IGEN INTERNATIONAL, INC.
16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 28, 2002
To The Stockholders of IGEN International, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of IGEN
International, Inc. will be held on August 28, 2002 at 10:00 a.m. local time
at The Four Seasons Hotel, 2800 Pennsylvania Avenue, N.W., Washington, DC
20007 for the following purposes:
1. To elect two Class III directors for a three-year term (Proposal 1).
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as the Company's independent auditor for the fiscal year
ending 2003 (Proposal 2).
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the
close of business on July 15, 2002 as the record date for the Annual Meeting.
Only holders of the Company's common stock at the close of business on that date
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof. A complete list of stockholders entitled to
vote at the Annual Meeting will be open for examination by any stockholder, for
any purpose germane to the meeting, during ordinary business hours at 16020
Industrial Drive, Gaithersburg, Maryland, 20877 from August 15, through August
27, 2002.
By Order of the Board of Directors
/s/ George V. Migausky
George V. Migausky
Secretary
Gaithersburg, Maryland
July 29, 2002
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE TO
ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING. A RETURN ENVELOPE (WHICH IS
POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE.
EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND
THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD
BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING,
YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
IGEN INTERNATIONAL, INC.
16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 28, 2002
This Proxy Statement is being furnished to the stockholders of IGEN
International, Inc., a Delaware corporation (the "Company"), as part of the
solicitation of the enclosed proxy by its board of directors (the "Board of
Directors" or "Board") from holders of the outstanding shares of the Company's
common stock, par value $0.001 per share ("Common Stock"), for use at the Annual
Meeting of Stockholders to be held on August 28, 2002, at 10:00 a.m. local time
(the "Annual Meeting"), or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting. The
Annual Meeting will be held at the Four Seasons Hotel, 2800 Pennsylvania Avenue,
N.W., Washington, DC 20007. The Company first mailed this Proxy Statement, the
accompanying proxy card and the Company's Annual Report for the fiscal year
ended March 31, 2002 on or about July 29, 2002, to all stockholders entitled to
vote at the Annual Meeting.
GENERAL INFORMATION
VOTING
Each outstanding share of Common Stock is entitled to one vote on all
matters as to which a vote is taken at the Annual Meeting. The Board of
Directors has fixed the record date as July 15, 2002 (the "Record Date") for
determination of stockholders entitled to notice of and to vote at the Annual
Meeting. The number of shares of Common Stock outstanding on the Record Date was
23,720,504. The presence, in person or by proxy, of at least a majority of the
shares of Common Stock outstanding on the Record Date is necessary to constitute
a quorum at the Annual Meeting. Abstentions and broker non-votes will be treated
as shares that are present and entitled to vote for purposes of determining a
quorum but are not counted for any purpose in determining whether a matter is
approved.
VOTES REQUIRED TO APPROVE EACH ITEM
The following votes are required to approve each item of business at the
meeting. As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters to present for action by the stockholders at the
Annual Meeting. If, however, any other matters not now known are properly
brought before the Annual Meeting, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their best
judgment.
Election of Directors (Proposal 1): The two candidates receiving the highest
number of affirmative votes cast at the meeting in person or by proxy will be
elected directors of the Company. Proxies may not be voted for a greater number
of persons than the number of nominees named.
Other Items: A majority of the votes cast at the meeting in person or by proxy
is required to ratify the appointment of Deloitte & Touche LLP, as the Company's
independent auditor for fiscal year ending 2003 (Proposal 2) and to approve any
other items of business that may properly come before the meeting.
1
At the Annual Meeting, stockholder votes will be tabulated by one or more
persons appointed to act as inspectors of election. The inspectors of election
will separately tabulate affirmative and negative votes, abstentions and broker
non-votes.
All proxies in the enclosed form of proxy that are properly executed and
returned to the Company prior to commencement of voting at the Annual Meeting
will be voted at the Annual Meeting or any adjournments or postponements thereof
in accordance with the instructions thereon. Executed but unmarked proxies will
be voted FOR all proposals set forth in this Proxy Statement.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company.
No additional compensation will be paid to directors, officers or other regular
employees for such services.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke such proxy at any time before it is exercised. A proxy may be revoked by
filing with the Secretary of the Company at the Company's principal executive
office, 16020 Industrial Drive, Gaithersburg, Maryland 20877, a written notice
of revocation or a duly executed proxy bearing a later date, or it may be
revoked by attending the Annual Meeting and voting in person. Attendance at the
Annual Meeting will not, by itself, revoke a proxy.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors consists of six directors divided equally into
three classes designated as Class I, Class II and Class III. The term of office
of the Class III directors will expire at the Annual Meeting and Class III
directors will be elected for a three-year term. The terms of office of the
Class I directors and Class II directors will expire at the annual meetings of
stockholders in 2003 and 2004, respectively, and their successors will be
elected for a three-year term. The nominees listed below are currently directors
of the Company.
It is the intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as director of the
persons named below as nominees, if authority to do so is not withheld. The
Company believes that each nominee will stand for election and will serve if
elected as director. If a person nominated by the Board of Directors fails to
stand for election or will be unable to accept election, the proxies will be
voted for the election of such other person as the Company's Board of Directors
may propose. THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE NAMED
NOMINEES.
INFORMATION AS TO THE NOMINEES AND CONTINUING DIRECTORS
The following table sets forth, as of July 15, 2002, the names and certain
other information regarding the nominees for election as director and those
directors who will continue to serve after the Annual Meeting.
2
DIRECTOR EXPIRATION
NOMINEES FOR A THREE-YEAR TERM AGE SINCE OF TERM POSITIONS HELD WITH THE COMPANY
------------------------------ --- ----- ------- -------------------------------
Samuel J. Wohlstadter(1) 60 1982 2002 Chairman, Chief Executive Officer
and Director
Richard Cass 56 2000 2002 Director
CONTINUING DIRECTORS
--------------------
Richard J. Massey, Ph.D.(1) 55 1990 2004 President, Chief Operating Officer
and Director
Joop Sistermans(2)(3) 59 1999 2004 Director
Robert Salsmans(2)(3) 57 1995 2003 Director
Anthony Rees(2) 58 2000 2003 Director
-----------------------
(1) Member of Non-Officer Stock Option Committee.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
Set forth below is certain biographical information regarding the directors of
the Company.
