SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
PROCEPT, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PROCEPT, INC.
840 Memorial Drive, Cambridge, Massachusetts 02139
(617) 491-1100
NOTICE OF ADJOURNED SESSION OF ANNUAL MEETING OF STOCKHOLDERS
The enclosed Supplement to the Proxy Statement of Procept, Inc. ("Procept")
dated April 30, 1997 is being furnished to stockholders of Procept in connection
with the solicitation of proxies by Procept for use at an adjourned session of
its annual meeting of stockholders which was commenced on June 16, 1997. The
adjourned session will be held at the offices of Procept, 840 Memorial Drive,
Cambridge, Massachusetts at 10:00 a.m. on Tuesday, July 15, 1997.
The annual meeting commenced at the offices of Procept, 840 Memorial Drive,
Cambridge, Massachusetts, at 10:00 a.m. on Monday, June 16, 1997. On June 16,
1997, the stockholders voted to: (i) elect four directors; (ii) approve a
proposed amendment to Procept's 1989 Stock Plan that increased the number of
shares of Procept's Common Stock, $0.01 par value per share (the "Common
Stock"), covered by that plan by 500,000 shares; (iii) approve a proposed
amendment to Procept's 1994 Employee Stock Purchase Plan that increased the
number of shares of Common Stock covered by that plan by 250,000 shares; and
(iv) approve a proposed amendment to Procept's 1994 Director Stock Option Plan
that increased the number of shares of Common Stock covered by that plan by
150,000 shares. The meeting was then adjourned until a later session for a vote
upon an amendment and restatement of Procept's Restated Certificate of
Incorporation to authorize 1,000,000 shares of preferred stock (the "Preferred
Stock Proposal") and to transact such other business as may properly come before
the meeting. The purpose of the adjournment was to permit Procept to solicit
additional proxies on the Preferred Stock Proposal to obtain a vote in favor of
such proposal representing at least a majority of the outstanding shares.
The enclosed Supplement is being sent to you in connection with the
Preferred Stock Proposal. Subsequent to April 30, 1997, the date the Proxy
Statement was first given or sent to stockholders, Procept has entered into a
set of agreements which, contingent upon Procept's stockholders approving the
Preferred Stock Vote, contemplate the issuance of shares of preferred stock.
Only stockholders of record at the close of business on April 21, 1997 (the
"Record Date") are entitled to vote at the meeting. On the Record Date there
were 13,720,338 shares of outstanding Common Stock.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ADJOURNED SESSION OF
THE MEETING. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND SUCH SESSION, PLEASE
COMPLETE YOUR PROXY IF YOU HAVE NOT ALREADY DONE SO. IF YOU ATTEND THE SESSION
AND WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT BE USED. IF, IN LIGHT OF THE
INFORMATION CONTAINED IN THE ENCLOSED SUPPLEMENT OR FOR ANY OTHER REASON, YOU
WISH TO REVOKE OR ALTER A PREVIOUSLY SUBMITTED PROXY WITH RESPECT TO THE
PREFERRED STOCK PROPOSAL, YOU ARE ENTITLED TO DO SO AT OR BEFORE THE ADJOURNED
SESSION OF THE MEETING OR ANY SUBSEQUENT ADJOURNMENT. TO OBTAIN A NEW PROXY
CARD, PLEASE CONTACT MICHAEL J. HIGGINS AT (617) 491-1100.
By Order of the Board of Directors
Lynnette C. Fallon
Secretary
July 3, 1997
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PROCEPT, INC.
840 Memorial Drive, Cambridge, Massachusetts 02139
(617) 491-1100
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PROXY STATEMENT SUPPLEMENT
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INTRODUCTION
This Proxy Statement Supplement (this "Supplement") is furnished by the
Board of Directors of Procept, Inc. ("Procept" or the "Company"). It modifies
and supplements the Proxy Statement of Procept dated April 30, 1997, which was
first sent or given to stockholders on or about April 30, 1997 (the "Proxy
Statement"). The approximate date on which this Supplement is first being sent
or given to stockholders is July 3, 1997.
This Supplement is being furnished to stockholders in connection with the
solicitation of proxies for use at an adjourned session of Procept's annual
meeting of stockholders scheduled for July 15, 1997 and any further adjournments
or postponements thereof. This Supplement provides information relating to the
proposal to approve an amendment and restatement of Procept's Restated
Certificate of Incorporation to authorize 1,000,000 shares of preferred stock
(the "Preferred Stock Proposal"). Attached as Annex 1 hereto is a copy of
Procept's Restated Certificate of Incorporation as proposed to be amended and
restated.
