<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
IGEN INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/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:
-----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
3) Filing Party:
-----------------------------------------------------------------------
4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
IGEN INTERNATIONAL, INC.
16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 7, 1997
To The Stockholders of IGEN International, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of IGEN International, Inc., a Delaware corporation (the "Company"),
will be held on October 7, 1997 at 10:00 a.m. local time at the Gaithersburg
Hilton, 620 Perry Parkway, Gaithersburg, Maryland 20877 for the following
purposes:
1. To elect two directors, each for a three-year term (Proposal One).
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year ending
March 31, 1998 (Proposal Two).
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the close
of business on September 1, 1997, as the record date for the Annual Meeting.
Only holders of the Company's Common Stock at the close of business on that date
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof.
By Order of the Board of Directors
Andrei M. Manoliu
SECRETARY
Gaithersburg, Maryland
September 8, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE TO
ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING. A RETURN ENVELOPE (WHICH IS
POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE.
EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND
THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD
BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING,
YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
IGEN INTERNATIONAL, INC.
16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 7, 1997
INTRODUCTORY STATEMENT
This Proxy Statement is being furnished to the stockholders of IGEN
International, Inc., a Delaware corporation (the "Company"), as part of the
solicitation of the enclosed proxy by its board of directors ("the Board of
Directors") from holders of the outstanding shares of the Company's common
stock, par value $0.001 per share ("Common Stock"), for use at the Annual
Meeting of Stockholders to be held on October 7, 1997, at 10:00 a.m. local time
(the "Annual Meeting"), or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting. The
Annual Meeting will be held at the Gaithersburg Hilton, 620 Perry Parkway,
Gaithersburg, Maryland 20877. The Company intends to mail this Proxy Statement,
accompanying proxy card and the Company's Annual Report for the fiscal year
ended March 31, 1997 on or about September 8, 1997 to all stockholders entitled
to vote at the Annual Meeting.
SOLICITATION, VOTING, AND REVOCABILITY OF PROXIES
VOTING
Each outstanding share of Common Stock is entitled to one vote on all
matters as to which a vote is taken at the Annual Meeting. September 1, 1997,
has been fixed by the Board of Directors as the record date (the "Record Date")
for determination of stockholders entitled to notice of and to vote at the
Annual Meeting. The number of shares of Common Stock outstanding on the Record
Date was 15,122,043. The presence, in person or by proxy, of at least a majority
of the shares of Common Stock outstanding on the Record Date (7,561,022 shares)
is necessary to constitute a quorum at the Annual Meeting. Abstentions and
broker non-votes will be treated as shares that are present and entitled to vote
for purposes of determining a quorum but are not counted for any purpose in
determining whether a matter is approved. Directors are elected (Proposal One)
by a plurality of the votes of shares present (in person or by proxy) and
entitled to vote.
At the Annual Meeting, stockholder votes will be tabulated by persons
appointed to act as inspectors of election. The inspectors of election will
separately tabulate affirmative and negative votes, abstentions and broker
non-votes.
All proxies in the enclosed form of proxy that are properly executed and
returned to the Company prior to commencement of voting at the Annual Meeting
will be voted at the Annual Meeting or any adjournments or postponements thereof
in accordance with the instructions thereon. EXECUTED BUT UNMARKED PROXIES WILL
BE VOTED FOR all proposals set forth in this Proxy Statement.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke such proxy at any time before it is voted. A proxy may be revoked by
filing with the Secretary of the Company at the Company's principal executive
office, 16020 Industrial Drive, Gaithersburg, Maryland 20877, a written notice
of
1
<PAGE>
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company.
No additional compensation will be paid to directors, officers or other regular
employees for such services.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors consists of six directors divided into three classes
designated as Class I, Class II and Class III, respectively. The term of office
of the Class I directors will expire at the Annual Meeting and Class I directors
will be elected for a three-year term. The terms of office of the Class II
directors and Class III directors will expire at the annual meetings of
stockholders in 1998 and 1999, respectively, and their successors will be
elected for a three-year term.
Each of the nominees listed below is currently a director of the Company and
each nominee has previously been elected by the stockholders.
It is the intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as directors of the
persons named below as nominees, if authority to do so is not withheld. The
Company's management believes that the nominees will stand for election and will
serve if elected as directors. However, if any of the persons nominated by the
Board of Directors fails to stand for election or will be unable to accept
election, the proxies will be voted for the election of such other person or
persons as the Company's management may propose.