NOMINEES FOR A THREE-YEAR TERM
SAMUEL J. WOHLSTADTER is a founder of the Company and has been Chairman
of the Board and Chief Executive Officer since its formation in 1982. Mr.
Wohlstadter has been a venture capitalist for more than 25 years and has
experience in founding, supporting and managing high technology companies,
including Amgen Inc., a biopharmaceutical company, and Applied Biosystems, Inc.,
a medical and biological research products company. Mr. Wohlstadter is also
Chief Executive Officer of Hyperion Catalysis International, an advanced
materials company, which he founded in 1981; of Wellstat Therapeutics
Corporation (formerly known as Pro-Neuron, Inc.), a drug discovery company,
which he founded in 1985; of Proteinix Corporation, a development stage company
organized to conduct research in intracellular metabolic processes, which he
founded in 1988; and of Wellstat Biologics Corporation (formerly known as
Pro-Virus, Inc.), a drug discovery company, which commenced operations in 1994.
RICHARD W. CASS has been a partner with the law firm of Wilmer, Cutler
& Pickering since 1979 and is a former member of his firm's Management Committee
and chairman of its Business Transactions Practice Group. He specializes in
corporate and securities law and represents companies and entrepreneurs in
acquisitions, dispositions, joint ventures and public securities offerings. Mr.
Cass received his bachelor's degree from Princeton University and his law degree
from Yale University.
CONTINUING DIRECTORS
Class I (term expires 2003)
ROBERT R. SALSMANS serves as President and Chief Executive Officer of
Diosynth RTP, Inc. the US subsidiary of Diosynth, a business unit that is part
of the Pharma group of Akzo Nobel N.V., a holding company with high technology
operating units in the biotechnology, medical, and pharmaceutical industries,
a position he has held since November 2001. From September 1994 to August 2001,
Mr. Salsmans was President and Chief Executive Officer of Organon Teknika B.V.
in The Netherlands. From October 1993 through August 1994, Mr. Salsmans served
as Managing Director of Organon Teknika B.V., a business unit of Akzo Nobel,
and from 1990 through September 1993, he served as Managing Director of Organon
International B.V. Mr. Salsmans has been a Director of the Company since 1995.
3
ANTHONY REES, D. Phil. is Director of Science at Synt:em, a private
biopharmaceutical company that is focused on the discovery and development of
novel Central Nervous System (CNS) medicines, a position he has held since
January 2000. During 1997-1999, he served as a non-executive employee of
Synt:em. Professor Rees has held faculty positions at the University of Oxford
(1980-1990) and the University of Bath (Great Britain) where, from 1990-1993, he
was Head of the Biochemistry Department and from 1993-1997 Head of the School of
Biology and Biochemistry. He is currently Professorial Research Fellow.
Professor Rees has been Executive Editor of the journal Protein Engineering
since 1997. In 1989 he co-founded Oxford Molecular PLC, a British software
company. While on sabbatical from Oxford University from 1989 to 1990, Professor
Rees was Vice President of Research at IGEN. Professor Rees received his
doctoral degree from Oxford University.
Class II (term expires 2004)
RICHARD J. MASSEY, Ph.D. is a founder of the Company, has been
President and Chief Operating Officer of the Company since February 1992, and
served as Senior Vice President of the Company from 1985 to 1992. From 1981
until he joined IGEN in 1983, Dr. Massey was a faculty member in the
Microbiology and Immunology Department at Rush Medical Center in Chicago. Prior
to that, he was Senior Research Scientist at the National Cancer Institute,
Frederick Cancer Research Center.
JOOP SISTERMANS currently serves as Chairman, Supervisory Board of
Thuiszorg Kempenstreek (Netherlands), a public organization for homecare, a
position he has held since September 2000, after having been a member of the
Board since 1998. He serves on the Advisory Committee Economy, Ecology and
Technology, for the Dutch Ministry of Economic Affairs, a position he has held
since August 1999. Mr. Sistermans also is Vice Chairman of the Framework
Programme Expert Advisory Group of the European Commission for Innovative
Products, Processes and Organizations, a position he has held since December
1998; he was reappointed Vice Chairman by the European Commission in March 2001.
He is a Supervisory Board member for the University of Twente a position that he
has held since May 1997 and of the Maastricht School of Management, a position
he has held since February 2001. From February 1999 to November 2000, Mr.
Sistermans served as Executive Vice President of Origin International B.V., a
member company of the Philips Electronics Group of Companies based in The
Netherlands. Mr. Sistermans was employed by Akzo Nobel from 1986 to January
1999, serving as Executive Vice President and member of the Executive Council
responsible for Strategy and Technology since 1994. Mr. Sistermans previously
served on the Board of Directors of the Company from 1993 to 1995 while in the
position of President and Chief Executive Officer of Akzo Nobel's Organon
Teknika business unit.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors acts as nominating committee for selecting nominees
for election as directors. The Company's Bylaws permit stockholders eligible to
vote for the election of directors at the Annual Meeting to make nominations for
directors, but only if such nominations are made pursuant to timely notice in
writing to the Secretary of the Company. The Bylaws also permit stockholders to
propose other business brought before an annual meeting, provided that such
proposals are made pursuant to timely notice to the Secretary of the Company. To
be timely, notice must be received at the principal executive offices of the
Company no later than the date designated for receipt of stockholder proposals.
See "Stockholder Proposals".
During fiscal year 2002, the Board of Directors had three standing
committees, an Audit Committee, a Compensation Committee and a Non-Officer
Director Stock Option Committee. The Board of Directors does not have a
Nominating Committee.
