FORM 10-K/A-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
Commission File No. 0-21990
OXiGENE, INC.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
Delaware 13-3679168
- --------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
One Copley Place, Suite 602, Boston, MA 02116
(Address of principal executive offices)
(617) 536-9500
(Telephone number, including area code)
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 per share
Warrant to purchase one share of Common Stock
Title of Each Class
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 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 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 this
Form 10-K. [ X ]
The approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of March 19, 1998 was $160,791,403, based on
the closing price of $17.125 on that date.
As of March 19, 1998, the aggregate number of outstanding shares of Common Stock
of the registrant was 10,195,765 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant's Proxy Statement for the Annual Meeting of Stockholders,
scheduled to be held on June 5, 1998, is incorporated by reference to Part III
(Items 10, 11, 12 and 13) of this Form 10-K.
<PAGE>
OXiGENE, Inc.
(A development stage company)
List of Consolidated Financial Statements
The following consolidated financial statements of OXiGENE, Inc. are included in
Item 8:
Report of Independent Auditors...........................................F-2
Consolidated Balance Sheets--December 31, 1997 and 1996..................F-3
Consolidated Statements of Operations--Years Ended December
31, 1997, 1996 and 1995 and the Period from February 22,
1988 (Inception) through December 31, 1997 (Unaudited)................F-4
Consolidated Statements of Stockholders' Equity
(Deficit)--Years Ended December 31, 1997, 1996, 1995, 1994, 1993,
1992, 1991 and 1990 (Unaudited), and the Period from February 22
(Inception) through December 31, 1989 (Unaudited)....................F-5
Consolidated Statements of Cash Flows--Years Ended December
31, 1997, 1996 and 1995 and the Period from February 22,
1989 (Inception) through December 31, 1997 (Unaudited)................F-15
Notes to Consolidated Financial Statements...............................F-16
Schedules for which provision is made in the applicable accounting regulation of
the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been omitted.
<PAGE>
Report of Independent Auditors
The Board of Directors and Stockholders
OXiGENE, Inc.
We have audited the accompanying consolidated balance sheets of OXiGENE,
Inc. (the "Company") (a development stage company) as of December 31, 1997 and
1996, and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of OXiGENE, Inc.
(a development stage company) at December 31, 1997 and 1996, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
January 12, 1998
<PAGE>
OXiGENE, Inc.
(A development stage company)
Consolidated Balance Sheets
December 31
1996 1997
----------------------------------
Assets
Current assets:
Cash and cash equivalents $ 40,517,182 $ 40,136,662
Prepaid expenses 194,628 341,912
Interest receivable 280,411 300,636
Other 76,626 61,272
------------- -------------
Total current assets 41,068,847 40,840,482
Furniture, fixtures and equipment, 143,652 357,876
at cost
------------- -------------
Accumulated depreciation (53,340) (125,601)
90,312 232,275
Deposits 9,600 79,600
------------- -------------
Total assets $ 41,168,759 $ 41,152,357
------------- -------------
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable and accrued
expenses:
Accrued expenses $ 225,995 $ 778,606
Other payables 424,006 172,482
------------- -------------
Total current liabilities 650,001 951,088
Commitments (Note 4)
Stockholders' equity (Note 2):
Common stock, $.01 par value:
Authorized shares--
60,000,000 shares at
December 31, 1996
60,000,000 shares at
December 31, 1997
Issued and outstanding shares--
9,052,343 shares at
December 31, 1996; 90,523 101,858
10,185,765 shares at
December 31, 1997
Additional paid-in capital 57,673,667 65,348,603
Deficit accumulated during the (17,358,307) (25,468,828)
development stage
Foreign currency translation 112,875 219,636
adjustment
------------- -------------
Total stockholders' equity 40,518,758 40,201,269
------------- -------------
Total liabilities and $ 41,168,759 $ 41,152,357
stockholders' equity
============= ==============
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
OXiGENE, Inc.
(A development stage company)
Consolidated Statements of Operations
Period from
February 22, 1988
(inception)
Year ended December 31 through
1995 1996 1997 December 31, 1997
---- ---- ---- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues
Research income $ - $ - $ - $ 31,000
Interest income 420,949 684,039 2,217,467 3,648,747
------- ------- --------- ---------
420,949 684,039 2,217,467 3,679,747
Operating expenses
Research and development:
CATO Research, Ltd. 739,994 318,210 166,640 2,950,073
(Note 5)
Other 2,103,599 4,504,624 7,114,864 16,224,025
--------- --------- --------- ----------
Total research and 2,843,593 4,822,834 7,281,504 19,174,098
development
General and administrative
(including related party
transactions of
approximately $72,000,
$336,000 and $494,000 in 1,295,191 1,819,638 3,046,484 9,974,477
1995, 1996 and 1997)
(Note 5)
Total operating expenses 4,138,784 6,642,472 10,327,988 29,148,575
--------- --------- ---------- ----------
Net loss $(3,717,835) $ (5,958,433) $ (8,110,521) $(25,468,828)
=========== ============ ============ ============
Net loss per common share $(.63) $(.80) $(.83)
Weighted average number of
common shares outstanding 5,876,295 7,439,616 9,770,364
See accompanying notes.
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit)
(Note 2)
<TABLE>
<CAPTION>
Common Stock,
$.01 Par Value
---------------------------
Date Shares Amounts
------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock in exchange for
transfer of patent application ownership
to the Company by an officer/director May 1988 380,000 $ 3,800
recorded at no value, which reflects
transferor's basis (unaudited)
Issuance of common stock at approximately June 1988 271,033 2,710
$0.74 per share (unaudited)
Issuance of common stock in exchange for the
outstanding common stock of Bio-Screen August 1988 100,000 1,000
Inc. (unaudited)
Net loss for period from February 22, 1988
(inception) through - -
December 31, 1988 (unaudited)
----------------------------------------
Balance at December 31, 1988 (unaudited) 751,033 7,510
Issuance of common stock at approximately January 1989 271,033 2,710
$0.74 per share (unaudited)
Net loss for 1989 (unaudited) - -
----------------------------------------
Balance at December 31, 1989 (unaudited) 1,022,066 10,220
Issuance of common stock at approximately March 1990 to
$0.74 per share December 1990 257,487 2,575
Common stock subscribed December 1990 - -
Net loss for 1990 - -
----------------------------------------
Balance at December 31, 1990 1,279,553 12,795
Issuance of common stock at approximately January 1991 13,547 136
$0.74 per share
Issuance of common stock February 1991 330,000 3,300
at $0.71 per share
Issuance of common stock at approximately August 1991 100,000 1,000
$1.50 per share
Issuance of common stock at December 1991 220,000 2,200
$1.95 per share
Net loss for 1991 - -
----------------------------------------
Balance at December 31, 1991 1,943,100 19,431
Issuance of common stock at
1.95 per share, net of issuance December 1992 985,000 9,850
costs of approximately $121,000
Net loss for 1992 - -
----------------------------------------
Balance at December 31, 1992 2,928,100 29,281
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common Stock Subscribed Additional
-------------------------------- Paid-In
Shares Amount Capital
-------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock in exchange for
transfer of patent application ownership
to the Company by an officer/director - $ - $ (3,800)
recorded at no value, which reflects
transferor's basis (unaudited)
Issuance of common stock at approximately - - 197,290
$0.74 per share (unaudited)
Issuance of common stock in exchange for the
outstanding common stock of Bio-Screen - - (1,000)
Inc. (unaudited)
Net loss for period from February 22, 1988
(inception) through - - -
December 31, 1988 (unaudited)
------------------------------------------------------------
Balance at December 31, 1988 (unaudited) - - 192,490
Issuance of common stock at approximately - - 197,290
$0.74 per share (unaudited)
Net loss for 1989 (unaudited) - - -
------------------------------------------------------------
Balance at December 31, 1989 (unaudited) - - 389,780
Issuance of common stock at approximately
$0.74 per share - - 187,425
Common stock subscribed 13,547 10,000 -
Net loss for 1990 - - -
------------------------------------------------------------
Balance at December 31, 1990 13,547 10,000 577,205
Issuance of common stock at approximately (13,547) (10,000) 9,864
$0.74 per share
Issuance of common stock at - - 230,033
$0.71 per share
Issuance of common stock at approximately - - 149,000
$1.50 per share
Issuance of common stock at - - 426,800
$1.95 per share
Net loss for 1991 - - -
Balance at December 31, 1991 - - 1,392,902
------------------------------------------------------------
Issuance of common stock at
$1.95 per share, net of issuance costs of - - 1,789,866
approximately $121,000
Net loss for 1992 - - -
------------------------------------------------------------
Balance at December 31, 1992 - - 3,182,768
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Deficit Accumulated During the Foreign Currency
Development Stage Translation Adjustment
--------------------------------------------------------------------
<S> <C> <C>
Issuance of common stock in exchange for
transfer of patent application ownership
to the Company by an officer/director $ - $ -
recorded at no value, which reflects
transferor's basis (unaudited)
Issuance of common stock at approximately - -
$0.74 per share (unaudited)
Issuance of common stock in exchange for the
outstanding common stock of Bio-Screen - -
Inc. (unaudited)
Net loss for period from February 22, 1988
(inception) through December 31, 1988 (185,962) -
(unaudited)
--------------------------------------------------------------------
Balance at December 31, 1988 (unaudited) (185,962) -
Issuance of common stock at approximately - -
$0.74 per share (unaudited)
Net loss for 1989 (unaudited) (179,119) -
--------------------------------------------------------------------
Balance at December 31, 1989 (unaudited) (365,081) -
Issuance of common stock at approximately - -
$0.74 per share
Common stock subscribed - -
Net loss for 1990 (326,648) -
--------------------------------------------------------------------
Balance at December 31, 1990 (691,729) -
Issuance of common stock at approximately - -
$0.74 per share
Issuance of common stock at - -
$0.71 per share
Issuance of common stock at approximately - -
$1.50 per share
Issuance of common stock at - -
$1.95 per share
