Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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OXiGENE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
Common Stock, $.01 par value, of OXiGENE, INC.
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[LOGO]
ONE COPLEY PLACE, SUITE 602 BLASIEHOLMSGATAN 2C
BOSTON, MASSACHUSETTS 02116 STOCKHOLM, SE-111 48 SWEDEN
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 29, 1999
TO OUR STOCKHOLDERS:
Please take notice that the 1999 annual meeting of the stockholders of
OXiGENE, Inc., a Delaware corporation, will be held at 9:00 a.m., local time, on
Tuesday, June 29, 1999, at the Marriott Hotel Copley Place, 110 Huntington
Avenue, Boston, Massachusetts 02116, for the following purposes:
1. To elect seven directors to hold office until the 2000 annual meeting;
2. To approve and adopt certain amendments to the OXiGENE 1996 Stock
Incentive Plan, including an increase in the number of shares under
that plan;
3. To ratify the appointment of Ernst & Young LLP as our independent
auditors for the fiscal year ending December 31, 1999; and
4. To transact such other business as may properly come before the annual
meeting.
Only stockholders of record at the close of business on the record
date, May 7, 1999, are entitled to notice of, and to vote at, the annual
meeting.
By Order of the Board of Directors
Bo Haglund,
May 25, 1999 Corporate Secretary
===============================================================================
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. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE
THEIR PROXIES AND VOTE THEIR SHARES IN PERSON.
===============================================================================
<PAGE>
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.................................Cover
Defined Terms................................................................i
Information Relating to the Annual Meeting...................................1
Board of Directors Meetings..................................................2
Committees...................................................................2
Compensation of Directors....................................................3
Section 16(a) Beneficial Ownership Reporting.................................3
PROPOSAL 1 -ELECTION OF DIRECTORS............................................4
Report of Compensation Committee on Executive Compensation...................7
PROPOSAL 2 -APPROVAL OF CERTAIN AMENDMENTS
TO THE OXiGENE 1996 STOCK INCENTIVE PLAN.......................11
PROPOSAL 3 -RATIFICATION OF APPOINTMENT OF AUDITORS.........................17
Security Ownership of Certain Beneficial Owners and Management..............18
Executive Compensation......................................................19
Certain Relationships and Related Transactions..............................21
Stockholder Return Performance Graph........................................22
Other Information...........................................................23
DEFINED TERMS
"OXIGENE," "WE," "US," "OUR" or "COMPANY" means, collectively, OXiGENE, Inc.
and its Swedish subsidiary OXiGENE Europe AB.
"PLAN" or "1996 PLAN" means the OXiGENE 1996 Stock Incentive Plan.
"NAMED EXECUTIVE OFFICER" means, collectively, Dr. Bjorn Nordenvall, our
President and Chief Executive Officer, our three next highest paid executive
officers at the end of 1998 named in the "Summary Compensation Table" and Claus
M0ller, a former executive who ceased to be our employee on April 30, 1998.
i
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[LOGO]
ONE COPLEY PLACE, SUITE 602 BLASIEHOLMSGATAN 2C
BOSTON, MASSACHUSETTS 02116 STOCKHOLM, SE-111 48 SWEDEN
PROXY STATEMENT
FOR THE
1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 29, 1999
INFORMATION RELATING TO THE ANNUAL MEETING
PROXY STATEMENT
OXiGENE's Board of Directors is soliciting proxies to be used at the
1999 annual meeting of stockholders. This proxy statement and the proxy card
will be mailed to stockholders beginning May 25, 1999.
WHO CAN VOTE
Record holders of our common stock at the close of business on the
record date, May 7, 1999, may vote at the annual meeting. On the record date,
approximately 50 record holders held 10,257,049 shares of outstanding common
stock.
HOW YOU CAN VOTE
You can only vote your shares if you are either present in person or
represented by proxy at the annual meeting. You can vote your proxy by
completing and returning the enclosed proxy card by mail. If you return a
properly signed proxy card, we will vote your shares as you direct. IF YOUR
PROXY CARD DOES NOT SPECIFY HOW YOU WANT TO VOTE YOUR SHARES, WE WILL VOTE YOUR
SHARES "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND "FOR" THE APPROVAL OF
THE OTHER PROPOSALS SET FORTH IN THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.
REVOCATION OF PROXIES
You can revoke your proxy at any time before it is exercised by any of
these three methods:
o by voting in person at the annual meeting;
o by delivering a written notice of revocation dated after the
proxy to our Secretary; or
o by delivering another proxy dated after the previous proxy.
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REQUIRED VOTES
Each share of common stock receives one vote on all matters properly
brought before the annual meeting. In order to conduct business at the annual
meeting, a quorum, consisting of a majority of the outstanding shares of common
stock as of the record date, must be present in person or represented by proxy
at the meeting. The following is an explanation of the vote required for each of
the matters to be voted on at the annual meeting:
o DIRECTORS. The seven nominees for director receiving the highest
number of votes will be elected.
o PROPOSAL 2. The amendment to our 1996 Stock Incentive Plan will
require the affirmative vote of a majority of the shares
represented in person or by proxy at the annual meeting. This
means that, so long as a quorum is present, a majority of the
votes cast at the meeting will determine the outcome of the vote
on this proposal. Therefore, the amendment could be approved by
the vote of less than a majority of all of the outstanding
shares.
Designated blank spaces are provided on the proxy card to mark, if you
wish either to abstain on one or more of the proposals or to withhold authority
to vote for any nominee for director. Proxies submitted by brokers who do not
indicate a vote for some or all of the items voted on because they do not have
discretionary voting authority and have not received voting instructions are
called "broker non-votes." Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum. Since our By-Laws
require the affirmative vote of a majority of the shares present, in person or
by proxy, an abstention on the proposals to ratify the selection of our auditors
and to increase the number of shares under the 1996 stock incentive plan 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. 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.
BOARD OF DIRECTORS MEETINGS
During 1998, the Board of Directors held seven meetings. Except for
Dr. Caruthers, attendance by incumbent directors at meetings of the Board of
Directors and its Committees was at least 75%.
