<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
[ ] 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 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)(1) 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 12, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of ImmunoGen, Inc. (the "Company") to be held at 10:00 a.m., Boston time, on
Tuesday, November 9, 1999 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. In addition, the Board of Directors recommends
approval of the proposed amendment to the Company's Restated Stock Option Plan
to increase the number of shares reserved for the grant of options from 3.525
million to 4.850 million shares.
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 9, 1999
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 9, 1999 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 consider and act upon the proposed amendment to the Company's
Restated Stock Option Plan to increase the number of shares reserved
for the grant of options from 3.525 million to 4.850 million.
3. 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 20, 1999
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. Your Proxy is revocable 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 12, 1999
<PAGE> 4
IMMUNOGEN, INC.
333 PROVIDENCE HIGHWAY
NORWOOD, MASSACHUSETTS 02062
-------------------------------
PROXY STATEMENT
-------------------------------
------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------------
TO BE HELD ON NOVEMBER 9, 1999
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 9, 1999 at 10:00
a.m., Boston time, and at any adjournments thereof (the "Meeting"), and,
together with the enclosed Form of Proxy and Annual Report to Shareholders for
the Fiscal Year ended June 30, 1999, is being mailed to the shareholders on or
about October 12, 1999. 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 Company will pay the entire cost of this
solicitation. 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, or
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 26,692,336
shares of Common Stock, $.01 par value per share (the "Common Stock"),
outstanding as of the close of business on September 20, 1999 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 10, 1999 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 8.4%
One Capitol Place, P.O. Box 1787 GT
Grand Cayman, Cayman Islands, BWI
Mitchel Sayare(3)........................................... 692,389 2.6%
Walter A. Blattler(4)....................................... 362,701 1.4%
David W. Carter(5).......................................... 30,001 **
Michael R. Eisenson(6)...................................... 0 --
Stuart F. Feiner(7)......................................... 2,100 **
Kathleen A. Carroll(8)...................................... 75,535 **
John M. Lambert(9).......................................... 189,481 **
All current executive officers and Director as a group
(7 persons)(10)........................................... 1,352,207 5.0%
</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 490,889 shares of Common Stock which Mr. Sayare may acquire upon
the exercise of options within 60 days after September 10, 1999.
(4) Includes 279,640 shares of Common Stock which Dr. Blattler may acquire upon
the exercise of options within 60 days after September 10, 1999.
(5) Consists of 30,001 shares of Common Stock which Mr. Carter may acquire upon
the exercise of options within 60 days after September 10, 1999.
(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 advisor to Aeneas
Venture Corporation ("Aeneas"). Mr. Eisenson owns no shares of
2
<PAGE> 6
Common Stock and disclaims beneficial ownership of the shares owned by
Aeneas. Pursuant to an agreement among the Company, Aeneas and Mr.
Eisenson, grants of stock options in connection with Mr. Eisenson's service
as a Director are granted directly to Aeneas. Pursuant to such grants,
Aeneas may acquire 42,501 shares of Common Stock within 60 days after
September 10, 1999.
(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
10, 1999. He is also named as direct owner of non-qualified options to
acquire 95,000 shares of Common Stock granted by the Company in each of
July 1992, July 1996 and July 1998. Pursuant to such option grants, Mr.
Feiner may directly acquire 42,501 shares of Common Stock within 60 days
after September 10, 1999. 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 69,534 shares of Common Stock which Ms. Carroll may acquire upon
the exercise of options within 60 days after September 10, 1999.
(9) Includes 166,690 shares of Common Stock which Dr. Lambert may acquire upon
the exercise of options within 60 days after September 10, 1999.
(10) See also footnotes (3) through (9).
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............................... 51 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........................... 50 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.............................. 60 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.......................... 44 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.
Stuart F. Feiner............................. 51 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.
</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. ...................... 48 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.......................... 47 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 comprised
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 Committee's fundamental executive compensation philosophy is to enable
the Company to attract and retain key executives, and to motivate those
executives to achieve the Company's long-term objective of becoming a profitable
company. Attracting and retaining key executives is important to any
organization. However, it is an especially difficult challenge in the
biotechnology industry, where executives are required to remain focused and
committed throughout many years of product development and financial
instability.
