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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))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Chantal Pharmaceutical Corporation
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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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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SETTLEMENT AGREEMENT
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AGREEMENT made this 27th day of June, 1997, by and among Chantal
Pharmaceutical Corporation ("Company") and the following named individuals (said
individuals being hereinafter collectively referred to as the "Settling
Defendants"):
Peter Ting
Margarette Ting
William T. Gibson
Kathleen Gibson
Robert Binder
Brad Bulloch
Richard Love
Rick Mahonski
Diane Mahonski
MH Associates
Howard Miller
Patrick J. McInnis
The parties mutually acknowledge that:
(A) The Settling Defendants and others have filed a Schedule 13D with the
Securities and Exchange Commission stating their intention to oppose management
and have otherwise indicated their intention to oppose management at an annual
meeting of stockholders presently scheduled for July 17, 1997 in Los Angeles,
California;
(B) The Company has brought an action against the Settling Defendants and
other signers of the Schedule 13D in the U.S. District Court for the Southern
District of New York, entitled Chantal Pharmaceutical Corporation v. Ting, et
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al., 97 Civ. 4497 (the "Federal Court Action") alleging fraud, misrepresentation
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and nondisclosure of material facts, violation of Sections 13 and 14 of the
Securities Exchange Act of 1934, including violation of the proxy rules, and
seeking damages and injunctive and other relief;
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(C) The Court in the Federal Court Action has granted the Company's motion
for expedited discovery and an expedited hearing to be held on July 11, 1997;
(D) The Settling Defendants share the concerns expressed by the Company in
the Federal Court Action and have concluded that it is in the best interests of
the Company and its stockholders as well as in their own interest to
disassociate themselves from the other signers of the Schedule 13D and to fully
support and vote their stock in favor of the Company's existing management and
its nominees for the Board of Directors.
(E) The Company and the Settling Defendants have agreed to resolve their
differences on the terms stated herein.
THEREFORE, it is hereby agreed:
1. The Settling Defendants and each of them will promptly file with
the Securities and Exchange Commission, on or before July 1, 1997, an amendment
to the Schedule 13D Statement acceptable to the Company and its counsel
disassociating themselves from and withdrawing from the Schedule 13D and stating
that they intend to fully support and vote in favor of the current management of
the Company and its nominees for the Board of Directors.
2. The Settling Defendants agree that they will publicly and
privately support and that they will vote their stock in favor of the Company's
existing management and its nominees for the Board of Directors, including two
new nominees, Gil Raker and Charles Strang, as well as Chantal Burnison as
Chairman and Chief Executive Officer, Polly Bergen as Chief Operating Officer
and
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Joseph DeKama as Executive Vice President. In connection therewith, each of the
Settling Defendants will execute and deliver to the Company an irrevocable proxy
in form reasonably acceptable to the Company and its counsel, to be voted in
favor of management and its nominees at the Annual Meeting on July 17, 1997 or,
in the event such meeting or any part thereof shall be adjourned or re-
scheduled, then on such adjourned or re-scheduled date or dates. Each such
proxy shall remain irrevocable until the completion of the aforesaid Annual
Meeting and any adjourned or re-scheduled portions thereof, but not more than
three months from the date of execution thereof or such longer period as the
meeting may be extended by Court order. In addition, Peter Ting will provide
such assistance as management of the Company shall reasonably request in
soliciting the support and proxies of the stockholders on behalf of management
in connection with the July 17 annual meeting by telephone, mail and in all
other proper ways, to the full extent permitted by law. In addition, Bill
Gibson will advise all stockholders who contact him with regard to the upcoming
election of directors that he is voting for management.
3. The Settling Defendants agree to join in the issuance on behalf of
each and all of them and the Company of the press releases annexed hereto as
Exhibits A and B publicly stating that they have disassociated themselves from
the signers of the Schedule 13D and that they fully support and have complete
confidence in the current management group including Chantal Burnison and the
management nominees for the Board of Directors.
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4. Peter Ting, Bill Gibson and other knowledgeable Settling
Defendants will fully disclose their knowledge of all meetings, statements,
agreements, whether written or oral and any other information known to them
relating to the Schedule 13D and the activities of the signers thereof, as well
as any known solicitation of stockholders, any knowledge of any efforts to
manipulate or impact the value of the stock of the Company and all other facts
relevant to the Federal Court Action. These facts will be discussed with and
disclosed to the Company and its counsel promptly and on an ongoing and as
needed basis and will be furnished in the form of a signed affidavit or
deposition or court testimony, as the Company and its counsel may request, for
use before the Court in connection with the pending Federal Court Action or
other Court proceedings. Each of the Settling Defendants will also supply the
Company with any supporting documentation in their possession, custody or
control, including copies of any written memoranda and any information
circulated among the dissident group and all telephone (including cellular
phone) records, logs and diaries and other documents relevant to the issues
raised in the Federal Court Action.
