SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
INTROGEN THERAPEUTICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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INTROGEN THERAPEUTICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 1, 2002
To Introgen's Stockholders:
We cordially invite you to attend Introgen's 2002 Annual Meeting of
Stockholders (the Annual Meeting) to be held on Wednesday, May 1, 2002 at 10:00
a.m., local time, at the Houston Marriott Medical Center, located at 6580 Fannin
Street, Houston, Texas 77030. At the Annual Meeting we will:
1. Elect two (2) Class II directors to the Board of Directors, each to
serve a term of three (3) years;
2. Ratify the appointment of Ernst & Young LLP as Introgen's
independent auditors for the current fiscal year ending December 31, 2002;
and
3. Transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Stockholders who owned Introgen stock at the close of business on March 11,
2002 may attend and vote at the Annual Meeting. If you cannot attend the Annual
Meeting, you may vote electronically using the Internet as instructed on the
enclosed Proxy Card or by mailing the Proxy Card in the enclosed postage prepaid
envelope. Any stockholder attending the Annual Meeting may vote in person, even
though he or she has already returned a Proxy Card.
Sincerely,
/s/ RODNEY VARNER
--------------------------------------
Rodney Varner
Secretary
Austin, Texas
April 1, 2002
INTROGEN THERAPEUTICS, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
Our Board of Directors is soliciting proxies for our 2002 Annual Meeting of
Stockholders (the "Annual Meeting"). This Proxy Statement contains important
information for you to consider when deciding how to vote on the matters brought
before the Annual Meeting. Please read it carefully.
This Proxy Statement, a Proxy Card and the 2002 Annual Report to
Stockholders were mailed to stockholders on or about April 1, 2002.
QUESTIONS AND ANSWERS
Q: WHAT IS THE RECORD DATE FOR THE ANNUAL MEETING AND HOW MANY SHARES OF OUR
COMMON STOCK WERE OUTSTANDING ON THE RECORD DATE?
A: Our Board of Directors set March 11, 2002 as the record date for the Annual
Meeting. On March 11, 2002, approximately 21,451,719 shares of our common
stock were outstanding.
Q: WHO IS ENTITLED TO VOTE AND HOW MANY VOTES DO I HAVE?
A: All stockholders who owned shares of our common stock on March 11, 2002 are
entitled to vote at the Annual Meeting. Every stockholder is entitled to
one (1) vote for each share of common stock held.
Q: HOW DO I VOTE?
A: You may vote in person by attending the Annual Meeting or by completing and
returning your proxy by mail or electronically using the Internet. To vote
your proxy by mail, mark your vote on the enclosed Proxy Card, then follow
the directions on the Proxy Card. To vote your proxy using the Internet,
see the instructions on the Proxy Card, and have the Proxy Card available
when you access the Internet Web site. The home page will prompt you to
enter your control number, then follow the instructions to record your
vote. If you do not mark any selections, your shares will be voted as
recommended by our Board of Directors. Whether you plan to attend the
Annual Meeting or not, we encourage you to vote by proxy as soon as
possible.
Q: CAN I CHANGE MY VOTE?
A: You can revoke your proxy before the time of voting at the Annual Meeting
in several ways:
- by mailing a revised proxy dated later than the prior proxy;
- by voting again at the Internet Web site;
- by voting in person at the Annual Meeting; or
- by notifying our corporate secretary in writing that you are revoking
your proxy.
Your revocation must be received before the Annual Meeting to be counted.
Q: WHAT CONSTITUTES A "QUORUM" FOR THE ANNUAL MEETING?
A: At least a majority of the shares of our common stock outstanding as of the
record date must be present at the Annual Meeting in person or by proxy in
order to hold the Annual Meeting and conduct business. This is called a
quorum. Your shares are counted as present at the Annual Meeting if you are
either (i) present and vote in person at the Annual Meeting or (ii) have
properly submitted a proxy via mail or Internet. Abstentions, broker
non-votes and votes withheld from director nominees are considered as
shares present at the Annual Meeting for the purposes of determining a
quorum. A broker non-vote occurs when a broker or other nominee who holds
shares for the owner of the shares does not vote on a particular proposal
because the nominee does not have discretionary voting authority for that
proposal and has not received voting instructions from the owner of the
shares.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: For Proposal I, the two (2) individuals receiving the highest number of
"FOR" votes will be elected. To pass, Proposal II requires the affirmative
"FOR" vote of at least a majority of the shares of our common stock present
at the Annual Meeting and entitled to vote.
Q: HOW ARE VOTES COUNTED?
A: For Proposal I, the election of directors, you may vote "FOR" all of the
nominees or you may elect to have your vote "WITHHELD" with respect to one
or more of the nominees. Votes that are withheld will be excluded entirely
and will have no effect in the election of directors. Similarly, if you
hold your shares in a brokerage account in your broker's name (this is
called "street name") and you do not vote or instruct the broker how to
vote the shares, or your broker does not have discretionary authority to
vote in the election of directors, your shares will have no effect in the
election of directors.
For Proposal II, the ratification of the appointment of the independent
auditors, you may vote "FOR," "AGAINST" or "ABSTAIN." If you abstain from
voting on Proposal II, it has the same effect as a vote against Proposal
II. If you hold your shares in "street name" and you do not vote or
instruct the broker how to vote the shares, or your broker does not have
discretionary authority to vote, your shares will not be counted in the
tally of the number of shares cast on Proposal II and therefore may have
the effect of reducing the number of shares needed to approve Proposal II.
Finally, if you just sign your Proxy Card with no further instructions,
your shares will be counted as a vote "FOR" each director and "FOR" the
ratification of the appointment of Ernst & Young LLP as Introgen's
independent auditors for the fiscal year ending December 31, 2002.
Q: WHO IS SOLICITING MY VOTE AND WHO PAYS FOR THE SOLICITATION OF PROXIES?
A: This Proxy Statement is furnished in connection with the solicitation of
your vote by our Board of Directors. We pay the costs of soliciting proxies
from stockholders. We may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
the voting materials to the beneficial owners. Directors, officers and
regular employees may solicit proxies on behalf of Introgen personally, by
telephone or by facsimile, without additional compensation.
Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND VOTING ON THE PROPOSALS?
A: Our Board of Directors recommends that you vote your shares "FOR" each of
the nominees to the Board of Directors and "FOR" the ratification of the
appointment of Ernst & Young LLP as Introgen's independent auditors for the
current fiscal year ending December 31, 2002.
