company remains in its research and development phase, methods
of assessing each executive's performance must be appropriate to the Company's
stage of maturity; that is, attainment by each executive of his or her specific
personal objectives in light of the Company's broad strategic goals.
Generally, each executive officer's compensation package is reviewed
annually and may be comprised of up to three components: base salary, incentive
cash bonuses and stock options. In addition to these components, executive
officers of the Company are eligible to participate in all employee benefit
programs generally available to all other Company employees.
Progress toward the Company's broad strategic goal of becoming a profitable
biopharmaceutical company is measured by specific corporate objectives and
annual milestones. Personal objectives and milestones by which individual
executives of the Company are evaluated must fit within the framework of the
Company's overall goals and objectives. Subjective factors, such as changes in
business conditions and other relevant external circumstances, are also taken
into consideration. The Company believes the nature of its specific goals and
milestones and progress toward their achievement constitute proprietary and
confidential information, disclosure of which would place the Company at a
competitive disadvantage.
- ---------------
(1) The report of the Compensation Committee of the Board of Directors shall not
be deemed incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the Securities Act
of 1933, as amended, or under the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically incorporates
this report by reference.
6
<PAGE> 10
BASE SALARY
Despite the partnering and financing successes of the past year as
previously noted, the Company's current cash position continues to require that
substantial additional funding be obtained. In that regard, no salary increases
for executive officers have as yet been awarded in respect of fiscal 1998.
Further, because of the Company's tenuous cash position over the last several
years, for fiscal 1995 and fiscal 1996 the Committee determined not to award any
increases in base salaries for the Company's executive officers until such time
as the Committee deemed appropriate a resumption of salary increases for those
senior executives. In addition, effective January 1995 and in conjunction with
the restructuring program implemented in December 1994, a voluntary reduction in
salaries was assumed and the base salary of certain executive officers was
frozen at 80% of his or her salary level then in effect. In fiscal 1996, the
Compensation Committee determined not to pay the 20% of salaries deferred since
January 1995, and the 20% reduction in salaries for those individuals remained
in effect until the second quarter of fiscal 1997, at which time those salaries,
except for the Chief Executive Officer, were prospectively restored to their
pre-reduction levels.
Generally, the Committee sets the salaries of executive officers by
reviewing surveys of biotechnology industry compensation as well as other
available information on the base salaries of executive officers in comparable
positions in other biotechnology companies. There is substantial overlap between
the biotechnology companies, the compensation practices of which are reflected
in such surveys, and the biotechnology companies included in the Nasdaq
Pharmaceutical Stocks Total Return Index (see "Stock Price Performance Graph").
Comparative factors considered include, but are not limited to, company size,
stage of development of a company's products and geographic location. The
Committee uses the collected data and applies the members' significant
experience in hiring and managing personnel in a biopharmaceutical environment
to set base salaries. The Committee takes into account, for both new and current
executive officers, not only competitive factors, but also breadth of
experience, length of service with the Company and recent individual performance
of those officers. It is not the Company's intent to establish fixed levels of
compensation in general or for specific positions, but rather to establish
compensation on a case-by-case basis as recommended by management and determined
by the Committee in the exercise of the members' best judgment. Salaries of
executive officers of the Company, as currently paid, are estimated to range
from the 5th percentile to the 50th percentile of the comparable average
salaries for executives of biotechnology companies of similar size. The salary
of the Company's Chief Executive Officer is estimated to be in the 40th
percentile of such range. The Committee believes the base salaries of its
executive officers are low in comparison to similarly situated biotechnology
companies.
In certain cases initial annual base compensation was established pursuant
to employment agreements with executive officers (see "Employment Contracts,
Termination of Employment and Change in Control Agreements"). The terms of such
employment contracts were reviewed and authorized by the Board (including
members of the Committee but excluding any interested officer) and were
consistent with the Company's compensation policies then in place.
BONUS AWARDS
The Company does not have formal incentive or bonus plans for executives
and, for the three fiscal years ended June 30, 1998, no bonus has been awarded
to any current executive officer of the Company.
STOCK OPTION PLAN
Subject to the provisions of the Plan, the Committee has the authority to
determine the terms under which options are granted under the Plan and the
individuals to whom such options may be granted. The Committee believes that
equity participation is a key component of its executive compensation program.
