<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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
</TABLE>
<TABLE>
<S> <C>
MIRAVANT MEDICAL TECHNOLOGIES
- ----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
----------------------------------------------------------
</TABLE>
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
336 BOLLAY DRIVE
SANTA BARBARA, CALIFORNIA 93117
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 2000
Notice is hereby given that the Annual Meeting of Stockholders of Miravant
Medical Technologies (the "Company") will be held on Wednesday, June 14, 2000,
at 9:00 a.m., at The Four Seasons Biltmore Hotel, 1260 Channel Drive, Santa
Barbara, California, 93108, (805) 969-2261, for the following purposes:
1. To elect six (6) Directors to serve until the 2001 Annual Meeting and
until their successors are elected and qualified;
2. To approve the Miravant Medical Technologies 2000 Stock Compensation
Plan;
3. To ratify the appointment of Ernst & Young LLP, certified public
accountants, as the Company's independent auditors for the fiscal year
ending December 31, 2000; and
4. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
These items are more fully described in the following pages. The Board of
Directors has fixed the close of business on APRIL 25, 2000, as the record
date for the determination of stockholders entitled to receive notice of and
to vote at the meeting. STOCKHOLDERS ARE REMINDED THAT SHARES CANNOT BE VOTED
UNLESS THE STOCKHOLDER IS PRESENT AT THE MEETING OR THE SIGNED PROXY IS
RETURNED OR OTHER ARRANGEMENTS ARE MADE TO HAVE THE SHARES REPRESENTED AT THE
MEETING.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
/s/ JOSEPH E. NIDA
-------------------------------
Joseph E. Nida
SECRETARY
Santa Barbara, California
May 8, 2000
PLEASE SIGN AND RETURN THE ENCLOSED PROXY
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
336 BOLLAY DRIVE
SANTA BARBARA, CALIFORNIA 93117
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are first being mailed
to stockholders on or about May 10, 2000 in connection with the solicitation of
proxies on behalf of the Board of Directors (the "Board") of Miravant Medical
Technologies (collectively with its subsidiaries, the "Company") for the 2000
Annual Meeting of Stockholders, to be held on Wednesday, June 14, 2000, at
9:00 a.m. local time, at The Four Seasons Biltmore, Santa Barbara, California,
or at any adjournment thereof. Proxies are solicited to give all stockholders of
record at the close of business on April 25, 2000 an opportunity to vote on
matters to be presented at the Annual Meeting. Shares can be voted at the
meeting only if the stockholder is present or represented by proxy.
At the Annual Meeting, stockholders will be asked to consider and vote upon
three items as follows:
ITEM NO. 1. To elect six (6) Directors to serve until the 2001 Annual
Meeting and until their successors are elected and qualified;
ITEM NO. 2. To approve the Miravant Medical Technologies 2000 Stock
Compensation Plan;
ITEM NO. 3. To ratify the appointment of Ernst & Young LLP, certified
public accountants, as the Company's independent auditors for the fiscal
year ending December 31, 2000; and
ITEM NO. 4. To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
Any stockholder giving a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by giving notice of such revocation either
personally or in writing to the Secretary of the Company at the Company's
executive offices, by subsequently executing and delivering a later-dated proxy,
or by voting in person at the Annual Meeting.
A copy of the Annual Report to Stockholders is included herewith but shall
not constitute proxy solicitation materials.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE ELECTION OF EACH
OF ITS DIRECTOR NOMINEES IN ITEM NO. 1 AND APPROVAL OF ITEM NO. 2 AND ITEM
NO. 3 ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE TO ELECT EACH OF THE
DIRECTOR NOMINEES IN ITEM NO. 1 AND VOTE FOR ITEM NO. 2 AND FOR ITEM NO. 3.
<PAGE>
VOTING AND SOLICITATION OF PROXIES
Only holders of record at the close of business on April 25, 2000 (the
"Record Date") of the Company's Common Stock, $.01 par value (the "Common
Stock"), which is quoted on The NASDAQ National Market under the symbol "MRVT",
will be entitled to vote at the Annual Meeting. On April 24, 2000, there were
18,283,074 shares of Common Stock outstanding. The holders of a majority of the
outstanding shares of Common Stock present in person or by proxy and entitled to
vote will constitute a quorum at the meeting. Broker non-votes (see below) will
be counted toward the establishment of a quorum. On all matters to come before
the Annual Meeting, each holder of Common Stock will be entitled to one vote for
each share owned.
Please specify your choices on the items by marking the appropriate boxes on
the enclosed proxy card and signing it. Shares represented by duly executed and
unrevoked proxies in the enclosed form received by the Board will be voted at
the Annual Meeting in accordance with the specifications made therein by the
stockholders, unless authority to do so is withheld. If no specification is
made, shares represented by duly executed and unrevoked proxies will be voted
FOR the election as directors of the nominees listed in Item No. 1, FOR Item
No. 2 and FOR Item No. 3, and with respect to any other matter that may properly
come before the meeting, in the discretion of the proxy holder.
This proxy solicitation is being made by the Company. The Company intends to
solicit proxies by use of the mail. In addition, solicitation of proxies may be
made by personal and telephonic meetings with stockholders by directors,
officers and regular employees of the Company. The cost of preparing, assembling
and mailing the proxy materials will be borne by the Company.
VOTE REQUIRED
The election of the director nominees pursuant to Item No. 1 requires a
plurality of the votes cast in person or by proxy at the Annual Meeting. A
plurality means that the nominees with the largest number of votes are elected
as directors up to the maximum number of directors to be chosen at the meeting.
Under Delaware law, the Company's Certificate of Incorporation and the Company's
ByLaws, shares as to which a stockholder abstains or withholds from voting on
the election of Directors, and shares as to which a broker indicates that it
does not have discretionary authority to vote ("broker non-votes") on such
nominees, will not affect the outcome of the election of directors.
If any stockholder gives notice at the meeting of his or her intention to
cumulate votes in the election of directors, each stockholder will be entitled
to cumulate his or her votes and give one nominee a number of votes equal to the
number of directors to be elected, multiplied by the number of shares then held,
or distribute the votes on the same principle among as many nominees as the
stockholder deems fit. Stockholders voting by means of the accompanying proxy
will be granting the proxy holders discretionary authority to vote their shares
cumulatively, but such stockholders may not mark the proxy to cumulate their own
votes. The Board of Directors does not presently intend to give notice to
cumulate votes, but it may elect to do so in the event of a contested election
or other, presently unexpected, circumstances. In the event of cumulative
voting, the accompanying proxy authorizes the individuals named as proxy
holders, in their discretion, to vote cumulatively and to distribute, in any
manner, the votes to which each share is entitled in the election of directors,
among the nominees for whom the authority to vote has not been withheld in the
accompanying proxy.
Approval of the Miravant Medical Technologies 2000 Stock Compensation Plan
pursuant to Item No. 2 and ratification of the appointment of Ernst & Young LLP
as the independent auditors for the Company pursuant to Item No. 3 requires the
affirmative vote of a majority of the shares present in person or represented by
proxy at the Annual Meeting and entitled to vote. Under Delaware law, the
Company's Certificate of Incorporation and the Company's ByLaws, abstentions on
such proposals have the same legal effect as a vote against such proposals.
Broker non-votes are not counted as shares represented and entitled to vote and
therefore will not affect the outcome of the vote on such proposals.
2
<PAGE>
A list of the stockholders of record as of the Record Date will be available
for examination during ordinary business hours at least ten days prior to the
Annual Meeting by any stockholder, for any purpose germane to the Annual Meeting
at the Company's offices at 336 Bollay Drive, Santa Barbara California 93117
(telephone (805) 685-9880), Attention: Shadean Runyen.
IF YOU PLAN TO ATTEND THE MEETING, PLEASE MARK THE APPROPRIATE BOX ON THE
PROXY CARD. STOCKHOLDERS WHOSE SHARES ARE HELD OF RECORD BY BROKERS OR OTHER
INSTITUTIONS, WILL BE ADMITTED UPON PRESENTATION OF PROPER IDENTIFICATION AND
PROOF OF OWNERSHIP (E.G., A BROKERS' STATEMENT) AT THE DOOR.