The two candidates receiving the highest number of affirmative votes cast at
the meeting will be elected directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF EACH NAMED NOMINEE.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth, as of September 1, 1997, the names of the
Board of Directors' nominees for election as directors and those directors who
will continue to serve after the Annual Meeting. Also set forth is certain other
information with respect to each such person's age, principal occupation or
employment during the past five years, the periods during which he has served as
a director and positions currently held with the Company. One Class II director
position is vacant.
<TABLE>
<CAPTION>
NOMINEES FOR A DIRECTOR EXPIRATION POSITIONS HELD
THREE-YEAR TERM AGE SINCE OF TERM WITH THE COMPANY
- ----------------------------------------------------------- --- ----------- ------------- -------------------------
<S> <C> <C> <C> <C>
Robert Salsmans............................................ 52 1995 1997 Director
Edward B. Lurier(1)(2)..................................... 66 1987 1997 Director
CONTINUING DIRECTORS
- -----------------------------------------------------------
Richard J. Massey, Ph.D.................................... 51 1990 1998 President, Chief
Operating Officer and
Director
William J. O'Neill(1)(2)................................... 55 1984 1999 Director
Samuel J. Wohlstadter...................................... 55 1982 1999 Chairman, Chief
Executive Officer and
Director
</TABLE>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
Set forth below is certain biographical information regarding the directors
of the Company.
3
<PAGE>
NOMINEES FOR A THREE-YEAR TERM
EDWARD B. LURIER is a General Partner of Gryphon Financial Partners, a
venture capital fund, and Chairman of Gryphon Management Co., Inc., a venture
capital firm, positions he has held since January 1986. Mr. Lurier has been a
Director of the Company since 1987. Mr. Lurier is also a Director of Energy
Biosystems Corp., a fossil fuel, biotechnology research and development company,
and several privately held companies.
ROBERT R. SALSMANS has served as President and Chief Executive Officer of
Organon Teknika B.V., a business unit that is part of the Pharma group of Akzo
Nobel N.V., a holding company with high technology operating units in the
biotechnology, medical, and pharmaceutical industries, in the Netherlands, since
September 1994. From October 1993 through August 1994, Mr. Salsmans served as
Managing Director of Organon Teknika B.V. and from 1990 through September 1993,
he served as Managing Director of Organon International B.V. Mr. Salsmans sits
on the Board pursuant to an agreement between Organon Teknika entered into as
part of the long-term license agreement and stock purchase agreement between the
parties in May 1993. Mr. Salsmans has been a Director of the Company since 1995.
CONTINUING DIRECTORS
CLASS II (TERM EXPIRES 1998)
RICHARD J. MASSEY, Ph.D. is a founder of the Company, has been President and
Chief Operating Officer of the Company since February 1992, and has been a
Director of the Company since 1990. He served as Senior Vice President from 1985
to 1992. From 1981 until he joined IGEN in 1983, Dr. Massey was a faculty member
in the Microbiology and Immunology Department at Rush Medical Center in Chicago.
Prior to that, he was Senior Research Scientist at the National Cancer
Institute, Frederick Cancer Research Center.
CLASS III (TERM EXPIRES 1999)
WILLIAM J. O'NEILL has been a Director of the Company since 1984. He serves
as Executive Vice President and Chief Financial Officer of Polaroid Corporation,
a photographic equipment company, where he has been employed for more than 25
years.
SAMUEL J. WOHLSTADTER is a founder of the Company and has been Chairman of
the Board and Chief Executive Officer since its formation in 1982. Mr.
Wohlstadter has been a venture capitalist for more than 20 years and has
experience in founding, supporting and managing high technology companies,
including Amgen Inc., a biopharmaceutical company, and Applied Biosystems, Inc.,
a medical and biological research products company. Mr. Wohlstadter is also
Chief Executive Officer of Hyperion Catalysis International, an advanced
materials company, which he founded in 1981, of Pro-Neuron, Inc., a drug
discovery company, which he founded in 1985, of Proteinix Corporation, a
development stage company organized to conduct research in intracellular
metabolic processes, which he founded in 1988, and of Pro-Virus, Inc., a drug
discovery company, which commenced operations in 1994.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors acts as nominating committee for selecting nominees
for election as directors. The Company's Bylaws permit stockholders eligible to
vote for the election of directors at the Annual Meeting to make nominations for
directors, but only if such nominations are made pursuant to timely notice in
writing to the Secretary of the Company. The Bylaws also permit stockholders to
propose other business brought before an annual meeting, provided that such
proposals are made pursuant to timely notice to the Secretary of the Company. To
be timely, notice must be received at the principal executive offices of the
Company no later than the date designated for receipt of stockholder proposals
in a prior public disclosure made by the Company. For the 1998 Annual Meeting,
such proposals must be received by
4
<PAGE>
the Company no later than the date specified in this Proxy Statement for
stockholder proposals, which is May 11, 1998.
