Schedule 14A Information
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by Registrant
[ ] Filed by a Party other than Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Section 240.14a-11(c)
or 240.14a-12
MEDIMMUNE, INC.
(Name of Registrant as Specified in its Charter)
MEDIMMUNE, INC.
(Name of Person(s) filing Proxy Statement)
Payment of Filing Fee (check appropriate box): N/A
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1. Title of each class of securities to which transaction
applies: N/A
2. Aggregate number of securities to which
transaction applies: N/A
3. Per unit price or other underlying value
of transaction computed pursuant to
Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction:
N/A
* Set forth the amount on which the filling fee is calculated and
state how it was determined. N/A
[ ] 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: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
MEDIMMUNE, INC.
[LETTERHEAD & LOGO]
April 10, 1997
Dear MedImmune Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders to be held at the Gaithersburg Marriott,
Washingtonian Center, 9751 Washingtonian Boulevard, Gaithersburg,
Maryland 20878 on May 16, 1997 at 10:00 a.m. Information about
the meeting, the nominees for directors and the proposals to be
considered is presented in the Notice of Annual Meeting and the
Proxy Statement on the following pages.
In addition to the formal items of business to be brought
before the meeting, I will report on our Company's operations
during 1996. This will be followed by a question and answer
period.
Your participation in MedImmune's affairs is important,
regardless of the number of shares you hold. To ensure your
representation, even if you cannot attend the meeting, please
sign, date and return the enclosed proxy promptly.
We look forward to seeing you on May 16th.
Sincerely,
Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
MEDIMMUNE, INC.
[LETTERHEAD & LOGO]
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 16, 1997
________________________________________________________________
The Annual Meeting of Stockholders of MedImmune, Inc. will
be held at the Gaithersburg Marriott, Washingtonian Center, 9751
Washingtonian Boulevard, Gaithersburg, Maryland on May 16, 1997
at 10:00 a.m., for the following purposes:
1. To elect eight directors;
2. To approve an amendment to the MedImmune, Inc. 1991 Stock
Option Plan;
3. To approve and ratify the appointment of Coopers & Lybrand
L.L.P. as independent auditors; and
4. To transact such other business as properly may come before
the meeting and any adjournment thereof.
Stockholders of record at the close of business on March 31,
1997 are entitled to receive notice of, and to vote at, the
Annual Meeting.
By Order of the Board of Directors,
Carol A. Iorio
Corporate Secretary
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
April 10, 1997
_________________________________________________________________
PROXY STATEMENT
_________________________________________________________________
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of MedImmune, Inc.
("MedImmune" or the "Company") of proxies to be voted at the
Annual Meeting of Stockholders on May 16, 1997. This Proxy
Statement, the accompanying proxy card and Annual Report to
Stockholders are being mailed to stockholders on or about April
11, 1997. Business at the Annual Meeting is conducted in
accordance with the procedures determined by the presiding
officer and is generally limited to matters properly brought
before the meeting by or at the suggestion of the Board of
Directors or by a stockholder pursuant to provisions requiring
advance notice and disclosure of relevant information.
The number of voting securities of MedImmune outstanding on
March 31, 1997, the record date for the meeting, was 21,902,918
shares of common stock, $.01 par value per share, each share
being entitled to one vote. Stockholders do not have cumulative
voting rights.
Voting of Proxies
Since many MedImmune stockholders are unable to attend the
Company's Annual Meeting, the Board of Directors solicits proxies
to give each stockholder an opportunity to vote on all matters
scheduled to come before the meeting and set forth in this Proxy
Statement. Stockholders are urged to read carefully the material
in this Proxy Statement, specify their choice on each matter by
marking the appropriate boxes on the enclosed proxy card, and
sign, date and return the card in the enclosed stamped envelope.
If no choice is specified and the card is properly signed and
returned, the shares will be voted by the Proxy Committee as
recommended by the Company. A stockholder who signs a proxy may
revoke or revise that proxy at any time before the meeting. A
previously returned proxy may be cancelled by voting by ballot at
the meeting.
Stockholder proxies are received by American Stock Transfer &
Trust Company, the Company's independent proxy processing agent,
and the vote is certified by Inspectors of Election. Proxies and
ballots that identify the vote of individual stockholders are
kept confidential until the final vote has been tabulated at the
Annual Meeting, except as necessary to meet legal requirements or
in a contested proxy solicitation, and in cases where
stockholders write comments on their proxy cards.
MedImmune's Proxy Committee consists of Dr. Wayne T.
Hockmeyer, Chairman and Chief Executive Officer, and Mr. David M.
Mott, President and Chief Operating Officer. Proxy cards, unless
otherwise indicated by the stockholder, also confer upon the
Proxy Committee discretionary authority to vote all shares of
stock represented by the proxies on any matter which properly may
be presented for action at the meeting even if not covered
herein. If any of the nominees for director named in Proposal
1 - Election of Directors should be unavailable for election, the
proxies will be voted for the election of such other person as
may be recommended by the Company in place of such nominee.
Stockholders of record at the close of business on March 31,
1997, are entitled to receive notice of the meeting and to vote
the shares held on that date. The holders of a majority of the
issued and outstanding shares of stock of the Company entitled to
vote at the meeting must be represented in person or by proxy at
the Annual Meeting for the meeting to be held. Other than the
election of directors, which requires a plurality of the votes of
the stockholders represented at the meeting, each matter to be
submitted to the stockholders requires the affirmative vote of
the holders of a majority of the shares represented at the
meeting, in person or by proxy, and entitled to vote.
Abstentions have the same effect as a vote against any such
matter. Broker non-votes are deemed not entitled to vote and are
not counted as votes for or against any such matter.
Attendance at Annual Meeting
To ensure the availability of adequate space for MedImmune
stockholders wishing to attend the meeting, priority seating will
be given to stockholders of record, beneficial owners of the
Company's stock having evidence of such ownership, or their
authorized representatives, and invited guests of management. In
addition, a stockholder may bring one guest. In order that
seating may be equitably allocated, a stockholder wishing to
bring more than one guest must write to the Secretary of the Com
pany in advance of the meeting and receive written concurrence.