The past year was one of significant achievement by ImmunoGen and its
97%-owned subsidiary, Apoptosis Technology, Inc. ("ATI"). In February 1999,
ImmunoGen executed an exclusive license agreement with SmithKline Beecham plc
("SB") for the development and commercialization of huC242-DM1/SB-408075, the
Company's lead tumor-activated prodrug for the treatment of colorectal and
pancreatic cancers. This collaboration provides for substantial milestone
payments, royalty payments, and equity investments in the Company by SB, subject
to specific achievements by the Company. To date, $9.5 million has been received
pursuant to this agreement, a substantial infusion of working capital for the
Company. In September 1999, ImmunoGen's Investigational New Drug application
("IND") to the United States Food and Drug Administration to begin human
clinical trials of huC242-DM1/SB-408075 became effective, and management
anticipates that clinical trials will commence by the end of 1999. Also in
fiscal 1999, ATI delivered the third and fourth high-throughput screens to
BioChem Pharma Inc. ("BioChem") pursuant to the July 1997 collaboration
agreement between those companies. Current corporate objectives include
identification of a partner for the development and commercialization of
huN901-DM1, the Company's product candidate for the treatment of small-cell lung
cancer, and exploiting the Company's existing technologies.
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, the Company's executive officers are eligible to
participate in all employee benefit programs generally available to all other
ImmunoGen 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 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
- ---------------
(1) The report of the Compensation Committee of the Board 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
milestones and progress toward their achievement constitute proprietary and
confidential information, the disclosure of which would place the Company at a
competitive disadvantage.
BASE SALARY
Despite the ATI/BioChem partnering success and many short-term financing
successes over the last several years, the Company's cash position remained
tenuous until execution of the SB agreement in February 1999. Consequently, no
salary increases for executive officers had been awarded with respect to fiscal
years 1995, 1996, 1997 and 1998. Furthermore, 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 reduced to 80% of his or her salary level then in effect.
In fiscal 1996, the 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. As noted, the collaboration with SB has resulted in
a substantial strengthening of the Company's financial position. Accordingly, in
June 1999, and retroactive to January 1999, the salaries of the executive
officers other than the Chief Executive Officer were set as follows: $230,000
for Dr. Blattler, $172,000 for Dr. Lambert and $125,000 for Ms. Carroll.
The Committee sets the salaries of executive officers by reviewing
independently-prepared 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 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 to set salaries. The Committee also
takes into account, for both current and new executive officers, competitive
industry factors, breadth of experience, length of service and recent individual
performance. 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 confirmed
by the Committee. The Company's executive salaries, as currently paid, are
estimated to range from the 50th percentile to the 75th percentile of comparable
biotechnology companies. The salary of the Company's Chairman of the Board,
President and Chief Executive Officer is estimated to be in the 75th percentile
of such range.
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, 1999, no bonuses have 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 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
7
<PAGE> 11
is the Company's major long-term incentive plan, designed to retain executive
officers 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
all 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. The executive officers participate in the Plan in the same manner as all
of the Company's full-time employees. Initial stock option awards, which are
individually determined prior to employment, are derived from the employee's
anticipated contribution to the Company's growth and are designed to be
competitive with awards granted by other biotechnology companies. Subsequent
annual stock option awards are based on historical levels of prior grants,
position within the Company and individual performance. No stock options were
awarded to executive officers in fiscal year 1997. For fiscal year 1998, all
current executive officers were awarded stock options in August and December of
1997. For fiscal year 1999, stock options were awarded to all current executive
officers in January 1999. All options are issued with exercise prices equal to
the fair market value of the Company's Common Stock on the date of grant. The
options granted in fiscal years 1998 and 1999 vest as to one-third of the shares
each year after issuance beginning one year from 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 vested 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 (see "Base Salary"), Mr. Sayare did
not receive a base salary increase during fiscal 1995 or fiscal 1996. Moreover,
between January 1995 and October 1996, Mr. Sayare's base salary had been reduced
to 80% of his 1995 salary of $257,000, or $205,600. Further, in October 1996,
the Committee determined not to pay the 20% reduction withheld to that date,
and, from October 1996 through January 1999, Mr. Sayare's salary was set at
$245,000. In June 1999, and retroactive to January 1999, Mr. Sayare's salary was
increased to $340,000.