Q: WHEN ARE THE STOCKHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING OF
STOCKHOLDERS DUE?
A: We anticipate holding our 2003 Annual Meeting of Stockholders on or about
May 1, 2003. Stockholder proposals for our 2003 Annual Meeting of
Stockholders, whether intended for inclusion in the Proxy Statement for
such meeting or for presentation directly at such meeting, must be received
at our principal executive offices by the close of business on December 2,
2002. In addition, notice of any stockholder proposals must be given in
accordance with our Bylaws and all other applicable requirements including
the rules and regulations of the United States Securities and Exchange
Commission. If a stockholder fails to give notice of a stockholder proposal
as required by our Bylaws or other applicable requirements, then the
proposal will not be included in the Proxy Statement for the 2003 Annual
Meeting and the stockholder will not be permitted to present the proposal
to the stockholders for a vote at the 2003 Annual Meeting.
Q: WHERE ARE INTROGEN'S PRINCIPAL EXECUTIVE OFFICES?
A: Our principal executive offices are located at 301 Congress Avenue, Suite
1850, Austin, Texas 78701. Our telephone number is (512) 708-9310.
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SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of our common stock
as of the record date by (i) all persons known to us, based on statements filed
by such persons pursuant to Section 13(d) or 13(g) of the Securities Exchange
Act of 1934, as amended, to be the beneficial owners of more than 5% of our
common stock and based on the records of EquiServe, N.A., our transfer agent,
(ii) each of the executive officers named in the table under "Executive
Compensation -- Summary Compensation Table," and (iii) all current directors and
executive officers as a group.
Except as otherwise noted, and subject to applicable community property
laws, the persons named in this table have, to our knowledge, sole voting and
investing power for all of the shares of common stock held by them.
This table lists applicable percentage ownership based on 21,451,719 shares
of common stock outstanding as of March 11, 2002. Options to purchase shares of
our common stock that are exercisable within 60 days of March 11, 2002 are
deemed to be beneficially owned by the persons holding these options for the
purpose of computing percentage ownership of that person, but are not treated as
outstanding for the purpose of computing any other person's ownership
percentage.
Unless otherwise indicated, the address for each stockholder on this table
is c/o Introgen Therapeutics, Inc., 301 Congress Avenue, Suite 1850, Austin,
Texas 78701.
SHARES BENEFICIALLY
BENEFICIALLY OWNED
BENEFICIAL OWNER OWNED PERCENT
---------------- ------------ ------------
Aventis Holdings Inc. (formerly known as Rhone-Poulenc Rorer
International Holdings Inc.)(1)........................... 6,312,614 26.5%
500 Arcola Road
Collegeville, PA 19426
John N. Kapoor, Ph.D.(2).................................... 3,573,755 16.6%
225 Deerpath, #250
Lake Forest, IL 60045
David G. Nance(3)........................................... 2,580,825 11.8%
The Board of Regents of The University of Texas System...... 1,274,798 5.9%
201 West 7th Street
Austin, TX 78701
Mahendra G. Shah, Ph.D.(4).................................. 439,523 2.0%
James A. Merritt, M.D.(5)................................... 184,854 *
David L. Parker, Ph.D., J.D.(6)............................. 179,955 *
James W. Albrecht, Jr.(7)................................... 178,544 *
Shawn L. Gallagher(8)....................................... 177,782 *
J. David Enloe, Jr.(9)...................................... 122,800 *
Charles E. Long(10)......................................... 38,933 *
G. Thomas Finnegan III(11).................................. 37,500 *
William H. Cunningham, Ph.D.(12)............................ 34,533 *
Elise T. Wang(13)........................................... 28,933 *
Max W. Talbott, Ph.D.(14)................................... -- --
All directors and executive officers as a group (13
people)(15)............................................... 7,577,937 32.7%
---------------
* Represents less than 1% of the outstanding shares of common stock.
(1) In December 1999, Rhone-Poulenc S.A., the ultimate parent company of
Rhone-Poulenc Rorer Pharmaceuticals Inc., combined with Hoechst AG, and the
parties have combined Hoechst Marion Roussel, the pharmaceutical business
of Hoechst AG, with that of Rhone-Poulenc Rorer to form Aventis Pharma.
Rhone-Poulenc Rorer Pharmaceuticals Inc. is now known as Aventis
Pharmaceuticals Inc. The share number includes 2,343,721 shares of our
common stock issuable within 60 days of March 11, 2002 upon conversion of
Series A non-voting convertible preferred stock held by Aventis
Pharmaceuticals Inc.
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(2) Consists of 383,888 shares held by EJ Financial Enterprises, Inc.,
3,099,067 shares held by EJ Financial/Introgen Management L.P. and 90,800
shares held by Dr. Kapoor subject to stock options that are exercisable
within 60 days of March 11, 2002. EJ Financial/ Introgen Management L.P.
controlled by its general partner, EJ Financial Enterprises. Dr. Kapoor is
Chairman of the Board of Directors of EJ Financial Enterprises. Dr. Kapoor
disclaims beneficial ownership of the shares held by EJ Financial
Enterprises and EJ Financial/Introgen Management L.P.
(3) Consists of 1,346,979 shares held by Developtech Resources Corporation,
18,130 shares held by Domecq Technologies, Inc., 850,496 shares held by
Debouchement, Ltd., and 365,220 shares held by Mr. Nance subject to stock
options that are exercisable within 60 days of March 11, 2002. Mr. Nance is
President and Chief Executive Officer of Developtech Resources Corporation,
Domecq Technologies, Inc. and Debouchement, Ltd. Mr. Nance holds the right
to vote for each entity and has dispositive control over the shares.
(4) Consists of 257,744 shares subject to stock options that are exercisable
within 60 days of March 11, 2002 and a fully-vested option to purchase from
EJ Financial Enterprises, Inc. a total of 181,779 shares of our common
stock.
(5) Includes 85,744 shares subject to stock options that are exercisable within
60 days of March 11, 2002.
(6) Includes 157,744 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(7) Includes 176,944 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(8) Includes 167,344 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(9) Consists of 122,800 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(10) Includes 28,933 shares subject to stock options that are exercisable within
60 days of March 11, 2002.
(11) Consists of 37,500 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(12) Consists of 34,533 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(13) Consists of 28,933 shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(14) Dr. Talbott has no shares subject to stock options that are exercisable
within 60 days of March 11, 2002.
(15) Includes shares described in the notes above, as applicable to our
directors and current executive officers.