The stock option program is the Company's major long-term incentive plan,
designed to retain executive officers
7
<PAGE> 11
and other employees and motivate them to enhance shareholder value by aligning
the long-term interests of the Company's employees with those of its outside
shareholders. Stock options provide an effective long-term incentive for
executive officers and other employees to create shareholder value since the
full benefit of the options cannot be realized unless an appreciation in the
price of the Common Stock occurs over a number of years. The executive officers
participate in the Plan in the same manner as all of the Company's employees.
Initial stock option awards are individually determined prior to employment at
levels based upon an employee's potential contribution to the Company's growth
and are designed to be competitive with awards by other companies within the
biotechnology industry. Subsequent annual stock option awards are based on
individual performance and position within the Company. Also taken into
consideration is the aggregate amount of stock options granted to an individual.
All of the Company's current executive officers were awarded stock options in
March 1996 for fiscal year 1996 and in August and December 1997 for fiscal year
1998. No stock options were awarded to executive officers in fiscal 1997. All
options have exercise prices equal to the fair market value of the Common Stock
on the date of grant. The options granted to executive officers in fiscal years
1996 and 1998 vest ratably over three years beginning on the date of grant.
Vesting of options may be accelerated and options may become fully exercisable
upon the occurrence of certain events such as a change in control of the Company
(see "Employment Contracts, Termination of Employment and Change in Control
Agreements").
In addition to incentive stock options, the Committee also has
discretionary authority under the Plan to grant non-qualified options to certain
individuals, including executive officers of the Company. Of the current
executive officers, only Mr. Sayare and Dr. Blattler have been granted
non-qualified options. In each case, the options were granted with exercise
prices equal to the fair market value of the Common Stock on the date of grant
and were scheduled to vest over three years.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In connection with the Committee's decision not to increase base salaries
and the voluntary 20% reduction in salaries, Mr. Sayare received no increase in
base salary during fiscal 1995 or fiscal 1996. In addition, between January 1995
and October 1996, Mr. Sayare's base salary had been 80% of $257,000, or
$205,600. In October 1996, the Committee determined not to pay the 20% reduction
withheld to that date, and Mr. Sayare's salary was set at $245,000. Mr. Sayare
has received no salary increase since October 1996 and his annual salary remains
at $245,000.
No cash bonus was paid to Mr. Sayare in fiscal 1998. In March 1996, Mr.
Sayare was granted options to purchase 125,000 shares of Common Stock. In August
and December 1997, Mr. Sayare was granted options to purchase 75,000 shares and
229,166 shares of Common Stock, respectively. These options were awarded based
upon Mr. Sayare's performance in each of those years. The options granted in
fiscal years 1996 and 1998 vest ratably over three years beginning on the date
of grant. No options were granted to Mr. Sayare in fiscal 1997. All options are
subject to Mr. Sayare's continued employment with the Company and were issued
with exercise prices equal to the fair market value of the Common Stock on the
date of grant.
8
<PAGE> 12
CERTAIN AGREEMENTS
The Company has entered into agreements with certain of its executive
officers relating to employment and separation. In making determinations of
salary and benefits to be provided under the aforementioned employment and
separation agreements, the Committee took into consideration contractual
commitments and Company policies (see "Employment Contracts, Termination of
Employment and Change in Control Agreements").
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
DAVID W. CARTER
MICHAEL R. EISENSON
STUART F. FEINER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Committee members during fiscal year 1998 were Messrs. David W. Carter,
Michael R. Eisenson, Stuart F. Feiner and Donald E. O'Neill. Mr. O'Neill
resigned his position as a Director of the Company effective July 29, 1998. None
of these Directors is or has been an officer or employee of the Company. Mr.
Sayare, though not a member of the Committee, assists the Committee in
determining any compensation to be awarded to executive officers other than
himself. Mr. Sayare provides supplemental information regarding performance
evaluations of executive officers other than himself.