3
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of April 24, 2000 by (i) each person known by
the Company to own beneficially five percent or more of the outstanding shares
of its Common Stock, (ii) each of the executive officers named in the Summary
Compensation Table included herein, (iii) each director and nominee for director
of the Company and (iv) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES BENEFICIALLY OUTSTANDING
NAME OWNED (1)(2) STOCK
---- -------------------- -------------
<S> <C> <C>
Pharmacia Corporation(3).................................... 2,101,534 11.35 %
St. Cloud Investment, Ltd.(4)............................... 1,720,303 9.29 %
Gary S. Kledzik, Ph.D.(5)................................... 1,669,150 8.76 %
David E. Mai................................................ 376,250 2.02 %
Charles T. Foscue(6)........................................ 98,177 *
Larry S. Barels(7).......................................... 91,750 *
John M. Philpott............................................ 87,500 *
William P. Foley II(8)...................................... 56,250 *
Jonah Shacknai(9)........................................... -- *
All directors and executive officers as a group (7
persons).................................................. 2,379,077 12.13 %
</TABLE>
- ------------------------
* Less than one percent.
(1) Each person has sole voting and investment power over the Common Stock shown
as beneficially owned, subject to community property laws where applicable
and the information contained in the footnotes below.
(2) Includes the following shares of Common Stock issuable upon exercise of
options and/or warrants exercisable within 60 days of April 24, 2000:
Pharmacia Corporation--240,000; Dr. Kledzik--768,750 shares;
Mr. Mai--338,940 shares; Mr. Foscue--82,250 shares; Mr. Philpott--80,000
shares; Mr. Foley--26,250 shares; Mr. Barels--26,250 shares; St. Cloud
Investments, Ltd.--233,532; and directors and executive officers as a
group--1,322,440 shares.
(3) Pharmacia Corporation is a Delaware corporation formed by the merger in
April 2000 of Pharmacia & Upjohn, Inc. and Monsanto Company, according to a
press release issued by Pharmacia Corporation March 31, 2000. According to
the Schedule 13D filing on April 10, 2000, the principal business address of
Pharmacia Corporation is 100 Route 206 North, Peapack, New Jersey, 07977.
See "Certain Relationships and Related Transactions".
(4) According to the Schedule 13D filed with the SEC on March 10, 1999, St.
Cloud Investments, Ltd. is a corporation organized under the laws of the
British Virgin Islands and its principal business address is c/o Robert
Tucker, 61 Purchase Street, Suite 2, Rye, New York 10580.
(5) Excludes 40,000 shares of Common Stock to which Dr. Kledzik disclaims
beneficial ownership. Such shares were transferred to The Gary S. Kledzik
Charitable Remainder Unitrust, of which Gary S. Kledzik is the trustee and
beneficiary. Dr. Kledzik's address is 336 Bollay Drive, Santa Barbara,
California 93117.
(6) Excludes 12,069 shares of Common Stock to which Mr. Foscue disclaims
beneficial ownership. 11,521 of these shares are held by HAI
Financial, Inc., of which Mr. Foscue is the Chairman, President and Chief
Executive Officer and the remaining 548 shares are held in a pension plan
for the benefit of Mr. Foscue.
4
<PAGE>
(7) Excludes 5,500 shares of Common Stock to which Mr. Barels disclaims
beneficial ownership. Such shares are held by his spouse and children.
(8) Excludes 326,400 shares of Common Stock to which Mr. Foley disclaims
beneficial ownership. 320,900 of these shares are held by Fidelity National
Financial, Inc., of which Mr. Foley is the Chairman and Chief Executive
Officer, and the remaining 5,500 shares are held by his spouse and children.
(9) Excludes 68,125 shares underlying options exercisable within 60 days of
April 24, 2000 as to which Mr. Shacknai disclaims beneficial ownership. Such
shares are held in a trust administered by an independent trustee for the
benefit of Mr. Shacknai's children.
5
<PAGE>
BOARD MEETINGS, REMUNERATION OF DIRECTORS AND COMMITTEES
During 1999, the Board of Directors met on four occasions. Each director
then in office attended in person or by telephone one hundred percent (100%) of
the meetings of the Board of Directors and Committees on which he served.
Employees of the Company do not receive any additional compensation for
serving the Company as members of the Board of Directors or any of its
Committees. Directors who are not employees of the Company do not receive fees
for board meetings attended, but do receive an annual stock option grant under
the Miravant Medical Technologies 1996 Stock Compensation Plan, as amended and
restated effective March 3, 1997 (the "1996 Plan"). The 1996 Plan currently
provides for an automatic grant of non-qualified stock options to purchase 7,500
shares of Common Stock to non-employee directors on the first day of the fourth
quarter of each year that a non-employee director serves on the Board of
Directors during the term of the 1996 Plan. Each option vests upon the grant
date and is granted at an option price equal to the fair market value of the
Common Stock on the grant date. The options terminate on the earlier of 90 days
from the date on which a director is no longer a member of the Board of
Directors for any reason other than death, ten years from the date of grant or
six months from the director's death. Non-employee directors are also eligible
for discretionary awards under the 1996 Plan. During the year ended
December 31, 1999, the following non-employee directors were each automatically
granted stock options to purchase 7,500 shares of Common Stock under the 1996
Plan: Charles T. Foscue, Jonah Shacknai, Larry S. Barels and William P. Foley
II. The Company also reimburses directors for out-of-pocket expenses incurred in
connection with attending Board and Committee meetings.
The Board has standing Audit and Compensation Committees. The Board does not
have a standing nominating committee or a committee performing similar
functions. The current members of each of the Board's Committees are listed
below.
THE AUDIT COMMITTEE
The Audit Committee, composed solely of outside directors, meets with the
Company's independent accountants and management to discuss, recommend and
review accounting principles, financial and accounting controls, the scope of
the annual audit and other matters; advises the Board on matters related to
accounting and auditing; and reviews management's selection of independent
accountants. The members of the Audit Committee are Charles T. Foscue, Jonah
Shacknai, William P. Foley II and Larry S. Barels. During 1999, the Audit
Committee met one time.
THE COMPENSATION COMMITTEE
The Compensation Committee, composed solely of outside directors, reviews
and takes action regarding terms of compensation, employment contracts and
pension matters that concern executive officers of the Company. The Compensation
Committee also administers the 1996 Plan. The members of the Compensation
Committee are Jonah Shacknai, William P. Foley II and Larry S. Barels. During
1999, the Compensation Committee met one time.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Foscue is a founder, Chairman, President and Chief Executive Officer of
HAI Financial, Inc., previously known as Harmet Associates, Inc., ("HAI"), which
provides corporate financial consulting services in the areas of mergers and
acquisitions, public and private financings, strategic planning and financial
analysis. Both HAI and Mr. Foscue have been advisors to the Company since 1991
and have been involved in the Company's private and public financings from 1991
to the present. For the year ended December 31, 1999, the Company recorded as
expense $2,000 in connection with ongoing consulting services provided by HAI.
6
<PAGE>
EXECUTIVE OFFICERS
The names, ages and certain additional information (if not set out in Item
No. 1) of the current executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------- -------- ----------------------------------------------------------
<S> <C> <C>
Gary S. Kledzik, Ph.D.......... 50 Chairman of the Board and Chief Executive Officer
David E. Mai................... 55 President of Miravant Medical Technologies, Miravant
Systems, Inc., Miravant Cardiovascular, Inc. and Miravant
Pharmaceuticals, Inc.
John M. Philpott............... 39 Chief Financial Officer and Treasurer
</TABLE>
Information about Dr. Kledzik and Mr. Mai is set forth in Item No. 1.
JOHN M. PHILPOTT has served as Chief Financial Officer since December 1995.