Those unable to attend may request from the Corporate Secretary a
copy of the report of the proceedings of the meeting.
PROPOSAL 1 - ELECTION OF DIRECTORS
A Board of eight directors is to be elected at the Annual
Meeting, each director so elected to hold office for a term of
one year and until the election and qualification of a successor.
All directors hold office until the next annual meeting of
stockholders and until their successors are duly elected and
qualified. The Company's By-Laws authorize the Board of
Directors from time to time to determine the number of its
members. Vacancies in unexpired terms and any additional
positions created by Board action are filled by action of the
existing Board of Directors.
The Board of Directors recommends a vote FOR the following
nominees:
Wayne T. Hockmeyer
Dr. Hockmeyer (age 52) founded the Company in April 1988 as
President and Chief Executive Officer and was elected to serve
on the Board of Directors in May 1988. He became Chairman of
the Board of Directors in May 1993. From 1986 to 1988, Dr.
Hockmeyer served as Vice President, Research and Development,
of Praxis Biologics, Inc. ("Praxis"). From 1980 to 1986, Dr.
Hockmeyer served as Chairman, Department of Immunology, Walter
Reed Army Institute of Research. Dr. Hockmeyer currently
serves on the Advisory Board of the University of Maryland
Biotechnology Institute and is also a member of the board of
directors of Digene Corporation and of the Suburban Maryland,
Montgomery County Technology Council. Dr. Hockmeyer holds a
doctorate from the University of Florida and a bachelor of
science degree from Purdue University.
David M. Mott
Mr. Mott (age 31) joined the Company in April 1992 as Vice
President, with responsibility for business development,
strategic planning and investor relations. In 1994, Mr. Mott
assumed additional responsibility for the medical and
regulatory groups, and in 1995 was promoted to Executive Vice
President and Chief Financial Officer. In November 1995, Mr.
Mott was promoted to the position of President and Chief
Operating Officer and was elected to the Board of Directors.
Prior to joining the Company, he was a Vice President in the
Health Care Investment Banking Group at Smith Barney, Harris
Upham & Co., Inc. At Smith Barney, where he was employed from
July 1986 to April 1992, Mr. Mott's activities included public
and private equity and debt financings as well as merger and
acquisition work for biotechnology, medical services, and
medical product and device companies. He holds a bachelor of
arts degree in economics and government from Dartmouth
College.
Franklin H. Top, Jr., M.D.
Dr. Top (age 61) joined the Company in June 1988 as Executive
Vice President. He was elected to the Board of Directors in
July 1988 and became the Company's Medical Director in 1990.
From 1987 to 1988, Dr. Top served as Senior Vice President for
Clinical and Regulatory Affairs at Praxis. Prior to 1987, Dr.
Top served for 22 years in the U.S. Army Medical Research and
Development Command, where he was appointed Director, Walter
Reed Army Institute of Research in 1983. Dr. Top holds a
doctorate of medicine cum laude and a bachelor of science
degree in biochemistry from Yale University.
M. James Barrett, Ph.D.
Dr. Barrett (age 54) has been a director of the Company since
1988 and is the Chairman, Chief Executive Officer and a
director of Sensors for Medicine and Science, Inc. From July
1987 to September 1996 he was Chief Executive Officer and
director of Genetic Therapy, Inc. From 1982 to July 1987, Dr.
Barrett served as President of Life Technologies, Inc. and its
predecessor, Bethesda Research Laboratories, Inc. Prior to
1982, he was employed at SmithKline Beecham Corporation for 13
years, where he held a variety of positions, including
President of its In Vitro Diagnostic Division and President of
SmithKline Clinical Laboratories. Dr. Barrett holds a
doctorate in biochemistry from the University of Tennessee and
a master's degree in business administration from the
University of Santa Clara.
James H. Cavanaugh, Ph.D.
Dr. Cavanaugh (age 60) has been a director of the Company
since September 1990 and has been President of HealthCare
Investment Corporation L.L.C. ("HIC") since 1989 and a general
partner of HealthCare Partners I, L.P. ("HCP I") and
HealthCare Partners II, L.P. ("HCP II"), the general partners
of HealthCare Ventures I, L.P. and HealthCare Ventures II,
L.P., respectively, principal stockholders of the Company.
Prior thereto, Dr. Cavanaugh served as President of SmithKline
and French Laboratories U.S., Inc., from March 1985 to
February 1989 and as President of SmithKline Clinical
Laboratories from 1981 to 1985. Prior thereto, Dr. Cavanaugh
was the President of Allergan International, a specialty eye
care company. Dr. Cavanaugh also serves as a member of the
Board of Directors of Human Genome Sciences, Inc., Magainin
Pharmaceuticals, Inc., Shire Pharmaceuticals Group PLC, and
Procept, Inc. Prior to his industry experience, Dr. Cavanaugh
was Deputy Assistant to the President for Domestic Affairs and
Deputy Chief of the White House Staff. Before his White House
tour, he served as Deputy Assistant Secretary for Health and
Scientific Affairs in the U.S. Department of Health, Education
and Welfare and as Special Assistant to the Surgeon General of
the U.S. Public Health Service. In addition to serving on the
boards of directors of several health care and biotechnology
companies, Dr. Cavanaugh currently serves on the Board of
Trustees of the National Committee for Quality Health Care
(Chairman, 1988), the National Committee of the American
Refugee Committee, the Board of Councilors of the School of
Pharmacy of the University of Southern California and as
Trustee Emeritus of the California College of Medicine. He
has served on the Board of Directors of the Pharmaceutical
Manufacturers Association, Unihealth America, and the
Proprietary Association. He was a Founding Director of the
Marine National Bank in Santa Ana, California. Dr. Cavanaugh
holds a doctorate and a master's degree from the University of
Iowa and a bachelor of science degree from Fairleigh Dickinson
University.
