SCHEDULE 14A INFORMATION
(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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IXION BIOTECHNOLOGY, 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)(4) 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:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
PRELIMINARY PROXY MATERIALS
IXION
Notice of Annual Meeting of Stockholders
June 11, 1999
The annual meeting of stockholders of Ixion Biotechnology, Inc, a
Delaware corporation (the "Company"), will be held at the offices of the Company
at 13709 Progress Blvd., Alachua, Florida, on June 11, 1999 at 10:00 a.m., local
time to:
1. Elect five directors for a term of one year;
2. To approve an amendment to the Company's certificate of
incorporation to increase the authorized number of shares of common stock from
4,000,000 to 20,000,000 and to authorize 1,000,000 shares of a new class of
preferred stock;
3. To approve an amendment of the Company's 1994 Board Retainer Plan to
increase the aggregate number of shares authorized to be outstanding under such
plan to 250,000;
4. To ratify the selection of PricewaterhousCoopers to audit the books
and records of the Company for 1998; and
5. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The board of directors has fixed the close of business on April 13,
1999 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the annual meeting and any adjournments or postponements
thereof.
By Order of the Board of Directors,
Mary Trew
Secretary
Alachua, Florida
April xx, 1999
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IMPORTANT
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If you do not expect to attend the meeting in person, please complete,
date, and sign the enclosed proxy and return it without delay in the
enclosed envelope, which requires no additional postage if mailed in the United
States.
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<PAGE>
PRELIMINARY PROXY MATERIALS
IXION
IXION BIOTECHNOLOGY, INC.
13709 Progress Blvd., Box 13
Alachua, FL 32615
April xx, 1999
PROXY STATEMENT
For annual meeting of stockholders to be held
on Friday, June 11, 1999
GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by the board of directors of Ixion Biotechnology, Inc. (the "Company"
or "Ixion"), for use at the annual meeting of stockholders on June 11, 1999 at
10:00 a.m. local time, and at any postponements or adjournments thereof. We
expect to distribute this proxy statement and the accompanying proxy card to
stockholders about April xx, 1999.
The Company will bear the cost of proxy solicitation. In addition to
the use of mails, proxies may be solicited by telephone by officers, directors,
and regular employees of the Company, none of whom will be specially compensated
for such services.
Our annual report to stockholders for the fiscal year ended December
31, 1998, including audited financial statements, is included herewith, but does
not constitute a part of this proxy statement.
Holders of our common stock, of record at the close of business on
April 13, 1999, are entitled to vote at the meeting. As of that date, there were
xxxxxxxxx shares of common stock outstanding. Each stockholder entitled to vote
shall have the right to one vote for each share outstanding in such
stockholder's name.
We presently have no other class of stock outstanding and entitled to
be voted at the meeting. The presence in person or by proxy of stockholders
composing a majority of all votes entitled to be cast at the meeting constitutes
a quorum.
Shares cannot be voted at the meeting unless the holder of record is
present in person or by proxy. The enclosed proxy is a means by which a
stockholder may authorize the voting of his or her shares at the meeting. The
shares of common stock represented by each properly executed proxy will be voted
at the meeting in accordance with each stockholder's directions. Stockholders
should specify choices by marking the appropriate boxes on the enclosed proxy;
if no choice has been specified, the shares will be voted as recommended by the
board of directors. If any other matters are properly presented at the meeting
for action, the proxy holders will vote the proxies (which confer discretionary
authority to vote on such matters) in accordance with their judgement.
<PAGE>
PRELIMINARY PROXY MATERIALS
Your execution of the accompanying proxy will not affect your right to
attend the meeting and vote in person. Any stockholder giving a proxy has a
right to revoke it by giving written notice of revocation to the Secretary of
the Company, or by delivering a subsequently executed proxy, at any time before
the proxy is voted, or by attending the meeting and voting in person. If you are
a stockholder of record and plan to attend the meeting, please return the proxy
card with the "Annual Meeting" box marked. Admission to the meeting will be on a
first-come, first served basis. Stockholders will be admitted upon verification
of ownership at the door.
Your proxy vote is important. Accordingly, please complete, sign, and
return the accompanying proxy whether or not you plan to attend the meeting.
PROPOSAL 1: ELECTION OF DIRECTORS
Proxies in the accompanying form will be voted at the meeting, unless
authority to do so is withheld, in favor of the election as directors of the
nominees named below.
The stockholders will elect five directors at the annual meeting for a
term of one year expiring at the 2000 annual meeting of the stockholders, and
until the election and qualification of successors (or until earlier removal or
resignation). In the event one or more of the named nominees is unable to serve,
the persons designated as proxies may cast votes for other persons as substitute
nominees. The board of directors has no reason to believe that any of the
nominees named below will be unavailable, or, if elected, will decline to serve.
Directors will be elected by a plurality of the votes cast at the annual
meeting. Withheld votes will not count toward such nominee's achievement of a
plurality.
Certain information is set forth below for each nominee for director.
All of the nominees are presently directors and were previously elected by the
stockholders.
The Board of Directors unanimously recommends a vote FOR each of the
nominees.
Nominees for Director
<TABLE>
<CAPTION>
Year First
Principal Occupations During Past Five Became
Name of Director Age Years and Certain Directorships Director
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<S> <C> <C> <C>
Weaver H. Gaines 55 Mr. Gaines is one of the founders of the Company and has been its 1993
Chairman and Chief Executive and a director since inception. He was
also President from April 1993 to April 1994. From April to November
1992, he was a member of Bush/Quayle 92. He is also a director of
BIO+Florida, the Florida biotechnology trade
association, and of AquaGene, Inc.
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David C. Peck 51 Mr. David Peck is one of the founders of Ixion and has been a director 1993
since inception. Since April 1994, he has served as President and
Chief Financial Officer. From September 1995, Mr. Peck has also been
Chief Executive Officer and Chief Operating Officer of BACOMPT, a
printing company located in Carmel, Indiana. Mr. Peck is the brother
of Dr. Peck, the Company's Chief Scientist.
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David M. Margulies 47 Dr. Margulies is currently Executive Vice President and Chief 1994
Scientist of Synetic, Inc., a publicly-held company. From July 1996
to January 1997, Dr. Margulies was a founder and Chairman and CEO of
CareAgents, Inc, a developer of Internet-based clinical commerce
applications, which was acquired by Synetic in January 1997. From
1991 to July 1996, Dr. Margulies was a Director, an Executive Vice
President, and Chief Scientist of Cerner
Corporation, a publicly-held company.
- ------------------------ ------ ------------------------------------------------------------------------ -----------
- ------------------------ ------ ------------------------------------------------------------------------ -----------
Vincent P. Mihalik 48 Mr. Mihalik is presently Senior Vice President and General Manager, 1995
Lab Systems and Molecular Biochemicals, Roche Diagnostics. From
November of 1996 until June 1998, he was Executive Vice President,
Group Personnel, Corange International Holding BV, the parent company
of Boehringer Mannheim Corporation. From November 1995 to November of
1996, he was Senior Vice President Global Marketing for the Diabetes
Care Business Unit of Boehringer Mannheim Corporation.
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Karl-E. Arfors 62 Dr. Arfors has been President of Experimental Medicine, Inc., since 1998
1993. His professional career includes positions with the Liposome
Company and Pharmacia AB, as well as President of the La Jolla
Institute for Experimental Medicine.