Since March 1995, Mr. Philpott had served as Controller. Prior to joining the
Company, Mr. Philpott was a Senior Manager with Ernst & Young LLP, which he
joined in 1986. Mr. Philpott is a Certified Public Accountant in the State of
California. He holds a B.S. degree in Accounting and Management Information
Systems from California State University, Northridge.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee"), composed entirely of outside
directors, is responsible for the oversight and administration of executive
compensation. The Committee also reviews the Company's overall compensation
program as reported to the Committee by management. In establishing the
Company's executive compensation program, the Committee takes into account the
significance of the position to the Company, stockholder value, current market
data and compensation trends for comparable companies and geographic locations,
compares corporate performance to that of other companies in the same industry,
gauges achievement of corporate and individual objectives and accomplishments
and considers the overall effectiveness of the program in measuring and
rewarding desired performance levels. These principles have been adhered to by
developing incentive pay programs which provide competitive compensation and
reflect the Company's performance. Both short-term and long-term incentive
compensation are based on Company performance, achievement of specific
milestones and the value received by stockholders. Since the Company is in the
pre-commercialization stage, the use of traditional performance standards (such
as revenue growth, operating income, profit levels and return on equity) are not
appropriate in evaluating the performance of the executive officers. In
particular, the unique nature of the biotechnology industry, specifically the
absence of commercial revenues and the fact that the Company's stock performance
is often more a consequence of large market forces than that of actual Company
achievements, makes it difficult to tie performance objectives to standard
financial consideration. The Committee believes the compensation of the
Company's executive officers is in the middle range of compensation data
compiled for comparable companies.
COMPENSATION PHILOSOPHY
The Committee bases the executive compensation program on the following
principles which reflect the value created for stockholders while supporting the
Company's strategic business goals:
- Compensation should encourage increased stockholder value.
- Compensation levels for executive officers are benchmarked to the outside
market, utilizing information from general industry surveys.
- Total compensation opportunity is targeted to the mid-range from general
industry surveys with incremental amounts which may be earned above that
level depending upon corporate and individual performance. The Committee
considers it essential to the vitality of the Company that the total
compensation opportunity for executive officers remain competitive in
order to attract and retain the talent needed to manage and build the
Company's business.
- Incentive compensation is designed to reinforce the achievement of both
short and long-term strategic business goals and objectives of the
Company.
COMPENSATION MEASUREMENT
The Company's executive compensation is composed of three components, base
salary, short-term incentives and long-term incentives, each of which is
intended to serve the overall compensation philosophy.
BASE SALARY. The Company's salary levels are intended to be consistent with
competitive pay practices and level of responsibility, with salary increases
reflecting competitive trends, the overall financial position and performance of
the Company, general economic conditions, as well as a number of factors
relating to the particular individual, including the performance of the
individual executive, and level of experience, ability and knowledge of the job.
SHORT-TERM INCENTIVES. The Compensation Committee has the ability to award
stock-based, short-term incentive compensation to executives under the 1996 Plan
based on the executive's level of responsibility,
8
<PAGE>
potential contribution, the success of the Company and competitive conditions.
Although no such awards have been granted under the 1996 Plan to date, the
executive's actual award would generally be determined following the end of the
fiscal year based on the Company's achievement of its goals and an assessment of
the executive's individual performance. Although generally the Company currently
does not award short-term cash incentive compensation to its executives, the
Committee may in the future award cash or stock bonuses based on the achievement
of target levels of growth or other performance objectives established in
consultation with senior management.
LONG-TERM INCENTIVES. The Committee may award long-term incentive stock
compensation based upon the achievement of the Company's research and
development program goals, strategic alliance collaboration goals, capital
fundings and the performance of the Common Stock on the NASDAQ National Market.
Under the Company's employment agreements and the 1996 Plan, stock options and
other stock awards are granted from time to time to reward key employee's
contributions and as an incentive for future contributions. Such grants of
awards are based primarily on a key employee's past and potential contribution
to the Company's accomplishments and growth. Under the 1996 Plan, the exercise
price of incentive stock options must equal or exceed the fair market value of
the Common Stock on the date of grant. Although the exercise price of certain
non-statutory stock options granted in the past were less than the fair market
value of the Common Stock at the date of grant, no options granted to executive
officers in 1999 were granted with an exercise price below fair market value.
Generally, the options under the 1996 Plan vest over four years and employees
must continue to be employed by the Company for such options to vest.
The stock option grants are designed to align the interests of the executive
officers with those of the stockholders and provide each individual with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the Company.
1999 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER. In setting the 1999
salary and incentive award levels for the Chief Executive Officer, the Committee
reviewed the Company's achievements in 1998. The Committee also considered the
Chief Executive Officer's leadership in continuing to strategically position the
Company for the development and commercialization of drugs and devices for use
in photodynamic therapy in the treatment of a number of disease indications.
Some of the achievements during 1998 include:
- The Company restructured its ophthalmology, oncology and urology
agreements with Pharmacia Corporation, formerly Pharmacia & Upjohn, to
provide the Company with the responsibility of the U.S. clinical trials
and product development, enhanced funding for oncology and urology and
received the rights back for SnET2 in dermatology;
- The Company effectively commenced Phase III clinical trials for
age-related macular degeneration and received a "fast track" designation
from the Food and Drug Administration;
- During 1998, the Company implemented a cost restructuring program which
reduced the Company's cash burn rate while maintaining focus on our core
development programs;
- The Company added two new directors to the Board of Directors; and
- In early 1999, the Company again restructured its existing relationship
and agreements with Pharmacia Corporation, which resulted in Pharmacia
Corporation eventually assuming the majority of the clinical development
work for SnET2 in ophthalmology. Additionally, the Company obtained a
$19.0 million equity infusion and a $22.5 line of credit from Pharmacia
Corporation.
While acknowledging the significance of the above mentioned achievements,
the Committee in 1999 only increased the Chief Executive Officer's salary from
$300,000 to $325,000. Additionally, consistent with the Company's current
general policy of not awarding short-term cash incentives, the Committee
determined to forego any short-term incentive award to the Chief Executive
Officer for 1999. With respect to
9
<PAGE>
long-term incentives, however, the Committee approved the grant to the Chief
Executive Officer of 200,000 non-statutory stock options under the 1996 Plan
priced at the fair market value on the grant date and vesting at the rate of 25%
a year.
SECTION 162(m) IMPLICATIONS FOR EXECUTIVE COMPENSATION. It is the
responsibility of the Committee to address the issues raised by Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), which makes
certain "non-performance-based" compensation to certain executives of the
Company in excess of $1,000,000 non-deductible to the Company. To qualify as
"performance-based" under Section 162(m), compensation payments must be made
pursuant to a plan, by a committee of at least two "outside" directors (as
defined in the regulations promulgated under the Code) and must be based on
achieving objective performance goals. In addition, the material terms of the
plan must be disclosed to and approved by stockholders, and the outside
directors or the Committee, as applicable, must certify that the performance
goals were achieved before payments can be awarded.
The Committee, in planning for the future of the Company, has considered the
impact of Section 162(m) and has taken several steps which are designed to
minimize its effect to the extent practicable while maintaining competitive
compensation practices. The Committee expects to continue to examine the effects
of Section 162(m) and to monitor the level of compensation paid to the Company's
executive officers in order to take any steps which may be appropriate in
response to the provisions of Section 162(m) to the extent practicable while
maintaining competitive compensation practices.
COMPENSATION COMMITTEE
William P. Foley II, Chairman
Larry S. Barels
Jonah Shacknai
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes all compensation paid to the Company's Chief
Executive Officer and to the Company's other most highly compensated executive
officers other than the Chief Executive Officer, whose total annual salary
exceeded $100,000 for services rendered in all capacities to the Company during
the fiscal years ended December 31, 1999, 1998 and 1997 (collectively, the
"named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------- ----------------
SECURITIES
UNDERLYING
OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (# OF SHARES)(1)
- --------------------------------------------------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Gary S. Kledzik, Ph.D.............................. 1999 $325,000 $ -- 200,000
Chairman of the Board and Chief Executive Officer 1998 300,000 -- 200,000
1997 200,000 -- 100,000
David E. Mai....................................... 1999 $250,000 $ -- 100,000
Director and President 1998 225,000 -- 100,000
1997 178,000 -- 50,000
John M. Philpott................................... 1999 $175,000 $ -- 75,000
Chief Financial Officer and Treasurer 1998 140,000 -- 50,000
1997 108,000 -- 25,000
</TABLE>
- ------------------------
(1) The options vest equally over a period of four years and expire upon the
earlier of (i) three months after termination of employment (or upon
termination if terminated for cause), or (ii) ten years from the date of
grant.
