Wallace G. Dempsey has been a director of the Corporation since February
1986. From 1973 until May 1993, he served as the Secretary and General
Attorney of International Flavors & Fragrances, Inc. From May 1993 until
April 1994, Mr. Dempsey served as a consultant to International Flavors &
Fragrances, Inc.
Irwin J. Gruverman has been a director of the Corporation since November
1990. Since 1982, Mr. Gruverman has been Chairman of the Board and Chief
Executive Officer of Microfluidics International and its predecessor,
Biotechnology Development Corp. Since 1990, he has also been a General
Partner of G&G Diagnostics Funds which invests in medical diagnostics
companies. Mr. Gruverman is also a director of Fiberchem International, Inc.,
InVitro International and North American Scientific, Inc.
Hayden H. Harris has been a director of the Corporation since March 1993
and Chairman of the Board since November 1995. Since 1997, Mr. Harris has
been President and a director of Enterprise Management, Inc., a venture
capital management and consulting company. From 1990 to present, Mr. Harris
has been Chairman of the Board and Chief Executive Officer of Software
Services Corporation, a provider of contract software services, and since
1995 he has served as President and a director of EDM, Inc., a venture
capital management company.
Wolfgang Woloszczuk, Ph.D. has been a director of the Corporation since
November 1990. Dr. Woloszczuk has also served as Chief Executive Officer of
Biomedica GmbH since 1992 and of Biocis Handels GmbH since 1994. He has also
served as an executive officer of Bionova Handels GmbH since 1988. Dr.
Woloszczuk was an executive officer of Biozol Diagnostica Vertriebs GmbH from
1989 until May 1996. Since November 1997, Dr. Woloszczuk has been President
of BioNet, Inc., an exporter of biomedical products located in Southbridge,
Massachusetts. In addition, Dr. Woloszczuk has been a Professor of medicinal
chemistry at the University of Vienna since 1989.
Family Relationships
Wallace G. Dempsey is the father of Owen A. Dempsey. There are no other
family relationships among directors or executive officers of Endogen.
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth as of September 11, 1998 certain
information regarding the ownership of shares of the Corporation's Common
Stock by (i) each person who, to the knowledge of the Corporation, owned
beneficially more than 5% of the shares of Common Stock of the Corporation
outstanding at such date ("Principal Stockholders"), (ii) each director and
nominee director the Corporation, (iii) each Named Officer (as defined below)
of the Corporation, and (iv) all directors and executive officers as a group.
Amount and Nature of Percent of Common
Name and Address of Beneficial Owner Beneficial Ownership(1) Stock Outstanding(2)
- ------------------------------------------------------------------------------------------------
Owen A. Dempsey (3)..................... 337,200 9.53%
c/o Endogen, Inc.
30 Commerce Way
Woburn, MA 01801
Wallace G. Dempsey (4).................. 184,000 5.29%
c/o Endogen, Inc.
30 Commerce Way
Woburn, MA 01801
4\Endogen 1998 Proxy Statement
(3) Represents all options granted to Mr. Dempsey, Mr. Catlin and Mr.
Walczewski during the fiscal year ended May 31, 1998, respectively,
as a percentage of the total options granted to employees during
the same period. A total of 97,000 options were granted to employees
in fiscal year 1998.
The following table sets forth certain information concerning stock
options held by the Named Officers on May 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
Shares at May 31, 1998 (#) at May 31, 1998 ($) (3)
Acquired on Value -------------------------- --------------------------
Name Exercise (#) Realized ($) (2) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------
Owen A. Dempsey 12,000 $31,680 77,100 17,100 $113,960 $10,060
Avery W. Catlin -- -- 15,100 57,100 900 2,700
Dennis H. Walczewski -- -- 17,100 29,100 300 300
- ---------------------
(1) The Corporation has never granted any SAR's.
(2) Value is based on the difference between the option exercise price and
$4.00, the fair market value of the Corporation's Common Stock on the date
of exercise, multiplied by the number of shares exercised.
(3) Value is based on the difference between the option exercise price and
$3.94, the fair market value of the Corporation's Common Stock on May 29,
1998, the last trading day for the fiscal year ended May 31, 1998,
multiplied by the number of shares of Common Stock underlying the options.