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</TABLE>
Committees of the Board of Directors
The Bylaws provide that the board may designate an executive
committee and other committees, each of which shall consist of one or more
directors, and the board annually elects from its members of an Audit and
Benefits Committee and an Executive Committee.
Audit and Benefits Committee. The members of the Audit and Benefits
Committee are Dr. Margulies, Dr. Arfors, and Mr. Mihalik, all non-employee
directors. This Committee, which met twice during 1998, recommends to the board
the engagement of independent auditors, reviews the professional services to be
rendered by the independent auditors, the scope of their audit, their fees, and
the results of their engagement. The independent auditors meet periodically with
the Committee and have unrestricted access to them. The Committee is also
responsible for developing and executing plans for the compensation of the
executive officers. Additionally, the Committee administers the terms and
provisions of the 1994 Stock Option Plan (the "Option Plan") and the Board
Retainer Plan, including the determination of the individuals eligible to
receive awards, the individuals to whom awards should be granted, the nature of
the awards to be granted, and the exercise price, vesting schedule, and term of
options or awards to be granted.
Executive Committee. The members of the Executive Committee are Mr.
Gaines and Mr. Peck. The Executive Committee has all of the powers of the Board
permitted under the Delaware corporation law. There were no meetings of the
Executive Committee during 1998.
Board Meetings and Attendance of Directors
The board of directors had four meetings in 1998. All directors
attended more than 75% of the aggregate of (i) the total number of meetings of
the board held while they were members, and (ii) the total number of meetings
held by all committees of the board.
PROPOSAL 2: APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK AND OF A NEW CLASS OF PREFERRED STOCK
The board of directors has approved and adopted, subject to
stockholder approval, an amendment to the Company's certificate of incorporation
to increase the Company's authorized number of shares of common stock from
4,000,000 shares to 20,000,000 shares and to authorize up to 1,000,000 shares of
a new class of preferred stock.
<PAGE>
PRELIMINARY PROXY MATERIALS
Although at present the Company has no plans to issue additional shares of
common stock other than the shares currently reserved as discussed below, nor to
issue any preferred stock, it desires to have such shares available to provide
additional flexibility to use its capital stock for business and financial
purposes in the future. The additional common shares and the new preferred
shares may be used, without further stockholder approval, for various purposes
including, without limitation, raising capital, providing equity incentives to
employees, officers, directors or consultants, establishing strategic
relationships with other companies and expanding the Company's business through
the acquisition of other businesses or products. Stockholders will not be
entitled to preemptive rights with respect to any such issuances.
The additional shares of common stock to be authorized by adoption of
the amendment to the certificate of incorporation would have rights identical to
the currently authorized common stock. The issuance of common stock authorized
under the amendment would not affect the rights of the holders of currently
outstanding common stock, except for effects incidental to any later increase in
the number of shares of the Company's common stock outstanding, such as dilution
of the earnings per share and voting rights of current holders of common stock.
Please note that any issuance of additional shares of common stock
could be disadvantageous to existing stockholders because such issuance might
serve to dilute their percentage interest in the Company. Holders of common
stock do not have preemptive rights to purchase any additional shares of common
stock which may be issued. The Company would not be required to obtain
stockholder approval to issue authorized but unissued shares of common stock,
unless required to do so by applicable law or the rules of any stock exchange on
which the Company's shares may be listed.
The authorized but unissued shares of common stock also could be used
by incumbent management to make more difficult, and thereby discourage, an
attempt to acquire control of the Company. For example, the shares could be
privately placed with purchasers who might support the board of directors in
opposing a hostile takeover bid. The issuance of the new shares also could be
used to dilute the stock ownership and voting power of a third party seeking to
remove directors, replace incumbent directors, accomplish certain business
combinations, or alter, amend, or repeal provisions of the Company's Certificate
of Incorporation. To the extent that it impedes any such attempts, the issuance
of shares following the amendment may serve to perpetuate existing management.
Following approval by the stockholders of the amendment, the board of
directors, by adoption of an authorizing resolution, may cause preferred stock
to be issued from time to time in one or more series, and may, with regard to
the shares of any series of preferred stock:
o Fix the distinctive serial designation of the shares;
o Fix the dividend rate, if any;
o Fix the date from which dividends on shares
issued before the date for payment of the
first dividend shall be cumulative, if any;
o Fix the redemption price and terms of redemption, if any;
o Fix the amounts payable per share in the event of dissolution or
liquidation of the Company, if any; o Fix the terms and amounts
of any sinking fund to be used for the purchase or redemption of
shares, if any;
o Fix the terms and conditions under which the shares may be
converted, if any;
o Provide whether such shares shall be non-voting, or shall have
full or limited voting rights, and the rights, if any, of such
shares to vote as a class on some or all matters on which
such shares may be entitled to vote; and
o Fix such other preferences, qualifications, limitations,
restrictions, and special or relative rights not required by law.
None of these actions would require stockholder approval.
As of February 28, 1999, of the 4,000,000 shares of common stock
presently authorized
o 2,514,014 shares were issued and outstanding;
o under the Company's 1994 Stock Option Plan, 224,100 shares were
reserved for future option grants and 100,900 shares were reserved
for issuance upon exercise of presently outstanding stock options;
<PAGE>
PRELIMINARY PROXY MATERIALS
o in connection with the Company's public offering of 150,000 units
(composed of 150,000 shares of stock and 37,500 Charitable
Benefit Warrants), 115,580 shares were reserved for future sales
of units in the offering, 23,630 shares are reserved for future
sales of Charitable Benefit Warrants included in the units, and
8,605 shares are reserved for exercise of outstanding
Charitable Benefit Warrants;
o 323,557 shares were reserved for issuance upon conversion of the
Company's unsecured convertible notes; o under the Company's
1994 Board Retainer Plan (subject to stockholder approval of the
amendment discussed in Proposal 3), 150,950 shares were reserved
for future awards;
o 23,630 shares were reserved for issuance pursuant to outstanding
warrants; and
o 509,769 shares were unissued and unreserved.
If the amendment to the Certificate of Incorporation is approved by the
stockholders, it will become effective upon the filing of the Certificate of
Amendment of the Certificate of Incorporation with the Secretary of State of the
State of Delaware, which is expected to occur as promptly as practicable
following the annual meeting. The complete text of the Certificate of Amendment
to the Certificate of Incorporation is set forth in Exhibit A to this Proxy
Statement.
The affirmative vote of the holders of a majority of the shares of the
common stock outstanding on the record date will be required to approve the
proposed amendment to the certificate of incorporation. As a result, abstentions
will have the same effect as negative votes.
The board of directors recommends a vote FOR Proposal 2.
PROPOSAL 3: APPROVAL OF 1994 BOARD RETAINER PLAN, AS AMENDED
The Company does not pay cash compensation to outside members of the
board of directors or to members of the scientific advisory board. Accordingly,
on August 31, 1994, the board of directors adopted the 1994 Board Retainer Plan
to grant shares of common stock to such members as well as to permit grants of
stock as hiring bonuses for key employees. There are 75,000 shares of the
Company's common stock authorized for issuance under the Board Retainer Plan to
directors and members of the Company's scientific advisory board. Shares may
also be issued to key employees under the Board Retainer Plan (generally upon
hire), but no specific number of shares were originally reserved for grants to
employees.
