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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
ANNUAL REPORT PURSUANT TO 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission file number: 0-19117
IMMULOGIC PHARMACEUTICAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3397957
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
610 LINCOLN STREET, WALTHAM, MASSACHUSETTS 02451
(781) 466-6000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
Par Value $.01
Preferred Stock Purchase Rights
Par Value $.01
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
-- --
Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [ X ]
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the last sale price of the Common Stock reported on the
Nasdaq National Market on March 29, 1999 was $28,086,565.
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The number of shares of Common Stock outstanding as of March 29, 1999 was
20,376,296.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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ImmuLogic Pharmaceutical Corporation (the "Company") hereby amends its
Annual Report on Form 10-K for the year ended December 31, 1998 to include the
information required under Part III.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company as of April 15, 1999.
Name Age Position
J. Richard Crowley 43 President, Secretary and
Treasurer of the Company
Carl S. Goldfischer, M.D. 40 Director
C. Garrison Fathman, M.D. 56 Director
Samuel C. Fleming 58 Director
Paul A. Friedman, M.D. 56 Director
J. Joseph Marr, M.D. 60 Director
Richard F. Pops 37 Director
Mr. J. Richard Crowley, a consultant to the Company, served as the
Company's interim Chief Financial Officer from May 1997 until April 1, 1999,
when he was appointed President, Secretary and Treasurer. Mr. Crowley is
President of Keystone Consulting, a contract financial and operational
management services firm which he founded in 1995. Mr. Crowley's experience from
1983 to 1995 includes senior financial and operational positions with the
LittlePoint Corporation, a children's consumer products company, TransNational
Financial Services, a marketer of financial products to affinity groups, and the
Crosby Vandenburgh Group, a contract publisher. From 1979 to 1983, Mr. Crowley
was with Price Waterhouse, during which time he obtained his C.P.A. Mr. Crowley
holds a B.A. in Economics from Providence College.
Dr. Carl S. Goldfischer became a member of the Company's Board of
Directors in March 1997. Dr. Goldfischer has served as Vice President, Finance
and Strategic Planning and Chief Financial Officer of ImClone Systems, Inc., a
publicly-held biotechnology company, since May 1996. From June 1994 until May
1996, Dr. Goldfischer served as a health care analyst with Reliance Insurance,
an insurance company. From June 1991 until June 1994, Dr. Goldfischer was
Director of Research for D. Blech & Co., a securities firm. Dr. Goldfischer
received a doctorate of medicine from
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Albert Einstein College of Medicine in 1988 and served as a resident in
radiation oncology at Montefiore Hospital of the Albert Einstein College of
Medicine until 1991.
Dr. C. Garrison Fathman became a member of the Company's Board of
Directors in March 1997. Dr. Fathman is a Professor of Medicine and the Director
of the Center for Clinical Immunology at Stanford University School of Medicine,
where he joined the faculty in 1981. He was previously on the faculty at the
Mayo Clinic from 1977 to 1981 and a Member of the Basel Institute for Immunology
from 1975 to 1977. He is a member of the American Association of Immunologists
and the Clinical Immunology Society. Dr. Fathman received a B.A. from the
University of Kentucky and an M.D. from Washington University School of
Medicine. Dr. Fathman has served as a consultant to the Company from 1988 to
1998.
Mr. Samuel C. Fleming became a member of the Company's Board of
Directors in September 1996. Since 1990, Mr. Fleming has been the Chairman and
Chief Executive Officer of Decision Resources Inc., a health care research and
consulting company. From 1967 to 1990, Mr. Fleming held various positions at
Arthur D. Little, Inc., most recently as Senior Vice President, Member of the
Corporate Management Committee and Chairman of Arthur D. Little Decision
Resources, which he founded in the mid-1970s. Mr. Fleming received a B.Ch.E.
from Cornell University and an M.B.A. from Harvard Business School. He serves as
a Director of CareGroup, Inc. and a Trustee of Cambridgeport Bank and the
Standish Ayer & Wood Investment Trust.
