SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
MEDIMMUNE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(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):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE>
MEDIMMUNE, INC.
[LETTERHEAD & LOGO]
April 10, 1998
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 15, 1998 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 1997. 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 15th.
Sincerely,
/s/Wayne T. Hockmeyer, Ph.D.
Chairman and Chief Executive Officer
<PAGE>
MEDIMMUNE, INC.
[LETTERHEAD & LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 15, 1998
The Annual Meeting of Stockholders of MedImmune, Inc. will be held at the
Gaithersburg Marriott, Washingtonian Center, 9751 Washingtonian Boulevard,
Gaithersburg, Maryland on May 15, 1998 at 10:00 a.m., for the following
purposes:
1. To amend the Restated Certificate of Incorporation of the Company to
increase the number of authorized shares of Common Stock, par value $.01
per share, from 60,000,000 shares to 120,000,000 shares;
2. To elect eight directors;
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, 1998 are
entitled to receive notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors,
/s/Carol A. Iorio
Corporate Secretary
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
April 10, 1998
<PAGE>
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 15, 1998. This
Proxy Statement, the accompanying proxy card and Annual Report to Stockholders
are being mailed to stockholders on or about April 10, 1998. 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, 1998,
the record date for the meeting, was__________ 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 2- 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, 1998, 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 Company 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 - AMENDMENT OF THE RESTATED CERTIFICATE
OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has unanimously approved and recommends that the
stockholders adopt a proposed amendment (the "Common Stock Amendment") to the
Restated Certificate of Incorporation which would increase the authorized number
of shares of Common Stock, par value $.01 per share, by 60,000,000 shares from
60,000,000 shares to 120,000,000 shares. The authorized number of shares of
Preferred Stock of the Company ("Preferred Stock") would remain 5,524,525
shares. Accordingly, the aggregate number of shares of capital stock (including
both Common Stock and Preferred Stock) authorized under the Amendment would
increase from 65,524,525 shares to 125,524,525 shares.
As noted above, at March 31, 1998, there were ________ shares of the
Company's Common Stock outstanding. At that date, after giving effect to
___________ shares reserved for issuance under the Company's stock option plans
and _____________ shares reserved for issuance upon conversion of convertible
subordinated notes, the Company had ________ shares of Common Stock available
for issuance.
The additional Common Stock to be authorized by adoption of the Common
Stock Amendment would have rights identical to the currently outstanding Common
Stock of the Company. Approval of the Common Stock Amendment by the
stockholders and issuance of the Common Stock would not affect the rights of the
holders of currently outstanding Common Stock of the Company, except for effects
incidental to increasing the number of shares of the Company's Common Stock
outstanding, including a dilutive effect on present stockholders if and when
such shares were issued. In addition, the increase in the authorized but
unissued Common Stock could have the effect of making it more difficult for a
third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company.
The proposed increase in the number of shares of authorized Common Stock
will insure that shares will be available, if needed, for issuance in connection
with acquisitions, stock splits or other corporate purposes. The Board of
Directors believes that the availability of the additional shares for such
purposes without delay would be beneficial to the Company. Currently, the
Company does not have any immediate plans, arrangements, commitments or
understandings with respect to the issuance of any of the additional shares of
Common Stock which would be authorized by the Common Stock Amendment.
No further action or authorization by the Company's stockholders would be
necessary prior to the issuance of the additional shares of Common Stock unless
required by applicable law or regulatory agencies or by the rules of any stock
exchange on which the Company's securities may then be listed. If the Common
Stock Amendment is adopted, it will become effective upon filing a Certificate
of Amendment to the Company's Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware.
The Board of Directors recommends a vote "FOR" approval of the Common Stock
Amendment.
PROPOSAL 2 - 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, Ph.D.
Dr. Hockmeyer (age 53) 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 is a member of the Board of Directors
of Digene Corporation and serves on the Advisory Board of the University of
Maryland Biotechnology Institute. He is also a member of the Board of
Directors of the High Technology Council of Maryland and Chairman of the
Maryland BioScience Alliance. Dr. Hockmeyer received a Bachelor of Science
degree from Purdue University and a doctorate from the University of
Florida.