COMMITTEES
The Board of Directors has established the following two standing
committees to assist it in fulfilling its responsibilities:
AUDIT COMMITTEE
MEMBERS: Gerald A. Eppner (Chairman)
Arthur B. Laffer
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NUMBER OF MEETINGS IN 1998: 2
FUNCTIONS: Reviews the scope and timing of the independent
auditors' audit and other services, the
auditors' 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.
Makes annual recommendations to the Board of
Directors regarding the appointment of
independent auditors for the ensuing year.
COMPENSATION COMMITTEE
MEMBERS: Michael Ionata (Chairman)
Per-Olof Soderberg
NUMBER OF MEETINGS IN 1998: 6
FUNCTIONS: Please refer to the Report of Compensation
Committee on Executive Compensation below for a
description of the functions of the Compensation
Committee.
COMPENSATION OF DIRECTORS
Fees. 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.
Equity Incentives. Under the terms of the 1996 Stock Incentive Plan,
directors also receive, upon first being elected to the Board of Directors,
options to purchase an aggregate of 55,000 shares. The options vest in five
equal, annual, cumulative installments of 11,000 shares each. We intend to
change the way we compensate our directors. Please refer to Proposal 2 for a
discussion of the changes we intend to implement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our Directors and executive officers, and persons who own more than 10%
of our common stock, to file with the Securities and Exchange Commission (the
"SEC"), the Nasdaq National Market and the Company, reports of ownership and
changes in ownership of common stock and other equity securities of the Company.
For these purposes, the term "other equity securities" would include options
granted under our 1996 Stock Incentive Plan. Based solely on a review of the
reports and representations provided to us by the above-referenced persons, we
believe that during 1998 all filing requirements applicable to our reporting
officers, directors and greater-than-ten percent beneficial owners were properly
and timely satisfied, except that Mr. Laffer and Dr. Sherris each filed late a
Form 3 (Initial Statement of Beneficial Ownership). In making these statements,
we have relied on representations of our directors, officers and
greater-than-ten percent beneficial owners and copies of reports they have filed
with the SEC.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Information concerning the nominees for election to the Board of
Directors is set forth below. Each nominee for election to the Board of
Directors 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 2000 annual meeting of stockholders. We will vote your shares as you specify
on your proxy card. If you sign, date and return the proxy card but do not
specify how you want your shares voted, we will vote them FOR the election of
the nominees listed below. If unforeseen circumstances (such as death or
disability) make it necessary for the Board of Directors to substitute another
person for any of the nominees, we will vote your shares FOR that other person.
If we do not name a substitute nominee, the size of the Board of Directors will
be reduced. We are not aware of any circumstances that would render any nominee
for director unavailable.
Our Board of Directors currently consists of seven members, including
five members who are "non-employee directors" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended. Each nominee for election
to the Board of Directors is currently serving as a director.
The following information with respect to each nominee has been
furnished to the Company by that nominee. The ages of the nominees are as of
March 31, 1999.
MARVIN H. CARUTHERS, PH.D.
Age: 59
Director Since: 1996
Principal Occupation: Professor of Chemistry and Biochemistry at the
University of Colorado, Boulder, Colorado.
Business Experience: Scientific co-founder of, and a consultant to, Amgen
Inc., a biotechnology company engaged in the
development of products derived from gene synthesis
capabilities. Scientific co-founder of Applied
Biosystems Inc., a biotechnology company engaged in
the development of DNA synthesizers and protein
sequencers, which is a division of The Perkin-Elmer
Corporation.
Other Directorships: BioStar, Inc., a biotechnology company.
GERALD A. EPPNER
Age: 60
Director Since: 1997
Principal Occupation: Partner, Cadwalader, Wickersham &Taft, a New York law
firm that provides certain legal services to the
Company.
Business Experience: Domestic and international corporate and securities
law matters. In private practice in New York City
since 1966, and for more than five years prior thereto
an employee of certain agencies and departments of the
United States government.
Other Directorships: None.
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<PAGE>
MICHAEL IONATA
Age: 47
Director Since: 1995
Principal Occupation: Director of Corporate Finance of Nordberg Capital
Inc., an investment banking firm based in New York
City.
Business Experience: Corporate finance and venture capital
management at Den Norske Bank, a Norwegian bank (May
1983 to May 1991). Specializing in valuations,
cost-benefit analysis and restructurings at Coopers &
Lybrand LLP prior to May 1983.
Other Directorships: C.E.L. Industries Poland, a restaurant company.
ARTHUR B. LAFFER
Age: 58
Director Since: 1998
Principal Occupation: Chairman and chief executive officer of Laffer
Associates, an economic research and financial
consulting firm.
Business Experience: Co-founder and chairman of Calport Asset Management,
an institutional money management firm. Member of
President Reagan's Economic Policy Advisory Board
(1980 to 1988). Member of the Policy Committee and
the board of directors of the American Council for
Capital Formation in Washington, D.C. Distinguished
University Professor at Pepperdine University, and a
member of Pepperdine's board of directors. Charles
B. Thornton Professor of Business Economics at the
University of Southern California (1976 to 1984).
Associate Professor of Business Economics at the
University of Chicago (1970 to 1976). Consultant to
the Secretaries of Treasury and Defense during the
years 1972-1977. First chief economist at the Office
of Management and Budget under George Shultz (October
1970 to July 1972, on leave of absence from the
University of Chicago).
Other Directorships: Nicholas-Applegate Mutual Funds; Nicholas-Applegate
Growth Equity Fund; United States Filter Corp., a New
York Stock Exchange-listed manufacturer and operator
of sewage and water treatment facilities, MasTec
Inc., a New York Stock Exchange-listed company
specializing in telecommunications infrastructure,
and Coinmach Corp., a Nasdaq National Market-listed
company engaged in coin-operated laundry equipment.
BJORN NORDENVALL, M.D., PH.D.