Net loss for 1991 (501,872) -
--------------------------------------------------------------------
Balance at December 31, 1991 (1,193,601) -
Issuance of common stock at
$1.95 per share, net of issuance costs of - -
approximately $121,000
Net loss for 1992 (1,628,667) -
--------------------------------------------------------------------
Balance at December 31, 1992 (2,822,268) -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unrealized
Stock Losses on Total
Subscription Securities Stockholders'
and Notes Available for Equity
Receivable Sale (Deficit)
-----------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock in exchange for
transfer of patent application ownership
to the Company by an officer/director $ - $ - $ -
recorded at no value, which reflects
transferor's basis (unaudited)
Issuance of common stock at approximately - - 200,000
$0.74 per share (unaudited)
Issuance of common stock in exchange for
the outstanding common stock of - - -
Bio-Screen Inc. (unaudited)
Net loss for period from February 22, 1988
(inception) through December 31, 1988 - - (185,962)
(unaudited)
Balance at December 31, 1988 (unaudited) - - 14,038
Issuance of common stock at approximately - - 200,000
$0.74 per share (unaudited)
Net loss for 1989 (unaudited) - - (179,119)
Balance at December 31, 1989 (unaudited) - - 34,919
Issuance of common stock at approximately - - 190,000
$0.74 per share
Common stock subscribed (10,000) - -
Net loss for 1990 - - (326,648)
Balance at December 31, 1990 (10,000) - (101,729)
Issuance of common stock at approximately 10,000 - 10,000
$0.74 per share
Issuance of common stock at $0.71 per share - - 233,333
Issuance of common stock at approximately - - 150,000
$1.50 per share
Issuance of common stock at $1.95 per share - - 429,000
Net loss for 1991 - - (501,872)
Balance at December 31, 1991 - - 218,732
Issuance of common stock at $1.95 per
share, net of issuance costs of (360,750) - 1,438,966
approximately $121,000
Net loss for 1992 - - (1,628,667)
---------------------------------------------------------
Balance at December 31, 1992 (360,750) - 29,031
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Common Stock,
$.01 Par Value
-----------------------------------------
Date Shares Amounts
------------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock at $1.95 per January 1993 to
share, net of issuance costs of February 1993 445,000 $ 4,450
approximately $136,500
Repayment of notes receivable January 1993 - -
Issuance of warrants and options as
compensation to certain directors to
purchase 180,000 and 10,000 shares May 1993 - -
of common stock, respectively, at
$1.95 per share
Issuance of common stock at $6.00 per
share, net of issuance costs of September 1993 1,500,000 15,000
approximately $1,836,000
Issuance of common stock at $6.00 per
share, net of issuance costs of October 1993 105,000 1,050
approximately $82,000
Net loss for 1993 - -
----------------------------------------------
Balance at December 31, 1993 4,978,100 49,781
Issuance of common stock at $1.95 per April 1994 80,000 800
share
Net loss for 1994 - -
----------------------------------------------
Unrealized losses on securities - -
available-for-sale
----------------------------------------------
Balance at December 31, 1994 5,058,100 50,581
Issuance of options as compensation to
consultants to purchase 165,000 June 1995 - -
shares of common stock at $6.00 per
share
Issuance of common stock at $6.00 per
share, net of issuance costs of July 1995 1,666,700 16,667
approximately $524,000
Issuance of common stock at $1.50 per July 1995 to
share (12,500) and $1.95 per share December 1995 98,500 985
(86,000)
Subscriptions for 5,000 shares of December 1995 - -
common stock at $1.95 per share
Foreign currency translation - -
adjustment for 1995
Net loss for 1995 - -
Unrealized gain on securities - -
available-for-sale
----------------------------------------------
Balance at December 31, 1995 6,823,300 68,233
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common Stock Subscribed Additional
------------------------------------------- Paid-In
Shares Amount Capital
------------------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock at $1.95 per
share, net of issuance costs of - $ - $ 726,800
approximately $136,500
Repayment of notes receivable - - -
Issuance of warrants and options as
compensation to certain directors
to purchase 180,000 and 10,000 - - 427,500
shares of common stock,
respectively, at $1.95 per share
Issuance of common stock at $6.00 per
share, net of issuance costs of - - 7,149,247
approximately $1,836,000
Issuance of common stock at $6.00 per
share, net of issuance costs of - - 547,050
approximately $82,000
Net loss for 1993 - - -
------------------------------------------------------------------------
Balance at December 31, 1993 - - 12,033,365
Issuance of common stock at $1.95 per - - 155,200
share
Net loss for 1994 - - -
Unrealized losses on securities - - -
available-for-sale
------------------------------------------------------------------------
Balance at December 31, 1994 - - 12,188,565
Issuance of options as compensation
to consultants to purchase 165,000 - - 20,625
shares of common stock at $6.00 per
share
Issuance of common stock at $6.00 per
share, net of issuance costs of - - 9,460,009
approximately $524,000
Issuance of common stock at $1.50 per
share (12,500) and $1.95 per share - - 185,465
(86,000)
Subscriptions for 5,000 shares of 5,000 50 9,700
common stock at $1.95 per share
Foreign currency translation - - -
adjustment for 1995
Net loss for 1995 - - -
Unrealized gain on securities - - -
available-for-sale
------------------------------------------------------------------------
Balance at December 31, 1995 5,000 50 21,864,364
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Deficit
Accumulated Foreign Stock and
During the Currency Subscription
Development Translation and Notes
Stage Adjustment Receivable
----------------------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock at $1.95
per share, net of issuance costs $ - $ - $ -
of approximately $136,500
Repayment of notes receivable - - 360,750
Issuance of warrants and options
as compensation to certain
directors to purchase 180,000 - - -
and 10,000 shares of common
stock, respectively, at $1.95
per share
Issuance of common stock at $6.00
per share, net of issuance costs - - -
of approximately $1,836,000
Issuance of common stock at $6.00
per share, net of issuance costs - - -
of approximately $82,000
Net loss for 1993 (2,020,012) - -
----------------------------------------------------------------------------
Balance at December 31, 1993 (4,842,280) - -
Issuance of common stock at $1.95 - - -
per share
Net loss for 1994 (2,839,759) - -
Unrealized losses on securities - - -
available-for-sale
----------------------------------------------------------------------------
Balance at December 31, 1994 (7,682,039) - -
Issuance of options as
compensation to consultants to - - -
purchase 165,000 shares of
common stock at $6.00 per share
Issuance of common stock at $6.00
per share, net of issuance costs - - -
of approximately $524,000
Issuance of common stock at $1.50
per share (12,500) and $1.95 per - - -
share (86,000)
Subscriptions for 5,000 shares of - - -
common stock at $1.95 per share
Foreign currency translation - 24,894 -
adjustment for 1995
Net loss for 1995 (3,717,835) - -
Unrealized gain on securities - - -
available-for-sale
----------------------------------------------------------------------------
Balance at December 31, 1995 (11,399,874) 24,894 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unrealized Losses on Securities Total Stockholders' Equity
Available for
Sale (Deficit)
-----------------------------------------------------------------
<S> <C> <C>
Issuance of common stock at $1.95 per
share, net of issuance costs of $ - $ 731,250
approximately $136,500
Repayment of notes receivable - 360,750
Issuance of warrants and options as
compensation to certain directors to
purchase 180,000 and 10,000 shares of - 427,500
common stock, respectively, at $1.95
per share
Issuance of common stock at $6.00 per
share, net of issuance costs of - 7,164,247
approximately $1,836,000
Issuance of common stock at $6.00 per
share, net of issuance costs of - 548,100
approximately $82,000
Net loss for 1993 - (2,020,012)
---------------------------------------------------------------
Balance at December 31, 1993 - 7,240,866
Issuance of common stock at $1.95 per - 156,000
share
Net loss for 1994 - (2,839,759)
Unrealized losses on securities (77,125) (77,125)
available-for-sale
----------------------------------------------------------------
Balance at December 31, 1994 (77,125) 4,479,982
Issuance of options as compensation to
consultants to purchase 165,000 - 20,625
shares of common stock at $6.00 per
share
Issuance of common stock at $6.00 per
share, net of issuance costs of - 9,476,676
approximately $524,000
Issuance of common stock at $1.50 per
share (12,500) and $1.95 per share - 186,450
(86,000)
Subscriptions for 5,000 shares of - 9,750
common stock at $1.95 per share
Foreign currency translation adjustment - 24,894
for 1995
Net loss for 1995 - (3,717,835)
Unrealized gain on securities 76,632 76,632
available-for-sale
-----------------------------------------------------------------
Balance at December 31, 1995 (493) 10,557,174
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Common Stock,
$.01 Par Value
---------------------------------------
Date Shares Amounts
--------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon
exercise of options, warrants
or stock appreciation rights (SAR):
At $1.95 per share January 1996 5,000 $ 50
At $1.95 per share January 1996 50,000 500
At $1.95 per share March 1996 95,000 950
At $1.95 per share April 1996 50,000 500
At $7.25 per share June 1996 2,500 25
At $9.67 per share June 1996 120,482 1,206
At $1.95 per share June 1996 75,000 750
At $1.95 per share July 1996 50,000 500
At $5.50 per share July 1996 5,000 50
At $10.35 per share July 1996 49,755 498
At $7.25 per share July 1996 10,000 100
At $1.95 per share August 1996 31,500 315
At $7.25 per share August 1996 2,500 25
At $22.00 per share (SAR) August 1996 5,129 51
At $9.67 per share August 1996 270,342 2,702
At $21.00 per share (SAR) September 1996 1,910 19
At $11.54 per share October 1996 8,560 86
At $1.95 per share November 1996 5,000 50
At $6.25 per share November 1996 50,000 500
At $8.95 per share November 1996 27,250 272
At $7.25 per share November 1996 42,150 422
At $11.54 per share November 1996 52,965 529
At $15.74 per share November 1996 69,000 690
Capital contribution by officer June 1996 - -
Public offering of common stock
at $25.2732 per share, net of issuance
costs of approximately $2,217,000 November 1996 1,150,000 11,500
Foreign currency translation - -
adjustment for 1996
Net loss for 1996 - -
Accrued stock appreciation rights - -
Unrealized gain on securities - -
available-for-sale
---------------------------------------
Balance at December 31, 1996 9,052,343 90,523
