================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Regeneron Pharmaceuticals, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Regeneron Pharmaceuticals, Inc.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: April 30, 1998
================================================================================
- - --------------------------------------------------------------------------------
Regeneron Pharmaceuticals, Inc.
Proxy
Statement
- - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON JUNE 12, 1998
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Dear Shareholders:
The Annual Meeting of Shareholders of Regeneron Pharmaceuticals, Inc. (the
"Company") will be held at the Westchester Marriott Hotel, 670 White Plains
Road, Tarrytown, New York 10591 at 10:30 am., Eastern Daylight Savings Time, on
Friday, June 12, 1998.
The purposes of the meeting are:
o To elect three Directors to hold office for a three-year term as Class I
directors, and until their successors are duly elected and qualified;
o To approve the selection of Coopers & Lybrand L.L.P. as independent
accountants for the Company's fiscal year ending December 31, 1998; and
o To act upon such other matters as may properly come before the meeting and any
adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 17, 1998 as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting and at any adjournment or postponement thereof.
Whether or not you plan to attend the Annual Meeting, please complete, sign, and
date the accompanying proxy and return it promptly in the enclosed prepaid
envelope. If you attend the Annual Meeting, you may vote in person if you wish,
even if you have previously returned your proxy.
By Order of the Board of Directors,
Paul Lubetkin
Secretary
Tarrytown, New York
May 12, 1998
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591
May 12, 1998
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Regeneron Pharmaceuticals, Inc. to be held on Friday, June 12, 1998 at 10:30
a.m. at the Westchester Marriott Hotel, 670 White Plains Road, Tarrytown, New
York 10591.
Whether or not you plan to attend the Annual Meeting, please mark,
sign, and date the accompanying proxy and return it promptly in the enclosed
prepaid envelope. If you attend the Annual Meeting, you may vote in person if
you wish, even if you have previously returned your proxy.
Sincerely,
P. Roy Vagelos, M.D.
Chairman of the Board of Directors
Proxy Statement
1998 Annual Meeting of Shareholders
of Regeneron Pharmaceuticals, Inc.
- - --------------------------------------------------------------------------------
Proxy Solicitation
This Proxy Statement is furnished to the shareholders of Regeneron
Pharmaceuticals, Inc., a New York corporation (the "Company"), in connection
with the solicitation by its Board of Directors from holders of the Company's
Common Stock (the "Common Stock") and Class A Common Stock (the "Class A Stock")
of proxies to be voted at the Annual Meeting of Shareholders of the Company to
be held on Friday, June 12, 1998 at 10:30 a.m., at the Westchester Marriott
Hotel, 670 White Plains Road, Tarrytown, New York 10591, and at any adjournment
or postponement thereof (the "Annual Meeting"), for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. The Company's
executive offices are located at 777 Old Saw Mill River Road, Tarrytown, New
York 10591.
This Proxy Statement and form of proxy are first being mailed to shareholders of
the Company on or about May 12, 1998. All proxies duly executed and received
prior to or at the Annual Meeting, and not revoked, will be voted on all matters
presented at the meeting in accordance with the instructions indicated on such
proxies. In the absence of instructions, proxies so received will be voted (1)
FOR the named nominees to the Company's Board of Directors and (2) FOR the
approval of the selection of Coopers & Lybrand L.L.P. as independent accountants
for the Company's fiscal year ending December 31, 1998. If any other matters are
properly presented at the Annual Meeting for consideration, the persons named in
the enclosed form of proxy will have discretion to vote on such matters in
accordance with their best judgment.
Any proxy given pursuant to this solicitation may be revoked by (i) filing with
the Secretary of the Company, at or before the taking of the vote at the Annual
Meeting, a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Company before the taking of the vote at
the Annual Meeting, or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself constitute
the revocation of a proxy). Any written notice of revocation or subsequent proxy
should be sent so as to be delivered to Regeneron Pharmaceuticals, Inc., 777 Old
Saw Mill River Road, Tarrytown, New York 10591, Attention: Secretary, or hand
delivered to the Secretary of the Company at or before the taking of the vote at
the Annual Meeting.
The persons named as proxies in the enclosed form of proxy, Leonard S. Schleifer
and Paul Lubetkin, were selected by the Board of Directors of the Company and
are officers of the Company.
Record Date & Voting at the Annual Meeting
The Board of Directors of the Company has fixed the close of business on April
17, 1998 as the record date for the determination of the shareholders entitled
to notice of, and to vote at, the Annual Meeting. Accordingly, only holders of
record of Common Stock and Class A Stock on the record date will be entitled to
notice of, and to vote at, the Annual Meeting. As of April 17, 1998, 27,092,480
shares of Common Stock and 3,899,874 shares of Class A Stock were outstanding.
The Common Stock and the Class A Stock vote together on all matters as a single
class, with the Common Stock being entitled to one vote per share and the Class
A Stock being entitled to ten votes per share. No other voting securities of the
Company were outstanding on the record date. The holders of a majority of the
shares issued and outstanding attending personally or by proxy will constitute a
quorum for the transaction of business at the Annual Meeting.
Election of directors will be determined by a plurality of the votes cast in
person or by proxy at the Annual Meeting. All other matters presented to
shareholders will be determined by the affirmative vote of a majority of the
votes cast in person or by proxy at the Annual Meeting. Under applicable New
York law, in determining whether any proposal has received the requisite number
of affirmative votes and tabulating the votes for directors, abstentions and
broker nonvotes will be disregarded and will have no effect on the outcome of
the vote.