At February 28, 1999, a total of 74,000 shares had been issued to
directors and members of the scientific advisory board and only 1,000 shares
remained available for future grants to them under the Board Retainer Plan (plus
any shares that might in the future be returned to the Board Retainer Plan as a
result of repurchases of unvested issued shares which the Company has a right to
repurchase upon termination of such director or member of the scientific
advisory board). 25,050 shares have been issued to employees.
The amended Board Retainer Plan will increase the total number of
shares which may be issued and outstanding to 250,000 (of which, as noted above,
99,050 have been issued already). It will also limit the total number of shares
reserved for issuance under this Plan by bringing issuances to employees and
consultants under the 250,000 cap.
Stockholders are requested in this Proposal 3 to approve the amended
Board Retainer Plan. The affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the amended Board Retainer Plan. Abstentions
will be counted toward the tabulation of votes cast on proposals presented to
the stockholders and will have the same effect as negative votes.
The complete text of the Board Retainer Plan is set forth in Exhibit B
to this proxy statement. The essential features of the amended Board Retainer
Plan are set forth below and are qualified in their entirety by reference to the
full text of the Board Retainer Plan.
<PAGE>
PRELIMINARY PROXY MATERIALS
Stock Subject to the Plan. Assuming approval by the stockholders, a
total of 250,000 shares may be issued and outstanding under the Plan.
Granting of Awards. Any serving outside director, or any member of the
scientific advisory board, and key employees and key consultants are eligible
for awards. There are currently three outside directors, six members of the
scientific advisory board, and approximately 10 employees and consultants who
are eligible for awards.
Outside directors and members of the scientific advisory board receive
5,000 shares upon joining a board. Thereafter, following each annual meeting of
the board, each such person is awarded an additional 1,000 shares so long as
they continue their active service. Employees and consultants may be
granted awards in connection with employment or otherwise upon recommendation of
the Audit and Benefit Committee and approval by the board of directors.
Participants do not pay cash consideration for awarded shares.
Administration of the Plan. The Plan is administered by the Audit and
Benefits Committee, which must consist of at least two outside directors. The
Committee has the sole discretionary authority to impose conditions and
restrictions on awards, interpret the plan, establish rules and regulations, and
take any other actions.
Terms of the Grants. Participants receive certificates for fully-paid
and nonassessable shares in the amount of the award. Shares awarded but not yet
vested may be reacquired by the Company at no cost if a participant ceases, for
any reason, to be a member of the board, a member of the scientific advisory
board, or an active employee or consultant.
Transfer Restrictions and Vesting. Unless the Committee decides
otherwise, no shares issued pursuant to an award may be sold, pledged, or
transferred until they have vested and unless the transfer is not in violation
of the securities laws. With respect to directors, employees, or consultants,
the awarded shares will typically vest as over a five-year period (20% after the
participants first full year of continuous service and 1/12 of 20% at the end of
each additional full month of continuous service thereafter). Scientific
advisors' shares vest 25% at the end of each three months. Generally, unvested
shares at the time of termination will not vest, unless the Committee determines
otherwise, except in the case of a change of control, when all unvested awards
vest immediately. The Plan does not confer any rights of employment on any
participant.
Miscellaneous. All costs are paid by the Company. The Company has the
right to deduct from any award and taxes that may be required to be withheld.
The Company may suspend or terminate the plan at any time.
The board of directors recommends a vote FOR Proposal 3.
PROPOSAL 4: DESIGNATION OF AUDITORS
Upon the recommendation of the Audit and Benefits Committee, the Board
of Directors has designated PricewaterhouseCoopers LLP to audit the books and
accounts of the Company for the year ending December 31, 1999, and will offer a
resolution at the annual meeting to ratify the designation.
The board recommends a vote FOR Proposal 4.
OTHER BUSINESS
The Board of Directors is not aware of any matters not set forth herein
that may come before the meeting. If, however, further business properly comes
before the meeting, the persons named in the proxies will vote the shares
represented thereby in accordance with their judgement.
EXECUTIVE COMPENSATION
Compensation of Directors
<PAGE>
PRELIMINARY PROXY MATERIALS
Employees and consultants of the Company who are also directors of the
Company receive no additional remuneration for fulfilling their role as
director.
Pursuant to the Board Retainer Plan, as described above, non-employee
directors receive a grant of 5,000 shares of common stock upon election to the
board, and, during the duration of the Plan, will receive 1,000 shares annually
thereafter, immediately following the annual meeting at which they are reelected
to the Board. They also receive reimbursement of their expenses to attend board
meetings. In June of 1998, Dr. Margulies and Mr. Mihalik each received 1,000
shares under the Board Retainer Plan, and Dr. Arfors received 5,000 shares. In
addition, non-employee directors are eligible to receive options under the terms
of the 1994 Stock Option Plan as determined by the Audit and Benefits Committee.
Non-employee directors who are members of the Audit and Benefit Committee may
not be awarded discretionary option grants, but will receive a grant of options
to purchase 2,000 shares of the Company's Common Stock upon appointment to the
Committee, and options to purchase an additional 2,500 shares annually
thereafter. Options vest over a five-year period, with an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant. In
1998, Dr. Margulies and Mr. Mihalik each received an automatic annual grant
under the 1994 Stock Option Plan of a nonqualified option to purchase 2,500
shares of Common Stock at an exercise price of $10.00 per share.
Summary Compensation Table
The following table summarizes the compensation of those persons who
were, at December 31, 1998, the Company's Chairman and Chief Executive Officer,
its President, and its Senior Vice President and Chief Scientist, for the years
ended December 31, 1996, 1997, and 1998.
<TABLE>
<CAPTION>
Summary Compensation Table
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Annual Compensation Long-Term Compensation Awards
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Deferred Cash All Restricted Securities
Name Year Salary Salary Other Stock Awards Underlying Options/SARs
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<S> <C> <C> <C> <C> <C> <C>
Weaver H. Gaines (1)...... 1996 $25,000 $60,000 $0 $0 0
Chairman and CEO 1997 $23,750 $71,250 $0 $0 0
1998 $95,000 $ 0 $0 $0 19,000
- ------------------------------ ------ ---------- -------- ------- -------------- -------------------------
- ------------------------------ ------ ---------- -------- ------- -------------- -------------------------
David C. Peck (2)......... 1996 $25,000 $35,000 $0 $0 0
President & CFO 1997 $20,000 $40,000 $0 $0 0
1998 $60,000 $ 0 $0 $0 12,000
- ------------------------------ ------ ---------- -------- ------- -------------- -------------------------
- ------------------------------ ------ ---------- -------- ------- -------------- -------------------------
Ammon B. Peck (3)......... 1996 $ 5,000 $35,000 $0 $0 0
Sr. V.P. & Chief Scientist 1997 $16,667 $33,333 $0 $0 0
1998 $50,000 $ 0 $0 $0 10,000
- ------------------------------ ------ ---------- -------- ------- -------------- -------------------------
</TABLE>
(1) Mr. Gaines joined the Company at its inception in March 1993.
(2) Mr. Peck joined the Company in April 1994. He is paid a consulting fee
rather than a salary. (3) Dr. Peck began consulting for the Company on June
1, 1994. He is paid a consulting fee rather than a salary.