11
<PAGE>
OPTION GRANTS IN 1999
The following table sets forth certain information as of December 31, 1999
and the year then ended concerning stock options granted to the named executive
officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM
OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION ------------------------------
NAME (# OF SHARES)(1) DURING THE YEAR ($/SHARE) DATE 5% 10%
- --------------------- ---------------- --------------- --------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gary S. Kledzik...... 200,000 29.37% $13.31 1/26/09 $1,674,495 $ 4,243,499
David E. Mai......... 100,000 17.22% 13.31 1/26/09 837,247 2,121,749
John M. Philpott..... 75,000 13.49% 13.31 1/26/09 627,936 1,591,312
</TABLE>
- --------------------
(1) The options vest ratably over a period of four years and expire upon the
earlier of (i) three months after termination of employment (or upon
termination if terminated for cause), or (ii) ten years from the date of
grant.
AGGREGATED OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information as to the stock options exercised
by the named executive officers at the end of 1999 and the value of the options
exercised at that date based on the difference between the market price of the
stock and the exercise prices of the options.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999(#) DECEMBER 31, 1999($)(1)
SHARES ACQUIRED VALUE ------------------------------ ------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary S. Kledzik...... -- $ -- 643,125 400,625 $2,465,565 $--
David E. Mai......... -- -- 275,815 215,625 933,816 --
John M. Philpott..... -- -- 41,875 125,625 4,924 --
</TABLE>
- --------------------
(1) Based on the difference between the closing price of the Common Stock as
reported on the NASDAQ National Market as of December 31, 1999 and the
exercise price of such options.
EMPLOYMENT AGREEMENTS
The Company and Dr. Kledzik are parties to an employment agreement effective
December 31, 1989, as amended (the "Employment Agreement"), pursuant to which
Dr. Kledzik serves as Chief Executive Officer for the Company and its
subsidiaries. The Employment Agreement provides for an initial employment term
of one (1) year, renewed for successive one-year terms, unless Dr. Kledzik
notifies the Company in writing at least 30 days in advance of, or the Company
notifies Dr. Kledzik in writing 30 days before or after, December 31 of each
year. Under the terms of the Employment Agreement, Dr. Kledzik is entitled to an
annual salary as determined by the Compensation Committee of the Board of
Directors from time to time. The current annual salary is $357,500. As of
December 31, 1999, in connection with the Employment Agreement, Dr. Kledzik has
received options to purchase a total of 674,466 shares of Common Stock at
exercise prices ranging from $0.03 to $2.00 per share with a weighted average
price of
12
<PAGE>
$0.88 per share. Additionally, from two of the Company's employee stock option
plans, Dr. Kledzik has received options to purchase 731,250 shares at exercise
prices ranging from $6.00 to $56.00 per share with a weighted average exercise
price of $26.18 per share. Options for 1,002,591 shares have vested, of which
359,466 have been exercised. Options outstanding at December 31, 1999 vest
ratably over four years from the date of grant. The Employment Agreement
provides that Dr. Kledzik shall perform his duties at the Company's designated
facility in Santa Barbara, California. If the Employment Agreement is terminated
other than at Dr. Kledzik's option or by the Company for cause, then the Company
shall pay Dr. Kledzik severance compensation in an amount equal to the product
of his monthly base salary multiplied by the greater of: (i) the number of
months remaining under the term of the Employment Agreement; or (ii) six. If the
Company terminates Dr. Kledzik's employment for cause or Dr. Kledzik terminates
his employment, he is not entitled to severance pay. "Cause" is defined in the
Employment Agreement to be personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than minor traffic violations) or material breach of any
provision of the Employment Agreement or any other agreement between
Dr. Kledzik and the Company. In addition, in connection with the execution of
the Employment Agreement, Dr. Kledzik executed and delivered the Company's
standard form Intellectual Property and Confidentiality Agreement providing for
the assignment to the Company of inventions and intellectual property created or
enhanced during Dr. Kledzik's employment and providing for the protection of
confidential information.
The Company and Mr. Mai are parties to an employment agreement effective
February 1, 1991, as amended (the "Employment Agreement"), pursuant to which
Mr. Mai serves as President of the Company and its subsidiaries. The Employment
Agreement provides for an initial employment term of one (1) year, renewed for
successive one-year terms, unless Mr. Mai notifies the Company in writing at
least 30 days in advance of, or the Company notifies Mr. Mai in writing 30 days
before or after, January 1st of each year. Under the terms of the Employment
Agreement, Mr. Mai is entitled to an annual salary as determined by the
Compensation Committee from time to time. The current annual salary is $275,000.
As of December 31, 1999, in connection with the Employment Agreement, Mr. Mai
has received options to purchase a total of 150,000 shares of Common Stock at
exercise prices ranging from $0.67 to $2.00 per share with a weighted average
price of $1.42 per share. Additionally, from two of the Company's employee stock
option plans, Mr. Mai has received options to purchase 381,250 shares at
exercise prices ranging from $6.00 to $56.00 per share with a weighted average
exercise price of $25.51 per share. Options for 313,125 shares have vested, of
which 37,310 shares have been exercised. The options generally vest ratably over
four years from the date of grant. The remaining terms and conditions of
Mr. Mai's Employment Agreement are substantially identical to those in
Dr. Kledzik's agreement, except that if the Employment Agreement is terminated
other than at Mr. Mai's option or by the Company for cause, then the Company
shall pay Mr. Mai severance compensation in an amount equal to one week's salary
for each six month employment period, beginning six months after the effective
date of the Employment Agreement.
The Company and Mr. Philpott are parties to an employment agreement
effective March 20, 1995, as amended (the "Employment Agreement"), pursuant to
which Mr. Philpott serves as Chief Financial Officer of the Company and its
subsidiaries. The Employment Agreement provides for an initial employment term
of one (1) year, renewed for successive one-year terms, unless Mr. Philpott
notifies the Company in writing at least 30 days in advance of, or the Company
notifies Mr. Philpott in writing 30 days before or after, March 20 of each year.
Under the terms of the Employment Agreement, Mr. Philpott is entitled to an
annual salary as determined by the Company from time to time. The current annual
salary is $192,500. As of December 31, 1999, in connection with the Employment
Agreement, Mr. Philpott has received options to purchase a total of 15,000
shares of Common Stock at exercise prices ranging from $8.00 to $10.67 per share
with a weighted average price of $9.34 per share. Additionally, from two of the
Company's employee stock option plans, Mr. Philpott has received options to
purchase 162,500 shares at exercise prices ranging from $13.31 to $56.00 per
share with a weighted average exercise price of $22.72 per share. Options for
49,375 shares have vested, of which 7,500 shares have been exercised. The
options
13
<PAGE>
generally vest ratably over four years from the date of grant. The remaining
terms and conditions of Mr. Philpott's Employment Agreement are substantially
identical to those in Dr. Kledzik's agreement, except that if the Employment
Agreement is terminated other than at Mr. Philpott's option or by the Company
for cause, then the Company shall pay Mr. Philpott severance compensation in an
amount equal to one week's salary for each six month employment period,
beginning six months after the effective date of the Employment Agreement.
EMPLOYEE STOCK OPTION PLANS
The Company has five stock-based compensation plans which are described
below--the 1989 Plan, the 1992 Plan, the 1994 Plan or, as a group, the Prior
Plans, the 1996 Plan and the Non-Employee Directors Stock Option Plan or the
Directors' Plan.
The Prior Plans provided for the grant of both incentive stock options and
non-statutory stock options. Stock options were granted under these plans to
certain employees and corporate officers. The purchase price of incentive stock
options must equal or exceed the fair market value of the Common Stock at the
grant date and the purchase price of non-statutory stock options may be less
than fair market value of the Common Stock at grant date. Effective July 21,
1996, the Prior Plans were superseded with the adoption of the 1996 Plan except
to the extent of options outstanding in the Prior Plans. The Company has
allocated 300,000 shares, 750,000 shares and 600,000 shares for the 1989 Plan,
the 1992 Plan and the 1994 Plan, respectively. The outstanding shares granted
under the Prior Plans vest in equal annual installments over four years
beginning one year from the grant date and expire ten years from the original
grant date.
