<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 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 SEPTEMBER 15, 1999
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 September 15, 1999 at 10:00 a.m. local time at The Four Seasons
Hotel, 2800 Pennsylvania Avenue, N.W., Washington, D.C. 20007 for the following
purposes:
1. To elect two directors 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, 2000 (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 July 28, 1999, 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. A complete list of stockholders entitled to vote at the
Annual Meeting will be open for examination by any stockholder, for any purpose
germane to the meeting, during ordinary business hours at 16020 Industrial
Drive, Gaithersburg, Maryland, 20877 from September 3, 1999 through September
14, 1999.
By Order of the Board of Directors
George V. Migausky
SECRETARY
Gaithersburg, Maryland
July 29, 1999
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 SEPTEMBER 15, 1999
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" or "Board") 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 September 15, 1999, 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 Four Seasons Hotel, 2800 Pennsylvania
Avenue, N.W., Washington, D.C. 20007. The Company intends to mail this Proxy
Statement, accompanying proxy card and the Company's Annual Report for the
fiscal year ending March 31, 1999 on or about August 5, 1999, 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. July 28, 1999, 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
15,373,148. The presence, in person or by proxy, of at least a majority of the
shares of Common Stock outstanding on the Record Date (7,686,574 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.
1
<PAGE>
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 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 III directors will expire at the Annual Meeting and Class III
directors will be elected for a three-year term. The terms of office of the
Class I directors and Class II directors will expire at the annual meetings of
stockholders in 2000 and 2001, respectively, and their successors will be
elected for a three-year term. One Class II director position is vacant. The
Bylaws authorize the Board of Directors to appoint a director to that position,
and the Board of Directors is currently evaluating whether to fill this vacancy.
The nominees listed below are currently directors of the Company and have
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 director of the
persons named below as nominees, if authority to do so is not withheld. The
Company's management believes that each nominee will stand for election and will
serve if elected as director. However, if a person 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. Proxies may not be voted
for a greater number of persons than the number of nominees named.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF THE NAMED NOMINEES
3
<PAGE>
INFORMATION AS TO THE NOMINEES AND CONTINUING DIRECTORS
The following table sets forth, as of July 28, 1999, the names of the Board
of Directors' nominees for election as director 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.
<TABLE>
<CAPTION>
DIRECTOR EXPIRATION
NOMINEES FOR A THREE-YEAR TERM AGE SINCE OF TERM POSITIONS HELD WITH THE COMPANY
- ------------------------------------------ --- ----------- ------------- ------------------------------------------
<S> <C> <C> <C> <C>
Samuel J. Wohlstadter..................... 57 1982 1999 Chairman, Chief Executive Officer and
Director
William J. O'Neill(1)(2).................. 57 1984 1999 Director
CONTINUING DIRECTORS
Robert Salsmans........................... 54 1995 2000 Director
Edward B. Lurier(1)(2).................... 68 1987 2000 Director
Richard J. Massey, Ph.D................... 53 1990 2001 President, Chief Operating 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.
NOMINEES FOR A THREE-YEAR TERM
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 25 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.
WILLIAM J. O'NEILL has been a Director of the Company since 1984. He serves
as Executive Vice President and President of Corporate Development and
previously served as Chief Financial Officer of Polaroid Corporation, a
photographic equipment company, where he had been employed for more than 25
years.
CONTINUING DIRECTORS
CLASS I (TERM EXPIRES 2000)
EDWARD B. LURIER founded Lurier & Company, Inc. which assists corporations
with mergers and acquisitions, divestitures, corporate finance and business
evaluations. Until 1998, Mr. Lurier was a General Partner of Gryphon Financial
Partners, a venture capital fund, and Chairman of Gryphon Management Co., Inc.,
a venture capital firm. 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.
4
<PAGE>
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.
CLASS II (TERM EXPIRES 2001)
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.
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 2000 Annual Meeting,
such proposals must be received by the Company no later than the date specified
in this Proxy Statement for stockholder proposals, which is April 9, 2000.