Age: 47
Director Since: 1995
Principal Occupation: OXiGENE's President and Chief Executive Officer and
Chairman of the Board of Directors.
Business Experience: General surgeon. President of Sophiahemmet AB, a
Stockholm-
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based hospital (1987 to September 1996). President of
Carnegie Medicine AB, a biotechnology company (during
1983 and 1984). Practiced surgery at Danderyd Hospital,
Stockholm (1977 through 1985). Consultant to Carnegie
AB, a Swedish investment banking company (1984 through
1986). Consultant to Skandia Insurance Company, a
Swedish insurance company, since 1984.
Other Directorships: None.
RONALD W. PERO, PH.D.
Age: 58
Director Since: 1988
Principal Occupation: OXiGENE's Chief Scientific Officer.
Business Experience: Research with specialty in the field of DNA repair
and its relation to cancer treatment. Associate
research professor (1989-1994) and adjunct professor
(since 1994) at New York University Medical Center,
Department of Environmental Medicine. Professor of
Molecular Ecogenetics at the University of Lund in
Lund, Sweden. Member of the American Association of
Science, New York Academy of Sciences, International
Preventive Oncology Society, European Society for
Therapeutic Radiation Oncology, The American
Association of Cancer Research, and Scientific
Director of the Board of Trustees of the Swedish
American Research Foundation.
Other Directorships: None.
PER-OLOF SODERBERG
Age: 44
Director Since: 1997
Principal Occupation: Chief executive officer of Dahl International AB, a
publicly-traded, wholesale sanitation and heating
products company in Stockholm, Sweden, and
Copenhagen, Denmark.
Business Experience: Masters degree from Stockholm's School of economics
and MBA from INSEAD, France. Over twenty years
business experience, mainly with wholesale and
trading companies located in Scandinavia, including:
President of Dahl International for the past 9 years,
a company which has grown from a local wholesaler to
the leading wholesaler in its area with over 250
affiliates in Denmark, Norway, Poland, Sweden,
Estonia and Finland.
Other Directorships: Bergman & Beving AB, a publicly-traded trading company
in Scandinavia; Martin Olsson, a food wholesaler 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.
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<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
INTRODUCTION
Two of our directors, Mr. Ionata (Chairman) and Mr. Per-Olof
Soderberg, each of whom is a non-employee director, constitute the Compensation
Committee. The Compensation Committee, among other things, is responsible for
making recommendations to the Board of Directors with respect to:
(1) the compensation philosophy and compensation guidelines for our
executives;
(2) the role and performance of each of our executive officers,
especially as these affect compensation;
(3) appropriate compensation levels for our Chief Executive Officer
and other executives based on a comparative review of
compensation practices of similarly situated businesses; and
(4) the design and implementation of our compensation plans and the
establishment of criteria and the approval of performance results
relative to our incentive plans. An important consideration in
respect of all these criteria is our overriding desire to retain
cash and to compensate our managers in stock, which also has the
effect of aligning their interests with the interest of the
stockholders.
As a practical matter, the Committee sets and administers all
compensation of our management directors, Drs. Nordenvall and Pero, 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 1998 fiscal year.
This report sets out the Company's executive compensation philosophy
and objectives, describes the components of our executive compensation program
and describes the bases on which 1998 executive compensation determinations were
made with respect to our executive officers, including those named in the
Summary Compensation Table following this report.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
It is our policy to maintain a flexible managerial and compensation
structure so that we may continue to meet our evolving and changing supervisory
needs, while tightly controlling our overhead expenses, as our business
progresses. As part of this policy, we provide 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 our
stockholders. We also recognize that competition in our markets is strong both
for obtaining and retaining high quality executives and key employees, and that
we must meet the standards of the marketplace if we are to fulfill our
managerial and employee goals.
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In 1998, total cash remuneration arrangements with the Company's
executive officers serving from time to time amounted to approximately $950,000.
Unlike advisory board members and directors, the Company traditionally has paid
remuneration to certain consultants largely in cash, even those who often
perform functions that are customarily associated with executive officer
positions. The amount of cash remuneration payable to consultants is likely to
vary from time to time depending on our activities, including the progress of
our clinical trials. As our clinical trials continue to progress and expand and
we prepare to file one or more new drug applications with the United States Food
and Drug Administration and similar government authorities in other countries,
we will evaluate the need to hire more full-time executives and key employees.
COMPENSATION PROGRAM COMPONENTS
Consistent with our executive compensation objectives, compensation
for the senior managers consists of two elements: an annual base salary 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 our experience. Salaries are determined at a level to attract, motivate and
retain superior executives. We determine annual salary adjustments based on the
Company's performance, the individual executive's contribution to that
performance, prevailing norms and our 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(s). 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 stockholder value over the long term, and
the amount, vesting and expiration dates of each executive's outstanding
options. We look at each executive's total compensation package and, taking into
account our desire to minimize cash outlays as a matter of policy based on
fiscal prudence, we expect our executives and key employees to look at the
incentive compensation component as being the predominant feature of their
overall compensation package. This policy is in contrast to that of a number of
other biopharmaceutical companies.
Consultant's Compensation. The Company continues to rely to a great
extent on consultants, including, among others, the members of our Scientific
Advisory Board and the newly-established Clinical Trial Advisory Board, in the
areas of research and development, clinical trials and clinical trial management
and marketing. We believe that, at least presently, 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, and in order to conserve cash, from time to
time these consultants will be granted options under the Company's stock
incentive plan(s). Indeed, as a matter of policy, we
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currently are moving in the direction of increasing the relative portion of our
consultants' compensation that is comprised of equity interests, particularly
stock options.
Other. Based on currently prevailing authority, including proposed
Treasury regulations, and in consultation with outside tax and legal experts, we
have determined that it is unlikely that we would require the Company to pay any
amounts in 1999 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 we have not recommended that any special actions be taken or plans
or programs be revised at this time in light of such tax provisions.
