<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
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 (S)240.14a-11(c) or (S)240.14a-12
AutoImmune Inc.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AutoImmune Inc.
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
AutoImmune Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 20, 1999
The Annual Meeting of Shareholders of AutoImmune Inc. (the "Company") will
be held on Thursday, May 20, 1999 at 11:00 o'clock in the morning, Eastern
Standard Time, at the Louis D. Brandeis Conference Center, 16th Floor, Nutter,
McClennen & Fish, LLP, One International Place, Boston, Massachusetts, for the
following purposes:
1. To elect a Board of Directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To consider and act upon such other business and matters or proposals
as may properly come before said Annual Meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed April 1, 1999 as the record date for
determining the shareholders having the right to receive notice of and to vote
at said Annual Meeting.
By Order of the Board of Directors
Constantine Alexander
Secretary
Lexington, Massachusetts
April 8, 1999
IF YOU DO NOT EXPECT TO BE PRESENT AT THIS MEETING AND WISH YOUR SHARES OF
CAPITAL STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE
ENCLOSED PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A
RETURN ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS
ENCLOSED FOR THAT PURPOSE.
<PAGE>
AUTOIMMUNE INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 20, 1999
This proxy statement is furnished in connection with the solicitation by and
on behalf of the Board of Directors of AutoImmune Inc. (the "Company") of
proxies for use at the Annual Meeting of Shareholders of the Company to be
held, pursuant to the accompanying Notice of Annual Meeting, on Thursday, May
20, 1999, and at any adjournment or adjournments thereof (the "Annual
Meeting"). Action will be taken at the Annual Meeting to elect a Board of
Directors to serve for the ensuing year and until their successors are duly
elected and qualified.
Shares of AutoImmune Inc. common stock, par value $0.01 (the "Common Stock")
represented by a properly executed proxy received prior to the date of the
Annual Meeting and not revoked will be voted as directed in the proxy. If a
proxy is signed and returned, but does not specify how the shares represented
thereby are to be voted, the proxy will be voted FOR the election of the
nominees for directors and in such manner as the proxies shall decide on any
other matters that may properly come before the Annual Meeting.
The Company's principal executive offices are located at 128 Spring Street,
Lexington, Massachusetts 02421. The Company mailed this proxy statement and
related form of proxy on or about April 8, 1999 to its shareholders of record
on April 1, 1999.
ANNUAL REPORT AND INDEPENDENT ACCOUNTANTS
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1998, including financial statements and the report of
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") thereon, is being mailed
herewith to each of the Company's shareholders of record on April 1, 1999. The
Board of Directors has selected PricewaterhouseCoopers as the Company's
independent accountants for the current fiscal year. Representatives of
PricewaterhouseCoopers are expected to be present at the Annual Meeting where
they will have the opportunity to make a statement if they desire to do so and
will be available to respond to appropriate questions.
VOTING SECURITIES
The holders of record of shares of Common Stock on April 1, 1999 may vote at
the Annual Meeting. On that date, there were 16,555,949 shares of Common Stock
outstanding and entitled to vote. Each share of Common Stock is entitled to
one vote on each of the matters listed in the Notice of Annual Meeting. So
long as a quorum is present at the Annual Meeting, the directors will be
elected by a plurality of the votes cast at the Annual Meeting by the holders
of shares entitled to vote at the Annual Meeting. With regard to the election
of directors, votes may be cast in favor or withheld. Votes that are withheld
will have no effect on the outcome of the election of directors.
Any shareholder giving a proxy prior to the Annual Meeting has the power to
revoke it at any time before it is exercised by a written revocation received
by the Secretary of the Company or by executing and returning a proxy bearing
a later date. Any shareholder of record attending the Annual Meeting may vote
in person, whether or not a proxy has been previously given, but the mere
presence of a shareholder at the Annual Meeting will not constitute revocation
of a previously given proxy. In addition, shareholders whose shares of Common
Stock are not registered in their own name will need additional documentation
from the record holder of such shares to vote personally at the Annual
Meeting.
<PAGE>
ELECTION OF DIRECTORS
The Company's By-Laws provide that the number of directors that shall
constitute the Board of Directors shall be determined by the Board of
Directors from time to time, but in no event shall the number of directors be
less than three. The Company's Board of Directors has currently set the number
of directors at six.