As in prior years, Mr. Sayare's annual base salary was determined in
accordance with the criteria outlined in other sections of this report, the
Committee's evaluation of the Company's overall performance, and Mr. Sayare's
individual performance. Performance was measured by achievement of certain goals
over the last several years, including the consummation of the SB and BioChem
licensing agreements, accomplishment of several private financing transactions,
achievement of an effective IND and the continued development of the Company's
other technologies.
No cash bonus was paid to Mr. Sayare during fiscal years 1997, 1998 and
1999. No stock options were granted to Mr. Sayare in fiscal 1997. In fiscal
1998, Mr. Sayare was granted options to purchase 75,000 shares and 229,166
shares of Common Stock in each of August 1997 and December 1997, respectively.
In fiscal 1999, Mr. Sayare was awarded options to purchase 80,000 shares of
Common Stock in January 1999. The options granted to Mr. Sayare in fiscal years
1998 and 1999 vest as to one-third of the shares each year after issuance
beginning one year from the date of grant. 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 1999 were Messrs. David W. Carter,
Michael R. Eisenson, and Stuart F. Feiner. 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.
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 executive officers, other than the Chief Executive Officer, whose
total annual salary and bonus exceeded $100,000 in fiscal year 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES ALL OTHER
NAME AND ------------- UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($)(1) OPTIONS (#) ($)(2)
------------------ ---- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Mitchel Sayare............................... 1999 273,000 80,000 3,185
Chairman of the Board, Chief Executive 1998 245,000 304,166 2,734
Officer and President 1997 230,907 -- 2,837
Walter A. Blattler, Ph.D. ................... 1999 201,539 75,000 1,915
Director and Executive Vice President, 1998 180,000 230,417 1,598
Science and Technology 1997 166,372 -- 1,682
John M. Lambert, Ph.D........................ 1999 159,692 54,000 1,370
Vice President, Research and 1998 150,000 141,667 1,232
Development 1997 140,980 -- 1,103
Kathleen A. Carroll.......................... 1999 110,769 45,000 1,051
Vice President, Finance and 1998 100,000 108,750 360
Administration 1997 95,077 -- 297
</TABLE>
9
<PAGE> 13
- ---------------
(1) Includes amounts, if any, deferred by each individual under the ImmunoGen,
Inc. 401(k) Plan and Trust.
(2) Fiscal year 1999 amounts include term life insurance premiums of $999 for
Mr. Sayare, $738 for Dr. Blattler, $581 for Dr. Lambert and $405 for Ms.
Carroll. Also included are matching 401(k) contributions of $2,186 for Mr.
Sayare, $1,177 for Dr. Blattler, $789 for Dr. Lambert and $646 for Ms.
Carroll.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding each stock option
granted during fiscal year 1999 to each individual named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION
OPTIONS EMPLOYEES IN FOR OPTION TERM(3)
GRANTED FISCAL YEAR EXERCISE EXPIRATION ----------------------
NAME (#)(1) (%) PRICE ($)(2) DATE 5% ($) 10% ($)
---- ---------- ------------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Mitchel Sayare............. 80,000 12.4 2.25 01/14/09 113,201 286,874
Walter A. Blattler,
Ph.D. ................... 75,000 11.7 2.25 01/14/09 106,126 268,944
John M. Lambert, Ph.D. .... 54,000 8.4 2.25 01/14/09 76,411 193,640
Kathleen A. Carroll........ 45,000 7.0 2.25 01/14/09 63,676 161,366
</TABLE>
- ---------------
(1) Options were granted on January 14, 1999. 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.