REPRICING OF OPTIONS
Equity incentives have always been a significant component and, in
some cases, the sole component, of our compensation package for a broad range of
our employees, directors and consultants. This practice has enabled us to
attract, retain and motivate experienced and dedicated employees, directors and
consultants to achieve and continue our long-term objectives. By linking key
parts of their compensation to corporate performance, an employee's, director's
or consultant's reward is directly related to our success. We believe the use of
equity incentives increases motivation to improve stockholder value.
Some consultants, including some members of our Scientific Advisory
and Clinical Trial Advisory Boards, and our non-employee directors, including
the undersigned members of the Compensation Committee, receive no cash
compensation at all. Their compensation has consisted entirely of stock options.
As we approached year-end 1998, however, we recognized that, as a result of the
decline in our stock price, the effectiveness of our equity-based incentive
program had diminished. We concluded that previously granted options no longer
had any retention value and that we were at risk of losing persons critical to
our success. We believed this situation was particularly serious in light of the
time and resources expended over the past three years in putting together our
current management team and both the experience they had gained and the
dedication to the Company they had evidenced over that period. We believed,
therefore, that a repricing was necessary to provide the intended incentive
value that is a fundamental part of our compensation policy.
Accordingly, we retained the Hay Group, a Boston-based compensation
consulting firm, to advise us regarding this matter, and on December 14, 1998,
in accordance with the Hay Group's report, we offered to reprice approximately
720,000 options, representing less than 6% of our fully-diluted shares
outstanding. Of the 720,000 options that we offered to reprice, 41.7% were
options previously granted to executive officers, 38.2% were options previously
granted to non-employee directors and 20.1% were options previously granted to
certain consultants.
In adopting the repricing, we were of the view that we were balancing
and aligning our incentive and retention goals with your interests as
stockholders. For example, the options were not merely repriced, but we added an
additional one-year vesting period to options that had already vested and an
additional year was added to the vesting schedule of those options that had not
already vested. As a result, the services of the option recipients were assured
for a longer period. Further, options were repriced using an exchange ratio
under which fewer
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repriced (lower priced) new options were received in exchange for the higher
priced, old options that were canceled. As a result, fewer options are now
outstanding, which reduces current dilution. In addition, by repricing the
options on the basis of the Black-Scholes economic exchange method, as
recommended by the Hay Group, we concluded that the optionholders were not being
given any greater value indeed, by using the Black-Scholes method, the values of
the old and the newly repriced option packages were equal. Further, you, our
stockholders, received added value in the form of an expectation of the
Company's ability to better retain key persons with increased incentives for
them to create stockholder value. Finally, the options of our non-employee
directors were repriced to reflect a new option exercise price that was actually
higher than the then open-market price of our common stock, which resulted in a
premium for the Company over the then fair market value of the options.
The table below provides information with respect to the repricing of
options held by the named executive officers, other than Dr. Claus M0ller, who
ceased to be an executive officer on April 30, 1998, and Dr. Sherris, who
declined to have his options repriced.
All options were repriced on December 14, 1998. Employee and
consultant options were repriced with a new exercise price of $8.9375, the
closing price of our common stock on December 14, 1998. Non-employee director
options were repriced to $10.00, which, as noted above, reflected a more than
10% premium in favor of the Company over the then market price of the common
stock. We have never before repriced any options and do not have any plans to do
so further in the future.
LENGTH OF
NUMBER OF SHARES MARKET ORIGINAL
UNDERLYING OPTION PRICE EXERCISE OPTION TERM
------------------- OF STOCK PRICE AT NEW REMAINING
BEFORE AFTER AFTER TIME OF EXERCISE AT DATE
NAME REPRICING REPRICING REPRICING REPRICING PRICE(1) OF REPRICING
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Bjorn Nordenvall, 165,000 120,053 $8.9375 $30.25 $8.9375 7 years,
President and CEO 182 days
Ronald Pero, 60,000 46,821 $8.9375 $28.8125 $8.9375 8 years,
Chief Scientific 137 days
Officer
Bo Haglund, 30,000 24,253 $8.9375 $22.00 $8.9375 7 years,
Chief Financial 241 days
Officer
- ------------
(1) Represents market price on date of repricing.
RESPECTFULLY SUBMITTED,
THE COMPENSATION COMMITTEE
Michael Ionata (Chairman)
Per-Olof Soderberg
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PROPOSAL 2 - APPROVAL OF CERTAIN AMENDMENTS TO
THE OXIGENE 1996 STOCK INCENTIVE PLAN
We are also asking you to approve certain amendments to the OXiGENE
1996 Stock Incentive Plan. The amendments provide for (1) an increase in the
number of shares available under the Plan from 1 million shares, as presently
constituted, to 1.5 million shares, as proposed, an increase of 500,000 shares,
and (2) a change in the compensation formula for our non-employee directors as
described below. As of the date of this proxy statement, awards with respect to
816,460 shares have been made under the Plan. As a result, only approximately
174,000 shares remain available for the grant of options in the future if the
proposed amendment to the Plan is not approved. The closing price of our common
stock as reported on the Nasdaq National Market on May 11, 1999, was $10.50 per
share.
In connection with the December 1998 repricing described in the
Compensation Committee's report, we retained the Hay Group to assist us in
undertaking a comprehensive review of our compensation policy and practices. The
fundamental objective of our compensation policy remains the attraction and
retention of highly qualified persons to serve as directors, officers, key
employees and consultants. This objective is balanced against, and is strongly
influenced by, our need to preserve our cash resources. Therefore, we have
traditionally considered options and other equity incentives to be an important
element of our overall compensation philosophy. In that regard, however, we
recognize that, while options may have substantial upside potential, their value
and, therefore, their ability to attract and retain personnel, is inherently
uncertain.
In comparing our compensation practices to those of a peer group of 18
small biotech/pharmaceutical companies specializing in cancer-related areas (the
"peer group"), who were identified for us by the Hay Group, we found that our
directors, officers and consultants were compensated below the mean compensation
level of the peer group. As a result, and based on the advice and recommendation
of our outside consultants, we have concluded that we should amend our plan to
change the compensation package of our non-employee directors as follows:
Non-employee directors will be granted options as follows:
o Initial Option Grant Upon First Election to Board: Options with a
Black-Scholes value of approximately $150,000 (measured at the
time of grant), vesting over five years and exercisable at the
market price in effect on the date of grant (currently, this
would result in an initial grant of approximately 29,000
options); and
o Annual Option Grant: On each anniversary thereafter, options with
a Black-Scholes value of about $35,000, containing similar
vesting and pricing terms.