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table (the "Summary Compensation Table") sets forth certain
information regarding compensation paid during each of the Company's last three
fiscal years to the Company's Chief Executive Officer and to each of the
Company's other executive officers whose total annual salary and bonus exceeded
$100,000 in fiscal year 1998.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES ALL OTHER
NAME AND ------------------- UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($)(1) OPTIONS (#) ($)(2)
------------------ ---- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Mitchel Sayare............................ 1998 245,000 304,166 2,734
Chairman of the Board, Chief 1997 230,907 -- 2,837
Executive Officer and President 1996 205,600 125,000 2,480
Walter A. Blattler, Ph.D.................. 1998 180,000 230,417 1,598
Director, Executive Vice President, 1997 166,372 -- 1,682
Science and Technology 1996 141,900 75,000 1,262
John M. Lambert, Ph.D..................... 1998 150,000 141,667 1,232
Vice President, Research and 1997 140,980 -- 1,103
Development 1996 124,783 50,000 1,013
</TABLE>
- ---------------
(1) Includes amounts, if any, deferred by each individual under the ImmunoGen,
Inc. 401(k) Plan and Trust.
(2) Fiscal 1998 amounts include term life insurance premiums of $882 for Mr.
Sayare, $648 for Dr. Blattler and $540 for Dr. Lambert. Also included are
matching 401(k) contributions of $1,852 for Mr. Sayare, $950 for Dr.
Blattler and $692 for Dr. Lambert.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding each stock option
granted during fiscal 1998 to each individual named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ANNUAL
SECURITIES TOTAL OPTIONS RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION
OPTIONS EMPLOYEES IN FOR OPTION TERM(3)
GRANTED FISCAL YEAR EXERCISE EXPIRATION --------------------
NAME (#)(1) (%) PRICE($)(2) DATE 5%($) 10%($)
---- ---------- ------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Mitchel Sayare.................. 75,000 5.7 1.313 8/11/07 61,930 156,944
229,166 17.5 0.844 12/31/07 121,638 308,255
------- ---- ------- -------
304,166 23.2 183,568 465,199
Walter A. Blattler, Ph.D........ 70,000 5.4 1.313 8/11/07 57,802 146,481
160,417 12.3 0.844 12/31/07 85,147 215,780
------- ---- ------- -------
230,417 17.7 142,949 362,261
John M. Lambert, Ph.D........... 50,000 3.8 1.313 8/11/07 41,287 104,629
91,667 7.0 0.844 12/31/07 48,656 123,303
------- ---- ------- -------
141,667 10.8 89,943 227,932
</TABLE>
- ---------------
(1) Options were granted in August and December of 1997. All options vest
ratably over three years beginning on the date of grant. Under certain
circumstances, vesting of options may be accelerated and options may become
fully exercisable.
10
<PAGE> 14
(2) The exercise price was equal to the fair market value of the Common Stock on
the date of grant.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. Those gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted. These
rates of appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent the Company's estimate or
projection of future Common Stock prices.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides information as to each individual named in the
Summary Compensation Table regarding option exercises during fiscal 1998, the
number of shares covered by both exercisable and unexercisable options as of
June 30, 1998, and the value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mitchel Sayare............. 21,000 16,538 402,000 304,166 -- 240,399
Walter A. Blattler,
Ph.D..................... 20,061 14,544 209,500 230,417 -- 175,928
John M. Lambert, Ph.D...... 12,291 8,911 113,300 141,667 -- 104,900
</TABLE>
- ---------------
(1) Value realized is based on the difference between the option exercise price
and the closing sale prices of the Common Stock as reported on the Nasdaq
National Market for June 26, June 25 and June 22, 1998, the dates of
exercise of options by Mr. Sayare, Dr. Blattler and Dr. Lambert,
respectively.
(2) Value is based on the last sale price per share ($1.75) on June 30, 1998, as
reported on the Nasdaq National Market, less the applicable option exercise
price. Each option has an exercise price equal to the fair market value of
the Common Stock on the date of grant.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
The Company has entered into employment agreements with Dr. Blattler and
Dr. Lambert. These agreements currently provide for annual salaries of $180,000
for Dr. Blattler and $150,000 for Dr. Lambert. These agreements may be
terminated by either the Company or the executive officer upon 90 days' prior
written notice. In addition, each agreement provides that the Company may
terminate the employment of the executive officer at any time for cause (as
defined in the respective agreements). The agreements with Dr. Blattler and Dr.
Lambert also provide that the executive officers will not engage in any business
competitive with the business of the Company for a period of two years following
termination of employment.
In making determinations of salary and benefits to be provided under the
aforementioned employment agreements, the Committee took into consideration, in
addition to contractual commitments, Company personnel policies.