Annual Report
The Company's Annual Report to Shareholders for the year ended December 31, 1997
is being furnished herewith to shareholders of record on or about May 12, 1998.
The Annual Report to Shareholders does not constitute a part of the proxy
soliciting material. The Company has also filed with the Securities and Exchange
Commission a report on Form 10-K for the year ending December 31, 1997, a copy
of which will be furnished (except for exhibits) without charge to any
shareholder upon written request addressed to the Investor Relations Department
of the Company at the address shown above.
1
- - --------------------------------------------------------------------------------
Security Ownership of Management
The following table sets forth, as of April 17, 1998, the number of shares of
the Company's Common Stock and Class A Stock beneficially owned by each of its
directors or nominees for directors, and all directors and executive officers as
a group, and the percentage that such shares represent of the total combined
number of outstanding Common Stock and Class A Stock, based upon information
obtained from such persons.
Management and Directors Stock Ownership Table as of April 30, 1998
Percentage
of
Common Stock
Number of Shares Number of Shares & Class A Stock
of Class A Stock of Common Stock Beneficially
Beneficially Owned Beneficially Owned Owned
Name of Beneficial Owner (1) (1) (2)
- - -----------------------------------------------------------------------------------------------------------------
Leonard S. Schleifer, M.D., Ph.D. 1,769,340(3) 258,000(8) 6.5%
P. Roy Vagelos, M.D. 0 841,001(9) 2.7%
Charles A. Baker 62,384(4) 40,591(10) *
Michael S. Brown, M.D. 60,750 85,001(11) *
Alfred G. Gilman, M.D.,Ph.D. 124,912 89,701(12) *
Joseph L. Goldstein, M.D. 52,000 66,668(11) *
Fred A. Middleton c/o
Sanderling Ventures 81,997(5) 58,019(10) *
Eric M. Shooter, Ph.D. 92,911 85,001(11) *
George L. Sing 0 92,221(10) *
Murray A. Goldberg 0 42,700(13) *
Paul Lubetkin 40,912(6) 53,600(14) *
George D. Yancopoulos, M.D., Ph.D. 42,750(7) 229,950(11) *
Randall R. Rupp 0 66,100(11) *
All Directors and Executive Officers 2,379,530 2,166,064 13.75%
as a Group (20 persons)
- - -------------------------------
* Represents less than 1%
(1) The inclusion herein of any Class A Stock or Common Stock, as the case may
be, deemed beneficially owned does not constitute an admission of beneficial
ownership of those shares. Unless otherwise indicated, each person listed above
has sole voting and investment power with respect to the shares listed
(2) Number of shares outstanding includes 30,992,354 shares outstanding as of
April 17, 1998 plus any shares subject to options held by the person or entity
in question that are currently exercisable or exercisable within sixty days
after April 17, 1998.
(3) Includes 52,550 shares of Class A Stock held in trust for the benefit of Dr.
Schleifer's two sons, of which Dr. Schleifer disclaims beneficial ownership.
Excludes 33,000 shares of Class A Stock held by the Schleifer Family Foundation,
a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership.
(4) Excludes shares owned by Sanderling Ventures, of which Mr. Baker is a
special limited partner.
(5) Fred A. Middleton, a Director of the Company, is a General Partner of
Sanderling Ventures, and the beneficial owner of the shares. Sanderling Ventures
consists of several entities: Sanderling Venture Partners II, L.P., Sanderling
Ventures Limited, L.P., and Sanderling Biomedical, L.P. Also includes 16,018
shares of Common Stock held directly by Mr. Middleton and 2,000 shares of Common
Stock held in trust for the benefit of Mr. Middleton's children, of which Mr.
Middleton disclaims beneficial ownership.
(6) Includes 4,800 shares of Class A Stock held in trust for the benefit of Mr.
Lubetkin's son and excludes 7,500 shares held by Mr. Lubetkin's wife. Mr.
Lubetkin disclaims beneficial ownership of all such shares.
(7) Includes 19,383 shares of Class A Stock held in trust for the benefit of Dr.
Yancopoulos's children and excludes 7,500 shares held by Dr. Yancopoulos's wife.
Dr. Yancopoulos disclaims beneficial ownership of all such shares.
2
(8) Includes 208,000 shares of Common Stock purchasable upon the exercise of
options granted pursuant to the Long-Term Incentive Plan which are exercisable
or become so within sixty days from April 17, 1998.
(9) Includes 600,000 shares of restricted Common Stock purchased by Dr. Vagelos
in January 1995 pursuant to an agreement with the Company that provides, among
other things, that such restricted shares are not transferable, with such
restriction lapsing ratably over a five year period. Also includes 191,001
shares of Common Stock purchasable upon the exercise of options granted pursuant
to the Long-Term Incentive Plan which are exercisable or become so within sixty
days from April 17, 1998.
(10) Includes 40,001 shares of Common Stock purchasable upon the exercise of
options granted pursuant to the Long-Term Incentive Plan which are exercisable
or become so within sixty days from April 17, 1998.
(11) All shares of Common Stock beneficially owned represents shares of Common
Stock purchasable upon the exercise of options granted pursuant to the Long-Term
Incentive Plan which are exercisable or become so within sixty days from April
17, 1998.