4
The Audit Committee meets with the Company's independent auditors at least
quarterly to review the results of the quarterly reviews and annual audit and to
discuss the financial statements; recommends to the Board the independent
auditors to be retained; and receives and considers the accountants' comments as
to controls, adequacy of staff and management performance and procedures in
connection with audit and financial controls. During fiscal 2002, the Audit
Committee held seven meetings and its members were Messrs. Salsmans, Sistermans
and Rees, each of whom is independent as defined in Rule 4200(a)(15) of the
National Association of Securities Dealers' listing standards. The Board of
Directors has adopted a written charter for the Audit Committee which was
included as an appendix to the Company's 2000 Proxy Statement.
The Compensation Committee is responsible for establishing the Company's
compensation programs for executive officers and makes determinations concerning
executive salaries and incentive compensation, awards stock options to executive
officers under the Company's stock option plans and otherwise determines
executive compensation levels and performs such other functions regarding
compensation as the Board may delegate. During fiscal 2002, the Compensation
Committee of the Board of Directors had five meetings and its members were
Messrs. Salsmans and Sistermans both of whom are "non-employee directors" and
"outside directors" as defined in the rules promulgated by the Securities and
Exchange Commission and Section 162(m) of the Internal Revenue Code.
The Non-Officer Stock Option Committee has authority to grant stock options
to persons who are not, at the time of the grant of the option, executive
officers of the Company subject to Section 16 of the Securities Exchange Act of
1934, as amended. The Non-Officer Stock Option Committee held two meetings
during fiscal 2002 and its members were Mr. Wohlstadter and Dr. Massey.
During the fiscal year ended March 31, 2002, the Board of Directors held 18
meetings. All directors attended at least 75% of the meetings of the Board and
of the committees on which they served.
COMPENSATION OF DIRECTORS
Each non-employee director of the Company receives an attendance fee of
$1,000 for each meeting of the board of directors that he attends. In fiscal
year ended March 31, 2002, the compensation paid to non-employee directors (all
directors except Mr. Wohlstadter and Dr. Massey) was $15,000. In fiscal 2002,
each member of the Independent Committee of the Board of Directors, which held
more than 60 meetings after being established in 2000 to evaluate and issue a
report on certain shareholder demands and claims and to evaluate and negotiate
the terms under which the Company's Meso Scale Diagnostic, LLC. joint venture
might be continued, received compensation in the amount of $75,000. In
accordance with Company policy, the Company pays for or reimburses for all
expenses incurred by members of the Board of Directors in connection with
attendance at Board meetings.
Under the Company's 1994 Non-Employee Directors' Stock Option Plan, each
non-employee director of the Company is automatically granted an option to
purchase 10,000 shares of the Company's Common Stock effective on the date of
such director's election or appointment to the Board. Effective June 6, 2001,
the Board of Directors adopted an amendment to the plan. Under the plan, as
amended, each non-employee director was granted as of June 6, 2001 an additional
10,000 shares of the Company's Common Stock. Additional options may be granted
in the future to non-employee directors at a date or dates set by the Board of
Directors. The options have an exercise price set at 100% of the fair market
value on the date of grant, have a ten year term, and vest over a period of five
years with one-fifth of the option becoming exercisable one year from the date
of grant and an additional one-twentieth becoming exercisable every three months
thereafter. Such vesting is conditioned upon continued service as a director of
the Company. Set forth below is a table of options granted under this plan to
and held by the non-employee directors as of the Record Date.
5
OPTION GRANTS TO NON-EMPLOYEE DIRECTORS
NUMBER OF NUMBER
SHARES UNDERLYING OF SHARES EXERCISE OR BASE
NAME OPTIONS GRANTED VESTED PRICE ($/SH) EXPIRATION DATE
---- --------------- ------ ------------ ---------------
Richard W. Cass 10,000 4,000 $15.69 June 2010
10,000 2,000 $23.06 June 2011
Anthony R. Rees 6,500 500 $15.69 June 2010
10,000 2,000 $23.06 June 2011
Robert R. Salsmans 10,000 10,000 $ 6.25 August 2005
10,000 2,000 $23.06 June 2011
Joop Sistermans 10,000 5,500 $24.69 September 2009
10,000 2,000 $23.06 June 2011
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based on the Company's records and other information, the Company
believes that its current directors and officers reported all transactions in
the Company's common stock and options on a timely basis during the fiscal year
ended March 31, 2002.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
(PROPOSAL 2)
The Board of Directors is seeking ratification of its appointment of
Deloitte & Touche LLP as the Company's auditor for the fiscal year ending March
31, 2003. Deloitte & Touche LLP is currently the Company's independent auditor.
A representative of Deloitte & Touche LLP is expected to attend the Annual
Meeting and be available to respond to appropriate questions from stockholders.
Stockholder ratification of the selection of Deloitte & Touche LLP as the
Company's independent auditor is not required by the Company's Bylaws or
otherwise. The Board is submitting the selection of Deloitte & Touche to the
stockholders for ratification as a matter of good corporate practice. If a
majority of the stockholders voting at the Annual Meeting do not approve the
selection of Deloitte & Touche LLP, the selection of independent auditor may be
reconsidered by the Board of Directors. Even if the selection is ratified, the
Board, in its discretion, may direct the appointment of a different independent
auditing firm at any time during the year if the Board determines that such a
change would be in the best interest of the Company and its stockholders. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
6
REPORT OF THE AUDIT COMMITTEE(1)
The Audit Committee is comprised of three directors named below, all of
whom meet the independence and experience requirements of Rule 4200(a)(15) of
the National Association of Securities Dealers' listing standards. The Audit
Committee has adopted a written charter that has been approved by the Board of
Directors.
The Audit Committee has reviewed and discussed the Company's audited
financial statements for the fiscal year ended March 31, 2002 with management
and Deloitte & Touche LLP, the Company's independent auditor. The Audit
Committee has discussed with Deloitte & Touche LLP the matters required to be
discussed by Statement of Audit Standards No. 61 (Communication with Audit
Committees) relating to the conduct of the audit, including discussions relating
to that firm's independence. The Audit Committee has received the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees).