Compensation of Directors
Each non-employee director of the Corporation is entitled to $500, plus
all reasonable expenses, for each meeting of the Corporation's Board of
Directors and each Committee meeting that he attends. In addition, pursuant
to the Director Plan, each non-employee director is automatically granted,
without further action by the Board, an option to purchase 6,000 shares of
the Corporation's Common Stock upon (a) the date such director is first
elected to the Board and (b) each subsequent anniversary of that director's
election to the Board. The exercise price per share of all options granted
under the Director Plan is equal to 100% of the fair market value of the
Corporation's Common Stock on the date such options are granted. Options
granted under the Director Plan are exercisable as to one-third of the shares
subject to the option on each successive anniversary of the date of grant,
provided that the optionee has continuously served as a member of the Board
of Directors through such date. Notwithstanding the foregoing, those options
which were granted under the Director Plan on November 12, 1993 were fully
vested and exercisable in full on the date of such grant.
The Chairman of the Corporation's Board of Directors, Hayden Harris, is
entitled to an additional $500 per meeting of the Board of Directors and
$1,000 per day for each meeting with the Corporation's President and Chief
Executive Officer that is not a Board or Committee meeting. Moreover, in
addition to his annual option grant under the Director Plan, the Chairman
also received an option to purchase 6,000 shares of the Corporation's Common
Stock pursuant to the 1992 Plan.
8\Endogen 1998 Proxy Statement
These options were granted at an exercise price equal to 100% of the fair
market value of the Corporation's Common Stock as of the date of grant.
Provided that the Chairman continues to serve the Corporation in the capacity
of employee, officer, director or consultant, the options shall vest over a
period of one year from the date of grant, in four equal quarterly
installments.
In addition to his annual option grant under the Director Plan, Charles
Burke received an option to purchase 6,000 shares of the Corporation's Common
Stock pursuant to the 1992 Plan. These options were granted at an exercise
price equal to 100% of the fair market value of the Corporation's Common
Stock as of the date of grant. One-third of these options vested on the date
of grant and, provided that Dr. Burke continues to serve the Corporation in
the capacity of employee, officer, director or consultant, the balance of the
options shall vest over a period of two years, in two equal annual
installments.
Directors who are employees of the Corporation receive no additional
compensation for serving on the Board of Directors or its Committees.
Executive Employment Agreements
On December 4, 1996, the Corporation entered into an employment
agreement with Avery W. Catlin pursuant to which he joined the Corporation
(the "Catlin Agreement"). Under the terms of the Catlin Agreement, Mr. Catlin
is entitled to receive a minimum salary of $120,000 and a minimum bonus of
$34,000 for the first year of the term and a minimum salary of $130,000 for
the second year of the term. Mr. Catlin's bonus after the first year of the
term will be based on formulas agreed to by the Corporation and Mr. Catlin.
Mr. Catlin's salary after the second year of the term will be determined by
the Board of Directors. Additionally, Mr. Catlin is eligible for
participation in an executive incentive pay plan and in all of the
Corporation's welfare, benefit, retirement and savings plans on the same
basis as other employees of the Corporation. Pursuant to the Catlin
Agreement, and subject to the terms of a stock option agreement, Mr. Catlin
received an option to purchase 60,000 shares of Common Stock at $3.88 per
share, vesting at 25% per annum for four years. Mr. Catlin's employment by the
Corporation may be terminated, with or without cause, by either party upon
prior written notice. In the event Mr. Catlin is terminated by the
Corporation other than for cause or the death of Mr. Catlin, Mr. Catlin would
be entitled to continue receiving his salary and benefits for a period of six
months following his termination date. In the event Mr. Catlin is terminated
by the Corporation without cause, all of the outstanding options which have
been granted to Mr. Catlin, but which have not vested, shall vest immediately
and be exercisable in full. In the event Mr. Catlin is terminated pursuant to
a change in control of the Corporation, as defined in the Catlin Agreement,
Mr. Catlin would be entitled to receive a cash payment equal to his annual
salary on the date of termination and all of the outstanding options which
have been granted to Mr. Catlin, but which have not yet vested, shall vest
immediately and be exercisable in full. The initial term of the Catlin
Agreement is three years and may be automatically renewed for one year
periods.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1991, the Corporation entered into a distribution and supply
agreement with Biozol Diagnostica Vertriebs GmbH ("Biozol") under which
Biozol exclusively distributed the Corporation's products to individual
country distributors in certain European countries. Effective September 1,
1996, the agreement was amended so that the Corporation could distribute its
products directly to certain individual country distributors in Europe.
Biozol continues as the corporation's exclusive distributor in Germany.
Wolfgang Woloszczuk, a director of the Corporation, was an executive officer
of Biozol from 1989 until May 1996, and is currently an executive officer and
20% shareholder of Biomedica GmbH, a 50% owner of Biozol.
9\Endogen 1998 Proxy Statement