EXECUTIVE OFFICERS
The following sets forth information concerning the persons currently
serving as our executive officers, including information as to each executive
officer's age as of the record date, position and business experience.
NAME AGE POSITION
---- --- --------
David G. Nance........................ 50 President and Chief Executive Officer
Max W. Talbott, Ph.D.................. 53 Senior Vice President, Worldwide
Commercial Development
James W. Albrecht, Jr. ............... 47 Chief Financial Officer
James A. Merritt, M.D................. 50 Chief Medical Officer
J. David Enloe, Jr. .................. 38 Vice President, Operations
G. Thomas Finnegan III................ 34 Vice President, Finance and Corporate
Development
Shawn L. Gallagher.................... 40 Vice President, Product Development
David L. Parker, Ph.D., J.D........... 47 Vice President, Intellectual Property
Please see "Election of Directors" for additional information with respect
to Mr. Nance.
Max W. Talbott, Ph.D., joined Introgen in February 2002 as our Senior Vice
President, Worldwide Commercial Development. From 2000 to 2002, Dr. Talbott was
Senior Vice President, Worldwide Regulatory Affairs and Pharmacovigilance at
DuPont Pharmaceuticals Company and Bristol-Myers Squibb Pharmaceuticals Company,
which merged during this period. From 1996 to 2000, he served in various
positions with Aventis Pharmaceuticals and Rhone-Poulenc Rorer Pharmaceuticals,
most recently as Senior Vice President, Drug Regulatory Affairs and Quality
Assurance. Prior to 1996, Dr. Talbott occupied several management positions with
Eli Lilly and Company and he spent five years with the U.S. Food and Drug
Administration. He received his Ph.D. in immunology and pharmacology from
Rutgers University.
James W. Albrecht, Jr., joined Introgen in November 1994 as our Vice
President, Operations and Administration, and he has served as our Chief
Financial Officer since April 1995. From 1993 to 1996, he
4
operated a consulting business providing chief financial officer services to the
technology and real estate industries. Mr. Albrecht worked previously at Arthur
Andersen LLP as an accountant and he is a Certified Public Accountant. He
received his B.B.A. in accounting from The University of Texas at Austin.
James A. Merritt, M.D., joined Introgen in February 1996 as our Vice
President, Clinical Affairs, and he has served as our Chief Medical Officer
since October 2001. From 1994 to 1995, he served as Vice President of Medical
Affairs at Viagene, Inc., a biotechnology company. From 1990 to 1994, Dr.
Merritt held various positions with IDEC Pharmaceuticals Corp., most recently as
Senior Director, Clinical Sciences. Dr. Merritt has served on the editorial
board of the Journal of Anti-Cancer Drugs since 1990. He received his M.D. from
the University of Vermont and he is board certified in internal medicine and
medical oncology.
J. David Enloe, Jr., joined Introgen in March 1995. He has served as our
General Business Manager and Vice President, Administration, and he is currently
Vice President, Operations. From 1989 to 1995, he held various positions at
Centrilift, a division of Baker Hughes, Inc., an energy services company,
including Region General Manager, Southeast Asia, and he worked at Arthur
Andersen LLP as an accountant prior to that time. Mr. Enloe is a Certified
Public Accountant. He received his B.B.A. in accounting from The University of
Texas at Austin.
G. Thomas Finnegan III joined Introgen in March 2001 as Vice President of
Finance and Corporate Development. From 1999 to March 2001, he was employed in
the Health Care Investment Banking division of SG Cowen. From 1996 to 1997, he
was an equity analyst for Forstmann Partners LP. Prior to 1996, he worked with
various hedge funds as a trader and an analyst. Mr. Finnegan earned his M.B.A.
from the Goizueta School of Business at Emory University and his B.A. in finance
from the University of South Carolina.
Shawn L. Gallagher joined Introgen in August 1996 as our Vice President,
Manufacturing, and he is currently our Vice President, Product Development. From
1995 to 1996, he served as Director of Operations at Magenta Corporation, a
biotechnology services company, now BioReliance Corp. From 1991 to 1995, he held
various manufacturing management positions at ImmunoGen, Inc., a biotechnology
company. Mr. Gallagher received his M.S. in chemical engineering from the
University of California at San Diego.
David L. Parker, Ph.D., J.D., joined Introgen in March 1999 as our Vice
President, Intellectual Property. Since January 2000, Dr. Parker has been a
partner with the law firm Fulbright & Jaworski LLP. From 1992 to January 2000,
he was a shareholder of the patent law firm Arnold White & Durkee Professional
Corporation where he was previously an associate. Since 1997, Dr. Parker has
served as an adjunct professor at The University of Texas School of Law. Dr.
Parker received his Ph.D. in molecular pharmacology and molecular biology from
Baylor College of Medicine and his J.D. from The University of Texas School of
Law.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
Our Board of Directors is divided into three classes, with the term of
office of one class expiring each year. We currently have six directors with two
directors in each class. The terms of office of our Class II directors, Mahendra
G. Shah, Ph.D. and Charles E. Long, will expire at the 2002 Annual Meeting. The
terms of office of our Class III directors, John N. Kapoor, Ph.D. and David G.
Nance, will expire at the 2003 Annual Meeting. Finally, the terms of office of
our Class I directors, William H. Cunningham, Ph.D. and Elise T. Wang, will
expire at the 2004 Annual Meeting. At the 2002 Annual Meeting, stockholders will
elect two Class II directors, each for a term of three years.
5
NOMINEES FOR ELECTION AT THE 2002 ANNUAL MEETING
The following sets forth information concerning the nominees for election
as directors at the 2002 Annual Meeting, including information as to each
nominee's age and business experience as of the record date.
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
Charles E. Long(1)(2)........... 62 Director; Retired 2001
Mahendra G. Shah, Ph.D.......... 57 Director; Chief Executive 1993
Officer and Chairman of the
Board of Directors of First
Horizon Pharmaceutical
Corporation
---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Charles E. Long has served as a member of our Board of Directors since
January 2001. Mr. Long is former vice chairman of Citicorp and its principal
subsidiary, Citibank. Mr. Long held various positions during his career with
Citicorp, which began in 1972. From 1982 to 1998, he headed Citicorp's External
Affairs Division, which includes the Government Relations Division in
Washington, D.C. From 1976 to 1982, he was responsible for managing Citicorp's
international consumer banking business, as well as legal and external affairs
for consumer banking worldwide. Mr. Long is a trustee of the Eisenhower Exchange
Fellowship, the Midwest Research Institute and the National Forest Foundation.