(12) Includes 85,001 of Common Stock purchasable upon the exercise of options
granted pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 17, 1998.
(13) Includes 41,000 shares of Common Stock purchasable upon the exercise of
options pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 17, 1998, and 300 shares held jointly as
custodian for Mr. Goldberg's children, of which Mr. Goldberg disclaims
beneficial ownership.
(14) Includes 52,600 shares of Common Stock purchasable upon the exercise of
options pursuant to the Long-Term Incentive Plan which are exercisable or become
so within sixty days from April 17, 1998.
Security Ownership of Certain Beneficial Owners as of April 17, 1998
Set forth below is the name, address, and stock ownership of each person or
group of persons known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock or Class A Stock.
Percentage of
Number of Shares Shares of Common
Number of Shares of of Common Stock Stock and Class A
Class A Stock Beneficially Stock Beneficially
Name and Address of Beneficial Owner Beneficially Owned Owned Owned
- - ----------------------------------------------------------------------------------------------------------------
Leonard S. Schleifer, M.D., Ph.D. 1,769,340 (1) 258,000 6.5% (2)
777 Old Saw Mill River Road
Tarrytown, New York 10591
Amgen Inc. 788,766 3,650,000 14.3% (3)
1840 DeHavilland Drive
Thousand Oaks, California 91320
Procter & Gamble Pharmaceuticals, Inc. 0 5,150,000 16.6% (4)
Blue Ash Office Center
10200 Alliance Road
Cincinnati, OH. 45242
- - ----------------------------
(1) Includes 52,550 shares of Class A Stock held in trust for the benefit of Dr.
Schleifer's two sons, of which Dr. Schleifer disclaims beneficial ownership.
Excludes 33,000 shares of Class A Stock held by the Schleifer Family Foundation,
a charitable foundation, of which Dr. Schleifer disclaims beneficial ownership.
(2) Number of shares deemed outstanding includes 30,992,354 shares outstanding
as of April 17,1998 plus 208,000 shares subject to options held by Dr. Schleifer
that are currently exercisable or exercisable within sixty days after April 17,
1998.
(3) Number of shares deemed outstanding includes 30,992,354 shares outstanding
as of April 17, 1998, and does not include a warrant held by Amgen to purchase
700,000 shares of Common Stock.
3
(4) Number of shares deemed outstanding includes 30,992,354 shares outstanding
as of April 17, 1998, and does not include a warrant held by Procter & Gamble to
purchase 1,450,000 shares of Common Stock.
- - --------------------------------------------------------------------------------
ELECTION OF DIRECTORS
Nominees
The Board of Directors is divided into three classes, denominated Class I, Class
II, and Class III, with members of each class holding office for staggered
three-year terms. There are currently three Class I Directors, whose terms
expire at the 1998 Annual Meeting, three Class II Directors, whose terms expire
at the 1999 Annual Meeting, and three Class III Directors, whose terms expire at
the 2000 Annual Meeting (in all cases subject to the election and qualification
of their successors and to their earlier death, resignation, or removal).
At each annual meeting of shareholders, the successors to directors whose terms
expire shall be elected to serve from the time of election and qualification
until the third annual meeting following their election and until a successor
has been duly elected and qualified. All of the nominees for Class I Directors
are currently Class I Directors of the Company. All of these nominees have
indicated a willingness to serve if elected, but if any should be unable or
unwilling to serve, proxies may be voted for substitute nominees designated by
the Board of Directors.
The following table contains information, as of April 17, 1998, with respect to
the persons who serve on the Board, including the persons who have been
nominated to serve a three-year term as directors.
Served as a
Director Class
Name Age Position with the Company Since of Dir.
---- --- ------------------------- ----- -------
P. Roy Vagelos, M.D. (1)(3) 68 Chairman of the Board 1995 II
Leonard S. Schleifer, M.D., Ph.D. 45 Director, Chief Executive Officer, 1988 I
and President
Eric M. Shooter, Ph.D. (1) 74 Director and Chairman of 1988 I
Scientific Advisory Board
Fred A. Middleton (2) 48 Director 1990 I
Joseph L. Goldstein, M.D. (1) 58 Director and Member of Scientific 1991 II
Advisory Board
Alfred G. Gilman, M.D., Ph.D. (1) 56 Director and Member of Scientific 1990 II
Advisory Board
George L. Sing (2)(3) 49 Director 1988 III
Charles A. Baker (2)(3) 65 Director 1989 III
Michael S. Brown, M.D. (1) 57 Director and Member of Scientific 1991 III
Advisory Board
- - -------------------------------------------
(1) Member of the Technology Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
- - --------------------------------------------------------------------------------
Background of Nominees for Class I Directors
LEONARD S. SCHLEIFER, M.D., Ph.D., 45, founded Regeneron in 1988 and has been
its President and Chief Executive Officer since its inception and served as
Chairman of the Board from 1990 through 1994. In 1992, Dr. Schleifer was
appointed Clinical Professor of Neurology at the Cornell University Medical
School, and from 1984 to 1988 he was Assistant Professor at the Cornell
University Medical School in the Departments of Neurology and Neurobiology. Dr.
Schleifer received his M.D. and Ph.D. in Pharmacology from the University of
Virginia. Dr. Schleifer is a licensed physician and is certified in Neurology by
the American Board of Psychiatry and Neurology.
