<PAGE>
================================================================================
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
- --------------------------------------------------------------------------------
(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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
<PAGE>
CHANTAL PHARMACEUTICAL CORPORATION
12901 West Jefferson Boulevard
Los Angeles, California 90066
To Our Stockholders:
Accompanying this letter is a Notice of Meeting and Proxy Statement
regarding the Annual Meeting of Stockholders of Chantal Pharmaceutical
Corporation, which will be held on July 17, 1997, at 10 a.m. in Los Angeles.
In the Proxy Statement, the Company is proposing a slate of nominees for
the Board of Directors which includes five highly qualified and experienced
individuals who are new to the Board. As announced on June 9, 1997, we added
Polly Bergen as Chief Operating Officer and Joseph DeKama as Executive Vice
President. They bring impressive credentials and highly successful cosmetic
industry backgrounds to our management team. We are all hard at work to
increase stockholder value by expanding the Ethocyn-based Chantal Skin Care
product line, broadening product endorsements, and realizing additional product
distribution channels.
Polly Bergen recently appeared on the Home Shopping Network and after only
three twenty-minute segments, HSN sold out its entire initial supply of 3,000
four-piece Chantal Ethocyn four-piece product kits. HSN has reordered more than
double that amount for her next appearance. This successful direct response
effort will continue and be expanded. The Baywatch makeup artists and
star/producer David Hasselhoff are also enhancing the Company's stature and
profile in the marketplace. Joe DeKama is building the sales and marketing
infrastructure for the distribution of our products and is formulating plans for
new marketing and distribution programs. He has met with several of our
customers in various market sectors, contracted with enthusiastic and
experienced sales representatives in the United States and Canada, and
represented the Company at the recent National Association of Chain Drug Stores
convention in San Diego. Both Polly and Joe exhibit the enthusiasm and
demonstrated professional competence to propel sales and strengthen the
reputation of our products.
We continue to work with Stanson Marketing, Inc. to finalize the previously
announced agreement in principle to terminate the marketing agreement between
the Company and Stanson. We believe we are close to finalizing this transaction
and hope to report to you of its completion at the Annual Meeting.
In my last letter accompanying the proxy materials previously sent to
stockholders, I reported that we had reached the agreement in principle with
Stanson Marketing, elected five highly respected individuals as new directors,
and added Ms. Bergen and Mr. DeKama to key management positions. These
developments, which had been in our plans for the Company, were accelerated
based upon a June 3, 1997 agreement reached with a group of dissident
stockholders who believed that the
<PAGE>
Company needed to be strengthened. However, the agreement was breached and
certain events occurred that prompted the Company to take serious legal action,
which we believe we had an obligation to undertake on behalf of all our
stockholders. I would like to briefly summarize the events of the past three
weeks:
. Based on the agreement that was reached between the Company and the
dissident stockholders, as well as the advice of other stockholders
who felt it important that our new directors be present at the
stockholders meeting, the place of the meeting was changed at the last
minute from Los Angeles to New York, where several of the new
directors live or work.
. Almost immediately following the mailing of the Notice of Meeting and
the proxy solicitation materials, the group of dissident stockholders,
including the representative of the group with whom the Company
negotiated the agreement, filed a Schedule 13D with the Securities and
Exchange Commission in which contrary to the agreement, the group
stated that it was its intention to work toward the replacement of
management, including the new Board of Directors. That same dissident
group, working in conjunction with a stockholder who had originally
filed a complaint in the Delaware Chancery Court seeking that the
Company hold the stockholders meeting, then sought to have the meeting
postponed because it had been moved to New York from Los Angeles, as
was originally contemplated by the Delaware Court. While recognizing
that the change to New York was one for convenience of directors, the
Court determined that the previously noticed meeting should be
adjourned to July 17 and held in Los Angeles. In accordance with the
Court order, that meeting was convened on June 17 and immediately
adjourned to July 17 in Los Angeles.
. The Company filed a lawsuit in the New York Federal District Court on
June 18, 1997, alleging that the members of the dissident group who
filed the Schedule 13D solicited stockholders without disclosing
material facts and without providing stockholders with appropriate
proxy solicitation material. The complaint also alleges that the
Schedule 13D is false and misleading, that one defendant had arranged
for secret commissions in substantial amounts on the Company's Asian
product sales, and that certain of the defendants had disseminated
false information about the Company to drive the stock down to $1.00,
both to create trading profit opportunities and to make it easier to
unseat the Company's management. In addition, the suit also alleges
that the defendants misled the public by indicating that a well known
individual was considering becoming the Chief Executive Officer of the
Company in the event that the take-over efforts were successful. While
the 13D filing did indicate that there was no agreement reached with
this individual to that effect, the Company alleges that this
individual has refused to become an executive of the Company through
an acrimonious fight among stockholders and therefore her name should
not have been used at all. Finally, the suit alleges violations of
federal
2
<PAGE>
securities laws as well as the violation of the previously mentioned
agreement between the Company and the dissident stockholders.
. On June 23, the New York Federal Court granted the Company's motion
for expedited discovery and an expedited hearing.
Citing the acrimonious activities that breached the agreement reached with
the dissident group, two of our newly named directors, Don Belvedere and Roy
Benjamin, resigned from the Board. I am pleased to announce that Gilbert Raker
and Charles Strang will stand for election to the Board to fill the two
vacancies.
We believe that our nominees to the Board of Directors, which now include
Polly Bergen, Sheldon Brody, Joe Daly, Gilbert Raker and Charles Strang,
together with Norman Estrin, George Goldstein and Robert Pinco, who will
continue to serve as directors, will provide valuable leadership in moving the
Company toward its goal of becoming an integrated marketing and distribution
Company of our proprietary Ethocyn-based Chantal Skin Care cosmetic products.