Contractual language is included in stock option agreements between the
Company and members of its senior management group to the effect that in
instances where (i) (A) a person becomes the beneficial owner of fifty percent
or more of the voting securities of the Company, or (B) the Board approves a
consolidation or merger of the Company whereby the shareholders of the Company
would not retain fifty percent or more of the voting securities of the Company
after the consolidation or merger, and (ii)(A) a material change is made in the
Plan or an option granted thereunder (except as provided in Section 16(b) of the
Plan), or (B) the affected employee is, within two years, terminated for any
reason other than for cause, then all unvested options of the affected employee
will become immediately exercisable.
11
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
The graph and table below compare the cumulative total stockholder return
on an annual basis on the Common Stock for the period from June 30, 1993 through
June 30, 1998 to the cumulative total returns on the Nasdaq Composite Index
(U.S.) and the Nasdaq Pharmaceutical Stocks Total Return Index for the same
period.
[STOCK PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Nasdaq
Measurement Period ImmunoGen, Composite Nasdaq
(Fiscal Year Covered) Inc. Index Pharmaceutical
<S> <C> <C> <C>
6/30/93 100.00 100.00 100.00
6/30/94 65.00 101.00 84.00
6/30/95 60.00 135.00 111.00
6/30/96 62.00 172.00 163.00
6/30/97 25.00 210.00 166.00
6/30/98 27.00 277.00 171.00
</TABLE>
The above graph and table assume $100 invested on June 30, 1993 with all
dividends reinvested, in each of the Common Stock, the Nasdaq Composite Index
(U.S.) and the Nasdaq Pharmaceutical Stocks Total Return Index. The Nasdaq
Pharmaceutical Stocks Total Return Index was prepared by the Center for Research
in Security Prices. Upon written request by any shareholder, the Company will
promptly provide a list of the companies comprising the Nasdaq Pharmaceutical
Stocks Total Return Index.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting the number of Directors will be fixed at five and five
directors will be elected to serve until the next annual meeting of shareholders
and until such Directors' successors have been elected and qualified.
The enclosed Proxy, unless authority to vote is withheld, will be voted for
the election of the nominees named herein as directors of the Company. The
nominees are Mitchel Sayare, Walter A. Blattler, Ph.D., David W. Carter, Michael
R. Eisenson and Stuart F. Feiner. The Board has no reason to believe that any
nominee will become unavailable. However, in the event that any one or more of
such nominees shall unexpectedly become unavailable for election, votes will be
cast, pursuant to authority granted by the enclosed Proxy, for such person or
persons as may be designated by the Board.
12
<PAGE> 16
COMMITTEES OF THE BOARD AND MEETING ATTENDANCE
David W. Carter, Michael R. Eisenson and Stuart F. Feiner currently serve
on the Company's Audit Committee. The Audit Committee reviews the engagement of
the Company's independent accountants, reviews quarterly and annual financial
statements, considers matters relating to accounting policy and internal
controls and reviews the scope of annual audits.
David W. Carter, Michael R. Eisenson and Stuart F. Feiner currently
comprise the Compensation Committee. The Compensation Committee reviews,
approves and makes recommendations concerning the Company's compensation
policies, practices and procedures to ensure that the legal and fiduciary
responsibilities of the Board are carried out and that such policies, practices
and procedures contribute to the success of the Company. The Compensation
Committee also administers the Plan.
The Company does not have a standing Nominating Committee.
During the fiscal year ended June 30, 1998, there was one meeting of the
Board and no meetings of the Audit or Compensation Committees. However, from
time to time, the members of the Board and its Committees acted by unanimous
written consent or actions by Directors without a meeting pursuant to
Massachusetts law. All Board members attended the meeting of the Board.
COMPENSATION OF DIRECTORS
All non-employee Directors are entitled to receive cash compensation of
$1,500 per Board meeting, although none was paid during fiscal 1998. Directors
are also reimbursed for travel expenses incurred with respect to attending Board
meetings. No compensation is paid for attendance at, or activities related to,
Audit or Compensation Committee meetings.
Each non-employee Director who was a member of the Board as of July 9, 1992
was granted an option under the Plan to purchase 10,000 shares of Common Stock
as of that date and will continue to receive such an option upon every fourth
anniversary thereof (assuming he remains a non-employee Director). Messrs.