Executive Compensation and Employment Arrangements
In August, 1994, the Board of Directors adopted an annual incentive
compensation plan (the "Annual Bonus Plan"), administered by the Audit and
Benefits Committee, pursuant to which officers and key consultants may be
awarded cash bonuses (deferred unless the Company has sufficient cash to pay
such bonuses prudently), based on the financial performance of the Company. For
1998, the Audit and Benefits Committee determined that awards could range up to
50% of a participant's base salary or consulting fee, depending on their rank.
No awards under the Annual Bonus Plan were made for 1997. Awards, if any, for
1998, will be determined following the annual meeting.
<PAGE>
PRELIMINARY PROXY MATERIALS
In January, 1994, the Board of Directors adopted a Deferred
Compensation Plan for officers, key employees, and key consultants of the
Company, permitting such persons to defer the receipt of all or a portion of
their compensation. Under the Deferred Compensation Plan, an unfunded deferred
compensation account is established for each participant. The only obligation of
the Company regarding such account is to make the payments when they become
payable if the Company has sufficient cash to do so prudently. Any amount
credited to such account is solely for record-keeping, and is not considered to
be held in trust or in escrow or in any way vested in the participant. Payments
under the Deferred Compensation Plan are to be made only upon termination of
employment (which may be by death, disability, retirement, or otherwise) and may
be in a lump sum or as an annuity. In the case of certain senior participants,
if termination is by death or dismissal without cause, at the election of the
participant, the balance in his account may be converted into Common Stock of
the Company at a price per share not greater than the lowest price per share
(adjusted for stock splits, stock dividends, the issuance of convertible
securities, warrants, or options, or other dilution) at which shares of the
Company's Common Stock have been issued (or agreed to be issued) at any time in
the 365 days preceding the date of termination. A termination is deemed without
cause for substantially the same occurrences described under "Employment
Agreements," below. Amounts in the account bear interest, compounded annually,
at a rate established by the Board of Directors, which was 6.54% during 1998.
Effective January 1, 1999, the rate established by the Board is 6.29%. All
compensation and all interest during 1998 were deferred by the officers.
The Company has entered into written employment agreements (the
"Employment Agreements") with two of its executive officers, Messrs. Gaines and
D. Peck (who also has a consulting agreement with the Company which essentially
duplicates the terms of the Employment Agreement), which provide for initial
annual base compensation of $95,000 and $60,000, respectively. Base compensation
levels are to be reviewed at least annually. Upon a determination by the Board
that the Company has obtained adequate financing, base compensation may be
increased to not less than the average cash base compensation reported by an
appropriate salary survey (as determined by the Board) for executive officers at
biotechnology companies of equivalent size and status. The effective date of the
Employment Agreements is August 31, 1994, and the current term of each expires
December 31, 2000, renewable automatically for one-year terms unless either
party gives written notice of termination at least 92 days before the end of the
then current term. Annual bonus compensation, if any, shall be determined by the
Board of Directors.
The Employment Agreements provide that the Company has the right to
terminate the executive at any time upon 60 days' notice. A termination for
cause (as defined in the Employment Agreements) is effective without further
benefits, upon a finding by the Board of Directors. Termination without cause
(as defined in the Employment Agreements), or termination by the executive for
"Good Reason" (as defined in the Employment Agreements) requires the Company to
pay severance benefits equal to the aggregate base salary at the then current
rate payable through the end of the then current term, but not less than two
times the executive's base compensation. In addition, the Company must pay
annual bonus compensation calculated in accordance with the Employment
Agreements. Finally, all restricted stock is immediately vested, all outstanding
stock options are immediately vested and accelerated, and the executives have
the right to purchase Common Stock of the Company pursuant to the terms of the
Subordinated Note Agreement and the Deferred Compensation Plan. Termination is
deemed without cause or for "Good Reason" if (i) there is a reduction in the
executive's annual aggregate compensation or benefits, (ii) there is an
involuntary diminution in the executive's position, powers, authority, duties,
or responsibilities, or (iii) there is a material breach of the Employment
Agreement by the Company.
The Employment Agreements contain covenants that an executive must
refrain from engaging in any business competitive with the Company during the
period of his employment and for six months after termination or resignation and
must not use, disclose or make accessible to any third party any proprietary
information of the Company during the period of his employment, or thereafter.
All inventions relating to oxalate technology, or biotechnology generally
conceived while rendering services to the Company must be assigned to the
Company.
The Company has an exclusive consulting agreement expiring in 2000
with Dr. Ammon B. Peck for consulting services relating to the Company's
business and technology. The fee is $50,000 per year. Dr. Peck is obligated to
devote 48 days of service per year to the Company, including travel time, and
has agreed not to engage in competitive activities with Ixion during the term of
the agreement, or for two years thereafter. Subject to the provisions of Dr.
Peck's employment agreement with the University of Florida, Dr. Peck has agreed
to assign to the Company any inventions or intellectual property rights
developed by him while performing services under the agreement. The agreement
may be canceled by either party on 30 days' written notice.
Option Tables
The following table sets forth certain information concerning all stock
option grants to the Company's executive officers to date.
<PAGE>
PRELIMINARY PROXY MATERIALS
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal year
(Individual Grants)
------------------------------------------------
Number of Securities % of Total Options/SARs
Underlying Granted to Employees in Exercise Price
Name Options/SARs Granted Fiscal Year Per Share Expiration Date
- ----------------------- -------------------- ----------------------- -------------- ---------------
<S> <C> <C> <C> <C>
Weaver H. Gaines 19,000 42% $10.00 June 30, 2008
- ----------------------- -------------------- ----------------------- -------------- ---------------
- ----------------------- -------------------- ----------------------- -------------- ---------------
David C. Peck 12,000 27% $10.00 June 30, 2008
- ----------------------- -------------------- ----------------------- -------------- ---------------
- ----------------------- -------------------- ----------------------- -------------- ---------------
Ammon B. Peck 10,000 22% $10.00 June 30, 2008
- ----------------------- -------------------- ----------------------- -------------- ---------------
</TABLE>
The following table sets forth certain information concerning option
exercises and option holdings under the Option Plan as of December 31, 1998 with
respect to each of the Company's executive officers.
Aggregated Options/SAR Exercises in Last Fiscal Year and
Fiscal Year-end Option/SAR Values
- ----------------------------------------- ------------------------------------ -
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at FY-end Options/SARs at FY-end
Name Exercisable/Unexerciseable Exercisable/Unexerciseable(1)
- ------------------ ------------------------------ -----------------------------
- ------------------ ------------------------------ -----------------------------
Weaver H. Gaines 0/19,000 $0/$0
- ------------------ ------------------------------ -----------------------------
- ------------------ ------------------------------ -----------------------------
David C. Peck 0/12,000 $0/$0
- ------------------ ------------------------------ -----------------------------
- ------------------ ------------------------------ -----------------------------
Ammon B. Peck 0/10,000 $0/$0
- ------------------ ------------------------------ -----------------------------
(1) Value is based on the public offering price of the Company's Units.
There is no trading market for the Company's common stock, accordingly no
options are "in-the-money."
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information with respect to
beneficial ownership of the Company's common stock as of February 28, 1999, by
the Company's executive officers and by all directors and officers of the
Company as a group.
