[LOGO] OXiGENE, INC.
ONE COPLEY PLACE, SUITE 602
BOSTON, MASSACHUSETTS 02116
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 1998
TO OUR STOCKHOLDERS:
Please take notice that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of OXiGENE, Inc., a Delaware corporation (the "Company"), will
be held at 1:00 p.m., local time, on Friday, June 5, 1998, at Uppropssalen,
Stockholm Stock Exchange, Kallergrand 2, Stockholm, Sweden, for the following
purposes:
1. To elect seven directors to hold office until the 1999 Annual
Meeting of Stockholders;
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for its fiscal year ending December 31,
1998; and
3. To transact such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
Stockholders of record at the close of business on the record date, April
21, 1998, are entitled to notice of, and to vote at, the Annual Meeting and any
postponement or adjournment thereof.
By Order of the Board of Directors
Bo Haglund
May 5, 1998 Corporate Secretary
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YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE
ENCLOSED FORM OF PROXY IN THE ENVELOPE PROVIDED WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED
STATES OR SWEDEN, AS THE CASE MAY BE. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING
MAY REVOKE THEIR PROXIES AND VOTE THEIR SHARES IN PERSON.
- --------------------------------------------------------------------------------
<PAGE>
[LOGO] OXiGENE, INC.
ONE COPLEY PLACE, SUITE 602
BOSTON, MASSACHUSETTS 02116
PROXY STATEMENT
FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 1998
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of OXiGENE, Inc., a Delaware corporation
("OXiGENE" or the "Company"), for use at the 1998 Annual Meeting of Stockholders
scheduled to be held on Friday, June 5, 1998, at 1:00 p.m., local time, or any
postponement or adjournment thereof (the "Annual Meeting"). The Annual Meeting
will be held at Uppropssalen, Stockholm Stock Exchange, Kallergrand 2,
Stockholm, Sweden. A form of proxy for use at the Annual Meeting and a return
envelope for the proxy are also enclosed.
Purpose of the Annual Meeting. It is proposed that at the Annual Meeting:
(i) seven members of the Board of Directors be elected for terms expiring at the
1999 Annual Meeting of Stockholders; and (ii) the appointment by the Board of
Directors of the independent auditors of the Company for fiscal year 1998 be
ratified.
The Company is not aware at this time of any other business to be acted
upon at the Annual Meeting. However, if any other business properly comes before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of proxy to vote on those matters in accordance with their best judgment.
Solicitation and Voting of Proxies; Revocation. Shares cannot be voted at
the Annual Meeting unless the owner thereof is present in person or by proxy.
The Board of Directors urges stockholders to complete, date, sign and return
their proxies promptly whether or not they plan to attend the Annual Meeting in
person. All duly executed and unrevoked proxies in the accompanying form that
are received in time for the Annual Meeting will be voted at the Annual Meeting
in accordance with the instructions indicated thereon. In the absence of such
instructions, duly executed proxies will be voted "FOR" the election of the
director nominees listed below and "FOR" the approval of the other proposals set
forth in the Notice of Annual Meeting of Stockholders of the Company.
The submission of a signed proxy will not affect a stockholder's right to
attend, or to vote in person at, the Annual Meeting. A stockholder who executes
a proxy may revoke it at any time before it is voted by filing a revocation with
the Corporate Secretary of the Company, by executing a proxy bearing a later
date or by attending the Annual Meeting and voting in person. In accordance with
applicable rules, boxes and a designated blank space are provided on the form of
proxy for stockholders to mark if they wish either to withhold authority to vote
for the nominees for director or abstain on the other matters presented for a
vote of stockholders.
The solicitation will be made by mail, and may also be made personally or
by telephone by directors, officers and employees of the Company, for which they
will receive no compensation other than their regular compensation as directors,
officers or employees, if any. All the expenses of the solicitation will be
borne by the Company. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy materials to
beneficial owners of the Company's voting securities, and the Company will
reimburse such brokerage houses and others for their reasonable expenses in so
doing. This Proxy Statement and the enclosed proxy card, together with the
Company's Annual Report to Stockholders, are being mailed to stockholders
beginning approximately May 5, 1998.
Record Date; Voting Rights. Stockholders of record at the close of business
on April 21, 1998 (the "Record Date"), will be entitled to notice of, and to
vote at, the Annual Meeting. At the close of business on the Record Date, there
were issued and outstanding 10,197,765 shares of OXiGENE common stock, $0.01 par
value per share (the "Common Stock"). Holders of Common Stock are entitled to
one vote for each share of Common Stock registered in their name. The presence
at the Annual Meeting, in person or by proxy, of stockholders holding a majority
of the shares of Common Stock outstanding on the Record Date will constitute a
quorum to transact business at the Annual Meeting. The matters to be voted upon
at the Annual Meeting require the affirmative vote of a majority of the votes
cast at the Annual Meeting.