Based on the considerations referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
fiscal year ended March 31, 2002 be included in the Company's Annual Report on
Form 10-K for 2002 for filing with the Securities and Exchange Commission.
By the Audit Committee of the Board of Directors:
Joop Sistermans
Robert Salsmans
Anthony Rees
RELATIONSHIP WITH INDEPENDENT AUDITOR
Deloitte & Touche LLP is the independent accounting firm that audits the
Company's financial statements. In accordance with standing policy, Deloitte &
Touche LLP periodically changes the personnel who work on the audit.
In addition to performing the audit of the Company's consolidated financial
statements, Deloitte & Touche LLP provided various other services during fiscal
year 2002. The aggregate fees billed for fiscal year 2002 for each of the
following categories of services are set forth below:
o Audit Fees: $202,000 for services rendered for the annual audit of the
Company's consolidated financial statements for fiscal year 2002 and the
quarterly review of the financial statements included in the Company's Form
10-Q; and
o All Other Fees: $64,000 for all other services. "All other services"
primarily includes (i) the preparation of tax returns of the Company, (ii)
review and other procedures related to consents on registration statements
filed with the U.S. Securities & Exchange Commission and (iii) a compliance
report relating to a debt agreement.
-------------------
(1) The material in this report is not "soliciting material", is not deemed
filed with the SEC, and is not to be incorporated by reference into any filing
of the Company under the 1933 Act or 1934 Act, whether made before or after the
date hereof and irrespective of any general incorporation language contained in
any such filing.
7
Deloitte & Touche LLP did not provide any services related to financial
information systems design and implementation during fiscal year 2002. The Audit
Committee has considered whether, and determined that, the provision of services
described in All Other Fees, above, is consistent with maintaining Deloitte &
Touche's independence.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of July 15, 2002 (except as otherwise
footnoted below), certain information regarding the ownership of the Company's
Common Stock of: (i) each current director; (ii) each nominee for director;
(iii) each of the Named Executive Officers (see Executive Compensation); (iv)
each person known by the Company to be the beneficial owner of more than 5% of
its outstanding Common Stock; and (v) all executive officers and directors of
the Company as a group.
NUMBER OF PERCENT
NAME(1) SHARES OF TOTAL
------- ------ --------
Samuel J. and Nadine Wohlstadter(2) 4,491,437 18.9%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Richard J. Massey, Ph.D.(3) 1,148,875 4.8%
c/o IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
George V. Migausky(4) 205,065 *
Robert R. Salsmans(5) 12,500 *
Joop Sistermans(6) 4,000 *
Richard Cass(7) 6,500 *
Anthony Rees(8) 9,600 *
All directors and executive officers as a group(9) (7 persons) 5,877,977 24.4%
---------------------
* Less than 1%
(1) This table is based upon information supplied by officers, directors and
principal stockholders. Unless otherwise indicated in the notes to this
table and subject to the community property laws where applicable, each of
the stockholders named in this table has sole voting and investment power
with respect to the shares shown as beneficially owned by him.
(2) Includes 80,000 shares issuable upon exercise of options held by Mr.
Wohlstadter that are currently exercisable or exercisable within 60 days.
Also, includes 15,000 shares that were issued under an early exercise
feature in an option granted to Mr. Wohlstadter, subject to a limited
repurchase right in favor of the Company at the option exercise price if
Mr. Wohlstadter leaves the employ of the Company before vesting. Does not
include shares held by Mr. Wohlstadter's adult children. Also excludes
210,000 shares issuable upon exercise of options held by Jacob Wohlstadter,
the adult son of Mr. Wohlstadter, that are currently exercisable or
exercisable within 60 days. See "Certain Transactions".
(3) Includes 138,572 shares issuable upon exercise of options held by Dr.
Massey that are currently exercisable or exercisable within 60 days. Also
includes 12,000 shares that were issued under an early exercise feature in
an option granted to Dr. Massey, subject to a limited repurchase right in
favor of the Company at the option exercise price if Dr. Massey leaves the
employ of the Company before vesting.
(4) Includes 132,500 shares issuable upon exercise of options held by Mr.
Migausky that are currently exercisable or exercisable within 60 days. Also
includes 24,620 shares held by Mr. Migausky's minor children.
8
(5) Includes 12,500 shares issuable upon exercise of an option held by Mr.
Salsmans that is currently exercisable or exercisable within 60 days.
(6) Includes 8,000 shares issuable upon exercise of an option held by Mr.
Sistermans that is exercisable within 60 days.
(7) Includes 6,500 shares issuable upon exercise of an option held by Mr. Cass
that is currently exercisable within 60 days.
(8) Includes 3,000 shares issuable upon exercise of an option held by Mr. Rees
that is currently exercisable within 60 days.
(9) Includes 381,072 shares issuable upon exercise of options that are
currently exercisable or exercisable within 60 days.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows for the fiscal years ending March 31, 2002, 2001
and 2000, compensation awarded or paid to, or earned by each of the following
(the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION
FISCAL OTHER ANNUAL AWARDS/OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) (# SHARES)
--------------------------- ---- ---------- --------- ---------------- ----------
(a) (b) (c) (d) (e) (g)
Samuel J. Wohlstadter 2002 $392,167 $250,000(1) -- --
Chairman and Chief Executive Officer 2001 $370,000 $170,400(1) -- 200,000
2000 $370,000 -- -- --
Richard J. Massey, Ph.D. 2002 $316,208 $200,000(1) $14,406(2) --
President and Chief Operating Officer 2001 $298,000 $136,200(1) $15,359(3) 100,000
2000 $298,000 -- $15,234(4) --
George V. Migausky 2002 $221,667 $112,500(1) $ 5,290(5) --
Vice President and Chief Financial 2001 $209,000 $60,000(1) $ 5,225(5) 25,000
Officer 2000 $209,000 -- $ 5,000(5) --
----------------------------
(1) Paid to employee after end of fiscal year.