(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 year 1999,
the number of shares covered by both exercisable and unexercisable options as of
June 30, 1999, and the value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS
ON VALUE FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(2)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mitchel Sayare................. 37,500 15,825 465,889 282,777 165,340 279,492
Walter A. Blattler, Ph.D....... 30,000 13,140 256,307 228,610 120,626 208,492
John M. Lambert, Ph.D.......... 10,500 3,938 150,023 148,444 70,929 126,507
Kathleen A. Carroll............ 6,000 2,628 56,201 117,499 48,999 96,830
</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 on the dates of exercise of the options --
10
<PAGE> 14
May 11, 1999 for Mr. Sayare, May 12, 1999 for Drs. Blattler and Lambert, and
May 13, 1999 for Ms. Carroll.
(2) Value is based on the last sale price per share ($2.313) on June 30, 1999,
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 entered into employment agreements with Dr. Blattler and Dr.
Lambert on their respective hire dates. These agreements currently provide for
annual salaries of $230,000 for Dr. Blattler and $172,000 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 these 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 Restated Stock Option 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, 1994 through
June 30, 1999 to the cumulative total returns on the Nasdaq Composite Index
(U.S.) and the Nasdaq Pharmaceutical Stocks Total Return Index for the same
period.
<TABLE>
<CAPTION>
IMMUNOGEN, INC. NASDAQ COMPOSITE INDEX NASDAQ PHARMACEUTICAL
--------------- ---------------------- ---------------------
<S> <C> <C> <C>
6/30/94 100.00 100.00 100.00
6/30/95 91.00 133.00 133.00
6/30/96 94.00 171.00 196.00
6/30/97 37.00 208.00 199.00
6/30/98 41.00 274.00 204.00
6/30/99 54.00 392.00 285.00
</TABLE>
The above graph and table assume $100 invested on June 30, 1994 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 Company's Restated Stock Option Plan.
The Company does not have a standing Nominating Committee.
During the fiscal year ended June 30, 1999, there were four meetings of the
Board and one meeting each of the Audit Committee and the Compensation
Committee. Further, from time to time, the members of the Board and its
Committees acted by unanimous written consent or actions by the Directors
without a meeting pursuant to Massachusetts law. Messrs. Sayare, Carter,
Eisenson and Dr. Blattler attended all meetings of the Board. Mr. Feiner
attended two meetings 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 1999, 1998 or
1997. 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.
Under the Company's Restated Stock Option Plan, 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 remains a non-employee director),
will receive options to purchase 10,000 shares of Common Stock. Further, the
Board may also vote, at its discretion, to issue additional options as deemed
appropriate. In that regard, the Board voted to grant options to purchase 25,000
and 50,000 shares of Common Stock to each non-employee director in December 1997
and July 1998, respectively. In July 1998, the Board also voted to grant options
to purchase 50,000 shares of stock to any new non-employee director, if and when
elected to the Board. All options granted under the Plan have ten year terms and
exercise prices which are equal to the fair market value of the Common Stock on
the date of grant. Total option grants to date to the Company's current
non-employee Directors are as follows:
<TABLE>
<CAPTION>
OPTIONS GRANTED
-------------------------------------------
GRANT DATE EXERCISE PRICE MR. CARTER MR. EISENSON(1) MR. FEINER
- ---------- -------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
July 2, 1992(2).......................... $11.50 -- 10,000 10,000
July 2, 1996(2).......................... 4.38 -- 10,000 10,000
June 17, 1997(2)(3)...................... 1.63 10,000 -- --
December 31, 1997(4)..................... 0.84 25,000 25,000 25,000
July 29, 1998(4)......................... 1.38 50,000 50,000 50,000
------ ------ ------
85,000 95,000 95,000
====== ====== ======
</TABLE>
13
<PAGE> 17
- ---------------
(1) 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.
(2) These options become exercisable as to one-quarter of the shares each year
after issuance beginning one year from the date of grant.
(3) Option granted upon Mr. Carter's election to the Board.
(4) These options become exercisable as to one-third of the shares each year
after issuance beginning one year from the date of grant.
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.