Our nominees for the Board of Directors bring a wealth of business experience
and I look forward to working with them.
After considering the additional nominees to the Board, as well as the
developments discussed above, most of the stockholders who made up the dissident
group who filed the Schedule 13D, including the group's reported spokesman, have
agreed to file an amendment to the Schedule 13D disassociating themselves from
the dissident stockholder group, publicly announce their support for the
Company's slate of directors and vote for them at the Annual Meeting, and give
management an irrevocable proxy to vote their shares. The Company has, in turn,
agreed to dismiss the claims against these individuals upon the fulfillment of
their commitments. The Company fully intends to pursue vigorously its claims
against the remaining defendants.
Notwithstanding these lawsuits, we remain focused on the sales and
marketing of our products, and I look forward to bringing you more fully up to
date at the Annual Meeting. I hope you will be able to attend. If you are
unable to do so, it is important that you sign and return the enclosed blue
proxy card so that your shares can be voted.
We appreciate the continued support of our stockholders through these
difficult times and again thank our dedicated and loyal employees for their
continued efforts.
/s/ Chantal Burnison
Chantal Burnison
Chairman and Chief Executive Officer
3
<PAGE>
CHANTAL PHARMACEUTICAL CORPORATION
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 17, 1997
A meeting of stockholders of Chantal Pharmaceutical Corporation was convened
on June 17, 1997 and immediately adjourned.
NOTICE IS HEREBY GIVEN that the meeting will be reconvened as the Annual
Meeting of Stockholders (the "Annual Meeting") on Thursday, July 17, 1997, at
10:00 A.M., at The Sheraton Gateway Hotel, 6101 West Century Boulevard, Los
Angeles, California, 90045 for the purpose of considering and voting upon:
1. The election of directors.
2. Approval of an amendment to the Company's Certificate of Incorporation
to increase the number of shares of common stock, $.01 par value,
authorized for issuance from 20,000,000 to 50,000,000.
3. Such other business as may properly come before the meeting.
The close of business on May 16, 1997, has been fixed as the record date for
determining the stockholders entitled to notice of and to vote at the meeting
convened on June 17, 1997 and any adjournment thereof. Accordingly, only
stockholders of record on such date shall be entitled to notice of and to vote
at the Annual Meeting.
Please promptly date, sign and mail the enclosed proxy card using the
enclosed addressed envelope which needs no postage if mailed within the United
States.
By Order of the Board of Directors,
Chantal Burnison,
Chairman of the Board
Dated: June 27, 1997
<PAGE>
PROXY STATEMENT
CHANTAL PHARMACEUTICAL CORPORATION
12901 WEST JEFFERSON BOULEVARD
LOS ANGELES, CALIFORNIA 90066
ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is furnished to stockholders in connection with the
solicitation by the Board of Directors of Chantal Pharmaceutical Corporation
(the "Company") of proxies to be voted at a Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held on July 17, 1997, at 10:00 A.M.,
and at any adjournment thereof. This proxy statement and the proxies solicited
hereby are first being sent or delivered to stockholders on or about June 27,
1996. The Annual Meeting is a continuation of a meeting of stockholders,
initially convened on June 17, 1997 and immediately adjourned to July 17, 1997,
in Los Angeles for which you should have received a Notice of Meeting, a Proxy
Statement and the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996.
The Annual Meeting has been called for the following purposes: (1) election
of directors, and (2) approval of an amendment to the Company's Certificate of
Incorporation to increase the number of shares of Common Stock, $.01 par value
(the "Common Stock"), authorized for issuance from 20,000,000 to 50,000,000 (the
"Amendment").
VOTING
All proxies delivered pursuant to this solicitation may be revoked by the
stockholder at any time prior to its use by voting in person at the Annual
Meeting, by executing a later proxy, or by submitting a written notice of
revocation to the Secretary of the Company at the Company's office or at the
Annual Meeting. If the proxy is signed properly by the stockholder and is not
revoked, it will be voted at the Annual Meeting. If a stockholder specifies how
the proxy is to be voted, the proxy will be voted in accordance with such
specification.
If no specification is indicated on the proxy, the voting rights represented
thereby will be voted to (1) elect the Board's nominees for director; (2)
approve the Amendment; and (3) transact such other business as may properly come
before the Annual Meeting.
Holders of record of shares of Common Stock, $.01 par value and Series C
Voting Convertible Preferred Stock, $.10 par value (the "Series C Preferred
Stock") at the close of business on May 16, 1997 (the "Record Date"), were
entitled to notice of and to vote at the meeting convened on June 17, 1997 and
any adjournment thereof. Accordingly, any stockholders of record on the Record
Date are entitled to notice of and to vote at the Annual Meeting. Each share of
Common Stock and Series C Preferred Stock entitles the holder to one vote per
share on each matter to be acted upon by the stockholders of the Company. On
the Record Date, there were 18,190,516 shares of Common Stock;
1
<PAGE>
and 500,000 shares of Series C Preferred Stock, issued and outstanding.
Accordingly, the total number of votes possible to be cast at the Annual Meeting
is 18,690,516.
For purposes of the meeting, a quorum will consist of the majority of the
shares of stock represented at the Annual Meeting, either in person or by proxy,
and entitled to vote thereat. The election of directors is decided by a
plurality of the votes cast. The approval of the Amendment requires the
affirmative vote of the holders of a majority of the shares of Common Stock and
Series C Preferred present in person or by proxy at the Annual Meeting and
entitled to vote, voting together as a class. Abstentions have the same legal
effect as a vote against the Amendment.
