<PAGE> 1
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))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Antex Biologics Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(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) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
ANTEX BIOLOGICS INC.
300 Professional Drive
Gaithersburg, Maryland 20879
------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2000
------------------------------------
The Annual Meeting of Stockholders of Antex Biologics Inc. (the
"Company") will be held on Friday, June 23, 2000, at the Courtyard by Marriott
Gaithersburg, 805 Russell Avenue, Gaithersburg, Maryland, for the following
purposes.
1. To reelect Donald G. Stark to the Board of Directors to serve as a
Class II director for a three-year term, and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 26, 2000
as the record date for determining stockholders entitled to notice of and to
vote at the meeting. A complete list of stockholders entitled to vote at the
meeting will be open to examination by stockholders for any purpose germane to
the meeting during normal business hours at the Company's offices at 300
Professional Drive, Gaithersburg, Maryland 20879.
By Order of the Board of Directors
/S/GREGORY C. ZAKARIAN
----------------------
GREGORY C. ZAKARIAN
Secretary
April 28, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
TO ASSURE THE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
<PAGE> 3
Antex Biologics Inc.
300 Professional Drive
Gaithersburg, Maryland 20879
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be Held
June 23, 2000
This Proxy Statement is furnished to the stockholders of Antex Biologics
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of proxies for use at the Annual Meeting
of Stockholders of the Company to be held on June 23, 2000, and any adjournment
or adjournments thereof. A copy of the notice of meeting accompanies this Proxy
Statement. It is anticipated that the mailing of this Proxy Statement and
enclosed form of proxy will commence on or about April 28, 2000.
Only stockholders of record at the close of business on April 26, 2000,
the record date for the meeting, will be entitled to notice of and to vote at
the meeting. On the record date, the Company had issued and outstanding
48,200,254 shares of Common Stock, which are the only securities of the Company
entitled to vote at the meeting. Each outstanding share of Common Stock is
entitled to one vote.
A quorum for the meeting requires the presence in person or by proxy of
the holders of a majority of the outstanding shares of Common Stock. Assuming a
quorum is present, one director of the Company will be elected by a plurality of
the votes cast by stockholders present or represented and entitled to vote at
the meeting.
Abstentions will have no effect on the outcome of the vote for the
election of the director.
A stockholder who executes a proxy may revoke it by giving written notice
to the Secretary of the Company at any time before the proxy is voted.
Attendance at the meeting will not have the effect of revoking a proxy unless
the stockholder notifies the Secretary of the meeting in writing prior to the
voting of the proxy.
The Board of Directors does not know of any matter, besides the vote for
the election of the director described herein, that is expected to be presented
for consideration at the meeting. However, if other matters properly come before
the meeting, the persons named in the accompanying proxy intend to vote the
shares represented by such proxy on any such matter in accordance with their
best judgment. All proxies received pursuant to this solicitation will be voted
except as to matters where authority to vote is specifically withheld. If no
instructions are given, the persons named in the enclosed proxy intend to vote
for the nominee for reelection as a director as set forth below.
The Company will bear the cost of soliciting proxies, including the cost
of mailing the proxy material, and will reimburse banks, brokers and other
custodial nominees and fiduciaries for the costs of supplying the proxy material
to beneficial owners of the Common Stock. Directors, officers, and regular
employees of the Company (who will not be specifically compensated for such
service) also may solicit proxies in person or by telephone.