It is the intention of the persons named as proxies in the accompanying form
of proxy (unless authority to vote therefor is specifically withheld) to vote
for the election of the persons named in the following table, all of whom are
now directors of the Company, to serve for the ensuing year and until their
successors are elected and qualified. In the event that any of the nominees
becomes unavailable (which is not now anticipated by the Company), the persons
named as proxies have discretionary authority to vote for a substitute. The
Board of Directors has no reason to believe that any of said persons will be
unwilling or unable to serve if elected.
<TABLE>
<CAPTION>
Director
Name Age Since
---- --- --------
<S> <C> <C>
Robert C. Bishop, Ph.D................................... 56 1992
Hugh A. D'Andrade........................................ 60 1994
Allan R. Ferguson........................................ 56 1988
R. John Fletcher......................................... 53 1991
Henri A. Termeer......................................... 53 1992
Barry Weinberg........................................... 60 1988
</TABLE>
Robert C. Bishop, Ph.D. has served as President and Chief Executive Officer
of the Company since he joined the Company in May 1992. Prior to joining the
Company, Dr. Bishop held senior management positions at Allergan, Inc., an eye
and skin care company, including President, Allergan Medical Optics from 1986
to 1988, Senior Vice President, Corporate Development from December 1988 to
August 1989, President, Allergan Pharmaceuticals, Inc. from August 1989 to
February 1991 and Group President, Therapeutics from February 1991 to May
1992. Dr. Bishop received his B.A. degree and a Ph.D. in biochemistry from the
University of Southern California and his M.B.A. from the University of Miami.
Dr. Bishop is also a director of Quintiles Transnational Corp. and Millipore
Corporation.
Hugh A. D'Andrade has been Vice Chairman and Chief Administrative Officer of
Schering-Plough Corporation since January 1996 and was Executive Vice
President (Administration) of Schering-Plough Corporation from January 1984 to
January 1996. Mr. D'Andrade is also a director of Schering-Plough Corporation.
Allan R. Ferguson has been General Partner of Atlas Venture, an
international venture capital fund which invests in early stage health care
companies, and leader of its Life Science team, since April 1993. He has also
been a Managing Partner of Aspen Venture Partners, L.P., a limited partnership
formed to carry on the venture capital activities of 3i Ventures in the United
States, since March 1991. Mr. Ferguson is a director of ArQule, Inc.,
Molecular Geodesics, Inc., Boston Medical Technologies, Inc., NitroMed, Inc.,
Scriptgen Pharmaceuticals, Inc., Triad Investors Corporation and FluidSense
LLC.
R. John Fletcher is the founder and Chief Executive Officer of Fletcher
Spaght, Inc., a management consulting firm, founded in 1983 specializing in
strategy development for high technology and health care businesses. Mr.
Fletcher is a director of Nitinol Medical Technologies, Inc. and Fisher
Imaging Corp.
Henri A. Termeer has been President since 1983, Chief Executive Officer
since 1985 and Chairman of the Board of Directors since 1988 of Genzyme
Corporation, an international health care company that develops, manufactures
and markets its own products. Mr. Termeer is also a director of ABIOMED, Inc.,
Genzyme Corp., Genzyme Transgenics Corp. and Diacrin, Inc. Mr. Termeer is a
Trustee of Hambrecht & Quist Healthcare Investors, Inc. and Hambrecht & Quist
Life Sciences, Inc., closed-end investment companies whose investment advisor
is Hambrecht & Quist Capital Management Incorporated, an affiliate of
Hambrecht & Quist LLC.
2
<PAGE>
Barry Weinberg is Chairman of the Board of Directors. From September 1988 to
May 1992, Mr. Weinberg was President of the Company. He is a co-founder and
for more than five years has been President of CW Group, Inc., a venture
capital management firm specializing in the health care industry. Mr. Weinberg
is a director of CareAdvantage, Inc. and Scriptgen Pharmaceuticals, Inc.
Certain Information Concerning the Board of Directors
The Board of Directors currently has formed the following committees:
(a) Compensation Committee, consisting of Messrs. Ferguson, Fletcher and
Termeer, the function of which is to review compensation paid to the
Company's officers and employees and to administer the Company's stock
option plans.
(b) Audit Committee, consisting of Messrs. Ferguson, Fletcher and
Termeer, the function of which is to consult with the Company's independent
auditors to ascertain compliance with appropriate audit procedures.
