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
|X| Definitive proxy statement only (as permitted by Rule 14a-6(e)(2))
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule
14a-11(c) or Rule 14a-12
ATLANTIC PHARMACEUTICALS, INC.
(Name of Registrant as Specified in Its Charter)
(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)(4) 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:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
Atlantic Pharmaceuticals, Inc.
1017 Main Campus Drive
Suite 3900
Raleigh, North Carolina 27606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 23, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
(the "Annual Meeting") of Atlantic Pharmaceuticals, Inc. ("Atlantic"), which
will be held at noon Eastern Daylight Time on Thursday, September 23, 1999, at
the offices of Kramer Levin Naftalis & Frankel LLP, at 919 Third Avenue, 40th
Floor, New York, New York 10022.
At the Annual Meeting, certain proposals will be voted upon by the
holders of Atlantic's common and preferred stock. These proposals are described
in the enclosed Proxy Statement. Atlantic's Board of Directors has unanimously
approved each of these proposals and recommends that you vote in favor of each
of them.
Whether or not you plan to attend, to assure your representation at the
meeting, please carefully read the accompanying Proxy Statement, which describes
the matters to be voted upon, and complete, sign, date, and return the enclosed
proxy card in the reply envelope provided. Should you receive more than one
proxy card because your shares are registered in different names and addresses,
please return each of them to ensure that all your shares are voted. If you hold
your shares of Atlantic in street name and decide to attend the Annual Meeting
and vote your shares in person, please notify your broker to obtain a ballot so
that you may vote your shares. If you are a holder of record of Atlantic shares
and submit the enclosed proxy card and then vote by ballot, your proxy vote will
be revoked automatically and only your vote will be counted. The prompt return
of your proxy card will assist us in preparing for the Annual Meeting.
A letter from Atlantic's President and a copy of Atlantic's 1998 Annual
Report on Form 10-KSB are also enclosed.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ A. Joseph Rudick
-----------------------
A. Joseph Rudick, M.D.
President
Raleigh, North Carolina
August 23, 1999
<PAGE>
ATLANTIC PHARMACEUTICALS, INC.
1017 MAIN CAMPUS DRIVE, SUITE 3900
RALEIGH, NORTH CAROLINA 27606
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 23, 1999
General Information for Stockholders
The enclosed proxy card ("Proxy") is solicited on behalf of the Board
of Directors of Atlantic Pharmaceuticals, Inc., a Delaware corporation
("Atlantic"), for use at the 1999 annual meeting of stockholders (the "Annual
Meeting") to be held at noon Eastern Daylight time on Thursday, September 23,
1999, at the offices of Kramer Levin Naftalis & Frankel LLP, at 919 Third
Avenue, 40th Floor, New York, New York 10022, and at any adjournment.
This Proxy Statement and the Proxy were first mailed to the
stockholders entitled to vote at the Annual Meeting on or about August 24, 1999.
Record Date and Voting
The specific proposals to be considered and acted upon at the Annual
Meeting are described in detail in this Proxy Statement. Stockholders of record
at the close of business on August 9, 1999 are entitled to notice of, and to
vote at, the Annual Meeting. As of the close of business on that date, there
were outstanding and entitled to vote 4,774,121 shares of Atlantic's common
stock, par value $0.001 per share (the "Common Stock"), and 622,942 shares of
Atlantic's Series A Convertible Preferred Stock, par value $0.001 per share (the
"Series A Preferred Stock"). Each holder of Common Stock is entitled to one vote
for each share of Common Stock held by that stockholder on the record date. Each
holder of Series A Preferred Stock is entitled to one vote for each share of
Common Stock into which that holder's shares of Series A Preferred Stock were
convertible as of the record date. As of the record date, each share of Series A
Preferred Stock was convertible into 3.27 shares of shares of Common Stock and,
therefore, as a class the Series A Preferred Stock is entitled to an aggregate
of 2,037,020 votes.
At the Annual Meeting, all holders of shares of Common Stock and Series
A Preferred Stock will be asked to vote on proposals 1, 2, 3, and 4. In
addition, pursuant to the Delaware General Corporation Law, the holders of
shares of Series A Preferred Stock will also vote as a separate class with
respect to proposal 3. A majority of the votes cast by the holders of both
Common Stock and Series A Preferred Stock, voting together, is required in order
to approve each of proposals 1, 2 and 3. In addition, the affirmative vote of at
least 66.67% of all outstanding shares of Series A Preferred Stock, voting
separately as a class, is required in order for proposal 3 to be adopted.
If a choice as to the matters coming before the Annual Meeting has been
specified by a stockholder on a returned Proxy, the shares will be voted
accordingly. If no choice is specified, the shares will be voted in favor of the
election of each of the directors proposed by the Board and in favor of
proposals 2, 3, and 4 described in the Notice of Annual Meeting and in this
Proxy Statement.
Abstentions and broker non-votes (that is, a Proxy submitted by a
broker or nominee that specifically indicates the lack of discretionary
authority to vote on the proposals) are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions
will have the same effect as negative votes, whereas broker non-votes will not
be counted for purposes of determining whether a proposal has been approved or
not.
<PAGE>
To ensure that your shares are voted at the Annual Meeting, please
complete, date, sign and return the enclosed Proxy in the accompanying
postage-prepaid, return envelope as soon as possible.
Revocability of Proxies
Any stockholder giving a Proxy pursuant to this solicitation may revoke
it at any time prior to its exercise. A stockholder of record may revoke a Proxy
by filing with the Secretary of Atlantic at its principal executive offices at
1017 Main Campus Drive, Suite 3900, Raleigh, North Carolina 27606 a duly
executed Proxy bearing a later date or by attending the Annual Meeting and
voting that stockholder's shares in person. Persons who hold Atlantic shares in
street name may revoke their Proxy by contacting their broker to obtain a legal
ballot and filing that ballot bearing a later date with the Secretary of
Atlantic at its principal executive offices or by attending the Annual Meeting
and voting that legal ballot in person.
Solicitation
Atlantic will bear the entire cost of solicitation, including
preparing, assembling, printing and mailing the Notice of Annual Meeting, this
Proxy Statement, the Proxy and any additional solicitation materials furnished
to stockholders. Copies of solicitation materials will be furnished to any
brokerage house, fiduciary or custodian holding shares in its name that are
beneficially owned by others, so that they may forward the solicitation
materials to the beneficial owners. To assure that a quorum is present in person
or by proxy at the Annual Meeting, Atlantic anticipates causing one of its
consultants to solicit Proxies by telephone. Atlantic has engaged this
consultant to perform various services, including the soliciting of proxies, for
total compensation of $1,500 a month.