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 1999, the Audit Committee consisted of two
non-employee directors: Messrs. Lurier and O'Neill. It met once during the
fiscal year ended March 31, 1999; 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 1999, the Compensation Committee was composed of two
non-employee directors: Messrs. Lurier and O'Neill. The Compensation Committee
did not meet during the fiscal year ended March 31, 1999.
During the fiscal year ended March 31, 1999 the Board of Directors held four
meetings. All directors, except Mr. Salsmans, attended each meeting of the Board
and of the committees on which they served. Mr. Salsmans did not attend 75% of
the meetings of the Board.
5
<PAGE>
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, 2000. 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
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of July 28, 1999 (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 officers appearing in the table at page 10 (the "Named
Executive Officers"); and (iv) all executive officers and directors of the
Company as a group. As of July 28, 1999, none of the individuals identified in
the foregoing sentence owned any of the Company's Series B Convertible Preferred
Stock. The table also sets forth, as of July 28, 1999 (except as otherwise
footnoted below), certain information regarding the ownership of the Company's
Common Stock by all those known by the Company to be beneficial owners of more
than five percent (5%) of its outstanding Common Stock.
<TABLE>
<CAPTION>
NUMBER PERCENT
TITLE OF CLASS(1) NAME OF SHARES OF TOTAL
- ----------------- ------------------------------------------------------------------------ ---------- -----------
<S> <C> <C> <C>
Common Stock Samuel J. and Nadine Wohlstadter(2)..................................... 4,306,437 27.00%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Common Stock White Rock Capital Management, L.P.(3).................................. 2,338,849 14.60%
3131 Turtle Creek Boulevard
Dallas, TX 75219
Common Stock Richard J. Massey, Ph.D.(4)............................................. 1,248,000 7.93%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Common Stock George V. Migausky(5)................................................... 187,500 1.21%
Common Stock Robert Connelly(6)...................................................... 55,500 *
Common Stock William J. O'Neill(7)................................................... 39,500 *
Common Stock Edward B. Lurier(8)..................................................... 14,700 *
Common Stock Robert R. Salsmans(9)................................................... 8,000 *
Common Stock All directors and executive officers as a group(10)..................... 5,859,637 35.47%
(7 persons)
</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 of Common Stock is based on 15,373,148 shares
outstanding as of July 28, 1999, 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 577,500 shares issuable upon exercise of options held by Mr.
Wohlstadter that are currently exercisable or exercisable within sixty
days. Does not include 105,000 shares issuable upon exercise of options
held by
7
<PAGE>
Mr. Wohlstadter that are subject to certain vesting conditions expiring
ratably through March 2003.
(3) Based on information contained in the Schedule 13G/A filed with the
Securities and Exchange Commission on February 9, 1999. Also included in
the group covered by this filing are (i) Soros Fund Management LLC with
beneficial ownership of 849,583 shares, (ii) George Soros with beneficial
ownership of 849,583 shares, (iii) Stanley F. Druckenmiller with beneficial
ownership of 849,583 shares, (iv) White Rock Capital Partners, L.P. with
beneficial ownership of 290,133 shares, (v) White Rock Capital, Inc. with
beneficial ownership of 2,338,849 shares, (vi) Thomas U. Barton with
beneficial ownership of 2,345,549 shares, and (vii) Joseph U. Barton with
beneficial ownership of 2,343,849 shares. The filing discloses (a) that
Soros Fund Management LLC and Messrs. Soros and Druckenmiller have no
voting or dispositive power over the shares beneficially owned by them; (b)
that White Rock Capital Partners, L.P., White Rock Capital Management,
L.P., Thomas U. Barton and Joseph U. Barton each have sole voting and
dispositive power over 290,133 shares, 25,000 shares, 6,700 shares and
5,000 shares, respectively; (c) that White Rock Capital, Inc., Thomas U.
Barton and Joseph U. Barton share voting and dispositive power over
2,338,849 shares; and (d) that White Rock Capital Management, L.P. shares
voting and dispositive power over 2,313,849 shares.