David M. Mott
Mr. Mott (age 32) 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, healthcare 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 62) 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 55) 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 61) has been a director of the Company since September
1990 and has been President of HealthCare Ventures L.L.C. (HCV) since 1989.
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) 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 57) 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), 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., and Cincinnati Milacron, Inc. She has been a
director of the Nasdaq Stock Market, Inc. and the American Institute of
CPA's. 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 69) 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 Pharmaceu
tical 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 Operations. 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 69) has been a director of the Company since July 1994.
Mr. Macklin has served as Chairman of the White River Corporation since
1994 and as President and Chief Executive Officer since January 1998. From
1987 through 1992, he was Chairman of Hambrecht and Quist Group, an invest
ment 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., Real 3D, Inc., 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 of Funds.
The Board of Directors and its Committees
Board Meetings
During 1997, the Board of Directors met six times, and all directors
attended more than 75% of the meetings of the Board.
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. All directors attended more than
75% of the meetings of the Board Committees on which they served, except Mr.
Hoff who was unable to attend two meetings of the Audit Committee and one
meeting of the Compensation and Stock Committee.
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 1997, 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 Com
pany's 1991 Stock Option Plan (the "1991 Plan") in accordance with the terms and
conditions set forth therein. The Compensation and Stock Committee consists of
Dr. Cavanaugh (Chairman), Dr. Barrett, Ms. Franklin and Mr. Hoff, with Dr.
Hockmeyer serving as a non-voting ex officio member. During 1997, the
Compensation and Stock Committee met twice.
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 consists of Dr. Hockmeyer (Chairman), Dr. Barrett,
Dr. Cavanaugh and Mr. Macklin. During 1997, the Executive Committee met once.
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 1997, 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 1997 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 contribution 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 establishing 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 1997 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 1997 commensurate
with their increased responsibilities and the growth in scope of the Company's
operations. The 1997 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 February 1997, 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 1997 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
1997 and prior years satisfied the requirements of federal tax law and thus
compensation recognized in connection with such awards should be fully de
ductible. It is the Company's intention to make efforts to maximize
deductibility of compensation paid to its officers under such law. During 1997,
the Company did not exceed the $1 million deductibility cap with respect to any
officer covered by such law.
James H. Cavanaugh, Ph.D., Chairman
M. James Barrett, Ph.D.
Barbara Hackman Franklin
Lawrence C. Hoff
Wayne T. Hockmeyer, Ph.D., ex officio
<PAGE>
Compensation and Stock Committee Interlocks and Insider Participation
Dr. Hockmeyer, the Company's Chairman and Chief Executive Officer, is a
non-voting ex officio member of the Compensation and Stock Committee. In
addition, Dr. Cavanaugh, a director of the Company, is an officer of HCV. See
"Certain Transactions" below.
Executive Compensation
Summary Compensation Table
The following table summarizes the compensation paid by the Company to its
Chief Executive Officer and the Company's five most highly compensated executive
officers other than the Chief Executive Officer (the "named executive officers")
for the last three years.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- -----------
Other Annual Option
Name and Principal Year Salary Bonus Compensation Awards (#)
Position ($) ($) ($)
- -------------------------- ---- -------- ------- -------------- -----------
Wayne T. Hockmeyer 1997 353,333 225,000 - 120,000
Chairman and Chief 1996 313,939 120,000 - 75,000
Executive Officer 1995 280,546 100,000 - 40,000
David M. Mott 1997 271,504 200,000 - 100,000
President and Chief 1996 240,933 100,000 - 35,000
Operating Officer 1995 179,203 70,000 - 200,000
David P. Wright 1997 229,833 100,000 - 30,000
Executive Vice 1996 222,767 40,000 - 30,000
President,
Sales and Marketing 1995 216,000 40,000 - 100,000
Franklin H. Top, Jr. 1997 210,806 100,000 - 30,000
Executive Vice President 1996 196,289 50,000 - 30,000
and Medical Director 1995 175,729 50,000 - 25,000
Bodgan Dziurzynski (1) 1997 183,499 100,000 16,501 80,000
Senior Vice President, 1996 178,975 40,000 10,644 30,000
Regulatory Affairs 1995 171,875 10,000 17,298 12,500
and Quality Assurance
James F. Young 1997 208,907 100,000 - 30,000
Senior Vice President 1996 189,565 40,000 - 30,000
Research & Development 1995 175,343 40,000 - 25,000
- --------------------------
(1) Mr. Dziurzynski's other compensation consisted of a forgiven loan and
tuition expense
reimbursement in 1997, a forgiven loan in 1996 and relocation expense
reimbursement and
a forgiven loan in 1995.
