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OPHIDIAN
PHARMACEUTICALS, INC.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OPHIDIAN PHARMACEUTICALS, INC.
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OPHIDIAN
PHARMACEUTICALS, INC.
5445 EAST CHERYL PARKWAY
MADISON, WI 53711
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MARCH 23, 1999
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TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Ophidian Pharmaceuticals, Inc., a Wisconsin Corporation (the "Company"), will be
held on Tuesday, March 23, 1999, at 9:00 a.m., local time, in the auditorium of
the BioPharmaceutical Technology Center at 5445 East Cheryl Parkway, Madison,
Wisconsin 53711 for the following purposes:
1. To elect directors to serve until the next annual meeting of
shareholders and until their successors are duly elected and
qualified.
2. To adopt the 1998 Incentive Stock Option Plan of Ophidian
Pharmaceuticals, Inc.
3. To approve the Agreement and Plan of Merger of Ophidian
Pharmaceuticals, Inc., a Wisconsin corporation, into Ophidian
Pharmaceuticals, Inc., a Delaware corporation, thereby effecting
the Company's reincorporation in Delaware.
4. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending September 30,
1999.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice. Only shareholders of record at the close of business
on February 12, 1999 (the "Record Date") are entitled to notice of, and to vote
at, the meeting and any adjournments thereof.
All shareholders are cordially invited to attend the meeting in person. However,
to assure your representation at the meeting, you are urged to mark, sign, date,
and return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the Annual Meeting
may vote in person even if such shareholder previously signed and returned a
proxy.
By Order of the Board of Directors,
Madison, Wisconsin Margaret B. van Boldrik
February 12, 1999 Secretary
<PAGE> 3
OPHIDIAN
PHARMACEUTICALS, INC.
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of Ophidian
Pharmaceuticals, Inc. (the "Company) for use at the Company's Annual Meeting of
Shareholders (the "Annual Meeting") to be held Tuesday, March 23, 1999, at 9:00
a.m., central standard time, or at any adjournments or postponements thereof,
for the purposes set forth in this Proxy Statement and in the accompanying
Notice of Annual Meeting of Shareholders. The Annual Meeting will be held in the
auditorium of the BioPharmaceutical Technology Center at 5445 East Cheryl
Parkway, Madison, Wisconsin 53711. The telephone number for the location of the
Annual Meeting is (608) 274-4330. The Company's principal executive offices are
also located at 5445 East Cheryl Parkway, Madison, Wisconsin 53711. The
Company's telephone number is (608) 271-0878.
These proxy solicitation materials were mailed on or about February 23, 1999, to
all shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on February 12, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. At
the Record Date, 9,223,018 shares of the Company's Common Stock, $0.0025 par
value per share (the "Common Stock"), were issued, outstanding, and entitled to
vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted by (a) delivering a written notice to
the Secretary of the Company or the acting secretary of the Annual Meeting; or
(b) giving oral notice to the presiding officer during the Annual Meeting; or
(c) duly executing a proxy bearing a later date; or (d) attending the Annual
Meeting and voting in person. The mere presence at the Annual Meeting of a
shareholder who has filed a proxy will not constitute a revocation.
VOTING AND SOLICITATION
Every shareholder of record on the Record Date is entitled, for each share of
Common Stock held, to one vote on each proposal or item that comes before the
Annual Meeting.
Ophidian Proxy Statement - Page 1 of 34
<PAGE> 4
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding solicitation material to the
beneficial owners. Proxies may also be solicited by certain of the Company's
Directors, officers and regular employees, without additional compensation,
personally, by telephone, facsimile, e-mail, or telegram.
QUORUM; ABSTENTIONS; AND BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is a
majority of the shares outstanding on the Record Date. Broker non-votes and
shares held by persons abstaining and any other shares represented for any
purpose, other than objecting to holding the meeting or transacting business at
the meeting, will be counted in determining whether a quorum is present. If a
quorum is present, action on any matter is approved if it receives the
affirmative vote of the majority of shares represented at the Annual Meeting and
entitled to vote on the subject matter.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Shareholder proposals that are intended to be presented at the Company's next
annual meeting in the year 2000 must be received by the Company no later than
August 16, 1999, in order that they may be included in the proxy statement and
form of proxy for that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
Five directors, constituting the entire Board of Directors, are to be elected at
the Annual Meeting. One of the current Directors, chairman William Linton, has
indicated to the Company that he will not stand for re-election to the Board. To
the Company's knowledge, Mr. Linton's decision not to stand for re-election to
the Board is not, in any way, the result of a disagreement with the Company on
any matter relating to its operations, policies, or practices. As a consequence
of Mr. Linton's decision not to stand for re-election to the Board, the
directors have determined to reduce the number of directors from six to five, as
permitted by the Company's Bylaws, effective from and after the date of the
Annual Meeting. Each director elected at the Annual Meeting will hold office for
one year and until his or her successor has been elected and qualified, or until
his or her prior death, resignation, or removal. The nominees named below have
been selected by the Board of Directors of the Company. The Board believes that
all of its present nominees will be available for election at the meeting and
will serve if elected. If, due to circumstances not now foreseen, any of the
nominees named below will not be available for election, the proxies will be
voted for such other person or persons as the Board of Directors may select.
Each of the nominees is currently a director of the Company. There are no family
relationships among the nominees or the Company's current directors and
executive officers.
Ophidian Proxy Statement - Page 2 of 34
<PAGE> 5
THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY WILL VOTE FOR THE ELECTION
OF THE NOMINEES UNLESS SHAREHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
There follows information as to each nominee for election as a director at the
Annual Meeting, including, as of January 19, 1999, his or her age, present
principal occupation, other business experience during the last five years,
directorships of other publicly-held companies, and periods of service as a
director of the Company.
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation
---- --- -------- --------------------
<S> <C> <C> <C>
Dr. Douglas C. Stafford 43 1997 Director, President and Chief
Executive Officer of the Company
Dr. Margaret B. van Boldrik 43 1989 Director, Vice President, and
Secretary of the Company
Mr. Rex J. Bates 75 1992 Director, retired from Chief
Investment Officer of State Farm
Mutual Insurance Company
Dr. W. Leigh Thompson 60 1995 Director and founder of Profound
Quality Resources, Ltd.
Dr. Peter Model 65 1996 Director and senior faculty
member at the Rockefeller
University.
</TABLE>
DR. DOUGLAS C. STAFFORD, has served as President and Chief Executive Officer of
the Company since January, 1995. Dr. Stafford served as the Company's President
and Chief Operating Officer from August, 1990 to January, 1995. In May, 1997,
Dr. Stafford joined the Company's Board of Directors. Prior to joining the
Company, Dr. Stafford was employed by Baxter Healthcare Corporation, a publicly
held healthcare products company, from 1985 to 1990. He held various senior
management positions, including Director of Immunodiagnostics Development and
Manufacturing at the Pandex Division of Baxter Healthcare Corporation, a company
developing products for the diagnosis of infectious diseases. His experience
also includes senior management positions in biologic product development,
quality assurance, project management, process development, and manufacturing
operations at Pandex and in other assignments within the Baxter organization
where he was involved in corporate and divisional technology and manufacturing,
strategic planning and business development. Prior to Baxter, Dr. Stafford was
employed at Sensor Diagnostics, Inc., a privately held medical diagnostics
company, from 1984 to 1985 and held a faculty position at the University of
Detroit from 1983 to 1984. Dr. Stafford holds B.S. and M.S. degrees in Biology
from the University of
Ophidian Proxy Statement - Page 3 of 34
<PAGE> 6
Detroit, a Ph.D. in Immunology from Tufts University, and a M.S. in Management
from Lesley College.
DR. MARGARET B. VAN BOLDRIK, is a co-founder of the Company and has served as a
Director and Secretary of the Company since its inception in November, 1989 and
Vice President since January, 1990. In August, 1990, Dr. van Boldrik joined the
Company as Vice President for Business Development and later as Vice President
for Corporate Development. In September, 1995, Dr. van Boldrik continued her
role with the Company as a consultant. Prior to joining the Company, Dr. van
Boldrik created and directed the Technology Transfer Office of the University of
Wisconsin Biotechnology Center, where she developed programs to foster
entrepreneurship and enhance the commercial development of university-based
technology. She has served as a Commissioner on the Madison Economic Development
Commission and worked closely with the Governor's Council for Biotechnology. Dr.
van Boldrik holds a B.S. in Biochemistry from the University of California at
Davis, and a Ph.D. in Biochemistry from Tufts University.
MR. REX J. BATES, has served as a Director of the Company since March, 1992. He
has also served as a Director of Ventana Medical Systems, Inc., a publicly held
medical diagnostic instrument company, since April, 1996. From August, 1991 to
May, 1995, Mr. Bates served on the Board of Directors of Twentieth Century
Industries, a publicly held insurance holding company, and was a member of its
compensation committee. Mr. Bates worked at State Farm Mutual Automobile
Insurance Company from May, 1972 to March, 1991 serving as Vice-Chairman of the
Board of Directors and as Chief Investment Officer. In March of 1991, Mr. Bates
retired from State Farm. Mr. Bates was a member of the investment advisory firm
of Stein, Roe & Farnham in Chicago from August, 1949 to May, 1972. Mr. Bates
received an S.B. and an M.B.A. from the University of Chicago.
DR. W. LEIGH THOMPSON, has served as a Director of the Company since December,
1995. Dr. Thompson founded Profound Quality Resources, Ltd., a private
healthcare consulting firm, in 1995 to provide consulting services to health
institutions and manufacturers worldwide. Dr. Thompson served as an Assistant
Professor of Medicine and of Pharmacology and Experimental Therapeutics at Johns
Hopkins University from 1970 to 1974 where he founded and led the Medical
Critical Care Unit, and as a Professor of Medicine at Case Western Reserve from
1974 to 1982, where he founded programs in clinical pharmacology and critical
care medicine. He worked at Eli Lilly and Company, holding several executive
positions including Executive Vice President of Lilly Research Laboratories and
Chief Scientific Officer from 1982 to 1993. He holds a Ph.D. from the Medical
University of South Carolina and an M.D. from Johns Hopkins University.
DR. PETER MODEL, has served as a Director of the Company since December, 1996.
Dr. Model is a senior faculty member conducting research in the areas of
biochemistry and genetics at the Rockefeller University, where he has been
employed since 1967. He has served on the editorial boards of the Journal of
Virology and Virology and is a member of
Ophidian Proxy Statement - Page 4 of 34
<PAGE> 7
various scientific advisory committees. Dr. Model received his B.S. from
Stanford University and his Ph.D. in Biochemistry from Columbia University.
REQUIRED VOTE
The five nominees receiving the highest number of affirmative votes of the
shares present or represented by proxy and entitled to vote for them will be
elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES
LISTED ABOVE.
PROPOSAL TWO
ADOPTION OF THE 1998 INCENTIVE STOCK OPTION PLAN
At the Annual Meeting, the Board of Directors will ask the shareholders to
approve the adoption of the Company's 1998 Incentive Stock Option Plan (the
"Plan") and the reservation of up to a maximum of 975,000 shares of the
Company's Common Stock for issuance pursuant to the exercise of options granted
thereunder. The Board of Directors approved adoption of the Plan on August 7,
1998, contingent upon shareholder approval of the Plan within twelve months of
the Board's approval.
PURPOSE OF THE PROPOSED 1998 INCENTIVE STOCK OPTION PLAN
The execution of the Company's business strategy is critically dependent upon
its ability to attract and retain qualified personnel. The Board of Directors
believes that an essential element in the Company's compensation program is
stock options. The purpose of the Plan is to encourage certain key employees of
the Company to acquire or increase their stock ownership in the Company, to
provide an incentive to such employees to promote the financial success of the
Company, and to enable the Company to attract and retain key personnel necessary
for continued growth and profitability.
MATERIAL FEATURES OF THE PROPOSED 1998 INCENTIVE STOCK OPTION PLAN
Only Common Stock of the Company may be issued pursuant to options granted under
the Plan. The maximum number of shares of Common Stock that may be issued
pursuant to the exercise of options granted under the Plan is 975,000 shares,
reduced by the number of shares from time to time issued or reserved for
issuance upon exercise of then outstanding options granted under the Company's
existing 1990 Incentive Stock Option Plan and 1992 Employee Stock Option Plan,
as amended, (collectively, the "1990/1992 Stock Option Plans"). As of January
19, 1999, a total of 657,160 shares had been issued or reserved for issuance
pursuant to options granted under the 1990/1992 Stock Option Plans, leaving a
net, following approval of the Plan, of 317,840 shares available for new
issuances pursuant to either the Plan or the 1990/1992 Stock Option Plans. For a
description of the Company's existing 1990/1992 Stock Option Plans and the
options
Ophidian Proxy Statement - Page 5 of 34
<PAGE> 8
issued thereunder, see "Other Information Regarding the Company - Stock Option
Plans," below. The market value of the Common Stock, as of the close of business
on January 19, 1999, was approximately $14,987,404. Only officers and other key
employees of the Company shall be eligible to receive options under the Plan.
The option price shall not be less than the fair market value of the Common
Stock on the day of the grant of the option. The Plan shall be administered by a
committee (the "Committee"), consisting of two or more members of the Board of
Directors who are not currently an officer or other employee of the Company, do
not receive compensation from the Company other than as a Director, and who
otherwise qualify as a "non-employee director" as that term is defined in Rule
16b-3(b)(3) under the Securities and Exchange Act of 1934, as amended. Subject
to the express provisions of the Plan, the Committee shall determine those
employees to whom options shall be granted, the option price, the option
periods, and the number of shares to be subject to each option. The term of each
option will be for such period not exceeding ten years from the date of the
grant, as the Committee shall determine. A complete copy of the Plan, including
all terms and conditions, together with the form of Stock Option Agreement is
enclosed with this Proxy Statement as Exhibit A.
PARTICIPATION IN THE PLAN
The grant of options under the Plan to officers and other key employees is
subject to the discretion of the Committee. As of the date of this Proxy
Statement, there has been no determination by the Committee with respect to
future awards. However, if the Plan is approved, the Company has previously
stated that it intends to grant Mr. Donald L. Nevins, the Company's Vice
President of Finance and Chief Financial Officer, an option to purchase 50,000
shares at a price to be determined by the Board of Directors, which option will
vest in stages over a five year period. Other than the foregoing, future awards
are not determinable. For reference, however, the following table sets forth the
number of shares and total dollar amount of the options that would have been
awarded to each of the executive officers named in the Summary Compensation
Table in this Proxy Statement, all current executive officers as a group, and
all other employees in Fiscal 1998 if the Plan had been in effect.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
DOLLAR NUMBER
NAME OR IDENTITY OF GROUP AND POSITION VALUE OF SHARES
-------------------------------------- ------ ---------
<S> <C> <C>
Dr. Douglas Stafford, President and C.E.O $0 0
Dr. Joseph R. Firca, Vice President, Research &
Development...................................................$0 0
Dr. F. Michael Hoffmann, Vice President, Genetic
Technology Programs...........................................$0 0
Donald L. Nevins, Vice President, Finance and C.F.O....................$[t.b.d.] 50,000
All Executive Officers as a group (4 persons)..........................$[t.b.d.] 50,000
All other employees as a group.........................................$0
--
Totals:....................$[T.B.D.] 50,000
</TABLE>
Ophidian Proxy Statement - Page 6 of 34
<PAGE> 9
TAX INFORMATION
Options granted under the Plan will be incentive stock options (as defined in
Section 422 of the Internal Revenue Code). An optionee will not recognize
taxable income either at the time the option is granted or upon its exercise,
although the exercise may subject the optionee to the alternative minimum tax.
Upon the sale or exchange of the shares more than two years after grant of the
option and one year after exercising the option, any gain or loss will be
treated as a long term capital gain or loss. If these holding periods are not
satisfied, the optionee will recognize ordinary income at the time of sale or
exchange equal to the difference between the exercise price and the lower of (a)
the fair market value of the shares at the date of the option exercise or (b)
the sale price of the shares. A different rule for measuring ordinary income may
apply if the optionee is also an officer, director, or 10% shareholder of the
Company. Generally, the Company will be entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income will be characterized as long-term or short-term
capital gain or loss, depending on the holding period.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON
THE OPTIONEE AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS
UNDER THE PLAN. IT IS NOT COMPLETE, AND THIS SUMMARY DOES NOT DISCUSS THE TAX
CONSEQUENCES OF THE OPTIONEE'S DEATH OR THE INCOME TAX LAWS OF ANY MUNICIPALITY,
STATE, OR FOREIGN COUNTRY IN WHICH AN OPTIONEE MAY RESIDE.
REQUIRED VOTE
To be approved, the Plan must receive the affirmative vote of a majority of all
outstanding voting shares of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" ADOPTION OF THE
1998 INCENTIVE STOCK OPTION PLAN
PROPOSAL THREE
THE AGREEMENT AND PLAN OF MERGER TO EFFECT THE
REINCORPORATION OF THE COMPANY UNDER THE LAWS OF THE
STATE OF DELAWARE
The Board of Directors has unanimously approved, and for the reasons described
below recommends that the shareholders approve, a reorganization in which the
Company's state of incorporation would be changed from Wisconsin to Delaware.
This change would be accomplished by merging the Company (referred to in this
proposal as "Ophidian Wisconsin") into a wholly-owned Delaware subsidiary
(referred to in this proposal as "Ophidian Delaware"), which will be formed for
this purpose, with each share of Ophidian Wisconsin's outstanding Common Stock
being exchanged for one
Ophidian Proxy Statement - Page 7 of 34
<PAGE> 10
share of Common Stock of Ophidian Delaware. Upon completion of the merger, all
of the previously outstanding shares of Common Stock of Ophidian Wisconsin will
be automatically converted into shares of Common Stock of Ophidian Delaware. The
proposed reorganization will be accomplished pursuant to the terms of an
Agreement and Plan of Merger between Ophidian Wisconsin and Ophidian Delaware, a
copy of which is attached to this Proxy Statement as Exhibit B.
At and after the effective date of the merger, each certificate that previously
represented shares of Common Stock of Ophidian Wisconsin will represent shares
of Common Stock of Ophidian Delaware into which those shares of Common Stock of
Ophidian Wisconsin have been converted as a result of the merger. IT WILL NOT BE
NECESSARY FOR SHAREHOLDERS OF OPHIDIAN WISCONSIN TO HAVE THEIR STOCK
CERTIFICATES EXCHANGED FOR STOCK CERTIFICATES REPRESENTING THE SHARES OF
OPHIDIAN DELAWARE. The Common Stock and the Common Stock Purchase Warrants of
the Company are listed for trading on the Nasdaq SmallCap Market and the Pacific
Exchange, Inc. and will continue to be traded on those markets, without
interruption, after the reincorporation. The reorganization will not result in
any change in the name, business, management, assets, liabilities or net worth
of Ophidian, and it will not cause the relocation of its corporate offices,
management, or employees. The directors who are elected as directors of Ophidian
Wisconsin at the Annual Meeting will become the directors of Ophidian Delaware
upon completion of the reincorporation. Ophidian Delaware will be governed by
Delaware law, and a new certificate of incorporation and bylaws will take
effect, resulting in certain changes in the rights of shareholders as described
below.
Shareholders should note that approval of the proposed Agreement and Plan of
Merger to effect the reorganization will constitute approval of the assumption
by Ophidian Delaware of the 1998 Incentive Stock Option Plan (Exhibit A),
approval of the Certificate of Incorporation (Exhibit C) and Bylaws (Exhibit D)
of Ophidian Delaware, and approval of the Indemnification Agreements with each
of the Company's directors, a form of which is attached to this Proxy Statement
as Exhibit E.
The affirmative vote of holders of a majority of all of the outstanding shares
of the Company will be required to approve the Agreement and Plan of Merger. If
approved by the shareholders, it is anticipated that the reorganization would be
completed within 30 days of shareholder approval. However, the reorganization
may be delayed or abandoned, either before or after shareholder approval, if
circumstances arise which, in the opinion of the Board of Directors, make it
inadvisable to proceed.
Important aspects of the Agreement and Plan of Merger and the resulting
reorganization and reincorporation of the Company in Delaware are outlined
below.