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common Stock Subscribed Additional
----------------------------------------- Paid-In
Shares Amount Capital
-----------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon
exercise of options, warrants
or stock appreciation rights (SAR):
At $1.95 per share (5,000) $(50) $ -
At $1.95 per share - - 97,000
At $1.95 per share - - 184,300
At $1.95 per share - - 97,000
At $7.25 per share - - 18,100
At $9.67 per share - - 1,164,204
At $1.95 per share - - 145,500
At $1.95 per share - - 97,000
At $5.50 per share - - 27,450
At $10.35 per share - - 480,777
At $7.25 per share - - 72,400
At $1.95 per share - - 61,110
At $7.25 per share - - 18,100
At $22.00 per share (SAR) - - 112,789
At $9.67 per share - - 2,612,318
At $21.00 per share (SAR) - - 40,091
At $11.54 per share - - 98,714
At $1.95 per share - - 9,700
At $6.25 per share - - 312,000
At $8.95 per share - - 243,615
At $7.25 per share - - 370,021
At $11.54 per share - - 610,796
At $15.74 per share - - 943,710
Capital contribution by officer - - 53,170
Public offering of common stock
at $25.2732 per share, net of issuance
costs of approximately $2,217,000 - - 26,835,896
Foreign currency translation - - -
adjustment for 1996
Net loss for 1996 - - -
Accrued stock appreciation rights - - 1,103,542
Unrealized gain on securities - - -
available-for-sale
-----------------------------------------------------------
Balance at December 31, 1996 - - 57,673,667
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Deficit
Accumulated Foreign Stock
During the Currency Subscription and
Development Translation Notes
Stage Adjustment Receivable
-----------------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon
exercise of options, warrants
or stock appreciation rights (SAR):
At $1.95 per share $ - $ - $ -
At $1.95 per share - - -
At $1.95 per share - - -
At $1.95 per share - - -
At $7.25 per share - - -
At $9.67 per share - - -
At $1.95 per share - - -
At $1.95 per share - - -
At $5.50 per share - - -
At $10.35 per share - - -
At $7.25 per share - - -
At $1.95 per share - - -
At $7.25 per share - - -
At $22.00 per share (SAR) - - -
At $9.67 per share - - -
At $21.00 per share (SAR) - - -
At $11.54 per share - - -
At $1.95 per share - - -
At $6.25 per share - - -
At $8.95 per share - - -
At $7.25 per share - - -
At $11.54 per share - - -
At $15.74 per share - - -
Capital contribution by officer - - -
Public offering of common
stock at $25.2732 per share,
net of issuance costs of approximately - - -
$2,217,000
Foreign currency translation adjustment for - 87,981 -
1996
Net loss for 1996 (5,958,433) - -
Accrued stock appreciation rights - - -
Unrealized gain on securities - - -
available-for-sale
-----------------------------------------------------------------------
Balance at December 31, 1996 (17,358,307) 112,875 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unrealized Losses on Securities Total Stockholders'
Available for Sale Equity (Deficit)
---------------------------------------------------------
<S> <C> <C>
Issuance of common stock upon
exercise of options, warrants or
stock appreciation rights (SAR):
At $1.95 per share $ - $ -
At $1.95 per share - 97,500
At $1.95 per share - 185,250
At $1.95 per share - 97,500
At $7.25 per share - 18,125
At $9.67 per share - 1,165,410
At $1.95 per share - 146,250
At $1.95 per share - 97,500
At $5.50 per share - 27,500
At $10.35 per share - 481,275
At $7.25 per share - 72,500
At $1.95 per share - 61,425
At $7.25 per share - 18,125
At $22.00 per share (SAR) - 112,840
At $9.67 per share - 2,615,020
At $21.00 per share (SAR) - 40,110
At $11.54 per share - 98,800
At $1.95 per share - 9,750
At $6.25 per share - 312,500
At $8.95 per share - 243,887
At $7.25 per share - 370,443
At $11.54 per share - 611,325
At $15.74 per share - 944,400
Capital contribution by officer - 53,170
Public offering of common
stock at $25.2732 per share,
net of issuance costs of approximately - 26,847,396
$2,217,000
Foreign currency translation adjustment for - 87,981
1996
Net loss for 1996 - (5,958,433)
Accrued stock appreciation rights - 1,103,542
Unrealized gain on securities 493 493
available-for-sale
------------------------------------------------------------------
Balance at December 31, 1996 - 40,518,758
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Common Stock,
$.01 Par Value
--------------------------------------
Date Shares Amounts
--------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon
exercise of options, warrants or
stock appreciation rights (SAR):
At prices ranging from $25.50 January 1997 3,690 $ 37
to $32.25 (SAR)
At $8.95 per share January 1997 32,700 328
At $11.54 per share January 1997 34,240 343
At $5.50 per share February 1997 25,000 250
At $7.25 per share February 1997 45,000 450
At $11.54 per share February 1997 32,324 322
At $34.50 per share (SAR) February 1997 473 5
At $5.50 per share March 1997 15,000 150
At $7.25 per share March 1997 2,500 25
At $11.54 per share March 1997 52,930 529
At $13.69 per share March 1997 34,500 344
At $33.50 per share (SAR) March 1997 391 4
At $1.95 per share April 1997 285,000 2,850
At $5.50 per share April 1997 80,000 800
At $7.25 per share April 1997 100,000 1,000
At $11.54 per share April 1997 17,253 173
At $5.50 per share May 1997 5,000 50
At $6.94 per share May 1997 2,000 20
At $7.00 per share May 1997 5,000 50
At $7.25 per share May 1997 5,000 50
At $11.54 per share May 1997 13,979 140
At $1.95 per share June 1997 10,000 100
At $5.50 per share June 1997 5,000 50
At $7.00 per share June 1997 5,000 50
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common Stock Subscribed Additional
----------------------------------------- Paid-In
Shares Amount Capital
------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon exercise
of options, warrants or stock
appreciation rights (SAR):
At prices ranging from $25.50 - $ - $ 98,023
to $32.25 (SAR)
At $8.95 per share - - 292,338
At $11.54 per share - - 394,857
At $5.50 per share - - 137,250
At $7.25 per share - - 325,800
At $11.54 per share - - 372,772
At $34.50 per share (SAR) - - 16,345
At $5.50 per share - - 82,350
At $7.25 per share - - 18,100
At $11.54 per share - - 610,401
At $13.69 per share - - 471,856
At $33.50 per share (SAR) - - 13,121
At $1.95 per share - - 552,900
At $5.50 per share - - 439,200
At $7.25 per share - - 724,000
At $11.54 per share - - 198,972
At $5.50 per share - - 27,450
At $6.94 per share - - 13,860
At $7.00 per share - - 34,950
At $7.25 per share - - 36,200
At $11.54 per share - - 161,213
At $1.95 per share - - 19,400
At $5.50 per share - - 27,450
At $7.00 per share - - 34,950
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Deficit Accumulated
During the Foreign Currency Stock Subscription
Development Translation and Notes
Stage Adjustment Receivable
--------------------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock upon exercise
of options, warrants or stock
appreciation rights (SAR):
At prices ranging from $25.50 to $ - $ - $ -
$32.25 (SAR)
At $8.95 per share - - -
At $11.54 per share - - -
At $5.50 per share - - -
At $7.25 per share - - -
At $11.54 per share - - -
At $34.50 per share (SAR) - - -
At $5.50 per share - - -
At $7.25 per share - - -
At $11.54 per share - - -
At $13.69 per share - - -
At $33.50 per share (SAR) - - -
At $1.95 per share - - -
At $5.50 per share - - -
At $7.25 per share - - -
At $11.54 per share - - -
At $5.50 per share - - -
At $6.94 per share - - -
At $7.00 per share - - -
At $7.25 per share - - -
At $11.54 per share - - -
At $1.95 per share - - -
At $5.50 per share - - -
At $7.00 per share - - -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Unrealized Losses on
Securities Available Total Stockholders' Equity
for Sale (Deficit)
----------------------------------------------------------
<S> <C> <C>
Issuance of common stock upon exercise of
options, warrants or stock appreciation
rights (SAR):
At prices ranging from $25.50 to $ - $
$32.25 (SAR) 98,060
At $8.95 per share - 292,666
At $11.54 per share - 395,200
At $5.50 per share - 137,500
At $7.25 per share - 326,250
At $11.54 per share - 373,094
At $34.50 per share (SAR) - 16,350
At $5.50 per share - 82,500
At $7.25 per share - 18,125
At $11.54 per share - 610,930
At $13.69 per share - 472,200
At $33.50 per share (SAR) - 13,125
At $1.95 per share - 555,750
At $5.50 per share - 440,000
At $7.25 per share - 725,000
At $11.54 per share - 199,145
At $5.50 per share - 27,500
At $6.94 per share - 13,880
At $7.00 per share - 35,000
At $7.25 per share - 36,250
At $11.54 per share - 161,353
At $1.95 per share - 19,500
At $5.50 per share - 27,500
At $7.00 per share - 35,000
</TABLE>
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Common Stock,
$.01 Par Value
-------------------------------------------------
Date Shares Amounts
---------------------------------------------------------------------------
<S> <C> <C> <C>
At $7.25 per share June 1997 15,000 $ 150
At $11.54 per share June 1997 32,782 327
At $8.95 per share July 1997 16,350 163
At $11.54 per share July 1997 2,033 20
At $15.74 per share July 1997 17,250 172
At $11.54 per share August 1997 120,801 1,209
At $5.38 per share September 1997 10,000 100
At $7.25 per share September 1997 1,000 10
At $13.41 per share September 1997 1,070 11
At $5.38 per share October 1997 5,000 50
At $7.25 per share October 1997 5,000 50
At prices ranging from $25.75 October 1997 7,437 75
to $27.00 (SAR)
At $5.50 per share November 1997 30,000 300
At $ 6.00 per share November 1997 5,000 50
At $6.375 per share November 1997 46,666 467
At $19.75 per share (SAR) November 1997 1,053 11
At $5.38 per share December 1997 5,000 50
Foreign currency translation - -
adjustment for 1997
Net loss for 1997 - -
Accrued stock appreciation rights - -
---------------------------------------------------
Balance at December 31, 1997 10,185,765 $ 101,858
===================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common Stock Subscribed Additional
-------------------------------------------------- Paid-In
Shares Amount Capital
-----------------------------------------------------------------------
<S> <C> <C> <C>
At $7.25 per share - $ - $ 108,600
At $11.54 per share - - 378,052
At $8.95 per share - - 146,169
At $11.54 per share - - 23,445
At $15.74 per share - - 235,928
At $11.54 per share - - 1,393,106
At $5.38 per share - - 53,700
At $7.25 per share - - 7,240
At $13.41 per share - - 14,339
At $5.38 per share - - 26,850
At $7.25 per share - - 36,200
At prices ranging from $25.75 - - 200,141
to $27.00 (SAR)
At $5.50 per share - - 164,700
At $ 6.00 per share - - 29,950
At $6.375 per share - - 297,029
At $19.75 per share (SAR) - - 20,794
At $5.38 per share - - 26,850
Foreign currency translation - - -
adjustment for 1997
Net loss for 1997 - - -
Accrued stock appreciation rights - - (591,915)
-----------------------------------------------------------------------
Balance at December 31, 1997 - $ - $ 65,348,603
=======================================================================
</TABLE>
See accompanying notes.
