<PAGE>
UNITED STATES
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
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
XOMA Ltd.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (set for the amount on which the
filing fee is calculated and state how it was determined):
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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:
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<PAGE>
[XOMA CORPORATION LOGO]
January 3, 2000
Dear Fellow Shareholder:
On January 31, 2000, XOMA will hold a special general shareholder meeting at
the offices of the Company in Berkeley, California, to secure approval for an
important proposal to increase the number of XOMA's authorized common shares.
The current authorized shares do not provide the Company with adequate
flexibility for structuring strategic business collaborations or for meeting
the Company's financing needs.
I'd also like to take this opportunity to give you some additional background
on why we have called this special meeting and why I believe this proposal is
in the best interests of XOMA and its shareholders. First, the Company has
accomplished a great deal in 1999:
. In April, we strengthened and extended our anti-CD11a antibody
collaboration with Genentech. We have initiated Phase III testing of the
product in patients with moderate-to-severe plaque psoriasis, and have
expanded the program to include organ transplant rejection, initially
focusing on kidney transplants.
. In May, we completed the first pivotal clinical trial of our NEUPREX(R)
product in pediatric patients suffering from severe meningococcemia. We
subsequently completed a detailed analysis which showed clinical benefits
in mortality and morbidities (such as amputations and organ failures) for
patients treated with NEUPREX(R) and re-affirmed the product's excellent
safety profile. We have submitted this analysis to the FDA, and have
scheduled a meeting with the Agency to discuss plans for submission of a
biologics license application (BLA) for U.S. marketing approval. We have
taken similar steps in Europe.
. In June, we concluded a collaborative arrangement with Allergan to
develop ophthalmic anti-infective products using recombinant BPI
(bactericidal/permeability-increasing protein) in combination with
antibiotics, and we recently completed a joint evaluation demonstrating
rBPI's synergistic activity in combination with an ophthalmic antibiotic
against a variety of gram-positive and gram-negative bacterial pathogens,
including antibiotic-resistant strains. Next steps include development of
formulations for preclinical testing.
. We are in discussions with a number of pharmaceutical companies regarding
the NEUPREX(R) product and our Mycoprex(TM) antifungal program, although
the ultimate outcomes of these discussions cannot be predicted.
. We have also undertaken key initiatives involving additional monoclonal
antibody products and novel non-systemic uses of BPI. If these products
meet appropriate technical and market criteria, these are projects that
we hope to move into clinical development.
. We completed the change of the company's legal domicile to Bermuda, which
positions the company to take advantage of potential future financial and
other benefits.
While we are pleased with the above developments, we have also faced some
delays and setbacks in the past year.
. Completing and analyzing the meningococcemia trial took longer than
originally planned. To compensate for a lower-than-expected mortality
rate in the trial we extended patient enrollment until May 1999, rather
than concluding accrual at the end of 1998. We also agreed with the FDA
to analyze the trial results
[XOMA CORPORATION LETTERHEAD]
<PAGE>
based on a composite endpoint that included mortality and morbidities.
While the decisions to extend the trial and look at a more complex
endpoint were made to improve our chances for marketing approval, the
resulting delays had a cost in terms of cash flow and have created a
period of uncertainty about the outcome of the trial.
. A separate Phase III trial testing NEUPREX(R) in patients with hemorrhage
due to trauma was halted in September following an interim analysis of
efficacy data from 842 patients. While no safety issues were reported,
the independent Data Safety Monitoring Board advised us that the trial
was not likely to succeed if continued to its planned enrollment of 1650
patients. This setback was unexpected, since we had seen benefits in two
previous trials involving 570 patients. We are conducting a detailed
review of the data from the 1100 enrolled patients that we hope will
provide information for future NEUPREX(R) indications and help us design
related clinical trials.
Both these events had a negative impact on the price of XOMA shares, which can
make strategic business collaborations and financing more challenging and
expensive.
The bottom line is that we are entering the Year 2000 with some very
important opportunities and also some very real risks. There may be
significant positive or negative developments early in the year--before our
annual shareholder's meeting. We need to position the Company now to be able
to act on the opportunities and mitigate the risks.
For these reasons, the Board has authorized a special shareholder meeting
and is recommending an increase in the authorized common shares from seventy
million to one hundred thirty-five million. This will provide the Company with
flexibility for structuring strategic business collaborations, as well as
providing shares that may be used to meet our financing needs.
I urge you to read the accompanying proxy document and vote promptly on the
proposal by phone, Internet or mail. If you have questions, please call Ellen
Martin, Peter Davis or myself.
Sincerely yours,
/s/ John L. Castello
John L. Castello
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
[XOMA CORPORATION LOGO]
XOMA LTD.
