<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the commission Only (as permitted by
rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ZILA, INC.
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(Name of Registrant As Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing the Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)0 and
0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
-------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing:
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
[ZILA INC. LOGO]
TO: ZILA SHAREHOLDERS
FROM: JOSEPH HINES, CHAIRMAN
SUBJECT: SECOND QUARTER REPORT & PROXY STATEMENT
Enclosed is Zila's Second Quarter Report for the period ending January 31, 1998.
Zila produced a substantial profit in the second quarter, which resulted from
growth among our diversified product lines, and from strategic acquisitions.
Management's objective is to continue the growth that has taken place during the
first half of this fiscal year.
Attached is a notice and proxy statement concerning the Board of Directors'
recommendation to authorize an additional 15 million shares of Common Stock.
The proposed increase in the number of shares of authorized Common Stock will
ensure that shares can be issued, if needed, in connection with stock splits,
stock dividends or acquisitions. The increased authorized shares could also be
used to make a hostile takeover attempt more difficult, by using the shares to
make a counter-offer for the shares of the bidder, or by selling shares to
dilute the bidder's voting power.
Management believes it will be beneficial for the Company to have the
flexibility to take advantage of accretive acquisition/growth opportunities as
they arise. The recommended stock authorization would have no impact on earnings
per share calculations.
The Board of Directors also recommends the ratification of the issuance of
Preferred Stock, the proceeds from which were used to complete the acquisition
of Oxycal Laboratories. This ratification would allow the Preferred Stock
shareholders full access to their conversion rights.
The Board of Directors recommends that you vote "yes" on the enclosed ballot.
Thank you for your continuing support.
Please sign your proxy and mail it today.
<PAGE> 3
ZILA, INC.
5227 NORTH 7TH STREET
PHOENIX, ARIZONA 85014
(602) 266-6700
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NOTICE AND PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 14, 1998
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To the Holders of Our Common Stock:
A Special Meeting of Stockholders (the "Meeting") of Zila, Inc. (the
"Company") will be held at the Marriott Camelback Inn located at 5402 E. Lincoln
Dr. Scottsdale, Arizona, on April 14, 1998 at 9:00 am, local time, to consider
and act upon the following matters:
1. A proposal requesting approval of an amendment to the
Certificate of Incorporation of the Company increasing the
number of authorized shares of the Company's $.001 par value
common stock (the "Common Stock") from fifty million shares to
sixty-five million shares.
2. A proposal requesting the ratification by the Stockholders of
the Company's October 1997 issuance of 30,000 shares of the
Company's Series A Redeemable Convertible Preferred Stock,
$.001 par value (the "Preferred Stock"). Ratification was not
necessary for completion of the transaction, however, the
agreement with the holders of the Preferred Stock called for
the Company to seek ratification if the price of the Common
Stock fell below $6.50 per share for five consecutive days
which occurred in late November 1997. Ratification will permit
the Company to issue shares of Common Stock upon the
conversion of the Preferred Stock in accordance with NASD
requirements.
3. To transact such other business as may properly come before
the Meeting. Management is presently aware of no other
business to be considered at the Meeting.
The Board of Directors has fixed the close of business on February 27,
1998 as the record date for the determination of Stockholders entitled to
receive notice of and to vote at the Meeting or any adjournment thereof. Shares
of Common Stock can be voted at the Meeting only if the holder is present at the
Meeting in person or by valid proxy.
This Notice and Proxy Statement was mailed on or about March 20, 1998 to all
Stockholders of record as of the record date. The officers and directors of the
Company cordially invite you to attend the Meeting.
Your attention is directed to the attached Proxy Statement.
By Order of the Board of Directors,
/S/ Janice L. Backus
Janice L. Backus
Vice President and Corporate Secretary
Phoenix, Arizona
March 20, 1998
IMPORTANT
STOCKHOLDERS ARE EARNESTLY REQUESTED TO DATE, SIGN AND MAIL THE ENCLOSED PROXY.