He has served as an officer, director or trustee on a number of corporate,
charitable and public boards, including vice chairman of Georgetown University,
vice chairman and director of Woodrow Wilson House Museum and Ford's Theater in
Washington, D.C. Mr. Long is a director of Atlas Copco North America. Mr. Long
is also a member of the board of directors of Gendux AB, our wholly-owned
subsidiary.
Mahendra G. Shah, Ph.D., has served as a member of our Board of Directors
since our inception in June 1993. From 1993 to 2000, Dr. Shah served as our Vice
President, Corporate and Business Development. From 1991 to January 2001, he
served as Vice President, Corporate Development of EJ Financial Enterprises,
Inc., a healthcare investment company. Dr. Shah presently serves as the chief
executive officer and chairman of the board of directors of First Horizon
Pharmaceutical Corporation. Dr. Shah received his Ph.D. in industrial pharmacy
from St. John's University.
INCUMBENT DIRECTORS WHOSE TERMS OF OFFICE CONTINUE AFTER THE ANNUAL MEETING
The following sets forth information concerning the directors whose terms
of office continue after the 2002 Annual Meeting, including information as to
each director's age and business experience as of the record date.
DIRECTOR
NAME OF INCUMBENT DIRECTOR AGE POSITION/PRINCIPAL OCCUPATION SINCE
-------------------------- --- ----------------------------- --------
David G. Nance.................... 50 President, Chief Executive Officer 1993
and Director
John N. Kapoor, Ph.D.............. 58 Chairman of the Board; Chairman of 1993
the Board of EJ Financial
Enterprises, Inc.
William H. Cunningham,
Ph.D.(1)(2)..................... 58 Professor, The University of Texas 2000
at Austin
Elise T. Wang (1)................. 42 Managing Director, U.S. Equity 2001
Research Division of Salomon Smith
Barney
---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
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David G. Nance has served as a member of our Board of Directors and as our
President and Chief Executive Officer since our inception in June 1993. From
1992 to 1996, Mr. Nance served as the Managing Partner of Texas Biomedical
Development Partners, the investment group that founded us.
John N. Kapoor, Ph.D., has served as Chairman of our Board of Directors
since our inception in June 1993. In 1990, Dr. Kapoor founded EJ Financial
Enterprises, Inc., a healthcare investment company and he is presently the
chairman of its board of directors. He is also presently chairman of the board
of directors of Akorn, Inc., NeoPharm, Inc. and OptionCare, Inc., and he is a
director of Integrated Surgical Systems, Inc. Dr. Kapoor received his Ph.D. in
medicinal chemistry from the State University of New York at Buffalo.
William H. Cunningham, Ph.D., has served as a member of our Board of
Directors since July 2000. Dr. Cunningham served as Chancellor and Chief
Executive Officer of The University of Texas System from 1992 to 2000, in
addition to holding the Lee Hage and Joseph D. Jamail Regents Chair in Higher
Education Leadership. He served as President of The University of Texas at
Austin, a component institution of the University of Texas System, from 1985 to
1992. He is currently a Professor of Marketing at The University of Texas at
Austin. Dr. Cunningham serves on a number of public commissions, private
corporate boards and in a number of advisory roles to corporations. Dr.
Cunningham serves as a director on the board of directors of John Hancock
Advisers, Inc. He also serves on the board of directors of Jefferson Pilot
Corporation and Southwest Airlines, Inc., both of which are publicly-traded
Fortune 500 corporations. Dr. Cunningham received his Ph.D. and M.B.A. from
Michigan State University. In 1993, he received an Honorary Doctor of Laws
Degree and the Distinguished Alumnus Award from Michigan State University.
Elise T. Wang has served as a member of our Board of Directors since
January 2001. She is currently Managing Director, U.S. Equity Research Division
of Salomon Smith Barney. Ms. Wang was formerly managing director and senior
research analyst in the Health Care Equity Research Group at PaineWebber
Incorporated, where she covered the biotechnology industry for the past nine
years. Prior to joining PaineWebber Health Care Equity Research Group in January
1996, Ms. Wang was vice president in the Health Sciences Group of PaineWebber's
Investment Banking Division with responsibility for providing financial advisory
services to biotechnology and other health care sectors. Ms. Wang joined
PaineWebber Development Corporation in 1987, became vice president in 1992 and
joined Investment Banking in 1993. Ms. Wang received her M.B.A. from Harvard
Graduate School of Business.
There are no family relationships among any of our directors or executive
officers.
BOARD MEETINGS AND COMMITTEES
Our Board of Directors held a total of six meetings and acted by written
consent once during the calendar year ended December 31, 2001.(1) Dr. Shah was
unable to attend two of the six Board of Directors' meetings held during the
calendar year ended December 31, 2001. During such period, the Board of
Directors had a standing Audit Committee, Compensation Committee and Executive
Committee. The Board of Directors does not have a standing Nominating Committee.
The Audit Committee, which currently consists of directors William H.
Cunningham, Ph.D., Charles E. Long and Elise T. Wang, met four times during the
calendar year ended December 31, 2001. The Audit Committee monitors our system
of internal controls, provides our Board of Directors with the results of its
examinations and recommendations derived therefrom, outlines to the Board of
Directors improvements made, or to be made, in internal accounting controls,
recommends the appointment of independent auditors and provides to our Board of
Directors such additional information and materials as it may deem necessary to
make our Board of Directors aware of significant financial matters that require
their attention.
The Compensation Committee, which currently consists of directors William
H. Cunningham, Ph.D. and Charles E. Long, met once and acted by written consent
seven times during the calendar year ended
---------------
(1) On September 26, 2001, our Board of Directors elected to change our
fiscal year end from June 30 to December 31. Accordingly, the disclosure
regarding the number of meetings of our Board of Directors and committees
thereof is reported for the calendar year ended December 31, 2001.
7
December 31, 2001. The Compensation Committee administers our 2000 Stock Option
Plan, reviews forms of compensation to be provided to our officers, employees
and consultants, including stock compensation and loans, grants options to
purchase our common stock to our employees, executive officers, directors and
consultants, and reviews and makes recommendations to the Board of Directors
regarding all forms of compensation to be provided to the members of the Board
of Directors, including stock compensation and loans.
The Executive Committee, which currently consists of directors David G.