PROPOSAL 2: AMENDMENT TO RESTATED STOCK OPTION PLAN
The Board recommends that the shareholders consider and approve a proposed
amendment to the Company's Restated Stock Option Plan (the "Plan") adopted by
the Board on July 21, 1999. For a description of the Plan, see "Summary of
Restated Stock Option Plan." The proposed amendment to the Plan would increase
the number of shares of Common Stock reserved for the grant of options as
described below.
Prior to July 21, 1999, 3,525,000 shares of Common Stock were reserved for
grants of options under the Plan. On July 21, 1999, the Board authorized,
subject to shareholder approval, an amendment to the Plan to increase the number
of shares reserved for grants of options to 4,850,000 shares of Common Stock.
The Committee also authorized on that date the grant of certain options. Of the
4,850,000 shares authorized as of July 21, 1999, 3,478,948 shares were subject
to outstanding options or had been exercised. Due to subsequent forfeitures of
outstanding options, as of September 20, 1999, 3,466,182 shares were subject to
outstanding options or had been exercised, leaving 1,383,818 shares available
for future grants.
The Board believes that having additional shares available for grants of
options under the Plan is both necessary and desirable in order to enable the
Company to continue to attract and retain qualified employees, consultants and
Directors.
From the inception of the Plan to September 20, 1999, the aggregate number
of shares of Common Stock obtainable upon exercise of options granted to:
Mitchel Sayare, Chairman, President and Chief Executive Officer (909,166
shares); Walter A. Blattler, Ph.D., Executive Vice President, Science and
Technology (552,978 shares); John M. Lambert, Ph.D., Vice President, Research
and Development (340,758 shares); Kathleen A. Carroll, Vice President, Finance
and Administration (187,950 shares), is 1,990,852. Of the options to purchase
1,990,852 shares of Common Stock, options to purchase 285,102 shares have been
exercised.
As of September 20, 1999, the aggregate number of options to purchase
shares of Common Stock exercisable by: all current executive officers as a group
(1,006,753 shares); all current Directors who are not executives (30,001
shares); affiliates of all current Directors, including their respective
employers (85,002 shares); and all other employees and consultants as a group
(373,996 shares), is 1,495,752. There is no nominee for election as a director
who is not a current director. Options granted in respect of the services of
certain current Directors are granted or assigned to their respective employers
(See Footnotes (6) and (7) to the table appearing under the caption "Principal
Shareholders").
14
<PAGE> 18
SUMMARY OF RESTATED STOCK OPTION PLAN
Under the Plan, incentive stock options, within the meaning of Section 422
of the Internal Revenue Code (the "Code"), may be granted to key employees, and
non-qualified options may be granted to key employees, Directors and consultants
of the Company. Approximately 60 persons are currently eligible to participate
in the Plan. The Plan was originally adopted by the Board on February 13, 1986
and approved by the Company's shareholders on December 5, 1986. The Committee
amended the original Plan on July 9, 1992, October 4, 1993, June 7, 1994 and
June 17, 1997. The shareholders approved the corresponding amendments on
November 10, 1992, November 9, 1993, November 8, 1994 and November 12, 1997,
respectively.
The exercise price of incentive stock options granted under the Plan may
not be less than 100% of the fair market value of the Company's Common Stock on
the date of grant. However, in the case of incentive stock options granted under
the Plan to holders of more than 10% of the voting power of the Company, the
exercise price may not be less than 110% of the fair market value of the Common
Stock on the date of grant. The exercise price of non-qualified options must be
equal to at least the par value per share of Common Stock on the date of grant.
Options granted under the Plan may not be exercised later than 10 years from the
date of grant, except in the case of incentive stock options issued with an
exercise price of at least 110% of fair market value, which may not be exercised
later than five years from the date of grant. Options generally vest over
periods of up to four years, and are intended to create long-term incentive and
motivation for the Company's employees, Directors and consultants, as well as to
provide those persons with the perspective of the Company's shareholders in
assessing corporate results.