Barbara Hackman Franklin
Ms. Franklin (age 56) has been a director of the Company since
November 1995 and, since January 1995, has served as the
President and Chief Executive Officer of Barbara Franklin
Enterprises, a private international consulting and investment
firm in Washington, D.C. Between January 1993 and January
1995, Ms. Franklin was a lecturer and served as a director of
various corporations and organizations. Previously,
Ms. Franklin served as the 29th U.S. Secretary of Commerce in
the Bush Administration. Ms. Franklin has served four terms
on the Advisory Committee for Trade Policy and Negotiations,
by appointment of Presidents Reagan and Bush, and as an
Alternate Representative and Public Delegate to the United
Nations General Assembly, by appointment of President Bush.
Ms. Franklin founded Franklin Associates, an internationally
recognized consulting firm, and served as its President from
1984 through 1992, was Senior Fellow of the Wharton School of
the University of Pennsylvania (1979-1988), director of the
Wharton Government and Business Program (1980-88), one of the
original Commissioners of the U.S. Consumer Product Safety
Commission (1973-1979) and a staff assistant to President
Nixon, creating the first White House effort to recruit women
for high level government jobs (1971-1973). Ms. Franklin
currently serves on the board of directors of Aetna Inc., The
Dow Chemical Company, AMP Inc., Cincinnati Milacron, Inc. and
the Nasdaq Stock Market, Inc. Ms. Franklin graduated from The
Pennsylvania State University and received a master's degree
in business administration from Harvard University.
Lawrence C. Hoff
Mr. Hoff (age 68) has been a director of the Company since
April 1991. In 1990, Mr. Hoff retired as President and Chief
Operating Officer of the Upjohn Company. Mr. Hoff joined
Upjohn in 1950 as a pharmaceutical sales representative. He
was appointed Vice President for Domestic Pharmaceutical
marketing in 1969. In 1973, Mr. Hoff was elected to the Board
of Directors of Upjohn and the following year became Vice
President and General Manager of Domestic Pharmaceutical Opera
tions. He was promoted to Executive Vice President in 1977,
was named President in 1984, and President and Chief Operating
Officer in 1987. Mr. Hoff was elected to the Board of
Directors of the Pharmaceuticals Manufacturers Association
("PMA") in 1984. He was elected Chairman-elect of the PMA in
1986 and Chairman in 1987. Mr. Hoff currently serves on the
board of directors of Pathogenesis Corp., Curative Health
Systems, Inc., and Alpha-Beta Technology, Inc. Mr. Hoff
graduated from Stanford University and has received honorary
degrees from the Massachusetts College of Pharmacy and Allied
Health Sciences and from Kalamazoo College.
Gordon S. Macklin
Mr. Macklin (age 68) has been a director of the Company since
July 1994. Mr. Macklin has served as Chairman of the White
River Corporation since 1994 and has been a corporate
financial advisor since 1992. From 1987 through 1992, he was
Chairman of Hambrecht and Quist Group, an investment banking
and venture capital firm. Previously, Mr. Macklin was
President of the National Association of Securities Dealers,
Inc. from 1970 through 1987. He also served as Chairman of
National Clearing Corporation (1970 to 1975) and as a partner
and member of the Executive Committee of McDonald & Company
Securities, Inc. where he was employed from 1950 through 1970.
Mr. Macklin serves on the Board of Directors of Fund American
Enterprises Holdings, Inc., MCI Communications Corporation,
CCC Information Services Group, Inc., Source One Mortgage
Services Corporation, Shoppers Express and Spacehab, Inc. and
as director, trustee or managing general partner, as the case
may be, of 52 of the investment companies in the
Franklin/Templeton Group.
The Board of Directors and its Committees
Board Meetings
During 1996, the Board of Directors met seven times, and all
directors attended more than 75% of the meetings of the Board and
the Board Committees on which they served.
Committees of the Board
Committees of the Board of Directors consist of the Audit
Committee, the Compensation and Stock Committee and the Executive
Committee. Information concerning the committees is set forth
below.
The Audit Committee oversees the performance, and reviews the
scope, of the audit performed by the Company's independent
accountants. The Audit Committee also reviews audit plans and
procedures, changes in accounting policies and the use of the
independent accountants for non-audit services. The Audit
Committee consists of Mr. Hoff (Chairman), Dr. Barrett, Ms.
Franklin and Mr. Macklin. During 1996, the Audit Committee met
three times.
The Compensation and Stock Committee determines the
compensation and benefits of all officers of the Company and
establishes general policies relating to compensation and
benefits of employees of the Company. The Compensation and Stock
Committee is also responsible for administering the Company's
1991 Stock Option Plan (the "1991 Plan") in accordance with the
terms and conditions set forth therein. The Compensation and
Stock Committee currently consists of Dr. Cavanaugh (Chairman),
Dr. Barrett, Ms. Franklin and Mr. Hoff, with Dr. Hockmeyer
serving as a non-voting ex officio member. During 1996, the
Compensation and Stock Committee met once.
The Executive Committee is responsible for all matters which
arise between regular meetings of the Board of Directors to the
extent permitted by applicable law. The Executive Committee
currently consists of Dr. Hockmeyer (Chairman), Dr. Barrett, Dr.
Cavanaugh and Mr. Macklin. During 1996, the Executive Committee
met four times.
Compensation and Stock Committee Report on Executive Compensation
Compensation of the Company's executives is subject to review
and approval by the Compensation and Stock Committee (the
"Committee") of the Company's Board of Directors. The Committee
consists of four outside directors (James H. Cavanaugh
(Chairman), M. James Barrett, Barbara Hackman Franklin and
Lawrence C. Hoff), and the Chairman and Chief Executive Officer
of the Company (Wayne T. Hockmeyer), who serves as a non-voting
ex officio member.
In determining the compensation to be paid to the Company's
executive officers in 1996, the Committee employed compensation
policies designed to align such compensation with the interests
of the Company's stockholders and to relate it to overall
corporate performance. These policies are intended to attract
and retain executives whose abilities are critical to the
long-term success of the Company, to support a
performance-oriented environment that rewards achievement of
internal corporate goals and to reward executives for the
enhancement of stockholder value.