</TABLE>
Option Grants in Fiscal 1997
The following table sets forth information relating to the grant of stock
options by the Company during 1997 to the named executive officers.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Potential Realizable
Value of
Assumed Annual Rates
of
Stock Price
Appreciation for
Individual Grants Option Term (1)
------------------------------------- ----------------------
%of
Total
Options
Number of Granted Exerci
to se
Securities Employee or
s Base
Underlying in Price Expirat
Fiscal ion
Name Options 1997 ($/sh) Date 5% ($) 10% ($)
(#)(2)
---- ----------- ---- ----- ---- ------ -------
Wayne T. 120,000 15.06% 14.75 2/26/07 1,115,100 2,814,300
Hockmeyer
David M. Mott 100,000 12.55% 14.75 2/26/07 929,250 2,345,250
David P. Wright 30,000 3.77% 14.75 2/26/07 278,775 703,575
Franklin H. 30,000 3.77% 14.75 2/26/07 278,775 703,575
Top, Jr.
Bogan 30,000 3.77% 14.75 2/26/07 278,775 703,575
Dziurzynski
50,000 6.28% 29.63 9/5/07 933,188 2,355,188
James F. Young 30,000 3.77% 14.75 2/26/07 278,775 703,575
- ---------------
(1) The indicated dollar amounts are the result of calculations based on the
exercise price of each
option and assume five and ten percent appreciation rates set by the
Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any,
of the Company's stock price.
(2) Granted options become exercisable in 25% annual increments beginning on
the first anniversary of
the date of grant, except for Mr. Dziurzynski's 9/5/97 grant which becomes
exercisable
beginning 9/5/98 in two equal installments upon the achievement of certain
corporate milestones.
</TABLE>
Aggregated Option Exercises in 1997 and Fiscal Year-End Values
The following table sets forth information relating to the exercise of
stock options by the named executive officers during 1997, the number of shares
covered by stock options held by the named executive officers at December 31,
1997, and also shows the value of "in-the-money" options (market price of the
Company's stock less the exercise price) at that date.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of Securities
Underlying Value of
Unexercised Unexercised
Options Held at In-the-Money
Options at
December 31, 1997 (#) December 31, 1997($)
-------------------- -------------------
Shares
Acquired Value
Name on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise
---- ---------- -------- ---------- -------------------- ---------
Wayne T. Hockmeyer - - 193,750 206,250 5,112,656 5,879,844
David M. Mott - - 317,539 183,750 10,474,964 5,270,156
Franklin H. Top, Jr. - - 175,936 70,000 5,708,378 2,037,500
David P. Wright 100,000 3,119,758 157,988 58,750 5,760,739 1,627,031
Bogan Dziurzynski 46,250 933,634 7,500 118,750 197,813 2,703,906
James F. Young 36,429(1) 814,429(1)165,366(2) 70,000 5,215,674 2,037,500
- ----------------
(1) Excludes transfer of beneficial interest in 43,564 acquired shares pursuant to
a qualified domestic
relations order.
(2) Of this amount, 47,860 shares are subject to a qualified domestic relations
order.
</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") with the consent of the executive officer, and to earlier
termination as provided in the Agreements. In March 1998, with the consent of
each affected executive officer, the Committee extended the term of the
Agreements to March 31, 2000. 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
James H. Cavanaugh, a director of the Company, is the President of HVC.