During fiscal 1998, the Board of Directors met five times, the Audit
Committee met twice, and the Compensation Committee met three times. Each
director, except Mr. Weinberg, who attended 40% of the meetings, attended at
least 75% of the aggregate of the meetings of the Board of Directors and the
meetings of the committees on which he served that were held in fiscal year
1998 during the period that he served.
Directors currently do not receive any fees for service on the Board of
Directors but they are reimbursed for their expenses for each meeting
attended. In addition, pursuant to the Stock Option Plan for Nonemployee
Directors (the "Nonemployee Director Plan"), each director who is not an
employee of the Company automatically receives an option to purchase 25,000
shares of Common Stock immediately following the annual meeting of
shareholders at which he is first elected and an option to purchase 6,500
shares of Common Stock annually thereafter if he continues to be eligible
under the terms of the Nonemployee Director Plan. Each nonemployee director
who is a member of any standing committee of the Board of Directors
automatically receives an additional option to purchase 1,000 shares of Common
Stock immediately following his first election to a standing committee of the
Board of Directors (a "Committee Initial Grant"). An option to purchase 1,000
shares of Common Stock is automatically granted every four years to a director
who continues to be a member of the standing committee for which he received a
Committee Initial Grant, provided that the director continues to be eligible
under the terms of the Nonemployee Director Plan. In addition, each
nonemployee director is eligible to receive options to purchase shares of
Common Stock under the terms of the Company's 1998 Stock Option Plan. The
exercise price of options granted under the Nonemployee Director Plan is equal
to the closing price of a share of the Company's Common Stock on the Nasdaq
National Market System on the date the option is granted. The options become
exercisable in four equal annual installments commencing one year after the
date of grant, provided that the director continues to be eligible under the
terms of the Nonemployee Director Plan.
All directors hold office until the next meeting of the shareholders of the
Company and until their successors are elected and qualified. There are no
family relationships among directors or executive officers of the Company.
3
<PAGE>
EXECUTIVE COMPENSATION
The following table contains a summary of the annual, long-term and other
compensation for each of the Company's fiscal years ended December 31, 1996,
1997 and 1998 of those persons who were, during 1998, the Chief Executive
Officer, the two other most highly compensated executive officers of the
Company who were serving as executive officers at December 31, 1998 and one
executive officer who was no longer an executive officer of the Company at
December 31, 1998. The Company did not grant any restricted stock awards or
stock appreciation rights or make any long term incentive plan payouts in
1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Awards
------------
Annual Compensation Securities
--------------------- Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Options(#) Compensation($)
- ---------------------------- ---- ---------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Robert C. Bishop........ 1996 283,308 85,000 15,000 1,040(1)
President and Chief 1997 306,538 73,600 216,000(2) 26,250
Executive Officer 1998 328,154 98,500 25,000 --
Jo Ann Wallace.......... 1996 140,000 28,000 9,000 12,096(4)
Senior Vice President 1997 153,442 30,000 183,000(2) 14,333(5)
1998 174,769 43,750 15,000 620(1)
Heather A. Ellerkamp.... 1997 93,539 13,700 35,600(2) 8,500(3)
Treasurer and Director 1998 107,192 10,500 9,000 --
of Finance(6)
Malcolm J. F. Fletcher.. 1996 148,262 27,000 9,000 100(1)
Vice President, 1997 161,115 31,600 174,250(2) 14,167(3)
Clinical and Regulatory 1998 130,769 -- 15,000 795(1)
Affairs(7)
</TABLE>
- --------
(1) Represents expenses for personal financial planning for which the Company
reimbursed Dr. Bishop, Ms. Wallace and Dr. Fletcher.
(2) Includes shares underlying options that were issued in replacement of
options that were cancelled--199,000 for Dr. Bishop, 173,000 for Ms.
Wallace, 26,600 for Ms. Ellerkamp and 164,500 for Dr. Fletcher.
(3) Represents an employee retention program payment equal to one month's
salary.
(4) Represents expenses for relocation for which Ms. Wallace was reimbursed by
the Company.
(5) Represents $1,000 in expenses for personal financial planning for which
the Company reimbursed Ms. Wallace and an employee retention program
payment equal to one month's salary.
(6) Ms. Ellerkamp became an executive officer of the Company on June 19, 1997.