A letter from Atlantic's President as well as Atlantic's Annual Report
on Form 10-KSB for the year ended December 31, 1998 have been mailed with the
Notice of Annual Meeting and Proxy Statement to all stockholders entitled to
notice of and to vote at the Annual Meeting. The President's letter and the
Annual Report on Form 10-KSB are not incorporated into this Proxy Statement and
are not considered proxy soliciting material.
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<PAGE>
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, a Board of Directors consisting of four
directors will be elected to serve until the next annual meeting of stockholders
and until their successors have been duly elected and qualified or until their
earlier resignation or removal. The Board has selected four nominees, all of
whom are current directors of Atlantic. Each person nominated for election has
agreed to serve if elected, and management has no reason to believe that any
nominee will be unavailable to serve. Unless otherwise instructed, the Proxy
holders will vote the Proxies received by them in favor of the nominees named
below. Holders of shares of Common Stock and holders of shares of Series A
Preferred Stock vote together as a class for the election of directors. If any
nominee is unable or declines to serve as a director, the Proxies may be voted
for a substitute nominee designated by the current Board. As of the date of this
Proxy Statement, the Board is not aware of any nominee who is unable to or will
decline to serve as a director.
The Board recommends that stockholders vote in favor of the election of
each of the following nominees to serve as directors of Atlantic until the next
annual meeting of stockholders and until their successors have been duly elected
and qualified or until their earlier resignation or removal.
Information With Respect to Nominees
Set forth below is information regarding the nominees.
NAME OF NOMINEE AGE POSITION DIRECTOR SINCE
A. Joseph Rudick, M.D. 41 Director and President 1999
Yuichi Iwaki, M.D., Ph.D. 49 Director 1996
Steve H. Kanzer, C.P.A., Esq. 35 Director 1993
Frederic P. Zotos, Esq. 33 Director 1999
Business Experience of Nominees
A. JOSEPH RUDICK, M.D. is the President of Atlantic and a founder of
Atlantic and two of its majority-owned subsidiaries, Optex Ophthalmologics, Inc.
("Optex") and Channel Therapeutics, Inc. ("Channel"). Dr. Rudick served as a
business consultant to Atlantic from January 1997 until November 1998. From
November 1994 until December 1998, Dr. Rudick was a Vice President of Paramount
Capital, Inc. ("Paramount"), an investment bank specializing in the
biotechnology and biopharmaceutical industries. Since 1988, he has been a
Partner of Associate Ophthalmologists P.C., a private ophthalmology practice
located in New York, and since 1993 has served as a director of Healthdesk
Corporation, a publicly-traded medical information company. Dr. Rudick earned a
B.A. in Chemistry from Williams College in 1979 and an M.D. from the University
of Pennsylvania in 1983. He is acting as a consultant to Optex pursuant to a
Consulting Agreement dated as of May 18, 1999.
YUICHI IWAKI, M.D., Ph.D., has served as a director of Atlantic since
August 1996. He has been a Director of the Transplantation Immunology and
Immunogenetics Laboratory in the Department of Urology at the University of
Southern California and a Professor of Urology and Pathology at the University
of Southern California School of Medicine since 1992. Prior to that, Dr. Iwaki
held various academic appointments at the University of Southern California
School of Medicine, the University of Pittsburgh, the University of California
at Los Angeles, Sapporo Medical School and Nihon University School of Medicine.
Dr. Iwaki, who received his M.D. and Ph.D. from Sapporo Medical School in Japan,
also serves as a director of Avigen, Inc., a publicly-traded biotechnology
company, and of a second, privately-held, company.
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<PAGE>
STEVE H. KANZER, C.P.A., Esq., has served as a director of Atlantic
since its inception in 1993. Since December 1997, Mr. Kanzer has been President,
Chief Executive Officer and a member of the board of directors of the Institute
for Drug Research, Inc., a private pharmaceutical research and development
company with offices in Budapest, Hungary, and in New York. From 1992 until
December 1998, Mr. Kanzer was a founder and Senior Managing Director of
Paramount, and Senior Managing Director--Head of Venture Capital of Paramount
Capital Investments, LLC ("Paramount Investments"), a biotechnology and
biopharmaceutical venture capital and merchant banking firm that is associated
with Paramount. From 1993 until June 1998, Mr. Kanzer was a founder and a member
of the Board of Directors of Boston Life Sciences, Inc., a publicly-traded
pharmaceutical research and development company. Mr. Kanzer is a founder and
Chairman of the Board of Discovery Laboratories, Inc., and a member of the Board
of Directors of Endorex Corp., two publicly-traded pharmaceutical research and
development companies. Prior to joining Paramount, Mr. Kanzer was an attorney
with Skadden, Arps, Slate, Meagher & Flom LLP in New York, New York from
September 1988 to October 1991. He received his J.D. from New York University
School of Law and a B.B.A. in Accounting from Baruch College.
FREDERIC P. ZOTOS, Esq., is an independent patent attorney and
technology licensing consultant. From December 1996 until September 1998, Mr.
Zotos was Assistant to the President and Patent Counsel of Competitive
Technologies, Inc., a publicly-traded technology licensing agency located in
Fairfield, Connecticut. From July 1994 until November 1996, Mr. Zotos was a
General Associate of Pepe & Hazard, an intellectual property and corporate law
firm located in Hartford, Connecticut. He is Co-Chair of the
Fairfield-Westchester Chapter of the Licensing Executive Society, and a member
of its Valuation and Taxation Committee. Mr. Zotos is a registered patent
attorney with the United States Patent and Trademark Office. He earned a B.S. in
Mechanical Engineering from Northeastern University in 1987 and a joint J.D. and
M.B.A. degree from Northeastern University in 1993.
Number of Directors; Relationships
Atlantic's Bylaws authorize the Board to fix the number of directors
serving on the Board. Since May 28, 1999, the number of directors has been fixed
at four. Each director holds office until the annual meeting of stockholders
following the initial election or appointment of that director and until that
director's successor has been duly elected and qualified, or until that
director's earlier resignation or removal. Officers are appointed to serve at
the discretion of the Board.
There are no family relationships among the executive officers or
directors of Atlantic.
Board Meetings and Committees
The Board held 10 meetings during the 1998 fiscal year. Each of the
directors participated in or attended at least 75% of the aggregate number of
meetings held during the period that such director was a member of the Board.