The 1999 Annual Report to Stockholders is enclosed herewith. The Annual
Report, which includes financial statements, does not form any part of the proxy
solicitation materials.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of April 26, 2000
regarding the beneficial ownership of the Company's Common Stock by (i) each
person known to the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each executive
officer of the Company
<PAGE> 4
named in the Summary Compensation Table, and (iv) all directors and executive
officers of the Company as a group. The persons named in the table below have
advised the Company that they have sole voting power and sole investment power
with respect to all shares of Common Stock shown as beneficially owned by them,
except as otherwise indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENTAGE
NAME AND ADDRESS(1) BENEFICIALLY OWNED(2) OF CLASS(2)
------------------- --------------------- -----------
<S> <C> <C>
SmithKline Beecham Biologicals Manufacturing s.a. 7,461,033(3) 14.32%
Rue de L'Institut 89
B-1330 Rixensart, Belgium
First Lincoln Holdings, Inc. 4,545,454(4) 8.62%
1001 Jefferson Plaza, Suite 200
Wilmington, Delaware 19801
CHL Medical Partners, L.P. 3,030,302(5) 5.92%
1055 Washington Boulevard
Stamford, Connecticut 06901
V. M. Esposito, Ph.D. 2,789,630(6)(7) 5.48%
Charles J. Coulter 212,476(8) *
Robert L. Curry 60,000(9) *
Donald G. Stark 231,191(8) *
Larry R. Ellingsworth, Ph.D. 231,250(9) *
Theresa M. Stevens 286,562(9) *
Gregory C. Zakarian 650,934(10) 1.33%
All directors and executive officers 4,462,043(11) 8.52%
(7 persons in group)
</TABLE>
- ------
* less than 1%
(1) The address for all of the named individuals is c/o Antex Biologics Inc.,
300 Professional Drive, Gaithersburg, MD 20879, unless otherwise
indicated.
(2) Pursuant to the rules of the Securities and Exchange Commission, shares
of Common Stock which an individual or group has a right to acquire
within 60 days pursuant to the exercise of options or warrants are deemed
to be outstanding for the purpose of computing the percentage ownership
of such individuals or group, but are not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person or
group shown in the table.
(3) Based on information contained in a Schedule 13D, dated September 24,
1999, filed with the Securities and Exchange Commission, includes
3,865,769 shares issuable upon the exercise of a warrant granted in
connection with agreements entered into with the Company effective
September 1, 1999. See "Certain Relationships and Related Transactions."
(4) Based on information contained in a Schedule 13G, dated March 27, 2000,
filed with the Securities and Exchange Commission, includes 2,272,727
shares issuable upon the exercise of Class A Warrants. See "Certain
Relationships and Related Transactions."
(5) Based on information contained in a Schedule 13G, dated March 23, 2000,
filed with the Securities and Exchange Commission, includes 1,515,151
shares issuable upon the exercise of Class A Warrants. Does not include
300,000 shares issuable upon the exercise of Class C Warrants and 300,000
shares issuable upon the exercise of Class D Warrants. See "Certain
Relationships and Related Transactions."
2
<PAGE> 5
(6) Includes 2,751,465 shares issuable upon the exercise of options.
(7) Includes 20,000 shares owned by a trust of which Dr. Esposito's wife is
sole trustee and as to which he disclaims beneficial ownership.
(8) Includes 195,476 shares issuable upon the exercise of options.
(9) Consists solely of shares issuable upon the exercise of options.
(10) Includes 650,834 shares issuable upon the exercise of options.
(11) Includes 4,175,587 shares issuable upon the exercise of options.
ITEM 1.
ELECTION OF DIRECTOR
The Board of Directors of the Company is divided into three classes which
are required to be as nearly equal in size as possible. Directors are elected
for three-year terms. At the 1997 Annual Meeting, Donald G. Stark was reelected
as a Class II director (term to expire at the 2000 Annual Meeting). At the 1998
Annual Meeting, Charles J. Coulter and V. M. Esposito, Ph.D. were reelected as
Class III directors (terms to expire at the 2001 Annual Meeting). At the 1999
Annual Meeting, Robert L. Curry was reelected as a Class I director (term to
expire at the 2002 Annual Meeting). At the 2000 Annual Meeting, the stockholders
will elect one Class II director, whose term will extend until the 2003 Annual
Meeting.
The Board of Directors has nominated Donald G. Stark for reelection as a
Class II director. Shares represented by all proxies received by the Board of
Directors and not so marked as to withhold authority to vote for the nominee
will be voted (unless the nominee is unable or unwilling to serve) for the
election of the nominee as a Class II director. The Board of Directors knows of
no reason why the nominee will be unable or unwilling to serve, but if this
should be the case, the persons named in the proxy will have the authority to
vote the proxy for the election of a replacement nominee selected by the Board
of Directors.