Ophidian Proxy Statement - Page 8 of 34
<PAGE> 11
PRINCIPAL REASONS FOR REINCORPORATION
For many years Delaware has encouraged incorporation in that state by
maintaining comprehensive, modern, and flexible corporate laws, which are
periodically updated and revised to meet changing business needs. The Delaware
courts have developed considerable expertise in dealing with corporate issues,
and a substantial body of case law has developed construing Delaware law and
establishing public policies with respect to corporate legal affairs. As a
result, Delaware corporate law has a high degree of predictability and
flexibility. In addition, an increasing number of major corporations are now
incorporated in Delaware, and investors from all parts of the country and
internationally are more familiar with Delaware law than with the corporate law
of most other states, including Wisconsin. Accordingly, the Board of Directors
of the Company believes the Company's continued growth will be aided by its
reincorporation in Delaware.
In addition to these general reasons, the Board of Directors has recommended the
proposed reorganization of the Company under Delaware law because it will permit
the Company to limit the liability of its directors and to provide
indemnification to its officers, directors, and employees with greater certainty
than is presently possible under Wisconsin law. The Company seeks to retain the
most capable individuals available to serve as its officers and directors. The
Board of Directors believes that the adoption of the reincorporation, including
the approval of the indemnification agreements discussed herein, could be a
significant factor in attracting such individuals and in encouraging existing
directors and officers to continue to serve in these capacities and freeing them
to make corporate decisions on the merits rather than out of a desire to avoid
personal liability. It should be noted that there may be an inherent conflict of
interest in the Board of Directors recommendation of the proposed reorganization
due to the interest of the members of the Board of Directors in obtaining the
protection of such limited liability provisions.
Delaware law allows provisions in corporate charters that give boards of
directors greater continuity, stability and independence, thereby discouraging
takeover attempts without negotiation with boards of Directors on behalf of
stockholders. The Ophidian Delaware Certificate of Incorporation includes
certain anti-takeover provisions permitted under Delaware law.
The principal changes in the Company's Certificate of Incorporation and Bylaws
effected by the Delaware reincorporation will be the provision for the issuance
of shares of Preferred Stock with preference rights, powers and designations to
be determined solely by the Board of Directors, the inclusion in the Company's
charter of a new provision further limiting director liability, conversion of
the terms of directors from one year terms to three year staggered terms, the
elimination of shareholder action by written consent, a limitation on
shareholders' right to call a special meeting of shareholders unless requested
by the holders of a majority of voting shares, and the addition of new
provisions requiring a two thirds vote of shareholders to amend or
Ophidian Proxy Statement - Page 9 of 34
<PAGE> 12
repeal certain provisions of the Certificate of Incorporation and Bylaws.
Additionally, as reorganized, the Company would enter into indemnification
agreements with its directors.
The proposed reorganization does not result from any pending legal action
against the officers, directors or employees of the Company which would be
covered by such indemnification provisions. Similarly, the Board of Directors
has no present knowledge of any proposed tender offer or other attempt to change
the control of the Company, and no tender offer or other type of change of
control is presently pending or has occurred in the past. Nonetheless, if a
takeover were attempted in the future, the laws of Delaware coupled with the
changes to the Certificate of Incorporation and Bylaws resulting from the
reorganization herein proposed would improve the Company's ability to defend
itself and/or negotiate the highest possible return for shareholders.
CHANGES IN OPHIDIAN'S CERTIFICATE OF INCORPORATION AND BYLAWS TO BE EFFECTED BY
REINCORPORATION
The following discussion summarizes the material differences between the current
Articles of Incorporation and Bylaws of Ophidian Wisconsin and the proposed
Certificate of Incorporation and Bylaws of Ophidian Delaware (collectively and
sometimes referred to hereafter as the "charter documents") and between the
applicable corporate laws of Wisconsin and Delaware. A copy of the Certificate
of Incorporation of Ophidian Delaware is attached hereto as Exhibit C and a copy
of the Bylaws of Ophidian Delaware is attached hereto as Exhibit D, and all
statements herein concerning such documents are qualified by reference to the
exact provisions thereof. Both of these documents would govern Ophidian Delaware
following completion of the merger. Approval of the reorganization by the
shareholders and completion of the merger by Ophidian Wisconsin will result in
the adoption of all such charter provisions set forth in the Ophidian Delaware
Certificate of Incorporation and Bylaws.
LIMITATION OF LIABILITY FOR DIRECTORS
Although both the Wisconsin Business Corporation Law ("Wisconsin corporation
law") and the Delaware General Corporation Law ("Delaware corporation law")
limit the personal liability of directors to the corporation and its
shareholders, but not third parties, there are, nonetheless, certain minor
differences, as noted below.
Unless a company's articles of incorporation specifically provide otherwise, and
Ophidian Wisconsin's articles do not, Wisconsin corporation law provides an
automatic limitation on liability which provides that directors are not liable
to the corporation, its shareholders, or any person asserting rights on behalf
of the corporation or its shareholders except in the following circumstances:
(i) a willful failure to deal fairly with the corporation or its shareholders in
a matter in which the director has a material conflict of interest; (ii) a
violation of criminal law, unless the director had no reasonable
Ophidian Proxy Statement - Page 10 of 34
<PAGE> 13
cause to believe his or her conduct was unlawful; (iii) a transaction from which
the director derived an improper personal profit; or (iv) willful misconduct.
Conversely, Delaware corporation law permits a corporation to include a
provision in its certificate of incorporation which eliminates the personal
liability of a director for monetary damages arising from breaches of his or her
fiduciary duties to the corporation or its shareholders, subject to the
following exceptions: (i) a breach of the director's duty of loyalty to the
Company or its shareholders; (ii) acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of the law; (iii)
willful or negligent conduct in paying dividends or repurchasing stock out of
other than lawfully available funds (a violation of Section 174 of Delaware
General Corporation Law), and (iv) any transaction from which the director
derives an improper personal benefit. A limitation of liability provision,
including the foregoing required exceptions, is included in the proposed
Ophidian Delaware Certificate of Incorporation. In addition, under Delaware
corporation law, a limitation of liability provision may not relieve directors
from the obligation to comply with any law, including federal and state
securities laws, or from the availability of non-monetary remedies such as
injunctive relief or rescission. Finally, the liability limitation provision in
the Ophidian Delaware Certificate of Incorporation will not extend to acts or
omissions of a director which occurred before the date on which the Certificate
of Incorporation became effective.
In general, under both Wisconsin and Delaware corporation law and the respective
charter documents, a director may not be held liable to the Company or its
shareholders for monetary damages arising out of the director's negligence,
gross negligence, or lack of due care in carrying out his or her fiduciary
duties as a director. After the reincorporation, and under Delaware corporation
law and the proposed Certificate of Incorporation, a director could be held
liable to the Company or its stockholders only if the director either acted in
bad faith or in breach of the director's duty of loyalty to the Company, engaged
in intentional misconduct, knowingly derived an improper personal benefit, or
approved an illegal dividend or stock repurchase. Although not significantly
different than the "willful failure to deal fairly" and "willful misconduct"
exceptions to limited liability under Wisconsin law, the effect of including the
permitted limitation of liability provisions in the Delaware Certificate of
Incorporation may be to limit or eliminate an effective remedy that would
otherwise be available to a stockholder dissatisfied with decisions of the Board
of Directors. The Company believes, however, that directors are primarily
motivated to exercise due care in managing the Company's affairs by concern for
the best interests of the Company and its shareholders, not the fear of
potential monetary damage awards. Accordingly, the Company believes that the
reincorporation would not diminish the Board of Directors' high standard of
corporate governance or the accountability of directors to the Company and its
shareholders.
INDEMNIFICATION FOR DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS
Under their respective and corresponding charter provisions, both Ophidian
Wisconsin and Ophidian Delaware, are required to indemnify their directors and
officers to the
Ophidian Proxy Statement - Page 11 of 34
<PAGE> 14
fullest extent permitted by the respective state corporation laws. Additionally,
the charter documents of both companies provide that such indemnification shall
not be exclusive of such other rights to indemnification as may be provided to
the directors and officers by written agreement, vote of either the shareholders
or disinterested directors, or otherwise. As discussed below, however, there are
a number of differences between the indemnification provided by Wisconsin
corporation law and the Ophidian Wisconsin Bylaws and that provided by Delaware
corporation law and the proposed Ophidian Delaware Bylaws.
As stated, Ophidian Wisconsin's Bylaws require indemnification of the Company's
directors and officers to the fullest extent permitted under Wisconsin
corporation law. Wisconsin corporation law requires indemnification of a
corporation's directors and officers to the extent that they are successful on
the merits in the defense of proceeding. In all other cases, Wisconsin
corporation law also requires indemnification unless liability was incurred
because the director or officer breached or failed to perform a duty that he or
she owed to the corporation and the breach or failure to perform constituted any
of the following: (i) a willful failure to deal fairly with the corporation or
its shareholders in a matter in which the director has a material conflict of
interest; (ii) a violation of criminal law, unless the director had no
reasonable cause to believe his or her conduct was unlawful; (iii) a transaction
from which the director derived an improper personal profit; or (iv) willful
misconduct. These same four limitations on indemnification also apply to any
additional right to indemnification provided in a company's articles of
incorporation, bylaws, or by written agreement, or by board or shareholder
resolutions. That is, Ophidian Wisconsin cannot, under current Wisconsin
corporation law, indemnify its officers and directors for conduct falling into
one of the foregoing excepted categories even if such indemnification were to be
set forth in a separate agreement or resolution of the Company. Under Wisconsin
corporation law, the officer or director seeking indemnification, other than in
cases where he or she has prevailed upon the merits, may select one of the
following four methods for determining his or her right to indemnification: (i)
majority vote of disinterested directors; (ii) independent legal counsel
selected by the board of directors; (iii) a panel of 3 arbitrators selected by
the board of directors; or (iv) shareholder vote. Even where an officer or
director would not be entitled to indemnification because of a breach or failure
to perform, they may still obtain court-ordered indemnification if the court
determines that they are "fairly and reasonably entitled to indemnification in
view of all the relevant circumstances."
Wisconsin corporation law allows, and the Ophidian Wisconsin Bylaws require,
advancement of expenses as incurred to officers and directors upon submission of
their written request and representations that they have not breached or failed
to perform their duties to the corporation and that they will repay the
corporation the amounts advanced to them if indemnification is ultimately
disallowed. Finally, Wisconsin corporation law requires indemnification of
employees who are not officers or directors, to the extent that they are
successful on the merits. Corporations may indemnify their employees in other
circumstances and their agents under any circumstances as provided in the
Ophidian Proxy Statement - Page 12 of 34
<PAGE> 15
corporation's articles of incorporation, bylaws, by Board action, or by
contract. Neither the Articles of Incorporation nor the Bylaws of Ophidian
Wisconsin provide for indemnification of the Company's employees or agents.
As in Wisconsin, Delaware corporation law requires indemnification of directors
and officers where they have been successful on the merits. In all other
circumstances, Delaware corporation law generally permits indemnification for
expenses incurred in the defense or settlement of a derivative or third-party
action if there is a determination by a majority vote of the directors who are
not parties to such action, even though less than a quorum, or, if there are no
such directors or if such directors so direct, by independent legal counsel in a
written opinion, or by the stockholders, that the person seeking indemnification
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation, and with respect to any criminal
action, had no reasonable cause to believe their conduct was unlawful. Without
court approval, however, no indemnification may be made in respect of any
derivative action in which such person is adjudged liable for negligence or
misconduct in the performance of his or her duty to the corporation.
The Certificate of Incorporation of Ophidian Delaware permits indemnification to
the fullest extent permitted by Delaware corporation law, except that in an
action initiated by the officer or director, the Company is only required to
indemnify if the action was first authorized by the Board of Directors. The
proposed Delaware Certificate of Incorporation further provides that expenses
incurred by an individual in his or her capacity as a director of Ophidian or in
certain other capacities in defending a civil or criminal action shall be paid
by Ophidian in advance of the final disposition of the matter upon receipt of an
undertaking from the director to repay the sum advanced if it shall ultimately
be determined that he or she is not entitled to be indemnified by Ophidian
pursuant to the terms of Delaware corporation law.
Delaware corporation law states that the indemnification provided by statute is
not exclusive of any other rights or remedies that directors, officers,
employees, or agents may have under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise. Under Delaware corporation law and the
proposed Delaware Bylaws, therefore, Ophidian Delaware is authorized to enter
into separate indemnification agreements with its directors, officers,
employees, or agents. The form of the proposed indemnification agreements,
attached hereto as Exhibit E, provide that if for any reason statutory
indemnification is not available, the Company, with certain exceptions, shall
pay any amounts owed by a director in any situation in which the Company and
such director are jointly liable (or would be if the Company were joined in the
litigation). Such indemnification payments would be based on the relative
benefits to, and relative faults of, the Company and the individual with respect
to the transaction from which liability arose. This provision could be
applicable, for example, in the event a court found that under the federal
securities laws statutory indemnification is against public policy and thus not
enforceable, and could also be applicable in other cases where the Company was
unable to obtain satisfactory and affordable insurance for its directors and
Ophidian Proxy Statement - Page 13 of 34
<PAGE> 16
officers. If the proposed reincorporation is approved, the text of the
indemnification agreements will be substantially as set forth in Exhibit E
hereto. A vote in favor of the proposed reincorporation is also approval of such
indemnification agreements and approval for the Company to enter into similar
indemnification agreements with future directors of Ophidian Delaware, as well
as with certain officers, employees and agents of Ophidian Delaware, as may be
determined by the Ophidian Delaware Board of Directors.
PREFERRED STOCK.
The current Articles of Incorporation of Ophidian Wisconsin authorize only one
class of shares: common shares with a par value of $0.0025 per share. Preferred
stock is not authorized.
The Delaware Certificate of Incorporation provides that the Board of Directors
is authorized, subject to certain limitations prescribed by law and without
further shareholder approval, to issue from time to time up to an aggregate of
2,000,000 shares of Preferred Stock in one or more series and to fix or alter
the designation, preferences, rights and any qualification, limitation or
restriction of the shares of each such series, including the dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designation of such series. The issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change of
control of the Company, and its presence in the Certificate of Incorporation is
a deterrent to a non-negotiated takeover. However, the rights, preferences and
privileges of holders of Common Stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of Preferred
Stock that the Company may designate and issue in the future. The Company has no
present plans to issue any shares of Preferred Stock.
CLASSIFIED BOARD OF DIRECTORS
Wisconsin corporation law permits companies to require in their articles of
incorporation or bylaws a classified or staggered board, consisting of two or
three groups of directors. The Articles of Incorporation and the Bylaws of
Ophidian Wisconsin's do not contain such a provision. Rather, Ophidian
Wisconsin's Bylaws provide that all the Directors shall be elected annually by
the shareholders at the annual meeting of the shareholders.
The Delaware Certificate of Incorporation provides for a Board of Directors
divided into three classes of directors, serving staggered three-year terms. A
"classified" Board provides a Board of Directors with a greater likelihood of
continuity and experience since at all times a majority of the directors will
have experience as directors of the Company. The classification of directors has
the effect of making it more difficult for shareholders, including shareholders
seeking to take over the Company, to change the composition of the Board of
Directors in a short period of
Ophidian Proxy Statement - Page 14 of 34
<PAGE> 17
time. At least two annual meetings of shareholders, rather than one, will
generally be required to effect a change in a majority of the Board of
Directors.
CHANGE IN NUMBER OF DIRECTORS; FILLING VACANCIES; REMOVAL
The Articles of Incorporation for Ophidian Wisconsin provide that the number of
directors shall be fixed by or in the manner provided in the Bylaws. The
Wisconsin Bylaws provide that the Board of Directors shall consist of not less
than four nor more than nine directors, as the Board of Directors may from time
to time determine. The Bylaws further provide that the Board of Directors may
fill any vacancy by a majority vote of the Board, except that a vacancy created
by a removal by the shareholders may be filled by the shareholders. Wisconsin
corporation law and the Wisconsin Bylaws provide that the shareholders may
remove any or all of the directors from office with or without cause by the
affirmative vote of a majority of the outstanding shares at a meeting called for
that purpose.
The Delaware Certificate of Incorporation and the By-laws provide that the Board
of Directors will consist of not less than one nor more than seven directors as
determined by the Board of Directors. The By-laws provide that the Board of
Directors, acting by a majority vote of the directors then in office, may fill
any vacancies or newly created directorships or vacancies on the Board of
Directors. But a vacancy created by the removal of a director by a vote of the
stockholders or by court order may be filled only by the affirmative vote of a
majority of the shares represented and voting at a duly held meeting at which a
quorum is present. A director selected by the Board of Directors or elected by
the stockholders, as the case may be, to fill a vacancy shall hold office only
until the next annual meeting of stockholders and until a successor has been
elected and qualified or until that director's earlier death, incapacity,
resignation, or removal. Delaware corporation law permits, and the Delaware
Certificate of Incorporation and By-laws provide, that a director may only be
removed for cause and by the vote of the holders of a majority of the shares
entitled to vote, subject to the rights of the holders of Preferred Stock to
remove any directors elected by the holders of such Preferred Stock.
NO SHAREHOLDER ACTION BY WRITTEN CONSENT AND SPECIAL MEETINGS
Wisconsin corporation law and Ophidian Wisconsin's Bylaws provide that a special
meeting of the shareholders may be called by the Board of Directors, the
president or secretary of the Company, or by the president upon receipt of a
request in writing for a special meeting signed by the holders of at least ten
percent (10%) of all votes entitled to be cast on any issue proposed be
considered at the special meeting. In addition, Wisconsin corporation law
permits shareholder action by written consent and without a meeting.
The proposed Delaware Certificate of Incorporation eliminates the power of
stockholders to act without a meeting by written consent. This provision
prevents a
Ophidian Proxy Statement - Page 15 of 34
<PAGE> 18
stockholder or stockholders who own a majority of the voting power from acting
by written consent without the benefit of the exchange of views at a meeting of
stockholders. In addition, the Delaware Bylaws provide that only the Board of
Directors, the Chairman of the Board, the President, or the holders of a
majority of the shares entitled to vote, may call a special meeting of the
shareholders. Because only the stockholders holding a majority of the voting
shares have the right to call a special meeting, stockholders in the minority
cannot force stockholder consideration of a proposal prior to such time as the
Board believes such consideration to be appropriate.
SUPER-MAJORITY VOTE TO AMEND CERTIFICATE OF INCORPORATION AND BYLAWS
Generally, Wisconsin corporation law and Ophidian Wisconsin's Articles of
Incorporation and Bylaws allow the shareholders to amend any provision of either
the Articles of Incorporation or the Bylaws of the Company upon the majority
vote of all shares entitled to vote.
The proposed Delaware Certificate of Incorporation provides that a
super-majority of 66 2/3% of the outstanding shares of the Company is necessary
to modify or repeal the provisions regarding (i) cumulative voting, (ii)
director liability, (iii) the super-majority voting requirement, (iv) special
meetings, (v) advance notice of stockholder nominees and business, (vi) voting
requirements, or (vii) stockholders' action without a meeting.
OTHER SIGNIFICANT DIFFERENCES BETWEEN THE CORPORATION LAWS OF WISCONSIN AND
DELAWARE
In addition to the foregoing changes in the charter documents of the Company,
the reincorporation will also effect a transfer from the jurisdiction of
Wisconsin corporation law to Delaware corporation law as controlling on other
aspects of corporate governance. The following provides a summary of the major
substantive differences, other than those already discussed above under the
changes to the charter documents, between the corporate laws of Wisconsin and
Delaware. It is not an exhaustive description of the differences between the two
states' laws, and all statements herein are qualified by reference to the
complete texts of the Wisconsin Business Corporation Law and Delaware General
Corporation Law.
RESTRICTIONS ON CERTAIN BUSINESS COMBINATIONS
Both Wisconsin and Delaware have enacted laws designed to make certain kinds of
hostile corporate takeovers, or other transactions involving one or more of a
corporation's significant shareholders more difficult. Generally, under the
corporate laws of Wisconsin and Delaware, resident corporations are prohibited
from engaging in a "business combination" with an "interested stockholder" for
three years following the date that such person or entity became an interested
stockholder. In Wisconsin, an "interested stockholder" is generally defined as a
person or entity owning 10% or more of the corporation's outstanding voting
stock. In Delaware, the threshold is 15% or
Ophidian Proxy Statement - Page 16 of 34
<PAGE> 19
more of the outstanding voting stock. There are also certain exceptions to the 3
year moratorium, which exceptions vary between Wisconsin and Delaware. Wisconsin
also places certain restrictions on business combinations occurring more than 3
years after the date on which the interested stockholder acquired the stock and
requires that all shareholders receive the same price for their shares unless
the transaction is first approved by 80% of all outstanding shares and
two-thirds of all shares other than those owned by a shareholder who is a party
to the transaction. Delaware does not impose such additional restrictions on
business combinations.