The Board has an Audit Committee and a Compensation Committee, but not
a standing Nominating Committee. The Audit Committee, which is currently
composed of Dr. Rudick and Dr. Iwaki, reviews the professional services provided
by Atlantic's independent auditors and monitors the scope and results of the
annual audit; reviews proposed changes in Atlantic's financial and accounting
standards and principles; reviews Atlantic's policies and procedures with
respect to its internal accounting, auditing and financial controls; makes
recommendations to the Board on the engagement of the independent auditors and
addresses other matters that may come before it or as directed by the Board of
Directors. The Audit Committee did not hold any meetings during the 1998 fiscal
year.
The Compensation Committee, which is currently composed of Mr. Zotos
and Mr. Kanzer, sets the compensation for certain of Atlantic's personnel and
administers Atlantic's 1995 Stock Option Plan, as amended and restated (the
"1995 Stock Option Plan"). The Compensation Committee held three meetings during
the 1998 fiscal year.
4
<PAGE>
Director Compensation
Non-employee Board members are eligible to participate in an automatic
stock option grant program pursuant to the 1995 Stock Option Plan. Non-employee
directors are granted an option for 10,000 shares of Common Stock upon their
initial election or appointment to the Board and an option for 2,000 shares of
Common Stock on the date of each annual meeting of Atlantic for those
non-employee directors continuing to serve after that meeting. Pursuant to the
automatic stock option grant program, Atlantic granted the following options,
each with an exercise price equal to the fair market value of the Common Stock
on the date of the grant: to each of Drs. Iwaki and Fildes and Mr. Kanzer on
August 28, 1998, an option for 2,000 shares of Common Stock at an exercise price
of $2.313 per share; to Mr. Cleary on December 17, 1998, an option for 10,000
shares of Common Stock at an exercise price of $1.656 per share; to each of Dr.
Rudick and Mr. Zotos on May 18, 1999, an option for 10,000 shares of Common
Stock at an exercise price of $1.25 per share.
Board members are reimbursed for reasonable expenses incurred in
connection with attendance at meetings of the Board and of Committees of the
Board.
Each employee of Atlantic who is also a director of Atlantic does not
receive any additional compensation for his service on the Board. Currently,
none of the nominees to the Board is an Atlantic employee. Each of Mr. Kanzer,
Dr. Rudick and Mr. Zotos is currently a director of each of Atlantic's three
subsidiaries, Optex, Channel and Gemini Technologies, Inc., ("Gemini") and
receives as compensation for so serving $2,000 per year per subsidiary plus $250
per board meeting attended.
Dr. Rudick has entered into a consulting agreement dated as of May 18,
1999, with Optex pursuant to which he receives $6,000 a month in compensation.
In June 1999, Mr. Zotos performed consulting services for Channel for which he
received $2,500, and he may perform further such services from time to time in
the future.
PROPOSAL 2: RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board has appointed the firm of KPMG Peat Marwick LLP, independent
auditors, to audit the financial statements of Atlantic for the year ending
December 31, 1999, and is asking the stockholders to ratify this appointment.
KPMG Peat Marwick LLP began annually auditing Atlantic's financial statements in
December 1995.
In the event the stockholders fail to ratify the appointment, the Board
will reconsider its selection. Even if the selection is ratified, the Board in
its discretion may direct the appointment of a different independent auditing
firm at any time during the year if the Board believes that such a change would
be in the best interests of Atlantic and its stockholders. The affirmative vote
of the holders of a majority of the shares of Common Stock and shares of Series
A Preferred Stock, voting together as a class, present or represented by Proxy
at the Annual Meeting and entitled to vote is required to ratify the selection
of KPMG Peat Marwick LLP.
The Board recommends that stockholders vote in favor of the
ratification of the selection of KPMG Peat Marwick LLP to serve as Atlantic's
independent auditors for the year ending December 31, 1999.
PROPOSAL 3: AMENDMENT OF
CERTIFICATE OF INCORPORATION
This proposal would amend clause (vii) of Section 6(b) of the
Certificate of Designations of the Series A Preferred Stock (the "Certificate of
Designations"), thereby amending Atlantic's Certificate of Incorporation.
Section 6(b) of the Certificate of Designations currently provides
that, for so long as 50% of the shares of Series A Preferred Stock are
outstanding, the affirmative vote or consent of the holders of at least 66.67%
of
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<PAGE>
all outstanding shares of Series A Preferred Stock voting separately as a class
is necessary to permit, effect or validate a number of corporate actions,
including, as stated in clause (vii), "the approval of any transactions between
the Corporation and its affiliates (other than transactions between the
Corporation and its subsidiaries in the ordinary course of business)." The
complete text of Section 6(b) is attached as Exhibit A.
Atlantic proposes to amend clause (vii) of Section 6(b) of the
Certificate of Designations to read as follows: "the approval of any
transactions between the Corporation and its affiliates (other than (A)
transactions between the Corporation and its subsidiaries in the ordinary course
of business and (B) transactions between the Corporation and its directors and
executive officers)." (Emphasis added to indicate new language.)
Atlantic is proposing this amendment because it finds it difficult to
conduct business effectively as a result of clause (vii). Because the definition
of "affiliates" could include the company's present or future directors and
executive officers, and because the restriction includes "any transaction," the
holders of shares of Series A Preferred Stock may have a de facto veto power
over Atlantic's ability to enter into employment, indemnification, and
consulting agreements and to establish compensation and bonus arrangements for
such persons, among other fundamental corporate actions. If this interpretation
is correct, it would be expensive and time-consuming for Atlantic to repeatedly
solicit the approval of a large number of holders of shares of Series A
Preferred Stock, of whom there were 121 on the record date.
Furthermore, the requirement that approval be by 66.67% of all
outstanding shares of Series A Preferred Stock, rather than by 66.67% of those
shares that are voted, is onerous. If any holders of shares of Series A
Preferred Stock do not vote on a proposal regarding affiliate transactions,
adoption of that proposal would require the affirmative vote of more than 66.67%
of those shares actually voted, perhaps significantly more, depending on the
number of shares that are not voted. This could constitute an insurmountable
obstacle to adoption of such proposals, which could in turn force Atlantic to
forego desirable corporate opportunities and adversely affect its ability to
recruit and retain qualified management personnel.
If proposal 3 is adopted, Atlantic would promptly file with the
Delaware Secretary of State a certificate amending appropriately clause (vii) of
Section 6(b) the Certificate of Designations.