In accordance with applicable Securities and Exchange Commission ("SEC")
rules, designated blank spaces are provided on the form of proxy for
stockholders to mark if they wish either to abstain on one or more of the
proposals or to withhold authority to vote for any nominee for director. Under
the rules of the principal stock exchanges, when brokers have not received
instructions from their customers, brokers holding shares in street name have
the authority to vote the shares on some matters, but not others. Such missing
votes are called "broker non-votes." Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum. Since
the Company's By-Laws require the affirmative vote of a majority of the shares
present, in person or by proxy, abstentions on the Company's proposals to ratify
the selection of its auditors will have the practical effect of a negative vote
since it represents one less vote for approval. With regard to the election of
directors, votes that are withheld will be excluded entirely from the vote and
will have no effect. Under applicable Delaware law, broker non-votes will not be
counted for purposes of determining total votes cast and thus will have no
effect on the outcome of the election of the Board of Directors.
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
Information concerning the nominees for election to the Company's Board of
Directors is set forth below. Each nominee for election to the Board of
Directors named below has consented to being named as a nominee and has agreed
to serve if elected. If elected, each director would serve for a one-year term,
expiring at the 1999 annual meeting of stockholders. The persons identified as
proxies on the enclosed form of proxy intend to vote each properly executed
proxy "FOR" the election of the listed nominees for the ensuing terms or until
their successors are elected and qualified, unless indicated otherwise in a
properly executed form of proxy. If any of the named nominees is not available
for election at the time of the Annual Meeting, discretionary authority will be
exercised to vote for a substitute or substitutes, unless the Board of Directors
chooses to reduce the number of directors. Management is not aware of any
circumstances that would render any nominee for director named below
unavailable.
The Company's Board of Directors currently consists of seven members,
including four members who are "non-employee directors" within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.
Each nominee for election to the Board of Directors, other than Arthur B.
Laffer, is currently serving as a director.
The Company has agreed, until August 26, 1998, to use its best efforts to
cause one individual designated by RAS Securities Corp. and ABD Securities
Corporation, the representatives of the underwriters of the Company's initial
public offering (the "Representatives"), to be elected to the Company's Board of
Directors. None of the nominees for election at the Annual Meeting has been
designated by the Representatives. Since the Company's initial public offering
in August 1993, the Representatives have not exercised their right to designate
an individual for election to the Board of Directors, and the Company has no
reason to believe they have any intention to do so in the future.
The following information with respect to each nominee has been furnished
to the Company by such nominee. The ages of the nominees are as of March 31,
1998.
Marvin H. Caruthers, Ph.D., 58, was elected as a Director in June 1996, and
serves on the Company's Compensation Committee. Dr. Caruthers is a Professor of
Chemistry and Biochemistry at the University of Colorado, Boulder, Colorado,
whose research in nucleic acid chemistry resulted in new methods for the
chemical synthesis of DNA. Dr. Caruthers is a scientific co-founder of, and
serves as a consultant to, Amgen Inc., a biotechnology company engaged in the
development of products derived from gene synthesis capabilities, and is a
scientific co-founder of Applied Biosystems Inc., a biotechnology company
engaged in the development of DNA synthesizers and protein sequencers and a
division of The Perkin-Elmer Corporation. Dr. Caruthers also serves on the board
of directors of BioStar, Inc., a biotechnology company, and Skandigen AB, a
publicly-traded Swedish biotechnology company ("Skandigen"). Dr. Caruthers, who
is a member of the United States National Academy of Sciences and the American
Academy of Arts and Sciences, has published more than 140 manuscripts related to
his research.
Gerald A. Eppner, 59, has been a Director of the Company since July 1997,
and is a member of the Audit Committee. Mr. Eppner is a partner in the New York
law firm of Cadwalader, Wickersham & Taft, legal counsel to the Company since
January 1998, specializing in domestic and international corporate and
securities law matters. Prior to January 1998, Mr. Eppner was a partner in the
New York City law firm of Battle Fowler LLP.
Michael Ionata, 46, was appointed as a Director in October 1995, and serves
as Chairman of the Company's Compensation and Audit Committees. Mr. Ionata is
Director of Corporate Finance of Nordberg Capital Inc., an investment banking
firm based in New York. From May 1983 to May 1991, Mr. Ionata worked in
corporate finance and venture capital management at Den Norske Bank, a Norwegian
bank, in its New York office. Prior to joining Den Norske Bank, Mr. Ionata
worked for Coopers & Lybrand LLP specializing in valuations, cost-benefit
analysis and restructurings. Mr. Ionata is currently a director of C.E.L.