The foregoing does not affect our incumbent directors, none of whom
will receive initial options in accordance with the foregoing. Following the
1999 annual meeting, our incumbent directors, however, will receive additional
options as described below and, thereafter, may receive annual options only
after the fifth anniversary of the granting of the options described below.
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In addition, we intend to change the manner in which we compensate our
executive employees as follows. At the end of each year, we will compare the
amount of compensation actually received by each of our executive employees to
that received by similarly positioned executive employees of companies in the
75th percentile of our peer group. To the extent our executive employees are
paid less than those of the peer group companies, we will take the dollar amount
of such difference (the "differential") and will grant the executive an option
to purchase a number of shares that will be determined by the Compensation
Committee. The number of shares subject to that option will not exceed the
dollar amount of the differential. To calculate the maximum number of shares
that may be the subject of such an option, we will use the Black-Scholes method
based on the stock price on the date of grant. As previously noted, however,
executive employees will not automatically receive an option to purchase the
maximum number of shares. Instead, the actual number of options will be
negotiated with each individual executive employee based on his or her
performance and his or her contribution to the Company. We intend to examine our
executive employees' 1998 compensation arrangements and to compare them with the
arrangements of their counterparts at companies in our peer group promptly
following the 1999 annual meeting. We will then grant additional options, in
accordance with the formula described above, if appropriate.
In order to bring our incumbent non-employee directors to a level that
we believe fairly reflects their position relative to that of their counterparts
in the peer group companies, we intend to make a one-time grant as set forth in
the following table.
DIRECTOR ADDITIONAL OPTIONS
-------- ------------------
Marvin Caruthers 18,623
Michael Ionata 18,623
Gerald Eppner 10,856
Per-Olof Soderberg 10,856
Arthur Laffer 7,467
Consequently, we are proposing that each incumbent non-employee
director will have five-year options for an aggregate of 60,000 shares,
including the new options reflected in the above table that cover for all of our
incumbent non-employee directors an aggregate of 66,425 shares. These options
will have an exercise price of $10.50, which represents a slightly higher
premium over the market price on the date of grant than the premium over market
used for the repricing of the non-employee directors options in December 1998.
We are requesting that you approve the amendments to the Plan in order
that the Company may have sufficient shares available for the grant of options
in the future. We believe the increased number of shares we are asking you to
approve are necessary for the Company to be able to attract and retain executive
officers and key employees, directors and consultants, including as a result of
the implementation of the new program described above, while continuing the
Company's policy of conserving its cash resources.
Accordingly, the Board of Directors adopted the amendments to the Plan
effective May 6, 1999, subject to stockholder approval. The affirmative vote of
the holders of a majority
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of the shares represented in person or by proxy at the annual meeting is
required to approve the amendment to the Plan. As a result, abstentions and
broker non-votes will have the same effect as negative votes. Below is a summary
of the principal provisions of the Plan and its operation. A copy of the Plan
was filed as an exhibit to our proxy statement for our 1996 annual meeting and
is available on the SEC's web site at http://www.sec.gov. The following
description of the Plan is qualified in its entirety by reference to that
exhibit.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO
THE OXIGENE 1996 STOCK INCENTIVE PLAN
SHARES SUBJECT TO PLAN Awards with respect to a maximum of 1,500,000 shares of
common stock may be made under the Plan, as amended.
Of that number of shares, the proposed amendment would
add 500,000 shares to the 1,000,000 shares initially
approved, of which only approximately 174,000 remain
available for the grant of new options. No employee
may be granted options or free-standing SARs with
respect to more than 500,000 shares of common stock.
That number of shares may be adjusted in the event of
certain changes in the capitalization of the Company.
PLAN ADMINISTRATION The Plan is administered by a committee of at least two
"non-employee directors" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as
amended, and "outside directors" within the meaning of
Section 162(m) of the Code. The committee will have
authority, subject to the terms of the Plan, to
determine when and to whom to make grants under the
Plan, the number of shares to be covered by the grants,
the types and terms of options and SARs granted, the
exercise price of the shares of common stock covered by
options and SARs and to prescribe, amend and rescind
rules and regulations relating to the Plan. New
options granted to non-employee directors are governed
by the formula discussed below.
ELIGIBILITY Certain of our directors, officers, employees,
consultants and advisors may be granted options to
purchase shares of our common stock or stock
appreciation rights ("SARs") under the Plan. The number
of persons eligible to receive awards under the Plan is
not presently determinable.
TRANSFER OF AWARDS Generally, awards may not be transferred to another
person except by will or the laws of descent and
distribution. In addition, options that are not
incentive stock options may be transferred by the
holder to the holder's children, grandchildren, spouse,
one or more trusts for the benefit of such family
members or a corporation (including a limited liability
company) or partnership (including a limited
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liability partnership) in which such family members
and/or the holder are the majority shareholders, members
or partners; provided, however, that the holder may not
receive any consideration for the transfer.
TERMINATION Options expire ten years from the option grant date,
except that an "incentive stock option" granted to an
employee who is the holder of 10% of our outstanding
shares expires five years from the option grant date.
DIRECTOR OPTIONS Following the 1999 annual meeting, each director who is
not an employee of the Company will be granted options
as follows: (1) upon his first-time election to the
Board, an option with a then Black-Scholes value of
$150,000; and (2) at each succeeding anniversary of his
election on which he remains a director, an option
having a then Black-Scholes value of $35,000. The per
share exercise price of an option will be equal to the
fair market value of a share of common stock on the
date such option is granted. Each option will vest,
and be exercisable, in five equal annual installments
on each anniversary of the date of grant, subject to
the power of the Compensation Committee to vary the
vesting arrangement to meet the tax needs of an
individual recipient if such variance does not change
the substance of the arrangement set forth herein
insofar as it affects the Company.