(4) Includes 371,000 shares issuable upon exercise of options held by Dr.
Massey that are currently exercisable or exercisable within sixty days.
Does not include 84,000 shares issuable upon exercise of options held by
Dr. Massey that are subject to certain vesting conditions expiring ratably
through March 2003.
(5) Includes 20,000 shares held by Mr. Migausky's minor children and does not
include 10,000 shares held by Mr. Migausky's adult child. Also includes
139,500 shares issuable upon exercise of options held by Mr. Migausky that
are currently exercisable or exercisable within sixty days. Does not
include 52,500 shares issuable upon exercise of options held by Mr.
Migausky that are subject to certain vesting conditions expiring ratably
through March 2003.
(6) Includes 37,500 shares issuable upon exercise of options held by Mr.
Connelly that are currently exercisable or exercisable within sixty days.
Mr. Connelly's employment terminated June 30, 1999.
(7) Includes 10,000 shares issuable upon exercise of options held by Mr.
O'Neill that are currently exercisable or exercisable within sixty days.
(8) Includes 2,500 shares issuable upon exercise of options held by Mr. Lurier
that are currently exercisable or exercisable within sixty days.
(9) Includes 8,000 shares issuable upon exercise of options held by Mr.
Salsmans that are currently exercisable or exercisable within sixty days.
Does not include 2,000 shares issuable upon exercise of options held by Mr.
Salsmans that are subject to certain vesting conditions expiring ratably
through August 2000. Also excludes 278,635 shares held of record by Organon
Teknika B.V. of which Mr. Salsmans disclaims beneficial ownership.
(10) Includes 1,146,000 shares issuable upon exercise of options that are
currently exercisable or exercisable within sixty days. See also Notes 2
and 4 through 9.
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 10% 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
10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
8
<PAGE>
Based on the Company's records and other information, the Company believes
that its directors and officers reported all transactions in the Company's
common stock and options on a timely basis during the fiscal year ended March
31, 1999, except that each of Messrs. Wohlstadter, Massey, Migausky, Connelly
and Richard Pytelewsky, the Company's former Vice President for Operations did
not timely file his annual statement of changes in beneficial ownership on Form
5, which reported the March 1998 option grants.
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, 1999,
the total compensation paid to non-employee directors (all directors except Mr.
Wohlstadter and Dr. Massey) was $8,000. 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). Mr.
Salsmans 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 $6.25 when he joined the Board effective on August 25, 1995 (the
closing price reported in the Nasdaq National Market System on the day prior to
the date of grant). The options vest over a period of five years with one-fifth
of the option becoming exercisable one year from the date of grant and an
additional one-twentieth becoming exercisable every three months thereafter.
Such vesting is conditioned upon continued service as a director of the Company.
9
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending March 31, 1999, 1998
and 1997, compensation awarded or paid to, or earned by the Named Executive
Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------ OTHER ANNUAL ------------
SALARY BONUS COMPENSATION OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (# SHARES)
- -------------------------------------------------- ---- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Samuel J. Wohlstadter............................. 1999 $370,000 $ -- $ -- $ --
Chairman and Chief Executive Officer 1998 $287,500 $100,000 $224,000(1) 100,000
1997 $260,000 $ -- $ -- 100,000
Richard J. Massey, Ph.D........................... 1999 $309,750 $ -- $ 15,188(2) $ --
President and Chief Operating Officer 1998 $239,500 $ 75,000 $ 66,928(3) 80,000
1997 $220,000 $ -- $ 8,750(4) 80,000
George V. Migausky................................ 1999 $209,000 $ -- $ 4,500(5) --
Vice President and Chief Financial Officer 1998 $176,000 $ 50,000 $ 7,135(6) 50,000
1997 $165,000 $ -- $ -- 50,000
Robert Connelly(7)................................ 1999 $160,000 $ -- $ 4,200(5) --
Vice President, Marketing and Sales 1998 $145,000 $ 25,000 $ -- 30,000
1997 $140,000 $ -- $ -- 30,000
</TABLE>
- ------------------------
(1) Consists of note forgiveness for subscribed stock.