(2) Consists of annual lease value of Company provided automobile of
$10,750 and 401(k) match amount of $3,656.
(3) Consists of annual lease value of Company provided automobile of
$11,750 and 401(k) match amount of $3,609.
(4) Consists of annual lease value of Company provided automobile of
$11,750 and 401(k) match amount of $3,484.
(5) Consists of 401(k) match amount.
9
STOCK OPTION GRANTS AND EXERCISES
The Company has granted options to its executive officers under its 1985
Stock Option Plan (the "1985 Plan") and its 1994 Stock Option Plan ("1994
Plan"). The 1985 Plan has expired although options granted under that plan
remain outstanding and exercisable.
Option Grants in Last Fiscal Year
None of the Named Executive Officers were granted stock options during the
fiscal year ended March 31, 2002.
Aggregated Option Exercises in Last Fiscal Year, and Fiscal Year End Stock
Option Values
The following table sets forth information related to options exercised by
the Named Executive Officers during the fiscal year ending March 31, 2002 and
the number and value of options held at year-end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END STOCK OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES MARCH 31, 2002 MARCH 31, 2002
ACQUIRED VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
ON EXERCISE (1) (2) (3)
NAME ------- ----- ----- -----
----
Samuel J. Wohlstadter 582,500 $12,178,785 60,000/140,000 $1.1 million/$2.7 million
Richard J. Massey, Ph.D. 241,500 $ 8,520,883 160,000/70,000 $4.7 million/$1.3 million
George V. Migausky 59,500 $ 1,947,479 125,000/27,500 $3.3 million/$507,400
-----------------------
(1) Based on the Fair Market Value of the Company's Common Stock on the
date of exercise (the closing price) minus the exercise price and
multiplied by the number of shares acquired.
(2) Includes both "in-the-money" and "out-of-the-money" options.
"In-the-money" options are options with exercise prices below the
market price of the Company's Common Stock on March 31, 2002.
(3) Based on the closing price of the Company's Common Stock on March 31,
2002 of $37.88 minus the exercise price.
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company does not have an employment agreement with any of its named
executive officers. In furtherance of the stated goals of attracting and
retaining the named executive officers and other key employees who contribute to
the long-term success of the Company, the Company has adopted a Termination
Protection Program (the "Program"). The purpose of the Program is to encourage
participants to continue as employees of the Company in the event of a "Change
of Control" of the Company, as defined in the Program. The Program provides that
in the event a covered employee is terminated by the Company without "cause" or
by the employee for "good reason" in anticipation of or within 30 months
10
following a Change in Control of the Company, then the Company shall make a cash
payment to the employee equal to 1.5 to 3 times the sum of the employee's annual
salary plus bonus (3 times in the case of the named executive officers).
The Program also provides that employees are entitled to continued
participation in the Company's group medical, dental, life and disability
programs for a period of 18 months (lifetime for medical and dental coverage and
36 months for all other programs in the case of the named executive officers).
In addition, under the Program, upon a Change in Control the vesting for all
options held by an employee will immediately accelerate and remain exercisable
for 2 years following the Change in Control. The Program also provides
reimbursement for outplacement services and for any "parachute" excise tax
imposed on payments made under the Program, and for the advancement of costs and
expenses (including legal fees) incurred by the employee related to the Program.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION(2)
During fiscal 2002, the members of the Executive Compensation Committee of
the Board of Directors were Messrs. Salsmans and Sistermans, both of whom are
"non-employee directors" and "outside directors" as defined in the rules
promulgated by the Securities and Exchange Commission and Section 162(m) of the
Internal Revenue Code, respectively. The Committee is responsible for
establishing the Company's compensation programs for executive officers.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract, retain
and reward executive officers and other key employees who contribute to the
long-term success of the Company and to establish an appropriate relationship
between executive compensation and the creation of long-term stockholder value.
To meet these goals, the Committee has adopted a mix among the compensation
elements of salary, bonus and stock options.
BASE SALARY. The Committee periodically reviews each executive officer's
base salary. When reviewing base salaries, the Committee considers individual
performance, levels of responsibility, prior experience, breadth of knowledge
and competitive pay practices. In general, the salaries and stock option awards
of executive officers are established based upon meeting Company and individual
achievement performance goals and objectives and upon a review of salary surveys
of other emerging health care companies subjectively selected by the Committee.
The Committee utilizes published salary surveys for the life science industry
and surveys a relevant group of health care companies that are publicly traded
to obtain additional information for making compensation comparisons. This group
of companies includes diagnostic, biotechnology and medical technology companies
with size and market capitalizations similar to that of the Company. Based upon
such surveys, the executive officers' salaries are set in a range similar to
other comparable health care companies.
BONUS. The bonus program is a variable pay program for executive officers
of the Company to earn additional annual compensation. The bonus award earned
depends on the extent to which Company and individual performance objectives are
achieved. The Company's objectives consist of operating, strategic and financial
----------------------------
(2) The material in this report is not "soliciting material", is not
deemed filed with the SEC, and is not to be incorporated by reference into any
filing of the Company under the 1933 Act or 1934 Act, whether made before or
after the date hereof and irrespective of any general incorporation language
contained in any such filing.
11
goals that are considered to be critical to the Company's fundamental long-term
goal of building shareholder value. For fiscal 2002, these objectives related
to: (i) effective implementation of the planned growth of the Company; (ii)
continued advances toward project goals in research and development programs;
(iii) expansion of technological capabilities; (iv) progress towards commercial
goals in development programs; (v) progress in connection with attainment of
collaborative relationships; and (vi) progress in certain financial,
administrative and legal activities.
The Committee met once to review salary and bonus compensation for fiscal
2002. Based on the factors described above, the Committee awarded bonuses to
Mr. Wohlstadter, Dr. Massey and Mr. Migausky in the amounts of $250,000,
$200,000 and $112,500, respectively.