Dr. Paul A. Friedman became a member of the Company's Board of
Directors in September 1996. Dr. Friedman has been President of DuPont Merck
Research Labs, a pharmaceutical research company, since 1994. He was a Senior
Vice President of Merck Research Labs, a pharmaceutical research company, from
1992 to 1994 and was first a Senior Director and Head and then Executive
Director and Head of the Department of Pharmacology at Merck Sharp & Dohme
Research Labs from 1985 to 1989. Between 1974 and 1985, he held various
positions at Peter Bent Brigham Hospital, Children's Hospital Medical Center,
the Center for Blood Research, Harvard Medical School and Beth Israel Hospital.
Dr. Friedman received a A.B. from Princeton University and an M.D. from Harvard
Medical School.
Mr. Richard F. Pops became a member of the Company's Board of Directors
in March 1997. Mr. Pops has been the Chief Executive Officer of Alkermes, Inc.,
a publicly-held biotechnology company, since 1991. From 1984 to 1991, Mr. Pops
was employed as Vice President of PaineWebber Development Corporation, a
subsidiary of PaineWebber, Inc. Mr. Pops currently serves on the Board of
Directors of Alkermes, Inc., the Biotechnology Industry Organization and The
Brain Tumor Society. He is also the Vice President of the Massachusetts
Biotechnology Council. Mr. Pops received a B.A. degree from Stanford University.
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Item 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to each person who
served as the Company's Chief Executive Officer and each of the Company's other
most highly compensated officers, based on salary and bonuses earned during 1998
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------- -------------
SHARES SUBJECT
NAME AND PRINCIPAL TO OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS GRANTED COMPENSATION(1)
- ------------------ ---- ------ ----- ------------- ---------------
<S> <C> <C> <C> <C> <C>
J. Joseph Marr, M.D. (2) 1998 $210,000 $100,000 172,727 $21,763
Former President and Chief 1997 210,000 100,000 200,000 50,797
Executive Officer 1996 100,769 100,000 100,000 65,807
J. Richard Crowley 1998 $101,386 -- 17,273
President, Secretary and 1997 80,797 -- 30,000 --
Treasurer(3) --
</TABLE>
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(1) Amounts for Dr. Marr in 1998 include $7,330 in relocation expenses and
$12,463 of premiums paid on, and the cash surrender value of, insurance
policies maintained by the Company, including payment of related taxes
to Dr. Marr. All other amounts shown represent contributions made in
the form of Common Stock by the Company to its 401(k) Savings Plan on
behalf of each Named Executive Officer to match pre-tax elective
deferral contributions (included under salary) made by such Named
Executive Officer under such Plan.
(2) Dr. Marr resigned as President and Chief Executive Officer on April 1,
1999.
(3) Mr. Crowley joined the Company as interim Chief Financial Officer in
1997. Accordingly, no information is provided for 1996. Mr. Crowley was
appointed President, Secretary and Treasurer effective April 1, 1999.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information regarding options
granted in 1998 by the Company to each of the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE
SHARES OPTIONS AT ASSUMED ANNUAL RATES OF
SUBJECT TO GRANTED TO EXERCISE STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES PRICE PER EXPIRATION FOR OPTION TERMS (2)
NAME GRANTED(1) IN FY SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- --- ---
<S> <C> <C> <C> <C> <C> <C>
J. Joseph Marr, M.D. 172,727 55.2% $1.44 4/1/00 $18,765 $38,552
J. Richard Crowley 17,273(3) 5.5% $1.44 9/23/08 15,649 39,642
</TABLE>
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(1) The Company's Amended and Restated 1987 Stock Option Plan and 1996
Stock Option Plan provide that the vesting of options granted to
officers and employees under such Plan will become exercisable in the
event of a "change in control" of the Company. In accordance with the
terms of Dr. Marr's employment agreement, all stock options held by Dr.
Marr became exercisable in full upon his resignation as President and
Chief Executive Officer. See "Employment Termination and
Change-in-Control Arrangements."
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock appreciation of 5% and 10%
compounded annually from the date the respective options were granted
to their expiration date. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock and
the date on which the options are exercised.
