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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)May 24, 1996
VION PHARMACEUTICALS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-26534 13-3671221
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4 Science Park, New Haven, Connecticut 06511
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 498-4210
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Item 5. Other Events.
Vion Pharmaceuticals, Inc. issued the press release set forth in
Exhibit 99.1 on May 24, 1996 and issued the press release set
forth in Exhibit 99.2 on June 4, 1996.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
Exhibit No. Exhibit Description
4.1 Certificate of Rights,
Designations and Preferences of Class A
Convertible Preferred Stock
99.1 Press Release dated May 24, 1996
99.2 Press Release dated June 4, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VION PHARMACEUTICALS, INC.
By:/s/ Thomas E. Klein
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Thomas E. Klein
Vice President - Finance and
Chief Financial Officer
Date: June 28, 1996
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EXHIBIT 4.1
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VION PHARMACEUTICALS, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
CLASS A CONVERTIBLE PREFERRED STOCK
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
VION PHARMACEUTICALS, INC., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), does
hereby certify that, pursuant to the authority conferred on the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation and in accordance with Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors of the Corporation adopted the
following resolution establishing a series of 3,500,000 shares of Preferred
Stock of the Corporation designated as "Class A Convertible Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the
Board of Directors of this Corporation by the Certificate of
Incorporation, as amended, a series of Preferred Stock, par value $.01
per share, of the Corporation is hereby established and created, and
that the designation and number of shares thereof and the voting and
other powers, preferences and relative, participating, optional or
other rights of the shares of such series and the qualifications,
limitations and restrictions thereof are as follows:
Class A Convertible Preferred Stock
Section 1. Designation and Amount. The shares of such series
shall be designated as "Class A Convertible Preferred Stock" and the number of
shares constituting such series shall be 3,500,000.
Section 2. Issuance of Additional Shares. The number of
authorized shares of the Class A Preferred Stock may be reduced or eliminated by
the Board of Directors of the Corporation or a duly-authorized committee thereof
in compliance with the General Corporation Law of the State of Delaware stating
that such reduction has been authorized, but the number of authorized shares of
Class A Preferred Stock shall not, except as contemplated in Section 10(c) be
increased nor shall it be decreased to be less than the then outstanding shares
of Class A Preferred Stock.
Section 3. Certain Definitions. For purposes hereof
the following definitions shall apply:
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"Board" shall mean the Board of Directors of the
Corporation.
"Business Day" shall mean any day excluding Saturday, Sunday
and any day which shall be in the State of New York a legal holiday or a day on
which banking institutions in the State of New York are authorized by law to
close.
"Common Stock" shall mean the Common Stock, par value $.01 per
share, of the Corporation.
"Corporation" shall mean Vion Pharmaceuticals, Inc., a
Delaware corporation.
"Dividend Payment Date" shall have the meaning assigned to
such term in Section 4(a)(i) hereof.
"Fair Value" shall have the meaning assigned to such term in
Section 9(j) hereof.
"Issuance Date" shall mean the date of original issuance of
the Class A Preferred Stock.
"Junior Stock" shall mean the Common Stock and any shares of
Preferred Stock of any series or class of the Corporation, whether presently
outstanding or hereafter issued, which are by their terms expressly made junior
to the shares of Class A Preferred Stock at the time outstanding as to the
distribution of assets on any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and are not subject to mandatory
redemption or repurchase prior to the date on which no shares of Class A
Preferred Stock are outstanding.
"Majority of the Class A Preferred Stock" shall mean more than
50% of the outstanding shares of Class A Preferred Stock.
"Preferred Stock" shall mean the unclassified Preferred Stock,
par value $.01 per share, of the Corporation.
"Record Date" shall have the meaning assigned to such term in
Section (4)(a)(i) hereof.
"Redemption Date" shall have the meaning assigned to such term
in Section 7(b) hereof.
"Redemption Price" shall have the meaning assigned to such
term in Section 7(c) hereof.
"Redemption Notice" shall have the meaning assigned to such
term in Section 7(d) hereof.
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"Class A Conversion Ratio" shall have the meaning assigned to
such term in Section 9(b) hereof.
"Class A Preferred Stock" shall mean the Class A Preferred
Stock, par value $.01 per share, of the Corporation.
"Special Dividend Date" shall have the meaning assigned to
such term in Section 4(a)(ii) hereof.
"Subsidiary" shall mean any corporation, limited liability
company or other entity, a majority of the voting stock or interest of which is,
at the time as of which any determination is being made, owned by the
Corporation either directly or through one or more Subsidiaries.
"Voting Stock" shall mean any shares having general voting
power in electing the Board (irrespective of whether or not at the time stock of
any other class or classes has or might have voting power by reason of the
occurrence of any contingency). The Common Stock and the Class A Preferred
Stock are Voting Stock.