The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and to discuss the financial
statements; recommends to the Board the independent auditors to be retained; and
receives and considers the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial controls. During fiscal 1997, the Audit Committee consisted of two
non-employee directors: Messrs. Lurier and O'Neill. It met once during the
fiscal year ended March 31, 1997; Messrs. Lurier and O'Neill both attended the
meeting.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants under
the Company's stock option plans and otherwise determines compensation levels
and performs such other functions regarding compensation as the Board may
delegate. During fiscal 1997, the Compensation Committee was composed of three
non-employee directors: Messrs. Lurier, O'Neill and Rehkaemper. It met once
during the fiscal year ended March 31, 1997 and Messrs. Lurier, O'Neill and
Rehkaemper all attended that meeting.
During the fiscal year ended March 31, 1997 the Board of Directors held four
(4) meetings. All directors attended at least 75% of the aggregate number of the
meetings of the Board and of the committees on which they served, held during
the period for which they were a director or committee member, respectively,
except for Messrs Lurier and Salsmans who attended at least 66% and 50%
respectively.
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors is seeking ratification of its appointment of
Deloitte & Touche LLP as the Company's independent auditors for the fiscal year
ending March 31, 1998. Deloitte & Touche LLP is currently the Company's
independent auditors. A representative of Deloitte & Touche LLP is expected to
attend the Annual Meeting and be available to respond to appropriate questions
from stockholders.
Stockholder ratification of the selection of Deloitte & Touche LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Deloitte & Touche
to the stockholders for ratification as a matter of good corporate practice. If
a majority of the stockholders voting at the Annual Meeting should not approve
the selection of Deloitte & Touche LLP, the selection of independent auditors
may be reconsidered by the Board of Directors. Even if the selection is
ratified, the Board, in its discretion, may direct the appointment of a
different independent auditing firm at any time during the year if the Board
determines that such a change would be in the best interests of the Company and
its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF PROPOSAL TWO
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of August 25, 1997 (except as otherwise
footnoted below), certain information regarding the ownership of the Company's
Common Stock of: (i) each current director; (ii) each nominee for director;
(iii) each of the Named Executive Officers; (iv) all executive officers and
directors of the Company as a group; and (v) all those known by the Company to
be beneficial owners of more than five percent (5%) of its outstanding Common
Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
------------------------------------
<S> <C> <C>
NAME NUMBER OF SHARES PERCENT OF TOTAL
- ------------------------------------------------------------------------------- ----------------- -----------------
Samuel J. and Nadine Wohlstadter (2)........................................... 4,217,687 27.02%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Richard J. Massey, Ph.D. (3)................................................... 1,177,000 7.63%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Four Partners (4).............................................................. 1,288,200 8.52%
c/o Thomas J. Tisch
667 Madison Ave.
New York, NY 10021
Edward B. Lurier (5)........................................................... 437,291 2.89%
George V. Migausky (6)......................................................... 154,250 1.01%
Herman H. Spolders, Ph.D. (7).................................................. 52,250 *
Robert Connelly (8)............................................................ 28,500 *
William J. O'Neill (9)......................................................... 38,500 *
Robert R. Salsmans (10)........................................................ 4,000 *
All directors and executive officers as a group (10 persons)(11)............... 6,125,228 37.98%
</TABLE>
- ------------------------
* Less than 1%
(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the notes to this
table and subject to the community property laws where applicable, each of
the stockholders named in this table has sole voting and investment power
with respect to the shares shown as beneficially owned by him. Percentage of
beneficial ownership is based on 15,122,043 shares of Common Stock
outstanding as of August 25, 1997, adjusted as required by rules promulgated
by the Securities and Exchange Commission.
(2) Includes 3,728,937 shares held by Mr. Wohlstadter and his wife and does not
include 128,100 shares held by Mr. Wohlstadter's adult children. Also
includes 488,750 shares issuable upon exercise of options held by Mr.
Wohlstadter that are currently exercisable or exercisable within sixty days.
Does not include 93,750 shares issuable upon exercise of options held by Mr.
Wohlstadter that are subject to certain vesting conditions expiring ratably
through May 2001.
(3) Includes 300,000 shares issuable upon exercise of options held by Mr. Massey
that are currently exercisable or exercisable within sixty days. Does not
include 75,000 shares issuable upon exercise of options held by Dr. Massey
that are subject to certain vesting conditions expiring ratably through May
2001.
(4) Based on information contained in the Schedule 13D filed with the Securities
and Exchange Commission on January 8, 1997.