Affiliates of HVC 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 graft-verses-host disease and
related organ transplant and autoimmune conditions. The Company paid an
aggregate of $750,000 in research support to BTI during 1997.
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.
<PAGE>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___ companies, of which a large majority are biotechnology
companies.
<TABLE>
<CAPTION>
Comparison of 1993-1997 Cumulative Shareholder Return (1)
(Performance Chart)
<S> <C> <C> <C> <C> <C> <C>
1/93 7/93 1/94 7/94 1/95 7/95
MedImmune $100.00 $83.15 $47.83 $ 38.04 $15.22 $62.50
Nasdaq $100.00 $75.86 $89.13 $ 63.04 $67.08 $84.23
Pharmaceutical
NASDAQ (U.S.) $100.00 $103.95 $114.80 $104.83 $112.21 $139.93
<S> <C> <C> <C> <C> <C>
1/96 7/96 1/97 7/97 12/97
MedImmune $ 86.96 $73.91 $73.91 $ 80.43 $186.41
Nasdaq $122.72 $124.03 $123.08 $126.18 $127.19
Pharmaceutical
NASDAQ (U.S.) $158.70 $179.66 $195.19 $218.45 $239.53
(1) Assumes $100.00 invested on January 1, 1993.
</TABLE>
<PAGE>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 1998,
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 1998.
<PAGE>SECURITY OWNERSHIP
Principal Stockholders
The following table sets forth certain information at January 31, 1998
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>
<S> <C> <C>
Beneficial Ownership
-----------------------------
Name Number of Percent
Shares
- --------------------------------- -------------- -------------
The Equitable Companies 4,475,987 18.0
Incorporated(1)
787 Seventh Avenue
New York, New York 10019
BB Biotech AG 2,753,000 11.3
Vordergasse 3
8200 Schaffhausen
CH/Switzerland
FMR Corp. 2,046,200 8.4
82 Devonshire Street
Boston, Massachusetts 02109
Investor AB 1,619,000 6.6
S-103 32
Stockholm, Sweden
Wayne T. Hockmeyer, Ph.D.(2) 318,160 1.3
David M. Mott(2) 358,789 1.4
Franklin H. Top, Jr., M.D.(2) 418,160 1.7
M. James Barrett, Ph.D.(2) 32,500 *
James H. Cavanaugh, Ph.D.(3) 56,730 *
Barbara Hackman Franklin(2) 11,100 *
Lawrence C. Hoff 200 *
Gordon S. Macklin(2) 48,750 *
Bogdan Dziurzynski(2) 35,820 *
David P. Wright(2) 177,730 *
James F. Young, Ph.D.(2) 204,430 *
All executive officers and 1,596,050 6.2
directors
as a group (11 persons) (2)(3)
- ----------------------------------
* Less than one percent.
</TABLE>
(1) Includes 409,551 shares of Common Stock issuable upon conversion of 7%
Convertible Notes due 2003 of MedImmune, Inc. beneficially owned by
Equitable Companies Incorporated.
(2) Includes shares of Common Stock issuable upon exercise of options vesting
prior to April 2, 1998 as follows: Dr. Hockmeyer, 262,500 shares: Dr.
Barrett, 12,500 shares;
Mr. Dziurzynski, 25,625 shares; Ms. Franklin, 10,000 shares; Mr. Macklin,
18,750 shares; Mr. Mott, 358,789 shares; Dr. Top, 202,186 shares; Mr.
Wright 177,738 shares; Dr. Young, 183,616 shares; and all officers and
directors as a group, 1,185,454 shares.
(3) Includes 28,765 shares owned directly by Dr. Cavanaugh and 27,973 shares
owned by a partnership of which Dr. Cavanaugh is a general partner.
<PAGE>
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.
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, 1998.
The Company's Annual Report to Stockholders, including the Company's
audited financial statements for the year ended December 31, 1997, 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,
/s/Carol A. Iorio
Corporate Secretary
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
April 10, 1998