OPTION PLANS. The Option Plans offered by the Company have been established
to provide all employees of the Company with an opportunity to share, along with
stockholders of the Company, in the long-term performance of the Company.
Periodic grants of stock options are generally made to all eligible
employees, with additional grants being made to certain employees upon
commencement of employment and occasionally following a significant change in
job responsibilities, scope or title. Stock options granted generally have a
five-year vesting schedule and expire 10 years from the date of grant. The
exercise price of options granted under the stock option plans is usually 100%
of fair market value of the underlying stock on the date of grant.
Guidelines for the number of stock options for each participant in the
periodic grant program generally are determined by a formula established by the
Committee whereby several factors are applied to the salary and performance
level of each participant and then related to the approximate market price of
the stock at the time of grant. In awarding stock options, the Committee
considers individual performance, overall contribution to the Company, officer
retention, the number of unvested stock options and the total number of stock
options to be awarded. During fiscal 2002, the Committee did not meet to review
stock option compensation.
Section 162(m) of the Code limits the Company to a deduction for federal
income tax purposes of no more than $1 million of compensation paid to certain
Named Executive Officers in a taxable year. Compensation above $1 million may be
deducted if it is "performance-based compensation" within the meaning of the
Code. The Compensation Committee believes that stock options granted under the
Company's 1994 Stock Option Plan with an exercise price at least equal to the
fair market value of the Company's Common Stock on the date of grant should be
treated as "performance-based compensation" and any compensation recognized by a
Named Executive Officer as a result of the grant of such a stock option is
deductible by the Company.
CEO COMPENSATION
The Compensation Committee uses the same procedures described above in
setting the annual salary, bonus and stock option awards for the CEO. The CEO's
salary is determined based on comparisons with other public health care
companies as described above. In awarding stock options and bonuses, the
Compensation Committee considered the CEO's performance, overall contribution to
the Company, retention, the number of unvested options and the total number of
options to be granted and the Committee's subjective evaluation of the CEO's
performance. As described above, in determining where the CEO's total
compensation is set within the ranges and in light of the considerations
described above, the Committee by necessity makes certain subjective
evaluations. The Committee believes that compared to other health care companies
surveyed by the Company, the CEO's salary is in the mid range and his bonus and
stock options are in the low range. The Committee recognizes, however, that the
12
CEO's overall equity ownership of the Company accumulated over an approximate
twenty-year period is in the high range. On the basis of the foregoing factors
the Committee determined to grant Mr. Wohlstadter a bonus in the amount of
$250,000. The Committee did not meet during fiscal 2002 to review stock option
compensation.
CONCLUSION
Through the plans described above, a significant portion of the Company's
compensation program and the CEO's and the other executive officers'
compensation are contingent on Company performance, and realization of benefits
by the CEO and the other executive officers is closely linked to increases in
long-term stockholder value. The Company remains committed to this philosophy of
pay for performance, recognizing that the competitive market for talented
executives and the volatility of the Company's business may result in highly
variable compensation.
Compensation Committee of the Board of Directors
Robert R. Salsmans and Joop Sistermans
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Compensation Committee have been and are outside
directors and no director or executive officer of the Company serves on the
compensation committee of the board of directors of any company for which
Messrs. Salsmans or Sistermans serves as an executive officer or director.
CERTAIN TRANSACTIONS
The Company's Bylaws provide that the Company will indemnify its directors
and its officers, to the fullest extent permitted by Delaware law. The Company
is also empowered under its Bylaws to enter into indemnification contracts with
its directors and officers and to purchase insurance on behalf of any person
whom it is required or permitted to indemnify. Pursuant to these provisions, the
Company has entered into indemnity agreements with each of its directors and
executive officers and has obtained director and officer liability insurance in
the amount of $30 million.
In addition, the Company's Certificate of Incorporation provides that the
Company's directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty of care as a director, except liability for (i) any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which a director derived an
improper personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting personal liability of
directors, then the liability of a director shall be eliminated or limited to
the fullest extent permitted by the Delaware law.
In 1993, the Company entered into a license agreement with Organon Teknika.
Robert Salsmans, one of the Company's directors, was the President and Chief
Executive Officer of Organon Teknika until that company was sold in August 2001.
Under the terms of the license agreement, the Company receives royalty payments
from Organon Teknika from its product sales that utilize the Company's
intellectual property. During the year ended March 31, 2002, these royalty
payments aggregated $252,000. In addition, the Company and Organon Teknika have
a supply agreement under which each party has agreed to supply to the other
certain instruments and components. During the year ended March 31, 2002, the
Company paid $386,000 to Organon Teknika and Organon Teknika paid $214,000 to
the Company under this supply agreement.
13
During fiscal year 1995 the Company entered into agreements to develop and
commercialize biomedical products utilizing advanced materials and a supply
agreement with Hyperion Catalysis International ("Hyperion"). Messrs. Massey and
Wohlstadter are directors of Hyperion. In addition, Mr. Wohlstadter beneficially
owns more than 50% of the outstanding common stock of Hyperion. During the
fiscal year ended March 31, 2002 the Company did not pay to, or receive from,
Hyperion any amounts under these agreements. In addition, Hyperion has a service
arrangement with the Company under which the Company provides certain
administrative and other services at cost to Hyperion. The total amount billed
by the Company under this arrangement for the year-ended March 31, 2002 was
$332,000.
Mr. Wohlstadter is the principal stockholder and Chief Executive Officer of
Wellstat Biologics Corporation (formerly known as Pro-Virus, Inc.) and Wellstat
Therapeutics Corporation (formerly known as Pro-Neuron, Inc.) and Proteinix
Corporation ("Proteinix"). Dr. Massey is a shareholder in Proteinix. In 1993,
the Company licensed certain diagnostic technologies from, and certain
pharmaceutical technologies to, Proteinix and Wellstat Therapeutics Corporation.