RECENT DEVELOPMENTS
On June 30, 1997, Procept entered into a letter of intent with a placement
agent (the "Placement Agent") regarding proposed transactions in Procept
preferred stock. On June 30, 1997, Procept and two funds (together, the
"Purchasers"), both affiliates of the Placement Agent, entered into definitive
agreements (the "Financing Agreements") regarding a purchase of Procept
securities. Under the Financing Agreements, Procept raised $3,000,000 by selling
to the Purchasers shares of Procept's Common Stock, $0.01 par value per share
(the "Common Stock"), warrants to purchase additional shares of Common Stock and
$200,000 in principal amount of notes.
Pursuant to the terms of the Financing Agreements, if Procept's
stockholders approve the Preferred Stock Proposal, the Purchasers will have the
right to require the Company to authorize and file a Certificate of Designations
for Series A Convertible Preferred Stock and to put the shares of Common Stock
purchased pursuant to the Financing Agreements to the Company in exchange for
shares of the Series A Convertible Preferred Stock at the ratio that is the
reciprocal of the conversion rate of the Series A Convertible Preferred Stock in
effect at such time. The Certificate of Designations initially provides for
30,000 shares of Series A Convertible Preferred Stock. Each share of Series A
Convertible Preferred Stock would initially be convertible into approximately
169 shares of Common Stock. After the earliest of (i) September 30, 1997, (ii)
the satisfaction of Rule 4460 of the National Association of Securities Dealers
Marketplace Rules or (iii) such time as such rule no longer applies (the
earliest of which is the "Approval Date"), the rate of conversion of Series A
Convertible Preferred Stock to Common Stock would be based on a price per Common
Stock share equal to the lower of (i) $0.30 or (ii) a 50% discount to the lowest
per share marketprice on particular reference dates. The shares of Series A
Convertible Preferred Stock would accrue dividends, payable in shares of Common
Stock (valued at the conversion price) upon conversion, at a rate of 10% per
year.
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Holders of the Series A Convertible Preferred Stock would generally be
entitled to vote together with holders of Common Stock, with the number of votes
allocated to each share of Series A Convertible Preferred Stock being determined
by reference to the number of shares of Common Stock into which such share is
convertible. However, until the Approval Date, the holders of the Series A
Preferred Stock would not be entitled to vote in any election of the directors
of the Company except that they may appoint up to three directors of the
Company. Additionally, certain actions, such as an amendment to the Company's
Certificate of Incorporation or By-Laws, would require approval by the Series A
Convertible Preferred Stock voting as a separate class. The Certificate of
Designations would also contain significant anti-dilution protection, restrict
certain Company actions, such as the payment of dividends, and provide a
liquidation preference equal to $140.00 per share.
If the Preferred Stock Proposal is not approved, or if certain other
approvals are not obtained, by September 30, 1997, the Purchasers will have a
10-year right to require the Company to repurchase the shares of Common Stock
issued to the Purchasers under the Financing Agreements for 140% of the original
per share purchase price. In addition, in such case the Company will be required
to make a payment of $500,000 to the Placement Agent as a break-up fee.
On June 29, 1997, Procept's Board of Directors voted to increase the size
of Procept's Board of Directors to five members and to elect Michael A. Weiss as
Chairman of the Board of Directors (subject to the closing of the transactions
contemplated by the Financing Agreements). Mr. Weiss was selected by the
Purchasers and appointed pursuant to the Financing Agreements.
At a subsequent meeting of stockholders, Procept anticipates soliciting
authorization of the holders of its Common Stock in order to comply with rules
of the National Association of Securities Dealers applicable to issuers quoted
on the Nasdaq National Market.
If the Preferred Stock Proposal is approved, the Board of Directors will,
subject to restrictions contained in the Financing Agreements and certain other
contractual limitations, have discretion, without further stockholder action, to
designate the terms of and issue the 970,000 shares of preferred stock not
issued in connection with the transactions contemplated by the Financing
Agreements.
The Procept Proxy Statement is modified and supplemented as set forth
herein.
July 3, 1997
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Annex I
PROPOSED
RESTATED CERTIFICATE OF INCORPORATION
OF
PROCEPT, INC.
Incorporated Pursuant to an Original
Certificate of Incorporation
filed with the Secretary of State
of Delaware on May 8, 1992
The undersigned, for the purpose of amending and restating the Certificate
of Incorporation, as amended, of Procept, Inc. (the "Corporation") under the
laws of the State of Delaware, hereby certifies as follows:
FIRST: The name of the Corporation is Procept, Inc.
SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, State of Delaware. The name of its registered agent at
such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted
are:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
In general, to possess and exercise all the powers and privileges granted
by the General Corporation Law of Delaware or by any other law of Delaware or by
this Restated Certificate of Incorporation, together with any powers incidental
thereto, so far as such powers and privileges are necessary or convenient to the
conduct, promotion or attainment of the business or purposes of the Corporation.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Thirty Million (30,000,000) shares of Common Stock
with a par value of $0.01 per share and One Million (1,000,000) shares of
Preferred Stock with a par value of $0.01 per share.