- ----------------------------------- ------------------------------ -------------
Name Number of Shares Percent
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
Ammon B. Peck, Ph.D 655,000 (1) (4) 26%
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
Weaver H. Gaines 553,512 (2) (4) 22%
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
David C. Peck 417,734 (3) (4) 16%
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
David M. Margulies, M.D 21,875 (4) (5)
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
Vincent P. Mihalik 15,400 (4) (5)
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
Karl-E. Arfors, Ph.D 5,000 (5)
- ----------------------------------- ------------------------------ -------------
- ----------------------------------- ------------------------------ -------------
All officers and directors
as a group (6 persons) 1,667,021 (4) 66%
=================================== ============================== =============
<PAGE>
PRELIMINARY PROXY MATERIALS
(1) Includes 50,000 shares held by Dr. Peck's wife in trust for her
brothers as to which Dr. Peck disclaims beneficial ownership and 5,000 shares
issuable upon conversion of unsecured convertible notes held by members of Dr.
Peck's immediate family, as to which Dr. Peck disclaims beneficial ownership.
(2) Includes 5,952 shares issuable upon conversion of unsecured convertible
notes held by Mr. Gaines and 40,000 shares held by WABS Associates, a general
partnership composed of Mr. Gaines and his three siblings. Mr.
Gaines disclaims beneficial ownership of 30,000 of such WABS shares.
(3) Includes 12,000 shares issuable upon conversion of unsecured
convertible notes held by members of Mr. Peck's immediate family as to which Mr.
Peck disclaims beneficial ownership and 1,400 shares held by members of Mr.
Peck's immediate family, as to which Mr. Peck disclaims beneficial ownership.
(4) Includes shares which could be acquired within 60 days of February 28,
1999 through the exercise of stock options or the conversion of unsecured
convertible notes as follows: Dr. Peck (5,000 shares), Mr. Gaines (5,952
shares), Mr. Peck (12,000 shares), Dr. Margulies (4,875 shares), and Mr. Mihalik
(3,400 shares).
(5) Less than 1.0% (including shares which could be acquired within 60 days
of February 28, 1999, through the exercise of outstanding options). Percent is
calculated based on actual shares outstanding plus shares exercisable by
officers or directors within 60 days.
Security Ownership of Certain Beneficial Owners
Set forth below is certain information with respect to those persons
who are known to the Company to own beneficially more than five percent of the
Company's Common Stock as of February 28, 1999.
- --------------------------------- ------------------------------ ---------------
Name and Address of Beneficial Owners (1) Number of Shares Percent
- ----------------------------------------- ---------------- -------
- ----------------------------------------- ---------------- -------
Ammon B. Peck, Ph.D 655,000 (2) (5) 26%
- ------------------------------------------ --------------- -------
- ------------------------------------------ --------------- -------
Weaver H. Gaines 553,512 (3) (5) 22%
- ----------------------------------------- ---------------- -------
- ----------------------------------------- ---------------- -------
David C. Peck 417,734 (4) (5) 16%
- ----------------------------------------- ---------------- -------
(1) Address is 13709 Progress Blvd., Box 13, Alachua, FL 32615.
(2) Includes 50,000 shares held by Dr. Peck's wife in trust for her
brothers as to which Dr. Peck disclaims beneficial ownership and 5,000 shares
issuable upon conversion of unsecured convertible notes held by members of Dr.
Peck's immediate family, as to which Dr. Peck disclaims beneficial ownership.
(3) Includes 5,952 shares issuable upon conversion of unsecured convertible
notes held by Mr. Gaines and 40,000 shares held by WABS Associates, a general
partnership composed of Mr. Gaines and his three siblings. Mr.
Gaines disclaims beneficial ownership of 30,000 of such WABS shares.
(4) Includes 12,000 shares issuable upon conversion of unsecured
convertible notes held by members of Mr. Peck's immediate family as to which Mr.
Peck disclaims beneficial ownership and 1,400 shares held by members of Mr.
Peck's immediate family, as to which Mr. Peck disclaims beneficial ownership.
(5) Includes shares which could be acquired within 60 days of February 28,
through the conversion of unsecured convertible notes as follows: Dr. Peck
(5,000 shares), Mr. Gaines (5,952 shares), and Mr. Peck (12 shares). Percent is
calculated based on actual shares outstanding plus shares exercisable by
officers or directors within 60 days.
The Company is not aware of any arrangements, including pledges of
securities, the execution of which may at a subsequent time result in a change
in control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
The following are transactions since January 1, 1997 between the
Company and any officer, director, director nominee, or the immediate family of
any such persons.
On April 16, 1996, the Chairman and Chief Executive Officer and the
President of the Company each entered into a revolving agreement to extend funds
to the Company in the form of bridge loans. Outstanding loans currently bear
cash interest at the rate 8% (which can be reset annually, at the election of
either party, to the prime rate in effect on January 1 of any given year plus
3%), paid monthly and upon repayment of the principal. In addition, the
Chairman, on June 21, 1996, agreed to increase his loan commitment to an amount
up to $150,000. $380,000 in bridge loans to these officers was borrowed and was
outstanding at February 28, 1999.
The officers have no commitment to lend additional funds in the future.
<PAGE>
PRELIMINARY PROXY MATERIALS
It is the Company's policy that any material transactions or loans, and
any forgiveness of loans, between officers, directors, or material shareholders
and the Company must be approved by a majority of the Company's independent
directors, if any, who do not have an interest in the transaction. Furthermore,
all such transactions or loans must be entered into on terms that are no less
favorable to the Company than those that can be obtained from unaffiliated third
parties. The above transaction was entered into in compliance with the Company's
policy.
2000 ANNUAL MEETING OF SHAREHOLDERS
If any stockholder intends to present a proposal for consideration at
the 2000 annual meeting of stockholders, such proposal must be received by the
Company not later than December 26, 1999, for inclusion, pursuant to Rule 14a-8
under the Exchange Act, in the Company's proxy statement for such meeting.
ANNUAL REPORT
The annual report to stockholders of the Company for the year ended
December 31, 1998 has been mailed simultaneously to the stockholders of the
Company. The Company's annual report on Form 10-KSB for the year ended December
31, 1998, as filed with the Securities and Exchange Commission (excluding
exhibits) is included in the Company's annual report to stockholders.
<PAGE>
PRELIMINARY PROXY MATERIALS
Exhibit A
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
Ixion Biotechnology, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Company") through the Chairman of its Board of Directors certifies in
accordance with Section 103 of the General Corporation Law:
1. The name of the Company is Ixion Biotechnology, Inc.
2. The date on which the Certificate of Incorporation of the Company
was originally filed with the Secretary of State of the State of Delaware is
March 25, 1993.