(3) These options vest in four equal annual installments beginning on the
first anniversary of the date of grant. Mr. Crowley agreed to the
termination of his options in April 1999.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT FISCAL YEAR-END
The following table provides information on the value of unexercised
options held by the Named Executive Officers at December 31, 1998. Neither of
the Named Executive Officers exercised stock options in 1998.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS AT YEAR-END(1)
SHARES ACQUIRED ---------------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
J. Joseph Marr, M.D. - - 174,999 297,728
J. Richard Crowley - - 25,000 23,273
</TABLE>
- ---------------
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(1) The closing price for the Company's Common Stock as reported by the
Nasdaq National Market on December 31, 1998 was $1.22 per share. Value
is calculated on the basis of the difference between the option
exercise price and the fair market value on December 31, 1998,
multiplied by the number of shares of Common Stock underlying the
option. All option exercise prices exceeded the fair market value on
December 31, 1998; accordingly, no information is provided with respect
to in-the-money stock options.
EMPLOYMENT, TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into an employment agreement with Dr. Marr on July
3, 1996, as amended, relating to the obligations of the Company to Dr. Marr in
the event of termination of his employment. The agreement provided that if the
Company terminated Dr. Marr's employment for cause, the Company would be
obligated to pay Dr. Marr his compensation and benefits through the last day of
his actual employment. If Dr. Marr terminated his employment for "good reason"
(as defined in the agreement), or his employment was terminated (other than for
"cause," as defined in the agreement) upon a "change in control" (as defined in
the agreement), Dr. Marr would receive a lump-sum cash payment equal to 12
months of compensation at the level of compensation immediately prior to
termination (the "Base Compensation"). In addition, Dr. Marr would be eligible
to receive an amount equal to the Base Compensation in accordance with the
Company's normal payroll procedures beginning 12 months after the date of
termination and ending 24 months after the date of termination. Compensation
paid during this 12-month period would be offset by other compensation earned in
an employment or consulting arrangement during such period. Furthermore, the
Company would continue to provide medical and other benefits to Dr. Marr for a
period of up to 24 months. Finally, all unvested stock options held by Dr. Marr
would vest upon termination and would be exercisable for 12-months after the
date of termination. At the request of the Board of Directors and as a result of
the significant diminution of his responsibilities, Dr. Marr resigned from the
Company for "good reason" effective April 1, 1999 and is entitled to receive
amounts payable under this agreement, including acceleration in full of the
vesting of all options held by him, which options must be exercised on or before
April 1, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Board of Directors of
the Company was at any time during 1998, or formerly, an officer or employee of
the Company or any subsidiary of the Company, nor has any member of the
Compensation Committee had any relationship with the Company requiring
disclosure under Item 404 of Regulation S-K under the Securities Exchange Act of
1934 (as amended, the "Exchange Act"). No executive officer of the Company has
served as a director or member of the Compensation Committee (or other Committee
serving an equivalent function) of any other entity, whose executive officers
served as a director of or member of the Compensation Committee of the Company.
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COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act and regulations of the Securities and
Exchange Commission (the "Commission") thereunder require the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of initial
ownership and changes in ownership with the Commission and the National
Association of Securities Dealers, Inc. Such officers, directors and ten-percent
stockholders are also required by the rules of the Commission to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on its
review of the copies of such forms received by it, or written representations
from certain reporting persons that no other reports were required for such
persons, the Company believes that, during or with respect to the period from
January 1, 1998 to December 31, 1998, all of its executive officers, directors
and ten-percent stockholders complied with their Section 16(a) filing
obligations.
COMPENSATION OF DIRECTORS
The Company maintains a compensation program for each director who is
not an employee of the Company or any subsidiary of the Company and who does not
receive more than $50,000 in any year pursuant to a consulting contract with the
Company. Pursuant to this compensation program, each such director receives cash
compensation of $15,000 per annum for his services as a director. In addition,
the Chairman of each standing committee receives an additional $5,000 per annum.
The Company's 1993 Director Option Plan was terminated in May 1997.
