SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[X ] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X ] Preliminary Proxy Statement [ ] Confidential, for Use
of 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
VION PHARMACEUTICALS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), or
14a- 6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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 COPY
VION PHARMACEUTICALS, INC.
4 Science Park
New Haven, Connecticut 06511
(203) 498-4210
July __, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the Company's Special
Meeting of Stockholders to be held at 4:00 p.m., on Wednesday, August 14, 1996,
at the Company's offices at 4 Science Park, New Haven, Connecticut.
At this meeting you will be asked to approve an increase in
the authorized Common Stock of the Company from 20,000,000 shares to 35,000,000
shares.
We look forward to greeting personally those stockholders who
are able to be present at the meeting; however, whether or not you plan to be
with us at the meeting, it is important that your shares be represented.
Accordingly, you are requested to sign and date the enclosed proxy and mail it
in the envelope provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
John A. Spears
President and Chief Executive Officer
<PAGE>
VION PHARMACEUTICALS, INC.
-----------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
-----------------------------
New Haven, Connecticut
July ___, 1996
Notice is hereby given that a Special Meeting of Stockholders of
Vion Pharmaceuticals, Inc. will be held on Wednesday, August 14, 1996 at 4:00
p.m., at the Company's offices at 4 Science Park, New Haven, Connecticut, for
the following purpose:
(1) To consider and vote on the adoption of an amendment to
the Restated Certificate of Incorporation increasing the
Company's authorized Common Stock from 20,000,000 shares
to 35,000,000 shares.
Stockholders of record of the Company's Common Stock and the
Company's Class A Convertible Preferred Stock at the close of business on July
1, 1996 will be entitled to notice of and to vote at the Special Meeting or any
adjournments thereof. All stockholders are cordially invited to attend the
Special Meeting in person. Stockholders who are unable to attend the Special
Meeting in person are requested to complete and date the enclosed form of proxy
and return it promptly in the envelope provided. No postage is required if
mailed in the United States. Stockholders who attend the Special Meeting may
revoke their proxy and vote their shares in person.
THOMAS MIZELLE
Secretary
<PAGE>
VION PHARMACEUTICALS, INC.
4 Science Park
New Haven, Connecticut 06511
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PROXY STATEMENT
-----------------------------
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of Common Stock,
par value $.01 per share (the "Common Stock") and Class A Convertible Preferred
Stock, par value $.01 per share (the "Class A Preferred Stock"), of Vion
Pharmaceuticals, Inc. (the "Company") in connection with the solicitation by the
Board of Directors of the Company of proxies for use at the Special Meeting of
Stockholders to be held on Wednesday, August 14, 1996, or at any adjournments
thereof, pursuant to the accompanying Notice of Special Meeting of Stockholders.
The purpose of the meeting and the matter to be acted upon are set forth in the
accompanying Notice of Special Meeting of Stockholders.
Proxies for use at the meeting are being solicited by the Board
of Directors of the Company. Proxies will be mailed to stockholders on or about
July ___, 1995 and will be solicited chiefly by mail. The Company will make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the
shares and will reimburse them for their expenses in so doing. Should it appear
desirable to do so in order to ensure adequate representation of shares at the
meeting, officers, agents and employees of the Company may communicate with
stockholders, banks, brokerage houses and others by telephone, facsimile, or in
person to request that proxies be furnished. All expenses incurred in connection
with this solicitation will be borne by the Company.
Revocability and Voting of Proxy
A form of proxy for use at the Special Meeting and a return
envelope for the proxy are enclosed. Stockholders may revoke the authority
granted by their execution of proxies at any time before their effective
exercise by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the meeting. Shares of the Company's Common Stock and Class A Preferred Stock
represented by executed and unrevoked proxies will be voted in accordance
<PAGE>
with the choice or instructions specified thereon. If no specifications are
given, the proxies intend to vote the shares represented thereby to approve
Proposal No. 1 as set forth in the accompanying Notice of Special Meeting of
Stockholders and in accordance with their best judgment on any other matters
which may properly come before the meeting.