The components of the compensation of each executive officer,
including the Chief Executive Officer, are base salary, cash
bonus awards and stock option grants, as described below:
Base salaries of the executive officers are targeted to be
within the competitive range among biotechnology companies
similar in size to the Company. The Committee utilizes the
annual survey report of approximately 300 biotechnology
companies prepared by a leading compensation consulting firm
for this purpose. The base salaries of the executive officers
are subject to certain minimums set forth in individual
employment agreements.
Cash bonuses are designed to provide annual incentives based
on individual performance in achieving the Company's annual
business goals. For 1996 these goals included further
advancing the development, manufacture and marketing of new
therapeutic and vaccine products, expanding the market
presence and sales of the Company's two FDA-approved products
and continuing to recruit and train the Company's scientific
and marketing teams. The Committee makes the determination as
to bonus awards at the end of each year based on the
subjective evaluation of the contributions of the individual
executive officer towards the achievement of the Company's
annual business goals.
Stock option grants are intended to provide the most
meaningful component of executive compensation. Stock options
provide compensation in a manner that is intrinsically related
to long-term stockholder value because options have value only
to the extent of share appreciation from date of grant. Stock
options granted by the Company generally become exercisable in
25% annual increments beginning on the first anniversary of
the date of grant and remain exercisable for 10 years from the
date of grant unless the optionee's employment with the
Company is terminated.
The Committee believes that periodic stock option grants are
appropriate, particularly in view of the absence of a
Company-sponsored long-term incentive or pension plan. Periodic
awards of stock options are granted to executives at the
discretion of the Committee, based on an individual's contribu-
tion toward achieving the Company's strategic and product
development goals. These goals include: developing product
candidates with significant potential for commercialization;
driving product candidates through the research, development,
regulatory approval and commercialization process; and estab
lishing strategic alliances with corporate partners and research
institutions to leverage the Company's resources and to expand
its research and development pipeline. The Committee also takes
into account the number of stock options previously granted. In
view of the Company's early stage in product development, the
Committee assigns less weight to the Company's near-term
achievement of more traditional measures of corporate
performance, such as earnings per share and return on equity.
The Compensation and Stock Committee based the 1996
compensation of the Chief Executive Officer and the Company's
other executive officers on the policies described above. The
base salaries of the Chief Executive Officer and the Company's
other executive officers generally increased in 1996 commensurate
with their increased responsibilities and the growth in scope of
the Company's operations. The 1996 cash bonuses paid to the
executive officers, including the Chief Executive Officer, were
based on the achievement of individual productivity and
performance goals consistent with the Company's annual business
goals during the year. In March 1996, new stock option grants
were made to the executive officers, including the Chief
Executive Officer. These stock option grants were made by the
Committee as part of the program of making periodic stock option
grants to executive officers, with the number of stock options
granted to each officer during 1996 determined on the basis of
such officer's contribution toward achieving the Company's
strategic and product development goals, as described above. See
"Executive Compensation."
A federal tax law disallows corporate deductibility for
certain compensation paid in excess of $1 million to the chief
executive officer and the four other most highly paid executive
officers of publicly held companies. "Performance-based
compensation," as defined in the tax law, is not subject to the
deductibility limitation provided certain stockholder approval
and other requirements are met. The Company believes that the
stock options granted in 1996 and prior years satisfied the
requirements of federal tax law and thus compensation recognized
in connection with such awards should be fully deductible. It is
the Company's intention to make efforts to maximize deductibility
of compensation paid to its officers under such law. During
1996, the Company did not exceed the $1 million deductibility cap
with respect to any officer covered by such law.
James H. Cavanaugh, Ph.D., Chairman
M. James Barrett, Ph. D.
Barbara Hackman Franklin
Lawrence C. Hoff
Wayne T. Hockmeyer, Ph.D., ex officio
Compensation and Stock Committee Interlocks and Insider
Participation
Dr. Hockmeyer, the Company's Chairman and Chief Executive
Officer, is a non-voting ex officio member of the Compensation
and Stock Committee. In addition, Dr. Cavanaugh, a director of
the Company, is an officer of HIC. See "Certain Transactions"
below.
Executive Compensation
Summary Compensation Table
The following table summarizes the compensation paid by the
Company to its Chief Executive Officer and the Company's five
most highly compensated executive officers other than the Chief
Executive Officer (the "named executive officers") for the last
three years.
<TABLE>
<CAPTION> LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------ ------------
<S> <C> <C> <C> <C> <C>
Other Annual Securities
Name and Principal Salary Bonus Compensation Underlying
Position Year ($) ($) ($) Options (#)
Wayne T. Hockmeyer 1996 313,939 120,000 _ 75,000
Chairman and Chief 1995 280,546 100,000 - 40,000
Executive Officer 1994 267,364 40,000 - 40,000
David M. Mott 1996 240,933 100,000 - 35,000
President and Chief 1995 179,203 70,000 - 200,000
Operating Officer 1994 154,233 35,000 - 141,289(1)
David P. Wright 1996 222,767 40,000 - 30,000
Executive Vice 1995 216,000 40,000 - 100,000
President, Sales and 1994 165,380 25,000 - 29,738(1)
Marketing
Franklin H. Top, Jr., 1996 196,289 50,000 - 30,000
Executive Vice 1995 175,729 50,000 - 25,000
President and Medical 1994 166,822 20,000 - 20,000
Director
Bodgan Dziurzynski (2) 1996 178,975 40,000 10,644 30,000
Senior Vice President, 1995 171,875 40,000 17,298 12,500
Regulatory Affairs and 1994 68,652 10,000 6,288 50,000
Quality Assurance
James F. Young 1996 189,565 40,000 - 30,000
Senior Vice President, 1995 175,343 40,000 - 25,000
Research & Development 1994 167,354 20,000 - 20,000
</TABLE>
_________________________
(1) Includes shares granted under the 1994 Stock Option Exchange
Program for Messrs. Mott (145,000 option shares were exchanged
for 111,289 new option shares) and Wright (20,000 option shares
exchanged for 4,738 new option shares).