Section 4. Dividends.
(a) Dividends and Distributions. (i) The holders of the
outstanding Class A Preferred Stock shall be entitled to receive semi-annual
dividends, on a cumulative basis, equal to five percent (5%) (on a per annum
basis) of the Class A Preferred Stock held by such holder, payable, in arrears,
in additional shares of Class A Preferred Stock. Upon the Dividend Payment Date,
to the extent permitted by applicable law, the holder shall be deemed to be the
holder of record of the shares of Class A Preferred Stock issuable upon each
such semi-annual dividend, notwithstanding that the transfer books of the
Company shall then be closed or certificates representing such Class A Preferred
Stock shall not then have been actually delivered to the holder. Each such
dividend described above shall be payable on or about the first day of April and
October in each year as fixed by the Board, or such other dates as are fixed by
the Board (each a "Dividend Payment Date"), to the holders of record of Class A
Preferred Stock at the close of business on or about the 15th day of the month
next preceding such first day of April or October, as the case may be, as fixed
by the Board (each a "Record Date"). Such dividends shall become payable
beginning on the first Dividend Payment Date for which the Record Date is
subsequent to the Issuance Date. Dividends payable for any partial dividend
period shall be computed on the basis of the actual days elapsed in such period.
(ii) In the event that on the date that is
twenty-four (24) months after the Issuance Date (the "Special Dividend Date"),
the average closing bid price of the Common Stock for the thirty (30)
consecutive trading days immediately preceding the
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Special Dividend Date (the "Subsequent Trading Price") is less than 100% of the
then applicable Conversion Price, then the Company shall pay a one time dividend
of Class A Preferred Stock for each share of Class A Preferred Stock outstanding
equal to the lesser of (a) one share of Class A Preferred Stock or (b)(x) one
share of Class A Preferred Stock multiplied by (y) the then applicable
Conversion Price divided by the Subsequent Trading Price, minus one; provided,
however, that the Company shall have the option of delaying the Special Dividend
Date for up to 60 days at its sole discretion and the dividend calculation shall
be made as if such date were the Special Dividend Date.
(iii) If the Corporation calls the Class
A Preferred Stock for redemption at any time prior to three (3) years from the
Issuance Date, the Corporation will pay a one time dividend payable in shares of
Class A Preferred Stock equal to fifteen percent (15%) of the Class A Preferred
Stock held by such holder which shall be in addition to any cumulative dividends
described in subparagraph (i) hereof and any Special Dividend described in
subparagraph (ii) hereof. Prior to the Redemption Date, the holder will be
entitled to convert such shares of Class A Preferred Stock issuable pursuant to
this Section 4(a)(iii).
(b) To the extent the amount of any dividend payable to any
holder of Class A Preferred Stock does not equal an integral multiple of one
share of Class A Preferred Stock, such fractional share shall be rounded up to
the next whole integral number of shares.
(c) Subject to the prior and superior rights of the holders of
any shares of any series or class of capital stock ranking prior and superior to
the shares of Class A Preferred Stock with respect to dividends, the holders of
shares of Class A Preferred Stock shall be entitled to receive, as, when and if
declared by the Board of the Corporation, out of assets legally available for
that purpose, dividends or distributions in cash, stock or otherwise.
(d) If and when the Corporation shall declare any dividend or
distribution on the Common Stock (other than a stock dividend), the Corporation
shall, concurrently with the declaration of such dividend or distribution on the
Common Stock, declare a like dividend or distribution, as the case may be, on
the Class A Preferred Stock in an amount per share equal to (x) the amount of
the dividend or distribution per share of Common Stock multiplied by (y) the
number of shares of Common Stock into which one share of Class A Preferred Stock
is then convertible.
(e) Any dividend or distribution payable to the holders of the
Class A Preferred Stock pursuant to this Section 4(d) shall be paid to such
holders at the same time as the dividend or distribution on the Common Stock by
which it is measured is paid.
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(f) All dividends or distributions declared upon the Class A
Preferred Stock shall be declared pro rata per share.
Section 5. Liquidation Rights of Class A Preferred Stock. In
the event of a liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary (a "Liquidation Event"), after payment or
provision for payment of debts and other liabilities of the Corporation, the
holders of the Class A Preferred Stock then outstanding shall first be enti-
tled to be paid out of the assets of the Corporation available for distribution
to its shareholders, whether such assets are capital, surplus, or earnings,
before any payment or declaration and setting apart for payment of any amount
shall be made in respect of Junior Stock, an amount equal to $10.00 per share of
Class A Preferred Stock plus an amount equal to all declared and unpaid
dividends thereon (subject to appropriate adjustment to reflect any stock split,
combination, reclassification or reorganization of the Class A Preferred Stock).