Nance and John N. Kapoor, Ph.D., met once and acted by written consent once
during the calendar year ended December 31, 2001. The Executive Committee acts
on behalf of our Board of Directors to the extent permitted under Delaware law.
BOARD COMPENSATION
Each non-employee director is granted an option to purchase 33,600 shares
of our common stock (exercisable at fair market value on the date of grant) upon
first becoming a director. The option vests ratably each month after the date of
grant of such option, so that the entire option is fully vested three years from
the date of grant. Each incumbent director is annually granted an option to
purchase 9,600 shares of our common stock (exercisable at fair market value on
the date of grant) on the date of each annual meeting of stockholders. That
option vests ratably each month after the date of grant of such option, so that
the entire option is fully vested one year from the date of grant. Additionally,
on October 25, 2001, each director was granted a fully-vested option to purchase
10,000 shares of our common stock (exercisable at fair market value on the date
of grant). Management intended this one-time grant to supplement the normal
compensation for the members of our Board of Directors described above.
Directors do not receive any cash or other additional compensation, other than
reimbursement of their out-of-pocket expenses, for services provided as a
director.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF BOTH NOMINEES TO THE BOARD OF DIRECTORS NAMED ABOVE.
8
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITORS
The Board of Directors has appointed, subject to ratification by our
stockholders, Ernst & Young LLP, as independent auditors for the current fiscal
year ending December 31, 2002.
CHANGE OF AUDITORS
On March 6, 2002, we dismissed Arthur Andersen LLP as our independent
auditors, effective upon completion of Arthur Andersen LLP's services in
connection with the filing of our Annual Report on Form 10-K for the six-month
transition period ended December 31, 2001.
Arthur Andersen LLP's reports on our financial statements for each of the
years ended June 30, 2000 and 2001 and for the six-month transition period ended
December 31, 2001 did not contain an adverse opinion or a disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope or accounting
principles.
The decision to change independent auditors was recommended by the Audit
Committee of our Board of Directors and was approved by our Board of Directors.
During each of the two years ended June 30, 2000 and 2001, the six-month
transition period ended December 31, 2001, and through March 20, 2002, there
were no disagreements with Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused it to make reference to the subject matter of
the disagreement in connection with its report.
During each of the two years ended June 30, 2000 and 2001, the six-month
transition period ended December 31, 2001, and through March 20, 2002, Arthur
Andersen LLP did not advise us of any "reportable events" as described in Item
304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as amended.
On March 6, 2002, we engaged, subject to stockholder approval, Ernst &
Young LLP as our independent auditors for the year ending December 31, 2002.
During each of the two years ended June 30, 2000 and 2001, the six-month
transition period ended December 31, 2001, and through March 6, 2002, we did not
consult Ernst & Young LLP on any matters described in Items 304(a)(2)(i) or
304(a)(2)(ii) of Regulation S-K.
AUDIT FEES
Fees charged by Arthur Andersen LLP for the audit of our annual financial
statements for the six-month transition period ended December 31, 2001, and for
the review of the financial statements included in our quarterly reports on Form
10-Q during the transition period were approximately $55,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Arthur Andersen LLP did not render professional services relating to
financial information systems design and implementation for the six-month
transition period ended December 31, 2001.
ALL OTHER FEES
Fees charged by Arthur Andersen LLP for services other than those described
above under "Audit Fees" provided for the six-month transition period ended
December 31, 2001, totaled approximately $19,000, which consisted of $12,500 for
tax return preparation and tax advisory services and $6,500 for financial
accounting consultation. Our Audit Committee has determined that the fees paid
to Arthur Andersen LLP for the tax return preparation, tax advisory services and
financial accounting consultation are compatible with maintaining Arthur
Andersen's independence.
9
A representative of Arthur Andersen LLP is not expected to be available at
the Annual Meeting, but a representative of Ernst & Young LLP is expected to be
available at the Annual Meeting to make a statement if such representative
desires to do so and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT
AUDITORS. In the event of a negative vote on such ratification, the Board of
Directors will reconsider its appointment of Ernst & Young LLP as our
independent auditors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the compensation paid by us to our Chief
Executive Officer and our four other most highly compensated executive officers
(collectively, the "Named Executive Officers") during the last four fiscal
periods, including the six-month transition period ended December 31, 2001 and
each of fiscal year 2001 (July 1, 2000 -- June 30, 2001), fiscal year 2000 (July
1, 1999 -- June 30, 2000) and fiscal year 1999 (July 1, 1998 -- June 30, 1999):
LONG-TERM
COMPENSATION
AWARDS
-------------
SECURITIES
COMPENSATION UNDERLYING
----------------- OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION PERIOD SALARY BONUS (# OF SHARES) COMPENSATION
--------------------------- ---------------------- -------- ------ ------------- ------------
David G. Nance.............. 7/1/2001- 12/31/2001 $163,854 $ -- 69,600
President and Chief 7/1/2000- 6/30/2001 300,208 8,835 50,000
Executive Officer 7/1/1999- 6/30/2000 271,337 -- 77,840
7/1/1998- 6/30/1999 265,494 500 174,400 --
James A. Merritt, M.D....... 7/1/2001- 12/31/2001 $108,333 $ -- 10,000
Chief Medical Officer 7/1/2000- 6/30/2001 200,000 5,841 40,000
7/1/1999- 6/30/2000 196,337 250 21,888
7/1/1998- 6/30/1999 175,868 500 86,400 --
David L. Parker, Ph.D.,
J.D....................... 7/1/2001- 12/31/2001 $100,000 $ -- --
Vice President,
Intellectual 7/1/2000- 6/30/2001 190,000 5,257 40,000
Property 7/1/1999- 6/30/2000 190,000 250 21,888
7/1/1998- 6/30/1999 71,538 500 182,400 --
Shawn L. Gallagher.......... 7/1/2001- 12/31/2001 $ 93,750 $ -- --
Vice President, Product 7/1/2000- 6/30/2001 180,000 5,257 40,000
Development 7/1/1999- 6/30/2000 166,337 250 21,888
7/1/1998- 6/30/1999 156,660 500 105,600 --
James W. Albrecht, Jr. ..... 7/1/2001- 12/31/2001 $ 90,000 $ -- --
Chief Financial Officer 7/1/2000- 6/30/2001 180,000 5,257 40,000
7/1/1999- 6/30/2000 176,397 -- 21,888
7/1/1998- 6/30/1999 175,869 500 105,600 --
10
OPTION GRANTS MADE DURING THE SIX-MONTH TRANSITION PERIOD ENDED DECEMBER 31,
2001
The following table sets forth grants of stock options made during the
six-month transition period ended December 31, 2001 to each Named Executive
Officer.