(7) Dr. Fletcher left the employ of the Company on October 2, 1998.
Employment Agreement
The Company entered into an employment agreement with Dr. Robert C. Bishop
effective May 1, 1992, pursuant to which Dr. Bishop receives a base salary to
be reviewed annually by the Board of Directors, plus a mutually-agreed upon
bonus in the event that certain milestones, which are determined annually, are
achieved. Dr. Bishop's current base salary is $335,000 per year, and his
maximum potential bonus is currently set at 30% of base salary. If the Company
terminates Dr. Bishop's employment without cause, he is entitled to receive
twelve months severance pay. Either party may terminate Dr. Bishop's
employment agreement upon reasonable notice to the other party.
4
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options granted
during fiscal year 1998 under the Company's Amended and Restated 1988 Stock
Option Plan (the "1988 Plan") to the named executive officers.
<TABLE>
<CAPTION>
Potential
Realizable Value
At Assumed
Percent of Annual Rates of
Number of Total Options Stock Price
Securities Granted to Appreciation for
Underlying Employees in Option Term
Options Fiscal Exercise Expiration ----------------
Name Granted(#) Year(1) Price(2) Date 5% 10%
---- ---------- ------------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Bishop........ 25,000 16.2% $2.75 2/4/08 $43,237 $109,570
Jo Ann Wallace.......... 15,000 9.7% 2.75 2/4/08 25,942 65,742
Heather A. Ellerkamp ... 9,000 5.8% 2.75 2/4/08 15,565 39,445
Malcolm J. F. Fletcher.. 15,000 9.7% 2.75 2/4/08 25,942 65,742
</TABLE>
- --------
(1) Options to purchase a total of 154,300 shares were granted to employees in
fiscal year 1998 under the 1988 Plan and the Company's 1998 Stock Option
Plan (the "1998 Plan").
(2) The exercise price may be paid in cash, by check or, in the discretion of
the Committee, in shares of Common Stock valued at fair market value on
the date of exercise or by delivery of a personal recourse note bearing
interest payable not less than annually at no less than 100% of the lowest
applicable Federal rate, as defined in Section 1274(d) of the Internal
Revenue Code, or by any combination of the foregoing.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
The following table sets forth information as of December 31, 1998
concerning exercised and unexercised stock options held by the Chief Executive
Officer and the named executive officers.
<TABLE>
<CAPTION>
Number of Securities Value of Securities
Underlying Unexercised Underlying Unexercised
Options at Fiscal Year In-the-Money Options at
Shares End Fiscal Year End($)(1)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Bishop........ -- -- 524,651 149,349 $444,439 $52,561
Jo Ann Wallace.......... -- -- 75,865 112,135 28,387 41,463
Heather A. Ellerkamp.... -- -- 11,825 23,775 3,621 5,689
Malcolm J. F. Fletcher.. 28,598 $14,514(2) 85,794 -- 59,843 --
</TABLE>
- --------
(1) Based upon a fair market value of $2.25 for a share of the Company's
Common Stock which was the closing price for a share on December 31, 1998.
(2) Based upon a fair market value of $2.06 for a share of the Company's
Common Stock which was the closing price for a share on the date of
exercise.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised of three
non-employee directors. The Committee is responsible for the establishment and
administration of the Company's executive compensation program. In addition,
the Committee is responsible for the granting of awards under the Company's
1998 Plan and for the administration of the 1988 Plan, 1998 Plan, the
Nonemployee Director Plan and the AutoImmune Inc. Employee Stock Purchase
Plan.
The Compensation Committee's basic policy in setting compensation for the
Company's executive officers is to ensure that compensation is (a) designed to
align the interests of executive management with the long-term interests of
the shareholders and (b) competitive with the compensation paid by other
development stage biotechnology companies in order to attract and retain
executives. The Committee also endeavors to base compensation on each
individual's contribution to the Company's success. The Committee's objective
is to have each executive's compensation package contingent on the Company's
operational and, ultimately, financial success, as well as on individual
performance milestones. The Committee reviews the Chief Executive Officer's
performance and sets his compensation annually. Compensation recommendations
for the Company's other executive officers are made by the Chief Executive
Officer and reviewed by the Compensation Committee.
