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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
LIDAK PHARMACEUTICALS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[LIDAK PHARMACEUTICALS LETTERHEAD]
March 26, 1998
To the Shareholders of LIDAK Pharmaceuticals:
This letter is to inform you about recent events affecting the 1998
Annual Meeting of Shareholders of LIDAK Pharmaceuticals. As you may know, a
Shareholders Committee comprised of HealthMed, Inc. and Wallace O. Raubenheimer
recently filed with the Securities and Exchange Commission a proxy statement
supporting an alternate slate of directors for election to the LIDAK Board at
the 1998 Annual Meeting. In order to avoid the probable disruption of the
Company's business and the substantial expenses associated with a proxy contest,
the Company participated in settlement discussions with the other parties and on
March 25, 1998, LIDAK announced that it had reached a settlement with the
Shareholders Committee and certain individuals participating in their
solicitation, including Mitchell J. Stein, George P. Rutland and Edward L.
Hennessy, Jr.
The settlement agreement provides for, among other things, an expanded
LIDAK Board comprised of nine members, including four existing LIDAK directors,
three additional independent nominees to be mutually agreed upon and two
nominees of the Shareholders Committee, Mr. Rutland and Mr. Hennessy. In
connection with the increase in the size of the Board, the Board also has
adopted, subject to shareholder approval, additional Bylaw amendments expanding
the number of authorized directors to a maximum of nine and creating three
classes of directors with staggered three-year terms. The director nominees and
the Bylaw amendments will be voted upon by the shareholders at the 1998 Annual
Meeting. The settlement agreement does not contemplate any changes to the
Company's current executive management.
As a result of these actions, the LIDAK 1998 Annual Meeting of
Shareholders, which was previously scheduled to be held on April 18, 1998, has
been postponed in order to allow the Board adequate time to conduct an
expeditious search for three additional independent nominees and to amend
LIDAK's proxy materials. Following the selection of the three independent
nominees, LIDAK will announce a new date for the 1998 Annual Meeting. The
Company also intends to mail to shareholders a new Notice of Annual Meeting and
revised Proxy Statement and proxy card in connection with the rescheduled 1998
Annual Meeting.
You already may have received by mail the Company's Notice of Annual
Meeting and Proxy Statement dated March 13, 1998 and the proxy card included
with those materials. Please disregard the proxy card previously furnished to
you for the meeting that was to be held on April 18, 1998. Any of those proxy
cards which are signed and returned to the Company will be invalid. As noted
above, the Company will be mailing revised proxy materials to you relating to
the business to be acted upon at the rescheduled annual meeting to replace the
prior proxies.
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The settlement agreement also provides that the Shareholders Committee
and its nominees will not conduct any proxy or other shareholder solicitations
through the annual meeting of shareholders to occur in 2001, limits additional
stock purchases or control of voting shares by the parties and provides that
LIDAK will reimburse HealthMed for certain third party expenses, not to exceed
$150,000.
We are pleased that this potentially contentious situation was resolved
in a positive way for the Company. The Company was able to avoid the disruption
and potentially substantial costs associated with a proxy contest by reaching
this settlement agreement. We look forward to working with the new Board
members, with the mutual ultimate goal of significantly enhancing shareholder
value.
Sincerely,
/s/ GERALD J. YAKATAN
Gerald J. Yakatan, Ph.D.
President and Chief Executive Officer