ERIC M. SHOOTER, Ph.D., 74, a co-founder of the Company, has been a Director of
the Company and Chairman of the Scientific Advisory Board since 1988. Dr.
Shooter has been a Professor at Stanford University School of Medicine since
1968. He was the founding Chairman of the Department of Neurobiology at Stanford
University School of Medicine in 1975 and served as its Chairman until 1987. He
is a Fellow of the Royal Society of England, a Fellow of the American Academy of
Arts and Sciences, and a Foreign Associate of the Institute of Medicine of the
National Academy of Sciences.
FRED A. MIDDLETON, 48, has been a Director of the Company since July 1990. Mr.
Middleton also served as the Company's Chief Financial Officer and Treasurer
from October 1988 to May 1991. Mr. Middleton is a General Partner of Sanderling
Ventures, a venture capital firm he co-founded with Dr. Robert McNeil in
December 1987 specializing in early stage biomedical companies. Sanderling
Ventures is a shareholder of the Company. See "Security Ownership of
Management." Between 1984 and 1987, he was Managing General Partner of Morgan
Stanley Ventures and, from 1978 through 1984, was Vice President and Chief
Financial Officer of Genentech, Inc., and President, Genentech Development
Corporation. He is also a member of the Board of Directors of Vical, Inc. and
Chairman of the Board of Directors of Depotech Corporation.
- - --------------------------------------------------------------------------------
Background of Directors Whose Terms are Continuing
- - --------------------------------------------------------------------------------
Directors Whose Terms Expire at the 1999 Annual Meeting (Class II)
ALFRED G. GILMAN, M.D., Ph.D., 56, a co-founder of the Company, has been a
Director of the Company since July 1990 and a member of the Scientific Advisory
Board since 1988. Dr. Gilman has been the Raymond and Ellen Willie Professor of
Molecular Neuropharmacology and Chairman of the Department of Pharmacology at
The University of Texas Southwestern Medical Center at Dallas since 1981 and was
named a Regental Professor in 1995. Dr. Gilman is a member of the National
Academy of Sciences. He is the Consulting Editor of "Goodman and Gilman's The
Pharmacological Basis of Therapeutics," the leading medical pharmacology
textbook. Dr. Gilman received the Nobel Prize for Physiology or Medicine in
1994. Dr. Gilman is a member of the Board of Directors of Eli Lilly & Company.
JOSEPH L. GOLDSTEIN, M.D., 58, has been a Director of the Company since June
1991 and a Member of the Company's Scientific Advisory Board since January 1988.
Dr. Goldstein has been the Professor of Medicine and Genetics and Chairman of
the Department of Molecular Genetics at The University of Texas Southwestern
Medical Center at Dallas for more than five years. Dr. Goldstein is a member of
the National Academy of Sciences. Drs. Goldstein and Brown jointly received the
Nobel Prize for Physiology or Medicine in 1985.
P. ROY VAGELOS, M.D., 68, has been a Director of the Company, Chairman of the
Board, and member of the Scientific Advisory Board since January 1995. Dr.
Vagelos was Chairman of the Board and Chief Executive Officer of Merck & Co.,
Inc. He joined Merck in 1975, became a director in 1984, President and Chief
Executive Officer in 1985, and Chairman in 1986. Dr. Vagelos retired from all
positions with Merck in 1994. He is also currently Chairman of the Board of
Trustees of the University of Pennsylvania and a member of the Board of
Directors of PepsiCo, Inc., McDonnell Douglas Corporation, The Prudential
Insurance Company of America, and Estee Lauder Companies.
- - --------------------------------------------------------------------------------
Directors Whose Terms Expire at the 2000 Annual Meeting (Class III)
CHARLES A. BAKER, 65, has been a Director of the Company since February 1989.
Since December 1989, he has been the Chairman, President, and Chief Executive
Officer of The Liposome Company, Inc., a publicly held company. During his
career, Mr. Baker served in senior management capacities in various
pharmaceutical companies, including the positions of Group Vice President,
Squibb Corporation (now Bristol-Myers Squibb) and President, Squibb
International. He also held various senior executive positions at Abbott
Laboratories and Pfizer, Inc. Mr. Baker is a special limited partner in
Sanderling Ventures, which is a shareholder of the Company. See "Security
Ownership of Management."
MICHAEL S. BROWN, M.D., 57, has been a Director of the Company since June 1991
and a Member of the Company's Scientific Advisory Board since January 1988. Dr.
Brown is Professor of Medicine and Genetics and the Director of the Center for
Genetic Diseases at The University of Texas Southwestern Medical Center at
Dallas. He is a member of the National Academy of Sciences. He is a Director of
Pfizer, Inc. His scientific contributions in cholesterol and lipid metabolism
were made in collaboration with Dr. Joseph L. Goldstein. Drs. Brown and
Goldstein jointly received the Nobel Prize for Physiology or Medicine in 1985.
GEORGE L. SING, 49, has been a Director of the Company since January 1988. From
February 1990 until February 14, 1991, Mr. Sing served as a consultant to
Merrill Lynch Venture Capital Inc. with respect to the Company. From 1982 to
February 1990, Mr. Sing was a Vice President and member of the Board of
Directors of Merrill Lynch Venture Capital, Inc., a venture capital firm, which
was the management company for ML Venture Partners II, L.P., a shareholder of
the Company. Since 1987, Mr. Sing has been a limited partner of MLVPII Co.,
L.P., a general partner of ML Venture Partners II, L.P. Since 1993, Mr. Sing has
been a general partner of Zitan Partners, an investment and advisory firm.