Industries Poland, a restaurant company, and was a director of Skandigen.
Arthur B. Laffer, 58, is the chairman and chief executive officer of Laffer
Associates, an economic research and financial consulting firm. Dr. Laffer is a
co-founder and chairman of Calport Asset Management, an institutional money
management firm. Dr. Laffer was recently appointed a founding member of the
Congressional Policy Advisory Board, a select group to shape economic policies
in the One-Hundred Fifth Congress. Dr. Laffer was a member of President Reagan's
Economic Policy Advisory Board from 1980 to 1988. He was also a member of the
Policy Committee and the board of directors of the American Council for Capital
Formation in Washington, D.C. Dr. Laffer formerly was Distinguished University
Professor at Pepperdine University, and a member of the Pepperdine's board of
directors. He was the Charles B. Thornton Professor of Business Economics at the
University of Southern California from 1976 to 1984, and Associate Professor of
Business Economics at the University of Chicago from 1970 to 1976. During the
years 1972 - 1977 Dr. Laffer was a consultant to the Secretaries of Treasury and
Defense. He served as the first chief economist at the Office of Management and
Budget under George Schultz from October 1970 through July 1972, on leave of
absence from the University of Chicago. Dr. Laffer received a B.A. in Economics
from Yale University in 1963, prior to which he also attended the University of
Munich, Germany. He received an M.B.A. (1965) and a Ph.D. in Economics (1972)
from Stanford University. Dr. Laffer serves on the board of directors of
numerous public and private companies, including Nicholas-Applegate Mutual
Funds; Nicholas-Applegate Growth Equity Fund; United States Filter Corp., a New
York Stock Exchange- listed manufacturers of sewage and water treatment
equipment, MasTec Inc., a Nasdaq National Market-listed company specializing in
the build-out of telecommunications infrastructure, and Coinmach Corp. a Nasdaq
National Market-listed company engaged in supplying coin-operated laundry
equipment services for multi-family housing units.
Bjorn Nordenvall, M.D., Ph.D., 46, was appointed as a Director in March
1995, and became the Company's President and Chief Executive Officer in June
1995 and Chairman of the Board of Directors in June 1996. From March to August
1996, Dr. Nordenvall served as the Company's Chief Financial Officer. Dr.
Nordenvall is a specialist in general surgery and, from 1987 to September 1996,
was president of Sophiahemmet AB, a Stockholm-based hospital. During 1983 and
1984, Dr. Nordenvall was president of Carnegie Medicine AB, Stockholm, Sweden, a
biotechnology company, and from 1977 through 1985, he practiced surgery at
Danderyd Hospital, Stockholm. From 1984 through 1986, Dr. Nordenvall served as a
consultant to Carnegie, a Swedish investment banking company, and, since 1984,
he has been a consultant to Skandia Insurance Company, a Swedish insurance
company.
Ronald W. Pero, Ph.D., 57, is a co-founder of OXiGENE, and has been a
Director and the Company's Chief Scientific Officer since its inception. From
November 1993 to June 1995, Dr. Pero also served as President of the Company.
Dr. Pero specializes in the field of DNA repair and its relation to cancer
treatment, and directs and coordinates the Company's research and development
efforts. Dr. Pero has been a fellow of the National Institute of Environmental
Health Sciences in Research Triangle Park, North Carolina, a director of the
Division of Biochemical Epidemiology at the Strang Cancer Prevention Center in
New York City. From 1989 to 1994, Dr. Pero was an associate research professor,
and since 1994, he has been an adjunct professor, at New York University Medical
Center, Department of Environmental Medicine. Dr. Pero is also a Professor of
Molecular Ecogenetics at the University of Lund in Lund, Sweden, and, since
September 1997, a Research Professor of Medicine at Boston University School of
Medicine. Dr. Pero is also a member of the American Association of Science, New
York Academy of Sciences, International Preventive Oncology Society, European
Society for Therapeutic Radiation Oncology and The American Association of
Cancer Research, as well as serving as Scientific Director of the Board of
Trustees of the Swedish American Research Foundation. Dr. Pero has published
more than 175 manuscripts related to his research.
Per-Olof Soderberg, 43, was appointed as a Director in November 1997. Mr.
Soderberg is chief executive officer of Dahl International AB, a
publicly-traded, wholesale sanitation and heating products company in Stockholm,
Sweden, and Copenhagen, Denmark. Mr. Soderberg also serves on the board of
directors Bergman & Beving AB, a publicly-traded trading company in Scandinavia,
Martin Olsson, a food whole-saler based in Sweden, and Skandia Investment
Management, an insurance investment company.
Unless individual stockholders indicate otherwise, each returned proxy will
be voted "FOR" the election to the Board of Directors of each of the seven
nominees named above.