Record Date and Voting Rights
Only stockholders of record at the close of business on July 1,
1996 are entitled to notice of and to vote at the Special Meeting or any
adjournments thereof. On July 1, 1996 there were 7,554,106 shares of Common
Stock outstanding and 1,250,000 shares of Class A Preferred Stock outstanding;
each share of Common Stock is entitled to one vote and each share of Class A
Preferred Stock is entitled to 2.777777 votes on the matter to be presented at
the Special Meeting. The total number of votes entitled to be cast at the
Special Meeting is 11,026,328. The holders of a majority of the outstanding
shares which may be voted at the meeting, present in person or by proxy, will
constitute a quorum at the Special Meeting. Abstentions and broker non-votes
will be counted for purposes of determining the presence or absence of a quorum.
"Broker non-votes" are shares held by brokers or nominees which are present in
person or represented by proxy, but which are not voted on a particular matter
because instructions have not been received from the beneficial owner. Under
applicable Delaware law, the effect of broker non-votes on a particular matter
depends on whether the matter is one as to which the broker or nominee has
discretionary voting authority. The effect of broker non-votes on the matter to
be brought before the Special Meeting of Stockholders is discussed below.
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<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of July 1, 1996
(except as otherwise noted in the footnotes) regarding the beneficial ownership
(as defined by the Securities and Exchange Commission (the "SEC")) of the
Company's Common Stock and Class A Preferred Stock of: (i) each person known by
the Company to own beneficially more than five percent of the Company's
outstanding Common Stock or Class A Preferred Stock; (ii) each director of the
Company; (iii) the Company's Chief Executive Officer and each other officer who
received over $100,000 in compensation from the Company during the 1995 fiscal
year; and (iv) all directors and executive officers of the Company as a group.
Except as otherwise specified, the named beneficial owner has the sole voting
and investment power over the shares listed and the address of each beneficial
owner is c/o Vion Pharmaceuticals, Inc., 4 Science Park, New Haven, Connecticut
06511.
<TABLE>
<CAPTION>
Percentage of
Total Number Class A
of Shares of Percentage of Preferred
Class A Common Stock Common Stock Stock
Preferred Beneficially Beneficially Beneficially
Directors and Executive Officers Common Stock Stock Owned (1) Owned Owned
- -------------------------------- ------------ ----- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Michael C. Kent............................ 504,654(2) 0 504,654 6.7% --
Alan C. Sartorelli Ph.D.................... 439,008(3) 0 439,008 5.8% --
John A. Spears............................. 397,312(4) 0 397,312 5.0% --
Michel C. Bergerac......................... 25,000(5) 0 25,000 * --
Frank T. Cary.............................. 47,718 0 47,718 * --
A. E. Cohen................................ 25,000(5) 0 25,000 * --
James L. Ferguson.......................... 0 0 0 -- --
William R. Miller.......................... 143,156 0 143,156 1.9% --
E. Donald Shapiro.......................... 62,000(6) 0 62,000 * --
Walter Wriston............................. 47,718 0 47,718 * --
Terrence W. Doyle, Ph.D.................... 267,224(7) 0 267,224 3.5% --
Thomas Mizelle............................. 24,452(8) 0 24,452 * --
All directors and executive officers as a
group (13 persons)......................... 2,014,842(9) 0 2,014,842 24.8% --
Other Beneficial Owners
Phoenix Partners L.P.
Morgens Waterfall Vintiadis Investments N.V.
Betje Partners
c/o Morgens Waterfall Vintiadis Investments
& Co., Inc.
10 East 50th Street
New York, NY 10022...................... 0 275,000(10) 763,890 9.2% 22.0%
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<PAGE>
M. Kingdon Offshore, N.V.
Kingdon Associates, L.P.
Kingdon Partners, L.P.
152 West 57th Street, 50th Floor
New York, NY 10019....................... 0 200,000(11) 555,558 6.9% 16.0%
Ardsley Partners Fund I, L.P.
Ardsley Partners Fund II, L.P.
646 Steamboat Road
Greenwich, CT 06830...................... 0 187,500(12) 520,834 6.5% 15.0%
Britshire Ltd.............................. 431,047(13) 0 431,047 5.6% --
GFL Performance Fund Ltd.
c/o CITCO
Kaya Flamboyan 9
Curacao
Netherlands Antilles..................... 0 150,000 416,667 5.2% 12.0%
Strome Partners, L.P.