5
Board Committees
The Company's Board of Directors has an Audit Committee of which Messrs. Baker,
Middleton, and Sing are members. The Audit Committee is responsible for
reviewing the Company's financial results, the scope and results of audits, and
the evaluation of the Company's system of internal controls. It also recommends
the appointment of independent accountants. The Audit Committee is comprised of
directors who are not officers or employees of Regeneron.
The Board of Directors has a Compensation Committee of which Dr. Vagelos and
Messrs. Baker and Sing are members. The Compensation Committee has
responsibility for administering and approving cash compensation of all
corporate officers and of other employees of the Company, and for the
administration of the Company's Executive Stock Purchase Plan and Long-Term
Incentive Plan. Members of this committee are directors who are not officers or
employees of Regeneron.
The Board of Directors also has a Technology Committee of which Drs. Brown,
Gilman, Goldstein, Shooter, and Vagelos are members. The Technology Committee
has the responsibility for reviewing the Company's scientific and medical
programs and policies. The Technology Committee members are also members of the
Regeneron Scientific Advisory Board and are not officers or employees of the
Company.
During the last fiscal year, the Board of Directors held seven meetings, the
Audit Committee held two meetings, the Compensation Committee held five
meetings, and the Technology Committee held five meetings. No director attended
fewer than 75 percent of the number of Board of Directors meetings and meetings
of committees on which he served.
- - -----------------------------------------------------------------
Compensation of Directors
Non-employee directors receive an annual retainer of $5,000 and a payment of
$2,000 for each Board meeting attended in person. No additional retainer is paid
for committee service. Directors who are not employees are reimbursed for their
actual expenses relating to their attendance at Board of Directors meetings. For
his service as Chairman of the Board, Dr. Vagelos receives an additional
$70,000. In accordance with an agreement dated as of January 8, 1995 between Dr.
Vagelos and the Company, Dr. Vagelos purchased 600,000 restricted shares of
Common Stock ("Restricted Shares") for $300,000. He also received an option to
purchase up to 285,000 shares of the Company's Common Stock. The Restricted
Shares are nontransferable, with such restriction lapsing ratably over a five
year period. The stock options entitle Dr. Vagelos to purchase an equal number
of shares of Common Stock at the fair market value of the Common Stock as of the
date of grant, or $3.50 per share.
Pursuant to the Company's Long-Term Incentive Plan, each member of the Board of
Directors who is not at the time of grant an employee of the Company or any
subsidiary of the Company (an "Outside Director") receives an automatic grant of
an option to purchase 10,000 shares of Common Stock with an exercise price per
share equal to the fair market value of a share of Common Stock on the date of
grant. The grant occurs on March 1 of each year prior to the termination of the
Long-Term Incentive Plan. An option so granted is exercisable as to one-third of
the shares on the anniversary of the date of grant on each of the three
subsequent calendar years, and will expire ten years following the date of
grant. If prior to the option's expiration or exercise the grantee ceases to be
a voting member of the Board of Directors, then the portion of the option that
at that time is not exercisable will expire and the portion of the option, if
any, that is exercisable may be exercised during the three months after the
director ceases to be a voting member of the Board of Directors. In 1997, the
Company paid Dr. Shooter $60,000 for services provided as Chairman of the
Scientific Advisory Board. In addition, the Company paid Drs. Brown, Gilman,
Goldstein, and Vagelos $15,000 each as members of the Scientific Advisory Board.
6
- - -----------------------------------------------------------------------
Executive Compensation
Set forth below is information concerning the annual and long-term compensation
for services performed during each of the last three fiscal years for the
Company's Chief Executive Officer and its four other highest-compensated
executive officers (the "Named Officers").
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
------------------------------------------------------------------------
Other Securities
Name and Annual Underlying
Principal Position Year Salary Bonus Compensation Options
- - ------------------------------- ----- --------- -------- ------------- ------------
Leonard S. Schleifer, M.D., Ph.D. 1997 $415,077 $100,000 $1,670 80,000
President and Chief 1996 363,683 60,000 2,790 80,000
Executive Officer 1995 347,288 60,000 2,440 0
George D. Yancopoulos, M.D., Ph.D. 1997 $269,448 0 0 130,000
Senior Vice President of Research 1996 195,500 0 0 0
and Chief Scientific Officer 1995 182,546 0 0 25,000
Paul Lubetkin 1997 $196,823 0 0 20,000
Vice President, General 1996 179,615 0 0 20,000
Counsel, and Secretary 1995 169,577 0 0 0
Murray A. Goldberg (1) 1997 $192,231 0 0 25,000
Vice President, Finance & Adminis- 1996 174,615 0 0 30,000
tration, Treasurer, and Chief 1995 151,288 0 0 60,000
Financial Officer
Randall R. Rupp 1997 $185,885 0 0 20,000
Vice President, Manufacturing and 1996 169,231 0 0 25,000
Process Science 1995 149,618 0 0 0
- - -----------------------------------------
(1) Mr. Goldberg joined the Company in March 1995.
7
- - ---------------------------------------------------------------------------
Options
All options to purchase Regeneron Common Stock granted to the Named Officers
have been granted under the Company's Long-Term Incentive Plan. Set forth below
is information about grants of options during 1997 to the Named Officers. No
Restricted Share Rights, Stock Appreciation Rights, Incentive Stock Rights, or
Incentive Unit Rights have been granted by the Company.