Board of Directors Committees and Meetings
During 1997, the Board of Directors held five meetings. Except for Dr.
Caruthers who was absent from one meeting, all incumbent members of the Board of
Directors attended all meetings of the Board of Directors while serving on the
Board of Directors. The Board of Directors has two standing committees: the
Audit Committee and the Compensation Committee.
The Audit Committee reviews, with the Company's independent auditors, the
scope and timing of their audit services and any other services they are asked
to perform, the auditor's report on the Company's financial statements following
completion of their audit and the Company's policies and procedures with respect
to internal accounting and financial controls. In addition, the Audit Committee
makes annual recommendations to the Board of Directors regarding the appointment
of independent auditors for the ensuing year. The Audit Committee consists of
Mr. Ionata (Chairman) and Mr. Eppner. The Audit Committee did not meet in 1997.
The Compensation Committee did not meet in 1997. Its functions are
discussed in the Report on Executive Compensation which starts on page 13. The
Compensation Committee consists of Mr. Ionata (Chairman) and Dr. Caruthers.
Director Compensation
Directors receive no cash compensation for serving on the Board of
Directors, other than reimbursement of reasonable expenses incurred in
connection with meetings actually attended. In addition, pursuant to the OXiGENE
1996 Stock Incentive Plan, each Non-employee Director receives, upon first being
elected to the Company's Board of Directors, options to purchase an aggregate of
55,000 shares of Common Stock, such options to vest in five equal annual,
cumulative installments of 11,000 shares on the anniversary of their election.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998, and has
directed that the appointment of the independent auditors be submitted for
ratification by the Company's stockholders at the Annual Meeting. Ernst & Young
LLP has audited the Company's financial statements since 1992.
Stockholder ratification of the appointment of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's By-Laws or
otherwise. However, the Board of Directors is submitting the appointment of
Ernst & Young LLP to the stockholders for ratification as a matter of what it
considers to be good corporate practice. If the stockholders fail to ratify the
appointment, the Board of Directors will reconsider whether or not to retain
that firm. Even if the appointment is ratified, the Board of Directors, in its
discretion, may direct the appointment of a different independent accounting
firm at any time during the year if the Board of Directors determines that such
a change would be in the best interests of the Company and its stockholders.
Representatives of the Swedish affiliate of Ernst & Young LLP, are expected
to be present at the Annual Meeting, will have an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions from stockholders.
The Board of Directors Recommends a Vote "FOR" Ratification of the
Appointment of Ernst & Young LLP as the Independent Auditors
for the Fiscal Year Ending December 31, 1998.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned, as of April 3, 1998, by (i) each stockholder known to the
Company to be a beneficial owner of more than 5% of the Common Stock, (ii) each
director and nominee for director, (iii) each Named Executive Officer (as
defined below) included in the Summary Compensation Table under the caption
"Executive Compensation" below, and (iv) the directors and officers of the
Company as a group. Unless otherwise noted, all shares are owned directly with
sole voting and dispositive powers.
Beneficial Ownership(2)
Name(1) No. of Shares % of Total
Ronald W. Pero 705,000(3) 6.73%
Bjorn Nordenvall 450,000(4)(5) 4.32%
Per-Olof Soderberg 88,920(6) *
Claus Moller 56,066 *
Michael Ionata 16,000(7) *
Marvin H. Caruthers 12,500(8) *
Arthur B. Laffer 11,000 *
Gerald A. Eppner 0 *
Richard A. Brown 561,825 5.51%
Amvescap PLC 544,700 5.34%
All directors and executive
officers as a group (9 persons) 1,374,486 12.77%
- ---------------------------------
* Indicates less than one percent.
(1) Each person listed in the table is a director or nominee for director of
the Company or a Named Executive Officer (as defined below), with an
address at c/o OXiGENE, Inc., One Copley Place, Suite 602, Boston, MA
02116, except for Richard A. Brown, whose address is PO Box 8706, Longboat
Key, FL 34228, and Amvescap PLC, whose address is 11 Devonshire Square,
London EC2M4 and Amvescap PLC, whose address is 11 Devonshire Square,
London EC2M4YR, England.
(2) Includes the following shares that are purchasable under options and
warrants that are presently exercisable or exercisable within 60 days of
the date of this table: Dr. Pero - 275,000 shares; Dr. Moller - 25,000
shares; Mr. Ionata - 11,000 shares - Professor Caruthers - 11,000 shares;
and Mr. Laffer - 11,000 shares.
(3) Includes 70,588 shares held by a trust for the benefit of Dr. Pero's
children, and 120,588 shares held by The Ronald Pero Charitable Remainder
Unitrust, a trust of which Dr. Pero is the trustee.