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
January 3, 2000
To Our Shareholders:
You are cordially invited to attend a special general meeting of
shareholders of XOMA Ltd. on January 31, 2000 at 8:30 a.m. local time, which
will be held at the offices of the Company, 2910 Seventh Street, Berkeley,
California.
Details of business to be conducted at the special meeting are provided in
the enclosed Notice of Special General Meeting of Shareholders and Proxy
Statement. Some of our shareholders will be accessing these materials and
voting via the Internet and may not be receiving a paper proxy card by mail.
We hope that you will attend the special meeting. In any event, please
promptly sign, date and return the enclosed proxy in the accompanying reply
envelope or vote telephonically or via the Internet.
Sincerely yours,
/s/ John L. Castello
John L. Castello
Chairman of the Board,
President and Chief Executive
Officer
Enclosures
<PAGE>
XOMA LTD.
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NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT 8:30 A.M. ON JANUARY 31, 2000
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To the Shareholders of XOMA Ltd.:
Notice is hereby given that a special general meeting of the shareholders of
XOMA Ltd. (the "Company") will be held at the offices of the Company, 2910
Seventh Street, Berkeley, California, on January 31, 2000, at 8:30 a.m. local
time, for the following purposes:
1. To approve the increase of the Company's authorized share capital by
65,000,000 Common Shares; and
2. To consider and transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
These items of business are more fully described in the proxy statement
accompanying this notice.
The Board of Directors has fixed the close of business on December 15, 1999,
as the record date for the determination of shareholders entitled to notice of,
and to vote at, this meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors,
Christopher J. Margolin
Secretary
January 3, 2000
Berkeley, California
YOUR VOTE IS IMPORTANT
You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the meeting, please promptly mark, sign and date the
enclosed proxy and mail it in the accompanying postage pre-paid envelope or
vote telephonically or via the Internet.
<PAGE>
XOMA LTD.
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PROXY STATEMENT
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TO THE SHAREHOLDERS:
The enclosed proxy is solicited on behalf of the Board of Directors of XOMA
Ltd., a company organized under the laws of Bermuda ("XOMA" or the "Company"),
for use at a special general meeting of shareholders to be held at the offices
of the Company, 2910 Seventh Street, Berkeley, California, on January 31,
2000, at 8:30 a.m. local time, or any adjournment or postponement thereof, at
which shareholders of record on December 15, 1999 will be entitled to vote. On
December 15, 1999, the Company had issued and outstanding 58,324,058 common
shares, par value US$.0005 per share ("Common Shares"). Holders of Common
Shares are entitled to one vote for each share held.
All registered shareholders can vote by paper proxy or by telephone by
following the instructions included with their proxy card. Shareholders whose
Common Shares are registered in the name of a bank or brokerage firm should
follow the instructions provided by their bank or brokerage firm on voting
their shares. Shareholders whose Common Shares are registered in the name of a
bank or brokerage firm participating in the ADP Investor Communication
Services online program may vote electronically through the Internet.
Instruction forms will be provided to shareholders whose bank or brokerage
firm is participating in ADP's program. Signing and returning the proxy card
or submitting the proxy by telephone or via the Internet does not affect the
right to vote in person at the special meeting.
In the case of registered shareholders, a proxy may be revoked at any time
prior to its exercise by (a) giving written notice of such revocation to the
Secretary of the Company at the Company's principal office, 2910 Seventh
Street, Berkeley, California 94710, (b) appearing and voting in person at the
special meeting, (c) properly completing and executing a later-dated proxy and
delivering it to the Company at or before the special meeting or (d)
retransmitting a subsequent telephonic proxy before the special meeting.
Presence without voting at the special meeting will not automatically revoke a
proxy, and any revocation during the meeting will not affect votes previously
taken. Shareholders whose Common Shares are registered in the name of a bank
or brokerage firm should follow the instructions provided by their bank or
brokerage firm in revoking their previously voted shares. Abstentions and
broker non-votes are each included in the number of shares present for
purposes of establishing a quorum and are counted for purposes of determining
whether a proposal presented to shareholders has been approved.
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing, and mailing of this proxy statement, the
proxy card, and any additional material furnished to shareholders. Copies of
solicitation material will also be furnished to brokerage houses, fiduciaries,
and custodians holding in their names shares that are beneficially owned by
others to forward to such beneficial owners. The solicitation of proxies may
be supplemented by one or more of telephone, telegram, or personal
solicitation by directors, officers, or employees of the Company for no
additional compensation. Shareholders voting via the Internet should
understand that there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone companies, that
must be borne by the shareholder.
The Company intends to mail this proxy statement and make it available on
the Internet on or about January 3, 2000.