EMPLOYEE OPTIONS Under the Plan, "incentive stock options" ("ISOs")
within the meaning of Section 422 of the Internal
Revenue Code, "nonqualified stock options" ("NQSOs")
and SARs may be granted by the committee to employees
of the Company and any of its affiliates and to
consultants and service providers to the Company or any
present or future Affiliate Companies (as defined in
the Plan), except that ISOs may be granted only to
employees of the Company and any of its subsidiaries.
The per share purchase price (or "option price") under
each option is established by the committee at the time
the option is granted. However, the per share option
price of an ISO granted to a participant must be at
least 100% of the fair market value of a share on the
date the ISO is granted (110% in the case of an ISO
granted to a holder of 10% of our outstanding shares).
Options will be exercisable at such times and in such
installments as determined by the committee. The
committee may accelerate the exercisability of any
option at any time.
EXERCISABILITY Options generally may not be exercised more than three
months after the option holder ceases to provide
services to the Company or an affiliate, except that in
the event of the death or permanent and total
disability of the option holder, the option may be
exercised by the holder (or the holder's estate), for a
period of up to one year after the
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date of death or permanent and total disability. The
agreements evidencing the grant of an option (other than
an option to a non-employee director) may, in the
discretion of the committee, set forth additional or
different terms and conditions applicable to such option
upon a termination or change in status of the employment
or service of the optionee. Options terminate
immediately if the option holder's service was
terminated for cause.
PAYMENT OF EXERCISE The shares purchased upon the exercise of an option
PRICE must be paid for in cash (including cash that may be
received from the Company at the time of exercise as
additional compensation) or through the delivery of
other shares of Common Stock with a value equal to the
total Option Price or in a combination of cash and such
shares, subject to the power of the Compensation
Committee to vary the payment arrangement, including
delivery of a non-recourse note, to meet the tax needs
of an individual non-U.S. recipient if such variance
does not change the substance of the arrangement set
forth herein insofar as it affects the Company.. In
addition, the option holder may have the Option Price
paid by a broker or dealer and the shares issued upon
exercise of the option delivered directly to the broker
or dealer.
STOCK APPRECIATION The committee also may grant SARs either alone ("free
RIGHTS standing rights") or in conjunction with some or part
of an option ("related rights"). Upon the exercise of an
SAR a holder is entitled, without payment to the
Company, to receive cash, shares of common stock or any
combination thereof, as determined by the committee, in
an amount equal to the excess of the fair market value
of one share of common stock over the exercise price per
share specified in the related option (or in the case of
a free standing right, the price per share specified in
such right), multiplied by the number of shares of
common stock in respect of which the SAR is exercised.
AMENDMENT OR Our Board of Directors has the power to terminate or
TERMINATION amend the Plan at any time. If the Board of Directors
does not take action to earlier terminate the Plan, it
will terminate on March 11, 2006. Certain amendments may
require stockholder approval, and no amendment may
adversely affect options that have previously been
granted.
PLAN BENEFITS All incumbent non-employee directors have been granted
director options under the Plan. Such options cover a
total of 233,576 shares (after giving effect to the
December 1998 repricing) and have an exercise price of
$10.00 per share. Messrs. Nordenvall, Pero and Haglund
have received options with respect to a total of
191,127 shares (after giving effect to the December
1998 repricing), all of which have an exercise price of
$8.9375. Dr. Sherris was granted options with respect
to 45,000 shares, at an exercise price of $12.00
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per share, upon commencement of his employment in May
1998. Dr. Sherris declined to have his options repriced.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO OPTIONS
The following is a general discussion of certain U.S. federal tax
consequences relating to the exercise of options. This discussion does not
address all aspects of U.S. federal taxation, does not discuss state, local and
foreign tax issues and does not discuss considerations applicable to a holder
who is, with respect to the United States, a non-resident alien individual. This
summary of federal income tax consequences does not purport to be complete and
is based upon interpretations of the existing laws, regulations and rulings
which could be materially altered with enactment of any new tax legislation.
Further, this discussion does not address the Swedish tax consequences relating
to options and the exercise thereof; such consequences affect certain of the
Company officers, directors, key employees and consultants.
In general, an optionee will not recognize taxable income upon the
grant or exercise of an ISO, and the Company and its subsidiary will not be
entitled to any business expense deduction with respect to the grant or exercise
of an ISO. (However, upon the exercise of an ISO, the excess of the fair market
value on the date of exercise of the shares received over the exercise price of
the shares will be treated as an adjustment to alternative minimum taxable
income.) In order for the exercise of an ISO to qualify for this tax treatment,
the optionee generally must be an employee of the Company or its subsidiary
(within the meaning of Section 422 of the Code) from the date the ISO is granted
through the date three months before the date of exercise (one year preceding
the date of exercise in the case of an optionee who is terminated due to
disability). In addition, an option will not be treated as an ISO to the extent
that the fair market value of stock with respect to which ISOs first become
exercisable during any calendar year exceeds $100,000.
If the optionee has held the shares acquired upon exercise of an ISO
for at least two years after the date of grant and for at least one year after
the date of exercise, when the optionee disposes of the shares, the difference,
if any, between the sales price of the shares and the exercise price of the
option will be treated as long-term capital gain or loss. If the optionee
disposes of the shares prior to satisfying these holding period requirements (a
"disqualifying disposition"), the optionee will recognize ordinary income at the
time of the disqualifying disposition, generally in an amount equal to the
excess of the fair market value of the shares at the time the option was
exercised over the exercise price of the options. The balance of the gain
realized, if any, will be long-term or short-term capital gain, depending upon
whether or not the shares were sold more than one year after the option was
exercised. If the optionee sells the shares in a disqualifying disposition at a
price below the fair market value of the shares at the time the option was
exercised, the amount of ordinary income will be limited to the amount realized
on the sale over the exercise price of the option. The Company and its
subsidiary will be allowed a business expense deduction to the extent the
optionee recognized ordinary income.
