<PAGE> 1
Preliminary Copy--Confidential, For the Information of the Securities and
Exchange Commission Only
As Filed with the Securities and Exchange Commission on November ___, 1995
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/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 Section 240.14a-12
ECOGEN INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the 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 Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
ECOGEN INC.
2005 CABOT BOULEVARD WEST
LANGHORNE, PENNSYLVANIA 19047-1810
(215) 757-1590
December ___, 1995
Dear Fellow Stockholder:
We have recently completed fiscal year 1995 and I will be writing to you
shortly regarding the progress our Company has made in the last twelve months.
This letter, however, is for the specific purpose of addressing a very
important issue that is now before our Company.
On January __, 1995 there will be a Special Meeting of Stockholders to
consider and vote upon a proposal to amend the Company's Restated Certificate
of Incorporation (the "Amendment") which will effect a one-for-five reverse
stock split (the "Reverse Split") of the oustanding shares of Common Stock of
the Company. By this letter, I am personally requesting each stockholder to
vote.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE AMENDMENT TO
EFFECT THE REVERSE SPLIT IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND STRONGLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.
We believe the proposed Amendment is critical to the Company's continued
growth and development. The Reverse Split will result in additional authorized
and unissued shares of Common Stock that are necessary for the completion of
the recently announced strategic alliance with Monsanto Company. As we have
announced, Ecogen and Monsanto have signed a letter of intent to conclude a
collaboration that we believe will greatly enhance Ecogen's future. This
collaboration with Monsanto will enable Ecogen to focus on Bt bio-insecticides
while capitalizing on our Bt gene library and technology in the area of
in-plant applications, an area that we are not presently pursuing. The
proposed transaction will also provide the Company with $18 million upon the
closing of the transaction and an additional $7 million for additional
research and development work over the next four years. THIS TRANSACTION WITH
MONSANTO, HOWEVER, IS DEPENDENT ON YOUR APPROVAL OF THE AMENDMENT WHICH WILL
ALLOW THE COMPANY TO SELL $10 MILLION OF COMMON STOCK TO MONSANTO AT A PRICE
NO LESS THAN $2.12 PER SHARE ON A PRE-REVERSE SPLIT BASIS OR $10.60 PER SHARE
ON A POST-REVERSE SPLIT BASIS. We believe the Amendment will also allow the
Company to pursue strategic alliances with product distributors and other
business opportunities such as the possible acquisition of the remaining
outstanding stock of Ecogen Technologies I Incorporated.
We further believe that the Reverse Split will enhance the marketability
and acceptance of the Company's Common Stock by the financial community and the
investing public.
The approval of a majority of the outstanding shares of Common Stock and
Series B Convertible Preferred Stock, voting together as a single class, is
necessary to approve the Amendment. I ask that you please complete, date, sign
and return the accompanying proxy card in the enclosed prepaid return envelope
whether or not you plan on attending the Special Meeting. If you attend the
Special Meeting, you may vote in person whether or not your have previously
returned your proxy.
Information concerning the proposed Amendment is contained in the attached
Notice of Special Meeting of Stockholders and Proxy Statement and I encourage
you to give these materials your careful attention and consideration.
Thank you for your continued support of our Company. With the approval of
the Amendment, I believe Ecogen will be well positioned for a prosperous
future.
Sincerely,
James P. Reilly, Jr.
Chairman and Chief
Executive Officer
<PAGE> 3
ECOGEN INC.
2005 CABOT BOULEVARD WEST
LANGHORNE, PENNSYLVANIA 19047
(215) 757-1590
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [JANUARY __], 1996
-----------------------
TO THE STOCKHOLDERS OF ECOGEN INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders
of Ecogen Inc., a Delaware corporation (the "Company"), will be held at
[_____________], Pennsylvania, on [_______________], [JANUARY __], 1996,
at [________ a.m.], local time, for the following purposes:
1. To consider and vote upon a proposal to approve an
amendment to the Restated Certificate of Incorporation of the Company (the
"Amendment") which will effect a reverse stock split (the "Reverse Split") of
the Company's outstanding shares of Common Stock on the basis of one new share
of Common Stock for each five outstanding shares of Common Stock.