A POSTAGE PAID ENVELOPE IS PROVIDED FOR MAILING.
<PAGE> 4
ZILA, INC.
5227 NORTH 7TH STREET
PHOENIX, ARIZONA 85014
(602) 266-6700
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PROXY STATEMENT
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This Proxy Statement is furnished to the stockholders of Zila, Inc.
(the "Company"), a Delaware corporation, in connection with its solicitation of
proxies from holders of the Company's common stock, $.001 par value (the "Common
Stock"), to be voted at the Company's Special Meeting of Stockholders (the
"Meeting") to be held on April 14, 1998 (all holders of Common Stock are
referred to herein as the "Stockholders"). THE ENCLOSED PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS (THE "BOARD") OF THE COMPANY. The proxy materials were
mailed on or about March 20, 1998 to the Stockholders of record at the close of
business on February 27, 1998 (the "Record Date").
The purpose of the meeting will be (i) to seek approval for an
amendment to the Company's Certificate of Incorporation increasing the number of
shares of authorized Common Stock from fifty million shares to sixty-five
million shares, and (ii) to seek ratification of the October 1997 issuance of
30,000 shares of the Company's Series A Redeemable Convertible Preferred Stock,
par value $.001 per share (the "Preferred Stock"), which, if fully converted,
could potentially be converted into shares of Common Stock representing 20% or
more of the shares of Common Stock outstanding as of the date of issuance of the
Preferred Stock. THE COMPANY'S BOARD OF DIRECTORS (THE "BOARD") RECOMMENDS THAT
STOCKHOLDERS VOTE TO APPROVE THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION,
AND VOTE TO RATIFY THE ISSUANCE OF PREFERRED STOCK.
A person giving the enclosed proxy has the power to revoke it at any
time before it is exercised by (i) attending the Meeting and voting in person,
(ii) duly executing and delivering a proxy bearing a later date, or (iii)
sending a written notice of revocation to the Company's Secretary at 5227 North
7th Street, Phoenix, Arizona 85014. The Company will bear the cost of soliciting
proxies. In addition to the use of the mail, proxies may be solicited by
personal interview, telephone, telegraph or tele-facsimile. The Company has
arranged for Corporate Investors Communications, Inc. to serve as its proxy
solicitation agent. The fee for these services is estimated to be $6,000.00.
VOTING SECURITIES OUTSTANDING
As of the Record Date, there were 34,445,036 shares of Common Stock
issued and outstanding and 30,000 shares of Preferred Stock issued and
outstanding. Each holder of Common Stock issued and outstanding on the Record
Date is entitled to one vote for each such share held on each matter of business
to be considered at the Meeting. As of the Record Date, all issued and
outstanding shares of Common Stock represent a total of 34,445,036 votes. The
Preferred Stock is non-voting.
<PAGE> 5
The holders of a majority of all issued and outstanding shares of
Common Stock entitled to vote, present in person or represented by proxy, shall
constitute a quorum at the Meeting. Treasury shares, if any, will not be voted
and are not counted in determining the number of outstanding shares for voting
purposes.
If the enclosed proxy is properly executed and returned to the Company
in time to be voted at the Meeting, it will be voted as specified in the proxy,
unless it is properly revoked prior thereto. Votes cast in person or by proxy at
the Meeting will be tabulated by the inspectors of elections appointed for the
Meeting and will determine whether or not a quorum is present. The inspectors of
elections will treat abstentions as shares that are present and entitled to vote
for purposes of determining the presence of a quorum, but as unvoted for
purposes of determining the approval of any matter submitted to the Stockholders
for a vote. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter. The information included herein should be reviewed in
conjunction with the exhibit accompanying this Proxy Statement.