CUMULATIVE VOTING
Wisconsin corporation law prohibits cumulative voting for directors unless it is
specifically authorized in the corporation's articles of incorporation. Ophidian
Wisconsin's Articles of Incorporation do not contain any such authorization.
Under Delaware corporation law, the certificate of incorporation may provide for
cumulative voting in the election of directors. The proposed Certificate of
Incorporation for Ophidian Delaware does not provide for cumulative voting and
specifically denies the shareholders the right to cumulate their votes for
directors or for any other matter. Thus, following reincorporation, shareholders
will continue not to have cumulative voting rights unless the Certificate of
Incorporation is amended to provide such rights, and under the proposed Delaware
Certificate of Incorporation, an amendment to the article denying cumulative
voting rights requires a super-majority of 66 and 2/3 percent of all outstanding
shares. The continued absence of cumulative voting rights limits the ability of
minority shareholders to obtain representation on the Board of Directors.
LOANS TO DIRECTORS, OFFICERS, AND EMPLOYEES
Wisconsin corporation law prohibits loans to directors unless the loan is either
approved by majority vote of the shareholders, excluding the shares owned or
controlled by the benefited director, or the Board of Directors determines that
the loan benefits the corporation and approves the specific loan or a general
plan authorizing such loans. Under Delaware corporation law, a corporation may
make loans to officers and other employees (including any officer or other
employee who is also a director) when, in the judgment of the Board of
Directors, such action may reasonably be expected to benefit the corporation.
INSPECTION OF SHAREHOLDER LIST
Both Wisconsin and Delaware require corporations to allow shareholders to
inspect the shareholder list. Wisconsin corporation law requires that the list
be made available to shareholders, their agents, or attorneys, beginning two
business days after notice of the meeting is given and continuing to the date of
the meeting and at the meeting. Delaware corporation law requires the list be
made available to any stockholder for any purpose germane to the meeting
beginning at least 10 days prior to the meeting and continuing to the date of
and at the meeting. Wisconsin specifically provides that
Ophidian Proxy Statement - Page 17 of 34
<PAGE> 20
shareholders are entitled to copy the list and that if the list is not made
available at the required times, the shareholder may petition the circuit court
for the county in which the corporation has its principal offices for an order
requiring the list be made available and/or to postpone the meeting. Delaware
does not include these same terms but does make directors who refuse to provide
the list ineligible for election at the meeting.
DIVIDENDS AND REPURCHASE OF SHARES
Wisconsin corporation law permits a corporation to authorize and make
distributions, including dividends, redemptions, or other acquisitions of its
shares, but only if the corporation is able to pay its debts as they become due
and the corporation's total assets are equal to or greater than its total
liabilities plus the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
Delaware corporation law permits a corporation to declare and pay dividends out
of surplus or, if there is no surplus, out of net profits for the fiscal year in
which the dividend is declared and/or the for the preceding fiscal year as long
as payment of the dividend is not less than the aggregate amount of the capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. In addition, Delaware corporation
law generally provides that a corporation may redeem or repurchase its shares
only if the capital of the corporation is not impaired and such redemption or
repurchase would not impair its capital.
DISSENTERS' APPRAISAL RIGHTS
Under both Wisconsin and Delaware corporation law, a shareholder of a
corporation participating in certain major transactions may, under varying
circumstances, be entitled to receive appraisal rights pursuant to which such
shareholder may receive cash in the amount of the fair market value of his or
her shares in lieu of the consideration that he or she would otherwise receive
in the transaction. In both states, the fair market value is determined
exclusive of any element of value arising from the accomplishment or expectation
of the proposed transaction. Under Wisconsin corporation law, such appraisal
rights are not available if (a) the corporation is subject to a court-ordered
plan of reorganization under federal statute; or (b) the class or series of the
shareholders shares are listed on either a national securities exchange or
quoted on the NASDAQ system. Under Delaware corporation law, appraisal rights
are not available: (a) with respect to the sale, lease, or exchange of all or
substantially all of the assets of a corporation; or (b) if the shares are
either listed on a national securities exchange, or designated as a national
market system security on NASDAQ, or are held of record by more than 2,000
holders.
Ophidian Proxy Statement - Page 18 of 34
<PAGE> 21
DISSOLUTION
Under Wisconsin corporation law, a corporation's board of directors must first
propose dissolution for submission to the shareholders who must approve the
proposal by a majority of all the votes entitled to be cast on the proposal.
Under Delaware corporation law, unless the Board of Directors approves the
proposal to dissolve, the dissolution must be unanimously approved by all the
stockholders entitled to vote thereon. If the dissolution is approved by the
Board of Directors, it may be approved by a simple majority of all the votes
entitled to be cast on the proposal.
FEDERAL INCOME TAX CONSEQUENCES
The reorganization provided for in the Agreement and Plan of Merger is intended
to be tax free under the Internal Revenue Code. Assuming that the
reincorporation qualifies as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended, no gain or loss will be
recognized to the holders of Ophidian Wisconsin shares as a result of the
consummation of the reorganization, and no gain or loss will be recognized by
Ophidian Wisconsin or Ophidian Delaware. Each former holder of Ophidian
Wisconsin shares will have the same basis in the Ophidian Delaware stock
received by such holder pursuant to the reorganization as the holder had in the
Ophidian Wisconsin shares held by such holder at the time of the consummation of
the reorganization, and his or her holding period with respect to such Ophidian
Delaware stock will include the period during which the holder held the
corresponding Ophidian Wisconsin shares, provided the latter were held by the
holder as capital assets at the time of the consummation of the reorganization.
HIGH AND LOW SALE PRICES PRECEDING BOARD RESOLUTION TO REINCORPORATE COMPANY IN
DELAWARE
On January 28, 1999, the Board of Directors adopted resolutions authorizing the
Company's reincorporation in Delaware. Prior to the distribution of this Proxy
Statement, no public announcement has been made concerning the proposed
reincorporation. The high and low sales prices are shown below for the Company's
Common Stock and for the Warrants on the last day on which trading occurred
preceding the date of the Board resolutions.
<TABLE>
<CAPTION>
Common Stock Warrants
<S> <C> <C> <C> <C>
High Low High Low
1 5/8 1 1/4 17/64 17/64
</TABLE>
REQUIRED VOTE
The affirmative vote of a majority of all of the outstanding shares of the
Company's Common Stock is required to approve the proposed Agreement and Plan of
Merger and the reincorporation in Delaware effected by such merger.
Ophidian Proxy Statement - Page 19 of 34
<PAGE> 22
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AGREEMENT AND
PLAN OF MERGER.
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP ("Ernst & Young") to audit
the financial statements of the Company for the current fiscal year ending
September 30, 1999. Ernst & Young has audited the Company's financial statements
since its inception. Representatives of Ernst & Young are expected to be present
at the Annual Meeting, will have the opportunity to make a statement if they so
desire, and are expected to be available to respond to appropriate questions.
REQUIRED VOTE
The affirmative vote of a majority of the shares represented at the meeting and
entitled to vote is required to approve the appointment of the independent
auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the Board of Directors may recommend.
OTHER INFORMATION REGARDING THE COMPANY
The following additional information about the Company is provided as required
by Regulation and Schedule 14A of the General Rules and Regulations under the
Securities and Exchange Act of 1934, as amended.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth the beneficial ownership of the Company's Common
Stock as of January 19, 1999, by (a) each person known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (b) the
directors of the Company, (c) the executive officers of the Company, and (d) all
directors and executive officers as a group. A total of 9,223,018 shares of the
Company's Common Stock were issued and outstanding as of January 19, 1999.
Ophidian Proxy Statement - Page 20 of 34
<PAGE> 23
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES WARRANTS
NAME AND ADDRESS OF BENEFICIALLY PERCENTAGE BENEFICIAL PERCENTAGE
BENEFICIAL OWNER OWNED(1) OWNED OWNED(1) OWNED
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dr. Margaret B. van Boldrik(2)...........................1,460,000 15.8%
Dr. Sean B. Carroll(3)...................................1,460,333 15.8 333 *
Eli Lilly and Company
Lilly Corporate Center,
Indianapolis, IN 46285 .................................. 699,300 7.6
Mr. William A. Linton(4)................................. 513,020 5.6
Dr. Douglas C. Stafford(5)............................... 193,300 2.1 100 *
Dr. Peter Model(6)....................................... 235,532 2.6 45,000 2.3
Dr. Joseph R. Firca(7)................................... 104,000 1.1
Mr. Donald L. Nevins(8).................................. 21,300 * 50,500 2.6
Mr. Rex J. Bates(9)...................................... 192,878 2.1 9,150 *
Dr. F. Michael Hoffmann(10).............................. 40,000 *
Dr. W. Leigh Thompson(11)................................ 11,051 *
All Directors and Officers as a Group (8
persons)(12)(13).........................................2,771,081 30.0 105,083 5.4%
</TABLE>
*Less than 1%.
(1) Includes ownership of shares of Common Stock plus options exercisable
within 60 days of January 19, 1999. Shares of Common Stock subject to
outstanding options are deemed outstanding for purposes of computing the
percentage of ownership of the person holding such options but are not
deemed outstanding for computing the percentage ownership for any other
persons.
(2) Dr. van Boldrik's beneficial ownership includes 1,370,000 shares owned by
Dr. van Boldrik, 45,000 shares held by the Willem Erin Samburu Carroll
van Boldrik Trust A and 45,000 shares held by the Jan Patrick Jabiru van
Boldrik Carroll Trust A. Dr. van Boldrik is the sole trustee for both
trusts. Drs. van Boldrik and Carroll were divorced in December 1998.
(3) Dr. Carroll's beneficial ownership includes 1,370,333 shares owned by Dr.
Carroll, 45,000 shares held by the Jan Patrick Jabiru van Boldrik Carroll
Trust B, and 45,000 shares held by the Willem Erin Samburu Carroll van
Boldrik Trust B. Dr. Carroll is the sole trustee for both trusts. Drs.
van Boldrik and Carroll were divorced in December 1998.
(4) Includes 262,520 shares owned by Promega Corporation of which Mr. Linton
is Chairman, President and Chief Executive Officer and may be deemed to
have voting and investment power over the shares.
(5) Includes 100 shares and also includes options to purchase 137,200 shares
currently vested in the 1990 Stock Option Plan at an exercise price of
$0.0625 which expire in July 2000, options to purchase 50,000 shares
currently vested in the 1990 Stock Option Plan at an exercise price of
$2.00 which expire in October 2001, and options to purchase 6,000 shares
currently vested in the 1992 Stock Option Plan at an exercise price of
$5.50 which expire in July 2007.
(6) Includes 230,182 shares held by the Model Charitable Lead Trust and Peter
Model Trust II, for which Dr. Model is one of two co-trustees, and
options to purchase 5,350 shares currently vested in the 1992 Stock
Option Plan at an exercise price of $5.50 per share which expire January
2007.
(7) Includes options to purchase 100,000 shares currently vested in the 1990
Stock Option Plan at an exercise price of $2.00 which expire in July
2002, and options to purchase 4,000 shares currently vested in the 1992
Stock Option Plan at an exercise price of $5.50 which expire in July
2007.
Ophidian Proxy Statement - Page 21 of 34
<PAGE> 24
(8) Includes warrants owned by Bessie Nevins Trust (10,000), Mr. Nevins' son,
Donald L. Nevins III (500), and grandson, Jared Lester Nevins (500),
stepsons, Matthias J. Malin (500) and David G. Raquet (500), and
stepdaughters, Alexandra Nevins (500), Debra N. Safford (500), E. Paige
Malin (500) and Anne K. Malin (1,000) and wife, Sylvia M. Nevins (9,300),
who in addition owns, 9,500 shares.
(9) Includes 80,000 shares held by Susan Stein Elmendorf, who has delegated
investment authority to Mr. Bates, who disclaims any beneficial ownership
of such shares; and options to purchase 25,000 shares currently vested in
the 1992 Stock Option Plan at an exercise price of $2.00 which expire in
July 2006, options to purchase 5,000 shares currently vested in the 1992
Stock Option Plan at an exercise price of $4.50 which expire in January
2006 and options to purchase 5,000 shares currently vested in the 1992
Stock Option Plan at an exercise price of $5.50 per share which expire
January 2007.
(10) Includes options to purchase 40,000 shares currently vested in the 1992
Stock Option Plan at an exercise price of $5.50 per share which expire
July 2007.
(11) Includes options to purchase 5,323 shares currently vested in the 1992
Stock Option Plan at an exercise price of $4.50 per share which expire in
January 2006 and options to purchase 5,000 shares currently vested in the
1992 Stock Option Plan at an exercise price of $5.50 per share which
expire January 2007.
(12) Address is 5445 East Cheryl Parkway, Madison, Wisconsin 53711.
(13) Includes 387,873 shares of Common Stock issuable upon exercise of
outstanding options which will vest within 60 days of September 30, 1998,
of which 137,200 have an exercise price of $0.0625, 175,000 have an
exercise price of $2.00, 10,323 have an exercise price of $4.50 and
65,350 have an exercise price of $5.50 per share.
CHANGES IN CONTROL
As of January 19, 1999, Dr. Sean Carroll, an owner of 15.8% of the Common Stock
of the Company, was in the process of completing a sale of a total of 920,000 of
his shares, approximately 10% of the Company's outstanding Common Stock. The
purchasers are as follows: the Rex James Bates Trust, Davis U. Merwin, the Model
Charitable Lead Trust, Dr. Peter Model, and the Peter Model Trust No. 2. Rex J.
Bates and Peter Model are directors of the Company and trustees for the
respective trusts. Davis U. Merwin is an existing shareholder of the Company.
Upon completion of the transaction, none of the purchasers will be the
beneficial owner of 10% or more of the Company's Common Stock. Other than the
above-described transaction, the Company is not aware of any arrangement or plan
among the purchasers, or with the seller, or by or with any other party, that
would result in a further change in control of the Company or whereby one or
more of the purchasers and any other party would act in concert with respect to
any matter affecting the Company.
DIRECTORS AND EXECUTIVE OFFICERS
The executive officers and directors of the Company, and their ages as of
January 19, 1999, are as follows:
Ophidian Proxy Statement - Page 22 of 34
<PAGE> 25
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Dr. Douglas C. Stafford(1) 43 President, Chief Executive Officer, Director, Treasurer
Mr. William A. Linton(1)(2) 51 Chairman of the Board, Director
Dr. Joseph R. Firca 54 Vice President, Research and Development
Dr. F. Michael Hoffmann 47 Vice President, Genetic Technology Programs
Mr. Donald L. Nevins 60 Vice President, Finance, Chief Financial Officer
Dr. Margaret B. van Boldrik(1)(2) 43 Director, Vice President, Secretary
Mr. Rex J. Bates(3) 75 Director
Dr. W. Leigh Thompson(3) 60 Director
Dr. Peter Model(3) 65 Director
</TABLE>
(1) Member of Executive Search and Review Committee
(2) Member of Stock Option Committee
(3) Member of Audit Committee
The business experience of the Company's Executive Officers (except for Douglas
Stafford, who is also a Director) and that of Director William Linton, who is
not standing for re-election to the Board, is set forth below. For a description
of the business experience of the other Directors, see Proposal One, "Election
of Directors," pages 2 to 5.
Mr. William Linton has served as Chairman of the Board of Directors and a member
of the Board of Directors of the Company since its inception in November 1989.
Mr. Linton founded Promega Corporation, a privately held developer and
manufacturer of biomedical research products, in 1978, continuously serving as
President and Chief Executive Officer and Chairman of the Board of Directors. He
is also a Director of Promega's two joint ventures in the People's Republic of
China: Sino-American Biotechnology Company and Shanghai-Promega Biochemicals
Company LTD. Mr. Linton has extensive experience in biotechnology product
development and in structuring both U.S. and international marketing and
strategic business partnerships. Since 1996, Mr. Linton has served as the
President of the Fitchburg Center Corporation, a privately held real estate
development company, and on the Board of Directors of Wisconsin Manufacturers
and Commerce, a trade association since January 1996. Mr. Linton holds a B.S.
degree in Biology from the University of California-Berkeley and conducted
graduate studies at the University of Wisconsin-Madison.
Dr. Joseph Firca has served as the Company's Vice President, Research and
Development since July 1992. Prior to joining the Company, Dr. Firca was Vice
President, Advanced Technologies, at the Pandex Division of Baxter Healthcare
Corporation, a publicly held healthcare products company, responsible for
infectious disease, blood screening systems technology, immunoassay product
development, and advanced technology development from May 24, 1985, to January,
1992. Previously he held several scientific management positions at Abbott
Laboratories from 1976 to 1985. Dr. Firca received a B.S. degree in biology from
Xavier University, a M.S. from Duquesne University, and a Ph.D. in Microbiology
from the University of Cincinnati. In addition, Dr. Firca conducted
post-doctoral research at the Argonne National Laboratory and was a Visiting
Associate at the California Institute of Technology.
Ophidian Proxy Statement - Page 23 of 34
<PAGE> 26
Dr. F. Michael Hoffmann has served the Company as Vice President of Genetic
Technology Programs since August 1997. Effective December 1, 1998, the Company
entered into a new employment agreement with Dr. Hoffmann to change his
employment status from full-time to part-time, for a period of one year.
Pursuant to this agreement, Dr. Hoffmann will receive an annual compensation of
$50,000 and may receive additional incentive and bonus compensation upon the
completion of specific performance objectives. He was employed by the Company
from November 1996 to July 1997 as Principal Scientist in Business Development.
From July 1994, Dr. Hoffmann is a Professor of Oncology and Medical Genetics at
the McArdle Laboratory for Cancer Research at the University of
Wisconsin-Madison. He held the positions of Associate and Assistant Professor at
the University of Wisconsin-Madison from July 1984 to July 1994. He conducted
post-doctoral research at Harvard University and the Massachusetts Institute of
Technology from January 1979 to June 1984. He holds a Ph.D. degree in
biochemistry from Cornell University and a B.S. degree in chemistry from
Rensselaer Polytechnic Institute.
Mr. Donald L. Nevins joined the Company as Vice President, Finance, and Chief
Financial Officer in November 1997. From 1993 to 1997, Mr. Nevins operated his
own consulting firm, CPR Electronics, Inc., which provided financial and
strategic services to development-stage companies. He has been President, CEO,
and a director of CPR Electronics Inc., a company he formed for investment and
consulting purposes in 1993 which became inactive in September 1997. He was
president, CEO, and a director of LouveRail Enterprises, Inc. in 1996 and Vice
President-Finance and CFO of Personnel Data Systems from 1995 to 1996. From 1988
to 1992, he was chief financial officer of C & D Technologies, Inc., a publicly
held battery and electronics company. From 1986 to 1988, he was senior vice
president of finance and a director of Protein Sciences Corp., a private
biopharmaceutical company. From 1976 to 1986, he held a series of positions with
Uniroyal Inc. including chief financial officer of two major groups (Chemical
and Engineered Products). From 1974 to 1976, Mr. Nevins was assistant controller
of Combustion Engineering, Inc. and chief financial officer of its Brazilian
subsidiary. From 1967 to 1972, he held a series of financial staff positions
with Commercial Union Companies, Inc.; from 1972 to 1974 with Northwest
Industries, Inc.; from 1964 to 1967 with Carborundum Company. From 1960 to 1964,
Mr. Nevins was a certified public accountant at Price Waterhouse & Co. Mr.
Nevins received his B.B.A. from the University of Pittsburgh and a M.B.A. from
the State University of New York.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors held a total of five meetings and took action by written
consent on two occasions during the last fiscal year. No Director attended fewer
than 75% of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings held by all committees of the Board
of Directors on which he or she served.
The Audit Committee consisted of Directors Rex J. Bates, W. Leigh Thompson, and
Peter Model and did not meet during the last fiscal year. This Committee reviews
the scope and results of the Company's financial statements conducted by the
Company's
Ophidian Proxy Statement - Page 24 of 34
<PAGE> 27
independent accountants, the scope of other services provided by the Company's
independent accountants, proposed changes in the Company's financial and
accounting standards and principles, and the Company's policies and procedures
with respect to its internal accounting, auditing and financial controls, and
makes recommendations to the Board of Directors on the engagement of the
independent accountants, as well as other matters which may come before it or as
directed by the Board of Directors.
The Stock Option Committee consisted of Directors William A. Linton and Margaret
B. van Boldrik and did not meet during the last fiscal year. This Committee
administers the Company's stock option plans.
The Executive Search and Review Committee consisted of Directors Douglas C.