In 1998, the Company granted options to purchase 17,000 shares of the
Company's Common Stock to Dr. Goldfischer and Mr. Pops, at a price of $1.44 per
share, the closing price of the Company's Common Stock on the Nasdaq National
Market on the date of grant. In addition, the Company granted options to
purchase 12,000 shares of the Company's Common Stock to Mr. Fleming, Dr. Fathman
and Dr. Friedman, at a price of $1.44 per share, the closing price of the
Company's Common Stock on the Nasdaq National Market.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 31,
1999 (except as otherwise noted), with respect to the beneficial ownership of
the shares of Common Stock by (i) each person known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
current director of the Company, (iii) each of the Named Executive Officers of
the Company, and (iv) all directors and executive officers of the Company as a
group.
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<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OF SHARES OF COMMON STOCK OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK (2)
------------------- ---------------------- -----------------
<S> <C> <C>
5% Stockholders
Heartland Advisors, Inc.(3) 2,919,000 14.3%
790 North Milwaukee Street
Milwaukee, WI 53202
State of Wisconsin Investment Board(4) 2,211,500 10.9%
Lake Terrace
121 East Wilson Street
Madison, WI 53703
Dimensional Fund Advisors, Inc.(5) 1,237,100 6.1%
1299 Ocean Avenue
Santa Monica, CA 90401
Directors
C. Garrison Fathman, M.D.(6) 122,188 *
Samuel C. Fleming(6) 20,000 *
Paul A. Friedman, M.D.(6) 20,000 *
Carl S. Goldfischer, M.D.(6) 20,000 *
Richard F. Pops(6) 20,000 *
J. Joseph Marr, M.D.(6) 475,009 *
Other Named Executive Officer
J. Richard Crowley(6) 30,000 *
President and Treasurer;
Nominee for Director
All directors and executive officers as a group 707,197 3.5%
(7 persons)(6)(7)
</TABLE>
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* Less than 1% of the total number of outstanding shares of Common Stock.
(1) The inclusion herein of any shares of Common Stock deemed beneficially
owned does not constitute an admission of beneficial ownership of those
shares. Unless otherwise indicated, each stockholder referred to above
has sole voting and investment power with respect to the shares listed.
The number of shares of Common Stock beneficially owned by each
director and executive officer is determined under the rules of the
Commission and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which each executive
officer has sole or shared
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voting power or investment power and also any shares of Common Stock
into which any options held by such executive officer are exercisable
within 60 days after March 31, 1999.
(2) Based upon 20,376,296 shares of Common Stock outstanding as of March
31, 1999.
(3) Heartland Advisors, Inc. ("Heartland") filed a Schedule 13G/A with the
Commission dated January 26, 1999, indicating sole voting power with
respect to 889,000 shares of Common Stock, and dispositive power with
respect to 2,919,000 shares of Common Stock, which shares were
purchased for certain advisory clients of Heartland and as to which
Heartland disclaims beneficial ownership.
(4) The State of Wisconsin Investment Board filed a Schedule 13G/A with the
Commission dated February 8, 1999, indicating sole voting and
dispositive power with respect to 2,211,500 shares of Common Stock.
(5) Dimensional Fund Advisors Inc., together with certain affiliates, filed
a Schedule 13G/A with the Commission dated February 11, 1999,
indicating sole voting and dispositive power with respect to an
aggregate of 1,237,100 shares of Common Stock.
(6) Includes the following shares of Common Stock issuable pursuant to
stock options which may be exercised within 60 days after March 31,
1999: Dr. Fathman, 110,000 shares, Mr. Fleming, 20,000 shares, Dr.
Friedman, 20,000 shares, Dr. Goldfischer, 20,000 shares, Mr. Pops,
20,000 shares, Dr. Marr, 472,727 shares and Mr. Crowley, 30,000 shares.
(7) Includes an aggregate of 692,727 shares of Common Stock issuable
pursuant to stock options which may be exercised by all executive
officers and directors of the Company within 60 days after March 31,
1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 3, 1996, the Company and Dr. Marr entered into an employment
relating to the obligations of the Company to Dr. Marr in the event of
termination of his employment. See "Employment Termination and Change in Control
Arrangements" under the heading, "Item 11 -- Executive Compensation."
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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A to be
signed on its behalf by the undersigned, thereunto duly authorized.
IMMULOGIC PHARMACEUTICAL CORPORATION
April 30, 1999 By: /s/ J. Richard Crowley
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J. Richard Crowley
President
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