(4) Includes 220,000 shares purchasable upon presently exercisable options held
by B. Omentum AB, a company organized under the laws of Sweden of which Dr.
Nordenvall is the sole shareholder.
(5) Includes 1,000 shares held by his spouse as to which Dr. Nordenvall
disclaims beneficial ownership; 157,700 held by a corporation organized
under the laws of Sweden of which Dr. Nordenvall is the sole stockholder;
and 71,300 shares held through a capital insurance placed by Dr.
Nordenvall.
(6) Includes 1,320 shares held by Mr. Soderberg's wife and minor children.
(7) Includes 5,000 shares purchasable upon presently exercisable options held
by Nordberg Capital Inc., a New York investment banking firm, of which Mr.
Ionata is Director of Corporate Finance. Mr. Ionata disclaims beneficial
ownership of such shares.
(8) Includes 1,000 shares held by his spouse in trust for his children, as to
which Professor Caruthers disclaims beneficial ownership.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information for the years indicated
concerning the compensation awarded to, earned by or paid to the Chief Executive
Officer of the Company and the three most highly paid executive officers, other
than the Chief Executive Officer (collectively, the "Named Executive Officers")
for services rendered in all capacities to the Company and its Swedish
subsidiary during such period.
<TABLE>
<CAPTION>
Summary Compensation Table
----------------------------------------------- --------------------
Annual Compensation Long Term
Compensation
- -----------------------------------------------------------------------------------------------------------------------
Name and Principal Position Year Salary($) Bonus($) Securities All Other
- --------------------------- ---- --------- -------- Underlying Compensation
Options(#) ($)
---------- -----------
<S> <C> <C> <C> <C> <C>
Bjorn Nordenvall 1997 300,000 (1) -- 0 --
President and Chief 1996 213,710 (1) -- 165,000 --
Executive Officer 1995 56,847 (1) -- 165,000 --
Claus Moller 1997 185,064 (2) -- 100,000 --
Chief Medical Officer 1996 146,200 (2) -- -- --
1995 134,467 (2) -- 70,000 --
Ronald W. Pero 1997 217,792 (3) -- 60,000 --
Chief Scientific Officer 1996 233,170 (3) -- -- --
1995 201,850 -- -- --
Bo Haglund 1997 114,765 -- -- --
Chief Financial Officer 1996 43,349 (4) -- 30,000 --
1995 -- -- -- --
</TABLE>
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(1) Includes consulting fees for 1997, 1996 and 1995 of $250,000, $163,710 and
$27,680, respectively. These consulting fees were paid to B. Omentum
Consulting AB, a company organized under the laws of Sweden of which Dr.
Nordenvall is the sole shareholder ("Omentum"), pursuant to a consulting
agreement, dated October 1995, between the Company and Omentum. Dr.
Nordenvall joined the Company as Chief Executive Officer and President in
June 1995. See "Certain Relationships and Related Transactions."
(2) Includes consulting fees for 1997, 1996 and 1995 of $60,000, $145,200 and
$70,000, respectively, paid to IPC Nordic A/S, a company organized under
the laws of Denmark of which Dr. Moller is a director and principal
shareholder ("IPC"), pursuant to a consulting agreement, dated August 1995,
between the Company and IPC. See "Certain Relationships and Related
Transactions."
(3) Includes $114,500 in compensation that was deferred at the election of Dr.
Pero.
(4) Mr. Haglund became the Company's Chief Financial Officer in August 1996.
<PAGE>
Employment Agreements
Employment Agreement with Bjorn Nordenvall. In October 1995, the Company
entered into an employment agreement with Dr. Nordenvall. The employment
agreement was amended in March 1997, and currently provides for a base salary of
$50,000 per annum. The employment agreement provides that either party may
terminate the agreement on one-year prior written notice. In addition, in
October 1995, the Company entered into a consulting agreement with B. Omentum
AB, a company organized under the laws of Sweden of which Dr. Nordenvall is the
sole shareholder ("Omentum"), pursuant to which the Company pays Omentum a
consulting fee of $250,000 per year. See "Certain Relationships and Related
Transactions."
Employment Agreement with Ronald Pero. In April 1997, the Company entered
into a new employment with Dr. Ronald Pero. The agreement provides for a base
salary of $240,000 per annum. Pursuant to a prior deferred compensation
arrangement, $114,500 of such base salary continues to be deferred at the
election of Dr. Pero. The agreement contains the following termination
provisions (the "Termination Provisions"): (1) either party may terminate the
agreement on six month prior written notice, and (2) in the event the Company
terminates the employee for any reason, other than Cause (which is defined as
(i) the continued failure to perform assigned duties on behalf of OXiGENE, (ii)
a material breach of any of the provisions of the employment agreement, and
(iii) any act of fraud, material misrepresentation or material omission,
misappropriation, dishonesty, embezzlement or similar conduct against OXiGENE or
the conviction for a felony or any crime involving moral turpitude), then the
employee is entitled to three months salary following the effective date of the
termination of his employment.