PROPOSAL NUMBER 1 - ELECTION OF DIRECTORS
The Company's Board of Directors has nominated nine persons to be elected at
the Annual Meeting to serve as directors of the Company until the next annual
meeting of stockholders and until their respective successors shall have been
elected and shall have qualified. Seven of the nominees currently serve as
directors of the Company. It is the intention of the persons named in the proxy
to vote for the election of the persons named below. If any nominee is unable
or unwilling to serve, which the Board of Directors does not anticipate, the
persons named in the proxy will vote for another person in accordance with their
judgment.
The following information is supplied with respect to each person nominated
and recommended to be elected by the Board of Directors of the Company and is
based upon the records of the Company and information furnished to it by the
nominees. Reference is made to "Security Ownership of Certain Beneficial
Owners" for information pertaining to stock ownership by the nominees.
<TABLE>
<CAPTION>
Position(s) with Has served as
Name Age the Company director since
- ---- --- --------------------- --------------
<S> <C> <C> <C>
Chantal Burnison 46 Chairman of the Board May 1982
and Chief Executive Officer
Polly Bergen 66 Director June 1997
and Chief Operating Officer
Sheldon Brody 57 Director June 1997
Joseph Daly 79 Director June 1997
Dr. Norman Estrin 57 Director June 1996
Dr. George Goldstein 63 Director June 1996
Robert Pinco 52 Director April 1992
Gilbert D. Raker 53 Director Nominee
Charles D. Strang 76 Director Nominee
</TABLE>
2
<PAGE>
Ms. Burnison is Chief Executive Officer and Chairman of the Board of
Directors of the Company and its 90% owned subsidiary, Chantal Skin Care
Corporation ("Chantal Skin Care"). She has served as Chairman of the Board and
in various senior executive positions of the Company since May 1982, at which
date the Company (then known as Interferon Pharmaceutical Corporation) acquired
from CBD Pharmaceutical Corporation ("CBD"), a company controlled by her and her
family, the licensing rights to the patents and safety and efficacy test data
conducted to such date for the X-Andron synthetic anti-androgen compounds
(including Cyoctol and Ethocyn) and the Metcyclor family of cancercidal
compounds. In May 1994, she became Chairman of the Board and Chief Executive
Officer of Chantal Skin Care. In addition to being a corporate executive,
Chantal Burnison is a chemist, biologist and attorney. She is co-inventor on
the patents and patent applications relating to the compounds which are licensed
from CBD and has co-authored numerous scientific medical publications. Prior to
joining the Company, her employment experience included serving as a vice
president and general legal counsel to a steel company, as corporate counsel to
several other private companies, a partner in a Los Angeles based law firm
specializing in corporate and commercial property law, and as a chemist in
plastics in private industry. She has, and continues to, serve as a director on
the boards of several privately-held corporations. Since 1980, Ms. Burnison has
served as president of CBD which is engaged in the development and marketing of
products unrelated and not in competition with the business of the Company. See
"Certain Relationships and Related Transactions."
Ms. Bergen became a director and Chief Operating Officer in June, 1997.
From November 1996 to June 1997, she was a consultant to the Company, primarily
with respect to product development and marketing to department stores in North
America. Ms. Bergen is an Emmy Award winning actress having won the Emmy for
best actress for CBS-TV's "The Helen Morgan Story"and been twice nominated for
best actress in the ABC mini-series "Winds of War" and "War and Remembrance."
From 1965 to 1973, Ms. Bergen was President and Chief Executive Officer of
Polly Bergen Cosmetics, which marketed a full line of skin care, make-up and
fragrance products. Mrs. Bergen served as the first woman director on Singer
Corporation's Board of Directors. She is a founder and former President of the
National Business Council for Women, and a noted lecturer, author and recording
artist. Ms. Bergen currently serves as a director or trustee of a number of
charitable organizations, including The Martha Graham Dance Center and Cancer
Care, Inc.
Mr. Brody became a director in June, 1997. For the past 35 years, Mr.
Brody has been an entrepreneur in the apparel industry in the United States. He
presently serves as Chairman and Chief Executive Officer of Marcraft Apparel
Group. Marcraft Apparel Group has marketing rights that include Jones New York
Men's Wear and Albert Nipon Men's Wear. In addition to its North American
distribution operations, Marcraft manufactures in and imports fashion apparel
from both the Caribbean Basin and Pacific Rim countries.
Mr. Daly became a director in June, 1997. He is the former Chairman of DDB
Needham Worldwide, Inc., the international advertising agency ("DDB"), and the
present Chairman Emeritus of DDB. Mr. Daly has served as Chairman of the Board
of DDB from 1974 to 1986, and thereafter as Chairman of the Executive Committee
of the Board.
3
<PAGE>
Dr. Estrin became a director in June 1996. Dr. Estrin also serves as a
consultant to the Company with respect to certain U.S. and international
cosmetic regulatory agency rules and regulations. Dr. Estrin is a 25 year
veteran of the cosmetic industry. Dr. Estrin assists pharmaceutical, cosmetic
and other companies in executing international marketing and distribution
programs. In addition, he serves as a consultant to government agencies,
medical conference planning organizations and an international marketing
management company. Dr. Estrin was Senior Vice President - Science, at the
Cosmetic, Toiletry and Fragrance Association ("CTFA") from 1968 through 1985.
Dr. Estrin left CTFA in 1985 to assume the position of Vice President - Science
and Technology at the Health Industry Manufacturers Association, where he
developed a number of international and domestic programs relating to the
medical device industry.
Dr. Goldstein became a director in June 1996. Dr. Goldstein has served as
a consultant to major pharmaceutical companies that include Aprex Corporation,
Church and Dwight, Inc., Johnson and Johnson, Sterling Drug, Inc., Proctor and
Gamble, Glaxo, Fisens, Smith Kline Beecham, and others. Dr. Goldstein presently
is the President, Director and Co-founder of Pharmaceutical Discovery
Corporation. For fifteen years prior to the formation of Pharmaceutical
Discovery Corporation, he held several positions, including Corporate Vice
President, Worldwide Medical and Regulatory Affairs, at Sterling Drug Inc., of
New York, New York.