2. To transact such other business as may properly come
before the Special Meeting.
The Board of Directors has fixed the close of business on
[DECEMBER __], 1995 as the record date, and only holders of record of Common
Stock and Series B Convertible Preferred Stock of the Company at the close of
business on that date are entitled to notice of and to vote (together as a
single class) at the Special Meeting, and any adjournment or postponement
thereof.
A form of proxy and a proxy statement containing more detailed
information with respect to the matters to be considered at the Special Meeting
accompany this notice.
We invite all stockholders to attend the Special Meeting in
person. HOWEVER, TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED AND VOTED IN
ACCORDANCE WITH YOUR WISHES AT THE SPECIAL MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE. If you attend the meeting, you may vote in person even though
you have sent in your proxy.
By Order of the Board of Directors,
Richard A. Deak
Langhorne, Pennsylvania Secretary
December ___, 1995
<PAGE> 4
ECOGEN INC.
2005 CABOT BOULEVARD WEST
LANGHORNE, PENNSYLVANIA 19047
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY ___, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Ecogen Inc. (the
"Company") for use at the Special Meeting of Stockholders to be held on
[JANUARY ___], 1996 and any adjournment or postponement thereof (the "Special
Meeting"). This Proxy Statement and the accompanying proxy are first being
mailed on or after [DECEMBER ___,] 1995 to holders of record at the close of
business on December ___, 1995 (the "Record Date") of the Company's outstanding
shares of Common Stock, par value $.01 per share (the "Common Stock") and
Series B Convertible Preferred Stock, par value $.01 per share (the "Series B
Preferred Stock").
VOTING
Only holders of record of the Common Stock and Series B
Preferred Stock as of the close of business on the Record Date will be entitled
to notice of and to vote (together as a single class) at the Special Meeting or
any adjournment or postponement thereof.
Holders of Common Stock and Series B Preferred Stock are
entitled to one vote per share on any matter which may properly come before the
Special Meeting. The presence in person or by properly executed proxy of the
holders of a majority of the outstanding combined number of shares of Common
Stock and Series B Preferred Stock is necessary to constitute a quorum and
to permit action to be taken by the stockholders at the Special Meeting.
The affirmative vote of the holders of at least a majority of
the outstanding shares of Common Stock and Series B Preferred Stock voting
as a single class is required to approve the Amendment to effect the Reverse
Split (defined below). Under the Company's bylaws and Delaware law, shares
represented by proxies that reflect abstentions or "broker non-votes" (i.e.,
shares held by a broker or nominee which are represented at the Special
Meeting, but with respect to which such broker or nominee is not empowered to
vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
Abstentions will have the same effect as votes against the proposed Amendment
to effect the Reverse Split. Broker non-votes, however, will be treated as
unvoted for purposes of determining whether a proposal is approved and will
not be counted as votes either for or against such proposal.
All shares of Common Stock and Series B Preferred Stock
that are represented at the Special Meeting by properly executed proxies
received prior to or at the Special Meeting and not revoked will be voted at
the Special Meeting in accordance with the instructions indicated in such
proxies. If no instructions are indicated, such proxies will be voted FOR the
Amendment to effect the Reverse Split.
<PAGE> 5
ADJOURNMENT
In the event that a quorum is not present at the time the
Special Meeting is convened, or if for any other reason the Company believes
that additional time should be allowed for the solicitation of proxies, the
Company may adjourn the Special Meeting with or without a vote of the
stockholders. If the Company proposes to adjourn the Special Meeting by a vote
of the stockholders, the persons named in the enclosed form of proxy will vote
all shares of Common Stock and Series B Preferred Stock for which they have
voting authority in favor of such adjournment.