NOMINEE, CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
The names of the nominee for election as a director, each continuing
director, and each executive officer, and each such individual's age, positions
and offices held with the Company, years of service as a director, if
applicable, principal occupation and business experience during the past five
years, and any certain other directorships held is set forth below. The
following descriptions are based on information provided by such persons.
V. M. ESPOSITO, PH.D., age 59, has served as President, Chief Executive
Officer and a director of the Company since May 1992. In July 1992, he was
elected Chairman of the Board of Directors. From April 1987 until joining the
Company, Dr. Esposito was the Founder and served as the President and Chief
Executive Officer of Theracel Corporation, a privately-owned biotechnology
company.
CHARLES J. COULTER, age 74, has been a director of the Company since
October 1992. Mr. Coulter was President of American Research and Development, a
venture capital organization, from 1973 until his retirement in June 1992.
ROBERT L. CURRY, age 67, has been a director of the Company since March
1999. Since January 1, 1999, Mr. Curry has been Chairman of MPE Communications,
a division of McCann Ericson Health Care, a division of Inter Public Group
(IPG). From 1981 to December 1998, Mr. Curry was Chairman and CEO of MPE
Communications Inc., a privately-held health care education company. Mr. Curry
also is a Director and the Chief Executive Officer of Curry, Martin, and
Schiaveli, Inc., another division of McCann Ericson Health Care.
DONALD G. STARK, age 73, has been a director of the Company since October
1992. From September 1987 until his retirement in September 1992, Mr. Stark
served as the Vice Chairman of the Board of Nova Pharmaceutical Corporation.
3
<PAGE> 6
LARRY R. ELLINGSWORTH, PH.D., age 49, has served as Vice President,
Research and Development of the Company since December 1997. From October 1996
to November 1997, he was Executive Vice President, Research and Chief Scientific
Officer of Metamorphix, Inc., a privately-held biopharmaceutical company.
Previously, from November 1995 to September 1996, he was Executive Vice
President, Chief Scientific Officer and a director of Cystar, Inc., a
publicly-held biopharmaceutical company. From May 1991 to December 1994, he was
Vice President, Operations for Celtrix Pharmaceuticals, Inc., a publicly-held
biopharmaceutical company.
THERESA M. STEVENS, ESQ., age 39, has served as Vice President, Corporate
Development of the Company since September 1996. From January 1995 to September
1996, Ms. Stevens was employed as a patent attorney for the law firm of
Armstrong, Westerman, Hattori, McLeland & Naughton. Previously, she was a patent
attorney with the law firm of Pennie & Edmonds from August 1993 to January 1995.
Prior to August 1993, she worked as a patent attorney in the legal department of
The DuPont Merck Pharmaceutical Company.
GREGORY C. ZAKARIAN, CPA, age 51, has served as Vice President,
Administration, Chief Financial Officer and Treasurer of the Company since
September 1992. He has served as Secretary of the Company since November 1993,
and as Assistant Secretary of the Company from September 1992 until October
1993. Prior to September 1992, Mr. Zakarian was a partner with an international
CPA firm.
The Compensation Committee of the Board of Directors reviews and makes
recommendations to the Board on matters relating to employee compensation and
benefits, determines the compensation of the officers and other key employees,
and administers the Stock Option Plan. The current members are Charles J.
Coulter, Robert L. Curry and Donald G. Stark (chair). The Audit Committee of the
Board of Directors reviews and monitors the Company's financial reporting and
accounting practices. The current members are Charles J. Coulter (chair), Robert
L. Curry and Donald G. Stark. The Company does not have a nominating committee.
During 1999, the Board of Directors met 7 times, the Compensation
Committee met 3 times, and the Audit Committee met once.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that each of the Company's directors and executive
officers, and any beneficial owner of more than 10% of the Company's Common
Stock, file with the Securities and Exchange Commission (the "SEC") initial
reports of beneficial ownership of the Common Stock and reports of change in
beneficial ownership of the Common Stock. Such persons also are required by SEC
regulations to furnish the Company with copies of all such reports. Based solely
on the Company's review of the copies of such reports furnished to it for the
year ended December 31, 1999, and on the written representations made by such
persons that no other such reports are required, the Company is not aware of any
noncompliance with Section 16(a) during 1999.