The 1996 Plan provides for awards which include incentive stock options,
non-qualified stock options, restricted shares, stock appreciation rights,
performance shares, stock payments and dividend equivalent rights. Included in
the 1996 Plan is an employee stock purchase program which has not yet been
implemented. Also included in the 1996 Plan is a Non-Employee Directors' Stock
Option award program which provides for an automatic fully vested annual grant
on the first day of the fourth quarter of each year to each non-employee
director of a non-qualified stock option for the purchase of 7,500 shares of
Common Stock at fair market value and occasional discretionary grants. Officers,
key employees, directors and independent contractors or agents of the Company
may be eligible to participate in the 1996 Plan, except that incentive stock
options may only be granted to employees of the Company. The 1996 Plan
supersedes and replaces the Prior Plans and the Directors' Plan, except to the
extent of options outstanding under those plans. The purchase price for awards
granted from the 1996 Plan may not be less than the fair market value at the
date of grant. The maximum amount of shares that could be awarded under the 1996
Plan over its term is 4,000,000 shares. Awards granted under the 1996 Plan
expire on the date determined by the Plan Administrators as evidenced by the
award agreement, but shall not expire later than ten years from the date the
award is granted except for grants of restricted shares which expire at the end
of a specified period if the specified service or performance conditions have
not been met.
The Prior Plans and the 1996 Plan have been terminated and replaced by the
2000 Stock Compensation Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In August 1994, the Company entered into a Formulation Agreement with
Pharmacia & Upjohn. In July 1995, the Company entered into a License Agreement,
a Drug Supply Agreement and a Device Supply Agreement with Pharmacia & Upjohn,
the beneficial owners of more than five percent of the Company's Common Stock
relating to the development, distribution and sale of the Company's leading drug
candidate, SnET2, and certain light devices for use in PhotoPoint-TM- (the
Company's proprietary technologies for photodynamic therapy) in the fields of
oncology, urology and dermatology. Concurrent with entering into the License
Agreement, Pharmacia & Upjohn entered into a Stock Purchase Agreement pursuant
to which Pharmacia & Upjohn purchased 600,000 shares of Common Stock from the
Company
14
<PAGE>
for $12.0 million. In August 1996, the License Agreement was extended to the
field of ophthalmology. In January 1999, the Company entered into an Equity
Investment Agreement, whereby, Pharmacia Corporation, formerly Pharmacia &
Upjohn, purchased 1,136,533 shares of our Common Stock for an aggregate purchase
price of $19.0 million. In 1998, the Formulation Agreement was assigned to
Fresenius AG as part of their Asset Transfer Agreement between Pharmacia &
Upjohn and Fresenius. For the year ended December 31, 1999, the Company paid
$1.3 million and recorded as expense $881,000 in connection with the Formulation
Agreement. Additionally, for the year ended December 31, 1999 the Company
recorded revenues of $14.0 million related to the license agreement and related
amendments.
In December 1997, the Compensation Committee of the Board of Directors
recommended and subsequently approved an option loan program for the Company's
named executive officers. The loans, which accrue interest at the applicable
federal rates and are payable in five years, were awarded specifically for the
purpose of exercising options and paying the related option exercise price and
payroll taxes, if any, and are secured by the underlying shares exercised. The
current adjusted outstanding loan balances made available under this program are
$19,659 for Gary S. Kledzik, $32,864 for David E. Mai and $81,118 for John M.
Philpott. During 1996 and 1997, under the Company's employee loan program, the
named executive officers borrowed $25,000 each. These notes are collateralized
by their stock options and accrue interest at the applicable federal rates and
mature five years from the date of issuance. Currently, the notes are still
outstanding and are accruing interest. In addition, in August 1998, the Company
made a loan to its Chief Executive Officer. This note accrues interest at a
fixed rate of 5.5%. Currently, the note has an outstanding balance of $296,000
plus accrued interest. In December 1997, the Company made a loan to its
President. The note accrues interest at a fixed rate of 5.89% and currently, the
note has an outstanding principal balance of $32,500 plus accrued interest.
See also "Compensation Committee Interlocks and Insider Participation".
15
<PAGE>
COMPARISON OF TOTAL STOCKHOLDER RETURN
The Company's Common Stock began trading on the NASDAQ SmallCap Market on
April 11, 1995 and was designated as a National Market System security on The
NASDAQ National Market on August 30, 1995. From August 30, 1995 to
September 12, 1997, the stock was traded under the symbol PDTI. Effective
September 15, 1997, the Company changed the name to Miravant Medical
Technologies and the ticker symbol to MRVT. The graph below compares the
cumulative total stockholder return on the Common Stock with the cumulative
total return on the NASDAQ Market Index and a peer group made up of the
companies included in the NASDAQ Pharmaceutical Index over the period indicated
(assuming the investment of $100 in the Company's Common Stock on April 11,
1995, the date of the Company's initial public offering, and reinvestment of any
dividends). In accordance with SEC regulations, the stockholder return for each
entity in the peer group index has been weighted on the basis of market
capitalization as of each monthly measurement date set forth on the graph.
Stockholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future
performance. The other indices are included for comparative purposes only and do
not necessarily reflect management's opinion that such indices are an
appropriate measure of the relative performance of the Common Stock.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
MIRAVANT MEDICAL TECHNOLOGIES
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
Produced on 02/16/2000 including data to 12/31/1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CRSP TOTAL RETURNS INDEX FOR: 4/11/95 12/1995 12/1996 12/1997 12/1998 12/1999
- ----------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Miravant Medical Technologies................. 100.0 443.4 247.1 352.9 113.6 82.2
Nasdaq Stock Market (US Companies)............ 100.0 128.6 158.2 193.8 273.0 496.3
Nasdaq Pharmaceuticals Stocks
SIC 2830-2839 US & Foreign.................... 100.0 159.7 170.2 175.7 223.8 416.5
</TABLE>
16
<PAGE>
ITEM NO. 1
ELECTION OF DIRECTORS
The ByLaws of the Company authorize not more than nine (9) nor less than
five (5) members of the Board of Directors and, effective October 28, 1998, fix
the number of members at eight (8) until changed. Unless otherwise instructed,
proxy holders will vote the proxies received by them for the election of the
Company's six (6) nominees named below, each to serve until the next Annual
Meeting of Stockholders and until the director's successor is elected and
qualified. If any stockholder gives notice in accordance with the Company's
Certificate of Incorporation and applicable law of his or her intention to
cumulate votes, then all stockholders may cumulate votes. If such notice is
given, the proxy holders will vote the proxies received by them cumulatively in
their discretion.
Six (6) Directors are being nominated to be elected until the 2001 Annual
Meeting of Stockholders and until their successors are elected and qualified:
LARRY S. BARELS; WILLIAM P. FOLEY II; CHARLES T. FOSCUE; GARY S. KLEDZIK, PH.D.;
DAVID E. MAI; AND JONAH SHACKNAI.
If any nominee is unable to or declines to serve as a director at the time
of the Annual Meeting, the proxy holders will vote the shares which they
represent for a nominee designated by the present Board of Directors to fill the
vacancy, unless the Board, to the extent permitted, reduces the number of
directors. It is not presently expected that any nominee will be unable or will
decline to serve as a director.
Names of the nominees and certain information about each of them are set
forth below.
LARRY S. BARELS, AGE 51
Mr. Barels has served as a director of the Company since November 1998.
Mr. Barels has been Principal of Pacific Capital Resources, his own consulting
practice, from 1996 to the present. Since June 1999, Mr. Barels has been the
Chairman of the Board for Driveway Corporation and from November 1998 to
June 1999, he served as the President and Chief Executive Officer. From 1995 to
1997, Mr. Barels was the Chairman of Software.com, Inc., a company that develops
internet and intranet-based messaging server software. From 1997 to present,
Mr. Barels is a partner and advisor to Vantage Point Venture Partners. From 1985
through 1995, Mr. Barels was the Chairman and Chief Executive Officer of
Wavefront Technologies, a company involved in digital image manipulation and
computer animation. Currently, Mr. Barels is director of Miramar Systems and MSC
Software. Mr. Barels holds a B.A. from Brigham Young University in
Communications.
WILLIAM P. FOLEY II, AGE 55
Mr. Foley has served as a director of the Company since October 1998.
Mr. Foley has been Chairman and Chief Executive Officer of Fidelity National
Financial, Inc. since 1984 to the present. Mr. Foley is also currently serving
as Chairman of the Board of CKE Restaurants, Inc., the developer, owner,
operator and franchisor of Carl's Jr. restaurants and as Chairman of the Board
of Checkers Drive-In Restaurants, Inc. and Santa Barbara Restaurant Group, Inc.