6
<PAGE>
(5) Includes 7,000 shares issuable upon exercise of options held by Mr. Lurier
that are currently exercisable or exercisable within sixty days. Also
includes 418,091 shares held by Gryphon Ventures I, L.P. ("Gryphon
Ventures"). Mr. Lurier is a general partner of Gryphon Ventures and may be
deemed to own beneficially all of its shares. Does not include 3,000 shares
issuable upon exercise of options held by Mr. Lurier that are subject to
certain vesting conditions expiring ratably through April 1999.
(6) Includes 16,800 shares held by Mr. Migausky's minor children and 101,950
shares issuable upon exercise of options held by Mr. Migausky that are
currently exercisable or exercisable within sixty days. Does not include
45,750 shares issuable upon exercise of options held by Mr. Migausky that
are subject to certain vesting conditions expiring ratably through May 2001.
(7) Includes 52,250 shares issuable upon exercise of options held by Dr.
Spolders that are currently exercisable or exercisable within sixty days.
Does not include 20,250 shares issuable upon exercise of options held by Dr.
Spolders that are subject to certain vesting conditions expiring ratably
through May 2001.
(8) Includes 28,500 shares issuable upon exercise of options held by Mr.
Connelly that are currently exercisable or exercisable within sixty days.
Does not include 31,500 shares issuable upon exercise of options held by Mr.
Connelly that are subject to certain vesting conditions expiring ratably
through May 2001.
(9) Includes 7,000 shares issuable upon exercise of options held by Mr. O'Neill
that are currently exercisable or exercisable within sixty days. Does not
include 3,000 shares issuable upon exercise of options held by Dr. O'Neill
that are subject to certain vesting conditions expiring ratably through
April 1999.
(10) Includes 4,000 shares issuable upon exercise of options held by Mr.
Salsmans that are currently exercisable or exercisable within sixty days.
Does not include 6,000 shares issuable upon exercise of options held by Mr.
Salsmans that are subject to certain vesting conditions expiring ratably
through August 2000. Also excludes 346,135 shares held of record by Organon
Teknika B.V. of which Mr. Salsmans disclaims beneficial ownership.
(11) Includes 1,005,200 shares issuable upon exercise of options that are
currently exercisable or exercisable within sixty days. See also Notes (2),
(3) and (5) through (10).
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
ten percent stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 1997, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with except that Mr. Richard O.
Williams, a former officer of the Company, did not timely file a Form 4
(statement of Changes in Beneficial Ownership) to report his exercise of stock
options and his wife's disposition of shares in 1996.
7
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Effective April 25, 1994, each non-employee director of the Company receives
a per meeting attendance fee of $1,000. In the fiscal year ended March 31, 1997,
the total compensation paid to non-employee directors (all directors except Mr.
Wohlstadter and Dr. Massey) was $11,000. In accordance with Company policy, all
members of the Board of Directors are eligible for reimbursement for their
expenses incurred in connection with attendance at Board meetings.
On April 25, 1994, each non-employee director of the Company then sitting on
the Board of Directors was granted an option to purchase 10,000 shares of the
Company's Common Stock under the 1994 Non-Employee Directors' Stock Option Plan
at a purchase price of $8.75 per share (the closing sales price reported in the
NASDAQ National Market System on the day prior to the date of grant). Messrs.
Salsmans and Rehkaemper were each granted an option to purchase 10,000 shares of
the Company's Common Stock under the 1994 Non-Employee Directors' Stock Option
Plan at a purchase price of $6.25 when they joined the Board effective on August
25, 1995 (the closing price reported in the NASDAQ National Market System on the
day prior to the date of grant). The options vest over a period of five years
with one-fifth of the option becoming exercisable one year from the date of
grant and an additional one-twentieth becoming exercisable every three months
thereafter. Such vesting is conditioned upon continued service as a director of
the Company.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending March 31, 1997, 1996
and 1995, compensation awarded or paid to, or earned by the Company's Chief
Executive Officer and its other four most highly compensated executive officers
at March 31, 1997 ("Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------- -------------------- OTHER ANNUAL
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (# SHARES) ($)
- ------------------------------------------------- --------- ------------- --------- -------------------- -------------
<S> <C> <C> <C> <C> <C>
Samuel J. Wohlstadter............................ 1997 $ 260,000 $ -- 100,000 --
Chairman and Chief Executive Officer 1996 $ 237,000 $ 50,000 -- --
1995 $ 227,000 $ 40,000 62,500 $ 5,400(1)
Richard J. Massey, Ph.D.......................... 1997 $ 220,000 $ -- 80,000 $ 8,750(1)
President and Chief Operating Officer 1996 $ 200,000 $ 40,000 -- $ 8,750(1)
1995 $ 191,000 $ 35,000 50,000 $ 8,750(1)
George V. Migausky............................... 1997 $ 165,000 $ -- 50,000 --
Vice President and Chief Financial Officer 1996 $ 150,000 $ 30,000 -- --
1995 $ 142,000 $ 25,000 27,500 --
Herman H. Spolders, Ph.D......................... 1997 $ 187,500 $ -- 20,000 --
Vice President, Business Development 1996 $ 172,250 $ 25,000 -- --
and Planning 1995 $ 150,000 -- -- --
Robert Connelly.................................. 1997 $ 140,000 $ -- 30,000 --
Vice President, Marketing and Sales 1996 $ 127,000 $ 20,000 -- --
1995 $ 120,000 $ 12,000 30,000 --
</TABLE>
- ------------------------
(1) Consists of annual lease value of Company-provided automobile.