<PAGE>
PROPOSAL 1--INCREASE IN
THE NUMBER OF AUTHORIZED
COMMON SHARES AND SHARE CAPITAL
Background
Currently, the Company is authorized to issue 70,000,000 Common Shares in
the aggregate. On December 15, 1999, the Board of Directors unanimously
approved a proposal to increase the Company's authorized share capital by
65,000,000 Common Shares.
On December 15, 1999, the Company had issued and outstanding 58,324,058
Common Shares. As of that date, the Company had reserved approximately
6,817,335 shares for issuance upon exercise of outstanding options and
warrants and in connection with existing share-based compensation and benefit
plans. Consequently, the Company has approximately 4,858,607 shares available
for other issuances.
Description of the Proposal
The shareholders are being asked to adopt the following resolution:
RESOLVED, that the authorized share capital of XOMA Ltd. be increased
from US$85,000, consisting of 70,000,000 Common Shares and 1,000,000
Preference Shares, to US$117,500, consisting of 135,000,000 Common
Shares (with identical rights and ranking to the existing Common
Shares) and 1,000,000 Preference Shares.
Reasons for the Proposal
The Board of Directors of the Company considers it prudent and in the best
interests of the Company and its shareholders to have a sufficient number of
Common Shares available for issuance in order to provide the Company with
business and financing flexibility. Common Shares may be issued by the Company
in connection with future strategic business collaborations or equity
financings, upon conversion or exchange of outstanding securities, in
connection with existing share-based compensation and benefit plans or under
other circumstances. The Company is also obligated to reserve shares for
issuance to certain existing investors. Except as referred to herein, there
are currently no agreements or understandings regarding the issuance of any of
the additional Common Shares that would become available if the Company's
authorized share capital is increased as proposed.
Effects of Adoption of the Proposal
The additional Common Shares for which authorization is sought would be part
of the existing class of Common Shares, and, to the extent issued, would have
the same rights and privileges as the Common Shares currently outstanding. No
holder of the Common Shares is entitled to any preemptive right to subscribe
for or purchase any shares or other securities of the Company. The issuance of
a substantial amount of Common Shares or the granting of an option to purchase
a substantial amount of Common Shares could have a potential anti-takeover
effect with respect to the Company which may make it more difficult to effect
a change in control of the Company (for example, by decreasing the percentage
of share ownership of those persons seeking to obtain control), although the
Board of Directors is not presenting the proposal for that reason and does not
anticipate using the newly authorized shares for such a purpose. Under
applicable law, the Board of Directors is required to make any determination
to issue such shares based on its judgment at the time of such issuance as to
the best interest of the Company.
Approval of the proposal would not affect the number of authorized
preference shares or the number of shares issuable under any of the Company's
existing share-based compensation or benefit plans.
2
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Vote Required
The affirmative vote of the holders of a majority of the shares present in
person or by proxy and entitled to vote is required for the approval of the
increase in the Company's authorized share capital.
The Board of Directors unanimously recommends a vote "FOR" adoption of this
proposal.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at this
special meeting other than those set forth in this proxy statement and in the
notice accompanying this proxy statement. If other matters should properly
come before the meeting, it is intended that the proxy holders will vote on
such matters in accordance with their best judgment.
SHARE OWNERSHIP
The following table sets forth as of December 15, 1999, certain information
regarding all shareholders known by the Company to be the beneficial owners of
more than 5% of the Company's outstanding Common Shares and regarding each
director, each executive officer and all directors and current executive
officers as a group, together with the approximate percentages of outstanding
Common Shares owned by each of them. Unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares
beneficially owned, subject to community property laws where applicable.
<TABLE>
<CAPTION>
Number of Percentage of
Common Shares Common Shares
Name of Beneficial Owner Beneficially Owned Beneficially Owned
------------------------ ------------------ ------------------
<S> <C> <C>
Advantage Fund II Ltd./Genesee International, Inc./
Donald R. Morken (1)........................................ 3,063,824 5.3
James G. Andress(2).......................................... 24,000 *
William K. Bowes, Jr.(3)..................................... 60,069 *
John L. Castello(4).......................................... 768,499 1.3
Peter B. Davis(5)............................................ 170,680 *
Clarence L. Dellio(6)........................................ 225,187 *
Arthur Kornberg, M.D.(7)..................................... 40,000 *
Christopher J. Margolin(8)................................... 174,670 *
Steven C. Mendell(9)......................................... 261,000 *
Patrick J. Scannon, M.D., Ph.D.(10).......................... 510,084 *
W. Denman Van Ness(11)....................................... 62,931 *
All executive officers and directors as a group (10
persons)(12)................................................ 2,297,120 3.9
</TABLE>
- --------
* Indicates less than 1%.