<PAGE>
OXiGENE, Inc.
(a development stage company)
Statements of Stockholders' Equity (Deficit) (continued)
(Note 2)
<TABLE>
<CAPTION>
Deficit Accumulated
During the Foreign Currency Stock Subscription
Development Translation and Notes
Stage Adjustment Receivable
-----------------------------------------------------------------------------
<S> <C> <C> <C>
At $7.25 per share $ - $ - $ -
At $11.54 per share - - -
At $8.95 per share - - -
At $11.54 per share - - -
At $15.74 per share - - -
At $11.54 per share - - -
At $5.38 per share - - -
At $7.25 per share - - -
At $13.41 per share - - -
At $5.38 per share - - -
At $7.25 per share - - -
At prices ranging from
$25.75 to $27.00 (SAR) - - -
At $5.50 per share - - -
At $ 6.00 per share - - -
At $6.375 per share - - -
At $19.75 per share (SAR) - - -
At $5.38 per share - - -
Foreign currency translation 106,761 -
adjustment for 1997
Net loss for 1997 (8,110,521) - -
Accrued stock - - -
appreciation rights
----------------------------------------------------------------------------
Balance at $(25,468,828) $ 219,636 $ -
December 31, 1997
============================================================================
</TABLE>
<PAGE>
Unrealized Losses on for Total Stockholders'
Securities Available Equity
for Sale (Deficit)
-------------------------------------------------------
At $7.25 per share $ - $ 108,750
At $11.54 per share - 378,379
At $8.95 per share - 146,332
At $11.54 per share - 23,465
At $15.74 per share - 236,100
At $11.54 per share - 1,394,315
At $5.38 per share - 53,800
At $7.25 per share - 7,250
At $13.41 per share - 14,350
At $5.38 per share - 26,900
At $7.25 per share - 36,250
At prices ranging from - 200,216
$25.75 to $27.00 (SAR)
At $5.50 per share - 165,000
At $ 6.00 per share - 30,000
At $6.375 per share - 297,496
At $19.75 per share (SAR) - 20,805
At $5.38 per share - 26,900
Foreign currency - 106,761
translation adjustment
for 1997
Net loss for 1997 - (8,110,521)
Accrued stock - (591,915)
appreciation rights
---------------------------------------------
Balance at - $ 40,201,269
December 31, 1997 =============================================
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
OXiGENE, Inc.
(A development stage company)
Consolidated Statements of Cash Flows
Period from
February 22, 1988
(inception)
Year ended December 31 through
December 31, 1997
1995 1996 1997 (Unaudited)
---- ---- ---- -----------------
<S> <C> <C> <C> <C>
Operating activities
Net loss $ (3,717,835) $ (5,958,433) $ (8,110,521) $ (25,468,828)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Loss on securities 9,460 2,513 - 11,973
available-for-sale
Depreciation 13,773 37,153 79,244 140,466
Abandonment of
furniture, fixture and - 9,041 - 9,041
equipment
Compensation related to
issuance
of warrants, options 243,720 1,035,270 (243,359) 1,463,131
and stock appreciation
rights
Changes in operating
assets and liabilities:
Prepaid expenses and
other (14,740) (283,636) (173,311) (724,609)
current assets
Accounts payable and
accrued expenses 146,248 185,457 370,986 993,660
------- ------- ------- -------
Net cash used in operating (3,319,374) (4,972,635) (8,076,961) (23,575,166)
activities
Financing activities
Proceeds from investor - - - 100,000
Repayment to investor - - - (100,000)
Proceeds from issuance and
subscription of common 9,672,876 34,521,881 7,929,630 63,936,033
stock, net
Other capital contributions - 53,170 - 53,170
---------- ------ --------- ------
Net cash provided by 9,672,876 34,575,051 7,929,630 63,989,203
financing activities
Investing activities
Purchases of securities - - - (3,368,253)
available-for-sale
Proceeds from sale of
securities 2,856,280 500,000 - 3,356,280
available-for-sale
Deposits - - (70,000) (79,600)
Purchase of furniture,
fixtures and equipment (26,922) (101,058) (233,882) (395,460)
---------- ------ --------- ------
Net cash provided by (used
in) investing activities 2,829,358 398,942 (303,882) (487,033)
---------- ------ --------- ------
Effect of exchange rate on 29,746 109,219 70,693 209,658
changes in cash
---------- ------ --------- ------
Net increase (decrease) in
cash and cash equivalents 9,212,606 30,110,577 (380,520) 40,136,662
Cash and cash equivalents at
beginning 1,193,999 10,406,605 40,517,182 -
of period
---------- ------ --------- ------
Cash and cash equivalents at $ 10,406,605 $ 40,517,182 $ 40,136,662 $40,136,662
============ ============ ============ ===========
end of period
See accompanying notes.
</TABLE>
<PAGE>
OXiGENE, Inc.
(A development stage company)
Notes to Consolidated Financial Statements
December 31, 1997
1. Description of Business and Significant Accounting Policies
Description of Business
OXiGENE, Inc. (the "Company") is a development stage pharmaceutical
company. The Company was originally incorporated as Oxi-Gene, Inc. in the State
of New York on February 22, 1988 and subsequently recapitalized and incorporated
in the State of Delaware in December 1993.
The Company is in the research phase of its operations. Because operations
to-date have consisted of research activities only, no substantial income has
been generated to-date and the losses sustained result principally from outlays
for research and administrative expenses. The Company may need to obtain
additional funding from outside sources to fund operating expenses, pursue
regulatory approvals and build production, sales and marketing capabilities, as
necessary.
Principles of Consolidation
In December 1994, the Company established a wholly-owned subsidiary in
Sweden, OXiGENE (Europe) AB, to manage and control the Company's research and
development work, and monitor European clinical trials. The accounts of the
subsidiary have been consolidated from the time the subsidiary commenced
operations in January 1995. All material intercompany balances and transactions
have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
<PAGE>
1. Description of Business and Significant Accounting Policies (continued)
Depreciation
Furniture, fixtures and equipment are recorded at cost. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets which is principally seven years.
Cash and Cash Equivalents
The Company considers all highly liquid financial instruments with a
maturity of three months or less when purchased to be cash equivalents.
At December 31, 1997, approximately 73% and 26% of cash and cash
equivalents were deposited in two financial institutions. Substantially all cash
and cash equivalents at December 31, 1996 were deposited in one financial
institution.
Foreign Currency Translation
Assets and liabilities of the subsidiary are translated at year-end rates
and income and expenses are translated at average exchange rates prevailing
during the year. Translation adjustments arising from differences in exchange
rates from period to period are included in the accumulated foreign currency
translation adjustments account in stockholders' equity.
Investments
The Company accounts for marketable securities in accordance with the
provisions of Statement of Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities.
<PAGE>
1. Description of Business and Significant Accounting Policies (continued)
Patent and Patent Applications
The Company has filed applications for patents in connection with
technologies being developed. The patent applications and any patents issued as
a result of these applications are important to the protection of the Company's
technologies that may result from its research and development efforts. The
pharmaceutical industry is highly competitive and patents may be challenged from
time to time. The Company intends to vigorously defend its issued patents and
may therefore incur significant costs in the defense of the patents and related
technologies. Costs associated with the patent and patent applications are
expensed as incurred.