(2) Mr. Dziurzynski was hired on August 1, 1994. His Other Annual
Compensation consists of a forgiven loan in 1996, relocation
expense reimbursement and a forgiven loan in 1995 and relocation
expense reimbursement in 1994.
Option Grants in Fiscal 1996
The following table sets forth information relating to the
grant of stock options by the Company during 1996 to the named
executive officers.
<TABLE>
<CAPTION>
Potential
Realizable Value of
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term (1)
------------------------------------------------------------
% of Total
Options
Number of Granted
Securities to Exercise
Underlying Employees or Base Expira-
Options in Fiscal Price tion
Name (#) (2) 1996 ($/sh) Date 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Wayne T. 75,000 9.6% 16.50 3/13/06 $779,625 $1,967,625
Hockmeyer
David M. Mott 35,000 4.5% 16.50 3/13/06 $363,825 $ 918,225
David P. Wright 30,000 3.8% 16.50 3/13/06 $311,850 $ 787,050
Franklin H. 30,000 3.8% 16.50 3/13/06 $311,850 $ 787,050
Top, Jr
Bogdan 30,000 3.8% 16.50 3/13/06 $311,850 $ 787,050
Dziurzynski
James F. Young 30,000 3.8% 16.50 3/13/06 $311,850 $ 787,050
</TABLE>
(1) The indicated dollar amounts are the result of
calculations based on the exercise price of each option
and assume five and ten percent appreciation rates set by
the Securities and Exchange Commission and, therefore,
are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
(2) Granted options become exercisable in 25% annual
increments beginning on the first anniversary of the date
of grant.
Aggregated Option Exercises in 1996 and Fiscal Year-End Values
The following table sets forth information relating to the
exercise of stock options by the named executive officers during
1996, the number of shares covered by stock options held by the
named executive officers at December 31, 1996, and also shows the
value of "in-the-money" options (market price of the Company's
stock less the exercise price) at that date.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options held at Options at
December 31, 1996 December 31,1996
(#) ($)
------------------ ----------------
Shares
Acquired
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
___________ ________ ________ _______ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Wayne T. 158,684 $2,279,934 143,750 136,250 $601,250 $161,250
Hockmeyer
David M. _ _ 236,706 164,583 $1,663,230 $886,038
Mott
David P. _ _ 207,155 79,583 $2,504,679 $519,996
Wright
Franklin H. _ _ 150,936 65,000 $1,393,534 $266,250
Top, Jr.
Bogdan _ _ 33,125 59,375 $395,000 $351,250
Dziurzynski
James F. 15,000 $223,350 220,359 65,000 $2,533,410 $266,250
Young
</TABLE>
Employment Agreements
In March 1997, the Company entered into employment
agreements (the "Agreements") with each of the named executive
officers. The Agreements provide that the officers will serve
the Company in the respective offices listed in the Summary
Compensation Table for a term of two years, subject to annual one-
year extension by resolution of the Compensation and Stock
Committee of the Board (the "Committee") and to earlier
termination as provided in the Agreements. The Agreements set
forth the minimum base salary of each officer during the term of
the Agreements, subject to possible increase at the sole
discretion of the Committee. Each officer is also eligible to
receive, at the sole discretion of the Committee, an annual bonus
based on his contribution toward achievement of the annual
business goals of the Company. Under the Agreements, the
officers are entitled to participate in the employee benefit
plans of the Company and are eligible for the grant of stock
options, in the sole discretion of the Committee, under the
Company's 1991 Stock Option Plan.
The Agreements include provisions that are effective upon
the termination of employment of the officers under certain
circumstances. In general, the officers are entitled to
continuation of base salary and medical coverage for specified
periods following a termination of employment by the Company
without "cause" or by the officer for a "good reason" occurring
within specified periods following a "change in control" of the
Company (each as defined in the Agreements). For Dr. Hockmeyer
and Mr. Mott, the severance period is 12 months following
termination, but the period is extended for an additional 12
months if the officer has not accepted another position of
full-time employment by the expiration of such initial severance
period. For Dr. Top, Mr. Wright, Mr. Dziurzynski and Dr. Young,
the severance period is 12 months following termination. Upon a
"change in control" of the Company, all outstanding stock options
of Dr. Hockmeyer and Mr. Mott become fully vested and
exercisable. Upon a termination of employment within six months
following a change in control, the rights of Dr. Hockmeyer and
Mr. Mott to exercise outstanding stock options are extended for
up to three years following such termination. In the event of
termination of employment of an officer as a result of death or
disability, the officer is entitled to a lump-sum payment equal
to 12 months' base salary plus, in the case of disability,
continued medical coverage for the same period.
The Agreements include certain restrictive covenants for the
benefit of the Company relating to non-disclosure by the officer
of the Company's confidential business information, the Company's
right to inventions and technical improvements of the officer and
noncompetition by the officer with the Company's business for a
period of one year following termination of employment (six
months if termination is without "cause" or for "good reason").
Any violation of these provisions by an officer would cause a
breach of the Agreement and forfeiture of all severance benefits,
in addition to any remedies of the Company under law. The
Agreements are not assignable by either party but are binding
upon successors of the Company.
Director Compensation
Other than Dr. Barrett, Ms. Franklin, and Messrs. Hoff and
Macklin, directors receive no cash compensation for their
services to the Company as directors, but are reimbursed for
expenses actually incurred in connection with attending meetings
of the Board of Directors. As compensation for serving on the
Board, Dr. Barrett, Ms. Franklin, and Messrs. Hoff and Macklin
receive an annual retainer of $10,000, a fee of $2,500 per Board
meeting attended in person plus expenses and a fee of $1,000 for
participating in a telephonic Board meeting. For attendance at
meetings of Board committees held on days when the Board does not
meet, such directors receive $1,000 per meeting attended in
person plus expenses and $500 for participating by telephone.
Directors may also be compensated for special assignments
delegated by the Board of Directors. The Company also has a
Non-Employee Directors Stock Option Plan pursuant to which
options for 20,000 shares are granted to each non-employee
director, upon commencement of service on the Board, and options
for 5,000 shares are granted to each non-employee director on
June 30 of each year of continued service on the Board.