9
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Company has granted options to its executive officers under its 1985
Stock Option Plan (the "1985 Plan") and its 1994 Stock Option Plan (the "1994
Plan") (collectively, the "Plans"). The 1994 Plan was adopted by the Board of
Directors in July 1994 to replace the 1985 Plan and was approved by the
stockholders in September 1994. 280,000 options were granted under the Plans to
the Named Executive Officers during the fiscal year ended March 31, 1997. The
Company is empowered to and from time to time does repurchase shares of Common
Stock in the open market for the purpose of making shares available for issuance
upon the exercise of options.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows for the fiscal year ended March 31, 1997, certain
information regarding options granted to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR AND POTENTIAL
REALIZABLE VALUE AT ASSUMED RATE OF APPRECIATION
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (2)
----------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDER-LYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------------------------- -------------- --------------- ------------- ----------- ---------- ----------
Samuel J. Wohlstadter...................... 100,000 32.26% 5.00 5/02/06 $ 314,500 $ 797,000
Richard J. Massey, Ph.D.................... 80,000 25.81 5.00 5/02/06 251,500 637,500
George V. Migausky......................... 50,000 16.13 5.00 5/02/06 157,000 398,500
Herman H. Spolders, Ph.D................... 20,000 6.45 5.00 5/02/06 63,000 159,000
Robert Connelly............................ 30,000 9.68 5.00 5/02/06 94,000 239,000
</TABLE>
- ------------------------
(1) These options were granted on May 3, 1996 under the 1994 Plan. Unless
otherwise noted, the options granted each person vest over a period of five
years with one-fifth of such person's options becoming exercisable one year
from the date of grant and an additional one-twentieth of such options
becoming exercisable every three months thereafter. The options expire ten
years after the date of their grant. Under the 1994 Plan, the Compensation
Committee or the Board of Directors may accelerate the time of vesting or
time of exercise of any option granted. The Compensation Committee or the
Board of Directors also has the authority, at any time and from time to
time, to effect the downward repricing of any outstanding options and/or
with the consent of the affected holders of options, the cancellation of any
outstanding options and the grant of new options covering the same or
different numbers of shares of Common Stock with an exercise price as of the
new grant date of not less than: (i) 85% of the fair market value (as
defined in the 1994 Plan) of the stock for options not intended to qualify
as incentive stock options under Section 422 of the Internal Revenue Code of
1986, as amended and the regulations promulgated thereunder, (ii) 100% of
the fair market value for options intended to qualify as incentive stock
options, and (iii) 110% of the fair market value for options held by a
person holding more than 10% of the total combined voting power of all
classes of stock of the Company or any affiliates. Subject to adjustments
upon changes in stock, no person is eligible to be granted options covering
more than 200,000 shares of Common Stock in any 12 month period.
(2) These amounts represent hypothetical gains that could be achieved for
options if they are exercised at the end of the option term. These gains are
based on assumed rates of stock price appreciation of 5%
10
<PAGE>
and 10% compounded annually from the date the options are granted to the end
of the option term. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Company's Common Stock and the
optionee's continued employment through the vesting period. There can be no
assurance that the amounts reflected in this table will be achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND STOCK OPTION VALUES AT
MARCH 31, 1997
The following table sets forth information related to options exercised by
the Named Executive Officers during the fiscal year ended March 31, 1997 and the
number and value of options held at year end.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT IN-THE-MONEY OPTIONS AT
ON EXERCISE REALIZED MARCH 31, 1997 (#) MARCH 31, 1997 ($)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE(2)
- ----------------------------------------- --------------- ----------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
Samuel J. Wohlstadter.................... -0- -0- 469,375/113,125 $ 288,762/$21,250
Richard J. Massey, Ph.D. ................ -0- -0- 284,500/ 90,500 183,257/ 17,000
George V. Migausky....................... -0- -0- 92,825/ 54,875 92,313/ 10,625
Herman H. Spolders, Ph.D. ............... -0- -0- 45,000/ 27,500 29,251/ 11,375
Robert Connelly.......................... -0- -0- 21,000/ 39,000 1,125/ 6,375
</TABLE>
- ------------------------
(1) Includes both "in-the-money" and "out-of-the-money" options. "In-the-money"
options are options with exercise prices below the market price of the
Company's Common Stock at March 31, 1997.