5. The Company hereby agrees upon the completion of the Annual
Meeting and any adjourned or re-scheduled portions thereof, and upon condition
that all Settling Defendants have fully complied with their obligations
hereunder, to promptly execute and file such documents as may be necessary to
dismiss the Federal Court Action with prejudice as against the Settling
Defendants. Subject to any
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applicable order of a court, the Company will use its best good faith efforts to
expeditiously proceed with and complete the scheduled Annual Meeting on or as
soon as practicable after July 17, 1997. In the meantime, the Company agrees
that the Settling Defendants shall not be deemed in default of any discovery
obligations or obligation to file an answer or responding papers in the Federal
Court action and that their time to respond or answer shall be duly extended,
provided they are in compliance with their obligations pursuant to this
Agreement.
6. This Agreement constitutes the complete agreement between the
parties, superseding all prior agreements or understandings relating to the
subject matter hereof. This Agreement cannot be changed, amended, supplemented
or terminated except in writing, expressly signed by the party to be charged.
7. This Agreement may be signed in counterparts and may be exchanged
by facsimile transmission and shall thereupon be
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binding upon the parties who have signed and exchanged signed counterparts.
IN WITNESS WHEREOF, the parties have executed
this Agreement on the date stated above.
CHANTAL PHARMACEUTICAL
CORPORATION
By:____________________________
Authorized Officer
/s/ Peter Ting
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Peter Ting Richard Love
/s/ Margarette Ting /s/ Rick Mahonski
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Margarette Ting Rick Mahonski
/s/ William T. Gibson /s/ Diane Mahonski
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William T. Gibson Diane Mahonski
/s/ Kathleen Gibson (WTG) /s/ MH Associates By: John Heilman
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Kathleen Gibson MH Associates
/s/ Howard Miller (WTG)
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Robert Binder Howard Miller
/s/ Brad Bulloch /s/ Patrick J. McInnis
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Brad Bulloch Patrick J. McInnis
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EXHIBIT A
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PRESS
RELEASE
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FOR IMMEDIATE RELEASE
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FORMER DISSIDENTS ANNOUNCE
FULL SUPPORT FOR
MANAGEMENT OF
CHANTAL PHARMACEUTICAL CORPORATION
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Twelve of the nineteen stockholders who filed a 13D statement with the
Securities and Exchange Commission on June 10 opposing the management of Chantal
Pharmaceutical Corp. have announced their withdrawal from the dissident group
and that they have agreed to support management.
The twelve stockholders, including Peter Ting and William Gibson, own
an aggregate of 4.12% of the Company's stock. The remaining dissidents own a
total of only 2.84%.
Mr. Ting stated on behalf of the twelve stockholders withdrawing from
the 13D group:
"We share the concerns expressed by the Company regarding
dissident shareholders' actions and those concerns have led us to
disassociate ourselves from the 13D Group. Based on positive
talks with the Company's current management, including Chantal
Burnison, we have confidence in the current management group,
including Ms. Burnison as Chairman and Chief Executive Officer
and the Board of Directors as proposed to be constituted by
management. We have, therefore, concluded that it is in the best
interest of the stockholders to support the existing management
team. We will vote for management and its nominees at the July
17 annual meeting and urge all stockholders to do the same."
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EXHIBIT B
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PRESS
RELEASE
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FOR IMMEDIATE RELEASE
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CHANTAL PHARMACEUTICAL CORPORATION
DISSIDENTS AGREE TO SUPPORT MANAGEMENT
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Chantal Pharmaceutical Corporation announced today that it had reached
agreement with most of the small group of dissident stockholders who recently
filed a Schedule 13D with the S.E.C. opposing the Company's management. The
original group included nineteen stockholders claiming to own 6.96% of the
Company's stock. Twelve members of the group, representing a 4.12% stock
ownership, have now disassociated themselves from the dissidents and announced
their agreement to fully support the Company's Chairman and Chief Executive
Officer, Chantal Burnison, as well as all management nominees for the Board of
Directors at the Company's Annual Meeting scheduled for July 17 in Los Angeles.
The twelve stockholders agreeing to support management, including
Peter Ting and William Gibson, issued a statement today that they share the
Company's concerns regarding dissident stockholder actions and those concerns
have led them to disassociate themselves from the dissidents. Further, they
have acknowledged that based on positive talks with the Company's management,
including Chantal Burnison, they have confidence in the current management,
including Ms. Burnison as Chairman and Chief Executive Officer and the Board of
Directors as proposed to be constituted by management and will support the
management team, as
<PAGE>
being in the best interest of the Company and its stockholders. The twelve
urged all stockholders to vote in favor of the existing management and its
nominees at the July 17 meeting.
The Company, which filed a federal court action against the signers of
the Schedule 13D on June 18 charging misrepresentations and non-compliance with
the federal securities laws, has agreed to drop the action as against the twelve
stockholders who have agreed to support management. The dissident group now
numbers only seven, owning an aggregate of 2.84% of the Company's stock.