Mr. Pinco became a director in April 1992. Mr. Pinco is an attorney and
licensed pharmacist. He is a partner and Director of the Food and Drug Group of
the Washington, D.C. office of Akin, Gump, Strauss, Hauer & Feld, LLP.
Additionally, Mr. Pinco serves as an Adjunct Professor of Pharmacy Practice and
Administrative Sciences at the University of Maryland. From 1974 to 1977, Mr.
Pinco was the Director of the Over-the-Counter Drug Evaluation Division of the
United States Food and Drug Administration ("FDA"). From 1972 to 1974, Mr.
Pinco was an Assistant General Counsel with the White House Special Action
Office for Drug Abuse Prevention, and from 1969 to 1972, he served as an
attorney with the Office of Chief Counsel, Bureau of Narcotics and Dangerous
Drugs (now the Drug Enforcement Agency) of the Department of Justice. Akin,
Gump, Strauss, Hauer & Feld serves as FDA legal counsel to the Company.
Mr. Raker is a nominee for director. Since 1990, Mr. Raker has been the
Chairman, President and Chief Executive Officer of Semiconductor Packaging
Materials Co., Inc., a publicly held provider of materials and services for the
microelectronic and semiconductor industries. From 1987 to 1990, he was a
Managing Director of the buy out firm Ditri Associates, Inc. Prior thereto, Mr.
Raker held senior executive positions, including as chief executive officer and
chief financial officer, with various public and non-public companies.
Mr. Strang is a nominee for director. From November 1995 to the present,
Mr. Strang has been retired. From January 1993 to January 1996, he was a
director and Chairman of the Management Committee of Outboard Marine Corporation
("Outboard"), a marine products manufacturing company, and a consultant to
Volvo-Panta, a subsidiary of Outboard, from November 1993 to November 1995.
From January 1990 to January 1993, Mr. Strang was the Chairman of the Board of
Outboard and served as Chairman of the Board and Chief Executive Officer from
January 1982 to January 1990. From June 1966 to January 1982, he held a
variety
4
<PAGE>
of positions at Outboard, as a manager and executive officer. Mr. Strang has
been a director of Outboard since January 1970.
COMPENSATION OF DIRECTORS
In April 1997, the Company granted Dr. Estrin options for the purchase of
45,000 shares, at an exercise price of $1 5/16 per share, of which 25,000 are
immediately exercisable and the remaining 20,000 become exercisable upon re-
election to the Board at the Annual Meeting following the first anniversary of
service as a director. These options replaced options previously granted to Dr.
Estrin in June 1996.
In June 1996, the Company granted Dr. Goldstein options for the purchase of
40,000 shares at an exercise price of $7.00 per share, which exercise price was
reduced to 1 5/16 in April, 1997, of which 20,000 are immediately exercisable
and the remaining 20,000 become exercisable upon re-election to the Board at the
Annual Meeting following the first anniversary of service as a director.
In April 1997, the Company granted Mr. Pinco options for the purchase of
40,000 shares at an exercise price of $1 5/16, of which 20,000 are immediately
exercisable and the remaining 20,000 become exercisable upon the re-election to
the Board at the Annual Meeting following the first anniversary of grant.
In June 1997, the Company granted to each of Sheldon Brody and Joseph Daly
options for the purchase of 40,000 shares at an exercise price of $1.00 per
share, of which 20,000 are immediately exercisable and the remaining 20,000
become exercisable upon re-election to the Board at the Annual Meeting following
the first anniversary of service as a director.
In June 1997, the Company granted to Polly Bergen options for the purchase
of 100,000 shares at an exercise price of $1.00 per share. The Company also
granted options to Polly Bergen for the purchase of 200,000 shares that vest
upon certain performances by the Company at an exercise price determined at the
time of vesting.
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal year ended June 30, 1996, there were four meetings of the
Board of Directors. Currently, the Board of Directors has no audit, nominating
or compensation committees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of June 26, 1997,
pertaining to ownership of the Company's Common Stock and Series C Preferred
Stock determined in accordance with Rule 13d-3 under the Securities Exchange Act
of 1934, by (i) persons known to the Company to own 5% or more of the Company's
Common Stock and Series C Preferred Stock,
5
<PAGE>
(ii) each director or nominee for director, (iii) executive officers named in
the compensation table below, and (iv) directors and officers of the Company as
a group.
The information contained below has been obtained from the Company's
records, or from information furnished directly by the individual or entity to
the Company.
<TABLE>
<CAPTION>
Name and Address Number of Shares Owned Percentage of Class
- ---------------- -------------------------- --------------------
<S> <C> <C>
Chantal Burnison* 1,312,103 (1) 7.0
Polly Bergen* 50,000 (2) (3)
Sheldon Brody* 20,000 (2) (3)
Joseph Daly* 20,000 (2) (3)
Robert Pinco* 20,000 (2) (3)
Norman Estrin* 25,000 (2) (3)
George Goldstein* 22,000 (2) (3)
Gilbert D. Raker* - - (3)
Charles D. Strang* - - (3)
Mark Dworkin* - - (3)
Rino Gemelli (4) - - (3)
CBD Pharmaceutical Corporation
147 E. Liberty Street
Reno, Nevada 89501 1,209,503 6.5
All Directors and Officers
as a group (11 persons) 1,575,103 (1)(2) 8.5
- ------------------------
</TABLE>
* The address of each director, nominee for director and officer is c/o
Chantal Pharmaceutical Corporation, 12901 West Jefferson Boulevard, Los
Angeles, California 90066.