REVOCABILITY OF PROXY
Any proxy given pursuant to this solicitation may be revoked
by the person giving it at any time before it is voted. Proxies may be revoked
by (a) giving written notice of revocation to the Secretary of the Company at
or before the Special Meeting, (b) duly executing a subsequent proxy relating
to the same shares of Stock and delivering it to the Secretary of the Company
at or before the Special Meeting, or (c) attending the Special Meeting and
voting in person (although attendance at the Special Meeting will not in and of
itself constitute a revocation of a proxy).
SOLICITATION
The Company will bear the cost of the proxy solicitation. In
addition to solicitation by mail, the Company will request banks, brokers and
other custodian nominees and fiduciaries to supply proxy material to the
beneficial owners of Common Stock and Series B Preferred Stock of whom they
have knowledge, and may reimburse them for their expenses in so doing. Certain
directors, officers and other employees of the Company, not specially employed
for such purpose, may solicit proxies, without additional compensation therefor,
by personal interview, mail, telephone and other means. The Company may also
engage and pay the costs of an independent proxy solicitation firm to solicit
proxies for the Special Meeting.
APPROVAL OF AN AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO EFFECT A ONE-FOR-FIVE REVERSE STOCK
SPLIT OF THE COMPANY'S OUTSTANDING COMMON STOCK
GENERAL SUMMARY
The Board of Directors of the Company has unanimously
approved, subject to stockholder approval, a proposed amendment to the
Company's Restated Certificate of Incorporation (the "Amendment") which will
effect a one-for-five reverse stock split (the "Reverse Split") of the
Company's outstanding shares of Common Stock. On December ____, 1995, the
Company had 42,000,000 shares of authorized Common Stock of which _____ shares
were issued and outstanding or reserved for issuance pursuant to outstanding
options, warrants, convertible preferred stock and other securities. Thus, at
December ___, 1995 the Company had only _____ authorized shares of Common
Stock unissued and not reserved for issuance. Had the Amendment to effect the
Reverse Split been approved and effective as of December ___, 1995, the
Company would have had 42,000,000 authorized shares of Common Stock, ________
shares of Common Stock issued and outstanding or reserved for issuance
and ________ authorized shares of Common Stock unissued and not reserved for
any purpose.
The authorized number of shares of the Company's Preferred
Stock, $.01 par value per share (the "Preferred Stock") will remain unchanged
at 7,500,000 shares. The number of issued and outstanding
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<PAGE> 6
shares of Preferred Stock, which consist of 35,000 shares of Series B
Convertible Preferred Stock and __________ shares of Series C Convertible
Preferred Stock (collectively, the "Convertible Preferred Stock"), will also be
unchanged.
The complete text of the proposed Amendment is set forth in
Exhibit A to this Proxy Statement. The final text of the Amendment is subject
to change in order to meet the requirements as to form that may be requested or
required by the Secretary of State's Office of the State of Delaware.
If the requisite approval by the Company's stockholders is
obtained, the Amendment and Reverse Split will be effective upon the close of
business on the date of filing of the Amendment with the Delaware Secretary of
State (currently scheduled to occur on [JANUARY ___], 1996). Each certificate
representing shares of Common Stock outstanding immediately prior to the
Reverse Split (the "Old Shares") will be deemed automatically, without any
action-on the part of the stockholders, to represent one-fifth the number of
shares of Common Stock after the Reverse Split (the "New Shares"). A
stockholder's proportionate ownership interest in the Company will remain
unchanged by the Reverse Split. The New Shares issued pursuant to the Reverse
Split will be fully paid and nonassessable. The voting and other rights of the
Common Stock will not be altered by the Amendment or the Reverse Split.
No fractional New Shares will be issued as a result of the
Reverse Split. In lieu thereof, each stockholder whose Old Shares are not
evenly divisible by five will receive one additional New Share for the
fractional New Share that such stockholder would otherwise be entitled to
receive as a result of the Reverse Split. When the Reverse Split becomes
effective, stockholders will be asked to surrender certificates representing
Old Shares in accordance with the procedures set forth in a letter of
transmittal to be sent by the Company. Upon such surrender, a certificate
representing the New Shares will be issued and forwarded to the stockholders;
however, each certificate representing Old Shares will continue to be valid and
represent New Shares equal to one-fifth the number of Old Shares (plus one
additional New Share where such Old Shares are not evenly divisible by five).