Stafford, William A. Linton, and Margaret B. van Boldrik and met once during the
last fiscal year. This Committee is charged with identifying executive staff
requirements and recruiting to fill those needs.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended, (the
"Exchange Act") requires officers and directors of the Company and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership on Form 3 and changes in ownership on
Form 4 or Form 5 with the Securities and Exchange Commission (the "SEC"). Such
officers, directors, and 10% shareholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that during
Fiscal 1998, all Section 16(a) filing requirements applicable to its officers,
directors, and 10% shareholders were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of January 19, 1999, Dr. Sean B. Carroll, a founder of the Company,
beneficially owned 1,460,333 shares. In exchange for those shares, Dr. Carroll
contributed to the Company in 1990 all of his rights to his invention entitled
"Antivenoms and Methods for Making Antivenoms" which is the basis for the
Company's avian technology, as well as a subsequent assignment in the same year
of his rights to any patent applications filed in connection with the Company's
passive antibody technology. The Company determined that the transfer of Dr.
Carroll's technology rights was adequate consideration for the issuance of these
shares of Company Stock.
As of January 19, 1999, Dr. van Boldrik, Vice President, Secretary, a director
and founder of the Company, owns 1,460,000 shares. In exchange for those shares,
Dr. van Boldrik contributed in 1990 all of her rights in the invention entitled
"Antivenoms and Methods for Making Antivenoms," as well as a subsequent
assignment in the same year of her rights to any patent application filed in
connection with the Company's passive antibody technology. The Company
determined that the transfer of Dr. van Boldrik's
Ophidian Proxy Statement - Page 25 of 34
<PAGE> 28
technology rights was adequate consideration for the issuance of these shares of
Company Stock.
Fitchburg Research Park Associates Limited Partnership ("FRPA"), a Wisconsin
limited partnership of which William A. Linton, Chairman of the Board and a
director, is the sole general partner and holds a 50% ownership interest,
received 800,000 shares when the Company first issued shares January 17, 1990.
In exchange for those shares, FRPA contributed $50,000 for an effective price of
$0.0625 per share. FRPA has distributed its shares from the partnership.
Under the terms of a Stock Warrant granted to FRPA (the "FRPA Warrant") by the
Company on January 17, 1990, designed to protect FRPA against dilution of its
holdings in the Company due to the issuance of shares to employees of the
Company pursuant to the Company's Stock Option Plans, FRPA is entitled to
purchase one share for every four shares issued to employees pursuant to the
Plans. FRPA may purchase a maximum of 114,290 shares under the FRPA Warrant; the
exercise price thereunder is $.0025 per share.
On October 1, 1990, the Company obtained a line of credit from FRPA in the
original principal amount of $250,000 (the "FRPA Line of Credit"). The FRPA Line
of Credit was repaid in full on October 21, 1991, and the line of credit is no
longer in effect. As additional consideration for the line of credit, the
Company granted to FRPA an option to purchase 125,000 shares at a price of $2.00
per share. The option was exercised fully on October 1, 1993 through the payment
of $250,000 for 125,000 shares.
In September 1991, Promega agreed to purchase shares of the Company conditioned
upon its receipt of an exclusive and confidential first right, for a period of
10 years, to review any technology developed by the Company that is incidental
to the human and animal therapeutic and diagnostic markets. "Incidental" refers
to those markets that are not human or animal therapeutics or diagnostics.
Promega serves various incidental markets, such as, research products or food
testing. The arrangement was established so that the Company's core business
interests would not be encumbered by the agreement with Promega and a market
could be established in incidental markets. Promega has 60 days after disclosure
of a technology to review the technology and notify the Company in writing of
its interest in developing the technology. The parties will then negotiate in
good faith for up to 60 days thereafter regarding terms on which Promega might
obtain the right to use the technology. If Promega and the Company fail to enter
into an agreement within 60 days after notice of Promega's interest in the
technology, the Company may attempt to license or assign the rights to the
product to a third party, subject to Promega's right to first refuse the price
and terms offered by a third party, exercisable within 15 days after notice
thereof to Promega. The agreement with Promega will terminate at any time that
Promega's ownership of the Company falls below one percent of the outstanding
shares. Promega currently owns 262,520 shares of Ophidian, or 2.8%.
Ophidian Proxy Statement - Page 26 of 34
<PAGE> 29
Promega and FRPA are affiliated by virtue of common control and partial common
ownership. As sole general partner of FRPA; a shareholder, President, and
Chairman of the Board of Promega; and a director and Chairman of the Board of
the Company, William A. Linton may be subject to various conflicts of interest
in determining whether Promega will pursue, for use in incidental markets, the
development of any technology initially developed by the Company, and would be
subject to a significant conflict of interest in connection with any dispute
that might arise under the disclosure agreement between the Company and Promega
described above.
On January 1, 1994, the Company entered into a Lease with Promega for a 10,000
square foot office/research laboratory and production facility at 5445 East
Cheryl Parkway, Madison, Wisconsin. Mr. Linton is a shareholder, the President
and Chairman of the Board of Promega. The lease provides for a five-year lease
term with an option to renew the lease for an additional five-year term. In June
1998, Ophidian exercised this option.
The facility lease described above gives Promega the right to terminate in case
of a broad range of events of default by the Company, in which event the Company
would lose the value of improvements and may be liable for the remaining rent
even if its rights to use the premises are terminated. As Chairman of the Board
and a director of the Company, Mr. Linton would be subject to a significant
conflict of interest in connection with taking any adverse action on the lease
on behalf of Promega.
Dr. Peter Carroll, who is Dr. Sean Carroll's brother, is an attorney with Medlen
& Carroll, LLP, San Francisco, California, and serves as patent counsel to the
Company. Dr. Peter Carroll and his wife, Maureen Collins-Carroll, were given
40,000 shares as a gift from Dr. Sean Carroll in April 1990. As Dr. Sean
Carroll's brother, Dr. Peter Carroll would have a conflict of interest in any
dispute between Dr. Sean Carroll and the Company, especially with respect to
ownership of intellectual property.
Pursuant to the Lilly Agreements, Lilly can require, subject to certain
qualifications, that the Company register the shares Lilly purchased either in a
separate public offering or in conjunction with a public offering sponsored by
the Company. Lilly has waived its rights to require the Company to register its
shares in conjunction with the Company's initial public offering, but in every
other respect, retains those rights.
The Company believes that each of the transactions set forth above as well as
those currently in effect were entered into on (i) terms as fair as those that
could be obtained from independent third parties, and (ii) were ratified by a
majority (but no less than two) of the Company's independent directors who did
not have an interest in the transaction and who had access to the Company's
counsel at Company expense. All future transactions with the Company in which a
director, officer or 5% shareholder of the Company has a direct or indirect
interest must (i) be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties, and (ii) be approved by a majority of
directors who have no direct or indirect interest in the transaction and who
have access at Company expense to the Company's counsel or independent counsel.
Ophidian Proxy Statement - Page 27 of 34
<PAGE> 30
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by, or paid
for services rendered to the Company in all capacities during Fiscal 1998, 1997,
and 1996 by the Company's President and Chief Executive Officer and all other
corporate officers earning in excess of $100,000 annually.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
------------------- COMMON STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS
- --------------------------- ---- ------ ----- ------------------
<S> <C> <C> <C> <C>
Dr. Douglas Stafford 1998 $179,517 $25,000 ----
President & CEO 1997 $154,162 $10,000 30,000
1996 $146,028 $30,000 ----
Dr. Joseph R. Firca 1998 $139,624 (1) $ --- ----
V P, Research & Development 1997 $132,909 $15,000 20,000
1996 $125,668 $15,000 ----
Dr. F. Michael Hoffmann 1998 $118,381 $25,000 ----
V P, Genetic Technology 1997 $86,250 (2) $ --- 100,000
Programs 1996 $ --- $ --- ----
Donald L. Nevins 1998 $115,781 (3) $ --- ----
V P, Finance & CFO 1997 $ --- $ --- ----
1996 $ --- $ --- ----
</TABLE>
(1) Does not include certain relocation expenses to be paid by the Company in
the future to Dr. Firca.
(2) Dr. Hoffmann became a Vice President of the Company as of August 1, 1997.
(3) Mr. Nevins became a Vice President of the Company as of November 6, 1997,
and his salary compensation includes a nonaccountable relocation allowance of
$20,000.
The following table sets forth certain information regarding the value of
exercised and unexercised stock options held by each of the named Executive
Officers as of September 30, 1998. None of the named Executive Officers
exercised options to purchase Common Stock during the fiscal year ended
September 30, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SEPTEMBER 30, 1998 AT SEPTEMBER 30, 1998 (1)
------------------ -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Dr. D. C. Stafford...... 193,200 24,000 $277,525 $0
Dr. J. R. Firca............ 104,000 16,000 $6,250 $0
Dr. F. M. Hoffmann.... 20,000 80,000 $0 $0
Mr. D. L. Nevins (2)..... N/A N/A N/A N/A
</TABLE>
(1) The value of the options is based upon the difference between the exercise
price and the value of $2.0625 per share based on the closing price of the stock
on September 30, 1998.
Ophidian Proxy Statement - Page 28 of 34
<PAGE> 31
(2) Award of 50,000 shares, pending shareholder approval of 1998 Incentive Stock
Option Plan.
REPORT ON EXECUTIVE COMPENSATION
The Company does not have a compensation committee. The Board of Directors
annually reviews executive compensation and makes determinations as to the
optimal level of compensation for each of the Company's executive officers. It
is the philosophy of the Board of Directors that the total executive
compensation package should align the financial interests of the Company's
executives with the short-term and long-term goals of the Company and
consequently enhance shareholder value. The key elements of the Company's
current compensation program include a base salary and equity participation
through a long-term incentive plan.
Base Salary. As a development stage company, it is difficult to compare salaries
to any particular peer group. Rather, the Board takes into consideration the
responsibilities, experience level, individual performance levels, and amount of
time devoted to the Company's needs. Salaries are reviewed annually by the Board
based on the foregoing criteria and are adjusted, if warranted, by the Board.
Long-term Incentives. The Company currently has a 1990 Incentive Stock Option
Plan and a 1992 Employee Stock Option Plan in effect for its employees,
advisors, and directors. As discussed above, the Company is seeking shareholder
approval at the Annual Meeting for a 1998 Incentive Stock Option Plan. The
purpose of these plans is to create an opportunity for employees, including
executive officers, to share in the enhancement of shareholder value. These
plans are administered by a committee (the "Stock Option Committee"), which
reviews and grants incentive awards based upon its evaluation of the executive's
individual performance, level of responsibility, and overall contribution
towards the Company past and future success together with the Company's
achievement with respect to development milestones and growth.
Board of Directors
William A. Linton
Director, Chairman of the Board
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As stated above, the Company does not have a compensation committee. The Board
of Directors determines executive compensation. Two of the Company's officers,
the President and Chief Executive Officer, Douglas C. Stafford, and the
Secretary and a Vice President, Dr. Margaret B. van Boldrik are also members of
the Board of Directors. No other officer or employee of the Company serves as a
director. No executive officer of the Company has a relationship that would
constitute an interlocking relationship with the executive officers or directors
of another entity. There were no reportable transactions with any members of the
Board of Directors in Fiscal 1998.
Ophidian Proxy Statement - Page 29 of 34
<PAGE> 32
CONSULTANT COMPENSATION
In June 1996, the Company granted a consultant, G. Steven Burrill, the option to
purchase 100,000 shares of the Company at a price of $4.50 per share,
exercisable until May 2004.
Through December 31, 1998, Dr. van Boldrik received consulting fees for
services, which did not include her services as a Director. Dr. van Boldrik
received a consulting fee of $5,000 per quarter plus health insurance benefits,
subject to annual review. For Fiscal 1998, Dr. van Boldrik received $20,000.
The Company paid Dr. Sean Carroll a monthly consulting fee of $3,333, which
ended January 1998, for consulting services that did not include his services as
a director. Dr. Carroll's consulting agreement expired in January, 1998, and is
not subject to renewal. For Fiscal 1998, Dr. Carroll received $13,332.
Dr. Thompson receives $2,400 per day plus expenses for his services as a
consultant, payable in cash or shares, in any event not to exceed 10,000 shares
in aggregate. For Fiscal 1998, Dr. Thompson received $1,463.
Each of the consultants provides services regarding business development,
technology assessment or research strategies.
STOCK OPTION PLANS
The Company currently has a 1990 Incentive Stock Option Plan and a 1992 Employee
Stock Option Plan ("1990/1992 Stock Option Plans") in force for its employees,
advisors and directors. The 1990/1992 Stock Option Plans provide for the grant
of options to purchase shares, in the case of the 1990 Incentive Stock Option
Plan, at not less than fair market value as of the date options are granted, and
in the case of the 1992 Employee Stock Option Plan at a value determined by the
Stock Option Committee. The 1990/1992 Stock Option Plans are administered by a
committee (the "Stock Option Committee") made up of at least two members of the
Company's Board of Directors, and is currently made up of Dr. van Boldrik and
Mr. Linton. To facilitate the operation of the 1990/1992 Stock Option Plans, the
Company initially reserved 457,160 authorized but unissued shares for the
1990/1992 Stock Option Plans. On December 1, 1992, by a vote of shareholders,
the number of shares available for employee stock options was increased by
200,000 shares, for a total of 657,160.
The Company's Board of Directors has approved and seeks, pursuant to this Proxy
Statement, shareholder approval for a new incentive stock option plan, the 1998
Incentive Stock Option Plan, which will provide for the issuance of options to
purchase 975,000 shares of the Company, reduced by the number of shares issued
or reserved for issuance pursuant to options granted to eligible employees,
advisors, and directors under the 1990/1992 Stock Option Plans. As of January
19, 1999, 657,160 shares had been issued or reserved for issuance pursuant to
options granted under the 1990/1992
Ophidian Proxy Statement - Page 30 of 34
<PAGE> 33
Stock Option Plans, leaving a net, following approval of the 1998 Incentive
Stock Option Plan of 317,840 shares available for new issuances pursuant to
either the 1998 Incentive Stock Option Plan, if adopted by the shareholders, and
the 1990/1992 Stock Option Plans. For a complete discussion of the proposed 1998
Incentive Stock Option Plan, see "Proposal Two - Adoption of the 1998 Incentive
Stock Option Plan," above.
As of January 19, 1999, the Company has entered into stock option agreements
granting Dr. Stafford options to purchase up to 137,200 shares at an exercise
price of $.0625 per share, which options vested in stages ending August 1, 1994,
and may only be exercised prior to July 31, 2000, and to purchase 50,000 shares
at an exercise price of $2.00 per share, which options vested in stages ending
October 25, 1995, and may only be exercised prior to October 24, 2001, and to
purchase 30,000 shares at an exercise price of $5.50 per share, which options
vest in stages ending July 29, 2002, and may only be exercised prior to July 30,
2007. The Company has entered into an agreement granting Dr. Firca the option to
purchase 100,000 shares at an exercise price of $2.00 per share, which option
vested in stages ending July 13, 1997, and may only be exercised prior to July
13, 2002, and to purchase 20,000 shares at an exercise price of $5.50 per share,
which option vests in stages ending July 13, 2002, and may only be exercised
prior to July 30, 2007. The Company has entered into an agreement granting Dr.
Hoffmann the option to purchase 100,000 shares at an exercise price of $5.50 per
share, which option vests in stages ending November 1, 2001, and may only be
exercised prior to July 30, 2007. Following approval by the shareholders of the
1998 Incentive Stock Option Plan, the Company intends to grant Mr. Nevins an
option to purchase 50,000 shares at a price to be determined by the Board of
Directors, which option will vest in stages over a five-year period. The Company
has entered into an agreement granting Mr. Bates the option to purchase 25,000
shares at an exercise price of $2.00 per share, which option was immediately
vested, and may only be exercised prior to July 31, 2006. He was also granted
the option to purchase 5,000 shares at an exercise price of $4.50 per share,
which option vested on January 12, 1997, after one year of service with the
Company, and may only be exercised prior to January 12, 2006. A third Stock
Option Agreement was entered into between the Company and Mr. Bates, according
to which he was granted the option to purchase 5,000 shares at an exercise price
of $5.50, which option vested upon one year of service following January 10,
1997, and may only be exercised prior to January 10, 2007. The Company has
entered into an agreement granting Dr. Model the option to purchase 5,350 shares
at an exercise price of $5.50 per share, which option vested upon one year of
service following January 10, 1997, and may be exercised only prior to January
10, 2007. The Company has entered into an agreement granting Dr. Thompson the
option to purchase 5,323 shares at an exercise price of $4.50 per share, which
option vested upon one year of service following January 12, 1996, and may be
exercised by January 12, 2006, and a second agreement with Dr. Thompson granting
him the option to purchase 5,000 shares at an exercise price of $5.50 per share,
which vested upon one year of service from January 10, 1997, and may be
exercised by January 10, 2007. The Company has entered into similar agreements
with 21 Company employees who are not executive officers pursuant to the
1990/1992 Stock Option Plans, granting options to purchase an aggregate of
149,977 shares of common stock at a weighted average exercise price of $2.77 per
share. The number of shares reported in the
Ophidian Proxy Statement - Page 31 of 34
<PAGE> 34
Prospectus dated May 7, 1998, was 112,975. That number did not include 45,760
shares granted to an employee under Ophidian's 1990 Incentive Stock Option Plan.
Those shares are now reported in the 149,977 figure. The options granted
pursuant to the 1990/1992 Stock Option Plans are nontransferable, but may be
exercised by the personal representative of a holder thereof in the event of
death.
401(K) RETIREMENT PLAN
Effective October 1, 1993, the Company established a profit sharing plan and
trust to provide retirement benefits for eligible employees. The Ophidian
Pharmaceuticals, Inc. 401(k) Plan (the "401(k) Plan") is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended. Participants may direct a portion of their compensation, the lesser of
15% or $10,000 (the maximum limit set by law for 1999), to be contributed to
their accounts under the 401(k) Plan. The Company has arranged for the firm of
Robert W. Baird and Company to provide investment services to employees for
their funds contributed to the 401(k) Plan. The Company may, but is not required
to, match a participant's pre-tax contributions to the 401(k) Plan. In addition,
the Company may make discretionary contributions to the 401(k) Plan on an annual
basis. To date, the Company has not made any contributions under the 401(k) Plan
in addition to participants' own contributions. Participants are always vested
fully in their pre-tax contributions to the 401(k) Plan. Generally, amounts
contributed to the 401(k) Plan (and any earnings or interest) may not be
distributed until the participant's death, disability, retirement or termination
of employment. There may be certain tax penalties levied for lump-sum
withdrawals made prior to age 59 1/2, unless the sum is rolled over into another
qualified plan or individual retirement account. In addition, funds may be made
available in the form of a loan or hardship distribution to a participant in the
event of an immediate and heavy financial necessity.
DIRECTOR COMPENSATION
Non-employee Directors of the Company are paid $1,000 per regular meeting at
which the directors attend in person and $500 per substantive telephonic meeting
of the Board of Directors, which amounts are payable in cash or in shares of the
Company. In Fiscal 1998, Drs. van Boldrik and Thompson did not receive
compensation as Directors of the Company but received compensation as
consultants to the Company. See "Consultant Compensation" above.
EMPLOYMENT AND CONSULTING AGREEMENTS
The Company has entered into agreements with all its employees, including Drs.
Stafford, Firca, Hoffmann, and Mr. Nevins, who are corporate officers,
concerning ownership of intellectual property. These agreements prohibit
competition with the Company during and for a term of one year after termination
of, employment with the Company. They obligate each employee to keep
confidential the trade secrets and other proprietary information of the Company,
and employees are required to disclose and
Ophidian Proxy Statement - Page 32 of 34
<PAGE> 35
assign to the Company all of their discoveries and inventions and any and all
patent rights therein.
Effective June 1, 1997, the Company entered into an employment agreement with
Dr. Douglas Stafford, President and Chief Executive Officer of the Company, for
a three-year term. Pursuant to such agreement, Dr. Stafford receives an annual
base salary of $180,000 subject to annual review and increase by mutual
agreement.
Effective June 1, 1997, the Company entered into an employment agreement with
Dr. Joseph Firca, Vice President, Research and Development of the Company, for a
three-year term. Pursuant to such agreement, Dr. Firca receives an annual base
salary of $140,000 subject to annual review and increase by mutual agreement.