(1) Includes, 1,209,503 shares owned by CBD Pharmaceutical Corporation, which
is controlled by Ms. Burnison and certain members of her family.
(2) Includes shares issuable upon exercise of currently exercisable options.
(3) Less than one percent.
(4) Mr. Gemelli died in May 1997.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table shows, as to the Chief Executive Officer and as to
each of the other two most highly compensated executive officers whose salary
plus bonus exceeded $100,000 during the last fiscal year, information concerning
all compensation paid for services to the Company in all capacities during the
last three fiscal years.
<TABLE>
<CAPTION>
Annual Compensation Long Term
Compensation
--------------------------------------------- ---------------------
Other Annual Securities Underlying
Name and Principal Position Year Salary Bonus Compensation Options/SARS(1)
- --------------------------- ---- ----------- ------ ------------ ------------------------
<S> <C> <C> <C> <C> <C>
Chantal Burnison 1996 266,997(2) 5,000 --- ---
Chief Executive Officer 1995 200,769(2) --- --- ---
1994 186,747(2) --- --- ---
Mark Dworkin (3) 1996 153,946 25,000 18,000 300,000 shares
President
Rino Gemelli (4) 1996 112,518 33,376 --- ---
Vice President and 1995 65,141 --- --- ---
Director of Product 1994 48,698 --- --- ---
Production
</TABLE>
_____________________
(1) All numbers reflect the number of shares of Common Stock subject to options
granted during the fiscal year.
(2) Includes $107,692, $90,000 and $21,000 received as compensation from
Chantal Skin Care Corporation.
(3) Mr. Dworkin provided consulting services in early fiscal 1996 and then
joined the Company as an officer in August 1995.
(4) Mr. Gemelli died in May 1997. He also was an officer and director of the
Company's 90% owned subsidiary, Chantal Skin Care in the last fiscal year.
The amount of compensation paid or distributed during the last fiscal
year and not described above with respect to any individual named in the Summary
Compensation Table did not exceed the lesser of $25,000 or 10% of the
compensation table for such person.
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding grants of
stock options made during the fiscal year ended June 30, 1996 to the executive
officers named in the Summary Compensation Table.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of
Total Options
Number of Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year Per Share Date
- --------------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Marc Dworkin 500,000(1) 100% $5.00 6/30/02(1)
</TABLE>
____________________
(1) In July 1995, Mr. Dworkin was granted options to purchase an aggregate of
500,000 shares of Common Stock of the Company at a purchase price of $5.00
per share. The right to exercise such options vests in installments of
100,000 each as follows: The first installment of 100,000 options vests if
earnings per share of the Company are at least $.25 for two consecutive
quarters prior to June 30, 1996; the second, if earnings per share of the
Company are at least $1.50 for the fiscal year ending June 30, 1996, the
third if earnings per share of the Company are at least $4.00 for the
fiscal year ending June 30, 1997, the fourth if earnings per share of the
Company are at least $5.00 for the fiscal year ending June 30, 1998, and
the last if earnings per share of the Company are at least $6.00 for the
fiscal year ending June 30, 1999. The options vest only if Mr. Dworkin is,
at the vesting date, an employee of the Company and expire three years from
the date they vest. Per Mr. Dworkin's option agreement, 200,000 of the
options granted to him in fiscal 1996 terminated.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of All Unexercised
Shares Unexercised Options In-the-Money Options
Acquired Value at Fiscal Year-End at Fiscal Year End (1)
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- --------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Marc Dworkin - - 0/300,000 $0/$0
</TABLE>
____________________
(1) Based upon the last reported sale price of the Common Stock on NASDAQ
National Market System on June 30, 1996.
BOARD OF DIRECTOR'S REPORT ON EXECUTIVE COMPENSATION
8
<PAGE>
The Board of Directors is responsible for determining and administering the
Company's compensation policies for the remuneration of the Company's
executives.
The Company's approach to compensation seeks to encourage the achievement
of business objectives and enhanced corporate performance by the Company's
executives. The Board of Directors, in determining compensation, considers a
variety of factors, including, but not limited to, the executive's background
and level of experience, the nature of each executive's work and
responsibilities, his or her performance as an executive of the Company and
accomplishments or achievements on the Company's behalf, and the Company's
financial condition generally. Historically, the Company's executive employees
have received cash-based and equity-based compensation.
Base salary represents the primary cash component of an executive's
compensation, and is determined by evaluating such executive's responsibilities
associated with his or her position at the Company, the executive's overall
level of experience, the executive's historical performance, and the executive's
expected contribution to the overall profitability of the Company. Cash bonuses
are generally not a significant component of an executive's compensation.
The Board of Directors believe that the Company's management is best
motivated through stock option awards. The stock options granted by the Board
of Directors provide value only in the event that certain performance factors
are met by the Company, such as earnings per share targets or share price
targets. These performance-based stock options provide a direct relationship
between an executive's compensation and the stockholders' interests. No
specific formula is used to determine stock option awards for an executive.
Rather, individual award levels are based upon the subjective evaluation of each
executive's overall past and expected future contributions to the success of the
Company, and in some cases achievement of particular objectives associated with
the executive's responsibilities.
Chantal Burnison
Dr. Norman Estrin
Dr. George Goldstein
Robert Pinco
9
<PAGE>
COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph provides a comparison of the cumulative total return*of
the Nasdaq Market Index, a Line-of-Business Index** and the Company since the
Company's fiscal year ended June 30, 1991.
[GRAPH OF COMPARATIVE STOCK PERFORMANCE APPEARS HERE]
<TABLE>
<CAPTION>
6/28/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Chantal Pharmaceutical $ 100.00 97.87 14.89 15.96 109.57 112.77
Nasdaq Market Index 100.00 107.75 132.27 145.04 170.11 214.14
Line-of-Business Index** 100.00 114.42 98.14 97.72 145.40 204.02
</TABLE>
_______________
* $100 invested on June 28, 1991, in the Company's Common Stock or in the
index indicated, including reinvestment of dividend.