Persons who hold their shares in brokerage accounts or "street name" will not
be required to take any further actions to effect the exchange of their
certificates.
The "Designated Price" and the "Original Issuance Market
Price" in effect for each series of Convertible Preferred Stock immediately
prior to the Reverse Split shall be proportionately increased upon
effectiveness of the Reverse Split and the number of shares of Common Stock
issuable upon conversion thereof shall be proportionately reduced on a
five-for-one basis. Holders of Preferred Stock are not required to take any
action with respect to their certificates.
PURPOSE OF THE REVERSE SPLIT
Upon the effectiveness of the Amendment, the number of
authorized shares of Common Stock unissued and not reserved for issuance will
increase from approximately ________________ to approximately ________________
shares. The Board of Directors believes that an increase in the authorized
number of shares of Common Stock available for issuance is essential to the
Company's continued growth and development. UNLESS APPROVAL OF THE AMENDMENT IS
OBTAINED, THE COMPANY WILL BE UNABLE TO COMPLETE THE RECENTLY ANNOUNCED
STRATEGIC ALLIANCE WITH MONSANTO COMPANY WHICH, IF CONSUMMATED, IS EXPECTED TO
PROVIDE THE COMPANY WITH $25 MILLION OF MUCH NEEDED CAPITAL (OF WHICH $18
MILLION WILL BE RECEIVED BY THE COMPANY AT OR PRIOR TO CLOSING) AND ENHANCE ITS
LONG-TERM BUSINESS PROSPECTS. The availability of additional authorized shares
of Common Stock will also enable the Company to pursue strategic alliances with
product distributors and other business opportunities as they arise including
for example the possible acquisition of the remaining outstanding shares of
Ecogen Technologies I Incorporated which is currently over 70% owned by the
Company.
Further, the Board of Directors believes that the Amendment
and Reverse Split are desirable for several additional reasons. During the
fall of 1994, the Company's principal shareholder was forced to release and
sell into the public markets over nine million shares of Common Stock. The
release of these
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<PAGE> 7
shares overwhelmed the financial market for the Company's shares,
causing a precipitous decline in market value. In January 1995, the Company
issued an additional 4.1 million shares of Common Stock in connection with the
successful acquisition of 70% of Ecogen Technologies I Incorporated, thereby
solidifying the Company's control over its core technology. From January 1,
1995 through November 30, 1995 the closing sales price of the Common Stock has
ranged from $0.75 to $3.75 per share. The Reverse Split will have the effect
of reducing the number of outstanding shares of Common Stock without effecting
any material change in the proportionate ownership interest of Common
Stockholders in the Company. The Board believes that the Reverse Split may
increase the trading price for shares of Common Stock on the Nasdaq National
Market and thereby enhance the acceptability of the Common Stock by
institutional investors (many of whom will not invest in securities which trade
at a price of under $5 per share), and the financial community and the
investing public at large.
Further, a variety of brokerage house policies and practices
tend to discourage individual brokers within those firms from dealing
with lower priced stocks. Some of those policies and practices pertain to the
payment of brokers' commissions and to time-consuming procedures that make the
trading of lower priced stocks economically unattractive to brokers. In
addition, the structure of trading commissions also tends to have an adverse
impact upon investors in lower priced securities because the brokerage
commission on a sale of lower priced stock generally represents a higher
percentage of the sales price than the commission on a relatively higher priced
issue. The proposed Reverse Split should result in a price level for the
Common Stock that will reduce, to some extent, the effect of these policies and
practices of brokerage firms and diminish the adverse impact that minimum
trading commissions may have on the market for the Company's Common Stock. The
potential increase in price may also encourage new interest and additional
trading in the Common Stock.