No royalties have ever been earned or accrued under these agreements. Wellstat
Biologics Corporation, Proteinix and Wellstat Therapeutics Corporation each has
had a services arrangement with the Company since 1994, 1992 and 1986,
respectively, under which the Company provides certain services. These services
include accounting, human resources and other administrative services, as well
as facility related costs and services. The total amount billed by the Company
under this arrangement for the year ended March 31, 2002 was $823,000.
During August 2001, the Company entered into agreements with Meso Scale
Technologies, LLC. ("MST") continuing Meso Scale Diagnostics, LLC. ("MSD"), a
joint venture formed solely by MST and the Company in 1995. MSD was formed for
the development and commercialization of products utilizing a proprietary
combination of MST's multi-array technology together with ORIGEN and other
technologies owned by the Company. MST is a company established and wholly-owned
by Jacob Wohlstadter, the son of IGEN's Chief Executive Officer.
Under the amended agreements that were negotiated by an independent
committee of the Company's Board of Directors, the Company holds a 31% voting
equity interest in MSD. It also holds 100% of the non-voting equity interests in
MSD and is entitled to a preferred return before any payments are made to other
equity holders on $36.4 million of the funds previously invested in MSD through
March 31, 2002 and on additional funds it invests thereafter. This preferred
return would be payable out of a portion of both future profits and certain
third-party financings, before any payments are made to other equity holders.
The preferred return is 5% on investments made prior to January 1, 2001 and the
prime rate plus 0.5% on investments made after January 1, 2001. MST owns the
remaining 69% of the voting equity interest in MSD. The Company agreed, subject
to certain conditions, to fund the joint venture through November 2003.
The Company and MST are the sole members of MSD and each holds one seat on
MSD's two-member board of managers. The Company's representative on the MSD
Board of Managers is Richard J. Massey, the Company's President and Chief
Operating Officer, who also serves as the Treasurer and Secretary for MSD. The
other member of the MSD Board of Managers is Jacob Wohlstadter, who is the sole
owner of MST and serves as President and Chief Executive Officer of MSD. Under
most circumstances, significant governance matters require the approval of both
the Company and MST (or their representatives on the Board of Managers of MSD).
Neither Dr. Massey nor any other executive officer or director of the Company
has any ownership interest in MST or MSD, other than through ownership of
interests in the Company.
During the 2002 calendar year, the Company agreed to fund MSD $21.5
million, subject to a permitted variance of fifteen percent. The funding
commitment may be satisfied in part through in kind contributions of scientific
and administrative personnel and shared facilities. As of March 31, 2002, the
14
Company had satisfied $5.3 million of this funding commitment. For the year
ended March 31, 2002, the Company made total contributions to MSD of $19.6
million. The 2003 calendar year funding commitment would be based on an annual
budget prepared by MSD and submitted to a committee of the Company's Board of
Directors for approval. If the committee fails to approve the annual budget
submitted by MSD, the Company would still be required to provide MSD with
transitional funding for an additional six months, estimated at $11 million. If
the committee fails to approve a budget submitted by MSD, MSD and MST would have
the right to terminate the joint venture unless the budget calls for funding
that exceeds 110% of the prior 12 months' funding and the committee makes a
reasonable good faith determination for the rejection.
The term of the joint venture is through November 30, 2003. MSD and MST
have the right to terminate the joint venture prior to November 2003 under
certain circumstances including: (1) breach of IGEN's obligations, including its
funding obligations to MSD; (2) MSD's termination of Jacob Wohlstadter's
employment (other than for cause or disability), (3) if Jacob Wohlstadter is
entitled to terminate his employment agreement for good reason (as defined in
the agreement), or (4) upon a change in control of the Company, as defined in
the joint venture agreement. Change in control includes, among other things, the
acquisition by any person or group (other than Samuel Wohlstadter and his
affiliates) of 30% or more of the beneficial ownership of any class of voting
securities of the Company, or 15% or more of the beneficial ownership if
combined with the right to nominate one or more directors of the Company. Upon
termination, expiration or non-renewal of the joint venture agreement, MSD and
MST jointly have the right to repurchase the Company's interest in MSD at fair
market value, less a discount of 7.5% to 15% depending on the cause of
termination or non-renewal.
Under the terms of the revised agreements executed with MST and MSD, MSD
has a worldwide, perpetual, exclusive license (with certain exceptions) to the
Company's technology for use in MSD's research program. If the Company ceases to
be a member of the joint venture, the Company will receive royalty payments from
MSD on all products developed and sold by MSD using the Company's technology.
MST holds a worldwide, perpetual, non-exclusive license for certain
non-diagnostic applications of the Company's technology. The Company will
receive royalty payments from MST on any products developed and sold by MST that
use this technology.
Under the revised agreements, the Company and Jacob Wohlstadter revised
the terms of his consulting agreement with the Company to provide for a shorter
term running through August 15, 2004. Pursuant to the consulting agreement,
Jacob Wohlstadter will be entitled to receive such fees as the Company and Jacob
Wohlstadter agree to when particular services are requested by the Company.
During fiscal 2002, Jacob Wohlstadter received $275,000 for consulting services
performed for the Company for the period 1995 through 2001. Under this
consulting agreement, Jacob Wohlstadter was granted, in May 1997, an option for
180,000 shares of the Company's Common Stock, at $6.00 per share, which was the
fair market value on the date of grant. The option will expire on May 8, 2007
and is fully vested. On August 1, 2000, Jacob Wohlstadter was granted an option
for 75,000 shares of the Company's Common Stock, at an exercise price of $18.75
per share, which was the fair market value on the date of grant. The option will
expire on August 1, 2010 and 30,000 shares are exercisable within 60 days of
July 15, 2002.
MSD has entered into an employment agreement with Jacob Wohlstadter
that provides for a term running concurrent with the joint venture agreement.