Effective August 1, 1997, the Company entered into an employment agreement with
Dr. F. Michael Hoffmann, Vice President, Genetic Technology Programs of the
Company, for a three-year term. Pursuant to such agreement, Dr. Hoffmann
received an annual base salary of $125,000 subject to annual review and increase
by mutual agreement. Effective December 1, 1998, the Company entered into a new
employment agreement with Dr. Hoffmann to change his employment status from
full-time to part-time, for a period of one year. Pursuant to this agreement,
Dr. Hoffmann will receive an annual compensation of $50,000 and may receive
additional incentive and bonus compensation upon the completion of specific
performance objectives.
Effective November 6, 1997, the Company entered into an employment agreement
with Donald L. Nevins, Vice President, Finance, and Chief Financial Officer. Mr.
Nevins assumed his duties with the Company December 1, 1997. Mr. Nevins receives
an annual base salary of $110,000, subject to annual review and increases by
mutual agreement.
Scientists and consultants retained by the Company will generally be
contractually obligated to disclose and assign to the Company certain ideas and
inventions developed in the performance of duties for the Company and will be
prohibited from disclosing any confidential Company information to anyone
outside the Company at any time. The terms of their agreements may depend upon
the outcome of negotiations and the level of protection provided by other
circumstances.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the percentage change in cumulative total
shareholder return on the Company's Common Stock with the cumulative return on
the NASDAQ (Composite) Stock Market Index (designated as "Broad Market" below)
and the NASDAQ Biotechnology Stock Index (designated as "Peer" below) during the
period beginning June 12, 1998 (the date on which the Company's Common Stock
began trading separately from the warrants on the Nasdaq Small Cap System)
through September 30, 1998. The comparison assumes that $100 was invested on
June 12, 1998, in the Company's Common Stock and in the foregoing indices and
assumes the reinvestment of dividends.
Ophidian Proxy Statement - Page 33 of 34
<PAGE> 36
<TABLE>
<CAPTION>
MEASUREMENT PERIOD OPHIDIAN BROAD MARKET PEER
- ------------------ -------- ------------ ----
<S> <C> <C> <C>
June 12, 1998 100.00 100.00 100.00
September 30, 1998 44.59 97.07 101.52
December 31, 1998 37.84 125.65 139.39
</TABLE>
SIGNATURE
Pursuant to the requirements of Section 14 of the Securities and Exchange Act of
1934, as amended and Regulation 14A thereunder, the Company has caused this
Proxy Statement to be mailed to the shareholders of the Common Stock and filed
with the Securities and Exchange Commission.
THE BOARD OF DIRECTORS
By: _______________________________
William A. Linton
Director, Chairman of the Board
Madison, Wisconsin
Dated: February 12, 1999
Ophidian Proxy Statement - Page 34 of 34
<PAGE> 37
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
OPHIDIAN PHARMACEUTICALS, INC.
1998 INCENTIVE STOCK OPTION PLAN
- --------------------------------------------------------------------------------
1. Purpose. The purpose of the Ophidian Pharmaceuticals, Inc. 1998
Incentive Stock Option Plan (the "Plan") is to encourage certain key employees
of Ophidian Pharmaceuticals, Inc. (the "Company") to acquire or increase their
stock ownership in the Company, to provide an incentive to such employees to
promote the financial success of the Company, and to enable the Company to
attract and retain key personnel necessary for continued growth and
profitability.
2. Effective Date and Term of Plan. The Plan shall become effective on
the date adopted by the Board of Directors of the Company ("Board of Directors")
and shall continue for a period of ten years thereafter unless sooner terminated
as provided in Paragraph 17.
3. Approval of Shareholders. The Plan is subject to the approval of
holders of a majority of all of the outstanding voting shares of the Company. If
it is not so approved on or before one year after the date of adoption of the
Plan by the Board of Directors, the Plan shall not come into effect and any
options granted pursuant to the Plan shall be deemed canceled. No option may be
exercised prior to approval of the Plan by the shareholders.
4. Stock Subject to Plan. Only common stock of the Company ("Common
Stock") may be issued pursuant to options granted under this Plan. The maximum
number of shares of Common Stock that may be issued pursuant to the exercise of
options granted under the Plan ("Options") is Nine Hundred Seventy-Five Thousand
(975,000) shares, reduced by the number of shares from time to time reserved by
the Company for issuance upon exercise of then outstanding options granted under
the Company's 1990 Incentive Stock Option Plan and the Company's 1992 Employee
Stock Option Plan as amended and further reduced by shares issued upon the
exercise of options granted under such plans, and subject to any adjustments
provided in Paragraph 16. If any Options expire or terminate for any reason
without having been exercised in full, the unpurchased shares subject thereto
shall again be available for further grants under the Plan.
5. Administration. The Plan shall be administered by the committee
described in Paragraph 6 (the "Committee"). Subject to the express provisions of
the Plan, the Committee shall have complete authority in its discretion, to
determine those employees ("Participants") to whom Options shall be granted, the
option price, the option periods and the number of shares to be subject to each
Option. Subject to the express provisions of the Plan, the Committee shall also
have the authority in its discretion to prescribe the time or times at which
Options may be exercised, the limitations upon the exercise of Options
1998 Incentive Stock Option Plan - Page A-1
<PAGE> 38
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
(including limitations effective upon the death, disability or termination of
employment of any Participant) and the restrictions, if any, to be imposed upon
the transferability of shares acquired upon exercise of Options. In making such
determinations, the Committee may take into account the nature of the services
rendered by the respective Participants, their present and potential
contributions to the success of the Company and such other factors as the
Committee in its discretion shall deem relevant. Subject to the express
provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option agreements (which need not be identical), to determine whether the shares
delivered upon exercise of Options will be treasury shares or will be authorized
but previously unissued shares and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determinations on
the matters referred to in this paragraph shall be conclusive.
6. Committee. The Committee shall consist of two or more members of the
Board of Directors who are not currently an officer or other employee of the
Company, do not receive compensation from the Company other than as a Director,
and who otherwise qualify as a "non-employee director" as that term is defined
in Rule 16b-3(b)(3) under the Securities and Exchange Act of 1934, as amended.
The Committee shall be appointed from time to time by the Board of Directors,
which may from time to time appoint members of the Committee in substitution for
members previously appointed and may fill vacancies, however caused, in the
Committee. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing and signed by all of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may hold meetings by use of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other.
7. Eligibility. An Option may be granted under the Plan only to an
officer or other key employee of the Company, and of its present and future
subsidiaries, as defined in Section 424(f) of the Internal Revenue Code of 1986,
as amended ("Subsidiaries"). The foregoing notwithstanding, members of the
Committee shall not, while serving as members of the Committee, be eligible to
receive Options.
8. Option Price. The option price per share will be determined by the
Committee at the time each Option is granted, but shall not be less than 100% of
the fair market value, as determined by the Committee, of a share of Common
Stock on the date of grant. If such Option is granted to a person who owns,
directly or indirectly, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company on the date of the grant,
the option price per share shall not be less than 110% of its fair market value.
9. Option Periods. The term of each Option will be for such period not
exceeding ten years from the date of grant, as the Committee shall determine;
provided, however, that if such Option is granted to a person who owns, directly
or indirectly, stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company on the
1998 Incentive Sotck Option - Page A-2
<PAGE> 39
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
date of the grant, the term of such Option shall not exceed five years from the
date of grant. An Option shall be considered granted on the date the Committee
acts to grant the Option or such other date as the Committee shall specify. Each
Option shall be subject to earlier termination as described under Paragraphs 13
and 17.
10. Exercise of Options. Each Option may be exercised at any time
during the option period for such Option (subject to the restrictions in this
paragraph, in Paragraph 13 and in the agreements referred to in Paragraph 14) by
written notice delivered to an officer of the Company, stating the number of
shares with respect to which the Option is being exercised.
11. Payment for Option. Within five (5) business days following the
date of exercise, the Participant shall make full payment of the option price
(i) in cash; (ii) with the consent of the Committee, by tendering previously
acquired shares of Common Stock (valued at their fair market value, as
determined by the Committee, as of the date of exercise); or (iii) any
combination of (i) and (ii). Shares of Common Stock tendered shall be duly
endorsed in blank or accompanied by stock powers duly endorsed in blank. Upon
receipt of the payment of the entire option price for the shares so purchased,
certificates for such shares shall be delivered to the Participant.
12. Maximum Per Participant. The aggregate fair market value, as
determined by the Committee, of the stock for which options held by a
Participant are exercisable for the first time under the Plan or other options
granted to the Participant under any plan of the Company or any Subsidiary
during any calendar year shall not exceed $100,000. For purposes of this
paragraph, the fair market value of stock subject to an Option or other
Incentive Stock Option shall be determined as of the date the Option or other
Incentive Stock Option, as the case may be, is granted.
13. Termination of Employment. Except as hereinafter provided, no
Option may be exercised later than three months after a Participant terminates
his employment with the Company or its Subsidiaries, as the case may be. If
termination of employment results from the deliberate, willful or gross
misconduct of a Participant, then the Option may not be exercised and all of the
Participant's rights in the Option shall be forfeited upon termination. If
termination of employment results from the disability of a Participant within
the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended, any Option may be exercised at any time within twelve months after such
termination of employment, but in no event beyond the option period. If
termination of employment results from the death of a Participant, the personal
representative of the Participant's estate, or a person who by bequest,
inheritance, or otherwise by reason of the Participant's death, acquired the
right to exercise the Option, may exercise any Option at any time after the
death of such Participant, but in no event beyond the option period. The
Committee may impose additional restrictions upon the exercise of Options after
termination of employment, including prohibition of such exercise.
14. Agreements. Options granted pursuant to the Plan shall be evidenced
by stock option agreements in such form as the Committee shall from time to time
adopt.
1998 Incentive Stock Option Plan - Page A-3
<PAGE> 40
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
15. Nontransferability of Options. Options under the Plan are not
transferable by a Participant other than by will or the laws of descent or
distribution, and may be exercised during the lifetime of a Participant only by
such Participant.
16. Adjustment of Number of Shares. In the event of any change in the
outstanding Common Stock of the Company by reason of stock dividends,
recapitalizations, reorganizations, mergers, consolidations, split-ups,
combinations or exchanges of shares and the like, the Committee shall,
consistent with such change, appropriately adjust the number and kind of shares
which thereafter may be optioned and sold under the Plan, the number and kind of
shares under option in outstanding stock option agreements and the purchase
price per share thereof. The determination of the Committee as to any such
adjustment shall be final and conclusive. No adjustment or substitution provided
for in this paragraph shall require the Company in any stock option agreement to
sell a fractional share and the total substitution or adjustment with respect to
each stock option agreement shall be limited accordingly.
17. Amendment, Suspension or Termination. The Board of Directors,
without further approval of the shareholders, may from time to time amend,
suspend or terminate the Plan in such respects as the Board may deem advisable,
provided, however, that no amendment shall become effective without prior
approval of the shareholders which would (i) increase the aggregate number of
shares which may be issued pursuant to Options granted under the Plan, except as
permitted under Paragraph 16; (ii) permit the granting of options to anyone
other than an officer or key employee of the Company or a Subsidiary or to a
member of the Committee; (iii) decrease the minimum option prices; (iv) increase
the maximum option periods; (v) increase the maximum per Participant set in
Paragraph 12; or (vi) extend the term of the Plan. No amendment shall, without
the Participant's consent, alter or impair any of the rights or obligations
under any Option granted to the Participant prior to the effective date of such
amendment.
Dated as of the 7th day of August, 1998.
OPHIDIAN PHARMACEUTICALS, INC.
By: /s/ Douglas C. Stafford
----------------------------------------
Douglas C. Stafford, President and
Chief Executive Officer
Attest: /s/ Margaret B. van Boldrik
------------------------------------
Margaret B. van Boldrik, Secretary
1998 Incentive Stock Option - Page A-4
<PAGE> 41
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
OPHIDIAN
PHARMACEUTICALS, INC.
STOCK OPTION AGREEMENT
This Agreement, made as of the _____ day of _________________, 1999, by
and between OPHIDIAN PHARMACEUTICALS, INC. (the "Company") and _____________
_________________________ (the "Participant").
RECITALS
The Company has adopted the Ophidian Pharmaceuticals, Inc. 1998
Incentive Stock Option Plan (the "Plan") to encourage certain key employees of
the Company to acquire or increase their stock ownership in the Company, to
provide an incentive to such employees to promote the financial success of the
Company and to enable the Company to attract and retain personnel necessary for
continued growth and profitability.
The Company has employed the Participant as a key employee and
considers it desirable and in its best interests to grant to the Participant an
option to purchase shares of the Common Stock of the Company.
The option to purchase granted pursuant to this Agreement is intended
by the parties to be, and shall be treated as, an incentive stock option as such
term is defined in Section 422 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, it is agreed as follows:
1. GRANT OF OPTION. The Company hereby grants the Participant the option to
purchase up to _______________ (_____) shares of Common Stock of the
Company (the "Option Shares"), subject to the terms and conditions of this
Agreement.
2. PURCHASE PRICE. The purchase price for the Option Shares shall be
$___________ per share, which is the fair market value of the shares as of
the date of this Agreement.
3. TIME OF EXERCISE. Subject to the provisions of Paragraphs 6 and 7, the
Participant may elect to exercise the Option granted hereunder in ______
(__) installments, as follows:
[insert]
1998 Incentive Stock Option Plan - Stock Option Agreement - Page A-5
<PAGE> 42
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
However, if the Participant does not purchase the full number of shares to
which the Participant is entitled in any period, the Participant shall be
permitted to purchase those remaining shares in a later period through and
including ________, 2009, in addition to those shares which the Participant
may otherwise be entitled to purchase. No partial exercise of such Option
may be for less than one hundred (100) full shares. In no event shall the
Company be required to transfer fractional shares to the Participant.
4. METHOD OF EXERCISE. Each Option may be exercised at any time during the
option period for such Option (subject to the limitations in Paragraph 6
and the restrictions in Paragraph 7) by written notice delivered to an
officer of the Company, stating the number of shares with respect to which
the Option is being exercised.
5. PAYMENT FOR OPTION. Within five (5) business days following the date of
exercise, the Participant shall make full payment of the option price (i)
in cash; (ii) with the consent of the Company, by tendering previously
acquired shares of Common Stock (valued at their fair market value, as
determined by the Company, as of the date of exercise); or (iii) any
combination of (i) or (ii). Shares of Common Stock tendered shall be duly
endorsed in blank or accompanied by stock powers duly endorsed in blank.
Upon receipt of the payment of the entire option price for the shares so
purchased, certificates for such shares shall be delivered to the
Participant.
6. LIMITATIONS. The aggregate fair market value, as determined by the Company,
of the stock for which options held by the Participant are exercisable for
the first time under this Option or other options under any plan of the
Company or any Subsidiary during any calendar year shall not exceed
$100,000. For purposes of this paragraph, the fair market value of stock
subject to an Option or other Incentive Stock Option shall be determined as
of the date the Option or other Incentive Stock Option, as the case may be,
is granted.
7. TERMINATION OF OPTION. Except as hereinafter provided, no Option may be
exercised later than three months after the Participant terminates
employment with the Company or its Subsidiaries, as the case may be. If
termination of employment results from the deliberate, willful or gross
misconduct of the Participant, then the Options may not be exercised and
all of the Participant's rights in the Options shall be forfeited upon
termination. If termination of employment results from the disability of
the Participant within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended, any Option may be exercised at any time
within twelve months after such termination of employment, but in no event
beyond
1998 Incentive Stock Option Plan - Stock Option Agreement - Page A-6
<PAGE> 43
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT A TO PROXY STATEMENT
the option period. If termination of employment results from the
death of the Participant, the personal representative of the Participant's
estate, or a person who by bequest, inheritance, or otherwise by reason of
the Participant's death acquired the right to exercise the option, may
exercise any Option at any time within three years after the death of the
Participant, but in no event beyond the option period.
8. NONTRANSFERABILITY OF OPTIONS. The Options granted hereunder are not
transferable by the Participant other than by will or the laws of descent
or distribution, and may be exercised during the lifetime of the
Participant only by the Participant.
9. ADJUSTMENT OF NUMBER OF SHARES. In the event of any change in the
outstanding Common Stock of the Company by reason of stock dividends,
recapitalizations, reorganizations, mergers, consolidations, split-ups,
combinations or exchanges of shares and the like, the Company shall,
consistent with such change, appropriately adjust the number and kind of
shares which thereafter may be optioned and sold under this Agreement, and
the purchase price per share thereof. The determination of the Company as
to any such adjustment shall be final and conclusive. No adjustment or
substitution provided for in this paragraph shall require the Company to
sell a fractional share and the total substitution or adjustment shall be
limited accordingly.
10. BINDING EFFECT. This Agreement shall be construed in accordance with the
provisions of the Plan as implemented from time to time by the Committee
(as defined in the Plan) and shall be binding upon the parties hereto and
their respective heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first above written.
OPHIDIAN PHARMACEUTICALS, INC.
BY:
---------------------------------
ATTEST:
-----------------------------
PARTICIPANT:
------------------------------------
[print name]
------------------------------------
1998 Incentive Stock Option Plan - Stock Option Agreement - Page A-7
<PAGE> 44
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
AGREEMENT AND PLAN OF MERGER
OF OPHIDIAN PHARMACEUTICALS, INC.
A WISCONSIN CORPORATION
AND
OPHIDIAN PHARMACEUTICALS, INC.
A DELAWARE CORPORATION
This Agreement and Plan of Merger, dated as of ___________________,
1999, (the "Agreement") is between Ophidian Pharmaceuticals, Inc., a Wisconsin
corporation ("Ophidian Wisconsin") and Ophidian Pharmaceuticals, Inc., a
Delaware corporation ("Ophidian Delaware"). Ophidian Wisconsin and Ophidian
Delaware are sometimes referred to as the "Constituent Corporations."
RECITALS
A. Ophidian Wisconsin is a corporation duly organized and existing
under the laws of the State of Wisconsin and has an authorized capital of
22,400,000 shares, all of which are designated "Common Stock", $.0025 par value.
On the date hereof, 9,223,018 shares of Common Stock are issued and outstanding.
B. Ophidian Delaware is a corporation duly organized and existing under
the laws of the State of Delaware and has an authorized capital of 24,400,000
shares, 22,400,000 of which are designated "Common Stock", $0.0025 par value,
and 2,000,000 of which are designated "Preferred Stock," $0.001 par value. On
the date hereof, 100 shares of Common Stock are issued and outstanding, all of
which are held by Ophidian Wisconsin. No shares of Preferred Stock are issued or
outstanding.
C. The Board of Directors of Ophidian Wisconsin has determined that for
the purpose of effecting the reincorporation of Ophidian Wisconsin in the State
of Delaware, it is advisable and in the best interests of Ophidian Wisconsin
that Ophidian Wisconsin merge with and into Ophidian Delaware upon the terms and
conditions here provided.
D. The Constituent Corporations intend, by executing this Agreement, to
adopt a plan of reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and to cause the merger described
herein to qualify as a reorganization under the provisions of Section 368 of the
Code.
E. The respective Boards of Directors of Ophidian Delaware and Ophidian
Wisconsin have approved this Agreement and have directed that this Agreement be
submitted to a vote of their respective shareholders and if so approved,
executed by the undersigned officers.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Ophidian Wisconsin and Ophidian Delaware hereby agree to the
terms and conditions set forth below:
Agreement and Plan of Merger - Page B-1
<PAGE> 45
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
I. MERGER
1.1 Merger. In accordance with the provisions of this Agreement, the
Delaware General Corporation Law and the Wisconsin Business Corporation Law,
Ophidian Wisconsin shall merge into Ophidian Delaware (the "Merger"), the
separate existence of Ophidian Wisconsin will cease and Ophidian Delaware will
be, and is sometimes referred to herein as, the "Surviving Corporation," and the
name of the Surviving Corporation will be Ophidian Pharmaceuticals, Inc.
1.2 Filing and Effectiveness. The merger will become effective when an
executed Certificate of Merger meeting the requirements of the Delaware General
Corporation Law is filed with the Secretary of State of the State of Delaware.
The following actions shall occur prior to such filing:
(a) This Agreement and Plan of Merger is adopted and approved by the
shareholders of each Constituent Corporation in accordance with the requirements
of the Delaware General Corporation Law and the Wisconsin Business Corporation
Law;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement are satisfied or duly waived by the party entitled
to satisfaction thereof; and
(c) An executed Certificate of Merger or an executed counterpart of
this Agreement meeting the requirements of the Delaware General Corporation Law
is filed with the Secretary of State of the State of Delaware; and
(c) An executed Articles of Merger meeting the requirements of the
Wisconsin Business Corporation Law is filed with the Wisconsin Department of
Financial Institutions.