Employment Agreement with Claus Moller. In April 1997, the Company entered
into an employment agreement with Dr. Claus Moller, pursuant to which Dr.
Moller receives an annual base salary of $120,000. Dr. Moller's employment
agreement contains provisions regarding the termination of his employment
identical to the Termination Provisions in Dr. Pero's employment agreement
described in the preceding paragraph. In August 1995, the Company entered into a
consulting agreement with IPC Nordic A/S, a company organized under the laws of
Denmark ("IPC") of which Dr. Moller is a director and principal shareholder,
pursuant to which the Company currently pays IPC a consulting fee of $80,000 per
year. See "Certain Relationships and Related Transactions."
Employment Agreement with Bo Haglund. In August 1996, the Company entered
into an employment agreement with Mr. Haglund, the Company's Chief Financial
Officer. The agreement has a term of three years, ending on August 12, 1999.
Pursuant to the agreement, Mr. Haglund receives a base salary of $101,250 per
year. Either party may terminate the agreement on six months' prior written
notice. In the event the Company terminates Mr. Haglund, Mr. Haglund is entitled
to three months salary following the effective date of the termination of his
employment.
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table sets forth information regarding stock options granted
to each Named Executive Officer, other than Dr. Nordenvall and Mr. Haglund,
neither of whom were granted any options, during fiscal year 1997 pursuant to
the OXiGENE 1996 Stock Incentive Plan (the "Plan").
<TABLE>
<CAPTION>
Name Options % of Total Exercise Expiration Potential Realizable Value at
---- Granted Awards or Base Date(2) Assumed Annual Rates
(#)(1) Granted to Price ---------- -----------------------------
------- Employees ($/Sh) 5%($)(3) 10%($)(3)
in Fiscal ------- ---------- ----------
Year
----------
<S> <C> <C> <C> <C> <C> <C>
Claus Moller........ 100,000 60.24 28.8125 04/04/07 1,811,700 4,591,900
Ronald W. Pero...... 60,000 36.14 28.8125 04/04/07 1,087,020 2,755,140
</TABLE>
- --------------------------
(1) Options granted under the Plan are exercisable over a period of ten years,
except that incentive stock options granted to any holder of more than 10%
of the Company's outstanding shares of Common Stock are exercisable over a
period of 5 years.
(2) The Plan generally provides that if an optionee ceases to be an employee,
consultant or director for any reason other than death, disability or
discharge for "cause," the unexercised portion of any outstanding options
granted to the optionee, to the extent such options have vested, may be
exercised for a period of three months after such cessation. Upon
termination as a result of death or disability, the optionee or the
optionee's legal representative may exercise outstanding options, to the
extent such options have vested, within one year of termination. In no
event, however, shall the exercise period for an option extend beyond the
expiration of the option term. If the optionee is discharged for "cause,"
all outstanding options terminate immediately. Options are not transferable
during the optionee's lifetime and may only be exercised by the optionee's
legal representative in the event of the optionee's death. Payment of the
exercise price of options granted to an employee of the Company may, in the
discretion of the Compensation Committee, be made in either of the
following (or any combination thereof): (i) cash, or (ii) the transfer of
shares of Common Stock of the Company upon such terms and conditions as
determined by the Compensation Committee. In the event of a "change in
control" all outstanding options become immediately exercisable. In the
event of a "recapitalization," appropriate adjustments will be made to
outstanding options without a change in their total fair market value as of
the date of the adjustment.
(3) The dollar amount under each of these columns assumes that the market price
of the Common Stock from the date of the option grant appreciates at the
cumulative annual rates of 5% and 10%, respectively, over the option term
of ten years. The assumed rates of 5% and 10% were established by the SEC
and, therefore, are not intended to forecast possible future appreciation
of the Company's Common Stock.
<PAGE>
Option Exercises and Holdings as of December 31, 1997
Except as described below, no stock options and other awards were exercised
in fiscal year 1997 by any of the Named Executive Officers. The following table
sets forth, as of December 31, 1997, the number of unexercised options held by
each Named Executive Officer and the value thereof based on the closing bid
price of the Common Stock of $17.50 on December 31, 1997.