Following payment in full of the full preferential amounts set forth in the
immediately preceding sentence, the holders of the Class A Preferred Stock
shall not be entitled to any further distribution in the event of a Liquidation
Event. If upon any Liquidation Event, whether voluntary or involuntary, the
assets to be distributed to the holders of the Class A Preferred Stock shall be
insufficient to permit the payment to such shareholders of the full preferential
amounts aforesaid, then all of the assets of the Corporation to be distributed
shall be so distributed ratably to the holders of the Class A Preferred Stock on
the basis of the number of shares of Class A Preferred Stock held. All shares of
Class A Preferred Stock shall rank as to payment upon the occurrence of any
Liquidation Event above senior to the Common Stock as provided herein and,
unless the terms of such series shall provide otherwise, senior to all other
series of the Corporation's preferred stock.
Section 6. Merger, Consolidation.
(a) At any time, in the event of:
(1) any consolidation or merger of the
Corporation with or into any other corporation or other entity, or any other
corporate reorganization or transaction or series of related transactions by the
Corporation in which in excess of 50% of the Corporation's voting power is
transferred, or
(2) a sale or other disposition of all or
substantially all of the assets of the Corporation (any such event in (1) or (2)
a "Merger Event"), then:
in the case of a Merger Event, the holders of the
Class A Preferred Stock shall receive for each share of Class A Preferred Stock
in cash or in securities (including, without limitation, debt securities)
received from the acquiring
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corporation or other entity or person, or a combination thereof, at the closing
of any such transaction, an amount equal to $10.00 (subject to appropriate
adjustment to reflect any stock split, combination, reclassification or
reorganization of Class A Preferred Stock) plus an amount equal to all declared
and unpaid dividends on such shares; and
Such payments shall be made with respect to the Class A
Preferred Stock by (i) redemption or purchase of such shares by the Corporation
or (ii) purchase or acquisition of such shares by the surviving or acquiring
corporation, entity or person immediately upon consummation of the Merger Event.
Before any payment or distribution is made to the holders of the Junior Stock,
the full preferential amounts stated in this subsection 6(a)(2) shall first be
paid to the holders of the Class A Preferred Stock. In the event the full amount
of such payment is not paid to the holders of the Class A Preferred Stock upon
or immediately prior to such transaction in accordance herewith, then all cash
and securities (including, without limitation, debt securities) to be
distributed in respect of the proposed transaction shall be distributed ratably
among the holders of the Class A Preferred Stock.
(b) Any securities or other property to be delivered to the
holders of the Class A Preferred Stock or Common Stock pursuant to Section 6(a)
hereof above shall be valued as follows:
(1) (A) If traded on a securities exchange or
quoted on the Nasdaq National Market System, the value shall be deemed to be the
average of the closing prices of the securities on such exchange or market over
the 30-day period ending three (3) days prior to the closing;
(B) If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid prices over the
30-day period ending three (3) days prior to the closing; and
(C) If there is no active public market, the
value shall be the fair market value thereof, as determined in good faith by the
Corporation's Board.
(2) All other securities or other property shall
be valued at the fair market value thereof, as determined in good faith by the
Corporation's Board.
(c) In the event the requirements of Section 6(a) hereof are
not complied with, the Corporation shall forthwith either:
(1) Cause such Merger Event to be postponed until
such time as the requirements of this Section 6 have been
complied with; or
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(2) Cancel such Merger Event, in which event the
rights, preferences and privileges of the holders of the Class A Preferred Stock
shall revert to and be the same as such rights, preferences and privileges
existing immediately prior to the date of the first notice referred to in
Section 6(d) hereof.
(d) The Corporation shall give each holder of record of Class
A Preferred Stock written notice of such impending transaction not later than
thirty (30) days prior to the shareholders' meeting called to approve such
transaction, or thirty (30) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this Section 6, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than thirty (30) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of a Majority
of the Class A Preferred Stock.
(e) The provisions of this Section 6 are in addition to the
protective provisions of Section 10 hereof.
(f) A consolidation or merger of the Corporation with or into
another corporation, other than in a transaction described in this Section 6,
shall not be considered a Merger Event and accordingly the Corporation shall
make appropriate provision to ensure that the terms of this Certificate of
Designations survive such transaction.
Section 7. Redemption.
(a) Restriction on Redemption and Purchase. Except as
expressly provided in this Section 7, the Corporation shall not have the right
to purchase, call, redeem or otherwise acquire for value any or all of the Class
A Preferred Stock.