INDIVIDUAL GRANTS
--------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING OPTIONS TO EMPLOYEES EXERCISE OR
NAME PERIOD GRANTED DURING PERIOD(1) BASE PRICE EXPIRATION DATE
---- ---------------------- ------------------ ---------------- ------------- ---------------
David G. Nance.......... 7/1/2001- 12/31/2001 50,000(3) 17.8 $4.55 7/29/2011
10,000(4) 3.6 4.71 10/22/2011
9,600(5) 3.4 3.75 12/3/2011
James A. Merritt, M.D... 7/1/2001- 12/31/2001 10,000(4) 3.6 4.71 10/22/2011
David L. Parker, Ph.D.,
J.D.................... 7/1/2001- 12/31/2001 -- -- -- --
Shawn L. Gallagher...... 7/1/2001- 12/31/2001 -- -- -- --
James W. Albrecht,
Jr. ................... 7/1/2001- 12/31/2001 -- -- -- --
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
OPTION TERM(2)
---------------------
NAME 5% 10%
---- --------- ---------
David G. Nance.......... $143,074 $362,576
29,621 75,065
22,640 57,375
James A. Merritt, M.D... 29,621 75,065
David L. Parker, Ph.D.,
J.D.................... -- --
Shawn L. Gallagher...... -- --
James W. Albrecht,
Jr. ................... -- --
---------------
(1) Based on the grant of stock options representing 281,300 shares to employees
during the six-month transition period ended December 31, 2001.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, of our
stock price. We did not use an alternative formula for a grant date
valuation, as we do not believe that any formula will determine with
reasonable accuracy a present value based on future unknown or volatile
factors.
(3) These options vest as to one-quarter of the shares each year, starting one
year after the date of grant.
(4) These options are fully vested upon the date of grant.
(5) These options vest in twelve equal monthly installments starting with the
date of grant.
AGGREGATED OPTION EXERCISES DURING THE SIX-MONTH TRANSITION PERIOD ENDED
DECEMBER 31, 2001 AND OPTION VALUES AS OF THE END OF SUCH PERIOD
The following table sets forth, for each of the Named Executive Officers,
the number of options exercised during the six-month transition period ended
December 31, 2001, as well as the value of unexercised options at the end of
such period:
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AS OF THE END OF
NUMBER OF SHARES EACH PERIOD
ACQUIRED ON ---------------------------
NAME PERIOD EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE
---- --------------------- ---------------- -------------- ----------- -------------
David G. Nance.......... 7/1/2001- 12/31/2001 -- -- 325,093 181,147
James A. Merritt,
M.D.................... 7/1/2001- 12/31/2001 -- -- 70,272 88,016
David L. Parker, Ph.D.,
J.D.................... 7/1/2001- 12/31/2001 -- -- 96,672 147,616
Shawn L. Gallagher...... 7/1/2001- 12/31/2001 -- -- 151,872 82,816
James W. Albrecht,
Jr. ................... 7/1/2001- 12/31/2001 -- -- 161,472 82,816
VALUE OF UNEXERCISED
IN-THE-MONEY OPTIONS AS
OF THE END OF EACH
PERIOD(1)
---------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------
David G. Nance.......... $1,553,131 $412,974
James A. Merritt,
M.D.................... 348,836 208,778
David L. Parker, Ph.D.,
J.D.................... 481,390 549,940
Shawn L. Gallagher...... 762,984 224,579
James W. Albrecht,
Jr. ................... 813,010 224,579
---------------
(1) Based on a fair market value of $5.54 per share, which was the closing price
of our common stock on December 31, 2001, as reported on the Nasdaq National
Market.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
We have an employment agreement with David G. Nance, under which he serves
as our President and Chief Executive Officer. The agreement continues through
July 31, 2003, and renews automatically for one-year terms until either party
gives timely written notice of non-renewal. Mr. Nance's initial base salary
under this agreement was $275,000 per annum, which is subject to a 10% increase
effective August 1 of each year. His base salary was raised to $302,500 per
annum effective August 1, 2000, to $332,750 per annum effective August 1, 2001
and will be raised to $366,025 per annum effective August 1, 2002. Under this
agreement,
11
Mr. Nance was granted an option to purchase 50,000 shares of our common stock
upon the completion of our initial public offering in October 2000. This
agreement provides that he is to be granted an option to purchase an additional
50,000 shares of our common stock on each August 1; accordingly, he was granted
such an option on August 1, 2001, and will be granted such an option on August
1, 2002. Such options are exercisable at a price determined by the Administrator
of the Stock Plan and are fully vested when granted.
All of the options granted under our 1995 Stock Plan and the 2000 Stock
Option Plan shall immediately vest and become exercisable upon our merger or
reorganization with or into another corporation, entity or person, or the sale
of all or substantially all our assets to another corporation, entity or person,
unless after such merger, reorganization or sale of assets, 51% of the capital
stock or equity interest in such other corporation, entity or person is owned by
persons who owned an aggregate 51% of our capital stock immediately prior to
such merger, reorganization or sale of assets.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We sold and issued 100,000 shares of a new class of Series A Non-Voting
Convertible Preferred Stock, $.001 par value per share, convertible into
2,343,721 shares of Introgen's common stock, to Aventis Pharmaceuticals Inc. for
$25,000,000 pursuant to a purchase agreement executed on June 30, 2001. We
received the cash payment and issued the shares on July 2, 2001. Aventis
Pharmaceuticals Inc., formerly known as Aventis Pharmaceuticals Products Inc.,
is an affiliate of Aventis Holdings Inc., which holds greater than five percent
of our outstanding common stock.
Mahendra G. Shah, Ph.D., one of our directors, was, until January 1, 2001,
an employee of EJ Financial Enterprises, Inc., one of our stockholders. John N.
Kapoor, Ph.D., the Chairman of our Board of Directors, is the sole stockholder
of EJ Financial Enterprises. We have a consulting agreement with EJ Financial
Enterprises pursuant to which EJ Financial Enterprises provides services to us
for $175,000 per year. The Agreement provides for the assistance of EJ Financial
Enterprises with our business development, license negotiation, market analysis
and general corporate development. This agreement is automatically renewable
each July 1 for one-year terms, unless either party gives 30 days' advance
notice of termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee is currently, or has ever
been at any time since our formation, one of our officers or employees. No
member of the Compensation Committee serves as a member of the board of
directors or compensation committee of any entity that has one or more officers
serving as a member of our Board of Directors or Compensation Committee.