Certain Transactions
HCV I and HCV II, principal stockholders of the Company, are
limited partnerships which were formed to provide capital to
companies in the health care field. HCP I and HCP II are limited
partnerships which serve as the general partner of HCV I and HCV
II, respectively. James H. Cavanaugh, a director of the Company,
is a general partner of HCP I and HCP II, owns a limited
partnership interest in HCV I and is the President of HIC, the
management company for each of HCV I and HCV II.
Affiliates of HIC are principal stockholders of
BioTransplant, Inc. ("BTI"). In October 1995, the Company and
BTI formed a strategic alliance for the development of products
to treat and prevent organ transplant rejection. The Company
paid an aggregate of $4.0 million in license fees and research
support to BTI during 1995 and 1996.
The Company believes that transactions referred to above
were on terms no less favorable to the Company than could have
been obtained from unaffiliated parties.
Performance Graph
Set forth below is a line graph based on monthly data
comparing the Company's cumulative total shareholder return (as
measured by dividing the difference between the Company's share
price at the beginning and the end of the measurement period by
the share price at the beginning of the measurement period) with
(i) the cumulative total return of The Nasdaq Stock Market (U.S.)
Index and (ii) the cumulative total return of the Nasdaq
Pharmaceutical Stocks Index. The Company has selected the Nasdaq
Pharmaceutical Stocks Index as the appropriate published industry
index for this comparison, as this Index is comprised of 243
companies, of which a large majority are biotechnology companies.
Comparison of Cumulative Shareholder Return (1)
NOTE: LINE GRAPH APPEARS HERE IN PRINTED VERSION; EDGAR
REPRESENTATION OF DATA POINTS USED IN LINE GRAPH ARE SET FORTH
BELOW:
<TABLE>
<CAPTION>
NASDAQ, US PHARMACEUTICAL MEDIMMUNE
1997 1997
Date List Index List Index
______________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Jan-92 198.15 100.00 404.17 100.00 40 1/2 100.00
Feb-92 202.64 102.27 369.16 91.34 37 1/4 91.98
Mar-92 193.08 97.44 335.29 82.96 31 1/2 77.78
Apr-92 184.80 93.26 280.69 69.45 28 69.14
May-92 187.20 94.47 291.14 72.03 18 3/4 46.30
Jun-92 179.88 90.78 281.25 69.59 19 46.91
Jul-92 186.25 93.99 296.48 73.35 21 1/4 52.47
Aug-92 180.56 91.12 269.88 66.77 18 1/4 45.06
Sep-92 187.27 94.51 264.85 65.53 17 1/4 42.59
Oct-92 194.64 98.23 282.23 69.83 14 3/4 36.42
Nov-92 210.13 106.05 325.52 80.54 23 1/2 58.02
Dec-92 217.86 109.95 322.29 79.74 23 56.79
Jan-93 224.07 113.08 299.56 74.12 18 44.44
Feb-93 215.71 108.86 229.93 56.89 16 39.51
Mar-93 221.95 112.01 232.00 57.40 14 1/2 35.80
Apr-93 212.48 107.23 234.43 58.00 15 37.04
May-93 225.17 113.64 244.04 60.38 15 3/8 37.96
Jun-93 226.21 114.16 244.49 60.49 19 1/8 47.22
Jul-93 226.48 114.30 237.47 58.76 20 5/8 50.93
Aug-93 238.18 120.20 250.13 61.89 24 1/2 60.49
Sep-93 245.28 123.78 265.06 65.58 22 54.32
Oct-93 250.79 126.57 288.50 71.38 21 1/4 52.47
Nov-93 243.31 122.79 282.17 69.81 24 59.26
Dec-93 250.09 126.21 287.26 71.07 11 27.16
Jan-94 257.69 130.05 296.00 73.24 12 7/8 31.79
Feb-94 255.28 128.83 269.35 66.64 12 1/2 30.86
Mar-94 239.57 120.91 234.30 57.97 10 1/4 25.31
Apr-94 236.47 119.34 224.87 55.64 9 5/8 23.77
May-94 237.04 119.63 221.84 54.89 8 1/4 20.37
Jun-94 228.38 115.25 204.51 50.60 8 3/4 21.60
Jul-94 233.06 117.62 210.70 52.13 4 7/8 12.04
Aug-94 247.92 125.12 233.36 57.74 4 3/4 11.73
Sep-94 247.28 124.80 230.34 56.99 4 5/8 11.42
Oct-94 252.14 127.25 222.47 55.04 4 3/8 10.80
Nov-94 243.78 123.03 223.45 55.28 4 3/8 10.80
Dec-94 244.46 123.37 216.21 53.49 3 1/2 8.64
Jan-95 245.83 124.06 228.17 56.45 7 1/8 17.59
Feb-95 258.83 130.63 236.79 58.59 7 17.28
Mar-95 266.50 134.50 233.41 57.75 6 3/8 15.74
Apr-95 274.89 138.73 239.97 59.37 7 1/2 18.52
May-95 281.98 142.31 242.99 60.12 8 3/4 21.60
Jun-95 304.83 153.84 271.46 67.16 14 3/8 35.49
Jul-95 327.24 165.15 294.83 72.95 9 22.22
Aug-95 333.87 168.49 329.70 81.57 12 3/8 30.56
Sep-95 341.55 172.37 339.19 83.92 11 1/8 27.47
Oct-95 339.59 171.38 326.51 80.78 10 7/8 26.85
Nov-95 347.57 175.41 342.89 84.84 12 3/4 31.48
Dec-95 345.72 174.47 395.55 97.87 20 49.38
Jan-96 347.42 175.33 429.91 106.37 18 1/4 45.06
Feb-96 360.67 182.02 421.81 104.36 18 3/4 46.30
Mar-96 361.86 182.62 411.62 101.84 15 3/4 38.89
Apr-96 391.88 197.77 432.88 107.10 16 1/2 40.74
May-96 409.87 206.85 447.54 110.73 18 5/8 45.99
Jun-96 391.40 197.53 399.96 98.96 17 41.98
Jul-96 356.54 179.94 356.42 88.19 13 3/4 33.95
Aug-96 376.52 190.02 382.24 94.57 14 34.57
Sep-96 405.34 204.56 408.98 101.19 14 1/4 35.19
Oct-96 400.90 202.32 390.60 96.64 15 1/2 38.27
Nov-96 425.74 214.86 384.81 95.21 15 1/4 37.65
Dec-96 425.26 214.62 395.98 97.97 17 41.98
</TABLE>
(1) Assumes $100 invested on January 1, 1992.