Income Taxes
The Company accounts for income taxes based upon the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
("SFAS 109"). Under SFAS 109, the liability method is used for accounting for
income taxes, and deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities.
Share Information
All outstanding share amounts included in the accompanying consolidated
financial statements have been adjusted to reflect the 10,000 for 1 stock split
disclosed in Note 2.
Unaudited Information
Information pertaining to the period from February 22, 1988 (inception)
through December 31, 1989 is unaudited.
<PAGE>
1. Description of Business and Significant Accounting Policies (continued)
Net Loss Per Share
In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share. Statement 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any dilutive
effects of options, warrants and convertible securities. The Company's primary
net loss per share was calculated by dividing the net loss per share by the
weighted average number of shares outstanding. All options and warrants issued
by the Company were antidilutive and, accordingly, excluded from the calculation
of weighted average shares. Accordingly, Statement 128 had no effect on the
Company's net loss per share. All options and warrants were antidilutive in 1997
as well.
Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"). SFAS 123 is effective for fiscal years beginning
after December 31, 1995 and prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using existing accounting rules prescribed by Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") and
related interpretations with pro forma disclosure of what net income and
earnings per share would have been had the Company adopted the new fair value
method. The Company has elected to continue to account for its stock based
compensation plans in accordance with the provisions of APB 25.
<PAGE>
2. Stockholders' Equity
Options and Warrants
The following is a summary of the Company's stock option, warrant and stock
appreciation rights activity.
Number of Options, Warrants and Stock Appreciation Rights
<TABLE>
<CAPTION>
Nonqualified Stock Stock
Stock Options Incentive Appreciation Stock
Options Rights Warrants
------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 220,000 115,000 75,000 2,712,500
1994
Granted during 1995 664,000 - 2,000 5,000
Exercised during 1995 (12,500) - - (86,000)
Canceled during 1995 (2,000) - - -
------- ------- ------- ----------
Balance at December 31, 869,500 115,000 77,000 2,631,500
1995
Granted during 1996 336,518 13,482 - 148,350
Exercised during 1996 (74,000) - (10,000) (998,004)
Canceled during 1996 (20,000) - - -
------- ------- ------- ----------
Balance at December 31, 1,112,018 128,482 67,000 1,781,846
1996
Granted during 1997 316,120 19,880 - -
Exercised during 1997 (402,166) - (17,388) (718,212)
Canceled during 1997 - - - -
------- ------- ------- ----------
Balance at December 31, 1,025,972 148,362 49,612 1,063,634
1997 ========= ======= ====== =========
</TABLE>
<TABLE>
<CAPTION>
Weighted Average Price of Options, Warrants and
Stock Appreciation Rights
Nonqualified Stock Stock
Stock Options Incentive Appreciation Stock
Options Rights Warrants
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, $ 6.91 $ 7.52 $6.99 $ 7.11
1994
Granted during 1995 5.90 - 5.38 6.00
Exercised during 1995 1.50 - - 1.95
Canceled during 1995 5.50 - - -
------- ------- ------- ----------
Balance at December 31, 6.21 7.52 6.95 8.50
1995
Granted during 1996 27.69 22.13 - 10.73
Exercised during 1996 6.46 - 6.41 7.22
Canceled during 1996 6.00 - - -
------- ------- ------- ----------
Balance at December 31, 12.75 8.95 7.03 9.60
1996
Granted during 1997 30.75 28.81 - -
Exercised during 1997 6.35 - 6.58 8.28
------- ------- ------- ----------
Balance at December 31,
1997 $20.76 $11.43 $7.19 $12.63
====== ====== ===== ======
</TABLE>
<PAGE>
2. Stockholders' Equity (continued)
Options, Warrants and Stock Appreciation Rights Exercisable
<TABLE>
<CAPTION>
Nonqualified Stock Stock
Stock Options Incentive Appreciation Stock Warrants
Options Rights
----------------------------------------------------------------
<S> <C> <C> <C> <C>
December 31, 1994:
Exercisable 210,000 125,000 32,500 2,712,500
Weighted average $6.91 $7.52 $4.86 $7.11
exercise price
December 31, 1995:
Exercisable 747,833 125,000 66,000 2,631,500
Weighted average $6.22 $7.52 $6.87 $8.50
exercise price
December 31, 1996:
Exercisable 824,673 129,494 67,000 1,781,846
Weighted average $5.53 $7.01 $7.03 $9.60
exercise price
December 31, 1997:
Exercisable 445,814 129,519 49,612 1,063,634
Weighted average $10.07 $7.01 $7.19 $12.63
exercise price
</TABLE>
<PAGE>
2. Stockholders' Equity (continued)
Options, Warrants and Stock Appreciation Rights Outstanding
<TABLE>
<CAPTION>
Nonqualified Stock Stock
Stock Options Incentive Appreciation Stock Warrants
Options Rights
--------------------------------------------------------------
<S> <C> <C> <C> <C>
December 31, 1997:
Exercise price of
$1.95 per share:
Outstanding - 10,000 - 55,000
Weighted average
remaining - 1 year - 1 year
contractual life
Exercisable - 10,000 - 55,000
Exercise prices ranging
from $5.38 per share to
$13.69 per share:
Outstanding 363,334 115,000 49,612 1,008,634
Weighted average
exercise price $6.01 $8.00 $7.19 $13.21
Weighted average
remaining 7.4 years 1 year 6.78 years 1 year
contractual life
Exercisable 348,334 115,000 49,612 1,008,634
Weighted average
exercise price $5.99 $8.00 $7.19 $13.21
Exercise prices
ranging from $22.00
per share to $33.81 - -
per share:
Outstanding 662,368 33,362 - -
Weighted average
exercise price $29.18 $26.15 - -
Weighted average
remaining 9.5 years 9.7 - -
contractual life years
Exercisable 97,481 4,519 - -
Weighted average
exercise price $27.69 $22.25 - -
</TABLE>
Nonqualified Stock Options
In August 1991, the Company's Board of Directors granted options to a
former officer of the Company to purchase 12,500 shares of the Company's common
stock at $1.50 per share exercisable at any time prior to August 7, 2001. During
1995, such options to purchase 12,500 shares of the Company's common stock were
exercised.
<PAGE>
2. Stockholders' Equity (continued)
In December 1993, under the Amended Plan, as defined below, the Company's
Board of Directors granted options to certain directors of the Company and other
individuals to purchase 197,500 shares of the Company's common stock at $7.25
per share. Such options vested at various dates over a period of one year from
the date of grant.
In November 1994, under the Amended Plan, the Company's Board of Directors
granted options, subsequently approved by stockholders in May 1995, to certain
directors of the Company and other individuals to purchase 252,000 shares of the
Company's common stock at market value ($5.50 per share). Such options vest at
various dates over a period of 28 months from the date of grant.
In 1995, under the Amended Plan, the Company's Board of Directors granted
to certain directors of the Company and other individuals options to purchase
412,000 shares of the Company's common stock at exercise prices ranging from
$5.375 per share to $7.00 per share. Options to purchase 247,000 shares were
granted at exercise prices equal to the market value of the shares on date of
grant. The remaining 165,000 shares are exercisable at $6.00 per share. Because
the market price of the Company's shares amounted to $6.125 per share on the
date these options were granted, the Company recorded a charge for financial
reporting purposes of approximately $20,625.
In 1996, the Company's stockholders approved the OXiGENE 1996 Stock
Incentive Plan (the "1996 Plan"). Certain directors, officers and employees of
the Company and its subsidiary and consultants and advisors thereto may be
granted options to purchase shares of common stock of the Company. Under the
terms of the 1996 Plan, "incentive stock options" (ISO's) within the meaning of
Section 422 of the Internal Revenue Code, "nonqualified stock options" (NQSO's)
and stock appreciation rights may be granted. A maximum of 1,000,000 shares may
be the subject of ISOs, NQSOs and stock appreciation rights under the 1996 Plan.
In 1996, the Company's Board of Directors granted to certain officers of
the Company and other individuals options to purchase 336,443 shares of common
stock at exercise prices ranging from $22.00 per share to $28.75 per share.
Options to purchase 110,000 shares of common stock vest in equal installments
over five years. The remaining options vest in equal installments over three
years.
<PAGE>
2. Stockholders' Equity (continued)
In 1997, the Company's Board of Directors granted to certain officers of
the Company and other individuals options to purchase 316,120 shares of common
stock at exercise prices ranging from $28.81 per share to $33.81 per share.
Options to purchase 90,000 shares of common stock vest in equal installments
over five years. The remaining options vest in equal installments over four
years.
Stock Incentive Options
During 1992, the Board of Directors implemented an Stock Incentive Option
Plan (the "Plan"). The Plan provided for the grant of options to purchase up to
250,000 shares of common stock to any officer, director and employee of the
Company upon the terms and conditions (including price, exercise date and number
of shares) determined by the Board of Directors or a committee selected by the
Board of Directors to administer the Plan.
In April 1992, under the Plan, the Company's Board of Directors granted
stock options to an officer of the Company for the purchase of 240,000 shares of
the Company's common stock at $1.95 per share. Such options vest at 80,000 per
year for a three-year period. During 1995, vested options to purchase 80,000
shares of the Company's common stock were exercised. The remaining nonvested
options to purchase 160,000 shares of the Company's common stock were cancelled
upon the termination of the officer's services in 1994.
On May 15, 1993, under the Plan, the Board of Directors granted options as
compensation to certain directors of the Company, to purchase 10,000 shares of
common stock at $1.95 per share, exercisable at any time for a period of five
years.
During May 1993, the Company amended and restated its Stock Incentive Plan
(the "Amended Plan"). Under the Amended Plan, the Company has reserved for
issuance an additional 916,900 shares of Common Stock. The Amended Plan provides
for the issuance of stock appreciation rights.