The Plan provides that the aggregate fair market value of shares issuable
upon the exercise of incentive stock options exercisable for the first time
during any one calendar year may not exceed $100,000. Options granted under the
Plan become exercisable in installments over the option term. Options granted
under the Plan expire upon termination of an optionee's employment for cause.
Generally, options must be exercised within three months after termination of an
optionee's employment for any other reason (except death or disability), and
within one year after an optionee's death or disability, but in no event later
than the originally prescribed term of the option. The Plan terminates on
November 9, 2003, unless previously terminated by vote of the shareholders of
the Company. The plan provides for termination of all options granted thereunder
in the event of dissolution or liquidation of the Company, subject to the right
of optionees (or optionees' survivors) to exercise all their options immediately
before such event, to the extent that the right to exercise such options has
accrued as of the date immediately prior to such dissolution or liquidation.
The Plan also provides that, in the event of a consolidation of the Company
with, or acquisition of the Company by, another entity, or sale of all or
substantially all of the assets of the Company, the Board will make appropriate
provision for options granted pursuant to the Plan. The Directors will either
(i) continue options granted under the Plan (if necessary substituting rights to
shares of the successor entity), or (ii) require that all options granted
thereunder be exercised, or (iii) terminate all options in exchange for a fair
market value cash payment. If the Board should utilize either of the methods
described in (ii) or (iii) above, all options granted pursuant to the Plan will
be made fully exercisable irrespective of original vesting schedules.
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
15
<PAGE> 19
(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 Restated Stock Option 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.
The Plan is administered by the Committee. Subject to the provisions of the
Plan, the Committee has the authority to determine the terms under which options
are granted, including the individuals to whom such options may be granted, the
exercise price and number of shares subject to each option, the time or times
during which all or a portion of each option may be exercised and certain other
provisions. The Plan may be amended by the shareholders of the Company. The Plan
may also be amended by the Board or the Committee without approval by the
shareholders except to the extent that shareholder approval is required to
ensure favorable tax treatment under the Code for incentive stock options or in
order to ensure the qualification of the Plan under Rule 16b-3 promulgated under
the Securities Exchange Act of 1934. Any optionee who is adversely affected by
any such changes must consent thereto in writing.
To date, all options have been granted with exercise prices equal to the
fair market value of the Company's Common Stock on the date of grant. As of
September 20, 1999, as reported by the Nasdaq National Market System, the
closing price for the Common Stock was $2.03.
FEDERAL INCOME TAX CONSIDERATIONS
Incentive Stock Options. An incentive stock option does not result in
taxable income to the optionee or in a deduction to the Company at the time it
is granted or exercised, provided that no disposition is made by the optionee of
the shares acquired pursuant to the option within the two-year period commencing
on the day after the date of grant or within one year commencing on the day
after the date of transfer of shares to such optionee (the "ISO holding
period"). However, the difference between the fair market value of the stock on
the date of exercise and the option price thereof will be an "item of tax
preference" includible in "alternative minimum taxable income." Upon disposition
of the stock after the expiration of the ISO holding period, the optionee's
basis for determining taxable gain or loss will be the option price paid for the
stock. Any amount realized in excess of his or her basis will be taxed to the
optionee as long-term capital gain and any loss sustained will be long-term
capital loss.
Except in the event of the death of an optionee or transfers by an
insolvent optionee in connection with certain bankruptcy proceedings, if the
stock is disposed of prior to the expiration of the ISO holding period, the
optionee generally will be considered to have realized taxable compensation in
the year of disposition equal to the excess of the fair market value of the
stock on the date of exercise of the option over the option price. Any
additional gain realized on the disposition will normally constitute capital
gain. If the amount realized upon such a disqualifying disposition is less than
the fair market value of the stock on the date of exercise (and if the
disposition is a sale or exchange with respect to which a loss, if sustained,
would be recognized to the optionee), the amount of compensation income will be
limited to the excess (if any) of the amount realized over the optionee's
adjusted basis in the stock. If the stock is disposed of prior to the expiration
of the ISO holding period, subject to the applicable provisions of the Code, a
deduction for federal income tax purposes will be allowable to the Company in
the year of the disposition in an amount equal to the compensation recognized by
the optionee.