Options Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates
Number of Percent of of Stock Price
Securities Total Options Appreciation for
Underlying Granted to Exercise Option Term
Options Employees Price Expiration
Name Granted (#)(1) In Fiscal Year ($/Share) Date 5%($) 10% ($)
- - ---- ------------- --------------- --------- ----- ---------- ------------
Leonard S. Schleifer, M.D., 52,630 5.7% $10.45 2/01/07 264,439 746,849
Ph.D. 27,370 2.9% $9.50 2/01/07 163,522 414,397
George D. Yancopoulos, M.D., 19,723 2.1% $9.50 2/01/07 117,835 298,617
Ph.D. 10,277 1.1% $9.50 2/01/07 61,400 155,599
9,556 1.0% $10.563 6/03/07 63,473 160,860
90,444 9.7% $10.563 6/03/07 600,747 1,522,480
Paul Lubetkin 7,072 0.8% $9.50 2/01/07 42,252 107,074
12,928 1.4% $9.50 2/01/07 77,238 195,737
Murray A. Goldberg 10,000 1.1% $9.50 2/01/07 59,745 151,406
15,000 1.6% $9.50 2/01/07 89,617 227,108
Randall R. Rupp, Ph.D. 17,504 1.9% $9.50 2/01/07 104,578 265,020
2,496 0.3% $9.50 2/01/07 14,912 37,791
- - -------------------
(1) All options granted expire ten years from the date of grant and become
exercisable ratably over five years beginning one year from the date of
grant.
8
- - -------------------------------------------------------------------------------
Aggregated Option Exercise in Last Fiscal Year and Fiscal Year-End Option Values
The following table shows information with respect to the Named Officers
concerning options exercised during 1997 and the value of stock options held as
of the end of 1997.
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired on Value Options at Options at
Name Exercise (#) Realized ($) Fiscal Year-End (#) Fiscal Year-End ($) (1)
- - ----------------------------------- ------------- ------------- ----------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- ------------- ------------- -------------
Leonard S. Schleifer, M.D., Ph.D. 0 0 169,000 151,000 0 0
George D. Yancopoulos, M.D., Ph.D. 0 0 194,950 297,300 845,881 650,337
Murray A. Goldberg 10,000 53,750 18,000 85,000 36,000 108,000
Paul Lubetkin 15,000 101,875 42,200 76,800 169,425 181,200
Randall R. Rupp 0 0 54,300 55,200 243,637 157,800
- - ------------------------------------
(1) Based on the closing sales price of the Company's Common Stock on December
31, 1997 reported on the Nasdaq Stock Market of $8.625, less the exercise price.
- - --------------------------------------------------------------------------------
Employment Agreement
On February 12, 1998, the Company entered into a new employment agreement with
Dr. Schleifer providing for his employment with the Company through December 31,
2002. During the term of his employment, the Company will pay Dr. Schleifer a
base salary of $410,000 (retroactive to January 1, 1998), with such increases as
may be determined by the Compensation Committee and approved by the Board of
Directors. Under his employment agreement, Dr. Schleifer may participate in all
Company benefit and incentive programs. During his employment term, the Company
will maintain life insurance on Dr. Schleifer's life in the amount of $1,000,000
payable to beneficiaries designated by Dr. Schleifer. Also under the employment
agreement, the Company has agreed that in the event that Dr. Schleifer's
employment is terminated other than for cause (as defined in the agreement) or
is terminated by Dr. Schleifer for good reason (as defined in the agreement to
include specified acts of constructive termination, as well as the first year
following a change in control of the Company) (collectively, an "Involuntary
Termination"), the Company will pay Dr. Schleifer his base salary for 15 months,
continue to provide Dr. Schleifer and his dependents medical, dental, and life
insurance for 18 months, and accelerate certain otherwise unexercisable stock
options granted to Dr. Schleifer. Upon an Involuntary Termination within three
years after a change in control of the Company or within three months prior
thereto, the Company will pay Dr. Schleifer an amount equal to two times his
base salary in effect, continue to provide Dr. Schleifer and his dependents
medical, dental, and life insurance for 24 months, and accelerate certain
otherwise unexecisable stock options granted to Dr. Schleifer. Notwithstanding
the foregoing, if payments resulting from the change in ownership as defined in
Section 280G(b)(2) of the Internal Revenue Code exceed certain thresholds, the
amounts and benefits provided under the employment agreement will be
automatically reduced to an amount that would not subject Dr. Schleifer to the
excise tax under Section 4999 of the Internal Revenue Code or the Company to a
loss of deductibility under Section 280G.
- - --------------------------------------------------------------------------------
Compensation Committee
Report on Executive Compensation
The Company's executive compensation program is administered by the Compensation
Committee, which is comprised of three non-employee directors. Subject to
approval by the Board of Directors, the Compensation Committee is responsible
for (among other things) determining the compensation package of each executive
officer. The Compensation Committee considers the views and recommendations of
other directors, including those of Dr. Schleifer, in making decisions regarding
the compensation of the Company's executive officers.
9
The Company's executive compensation program is designed to promote the
achievement of the Company's business objectives and, thereby, to maximize
long-term corporate performance and shareholder value. The compensation of the
executive officers consists of a combination of base salary, bonuses, and
long-term stock-based incentives through the Company's Long-Term Incentive Plan.
