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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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
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
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
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 26,509,269 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 26,509,269 shares of the
Company's Common Stock outstanding. At that date, after giving effect to
5,342,069 shares reserved for issuance under the Company's stock option plans
and 3,048,780 shares reserved for issuance upon conversion of convertible
subordinated notes, the Company had 25,099,882 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.("Smith Barney"). 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., 3-Dimensional
Pharmaceuticals, Inc., Shire Pharmaceuticals Group PLC, and Diversa Corp.
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 ("PMA"),
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 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
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., Real 3D, Inc., 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 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 devel
opment, 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 $1 million deductibility cap with respect
to any officer covered by such law.
James H. Cavanaugh, Ph.D., Chairman
M. James Barrett, Ph.D.
Barbara Hackman Franklin
Lawrence C. Hoff
Wayne T. Hockmeyer, Ph.D., ex officio
Compensation and Stock Committee Interlocks and Insider Participation
Dr. Hockmeyer, the Company's Chairman and Chief Executive Officer, is a
non-voting ex officio member of the Compensation and Stock Committee. In
addition, Dr. Cavanaugh, a director of the Company, is an officer of HCV. See
"Certain Transactions" below.
Executive Compensation
Summary Compensation Table
The following table summarizes the compensation paid by the Company to its
Chief Executive Officer and the Company's five most highly compensated
executive officers other than the Chief Executive Officer (the "named executive
officers") for the last three years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- -------------
<S> <C> <C> <C> <C> <C>
Other Annual Option
Name and Principal Position Year Salary($) Bonus($) Compensation Awards (#)
($)
- --------------------------- ---- --------- -------- --------------------------
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 President, 1996 222,767 40,000 - 30,000
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
Bogdan 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>
Potential Realizable
Value
of Assumed Annual Rates
of Stock Price
Appreciation
Individual Grants for Option Term (1)
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
%of Total
Options
Number of Granted Exercise
Securities to or
Underlying Employees Base
Options in Fiscal Price Expiration
Name (#)(2) 1997 ($/sh) Date 5% ($) 10% ($)
---- ------------ ---- ----- ---- ------ -------
Wayne T. Hockmeyer 120,000 15.06% 14.75 2/26/07 1,115,100 2,814,300
David M. Mott . . 100,000 12.55% 14.75 2/26/07 929,250 2,345,250
David P. Wright . 30,000 3.77% 14.75 2/26/07 278,775 703,575
Franklin H. Top, Jr 30,000 3.77% 14.75 2/26/07 278,775 703,575
Bogdan Dziurzynski 30,000 3.77% 14.75 2/26/07 278,775 703,575
50,000 6.28% 29.63 9/5/07 933,188 2,355,188
James F. Young. . 30,000 3.77% 14.75 2/26/07 278,775 703,575
- ------------------
(1) The indicated dollar amounts are the result of calculations based on the
exercise price of each option and assume five and ten percent appreciation
rates set by the Securities and Exchange Commission and, therefore, are not
intended to forecast possible future appreciation, if any, of the Company's
stock price.
(2) Granted options become exercisable in 25% annual increments beginning on
the first anniversary of the date of grant, except for Mr. Dziurzynski's
9/5/97 grant which becomes exercisable beginning 9/5/98 in two equal
installments upon the achievement of certain corporate milestones.
</TABLE>
Aggregated Option Exercises in 1997 and Fiscal Year-End Values
The following table sets forth information relating to the exercise of
stock options by the named executive officers during 1997, the number of shares
covered by stock options held by the named executive officers at December 31,
1997, and also shows the value of "in-the-money" options (market price of the
Company's stock less the exercise price) at that date.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options Held at In-the-Money Options at
December 31, 1997 (#) December 31, 1997 ($)
-------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Shares
Acquired
on Value Exercis- Unexercis- Exercis- Unexercis
Name Exercise Realized able able able able
---- --------- -------- ---------- ---------- -------- ---------
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 3,119,629 157,988 58,750 5,760,739 1,627,031
Bogdan 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, 46,860 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 HCV.
Affiliates of HCV 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-versus-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.
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 386 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>
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.
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>
Beneficial Ownership
-------------------------
<S> <C> <C>
Name Number of Percent
Shares
------------------------------------ ------------- -----------
The Equitable Companies Incorporated(1). . . 4,475,987 18.0
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 directors as a. . . 1,596,050 6.2
group (11 persons) (2)(3)
- -----------------------
*Less than one percent.
(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.
</TABLE>
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