100 Wilshire Blvd.
Santa Monica, CA 90401.................. 0 100,000 277,778 3.5% 8.0%
</TABLE>
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*Less than one percent
(1) The Class A Preferred Stock is convertible into Common Stock by dividing
(i) the sum of the $10.00 per share stated value by (ii) $3.60 per share
(as adjusted from time to time for certain events of dilution). As of
July 1, 1996, each share of Class A Preferred Stock was convertible into
2.777777 shares of Common Stock.
(2) Includes 8,550 shares of Common Stock and warrants to purchase 17,100
shares of Common Stock exercisable within 60 days beneficially owned by
Mr. Kent's wife, as to which Mr. Kent disclaims beneficial ownership.
(3) Includes (i) 190,874 shares beneficially owned by Dr. Sartorelli's wife
and (ii) 57,260 shares held in trust for Dr. Sartorelli's grandchildren,
for which Dr. Sartorelli's wife serves as trustee, as to which Dr.
Sartorelli disclaims beneficial ownership. Does not include 57,260
shares beneficially owned by other family members of Dr. Sartorelli,
which were received as gifts from Dr.
Sartorelli.
(4) Includes 14,000 shares issuable upon exercise of warrants and 376,312
shares issuable upon exercise of options exercisable within 60 days.
Pursuant to an agreement, a portion of the shares issuable upon exercise
of such options are subject to repurchase by the Company at the exercise
price.
(5) Represents shares issuable upon exercise of options exercisable within
60 days.
(6) Includes 25,000 shares issuable upon exercise of options exercisable
within 60 days and includes 33,000 shares issuable upon exercise of
warrants, which Mr. Shapiro has agreed not to exercise prior to August
14, 1996.
(7) Includes 80,000 shares held by Dr. Doyle's wife and children, as to
which Dr. Doyle disclaims beneficial ownership. Pursuant to a four-year
vesting schedule, one-half of these shares are subject to repurchase by
the Company.
(8) Includes 12,500 shares issuable upon exercise of options and 9,468
shares issuable upon exercise of warrants, exercisable within 60 days.
(9) Includes 463,812 shares issuable upon exercise of options and 96,668
shares issuable upon exercise of warrants, which are exercisable within
60 days.
(10) Consists of 137,500 shares held by Phoenix Partners L.P., 91,667 shares
held by Morgens Waterfall Vintiadis Investments N.V. and 45,833 shares
held by Betje Partners. Edwin Morgens is the Managing Member of the
general partner of Phoenix Partners L.P. and is the Chairman of the
investment advisors to Morgens Waterfall Vintiadis Investments N.V. and
Betje Partners. Mr. Morgens disclaims beneficial ownership of all
indicated shares.
-4-
<PAGE>
(11) Consists of 120,000 shares held by M. Kingdon Offshore, N.V., 40,000
shares held by Kingdon Partners, L.P. and 40,000 shares held by Kingdon
Associates, L.P. Mark Kingdon is the general partner of Kingdon
Partners, L.P. and Kingdon Associates, L.P. and is the President of the
investment advisor to M. Kingdon Offshore, N.V. Mr. Kingdon disclaims
beneficial ownership of all indicated shares.
(12) Consists of 95,000 shares held by Ardsley Partners Fund I, L.P. and
92,500 shares held by Ardsley Partners Fund II, L.P. Kevin M. McCormack
is the general partner of both limited partnerships and disclaims
beneficial ownership of the indicated shares.
(13) Consists of (i) 337,618 shares owned by Britshire, Ltd., a corporation
the common stock of which is owned principally by certain relatives of
J. Morton Davis and officers of Blair & Co., which is substantially
owned by family members of Mr. Davis and (ii) 93,429 currently
exercisable warrants issued to D.H. Blair Investment Banking Corp. in
connection with private placements of Common Stock of the Company and
distributed to certain relatives of Mr. Davis who are also officers of
Blair & Co. Kalman Renov, a son-in-law of Mr. Davis and an officer of
Blair & Co., may be deemed to be a controlling person of Britshire, Ltd.
Does not include 112,500 shares owned by D.H. Blair Investment Banking
Corp. and an aggregate of 114,753 shares subject to currently
exercisable warrants issued to D.H. Blair Investment Banking Corp. in
connection with private placements of Common Stock of the Company which
are owned by D.H. Blair Investment Banking Corp., Mr. Davis, an officer
of D.H. Blair Investment Banking Corp. and officers and employees of
Blair & Co. D.H. Blair Investment Banking Corp. and Mr. Davis disclaim
beneficial ownership of any of the shares held by Britshire, Ltd. and
Britshire, Ltd. disclaims beneficial ownership of any of the shares
beneficially owned by D.H. Blair Investment Banking Corp., Mr. Davis and
the officers of D.H. Blair Investment Banking Corp.