The date and time when the Merger becomes effective is the "Effective Date of
the Merger."
1.3 Effect of the Merger. Upon the Effective Date of the Merger, the
separate existence of the Ophidian Wisconsin ceases and Ophidian Delaware, as
the Surviving Corporation, (i) possesses all of Ophidian Wisconsin's assets,
rights, powers and property as constituted immediately prior to the Effective
Date of the Merger, (ii) is subject to all actions previously taken by its and
Ophidian Wisconsin's Board of Directors, (iii) succeeds, without other transfer,
to all of the assets, rights, powers and property of Ophidian Wisconsin in the
manner more fully set forth in Section 259 of the Delaware General Corporation
Law, (iv) continues to be subject to all of its debts, liabilities and
obligations as constituted immediately prior to the Effective Date of the
Merger, and (v) succeeds, without other transfer, to all of the debts,
liabilities and obligations of Ophidian Wisconsin in the same manner as if
Ophidian Delaware had itself incurred them, all as more fully provided under the
applicable provisions of the Delaware General Corporation Law and the Wisconsin
Business Corporation Law.
Agreement and Plan of Merger - Page B-2
<PAGE> 46
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Ophidian Delaware in effect immediately prior to the Effective Date of the
Merger will continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended.
2.2 Bylaws. The Bylaws of Ophidian Delaware in effect immediately prior
to the Effective Date of the Merger will continue in full force and effect as
the Bylaws of the Surviving Corporation until duly amended.
2.3 Directors and Officers. The directors and officers of Ophidian
Wisconsin immediately prior to the Effective Date of the Merger will be the
directors and officers of the Surviving Corporation until their successors are
duly elected and qualified or until as otherwise provided by law, the
Certificate of Incorporation of the Surviving Corporation, or the Bylaws of the
Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
3.1 Ophidian Wisconsin Common Shares. Upon the Effective Date of the
Merger, each share of Ophidian Wisconsin Common Stock, $.0025 par value, issued
and outstanding immediately prior thereto will be converted into and become one
fully paid and nonassessable share of Common Stock, $0.0025 par value, of the
Surviving Corporation. The registered owner of any outstanding certificate for
shares of Ophidian Wisconsin will thereafter and until such certificate is
surrendered for transfer or conversion or otherwise accounted for to the
Surviving Corporation, have and be entitled to exercise any voting and other
rights with respect to and to receive dividends and other distributions upon the
shares of Common Stock of the Surviving Corporation represented by such
outstanding certificate as provided above.
3.2 Ophidian Wisconsin Options. Upon the Effective Date of the Merger,
the Surviving Corporation will assume and continue the stock option plans and
all other employee benefit plans of Ophidian Wisconsin. Each outstanding and
unexercised option, or other right to purchase, or security convertible into,
Ophidian Wisconsin Common Stock will become an option, or right to purchase, or
a security convertible into the Surviving Corporation's Common Stock on the
basis of one share of the Surviving Corporation's Common Stock for each share of
Ophidian Wisconsin Common Stock issuable pursuant to any such option, or stock
purchase right or convertible security, on the same terms and conditions and at
an exercise or conversion price per share equal to the exercise or conversion
price per share applicable to any such Ophidian Wisconsin option, stock purchase
right or other convertible security at the Effective Date of the Merger.
A number of shares of the Surviving Corporation's Common Stock will be
reserved for issuance upon the exercise of options, stock purchase rights and
convertible securities equal to the number of shares of Ophidian Wisconsin
Common Stock so reserved immediately prior to the Effective Date of the Merger.
Agreement and Plan of Merger - Page B-3
<PAGE> 47
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
3.3 Ophidian Delaware Common Stock. Upon the Effective Date of the
Merger, each share of Ophidian Delaware Common Stock, $.0025 par value, issued
and outstanding immediately prior thereto will, by virtue of the Merger and
without any action by Ophidian Delaware, the holder of such shares or any other
person, be canceled and returned to the status of authorized but unissued
shares.
IV. GENERAL
4.1 Covenants of Ophidian Delaware. Ophidian Delaware agrees that it
will, on or before the Effective Date of the Merger take all actions as may be
required by the Wisconsin Business Corporation Law to effect the Merger and to
qualify Ophidian Delaware to do business in Wisconsin following the Merger.
4.2 Further Assurances. When required by Ophidian Delaware or by its
successors or assigns, Ophidian Wisconsin shall execute and deliver any deeds
and other instruments and take such other actions as may be appropriate or
necessary to vest or perfect or conform of record the title and possession of
all the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of Ophidian Wisconsin and otherwise to carry out the
purposes of this Agreement. The officers and directors of Ophidian Delaware are
fully authorized in the name and on behalf of Ophidian Wisconsin or otherwise to
take any and all such action and to execute and deliver any and all such deeds
and other instruments.
4.3 Abandonment. At any time before the Effective Date of the Merger,
this Agreement may be terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either Ophidian Wisconsin or of Ophidian
Delaware, or of both, notwithstanding the approval of this Agreement by the
shareholders of Ophidian Wisconsin or by the sole stockholder of Ophidian
Delaware, or by both.
4.4 Amendment. The Boards of Directors of the Constituent Corporations
may amend this Agreement at any time prior to the filing of this Agreement or
certificate in lieu thereof with the Secretary of State of the State of
Delaware, provided that an amendment made subsequent to the adoption of this
Agreement by the shareholders of either Constituent Corporation may not: (1)
alter or change the amount or kind of shares, securities, cash, property and/or
rights to be received in exchange for or on conversion of all or any of the
shares of any class or series thereof of such Constituent Corporation, (2) alter
or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (3) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of either
Constituent Corporation.
4.5 Registered Office. The registered office of the Surviving
Corporation in the State of Delaware is located at 1209 Orange Street, City of
Wilmington, County of Newcastle, Delaware, 19801 and The Corporation Trust
Company is the registered agent of the Surviving Corporation at this address.
Agreement and Plan of Merger - Page B-4
<PAGE> 48
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
4.6 Agreement. Executed copies of this Agreement will be on file at the
principal place of business of the Surviving Corporation at 5445 East Cheryl
Parkway, Madison, Wisconsin, 53711, and copies thereof will be furnished to any
shareholder of either Constituent Corporation, upon request and without cost.
47. Governing Law. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as applicable, the merger provisions of the
Wisconsin Business Corporation Law.
4.8 Counterparts. In order to facilitate the filing and recording of
this Agreement, it may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Board of Directors of Ophidian Delaware and Ophidian
Wisconsin, is hereby executed on behalf of each of such two corporations and
attested by their duly authorized officers.
OPHIDIAN PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
By:
--------------------------------------
Douglas C. Stafford, Ph.D.
President and Chief Executive Officer
ATTEST:
- -----------------------------------
Margaret van Boldrik, Secretary
OPHIDIAN PHARMACEUTICALS, INC.,
A WISCONSIN CORPORATION
By:
--------------------------------------
Douglas C. Stafford, Ph.D.
President and Chief Executive Officer
ATTEST:
- -----------------------------------
Margaret van Boldrik, Secretary
Agreement and Plan of Merger - Page B-5
<PAGE> 49
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
CERTIFICATE OF SECRETARY
Ophidian Pharmaceuticals, Inc., a Delaware corporation
The undersigned, Margaret B. van Boldrik, Secretary of Ophidian
Pharmaceuticals, Inc., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies, as such Secretary, that the Agreement
and Plan of Merger to which this Certificate is attached, after having been
first duly signed on behalf of the said corporation and having been signed on
behalf of Ophidian Pharmaceuticals, Inc., a corporation of the State of
Wisconsin, was duly adopted by the sole stockholder of Ophidian Pharmaceuticals,
Inc., a Delaware corporation.
WITNESS my hand this _________ day of ______________, 1999.
___________________________________
Margaret B. van Boldrik, Secretary
Agreement and Plan of Merger - Page B-6
<PAGE> 50
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT B TO PROXY STATEMENT
CERTIFICATE OF SECRETARY
Ophidian Pharmaceuticals, Inc., a Wisconsin corporation
The undersigned, Margaret B. van Boldrik, hereby certifies that she is
the duly elected and acting Secretary of Ophidian Pharmaceuticals, Inc., a
Wisconsin corporation ("Ophidian Wisconsin"), and hereby certifies that the
attached Agreement and Plan of Merger between Ophidian Pharmaceuticals, Inc., a
Delaware corporation, and Ophidian Wisconsin was duly approved by the
shareholders of Ophidian Wisconsin on March 23, 1999.
IN WITNESS WHEREOF, the undersigned has hereto subscribed her name this
_____ day of ____________, 1999.
___________________________________
Margaret B. van Boldrik, Secretary
Agreement and Plan of Merger - Page B-7
<PAGE> 51
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
Certificate of Incorporation - Page C-1
CERTIFICATE OF INCORPORATION
OF
OPHIDIAN PHARMACEUTICALS, INC.
ARTICLE 1
The name of the corporation is OPHIDIAN PHARMACEUTICALS, INC. (the
"Corporation").
ARTICLE 2
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE 3
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 Delaware.
ARTICLE 4
4.1 Authorized Stock.
The total number of shares of all classes of stock that the Corporation
shall have authority to issue is 24,400,000 consisting solely of:
22,400,000 shares of common stock, $.0025 par value per share ("Common
Stock"); and
2,000,000 shares of preferred stock, $.001 par value per share
("Preferred Stock").
The following is a statement of the powers, designations, preferences,
privileges, and relative, participating, optional, and other special rights of
the Preferred Stock and Common Stock, respectively.
4.2 Preferred Stock.
The Board of Directors is hereby expressly authorized to provide for,
designate and issue, out of the authorized but unissued shares of Preferred
Stock, one or more series of Preferred Stock, subject to the terms and
conditions set forth herein. Before any shares of any series of Preferred Stock
are issued, the Board of Directors shall fix, and hereby is expressly empowered
to fix, by resolution or resolutions, the following provisions of the shares of
any such series:
Certificate of Incorporation - Page C-1
<PAGE> 52
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
(a) the designation of such series, the number of shares to constitute
such series, and the stated value thereof if different from the par value;
(b) whether the shares of such series shall have voting rights or
powers, in addition to any voting rights required by law, and, if so, the terms
of such voting rights or powers, which may be full or limited;
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any shares of stock
of any other class or series;
(d) whether the shares of such class or series shall be subject to
redemption by the Corporation, and, if so, the times, prices and other
conditions of such redemption;
(e) the amount or amounts payable with respect to shares of such class
or series upon, and the rights of the holders of such class or series in, the
voluntary or involuntary liquidations, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;
(f) whether the shares of such class or series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such class or series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(g) whether the shares of such class or series shall be convertible
into, or exchangeable for, shares of stock of any other class or series of any
other securities and, if so, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same, and any
other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective while any
shares of such class or series are outstanding upon the payment of dividends or
the making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock or shares of stock of any
other class or series;
(i) the conditions or restrictions, if any, to be effective while any
shares of such class or series are outstanding upon the creation of indebtedness
of the Corporation or upon the issue of any additional stock, including
additional shares of such class or series or of any other class or series; and
(j) any other powers, designations, preferences and relative,
participating, optional or other special rights, and any qualifications,
limitations or restrictions thereof.
Certificate of Incorporation - Page C-2
<PAGE> 53
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
The powers, designations, preferences and relative, participating,
optional or other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding. The Board of
Directors is hereby expressly authorized from time to time to increase (but not
above the total number of authorized shares of Preferred Stock) or decrease (but
not below the number of shares thereof then outstanding) the number of shares of
stock of any series of Preferred Stock designated to any one or more series of
Preferred stock pursuant to this Section 4.2. Different series of Preferred
Stock shall not be construed to constitute different classes of stock for
purposes of voting by classes unless expressly so provided in the resolution or
resolutions adopted by the Board of Directors creating or establishing any such
series of Preferred Stock. No resolution, vote, or consent of the holders of the
capital stock of the Corporation shall be required in connection with the
creation or issuance of any shares of any series of Preferred stock authorized
by and complying with the conditions of this Certificate of Incorporation, the
right to any such resolution, vote, or consent being expressly waived by all
present and future holders of the capital stock of the Corporation.
At such time as no shares of any series of Preferred Stock that may be
issued from time to time remain issued and outstanding, including without
limitation because all of such shares have been converted into shares of Common
Stock in accordance with this Certificate of Incorporation, all authorized
shares of such series of Preferred Stock, automatically and without further
actions, shall be reclassified as authorized but unissued shares of undesignated
Preferred Stock of no particular class or series, and any and all of such shares
may thereafter be issued by the Board of Directors of the Company in one or more
series, and the terms of any such series may be determined by the Board of
Directors, as provided in this Section 4.2.
4.3 Common Stock.
(a) Except as otherwise required by law, and subject to the voting
rights provided to the holders of any series of Preferred Stock, the holders of
Common Stock shall have full voting rights and powers to vote on all matters
submitted to stockholders of the Corporation for vote, consent or approval, and
each holder of Common Stock shall be entitled to one vote for each share of
Common Stock held of record by such holder.
(b) Each share of Common Stock issued and outstanding shall be
identical in all respects with each other such share, and no dividends shall be
paid on any shares of Common stock unless the same dividend is paid on all
shares of Common Stock outstanding at the time of such payment. Except for and
subject to those rights expressly granted to the holders of Preferred Stock and
except as may be provided by the laws of the State of Delaware, the holders of
Common Stock shall have all other rights of stockholders, including, without
limitation, (a) the right to receive dividends, when and as declared by the
Board of Directors, out of assets lawfully available therefor, and (b) in the
event of any distribution of assets upon a liquidation or otherwise, the right
to receive ratably and equally all the assets and funds of the Corporation
remaining after the payment to the holders of the Preferred Stock or of any
other class or series of stock ranking senior to the Common Stock upon
liquidation of the specific preferential amounts which they are entitled to
receive upon such liquidation.
Certificate of Incorporation - Page C-3
<PAGE> 54
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
ARTICLE 5
The Corporation reserves the right to amend, alter, change, or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon the
stockholders are granted subject to this right.
ARTICLE 6
The Corporation is to have perpetual existence.
ARTICLE 7
7.1. Limitation of Liability. A director of the Corporation is not
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that such provision shall
not eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under section 174 of the General Corporation
Laws of Delaware; or (iv) for any transaction from which the director derived an
improper personal benefit.
7.2. Indemnification. The Corporation may indemnify to the fullest
extent permitted by law any person made or threatened to be made a party to an
action or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that such person or his or her testator or intestate is or
was a director or officer or employee of the Corporation, or any predecessor of
the Corporation, or serves or served at any other enterprise as a director or
officer or employee or with respect to an employee benefit plan at the request
of the Corporation or any predecessor to the Corporation.
7.3. Amendments. Neither any amendment nor repeal of this Article 7,
nor the adoption of any provision of the Corporation's Certificate of
Incorporation inconsistent with this Article 7, shall eliminate or reduce the
effect of this Article 7, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article 7, would accrue or
arise, prior to such amendment, repeal, or adoption of an inconsistent
provision.
ARTICLE 8
Holders of stock of any class or series of the Corporation are not
entitled to cumulate their votes for the election of directors or any other
matter submitted to a vote of the stockholders.
ARTICLE 9
The Board of Directors, when considering a tender offer or merger or
acquisition proposal, may take into account factors in addition to potential
short-term economic benefits to stockholders of the Corporation, including
without limitation (A) comparison of the proposed
Certificate of Incorporation - Page C-4
<PAGE> 55
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
consideration to be received by stockholders in relation to the then current
market price of the Corporation's capital stock, the estimated current value of
the Corporation in a freely negotiated transaction, and the estimated future
value of the Corporation as an independent entity and (B) the impact of such a
transaction on the employees, suppliers, and customers of the Corporation and
its effect on the communities in which the Corporation operates.
ARTICLE 10
10.1. Number of Directors. The number of directors which constitutes
the whole Board of Directors of the Corporation shall be designated in the
Bylaws of the Corporation.
10.2 Classified Board of Directors. Effective as of the first annual
meeting of the stockholders of the Corporation following its incorporation in
Delaware, the Board of Directors will be divided into three classes of
directors, such classes to be as nearly equal in number of directors as
possible, having staggered three year terms of office. The term of office the
directors of the first class ("Class I") will expire at the second annual
meeting of the Corporation's stockholders following the incorporation of the
Corporation, those of the second class ("Class II") at the third annual meeting
of the Corporation's stockholders following the incorporation, and those of the
third class ("Class III") at the fourth annual meeting of the Corporation's
stockholders following the incorporation. At each annual meeting of
stockholders, nominees will stand for election for three year terms to succeed
those directors whose terms are to expire as of that meeting. Those directors
elected at the meeting to succeed those directors whose terms expire at the
meeting, shall serve for a term expiring at the third annual meeting of
stockholders following their election. Notwithstanding anything expressed or
implied to the contrary in the foregoing provisions of this Article 10, each
director shall continue to serve as such until the expiration of his or her term
as set forth above in this paragraph 10.2 and his or her successor is duly
elected and qualified or until his or her earlier death, incapacity, resignation
or removal. Those directors in office immediately prior to the first annual
meeting of the stockholders of this Corporation shall be allocated among Class
I, Class II and Class III as determined by a resolution of the Board of
Directors.
10.3. Removal of Directors. Any director may be removed only for cause
and only by the vote of the holders of a majority of the shares of the
Corporation's stock entitled to vote for the election of directors, subject to
the right, if any, of holders of any series of Preferred Stock to remove any
director elected by the holders of such series and/or any other series of
Preferred Stock.
ARTICLE 11
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
Certificate of Incorporation - Page C-5
<PAGE> 56
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT C TO PROXY STATEMENT
ARTICLE 12
No action may be taken by the stockholders of the Corporation except at
an annual or special meeting of the stockholders called in accordance with the
Bylaws. No action may be taken by the stockholders by written consent. The
affirmative vote of sixty-six and two-thirds percent (66 2/3%) of the then
outstanding voting securities of the Corporation, voting together as a single
class, shall be required for the amendment, repeal or modification of the
provisions of Article 4 (to the extent such provisions relate to the authority
of the Board of Directors to issue shares of Preferred stock in one or more
series, the terms of which may be determined by the Board of Directors), Article
7, Article 8, Article 9, Article 10 , Article 11 or Article 12 of this
Certificate of Incorporation or Sections 2.3 (Special Meeting), 2.5 (Advance
Notice of Stockholder Nominees and Stockholder Business), 2.9 (Voting) or 2.10
(No Stockholder Action by Written Consent Without a Meeting) of the
Corporation's Bylaws.
ARTICLE 13
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
Certificate of Incorporation - Page C-6
<PAGE> 57
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
BYLAWS
OF
OPHIDIAN PHARMACEUTICALS, INC.
<PAGE> 58
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
Bylaws - Page D-i
OPHIDIAN PHARMACEUTICALS, INC.