(2) Consists of annual lease value of Company-provided automobile of $11,750 and
401(K) match amount of $3,438.
(3) Consists of note forgiveness for subscribed stock of $54,000, annual lease
value of Company-provided automobile of $11,750 and 401(K) match amount of
$1,178.
(4) Consists of annual lease value of Company-provided automobile.
(5) Consists of 401(K) match amount.
(6) Consists of note forgiveness for subscribed stock of $2,400 and 401(K) match
amount of $4,735.
(7) Mr. Connelly's employment terminated on June 30, 1999.
10
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Company has granted options to its executive officers under its 1985
Stock Option Plan (the "1985 Plan") and its 1994 Plan ("1994 Plan"). The 1994
Plan was adopted by the Board of Directors in July 1994 to replace the 1985 Plan
and was approved by the stockholders in September 1994. No options for shares of
Common Stock were granted under the Plans to any Company employee during the
fiscal year ending March 31, 1999. The Company is empowered to and from time to
time does repurchase shares of Common Stock in the open market for the purpose
of making shares available for issuance upon the exercise of options.
OPTION GRANTS IN LAST FISCAL YEAR
No options for shares of Common Stock were granted to the Named Executive
Officers during the fiscal year ended March 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND STOCK OPTION VALUES AT
MARCH 31, 1999
The following table sets forth information related to options exercised by
the Named Executive Officers during the fiscal year ending March 31, 1999 and
the number and value of options held at year end.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE MARCH 31, 1999 MARCH 31, 1999
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($)(1) (2) (3)
- ------------------------------------- ------------- --------- ----------------------- -------------------------
<S> <C> <C> <C> <C>
Samuel J. Wohlstadter................ -- -- 554,375/128,125 $ 10,177,981/$1,172,656
Richard J. Massey, Ph.D.............. -- -- 352,500/102,500 $ 6,388,382/$938,125
George V. Migausky................... 1,000 $ 29,304 128,125/63,875 $ 2,227,801/$583,469
Robert Connelly...................... -- -- 40,500/37,500 $ 568,875/$337,500
</TABLE>
- ------------------------
(1) Based on the Fair Market Value of the Company's Common Stock on the date of
exercise (the closing price) minus the exercise price and multiplied by the
number of shares acquired.
(2) 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 on March 31, 1999.
(3) Based on the closing price of the Company's Common Stock on March 31, 1999
of $24.00 minus the exercise price.
11
<PAGE>
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 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. Massey and
Wohlstadter are directors of Hyperion. In addition, Mr. Wohlstadter is a
shareholder of Hyperion and assuming conversion of all convertible debentures
owned by him, would own in excess of 50% of the outstanding common stock. Mr.
Lurier was a previous director of Hyperion until his resignation in 1997.
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. 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. During the fiscal year ended March 31, 1999, Jacob Wohlstadter
received approximately $186,000 from his employment at MSD. For the year ending
March 31, 2000, he will receive $178,640. Thereafter, the salary of Jacob
Wohlstadter will be as mutually agreed by Jacob Wohlstadter and MSD. The Company
has agreed to indemnify Jacob Wohlstadter against liability from the joint
venture.
12
<PAGE>
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.
13
<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 and O'Neill, neither
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 periodically 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 relevant group of health care companies that
are publicly traded. This group includes diagnostic, biotechnology and medical
technology companies with size and public capitalizations similar to that of the
Company. Based upon such surveys, the executive officers' salaries are set in a
range similar 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's objectives consist of operating, strategic and financial
goals that are considered to be critical to the Company's fundamental long-term
goal of building shareholder value. For fiscal 1999, these objectives were: (i)
effective implementation of the planned growth of the Company; (ii) continued
advances toward project goals in research and development programs; (iii)
expansion of technological capabilities; (iv) progress toward commercial goals
in development programs; (v) progress in connection with attainment of
collaborative relationships; and (vi) progress in certain financial and
administrative activities. The Committee did not meet to review compensation
during fiscal 1999 and, thus, did not award any bonuses during fiscal 1999.