(2) Based on the closing price of the Company's Common Stock on March 31, 1997
($5.25) minus the exercise price.
CERTAIN TRANSACTIONS
The Company's Bylaws provide that the Company will indemnify its directors
and its officers, to the fullest extent permitted by Delaware law. The Company
is also empowered under its Bylaws to enter into indemnification contracts with
its directors and officers and to purchase insurance on behalf of any person
whom it is required or permitted to indemnify. Pursuant to these provisions, the
Company has entered into indemnity agreements with each of its directors and
executive officers and has obtained director and officer liability insurance in
the amount of $5,000,000.
In addition, the Company's Certificate of Incorporation provides that the
Company's directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty of care as a director, except liability for (i) any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which a director derived an
improper personal benefit. If the Delaware General Corporation Law is amended
after approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting personal liability of directors, then the
liability of a director shall be eliminated or limited to the fullest extent
permitted by the Delaware law.
The Company has entered into a long-term license agreement and stock
purchase agreement with Organon Teknika in May 1993. Robert Salsmans, the
current President and Chief Executive Officer of Organon Teknika, is one of the
Company's directors. During fiscal 1997, the Company recorded product sales of
approximately $1.4 million with respect to Organon Teknika.
During fiscal year 1995 the Company entered into agreements to develop and
commercialize biomedical products utilizing advanced materials and a supply
agreement with Hyperion Catalysis International ("Hyperion"). Messrs. Lurier,
Massey and Wohlstadter are affiliated with Hyperion. Also during fiscal 1996,
the Company entered into a research and supply agreement under which the Company
prepaid $500,000 to Hyperion to ensure itself of sufficient supplies of graphite
fibrils.
11
<PAGE>
Pro-Virus, Inc. ("Pro-Virus"), Proteinix Corporation ("Proteinix"), and
Pro-Neuron, Inc. ("Pro-Neuron") have a shared facilities arrangement and have
shared certain equipment and administrative services with the Company since
1994, 1992 and 1986, respectively. Pro-Virus, Proteinix and Pro-Neuron reimburse
the Company for their relative share of the services received. In June 1995, the
Company entered into a research and development agreement with Proteinix
pursuant to which the Company has paid the contractual amount of $950,000 under
the agreement. Mr. Wohlstadter is the principal stockholder and Chief Executive
Officer of Pro-Virus, Proteinix and Pro-Neuron.
During November 1995, the Company formed a Joint Venture for the development
and commercialization of advanced diagnostic products utilizing a proprietary
combination of multi-array technology together with the Company's ORIGEN
technology. Products based on these technologies would be used for high
throughput, multiparameter analysis for DNA sequencing. clinical chemistry and
immunodiagnostics. The joint venture is named Meso Scale Diagnostics, LLC
("MSD"), and was formed together with Meso Scale Technologies, LLC ("MST"), a
company based in Maryland. The Company has agreed to provide initial capital
contributions to MSD of $5 million over time, in exchange for its ownership
interest and to fund the organizational and certain ongoing (non-research)
operating expenses of MSD. The Company will also participate in a collaborative
research program. MST is a technology-based company established and operated by
Jacob Wohlstadter, the son of Samuel J. Wohlstadter, the Chief Executive Officer
of the Company. Nadine Wohlstadter, a member of MST, is the spouse of Samuel J.
Wohlstadter. Over the forty month period beginning on June 1, 1996, Jacob
Wohlstadter will receive an aggregate of approximately $420,000 from his
employment at MSD and will receive $115,000 for each year he is employed at MSD
thereafter. The Company has agreed to indemnify Jacob Wohlstadter against
liability from the joint venture.
The Company believes that all of the transactions set forth above were made
on terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. All future transactions, including loans, between
the Company and its officers, directors and principal stockholders and their
affiliates will be approved by a majority of the Board of Directors, including a
majority of the independent and disinterested outside directors on the Board of
Directors, and will be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties.
Furthermore, the Company adopted in April 1988 a policy on conflicts of
interest requiring the Company's directors, officers and Scientific Advisory
Board members to provide detailed disclosure of any outside activities or
interest that might potentially conflict or appear to conflict with the
Company's best interests. The Company also adopted a policy on related party
transactions in January 1990 requiring review and approval by the Board of
Directors of transactions involving, among others, the Company's management,
principal stockholders or parties controlled by them when the value of the
transaction equals or exceeds $50,000 or its duration exceeds three months.