12
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of two independent directors and
operates under a written charter adopted by the Board of Directors. The members
of the Compensation Committee are William H. Cunningham, Ph.D. and Charles E.
Long. The Compensation Committee administers our 2000 Stock Option Plan, reviews
forms of compensation to be provided to our officers, employees and consultants,
including stock compensation and loans, grants options to purchase our common
stock to our employees, executive officers, directors and consultants, and
reviews and makes recommendations to the Board of Directors regarding all forms
of compensation to be provided to the members of the Board of Directors,
including stock compensation and loans. The Compensation Committee believes it
has fulfilled its responsibilities under its charter for the six-month
transition period ended December 31, 2001.
Compensation Philosophy and Objectives. Our basic philosophy is to align
executive compensation with increases in stockholder value through achievement
of certain milestones, including milestones related to our pre-clinical and
clinical development. This is primarily accomplished through the use of stock
options, which provide compensation in direct proportion to increases in
stockholder value. In addition, we believe it is important to emphasize
teamwork, entrepreneurship and active participation by all employees. This is
accomplished through providing options to a majority of full-time, exempt
domestic employees and similarly situated international employees, and through
cash incentives, through which both executives and employees receive cash
bonuses based on company-wide financial goals.
Executive Compensation Programs. Our executive compensation programs
consist of three principal elements: base salary, cash bonus and stock options.
We emphasize incentive compensation in the form of stock options and bonuses,
rather than base salary. The Compensation Committee has adopted a guideline that
executives should be paid competitive base salaries. The Board of Directors sets
the annual base salary for executives after consideration of the recommendations
of the Compensation Committee. Prior to making its recommendations, the
Compensation Committee reviews historical compensation levels of the executives,
evaluations of past performance, assessments of expected future contributions of
the executives, competitive pay levels and programs provided by other comparable
companies, and general industry pay practices. In making its determinations, the
Committee does not utilize any particular indices or formulae to arrive at each
executive's recommended pay level.
Total compensation for executive officers also includes long-term
incentives in the form of stock options, which are generally provided through
initial stock option grants at the date of hire and periodic additional stock
option grants. Stock options are instrumental in promoting the alignment of
long-term interests between our executive officers and stockholders due to the
fact that executives realize gains only if the stock price increases over the
fair market value at the date of grant and the executives exercise their
options. In determining the amount of such grants, the Committee evaluates the
job level of the executive, responsibilities of the executive, and competitive
practices in the industry. Options are generally granted at 100% of fair market
value at the date of grant. Options generally vest ratably over a period of four
years. The long-term value realized by executives through option exercises can
be directly linked to the enhancement of stockholder value.
Chief Executive Officer Compensation. The compensation of our chief
executive officer is determined using the same philosophy and policies as for
all executive officers. The compensation includes base salary, cash bonus and
stock options. Our chief executive officer currently has an employment agreement
that is described under "Executive Compensation -- Employment Contracts and
Change-In-Control Arrangements."
13
Section 162(m). Section 162(m) of the Internal Revenue Code of 1986, as
amended, imposes a limit on tax deductions for annual compensation in excess of
one million dollars paid by a corporation to its chief executive officer and the
other four most highly compensated executive officers. Deductions are, however,
permitted if certain conditions are met, including a requirement that the plan
under which such compensation is paid be re-approved by stockholders every five
years. None of the compensation paid by us in the six-month transition period
ended December 31, 2001 was subject to the limitation on deductibility. The
Compensation Committee will continue to assess the impact of Section 162(m) on
its compensation practices and determine what further action, if any, is
appropriate.
Respectfully submitted,
COMPENSATION COMMITTEE
William H. Cunningham, Ph.D.
Charles E. Long
THE FOREGOING COMPENSATION COMMITTEE REPORT SHALL NOT BE DEEMED TO BE
"SOLICITING MATERIAL" OR TO BE "FILED" WITH THE SECURITIES AND EXCHANGE
COMMISSION, NOR SHALL SUCH INFORMATION BE INCORPORATED BY REFERENCE INTO ANY
PAST OR FUTURE FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT WE SPECIFICALLY
INCORPORATE IT BY REFERENCE INTO ANY SUCH FILING.
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is composed of three "independent" directors in
compliance with the Marketplace Rules of the Nasdaq Stock Market and operates
under a written charter adopted by the Board of Directors. The members of the
Audit Committee are William H. Cunningham, Ph.D., Charles E. Long and Elise T.
Wang. The Audit Committee believes it has fulfilled its responsibilities under
its charter for the six-month transition period ended December 31, 2001.
Our management is responsible for our internal controls and the financial
reporting process. Our independent auditors are responsible for performing an
independent audit of our consolidated financial statements in accordance with
generally accepted auditing standards and for issuing a report thereon. The
Audit Committee's responsibility is to monitor and oversee these processes.
The Audit Committee has reviewed and discussed our audited financial
statements for the six-month transition period ended December 31, 2001 with our
management and our independent auditors who performed such audit, Arthur
Andersen LLP. The Audit Committee also discussed with Arthur Andersen LLP the
matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended. The Audit Committee has also
received the written disclosures from Arthur Andersen LLP required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Audit Committee has discussed the independence of Arthur
Andersen LLP with that firm.
Based upon the Audit Committee's review and discussions referred to in the
immediately preceding paragraph, the Audit Committee recommended that the Board
of Directors include the audited consolidated financial statements in our Annual
Report on Form 10-K for the six-month transition period ended December 31, 2001,
filed with the Securities and Exchange Commission.
The Audit Committee met on March 5, 2002 to determine whether to recommend
a change in independent auditors to the Board of Directors. Upon deliberation,
the Audit Committee unanimously recommended to the Board of Directors to dismiss
Arthur Andersen LLP and engage Ernst & Young LLP as Introgen's independent
auditors for the year ending December 31, 2002, effective upon completion of
Arthur Andersen LLP's services in connection with the filing of our Annual
Report on Form 10-K for the six-month transition period ended December 31, 2001.
Respectfully submitted,
AUDIT COMMITTEE
William H. Cunningham, Ph.D.