Mr. Foley is also a director of Micro General Corporation, American National
Financial, Inc. and Fresh Foods, Inc. Mr. Foley holds a B.S. degree from the
United States Military Academy at West Point, an M.B.A from Seattle University
and a JD from the University of Washington.
17
<PAGE>
CHARLES T. FOSCUE, AGE 50
Mr. Foscue has served as a director of the Company since July 1996.
Mr. Foscue is a founder, Chairman, President and Chief Executive Officer of HAI
and has held those positions since the inception of HAI in 1979. HAI serves as a
corporate financial consultant in the areas of mergers and acquisitions, public
and private financings, strategic planning and financial analysis. HAI and
Mr. Foscue have been advisors to the Company since 1991 and have been involved
in the Company's private and public financings from 1991 to the present. Prior
to founding HAI, Mr. Foscue was Vice President of Marketing for Tri-Chem, Inc.
Mr. Foscue holds a B.A. degree in Economics from the University of North
Carolina and an M.B.A. degree from Harvard University, Graduate School of
Business.
GARY S. KLEDZIK, PH.D., AGE 50
Dr. Kledzik is a founder of the Company and has served as a director since
its inception in June 1989. He served as President of the Company from
June 1989 to May 1996. He has been Chairman of the Board of Directors since
July 1991 and Chief Executive Officer since September 1992. Dr. Kledzik held the
office of President of Miravant (formerly PDT) Pharmaceuticals, Inc. since its
formation until July 1996. Prior to joining the Company, Dr. Kledzik was Vice
President of the Glenn Foundation for Medical Research. His previous experience
includes serving as Research and General Manager for an Ortho Diagnostic
Systems, Inc. division of Johnson & Johnson, Vice President of Immulok, Inc., a
cancer and infectious disease biotechnology company which he co-founded and
which was acquired by Johnson & Johnson in 1983, Laboratory Director for
Endocrine Sciences in Los Angeles and Adjunct Research Scientist at the
University of California at Los Angeles. Dr. Kledzik holds a B.S. in Biology and
a Ph.D. in Physiology from Michigan State University.
DAVID E. MAI, AGE 55
Mr. Mai has served as President of the Company since May 1996, President of
Miravant Cardiovascular, Inc. since September 1992, President of Miravant
Pharmaceuticals, Inc. since July 1996 and President of Miravant Systems, Inc.
since June 1997. Mr. Mai served as Vice President of Corporate Development for
the Company from March 1994 until May 1996. Mr. Mai became associated with the
Company in July 1990 as a consultant assisting with technology and business
development. He joined the Company in 1991, serving as New Product Program
Manager from February 1991 to July 1992 and as Clinical Research Manager from
July 1992 to September 1992. Prior to joining the Company, Mr. Mai was Director
of the Intravascular Ultrasound Division of Diasonics Corporation from 1988 to
1989. Previously, Mr. Mai served as Director of Strategic Marketing for Boston
Scientific Corporation's Advanced Technologies Division, Vice President of
Stanco Medical and Sales Engineer with Hewlett-Packard Medical Electronics.
Mr. Mai holds a B.S. degree in Biology from the University of Hawaii.
JONAH SHACKNAI, AGE 43
Mr. Shacknai has served as a director of the Company since September 1997.
Mr. Shacknai is a founder of Medicis Pharmaceutical Corporation where he has
served as Chairman of the Board and Chief Executive Officer since July 1988.
Mr. Shacknai also served as a member of the National Arthritis and
Musculoskeletal and Skin Disease Advisory Council of the National Institute of
Health, is a member of the Joint High Level Advisory Panel of the United
States-Israel Science and Technology Commission and served as a director for
Health World Corporation. Previously, he was a member of the Washington D.C. law
firm of Royer, Shacknai & Mehle. Mr. Shacknai has also previously served as
Counsel to the United States House of Representatives Committee on Science and
Technology, founding director of IVAX Corporation and as a member of the
Commission on the Federal Drug Approval Process. Mr. Shacknai holds a B.A. from
Colgate University and a JD from Georgetown University Law Center.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF
THE SIX (6) NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT.
18
<PAGE>
ITEM NO. 2
PROPOSAL TO APPROVE THE MIRAVANT MEDICAL TECHNOLOGIES
2000 STOCK COMPENSATION PLAN
The Board of Directors determined that it is in the best interests of the
Company and its stockholders to adopt the Miravant Medical Technologies 2000
Stock Compensation Plan (described below). In April 2000, the Board of Directors
adopted the Plan and reserved Common Stock for issuance thereunder subject to
stockholder approval in the amount of 6,000,000 shares. The Plan is intended to
supersede and replace the 1996 Plan and Prior Plans. As of the date of
stockholder approval of the Plan, no options had been granted pursuant to the
Plan.
There follows a description of the principal features of the Plan, see
- --"Summary Description of the Miravant Medical Technologies 2000 Stock
Compensation Plan." The complete Plan is attached as Exhibit A.
SUMMARY DESCRIPTION OF THE MIRAVANT MEDICAL 2000 STOCK COMPENSATION PLAN
GENERAL. The purpose of the Plan is to attract and retain the best
available personnel for positions of substantial responsibility with the
Company, to provide additional incentive to the employees and consultants of the
Company and its subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be either "incentive stock options"
or nonstatutory stock options. Stock purchase rights may also be granted under
the Plan.
ADMINISTRATION. The Plan may generally be administered by the Board or a
Committee appointed by the Board (as applicable, the "Administrator"). The
Administrator may make any determinations deemed necessary or advisable for the
Plan.
ELIGIBILITY. Nonstatutory stock options and stock purchase rights may be
granted under the Plan to employees, directors and consultants of the Company
and any parent or subsidiary of the Company. Incentive stock options may be
granted only to employees. The Administrator, in its discretion, selects the
employees, directors and consultants to whom options and stock purchase rights
may be granted, the time or times at which such options and stock purchase
rights shall be granted, and the exercise price and number of shares subject to
each such grant.
LIMITATIONS. Section 162(m) of the Code places limits on the deductibility
for federal income tax purposes of compensation paid to certain executive
officers of the Company. In order to preserve the Company's ability to deduct
the compensation income associated with options granted to such persons, the
Plan provides that no employee may be granted, in any fiscal year of the
Company, options and stock purchase rights to purchase more than 500,000 shares
of Common Stock. Notwithstanding this limit, however, in connection with such
individual's initial employment with the Company, he or she may be granted
options and stock purchase rights to purchase up to an additional 500,000 shares
of Common Stock.
TERMS AND CONDITIONS OF OPTIONS. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
terms and conditions:
(a) EXERCISE PRICE. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an
incentive stock option may not be less than 100% of the fair market value
of the Common Stock on the date such option is granted; provided,
however, that the exercise price of an incentive stock option granted to
a 10% shareholder may not be less than 110% of the fair market value on
the date such option is granted. The fair market value of the
19
<PAGE>
Common Stock is generally determined with reference to the closing sale
price for the Common Stock (or the closing bid if no sales were reported)
on the last market trading day prior to the date the option is granted.
(b) EXERCISE OF OPTION; FORM OF CONSIDERATION. The Administrator determines
when options become exercisable, and may in its discretion, accelerate
the vesting of any outstanding option. The means of payment for shares
issued upon exercise of an option is specified in each option agreement.
The Plan permits payment to be made by cash, check, promissory note,
other shares of Common Stock of the Company (with some restrictions),
cashless exercises, any other form of consideration permitted by
applicable law, or any combination thereof.
(c) TERM OF OPTION. The term of an incentive stock option may be no more
than ten (10) years from the date of grant; provided, however, that in
the case of an incentive stock option granted to a 10% shareholder, the
term of the option may be no more than five (5) years from the date of
grant. No option may be exercised after the expiration of its term.