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.
- ----------------------------
(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.
14
<PAGE>
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.
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. The Committee did not meet to review compensation
during fiscal 1999 and, thus, no grants were made to Named Executive Officers in
fiscal 1999.
Section 162(m) of 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 believes 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 should 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 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. 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. In fiscal 1999, the Committee did not meet and, therefore, did not
award the CEO a bonus or grant him stock options. 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 15-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
15
<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 Russell 2000 Index,
(iii) the Wilshire 5000 Index and (iv) the H&Q Health Care Sector Index.
Beginning with next year's Proxy Statement, the Company intends to replace the
Wilshire 5000 Index with the Russell 2000 Index, because the Company is now
included in the Russell 2000 Index and because it believes the Russell 2000
Index is more representative of the market for its securities. All values assume
reinvestment of the full amount of all dividends and are calculated as of March
31, 1999:
COMPARISON OF TOTAL CUMULATIVE RETURN ON INVESTMENT
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG IGEN INTERNATIONAL, INC., THE WILSHIRE 5000 INDEX,
THE RUSSELL 2000 INDEX AND THE HAMBRECHT & QUIST HEALTHCARE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C> <C>
IGEN INTERNATIONAL, INC. WILSHIRE 5000 RUSSELL 2000 HAMBRECHT & QUIST HEALTHCARE
3/94 100 100 100 100
3/95 50 113 106 128
3/96 53 150 136 199
3/97 53 173 143 192
3/98 424 255 203 265
3/99 240 289 170 293
</TABLE>
* $100 INVESTED ON 3/31/94 IN STOCK OR INDEX--
INCLUDING REINVESTMENT OF DIVIDENDS,
FISCAL YEAR ENDING MARCH 31.
- ------------------------
(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.
16
<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 2000 Annual Meeting of Stockholders must be received by the Secretary
of the Company at 16020 Industrial Drive, Gaithersburg, Maryland 20877 not later
than April 9, 2000 to be included in the proxy statement and proxy relating to
the 2000 Annual Meeting. In addition, the Company's advance notice by-law
provision permits stockholders to propose business to be brought before an
annual meeting, see "Corporate Governance and Other Matters" at page 5.
FORM 10-K AVAILABILITY
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended March 31, 1999 accompanies this Proxy Statement. The Company has filed an
Annual Report for its fiscal year ended March 31, 1999 on Form 10-K with the
Securities and Exchange Commission. Stockholders may obtain, free of charge, a
copy of the Form 10-K by writing to George V. Migausky, Shareholder Relations,
at 16020 Industrial Drive, Gaithersburg, Maryland, 20877.
By Order of the Board of Directors
George V. Migausky
SECRETARY
July 29, 1999
17
<PAGE>
IGEN INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 1999
[GRAPHIC OMITTED]
The undersigned hereby appoints Samuel J. Wohlstadter, Richard J.
Massey 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 IGEN International, Inc. to be held at The
Four Seasons Hotel in Washington, D.C. on Wednesday, September 15, 1999 at 10:00
a.m. local time, and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would 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
THE 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. [GRAPHIC OMITTED]
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
X Please mark votes as in this example.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW AND FOR
PROPOSAL 2.
1. To elect two Class 3 directors for a three-year term and until their
successors are elected.
Nominees: Samuel J. Wohlstadter, William J. O'Neill
FOR, EXCEPT WITHHELD
FROM THE FOLLOWING
FOR WITHHELD NOMINEE:
----------------------
/ / / / / /
Signature: ________________________________ Date: _____________
Signature: ________________________________ Date:_____________
2. Ratify the selection of Deloitte & Touche, LLP as independent auditors
of the Company for its fiscal year ending March 31, 2000.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT / /
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United States.
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.