The Compensation Committee believes it is important for stock incentives to
constitute a significant portion of the compensation package in order to help
align executive and shareholder interests. In determining the total amount and
mixture of the compensation package for each executive officer, including Dr.
Schleifer and the other Named Officers, the Compensation Committee and the Board
consider numerous factors, the most important of which are (i) the Company's
needs and objectives, including attracting, motivating, and retaining key
management personnel, (ii) individual performance, including the expected
contribution to the Company's objectives of each executive officer, (iii)
compensation of persons holding comparable positions, including data obtained
from outside studies and proxy materials on the payment of executive officers at
comparable companies, as well as the Company's most direct competitors, and (iv)
the overall value to each executive of his or her compensation package. No
specific numerical weight is given to any of these factors.
The 1997 base salaries of the Named Officers as a group (other than Dr.
Schleifer) increased by an average of 17.5 percent over 1996. These increases
were made in January 1997 and reflected the Committee's review in late 1996 of
individual performance and internal and outside compensation studies of
competitive and regional factors.
Dr. Schleifer's 1997 compensation package was based on the same factors as
described above for all executive officers pursuant to the Company's executive
compensation objectives. In 1997, Dr. Schleifer's base salary increased 14.1
percent over 1996. In addition, the Compensation Committee directed that Dr.
Schleifer be paid a bonus of $100,000 in 1997 based on his achievements in 1996.
The Compensation Committee considered, among other things, the clinical progress
of brain-derived neurotrophic factor and neurotrophin-3 during 1996, the
Company's progress in its preclinical programs aimed at diseases and conditions
outside of the nervous system, and other significant accomplishments that
occurred during 1996, including significant fund-raising activities and the
commencement of several important collaborations with corporate partners. These
achievements were guided and managed by Dr. Schleifer and the Named Officers.
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation over $1 million to the Chief Executive Officer and the other Named
Officers unless certain conditions are met. The Company's Chief Executive
Officer and the other Named Officers have not received compensation over $1
million.
P. Roy Vagelos, M.D., Chairman
Charles A. Baker
George L. Sing
- - -------------------------------------------------------------------------------
Performance Graph
- - -------------------------------------------------------------------------------
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock with the cumulative total return of (i) The
Nasdaq Pharmaceutical Stocks Index and (ii) The Nasdaq Stock Market (U.S.) Index
for the period from December 31, 1992 through December 31, 1997.
[GRAPHIC OMITTED]
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
--------- --------- -------- --------- --------- --------
$100 $129 $25 $106 $130 $72
Regeneron
100 89 67 123 123 127
Nasdaq Pharm
100 115 112 159 195 240
Nasdaq-US
The above graph assumes $100 investments on December 31, 1992 in the Company's
Common Stock, The Nasdaq Pharmaceutical Stocks Index, and The Nasdaq Stock
Market (U.S.) Index, with all dividends reinvested.
10
- - -------------------------------------------------------------------------------
Officers of the Registrant
All officers of the Company are appointed annually and serve at the pleasure of
the Board of Directors. The names, positions, ages, and background of the
Company's senior managers who are not nominees for or currently Directors as of
April 29, 1996, are set forth below:
GEORGE D. YANCOPOULOS, M.D., Ph.D., 38, has been Senior Vice President, Research
since June 1997 and Chief Scientific Officer since January 1998. Dr. Yancopoulos
was Vice President, Discovery from January 1992 until June 1997, and was
employed by the Company since March 1989 as Senior Staff Scientist, and Head of
Discovery from January 1991 to January 1992. From January 1988 to February 1989,
he was a Lucille P. Markey Scholar at Columbia University. He received his Ph.D.
in Biochemistry and Molecular Biophysics and his M.D. from Columbia University.
JESSE M. CEDARBAUM, M.D., 46, has been Vice President, Clinical Affairs since
January 1993, and was Program Director of Clinical Affairs of the Company from
July 1990 until December 1992. He was Associate Professor of Neurology and
Neuroscience at Cornell University Medical College and director of the Parkinson
and Movement Disorders Clinics, New York Hospital and The Burke Rehabilitation
Center from 1983 to 1990 and is currently Clinical Associate Professor of
Neurology at Mt. Sinai Medical School in New York. Dr. Cedarbaum is a board
certified neurologist. Dr. Cedarbaum received his M.D. from the Yale University
School of Medicine.
MURRAY A. GOLDBERG, 53, has been Vice President, Finance & Administration,
Treasurer, and Chief Financial Officer since March 1995. Prior to joining the
Company, Mr. Goldberg was Vice President, Finance, Treasurer, and Chief
Financial Officer of PharmaGenics, Inc. from February 1991 and a Director of
that Company from May 1991. From 1987 to 1990, Mr. Goldberg was Managing
Director, Structured Finance Group at the Chase Manhattan Bank, N.A. and from
1973 to 1987 he served in various managerial positions in finance and corporate
development at American Cyanamid Company.
HANS-PETER GULER, M.D., 49, has been Vice President, Clinical Sciences since
April 1998. From 1994 until joining the Company, Dr. Guler was employed by
Chiron Corporation, most recently as Senior Director of Clinical Development.
From 1989 to 1994, he was Associate Director of Drug Development in the
Pharmaceuticals Divisions of CIBA-GEIGY Corporation.
Dr. Guler received his M.D. from the University of Zurich.