3. That the Board of Directors of the Company, acting in accordance
with the provisions of Section 141 and 242 of the General Corporation Law,
adopted a resolutions amending its Certificate of Incorporation as follows
RESOLVED, that the certificate of incorporation be amended by deleting
the Article numbered FOURTH and replacing in its entirety as follows:
"FOURTH: The total number of shares of stock which
the corporation shall have authority to issue is 1,000,000
shares of Preferred Stock with a par value of $0.01 per share
and 20,000,000 shares of Common Stock, par value $0.01 per
share. The Board of Directors, by adoption of an authorizing
resolution, may cause Preferred Stock to be issued from time
to time in one or more series. The Board of Directors, by
adoption of an authorizing resolution, may, with regard to the
shares of any series of Preferred Stock:
(1) Fix the distinctive serial designation of the
shares;
(2) Fix the dividend rate, if any;
(3) Fix the date from which dividends on shares
issued before the date for payment of the first
dividend shall be cumulative, if any;
(4) Fix the redemption price and terms of redemption,
if any;
(5) Fix the amounts payable per share in the event of
dissolution or liquidation of the Company, if any;
(6) Fix the terms and amounts of any sinking fund to
be used for the purchase or redemption of shares,
if any;
(7) Fix the terms and conditions under which the
shares may be converted, if any;
(8) Provide whether such shares shall be non-voting,
or shall have full or limited voting rights, and the
rights, if any, of such shares to vote as a class on
some or all matters on which such shares may be
entitled to vote; and
(9) Fix such other preferences, qualifications,
limitations, restrictions, and special or relative
rights not required by law."
4. Thereafter, pursuant to a resolution of the Board of Directors, this
Certificate of Amendment was submitted to the stockholders of the Company for
their approval, and was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
5. That the capital of the Company shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, the Company has executed this certificate and caused its
corporate seal to be affixed hereto this day of , 1999.
A-1
<PAGE>
PRELIMINARY PROXY MATERIALS
Ixion Biotechnology, Inc.
By ______________________________
Weaver H. Gaines,
Chairman of the Board
[Corporate Seal]
Attest: ________________________
Mary Trew, Secretary
STATE OF FLORIDA )
: ss.:
COUNTY OF ALACHUA )
On this day of , 1999, before me the undersigned, a Notary Public for
the State of Florida, appeared Weaver H. Gaines and Mary Trew (known to me), the
Chairman of the Board and Secretary of the Company that executed the forgoing
certificate of amendment of certificate of incorporation, and acknowledged to me
that the forgoing are their acts and deeds and the act and deed of the Company
and that the facts stated therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.
______________________________________
Notary Public for the State of Florida
(Notarial Seal)
PRELIMINARY PROXY MATERIALS A-2
<PAGE>
Exhibit B
Ixion Biotechnology, Inc.
1994 Board Retainer Plan
as amended March 22, 1999June 27, 1997
1. Purpose of Plan. The purpose of the Ixion Biotechnology, Inc. 1994
Board Retainer Plan (the "Plan") is to provide a means by which Ixion
Biotechnology, Inc. (the "Company") may attract and retain Outside Directors,
Members of the Scientific Advisory Board, and certain key employees, and key
consultants by providing those personnel with an opportunity to participate in
the growth, development and financial success of the Company which their
efforts, initiative, and skill have helped produce.
2. Definitions. Wherever the following capitalized terms are used in
the Plan, they shall have the following respective meaning:
2.1 "Award" means a grant of fully-paid and non-assessable shares of
Common Stock under the Plan.
2.2 "Board of Directors" means the board of directors of the Company.
2.3 "Change in Control" shall be deemed to have occurred if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the Common Stock, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding securities which vote
generally in the election of Directors (referred to herein as "Voting
Securities"); or
(b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any
new Directors whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were Directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of surviving
entity) more then 50% of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or a series of transactions) all or substantially
all of the Company's assets.
2.4 "Committee" means the Audit and Benefits Committee of the Company.
2.5 "Common Stock" means the Common Stock of the Company, par value
$0.01 per share.
2.6 "Company" means Ixion Biotechnology, Inc., a Delaware corporation.
2.7 "Director" or "Outside Director" means a member of the Board of
Directors who is not an officer or employee of the Company.
B-1
<PAGE>
PRELIMINARY PROXY MATERIALS
2.8 "Disability" or "disabled" means, with respect to a Participant a
physical or mental condition resulting from any medically determinable physical
or mental impairment that renders such person incapable of engaging in any
substantial gainful employment and that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not less
than six consecutive months.
2.9 "Exchange Act" means the Securities Exchange Action of 1934, as
amended.
2.10 "Fair Market Value" means the per share value of the Common Stock
as of a given date, determined as follows:
(a) If the Common Stock is listed or admitted for trading on
any national securities exchange, the Fair Market Value of the Common Stock is
the closing quotation for such stock on the day preceding such date, or, if
shares were not traded on the day preceding such date, then on the next
preceding trading day during which a sale occurred.
(b) If the Common Stock is not traded on any national
securities exchange, but is quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System (Nasdaq System) or any similar system
of automated dissemination of quotations of prices in common use, the Fair
Market Value of the Common Stock is the last sales price (if the stock is then
listed as a national market issue under the Nasdaq System) or the mean between
the closing representative bid and asked prices (in all other cases) for the
stock on the day preceding such date as reported by Nasdaq System (or such
similar quotation system).
(c) If neither clause (a) nor clause (b) of this Section 2.9
is applicable, the Fair Market Value of the Common Stock is the fair market
value per share as of such valuation date, as determined by the Board of
Directors in good faith and in accordance with uniform principles consistently
applied. Such Fair Market Value shall be determined on a regular basis, not less
than annually.
2.11 "Member of the Scientific Advisory Board" means a member of the
Company's Scientific Advisory Board.
2.12 "Officer" means an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such rule may be amended from time to time.
2.13 "Participant" means an Director, or Member of the Scientific
Advisory Board, key employee, or key consultant to whom an award is granted
under this Plan.
2.14 "Plan" means the Ixion Biotechnology, Inc. 1994 Board Retainer
Plan, as it may be amended from time to time.
2.15 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
as such rule may be amended from time to time.
2.16 "Secretary" means the Secretary of the Company.
2.17 "Securities Act" means the Securities Act of 1933, as amended.
2.18 "Termination of Relationship" means with respect to any Director,
Member of the Scientific Advisory Board, or employee, or consultant, the time
when such person ceases to be a Director, Member of the Scientific Advisory
Board, or employee, or consultant of the Company for any reason, with or without
cause, including without limitation, a termination by resignation, removal,
death, disability, or failure to be nominated or reelected by the Company's
stockholders. Nothing in this Plan shall confer upon any such person Director,
Member of the Scientific Advisory Board, or employee, any right to continue his
or her association with the Company or shall interfere with or restrict in any
way the rights of the Company and its stockholders, which are hereby expressly
reserved, to remove any such person at any time for any reason whatsoever, with
or without cause.
3. Stock Subject to Plan.
B-2
<PAGE>
PRELIMINARY PROXY MATERIALS
3.1 Stock Subject to Plan. The stock subject to an Award shall be
shares of the Company's Common Stock. The aggregate number of such shares issued
and outstanding Directors or Members of the Scientific Advisory Board pursuant
to Awards shall not exceed 250,000.
3.2 Changes in Company Capitalization. In the event that (i) the
outstanding shares of Common Stock are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or of
another entity, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, or (ii) the number of shares is increased or
decreased by reason of a stock split, stock dividend, combination of shares or
any other increase or decrease in the number of such shares of Common Stock
effected without receipt of consideration by the Company (provided, however,
that conversion or exchange of any convertible or exchangeable securities of the
Company shall not be deemed to have been "effected without receipt of
consideration"), then the Committee shall make appropriate adjustments in the
number and kind of shares available for Awards, including adjustments to the
limitations in Section 3.1 on the maximum number and kind of shares which may be
issued and outstanding pursuant to Awards.