(A DELAWARE CORPORATION)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 1.........................................................................................................1
CORPORATE OFFICES.................................................................................................1
1.1 REGISTERED OFFICE...............................................................................1
1.2 OTHER OFFICES...................................................................................1
ARTICLE 2.........................................................................................................1
MEETINGS OF STOCKHOLDERS..........................................................................................1
2.1 PLACE OF MEETINGS...............................................................................1
2.2 ANNUAL MEETING..................................................................................1
2.3 SPECIAL MEETING.................................................................................1
2.4 NOTICE OF STOCKHOLDERS' MEETINGS................................................................2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS.................................2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE....................................................3
2.7 QUORUM..........................................................................................3
2.8 ADJOURNED MEETING; NOTICE.......................................................................4
2.9 VOTING..........................................................................................4
2.10 NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING......................................4
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING......................................................5
2.13 ORGANIZATION....................................................................................5
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE...........................................................6
2.15 WAIVER OF NOTICE................................................................................6
ARTICLE 3.........................................................................................................6
DIRECTORS.........................................................................................................6
3.1 POWERS..........................................................................................6
3.2 NUMBER OF DIRECTORS.............................................................................6
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS........................................................7
3.4 RESIGNATION AND VACANCIES.......................................................................7
3.5 REMOVAL OF DIRECTORS............................................................................8
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE........................................................8
3.7 FIRST MEETING...................................................................................9
3.8 REGULAR MEETINGS................................................................................9
3.9 SPECIAL MEETINGS; NOTICE........................................................................9
3.10 QUORUM..........................................................................................9
3.11 WAIVER OF NOTICE...............................................................................10
3.12 ADJOURNMENT....................................................................................10
3.13 NOTICE OF ADJOURNMENT..........................................................................10
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING..............................................10
3.15 FEES AND COMPENSATION OF DIRECTORS.............................................................10
ARTICLE 4........................................................................................................11
COMMITTEES.......................................................................................................11
4.1 COMMITTEES OF DIRECTORS........................................................................11
4.2 MEETINGS AND ACTION OF COMMITTEES..............................................................11
</TABLE>
Bylaws - Page D-i
<PAGE> 59
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
<TABLE>
<S> <C> <C>
4.3 COMMITTEE MINUTES..............................................................................12
ARTICLE 5........................................................................................................12
OFFICERS.........................................................................................................12
5.1 OFFICERS.......................................................................................12
5.2 ELECTION OF OFFICERS...........................................................................12
5.3 SUBORDINATE OFFICERS...........................................................................12
5.4 REMOVAL AND RESIGNATION OF OFFICERS............................................................12
5.5 VACANCIES IN OFFICES...........................................................................13
5.6 CHAIRMAN OF THE BOARD..........................................................................13
5.7 PRESIDENT......................................................................................13
5.8 VICE PRESIDENTS................................................................................13
5.9 SECRETARY......................................................................................14
5.10 TREASURER......................................................................................14
5.11 ASSISTANT SECRETARY............................................................................15
5.12 ADMINISTRATIVE OFFICERS........................................................................15
5.13 AUTHORITY AND DUTIES OF OFFICERS...............................................................15
ARTICLE 6........................................................................................................15
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES................................................................15
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS......................................................15
6.2 INDEMNIFICATION OF OTHERS......................................................................16
6.3 INSURANCE......................................................................................17
6.4 INDEMNIFICATION AGREEMENTS.....................................................................17
ARTICLE 7........................................................................................................17
RECORDS AND REPORTS..............................................................................................17
7.1 MAINTENANCE AND INSPECTION OF RECORDS..........................................................17
7.2 INSPECTION BY DIRECTORS........................................................................17
7.3 ANNUAL STATEMENT TO STOCKHOLDERS...............................................................18
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.................................................18
7.5 CERTIFICATION AND INSPECTION OF BYLAWS.........................................................18
ARTICLE 8........................................................................................................18
GENERAL MATTERS..................................................................................................18
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING..........................................18
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS......................................................19
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED..............................................19
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES...............................................19
8.5 SPECIAL DESIGNATION ON CERTIFICATES............................................................20
8.6 LOST CERTIFICATES..............................................................................20
8.7 TRANSFER AGENTS AND REGISTRARS.................................................................20
8.8 CONSTRUCTION; DEFINITIONS......................................................................21
ARTICLE 9........................................................................................................21
AMENDMENTS.......................................................................................................21
</TABLE>
Bylaws - Page D-ii
<PAGE> 60
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
BYLAWS
OF
OPHIDIAN PHARMACEUTICALS, INC.
(a Delaware corporation)
ARTICLE 1
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation is fixed in the certificate of
incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders may be held at any place within or outside the
State of Delaware designated by the board of directors. In the absence of any
such designation, stockholders' meetings will be held at the principal executive
office of the corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders will be held each year on a date and
at a time designated by the board of directors. At the meeting, directors will
be elected, and any other proper business may be transacted.
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president, or by
the holders of a majority of the stock entitled to vote on the issues proposed
by them to be considered at such special meeting.
If a special meeting is called by stockholders, the request shall be in
writing, specify the time of such meeting and the business proposed to be
transacted, shall be signed by the
Bylaws - Page D-1
<PAGE> 61
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
stockholders calling the special meeting, and shall be delivered personally or
sent by registered mail or by telegraphic or other facsimile transmission to the
chairman of the board, the president, or the secretary of the corporation. The
officer receiving the request shall cause notice to be promptly given to the
stockholders entitled to vote, in accordance with the provisions of Sections 2.4
and 2.6 of these bylaws, that a meeting will be held at the time requested by
the person or persons calling the meeting, so long as that time is not less than
35 nor more than 60 days after the receipt of the request. If the notice is not
given within 20 days after receipt of the request, then the person or persons
requesting the meeting may give the notice. Nothing contained in this Section
2.3 shall be construed as limiting, fixing or affecting the time when a meeting
of stockholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders shall be sent or otherwise
given in accordance with Section 2.6 of these bylaws not less than 10 nor more
than 60 days before the date of the meeting. The notice shall specify the place,
date and hour of the meeting and (i) in the case of a special meeting, the
purpose or purposes for which the meeting is called (no business other than that
specified in the notice may be transacted) or (ii) in the case of the annual
meeting, those matters which the board of directors, at the time of giving the
notice, intends to present for action by the stockholders (but any proper matter
may be presented at the meeting for such action). The notice of any meeting at
which directors are to be elected shall include the name of any nominee or
nominees who, at the time of the notice, the board intends to present for
election.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER
BUSINESS
Subject to the rights of holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation, (a)
nominations for the election of directors, and (b) business proposed to be
brought before any stockholder meeting may be made by the board of directors or
proxy committee appointed by the board of directors or by any stockholder
entitled to vote in the election of directors generally if such nomination or
business proposed is otherwise proper business before such meeting. However, any
such stockholder may nominate one or more persons for election as directors at a
meeting or propose business to be brought before a meeting, or both, only if
such stockholder has given timely notice in proper written form of his/her
intent to make the nomination or nominations or to propose such business. To be
timely, the stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than 120 calendar
days in advance of the date specified in the corporation's proxy statement
released to stockholders in connection with the previous year's annual meeting
of stockholders. If no annual meeting was held the previous year or the date of
the annual meeting has been changed by more than 30 days from the date
contemplated at the time of the previous year's proxy statement, notice by the
stockholder to be timely must be so received a reasonable time before the
solicitation is made. To be in proper form, a stockholder's notice to the
secretary must set forth:
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(i) the name and address of the stockholder who intends to make
the nominations or propose the business and, as the case may
be, of the person or persons to be nominated or of the
business to be proposed;
(ii) a representation that the stockholder is a holder of record of
stock of the corporation entitled to vote at such meeting and,
if applicable, intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice;
(iii) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made
by the stockholder;
(iv) such other information regarding each nominee or each matter
of business to be proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had
the nominee been nominated, or intended to be nominated, or
the matter been proposed, or intended to be proposed by the
board of directors; and
(v) if applicable, the consent of each nominee to serve as
director of the corporation if so elected.
The chairman of the meeting shall refuse to acknowledge the nomination
of any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given by
first-class mail or by telegraphic or other written communication. Notices shall
be sent charges prepaid and shall be addressed to the stockholder at the address
of that stockholder appearing on the books of the corporation or given by the
stockholder to the corporation for the purpose of notice. Notice shall be deemed
to have been given at the time when delivered personally or deposited in the
mail or sent by telegram or other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, is prima facie evidence of
the giving of the notice.
2.7 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote at the meeting, present in person or
represented by proxy, constitute a quorum at all meetings of the stockholders
for the transaction of business except as otherwise provided
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by statute or by the certificate of incorporation. If a quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote, present in person or
represented by proxy, have power to adjourn the meeting in accordance with
Section 2.7 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy may decide any question brought before the meeting, unless the question is
one upon which, by express provision of the laws of the State of Delaware or of
the certificate of incorporation or these bylaws, a different vote is required,
in which case such express provision shall govern and control the decision of
the question.
If a quorum is initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business that
might have been transacted at the original meeting. If the adjournment is for
more than 30 days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting must be given to each
stockholder of record entitled to vote at the meeting.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders must
be determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint
owners, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of incorporation
or these bylaws, each stockholder is entitled to one vote for each share of
capital stock held by that stockholder. Stockholders may not cumulate their
votes in the election of directors or with respect to any matter submitted to a
vote of the stockholders.
2.10 NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
No action may be taken by the stockholders except at an annual or
special meeting of the stockholders called in accordance with these by-laws. No
action may be taken by the stockholders by written consent.
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2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote, the board of directors may fix, in advance, a record date,
which may not precede the date upon which the resolution fixing the record date
is adopted by the board of directors and which may not be more than 60 days nor
less than 10 days before the date of any such meeting. Only stockholders on
record on the date are entitled to notice and to vote, notwithstanding any
transfer of any shares on the books of the corporation after the record date.
If the board of directors does not fix a record date, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders is the close of business on the next business day preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the next business day preceding the day on which the meeting is held.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders will apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting,
but the board of directors must fix a new record date if the meeting is
adjourned for more than thirty (30) days from the date set for the original
meeting.
The record date for any other purpose is provided in Section 8.1 of
these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter,
has the right to do so either in person or by one or more agents authorized by a
written proxy signed by the person and filed with the secretary of the
corporation, but no proxy may be voted or acted upon after 3 years from its
date, unless the proxy provides for a longer period. A proxy is deemed signed if
the stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, telefacsimile or otherwise) by the
stockholder or the stockholder's attorney-in-fact. The revocability of a proxy
that states on its face that it is irrevocable is governed by the provisions of
Section 212(e) of the General Corporation Law of Delaware.
2.13 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, or, in the absence of the president and the chairman of the board, one of
the corporation's vice presidents, shall call the meeting of the stockholders to
order, and shall act as chairman of the meeting. In the absence of the
president, the chairman of the board, and all of the vice presidents, the
stockholders shall appoint a chairman for such meeting. The chairman of any
meeting of stockholders shall determine the order of business and the procedures
at the meeting, including such matters as the regulation of the manner of voting
and the conduct of business. The secretary of the corporation shall act as
secretary of all meetings of the
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stockholders, but in the absence of the secretary at any meeting of the
stockholders, the chairman of the meeting may appoint any person to act as
secretary of the meeting.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, either at a place within the city where the meeting is to be held which
place must be specified in the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held. The list must also be produced and
kept at the time and place of the meeting during the whole time thereof, and may
be inspected by any stockholder who is present.
2.15 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, is deemed equivalent to notice.
Attendance of a person at a meeting constitutes a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
ARTICLE 3
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware
and to any limitations in the certificate of incorporation or these bylaws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
3.2 NUMBER OF DIRECTORS
The number of directors which constitute the whole board may not be
less than one nor more than seven in number. The Board of Directors shall fix
the exact number of directors. Directors need not be stockholders.
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No reduction of the authorized number of directors will have the effect
of removing any director before that director's term of office expires.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
At the first annual meeting of the stockholders, the Board of Directors
will be separated into three classes of directors, these classes to be as nearly
equal in number of directors as possible, having staggered three-year terms of
office. The term of office of the directors of the first such class will expire
at the second annual meeting of the Corporation's stockholders; those of the
second class at the third annual meeting of the Corporation's stockholders; and
those of the third class at the fourth annual meeting of the Corporation's
stockholders. At each annual meeting of stockholders, nominees will stand for
election for three year terms to succeed those directors whose terms expire at
such meeting, will serve for a term expiring at the third annual meeting of
stockholders following their election. Members of the Board of Directors shall
hold office until the annual meeting of stockholders for the year in which their
term is scheduled to expire as set forth in this Section 3.3 and their
respective successors are duly elected and qualified or until their earlier
death, incapacity, resignation, or removal.
3.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future time, the
board of directors may elect a successor to take office when the resignation
becomes effective.
Vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director. But a vacancy created by the removal of a director by the vote of the
stockholders or by court order may be filled only by the affirmative vote of a
majority of the shares represented and voting at a duly held meeting at which a
quorum is present (which shares voting affirmatively also constitute a majority
of the required quorum). Each director elected under either of the foregoing
methods to fill a vacancy shall hold office until the next annual meeting of the
stockholders and until a successor has been elected and qualified or until such
director's earlier death, incapacity, resignation, or removal.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all
of the stockholders having the right to vote as a single class
may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director.
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(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by
the provisions of the certificate of incorporation, vacancies
and newly created directorships of such class or classes or
series may be filled by a majority of the directors elected by
such class or classes or series thereof then in office, or by
a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least 10 percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
3.5 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, only for cause, and by the vote of the holders of a majority of
the shares then entitled to vote at an election of directors, subject to the
right, if any, of holders of any series of Preferred Stock to remove any
director elected by holders of such series and/or any other series of Preferred
Stock.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place
within or outside the State of Delaware that has been designated from time to
time by resolution of the board. In the absence of such a designation, regular
meetings will be held at the principal executive office of the corporation.
Special meetings of the board may be held at any place within or outside the
State of Delaware that has been designated in the notice of the meeting or, if
not stated in the notice or if there is no notice, at the principal executive
office of the corporation.
Any meeting of the board, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another; and all such participating
directors will be deemed to be present in person at the meeting.
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3.7 FIRST MEETING
The first meeting of each newly elected board of directors will be held
at such time and place as fixed by the vote of the stockholders at the annual
meeting. In the event of the failure of the stockholders to fix the time or
place of such first meeting of the newly elected board of directors, or in the
event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as is specified in
a notice provided for special meetings of the board of directors, or as may be
specified in a written waiver signed by all of the directors.
3.8 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time as may from time to time be determined by the board of directors.
If any regular meeting day falls on a legal holiday, then the meeting will be
held at the same time and place on the next succeeding full business day.
3.9 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two directors.
Notice of the time and place of special meetings must be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it must be deposited in the United States mail at least 4 days
before the time of the holding of the meeting. If the notice is delivered
personally or by telephone, telecopy or telegram, it must be delivered
personally or by telephone or to the telegraph company at least 48 hours before
the time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the director or to a person at the
office of the director who the person giving the notice has reason to believe
will promptly communicate it to the director. The notice need not specify the
purpose or the place of the meeting, if the meeting is to be held at the
principal executive office of the corporation.
3.10 QUORUM
A majority of the authorized number of directors constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.12
of these bylaws. Every act or decision done or made by a majority of the
directors present at a duly held meeting at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of the
certificate of incorporation and applicable law.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the quorum for that meeting.
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3.11 WAIVER OF NOTICE
Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting other than for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. All such waivers must be filed with the corporate records or
made part of the minutes of the meeting. A waiver of notice need not specify the
purpose of any regular or special meeting of the board of directors.
3.12 ADJOURNMENT
A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting of the board to another time and place.
3.13 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting of the
board need not be given unless the meeting is adjourned for more than 24 hours.
If the meeting is adjourned for more than 24 hours, then notice of the time and
place of the adjourned meeting must be given before the adjourned meeting takes
place, in the manner specified in Section 3.9 of these bylaws, to the directors
who were not present at the time of the adjournment.
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors
may be taken without a meeting, provided that all members of the board
individually or collectively consent in writing to that action. Such action by
written consent has the same force and effect as a unanimous vote of the board
of directors. Such written consent and any counterparts must be filed with the
minutes of the proceedings of the board of directors.
3.15 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.15 does not
preclude any director from serving the corporation in any other capacity as an
officer, agent, employee or otherwise and receiving compensation for those
services.
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ARTICLE 4
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, may exercise
all the powers and authority of the board, but no such committee has the power
or authority to (i) amend the certificate of incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) of the General Corporation Law of Delaware, fix
the designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the corporation), (ii) adopt an agreement of merger or
consolidation under Sections 251 or 252 of the General Corporation Law of
Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all
or substantially all of the corporation's property and assets, (iv) recommend to
the stockholders a dissolution of the corporation or a revocation of a
dissolution or (v) amend the bylaws of the corporation. Unless the board
resolution establishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee has the power or authority
to declare a dividend, to authorize the issuance of stock, or to adopt a
certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees are governed by the following
provisions of Article 3 of these bylaws: Section 3.6 (place of meetings;
meetings by telephone), Section 3.8 (regular meetings), Section 3.9 (special
meetings; notice), Section 3.10 (quorum), Section 3.11 (waiver of notice),
Section 3.12 (adjournment), Section 3.13 (notice of adjournment) and Section
3.14 (board action by written consent without meeting), with such changes in the
context of those bylaws as are necessary to substitute the committee and its
members for the board of directors and its members. The time of regular meetings
of committees may be determined either by resolution of the board of directors
or by resolution of the committee. Special meetings of committees may also be
called by resolution of the board of directors, and that notice of special
meetings of committees must also be given to all alternate members, who have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these bylaws.
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4.3 COMMITTEE MINUTES
Each committee must keep regular minutes of its meetings and report
them to the board of directors when required.
ARTICLE 5
OFFICERS
5.1 OFFICERS
The Corporate Officers of the corporation are: president, vice
president, secretary, and treasurer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, more than one
vice president (however denominated), one or more assistant secretaries, and one
or more assistant treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these bylaws. Any number of
offices may be held by the same person.
In addition to the Corporate Officers of the Company described above,
there may also be such Administrative Officers of the corporation as may be
designated and appointed from time to time by the president of the corporation
in accordance with the provisions of Section 5.12 of these bylaws.
5.2 ELECTION OF OFFICERS
The Corporate Officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these bylaws, must be chosen by the board of directors, subject to the rights,
if any, of an officer under any contract of employment, and hold their
respective offices for such terms as the board of directors may from time to
time determine.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom will hold office, have the power and authority, and
perform the duties as are provided in these bylaws or as the board of directors
may from time to time determine.
The president may from time to time designate and appoint
Administrative Officers of the corporation in accordance with the provisions of
Section 5.12 of these bylaws.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of a Corporate Officer under any
contract of employment, any Corporate Officer may be removed, either with or
without cause, by the board of directors at any regular or special meeting of
the board or, except in case of a Corporate Officer chosen
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by the board of directors, by any Corporate Officer upon whom such power of
removal may be conferred by the board of directors.
Any Corporate Officer may resign at any time by giving written notice
to the corporation. Any resignation takes effect at the date of the receipt of
that notice or at any later time specified in that notice. Unless otherwise
specified in that notice, the acceptance of the resignation is not necessary to
make it effective. Any resignation is without prejudice to the rights, if any,
of the corporation under any contract to which the Corporate Officer is a party.
Any Administrative Officer designated and appointed by the president
may be removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause may be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other duties as may from time to time be assigned to him
by the board of directors or as may be prescribed by these bylaws. If there is
no president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties described in
Section 5.7 of these bylaws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction and control of the business and the officers of the corporation. He or
she shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He or she shall have the general powers and duties of management
usually vested in the office of president of a corporation, and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, and if there is no
chairman of the board, the vice presidents, if any, in order of their rank as
fixed by the board of directors or, if not ranked, a vice president designated
by the board of directors, shall perform all the duties of
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the president and when so acting shall have all the powers of, and be subject to
all the restrictions upon, the president. The vice presidents shall have such
other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.
5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of the board
of directors, committees of directors and stockholders. The minutes must show
the time and place of each meeting, whether regular or special (and, if special,
how authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these bylaws. He or she shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the board of directors or by these bylaws.
5.10 TREASURER
The treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings
and shares. The books of account shall at all reasonable times be open to
inspection by any director for a purpose reasonably related to his or her
position as a director.
The treasurer shall deposit all money and other valuables in the name
and to the credit of the corporation with such depositories as may be designated
by the board of directors. He or she shall disburse the funds of the corporation
as may be ordered by the board of directors, shall render to the president and
directors, whenever they request it, an account of all of his or her
transactions as chief financial officer and of the financial condition of the
corporation, and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or these bylaws.
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5.11 ASSISTANT SECRETARY
The assistant secretary, if any, or, if there is more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
5.12 ADMINISTRATIVE OFFICERS
In addition to the Corporate Officers of the corporation as provided in
Section 5.1 of these bylaws and such subordinate Corporate Officers as may be
appointed in accordance with Section 5.3 of these bylaws, there may also be such
Administrative Officers of the corporation as may be designated and appointed
from time to time by the president of the corporation. Administrative Officers
may perform such duties and have such powers as from time to time may be
determined by the president or the board of directors in order to assist the
Corporate Officers in the furtherance of their duties. In the performance of
such duties and the exercise of such powers, however, the Administrative
Officers shall have limited authority to act on behalf of the corporation as the
board of directors may establish, including but not limited to limitations on
the dollar amount and on the scope of agreements or commitments that may be made
by such Administrative Officers on behalf of the corporation, which limitations
may not be exceeded by such individuals or altered by the president without
further approval by the board of directors.
5.13 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing powers, authority and duties, all officers
of the corporation shall respectively have such authority and powers and perform
such duties in the management of the business of the corporation as may be
designated from time to time by the board of directors.
ARTICLE 6
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware as the same now exists or
may hereafter be amended, indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit, or proceeding in which such person was or is a party or is
threatened to be made a party by reason of the fact that such person is or was a
director or officer of the corporation, provided that the corporation is only
required to indemnify a director or officer in connection with an action, suit,
or proceeding (or part thereof) initiated
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
by such director or officer if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was first authorized by
the Board of Directors of the corporation.