Adoption of proposal 3 would give Atlantic greater freedom to enter
into agreements with directors and executive officers, while leaving otherwise
intact the significant protection afforded holders of Series A Preferred Stock
in the Certificate of Designations. Furthermore, Atlantic would remain subject
to all applicable laws governing transactions with directors and executive
officers. For example, members of the Board must, under Delaware law,
scrupulously observe their duties of care and of loyalty to Atlantic and its
stockholders. More specifically, Delaware law requires that directors with an
interest in a particular corporate transaction fully disclose that interest to
the other members of the Board and abstain from voting in favor of the
transaction. Further, directors who engage inappropriately in interested
transactions with Atlantic are subject to legal action by stockholders and may
also subject Atlantic to liability. Consequently, Atlantic believes that its
stockholders will remain adequately protected from potentially self-serving
transactions.
For these reasons, the Board recommends that you vote in favor of
proposal 3.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
Certain information regarding the sole executive officer other than Dr.
A. Joseph Rudick is set forth below (information concerning Atlantic's directors
is contained in proposal 1):
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NAME AGE POSITION
Shimshon Mizrachi 45 Chief Financial Officer, Treasurer and Secretary
SHIMSHON MIZRACHI assumed the position of Controller in November 1995
and was promoted to Chief Financial Officer, Treasurer and Assistant Secretary
in September 1997. He was appointed Secretary in 1999. Since November 1995, Mr.
Mizrachi also has served as Chief Financial Officer of each of Atlantic's
subsidiaries, Optex, Gemini and Channel. From April 1994 to November 1995, Mr.
Mizrachi served as Assistant Manager for Caldor Corp., a regional retail
company. From 1987 to April 1994, Mr. Mizrachi held management positions of
increasing responsibility for MidIsland Department Stores, a regional retail
company. Mr. Mizrachi is a Certified Public Accountant. He received his B.A.
from Tel Aviv University, his M.B.A. from Adelphi University and his second B.A.
from Queens College in New York.
Compensation of Executive Officers
The following table sets forth, for the last three fiscal years, the
compensation earned for services rendered in all capacities by Atlantic's Chief
Executive Officer and the three other highest-paid executive officers serving as
such at the end of 1998 whose compensation for that fiscal year was in excess of
$100,000. The individuals named in the table will be hereinafter referred to as
the "Named Officers." No other executive officer of Atlantic received
compensation in excess of $100,000 during fiscal year 1998. No executive officer
who would otherwise have been included in this table on the basis of 1998 salary
and bonus resigned or terminated employment during the year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------------------------------------------------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary($)(1) Bonus($) Compensation ($) Options/SARS(#)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert A. Fildes, Ph.D (2) 1998 63,500 0 0 77,000
Interim President and 1997 0 0 0 10,000
Chief Executive Officer
John D. Lindjord (3) 1998 256,554 35,000 9,500 0
President and Chief 1997 225,000 0 9,500 40,000
Executive Officer 1996 195,833 62,500 -- 60,000
Stephen R. Miller, M.D.(4)
Senior Vice President, 1998 163,833 20,000 9,500 20,000
Chief Scientific and 1997 164,200 0 9,500 30,000
Medical Officer 1996 145,175 20,000 -- 100,000
Margaret A. Schalk(4)
Vice President, Investor 1998 128,933 17,000 8,584 20,000
Relations and 1997 115,000 0 6,785 25,000
Project Management 1996 104,375 15,000 -- 90,000
Shimshon Mizrachi
Chief Financial Officer, 1998 146,667 15,000 9,500 20,000
Treasurer and 1997 122,000 0 5,900 20,000
Assistant Secretary 1996 91,250 10,000 -- 50,000
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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- ----------
(1) Does not include amounts deferred under Atlantic's SAR-SEP retirement
plan pursuant to payroll deductions and matching contributions of
Atlantic.
(2) Dr. Fildes acted as interim President and CEO from July 10 through
December 31, 1998. He received $63,500 as salary as well as 75,000
options at an exercise price of $3.25 per share. In addition he
received 2,000 options on August 28, 1998 as an automatic grant for
serving as a director of Atlantic at an exercise price of $2.31 per
share.
(3) Effective July 7, 1998, Mr. Lindjord resigned as Atlantic's CEO and as
a member of the Board of Directors and from all officer and director
positions held with Atlantic's subsidiaries. Atlantic agreed to
continue paying him his salary for a year after his resignation.
(4) Stephen R. Miller, M.D. and Margaret A. Schalk ceased being employees
of Atlantic effective July 1, 1999.
Options and Stock Appreciation Rights
The following table contains information concerning the grant of stock
options under the 1995 Stock Option Plan to the Named Officers during the 1998
fiscal year. Except as described in footnote (1) below, no stock appreciation
rights were granted during the 1998 fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
==========================================================================================================
Individual Grants
- ----------------------------------------------------------------------------------------------------------
Number of % of Underlying
Securities Options/SARs
Underlying Granted Exercise
Options/SARS to Employees in Price Expiration
Name Granted (#)(1) Fiscal Year (2) ($/Share)(3) Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert A. Fildes, Ph.D. 75,000 54% $3.25 03/12/08
2,000 1% $2.31 08/27/08
Stephen R. Miller, M.D. 20,000 15% $3.25 03/12/08
Margaret A. Schalk 20,000 15% $3.25 03/12/08
Shimshon Mizrachi 20,000 15% $3.25 03/12/08
==========================================================================================================
</TABLE>
- ----------
(1) Each option has a maximum term of ten years, subject to earlier
termination in the event of the optionee's cessation of service with
Atlantic. The grant date for the option grant of 2,000 shares to Dr.
Fildes was August 28, 1998 and the grant date for the remaining options
was August 7, 1998. Except for the grants to Dr. Fildes, each option
becomes exercisable as follows: one-third of the shares underlying the
option vest on August 7, 1999 and the remainder of the shares
underlying the option vest in 24 equal monthly installments commencing
September 7, 1999. Dr. Miller and Ms. Schalk's employment with Atlantic
terminated effective July 1, 1999, and consequently their options did
not vest. Dr. Fildes' option for 75,000 shares were to become
exercisable in a series of 36 equal monthly installments commencing
September 7, 1998; his employment terminated effective January 1, 1998,
and consequently his options did not vest. Each option will become
immediately exercisable in full upon an acquisition of Atlantic by
merger or asset sale, unless the option is assumed by the successor
entity. Each option includes a limited stock appreciation right
pursuant to which the optionee may surrender the option, to the extent
exercisable for vested shares, upon the successful completion of a
hostile
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tender for securities possessing more than 50% of the combined voting
power of Atlantic's outstanding voting securities. In return for the
surrendered option, the optionee would receive a cash distribution per
surrendered option share equal to the excess of (i) the highest price
paid per share of Common Stock in such hostile tender offer over (ii)
the exercise price payable per share under the cancelled option.