(d) TERMINATION OF SERVICE. If an optionee's service relationship terminates
for any reason (excluding death or disability), then the optionee
generally may exercise the option within three months of such termination
to the extent that the option is vested on the date of termination, (but
in no event later than the expiration of the term of such option as set
forth in the option agreement). Unless otherwise determined by the
Administrator, if an optionee's service relationship terminates due to
the optionee's disability, the optionee generally may exercise the option
within 12 months from the date of such termination. Unless otherwise
determined by the Administrator, if an optionee's service relationship
terminates due to the optionee's death, the optionee's estate or the
person who acquires the right to exercise the option by bequest or
inheritance generally may exercise the option within 12 months from the
date of such termination.
(e) NONTRANSFERABILITY OF OPTIONS. Unless otherwise determined by the
Administrator, options granted under the Plan are not transferable other
than by will or the laws of descent and distribution, and may be
exercised during the optionee's lifetime only by the optionee.
(f) OTHER PROVISIONS. The stock option agreement may contain other terms,
provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator.
STOCK PURCHASE RIGHTS. In the case of stock purchase rights, unless the
Administrator determines otherwise, the restricted stock purchase agreement
shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's employment with the Company for any
reason (including death or disability). The purchase price for shares
repurchased pursuant to the restricted stock purchase agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at a rate determined by the Administrator.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of stock
subject to the Plan, the number and class of shares of stock subject to any
option or stock purchase right outstanding under the Plan, and the exercise
price of any such outstanding option or stock purchase right.
In the event of a liquidation or dissolution, any unexercised options or
stock purchase rights will terminate. The Administrator may, in its sole
discretion, provide that each optionee shall have the right to exercise all or
any part of the option or stock purchase right, including shares as to which the
option or stock purchase right would not otherwise be exercisable.
In the event of a merger of the Company with or into another corporation, or
the sale of substantially all of the assets of the Company, the optionee shall
fully vest in and have the right to exercise the option or
20
<PAGE>
stock purchase right as to all of the optioned stock, including shares as to
which it would not otherwise be vested or exercisable, at the discretion of the
Administrators. The Administrators may allow for each outstanding option and
stock purchase right to be assumed or an equivalent option or right substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the option or stock purchase right, the optionee shall fully vest
in and have the right to exercise the option or stock purchase right as to all
of the optioned stock, including shares as to which it would not otherwise be
vested or exercisable. In such event, the Administrator shall notify the
optionee that the option or stock purchase right is fully exercisable for thirty
(30) days from the date of such notice and that the option or stock purchase
right terminates upon expiration of such period.
AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend, alter, suspend
or terminate the Plan, or any part thereof, at any time and for any reason.
However, the Company shall obtain stockholder approval for any amendment to the
Plan to the extent necessary and desirable to comply with applicable law. No
such action by the Board or stockholders may alter or impair any option or stock
purchase right previously granted under the Plan without the written consent of
the optionee. Unless terminated earlier, the Plan shall terminate ten years from
the date the Plan was adopted by the Board.
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise is an adjustment item for alternative
minimum tax purposes and may subject the optionee to the alternative minimum
tax. Upon a disposition of the shares more than two years after grant of the
option and one year after exercise of the option, any gain or loss is treated as
long-term capital gain or loss. Net capital gains on shares held more than
12 months may be taxed at a maximum federal rate of 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income. If
these holding periods are not satisfied, the optionee recognizes ordinary income
at the time of disposition equal to the difference between the exercise price
and the lower of (i) the fair market value of the shares at the date of the
option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income is treated as long-term or short-term capital gain or
loss, depending on the holding period. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% shareholder of the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee.
NONSTATUTORY STOCK OPTIONS. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. Unless limited by
Section 162(m) of the Code, the Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Upon a disposition of
such shares by the optionee, any difference between the sale price and the
optionee's exercise price, to the extent not recognized as taxable income as
provided above, is treated as long-term or short-term capital gain or loss,
depending on the holding period. Net capital gains on shares held more than
12 months may be taxed at a maximum federal rate of 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income.
STOCK PURCHASE RIGHTS. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is subject
to a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code, because the Company may repurchase the stock when the purchaser ceases to
provide services to the Company. As a result of this substantial risk of
forfeiture, the purchaser will not recognize ordinary income at the time of
purchase. Instead, the purchaser will recognize ordinary
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income on the dates when the stock is no longer subject to a substantial risk of
forfeiture (i.e., when the Company's right of repurchase lapses). The
purchaser's ordinary income is measured as the difference between the purchase
price and the fair market value of the stock on the date the stock is no longer
subject to the right of repurchase.
The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and begin his or her capital gains holding period by
timely filing (i.e., within thirty days of purchase), an election pursuant to
Section 83(b) of the Code. In such event, the ordinary income recognized, if
any, is measured as the difference between the purchase price and the fair
market value of the stock on the date of purchase, and the capital gain holding
period commences on such date. The ordinary income recognized by a purchaser who
is an employee will be subject to tax withholding by the Company. Different
rules may apply if the purchaser is also an officer, director, or 10%
shareholder of the Company.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS
UNDER THE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX
CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS OF THE
INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
EMPLOYEE OR CONSULTANT MAY RESIDE.
As described above, the employees of the Company and its subsidiaries who
will receive grants under the Plan and the size of the grants are generally to
be determined by the Administrators in their discretion. Thus, it is not
possible either to predict the benefits or amounts that will be received by or
allocated to particular individuals or groups of employees. Approximately 300
employees have received options under the Prior Plans and the 1996 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE
MIRAVANT MEDICAL TECHNOLOGIES 2000 STOCK COMPENSATION PLAN.
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ITEM NO. 3
PROPOSAL TO RATIFY APPOINTMENT OF
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed, subject to ratification by the
stockholders, Ernst & Young LLP as the Company's independent public accountants
for the fiscal year ending December 31, 2000. Ernst & Young LLP has been the
Company's independent auditors since 1992. The Board of Directors believes that
the continuation of Ernst & Young LLP as the Company's independent public
accountants is beneficial to the Company and its stockholders.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to address the meeting, if they so
desire, and respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS ITEM.
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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 any persons who own more than ten percent
of the Common Stock, to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock. Such persons are required by
the SEC regulations to furnish the Company with copies of all Section 16(a)
forms filed.
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 year ended December 31, 1999, all such
Section 16(a) filing requirements were complied with, except one late filing
made by William P. Foley II.
OTHER MATTERS
The Company is unaware of any other matters to be presented at the Annual
Meeting, but if any other matters should properly come before the Meeting, it is
intended that the persons named in the accompanying proxy will vote the proxy in
accordance with their judgment.
STOCKHOLDER PROPOSALS FOR THE 2001 PROXY STATEMENT
Any stockholder satisfying the SEC requirements and wishing to submit a
proposal to be included in the Proxy Statement for the Company's 2001 Annual
Meeting of Stockholders should submit the proposal in writing to Secretary,
Miravant Medical Technologies, 336 Bollay Drive, Santa Barbara, California 93117
no later than December 31, 2000, in order for such proposal to be considered for
inclusion in the Proxy Statement and all other conditions for such inclusion
must be satisfied. Additionally, management proxy holders for the Company's 2001
Annual Meeting will have discretionary authority to vote on any stockholder
proposal that is presented at such Annual Meeting, but that is not included in
the Company's Proxy Statement, unless notice of such proposal is received by the
Secretary on or before February 26, 2001.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE SIGN THE PROXY AND RETURN IT IN
THE ENCLOSED STAMPED ENVELOPE
Santa Barbara, California
May 8, 1999
By Order of the Board of Directors
/s/ JOSEPH E. NIDA
-------------------------------
Joseph E. Nida
SECRETARY
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EXHIBIT A
MIRAVANT MEDICAL TECHNOLOGIES
2000 STOCK COMPENSATION PLAN
1. PURPOSES OF THE PLAN. The purposes of this 2000 Stock Compensation Plan
are:
- To attract and retain the best available personnel for positions of
substantial responsibility;
- To provide additional incentive to Employees, Directors and
Consultants; and
- To promote the success of Miravant Medical Technologies business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the
time of grant. Stock Purchase Rights may also be granted under the Plan.
The Plan is intended to supersede and replace all existing Company stock
option plans (the "Existing Plans"), except to the extent of options
outstanding under the Existing Plans.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where Options or Stock Purchase
Rights are, or will be, granted under the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CODE" means the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" means a committee of Service Providers appointed by the
Board in accordance with Section 4. of the Plan.