The following is a statement of the designations, preferences, voting
powers, qualifications, special or relative rights and privileges in respect of
the authorized capital stock of the Corporation.
Preferred Stock
The Board of Directors is authorized, subject to limitations prescribed by
law and the provisions of this Article FOURTH, to provide by resolution for the
issuance of the shares of Preferred Stock in one or more series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, and to fix the designations, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or restrictions
thereof.
The authority of the Board of Directors with respect to each series shall
include, but shall not be limited to, determination of the following:
(a) The number of shares constituting that series and the distinctive
designation of that series;
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(b) The dividend rate, if any, on the shares of that series, whether
dividends shall be cumulative, and if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of the
series;
(c) Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for adjustment of
the conversion rate in such events as the Board of Directors shall determine;
(e) Whether or not the shares of that series shall be redeemable, and if
so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and if so, the terms and amount of such
sinking fund;
(g) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights of priority, if any, of payment of shares of that series;
(h) Any other relative rights, preferences and limitations of that series.
Common Stock
The Common Stock is subject to the rights and preferences of the Preferred
Stock as hereinbefore set forth or authorized.
Subject to the provisions of any applicable law or of the by-laws of the
Corporation, as from time to time amended, with respect to the fixing of a
record date for the determination of stockholders entitled to vote, and except
as otherwise provided herein or by law or by the resolution or resolutions
providing for the issue of any series of Preferred Stock, the holders of
outstanding shares of Common Stock shall have exclusive voting rights for the
election of directors and for all other purposes, each holder of record of
shares of Common Stock being entitled to one vote for each share of Common Stock
standing in his name on the books of the Corporation.
Subject to the rights of any one or more series of Preferred Stock, the
holders of Common Stock shall be entitled to receive such dividends from time to
time as may be declared by the Board of Directors out of any funds of the
Corporation legally available for the payment of such dividends.
In the event of the liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, after payment shall have been
made to the holders of the Preferred Stock of the full amount to which they are
entitled, the holders of Common Stock shall be entitled to share ratably
according to the number of shares of Common Stock held by them in all remaining
assets of the Corporation available for distribution to its stockholders.
Issuance
Subject to the provisions of this Certificate of Incorporation and except
as otherwise provided by law, the shares of stock of the Corporation, regardless
of class, may be issued for such consideration and for such corporate purposes
as the Board of Directors may from time to time determine.
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FIFTH: The Corporation is to have perpetual existence.
SIXTH: The Board of Directors is expressly authorized to exercise all
powers granted to the Directors by law except insofar as such powers are limited
or denied herein or in the by-laws of the Corporation. In furtherance of such
powers, the Board of Directors shall have the right to make, alter or repeal the
by-laws of the Corporation.
SEVENTH: Meetings of Stockholders may be held within or without the State
of Delaware, as the by-laws may provide. The books of the Corporation may be
kept outside 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 by-laws of the
Corporation. Elections of Directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
EIGHTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as amended from
time to time, indemnify each person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was, or has agreed to become, a director or officer of the
Corporation, or is or was serving, or has agreed to serve, at the request of the
Corporation, as a director, officer or trustee of, or in a similar capacity
with, another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom.
Indemnification may include payment by the Corporation of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of any undertaking by the person indemnified
to repay such payment if it is ultimately determined that such person is not
entitled to indemnification under this Article, which undertaking may be
accepted without reference to the financial ability of such person to make such
repayments.
The Corporation shall not indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person
unless the initiation thereof was approved by the Board of Directors of the
Corporation.
The indemnification rights provided in this Article (i) shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any law, agreement or vote of stockholders or disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs, executors and
administrators of such persons. The Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than, those
set forth in this Article.
NINTH: No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law (i) for 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) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize a further limitation or elimination of the liability of
directors or officers, then the liability of a director or officer of the
Corporation shall, in addition to the limitation on personal liability provided
herein, be limited or eliminated to the fullest extent permitted by the Delaware
General Corporation Law, as from time to time amended. No amendment to or repeal
of this Article Ninth shall apply to or have any effect on the liability or
alleged liability of any director or officer of the Corporation for or with
respect to any acts or omissions of such director or officer occurring prior to
such amendment or repeal.
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TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Restated Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
The amendments and the restatement of the Certificate of Incorporation
herein certified have been approved by the Board of Directors of the Corporation
and duly adopted by the holders of a majority of the outstanding shares of
Common Stock in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware.
Signed this ___th day of _____________, 1997.
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Stanley C. Erck, President
Attest:
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Lynnette C. Fallon, Secretary
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