(2) Calculated based on total option grants to employees of 137,000 shares
of Common Stock during the 1998 fiscal year.
(3) The exercise price may be paid in cash or in shares of Common Stock
(valued at fair market value on the exercise date) or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. Atlantic may also finance the option exercise by loaning the
optionee sufficient funds to pay the exercise price for the purchased
shares and the federal and state income tax liability incurred by the
optionee in connection with such exercise. The optionee may be
permitted, subject to the approval of the Plan Administrator, to apply
a portion of the shares purchased under the option (or to deliver
existing shares of Common Stock) in satisfaction of such tax liability.
Option Exercises and Holdings
The following table provides information with respect to the Named
Officers concerning the exercisability of options during fiscal year 1998 and
unexercisable options held as of the end of fiscal year 1998. No stock
appreciation rights were exercised during such fiscal year, and, except for the
limited rights described in footnote (1) to the preceding table, no stock
appreciation rights were outstanding at the end of that fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR ("FY")
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
====================================================================================================================
Value of Unexercised In-the-
No. of Securities Underlying Money Options/SARs at FY-End
Unexercised Options/SARs at FY-End (Market price of shares at FY-
(#) End less exercise price) ($)(1)
-------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert A. Fildes, Ph.D. 20,333 66,667 0 0
- --------------------------------------------------------------------------------------------------------------------
John D. Lindjord 280,000 0 0 0
- --------------------------------------------------------------------------------------------------------------------
Stephen R. Miller, M.D. 119,969 69,980 0 0
- --------------------------------------------------------------------------------------------------------------------
Margaret A. Schalk 99,979 61,660 0 0
- --------------------------------------------------------------------------------------------------------------------
Shimshon Mizrachi 47,500 42,500 0 0
====================================================================================================================
</TABLE>
(1) Equal to the excess of the fair market value of the purchased shares at
the time of the option exercise over the exercise price paid for those
shares.
Long Term Incentive Plan Awards
No long term incentive plan awards were made to a Named Officer during
the last fiscal year.
9
<PAGE>
Employment Contracts and Termination of Employment and Change of Control
Agreements
Pursuant to a letter agreement dated July 7, 1995, Mr. Lindjord became
Chief Executive Officer and President of Atlantic and of each of the
subsidiaries of Atlantic effective August 1, 1995; he resigned those positions
effective July 7, 1998. Pursuant to that agreement, Atlantic agreed to pay Mr.
Lindjord an annual salary of $175,000, in addition to a $25,000 discretionary
bonus payable at the end of Mr. Lindjord's first year of employment with
Atlantic. The agreement also provided that in the event that Atlantic were to
terminate Mr. Lindjord's employment without cause, Atlantic would be obligated
to continue to pay his salary for one year, subject to Mr. Lindjord's duty to
mitigate damages by seeking alternative employment. Atlantic agreed to continue
paying Mr. Lindjord his salary for a year after his resignation on July 7, 1998.
Further, pursuant to Agreement and under the 1995 Stock Option Plan, Atlantic
issued to Mr. Lindjord options to purchase 180,000 shares of Common Stock
exercisable at a weighted average exercise price of $2.58 per share.
Furthermore, Mr. Lindjord and his dependents were eligible to receive paid
medical and long-term disability insurance and such other health benefits as
Atlantic made available to its other senior officers and directors.
Effective September 19, 1995, Dr. Miller became Vice President, Chief
Medical Officer of Atlantic and of each of Atlantic's subsidiaries. Pursuant to
a letter agreement dated September 19, 1995, Atlantic agreed to pay Dr. Miller
an annual salary of $145,000 and, in the event Atlantic were to terminate him
without cause, Atlantic would continue to pay his salary for nine months,
subject to Dr. Miller's duty to mitigate damages by seeking alternative
employment. In addition, Atlantic issued Dr. Miller under the 1995 Stock Option
Plan an option to purchase 39,959 shares of Common Stock at an exercise price of
$3.75 per share. Finally, Dr. Miller and his dependents were eligible to receive
paid medical and long-term disability insurance and such other health benefits
as Atlantic made available to its other senior officers and directors. Dr.
Miller ceased being an employee of Atlantic effective July 1, 1999. It is
Atlantic's position that Dr. Miller's termination was voluntary, and that
consequently Atlantic is not required to continue to pay Dr. Miller's salary for
nine months. On July 12, 1999, Dr. Miller filed suit in Wake County Superior
Court, North Carolina, claiming, among other things, that Atlantic is required
to do so.
Effective September 19, 1995, Ms. Schalk became Senior Director,
Project Management of Atlantic and of each of Atlantic's subsidiaries. Pursuant
to a letter agreement dated September 19, 1995, Atlantic agreed to pay Ms.
Schalk an annual salary of $100,000, reimburse her for up to $8,000 of
relocation expenses, and, in the event Atlantic were to terminate her without
cause, continue to pay her salary for nine months, subject to Ms. Schalk's duty
to mitigate damages by seeking alternative employment. In addition, Atlantic
issued Ms. Schalk under the 1995 Stock Option Plan an option to purchase 26,639
shares of Common Stock at an exercise price of $3.75 per share. Finally, Ms.
Schalk and her dependents were eligible to receive paid medical and long-term
disability insurance and such other health benefits as Atlantic made available
to its other senior officers and directors. Ms. Schalk ceased being an employee
of Atlantic effective July 1, 1999. It is Atlantic's position that Ms. Schalk's
termination was voluntary, and that consequently Atlantic is not required to
continue to pay Ms. Schalk's salary for nine months. On July 12, 1999, Ms.
Schalk filed suit in Wake County Superior Court, North Carolina, claiming, among
other things, that Atlantic is required to do so.
Effective November 15, 1995, Mr. Mizrachi became Controller of Atlantic
and of each of Atlantic's subsidiaries. Pursuant to a letter agreement dated
November 6, 1995, Atlantic agreed to pay Mr. Mizrachi an annual salary of
$90,000, reimburse Mr. Mizrachi for up to $8,000 of relocation expenses, and, in
the event Atlantic were to terminate Mr. Mizrachi's employment without cause,
continue to pay his salary for six months, subject to Mr. Mizrachi's duty to
mitigate damages by seeking alternative employment. Finally, Mr. Mizrachi and
his dependents will be eligible to receive paid medical and long-term disability
insurance and such other health benefits as Atlantic makes available to its
other senior officers and directors.