The cash compensation paid to each executive officer in fiscal year 1998 was
comprised of two fundamental elements: base salary and a variable incentive
bonus. The Committee continues to believe that long term equity-based
incentive compensation (in the form of stock options) which is performance
driven and intended to align management's interest with the interests of the
Company's shareholders constitutes an equally fundamental element of each
executive officer's total compensation package. The Committee's policy
generally is that executive officers having higher levels of responsibility
should have a compensation package that places greater emphasis and dependence
upon the Company's success and stock appreciation than on base salary.
The Committee sets objectives for Dr. Bishop, the President and Chief
Executive Officer, the beginning of each year against which the Committee
rates Dr. Bishop's performance at the end of the year. Each objective is
weighted according to its importance. Dr. Bishop's base salary and incentive
bonus is based on the achievement of these objectives. In fiscal year 1998,
Dr. Bishop's objectives included advancing clinical trials, developing
partnerships and strategic alliances, maintaining a fiscally sound operation
and successfully managing human and capital resources.
Base Salary. The base salary in fiscal year 1998 for each of the executive
officers, including the Chief Executive Officer, was established based on the
performance of the individual as well as on a review of the compensation paid
to persons holding comparable positions in other development stage
biotechnology companies. To determine the compensation paid by these
comparable companies, the Committee reviewed three published salary surveys.
Dr. Bishop's base salary has been set above the average paid to the chief
executive officers of comparable companies in recognition of Dr. Bishop's
extensive experience and because he joined the Company at an early stage in
its development.
Incentive Bonus. Each executive officer who was an employee of the Company
at year end, including the Chief Executive Officer, was eligible to receive an
incentive bonus in fiscal year 1998 based upon his or her achievement of
specific objectives tied to operational milestones. Each executive's
objectives were determined by the Committee and approved by the Board of
Directors and were designed to assist the Company in achieving its overall
corporate goals. The goals for fiscal year 1998 were focused on advancing the
development program and conducting the pivotal clinical trial on Colloral, the
Company's product for the treatment of rheumatoid arthritis. Each objective in
an individual's bonus program was weighted according to its importance in
achieving Company-wide goals. In addition, a portion of each executive's bonus
was discretionary based upon results achieved by the Company to which he or
she contributed, as determined by the Committee.
The amount of incentive bonus as a percentage of base salary that each
executive officer was eligible to receive in fiscal year 1998 was set by the
Committee at a level sufficient to provide a meaningful incentive to
6
<PAGE>
each individual and to align his or her interests with the Company's goals.
There was no minimum guaranteed bonus for any of the executive officers in
fiscal year 1998.
The Committee reviewed each executive officer's performance, including the
performance of the Chief Executive Officer, to determine if the executive
officer had achieved his or her objectives. For fiscal 1998, Dr. Bishop earned
100% of the bonus he was eligible to receive and each executive officer earned
at least 98% of the bonus she was eligible to receive.
Stock Options. In fiscal 1998, the Committee recommended, and the Board of
Directors approved, grants of incentive stock options to the executive
officers which were designed to provide an incentive for these individuals to
work as a team to achieve the long term goals of the Company. The options
become exercisable in four equal annual installments commencing on the first
anniversary of the date of the grant.
Respectfully submitted,
Allan R. Ferguson
R. John Fletcher
Henri A. Termeer
7
<PAGE>
Comparison of Total Return Among AutoImmune Inc.,
AMEX Biotechnology Index, NASDAQ Pharmaceutical Index and
the NASDAQ Composite Index
The following graph compares, for the five year period commencing on
December 31, 1993 and ending on December 31, 1998, the cumulative total return
of the Company's Common Stock with the AMEX Biotechnology Index, NASDAQ
Pharmaceutical Index and the NASDAQ Composite Index, assuming the investment
of $100 on December 31, 1993. The Company has not paid any dividends on its
Common Stock. In 1998, the Company decided to use the NASDAQ Pharmaceutical
Index as its peer group index. This index provides a better comparison than
the AMEX Biotechnology Index due to the diversity and larger quantity of
companies included in the NASDAQ Pharmaceutical Index.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
31-Dec-93 31-Dec-94 31-Dec-95 31-Dec-96 31-Dec-97 31-Dec-98
<S> <C> <C> <C> <C> <C> <C>
AutoImmune Inc. $100 $ 77 $150 $205 $ 44 $ 30
AMEX Biotechnology Index $100 $ 71 $116 $125 $140 $160
NASDAQ Pharmaceutical Index $100 $ 95 $138 $138 $143 $183
NASDAQ Composite Index (U.S.) $100 $ 98 $138 $170 $209 $293
</TABLE>
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 1, 1999 by (i) those
persons known to the Company to be the beneficial owners of more than five
percent of the outstanding shares of Common Stock of the Company, (ii) each of
the Company's directors, (iii) the executive officers named in the Summary
Compensation Table, and (iv) all directors and officers of the Company as a
group. All information with respect to beneficial ownership by the Company's
directors, officers or beneficial owners has been furnished by the respective
director, officer or beneficial owner, as the case may be. The number of
shares set forth below includes shares beneficially owned by spouses and minor
children; the named persons disclaim any beneficial interest in the shares so
included.