(b) Optional Redemption. At any time, beginning six (6) months
after the Issuance Date, the Corporation may, at its option, redeem for cash the
Class A Preferred Stock in whole, but not in part, at the Redemption Price
hereinafter specified, in the event that the closing bid price of the
Corporation's Common Stock for twenty (20) trading days in any thirty trading
(30) day period, exceeds [insert price which is 150% of the closing bid price on
the Issuance Date]. The Corporation shall not redeem Class A Preferred Stock or
give notice of any redemption unless the Corporation has sufficient and lawful
funds to redeem all of the then outstanding Class A Preferred Stock. The date on
which the Class A Preferred Stock is to be redeemed pursuant to this
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Section 7(b) is herein called the "Redemption Date." If the Corporation redeems
the Class A Preferred Stock at any time prior to three (3) years from the
Issuance Date, the Corporation will pay an additional dividend pursuant to
Section 4(a)(iii).
The "closing bid price" for each trading day shall be the
reported closing bid price on the NASDAQ Small-Cap Market or the NASDAQ National
Market System (collectively referred to as, "NASDAQ") or, if the Common Stock is
not quoted on NASDAQ, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading (based on the aggregate dollar
value of all securities listed or admitted to trading) or, if not listed or
admitted to trading on any national securities exchange or quoted on NASDAQ, the
closing bid price in the over-the-counter market as furnished by any NASD member
firm selected from time to time by the Corporation for that purpose, or, if such
prices are not available, the fair market value set by, or in a manner
established by, the Board of the Corporation in good faith. "Trading day" shall
mean a day on which the national securities exchange or NASDAQ used to determine
the closing bid price is open for the transaction of business or the reporting
of trades or, if the closing bid price is not so determined, a day on which
NASDAQ is open for the transaction of business.
(c) Redemption Price. The Redemption Price of the Class A
Preferred Stock (the "Redemption Price") shall be an amount per share equal to
$10.00 (subject to appropriate adjustment to reflect any stock split,
combination, reclassification or reorganization of the Class A Preferred
Stock) plus all declared and unpaid dividends thereon, to and including the
Redemption Date.
(d) Redemption Notice. The Corporation shall, not less than
thirty (30) days nor more than sixty (60) days prior to the Redemption Date,
give written notice ("Redemption Notice") to each holder of record of Class A
Preferred Stock to be redeemed.
The Redemption Notice shall state:
(1) that all of the outstanding shares of Class A
Preferred Stock are to be redeemed and the total number of
shares being redeemed;
(2) the number of shares of Class A
Preferred Stock held by the holder which the
Corporation intends to redeem;
(3) the Redemption Date and Redemption
Price;
(4) that the holder's right to convert the Class A
Preferred Stock into shares of the Common Stock as provided in
Section 9
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hereof will terminate on the Redemption Date;
and
(5) the time, place and manner in which the holder is
to surrender to the Corporation the certificate or
certificates representing the shares of Class A Preferred
Stock to be redeemed.
(e) Payment of Redemption Price and Surrender of Stock. On the
Redemption Date, the Redemption Price of the Class A Preferred Stock scheduled
to be redeemed or called for redemption shall be payable to the holders of the
Class A Preferred Stock. On or before 5:00 p.m. New York City time on the
Redemption Date, each holder of Class A Preferred Stock to be redeemed, unless
the holder has exercised his right to convert the shares as provided in Section
9 hereof, shall surrender the certificate or certificates representing such
shares to the Corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price for such shares shall be
payable to the order of the person or entity whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be cancelled and retired.
(f) Termination of Rights. If the Redemption Notice is duly
given, and, if at least ten (10) days prior to the Redemption Date, the
Redemption Price is either paid or made available for payment through the
arrangement specified in subsection (g) below, then notwithstanding that the
certificates evidencing any of the shares of Class A Preferred Stock so called
or scheduled for redemption have not been surrendered, all rights with respect
to such shares shall forthwith after the Redemption Date cease and terminate,
except only (i) the right of the holders to receive the Redemption Price without
interest upon surrender of their certificates therefor or (ii) the right to
receive shares of Common Stock upon exercise of the conversion rights provided
in Section 9 hereof on or before the Redemption Date.