Aggregated Option/Warrant Exercises in Last Fiscal Year
and Fiscal Year-End Option/Warrant Values
Number of Unexercised Value of Unexercised In-the-
Options/Warrants Money Options/Warrants
at FY-End(#) at FY-End($)
------------------------- ----------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
Bjorn Nordenvall 220,000/110,000 1,897,500
Claus Moller 0/123,334 0/259,591
Ronald W. Pero 260,000/60,000 3,001,250
Bo Haglund 10,000/20,000 0/0
On November 17, 1997, Dr. Claus Moller exercised warrants and options to
purchase an aggregate of 81,666 shares of Common Stock for an aggregate exercise
price of approximately $492,495 as follows: 5,000 warrants at an exercise price
of $6.00 per share (the "Warrants"); 30,000 options at an exercise price of
$5.50 per share (the "First Options"); and 46,666 options at an exercise price
of $6.375 per share. From November 19 through November 21, 1997, Dr. Moller sold
25,600 shares of Common Stock for an aggregate sales price of approximately
$500,200. Assuming that the 25,600 shares of Common Stock sold by Dr. Moller
were the shares acquired by Dr. Moller upon exercise of the Warrants and the
First Options, Dr. Moller realized a gain of approximately $356,900. As of
December 31, 1997, Dr. Moller held 56,066 shares of Common Stock, representing
the shares of Common Stock acquired by Dr. Moller on November 17, 1997 and not
sold subsequently.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
IPC Nordic Consulting Agreement. In August 1995, the Company entered into a
consulting agreement with IPC Nordic A/S, a company organized under the laws of
Denmark ("IPC") of which Dr. Claus Moller, a director and the Chief Medical
Officer of the Company, is a director and principal shareholder. Pursuant to the
agreement, IPC provides services with respect to the Company's clinical trials
and a possible future compassionate use program in consideration of an annual
consulting fee of $80,000.
Omentum Consulting Agreement. In October 1995, the Company entered into a
consulting agreement with B. Omentum Consulting AB, a company organized under
the laws of Sweden ("Omentum") of which Dr. Bjorn Nordenvall, a director and the
President and Chief Executive Officer of the Company, is the sole shareholder.
Pursuant to the agreement, the Company pays Omentum an annual consulting fee of
$250,000.
<PAGE>
REPORT ON EXECUTIVE COMPENSATION(1)
- --------------------------
(1) Pursuant to Item 402(a)(9) of Regulation S-K promulgated by the SEC,
neither the "Report on Executive Compensation" nor the material under the
caption "Performance Measurement Comparison" shall be deemed to be filed
with the SEC for purposes of the Securities Exchange Act of 1934, as
amended, nor shall such report or such material be deemed to be
incorporated by reference in any past or future filing by the Company under
the Exchange Act or the Securities Act of 1933, as amended.
Introduction
Two of OXiGENE's directors, Mr. Ionata (Chairman) and Dr. Caruthers, each
of whom is a Non-employee Director, constitute the Compensation Committee,
which, among other things, is responsible for making recommendations to the
Board of Directors with respect to (1) the Company's compensation philosophy and
compensation guidelines for its executives; (2) the roles and respective
performances of the Company's executive officers, especially as these affect
compensation; (3) appropriate compensation levels for the Chief Executive
Officer and other executives of the Company based on a comparative review of
compensation practices in similarly situated business; and (4) the design and
implementation of the Company's compensation plans and the establishment of
criteria and the approval of performance results relative to the Company's
incentive plans. As a practical matter, the Committee sets and administers all
compensation of the three management directors, Drs. Nordenvall, Pero and
Moller, since the management directors do not participate in deliberations
regarding or vote on compensation matters affecting them. The Board of Directors
did not modify or reject any action or recommendation of the Compensation
Committee regarding compensation for the 1997 fiscal year.
This report sets out the Company's executive compensation philosophy and
objectives, describes the components of its executive compensation program and
describes the bases on which 1997 executive compensation determinations were
made with respect to the executive officers of the Company, including those
named in the Summary Compensation Table preceding this report.
Executive Compensation Philosophy and Objectives
It is the Company's policy to maintain a flexible managerial and
compensation structure in order that it may meet its evolving and changing
supervisory needs, while tightly controlling its overhead expenses, as its
business progresses. As part of this policy, the Company provides a compensation
package that is intended to focus executive behavior on the fulfillment of
annual and long-term business objectives, and to create a sense of ownership in
the Company that causes executive decisions to be aligned with the best
interests of the Company's stockholders.
In 1997, total cash remuneration arrangements with the Company's executive
officers serving from time to time amounted to approximately $821,788. The
Company traditionally has paid cash remuneration to certain consultants, who
often perform functions associated with executive officer positions. The amount
of cash remuneration payable is likely to vary from time to time depending on
the Company's activities, including the progress of its clinical trials. As the
Company's clinical trials continue to progress and expand and the Company
prepares to file a new drug application with the United States Food and Drug
Administration and similar government authorities in other countries, the
Company will evaluate the need to hire more full-time executives and key
employees. The Company's Board of Directors continually monitors its managerial
composition and compensation structure.