EXECUTIVE COMPENSATON
The following table sets forth information for each of the Company's last
three fiscal years concerning the compensation earned by each of the Company's
executive officers whose compensation, consisting of salary and bonuses,
exceeded $100,000 for the year ended December 31, 1999 (the "named executive
officers").
4
<PAGE> 7
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
--------------------------------------
Annual
Compensation Awards Payouts
-----------------------------------------------------------------------------------------------
Securities
Other Restricted Underlying All Other
Name and Principal Annual Com- Stock Options/ LTIP Compen-
Position Year Salary ($) Bonus ($) pensation ($) Awards ($) SARs (#) Payouts($) sation ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
V. M. Esposito, 1999 350,000 -- -- -- -- -- 9,215(1)
Ph.D., Chief 1998 325,000 -- -- -- 500,000 -- 36,858
Executive Officer 1997 300,000 50,000 -- -- -- -- 59,738
L. R. Ellingsworth, 1999 155,056 -- -- -- 100,000 -- --
Ph.D., Vice 1998 145,839 -- -- -- 150,000 -- --
President, Research 1997 9,388 -- -- -- 250,000 -- --
and Development
T. M. Stevens 1999 134,751 -- -- -- 100,000 -- --
Vice President, 1998 129,254 -- -- -- 150,000 -- --
Corporate Development 1997 122,005 -- -- -- 35,000 -- --
G. C. Zakarian 1999 154,672 -- -- -- 100,000 -- 3,340(1)
Chief Financial 1998 148,339 -- -- -- 150,000 -- 13,360
Officer 1997 141,672 -- -- -- 50,000 -- 29,202
</TABLE>
- -------
(1) Consists of premiums paid by the Company on a split dollar life insurance
policy. Such payments were discontinued in April 1999.
The following table sets forth individual grants of stock options to the
named executive officers during the year ended December 31, 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1999
Number of Securities Percent of Total Options
Underlying Options Granted to Employees in Exercise Price
Name Granted (#) Fiscal Year ($/Share)(2) Expiration Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
L. R. Ellingsworth, Ph.D. 100,000(1) 12.8% $0.50 12/03/09
T. M. Stevens 100,000(1) 12.8% $0.50 12/03/09
G. C. Zakarian 100,000(1) 12.8% $0.50 12/03/09
</TABLE>
- -------
(1) Options vest ratably on a monthly basis over the 48 months following date
of grant.
(2) All options were granted at an exercise price equal to the fair market
value based on the closing bid of the Common Stock on the date of grant.
The following table sets forth information concerning stock options
exercised during 1999 and the value of unexercised stock options held at
December 31, 1999 by the named executive officers.
5
<PAGE> 8
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1999
AND YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Year-End (#) At Fiscal Year End($)(1)
Shares Acquired on Exercise Exercisable (E)/ Exercisable (E)/
Name (#) Value Realized ($) Unexercisable (U) Unexercisable (U)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V. M. Esposito, Ph.D. 0 -- 2,628,549(E) $37,500(E)
411,459(U) $42,500(U)
L. R. Ellingsworth, Ph.D. 0 -- 168,750(E) $5,250(E)
331,250(U) $12,750(U)
T. M. Stevens 0 -- 225,937(E) $5,250(E)
259,068(U) $12,750(U)
G. C. Zakarian 0 -- 613,334(E) $10,250(E)
225,000(U) $12,750(U)
</TABLE>
- -------
(1) Market value of securities underlying in-the-money options at the end of
fiscal year 1999 (based on $0.41 per share, the closing bid of the Common
Stock on December 31, 1999), minus the exercise price.