(g) Deposit of Funds. At least ten (10) days prior to the
Redemption Date, the Corporation shall deposit with any bank or trust company in
New York, New York, a sum equal to the aggregate Redemption Price of all shares
of the Class A Preferred Stock scheduled to be redeemed or called for redemption
and not yet redeemed, with irrevocable instructions and authority to the bank or
trust company to pay, on or after the Redemption Date, the Redemption Price to
the respective holders upon the surrender of their share certificates. The
deposit shall constitute full payment for the shares of Class A Preferred Stock
to the holders thereof, and from and after the date of such deposit (even if
prior to the Redemption Date), the shares of Class A Preferred Stock shall be
deemed to be redeemed and no longer outstanding,
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and the holders thereof shall cease to be shareholders with respect to such
shares of Class A Preferred Stock and shall have no rights with respect thereto,
except the right to receive from the bank or trust company payment of the
Redemption Price of the shares of Class A Preferred Stock, without interest,
upon surrender of their certificates therefor or the right to convert such
shares of Class A Preferred Stock into shares of Common Stock as provided in
Section 9 hereof. Any monies so deposited and unclaimed at the end of one year
from the Redemption Date shall be released or repaid to the Corporation, after
which time the holders of shares of Class A Preferred Stock called for
redemption shall be entitled to receive payment of the Redemption Price only
from the Corporation.
Section 8. Voting Rights.
(a) Class A Preferred Stock. Each holder of shares of Class A
Preferred Stock shall be entitled to vote on all matters and, except as
otherwise expressly provided herein, shall be entitled to the number of votes
equal to the largest number of full shares of Common Stock into which the shares
of Class A Preferred Stock of such holder could be converted, pursuant to the
provisions of Section 9 hereof, at the record date for the determination of the
shareholders entitled to vote on such matters.
(b) Voting Together. Except as otherwise expressly provided
herein or as required by law, the holders of Class A Preferred Stock and Common
Stock shall vote together and not as separate classes.
(c) Amendment of Conversion Terms of Class A Preferred Stock.
Without the approval by the holders of a Majority of the Class A Preferred
Stock, the Corporation will not (i) change by amendment the Restated Certificate
of Incorporation of the Corporation or the terms and provisions of the Class A
Preferred Stock which adversely affects the rights and preferences of the
holders of the Class A Preferred Stock nor (ii) authorize the issuance of
capital stock ranking senior to the Class A Preferred Stock.
Section 9. Conversion. The holders of Class A
Preferred Stock shall have the following conversion rights:
(a) Right to Convert. The shares of Class A Convertible
Preferred Stock shall be convertible, in whole or in part, at the option of the
holder thereof and upon notice to the Corporation at any time prior to the
Redemption Date, into fully paid and nonassessable shares of Common Stock and
such other securities and property as hereinafter provided.
(b) Class A Conversion Price. The shares of Class A
Convertible Preferred Stock shall be convertible initially at the
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ratio of 2.777777 shares of Common Stock for each full share of Class A
Convertible Preferred Stock and shall be subject to adjustment as provided
herein (the "Class A Conversion Ratio"). The initial conversion price per share
of Common Stock is $3.60 and shall be subject to adjustment as provided herein
(the "Conversion Price"). For purposes of this resolution, the "Class A
Conversion Ratio" applicable to a share of Class A Convertible Preferred Stock
shall be the number of shares of Common Stock and number or amount of any other
securities and property as hereinafter provided into which a share of Class A
Preferred Stock is then convertible and shall be determined by dividing the then
existing Conversion Price into $10.00.
(c) Mechanics of Conversion. Each holder of Class A Preferred
Stock that desires to convert its shares of Class A Preferred Stock into shares
of Common Stock shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Class A Preferred Stock or Common Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state therein the number of shares of Class A Preferred Stock being converted.
Thereupon the Corporation shall promptly issue and deliver to such holder a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
certificate or certificates representing the shares of Class A Preferred Stock
to be converted, and the person or entity entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder of such shares of Common Stock on such date. In the event that
a notice to convert is given following a notice of a Merger Transaction,
Liquidation Event or a Redemption but prior to the consummation of one of the
foregoing events and such event is not consummated, the conversion shall, at the
option of the holder of the Class A Preferred Stock who tendered for conversion,
be voidable and such holder shall have the right to maintain ownership of the
shares of Class A Preferred Stock tendered for conversion, provided that the
holder shall have notified the Corporation accordingly within sixty (60) days
after such failure to consummate the event.
(d) Adjustment for Stock Splits and Combinations. If
the Corporation at any time or from time to time after the Iss-
uance Date effects a subdivision of the outstanding Common Stock,
the Class A Conversion Ratio then in effect immediately before
that subdivision shall be proportionately increased, and
conversely, if the Corporation at any time or from time to time
after the Issuance Date combines the outstanding shares of Common
Stock into a smaller number of shares, the Class A Conversion
Ratio then in effect immediately before the combination shall be
proportionately decreased. Any adjustment under this subsection
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(d) shall become effective at the close of business on the date the subdivision
or combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions. If
the Corporation at any time or from time to time after the Issuance Date makes,
or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Class A Conversion Ratio
then in effect shall be increased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record
date, by multiplying the Class A Conversion Ratio then in effect by a fraction
(1) the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution, and (2) the denominator of
which shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date; provided, however, that, if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Class A Conversion Ratio shall be recomputed accordingly as
of the close of business on such record date and thereafter the Class A
Conversion Ratio shall be adjusted pursuant to this subsection (e) as of the
time of actual payment of such dividends or distributions.