<PAGE>
2. Stockholders' Equity (continued)
Under the Amended Plan, the exercise price determined by the Board of
Directors or committee must be at least 100% of the fair market value of the
Company's common stock as of the date of the grant. Upon termination of
employment, any granted option, vested or unvested, shall, to the extent not
previously exercised, terminate except under certain conditions as outlined in
the Amended Plan. The options granted under the Amended Plan are generally
exercisable at specific dates over a ten-year period.
In December 1993, under the Amended Plan, the Company's Board of Directors
granted stock options to a certain director of the Company to purchase 115,000
shares of common stock at $8.00 per share. Such options vested in equal
installments on December 14, 1993 and 1994.
In July 1996, the Board of Directors granted options to an officer of the
Company to purchase 13,557 shares of common stock at $22.13 per share. Such
options vest in equal installments over three years.
In April 1997, the Board of Directors granted options to an officer and an
employee to purchase 19,880 shares of common stock at $28.81 per share. Such
options vest in equal installments over four years.
Stock Appreciation Rights
Under the Amended Plan, the Company's Board of Directors granted stock
appreciation rights to 22,500 shares of common stock at an exercise price of
$7.25 per share and stock appreciation rights to another 22,500 shares at an
exercise price of $5.875 per share to an employee, certain consultants and
clinical investigators on December 14, 1993 and April 4, 1994, respectively.
Such stock appreciation rights vested in equal installments on December 14, 1994
and 1995.
In September 1994, under the Amended Plan, a member of the scientific
advisory board received stock appreciation rights to 30,000 shares of common
stock at $7.63 per share. Such stock appreciation rights vested in equal
installments in September 1994, 1995 and 1996.
<PAGE>
2. Stockholders' Equity (continued)
In July 1995, under the Amended Plan, a consultant received stock
appreciation rights to 2,000 shares of common stock at $5.38 per share. Such
stock appreciation rights vested in equal installments on July 13, 1995 and July
13, 1996.
During 1996, stock appreciation rights to 10,000 shares were exercised when
the market value of the Company's stock exceeded the exercise price of the stock
appreciation rights. The Company issued 7,039 shares of common stock upon the
exercise of such stock appreciation rights.
During 1997, stock appreciation rights to 17,388 were exercised when the
market value of the Company's stock exceeded the exercise price of the stock
appreciation rights. The Company issued 13,044 shares of common stock (market
value $348,000) upon the exercise of such stock appreciation rights.
Because the market value per share of common stock exceeded the exercise
price of the stock appreciation rights ($10.25 on December 31, 1995 and $23.50
on December 31, 1996) the Company recorded a charge for financial reporting
purposes of approximately $223,000 (1995) and $1,035,000 (1996). Because stock
appreciation rights are satisfied, upon exercise, only by the distribution of
shares of common stock of the Company, the charge related to unexercised stock
appreciation rights was credited to additional paid-in capital. The market value
of the Company's common stock at December 31, 1997 was $17.50 and, accordingly,
the charge previously recorded for financial reporting purposes was reduced by a
credit of approximately $592,000 in 1997 to reflect the market value of the
unexercised stock appreciation rights at December 31, 1997.
Stock appreciation rights expire ten years from the date of grant.
<PAGE>
2. Stockholders' Equity (continued)
Stock Warrants
In November 1991, and January and June 1992, the Board of Directors granted
warrants to directors of the Company to purchase 50,000, 370,000 and 50,000
shares, respectively, of the Company's common stock at $1.95 per share
exercisable at any time for a period of five years. In connection with the sale
of stock during December 1992, the placement agents were granted warrants to
purchase 36,000 shares of the Company's stock at $1.95 per share exercisable for
a five-year period. In March 1995, the Board of Directors granted warrants to
purchase 5,000 shares of common stock at $6.00 per share. During 1995, 1996 and
1997, warrants to purchase 86,000, 356,500 and 310,000 shares of the Company's
common stock, respectively, were exercised. In addition, as of December 31,
1995, $9,750 was subscribed to exercise warrants to purchase 5,000 shares of
common stock. Such shares were issued in 1996.
From January 1, 1993 through February 26, 1993, the Company sold 445,000
shares of common stock to investors for approximately $868,000 ($1.95 per
share). In connection with this issuance of stock, the placement agents were
granted warrants for the purchase of 66,500 shares of the Company's common stock
at $1.95 per share exercisable for a five-year period.
In January 1993, the Board of Directors granted warrants to the Company's
scientific advisory board to purchase 45,000 shares of the Company's common
stock at $1.95 per share exercisable at any time for a period of five years.
On May 15, 1993, the Board of Directors granted warrants as compensation to
certain directors of the Company, to purchase 180,000 shares of common stock at
$1.95 per share exercisable at any time for a period of five years. The Company
has recorded a charge of $427,500 for financial reporting purposes, representing
the estimated value of such options and warrants granted on May 15, 1993.
<PAGE>
2. Stockholders' Equity (continued)
During 1993, the Company completed an initial public offering of 1,500,000
units at $6.00 per unit and an over-allotment issuance of 105,000 units at $6.00
per unit. Each unit consists of one share of the Company's common stock and one
warrant (the "Public Warrant"). Each warrant was exercisable for one share of
the Company's common stock at a price of $7 per share during the first year of
exercisability. Thereafter, the exercise price increased each year by $2. In
connection with this offering, the Company sold to the Underwriters, for nominal
consideration, 150,000 Warrants (the "Underwriters' Warrants"). The
Underwriters' Warrants were initially exercisable at a price of $9.90 per Unit
for a period of four years, commencing August 26, 1994. The shares of common
stock and warrants issuable upon the exercise of the Underwriters' Warrants are
identical to those included in the Units offered hereby except that the Warrants
contained in the Underwriters' Warrants were initially exercisable to purchase
one share of Common Stock at $11.55. In January 1996, to comply with
anti-dilution provisions, the number of shares issuable upon the exercise of the
Public Warrants and Underwriters' Warrants were revised to 1,717,350 and
163,500, respectively. The exercise prices of such warrants were also revised to
$10.35 (subsequently increased to $12.35 and $14.35 in August 1996 and 1997,
respectively) and $8.95 per share, respectively. In addition, the total shares
of common stock issuable upon the exercise of the warrant contained in the
Underwriters' Warrants was increased to 172,500 and the exercise price was
revised to $13.69 per share.
During the year ended December 31, 1996, Public Warrants to purchase
502,104 shares of common stock and Underwriters' Warrants to purchase 65,400
shares of common stock and warrants contained in the Underwriters' Warrants to
purchase 69,000 shares were exercised.
During the year ended December 31, 1997, Public Warrants to purchase
307,412 shares of common stock and Underwriters' Warrants to purchase 49,050
shares of common stock and warrants contained in the Underwriters' Warrants to
purchase 51,750 shares were exercised.
On December 14, 1993, the Board of Directors granted warrants to certain
individuals of the Company to purchase 10,000 shares of common stock at $7.25
per share. Such warrants vested immediately.
<PAGE>
2. Stockholders' Equity (continued)
Private Placement
In July 1995, the Company completed a private placement of 1,666,700 common
shares at $6.00 per share, resulting in net proceeds (after deducting issuance
costs) of approximately $9.5 million.
Public Offering
In November 1996, the Company completed a public offering of 1,150,000
common shares at $25.2732 per share, resulting in net proceeds (after deducting
issuance costs) of approximately $26.8 million.
Common Stock Reserved for Issuance
As of December 31, 1997, the Company has reserved approximately 2,600,000
shares of its common stock for issuance in connection with stock options, stock
appreciation rights and warrants.
Recapitalization
During December 1992, in connection with the recapitalization (see Note 1),
the Company changed its authorized common stock from 1,000 shares at $1.00 par
value to 5,000,000 shares at $.01 par value. In addition, the Company declared a
10,000 for 1 stock split on the then issued and outstanding common shares.
In April 1993, the Company changed its authorized common stock from
5,000,000 shares at $.01 par value to 10,000,000 shares at $.01 par value.
In May 1995, the Company changed its authorized common stock from
10,000,000 shares at $.01 par value to 15,000,000 shares at $.01 par value.
In November 1996, the Company changed it authorized common stock from
15,000,000 shares of $.01 par value to 60,000,000 shares at $.01 par value.
<PAGE>
2. Stockholders' Equity (continued)
Merger
During February 1991, the Company issued 100,000 shares of its common stock
to an officer/director and a director for all the outstanding common stock of
Bio-Screen, Inc. The balance sheet and the cumulative results of operations of
Bio-Screen, Inc. were not material to the Company and, consequently, the
statements of operations of the Company have not been restated. The issuance of
the 100,000 shares, which have been recorded at par value, has been reflected as
of August 1988, the date of inception of Bio-Screen, Inc. (see Note 4
"Commitments").
Stock Based Compensation
Pro forma information regarding net income and earnings per share is
required by SFAS 123, and has been determined as if the Company had accounted
for its employee stock options and stock appreciation rights under the fair
value method of SFAS 123. The fair value for these options and stock
appreciation rights was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions for 1995,
1996 and 1997:
Assumption 1995 1996 1997
- ------------------------------------------------------------------
Risk-free rate 5.8% 5.9% 5.5%
Dividend yield 0% 0% 0%
Volatility factor of the
expected market price of .744 .717 .649
the Company's common stock
Average life 3 years 3 years 3 years
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options and stock appreciation
rights have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of its
employee stock options and stock appreciation rights.