4. Granting of Awards
4.1 Eligibility. Any serving Outside Director or, Member of the
Scientific Advisory Board, and any or newly-hired key employee or consultant,
shall be eligible for Awards.
4.2 Grants. Each person who is an Outside Director or Member of the
Scientific Advisory Board of the Company at the date of the adoption of this
Plan shall be granted an Award of 5,000 shares of Common Stock. Thereafter,
immediately following the Annual Meeting of the Company, the Committee shall
grant a further Award of 1,000 shares of Common Stock to each Participant (so
long as he or she is an Outside Director or Member of the Scientific Advisory
Board on each such date). Employees and consultants may be granted Awards in
connection with employment or otherwise upon recommendation by the Committee and
approval by the Board.
4.3 Administration of the Plan.
(a) The Plan shall be administered by the Committee. The
Committee shall consist of at least two Outside Directors (if there are such)
selected by the Board of Directors. Committee members may resign by delivering
written notice to the Secretary. Vacancies on the Committee shall be filled by
the Board of Directors.
(b) Except as otherwise provided in the Plan and except as
otherwise expressly stated to the contrary in the Company's Certificate of
Incorporation, Bylaws, or elsewhere, the Committee shall have the sole
discretionary authority (i) to impose such conditions and restrictions on Awards
as it determines appropriate, (ii) to interpret the Plan, (iii) to prescribe,
amend, and rescind rules and regulations relating to the Plan, (iv) to determine
Fair Market Value in accordance with Section 2.9 (c), and (v) to take any other
actions in connection with the Plan and to make all determinations under the
Plan as it may deem necessary or advisable for the administration of the Plan.
The determinations of the Committee on the matters referred to in this Section 4
shall be binding and conclusive on all persons.
(c) A majority of the members of the Committee 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 of the Committee shall be fully effective as if it
had been made by a majority vote at a meeting duly called and held.
(d) The Committee may delegate to one or more persons any of
its powers, or designate one or more persons to do or perform those matters to
be done or performed by the Committee, including administration of the Plan. Any
person or persons delegated or designated by the Committee shall be subject to
the same obligations and requirements imposed on the Committee and its members
under the Plan.
B-3
<PAGE>
PRELIMINARY PROXY MATERIALS
(e) Members of the Committee shall receive such compensation
for their services as members as may be determined by the Board of Directors.
All expenses and liabilities incurred by members of the Committee in connection
with the administration of the Plan shall be borne by the Company. The Committee
may employ attorneys, consultants, accountants, appraisers, brokers, or other
persons. The Committee, the Company, and its Officers and Directors shall be
entitled to rely upon the advice, opinions, or valuations of any such persons.
All elections taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Participants, the
Company, and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan. Members of the Committee and each person or
persons designed or delegated by the Committee shall be entitled to
indemnification by the Company for any action or any failure to act in
connection with services performed by or on behalf of the Committee for the
benefit of the Company to the fullest extent provided or permitted by the
Company's Certificate of Incorporation, Bylaws, any insurance policy, or other
agreement intended for the benefit of the Committee, or by any applicable law.
5. Terms of Grants
5.1 Grant Agreement. Each Grant shall be evidenced by a written Grant
Agreement , which shall be signed by the Participant and by an authorized
Officer of the Company and which shall refer to such terms and conditions as the
Committee shall determine, consistent with the Plan.
5.2 Issuance of Shares. Participants shall be issued a certificate for
fully-paid and nonassessable shares of Common Stock for the number of shares
covered by the Award, which certificate may contain a legend referring to
restrictions on vesting and transfer and such other terms and conditions as the
Committee shall determine, consistent with the Plan.
5.3 Forfeiture of Unvested Shares. Shares which have been awarded but
not yet vested under this Section 5.3 shall be forfeited if the Participant
ceases to be a Director, Member of the Scientific Advisory Board, or employee,
or consultant of the Company for any reason, with or without cause, including
without limitation, a termination by resignation, removal, death, disability, or
failure to be nominated or reelected by the Company's stockholders, unless
provided to the contrary in any Grant Agreement approved by the Committee
between the Participant and the Company, which Agreement shall govern any
further vesting of shares pursuant to Awards.
5.4 Fair Market Value. The Company shall provide to each Participant
who receives an Award information regarding the Fair Market Value of the
Company's shares on the date such Award is granted. Such information shall be
provided to permit the Participant to determine his or her federal income tax
liability, if any, for such Award, or to permit the Participant to make the
election contemplated by Section 78 of the Internal Revenue Code.
5.5 Transfer Restrictions; Vesting.
(a) Unless otherwise approved in writing by the Committee, no
shares of Common Stock issued pursuant to an Award may be sold, assigned,
pledged, encumbered, or otherwise transferred until (i) they have vested, and
(ii) either the Company has made an offering of its shares to the public
pursuant to a registration statement under the Securities Act or there has been
a Change of Control of the Company, except as may be provided in Section 5.5(c)
or as may otherwise be provided for in an Grant Agreement which has been
approved by the Committee. The Committee, in its absolute discretion, may impose
such other restrictions on the transferability of the shares granted pursuant to
an Award as it deems appropriate. Any such other restriction shall be set forth
in the respective Grant Agreement and may be referred to on the certificates
evidencing such shares.
(b) Shares issued to members of the Board of Directors, or
employees, or consultants pursuant to Awards shall vest 20% at the end of the
first year of service after the date of the Award and 1/12 of 20% at the end of
each month thereafter. Subject to the provisions of Sections 5.3, 5.5(c), and
5.5(d), Awards shall otherwise become vested at such times and in such
installments (which may be cumulative) as the Committee shall provide in the
terms of each individual Grant Agreement; provided, however, that by resolution
adopted after an Award is granted the Committee may, on such terms and
conditions as it may determine to be appropriate and subject to Sections 5.3,
5.5(c), and 5.5(d), accelerate the time at which such Award or any portion
thereof may be vested, or such rights may be set forth in an agreement between
the Participant and the Company which has been approved by the Committee. Shares
issued to members of the Scientific Advisory Board shall vest 25% at the end of
each three months of service after the date of the award.
B-4
<PAGE>
PRELIMINARY PROXY MATERIALS
(c) No portion of an Award which is unvested at Termination of
Relationship shall thereafter become vested; provided, however, that provision
may be made that such Award shall become vested in the event of a Termination of
Relationship as may be determined by the Committee, or such rights may be set
forth in a Grant Agreement between the Participant and the Company which has
been approved by the Committee.
(d) Subject to the provisions of Section 5.5(a), the Committee
shall provide, in terms of each individual Grant Agreement when such Award
becomes vested, and (without limiting the generality of the foregoing) the
Committee may provide in the terms of individual Grant Agreements that unvested
shares shall be forfeited immediately upon a Termination of Relationship;
provided, however, that provision may be made that such shares shall become
vested in the event of a Termination of Relationship because of the
Participant's retirement, death, disability, or as may otherwise be determined
by the Committee.
5.6 No Right to Continued Relationship. Nothing in this Plan or in any
Grant Agreement issued hereunder shall confer upon any Participant, any right to
continue his or her association with the Company or shall interfere with or
restrict in any way the rights of the Company and its stockholders, which are
hereby expressly reserved, to remove any such person at any time for any reason
whatsoever, with or without cause.