Company Chairman Chantal Burnison stated "We are pleased that most of
the stockholders who filed the 13D in opposition to management, including Peter
Ting and William Gibson, have decided to disassociate themselves from the
dissidents and to support us and the Company's management team. The remaining
members of the dissident group represent a minuscule percentage of the Company's
stockholders and do not have responsible support. Two of them have been the
subject of prior S.E.C. consent decrees for securities law violations and
another, as we recently discovered, made a secret agreement with a distributor
siphoning off significant profits on the Company's Asian sales. This is a small
and irresponsible group that does not merit stockholder consideration. The
Company looks forward to overwhelming support for its leadership team at the
July 17 annual meeting."
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FROM: Peter Ting
510-736-5053
FOR IMMEDIATE RELEASE
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FORMER DISSIDENTS ANNOUNCE FULL SUPPORT FOR
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MANAGEMENT OF CHANTAL PHARMACEUTICAL CORPORATION
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Los Angeles, CA., July 1, 1997 -- Twelve of the 19 stockholders who filed a
Schedule 13D statement with the Securities and Exchange Commission on June 10,
opposing the management of Chantal Pharmaceutical Corporation, have announced
their withdrawal from the dissident group and that they have agreed to support
management.
The 12 stockholders, including Peter Ting and William Gibson, own an aggregate
of 4.12 percent of the Company's stock. The remaining dissidents own a total of
only 2.84 percent.
Mr. Ting stated on behalf of the 12 stockholders withdrawing from the 13D group:
"We share the concerns expressed by the Company regarding dissident
shareholders' actions an those concerns have led us to disassociate
ourselves from the 13D group. Based on positive talks with the Company's
current management, including Chantal Burnison, we have confidence in the
current management group, including Ms. Burnison as Chairman and Chief
Executive Officer and the Board of Directors as proposed to be constituted
by management. We have, therefore, concluded that it is in the best
interest of the stockholders to support the existing management team. We
will vote for management and its nominees at the July 17 annual meeting and
urge all stockholders to do the same."
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FROM: MARTIN E. JANIS & COMPANY, INC. CONTACT: Bev Jedynak
PUBLIC RELATIONS 312-943-1100
919 North Michigan Avenue
Chicago, IL 60611
FOR: CHANTAL PHARMACEUTICAL CORPORATION
FOR IMMEDIATE RELEASE
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CHANTAL PHARMACEUTICAL CORPORATION
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DISSIDENTS AGREE TO SUPPORT MANAGEMENT
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Los Angeles, CA., July 1, 1997 -- Chantal Pharmaceutical Corporation announced
today that it had reached agreement with most of the small group of dissident
stockholders who recently filed a Schedule 13D with the Securities and Exchange
Commission opposing the Company's management. The original group included 19
stockholders claiming to own 6.96 percent of the Company's stock. Twelve
members of the group, representing a 4.12 percent stock ownership, have now
disassociated themselves from the dissidents and announced their agreement to
fully support the Company's Chairman and Chief Executive Officer, Chantal
Burnison, as well as all management nominees for the Board of Directors at the
Company's Annual Meeting scheduled for July 17 in Los Angeles.
The 12 stockholders agreeing to support management, including Peter Ting and
William Gibson, issued a statement today that they share the Company's concerns
regarding dissident stockholder actions and those concerns have led them to
disassociate themselves from the dissidents. Further, they have acknowledged
that based on positive talks with the Company's management, including Chantal
Burnison, they have confidence in the current management, including Ms. Burnison
as Chairman and Chief Executive Officer and the Board of Directors as proposed
to be constituted by management and will support the management team, as being
in the best interest of the Company and its stockholders. The 12 urged all
stockholders to vote in favor of the existing management and its nominees at the
July 17 meeting.
The Company, which filed a federal court action against the signers of the
Schedule 13D on June 18 charging misrepresentations and non-compliance with the
federal securities laws, has agreed to drop the action against the 12
stockholders who have agreed to support management. The dissident group now
numbers only seven, owning an aggregate of 2.84 percent of the Company's stock.
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Page Two
Company Chairman Chantal Burnison stated, "We are pleased that most of the
stockholders who filed the 13D in opposition to management, including Peter
Ting and William Gibson, have decided to disassociate themselves from the
dissidents and to support us and the Company's management team. The remaining
members of the dissident group represent a miniscule percentage of the Company's
stockholders and do not have responsible support. Two of them have been the
subject of prior S.E.C. consent decrees for securities law violations and
another, as we recently discovered, made a secret agreement with a distributor
siphoning off significant profits on the Company's Asian sales. This is a small
and irresponsible group that does not merit stockholder consideration. The
Company looks forward to overwhelming support for its leadership team at the
July 17 annual meeting."
Chantal Pharmaceutical Corporation and its marketing subsidiary, Chantal Skin
Care Corporation, have executive offices, telemarketing and warehouse facilities
in Los Angeles, with a laboratory in Kaiserslautern, Germany. The Company
markets the Chantal Ethocyn Skin Care Line, and is the worldwide licensee of
patents for products for androgen mediated disorders such as acne, hirsutism,
male pattern baldness, benign prostrate hypertrophy and the treatment of certain
cancers.
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