<TABLE>
<CAPTION>
Number o Shares
of Common Stock Percent
Name and Address of Beneficial Owners Beneficially Owned(1) Owned
- ------------------------------------- --------------------- -------
<S> <C> <C>
Five Percent or Greater Shareholders
Wellington Management Company, LLP.............. 2,234,800 13.50%
75 State Street
Boston, MA 02109
Four Partners................................... 2,022,000 12.22%
667 Madison Avenue
New York, NY 10021
State of Wisconsin Investment Board............. 1,590,000 9.61%
P.O. Box 7842
Madison, WI 53707
Biotechnology Value Fund LP..................... 1,333,100 8.06%
One Sansome Street, 39th Floor
San Francisco, CA 94104
Garo H. Armen................................... 1,125,500 6.80%
c/o Armen Partners, L.P.
630 Fifth Avenue, Suite 2100
New York, New York 10111
Directors
Robert C. Bishop................................ 606,823(2) 3.55%
Hugh A. D'Andrade............................... 87,875(3) *
Allan R. Ferguson............................... 47,328(4) *
R. John Fletcher................................ 42,770(5) *
Henri A. Termeer................................ 59,375(6) *
Barry Weinberg ................................. 188,808(7) 1.13%
Named Executive Officers
Robert C. Bishop................................ 606,823(2) 3.55%
Jo Ann Wallace.................................. 97,676(8) *
Heather Ellerkamp............................... 19,319(9) *
Malcolm J. F. Fletcher ......................... 115,912(10) *
Directors and officers as a group (9 persons)... 1,265,886(11) 7.21%
</TABLE>
- --------
* Less than 1%
(1) Except as otherwise noted, each person referenced in the table has sole
voting and investment power with respect to such person's shares.
9
<PAGE>
(2) Includes 547,484 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table.
(3) Includes 10,000 shares of Common Stock held by a trust of which Mr.
D'Andrade is a trustee and 35,375 shares of Common Stock issuable upon
the exercise of options that are exercisable within 60 days of the date
of this table.
(4) Includes 15,000 shares of Common Stock issuable to Aspen Venture
Associates, L.P., the General Partner of Aspen Venture Partners, L.P.,
upon the exercise of options, 12,403 shares of Common Stock owned by Mr.
Ferguson, 13,875 shares of Common Stock that Mr. Ferguson has the right
to acquire within 60 days of the date of this table pursuant to options,
3,250 shares of Common Stock owned jointly by Mr. Ferguson and his
spouse, 800 shares of Common Stock owned by Mr. Ferguson's spouse and
2,000 shares of Common Stock owned by Mr. Ferguson as custodian for his
children. Mr. Ferguson has shared voting and investment power with
respect to all such shares of Common Stock except that Mr. Ferguson has
sole voting and investment power with respect to the 12,403 shares of
Common Stock owned by him and said 13,875 shares of Common Stock issuable
upon the exercise of options and no voting and investment power with
respect to the 800 shares held by his spouse. Mr. Ferguson disclaims
beneficial ownership of the 800 shares of Common Stock owned by his
spouse and the 2,000 shares of Common Stock owned by Mr. Ferguson as
custodian for his children.
(5) Includes 60 shares of Common Stock owned by Mr. Fletcher's minor children
and 22,625 shares of Common Stock issuable upon the exercise of options
that are exercisable within 60 days of the date of this table.
(6) Includes 39,375 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table.
(7) Includes 101,375 shares of Common Stock issuable to Mr. Weinberg upon the
exercise of options that are exercisable within 60 days of the date of
this table which includes options to purchase 28,125 shares donated to a
family investment partnership of which Mr. Weinberg is the general
partner.