Principal Stockholders
The following table sets forth certain information at
January 31, 1997 regarding the beneficial ownership of Common
Stock of each person known by the Company to be the beneficial
owner of more than five percent of the outstanding Common Stock,
each of the directors of the Company, each of the named executive
officers and all executive officers and directors of the Company
as a group.
<TABLE>
<CAPTION>
--------------------------------
Beneficial Ownership
--------------------------------
Number of
Name Shares Percent
________________________________________________________________________
<S> <C> <C>
HealthCare Ventures, I, L.P.(1) 2,621,430 11.0%
Twin Towers at Metro Park
379 Thornall Street
Edison, New Jersey 08837
HealthCare Ventures, II, L.P. 324,677 1.5
Twin Towers at Metro Park
379 Thornall Street
Edison, New Jersey 08837
The Equitable Companies Incorporated 2,578,687 11.8
787 Seventh Avenue
New York, New York 10019
State of Wisconsin Investment Board 1,745,000 8.0
P.O. Box 7842
Madison, Wisconsin 53707
Bernd Diethelm Hoener 1,349,553 6.2
c/o Summit Asset Management
666 Plainsboro Rd. Suite 445
Plainsboro, New Jersey 08536
Reliance Financial Services Corp. 1,191,130 5.5
Park Avenue Plaza
55 East 52nd Street, 29th Floor
New York, NY 10055
James H. Cavanaugh, Ph.D. (1) (2) 2,957,465 12.4
Wayne T. Hockmeyer, Ph.D. (3) 451,814 2.1
David M. Mott (3) 292,539 1.3
Franklin H. Top, Jr., M.D. (3) 391,919 1.8
M. James Barrett, Ph.D. (3) 48,024 *
Barbara Hackman Franklin (3) 5,500 *
Lawrence C. Hoff (3) 38,129 *
Gordon S. Macklin (3) 41,250 *
Bogdan Dziurzynski (3) 43,750 *
David P. Wright (3) 269,185 1.2
James F. Young, Ph.D. (3) 320,175 1.4
All executive officers and directors
as a group (11 persons) (1) (2) (3) 4,859,750 19.4
</TABLE>
_________________________________________
* Less than one percent.
(1) Includes 1,937,840 shares of Common Stock issuable upon
exercise of certain warrants issued by the Company in
connection with a previous issuance of Preferred Stock (the
"Preferred Stock Warrants") owned by HCV I. Dr. Cavanaugh,
who is a director of the Company, is a general partner of
HCP I and HCP II, which are general partners of HCV I and
HCV II, respectively. Dr. Cavanaugh is also a limited
partner of HCV I.
(2) Includes 324,677 shares of Common Stock owned by HCV II.
(3) Includes shares of Common Stock issuable upon exercise of
options vesting prior to April 2, 1997 as follows: Dr.
Hockmeyer, 193,750 shares: Dr. Barrett, 7,500 shares; Mr.
Dziurzynski, 43,750 shares; Ms. Franklin, 5,000 shares; Mr.
Hoff, 34,166 shares; Mr. Macklin, 11,250 shares; Mr. Mott,
292,539 shares; Dr. Top, 175,936 shares; Mr. Wright 257,988
shares; Dr. Young, 245,359 shares; and all officers and
directors as a group, 1,267,238 shares.
PROPOSAL 2 - APPROVAL OF AMENDMENTS TO 1991 STOCK OPTION PLAN
On February 26, 1997, the Board of Directors adopted an
amendment to the Company's 1991 Stock Option Plan (the "1991
Plan"), subject to stockholder approval at the 1997 Meeting,
which would increase the maximum number of shares of common stock
reserved for issuance under the 1991 Plan from 3,500,000 to
5,500,000. The following is a summary of the material features
of the 1991 Plan, as well as the amendment proposed for approval.
The 1991 Plan has been an integral component of the
Company's compensation program since its adoption, providing long-
term incentives for employees and encouraging their ownership of
the Company's common stock. The 1991 Plan provides for the grant
of incentive stock options ("ISOs"), which qualify under Section
422 of the Internal Revenue Code (the "Code"), and for the grant
of nonqualified stock options ("NSOs"), which do not so qualify.
The 1991 Plan is administered by the Compensation and Stock
Committee of the Board of Directors (the "Committee"). Subject
to the limitations set forth in the 1991 Plan, the Committee has
the authority to determine the persons to whom options will be
granted, the time at which options will be granted, the number of
shares subject to each option, the exercise price of each option,
the time or times at which the options will become exercisable
and the duration of the exercise period. ISOs may be granted
only to employees or officers of the Company. NSOs may be
granted to officers, employees, consultants or advisors of the
Company. The exercise price of an NSO may not be less than the
minimum purchase price of the common stock under applicable state
law (which is the $.01 par value of the common stock), and, in
the case of an ISO, may not be less than the fair market value of
the common stock on the date of grant. Options that are intended
to satisfy the requirements for exemption under Section 162(m) of
the Internal Revenue Code (the $1 million tax deduction limit on
individual executive compensation) will be granted at exercise
prices that are not less than the fair market value of the
Company's common stock on the date of grant. The maximum number
of shares of common stock underlying stock options that may be
granted to any participant during any one calendar year under the
1991 Plan is 400,000 shares. The maximum term of options granted
under the 1991 Plan is 10 years from the date of grant. ISOs
granted to any participant who owns stock possessing more than
10% of the total combined voting power of all classes of
outstanding stock of the Company are subject to special
limitations relating to the exercise price and term of the
options. The Committee may provide for the acceleration of the
exercise period of an option at any time prior to its termination
or upon the occurrence of specified events, subject to
limitations set forth in the 1991 Plan. The Committee has the
authority, with the consent of the participant, to cancel and
replace stock options previously granted with new options for the
same or a different number of shares and having a higher or lower
exercise price, and may amend, with the consent of the
participant, the terms of any outstanding stock option to provide
for an exercise price that is higher or lower than the current
exercise price. The 1991 Plan provides for proportionate
adjustments to stock options upon certain reorganizations of the
Company, and provides for the immediate exercisability of options
prior to dissolution or liquidation of the Company or a
reorganization in which the Company is not the surviving
corporation, unless such options are assumed or substituted for
in the transaction under conditions specified in the 1991 Plan,
or unless otherwise provided by the Committee. Under the 1991
Plan, the exercise price of an option is payable in cash or, in
the discretion of the Committee, in the Company's common stock or
a combination of cash and such common stock. The 1991 Plan has a
term of 10 years, subject to earlier termination or amendment by
the Board of Directors, and all options granted under the 1991
Plan prior to its termination remain outstanding until they have
been exercised or are terminated in accordance with their terms.