12
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(1)
During the last fiscal year, the Compensation Committee of the Board of
Directors (the "Committee") was composed of Messrs. Lurier, O'Neill and
Rehkaemper, none of whom has been an officer or employee of the Company. The
Committee is responsible for establishing the Company's compensation programs
for executive officers.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward executive officers and other key employees who contribute to the
long-term success of the Company and to establish an appropriate relationship
between executive compensation and the creation of long-term stockholder value.
To meet these goals, the Committee has adopted a mix among the compensation
elements of salary, bonus and stock options.
BASE SALARY. The Committee annually reviews each executive officer's base
salary. When reviewing base salaries, the Committee considers individual
performance, levels of responsibility, prior experience, breadth of knowledge
and competitive pay practices, with emphasis on the latter. In general, the
salaries and stock option awards of executive officers are not determined by the
Company's achievement of specific corporate performance criteria. Instead the
Committee determines the salaries for executive officers based upon a review of
salary surveys of other emerging health care companies performed for the
Committee. To provide the Compensation Committee with more information for
making compensation comparisons, IGEN utilizes published salary surveys for the
life science industry and surveys a group of health care companies that have
recently made an initial public offering or are publicly traded. This group
includes diagnostic, biotechnology and pharmaceutical companies with public
capitalizations similar to that of the Company. Based upon such surveys, the
executive officers' salaries are set in the mid-range as compared to other
comparable health care companies.
BONUS. The bonus program is a variable pay program for executive officers
of the Company to earn additional annual compensation. The bonus award earned
depends on the extent to which Company and individual performance objectives are
achieved. The Company objectives consist of operating, strategic and financial
goals that are considered to be critical to the Company's fundamental long-term
goal of building stockholder value. The Committee awarded no bonuses during
fiscal 1997.
OPTION PLANS
The Option Plans offered by the Company have been established to provide all
employees of the Company with an opportunity to share, along with stockholders
of the Company, in the long-term performance of the Company.
Periodic grants of stock options are generally made to all eligible
employees, with additional grants being made to certain employees upon
commencement of employment and occasionally following a significant change in
job responsibilities, scope or title. Stock options granted generally have a
five-year vesting schedule and expire ten years from the date of grant. The
exercise price of options granted under the stock option plans is usually 100%
of fair market value of the underlying stock on the date of grant.
- ------------------------
(1) The material in this report is not "soliciting material," is not deemed
filed with the SEC, and is not to be incorporated by reference into any
filing of the Company under the 1933 Act or 1934 Act, whether made before or
after the date hereof and irrespective of any general incorporation language
contained in any such filing.
13
<PAGE>
Guidelines for the number of stock options for each participant in the
periodic grant program generally are determined by a formula established by the
Compensation Committee whereby several factors are applied to the salary and
performance level of each participant and then related to the approximate market
price of the stock at the time of grant. In awarding stock options, the
Committee considers individual performance, overall contribution to the Company,
officer retention, the number of unvested stock options and the total number of
stock options to be awarded. In early fiscal year 1997, after considering
criteria relating to awarding stock options, the Committee determined that
grants be made to certain officers of the Company certain of which grants are
reflected in the table on page 10. Officer grants reflect an amount equal to 95%
of all grants in fiscal 1997.
Section 162(m) of the Internal Revenue Code (the "Code") limits the Company
to a deduction for federal income tax purposes of no more than $1 million of
compensation paid to certain Named Executive Officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code. The Compensation Committee has
determined that stock options granted under the Company's 1994 Stock Option Plan
with an exercise price at least equal to the fair market value of the Company's
common stock on the date of grant shall be treated as "performance-based
compensation" and any compensation recognized by a Named Executive Officer as a
result of the grant of such a stock option is deductible by the Company.
CEO COMPENSATION
The Committee uses the same procedures described above in setting the annual
salary, bonus and stock option awards for the CEO. The CEO's salary is
determined based on comparisons with other recently public health care companies
as described above. In awarding stock options, the Committee considered the
CEO's performance, overall contribution to the Company, retention, the number of
unvested options and the total number of options to be granted. A stock option
grant was made for 100,000 shares at $5.00 per share to the CEO in early fiscal
1997. In awarding bonuses, the Committee considers the Company's achievement of
the performance goals outlined above and the Committee's subjective evaluation
of the CEO's performance. The Committee did not award the CEO any bonus in
fiscal year 1997. As described above, in determining where the CEO's total
compensation is set within the ranges and in light of the considerations
described above, the Committee by necessity makes certain subjective
evaluations. Compared to other health care companies surveyed by the Company,
the CEO's salary is in the mid range and his bonus and stock options are in the
low range. The Committee recognizes, however, that the CEO's overall equity
ownership of the Company accumulated over a 13-year period is in the high range.