Compensation Program Components
Consistent with the Company's executive compensation objectives,
compensation for its senior managers consists of three elements: an annual base
salary, annual incentive compensation and long-term incentive compensation.
Annual Base Salary. Base salaries for executive officers are determined
with reference to a salary range for each position. Salary ranges are determined
by evaluating a particular employee's position and comparing it with what are
believed to be representative prevailing norms for similar positions in
similarly-sized companies. Within this salary range, an executive's initial
salary level is determined largely through Compensation Committee judgment based
on the experience of its members. Salaries are determined at a level to attract,
motivate and retain superior executives. The Compensation Committee determines
annual salary adjustments based on the Company's performance, the individual
executive's contribution to that performance, prevailing norms and the
Compensation Committee members' knowledge and experience.
Long-Term Incentive Compensation. Long-term incentive compensation is
provided by the grant of options to purchase shares of Common Stock under the
Company's stock incentive plans. In considering awards, the Compensation
Committee takes into account such factors as prevailing norms for the ratio of
options outstanding to total shares outstanding, the relative influence each
position will have on the building of shareholder value over the long term, and
the amount, vesting and expiration dates of each executive's outstanding
options.
Consultant's Compensation. The Company continues to rely to a great extent
on consultants, including, among others, the members of the Company's Scientific
Advisory Board, in the areas of research and development, clinical trials and
clinical trial management, marketing and finance. The Board of Directors has
determined that it is less expensive and more efficient to engage consultants
rather than to expand the Company's overhead by hiring individuals for these
positions. In order to retain their motivation and long-term commitment, from
time to time these consultants will be granted options under the Company's stock
incentive plans.
Other. Based on currently prevailing authority, including proposed Treasury
regulations, and in consultation with outside tax and legal experts, the
Compensation Committee has determined that it is unlikely that the Compensation
Committee would require the Company to pay any amounts in 1996 that would result
in the loss of a federal income tax deduction under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and accordingly has not recommended
that any special actions be taken or plans or programs be revised at this time
in light of such tax provisions.
The Compensation Committee
Michael Ionata (Chairman)
Marvin Caruthers
<PAGE>
Performance Measurement Comparison
The following chart shows cumulative total shareholder return on the
Company's Common Stock (since the initial public offering on August 26, 1993),
compared with the Standard & Poor's Biotechnology Midcap and the Standard &
Poor's Midcap 400 Index.
OXiGENE, INC.
Performance Graph
[GRAPHIC OMITTED]
Measurement S&P Biotechnology S&P Midcap 400
Period OXiGENE, Inc. Midcap Index
- ----------- ------------- ---------------- --------------
8/26/93 100 100 100
12/31/93 135.90 120.31 104.81
12/30/94 97.44 127.02 101.05
12/30/95 217.95 225.48 132.32
12/31/96 482.06 199.35 157.73
12/31/97 358.98 196.33 208.60
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders is being provided to
each stockholder of the Company with this Proxy Statement. Additional copies may
be obtained by writing to OXiGENE, Inc., One Copley Place, Suite 602, Boston,
Massachusetts 02116, Attention: Corporate Secretary.
FILINGS PURSUANT TO SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires certain
officers of the Company and its directors, and persons who own beneficially more
than ten percent of any registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of Common Stock of the
Company with the SEC, the Nasdaq National Market and the Company. Based solely
on a review of the reports and representations provided to the Company by the
above-referenced persons, the Company believes that during 1997, all filing
requirements applicable to its reporting officers, directors and greater than
ten percent beneficial owners were properly and timely satisfied. In making
these statements, the Company has relied on representations of its directors,
officers and greater than ten percent beneficial owners, and copies of reports
they have filed with the SEC.
STOCKHOLDER PROPOSALS
The eligibility of stockholders to submit proposals, the proper subjects of
stockholder proposals and the form of stockholder proposals are regulated by
Rule 14a-8 under Section 14 of the Securities Exchange Act of 1934, as amended.
In accordance with regulations issued by the SEC, stockholder proposals intended
for presentation at the 1998 Annual Meeting of stockholders must be received by
the Company at its principal executive office, One Copley Place, Suite 602,
Boston, Massachusetts 02116, no later than Friday, February 5, 1999, if such
proposals are to be considered for inclusion in the Company's proxy statement
for the 1999 annual meeting of stockholders. Each proposal submitted should
include the full and correct name and address of the stockholder(s) making the
proposal, the number of shares beneficially owned and their date of acquisition.
If beneficial ownership is claimed, proof thereof should also be submitted with
the proposal. The stockholder or his or her representative must appear in person
at the annual meeting and must present the proposal, unless he or she can show
good reason for not doing so.
By Order of the Board of Directors
Bo Haglund, Corporate Secretary