COMPENSATION OF DIRECTORS
Only directors who are not employees of the Company are compensated for
their services as directors. Each nonemployee director is paid an annual
retainer of $10,000 as compensation for services. Additionally, each nonemployee
director is paid $1,000 for each meeting of the Board of Directors which he
attends and $500 for each meeting of a committee of the Board attended in person
and held separately. Directors also are reimbursed for their expenses incurred
in attending Board and committee meetings.
Under the 1992 Directors' Stock Option Plan (the "Directors' Plan"), each
member of the Board of Directors of the Company who is not an employee of the
Company qualifies to participate in the Directors' Plan. Upon initial election
of the Board, a director is granted an option to purchase the number of shares
of Common Stock equal to $20,000 ($10,000 if elected on or after the six-month
anniversary of the most recent annual stockholders meeting) divided by the
greater of the market price of the Common Stock on the date of grant or $0.50.
At the time of reelection to serve or upon continuing to hold office for the
following year, a director is granted an additional option to purchase the
number of shares of Common Stock equal to $20,000 divided by the greater of the
market price of the Common Stock on the date of the grant or $0.50. For
directors who have served for at least three years, this basic annual grant is
supplemented every third year by an additional grant of an option to purchase a
number of shares of Common Stock equal to 150% of the number of shares covered
by the basic grant. Vesting occurs quarterly in four equal installments over a
period of one year following the date of grant. All stock options granted under
the Directors' Plan have a five-year term.
EMPLOYMENT CONTRACTS
Dr. Esposito entered into an agreement with the Company which commenced
January 1, 1996 and expires on December 31, 2000. The agreement requires Dr.
Esposito to devote his entire business time to the Company, not to compete with
the Company for a period of two years after termination of employment with the
Company and to assign to the Company all rights to technology discovered by him
during his employment. The agreement provides for an annual base salary of
$375,000 effective May 1, 2000. Dr. Esposito also is eligible to receive
bonuses as determined by the Board. The agreement provides for termination by
the Company on thirty-six months' prior notice or without notice upon payment
of severance equal to thirty-six months' salary and any bonus to which he would
have been entitled.
Dr. Ellingsworth is employed under an agreement with the Company which
commenced December 1, 1998 and expires on November 30, 2001. Dr. Ellingsworth's
agreement requires him to devote his entire business time to
6
<PAGE> 9
the Company, not to compete with the Company for a period of two years after
termination of employment with the Company and to assign to the Company all
rights to technology discovered by him during his employment. The agreement
provides for an annual base salary of $161,000 through November 30, 2000, and
thereafter is subject to adjustment by the Board, provided that it is not less
than the prior year's base salary. Dr. Ellingsworth also is eligible to receive
bonuses as determined by the Board. The agreement provides for termination by
the Company on six months' prior notice or without notice upon payment of
severance equal to six months' salary and any bonus to which he would have been
entitled. The agreement also provides that if Dr. Ellingsworth is terminated
within one year of a "change in control", related to such change in control,
then he will receive salary and benefits for a period of twelve months, net of
any employment earnings he may receive from other sources during the
twelve-month period.
Ms. Stevens is employed under an agreement with the Company which
commenced October 1, 1997 and expires on September 30, 2000. Ms. Stevens'
agreement requires her to devote her entire business time to the Company, not to
compete with the Company for a period of two years after termination of
employment with the Company and to assign to the Company all rights to
technology discovered by her during her employment. The agreement provides for
an annual base salary of $140,000 through September 30, 2000. Ms. Stevens also
is eligible to receive bonuses as determined by the Board. The agreement
provides for termination by the Company on six months' prior notice or without
notice upon payment of severance equal to six months' salary and any bonus to
which she would have been entitled. The agreement also provides that if Ms.
Stevens is terminated within one year of a "change in control", related to such
change in control, then she will receive salary and benefits for a period of
twelve months, net of any employment earnings she may receive from other sources
during the twelve-month period.