CONCLUSION
Through the plans described above, a significant portion of the Company's
compensation program and the CEO's and the other executive officers'
compensation are contingent on Company performance, and realization of benefits
by the CEO and the other executive officers is closely linked to increases in
long-term stockholder value. The Company remains committed to this philosophy of
pay for performance, recognizing that the competitive market for talented
executives and the volatility of the Company's business may result in highly
variable compensation.
COMPENSATION COMMITTEE
Edward B. Lurier
William J. O'Neill
14
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON (1)
The following chart shows the value of an investment of $100 in February
1994 in cash of (i) the Company's Common Stock, (ii) the Wilshire 5000 Index and
(iii) the H&Q Health Care Sector Index. All values assume reinvestment of the
full amount of all dividends and are calculated as of March 31, 1997:
COMPARISON OF TOTAL CUMULATIVE RETURN ON INVESTMENT
COMPARISON OF 38 MONTH CUMULATIVE TOTAL RETURN(2)
AMONG IGEN INTERNATIONAL, INC., THE WILSHIRE 5000 INDEX
AND THE HAMBRECHT & QUIST HEALTHCARE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
IGEN INTERNATIONAL, INC. WILSHIRE 5000 HAMBRECHT & QUIST HEALTHCARE
<S> <C> <C> <C>
2/03/94 $100 $100 $100
3/94 84 93 82
3/95 42 106 105
3/96 44 140 162
3/97 44 161 157
</TABLE>
- ------------------------
(1) The material in this report is not "soliciting material," is not deemed
filed with the SEC, and is not to be incorporated by reference into any
filing of the company under the 1933 Act or 1934 Act, whether made before or
after the date hereof and irrespective of any general incorporation language
contained in any such filing.
(2) $100 invested on 02/03/94 in Stock or on 1/31/94 in Index--including
reinvestment of dividends. Fiscal year ending March 31.
15
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any other matters to present for action by the Stockholders at the Annual
Meeting. If, however, any other matters not now known are properly brought
before the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
STOCKHOLDER PROPOSALS
Any proposals intended to be presented by any stockholder for action at the
Company's 1998 Annual Meeting of Stockholders must be received by the Secretary
of the Company at 16020 Industrial Drive, Gaithersburg, Maryland 20877 not later
than May 11, 1998 to be included in the proxy statement and proxy relating to
the 1998 Annual Meeting.
By Order of the Board of Directors
Andrei M. Manoliu
SECRETARY
September 8, 1997
16
<PAGE>
IGEN INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 7, 1997
The undersigned hereby appoints Samuel J. Wohlstadter and George
V. Migausky, and each of them, as attorneys and proxies of the
undersigned, with full power of substitution, to vote all of the
shares of stock of IGEN International, Inc. which the undersigned
may be entitled to vote at the Annual Meeting of Stockholders of
P IGEN International, Inc. to be held at the Gaithersburg Hilton in
R Gaithersburg Maryland on Tuesday, October 7, 1997 at 10:00 a.m.
O local time, and at any and all postponements, continuations and
X adjournments thereof, with all powers that the undersigned would
Y possess if personally present, upon and in respect of the following
matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may
properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR BOTH NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE
THEREWITH.
-----------
SEE REVERSE
SIDE
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Please mark
/X/ votes as in
this example.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW AND FOR PROPOSAL 2.
1. To elect Class 1 directors for a three year term 2. To ratify the selection FOR AGAINST ABSTAIN
and until their successors are elected. of Deloitte & Touche, LLP
as independent auditors / / / / / /
Nominees: Edward B. Lurier, Robert R. Salsmans of the Company for its
fiscal year ending
March 31, 1998.
FOR WITHHELD
/ / / / MARK HERE FOR ADDRESS CHANGE AND / /
NOTE AT LEFT
------------------------------------------------ Please vote, date and promptly return this proxy in the
To withhold authority to vote for one of the enclosed return envelope which is postage prepaid if mailed
nominees, write such nominee's name in the blank in the United States.
space above.
Please sign exactly as your name appears hereon. If the stock
is registered in the names of two or more persons, each should
sign. Executors, administrators, trustees, guardians and
attorneys-in-fact should add their titles. If signer is a
corporation, please give full corporate name and have a duly
authorized officer sign, stating title. If signer is a
partnership, please sign in partnership name by authorized
person.
Signature: __________________________________ Date: _____________ Signature:__________________________________ Date: ___________
</TABLE>