(f) "COMMON STOCK" means the common stock of the Company.
(g) "COMPANY" means Miravant Medical Technologies a Delaware
corporation.
(h) "CONSULTANT" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed
by statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 181(st) day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be
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treated for tax purposes as a Nonstatutory Stock Option. Neither service as
a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the
NASDAQ National Market or The NASDAQ SmallCap Market of The
NASDAQ Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last
market trading day prior to the time of determination, as
reported in THE WALL STREET JOURNAL or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of
determination, as reported in THE WALL STREET JOURNAL or such
other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
(p) "NOTICE OF GRANT" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(q) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "OPTION" means a stock option granted pursuant to the Plan.
(s) "OPTION AGREEMENT" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(t) "OPTION EXCHANGE PROGRAM" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.
(u) "OPTIONED STOCK" means the Common Stock subject to an Option or
Stock Purchase Right.
(v) "OPTIONEE" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(w) "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(x) "PLAN" means this Miravant Medical Technologies 2000 Stock
Compensation Plan.
(y) "RESTRICTED STOCK" means shares of Common Stock acquired pursuant to
a grant of Stock Purchase Rights under Section 11 of the Plan.
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(z) "RESTRICTED STOCK PURCHASE AGREEMENT" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted
Stock Purchase Agreement is subject to the terms and conditions of the Plan
and the Notice of Grant.
(aa) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect
to the Plan.
(bb) "SECTION 16(B)" means Section 16(b) of the Exchange Act.
(cc) "SERVICE PROVIDER" means an Employee, Director or Consultant.
(dd) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is Six Million (6,000,000) Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an
Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan
(unless the Plan has terminated); PROVIDED, however, that Shares that
have actually been issued under the Plan, whether upon exercise of an
Option or Right, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if Shares
of Restricted Stock are repurchased by the Company at their original
purchase price, such Shares shall become available for future grant
under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
(i) MULTIPLE ADMINISTRATIVE BODIES. Different Committees with
respect to different groups of Service Providers may administer
the Plan.
(ii) SECTION 162(m). To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of
Section 162(m) of the Code, the Plan shall be administered by a
Committee of two or more "outside directors" within the meaning
of Section 162(m) of the Code.
(iii) RULE 16B-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) OTHER ADMINISTRATION. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable
Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value;
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(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be covered
by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options
or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of
Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall
determine;
(vi) to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock
Purchase Right shall have declined since the date the Option or
Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right (subject
to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period
of Options longer than is otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the Shares to
be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may
deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or advisable
for administering the Plan.
(c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's decisions,
determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. ELIGIBILITY. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only
to Employees.
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6. LIMITATIONS.
(a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 6(a), Incentive Stock Options shall be taken into
account in the order in which they were granted. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to
such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional
500,000 Shares, which shall not count against the limit set
forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with
a transaction described in Section 13), the cancelled Option
will be counted against the limits set forth in subsections
(i) and (ii) above. For this purpose, if the exercise price of
an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.
7. TERM OF PLAN. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a
term of ten (10) years unless terminated earlier under Section 15 of the
Plan.
8. TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten
(10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in
the Option Agreement.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall
be no less than 110% of the Fair Market Value per Share on the
date of grant.
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(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the
case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of
Section 162(m) of the Code, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the
date of grant;
(iii) Notwithstanding the foregoing, Options may be granted with a
per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or
other corporate transaction.
(b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions that must be satisfied
before the Option may be exercised.
(c) FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the
time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be
exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred
compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall
be tolled during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator
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and permitted by the Option Agreement and the Plan. Shares issued upon
exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such Shares promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period
of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination
or at the discretion of the Committee, if longer. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent the Option is vested on the date of termination (but
in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination or at the discretion of the
Committee, if longer. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan, unless the Administrator
determines the unvested Shares exercisable. If, after termination, the
Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(d) DEATH OF OPTIONEE. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in
the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by
bequest or inheritance, but only to the extent that the Option is vested on
the date of death. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee's termination or at the discretion of the Committee,
if longer. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan, unless the Administrator determines
the unvested shares exercisable. The Option may be exercised by the executor
or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of
descent or distribution. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
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(e) BUYOUT PROVISIONS. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
11. STOCK PURCHASE RIGHTS.
(a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of
Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to
purchase, the price to be paid, and the time within which the offeree must
accept such offer. The offer shall be accepted by execution of a Restricted
Stock Purchase Agreement in the form determined by the Administrator.
(b) REPURCHASE OPTION. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate
determined by the Administrator.
(c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
(d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 13 of the Plan.
12. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right
may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only
by the Optionee. If the Administrator makes an Option or Stock Purchase
Right transferable, such Option or Stock Purchase Right shall contain such
additional terms and conditions as the Administrator deems appropriate.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares
of Common Stock which have been authorized for issuance under the Plan but
as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common
Stock covered by each such outstanding Option or Stock Purchase Right, shall
be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided
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herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Option or Stock Purchase
Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify
each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten
(10) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option applicable to any Shares purchased upon exercise of an
Option or Stock Purchase Right shall lapse as to all such Shares, provided
the proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) MERGER OR ASSET SALE. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets
of the Company, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or
exercisable, at the discretion of the Administrators. The Administrators may
allow for each outstanding Option and Stock Purchase Right to be assumed or
an equivalent option or right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested
and exercisable for a period of thirty (30) days from the date of such
notice, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or
Stock Purchase Right shall be considered assumed if, following the merger or
sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right, to be solely common stock of the successor corporation
or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of assets.
14. DATE OF GRANT. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other
later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time
after the date of such grant.
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15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
and the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.
16. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right to represent and warrant at
the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation
is required.
17. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
18. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner
and to the degree required under Applicable Laws.
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<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS--JUNE 14, 2000
MIRAVANT MEDICAL TECHNOLOGIES, 336 BOLLAY DRIVE, SANTA BARBARA, CALIFORNIA 93117
The undersigned hereby appoints Gary S. Kledzik, Ph.D. and John M. Philpott,
and each of them the true and lawful attorneys in fact, agents and proxies, each
with full power of substitution, to attend the annual meeting of stockholders of
Miravant Medical Technologies (the "Company") to be held June 14, 2000, at
9:00 a.m. at The Four Seasons Biltmore Hotel, Santa Barbara, California, and/or
at any adjournment of the annual meeting, and to vote in the manner indicated
below all shares of Common Stock which the undersigned would be entitled to vote
if personally present, all in accordance with and as more fully described in the
Notice of Annual Meeting and accompanying Proxy Statement, receipt of which is
hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY SHALL BE VOTED AS INDICATED BELOW:
PLEASE MARK YOUR VOTES LIKE THIS: /X/.
<TABLE>
<S> <C> <C> <C>
1. To elect the following as directors. FOR ALL NOMINEES LISTED BELOW-- WITHHOLD AUTHORITY TO VOTE
(except as marked below) / / FOR ALL NOMINEES LISTED
BELOW / /
</TABLE>
Larry S. Barels, William P. Foley II, Charles T. Foscue,
Gary S. Kledzik, Ph.D., David E. Mai, and Jonah Shacknai
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE OUT THE NAME OF ANY SUCH
NOMINEE(S) AND MARK THE FOLLOWING BOX: / /
2. To approve the Miravant Medical Technologies 2000 Stock Compensation Plan.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
3. To ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the 2000 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, on such other business as may properly come before the
annual meeting or any adjournment thereof.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN
ITEM 1, FOR ITEM 2, FOR ITEM 3 AND, WITH RESPECT TO ANY OTHER MATTERS THAT
PROPERLY COME BEFORE THE MEETING, IN THE DISCRETION OF THE PROXY HOLDERS.
Please mark, date and sign as your name appears below and return in the
enclosed envelope. If acting as executor, administrator, trustee or guardian,
state your full title and authority when signing. If the signer is a
corporation, please sign the full corporation name, by a duly authorized
officer. If shares are held jointly, each stockholder named should sign.
Dated ______________, 2000
__________________________
__________________________
Signature, if held jointly
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PRE-PAID
ENVELOPE
/ / I/WE PLAN TO ATTEND THE MEETING. IF YOU PLAN TO ATTEND THE MEETING, PLEASE
MARK THE BOX.