Eisenson and Feiner, both non-employee Directors as of July 9, 1992 and July 9,
1996, were each granted an option to purchase 10,000 shares of Common Stock as
of each of those dates at exercise prices of $11.50 and $4.375, respectively.
Mr. Carter became a non-employee Director on June 17, 1997 and was granted an
option to purchase 10,000 shares as of that date at an exercise price of $1.625
per share. In addition, on December 31, 1997, Messrs. Carter, Eisenson and
Feiner were each granted an option to purchase 25,000 shares of Common Stock at
an exercise price of $0.844. Pursuant to an agreement among the Company, Aeneas
Venture Corporation and Mr. Eisenson, grants of stock options in respect of Mr.
Eisenson's service as a Director are granted directly to Aeneas Venture
Corporation. Options granted under the Plan become exercisable as to 25% of the
shares on each anniversary of the date of grant if the optionee remains a
non-employee Director of the Company on such date. The options have a term of
ten years and exercise prices which are equal to the fair market value of the
Common Stock on the date of grant. In addition, the Plan provides that each
non-employee Director, upon first being elected or appointed to the Board after
July 9, 1992 and on every fourth anniversary thereof (assuming he or she remains
a non-employee Director), will be granted an option to purchase 10,000 shares of
Common Stock.
A plurality of the votes cast at the Meeting is required to elect each
nominee as a Director.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE NUMBER OF DIRECTORS BE FIXED AT
FIVE AND RECOMMENDS THE ELECTION OF THE NOMINEES AS DIRECTORS.
13
<PAGE> 17
CERTAIN TRANSACTIONS
The holders of approximately 792,769 shares of Common Stock (the
"Registrable Securities") are entitled to certain rights to register such shares
under the Securities Act of 1933, as amended, (the "Securities Act") for sale to
the public pursuant to a Registration Rights Agreement by and among the Company
and the holders of Registrable Securities, as amended (the "Registration Rights
Agreement"). The holders of Registrable Securities include, among others, Aeneas
Venture Corporation. Such holders have the right to require the Company, on not
more than two occasions, whether or not the Company proposes to register any of
its Common Stock for sale, to register all or part of their shares for sale to
the public under the Securities Act, subject to certain conditions and
limitations. In addition, holders of Registrable Securities may require the
Company to register all or part of their shares on Form S-3 (or a successor
short form of registration) if the Company then qualifies for use of such form,
subject to certain conditions and limitations. The Registration Rights Agreement
was amended on October 9, 1991 to limit the circumstances pursuant to which the
registration rights granted thereunder may be transferred to third parties and
to amend certain procedural requirements.
Pursuant to registration rights agreements between the Company and holders
of the Company's Series E Convertible Preferred Stock (the "Preferred Stock")
and related warrants, and holders of warrants issued in connection with the
issuance of the Company's Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock, Series C Convertible Preferred Stock and Series D
Convertible Preferred Stock (the "Warrants"), such holders are entitled to
rights to require the Company to register for resale to the public under the
Securities Act all shares of Common Stock issued or issuable to such holders on
conversion of the Preferred Stock and/or exercise of the Warrants. As of
September 11, 1998, approximately 10,346,472 shares are beneficially held by
such holders.
As part of an agreement entered into in July 1997 between the Company, ATI,
and BioChem Pharma Inc. ("BioChem"), BioChem receives warrants to purchase
shares of Common Stock equal to the amount invested in ATI over a three-year
period. These warrants become exercisable at the end of the three-year period at
the then current market price of the Common Stock. Pursuant to a registration
rights agreement between the Company and BioChem, at the end of the three-year
period BioChem is entitled to certain rights to require the Company to register
for sale to the public under the Securities Act all registrable securities. As
of September 11, 1998, warrants to purchase Common Stock equal to the $5.224
million invested as of that date have been issued to BioChem.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and executive officers, and persons holding more than
10% of the Common Stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in ownership of
Common Stock. Executive officers, Directors and greater than 10% shareholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to it and written representations that no other reports were
required, during the fiscal year ended June 30, 1998, the Company's executive
officers, Directors and greater than 10% beneficial owners of its Common Stock
complied with all applicable Section 16(a) filing requirements, except as to Mr.
Carter's option grant of June 17, 1997, which was inadvertently omitted from Mr.