(f) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Issuance Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of Class A Preferred Stock shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Corporation which
they would have received had their shares of Class A Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period subject to all other adjustments called for during such period under this
Section 9.
(g) Adjustment for Reclassification, Exchange and Sub-
stitution. In the event that at any time or from time to time after the Issuance
Date, the Common Stock issuable upon the conversion of the Class A Preferred
Stock is changed into the same or a different number of shares of any class or
classes of stock, whether by recapitalization, reclassification or otherwise
<PAGE>
(other than a subdivision or combination of shares or stock dividend or a
reorganization, merger, consolidation or sale of assets, provided for elsewhere
in this Section 9), then and in any such event each holder of Class A Preferred
Stock shall have the right thereafter to convert such Class A Preferred Stock
into the kind and amount of stock and other securities and property receivable
upon such recapitalization, reclassification or other change, by holders of the
maximum number of shares of Common Stock into which such shares of Class A
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein.
(h) Reorganizations, Mergers, Consolidations or Sales of
Assets. If at any time or from time to time after the Issuance Date there is a
capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 9) or a merger or consolidation of the Corporation
with or into another corporation, or the sale of all or substantially all of the
Corporation's properties and assets to any other person (other than as provided
for in Section 6), then, as part of such reorganization, merger, consolidation
or sale, provision shall be made so that the holders of the Class A Preferred
Stock shall thereafter be entitled to receive upon conversion of the Class A
Preferred Stock the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 9 with respect to the rights
of the holders of the Class A Preferred Stock after the reorganization, merger,
consolidation or sale to the end that the provisions of this Section 9 (includ-
ing adjustment of the Class A Conversion Ratio then in effect and the number of
shares purchasable upon conversion of the Class A Preferred Stock) shall be
applicable after that event and be as nearly equivalent as may be practicable.
(i) Adjustment for Issuances. If at any time or from time to
time after the Issuance Date, the Corporation shall issue or sell Common Stock
or rights, options, warrants or other securities convertible into Common Stock,
excluding those rights, options, warrants or other securities convertible into
Common Stock outstanding as of the Issuance Date, at a price per share which is
lower than both (A) the then effective Conversion Price and (B) the average
closing bid price (as defined in Section 7(b)) for the thirty (30) consecutive
trading days immediately prior to such issuance, then the conversion ratio shall
be increased by multiplying the conversion ratio theretofore in effect by a
fraction, of which the numerator shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such shares, rights, options,
warrants or convertible
<PAGE>
securities plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately prior to the issuance of such
rights, options, warrants or convertible securities plus the number of shares
which the aggregate offering price of the total number of shares offered would
purchase at the then effective Conversion Price, provided, however, that no such
adjustment shall be made which results in a decrease in the conversion ratio.
Such adjustment shall be made whenever such rights, options, warrants or
convertible securities are issued, and shall become effective immediately and
retroactive to the record date for the determination of stockholders entitled
to receive such rights, options, warrants or convertible securities.
Notwithstanding the foregoing, no adjustment will be required on account of (i)
the exercise of any of the options presently outstanding under the Company's
Amended and Restated 1993 Stock Option Plan (the "Plan") for officers, directors
and certain other key personnel of the Company or (ii) the issuance or exercise
of any other securities which may hereafter be granted or exercised under the
Plan or under any other employee benefit plan of the Company.
(j) Adjustment for Distributions. If at any time or from time
to time after the Issuance Date, the Corporation shall distribute to all or
substantially all holders of its Common Stock evidences of its indebtedness or
assets (excluding cash dividends or distributions out of earnings) or rights,
options, warrants or convertible securities containing the right to subscribe
for or purchase Common Stock (excluding those referred to in subparagraphs (f)
and (i) above), then in each case the conversion ratio shall be increased by
multiplying the conversion ratio theretofore in effect by a fraction, of which
the numerator shall be the then Fair Value on the date of such distribution, and
of which the denominator shall be such Fair Value on such date minus the then
Fair Value (as so determined) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options, warrants or
convertible securities applicable to one share, provided, however, that no such
adjustment shall be made which results in a decrease in the conversion ratio.
Such adjustment shall be made whenever any such distribution is made and shall
become effective on the date of distribution retroactive to the record date for
the determination of stockholders entitled to receive such distribution. "Fair
Value" shall equal the average closing bid price for the thirty (30) consecutive
trading days immediately prior to the date of distribution multiplied by the
then current conversion ratio.