2
<PAGE> 6
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
The following table sets forth, as of January 30, 1998, the number and
percentage of outstanding shares of Common Stock beneficially owned by (a) each
person known by the Company to beneficially own more than 5% of such stock, (b)
each director of the Company, (c) each of the executive officers of the Company
required to be disclosed pursuant to Item 403(b) of Regulation S-K, and (d) all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED COMMON STOCK(12)
------------------ ------- ------------
<S> <C> <C>
Joseph Hines(1) 1,357,271(2) 3.9%
Clarence J. Baudhuin(1) 849,273(3) 2.5%
Edwin Pomerantz(1) 256,331(4) *
Rocco Anselmo(1) 49,492(5) *
Carl Schroeder(1) 25,000(6) *
Patrick M. Lonergan(1) 18,846(7) *
Michael S. Lesser(1) 7,500(8) *
Douglas L. Ayer(1) 142,750(9) *
Curtis M. Rocca III(1) 137,750(10) *
All officers and directors as a group 3,359,695(11) 9.7%
(11 persons)
</TABLE>
- -----------------------------------
* Represents less than 1%.
(1) The address of this stockholder is c/o Zila, Inc., 5227 North 7th Street,
Phoenix, Arizona 85014-2800.
(2) Includes 412,269 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(3) Includes 46,537 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter, and 3,000 shares of Common Stock held in trust for the benefit of
Mr. Baudhuin's son.
3
<PAGE> 7
(4) Includes 21,100 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(5) Includes 49,492 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(6) Includes 12,500 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(7) Includes 12,500 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(8) Includes 7,500 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(9) Includes 14,875 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter, and 127,875 shares of Common Stock held by ICP of which Mr. Ayer is
a 30% partner.
(10) Includes 137,750 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
(11) Includes 990,375 shares of Common Stock which are subject to unexercised
options that were exercisable on January 30, 1998 or within sixty days
thereafter.
4
<PAGE> 8
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(PROPOSAL 1)
The Company's Certificate of Incorporation currently authorizes the
Company to issue fifty million shares of Common Stock, par value $.001 per
share. The Board of Directors has approved, subject to Stockholder ratification,
an amendment to Paragraph 1 of Article 4 of the Company's Certificate of
Incorporation, as amended, to increase the number of authorized shares of Common
Stock from fifty million shares to sixty-five million shares.
The text of the current Paragraph 1 of Article 4 and the text of
proposed amendment to Paragraph 1 of Article 4 of the Company's Certificate of
Incorporation is attached hereto as Exhibit A. The text of the remaining
paragraphs of Article 4 of the Company's Certificate of Incorporation will not
be changed if the proposed amendment is approved.
In October 1997, the Company issued 30,000 shares of its Series A
Redeemable Convertible Preferred Stock. Such shares are convertible into shares
of the Company's Common Stock. In order to ensure that there would be sufficient
shares of Common Stock available for issuance upon the conversion of such shares
of preferred stock, the Company has reserved and set aside 9,140,000 shares of
Common Stock. The reservation of such shares of Common Stock has reduced
significantly the number of authorized but unissued shares of Common Stock
available to the Company for future use. As of January 30, 1998, 34,418,024
shares of Common Stock are issued and outstanding. In addition, 3,296,291 shares
of Common Stock are reserved for issuance upon exercise of the Company's
outstanding options and warrants and for issuance pursuant to securities
exercisable or exchangeable for, or convertible into, shares of the Common Stock
(excluding the shares of Preferred Stock).
The proposed increase in the number of shares of authorized Common
Stock will ensure that shares can be issued if needed, in connection with stock
splits, stock dividends, acquisitions, and other corporate purposes. The Board
of Directors believes that it is beneficial to the Company to have the
additional shares available for such purposes without delay or the necessity of
an additional special stockholders' meeting. The Company has no immediate plans,
arrangements, commitments, or understandings with respect to the issuance of any
of the additional shares of Common Stock which would be authorized by the
proposed amendment. However, that certain Securities Purchase Agreement entered
into by the Company on October 17, 1997, pursuant to which the Company issued
30,000 shares of the Company's Series A Redeemable Convertible Preferred Stock,
requires the Company to reserve, upon Stockholder approval of an increase in the
number of authorized shares, 5,000,000 shares of Common Stock for issuance upon
conversion of the Series A Redeemable Convertible Preferred Stock.