Mr. Zakarian is employed under an agreement with the Company which
commenced May 1, 1998 and expires on April 30, 2001. Mr. Zakarian's agreement
requires him to devote his entire business time to the Company, not to compete
with the Company for a period of two years after termination of employment with
the Company and to assign to the Company all rights to technology discovered by
him during his employment. The agreement provides for an annual base salary of
$157,000 through April 30, 2000, and thereafter is subject to adjustment by the
Board, provided that it is not less than the prior year's base salary. Mr.
Zakarian also is eligible to receive bonuses as determined by the Board. The
agreement provides for termination by the Company on twelve months' prior notice
or without notice upon payment of severance equal to twelve months' salary and
any bonus to which he would have been entitled. The agreement also provides that
if Mr. Zakarian is terminated within one year of a "change in control", related
to such change in control, then he will receive salary and benefits for a period
of twelve months, net of any employment earnings he may receive from other
sources during the twelve-month period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 13, 1999, the Company entered into an Omnibus Agreement with
SmithKline Beecham Biologicals Manufacturing s.a. ("SB Bio") and its affiliate
SmithKline Beecham plc ("SB plc"). Pursuant to the Omnibus Agreement, (i)
MicroCarb Human Vaccines Inc., the joint venture between the Company and SB Bio
("MCHV"), was dissolved and SB Bio's 26.25 % equity interest in the joint
venture was converted into 3,595,264 shares of Common Stock of the Company and
(ii) the Company and SB plc entered into a Research and Development, Research
Support and License Agreement, dated as of September 13, 1999 (the "New License
Agreement"), which replaced an earlier license agreement among the Company,
SmithKline Beecham Corporation ("SKB") and MCHV. Under the New License
Agreement, the Company is entitled to receive milestone payments and royalties,
as defined.
In connection with the termination of the joint venture, the Company
issued to SB Bio an Amended and Restated Warrant (the "New Warrant"), which
entitles SB Bio to purchase, at an exercise price of $.37 per share, 3,865,769
shares of Common Stock (and which would increase to 4,731,958 shares of Common
Stock if, on or before October 1, 1999, SKB had provided the Company with a
second $666,667 payment of research and development funding under the New
License Agreement). The New Warrant is exercisable on or before September 1,
2003.
7
<PAGE> 10
SB Bio has agreed that, for a period of ten years beginning May 6, 1996,
except with the prior consent of the Company and subject to certain limited
exceptions, SB Bio and its affiliates will not acquire common or preferred stock
of the Company if the effect of the acquisition would be to increase the total
percentage ownership of SB Bio and its affiliates in any class of equity
securities of the Company to more than 28% of the outstanding securities of that
class. In addition, if at any time prior to May 6, 2006, SB Bio proposes to sell
5% or more of the then outstanding shares of Common Stock of the Company, it
must first offer the shares to the Company. The Company, or a designee of the
Company, can elect within 30 days to purchase the shares at the price offered by
SB Bio. If the Company does not elect to purchase the shares, SB Bio can sell
the shares to a third party on the same terms that it offered to the Company.
On March 15, 2000, the Company completed an equity financing in which it
raised gross proceeds of $15,293,790. In the financing, the Company sold
18,717,864 A Units and 4,454,545 B Units, in each case at a price of $0.66 per
Unit, of which First Lincoln Holdings, Inc. purchased 2,272,727 A Units and CHL
Medical Partners, L.P. purchased 1,515,151 A Units. Each A Unit consisted of (i)
one share of Common Stock of the Company and (ii) one Class A Warrant. Each
Class A Warrant has a five-year term and became exercisable immediately upon
issuance to purchase one share of Common Stock at an exercise price of $1.50 per
share. At the election of the Company, the Class A Warrants may be redeemed,
upon 30 days prior written notice to the holders, at a redemption price of $.10
per Warrant, if (i) after September 15, 2001, the average market price of the
Common Stock exceeds $7.50 per share for 20 consecutive trading days or (ii)
after March 15, 2002, the average market price of the Common Stock exceeds $4.50
per share for 20 consecutive trading days. The redemption of the Class A
Warrants is contingent upon the effectiveness of a registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), registering for
resale the shares of Common Stock acquired upon the exercise of the Class A
Warrants.