The Compensation Committee has the discretion under the 1995 Stock
Option Plan to accelerate options granted to any Named Officer in connection
with a change in control of Atlantic or upon the subsequent termination of the
Named Officer's employment following the change of control.
10
<PAGE>
Change of Control Transactions
Atlantic is not aware of any transactions resulting in a change of
control during fiscal year 1998.
Certain Relationships and Related Transactions
Atlantic's restated certificate of incorporation and bylaws provide for
indemnification of directors, officers and other agents of Atlantic. At the 1997
annual meeting of the stockholders of Atlantic, stockholders approved Atlantic
entering into an indemnification agreement with each of its directors and
executive officers. Accordingly, Atlantic has entered into an indemnification
agreement with each of its directors and executive officers.
On April 15, 1996 Atlantic entered into a letter agreement with
Paramount. Dr. Rosenwald is the President, Chairman and sole stockholder of
Paramount. Pursuant to this letter agreement, Paramount agreed to render
financial advisory services to Atlantic and Atlantic agreed to compensate
Paramount for those services by paying Paramount a retainer of $5,000 per month,
issuing a warrant to Paramount's designee to purchase 25,000 shares of Common
Stock at an exercise price of $10.00 per share, and paying Paramount additional
consideration in the event Paramount assisted Atlantic in connection with
certain financing or strategic transactions. Pursuant to the terms of the letter
agreement, (1) upon the renewal of the term of the letter agreement, Atlantic
issued a warrant to Paramount's designee exercisable for 25,000 shares of Common
Stock at an exercise price of $8.05 and (2) upon the consummation of a financing
transaction, Atlantic paid $76,438 to Paramount and issued a warrant to
Paramount's designee exercisable for 12,500 shares of Common Stock at an
exercise price of $6.73 per share. The term of the letter agreement has expired.
On June 24, 1996, Atlantic, Paramount and a second financial advisor
(Paramount and the second financial advisor are collectively referred to as the
"Financial Advisor") entered into a Financial Services Agreement pursuant to
which the Financial Advisor agreed to render financial advisory services.
Pursuant to the agreement, Atlantic paid the Financial Advisor a $30,000
retainer and agreed to pay additional consideration in the event the Financial
Advisor assisted Atlantic in connection with certain financing or strategic
transactions. The term of this Financial Services Agreement has expired,
although Atlantic may be obligated to pay fees to the Financial Advisor in the
event certain financing or strategic transactions are consummated pursuant to
the terms of the Financial Services Agreement.
Effective February 26, 1997, Atlantic and Paramount entered into a
letter of intent whereby Paramount agreed to act as placement agent for Atlantic
in connection with the private placement of Series A Preferred Stock (the
"Private Placement"). Thereafter, Atlantic entered into an agreement (the
"Placement Agreement") with Paramount, pursuant to which Atlantic agreed to pay
Paramount, for its services, compensation in the form of (i) cash commissions
equal to 9% of the gross proceeds from the sale of the Series A Preferred Stock
issued in the Private Placement and (ii) a non-accountable expense allowance
equal to 4% of the gross proceeds from the sale of the Series A Preferred Stock.
In addition, upon the final closing date of the sale of the Series A Preferred
Stock, Atlantic sold to Paramount and/or its designees, for $0.001 per warrant,
warrants exercisable for an aggregate of 123,720 shares of Series A Preferred
Stock, at an exercise price of $11.00 per share of Series A Preferred Stock.
These warrants are exercisable for 10 years and contain certain antidilution
provisions. Under the Placement Agreement, Atlantic has agreed to indemnify
Paramount against certain liabilities, including liabilities under the
Securities Act.
In connection with the Private Placement, Atlantic has committed to
enter into an advisory agreement (the "Placement Advisory Agreement") with
Paramount pursuant to which Paramount will act as Atlantic's non-exclusive
financial advisor, in return for which it will receive (i) a monthly retainer of
$4,000 commencing June 1, 1997 (with a minimum engagement of 24 months), (ii)
out-of-pocket expenses incurred in connection with services performed under the
Placement Advisory Agreement and (iii) standard success fees in the event
Paramount assists Atlantic in connection with certain financing and strategic
transactions. Paramount has agreed that, in the event it is entitled to
compensation under the letter agreement dated April 15, 1996 or the Financial
Services Agreement dated June 24, 1996, each described above, and the Placement
Advisory Agreement, it will seek payment under only one of the agreements.
11
<PAGE>
All transactions between Atlantic and its officers, directors,
principal stockholders and their affiliates are approved by a majority of the
Board of Directors, including a majority of the independent and disinterested
outside directors on the Board of Directors. Atlantic believes that all of the
transactions set forth above were made on terms no less favorable to Atlantic
than could have been obtained from unaffiliated third parties.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Atlantic's officers, directors and persons who are the beneficial
owners of more than 10% of the Common Stock to file initial reports of ownership
and reports of changes in ownership of the Common Stock with the Securities and
Exchange Commission (the "Commission"). Officers, directors and beneficial
owners of more than 10% of the Common Stock are required by Commission
regulations to furnish Atlantic with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms furnished to
Atlantic and certain written representations that no other reports were
required, Atlantic believes that, during the period from January 1, 1998 to
December 31, 1998, all officers, directors and beneficial owners of more than
10% of the Common Stock complied with all Section 16(a) requirements, except
that each of Dr. Lindsay Rosenwald and Dr. Fildes was late filing a Form 3, and
Dr. Miller was late filing a Form 5.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information known to Atlantic
with respect to the beneficial ownership of Common Stock as of August 9, 1999,
by (i) all persons who are beneficial owners of 5% or more of the Common Stock,
(ii) each director and nominee, (iii) the Named Officers in the Summary
Compensation Table above and (iv) all directors and executive officers as a
group. Atlantic does not know of any person who beneficially owns more than 5%
of the Series A Preferred Stock, other than Union d'Etudes et d'Investissements,
which owns 56,662 shares of Series A Preferred Stock, or 8.13% of the Series A
Preferred Stock, and none of Atlantic's directors or the Named Officers owns any
shares of Series A Preferred Stock. Consequently, the following table does not
contain information with respect to the Series A Preferred Stock.
The number of shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under those rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the individual has
the right to acquire within 60 days of August 9, 1999, through the exercise or
conversion of any stock option, convertible security, warrant or other right.