(k) Adjustment for Expirations. Upon the expiration of any
rights, options, warrants or conversion privileges, the issuance of which
necessitated an adjustment to the conversion ratio as set forth herein, if such
shall not have been exercised, then the conversion ratio shall, upon such
expiration, be
<PAGE>
readjusted and shall thereafter be such as it would have been had it been
originally adjusted (or had the original adjustment not been required, as the
case may be) on the basis of (A) the fact that Common Stock, if any, actually
issued or sold upon the exercise of such rights, options, warrants or conversion
privileges, and (B) the fact that such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the Corporation upon
such exercise plus the consideration, if any, actually received by the
Corporation for the issuance, sale or grant of all such rights, options,
warrants or conversion privileges whether or not exercised.
(l) Certificate of Adjustment. In each case of an adjustment
or readjustment of the Class A Conversion Ratio, the Corporation, at its
expense, shall cause its Chief Financial Officer or Chief Accounting Officer to
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by certified mail, return receipt requested, postage
prepaid, to each registered holder of the Class A Preferred Stock at the
holder's address as shown in the Corporation's books. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (1) the Class
A Conversion Ratio at the time in effect and (2) the type and amount, if any, of
other property which at the time would be received upon conversion of the Class
A Preferred Stock.
(m) Notices of Record Date. In the event (i) that the
Corporation fixes a date for determination of stockholders of record of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or (ii) of any capital
reorganization of the Corporation, any reclassification or recapitalization of
the capital stock of the Corporation, any merger or consolidation of the
Corporation with or into any other corporation or other entity, or any transfer
of all or substantially all of the assets of the Corporation to any other person
or entity or any voluntary or involuntary dissolution, liquidation or winding up
of the Corporation, the Corporation shall mail to each holder of Class A
Preferred Stock at least thirty (30) days prior to the record date specified
therein, or, if applicable, the effective date of such transaction or event
specified therein, a notice specifying (1) the record date for the purpose of
determining the stockholders who are entitled to receive such dividend or dis-
tribution and a description of such dividend or distribution, (2) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
or (3) the date, if any, that is to be fixed, as to when the holders of record
of Common Stock (or other securities) shall be entitled to exchange
<PAGE>
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.
(n) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Class A Preferred Stock. To the extent
the amount of any share of Common Stock payable to any holder of Class A
Preferred Stock does not equal an integral multiple of one share of Common
Stock, such fractional share shall be rounded up to the next whole integral
number of shares.
(o) Reservation of Common Stock Issuable Upon Conversion.
The Corporation shall at all times following the date which is ninety (90) days
after the Issuance Date, reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Class A Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Class A Preferred Stock.
(p) Notices. Any notice required or permitted by this Section
9 or any other provision hereof to be given shall be in writing and be deemed
given upon the earlier of actual receipt or three (3) days after the same has
been deposited in the United States mail, by certified or registered mail,
return receipt requested, postage prepaid, and addressed (i) to each holder of
record of Class A Preferred Stock at the address of such holder appearing on the
books of the Corporation, or (ii) to the Corporation at 4 Science Park, New
Haven, CT, 06511 or (iii) to the Corporation or any such holder, at any other
address for the giving of notice specified in a written notice given to the
other.
(q) Payment of Taxes. The Corporation will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of Class A Preferred Stock, including, without limitation,
any tax or other charge imposed in connection with any transfer involved in the
issue and delivery of shares of Common Stock in a name other than that in which
the shares of Class A Preferred Stock so converted were registered.
(r) No Amendment or Impairment. The Corporation shall not
amend its Restated Certificate of Incorporation or participate in any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, for the purpose of avoiding or
seeking to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times
<PAGE>
in good faith assist in carrying out all such action as may be reasonably
necessary or appropriate in order to protect the conversion rights of the
holders of the Class A Preferred Stock against impairment.
Section 10. Restrictions and Limitations. So long as any
shares of Class A Preferred Stock remain outstanding, the Corporation shall not,
and shall not permit any Subsidiary to, without the vote or written consent by
the holders of a Majority of the Class A Preferred Stock:
(a) Redeem, purchase or otherwise acquire for value, any share
or shares of Class A Preferred Stock, otherwise than by redemption in accordance
with Section 7 hereof, or any warrant, option or right to purchase any Class A
Preferred Stock;
(b) Declare or pay any dividends on or declare or make any
other distribution, direct or indirect (other than a dividend payable solely in
shares of Common Stock), on account of the Junior Stock or set apart any sum for
any such purpose;
(c) Increase (other than by redemption or conversion)
the total number of authorized shares of Class A Preferred Stock;
or
(d) Take any action which would result in taxation of the
holders of Class A Preferred Stock under Section 305 of the Internal Revenue
Code of 1986 (or any comparable provision of the Internal Revenue Code of 1986
as hereafter from time to time amended).