In connection with the financing, the Company has agreed to issue to CHL
Medical Partners, L.P., as compensation for services rendered in connection with
the financing, (i) 300,000 Class C Warrants and (ii) 300,000 Class D Warrants.
Each Class C Warrant has a five-year term and becomes exercisable March 15, 2001
to purchase one share of Common Stock at an exercise price of $.66 per share.
Each Class D Warrants has a five-year term and becomes exercisable March 15,
2001 to purchase one share of Common Stock at an exercise price of $1.50 per
share. Neither the Class C Warrants nor the Class D Warrants are redeemable by
the Company. The issuance of the Class C Warrants and the Class D Warrants is
contingent upon increasing the number of available shares of Common Stock.
The Company has agreed to file with the Securities and Exchange
Commission, and use its best efforts to have declared effective, a registration
statement under the Securities Act registering for resale (i) the shares of
Common Stock included in the A Units and (ii) the shares of Common Stock
issuable upon the exercise of the Warrants.
RESIGNATION OF AUDITORS
Effective April 28, 2000, the Company's independent accountants,
PricewaterhouseCoopers LLP, resigned.
In its report letter dated February 26, 1999 on the Company's calendar
year 1998 financial statements, PricewaterhouseCoopers LLP expressed a
qualification with respect to the Company's ability to continue as a going
concern. In its report letter dated March 30, 2000 on the Company's calendar
year 1999 financial statements, no such qualification was expressed by
PricewaterhouseCoopers LLP.
During the last two calendar years, and to the date of resignation, there
were no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principle or practice, financial statement disclosure, or auditing
scope or procedure that, if not resolved to the satisfaction of
PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to
refer to the matter in its report.
The Audit Committee of the Company is conducting a search for new
independent accountants.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 Annual Meeting
must be received by the Secretary of the Company on or before December 29, 2000
in order to be considered for inclusion in the Company's proxy statement and
form of proxy for the Annual Meeting, and must also meet the other requirements
set forth in the rules of the Securities and Exchange Commission relating to
such stockholder proposals. If the proposal is received by the Company less than
45 days prior to the anniversary of the mailing date of this proxy statement,
the persons named as proxies in the Company's proxy material for the 2001 Annual
Meeting will have the discretionary authority to vote on the matter in
accordance with their best judgment without disclosure in the proxy statement of
such matter or of how the proxy holders intend to exercise their discretionary
voting authority.
8
<PAGE> 11
By Order of the Board of Directors
/S/GREGORY C. ZAKARIAN
----------------------
GREGORY C. ZAKARIAN
Secretary
April 28, 2000
9
<PAGE> 12
ANTEX BIOLOGICS INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints V. M.
Esposito, Gregory C. Zakarian, or either of them, with full power of
substitution, as proxies to represent and vote on my behalf at the Annual
Meeting of Stockholders of Antex Biologics Inc. (the "Company") to be held on
June 23, 2000, and at any adjournment or adjournments thereof (the "Meeting"),
all shares of Common Stock of the Company held or owned by the undersigned as
directed on the reverse side upon that matter, and in their discretion, upon
such other matters as may come before the Meeting.
Attendance of the undersigned at the Meeting or at any adjournment
thereof will not be deemed to revoke this proxy unless the undersigned shall
revoke this proxy in writing or shall deliver a subsequently dated proxy to the
Secretary of the Company or shall vote in person at the Meeting.
(TO BE SIGNED ON REVERSE SIDE)
<PAGE> 13
<TABLE>
<S> <C>
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD
1. Election of Director [ ] [ ] NOMINEE: DONALD G. STARK
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF
NO DIRECTION IS GIVEN, A SIGNED PROXY WILL BE VOTED "FOR"
PROPOSAL 1.
ANTEX BIOLOGICS INC.
300 PROFESSIONAL DRIVE
GAITHERSBURG, MD 20879-3419
SIGNATURE(S)____________________________________________ ____________________________________________ DATE: __________, 2000
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
</TABLE>