The inclusion in the table of those shares, however, does not constitute an
admission that the named stockholder is a direct or indirect beneficial owner of
those shares. Unless otherwise indicated, each person or entity named in the
table has sole voting power and investment power (or shares that power with that
person's spouse) with respect to all shares of capital stock listed as owned by
that person or entity. The Common Stock represented here includes the Common
Stock that the beneficial holders would directly possess if they converted all
shares of Series A Preferred Stock held by them.
12
<PAGE>
NUMBER OF PERCENT OF TOTAL SHARES
NAME AND ADDRESS SHARES OUTSTANDING(1)
- ---------------- ------ --------------
CERTAIN BENEFICIAL HOLDERS:
Lindsay A. Rosenwald, M.D.(2) 519,802 10.5%
787 7th Avenue
New York, NY 10019
VentureTek, L.P.(3) 438,492 9.2%
39 Broadway
New York, NY 10006
Joseph Stevens & Company, Inc.(4) 330,000 6.5%
33 Maiden Lane, 8th floor
New York, NY 10038
MANAGEMENT:
John D. Lindjord(5) 70,000 1.4%
Stephen R. Miller, M.D.(5) 119,969 2.5%
Margaret A. Schalk(5) 99,979 2.1%
Shimshon Mizrachi(5) 47,500 1.1%
John K.A. Prendergast, Ph.D.(6) 41,553 *
Robert A. Fildes, Ph.D.(5) 20,333 *
Yuichi Iwaki, M.D., Ph.D.(5) 14,000 *
A. Joseph Rudick, M.D.(5) 13,000 *
Frederic P. Zotos, Esq.(5) 10,000 *
Steve H. Kanzer, C.P.A., Esq.(7) 6,121 *
All current executive
officers and directors as
a group (5 persons) 90,621 2.0%
- ------------------
* Less than 1.0%
(1) Percentage of beneficial ownership is calculated assuming 4,774,121
shares of Common Stock were outstanding on August 9, 1999.
13
<PAGE>
(2) Includes 344,507 shares of Common Stock and 174,915 shares of Common
Stock issuable upon conversion of 53,491 shares of Series A Preferred
Stock issuable pursuant to a warrant exercisable within 60 days of
August 9, 1999. Also includes 190 shares of Common Stock held by June
Street Corporation and 190 shares of Common Stock held by Huntington
Street Corporation. Dr. Rosenwald is the sole proprietor of both June
Street Corporation and Huntington Street Corporation.
(3) The general partner of VentureTek, L.P. is Mr. C. David Selengut. Mr.
Selengut may be considered a beneficial owner of shares owned by
VentureTek, L.P. by virtue of his authority as general partner to vote
and dispose of those shares. VentureTek, L.P. is a limited partnership,
the limited partners of which include Dr. Rosenwald's wife and
children, and sisters of Dr. Rosenwald's wife and their husbands and
children. Dr. Rosenwald disclaims beneficial ownership of those shares.
(4) Represents shares of Common Stock underlying a warrant exercisable
within 60 days of August 9, 1999, for shares of Common Stock and
securities convertible into Common Stock. Does not include any units,
shares of common stock or redeemable warrants that may be held in the
market-making account. Mr. Joseph Sorbara and Mr. Steven Markowitz,
each of whom is a controlling shareholder, director and officer of
Joseph Stevens, own beneficially the shares of Common Stock owned
beneficially by Joseph Stevens.
(5) Represents options exercisable within 60 days of August 9, 1999.
(6) Includes 53 shares of Common Stock held in trust for the benefit of the
children of Dr. Prendergast. Dr. Prendergast disclaims beneficial
ownership of such shares. Includes 4,000 shares of Common Stock
underlying options exercisable within 60 days of August 9, 1999.
Includes 37,500 shares of Common Stock underlying a warrant exercisable
within 60 days of March 16, 1999.
(7) Includes 6,000 shares of Common Stock underlying options exercisable
within 60 days of August 9, 1999.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Under the present rules of the Commission, the deadline for
stockholders to submit proposals to be considered for inclusion in Atlantic's
Proxy Statement for the next year's annual meeting of stockholders is April 25,
2000. Such proposals may be included in next year's Proxy Statement if they
comply with certain rules and regulations promulgated by the Commission. The
date of next year's annual meeting of stockholders has not yet been fixed; if
Atlantic fixes a date that is more than 30 days earlier or later than the date
of this year's annual meeting, Atlantic will specify a revised deadline in a
Form 10-QSB filed with the Commission.
FORM 10-KSB
Atlantic filed a Form 10-KSB for the year ended December 31, 1998 with
the Commission. A copy of this Form 10-KSB has been mailed concurrently with
this Proxy Statement to all stockholders entitled to notice of and to vote at
the Annual Meeting. The Form 10-KSB is not incorporated into this Proxy
Statement and is not considered proxy soliciting material. Stockholders may
obtain additional copies of this report, without charge, by writing to Investor
Relations, Atlantic Pharmaceuticals, Inc., 1017 Main Campus Drive, Suite 3900,
Raleigh, North Carolina 27606.
14
<PAGE>
OTHER MATTERS
Atlantic knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board may recommend.
Discretionary authority with respect to such other matters is granted by the
execution of the enclosed Proxy.
THE BOARD OF DIRECTORS
Dated: August 23, 1999
15
<PAGE>
Exhibit A
SECTION 6(C) OF
THE CERTIFICATE OF DESIGNATIONS OF
SERIES A CONVERTIBLE PREFERRED STOCK OF
ATLANTIC PHARMACEUTICALS, INC.
6. Voting Rights.
. . .
(b) Class Voting Rights. In addition to any vote specified in
Section 6(a), so long as at least 50% of the shares of Series A Preferred Stock
(including those shares of Series A Preferred Stock issued or issuable upon the
exercise of the warrants issued to Paramount Capital, Inc., the placement agent
in connection with the offer and sale of the Series A Preferred Stock) shall be
outstanding, the affirmative vote or consent of the holders of at least 66.67%
of all outstanding Series A Preferred Stock voting separately as a class shall
be necessary to permit, effect or validate any one or more of the following: (i)
the amendment, alteration or repeal of any provision of the Certificate of
Incorporation or the Bylaws of the Corporation so as adversely to affect the
relative rights, preferences, qualifications, limitations or restrictions of the
Series A Preferred Stock, (ii) the declaration or payment of any dividend or
distribution on any securities of the Corporation other than the Series A
Preferred Stock pursuant to and in accordance with the provisions of this
Certificate of Designations, or the authorization of the repurchase of any
securities of the Corporation, (iii) the issuance of any debt securities or the
incurrence of indebtedness for borrowed money in excess of $1,000,000, provided,
however, that any issuance of debt securities or incurrence of indebtedness for
borrowed money in excess of $500,000 shall be approved by a supermajority of the
Board of Directors of the Corporation, (iv) the authorization, issuance or
increase of any security ranking prior to, or on a parity with, the Series A
Preferred Stock (A) upon a Liquidation Event, (B) with respect to the payment of
any dividends or distributions or (C) with respect to voting rights (except for
class voting rights required by law), (v) the approval of any liquidation,
dissolution or sale of substantially all of the assets of the Corporation, (vi)
the approval of the incorporation of any subsidiary company or (vii) the
approval of any transactions between the Corporation and its affiliates (other
than transactions between the Corporation and its subsidiaries in the ordinary
course of business). The vote as contemplated herein shall specifically not be
required for (x) issuances of Common Stock, (y) the authorization, issuance or
increase in the amount of the Series A Preferred Stock prior to the Final
Closing Date or (z) any consolidation or merger of the Corporation with or into
another corporation in which the Corporation is not the surviving entity, a sale
or transfer of all or part of the Corporation's assets or cash, securities or
other property, or a compulsory share exchange.