In general, an optionee who receives a non-qualified stock option will
recognize no income at the time of the grant of the option. Upon exercise of a
non-qualified stock option, an optionee will recognize ordinary income in an
amount equal to the excess of the fair market value of the shares on the date of
exercise over the exercise price of the option. The optionee's
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tax basis in shares acquired upon exercise of a non-qualified stock option will
be the fair market value on the date income is recognized, and the optionee's
holding period will commence on that date. The Company and its subsidiary will
be entitled to a business expense deduction in the same amount and at the same
time as the optionee recognizes ordinary income.
PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF AUDITORS
Our Audit Committee has appointed Ernst & Young LLP as our independent
auditors for the fiscal year ending December 31, 1999. Ernst & Young LLP has
audited our financial statements since 1992.
Stockholder ratification of the appointment of Ernst & Young LLP as
our independent auditors is not required by our By-Laws or otherwise. However,
we are submitting the appointment of Ernst & Young LLP to the stockholders for
ratification as a matter of what we consider to be good corporate practice. If
the stockholders fail to ratify the appointment, we will reconsider whether or
not to retain that firm. Even if the appointment is ratified, our Board of
Directors, in its discretion, may direct the appointment of a different
independent accounting firm at any time during the year if they determines that
such a change would be in the best interests of the Company and its
stockholders.
Representatives 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, 1999.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below shows how many shares of common stock each Director
and each named executive officer and the Directors and executive officers as a
group beneficially owned as of April 9, 1999. Except as otherwise noted, each
person listed in the table owns all shares directly and has sole voting and
investment power.
SHARES SUBJECT TO
OPTIONS INCLUDED IN
NAME(1) NO. OF SHARES TOTAL % OF TOTAL
Ronald W. Pero 690,000(2) 260,000 6.59%
Bjorn Nordenvall 402,570(3) 165,000(4) 3.88%
Per-Olof Soderberg 120,220(5) - 1.17%
Claus M0ller 129,400 73,334 1.26%
David Sherris 1,000 - *
Bo Haglund 0 - *
Michael Ionata 5,000 5,000(6) *
Marvin H. Caruthers 1,500(7) - *
Arthur B. Laffesr 2,000 2,000 *
Gerald A. Eppner 0 - *
ODIN Fondene 757,700 - 7.42%
Amvescap PLC 544,700 - 5.34%
All directors and executive
officers as a group (9 1,351,690 432,000 12.70%
persons)
- ------------
* Indicates less than one percent.
(1) Each person listed in the table is a director of the Company or a named
executive officer, with an address at c/o OXiGENE, Inc., One Copley Place,
Suite 602, Boston, MA 02116, except for ODIN Fondene, whose address is c/o
Christiania Bank og. Kreditk. PO Box 1166, Sentrum Oslo 1, Norway, and
Amvescap PLC, whose address is 11 Devonshire Square, London EC2M4YR,
England.
(2) 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.
(3) Includes 70 shares held by his daughter; 157,700 held by a corporation
organized under the laws of Sweden of which Dr. Nordenvall's family is the
sole stockholder; and 71,300 shares held through a capital insurance placed
by Dr. Nordenvall.
(4) Options are held by B. Omentum AB, a company organized under the laws of
Sweden of which Dr. Nordenvall's family is the sole shareholder. The
Company has a consulting agreement with B. Omentum AB. See "Certain
Relationships and Related Transactions.
(5) Includes 1,320 shares held by Mr. Soderberg's wife and minor children.
(6) Options are 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 the option shares.
(7) Includes 1,000 shares held by his spouse in trust for his children, as to
which Professor Caruthers disclaims beneficial ownership.
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EXECUTIVE COMPENSATION
The following table sets forth information for the years indicated
concerning the compensation awarded to, earned by or paid to our named executive
officers for services rendered in all capacities to OXiGENE and its Swedish
subsidiary during that period.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#)
Bjorn Nordenvall 1998 300,000 (1) 120,053 (2)
President and Chief 1997 300,000 (1) --
Executive Officer 1996 213,710 (1) 165,000 (2)
Ronald W. Pero 1998 260,366 (3) 46,821 (4)
Chief Scientific Officer 1997 217,792 (3) 60,000 (4)
1996 233,170 (3) --
David Sherris 1998 72,115 (5) 45,000
Director of Product 1997 -- --
Development 1996 -- --
and U.S. Operating Officer
Bo Haglund 1998 119,300 24,253 (7)
Chief Financial Officer 1997 114,765 30,000 (7)
1996 43,349 (6) --
Claus M0ller 1998 200,000 (8) --
Chief Medical Officer 1997 185,064 (8) 100,000
1996 146,200 (8) --
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(1) Includes consulting fees for 1998 of $250,000, for 1997 of $250,000, and
for 1996 of $163,710. These consulting fees were paid to B. Omentum
Consulting AB, a company organized under the laws of Sweden of which Dr.
Nordenvall's family is the sole shareholder. See "Certain Relationships and
Related Transactions."
(2) In connection with a repricing effected in December 1998, 120,053 options
were granted in exchange for 165,000 options granted in 1996.
(3) Includes $114,500 in compensation that was deferred at the election of
Dr. Pero.
(4) In connection with a repricing effected in December 1998, 46,821 options
were granted in exchange for 60,000 options granted in 1997.
(5) Dr. Sherris became Director of Drug Development in May 1998 and U.S.
Operating Officer in August 1998.
(6) Mr. Haglund became Chief Financial Officer of the Company in August 1996.
(7) In connection with a repricing effected in December 1998, 24,253 options
were granted in exchange for 30,000 options granted in 1996.
(8) Includes consulting fees for 1998 of $80,002, for 1997 of $60,000, and for
1996 of $145,200, paid to IPC Nordic A/S, a company organized under the
laws of Denmark of which Dr. M0ller is a director and principal
shareholder.