STEVEN L. HOLST, 56, has been Vice President, Quality Assurance and Regulatory
Affairs since October 1997. From 1993 until October 1997, Mr. Holst was employed
by Novo Nordisk A/S, most recently as Senior Regulatory Officer and Responsible
Head of its worldwide Health Care group. From 1990 to 1993, he was Director of
Regeneron's regulatory affairs and quality assurance groups.
GAIL M. KEMPLER, Ph.D., 43, has been Vice President, Intellectual Property and
Associate General Counsel since January 1995, and was Regeneron's Patent Counsel
from December 1991. From May 1986 through November 1991, Dr. Kempler was
associated with the intellectual property law firm Kenyon & Kenyon.
PAUL LUBETKIN, 47, has been Vice President, General Counsel, and Secretary since
January 1992. From September 1994 through March 1995, Mr. Lubetkin also served
as Acting Chief Financial Officer and Treasurer of the Company. From April 1990
to December 1991, he was the General Counsel and Secretary of the Company. From
January 1990 until April 1990, Mr. Lubetkin was a partner of the law firm Kelley
Drye & Warren and from 1988 to 1990 he was of counsel to Kelley Drye & Warren.
RANDALL G. RUPP, Ph.D., 51, has been Vice President, Manufacturing and Process
Science since January 1992, and was Regeneron's Director of Manufacturing from
July 1991 until December 1992. From July 1990 to July 1991, Dr. Rupp was Vice
President, Research at Biohybrid Technologies, Inc. and from April 1989 to July,
1990 he served as Vice President of Development and Manufacturing at Somatogen
Corp. From 1986 to 1989, he served as Vice President of Development and Director
of Cell Biology at Invitron Corporation, and from 1985 to 1986, he was Assistant
Director, Cell Biology Department, at SmithKline Beckman, Inc. He received his
Ph.D. in Biomedical Sciences from the University of Texas, M.D.
Anderson Hospital and Tumor Institution, Houston.
DAVID VALENZUELA, Ph.D., 47, has been Vice President, Genomics and
Bioinformatics since January 1998. Dr. Valenzuela joined Regeneron in 1990 and
most recently was Senior Director, Genomics and Bioinformatics. He received his
Ph.D. in molecular biology from the Albert Einstein College of Medicine, Yeshiva
University.
BEVERLY C. DUBS, 43, has been Controller of the Company since March 1989 and
Assistant Treasurer of the Company since August 1990. Ms. Dubs was a controller
at Tri-County Micro Systems, Inc. from 1983 to 1989 and a senior accountant in
the Small Business Section of Deloitte Haskins & Sells from 1980 to 1983.
- - --------------------------------------------------------------------------------
APPROVAL OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors Unanimously Recommends a Vote FOR the Selection of
Coopers & Lybrand L.L.P.
The Board of Directors, at the recommendation of the Audit Committee, has
selected Coopers & Lybrand L.L.P. as the Company's independent accountants for
the fiscal year ending December 31, 1998. This appointment is subject to the
approval of the Company's shareholders. Accordingly, the following resolution
will be offered at the Annual Meeting:
11
"RESOLVED, that the appointment, by the Board of Directors of Regeneron
Pharmaceuticals, Inc., of Coopers & Lybrand L.L.P. as the independent
accountants of the Company for the year ending December 31, 1998 is hereby
approved."
Coopers & Lybrand L.L.P. has been the Company's independent accountants for the
past nine years and has advised the Company that it will have in attendance at
the Annual Meeting a representative who will be afforded an opportunity to make
a statement, if such representative desires to do so, and will respond to
appropriate questions presented at the Annual Meeting.
Proxies solicited by Management will be voted "FOR" ratification of the
selection of Coopers & Lybrand L.L.P. as independent accountants unless
shareholders indicate in their proxies their desire to have their shares voted
"AGAINST" such ratification.
- - -------------------------------------------------------------------------------
Other Matters
The Board of Directors of the Company does not intend to present any other items
of business and knows of no other items of business that are likely to be
brought before the Annual Meeting, except those set forth in the accompanying
Notice of the Annual Meeting of Shareholders. However, if any other matters
should properly come before the Annual Meeting, the persons named in the
enclosed proxy will have discretionary authority to vote such proxy on such
matters in accordance with their best judgment.
- - --------------------------------------------------------------------------------
Shareholder Proposals for 1999
Annual Meeting of Shareholders
A shareholder wishing to present a proposal at the 1999 Annual Meeting of
Shareholders must submit the proposal in writing and be received by the Company
at its principal executive offices (777 Old Saw Mill River Road, Tarrytown, New
York 10591) by January 22, 1999 in order for such proposal to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
- - --------------------------------------------------------------------------------
Cost of Solicitation
This solicitation is made on behalf of the Board of Directors of the Company.
The cost of solicitation of proxies in the accompanying form will be paid by the
Company. The Company will also, pursuant to regulations of the Securities and
Exchange Commission, make arrangements with brokerage houses and other
custodians, nominees, and fiduciaries to send proxies and proxy materials to
their principals and will reimburse them for their reasonable expenses in so
doing. In addition to solicitation by use of the mails, certain directors,
officers, and employees of the Company may solicit the return of proxies by
telephone, telegram, or personal interviews.
By Order of the Board of Directors,
PAUL LUBETKIN
Secretary
Tarrytown, New York
May 12, 1998
12