Carter's Form 3 filed June 24, 1997, but was reported on his Form 5 for the year
ended June 30, 1998, filed on August 13, 1998.
14
<PAGE> 18
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, independent accountants, audited the Company's
financial statements for the fiscal year ended June 30, 1998. The Company
expects that representatives of PricewaterhouseCoopers LLP will be present at
the Meeting, with the opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions. The Company has selected
PricewaterhouseCoopers LLP to audit the Company's financial statements for the
fiscal year ending June 30, 1999.
SHAREHOLDER PROPOSALS AND OTHER MATTERS
In order to be considered for inclusion in the proxy statement distributed
to shareholders prior to the Company's annual meeting in 1999, a shareholder
proposal must be received by the Company no later than June 11, 1999. Proposals
should be delivered in writing to ImmunoGen, Inc., 333 Providence Highway,
Norwood, Massachusetts 02062. One or more shareholders who hold at least 10% of
the capital stock entitled to vote at the meeting and who do not wish to include
their proposal in such proxy statement but who wish to present a proposal at the
Company's annual meeting of shareholders in 1999, must notify the Company in
writing at the above referenced address, no later than October 20, 1999. All
other shareholders who wish to present a proposal at such annual meeting must
notify the Company in writing at the above-referenced address no later than
August 29, 1999 in order for their proposal to be considered timely for purposes
of Rule 14a-4 under the Securities Exchange Act of 1934, as amended.
The Board does not know of any other matters which will be brought before
the Meeting. If other business is properly presented for consideration at the
Meeting, it is intended that the shares represented by the enclosed Proxy will
be voted by the persons voting the Proxies in accordance with their judgment on
such matters.
In order that your shares may be represented if you do not plan to attend
the meeting, and in order to assure the required quorum, please complete, sign,
date and return your Proxy promptly.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following document filed by the Company with the Commission is
incorporated herein by reference:
Items 6, 7, 8 and 9 of the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998, filed pursuant to Section 13 or 15(d) of the
1934 Act (File Number 0-17999).
By order of the Board of Directors
JONATHAN L. KRAVETZ, ESQ.
Clerk
October 13, 1998
15
<PAGE> 19
PROXY IMMUNOGEN, INC. PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
OF IMMUNOGEN, INC. FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 10, 1998
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement dated October 13, 1998, and does hereby appoint
Mitchel Sayare and Kathleen A. Carroll, or either of them, the undersigned's
attorneys-in-fact and proxies, with full power of substitution in each, for and
in the name of the undersigned, with all the powers the undersigned would
possess if personally present, hereby revoking any proxy heretofore given, to
appear and represent and vote all shares of Common Stock of ImmunoGen, Inc.
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders to be held at the offices of the Company, 333
Providence Highway, Norwood, Massachusetts on Tuesday, November 10, 1998, at
10:00 a.m., Boston time, and at any adjournments thereof.
PLEASE FILL IN REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE
* FOLD AND DETACH HERE *
<PAGE> 20
<TABLE>
<S> <C>
PLEASE MARK
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION YOUR VOTE AS
IS INDICATED, SUCH SHARES WILL BE VOTED FOR ALL OF THE NOMINEES LISTED IN ITEM 1. INDICATED IN [X]
THIS EXAMPLE.
ITEM 1. ELECTION OF DIRECTORS: Mitchel Sayare, Walter A. Blattler, David W. Carter,
Michael R. Eisenson and Stuart F. Feiner
FOR ALL WITHHOLD
NOMINEES LISTED AUTHORITY I PLAN TO ATTEND THE MEETING. [ ]
TO THE RIGHT to vote for
(except those crossed out) all nominees
[ ] [ ]
In their discretion the proxies are authorized to vote upon such other business as may THIS PROXY MAY BE REVOKED IN WRITING AT
properly come before the meeting or any adjournments thereof. ANY TIME PRIOR TO THE VOTING THEREOF.
Please date and sign exactly as name
appears on this card. Joint owners should
each sign. Please give full title when
signing as executor, administrator,
trustee, attorney, guardian for a minor,
etc. Signatures for corporations and
partnerships should be in the corporate or
firm name by a duly authorized person.
Please return this proxy promptly in the
enclosed envelope.
Signature: _______________________________
Date: ____________________________________
Signature: _______________________________
Date: ____________________________________
</TABLE>
* FOLD AND DETACH HERE *