However, there can be no assurance that the market price for
the Common Stock will increase proportionately or at all as a result of the
Reverse Split or that any of the other potentially favorable consequences of
the Reverse Split will occur. Stockholders should note that the Board of
Directors cannot predict what effect the Reverse Split will have on the market
price of the Common Stock. The Company is aware that not all companies which
have effected reverse stock splits have maintained their market capitalization
after their reverse stock split.
EFFECT OF THE REVERSE SPLIT
The Reverse Split will be effected by means of filing the
Amendment with the Delaware Secretary of State. Assuming approval of the
Reverse Split by the requisite vote of the stockholders at the Special Meeting,
the Amendment will thereafter be filed with the Delaware Secretary of State as
promptly as practicable and the Reverse Split will become effective as of 5:00
p.m Eastern Standard Time on the date of that filing (the "Effective Date").
After the Reverse Split, without any further action on the part of the Company
or the stockholders, certificates representing Old Shares will thereafter
represent New Shares equal to one-fifth of the number of Old Shares.
The Company currently has authorized capital stock of
49,500,000 shares. The Reverse Split will not affect the number of authorized
shares of Common Stock or Preferred Stock of the Company. The Reverse Split
also will not effect the number of shares of Convertible Preferred Stock
currently issued and outstanding.
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<PAGE> 8
As of [DECEMBER __], 1995, the number of issued and
outstanding Old Shares was [__________]. The following table illustrates the
principal effects of the proposed Reverse Split and decrease in outstanding
Common Stock assuming that no additional shares of Common Stock are issued
prior to the Effective Date as a result of the exercise of any options or
warrants or the conversion of any outstanding shares of Convertible Preferred
Stock and without giving effect to fractional shares:
<TABLE>
<CAPTION>
Authorized Authorized Outstanding Outstanding
Prior to After Prior to After
Reverse Reverse Reverse Reverse
Split Split Split Split
------------ ------------- -------------- --------------
<S> <C> <C> <C> <C>
Common Stock 42,000,000 42,000,000 [ ] [ ]
Series B Preferred Stock 35,000 35,000 35,000 35,000
Series C Preferred Stock [ ] [ ] [ ] [ ]
Preferred Stock 7,500,000 7,500,000 [ ] [ ]
</TABLE>
As of December __, 1995, the Company had ________ shares of Common
Stock reserved for issuance pursuant to the Ecogen Inc. Stock Option Plan (the
"Plan"), warrant agreements to purchase Common Stock (the "Warrants") between
the Company and various third parties (the "Warrant Agreements"), the terms of
the Convertible Preferred Stock and certain other outstanding options, warrants
or rights for the purchase or issuance of shares of Common Stock. Under the
terms of the Plan, the Warrant Agreements, the Convertible Preferred Stock and
the other securities, the number of shares reserved for issuance will be
reduced proportionately by a factor of five.
The Common Stock is currently registered under Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act") and, as a result, the
Company is subject to the periodic reporting and other requirement of the
Exchange Act. The Common Stock is admitted for trading on the Nasdaq National
Market. The number of holders of the Common Stock on the Record
Date was [XXXXX]. Accordingly, the Company does not anticipate that the
Reverse Split will result in a significant reduction in the number of such
holders. The Reverse Split is not expected to affect the registration of
the Common Stock under the Exchange Act or its status as a Nasdaq National
Market security.
FEDERAL INCOME TAX CONSEQUENCE OF THE REVERSE SPLIT
The Company has not sought and will not seek an opinion of counsel or
a ruling from the Internal Revenue Service regarding the federal income tax
consequences of the Reverse Split. However, the Company believes that because
the Reverse Split is not part of a plan to periodically increase a
stockholder's proportionate interest in the assets or earnings and profits of
the Company, the Reverse Split will have the following effects. The receipt of
Common Stock in the Reverse Split should not result in any taxable gain or loss
to stockholders for federal income tax purposes. If the Reverse Split is
approved, the tax basis of Common Stock received as a result of the Reverse
Split will be equal, in the aggregate, to the basis of the shares exchanged for
the Common Stock. For tax purposes, the holding period of the shares
immediately prior to the Effective Date will be included in the holding period
of the Common Stock received as a result of the Reverse Split.
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<PAGE> 9
CERTIFICATES AND FRACTIONAL SHARES
As soon as practicable after the Effective Date, the Company will
send a letter of transmittal to each holder of record of Old Shares outstanding
on the Effective Date. The letter of transmittal will contain instructions for
the surrender of certificate(s) representing such Old Shares to
[________________________________________], the Company's exchange
agent (the "Exchange Agent"). Upon proper completion and execution of the
letter of transmittal and return thereof to the Exchange Agent, together with
the certificate(s) representing Old Shares, a stockholder will be entitled to
receive a certificate representing the number of New Shares into which his or
her Old Shares have been reclassified and changed as a result of the Reverse
Split.
Stockholders should not submit any Common Stock certificates until
requested to do so. No new certificate will be issued to a stockholder until
he or she has surrendered his or her outstanding certificate(s), together with
the properly completed and executed letter of transmittal, to the Exchange
Agent.
No fractional New Shares will be issued as a result of the Reverse
Split. In lieu thereof, each stockholder whose Old Shares are not evenly
divisible by five will receive one additional New Share for the fractional New
Share that such stockholder would otherwise be entitled to receive as a result
of the Reverse Split. After the Reverse Split becomes effective, stockholders
will be asked to surrender certificates representing Old Shares in accordance
with the procedures set forth in a letter of transmittal to be sent by the
Company. Upon such surrender, a certificate representing the New Shares will
be issued and forwarded to the stockholders; however, each certificate
representing Old Shares will continue to be valid and represent New Shares
equal to one-fifth the number of Old Shares (plus one additional New Share
where such Old Shares are not evenly divisible by five).
STATUTORY ACCOUNTING CONSEQUENCES
The par value of the Common Stock will remain at $.01 per share
following the Reverse Split, and the number of shares of Common Stock
outstanding will be reduced. As a consequence, the aggregate par value of the
outstanding Common Stock will be reduced, while the aggregate capital in excess
of par value attributable to the outstanding Common Stock will be
correspondingly increased for statutory accounting purposes under the Delaware
General Corporation Law. Although it is currently expected that this increase
in capital in excess of par value will continue to be treated as capital for
statutory accounting purposes, the Board of Directors of the Company has the
authority to transfer some or all of such increased capital in excess of par
value from its statutory capital account to surplus. The additional statutory
surplus created thereby would then be available for general corporate purposes
without further action by the stockholders. The Company currently has no plans
to use any surplus so created.
MISCELLANEOUS
The Board of Directors may abandon the proposed Amendment to effect the
Reverse Split at any time before or after the Special Meeting and prior to the
Effective Date if for any reason the Board of Directors deems it advisable to
abandon the proposal. The Board of Directors may consider abandoning the
proposed Amendment if it determines, in its sole discretion, that the Amendment
would adversely affect the ability of the Company to raise capital or the
liquidity of the Common Stock, among other things. In addition, the Board of
Directors may make any and all changes to the Amendment that it deems necessary
or appropriate to file the Amendment with the Delaware Secretary of State to
give effect to the Amendment.
RECOMMENDATION AND VOTE
The affirmative vote of a majority of the shares of Common Stock and
Series B Preferred Stock outstanding on the Record Date, voting together as
a single class, is required to approve the Amendment. The Board of Directors
is of the opinion that the Amendment is advisable and in the best interests of
the Company and recommends a vote FOR the approval of the Amendment. All
proxies will be voted to approve the Amendment unless a contrary vote is
indicated on the enclosed proxy card.
OTHER BUSINESS
The Board of Directors does not intend to present to the meeting any
business other than the matters described in this proxy statement. If any
other matter is presented to the meeting which under applicable proxy
regulations need not be included in this proxy statement or which the Board of
Directors did not know would be presented within a reasonable time before this
solicitation, the persons named in the accompanying
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<PAGE> 10
proxy will have discretionary authority to vote proxies with respect to such
matter in accordance with their best judgment.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of [DECEMBER 1], 1995,
with respect to the beneficial ownership of the Company's Common Stock and
Convertible Preferred Stock by all persons known by the Company to be the
beneficial owners of more than 5% of its outstanding capital stock by each
director, by each executive officer, and by all executive officers and
directors as a group. Except as indicated in the footnotes to the table, the
persons named in the table have sole voting and investment power with respect
to all shares of capital stock beneficially owned by them.
<TABLE>
<CAPTION>
Number of Percentage
Shares of of
Common Common
Name and Address (1) Stock (10) Stock
- ---------------- ------------- -----------
<S> <C> <C>
John E. Davies (2) 521,573 ___%
James P. Reilly, Jr. (3) 143,333 *
Richard A. Deak (4) 19,583 *
Mary E. Paetzold (5) 50,000 *
Leigh English (6) ______
Patrick Owen Burns (7) 14,167 *
Jack D. Early (8) 9,205 *
Lowell N. Lewis (9) 19,867 *
All executive officers 912,949 ___%
and directors as a group
(eight persons) (2)(3)(4)
(5)(6)(8) and (9)
</TABLE>
- -----------------
* Indicates amount is less than 1%.
(1) The addresses of all officers, directors and nominees for director of
the Company listed above are in care of the Company. None of the
officers or directors own any shares of Convertible Preferred Stock.
(2) Includes 170,444 shares held by Mr. Davies' wife. Mr. Davies
disclaims beneficial ownership of these shares. Includes 282,083
shares which Mr. Davies has the right to acquire upon exercise of
stock options under the Plan. Does not include 22,917 shares which
Mr. Davies has the right to acquire upon exercise of stock options
under the Plan which are not yet exercisable.
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<PAGE> 11
(3) Includes 128,333 shares which Mr. Reilly has the right to acquire upon
exercise of stock options under the Plan. Does not include 236,667
shares which Mr. Reilly has the right to acquire upon exercise of
stock options under the Plan which are not presently exercisable.
(4) Includes 19,583 shares which Mr. Deak has the right to acquire upon
exercise of stock options under the Plan. Does not include 85,417
shares which Mr. Deak has the right to acquire upon exercise of stock
options under the Plan which are not presently exercisable.
(5) Includes 50,000 shares which Ms. Paetzold has the right to acquire
upon exercise of stock options under the Plan. Does not include
100,000 shares which Ms. Paetzold has the right to acquire upon
exercise of stock options under the Plan which are not presently
exercisable.
(6) Includes _____ shares which Dr. English has the right to acquire upon
the exercise of stock options under the Plan. Does not include
________ shares which Dr. English has the right to acquire upon
exercise of stock options under the Plan which are not presently
exercisable.
(7) Includes 14,167 shares which Mr. Burns has the right to acquire upon
the exercise of stock options under the Plan. Does not include 833
shares which Mr. Burns has the right to acquire upon exercise of stock
options under the Plan which are not presently exercisable.
(8) Includes 9,205 shares which Dr. Early has the right to acquire upon
the exercise of stock options under the Plan. Does not include 833
shares which Dr. Early has the right to acquire upon exercise of stock
options under the Plan which are not presently exercisable.
(9) Includes 14,167 shares which Dr. Lewis has the right to acquire upon
exercise of stock options under the Plan. Does not include 833 shares
which Dr. Lewis has the right to acquire upon exercise of stock
options under the Plan which are not presently exercisable.
(10) Includes and gives pro forma effect to stock options, warrants and
shares of Convertible Preferred Stock, which are presently exercisable
or convertible (as the case may be), held by executive officers and
directors.
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<PAGE> 12
STOCKHOLDER PROPOSALS FOR THE COMPANY'S 1996 ANNUAL MEETING
Stockholder proposals intended to be presented at the
Company's 1996 Annual Meeting of Stockholders, which is expected to be held on
[____________________, 1996], are required to be received at the principal
executive offices of the Company no later than [________________, 199_] for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
By Order of the Board of Directors
Richard A. Deak
Secretary
Dated: [DECEMBER ___], 1995
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<PAGE> 13
Preliminary Copy -- Confidential, For Use of the Securities and Exchange
Commission Only.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ECOGEN INC.
The undersigned, a Stockholder of ECOGEN INC., a Delaware corporation, (the
"Company") hereby appoints _________________________________ and
______________________________, and each of them, the proxies of the
undersigned, each with full power of substitution, to attend, vote and act for
the undersigned at the Special Meeting of Stockholders of the Company, to be
held on [JANUARY __], 1996, and any postponements or adjournments thereof (the
"Special Meeting"), and, in connection herewith, to vote and represent all of
the shares of the Company which the undersigned would be entitled to vote, as
follows:
1. To approve and adopt an amendment to the Company's Restated
Certificate of Incorporation to effect a reverse stock split of the
presently issued and outstanding shares of Common Stock, par value
$.01 per share, of the Company (the "Common Stock") on the basis of
one new share of Common Stock for each five issued and outstanding
shares of Common Stock.
FOR AGAINST ABSTAIN
/ / / / / /
2. To transact such other business as may properly come before the
Special Meeting.
FOR AGAINST ABSTAIN
/ / / / / /
The undersigned hereby revokes all other proxies to vote at such Special
Meeting, and hereby ratifies and confirms all that said proxies, and each of
them, may lawfully do by virtue hereof.
This Proxy will be voted in accordance with the instructions set forth above.
This Proxy will be treated as a GRANT OF AUTHORITY TO VOTE FOR the amendment to
the Company's Restated Certificate of Incorporation, and as said proxy shall
deem advisable on such other business as may come before the Special Meeting,
unless otherwise directed.
The undersigned acknowledges receipt of a copy of the notice of Special Meeting
and accompanying Proxy Statement dated [DECEMBER __], 1995 relating to the
Special Meeting.
Date:
------------------------------------
------------------------------------
Signature(s) of Stockholder(s)
(See Instructions Below)
The signature(s) herein should correspond exactly with the name(s) of the
Stockholder(s) appearing on the Stock Certificate. If stock is jointly held,
all joint owners should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If signer
is a corporation name, please sign the full corporation name, and give title of
signing officer.
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<PAGE> 1
EXHIBIT A
AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
"FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is forty-nine
million five hundred thousand (49,500,000) shares, of which
forty-two million (42,000,000) shall be shares of Common stock, the
par value of which is one cent ($.01) per share, amounting in the
aggregate to [four hundred twenty thousand dollars ($420,000)] and
seven million five hundred thousand (7,500,000) shall be shares of
Preferred Stock, the par value of which is one cent ($.01) per share,
amounting in the aggregate to Seventy Five Thousand Dollars ($75,000).
At the time this amendment becomes effective, and without any further
action on the part of the Corporation or its stockholders, each five
shares of Common Stock, par value $.01 per share, then issued and
outstanding shall be changed and reclassified into one fully paid and
non-assessable share of Common Stock, par value $.01. The capital
account of the corporation shall not be increased or decreased by such
change and reclassification. To reflect the said change and
reclassification, each certificate representing shares of Common
Stock, par value $.01 per share, theretofore issued and outstanding
shall represent one-fifth the number of shares of Common Stock, with a
par value of $.01 per share, issued and outstanding after such change
and reclassification; and the holder of record of each such
certificate shall be entitled to receive a new certificate
representing a number of shares of Common Stock, par value $.01, of
the kind authorized by this amendment, equal to one-fifth the number
of shares represented by said certificate for theretofore issued and
outstanding shares, so that upon this amendment becoming effective
each holder of record of five shares of the Common Stock will have or
be entitled to certificates representing in the aggregate one share of
Common Stock with par value $.01 of the kind authorized by this
amendment for each share of Common Stock with par value of $.01 of
which he was the holder prior to the effectiveness of this amendment."
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