(8) Includes 92,469 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table and
5,207 shares owned jointly by Ms. Wallace and another.
(9) Includes 16,100 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table.
(10) Includes 85,794 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table and
20 shares of Common Stock owned by Dr. Fletcher's child.
(11) Includes 656,053 shares of Common Stock issuable upon the exercise of
options that are exercisable within 60 days of the date of this table by
the Company's current executive officers.
10
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file with
the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than ten percent beneficial
owners are required to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1998, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten percent beneficial owners were satisfied,
provided that a Form 5 for Allan R. Ferguson, a director of the company, was
filed one day late.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the next annual
meeting of shareholders must be received by the Company at its principal
executive offices both (i) by December 9, 1999 if the proposal is to be
included in the proxy statement and form of proxy relating to that meeting and
(ii) within the time frames and in accordance with the procedures specified in
the Company's By-laws and summarized below. The proposals also must comply
with the applicable requirements of the Federal securities laws.
The By-laws of the Company specify when a stockholder must submit proposals
(including nominees for election to the Board of Directors) for consideration
at a stockholders' meeting in order for those proposals to be considered at
the meeting. In order for a proposal to be considered at a stockholders'
meeting, the stockholder making it must have given timely notice in writing to
the Secretary of the Company. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive office of the
Company, 128 Spring Street, Lexington, MA 02421, not less than 60 days nor
more than 90 days prior to the meeting; except that in the event that less
than 70 days' notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be timely must be
received no later than the close of business on the 10th day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made.
11
<PAGE>
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than that shown above. However, if
any such other business should come before the Annual Meeting, it is the
intention of the persons named as proxies in the enclosed form of proxy to
vote the proxies in respect of any such business in accordance with their best
judgment.
The cost of preparing, assembling and mailing this proxy material will be
borne by the Company. The Company may solicit proxies otherwise than by use of
the mail, in that certain officers and regular employees of the Company,
without additional compensation, may use their personal efforts, by telephone
or otherwise, to obtain proxies. Such assistance may take the form of
personal, telephonic or written solicitation or any combination thereof. All
costs of solicitation will be borne by the Company. The Company will also
request persons, firms and corporations holding shares in their names, or in
the names of their nominees, which shares are beneficially owned by others, to
send this proxy material to and obtain proxies from such beneficial owners and
will reimburse such holders for their reasonable expenses in doing so.
By Order of the Board of Directors
Constantine Alexander
Secretary
April 8, 1999
12
<PAGE>
AUTOIMMUNE INC.
ANNUAL MEETING OF SHAREHOLDERS -- May 20, 1999
Proxy Solicited On Behalf of the Board of Directors
The undersigned shareholder hereby appoints Robert C. Bishop and Heather A.
Ellerkamp, and each of them individually, proxies for the undersigned, with
full power of substitution and re-substitution, to represent the undersigned
and to vote all shares of common stock of AUTOIMMUNE INC. (the "Company") that
the undersigned is entitled to vote at the Annual Meeting of Shareholders of
the Company to be held on Thursday, May 20, 1999 and at any and all
adjournments thereof (the "Meeting"), as follows:
1. Election of Directors. Nominees:
Barry Weinberg Robert C. Bishop, Ph.D. Hugh A. D'Andrade Allan R.
Ferguson R. John Fletcher Henri A. Termeer
[_] FOR [_] WITHHELD
FOR, except vote withheld for the following nominee(s), if any:
- --------------------------------------------------------------------------------
2. Authorizing proxyholders to vote in their discretion as to such matters as
may properly come before the Annual Meeting, other than proposals of which the
Company has received proper notice in accordance with its By-laws.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED HEREIN. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL OF THE NOMINEES FOR
DIRECTOR, INCLUDING AUTHORIZING THE PROXYHOLDERS TO VOTE IN THEIR DISCRETION AS
TO ALL MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN ON REVERSE
<PAGE>
------------------------------------
------------------------------------
Signature(s)
Dated: ______________________ , 1999
NOTE: Please sign exactly as name
or names appear above. When signing
as Attorney, Executor, Trustee,
Guardian, or Officer of a
corporation, please give title as
such. For joint accounts, all named
holders should sign.
- --------------------------------------------------------------------------------
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