** Based on businesses with the same Standard Industrial Classification Code
us by the Company (2834).
10
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
No directors, officers or beneficial owners of more than 10% of the
Company's Common Stock failed to file on a timely basis reports required by
Section 16(a) of the Securities and Exchange Act of 1934, except for the filings
of an Initial Statement of Beneficial Ownership on Form 3 by each of Drs. Estrin
and Goldstein and the filing by Dr. Goldstein of the Statement of Change of
Beneficial Ownership on Form 4 for July and August 1996, each of which were
filed on December 4, 1996, the filing of an Initial Statement of Beneficial
Ownership on form 3 by Yvette Lamprecht, which was filed on February 24, 1997,
and the filing of an Initial Statement of Beneficial Ownership on Form 3 by
Joseph Daly, which was filed on June 17, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1982, the Company acquired a license for the exclusive manufacturing
and marketing rights to the X-Andron Series compounds (including Ethocyn and
Cyoctol) and Metcyclor compounds and all derivatives and isomeric families
thereof from CBD Pharmaceutical Corporation, which is controlled by Chantal
Burnison and certain members of her family, in exchange for 2,614,500 shares of
the Company's Common Stock and an agreement to pay an aggregate royalty of (i)
8% of the wholesale price of all licensed compounds and products containing
licensed compounds manufactured and sold directly by the Company to the
wholesale or retail markets; and (ii) 8% of all revenues derived by the Company
from royalty or other sales-based compensation pursuant to any sublicense, joint
venture or other marketing or development agreement between the Company and any
other party with respect to the licensed compounds. The term of the Company's
license from CBD Pharmaceutical Corporation is equal to the period during which
any of such compounds are protected under any patent rights which may issue from
the United States Patent Office. Total royalty expense under such royalty
arrangement with CBD was $414 for the year ended June 30, 1993. No royalty
expense was recorded for the years ended June 30, 1994 and 1995. As of June 30,
1993, the Company had accrued liabilities of $19,159 for unpaid royalties
pursuant to this agreement. The obligation to make payments to CBD
Pharmaceutical Corporation with respect to Ethocyn-based cosmetics products was
assumed by Chantal Skin Care in connection with the License Agreement between
the Company and Chantal Skin Care. In July 1994 and in conjunction with Ethocyn
U.S. and international marketing negotiations then in progress, CBD
Pharmaceutical Corporation agreed with the Company and Chantal Skin Care to
terminate the 8% royalty obligation, effective August 1, 1994, and in lieu
thereof, to accept from the Company 300,000 shares of its Common Stock and from
Chantal Skin Care 300,000 shares of its Common Stock.
Since May 1984, the law firm of Staubach Teich & Partner, of which Dr.
Rainer Staubach is a partner, has served as European legal and regulatory
counsel to the Company. Dr. Staubach, a former director and officer of the
Company, is the husband of Chantal Burnison, Chairman of Board and Chief
Executive Officer of the Company.
11
<PAGE>
In June 1993, CBD Pharmaceutical Corporation agreed to invest $150,000 of
royalties owed it by acquiring Units, each Unit consisting of one share of the
Company's Series B Convertible Preferred Stock and five Common Stock purchase
warrants, for $5.00 per Unit, all on the same terms and conditions as other
unrelated investors in the Company's June 1993 private placement. The warrants
expired in April 1994 unexercised. At June 30, 1996, the 30,000 shares of
Series B Convertible Preferred Stock were automatically converted in accordance
with the terms thereof into 240,000 shares of Common Stock of the Company.
On March 15, 1994, the Company entered into a License agreement (the
"License") with Cyto Skin Care Corporation ("Cyto Skin Care") pursuant to which
the Company licensed to Cyto Skin Care the rights to distribute and sell
Ethocyn-based cosmetics and skin care products (i.e. non-pharmaceutical
products) in the United States, Canada, Mexico and the Caribbean. Cyto Skin
Care issued to the Company in consideration for the License, 10,910,812 shares
of its Common Stock. Under the License, Cyto Skin Care was obliged to use its
best efforts to expeditiously launch the marketing and sale of Ethocyn-based
cosmetic skin care products (the "Chantal Line") by September 30, 1994, but in
no event later than December 31, 1994. In August of 1994, Cyto Skin Care
changed its name to Chantal Skin Care Corporation ("Chantal Skin Care"). The
License is terminable at the option of the Company if during the term of the
License Chantal Skin Care does not achieve sales of the Chantal Line of at least
$5,000,000 in the initial nine months following execution of the License;
$20,000,000 during calendar 1995; and $50,000,000 in calendar 1996. Although
Chantal Skin Care did not achieve the requisite product sales, the Company does
not intend to exercise its termination rights.
On February 24, 1995, the Company announced that it had decided to seek to
acquire the shares of Chantal Skin Care which the Company did not then own. In
furtherance thereof, on March 9, 1995, the Company commenced an exchange offer
seeking to acquire the shares of Chantal Skin Care owned by shareholders located
outside the United States, through the exchange of one (1) share of Common Stock
of the Company for one share of Common Stock of Chantal Skin Care. On June 16,
1995, the Company accepted for exchange 1,780,000 shares of Chantal Skin Care
Common Stock. Accordingly, the Company now owns 12,690,812 shares of Chantal
Skin Care or 90% of the outstanding Chantal Skin Care shares. The Company
intends to effect a merger of Chantal Skin Care with and into a newly formed
wholly owned subsidiary of the Company on the same basis as the exchange for the
shares owned by persons outside the United States.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION TO THE BOARD
OF DIRECTORS OF ALL THE NOMINEES.
PROPOSAL NUMBER 2 - PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE
On March 21, 1997, the Board of Directors unanimously adopted resolutions,
subject to the approval of stockholders, approving an amendment to the Company's
Certificate of Incorporation to increase the number of shares of Common Stock,
$.01 par value per share, authorized for issuance
12
<PAGE>
from 20,000,000 to 50,000,000. The Amendment to the Certificate of Incorporation
is set forth as Exhibit A to this Proxy Statement.
The holders of Common Stock have equal ratable rights to dividends from
funds legally available therefor, when, as and if declared by the Board of
Directors and are entitled to share ratably in all of the assets of the Company
available for distribution to holders of Common Stock upon the liquidation,
dissolution or winding up of the affairs of the Company. Holders of Common
Stock do not have preemptive, subscription or conversion rights. There are no
redemption or sinking fund provisions in the Company's Certificate of
Incorporation. Holders of Common Stock are entitled to one vote per share on
all matters which stockholders are entitled to vote upon at all meetings of
stockholders.
The Board of Directors has deemed it in the best interests of the Company
to increase the number of authorized shares. Management believes that it is
necessary to have such shares available for potential issuances in order to
afford the Company greater flexibility in meeting any future capital
requirements of the Company and for other corporate needs which may arise.
The Company is currently subject to certain obligations to issue shares of
Common Stock pursuant to the exercise of outstanding options and warrants and
upon conversion of the Company's Series C Preferred Stock, as described below.
Of the 20,000,000 currently authorized shares, at April 30, 1997, 18,190,516
shares were issued and outstanding and an aggregate of 635,000 shares were
reserved for issuance upon exercise of various outstanding options.
All outstanding shares of Series C Preferred Stock shall be automatically
converted on the later of (i) the date the Certificate of Incorporation is
amended to increase the number of authorized shares of Common Stock to at least
30,000,000 and (ii) the date a registration statement with respect to the Common
Stock issuable upon conversion of shares of Series C Preferred Stock is declared
effective by the Securities and Exchange Commission. Accordingly, 500,000
shares of the newly authorized shares will be reserved for issuance upon such
conversion.
The Company has previously announced that it had decided to seek to acquire
the shares of Chantal Skin Care Corporation, a 90% owned subsidiary of the
Company, through the merger of Chantal Skin Care Corporation with and into a
newly formed wholly-owned subsidiary of the Company on the basis of one share of
the Company for each share of Chantal Skin Care Corporation. The Company will be
required to issue 1,409,193 shares of Common Stock pursuant to the proposed
merger. An additional 852,000 shares of Common Stock will be reserved for
issuance upon exercise of currently outstanding options to purchase shares of
Chantal Skin Care Corporation, which by virtue of the merger are expected to
become options to purchase Common Stock of the Company.
On October 30, 1996, the Company completed the sale of $5.25 million
principal amount of 8% convertible debentures due December 31, 1998. The
debentures were sold to investors qualifying as "non U.S. persons" in an
offering completed under Regulation S. The debentures were convertible into
shares of common stock of the Company as to one-third of the principal amount of
each
13
<PAGE>
debenture after forty five (45) days from the date of issuance, an additional
one-third after seventy five (75) days from the date of issuance and the balance
after ninety days (90) from the date of issuance. The conversion price is the
lesser of $3.91 or 80% of the average closing bid price of the Company's common
stock for the five business days immediately preceding the conversion date. The
Company, in accordance with the terms of the debentures, notified those
debenture holders exercising their conversion option for the first one-third of
their debentures, that the Company intended to exercise its rights under the
debentures to pay cash in lieu of such conversion and notified all debenture
holders that it intended to also redeem the balance of the debentures for a
negotiated purchase price. Such redemption was not completed. The Company has
sought to restructure the 1996 Regulation S offering but to date has been unable
to do so. Were all the debentures converted as of the earliest date in
accordance with the terms, the Company would be required to issue approximately
3.5 million shares of common stock, which is in excess of the number of
authorized but unissued shares available prior to the proposed amendment. Were
the debentures converted at May 16, 1997, approximately 6,000,000 shares would
have been issuable based on the five day average price of $1.09 for the five
trading days ended on that date. A portion of the shares of common stock being
authorized may be issued upon conversion of the 1996 debentures or in connection
with a restructuring of these debentures.
On June 9, 1997, the Company announced that it had reached an
agreement-in-principle to terminate the Marketing Agreement dated June 29, 1995,
as amended, between the Company and its U.S. distributor, Stanson Marketing,
Inc. Under the terms of the proposed termination agreement, among other things,
the Company will be required to issue 1.2 million shares of Common Stock.
Although the Company believes that it currently has sufficient authorized but
unissued shares to meet this obligation, should the termination agreement be
completed in accordance with the terms of the agreement in principle as
contemplated, a portion of the shares of Common Stock being authorized may be
used for this purpose.
As a result of the Amendment, there will be approximately 18,190,516 shares
of Common Stock outstanding, 3,396,193 shares reserved for issuance upon the
conversion or exercise of the aforementioned securities and 28,413,291
authorized but unissued shares, some of which could be issued as stated above.
The Amendment would create a larger excess of authorized but unissued shares.
Other than as set forth above, the Board of Directors of the Company has no
plans, proposals, commitments, undertakings or arrangements which would result
in the issuance of any additional shares of Common Stock.
The affirmative vote of the holders of shares representing a majority of
the votes entitled to be cast at the Annual Meeting is required to authorize the
Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION.
14
<PAGE>
SOLICITATION STATEMENT
All expenses in connection with the solicitation of proxies will be borne
by the Company. In addition to the use of the mails, solicitations may be made
by regular employees of the Company and by certain stockholders, including Peter
Ting, by telephone, telegraph, or personal contact, without additional
compensation. The Company will, upon request, reimburse brokerage houses and
persons holding shares of Company Common Stock in the name of their nominee for
their actual out-of-pocket expenses in sending solicited material to their
principals. The Company has retained D.F. King & Co., Inc. to assist in the
solicitation of proxies, at an estimated cost of $20,000, plus reasonable
expenses.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 1998 Annual
Meeting of Stockholders which the stockholder desires to be presented in the
Company's Proxy Statement with respect to such meeting should submit such
proposals to the Company at its principal place of business no later than
February 10, 1998.
INDEPENDENT AUDITORS
BDO Seidman L.L.P. has been selected to serve as independent auditors of
the Company for its fiscal year ending June 30, 1997. Representatives of BDO
Seidman are expected to be present at the meeting and will have the opportunity
to make a statement if they desire to do so and be available to respond to
appropriate questions. BDO Seidman served as the Company's independent auditors
for the fiscal year ending June 30, 1996.
THE COMPANY'S 1996 ANNUAL REPORT ON FORM 10-K, EXCLUSIVE OF EXHIBITS, WILL
BE MAILED WITHOUT CHARGE TO ANY STOCKHOLDER ENTITLED TO VOTE AT THE MEETING,
UPON WRITTEN REQUEST TO: CHANTAL PHARMACEUTICAL CORPORATION, 12901 WEST
JEFFERSON BOULEVARD, LOS ANGELES, CALIFORNIA 90066, ATTENTION: INVESTOR
RELATIONS.
OTHER MATTERS
The Board of Directors did not know, a reasonable time before the
commencement of the solicitation, of any business constituting a proper subject
for action by the stockholders to be presented at the Annual Meeting other than
as set forth in this Proxy Statement. However, if any such matter should
properly come before the meeting, the persons named in the enclosed proxy intend
to vote such proxy in accordance with their best judgment.
The proxies named in the enclosed form of proxy and their substitutes will
vote the shares represented by the enclosed form of proxy, if the proxy appears
to be valid on its face and a choice
15
<PAGE>
is specified on the form of proxy, the shares will be voted in accordance with
each specification so made.
A list of stockholders of record of the Company as of May 16, 1997 will be
available for inspection by stockholders during normal business hours from 9:00
A.M. to 5:00 P.M. at the offices of the Company, commencing on July 7, 1997.
INCORPORATION BY REFERENCE
In connection with the authorization of additional shares of Common Stock,
stockholders are referred to the financial information about the Company
contained in the Company's Annual Report on Form 10-K which accompany's this
Proxy Statement as the Company's Annual Report to Stockholders, including the
financial statements under Item 8, and Management's Discussion and Analysis of
Financial Condition and Results of Operation under Item 7.
By Order of the Board
Chantal Burnison
Chairman and Chief Executive Officer
16
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CHANTAL PHARMACEUTICAL CORPORATION
(UNDER SECTION 242 OF THE GENERAL CORPORATION LAW)
CHANTAL PHARMACEUTICAL CORPORATION, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify that:
FIRST: The name of the Corporation is Chantal Pharmaceutical
Corporation.
SECOND: The Certificate of Incorporation of the Corporation is hereby
amended by striking out the first sentence of Article "FOURTH" thereof and by
substituting in lieu of said sentence the following provisions:
"FOURTH: The aggregate number of shares which the Corporation is
authorized to issue is 51,000,000, divided into 1,000,000 shares of
Preferred Stock, par value $.10 per share, and 50,000,000 shares of Common
Stock, par value $.01 per share."
THIRD: The Amendment to the Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
222 and 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
day of , 1997.
________________________________
Chantal Burnison, Chairman of
the Board and Chief Executive Officer
ATTEST:
_____________________________
<PAGE>
- --------------------------------------------------------------------------------
CHANTAL PHARMACEUTICAL CORPORATION
P R O X Y
ANNUAL MEETING OF SHAREHOLDERS - JULY 17, 1997
This Proxy is solicited on behalf of the Board of Directors. Unless otherwise
properly marked, this Proxy will be voted FOR the nominees for directors and
FOR Proposal 2 as recommended by the Board of Directors.
The undersigned hereby appoints Chantal Burnison and Yvette Lamprecht, and
each of them, each with full power to act without the other and with full power
of substitution, the attorneys and proxies of the undersigned and hereby
authorizes them to represent and to vote, all of the shares of Common Stock and
Series C Voting Convertible Preferred Stock of Chantal Pharmaceutical
Corporation that the undersigned would be entitled to vote, if personally
present, at the Annual Meeting of Shareholders to be held on Thursday, July 17,
1997, at 10:00 A.M., local time, and at any adjournment thereof, upon such
business as may properly come before the meeting, including the items set forth
below:
(1) ELECTION OF DIRECTORS
Nominees: Chantal Burnison, Polly Bergen, Sheldon Brody, Joseph Daly, Normal
Estrin, George Goldstein, Robert Pinco, Gilbert D. Raker and Charles D.
Strang.
[_] FOR ALL NOMINEES [_] AUTHORITY WITHHELD AS TO ALL NOMINEES
For, except authority withheld as to the following nominee(s):
- --------------------------------------------------------------------------------
(2) APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
NUMBER OF SHARES OF AUTHORIZED COMMON STOCK.
[_] FOR [_] AGAINST [_] ABSTAIN
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
(continued from Reverse Side)
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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 officer. If a partnership, please sign in partnership name by
authorized person.
Dated: _____________ , 1997
---------------------------
Signature
---------------------------
Signature if held jointly
PLEASE SIGN, DATE AND
RETURN THIS PROXY CARD
PROMPTLY USING THE
ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