<PAGE>
2. Stockholders' Equity (continued)
For purposes of pro forma disclosures, the estimated fair value of the
options and stock appreciation rights is amortized to expense over the vesting
period of the options and stock appreciation rights. The Company's pro forma
information follows:
1995 1996 1997
---------------- ---------------- -----------------
Pro forma net loss $(4,685,000) $(6,836,000) $(10,500,000)
Pro forma net loss per share $(.80) $(.92) $(1.07)
The weighted average fair value of options granted during the years ended
December 31, 1995, 1996 and 1997 were $3.28, $11.96 and $14.47, respectively.
3. Income Taxes
At December 31, 1997, the Company had net operating loss carryforwards of
approximately $49,800,000 for US and foreign income tax purposes, $36,000,000
expiring for U.S. purposes through 2012. The utilization of approximately
$2,500,000 of such US net operating losses are subject to an annual limitation
pursuant to Section 382 of the Internal Revenue Code of approximately $350,000.
Components of the Company's deferred tax asset at December 31, 1996 and
1997 are as follows:
1996 1997
---- ----
Net operating loss carryforwards $ 8,200,000 $ 18,400,000
Compensatory stock options,
warrants and stock appreciation
rights 550,000 450,000
---------- -----------
Total deferred tax asset 8,750,000 18,850,000
Valuation allowance (8,750,000) (18,850,000)
---------- -----------
Net deferred tax asset $ - $ -
============ ============
The change in valuation allowance amounted to approximately $1,174,000 and
$4,525,000, respectively, for the years ended December 31, 1995 and 1996.
<PAGE>
4. Commitments and Contingencies
The Company leases premises in facilities in New York, Boston and Stockholm
and Lund, Sweden. Rent expense for years ended December 31, 1995, 1996 and 1997
was approximately $50,000, $80,000 and $185,000, respectively.
The minimum annual rent commitments for the above leases are as follows:
1998 $156,000
1999 142,000
2000 81,000
2001 60,000
2002 15,000
===============
$454,000
===============
In connection with the merger with Bio-Screen, Inc. (see Note 2), the
Company obtained a license agreement to patent rights to a certain product. The
agreement requires the Company to pay royalties, as defined, based on revenues
received by the Company in respect to the specified product. The license expires
in October 2011. The product has not yet been commercially developed.
From time-to-time the Company may be a party to litigation arising out of
the normal course of its business. The Company is and will continue to
vigorously defend the actions and claims against it. In the opinion of
management, these claims are either without merit or, based in part on opinions
from legal counsel, will not have a material adverse effect on the Company's
financial position.
5. Related Party Transactions
In September 1991, the Company entered into an agreement with CATO
Research, Ltd. ("CATO"), a North Carolina corporation, which is majority-owned
by Dr. Cato, a consultant to the Company's Scientific Advisory Board through
January 1998 pursuant to which CATO performed preclinical and clinical planning,
development and regulatory services in connection with the Company's efforts to
obtain FDA approval for its technology. CATO is compensated by the Company on an
hourly basis for services actually rendered. For the years ended December 31,
1995, 1996, and 1997, the Company incurred costs under this agreement totaling
$739,994, $318,210 and $166,640, respectively.
<PAGE>
5. Related Party Transactions (continued)
The Company has consulting agreements with certain organizations whose
principal stockholders are officers of the Company. Consulting fees paid to such
organizations amounted to approximately $72,000, $336,000 and $494,000 for the
years ended December 31, 1995, 1996 and 1997.
6. Foreign Operations
Summary financial information for assets, liabilities at December 31, 1996
and 1997 and expenses for the years ended December 31, 1995, 1996 and 1997
related to foreign operations are as follows:
December 31
1995 1996 1997
------------- --------------- -----------------
Assets $ 240,000 $40,414,000 $40,264,417
Liabilities 178,000 478,000 728,000
Expenses 1,853,000 4,208,000 7,899,000
Net loss 1,835,000 4,162,000 7,822,000
Foreign exchange gains for the years ended December 31, 1995, 1996 and 1997
were not significant.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OXiGENE, INC.
By:/S/ BJORN NORDENVALL
Bjorn Nordenvall
President and
Chief Executive Officer
April 14, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/S/ BJORN NORDENVALL President, Chief Executive Officer April 14, 1998
- --------------------------- and Director (principal executive
Bjorn Nordenvall officer)
officer)
/S/ BO HAGLUND Chief Financial Officer April 14, 1998
- ---------------------------
Bo Haglund
/s/ MARVIN H. CARUTHERS Director April 14, 1998
- ---------------------------
Marvin H. Caruthers
Director April , 1998
- ---------------------------
Michael Ionata
/S/ CLAUS MOLLER Director April 14, 1998
- ---------------------------
Claus Moller
/S/ RONALD W. PERO Director April 14, 1998
- ---------------------------
Ronald W. Pero
/S/ PER-OLOF SODERBERG Director April 14, 1998
- ---------------------------
Per-Olof Soderberg
/S/ GERALD A. EPPNER Director April 14, 1998
- ---------------------------
Gerald A. Eppner
</TABLE>
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of March 1,
1997, between OXiGENE Inc., a Delaware corporation ("OXiGENE"), and Dr. Claus J.
M0ller (the "Executive"). OXiGENE together with its subsidiary OXiGENE Europe AB
shall be referred to as the "Company."
W I T N E S S E T H:
WHEREAS, Executive is currently employed by OXiGENE in the capacity of
Executive Vice President, Marketing, Medical and Regulatory Affairs; and
WHEREAS, OXiGENE and Executive desire to enter into an agreement relating
to the continued employment of the Executive by OXiGENE for an approximate
four-year period ending June 15, 2001.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, OXiGENE and Executive
hereby agree as follows:
1. Employment
1.1 Executive shall continue to serve in the capacity of Executive Vice
President, Marketing, Medical and Regulatory Affairs of OXiGENE, and shall have
the duties, responsibilities and authority assigned to Executive by the Board of
Directors of OXiGENE, ("Board") consistent with such position including, but not
limited to:
(A) responsibility with respect to the Company's clinical trials;
(B) responsibility to prepare and present to the Board a plan with
respect to the marketing of the Company's products in compliance
with government regulations;
(C) responsibility to manage and monitor the regulatory work
regarding the Company's products, including maintaining the
contact to organizations such as FDA; and
(D) responsibility to ensure proper manufacturing of the Company's
product according to cGMP.
Executive shall report directly to OXiGENE's President and Chief Executive
Officer.
1.2 Executive, so long as he is employed hereunder, (i) shall devote his
full professional time and attention to the services required of him as an
employee of OXiGENE, except as otherwise agreed and except permitted in
accordance with paid vacation time subject to OXiGENE's existing vacation
policy, and subject to OXiGENE's existing policies pertaining to reasonable
periods of absence due to sickness, personal injury or other disability, (ii)
shall use his best efforts to promote the interests of OXiGENE, and (iii) shall
discharge his responsibilities in a diligent and faithful manner, consistent
with sound business practices. Notwithstanding the foregoing, Executive may
serve as a director of, and a consultant to, IPC-Nordic A/S, provided such
activity does not interfere with Executive's ability to perform his duties and
responsibilities hereunder.
1.3 Executive represents that he has resigned from his position of General
Manager of IPC-Nordic A/S and that he holds no position with, and provides no
services to, IPC-Nordic A/S other than as a director and consultant, it being
understood that such resignation is a condition precedent to OXiGENE's
obligations under this Agreement.
2. Term
The term of Executive's employment under this Agreement shall commence as
of April 1, 1997, and shall end June 15, 2001, unless terminated sooner as
hereinafter provided (the "Employment Term").
3. Base Salary; Stock Options
3.1 OXiGENE shall pay Executive a monthly base salary during the Employment
Term of $10,000 US, inclusive of all income and employment taxes and social
costs, taxes or insurance (such amount as adjusted, from time to time, the "Base
Salary"). Executive's Base Salary shall be reviewed annually by the Board. The
Base Salary may be paid deposited directly to an account in a Danish bank
designated by Executive.
3.2 OXiGENE shall grant to Executive, subject to approval by the
Compensation Committee of the Board, pursuant to the OXiGENE Inc. 1996 Stock
Incentive Plan (the "Stock Plan"), an option (tegningsretter) to purchase
100,000 shares of common stock of OXiGENE, $.01 par value per share, as of the
date hereof. Such option shall have an exercise price equal to the Fair Market
Value (as defined in the Stock Plan) on the date of grant of such option, and
shall vest and become exercisable in four (4) equal installments of 25,000 each
on the first, second, third and fourth anniversary of the date of grant of such
option. The option shall be evidenced by, and subject to, an option agreement
having terms described in the Stock Plan, except to the extent otherwise
specified in this Agreement, including Section 6 hereof.
3.3 Executive is solely responsible for the payment of any and all taxes,
costs or insurance arising in connection with Executive's employment hereunder.
4. Benefits
Executive shall be entitled to participate in or receive benefits under any
employee benefit plan, arrangement or perquisite generally made available by
OXiGENE during the Employment Term to its executives and key management
employees.
5. Business Expenses
Executive shall be entitled to receive prompt reimbursement for all
reasonable and customary expenses incurred by him in performing services
hereunder during the Employment Term; provided that such expenses are incurred
and accounted for in accordance with the policies and procedures established by
OXiGENE and approved by the Board.
6. Termination
6.1 OXiGENE may, upon giving Executive six (6) months' written notice,
terminate Executive's employment subject to all provisions of this Agreement.
Notwithstanding the foregoing, OXiGENE may terminate Executive's employment for
Cause without prior notice. Executive may, upon giving OXiGENE six (6) months'
written notice, terminate Executive's employment hereunder. If Executive
terminates his employment following a material breach of the Agreement by
OXiGENE, which breach remains uncured ten (10) days after written notice thereof
is received by OXiGENE (a "Termination with Good Reason"), Executive shall be
treated as if his employment was terminated by OXiGENE without Cause.