For purposes of this Section 6.1, a "director" or "officer" of the
corporation means any person (i) who is or was a director or officer of the
corporation, (ii) who is or was serving at the request of the corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, or (iii) who was a director or officer of a corporation which
was a predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation.
The corporation shall pay the expenses (including attorneys' fees)
incurred by a director or officer of the corporation entitled to indemnification
hereunder in defending any action, suit or proceeding referred to in this
Section 6.1 in advance of its final disposition; provided, however, that payment
of expenses incurred by a director or officer of the corporation in advance of
the final disposition of such action, suit or proceeding may be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should ultimately be determined that the director of officer is
not entitled to be indemnified under this Section 6.1 or otherwise.
The rights conferred on any person by this Article are not exclusive of
any other rights which such person may have or hereafter acquire under any
statute, provision of the corporation's Certificate of Incorporation, these
bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
Any repeal or modification of the foregoing provisions of this Article
will not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any threatened, pending or completed action, suit, or
proceeding, in which such person was or is a party or is threatened to be made a
party by reason of the fact that such person is or was an employee or agent of
the corporation. For purposes of this Section 6.2, an "employee" or "agent" of
the corporation (other than a director or officer) shall mean any person (i) who
is or was an employee or agent of the corporation, (ii) who is or was serving at
the request of the corporation as an employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was an
employee or agent of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
6.3 INSURANCE
The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such
whether or not the corporation would have the power to indemnify him or her
against such liability under the provisions of the General Corporation Law of
Delaware.
6.4 INDEMNIFICATION AGREEMENTS.
The Board of Directors is authorized to enter into a contract with any
director, officer, employee or agent of the corporation, or any person serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including employee benefit plans, providing for indemnification rights
equivalent to or, if the Board of Directors so determines, greater than, those
provided for in this Article 6.
ARTICLE 7
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
Any stockholder of record, in person or by attorney or other agent,
has, upon written demand under oath stating the purpose, the right during the
usual hours for business to inspect for any proper purpose the corporation's
stock ledger, a list of its stockholders, and its other books and records and to
make copies or extracts therefrom. A proper purpose means a purpose reasonably
related to such person's interest as a stockholder. In every instance where an
attorney or other agent is the person who seeks the right to inspection, the
demand under oath must be accompanied by a power of attorney or such other
writing that authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath must be directed to the corporation at its
registered office in Delaware or at its principal place of business.
7.2 INSPECTION BY DIRECTORS
Any director has the right to examine (and to make copies of) the
corporation's stock ledger, a list of its stockholders and its other books and
records for a purpose reasonably related to his or her position as a director.
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7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders
a full and clear statement of the business and condition of the corporation.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president,
the treasurer, the secretary or any assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent and exercise on behalf of this
corporation all rights incident to any and all shares of the stock of any other
corporation or corporations standing in the name of this corporation. The
authority herein granted may be exercised either by such person directly or by
any other person authorized to do so by proxy or power of attorney duly executed
by such person having the authority.
7.5 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise altered
to date, certified by the secretary, must be kept at the corporation's principal
executive office and shall be open to inspection by the stockholders of the
corporation, at all reasonable times during office hours.
ARTICLE 8
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix, in advance, a record date, which may not precede
the date upon which the resolution fixing the record date is adopted and which
may not be more than 60 days before any such action. In that case, only
stockholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except as
otherwise provided by law.
If the board of directors does not fix in this manner a record date,
then the record date for determining stockholders for any such purpose must be
at the close of business on the day on which the board of directors adopts the
applicable resolution.
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the board of directors may determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws,
may authorize and empower any officer or officers, or agent or agents, to enter
into any contract or execute any instrument in the name of and on behalf of the
corporation; such power and authority may be general or confined to specific
instances. Unless so authorized or ratified by the board of directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to bind the corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or for any amount.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock are uncertificated shares. Any such resolution may not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and, upon request,
every holder of uncertificated shares, is entitled to have a certificate signed
by, or in the name of the corporation by, the chairman or vice-chairman of the
board of directors, or the president or vice-president, and by the treasurer or
an assistant treasurer, or the secretary or an assistant secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate has ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Certificates for shares must be of such form as the board of directors
may designate and must state the name of the record holder of the shares
represented thereby; its number; date of issuance; the number of shares for
which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; if the shares be assessable, or, if
assessments are collectible by personal action, a plain statement of such facts.
Upon surrender to the secretary or transfer agent of the corporation of
a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
authority to transfer, the corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, or upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.5 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences and the relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights must be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.7 TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, each of which shall be an
incorporated bank or trust company -- either domestic or foreign, who shall be
appointed at such times and places as the requirements of the corporation may
necessitate and the board of directors may designate.
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT D TO PROXY STATEMENT
8.8 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction and definitions in the General Corporation Law of Delaware shall
govern the construction of these bylaws. Without limiting the generality of this
provision, as used in these bylaws, the singular number includes the plural, the
plural number includes the singular, and the term "person" includes both an
entity and a natural person.
ARTICLE 9
AMENDMENTS
The original or other bylaws of the corporation may be adopted, amended
or repealed by the stockholders entitled to vote or by the board of directors of
the corporation. The fact that such power has been so conferred upon the
directors shall not divest the stockholders of the power, nor limit their power
to adopt, amend or repeal bylaws.
Certificate by Secretary of Adoption by Incorporation
The undersigned hereby certifies that she is the duly elected,
qualified, and acting Secretary of Ophidian Pharmaceuticals, Inc. and that the
foregoing Bylaws, comprising ____________ (___) pages, were adopted as the
Bylaws of the corporation on _________________, 1999, by the person appointed in
the Articles of Incorporation to act as the Incorporator of the Corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand and
affixed the corporate seal this ______ day of _____________, 1999.
__________________________________
Margaret B. van Boldrik, Secretary
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OPHIDIAN PHARMACEUTICALS, INC.
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of ___________________, ______, is made by
and between OPHIDIAN PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), and ______________________________________ (the "Indemnitee").
RECITALS
A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors, officers or agents of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors, officers and other agents.
B. The statutes and judicial decisions regarding the duties of directors and
officers are often difficult to apply, ambiguous, or conflicting, and therefore
fail to provide such directors, officers and agents with adequate, reliable
knowledge of legal risks to which they are exposed or information regarding the
proper course of action to take.
C. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so enormous (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is often beyond the personal
resources of directors, officers and other agents.
D. The Company believes that it is unfair for its directors, officers and
agents and the directors, officers and agents of its subsidiaries to assume the
risk of huge judgments and other expenses which may occur in cases in which the
director, officer or agent received no personal profit and in cases where the
director, officer or agent was not culpable.
E. The Company recognizes that the issues in controversy in litigation
against a director, officer or agent of a corporation such as the Company or its
subsidiaries are often related to the knowledge, motives and intent of such
director, officer or agent, that he is usually the only witness with knowledge
of the essential facts and exculpating circumstances regarding such matters, and
that the long period of time which usually elapses before the trial or other
disposition of such litigation often extends beyond the time that the director,
officer or agent can reasonably recall such matters; and may extend beyond the
normal time for retirement for such director, officer or agent with the result
that he, after retirement or in the event of his death, his spouse, heirs,
executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
director, officer or agent from serving in that position.
F. Based upon their experience as business managers, the Board of Directors
of the Company (the "Board") has concluded that, to retain and attract talented
and experienced
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
individuals to serve as directors, officers and agents of the Company and its
subsidiaries and to encourage such individuals to take the business risks
necessary for the success of the Company and its subsidiaries, it is necessary
for the Company to contractually indemnify its directors, officers and agents
and the directors, officers and agents of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims
against such directors, officers and agents in connection with their service to
the Company and its subsidiaries, and has further concluded that the failure to
provide such contractual indemnification could result in great harm to the
Company and its subsidiaries and the Company's stockholders.
G. Section 145 of the General Corporation Law of Delaware, under which the
Company is organized ("Section 145"), empowers the Company to indemnify its
directors, officers, employees and agents by agreement and to indemnify persons
who serve, at the request of the Company, as the directors, officers, employees
or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive.
H. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director, officer or agent of the Company and/or one or
more subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company.
I. Indemnitee is willing to serve, or to continue to serve, the Company
and/or one or more subsidiaries of the Company, provided that he is furnished
the indemnity provided for herein.
AGREEMENT
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
(a) AGENT. For the purposes of this Agreement, "agent" of the Company
means any person who is or was a director, officer, employee or other agent
of the Company or a subsidiary of the Company; or is or was serving at the
request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company as a director, officer, employee or
agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise; or was a director, officer, employee or
agent of a foreign or domestic corporation which was a predecessor
corporation of the Company or a subsidiary of the Company, or was a
director, officer, employee or agent of another enterprise at the request
of, for the convenience of, or to represent the interests of such
predecessor corporation.
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
(b) EXPENSES. For purposes of this Agreement, "expenses" include all
out-of-pocket costs of any type or nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or
enforcing a right to indemnification under this Agreement or Section 145 or
otherwise; provided, however, that "expenses" shall not include any
judgments, fines, ERISA excise taxes or penalties, or amounts paid in
settlement of a proceeding.
(c) PROCEEDING. For the purposes of this Agreement, "proceeding" means
any threatened, pending, or completed action, suit or other proceeding,
whether civil, criminal, administrative, or investigative.
(d) SUBSIDIARY. For purposes of this Agreement, "subsidiary" means
any corporation of which more than 50% of the outstanding voting securities
is owned directly or indirectly by the Company, by the Company and one or
more other subsidiaries, or by one or more other subsidiaries.
2. AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or continue to
serve as agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of
the Company, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he tenders his resignation in
writing; provided, however, that nothing contained in this Agreement is intended
to create any right to continued employment by Indemnitee.
3. LIABILITY INSURANCE.
(a) MAINTENANCE OF D&O INSURANCE. The Company hereby covenants and
agrees that, so long as the Indemnitee shall continue to serve as an agent
of the Company and thereafter so long as the Indemnitee shall be subject to
any possible proceeding by reason of the fact that the Indemnitee was an
agent of the Company, the Company, subject to Section 3(c), shall promptly
obtain and maintain in full force and effect directors' and officers'
liability insurance ("D&O Insurance") in reasonable amounts from
established and reputable insurers.
(b) RIGHTS AND BENEFITS. In all policies of D&O Insurance, the
Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if the Indemnitee is a
director; or of the Company's officers, if the Indemnitee is not a director
of the Company but is an officer; or of the Company's key employees, if the
Indemnitee is not a director or officer but is a key employee.
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
(c) LIMITATION ON REQUIRED MAINTENANCE OF D&O INSURANCE.
Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain D&O Insurance if the Company determines in good faith
that such insurance is not reasonably available, the premium costs for such
insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or the Indemnitee is covered by similar
insurance maintained by a subsidiary of the Company, provided that prior to
implementing a determination to either not obtain or not maintain such
coverage, the Company shall provide thirty (30) days advance written notice
to the Indemnitee.
4. MANDATORY INDEMNIFICATION. Subject to Section 8 below, the Company shall
indemnify the Indemnitee as follows:
(a) SUCCESSFUL DEFENSE. To the extent the Indemnitee has been
successful on the merits or otherwise in defense of any proceeding
(including, without limitation, an action by or in the right of the
Company) to which the Indemnitee was a party by reason of the fact that he
is or was an Agent of the Company at any time, against all expenses of any
type whatsoever actually and reasonably incurred by him in connection with
the investigation, defense or appeal of such proceeding.
(b) THIRD PARTY ACTIONS. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Company) by reason of the fact that he is
or was an agent of the Company, or by reason of anything done or not done
by him in any such capacity, the Company shall indemnify the Indemnitee
against any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) actually and reasonably incurred
by him in connection with the investigation, defense, settlement or appeal
of such proceeding, provided the Indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Company and its stockholders, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
(c) DERIVATIVE ACTIONS. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any proceeding by or in the
right of the Company by reason of the fact that he is or was an agent of
the Company, or by reason of anything done or not done by him in any such
capacity, the Company shall indemnify the Indemnitee against all expenses
actually and reasonably incurred by him in connection with the
investigation, defense, settlement, or appeal of such proceeding, provided
the Indemnitee acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and its
stockholders; except that no indemnification under this subsection 4(c)
shall be made in respect to any claim, issue or matter as to which such
person shall have been finally adjudged to be liable to the Company by a
court of competent jurisdiction unless and only to the extent that the
court in which such proceeding was brought
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OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such amounts which the
court shall deem proper.
(d) ACTIONS WHERE INDEMNITEE IS DECEASED. If the Indemnitee is a
person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is or was an agent of the Company,
or by reason of anything done or not done by him in any such capacity, and
if prior to, during the pendency of after completion of such proceeding
Indemnitee becomes deceased, the Company shall indemnify the Indemnitee's
heirs, executors and administrators against any and all expenses and
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) actually and reasonably incurred to the extent Indemnitee would
have been entitled to indemnification pursuant to Sections 4(a), 4(b), or
4(c) above were Indemnitee still alive.
(e) Notwithstanding the foregoing, the Company shall not be obligated
to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes and penalties, and amounts paid in settlement) for which payment is
actually made to or on behalf of Indemnitee under a valid and collectible
insurance policy of D&O Insurance, or under a valid and enforceable
indemnity clause, by-law or agreement.
5. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a proceeding, but not entitled, however, to indemnification for all of
the total amount hereof, the Company shall nevertheless indemnify the Indemnitee
for such total amount except as to the portion hereof to which the Indemnitee is
not entitled.
6. MANDATORY ADVANCEMENT OF EXPENSES. Subject to Section 8(a) below, the
Company shall advance all expenses incurred by the Indemnitee in connection with
the investigation, defense, settlement or appeal of any proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that the Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following delivery of a written request therefor by the Indemnitee to the
Company.
Indemnification Agreement - Page E-5
<PAGE> 86
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
7. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with
respect thereto may be sought from the Company under this Agreement, notify
the Company of the commencement or threat of commencement thereof.
(b) If, at the time of the receipt of a notice of the commencement of
a proceeding pursuant to Section 7(a) hereof, the Company has D&O Insurance
in effect, the Company shall give prompt notice of the commencement of such
proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
(c) In the event the Company shall be obligated to pay the expenses of
any proceeding against the Indemnitee, the Company, if appropriate, shall
be entitled to assume the defense of such proceeding, with counsel approved
by the Indemnitee, upon the delivery to the Indemnitee of written notice of
its election so to do. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to the Indemnitee under this Agreement for
any fees of counsel subsequently incurred by the Indemnitee with respect to
the same proceeding, provided that (i) the Indemnitee shall have the right
to employ his counsel in any such proceeding at the Indemnitee's expense;
and (ii) if (A) the employment of counsel by the Indemnitee has been
previously authorized by the Company, (B) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense, or (C) the
Company shall not, in fact, have employed counsel to assume the defense of
such proceeding, then the fees and expenses of Indemnitee's counsel shall
be at the expense of the Company.
8. EXCEPTIONS. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance expenses to
the Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by the Indemnitee and not by way of defense, unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board, (iii) such indemnification is
provided by the Company, in its sole discretion, pursuant to the powers
vested in the Company under the General Corporation Law of Delaware or (iv)
the proceeding is brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or
otherwise as required under Section 145.
Indemnification Agreement - Page E-6
<PAGE> 87
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
(b) LACK OF GOOD FAITH. To indemnify the Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by the
indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous;
or
(c) UNAUTHORIZED SETTLEMENTS. To indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of a proceeding unless the
Company consents to such settlement, which consent shall not be
unreasonably withheld.
9. NON-EXCLUSIVITY. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company's
Certificate of Incorporation or Bylaws, the vote of the Company's stockholders
or disinterested directors, other agreements, or otherwise, both as to action in
his official capacity and to action in another capacity while occupying his
position as an agent of the Company, and the Indemnitee's rights hereunder shall
continue after the Indemnitee has ceased acting as an agent of the Company and
shall inure to the benefit of the heirs, executors and administrators of the
Indemnitee.
10. ENFORCEMENT. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor. Indemnitee, in such
enforcement action, if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting his claim. It shall be a defense to any
action for which a claim for indemnification is made under this Agreement (other
than an action brought to enforce a claim for expenses pursuant to Section 6
hereof, provided that the required undertaking has been tendered to the Company)
that Indemnitee is not entitled to indemnification because of the limitations
set forth in Sections 4 and 8 hereof. Neither the failure of the Corporation
(including its Board of Directors or its stockholders) to have made a
determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.
11. SUBROGATION. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.
Indemnification Agreement - Page E-7
<PAGE> 88
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
12. SURVIVAL OF RIGHTS.
(a) All agreements and obligations of the Company contained herein shall
continue during the period Indemnitee is an agent of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any possible
claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal, arbitrational, administrative or investigative, by
reason of the fact that Indemnitee was serving in the capacity referred to
herein.
(b) The Company shall require any successor to the Company (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business or assets of the Company, expressly to
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession had taken place.
13. INTERPRETATION OF AGREEMENT. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law,
including those circumstances in which indemnification would otherwise be
discretionary.
14. SEVERABILITY. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 13 hereof.
15. MODIFICATION AND WAIVER. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
16. NOTICE. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.
Indemnification Agreement - Page E-8
<PAGE> 89
OPHIDIAN PHARMACEUTICALS, INC. - EXHIBIT E TO PROXY STATEMENT
17. GOVERNING LAW. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware as applied to contracts
between Delaware residents entered into and to be performed entirely within
Delaware.
The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.
OPHIDIAN PHARMACUETICALS, INC.
By:
--------------------------------------------
Doug Stafford, President and Chief Executive Officer
INDEMNITEE:
---------------------------------------------
print name:
----------------------------------
Indemnification Agreement - Page E-9
<PAGE> 90
OPHIDIAN
PHARMACEUTICALS, INC.
5445 EAST CHERYL PARKWAY
MADISON, WI 53711
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 23, 1999
The undersigned shareholder of Ophidian Pharmaceuticals, Inc. (the
"Company"), a Wisconsin corporation, hereby acknowledges receipt of the Notice
of Annual Meeting of Shareholders and Proxy Statement, each dated February 12,
1999, and hereby appoints William A. Linton and Margaret B. van Boldrik, and
each of them individually, proxies, each with full power of substitution, to
vote, as specified below, all shares of Common Stock of the Company held of
record by the undersigned on February 12, 1999, at the Annual Meeting of
Shareholders of the Company to be held on March 23, 1999, at 9:00 a.m. at 5445
East Cheryl Parkway, Madison, Wisconsin and any adjournments or postponements
thereof.
PLEASE COMPLETE, DATE, SIGN, AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT. IF
YOU DO PLAN TO ATTEND, YOU MAY, OF COURSE, VOTE YOUR SHARES IN PERSON.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSED ITEMS OF BUSINESS AND AS SUCH
PROXIES DEEM ADVISABLE ON ANY OTHER MATTERS AS MAY COME BEFORE THE MEETING.
PLEASE MARK VOTE IN BOX, USING DARK INK ONLY, IN THE FOLLOWING MANNER: /X/
1. To elect as directors of the Company, to hold office until the next
annual meeting of the shareholders and until their successors are
elected, the following five (5) nominees: Rex J. Bates, Peter
Model, Douglas C. Stafford, W. Leigh Thompson, and Margaret B. van
Boldrik
/ / For all nominees / / Withhold authority to
vote for all
/ / For all nominees except
----------------------------------
(write the nominee's name(s)
-------------------------------
in the spaces provided)
-------------------------------
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 91
2. To adopt the 1998 Incentive Stock Option Plan of the Company.
/ / For / / Against / / Abstain
3. To approve the Agreement and Plan of Merger of Ophidian
Pharmaceuticals, Inc., a Wisconsin corporation, into Ophidian
Pharmaceuticals, Inc., a Delaware corporation, thereby effecting
the Company's reincorporation in Delaware.
/ / For / / Against / / Abstain
4. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending September 30,
1999.
/ / For / / Against / / Abstain
PLEASE COMPLETE, DATE, AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE.
Date:
--------------------------------
Signature(s):
----------------------------- ------------------------------
(title/capacity):
------------------------- ------------------------------
NOTE: Please sign exactly as your name appears on this proxy. If signing for
an estate, trust, or corporation, your title and/or capacity should be
so stated. If shares are held jointly, at least one joint owner must
sign.