No further action by the Company's stockholders would be necessary to issue
the additional shares of Common Stock unless required by applicable law or
regulatory agencies or by the rules of any stock exchange on which the Company's
securities may then be listed.
5
<PAGE> 9
The holders of any of the additional shares of Common Stock issued in the
future would have the same rights and privileges as the holders of the shares of
Common Stock currently authorized and outstanding.
As stated above, the Company has no immediate plans, arrangements,
commitments, or understandings with respect to the issuance of any additional
shares of Common Stock which would be authorized by the proposed amendment.
However, the increased authorized shares could be used to make a takeover
attempt more difficult such as by using the shares to make a counteroffer for
the shares of the bidder or by selling shares to dilute the voting power of the
bidder. As of this date, the Board is unaware of any effort to accumulate the
Company's shares or to obtain control of the Company by means of a merger,
tender offer, solicitation in opposition to management or otherwise.
The Company is not proposing any increase in the number of shares of
authorized preferred stock, of which 2,500,000 shares are authorized and 30,000
shares have been issued.
CHARACTERISTICS OF COMMON STOCK
The holders of Common Stock elect all directors and are entitled to one
vote per share on all matters submitted to a vote of the Stockholders.
Stockholders are entitled to receive dividends when, as and if declared by the
Board out of funds legally available for that purpose. Upon any liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share pro-rata in any distribution to Stockholders. Holders of Common Stock
have no preemptive, subscription or conversion rights.
Stockholders of the Company do not have preemptive rights to subscribe
for or purchase any shares of Common Stock that may be issued in the future.
Shares of Common Stock generally may be issued by the Board for any proper
corporate purpose without further Stockholder action, unless required by
applicable laws, rules or regulations.
REQUIRED VOTE
The affirmative vote of a majority of the outstanding Common Stock is
required for the approval of the amendment to the Company's Certificate of
Incorporation.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO THE CERTIFICATE OF
INCORPORATION.
6
<PAGE> 10
RATIFICATION OF THE OCTOBER 1997 ISSUANCE OF 30,000 SHARES OF THE
COMPANY'S SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK
(PROPOSAL 2)
GENERAL
On October 17, 1997, the Company entered into that certain Securities
Purchase Agreement (the "Agreement"), pursuant to which the Company issued
30,000 shares of the Company's Series A Redeemable Convertible Preferred Stock,
par value $.001 per share (the "Preferred Stock"), for consideration in the
aggregate amount of thirty million dollars ($30,000,000). The majority of the
proceeds from the sale of Preferred Stock was used by the Company to acquire
Oxycal Laboratories, Incorporated in November 1997.
A copy of the Agreement was filed as Exhibit 10-N to the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1997. A copy of
the Certificate of Designation relating to the Preferred Stock was filed as
Exhibit 4-B to the Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997. Copies of the Agreement and the Certificate of Designation
may be obtained free of charge by contacting the Company at 5227 North 7th
Street Phoenix, Arizona 85014-2800, Attention Janice L. Backus or through the
Securities and Exchange Commission EDGAR database located at http:/www.sec.gov
on the worldwide web.
REASON FOR RATIFICATION
The Preferred Stock is convertible into shares of the Company's Common
Stock. The conversion formula pursuant to which the Preferred Stock may be
converted into Common Stock varies depending on the market price of the Common
Stock and the date of conversion. However, the terms of the Agreement provide a
limitation on the ability of the holders of the Preferred Stock to convert
shares of the Preferred Stock so that in no event may any holder be entitled to
convert Preferred Shares which would cause the aggregate number of shares of
Common Stock beneficially owned by that Preferred Stockholder to exceed 4.99% of
the number of outstanding shares of Common Stock following such conversion.