6.2 If Executive's employment is terminated by OXiGENE other than for Cause
(as defined below) or is a Termination with Good Reason, then OXiGENE shall
provide the following to Executive:
(a) as soon as practicable after the effective date of Executive's
termination of employment ("Termination Date") a lump sum cash payment equal to
the aggregate of the following:
(1) the portion of Executive's then current Base Salary accrued to
the Termination Date but unpaid as of the Termination Date (the
"Unpaid Salary"); plus
(2) an amount equal to three (3) months' Base Salary; plus
(3) if Executive's termination is a Termination with Good Reason, an
amount equal to six (6) month's Base Salary.
(b) All stock options, stock appreciation rights, restricted stock, and
other incentive compensation granted to the Executive by OXiGENE shall, to the
extent vested, remain exercisable in accordance with the terms of the Stock Plan
(or prior applicable plan) and the agreement entered pursuant thereto and the
Executive may exercise all such vested options and rights, and shall receive
payments and distributions accordingly.
6.3 Except as otherwise set forth in this Section 6, all obligations of
OXiGENE under this Agreement shall cease if, during the Employment Term, OXiGENE
terminates Executive for Cause or the Executive resigns his employment other
than in a Termination with Good Reason. Upon such termination, Executive shall
be entitled to receive in a lump sum cash payment as soon as practicable after
the Termination Date an amount equal to the Unpaid Salary.
6.4 The foregoing payments upon Executive's termination shall constitute
the exclusive payments due Executive upon termination from his employment with
OXiGENE under this Agreement or otherwise, provided, however, that except as
stated above, such payments shall have no effect on any benefits which may be
payable to Executive under any plan of OXiGENE which provides benefits after
termination of employment, other than severance pay or salary continuation
pursuant to an OXiGENE plan which amount shall be reduced by the amount of the
Severance Amount received by Executive pursuant to this Agreement.
6.5 For the purposes of this Agreement, the term "Cause" shall mean any of
the following:
(a) the continued failure by Executive to perform substantially his duties
on behalf of OXiGENE if Executive fails to remedy that breach within ten (10)
days of OXiGENE's written notice to Executive of such breach; or (ii) material
breach of any other provision of this Agreement by the Executive, if the
Executive fails to remedy that breach within ten (10) days of OXiGENE's written
notice to Executive of such breach; or
(b) any act of fraud, material misrepresentation or material omission,
misappropriation, dishonesty, embezzlement or similar conduct against OXiGENE or
any affiliate, or conviction of Executive for a felony or any crime involving
moral turpitude.
6.6 Upon termination of Executive's employment for any reason, Executive
shall resign from the Board of OXiGENE, and any of its affiliates of which he is
then a director; such resignations shall be effective not later than the
effective date of termination of his employment unless otherwise mutually agreed
by Executive and the Board.
7. No Solicitation; Confidentiality; Work for Hire
7.1 During the Restricted Period (defined below), neither Executive nor any
Executive-Controlled Person (defined below) will, without the prior written
consent of the Board, directly or indirectly, solicit for employment, employ in
any capacity or make an unsolicited recommendation to any other person that it
employ or solicit for employment any person who is or was, at any time during
the nine (9) month period prior to the Termination Date, an officer, executive
or key employee of OXiGENE or of any affiliate of OXiGENE. As used in this
Agreement, the term "Executive-Controlled Person" shall mean any company,
partnership, firm or other entity as to which Executive possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities, by
contract or otherwise.
7.2 (a) Executive acknowledges that, through his status as Executive Vice
President, Marketing, Medical and Regulatory Affairs of OXiGENE and as a member
of the Board, he has, and will have, possession of important, confidential
information and knowledge as to the business of OXiGENE and its affiliates,
including, but not limited to, information related to drugs and compounds
developed or under development by the Company, financial results and
projections, future plans, the provisions of other important contracts entered
into by OXiGENE and its affiliates, possible acquisitions and similar
information. Executive agrees that all such knowledge and information
constitutes a vital part of the business of OXiGENE and its affiliates and is by
its nature trade secrets and confidential information proprietary to OXiGENE and
its affiliates (collectively, "Confidential Information"). Executive agrees that
he shall not, so long as the Company remains in existence, divulge, communicate,
furnish or make accessible (whether orally or in writing or in books, articles
or any other medium) to any individual, firm, partnership or corporation, any
knowledge or information with respect to Confidential Information directly or
indirectly useful in any aspect of the business of OXiGENE or any of its
affiliates. As used in the preceding sentence, "Confidential Information" shall
not include any knowledge or information that: (i) is or becomes available to
others, other than as a result of breach by Executive of this Section 7.2; (ii)
was available to Executive on a nonconfidential basis prior to its disclosure to
Executive through his status as an officer or employee of OXiGENE or any
affiliate; or (iii) becomes available to Executive on a nonconfidential basis
from a third party (other than OXiGENE, any affiliate or any of its or their
representatives) who is not bound by any confidentiality obligation to OXiGENE
or any affiliate.
(b) All memoranda, notes, lists, records and other documents or papers (and
all copies thereof), including such items stored in computer memories, on
microfiche or by any other means, made or compiled by or on behalf of Executive
or made available to him relating to OXiGENE are and shall be OXiGENE's property
and shall be delivered to OXiGENE promptly upon the termination of Executive's
employment with OXiGENE or at any other time on request and such information
shall be held confidential by Executive after the termination of his employment
with OXiGENE.
7.3 As used in this Agreement, "Restricted Period" shall mean the twelve
(12) months following Executive's termination of employment.
7.4 The Executive grants the Company and each affiliate of the Company, as
appropriate, all rights in and to the contribution made by the Executive to any
projects or matters on which the Executive works during the Term. The Executive
acknowledges that each such matter and the contribution made by the Executive
thereto shall constitute a work made for hire within the meaning of the United
States copyright law and other applicable laws. The Company reserve's all rights
with respect to information relating to the Company's products, including, but
not limited to, the right to apply for patents.
7.5 The provisions contained in this Section 7 as to the time periods,
scope of activities, persons or entities affected, and territories restricted
shall be deemed divisible so that, if any provision contained in this Section 7
is determined to be invalid or unenforceable, such provisions shall be deemed
modified so as to be valid and enforceable to the full extent lawfully
permitted.
7.6 Executive agrees that the provisions of this Section 7 are reasonable
and necessary for the protection of OXiGENE and that they may not be adequately
enforced by an action for damages and that, in the event of a breach thereof by
Executive or any Executive-Controlled Person, OXiGENE shall be entitled to apply
for and obtain injunctive relief in any court of competent jurisdiction to
restrain the breach or threatened breach of such violation or otherwise to
enforce specifically such provisions against such violation, without the
necessity of the posting of any bond by OXiGENE. Executive further covenants and
agrees that if he shall violate any of his covenants under this Section 7,
OXiGENE shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remuneration or other benefits that Executive
directly or indirectly has realized and/or may realize as a result of, growing
out of or in connection with any such violation. Such a remedy shall, however,
be cumulative and not exclusive and shall be in addition to any injunctive
relief or other legal or equitable remedy to which OXiGENE is or may be
entitled. Accordingly, Executive agrees that he shall reimburse OXiGENE for any
reasonable attorneys' fees and expenses that OXiGENE might incur in enforcing
this Section 7 if it is judicially determined that Executive has breached this
Section 7.
8. Amendments
This Agreement may not be altered, modified or amended except by a written
instrument signed by each of the parties hereto.
9. Assignment
Neither this Agreement nor any of the rights or obligations hereunder shall
be assigned or delegated by any party hereto without the prior written consent
of the other parties; provided, however, that any payments and benefits owed to
Executive under this Agreement shall inure to the benefit of his heirs and
personal representatives.
10. Waiver
Waiver by any party hereto of any breach or default by any other party of
any of the terms of this Agreement shall not operate as a waiver of any other
breach or default, whether similar to or different from the breach or default
waived.
11. Severability
In the event that any one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
12. Notices
All notices and other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to Executive, to him as follows:
Dr. Claus J. M0ller
Lykkesholms Alle 31
DK-1902 Frederiksberg, Denmark
With a copy to:
If to OXiGENE, to it as follows:
OXiGENE Inc.
110 East 59th Street
New York, New York 10022
Attention: M. Andica Kunst, Esq.
With a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Gerald A. Eppner, Esq.
or to such other address or such other person as Executive or OXiGENE shall
designate in writing in accordance with this Section 12, except that notices
regarding changes in notices shall be effective only upon receipt.
13. Headings
Headings to Sections in this Agreement are for the convenience of the
parties only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.
14. Governing Law
This Agreement shall be governed by the laws of the State of New York
without reference to the principles of conflict of laws. Each of the parties
hereto consents to the jurisdiction of the federal and state courts of the State
of New Yorkin connection with any claim or controversy arising out of or
connected with this Agreement. Service of process in any such proceeding may be
made upon each of the parties hereto at the address of such party as determined
in accordance with Section 12 of this Agreement, subject to the applicable rules
of the court in which such action is brought.
15. All Other Agreements Superseded
This Agreement contains the entire agreement between Executive and OXiGENE
with respect to all matters relating to Executive's employment with OXiGENE and,
as of the date hereof, will supersede and replace any other agreements, written
or oral, between the parties relating to the terms or conditions of Executive's
employment with OXiGENE other than agreements relating to options
(tegningsretter) entered into pursuant to the Stock Plan or a predecessor plan
of OXiGENE.
IN WITNESS WHEREOF, OXiGENE and Executive have caused this Agreement to be
executed as of the date first above written.
_______________________________
Claus J. Moller
OXiGENE Inc.
By: ___________________________
Name:
Title:
