SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Ceck the Appropriate Box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
THERMOGENESIS CORP.
(Name of Registrant as Specified in Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rule 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 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 number, or
the Form or Schedule and the date of its filing.
1) Amount Prviously Paid: ______________________
2) Form, Schedule, or Registration No. _________
3) Filing Party: _______________________________
4) Date Filed: _________________________________
<PAGE>
THERMOGENESIS CORP.
11431 Sunrise Gold Circle, Suite A
Rancho Cordova, California 95742
(916) 858-5100
To the Stockholders of THERMOGENESIS CORP.:
You are invited to attend the Annual Meeting of the Stockholders of
THERMOGENESIS CORP. (the "Company") which will be held on May 29, 1996 at 10:00
a.m., local time, at the Courtyard by Marriott, located at 10683 White Rock
Road, Rancho Cordova, California 95670.
The accompanying Notice of the Annual Meeting of the Stockholders and
Proxy Statement contain the matters to be considered and acted upon, and you
should read that material carefully.
The Proxy Statement contains important information concerning the
election of the Board of Directors, an amendment to the Company's 1994 Stock
Option Plan, amendments to the Company's Certificate of Incorporation to
provide for (i) a classified board, (ii) a fair pricing provision, (iii) to
provide for a one-for-two consolidation of the Company's common stock, and such
other matters as may properly come before the meeting, including adjournment of
the meeting. I urge you to give these matters your close attention since they
are of great significance to the Company and its Stockholders.
We hope you will be able to attend the meeting, but, if you cannot do so,
it is important that your shares be represented. Accordingly, we urge you to
mark, sign, date and return the enclosed proxy promptly. You may, of course,
withdraw your proxy if you attend the meeting and choose to vote in person.
Sincerely,
Philip H. Coelho
President and Chief Executive Officer
April 26, 1996
<PAGE>
THERMOGENESIS CORP.
11431 Sunrise Gold Circle, Suite A
Rancho Cordova, CA 95742
(916) 638-8357
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
THERMOGENESIS CORP., a Delaware corporation (the "Company"), will be held on
May 29, 1996 at 10:00 a.m. (PSDT), at the Courtyard by Marriott, located at
10683 White Rock Road, Rancho Cordova, California 95670, for the following
purposes, all of which are more completely discussed in the accompanying Proxy
Statement:
1.To elect five (5) directors to serve one year terms or until their
successors have been elected and qualified, subject to longer terms as may be
adopted in accordance with the Company's proposed classification of the board
of directors as described in Proposal 3 below;
2.To adopt an amendment to the Company's 1994 Stock Option Plan to
increase the number of shares underlying that plan;
3.To approve an amendment to the Company's Certificate of Incorporation to
provide for a classified board of directors;
4.To approve an amendment to the Company's Certificate of Incorporation
to provide a "fair pricing" provision;
5.To consider an amendment to the Company's Certificate of Incorporation
to provide for a one-for-two consolidation of the Company's common stock; and
6.To transact such other business as may properly come before the meeting
or any adjournments of the meeting.
Only Stockholders of record at the close of business on April 19, 1996
are entitled to notice of, and to vote at, the Annual Meeting of the
Stockholders.
BY ORDER OF THE BOARD OF DIRECTORS
Charles de B. Griffiths
Secretary
April 26, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THERMOGENESIS CORP.'S ANNUAL MEETING OF
STOCKHOLDERS. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE
NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING YOU ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON
OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT
ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
PROXY STATEMENT
of
THERMOGENESIS CORP.
11431 Sunrise Gold Circle, Suite A
Rancho Cordova, CA 95742
(916) 638-8357
INFORMATION CONCERNING THE SOLICITATION OF PROXIES
This Proxy Statement is furnished to the Stockholders of THERMOGENESIS
CORP. (the "Company" or "Corporation") in connection with the solicitation of
proxies on behalf of the Company's Board of Directors for use at the Company's
Annual Meeting of the Stockholders (the "Meeting") to be held on may 29, 1996
at 10:00 a.m. (PDST), at the Courtyard by Marriott, located at 10683 White Rock
Road, Rancho Cordova, California 95670, and at any and all adjournments
thereof. A copy of the Company's Annual Report for the year ended June 30,
1995 accompanies this Proxy Statement. Only Stockholders of record on
April 19, 1996 will be entitled to notice of, and to vote at, the Meeting.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted at the Meeting in
accordance with the instructions contained therein. If no contrary
instructions are given, each proxy received will be voted "FOR" the nominees
for the Board of Directors and "FOR" the approval of proposals 2, 3, 4, and 5,
and at the proxy holders' discretion, on such other matters, if any, which may
come before the Meeting (including any proposal to adjourn the Meeting). Any
Stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Company written notice of its revocation
addressed to Secretary, THERMOGENESIS CORP., 11431 Sunrise Gold Circle, Suite
A, Ranch Cordova, California 95742, (ii) submitting a duly executed proxy
bearing a later date, or (iii) appearing at the Meeting and giving the
Secretary notice of his or her intention to vote in person.
The Company will bear the entire cost of preparing, assembling, printing
and mailing proxy materials furnished by the Board of Directors to
Stockholders. Copies of proxy materials will be furnished to brokerage houses,
fiduciaries and custodians to be forwarded to beneficial owners of the
Company's common stock. In addition to the solicitation of proxies by use of
the mail, some of the officers, directors, employees and agents of the Company
may, without additional compensation, solicit proxies by telephone or personal
interview, the cost of which the Company will also bear.
This Proxy Statement and form of proxy were first mailed to Stockholders
on or about April 26, 1996.
RECORD DATE AND VOTING RIGHTS
The Company is authorized to issue up to 50,000,000 shares of common
stock, par value $0.001, and 2,000,000 shares of preferred stock, par value
$0.001. As of March 22, 1996, there were 24,765,434 shares of common stock
issued and outstanding. No shares of preferred stock are outstanding. Each
share of common stock shall be entitled to one vote on all matters submitted
for Stockholder approval, including the election of directors. The record date
for determination of Stockholders entitled to notice of and to vote at the
Meeting is April 19, 1996. The Company's Certificate of Incorporation does not
provide for cumulative voting. Under Delaware law, abstentions and broker non-
votes will be counted for purposes of determining quorum to open the meeting,
but will not be counted for or against any proposal submitted.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The authorized number of directors of the Company is stipulated in
Article III, Section 2 of the Company's Bylaws as not less than three (3) nor
more than seven (7). The Board of Directors has fixed the number of directors
to be elected at the annual meeting at five (5), pursuant to the authority
vested in them by the Bylaws.
The Company's Amended and Restated By-laws (the "By-laws") currently
provide for the annual election of all directors. The Board of Directors has
approved an amendment to the Company's Certificate under which, subject to
stockholder approval as provided in Proposal 3 below, the Board would be
divided into three classes with each class of directors to serve a three-year
staggered term. If Proposal 3 is approved by the stockholders, the terms
served by the directors will be three years, with one of the three class of
directors standing for election each year, except for the initial year of the
classified Board at which time the first class of the directors will stand for
re-election to that class. The amendment to the Certificate of Incorporation
to provide for a classified board is discussed under Proposal 3 beginning on
page ___, and a copy of the proposed Amended and Restated Certificate of
Incorporation (incorporating all proposals set forth in this proxy statement)
is attached as Exhibit B to this Proxy Statement.
If the stockholders fail to approve the proposed Amendment to the
Certificate of Incorporation (as provided in Proposal No. 3 below), the Board
will continue to have one class of directors, all members of which we be
elected at each annual meeting of stockholders, and directors elected at an
annual meeting will continue serve (without regard to the class designation
below) until the next annual meeting or until their respective successors are
duly elected and qualified or until their earlier death, resignation or
removal.
In the event that any of the nominees should unexpectedly decline or be
unavailable to act as a director, the enclosed proxy may be voted for a
substitute nominee to be designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will become unavailable and
has no present intention to nominate any person in addition to, or in lieu of,
those named below.
NOMINEES FOR DIRECTOR
The following table sets forth the persons nominated by the Board of
Directors for election as directors and certain information with respect to
those persons.
<TABLE>
<CAPTION>
DIRECTOR COMMON STOCK PERCENT (7)
NOMINEE AGE SINCE OWNERSHIP{(1)} OWNERSHIP CLASS
<S> <C> <C> <C> <C> <C>
Philip H. Coelho 52 1986 1,069,000{(2)} 4.19% III
Charles de B. Griffiths 45 1989 1,015,000{(3)} 4.03% II
Sid V. Engler 55 1992 150,000{(4)} * % III
Noel K. Atkinson 75 1989 508,706{(5)} 2.05% I
Walter J. Ludt, III 52 -- 300,000{(6)} 1.2% II
Officers and Directors
as a Group (6) 3,042,706 11.48%
</TABLE>
Footnotes to Table
*Less than 1%.
{(1)} For computation purposes, the ownership includes only options exercisable
on or before June 30, 1996 and the total outstanding includes shares
assumed exercised for percentage ownership computation.
{(2)}Includes rights to purchase 350,000 Common Shares at $1.16 per share and
400,000 Common Shares at $1.0625 per share pursuant to stock options
granted December 31, 1993, and October 23, 1995, respectively.
{(3)}Includes rights to purchase 250,000 Common Shares at $1.16 per share and
200,000 Common Shares at $1.0625 per share pursuant to stock options
granted December 31, 1993 and October 23, 1995, respectively. Also
includes 515,000 Common Shares held by the Beuford Trust for the benefit
of Mr. Griffiths. Although he is the beneficiary of the trust,
Mr. Griffiths has no voting or dispositive power over the 515,000 shares
held in trust.
{(4)}Includes rights to purchase 50,000 Common Shares at $1.27 and 100,000
Common Shares at $1.16 pursuant to stock options granted in July 26,
1991 and December 31, 1993, respectively.
{(5)}Includes 176,707 shares of common stock registered in the name of a living
trust established by Mr. Atkinson and also includes rights to purchase
100,000 shares at $1.16 per share pursuant to stock options granted
on December 31, 1993.
{(6)}Includes rights to purchase 200,000 Common Shares at $1.062 per share
pursuant to stock options granted in October 1995, and rights to
purchase 100,000 Common Shares at $1.50 per share pursuant to stock
options granted pursuant to employment in 1995.
{(7)}Assuming approval of Proposal 3 below, board members designated in Class I
would stand for re-election at the next annual meeting of stockholders,
members designated in Class II would stand for re-election at the annual
stockholders meeting for fiscal 1997, and members designated in Class III
would stand for re-election at the annual meeting of stockholders for
fiscal 1998. If Proposal 3 is not approved, all directors will serve a
one year term and stand for re-election at the next annual meeting of
stockholders.
BACKGROUND OF NOMINEES.
The following is the business background for the previous five (5) years
for officers and directors of the Registrant:
Philip H. Coelho was named President of the Company on September 1, 1989.
Prior to becoming President he was Vice President and Director of Research,
Development and Manufacturing since October 1, 1986. Mr. Coelho was President
of Castleton, Inc. from October, 1983 until December 31, 1986. Castleton
developed and previously licensed the Insta Cool Technology to the Company.
Mr. Coelho has a Bachelor of Science degree in Mechanical Engineering from the
University of California, Davis.
Charles de B. Griffiths was elected to the Board of Directors in December
1989 and became Director of International Sales in January 1990. He is a
Chartered Accountant and holds a degree in Economics from the University of
Manchester, UK. From January 1980 until December 1987 he had been the Managing
Director of a number of successful overseas manufacturing subsidiaries of the
Cloride Group, including a $25,000,000 joint venture with the government of
Egypt which he steered to profitability in its first year of operation. In his
last appointment with Cloride he was in charge of the Scandinavian
manufacturing operations based in Denmark and was concurrently responsible for
all European automotive marketing activities. Mr. Griffiths is an
internationally oriented businessman with appropriate experience in industrial
marketing and manufacturing enhanced by studies at Harvard and Cranfield
Business Schools. He conducted a consulting practice in the United Kingdom
from January 1988 until December 1989.
S.V. Engler is Senior Vice President of Marketing of Liquid Carbonic,
Inc. Canada, a subsidiary of CBI, the world's largest supplier of commercial
carbon dioxide. Mr. Engler joined Liquid Carbonic in May 1961 and has worked
in the areas of engineering, sales and marketing and management positions. He
has been in his current position since January 1983. Mr. Engler's experience
is primarily in the area of food chilling and freezing and he holds several
patents and has several patents pending in this area. He graduated with a
Bachelor of Science Degree in Mechanical Engineering from Queens University in
Kingston, Ontario, Canada.
Noel K. Atkinson has been engaged successfully in general real estate
brokerage and development since 1946. After retiring in 1979, Mr. Atkinson
accepted selected consulting engagements until 1985 when he founded a venture
capital firm. His venture capital firm was a founding investor in Insta Cool,
Inc. of North America and Ovutec, Inc. Mr. Atkinson also was a founder and
investor in the media with KRU radio station in Northern California. Mr.
Atkinson completed five years of university level upper and lower division
courses in the field of structural engineering and architecture at the
University of Washington.
Walter J. Ludt, III rejoined the Company as its Chief Operating Officer
and Vice President in February 1995. From March 1994 until February 1995, Mr.
Ludt was a consultant (acting Chief Financial Officer) to the Omohundro
Company, a manufacturer of state of the art carbon fiber spars for sail boats,
where he was instrumental in raising $5,000,000 in capital and restructuring
$2,500,000 in bank debt. From June 1992 to February 1994, Mr. Ludt was Vice
President and Chief Financial Officer of Protel Technology, a developer and
marketer of sophisticated EDA software. Prior to June 1992, Mr. Ludt was a
Director, Chief Financial Officer, and Secretary of THERMOGENESIS CORP.
Mr. Ludt holds a Bachelor of Science Degree in Business/Accounting from
California State University at Long Beach.
VOTE REQUIRED
The plurality of votes of the shares of common stock present or
represented and voting at the meeting is required to elect the nominees
submitted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR ALL NOMINEES FOR THE
ELECTION OF DIRECTORS
PROPOSAL TWO
APPROVAL OF AMENDED STOCK OPTION PLAN
The Company's Stock Option Plan (the "Plan") currently provides for the
granting of options representing the right to acquire up to 800,000 shares of
common stock. On October 23, 1995, and subject to Stockholder approval, the
Board of Directors approved an amendment to the Stock Option Plan to increase
the number of shares of common stock issuable upon exercise of options granted
under the Plan by an additional 1,200,000 shares in order to assure that the
Stock Option Plan will continue to have sufficient shares to serve as a vehicle
to attract and retain the services of key employees and to help such key
employees realize a direct proprietary interest in the Company. The amendment
is set forth in Exhibit A attached to this Proxy Statement. The other terms of
the Plan remain unchanged.
At of June 30, 1995, options under the Plan representing the right to
acquire a total of 100,000 shares of the Company's common stock had been
granted to officers, directors, and employees of the Company. In addition, on
October 23, 1996, the Compensation Committee of the Board of Directors granted
replacement options to certain officers of the Company, subject to stockholder
approval of an amendment to the Plan to increase the number of shares of common
stock reserved under the plan, to compensate for the expiration of $.53 options
held by such officers, which was necessitated by the officers' agreement to
enter into a lock-up agreement with the Company's placement agent during the
Company's recent equity financing. The options granted represent the right to
purchase 800,000 shares of common stock in the aggregate. Specifically, a
replacement option was granted to Philip H. Coelho representing the right to
acquire 400,000 shares, a replacement option was granted to Charles de B.
Griffiths representing the right to acquire 200,000 shares, and a replacement
option was granted to Walter J. Ludt, III representing the right to acquire
200,000 shares, all of which are exercisable at $1.062 per share, the market
price for the Company's common stock on the date of grant. If stockholder
approval for the proposed amendment is not received, the options will be deemed
granted outside of the Plan.
DESCRIPTION OF THE PLAN.
The following is a summary of the principal provisions of the Plan in
effect prior to the amendment described in this Proposal Two. Other than the
increase in the number of shares of common stock underlying the Plan, no other
changes to the provisions described will be made. The summary is not intended
to be a complete description of all the terms and provisions of the Plan. Any
Stockholder of the Company may obtain a complete copy of the Plan upon written
request to the Secretary of the Company at its principal office in Rancho
Cordova, California.
ADMINISTRATION. The Plan is administered by the Stock Option and Compensation
Committee consisting of two or more disinterested Board members (herein the
"Committee"). The Committee is responsible for the operation of the Plan and,
subject to the terms thereof, makes all determinations regarding (i)
participation in the Plan by employees of the Company or subsidiaries and (ii)
the nature and extent of such participation. The interpretation and
construction of any provisions of the Plan by the Committee shall be final.
The Board may at any time remove a Committee member and appoint a successor,
provided the successor is a disinterested Board member.
The Plan provides that Committee members receive options to purchase
1,500 shares of Class A common stock under the Plan provided that the Committee
member serves as such for the entire year. Committee members shall not
otherwise be entitled to participate in the Plan. Options shall be granted to
Committee members for each year provided that the Committee member has served
as such for the entire year and shall have a term of five years and an exercise
price equal to the closing price of the Company's Class A common stock as of
the last business day of the calendar year. The options granted to Committee
members shall be subject to similar forfeiture provisions and other
restrictions as other participants under the Plan.
Other than the ability to receive options, Committee members shall serve
without compensation, unless otherwise determined by the Board, provided that
the Company shall pay the expenses of such members incurred in the
administration of the Plan, subject to approval of the Board.
ELIGIBILITY. The Plan provides for the grant of options to officers, directors
and employees of the Company (herein "participants"). The Committee determines
which participants are to be granted options under the Plan. The options under
the Plan which have not been granted may be granted to the participants except
that Committee members may only receive options granted to them as Committee
members.
TERMS OF OPTIONS. Each option will be evidenced by a stock option agreement
between the Company and the participants to whom such option may be granted.
Options granted to persons other than Committee members under the Plan shall
have a term of up to 10 years, as determined by the Committee, and shall be
subject to the following additional terms and conditions:
EXERCISE OF OPTIONS. Options shall become exercisable during a period or
during such periods as the Committee shall determine and may be specifically
conditioned upon achieving specified performance goals. An option may be
exercised by giving written notice of exercise to the Company, specifying the
number of full shares of Class A common stock to be purchased and tendering
payment to the Company of the purchase price. The Committee may, in its
discretion, allow a participant to pay the option price over such period of
time as the Committee shall, from time to time, designate, provided that the
participant shall execute a promissory note evidencing the debt on such terms
and conditions as is determined by the Committee. Interest at prime rate shall
be paid on any such promissory note and payment of the note in full must occur
at the time of the sale of the underlying stock.
OPTION EXERCISE PRICE. The option price will be determined by the Committee
and shall be the fair market value of the Company's Class A common stock on the
date of grant, based upon the closing price of the Class A common stock on that
date.
EMPLOYMENT AGREEMENT. The Committee may include in an option agreement a
condition that the participant shall agree to remain in the employ of the
Company for a specified period of time following the date of grant.
TERMINATION OF STATUS AS AN EMPLOYEE OR DIRECTOR. If the participant ceases to
serve as an employee, officer or director of the Company, the options held by
the optionee may be exercised within 90 days after the date he ceases to be an
employee, officer or director as to all or part of the shares that the optionee
was entitled to exercise at the date of such termination and after such 90-day
period all unexercised options shall terminate. Notwithstanding the foregoing,
in no event may an option be exercised after its term has expired.
DEATH. If an optionee should die while serving as an employee, officer or
director of the Company, the options held by the participant may be exercised
by the participant's estate at any time within six months after the death and
shall terminate thereafter. If a participant should die within one month after
ceasing to serve as an employee, officer or director of the Company, the
options may be exercised within six months after the death to the extent the
option was exercisable on the date of such death. Notwithstanding the
foregoing, in no event may an option be exercised after its term has expired.
SUSPENSION OR TERMINATION OF OPTIONS. No option shall be exercisable by any
person after its expiration date. If the Committee reasonably believes that a
participant has committed an act of misconduct, the Committee may suspend the
participant's right to exercise any option pending a final determination by the
Committee. If the Committee determines a participant has committed an act of
embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the
Company, breach of fiduciary duty or deliberate disregard of the Company's
rules resulting in loss, damage or injury to the Company, or if a participant
makes an unauthorized disclosure of any Company trade secret or confidential
information, engages in any conduct constituting unfair competition, induces
any Company customer to breach a contract with the Company, or induces any
principal for whom the Company acts as an agent to terminate such agency
relationship, neither the participant nor his or her estate shall be entitled
to exercise any option whatsoever. In making such determination, the Committee
shall act fairly and in good faith and shall give the participant an
opportunity to appear and present evidence on the participant's behalf at a
hearing before the Committee. The determination of the Committee shall be
final and conclusive unless overruled by the Board of Directors.
NONTRANSFERABILITY OF OPTIONS. An option is nontransferable, other than by
will or the laws of descent and distribution, and is exercisable only by the
participant during his or her lifetime or, in the event of death, by the
executors, administrators, legatees or heirs of his or her estate during the
time period provided above.
HOLDING REQUIREMENTS. To the extent required by Rule 16b-3, as promulgated
under Section 16(b) of the Securities Exchange Act of 1934, as amended, all
participants who are officers or directors of the Company shall not be entitled
to transfer any shares of Class A common stock received upon the exercise of
the options granted under the Plan for a period of six months from the date
that such options were granted.
OTHER PROVISIONS. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Committee.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event any change, such as
stock split, is made in the Company's capitalization which results in an
exchange of Class A common stock for a greater or lesser number of shares, an
appropriate adjustment shall be made in the option price and in the number of
shares subject to the option. In the event of the proposed dissolution or
liquidation of the Company, all outstanding options shall automatically
terminate, provided that the participant shall have the right, immediately
prior to the dissolution or liquidation, to exercise his or her options. In
the event of the sale of all or substantially all of the Company's assets or
the merger of the Company with or into another corporation, (i) if the Company
is the surviving corporation following a merger or consolidation each option
shall, upon exercise, entitle the holder to the issuance of securities to which
a holder of the number of shares of Class A common stock subject to the option
would be entitled after the merger or consolidation, or (ii) all options shall
otherwise terminate, provided that the participant shall have the right,
immediately prior to the merger, consolidation, dissolution or liquidation to
exercise his or her options.
AMENDMENT AND TERMINATION. The Board of Directors may amend the Plan at any
time or from time to time or may terminate it without approval of the
Stockholders; provided, however, that Stockholder approval is required for any
amendment which increases the number of shares for which options may be
granted, changes the designation of the class of persons eligible to be granted
options, or materially increases the benefits which may accrue to participants
under the Plan. Notwithstanding the foregoing, no action by the Board of
Directors or Stockholders may alter or impair any option previously granted
under the Plan without the consent of the participant.
VOTE REQUIRED
The affirmative vote of the majority of shares present or represented and
voting at the Meeting is required to approve Proposal Two.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF AN
AMENDMENT TO THE 1994 STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF
CLASS A COMMON STOCK ISSUABLE UNDER THE PLAN BY 1,000,000 TO 1,800,000 TOTAL
SHARES.
PROPOSAL THREE
APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO PROVIDE FOR CLASSIFICATION OF THE BOARD OF DIRECTORS
Delaware law permits, but does not require, the adoption of a classified
Board of Directors pursuant to which the directors can be divided into as many
as three classes with staggered terms of office and with only one class of
directors coming up for election each year. The Company's Certificate of
Incorporation does not currently provide for a classified board. Delaware law
allows the future classification of the Board of Directors upon a vote of the
stockholders. Adoption of a classified board is generally considered to have
an anti-takeover effect which may enhance stockholder value under certain
circumstances.
The Board has unanimously approved, subject to stockholder approval,
adoption of amendments to the Certificate of Incorporation to provide for a
classification of the Board into three classes of directors (designated Class
I, Class II and Class III), each class serving a staggered three-year term, an
each class being as nearly equal in number as possible. As a result of a
classified board, approximately one-third of the Board would be elected each
year. Initially, each class will have two members and members of all three
classes will be elected at this Meeting pursuant to the designation and
nominations submitted in Proposal 1 above. Directors elected to Class I will
serve until the next annual meeting of stockholders for fiscal year ended June
30, 1996 (or until their respective successors are duly elected and qualified
or until their earliest death, resignation or removal). Directors initially
elected to Classes II and III will serve until the annual meetings of
stockholders to be held for fiscal years 1998 and 1999, respectively (or until
their respective successors are duly elected and qualified or until their
earlier death, resignation or removal).
Commencing with the election of directors to Class I at the next annual
meeting of stockholders, each class of directors elected at an annual meeting
of stockholders would be elected to three-year terms. Any vacancies or newly
created directorships, however occurring, will be filled by a vote of the
majority of the directors then remaining in office. Once elected, a director
filling a vacancy or a newly created directorship will hold office for the term
expiring at the annual meeting of stockholders for the term of the class to
which he has been elected.
The By-laws currently provide that directors shall hold office until the
next annual meeting of stockholders and until the election and qualification of
their respective successors. Upon approval of this proposal, the Company's
Bylaws will also be amended to reflect the change to classify the Board of
Directors.
ADVANTAGES
A classified Board could moderate the pace of any change in control of
the Board of Directors by extending generally the overall time required to
elect a majority of the directors. At least two stockholder meetings, instead
of one, would generally be required to effect a change in control of the Board
of Directors.
The Board believes that lengthening the time required to elect the
majority of directors, and thus gaining control of the Board, will help to
assure the continuity and stability of the Company's management and policies in
the future, since a majority of the directors at any given time will have prior
experience as directors of the Company, and be knowledgeable about the
Company's products and development. Although the Company has had no difficulty
in the past in maintaining continuity, the Board of Directors considers it
advisable to provide the additional assurance of continuity that is afforded by
the classification of directors at this stage of its research and development
to insure completion of products and implementation of the Company's goal to
diversify with new products and markets.
DISADVANTAGES
It should be noted also that the effect of a classified board of
directors will impact the ability to significantly change the composition of
the Board of Directors at any single election of directors, whether or not
such a change in members comprising the Board of Directors would be beneficial
to the Company and its stockholders. Furthermore, even if a majority of the
company's stockholders believe that such a change in the composition of the
Board of Directors would be desirable, they could not effect the change at a
single meeting to elect directors. Rather, such change would most likely
require successive meetings to elect directors, unless a sufficient number of
stockholders voted in favor of amending the Certificate of Incorporation to
eliminate the classified board provisions. Therefore, adoption of the
amendment to the Certificate of Incorporation may have significant effects on
the ability of the stockholders of the Company to change the composition of the
incumbent Board of Directors. The overall effect of the proposal is to render
more difficult the accomplishment of the assumption of control by a principal
stock holder, and thus to make the removal of management more difficult, even
when performance of the present board is the reason for seeking the change.
Under the Delaware General Corporations Law, the affirmative vote of the
holders of a majority of all of the Company's issued and outstanding shares of
Common Stock is required to adopt the amendment to the Certificate concerning
classification of the Board. The amendment has been unanimously approved by
the Board of Directors and, assuming requisite stockholder approval, will
become effective upon the filing of an Amended and Restated Certificate
Incorporation with the Delaware Secretary of State.
VOTE REQUIRED
Approval of the Classified Board Proposal will require the affirmative
vote of the holders of at least a majority of the outstanding shares of the
Company's common stock.
THE BOARD OF DIRECTORS ___________ RECOMMENDS VOTING FOR THE PROPOSAL TO AMEND
THE COMPANY'S CERTIFICATE OF INCORPORATION TO PROVIDE FOR A CLASSIFIED BOARD.
PROPOSAL FOUR
APPROVAL OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION
TO INCLUDE A FAIR PRICING PROVISION
Because Delaware General Corporations Law, absent specific provisions to
the contrary in the Certificate of Incorporation, requires only a majority vote
of the outstanding shares to approve mergers, consolidations and most other
business combinations, a potential takeover bidder, under some circumstances,
could acquire a simple majority of the Corporation's outstanding stock through
any combination of one or more tender offers, exchange offers, open market
purchases or private purchases, and follow such acquisition by a business
combination such as a merger or a sale of assets with or to the takeover
bidder. In the Board's opinion, the terms of such a merger, sale of assets or
other transaction probably would not involve proper negotiation because the
takeover bidder would control both sides of the negotiations and would have
sufficient votes to approve any such transaction if a stockholder vote were
required. As a result, substantial inequities could be forced upon the
remaining stockholders.
The inclusion of a "fair pricing" provision in the Company's Certificate
of Incorporation would attempt to limit a person's ability to take over the
Company. The inclusion of Article FIFTH is intended to encourage potential
takeover bidders to engage in arms-length negotiations with the Corporation
before attempting a takeover. If the bidder negotiates with the Corporation,
the Board believes it will have the bargaining power necessary to ensure
appropriate terms for any proposed business combination.
Article FIFTH would mandate that one of three (3) requirements be met for
the approval of any "business Combination" of the Corporation or a subsidiary
with any "Interested Stockholder." An Interested Stockholder includes any
business entity, individual or group of individuals which is the beneficial
owner of 10% or more of the outstanding voting stock and affiliates of the
Corporation who were 10% beneficial owners within two (2) years preceding the
date in question. A Business Combination includes virtually every transaction
between a Major Stockholder and the Corporation or a subsidiary of the
Corporation, including a merger or consolidation, a sale of assets, the
issuance of securities and a reclassification or recapitalization involving
Corporation stock while an Interested Stockholder exists.
The three (3) alternatives, one of which would need to be satisfied under the
provision, are:
(1) The Business Combination must be approved by the affirmative vote
of at least 80% of the shares of outstanding voting stock and the affirmative
vote of at least 67% of outstanding voting stock exclusive of voting stock held
by the Interested Stockholder;
(2) The Business Combination must be approved by a 75% vote of the
Continuing Directors, which are defined as members of the board which are not
Interested Stockholders and were members of the board prior to the Interested
Stockholders becoming Interested Stockholders or certain successors of
Continuing Directors, and by a majority of the Board of Directors; or
(3) The consideration to be received by the Corporation's Stockholders
must meet certain fair pricing provisions. These fair pricing provisions
require that: (a) the aggregate consideration to be received per share by
holders of common stock in the Business Combination is equal to the higher of
(i) the amount paid for such common stock by the Interested Stockholder within
a two-year period or upon becoming an Interested Stockholder, (ii) the fair
market value of the common stock on the announcement date or the date on which
the Interested Stockholder became an Interested Stockholder, or (iii) the fair
market value multiplied by a ratio reflective of the price paid by the
Interested Stockholder and the fair market value; (b) the consideration for the
shares will be paid in cash or a form of consideration approved by the holders
of voting stock; (c) the amount per share received by holders of securities
other than common stock shall be equal to the higher of the highest price paid
by the Interested Stockholder for such securities, the fair market value of
such securities on the announcement date or on the determination date, or the
highest preferential amount holders of such securities would be entitled to
upon liquidation; (d) after the Interested Stockholder becomes an Interested
Stockholder but prior to the Business Combination there shall have been no
reduction in the rate of dividends, and the Interested Stockholder shall not
have become the beneficial owner of any newly issued shares; (e) the Interested
Stockholder shall not have received the benefit, directly or indirectly, of any
loans or other financial assistance from the Corporation; and (f) a proxy or
information statement describing the proposed Business Combination shall be
mailed to stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination.
The three alternative requirements proposed in Article FIFTH would apply
in addition to the requirement under Delaware law that most Business
Combinations, including mergers, consolidations, sales of assets and
dissolutions, be approved by a majority vote of the Corporation's outstanding
shares as well as approval by the board.
ARTICLE FIFTH IS NOT BEING PROPOSED IN RESPONSE TO OR IN ANTICIPATION OF
ANY PARTICULAR TAKEOVER ATTEMPT, BUT IS BEING PROPOSED TO DETER THE POSSIBILITY
THAT SUCH A BID MAY BE MADE IN THE FUTURE.
ADVANTAGES
This Article is intended to encourage potential takeover bidders to
engage in negotiations with the Board before attempting a takeover so that the
Board can obtain appropriate terms for all Stockholders in any proposed
Business Combination. If the potential takeover bidder is unwilling to obtain
prior Board approval, or the Board refuses to grant approval, the Article is
designed to give the Corporation's Stockholders protection not otherwise
available under Delaware law. If Board approval is not obtained, the proposed
transaction must be on terms sufficiently attractive to obtain approval by an
80% majority vote of the outstanding shares and two-thirds majority of the
shares excluding those of the Interested Stockholder, or, among other
requirements, such remaining Stockholders must receive fair value for their
stock.
DISADVANTAGES
The overall effect of the proposal is to render more difficult the
assumption of control by a principal Stockholder, and thus make it more
difficult to remove management. The additional approval requirements could
substantially increase the overall vote required to approve a Business
Combination, and, depending on how many votes are held by the Interested
Stockholder, approval could require a percentage approaching 100% of the
outstanding shares. Consequently, the Board and management may be able to
obtain veto power over any proposed takeover by refusing to approve the
proposed Business Combination and obtaining sufficient votes to defeat the
additional approval requirements.
In addition, if Board approval is not obtained by the potential takeover
bidder, a minority of the Corporation's Stockholders could effectively block a
proposed Business Combination by preventing the requisite Stockholder approval.
In order to eliminate a minority Stockholder's ability to defeat a Business
Combination which did not receive prior approval by the Board, but is
nonetheless later determined by the Board to be in the best interest of the
Corporation and its Stockholders, the Article provides that the approval of 75%
of the Board of Directors precludes the need for supermajority Stockholder
approval. Because this Article would tend to discourage certain takeover bids
and would encourage other takeover bidders to negotiate with the Board, it
would also tend to assist the incumbent Board and current management in
retaining their present positions. In addition, even if the Board does not
grant its prior approval, a takeover bidder may still proceed with a tender
offer or other purchases of Corporation stock although the resulting
acquisition may be more difficult and more expensive. Because of the potential
increased expenses and the tendency of Article FIFTH to discourage competitive
bidders, the price offered to Stockholders may be lower than if Article FIFTH
was not included.
Amendment or repeal of the proposed Article FIFTH would require the
affirmative vote of at least 80% of the outstanding shares, or by a majority of
the outstanding shares if approved by at least 75% of the Continuing Directors
and a majority of the Board of Directors.
VOTE REQUIRED
Approval of the Fair Pricing Provision Proposal will require the
affirmative vote of the holders of at least a majority of the outstanding
shares of the Company's common stock voting as a group.
THE BOARD OF DIRECTORS ___________ RECOMMENDS VOTING FOR THE PROPOSAL TO AMEND
THE CERTIFICATE OF INCORPORATION TO INCLUDE A FAIR PRICING PROVISION.
PROPOSAL FIVE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO EFFECT A ONE-FOR TWO CONSOLIDATION OF COMMON STOCK
GENERAL
The Board of Directors has concluded that it would be advisable to amend
the Company's certificate of incorporation to effect a one-for-two
consolidation ("reverse stock split") of the Company's issued and outstanding
common stock. The effect of such an amendment to the Company's certificate of
incorporation will be to add a new paragraph to existing Article FOURTH, which
will read as follows:
"Each two (2) issued and outstanding shares of common stock of this
Corporation shall be combined into one (1) share of validly issued, fully paid
and non-assessable common stock, par value $.001. Each person as of [the date
this amendment is filed] holding of record any issued and outstanding shares of
common stock shall receive upon surrender to the Company's transfer agent a
stock certificate or certificates to evidence and represent the number of
shares of post-consolidation common stock to which such shareholder is entitled
after giving effect to the consolidation; provided, however, that all
fractional shares resulting therefrom shall be paid in cash."
The proposed amendment to the certificate of incorporation of the Company
was ________ by the Board of Directors who directed that it be submitted for
stockholder approval at the Meeting. The amendment will result in each
stockholder receiving one (1) share of post-consolidation common stock ("New
Common Stock") for each two (2) shares of presently issued and outstanding
common stock ("Old Common Stock") owned by such stockholder.
The rights, preferences and privileges of the shares of common stock
before and after the proposed consolidation will be the same and the proposed
consolidation will not affect any stockholder's proportionate equity interest
in the Company or the rights, preferences, or privileges of any stockholder,
other than an immaterial adjustment which may occur due to the purchase of any
fractional shares of common stock that result from the consolidation. Shares
of common stock issuable upon the exercise of outstanding stock options or upon
the exercise of outstanding warrants will also be combined in the same ratio of
one-for-two.
The Company currently has outstanding only one class of common stock and
no shares of preferred stock. In the event that Proposal Five is approved and
adopted by the stockholders, the number of outstanding shares of common stock
would be reduced by approximately one-half. The Company is authorized to issue
52,000,000 shares of common stock, 50,000,000 of which are designated common
shares, and 2,000,000 of which are designated preferred shares. Of the
50,000,000 shares of authorized common stock, there are currently 24,765,434
shares issued and outstanding. Further, there are approximately 3,957,000
additional shares underlying warrants and options which are immediately
exercisable. The number of shares of common stock issuable upon conversion of
warrants or exercise of stock options would also be reduced (one-for-two) in
connection with the proposed consolidation.
The proposed consolidation will not change the authorized number of
shares of common stock or preferred stock, although as a result of the
consolidation, the decrease in the number of issued and outstanding shares will
result in an increase in the number of shares available for future issuance.
There would be no effect on outstanding options and warrants except for the
adjustment (one-for-two) to the conversion ratio as discussed above.
The following table illustrates the principal effects of the proposed
consolidation, as of the record date:
NUMBER OF PRIOR TO AFTER
SHARES OF PROPOSED PROPOSED
COMMON STOCK CONSOLIDATION CONSOLIDATION
Authorized 50,000,000 50,000,000
Issued and
Outstanding 24,765,000 12,382,717**
Available for
Future Issuance 21,277,566* 35,638,783*
NOTE TO TABLE
* Assumes further reduction for shares underlying warrants and options
which are reserved.
** Subject to minor adjustment due to the purchase of fractional shares
resulting from the consolidation.
If any stockholder is left with fractional shares as a result of the
consolidation, the Company will purchase for cash all such fractional shares
based on the average Lo and Hi bid price for the Company's common stock as of
the effective date of the amendment to the certificate of incorporation, which
will be the date it is filed with the Delaware Secretary of State (the
"Effective Date").
It is not anticipated that any change will be made in the Company's
capital stock as a result of the proposed consolidation, and the Company is not
currently entertaining any thoughts of placing additional shares of common
stock, either privately or publicly, to raise additional capital.
REASONS FOR THE CONSOLIDATION
The Board of Directors believes that a public company considered to be
engaged in the development and exploitation of biotechnology, or involved with
products and devices used in the biotechnology field, should generally have
between 12,000,000 and 15,000,000 shares of stock issued and outstanding. The
Board of Directors believes that the proposed consolidation of the Company's
common stock would place the Company within that range and allow management and
the market to evaluate the performance of other similar companies and to
compare other companies with the Company's performance.
The Board of Directors further believes that the current per share price
of the common stock and the large number of shares of common stock outstanding
have had a negative impact on the marketability of the existing common stock,
the amount and percentage of transaction costs by stockholders, and the
potential ability of the Company to raise capital by issuing additional shares
of common stock. The Board of Directors is hopeful that after the
consolidation the market will react positively and in such a fashion that the
price of the Company's common stock will rise and cease to be treated as "low-
priced" stock by the investment community.
The Board of Directors recognizes that the proposed consolidation will
not, in itself, result in the Company's common stock being categorized other
than as a low-priced stock, and that the only path to being categorized as
other than low-priced is through sustained growth and profitability, neither of
which can be assured, and the absence of which would result negatively upon the
trading value of the Company's common stock following the proposed
consolidation.
The Company believes there are several reasons why the proposed
consolidation may enhance the value of and marketability of its common stock.
These reasons are summarized briefly below.
Institutional investors often have internal policies that prevent the
purchase of low-priced stocks and many brokerage houses do not permit low-
priced stocks to be used as collateral for margin accounts. Similarly, many
banks do not permit collateralization of loans through the pledge of low-priced
stocks. If the consolidation, coupled with Company growth and profitability,
results in an increase in the per share price for the Company's common stock,
the Company may be able to attract institutional investors as well as provide
an avenue for its stockholders to collateralize loans using their common stock
instead of selling that stock for needed money.
Further, some brokerage firm's implement internal policies and practices
that tend to discourage dealing with low-priced stock. These practices result
in time-consuming procedures and internal controls that must be complied with
for payment of brokerage commissions (and additional procedures, including
branch manager approval), which function to make handling low-priced stock
unattractive to brokers and registered representatives of a brokerage firm.
Some brokerage firms also require a non-solicitation letter from the client
when the client desires to purchase a low-priced stock. These policies and
procedures add delay and burden to the process, based on separate business
criteria of the brokerage firm, and are designed to balance the commission to
be paid with the cost of handling the stock transaction, rather than
considering and evaluating such factors as the underlying nature of the
transaction and quality of the issuer. The Company believes that such policies
do not foster evaluation of its reported results and prospects for future
growth and stockholder return, factor which should be considered in evaluating
stock prices.
Also, since the broker's commissions and transaction costs on low-priced
stock generally represent a higher percentage of the stock sale price than
commissions and costs on higher-priced stocks, the current share price of the
Company's common stock can result in individual shareholders paying transaction
costs (commissions, mark-ups, mark-downs, etc.) which are a higher percentage
of the total share value than would be the case if the Company's share price
were higher.
Although the Board of Directors is hopeful that the decrease in the
number of shares of common stock that would be outstanding after the proposed
consolidation will result in an increased price level per share of common stock
which will encourage interest in the market for that common stock and promote
greater marketability for the common stock, no assurances can be given that the
market will respond to the consolidation with an increase in the per share
price.
Finally, the affect of the proposed consolidation, and resulting decrease
in the number of shares of common stock on the market, could adversely affect
the trading value of such common stock if there is not a corresponding increase
in the per share price level for such stock following the consolidation. Many
factors beyond the Company's control will affect the ultimate trading market
and there can be no assurance that the per-share price for the Company's common
stock immediately after the consolidation will reflect the corresponding math
material value based on the consolidation alone, or that any such value will
be sustained for any period of time.
The Company's common stock has been traded on the Nasdaq SmallCap Market
under the symbol "KOOL" since 1986. On April 1, 1996, the closing bid price
for the Company's common stock, as quoted on the Nasdaq Market, for a share of
common stock was $1.75 per share. The following table sets forth the range of
high and low bid prices for the Company's common stock for the fiscal years
ended June 30, 1994 and 1995 as reported in the Nasdaq Market. Such prices
reflect inter-dealer quotation without adjustment for retail mark ups, mark
downs or commissions and may not represent actual transactions.
FISCAL 1995: HIGH LOW
First Quarter $ 1.50 $ 0.97
Second Quarter $ 1.75 $ 1.25
Third Quarter $ 2.03 $ 1.19
Fourth Quarter $ 1.97 $ 1.50
FISCAL 1994:
First Quarter $ 2.44 $ 1.03
Second Quarter $ 1.47 $ 1.00
Third Quarter $ 1.56 $ 1.19
Fourth Quarter $ 1.22 $ 0.97
EXCHANGE OF STOCK CERTIFICATES
If the proposed amendment to the Company's certificate of incorporation
to provide for a one-for-two consolidation is approved, the Company will file
an amended and restated certificate of incorporation as soon as practicable
after the Meeting, consistent with the Company's judgment on timing and timing
requirements that may be imposed by the Nasdaq Market. The proposed
consolidation will become effective upon the filing of that amended and
restated certificate of incorporation (the "Effective Date"). The Trust
Company of New Jersey has been appointed as the Company's exchange agent
("Exchange Agent") to act for stockholders in effecting the exchange of their
certificates.
Stockholders will be notified and requested to surrender their
certificates representing shares of the Old Common Stock to the Exchange Agent
in exchange for certificates representing shares of New Common Stock after
giving effect to the consolidation. Commencing with the effective date,
however, each certificate representing shares of Old Common Stock will be
automatically deemed, without any action on the part of the holders thereof or
on the part of the Company or the Exchange Agent, for all purposes to evidence
ownership of New Common Stock taking into account the consolidation.
No scrip or fractional share certificates of New Common Stock will be
issued in connection with the proposed consolidation. Stockholders who would
otherwise receive fractional shares will receive, instead, the cash value for
such fractional shares determined by multiplying the fractional share by the
closing bid price for the Company's common stock on the Effective Date.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of the proposed consolidation are set
forth below. The following information is based upon existing law which is
subject to change by legislation, administrative action and judicial decision,
and is necessarily general in nature. Furthermore, individual circumstances
may alter the effect or require different tax treatment depending upon those
specific circumstances. Accordingly, stockholders are advised to consult with
their own tax advisor(s) for more detailed information relating to their
individual circumstances and the individual tax treatment that may result as a
result of the consolidation.
1.The proposed consolidation will be a tax-free recapitalization for the
Company and its stockholders.
2.The shares of New Common Stock registered in the name of a stockholder
(or beneficially owned by such stockholder) will have an aggregate basis for
computing gain or loss equal to the aggregate basis of the Old Common Stock
held by that stockholder immediately prior to the Effective Date for the
proposed consolidation.
3.A stockholder's holding period for shares of New Common Stock will
include the holding period of shares of Old Common Stock tendered in exchange,
provided that the shares of Old Common Stock were capital assets in the hands
of the stockholder on the Effective Date of the proposed consolidation.
4.Depending on the individual facts and circumstances, to the extent a
stockholder receives cash in lieu of a fractional share, the stockholder may be
required to treat such cash as income from a dividend or as a sale or exchange
of the fractional share and will recognize gain or loss based on the difference
between the cash price paid and the stockholder's basis in the fractional
share. While it appears that dividend treatment will not apply, stockholders
are advised to consult with their own tax advisor with respect to individual
treatment.
REGISTRATION AND TRADING
The New Common Stock will continue to be registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Company will
continue to file periodic and current reports with the Securities and Exchange
Commission (the "Commission") pursuant to the Exchange Act. In addition, the
Company's New Common Stock will continue to be traded on the Nasdaq SmallCap
Market. The Company intends to file all required notifications with the Nasdaq
Market to provide for continued trading (on a post-consolidated basis) in
coordination with the Effective Date. Certificates representing the New Common
Stock will, however, contain a new CUSIP number.
The Company has no intention of entering into any future transaction or
business combination which would result in deregistration of the New Common
Stock under the Exchange Act, or which might result in loss of eligibility for
the New Common Stock to be listed and traded on the Nasdaq Market.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding
common stock is required to approve Proposal Five.
THE BOARD OF DIRECTORS ___________ RECOMMENDS VOTING FOR THE PROPOSAL TO AMEND
THE CERTIFICATE OF INCORPORATION TO PROVIDE FOR A ONE-FOR-TWO CONSOLIDATION OF
THE COMPANY'S COMMON STOCK.
<PAGE>
EXECUTIVE COMPENSATION OF MANAGEMENT, OWNERSHIP OF CERTAIN
STOCKHOLDERS, AND CERTAIN RELATED TRANSACTIONS
The following table sets forth certain information with respect to executive
officers of the Company.
<TABLE>
<CAPTION>
AGE OFFICE HELD
NAME POSITIONS WITH THE COMPANY SINCE
<S> <C> <C> <C>
Philip H. Coelho President, Chief Executive Officer 52 1989{(1)}
and Chief Financial Officer
Charles de B. Griffiths V.P. Marketing, Secretary and 45 1990
Director
Walter J. Ludt, III Chief Operating Officer, Vice 52 1995{(2)}
President
</TABLE>
{(1)}Prior to becoming President, Mr. Coelho served as Vice President and
Director of Research, Development and Manufacturing from 1986 to 1989.
{(2)}Mr. Ludt previously served as Chief Financial Officer, Secretary and
Treasurer for the Company from June 1992 to February 1994.
Executive officers are elected annually by the Board of Directors and serve at
the pleasure of the Board. Messrs. Coelho and Griffiths have entered into
employment agreements with the Company which expire in December 1996. There is
no family relationship between any of the officers and directors.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid for the
past three years for all services of Philip H. Coelho, the President, Chief
Financial Officer and Chief Executive Officer of the Company. No other
executive officers of the Company received total annual salary in 1996 in an
amount exceeding $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
OTHER ANNUAL
NAME AND PRINCIPAL COMP. RESTRICTED STOCK OPTIONS GRANTED
POSITION YEAR SALARY BONUS AWARD(S)
Philip H. Coelho, 1993 $ 85,000 $0 $17,335{(1)} $0 350,000
President, Chief
Financial Officer, and 1994 $106,795 $0 $15,000{(2)} $0 -0-
Chief Executive
Officer 1995 $110,000 $0 $27,296{(3)} $0 -0-
</TABLE>
{(1)} Represents payments of $7,200 annual automobile allowance and $10,135 in
accrued vacation pay.
{(2)} Represents payments of $7,200 annual automobile allowance and $7,800 in
accrued vacation pay.
{(3)} Represents payments of $7,200 annual automobile allowance and $20,096 in
accrued vacation pay.
{(4)}Pursuant to Mr. Coelho's 1993 employment agreement with the Company, he
received an award of 350,000 options representing the right to acquire an equal
number of shares of the Company's common stock.
________________________
EMPLOYMENT AGREEMENTS
In December 1993, the Company and Mr. Coelho entered into an employment
agreement whereby Mr. Coelho agreed to serve as President and Chief Executive
Officer and receive compensation equal to $110,000 per year and a $600 per
month automobile allowance, subject to annual increases as may be determined by
the Board of Directors. The employment agreement may be terminated upon 60
days notice by Mr. Coelho or by the Company with or without cause. In the
event Mr. Coelho is terminated by the Company without cause, Mr. Coelho will be
entitled to receive severance pay equal to the lesser of two years of his
annual salary or the remaining term of the agreement. In addition, the
employment agreement provides that in the event Mr. Coelho is terminated other
than "for cause" within six months of a change of control, Mr. Coelho shall be
paid an amount equal to two years of his annual salary. Further, if, within
six months of a change of control, Mr. Coelho determines, in his sole
discretion, that the policies and procedures of the Board of Directors are
unacceptable, upon Mr. Coelho's resignation, he will be paid an amount equal to
his annual salary. The phrase "change of control" is defined to include (i)
the issuance of 33% or more of the outstanding securities to any individual,
firm, partnership, or entity, (ii) the issuance of 33% or more of the
outstanding securities in connection with a merger, (iii) the acquisition of
the Company in a merger or other business combination, or (iv) the sale or
transfer of 50% or more of the Company's assets or earning power. The
employment agreement expires, by its terms, in December 1996.
In December 1993 the Company and Charles de B. Griffiths entered into an
employment agreement whereby Mr. Griffiths agreed to serve as Vice-President of
Marketing and receive compensation equal to $80,000 per year and a $1,000 per
month car allowance, subject to annual increases as may be determined by the
Board of Directors. The employment agreement may be terminated upon 60 days
notice by Mr. Griffiths or by the Company with or without cause. In the event
Mr. Griffiths is terminated by the Company without cause, Mr. Griffiths will be
entitled to receive severance pay equal to the lesser of two years of his
annual salary, or the remaining term of the agreement. In addition, the
employment agreement provides that in the event Mr. Griffiths is terminated
other than "for cause" within six months of a change of control, Mr. Griffiths
shall be paid an amount equal to two years of his annual salary. Further, if,
within six months of a change of control, Mr. Griffiths determines, in his sole
discretion, that the policies and procedures of the Board of Directors are
unacceptable, upon Mr. Griffiths' resignation, he will be paid an amount equal
to his annual salary. The phrase "change of control" is defined to include (i)
the issuance of 33% or more of the outstanding securities to any individual,
firm, partnership, or entity, (ii) the issuance of 33% or more of the
outstanding securities in connection with a merger, (iii) the acquisition of
the Company in a merger or other business combination, or (iv) the sale or
transfer of 50% or more of the Company's assets or earning power. The
employment agreement expires, by its terms, in December 1996.
OPTIONS GRANTED IN LAST FISCAL YEAR
No options were granted to Mr. Coelho during the fiscal year ended June
30, 1995.
No options were granted to any other officer or director during the
fiscal year ended June 30, 1995, with the exception of the automatic award of
25,000 options to each outside director acting on the Compensation Committee
and administering the Company's 1994 Stock Option Plan as provided under the
Company's 1994 Stock Option Plan, and no officers or directors exercised any
options during that year.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth director options exercised and option
values for fiscal year 1995 for all nominees.
<TABLE>
<CAPTION>
Number of options at Value of Unexercised
Shares Acquired FY end (Exercisable/ Options at FY End
Exercised Value Realized Unexercisable) (Exercisable/
or Unexercisable) (1)
NAME
<S> <C> <C> <C> <C>
Noel K. Atkinson - - 66,666 $ 68,666
33,334 $ 34,334
Philip H. Coelho - - 433,333{(2)} $299,333
116,667 $ 46,667
S.V. Engler - - 116,666 $ 41,166
33,334 $ 13,334
Charles de B. Griffiths - - 266,666{(3)} $362,999
83,334 $130,001
Walter Ludt, III - - 100,000{(4)} $103,000
-0-
</TABLE>
{(1)} Based on June 30, 1995 year end closing bid price of $1.56 per share.
{(2)} Options to acquire 200,000 shares at $.53 per share expired in November
1995.
{(3)} Options to acquire 100,000 shares at $.53 per share expired in November
1995.
{(4)} Options to acquire 100,000 shares at $.53 per share expired in November
1995.
DIRECTORS COMPENSATION
All directors who are not employees of the Company are paid a meeting fee
of $300 per meeting attended in person. In addition, members of the Board's
Stock Option and Compensation Committee receive options to purchase 25,000
shares of Class A common stock upon completion of each full year of service on
such Committee. (See "the Company Stock Option Plan," below.)
THE 1994 STOCK OPTION PLAN
The Company's 1994 Stock Option Plan (the "Stock Option Plan") was
approved by the Company's stockholders in January 1995. A total of 800,000
shares were approved by the stockholders for issuance under option agreements,
subject to the Stock Option Plan. Subject to Stockholder approval, the Company
is proposing to increase the numbers of shares subject to the Stock Option Plan
by an additional 1,000,000 shares. (See Proposal Two, above.)
The Stock Option Plan permits the grant of stock options to employees,
officers and certain directors. The purpose of the Stock Option Plan is to
attract the best available personnel to the Company and to give employees,
officers and certain directors of the Company a greater personal stake in the
success of the business.
The Stock Option Plan is administered by the Stock Option and
Compensation Committee, which determines the recipients of options and the
terms of options granted, including the exercise price, number of shares
subject to the options and the exercisability thereof, and the terms of any
direct sales of shares. The exercise price of all stock options granted under
the Stock Option Plan must be at least equal to the fair market value of such
shares on the date of grant, and the term of the stock options may be up to
five years for all participants who are members of the Stock Option and
Compensation Committee and up to 10 years for all other participants.
Upon completion of each full year of service on the Stock Option and
Compensation Committee, each member of such Committee is granted options to
purchase 25,000 shares of common stock, at an exercise price equal to the
closing price of such common stock on the last business day of the calendar
year.
As of June 30, 1995, 100,000 options had been granted under the Stock
Option Plan. However, on October 23, 1996, the Stock Option and Compensation
Committee resolved to grant options to purchase 860,000 shares of common stock
to Philip H. Coelho, Charles de B. Griffiths, Walter J. Ludt, III, and Terry
Wolf in replacement of options which expired due to a lock-up agreement entered
into between those individuals and the Company's placement agent in order for
the Company to obtain a needed capital infusion for current research and
development needs. The options expire 5 years from the date of grant and are
exercisable at $1.062 per share which represents the fair market value on the
date of grant. In addition, as mentioned above, options to purchase 77,000
shares of common stock were issued to certain employees in connection with
normal employment practice, with exercise prices ranging from $0.82 to $1.19
per share.
PRINCIPAL STOCKHOLDERS
The Company is not aware of any stockholder of record who owns five
percent (5%) or more of the outstanding common stock, and the Company has not
received any Form 13d filings which would indicate that any stockholder owns
beneficially more than five percent (5%) or more of the Company's common stock.
The table sets forth on page 2 of this proxy statement sets forth, as of March
15, 1996, certain information with respect to the beneficial ownership of
shares of the Company's common stock by all directors and executive officers of
the Company individually, and all directors and all executive officers of the
Company as a group. As of March 15, 1996, there were 24,765,434 shares of
common stock outstanding.
CERTAIN RELATED TRANSACTIONS
There were no related party or interested party transactions involving
the Company during the fiscal year ended June 30, 1995, or from that date to
the date of this proxy statement.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of Forms 3, 4 and 5 delivered to the Company
as filed with the Securities and Exchange Commission ("Commission"), directors
and officers of the Company timely filed all required reports pursuant to
Section 16(a) of the Securities Exchange Act of 1934.
OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Company has retained the firm of Ernst & Young, LLP as independent
auditors of the Company for the fiscal year ending June 30, 1996. The Company
expects a representative of Ernst & Young LLP to be present at the Annual
Meeting of Stockholders and the representative will have an opportunity to make
a statement if he desires to do so. Such representative will be available to
respond to appropriate questions.
TRANSFER AGENT
The Trust Company of New Jersey, Thirty-Five Journal Square, Jersey City,
New Jersey 07306 is the transfer agent for the Company's Common Stock.
ACTION ON OTHER MATTERS
The Board of Directors of the Company knows of no other matters that may
or are likely to be presented to the Meeting. However, in such event, the
persons named in the enclosed form of proxy will vote such proxy in accordance
with their best judgement in such matters pursuant to discretionary authority
granted in the proxy.
STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's Proxy Statement and
proxy for its 1996 Annual Meeting must meet the requirements of Rule 14a-8
promulgated by the Securities and Exchange Commission ("SEC") and must be
received by the Company no later than September 15, 1996, which is 120 days
prior to when the Company usually sets its annual meeting date.
ADDITIONAL INFORMATION
Each Stockholder has received the Company's 1995 Annual Report containing
the Company's 1995 audited financial statements, including the report of its
independent public accountants. Upon receipt of a written request, the Company
will furnish to any Stockholder, without charge, a copy of the Company's 1995
Form 10-KSB as filed with the SEC under the Securities Exchange Act of 1934
(including the financial statements and the schedules thereto and a list
briefly describing the exhibits thereto). Stockholders should direct any
request to the Company, 11431 Sunrise Gold Circle, Suite A, Rancho Cordova,
California 95742, Attention: Charles de B. Griffiths, Secretary.
THERMOGENESIS CORP.
By Order of the Board of Directors
Charles de B. Griffiths, Secretary
Rancho Cordova, California
<PAGE>
EXHIBIT A
The following provision of the Company's Stock Option Plan is proposed to
be amended in the manner described in the Proxy Statement to which this Exhibit
relates.
"Section 3.1. Shares subject to the Plan.
The shares of stock of the Company subject to issuance under the Plan
shall be shares of Common Stock. Except as otherwise provided in Section 2.2,
the aggregate number of shares of Common Stock which may be issued under the
Plan shall not exceed 2,000,000."
<PAGE>
EXHIBIT B
FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
THERMOGENESIS CORP.
THERMOGENESIS CORP., a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
1. This corporation was originally incorporated under the name of
Refrigeration Systems International, Inc. on July 3, 1986 upon filing its
certificate of incorporation with the Secretary of State of the State of
Delaware.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Amended and Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the First Article
of the Certificate of Incorporation of this corporation to reflect the new
corporate name as approved by the stockholders pursuant to Section 242.
3. The text of the Restated Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as follows:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is
THERMOGENESIS CORP.
SECOND: The address, including street, number, city and county, of the
registered office of the Corporation in the State of Delaware is 32 Loockerman
Square, Suite L-100, City of Dover, County of Trent; and the name of the
registered agent of the Corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Fifty-Two Million (52,000,000) consisting of Two
Million (2,000,000) shares of Preferred Stock, par value $.001 per share, and
Fifty Million (50,000,000) shares of Common Stock, par value $.001 per share.
Each two (2) issued and outstanding shares of common stock of this
Corporation shall be combined into one (1) share of validly issued, fullly paid
and non-assessable common stock, par value $.001. Each person as of [the date
this amendment is filed] holding of record any issued and outstanding shares of
common stock shall receive upon surrender to the Company's transfer agent a
stock certificate or certificates to evidence and represent the number of
shares of post-consolidation common stock to which such shareholder is entitled
after giving effect to the consolidation; provided, however, that all
fractional shares resulting therefrom shall be paid in cash.
The Preferred Stock may be issued, from time to time, in one or more
series, with such designations, preferences and relative, participating,
optional or other rights, qualifications, limitations or restrictions thereof
as shall be stated and expressed in the resolution or resolutions providing for
the issue of such series adopted by the Board of Directors from time to time,
pursuant to the authority herein given, a copy of which resolution or
resolutions shall have been set forth in a Certificate made, executed,
acknowledged, filed and recorded in the manner required by the laws of the
State of Delaware in order to make the same effective. Each series shall
consist of such number of shares as shall be stated and expressed in such
resolution or resolutions providing for the issuance of the stock of such
series. All shares of any one series of Preferred Stock shall be alike in
every particular.
FIFTH: The affirmative vote of the holders of at least eighty percent
(80%) of the outstanding shares of Voting Stock (as herein defined) and the
affirmative vote of the holders of at least sixty-seven percent (67%) of the
outstanding shares of Voting Stock exclusive of Voting Stock held by an
"Interested Stockholder" (as herein defined) shall be required for the adoption
or authorization of any Business Combination (as herein defined), provided that
such eighty percent (80%) and sixty-seven percent (67%) voting requirements
shall not be applicable if all of the conditions specified in paragraph (2) of
this Article FIFTH are met.
1. DEFINITIONS. The following definitions shall apply for purposes of
this Article FIFTH:
(a) "Person" shall mean any individual, firm, corporation or other
entity.
(b) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934 provided, however, that the term
"registrant" as used in such definition of "Associate" shall mean the
Corporation.
(c) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation, provided, however, that for the purposes of the definition of
"Interested Stockholder" set forth below, the term "Subsidiary" shall mean only
a corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
(d) "Voting Stock" shall mean capital stock of the Corporation
entitled to vote generally in the election of directors.
(e) "Beneficial Owner" shall have the meaning set forth in
Regulation 13D under the Securities Exchange Act of 1934, and includes any
other person with which such Beneficial Owner has any agreement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares of Voting Stock.
(f) "Interested Stockholder" shall mean, in respect of any Business
Combination, any person (other than the Corporation, any Subsidiary, any
pension, savings, or other employee benefit plan of employees of the
Corporation or any Subsidiary, or any one or a group of more than one
Continuing Director) who or which:
(i) is the Beneficial Owner, directly or indirectly, of ten
percent (10%) or more of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
Beneficial Owner, directly or indirectly, of ten percent (10%) or more of the
voting power of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by an Interested Stockholder,
if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within
the meaning of the Securities Act of 1933 or any successor securities law.
(g) "Business Combination" shall mean any one or more of the
following transactions:
(i) Any merger or consolidation of the Corporation or any
Subsidiary with or into any Interested Stockholder or any Person (whether or
not itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate of an Interested Stockholder.
(ii) Any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related transactions) to
or with any Interested Stockholder, or any Affiliate of any Interested
Stockholder or any Person of more than 50% of the assets of the Corporation or
any Subsidiary having an aggregate Fair Market Value of five million dollars
($5,000,000) or more.
(iii) The issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder or any Person in exchange for cash,
securities or other property (or combination thereof) having an aggregate Fair
Market Value of one million dollars ($1,000,000) or more which amount shall be
adjusted for stock splits and combinations.
(iv) The adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder.
(v) Any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly
or indirectly beneficially owned by any Interested Stockholder or any Affiliate
of any Interested Stockholder.
(h) "Continuing Director" shall mean any member of the Board of
Directors of the Corporation who: (i) is not an Interested Stockholder nor an
Affiliate of the Interested Stockholder and was a member of the Board of
Directors prior to the time that such Interested Stockholder became an
Interested Stockholder; or (ii) is a successor of a Continuing Director who is
not an Affiliate of the Interested Stockholder and who is recommended to
succeed a Continuing Director prior to his initial election or appointment to
the Corporation's Board of Directors by a two-thirds vote of the Continuing
Directors then on the Board of Directors.
(i) "Fair Market Value" shall mean:
(i) in the case of stock, the highest closing sale price of a
share of such stock during the thirty (30) day period immediately preceding the
date for which such Fair Market Value is being determined on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 or successor law on which such stock is listed, or if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to
a share of such stock during the thirty (30) day period preceding the date for
which such Fair Market Value is being determined on the National Association of
Securities Dealers, Inc. Automated Quotation System or any system then in use,
or if no such quotations are available, the Fair Market Value of such stock as
determined in good faith by the Board of Directors; and
(ii) in the case of property other than cash or stock, the Fair
Market Value of such property determined by the Board of Directors in good
faith for the date on which such Fair Market Value is being determined subject
to any appraisal rights provided by applicable law.
(1) EXCEPTION TO 80% AND 67% VOTE REQUIREMENTS. The eighty percent
(80%) and sixty-seven percent (67%) vote required by this Article FIFTH for
approval of certain Business Combinations shall not be applicable to a Business
Combination, and such Business Combination shall require only such affirmative
vote of the Voting Stock as required by law and any other provision of this
Certificate of Incorporation, if:
(a) Such Business Combination shall have been approved by a seventy-
five percent (75%) vote of the Continuing Directors and a majority of the Board
of Directors, or
(b) All of the following conditions shall have been met with respect
to such Business Combination:
(i) The aggregate amount of cash and the Fair Market Value as
of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of Common Stock in such
Business Combination shall be at least equal to the highest of the following,
adjusted to reflect subdivisions of stock and stock splits:
A. The highest per share price (including brokerage
commissions, transfer taxes and soliciting dealer's fees) paid by the
Interested Stockholder for any shares of Common Stock acquired by it (1) within
the two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date"), or (2) in the
transaction in which it became an Interested Stockholder, whichever is higher;
B. The Fair Market Value per share of Common Stock (1) on
the Announcement Date, or (2) on the date on which the Interested Stockholder
became an Interested Stockholder (the "Determination Date"), whichever is
higher; or
C. The Fair Market Value per share of Common Stock
determined pursuant to the immediately preceding subparagraph B, multiplied by
the ratio of (1) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealer's fees) paid by the
Interested Stockholder for any shares of Common Stock acquired by it within the
two-year period immediately prior to the Announcement Date, to (2) the Fair
Market Value per share of Common Stock on the first day in such two-year period
upon which the Interested Stockholder acquired any shares of Common Stock.
(ii) The consideration to be received by holders of a particular
class of outstanding Voting Stock shall be in cash or in such form as the
holders of the Voting Stock may approve as a class.
(iii) The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of shares of any class or
series of outstanding Voting Stock, other than Common Stock, shall be at least
equal to the highest amount determined under clauses (A), (B) or (C) below.
A. The highest per share price (including any brokerage
commissions, transfer taxes, and soliciting dealers' fees) paid by or on behalf
of the Interested Stockholder for any share of such class or series of
beneficial ownership of shares of such class or series of Voting Stock (1)
within the two-year period immediately prior to the Announcement Date or (2) in
the transaction in which it became an Interested Stockholder, whichever is
higher;
B. The Fair Market Value per share of such class or series
of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher; and
C. The highest preferential amount per share to which the
holders of shares of such class or series of Voting Stock would be entitled, if
any, in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, regardless of whether the Business Combination
to be consummated constitutes such an event.
(iv) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (a)
there shall have been (1) no reduction in the annual rate of dividends paid on
the Common Stock (except as necessary to reflect any subdivision or split of
the Common Stock), except as approved by a seventy-five percent (75%) vote of
the Continuing Directors, and (2) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock, unless
the failure to so increase such annual rate is approved by a seventy-five
percent (75%) vote of the Continuing Directors; and (b) such Interested
Stockholder shall not have become the Beneficial Owner of any newly issued
shares of Voting Stock except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder, and except as
necessary to reflect any subdivision or split of the Common Stock.
(v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in anticipation of
or in connection with a Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act or Rules) shall be mailed to
stockholders of the Corporation at least thirty (30) days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
(1) CERTAIN DETERMINATIONS. The Continuing Directors, acting as a
committee, shall have the power and duty to determine for the purposes of this
Article FIFTH, on the basis of information known to them after reasonable
inquiry, (i) whether a person is an Interested Stockholder, (ii) the number of
shares of Voting Stock beneficially owned by any person, (iii) whether a person
is an Affiliate or Associate of another, and (iv) the Fair Market Value of the
assets which are the subject of any Business Combination, or the consideration
to be received for the issuance or transfer of securities by the Corporation or
any Subsidiary in any Business Combination, including whether the aggregate
Fair Market Value is five million dollars ($5,000,000) or more.
(1) FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS. Nothing contained
in this Article FIFTH shall be construed to relieve any Interested Stockholder
from any fiduciary obligation imposed by law.
(1) AMENDMENT AND REPEAL. Notwithstanding any other provisions of this
Certificate of Incorporation or the bylaws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, this
Certificate of Incorporation or the bylaws of the Corporation), the affirmative
vote of the holders of at least eighty percent (80%) of the outstanding shares
of the Voting Stock of the Corporation shall be required to amend, modify or
repeal, or to adopt any provisions inconsistent with this Article FIFTH of this
Certificate of Incorporation; provided, however, that this Article FIFTH may be
amended, modified or repealed, and any such new provision may be added, upon
the affirmative vote of the holders of not less than a majority of the total
voting power of all outstanding shares of the Voting Stock of the Corporation,
if such amendment, modification, repeal or addition shall first have been
approved and recommended by a resolution adopted by a seventy-five percent
(75%) vote of the Continuing Directors.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths (3/4) in value of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this Corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
EIGHTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholder or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors.
(a) The number of directors constituting the entire Board shall be
not less than three nor more than nine as fixed from time to time by vote of a
majority of the entire board, provided, however, that the number of directors
shall not be reduced so as to shorten the term of any director at the time in
office, and provided further, that the number of directors constituting the
entire Board shall be six (6) until otherwise fixed by a majority of the entire
board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in numbers as the then total number of directors constituting the
entire Board permits, with the term of office of one class expiring each year.
At the initial annual meeting of stockholders adopting of this Article Eighth
directors of the first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of the second class
shall be elected to hold office for a term expiring at the second succeeding
annual meeting, and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any directorships
resulting from any increase in the number of directors, may
be filled by the Board of Directors, acting by a majority of the directors then
in office, although less than a quorum, and any directors so chosen shall hold
office until the next election of the class for which such directors shall have
been chosen and until their successors shall be elected and qualified.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have
the right, voting separately as a class, to elect one or more directors of the
Corporation, the terms of the director or directors elected by such holders
shall expire at the next succeeding annual meeting of stockholders. Subject to
the foregoing, at each annual meeting of stockholders the successors to the
class of directors whose term shall then expire shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
(c) Notwithstanding any other provisions of this Certificate of
Incorporation or the Bylaws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, this Certificate of
Incorporation or the Bylaws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any time, but only for
cause and only by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have
the right, voting separately as a class, to elect one or more directors of the
Corporation, the provisions of section (c) of this Article EIGHTH shall not
apply with respect to the director or directors elected by such holders of
Preferred Stock.
2. After the original or other Bylaws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware and, after the Corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may
be exercised by the Board of Directors of the Corporation.
3. Whenever the Corporation shall be authorized to issue only one class
of stock, each outstanding share shall entitle the holder thereof to notice of,
and the right to vote at, any meeting of stockholders. Whenever the
Corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under the
provisions of this Certificate of Incorporation shall entitle the holder
thereof to the right to vote at any meeting of stockholders except as the
provisions of paragraph (b)(2) of Section 242 of the General Corporation Law of
the State of Delaware shall otherwise require; provided, that no share of any
such class which is otherwise denied voting power shall entitle the holder
thereof to vote upon the increase or decrease in the number of authorized
shares of said class.
NINTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by subsection (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
TENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the Corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
DATED: May ____, 1996
___________________________________
Philip H. Coelho, President
and Chief Executive Officer
ATTEST:
__________________________________
Charles de B. Griffiths, Secretary
<PAGE>
<PAGE>
THERMOGENESIS CORP.
11431 Sunrise Gold Circle, Suite A, Rancho Cordova, CA 95742
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip H. Coelho and Charles de B.
Griffiths, and each of them, as proxies with the power to appoint his or her or
their successor, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of THERMOGENESIS CORP. ("the
Company"), held of record by the undersigned on April 19, 1996, at the
Annual Meeting of Stockholders to be held on May 29, 1996, at 10:00 a.m. (PDT),
at the Courtyard by Marriott, located at 10683 White Rock Road, Rancho Cordova,
California, 95670, and at any and all adjournments thereof.
1. Election of Directors.
FOR all nominees listed below _____ WITHOUT AUTHORITY ____
(except as marked to the contrary below) (to vote for all Nominees below)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Philip H. Coelho Charles de B. Griffiths Sid V. Engler
Noel K. Atkinson Walter J. Ludt, III
2.Approval of an Amendment to increase the number of shares of common stock
underlying the 1994 Stock Option Plan.
FOR _______ AGAINST _________ ABSTAIN _____
3.Approval of an Amendment to the Certificate of Incorporation to provide for a
classified board of directors.
FOR ________ AGAINST ____________ ABSTAIN _____
4. Approval of an Amendment to the Certificate of Incorporation to provide
for a "fair pricing" provision.
FOR ________ AGAINST ____________ ABSTAIN _____
5.Approval of an Amendment to the Certificate of Incorporation to provide for a
one-for-two consolidation of common stock.
FOR _________ AGAINST ____________ ABSTAIN _____
6.In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting, including adjournment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4, AND 5, AND IN THE DISCRETION OF THE
PROXIES FOR ANY OTHER MATTER THAT IS PRESENTED.
Please sign exactly as your name appears on the share certificates. 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 officer. If a partnership, please sign in partnership name by
authorized person.
_______________________ _________________________
Name (Print) Name (Print) (if held jointly)
Dated: ____ ________________________ ___________________________
Signature Signature (if held jointly)
____________________________________________________
____________________________________________________
(Address) (Address)
I will ___ will not ___
attend the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