16
<PAGE> 20
Non-Qualified Stock Options. Under current U.S. federal income tax laws
and regulations, the grant of a non-qualified stock option will not ordinarily
result in taxable income to the optionee or a deduction to the Company at the
time it is granted. The optionee will recognize taxable compensation at the time
such optionee exercises a non-qualified stock option in the amount equal to the
excess of the then fair market value of the shares acquired over the option
price, except to the extent that shares are issued or transferred subject to a
restriction involving a substantial risk of forfeiture and the shares cannot be
transferred free of that risk.
Stock issued or transferred to certain employees will be considered subject
to a substantial risk of forfeiture throughout the period during which a sale of
the stock by such person at a profit could subject him or her to liability under
Section 16(b) of the Securities Exchange Act of 1934, as is stock issued upon
exercise of an option subject to Company repurchase rights. An optionee to whom
shares are issued or transferred subject to a substantial risk of forfeiture
will not realize compensation at the time of exercise. Compensation will instead
be realized at the time of the lapse of such restrictions, with the amount of
compensation so realized being equal to the excess of the fair market value of
the shares at the time of such lapse over the option price paid for the shares.
However, if the optionee so elects under Section 83 (b) of the Code, the
optionee will realize compensation at the time of exercise of the option in an
amount equal to the excess of the then fair market value of the shares over the
exercise price.
Subject to the applicable provisions of the Code and assuming federal tax
withholding requirements are satisfied, a deduction for federal income tax
purposes will be allowable to the Company in the same year as, and in an amount
equal to, the taxable compensation recognized by the optionee.
If the optionee disposes of the stock acquired pursuant to exercise of a
non-qualified stock option, the optionee's basis for determining taxable gain or
loss will be the sum of the option price paid for the stock plus any related
compensation income recognized by the optionee, and such gain or loss normally
will be capital gain or loss. The optionee's holding period for determining
long-term capital gain will be measured from the date of exercise of the option
if the acquired stock was not subject to a substantial risk of forfeiture or if
the election under Section 83 (b) was made; otherwise the optionee's holding
period will be measured from the date the restrictions lapse.
The affirmative vote of a majority of the shares present or represented and
entitled to vote at the Meeting is required to approve the increase in the
aggregate number of shares of Common Stock available under the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE RESTATED STOCK OPTION PLAN.
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
17
<PAGE> 21
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 (collectively, 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 10, 1999, such holders beneficially held approximately 10,346,472
shares of Common Stock.
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 10, 1999, warrants to purchase Common Stock equal to the $8.596
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, 1999, 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.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, independent accountants, audited the Company's
financial statements for the fiscal year ended June 30, 1999. 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 ended June 30, 2000.
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 2000, the Company must
receive a shareholder proposal no later than June 14, 2000. Proposals should be
delivered in writing to ImmunoGen, Inc., 128 Sidney Street, Cambridge,
Massachusetts 02139. One or more shareholders who hold at least a one-tenth part
in interest of the capital
18
<PAGE> 22
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 2000, must notify the Company in
writing at the above-referenced address no later than October 20, 2000. 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, 2000 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 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, 7A, 8 and 9 of the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1999, 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 12, 1999
19
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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 9, 1999
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement dated October 12, 1999, 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 9, 1999, at
10:00 a.m., Boston time, and at any adjournments thereof.
PLEASE FILL IN REVERSE SIDE AND MAIL IN THE ENCLOSED ENVELOPE
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THE SHARES REPRESENTED HEREBY WILL BE VOTED AS DIRECTED Please mark [X]
HEREIN. IF NO DIRECTION IS INDICATED, SUCH SHARES WILL BE your vote as
VOTED FOR ITEM 1 AND ITEM 2. indicated in
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
[ ] [ ]
Item 2: To approve the proposal to amend the Company's Restated Stock Option
Plan to increase the number of shares reserved for the grant of options
from 3.525 million to 4.850 million
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournments thereof.
THIS PROXY MAY BE REVOKED IN WRITING AT 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:
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Date:
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Signature:
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Date:
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