EMPLOYMENT AND CONSULTING 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's prior written notice. In addition, in
October 1995, the Company entered into a consulting
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agreement with B. Omentum AB, a company organized under the laws of Sweden of
which Dr. Nordenvall's family is the sole shareholder, 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: (1) either party may terminate the agreement on six months' prior
written notice, and (2) in the event the Company terminates the employee for any
reason, other than cause (which is defined as (a) the continued failure to
perform assigned duties on behalf of OXiGENE, (b) a material breach of any of
the provisions of the employment agreement, and (c) 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 employment.
Employment Agreement with David Sherris. In May 1998, the Company
entered into an employment agreement with Dr. Sherris, the Company's Director of
Product Development. Pursuant to the agreement, Dr. Sherris receives a base
salary of $125,000 per year. Either party may terminate the agreement on sixty
days' prior notice. Subsequently, in August 1998, Dr. Sherris was appointed to
the additional position of U.S. Operating Officer of the Company.
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 $110,000
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.
Consulting Agreement with Claus M0ller. In May 1998, the Company
entered into a new consulting agreement with Dr. Claus M0ller, terminating Dr.
M0ller's prior employment and consulting arrangements with the Company and
providing that Dr. M0ller continue to act as a consultant to the Company, for a
consulting fee of $200,000 per year. The agreement expires on April 4, 2000,
provided that Dr. M0ller may terminate the Agreement upon 30 days' prior written
notice.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The table below provides information regarding stock options granted
to each named executive officer, other than Dr. M0ller, during fiscal year 1998.
Dr. Sherris' options were granted to him when he started his employment with the
Company. In December 1998, the Company's Compensation Committee authorized the
repricing of certain options. All options listed in the table, other than Dr.
Sherris' options, represent repriced options that were granted in
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exchange for previously granted options. Dr. Sherris elected not to exchange his
options for repriced options.
% OF TOTAL
AWARDS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE POTENTIAL REALIZABLE
GRANTED IN FISCAL PRICE EXPIRATION VALUE AT ASSUMED
NAME (#) YEAR ($/SH) DATE(1) ANNUAL RATES
5%($)(2) 10%($)(2)
Bjorn 120,053 48.05% 8.9375 06/14/06 1,547,526 2,195,468
Nordenvall
Ronald W. Pero 46,821 18.74% 8.9375 04/04/07 627,534 923,025
David Sherris 45,000 17.09% 12.0000 06/09/08 856,985 1,331,863
Bo Haglund 24,253 9.71% 8.9375 08/12/06 315,070 450,707
(1) All options in the table, other than Dr. Sherris' options, are repriced
options that were granted in exchange for previously granted options. The
repriced options have the same expiration date as the cancelled options.
(2) The dollar amount under each of these columns assumes that the market price
of the Company's 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.
OPTION EXERCISES AND HOLDINGS AS OF DECEMBER 31, 1998
No stock options and other awards were exercised in fiscal year 1998
by any of the named executive officers. The following table sets forth, as of
December 31, 1998, 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 $10.75 on December 31, 1998.
AGGREGATED OPTION/WARRANT EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/WARRANT VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/WARRANTS AT FY-END(#) MONEY OPTIONS/WARRANTS AT
FY-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Bjorn Nordenvall 165,000/120,053 783,750/217,596
Ronald W. Pero 260,000/46,821 1,246,250/84,863
David Sherris 0/45,000 0/0
Bo Haglund 0/24,253 0/43,959
Claus M0ller 73,334/50,000 102,086/0
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Omentum Consulting Agreement. In October 1995, we entered into an
consulting agreement with B. Omentum Consulting AB, a company organized under
the laws of Sweden ("Omentum") of which the family of Dr. Bjorn Nordenvall, our
President and Chief Executive Officer is the sole shareholder. Pursuant to the
agreement, we pay Omentum an annual consulting fee of $250,000.
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STOCKHOLDER RETURN PERFORMANCE GRAPH
The following chart shows cumulative total shareholder return on our
common stock, compared with the Standard & Poor's Biotechnology Midcap and the
Standard & Poor's Midcap 400 Index.
[GRAPH OMITTED]
MEASUREMENT S&P BIOTECHNOLOGY S&P MIDCAP 400
PERIOD OXIGENE, INC. MIDCAP INDEX
12/30/94 71.70 105.57 96.42
12/30/95 160.38 187.42 126.25
12/31/96 354.72 165.70 150.49
12/31/97 264.15 163.19 199.03
12/31/98 162.26 293.52 237.05
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OTHER INFORMATION
EXPENSES OF SOLICITATION
We will bear the costs of soliciting proxies from our stockholders. We
will make this solicitation by mail, and our directors, officers and employees
may also solicit proxies by telephone or in person, for which they will receive
no compensation other than their regular compensation as directors, officers or
employees. Arrangements will also 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. The Company will reimburse
these brokerage firms, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses that are incurred by them.
SHAREHOLDER PROPOSALS
Your eligibility as a stockholder to submit proposals, the proper
subjects of such proposals and other issues governing stockholder proposals are
regulated by the rules adopted under Section 14 of the Securities Exchange Act
of 1934, as amended. If you wish to submit a proposal for inclusion in our proxy
materials for the 2000 annual meeting of stockholders, we must receive your
proposal at our principal executive office in the United States, One Copley
Place, Suite 602, Boston, Massachusetts 02116, no later than March 1, 2000.
In addition, if you wish to bring a proposal before the 2000 annual
meeting of stockholders but do not wish to have such proposal included in our
proxy statement for that meeting, you must give us written notice of your
proposal at the address set forth in the preceding paragraph, on or before May
14, 2000 in order for your proposal to be considered timely. The persons
designated as our proxies in connection with the 2000 annual meeting will have
discretionary voting authority with respect to any stockholder proposal of which
we do not receive timely notice.
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.
ANNUAL REPORT
A copy of our Annual Report to Stockholders is being provided to each
of our stockholder 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.
By Order of the Board of Directors
Dated: May 25, 1999 Bo Haglund, Corporate Secretary
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