(1) Based on a Schedule 13G filed with the Securities and Exchange Commission
("SEC") on November 9, 1999 and representations made to the Company in
connection with a Registration Statement on Form S-3 filed with the SEC on
December 17, 1999, consists of shares directly owned by Advantage Fund II
Ltd. ("Advantage") and shares issuable upon the exercise of certain Common
Share Purchase Warrants of the Company held by Advantage. According to
such filings, Advantage, Genesee International, Inc. and Mr. Morken share
voting and dispositive power with respect to all of these shares.
(2) Represents 24,000 shares issuable upon the exercise of options exercisable
as of 60 days after the record date.
(3) Includes 30,000 shares issuable upon the exercise of options exercisable
as of 60 days after the record date.
(4) Includes 702,499 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 7,000 shares owned
by Mr. Castello's sons. Mr. Castello disclaims beneficial ownership of
such shares. Does not include 7,026 shares which have vested pursuant to
the Company's Deferred Savings Plan.
3
<PAGE>
(5) Includes 146,581 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 4,995 shares which
have vested pursuant to the Company's Deferred Savings Plan.
(6) Includes 192,387 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 7,657 shares which
have vested pursuant to the Company's Deferred Savings Plan.
(7) Includes 30,000 shares issuable upon the exercise of options exercisable
as of 60 days after the record date.
(8) Includes 166,581 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 7,193 shares which
have vested pursuant to the Company's Deferred Savings Plan.
(9) Includes 219,000 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 631 shares which
have vested pursuant to the Company's Deferred Savings Plan and are now
held in a rollover IRA account.
(10) Includes 422,166 shares issuable upon the exercise of options exercisable
as of 60 days after the record date. Does not include 7,657 shares which
have vested pursuant to the Company's Deferred Savings Plan.
(11) Includes 32,481 shares held by The Van Ness 1983 Revocable Trust, of
which Mr. Van Ness is a trustee. Also includes 450 shares held by various
trusts of which Mr. Van Ness may be deemed the beneficial owner. Mr. Van
Ness disclaims such beneficial ownership. Includes 30,000 shares issuable
upon the exercise of options exercisable as of 60 days after the record
date.
(12) Includes 1,963,214 shares issuable upon exercise of options exercisable
as of 60 days after the record date. Does not include 35,159 shares which
have vested pursuant to the Company's Deferred Savings Plan.
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It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to promptly
execute and return the accompanying proxy in the postage prepaid envelope
which has been enclosed for your convenience or vote by telephone or via the
Internet.
By Order of the Board of Directors,
Christopher J. Margolin
Secretary
January 3, 2000
Berkeley, California
4
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XOMA LTD.
2910 Seventh Street
Berkeley, CA 94710
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOHN L. CASTELLO and PATRICK J. SCANNON,
and each of them, with full power of substitution, as the proxy or proxies of
the undersigned to vote all Common Shares of XOMA Ltd. which the undersigned is
entitled to vote at the special general meeting of shareholders of XOMA Ltd. to
be held at the offices of the Company, 2910 Seventh Street, Berkeley, California
on January 31, 2000, at 8:30 a.m. local time, and at any adjournment or
postponement thereof, with all powers that the undersigned would have if
personally present thereat:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON OTHER SIDE)
________________________________________________________________________________
* FOLD AND DETACH HERE *
YOU CAN VOTE IN ONE OF TWO WAYS:
1. Call TOLL FREE 1-800-840-1208 on a touch tone telephone
and follow the instructions on the reverse side. There is
NO CHARGE to you for this call.
2. Mark, sign and date your proxy card and return it promptly
in the enclosed envelope.
<PAGE>
Please mark
your votes [X]
as indicated
1. To approve the increase of the Company's authorized share capital by
65,000,000 Common Shares.
(The Board of Directors recommends a vote FOR.)
FOR [_] AGAINST [_] ABSTAIN [_]
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
postponement thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR Proposal 1.
________________________________________________________________________________
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW ***
________________________________________________________________________________
Dated: _______________________________, _____
_____________________________________________
Signature of Shareholder
_____________________________________________
Signature if held jointly
Please sign exactly as name appears above.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by President or other authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
________________________________________________________________________________
* FOLD AND DETACH HERE *
VOTE BY TELEPHONE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and return your proxy card.
You will be asked to enter a Control Number which is located in the box in the
lower right hand corner of this form.
To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
The instructions are the same for all remaining proposals.
Your vote will be confirmed as cast as you directed.
________________________________________________________________________________
If you vote by telephone, there is no need for you to mail back your proxy.
THANK YOU FOR VOTING.
________________________________________________________________________________
Call TOLL FREE on a touch tone telephone
1-800-840-1208 24 hours/day [______________]
There is NO CHARGE to you for this call CONTROL NUMBER