Jacob Wohlstadter has agreed to serve as President and Chief Executive Officer
of MSD for an initial annual salary of $250,000. Jacob Wohlstadter will be
eligible to receive, at the discretion of an independent committee of the
Company's Board of Directors, an annual cash bonus in an amount not to exceed
20% of his annual salary. During the fiscal year ended March 31, 2002, Jacob
Wohlstadter received $245,000 from his employment at MSD, which includes $25,000
paid by the Company for the use of an automobile and lease of apartment. If MSD
terminates the employment agreement without cause, or Jacob Wohlstadter
15
terminates the employment agreement for good reason (which includes a change in
control of the Company as described above), Mr. Wohlstadter shall be entitled to
receive, in addition to salary and pro rata bonus and adjustments earned through
the 60th day following the notice of termination, an amount equal to from 3 to
12 times (depending on the reason for the termination) the monthly pro rata
salary, bonus and adjustments in effect at the time of the termination. In
addition, upon such a termination, MSD and MST shall have a joint right to
repurchase the Company's interest in MSD on terms described above. The Company
is responsible for all amounts payable, costs incurred and other obligations
under the employment agreement, which is expected to be paid out of the
Company's capital contribution to MSD. The Company has also agreed to indemnify
Jacob Wohlstadter against certain liabilities, including liability from the
joint venture.
In connection with the exercise of employee stock options in July 2000,
Samuel Wohlstadter, Chairman and CEO, received a loan from the Company. The loan
is a 6.62% simple interest only, full recourse loan against all assets of Mr.
Wohlstadter in the principal amount of $2,060,500 maturing in July 2007.
Interest charged to and paid by Mr. Wohlstadter under this loan arrangement
during fiscal 2002 was $136,405. The loan is collateralized by the pledge of
100,000 shares of the Company's Common Stock.
In connection with the exercise of an employee stock option in July 2000,
Richard Massey, President and COO, received a loan from the Company. The loan is
a 6.62% simple interest only, full recourse loan against all assets of Dr.
Massey in the principal amount of $1,649,000, maturing in July 2007. Interest
charged to and paid by Dr. Massey under this loan arrangement during fiscal 2002
was $109,164. The loan is collateralized by the pledge of 80,000 shares of the
Company's Common Stock owned by Dr. Massey.
The Board also authorized the Company to provide additional loans to Mr.
Wohlstadter, Dr. Massey and Mr. Migausky in the principal amounts of up to
$3,750,000, $1,875,000 and $468,750, respectively, to be used in connection with
the exercise of stock options by each of them. The loans, if utilized by these
individuals, would bear interest at fair market value rates, be full recourse,
and be collateralized by the pledge of shares of the Company's common stock.
Richard Cass, a director of the Company, is a partner with the law firm of
Wilmer, Cutler & Pickering and is a member of that firm's Management Committee
and co-chairman of its Corporate Practices Group. The Company has retained
Wilmer Cutler & Pickering to perform legal services for each of the three prior
fiscal years.
In February 2001, Brown Simpson Strategic Growth Fund L.P. initiated a
shareholder derivative lawsuit for and on behalf of the shareholders of the
Company in the Circuit Court of Montgomery County, Maryland against four of the
Company's current directors, two former directors, three executive officers and
the Company as a nominal defendant. In the complaint, Brown Simpson alleged
breach of fiduciary duties by the named individual defendants in connection with
transactions between the Company and other entities in which certain directors
and officers are alleged to have an interest, including its MSD joint venture. A
second shareholder derivative lawsuit was filed in March 2001 by Laurence
Paskowitz in Circuit Court for Montgomery County, Maryland, for and on behalf of
the shareholders of the Company. In the lawsuit, Mr. Paskowitz named as
defendants all of the Company's existing directors, all of the current officers,
two former directors and the Company as a nominal defendant. The allegations and
the relief sought in this complaint were substantially the same as those set
forth in the complaint filed by Brown Simpson. On May 15, 2002, following
hearings in December 2001 and March 2002, the court issued an opinion and order
dismissing all claims asserted against all of the defendants. On June 19, 2002,
an appeal was filed by one of the plaintiffs.
16
PERFORMANCE MEASUREMENT COMPARISON(1)
The following chart shows the comparison of total cumulative return on an
investment of $100 invested on March 31, 1997 in cash of (i) the Company's
Common Stock, (ii) the S&P Biotechnology Index, (iii) the NASDAQ Stock Market.
All values assume reinvestment of the full amount of all dividends and are
calculated as of March 31, 2002:
Cumulative Total Return
------------------------------------------------------------------
3/97 3/98 3/99 3/00 3/01 3/02
---- ---- ---- ---- ---- ----
IGEN INTERNATIONAL, INC. 100.00 807.14 457.14 476.19 360.72 721.52
NASDAQ STOCK MARKET (U.S.) 100.00 151.57 204.77 380.94 152.35 153.42
S & P BIOTECHNOLOGY 100.00 108.95 268.01 417.94 383.08 389.75
--------
(1) The material in this report is not "soliciting material", is not deemed
filed with the SEC, and is not to be incorporated by reference into any filing
of the Company under the 1933 Act or 1934 Act, whether made before or after the
date hereof and irrespective of any general incorporation language contained in
any such filing.
17
STOCKHOLDER PROPOSALS
Any proposals intended to be presented by any stockholder for action at the
Company's 2003 Annual Meeting of Stockholders must be received by the Secretary
of the Company at 16020 Industrial Drive, Gaithersburg, Maryland 20877 not later
than March 31, 2003 to be included in the proxy statement and proxy relating to
the 2003 Annual Meeting or to be properly brought before the Company's 2003
Annual Meeting.
FORM 10-K AVAILABILITY
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended March 31, 2002 accompanies this Proxy Statement. The Company has filed an
Annual Report for its fiscal year ended March 31, 2002 on Form 10-K with the
Securities and Exchange Commission. Stockholders may obtain, free of charge, a
copy of the Form 10-K by writing to Director, Corporate Communications, IGEN
International, Inc., 16020 Industrial Drive, Gaithersburg, Maryland 20877.
By Order of the Board of Directors
/s/ George V. Migausky
George V. Migausky
Secretary
July 29, 2002