Under the conversion formula for the Preferred Stock, the number of
shares of Common Stock into which the Preferred Stock is convertible could
increase following the issuance date of the Preferred Stock, depending on the
market price of the Common Stock on the date of conversion. Furthermore, during
the first eight months there is an increasing discount at which the holders of
Preferred Stock may convert which is also dependant on the market price of the
Common Stock on the date of conversion. The greatest number of shares of Common
Stock issuable upon the conversion of the Preferred Stock, assuming the Common
Stock price of $7.125 (the January 30, 1998 closing bid price of the Common
Stock as reported by NASDAQ/National Market), following the end of such
eight-month period would be 5,136,842 shares of Common Stock, representing 14.9
percent of the Common Stock outstanding prior to such conversion and 13.0
percent of the Common Stock following the conversion.
7
<PAGE> 11
Under the rules of the National Association of Securities Dealers (the
"NASD"), issuers whose securities are on NASDAQ/National Market, the exchange on
which the Common Stock is listed, are required to obtain stockholder approval,
prior to the issuance of listed securities at a discount or in connection with
an acquisition, in the following limited circumstances: (i) any transaction
(other than a public offering for cash) where the present or potential issuance
of common stock (or securities convertible into common stock) is or will equal
or will be in excess of 20% or more of the voting power prior to issuance; or
(ii) any transaction (other than a public offering for cash) where the number of
shares of common stock (or securities convertible into common stock) to be
issued is or will equal or will be in excess of 20% of the number of shares of
common stock outstanding prior to issuance.
Under the terms of the Agreement and the Certificate of Designation
covering the Preferred Stock, the Company is not required to issue more than
19.99% of its Common Stock upon the conversion of the Preferred Stock. The
Agreement provides that should a situation arise in which the Company would be
required to issue more than 19.99% of its Common Stock upon the conversion of
the Preferred Stock, the Company would have the obligation to repurchase the
Preferred Shares rather than issuing additional shares of Common Stock.
Accordingly, Stockholder approval of the Agreement or of the issuance of shares
of Preferred Stock pursuant thereto was not required.
A vote of "no" by the Stockholders on this proposal will not affect the
Agreement or the Preferred Stock issued thereunder. However, under the terms of
the Agreement the holders of the Preferred Stock have the right to require the
Company to call a special meeting of its Stockholders for the purpose of
securing Stockholder ratification of the issuance of the Preferred Stock. This
right to require the Company to call a meeting arises if the closing market
price of the Common Stock falls below $6.50 per share and remains below $6.50
per share for five consecutive trading days. During November 1997, the closing
market price of the Common Stock was less than $6.50 per share for more than
five consecutive trading days. On January 22, 1998, the holders of the Preferred
Stock notified the Company that they were exercising their right to require the
Company to call a special meeting of the Company's Stockholders pursuant to the
terms of the Agreement.
In the event the Company's stockholders do not approve this Proposal
and the Proposal No. 1 (relating to the increase in the number of authorized
shares of Common Stock), the holders of the Preferred Stock could be limited in
their ability to fully convert their shares of Preferred Stock into Common
Stock. The Agreement and the Certificate of Designation covering the Preferred
Stock gives the Preferred Stockholders certain rights if they are not able to
fully convert their shares of Preferred Stock into Common Stock. Among those
rights are the ability of the Preferred Stockholders to require the Company to
redeem such shares of Preferred Stock which are not fully converted, and
potentially, the ability of the Preferred Stockholders to require delisting of
the Company's Common Stock.
Therefore, and in connection with that Agreement entered into by the
Company on October 17, 1997, the Board has approved, and seeks Stockholder
ratification of, the October 1997 issuance of 30,000 shares of the Company's
Series A Redeemable Convertible Preferred Stock
8
<PAGE> 12
which, if fully converted, could potentially be converted into shares of Common
Stock representing 20% or more of the shares of Common Stock outstanding as of
the date of issuance of the Preferred Stock.
REQUIRED VOTE
The affirmative vote of a majority of voting power of Common Stock
present at the Meeting in person or by proxy will be required for the
ratification of the October 1997 issuance of 30,000 shares of the Preferred
Stock which, if fully converted, could potentially be converted into shares of
Common Stock representing 20% or more of the shares of Common Stock outstanding
as of the date of issuance of the Preferred Stock.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE OCTOBER 1997
ISSUANCE OF 30,000 SHARES OF THE COMPANY'S SERIES A REDEEMABLE CONVERTIBLE
PREFERRED STOCK, PAR VALUE $.001 PER SHARE, WHICH, IF FULLY CONVERTED, COULD
POTENTIALLY BE CONVERTED INTO SHARES OF COMMON STOCK REPRESENTING 20% OR MORE OF
THE SHARES OF COMMON STOCK OUTSTANDING AS OF THE DATE OF ISSUANCE OF THE
PREFERRED STOCK.
9
<PAGE> 13
PROPOSALS BY STOCKHOLDERS
Any Stockholder proposal that is intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received at the Company's
principal executive offices by no later than July 18, 1998, if such proposal is
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to such meeting.
OTHER BUSINESS
The Special Meeting is being held for the purposes set forth in the
Notice that accompanies this Proxy Statement. The Board is not presently aware
of any business to be transacted at the Special Meeting other than as set forth
in the Notice.
By Order of the Board of Directors,
/S/ Janice L. Backus
Janice L. Backus
Vice President and Secretary
Phoenix, Arizona
10
<PAGE> 14
EXHIBIT A
PROPOSED AMENDMENT TO PARAGRAPH 1 OF
ARTICLE 4 OF THE ZILA, INC. CERTIFICATE OF INCORPORATION
CURRENT PROVISION
4. The total number of shares of capital stock which the Corporation
shall have authority to issue is 52,500,000, divided into 50,000,000 shares of
common stock of the par value $.001 per share, and 2,500,000 shares of preferred
stock of the par value of $.001 per share.
PROPOSED AMENDED PROVISION
4. The total number of shares of capital stock which the Corporation
shall have authority to issue is 67,500,000, divided into 65,000,000 shares of
common stock of the par value $.001 per share, and 2,500,000 shares of preferred
stock of the par value of $.001 per share.
<PAGE> 15
PROXY
ZILA, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints JOSEPH HINES, BRADLEY C.
ANDERSON and JANICE L. BACKUS, or any of them acting in the absence of the
others, with full power of substitution, the true and lawful attorneys and
proxies of the undersigned, to attend the Special Meeting of the Stockholders of
ZILA, INC. (The "Company") to be held at the Marriott Camelback Inn located at
5402 E. Lincoln Dr. Scottsdale, Arizona on April 14, 1998, at 9:00 am, local
time, and any adjournments thereof, and to vote the shares of Common Stock of
the Company standing in the name of the undersigned, as directed below, with all
the powers the undersigned would possess if personally present at the meeting.
Proposal No. 1: Amendment to the Certificate of Incorporation of the Company
increasing the number of authorized shares of the Company's
$.001 par value common stock from 50,000,000 shares to
65,000,000 shares.
[ ] VOTE FOR [ ] VOTE AGAINST [ ] VOTE WITHHELD
Proposal No. 2: Ratification of the October 1997 issuance of 30,000 shares of
the Company's Series A Redeemable Convertible Preferred Stock,
par value $.001 per share, which, if fully converted, could
potentially be converted into shares of Common Stock
representing 20% or more of the shares of Common Stock
outstanding as of the date of issuance of the Preferred Stock.
[ ] VOTE FOR [ ] VOTE AGAINST [ ] VOTE WITHHELD
<PAGE> 16
PLEASE PROMPTLY DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE.
This proxy will be voted in accordance with the directions indicated herein. If
no specific directions are given, this proxy will be voted for approval of all
nominees listed herein, for approval of the proposals listed herein and, with
respect to any other business as may properly come before the meeting, in
accordance with the discretion of the proxies.
DATED:
-----------------------------------------, 1998
-----------------------------------------
(Signature)
-----------------------------------------
(Signature)
When signing as executor, administrator,
attorney, 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. If a joint tenancy,
please have both joint tenants sign.