Section 11. No Reissuance of Class A Preferred Stock. No share
or shares of Class A Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued.
Section 12. Outstanding Shares. For purposes of this
Certificate of Designations, all shares of Class A Preferred Stock shall be
deemed outstanding except (i) from the date, or the deemed date, of surrender of
certificates evidencing shares of Class A Preferred Stock, all shares of Class A
Preferred Stock converted into Common Stock, (ii) from the date of registration
of transfer, all shares of Class A Preferred Stock held of record by the
Corporation or any subsidiary of the Corporation and (iii) any and all shares of
Class A Preferred Stock held in escrow prior to delivery of such stock by the
Corporation to the initial beneficial owners thereof.
Section 13. Status of Acquired Shares. Shares of Class A
Preferred Stock received upon conversion pursuant to Section 9 or otherwise
acquired by the Corporation will be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to class, and may
<PAGE>
thereafter be issued, but not as shares of Class A Preferred
Stock.
Section 14. Preemptive Rights. The Class A Preferred
Stock is not entitled to any preemptive or subscription rights in
respect of any securities of the Corporation.
Section 15. Severability of Provisions. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
<PAGE>
EXHIBIT 99.1
<PAGE>
CONTACTS: Thomas E. Klein Media Relations:
Chief Financial Officer Reva Jaffe Wayman
Vion Pharmaceuticals, Inc. Harrison, Star, Wiener
203/498-4210 & Beitler PR
212/689-3690
Investor Relations:
Susan Burnett
Burns McClellan
212/505-1919
FOR IMMEDIATE RELEASE
VION PHARMACEUTICALS, INC. CLOSES PRIVATE PLACEMENT
NEW HAVEN, CT, May 24, 1996 -- Vion Pharmaceuticals, Inc. (NASDAQ: VION)
announced today it has completed a private placement of 1,250,000 shares of
convertible preferred stock, at $10.00 per share, resulting in net proceeds to
the Company of $11,665,000. The shares of preferred stock pay semi-annual
dividends of 5% per annum, payable in additional shares of preferred stock, and
a 15% one time dividend if the Company redeems the issue within 3 years. The
issue also contains a provision for a special dividend after 2 years under
certain conditions if the Company's common stock falls below the conversion
price. The issuance of the preferred stock at closing will also trigger certain
adjustment provisions of the Company's outstanding warrants, resulting in the
issuance of additional warrants. Paramount Capital, Inc., New York, New York
acted as placement agent to the Company in connection with the offer and sale of
the preferred stock.
"This financing is an important step in support of our TAPETTM program and for
the expanded Phase III trial of Vion's anticancer agent PromycinTM
(Porfiromycin)," said Mr. John Spears, president and CEO. Vion has received
Orphan Drug designation for Promycin from the United States Food and Drug
Administration. TAPET is an enabling platform technology featuring a novel gene
therapy vector for the treatment of cancer. TAPET employs microorganisms
designed to be highly selective for tumor tissue as vectors capable of
delivering prodrug converting enzymes and genes to treat tumors.
Vion Pharmaceuticals is a biopharmaceutical company dedicated to discovering,
developing and marketing oncology and antiviral products.
<PAGE>
EXHIBIT 99.2
<PAGE>
CONTACTS: Thomas E. Klein Media Relations:
Chief Financial Officer Reva Jaffe Wayman
Vion Pharmaceuticals, Inc. Harrison, Star, Wiener
203/498-4210 & Beitler PR
212/689-3690
Investor Relations:
Susan Burnett
Burns McClellan
212/505-1919
FOR IMMEDIATE RELEASE
VION PHARMACEUTICALS, INC. ADJUSTS WARRANTS
NEW HAVEN, CT, June 4, 1996 -- Vion Pharmaceuticals, Inc. (NASDAQ: VION)
announced today adjustments in its outstanding warrants, required as a result of
its recent private placement. Holders of record as of the close of business on
July 3, 1996, of the Company's Class A and Class B warrants, will receive one
tenth of an additional Class A or Class B warrant respectively for each such
warrant held. The payment date will be July 12, 1996. The adjustment will also
reduce the exercise price of the Company's Class A warrants from $5.20 to $4.73,
and will reduce the exercise price of the Company's Class B warrants from $7.00
to $6.37.
Vion Pharmaceuticals is a biopharmaceutical company dedicated to discovering,
developing and marketing oncology and antiviral products. The Company's
anticancer agent PromycinTM (Porfiromycin) is currently in Phase III clinical
trials.