<PAGE>
ATLANTIC PHARMACEUTICALS, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 23, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
ATLANTIC PHARMACEUTICALS, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held September 23, 1999
and the Proxy Statement and appoints Dr. A. Joseph Rudick and Mr. Shimshon
Mizrachi, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of Common Stock of Atlantic Pharmaceuticals,
Inc. ("Atlantic") that the undersigned is entitled to vote, either on his or her
own behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders of Atlantic to be held at the offices of Kramer Levin Naftalis &
Frankel LLP, at 919 Third Avenue, 40th Floor, New York, New York 10022, on
September 23, 1999 at noon Eastern Daylight Time (the "Annual Meeting"), and at
any adjournment or postponement thereof, with the same force and effect as the
undersigned might or could do if personally present at the Annual Meeting. The
shares represented by this Proxy shall be voted in the manner set forth below.
1. To elect four directors to serve on the Board of Directors for the
ensuing year and until their respective successors are duly elected and
qualified:
To withhold authority to vote for
any nominees, FOR enter their name
or names below:
A. Joseph Rudick, M.D. |_| ____________________________________
Yuichi Iwaki, M.D., Ph.D. |_| ____________________________________
Steve H. Kanzer, C.P.A., Esq. |_| ____________________________________
Frederic P. Zotos, Esq. |_| ____________________________________
2. To ratify the Board of Director's selection of KPMG Peat Marwick LLP
to serve as Atlantic's independent auditors for the year ending December 31,
1999;
FOR |_| AGAINST |_| ABSTAIN |_|
3. To approve amending Atlantic's Certificate of Incorporation by
amending clause (vii) of Section 6(b) of the Certificate of Designations of
Series A Convertible Preferred Stock of Atlantic so as to exempt from its scope
transactions between Atlantic and its directors and executive officers;
FOR |_| AGAINST |_| ABSTAIN |_|
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
FOR |_| AGAINST |_| ABSTAIN |_|
<PAGE>
The Board of Directors recommends a vote in favor of each of the
directors listed above and a vote in favor of the other proposals. This Proxy,
when properly executed, will be voted as specified above. If no direction is
made, this Proxy will be voted in favor of the election of the directors listed
above and in favor of the other proposals.
Please print the stockholder name exactly as it appears on this Proxy.
If the shares are registered in more than one name, the signature of each person
in whose name the shares are registered is required. A corporation should sign
in its full corporate name, with a duly authorized officer signing on behalf of
the corporation and stating his or her title. Trustees, guardians, executors,
and administrators should sign in their official capacity, giving their full
title as such. A partnership should sign in its partnership name, with an
authorized person signing on behalf of the partnership.
------------------------------
(Print name)
------------------------------
(Authorized Signature)
Date: ________________________
2
<PAGE>
ATLANTIC PHARMACEUTICALS, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 23, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
ATLANTIC PHARMACEUTICALS, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held September 23, 1999
and the Proxy Statement and appoints Dr. A. Joseph Rudick and Mr. Shimshon
Mizrachi, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of Preferred Stock of Atlantic Pharmaceuticals,
Inc. ("Atlantic") that the undersigned is entitled to vote, either on his or her
own behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders of Atlantic to be held at the offices of Kramer Levin Naftalis &
Frankel LLP, at 919 Third Avenue, 40th Floor, New York, New York 10022, on
September 23, 1999 at noon Eastern Daylight Time (the "Annual Meeting"), and at
any adjournment or postponement thereof, with the same force and effect as the
undersigned might or could do if personally present at the Annual Meeting. The
shares represented by this Proxy shall be voted in the manner set forth below.
1. To elect four directors to serve on the Board of Directors for the
ensuing year and until their respective successors are duly elected and
qualified:
To withhold authority to vote for
any nominees, FOR enter their name
or names below:
A. Joseph Rudick, M.D. |_| ____________________________________
Yuichi Iwaki, M.D., Ph.D. |_| ____________________________________
Steve H. Kanzer, C.P.A., Esq. |_| ____________________________________
Frederic P. Zotos, Esq. |_| ____________________________________
2. To ratify the Board of Director's selection of KPMG Peat Marwick LLP
to serve as Atlantic's independent auditors for the year ending December 31,
1999;
FOR |_| AGAINST |_| ABSTAIN |_|
3. To approve amending Atlantic's Certificate of Incorporation by
amending clause (vii) of Section 6(b) of the Certificate of Designations of
Series A Convertible Preferred Stock of Atlantic so as to exempt from its scope
transactions between Atlantic and its directors and executive officers;
FOR |_| AGAINST |_| ABSTAIN |_|
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
FOR |_| AGAINST |_| ABSTAIN |_|
<PAGE>
The Board of Directors recommends a vote in favor of each of the
directors listed above and a vote in favor of the other proposals. This Proxy,
when properly executed, will be voted as specified above. If no direction is
made, this Proxy will be voted in favor of the election of the directors listed
above and in favor of the other proposals.
Please print the stockholder name exactly as it appears on this Proxy.
If the shares are registered in more than one name, the signature of each person
in whose name the shares are registered is required. A corporation should sign
in its full corporate name, with a duly authorized officer signing on behalf of
the corporation and stating his or her title. Trustees, guardians, executors,
and administrators should sign in their official capacity, giving their full
title as such. A partnership should sign in its partnership name, with an
authorized person signing on behalf of the partnership.
------------------------------
(Print name)
------------------------------
(Authorized Signature)
Date: ________________________
2