Charles E. Long
Elise T. Wang
THE FOREGOING AUDIT COMMITTEE REPORT SHALL NOT BE DEEMED TO BE "SOLICITING
MATERIAL" OR TO BE "FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION, NOR
SHALL SUCH INFORMATION BE INCORPORATED BY REFERENCE INTO ANY PAST OR FUTURE
FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE ACT OF
1934, AS AMENDED, EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE IT BY
REFERENCE INTO ANY SUCH FILING.
15
STOCK PRICE PERFORMANCE GRAPH
The following line graph compares the cumulative total return to
stockholders of our common stock from October 12, 2000 (the date of our initial
public offering) to December 31, 2001 to the cumulative total return over such
period of (i) the Nasdaq National Market System Composite Index and (ii) the S&P
Biotechnology Index. The graph assumes that $100.00 was invested on October 12,
2000 in our common stock at its initial public offering price of $8.00 per share
and in each of the other two indices as of September 30, 2000, and the
reinvestment of all dividends, if any.
The information contained in the Performance Graph shall not be deemed to
be "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
past or future filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent we
specifically incorporate it by reference into any such filing. The graph is
presented in accordance with Securities and Exchange Commission requirements.
Stockholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future
performance.
COMPARISON OF 14-MONTH CUMULATIVE TOTAL RETURN*
AMONG INTROGEN THERAPEUTICS, INC., THE NASDAQ NATIONAL MARKET SYSTEM COMPOSITE
INDEX AND THE S&P BIOTECHNOLOGY INDEX
[PERFORMANCE GRAPH]
---------------------------------------------------------------------------------------------
10/12/00 or 9/30/00 6/30/01 12/31/01
---------------------------------------------------------------------------------------------
Introgen Therapeutics, Inc. $100.00 $59.75 $69.25
Nasdaq National Market System Composite Index 100.00 58.91 53.13
S&P Biotechnology Index 100.00 84.67 84.29
* $100.00 invested on 10/12/00 in stock or on 9/30/00 in indices -- including
reinvestment of any dividends. Fiscal year ending December 31.
16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended, requires our
officers and directors, and persons who own more than 10% of a registered class
of our equity securities, to file reports of ownership on Form 3 and changes in
ownership on Form 4 or Form 5 with the Securities and Exchange Commission. Such
officers, directors and 10% stockholders are also required by the Securities and
Exchange Commission rules to furnish us with copies of all Section 16(a) forms
they file. Based solely on our review of the copies of such forms we received,
we believe that, during the six-month transition period ended December 31, 2001,
all Section 16(a) filing requirements applicable to our officers, directors and
10% stockholders were satisfied. Previously, a Form 4 filing for J. David Enloe,
Jr. was filed two days after the deadline of June 11, 2001.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented at
the Annual Meeting. If any other matter should properly come before the Annual
Meeting, however, the enclosed Proxy Card confers discretionary authority with
respect to such matter.
By Order of the Board of Directors
/s/ RODNEY VARNER
--------------------------------------
Rodney Varner
Secretary
Austin, Texas
April 1, 2002
17
(DETACH HERE)
PROXY
INTROGEN THERAPEUTICS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 1, 2002
The undersigned hereby constitutes and appoints David G. Nance and
James W. Albrecht, Jr. and each of them, as Proxies of the undersigned, with
full power to appoint his substitute, and authorizes each of them to represent
and to vote all shares of common stock of Introgen Therapeutics, Inc. (the
"Company") held of record by the undersigned as of the close of business on
Monday, March 11, 2002, at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Houston Marriott Medical Center, located at 6580
Fannin Street, Houston, Texas 77030, at 10:00 a.m., local time, on Wednesday,
May 1, 2002, and at any adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE TWO NOMINEES OF THE BOARD OF DIRECTORS
LISTED IN PROPOSAL 1 AND "FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR
ENDING DECEMBER 31, 2002 LISTED IN PROPOSAL 2. IN THEIR DISCRETION, THE PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
ANNUAL MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. A STOCKHOLDER
WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS NEED
ONLY SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE
ACCOMPANYING NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS, THE PROXY STATEMENT
WITH RESPECT THERETO AND THE COMPANY'S 2002 ANNUAL REPORT TO STOCKHOLDERS, AND
HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE GIVEN. THIS PROXY MAY BE REVOKED
AT ANY TIME BEFORE IT IS EXERCISED.
PLEASE VOTE, SIGN ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE (WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES).
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
INTROGEN THERAPEUTICS, INC.
C/O EQUISERVE
P.O. BOX 9398
BOSTON, MA 02205-9398
----------------
VOTE BY INTERNET
----------------
It's fast, convenient and your vote is immediately confirmed and
posted.
FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY STATEMENT AND PROXY CARD.
2. GO TO THE WEBSITE
http://www.eproxyvote.com/ingn
3. ENTER YOUR 14-DIGIT VOTER CONTROL NUMBER LOCATED ON YOUR PROXY CARD
ABOVE YOUR NAME.
4. FOLLOW THE INSTRUCTIONS PROVIDED.
YOUR VOTE IS IMPORTANT!
Go to http://www.eproxyvote.com/ingn anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY INTERNET
ZPPC1A DETACH HERE
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
--------------------------------------------------------------------------------
1. Elect two (2) Class II directors to the Board of Directors, each to
serve a term of three (3) years.
NOMINEES: (01) CHARLES E. LONG and (02) MAHENDRA G. SHAH, PH.D.
FOR WITHHELD
BOTH [ ] [ ] FROM BOTH
NOMINEES NOMINEES
[ ]
-----------------------------------------
For both nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the current fiscal year ending [ ] [ ] [ ]
December 31, 2002.
Signature: Date:
----------------------------------------- -----------------------
Signature: Date:
----------------------------------------- -----------------------
To transact such other business as may properly come before the Annual Meeting,
including any motion to adjourn to a later date to permit further solicitation
of proxies if necessary, or before any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY CARD WILL BE VOTED AS SPECIFIED ABOVE, BUT
IF NO SPECIFICATION IS MADE, THEY WILL BE VOTED "FOR" PROPOSALS 1 AND 2 AND AT
THE DISCRETION OF THE PROXIES ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING.
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL NAME AND TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY THE PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. IF SHARES ARE HELD BY
JOINT TENANTS OR COMMUNITY PROPERTY, ALL JOINT OWNERS SHOULD SIGN.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE.
MARK HERE MARK HERE
IF YOU PLAN [ ] FOR ADDRESS [ ]
TO ATTEND CHANGE AND
THE MEETING NOTE BELOW