Any amendment of the 1991 Plan that would change the class of
persons eligible for the grant of options, increase the maximum
number of shares that may be subject to options granted to all
participants or to any one participant, or materially increase
the benefits accruing to participants, is subject to the approval
of the Company's stockholders.
The 1991 Plan was initially adopted by the Board of
Directors in April 1991 with 750,000 shares of common stock
reserved for issuance upon exercise of stock options granted to
participants. The 1991 Plan was amended, with the approval of
the Company's stockholders, to increase the number of shares of
common stock reserved for issuance thereunder to 1,500,000 shares
in 1992 and to 3,500,000 shares in 1995. As of March 31, 1997,
no shares remained available for grant under the 1991 Plan.
In order to allow the 1991 Plan to continue to provide long-
term incentives to employees, the Board of Directors amended the
1991 Plan on February 26, 1997, subject to stockholder approval,
to increase to 5,500,000 the number of shares of common stock
reserved for issuance to officers, employees, consultants or
advisors of the Company. Of the additional 2,000,000 shares that
are proposed to be newly authorized under the 1991 Plan, stock
options covering 67,141 shares were granted in February and March
1997 (subject to stockholder approval of this proposal) at
exercise prices equal to the fair market value of the Company's
common stock on the date of grant. Such grants included grants to
the Company's named executive officers at an exercise price of
$14.75 per share as follows: Dr. Hockmeyer, 13,431 shares; Mr.
Mott, 11,192 shares; Mr. Wright, 3,358 shares; Dr. Top, 3,358
shares; Mr. Dziurzynski, 3,358 shares; and Dr. Young, 3,358
shares. In addition, such grants covering 29,086 shares were
made to other employees at a weighted average exercise price of
$14.67 per share. The grants listed above constituted a portion
of the total grants to the named executive officers in 1997.
Stock options granted during 1996 to the named executive officers
are shown in the "Option Grants in Fiscal 1996" table. Stock
options granted during 1996 to all executive officers as a group
totaled 230,000 shares of common stock at a weighted average
exercise price of $16.50 per share, and to all other employees
and consultants as a group totaled 584,400 shares of common stock
at a weighted average exercise price of $17.22 per share. On
March 31, 1997, the closing market price of the common stock on
the Nasdaq Stock Market was $13.75 per share.
The Board of Directors recommends a vote FOR the amendment to the
1991 Stock Option Plan.
PROPOSAL 3 - APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee recommended and the Board of Directors
approved the appointment of Coopers & Lybrand L.L.P. as
independent auditors for fiscal 1997, subject to stockholder
approval and ratification. The Audit Committee, in arriving at
its recommendation to the Board, reviewed the performance of
Coopers & Lybrand L.L.P. in prior years as well as the firm's
reputation for integrity and competence in the fields of
accounting and auditing. The Audit Committee has expressed its
satisfaction with Coopers & Lybrand L.L.P. in these respects.
Coopers & Lybrand L.L.P. has served as the Company's
independent auditor since the Company's inception.
Representatives of Coopers & Lybrand L.L.P. will be present at
the stockholders' meeting and will have the opportunity to make
such statements as they may desire. They will also be available
to respond to appropriate questions from the stockholders
present.
The Board of Directors recommends a vote FOR the approval of
the appointment of Coopers & Lybrand L.L.P. as independent
auditors of the Company for the year 1997.
OTHER MATTERS
The Board of Directors of the Company knows of no matters to
be presented at the Annual Meeting other than those described in
this Proxy Statement. Other business may properly come before
the meeting, and in that event it is the intention of the Proxy
Committee to vote as recommended by the Company.
Proxy Solicitation
The cost of the solicitation of proxies will be borne by the
Company. The Company will request brokerage houses, banks and
other custodians or nominees holding stock in their names for
others to forward proxy materials to their customers or
principals who are the beneficial owners of shares and will
reimburse them for their expenses in doing so. The Company
expects to solicit proxies primarily by mail, but directors,
officers, and other employees of the Company may also solicit in
person, by telephone, by facsimile, or by mail. The Company has
retained MacKenzie Partners, Inc. to assist in the solicitation
of proxies. MacKenzie Partners, Inc. will solicit proxies by
personal interview, telephone, facsismile, and mail. It is
anticipated that the fee for those services will not exceed
$3,000 plus reimbursement of customary out-of-pocket expenses.
Deadline for Submission of Stockholder
Proposals for Next Year's Annual Meeting
The proxy rules adopted by the Securities and Exchange
Commission provide that certain stockholder proposals must be
included in the proxy statement for the Company's Annual Meeting.
For a proposal to be considered for inclusion in next year's
proxy statement, it must be received by the Company no later than
December 1, 1997.
The Company's Annual Report to Stockholders, including the
Company's audited financial statements for the year ended
December 31, 1996, is being mailed herewith to all stockholders
of record.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
Carol A. Iorio
Corporate Secretary
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
April 10, 1997