6. Additional Provisions.
6.1 Nontransferability. No unvested shares issued pursuant to an Award
or interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Participant or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment, or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy
and divorce proceeding), and any attempted disposition thereof shall be null and
void and of no effect.
6.2 Securities Act. Upon issuance of Common Stock of the Company to the
Participant, or his heirs, the recipient of that stock shall represent that the
shares of stock are taken for investment and not resale and shall make such
other representations as may be necessary to qualify the issuance of the shares
as exempt from the Securities Act and applicable federal and state securities
laws and regulations, and shall represent that he or she shall not dispose of
those shares in violation of the Securities Act or of applicable federal and
state securities laws and regulations. The Company reserves the right to place a
legend on any stock certificate issued pursuant to the Plan to assure compliance
with this Section and with the vesting and transferability requirements of
Section 5. No shares of Common Stock of the Company shall be required to be
distributed until the Company shall have taken such action, if any, as is then
required to comply with the provisions of the Securities Act or any other then
applicable federal or state securities law or regulation.
6.3 Withholding of Tax. The Company shall have the right to deduct from
any Award made under the Plan any federal, state or local income or other taxes
required by law to be withheld with respect to such Award. It shall be a
condition to the obligation of the Company to deliver Common Stock upon an Award
that the Participant pay to the Company such amount as may be requested by the
Company for the purpose of satisfying any liability for such withholding taxes.
Any grant under this Plan may provide by its terms that the Participant may
elect, in accordance with any applicable regulations, to pay a portion or all of
the amount of such minimum required or additional permitted withholding taxes in
shares of Common Stock, subject to the timing restrictions set forth in Section
6 hereof. The Participant shall authorize the Company to withhold, or shall
agree to surrender back to the Company, on or about the date such withholding
tax liability is determinable, shares of Common Stock previously owned by such
Participant or a portion of the shares that were or otherwise would be
distributed to such Participant pursuant to such award having a Fair Market
Value equal to the amount of such required or permitted withholding taxes to be
paid in shares.
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PRELIMINARY PROXY MATERIALS
6.4 Termination and Amendment of Plan. The Committee may at any time
suspend or terminate the Plan, or make such modifications of the Plan as it
shall deem advisable, provided that the Plan not be changed to increase the cost
of the Plan to the Company. Notwithstanding anything to the contrary contained
herein, the Committee shall not amend or modify the Plan more than once every
six (6) months or in any other manner inconsistent with the requirements of Rule
16b-3(c)(2)(ii) except to the extent required by changes in the Internal Revenue
Code, the Employee Retirement Income Security Act of 1974, or regulations and
rules issued thereunder. No termination or amendment of the Plan may, without
the consent of a Participant, adversely affect the rights of such Participant
notwithstanding anything to the contrary herein. No Award may be granted during
any period of suspension of the Plan nor after termination of the Plan, and in
no event may any Award be granted under this Plan after August 30, 2004.
6.5 Duties of the Company. The Company shall pay all original issue
taxes with respect to the issuance or delivery of shares pursuant to an Award
and all other fees and expenses necessarily incurred by the Company in
connection therewith.
6.6 Absence of a Committee. Should the Board of Directors fail to
appoint the Committee or should there be no Committee for any other reason, then
the Plan shall be administered by the Board of Directors. In the absence of a
Committee, the Board of Directors (or that portion thereof comprised in
accordance with this Section 6.6) shall have all the powers of the Committee as
set forth herein in administration of the Plan.
7. General Provisions.
7.1 No Rights. Neither the adoption and maintenance of the Plan, the
granting of Awards pursuant to the Plan, nor issuance of shares pursuant to
Awards shall be deemed to constitute a contract of employment between the
Company and any Participant or to be a condition of the employment of any
person. The Plan and any Awards granted under the Plan shall not confer upon any
Participant any right with respect to a continued relationship with the Company,
nor shall they interfere in any way with the right of the Company or its
shareholders to terminate the relationship of any Participant with the Company
at any time, and for any reason, with or without cause.
7.2 Costs of Administration. The Company shall pay all costs and
expenses of administering the Plan.
7.3 Controlling Laws. The issuance of shares of Common Stock under the
Plan shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required. The provisions of this Plan shall be interpreted so as to comply
with the conditions and requirements of the Securities Act, the Exchange Act,
and rules and regulations issued thereunder, including without limitation Rule
16b-3, unless a contrary interpretation of any such provisions otherwise
required by applicable law. Except to the extent preempted by Federal law, this
Plan and all Stock Option Agreements entered into pursuant hereto shall be
construed and enforced in accordance with, and governed by, the laws of the
State of Delaware, determined without regard to its conflict of laws rules.
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PRELIMINARY PROXY MATERIALS
[Address Label]
PROXY
IXION BIOTECHNOLOGY, INC.
Proxy solicited by the board of directors
for the annual meeting of stockholders
to be held June 11, 1999
The undersigned hereby appoints Weaver H. Gaines or David C. Peck, or
either of them, as attorney and proxy of the undersigned, with full power of
substitution and resubstitution, to vote all of the shares of common stock of
Ixion Biotechnology, Inc. (the "Company") which the undersigned may be entitled
to vote at the annual meeting of stockholders to be held at the offices of the
Company at 13709 Progress Blvd., Box 13, Alachua, FL 32615, commencing at 10:00
a.m., local time, and at any and all postponements and adjournments thereof,
with all powers that the undersigned would possess if personally present, upon
and in respect of the following matters and in accordance with the following
instructions.
Unless a contrary direction is indicated, this proxy will be voted for
all nominees for director listed in Proposal 1, and for proposals 2, 3, and 4,
as more specifically described in the proxy statement. If specific instructions
are indicated, this proxy will be voted in accordance therewith.
You may revoke this proxy at any time prior to the vote at the annual
meeting.
Please complete, date, and sign this proxy and return it in the
accompanying envelope.
The board of directors recommends a vote for the nominees for director
listed on the reverse of this proxy card, and a vote for proposals 2, 3, and 4,
also set forth on the other side of this proxy card.
<PAGE>
Proposal 1. To elect five directors to hold office until the 2000 annual meeting
of stockholders.
Nominees: Weaver H. Gaines, David C. Peck, David M. Margulies, Vincent P.
Mihalik, and Karl-E. Arfors
For all nominees except as noted ___________________________________
Proposal 2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of shares of common stock authorized for
issuance from 4,000,000 to 20,000,000 shares and to authorize a new class of
preferred stock in the amount of 1,000,000 shares.
Proposal 3. To approve the Company's 1994 Board Retainer Plan, as amended, to
increase the aggregate number of shares authorized to be outstanding under such
plan to 250,000.
Proposal 4. To ratify the designation of PricewaterhouseCoopers LLP to audit the
books and accounts of the Company for the fiscal year ended December 31, 1999.
Please sign exactly as name appears Signature:____________________________
on this proxy. When signing as Date: _________________ 1999
attorney, executor, administrator,
trustee or guardian, please give
full title. If more than one trustee, Signature:____________________________
all should sign. All joint owners must Date: _________________ 1999
sign.
MARK HERE FOR CHANGE MARK HERE IF YOU
OF ADDRESS AND NOTE PLAN TO ATTEND
CHANGE ON OTHER SIDE THE ANNUAL MEETING