PROPOSAL NO. 1 -- APPROVAL OF AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION INCREASING THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK FROM 20,000,000 TO 35,000,000
The Board of Directors has approved and recommends that the first sentence of
Article Fourth of the Restated Certificate of Incorporation of the Company be
amended to increase the authorized shares of Common Stock from 20,000,000 to
35,000,000. The text of proposed amendment to Article Fourth is as follows:
"FOURTH. Authorization, Designation and Amount. The total number of shares
of all classes of stock which the Corporation shall have authority to issue is
40,000,000 shares, consisting of (a) 35,000,000 shares of Common Stock, par
value $.01 per share (the "Common Stock") and (b) 5,000,000 shares of
Preferred Stock, par value $.01 per share (the "Preferred Stock")."
On July 1, 1996, there were 7,554,106 shares of Common Stock outstanding. In
addition, there are 3,875,000 shares of Common Stock issuable upon exercise of
outstanding Class A Warrants, 3,875,000 shares issuable upon exercise of Class B
Warrants underlying such Class A Warrants, 2,875,000 shares issuable upon
exercise of outstanding Class B Warrants, 1,000,000 shares issuable upon
exercise in full of a unit purchase option granted to the underwriter of the
Company's August 1995 public offering, 208,182 shares issuable upon exercise in
full of other warrants issued in connection with previous private placements,
1,120,312 shares issuable pursuant to options granted, including 716,250 options
granted under the Company's Amended and Restated 1993 Stock Option Plan and
283,750 shares reserved for issuance under the Company's Amended and Restated
1993 Stock Option Plan, representing an aggregate of 20,791,350 shares of Common
Stock outstanding or reserved for issuance.
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<PAGE>
The proposed increase in the authorized Common Stock will provide the Company
with greater flexibility to issue Common Stock for appropriate corporate
purposes. Among the purposes for which such additional authorized stock could be
issued are the acquisition of desirable businesses, the sale of shares for cash
in connection with investments by corporate partners or otherwise, issuances in
connection with stock options, stock splits and stock dividends. The proposed
increase in the authorized number of shares of Common Stock will also allow the
Company to satisfy its obligations to the holders of its Class A Preferred Stock
with respect to the conversion of such shares into shares of Common Stock. Under
the terms of an agreement between the Company and the holders of the Class A
Preferred Stock, the Company has agreed to amend its Restated Certificate of
Incorporation on or before August 20, 1996, to increase the number of authorized
shares of Common Stock in order to allow for the conversion of the Class A
Preferred Stock into Common Stock. However, if the stockholders have not
approved an increase in the authorized number of shares of Common Stock of the
Company on or before August 20, 1996, the Company will be obligated to pay each
holder of Class A Preferred Stock a dividend in kind equal to 5% of the Class A
Preferred Stock held by such holder for each month or portion thereof until such
authorization is obtained. If authorization of sufficient Common Stock is not
obtained by February 17, 1997, the holder shall have the right to force the
Company to repurchase the shares of Class A Preferred Stock then held by such
holder (including any shares received as a dividend) at a price equal to the
stated value of the Class A Preferred Stock (currently $10.00 per share). The
holders of the Class A Preferred Stock have agreed to vote in favor of this
proposal. If the proposed increase in the authorized Common Stock is approved,
an aggregate of approximately 3.5 million shares of Common Stock will be
reserved for issuance upon conversion of the currently outstanding Class A
Preferred Stock. In addition, on July 12, 1996 the Company will issue an
aggregate of 387,500 Class A Warrants and 287,500 Class B Warrants to the
holders thereof on July 3, 1995 in connection with anti-dilution rights held by
such holders. These issuances will result in the reservation of approximately
1.1 million shares of Common Stock.
Approval of the proposed amendment to the Restated Certificate of
Incorporation will allow the Board to move promptly to issue additional shares,
if appropriate opportunities should arise, without the delay and expense of
calling an additional stockholders' meeting. The Board of Directors will
determine whether, when and on what terms the issuance of shares of Common Stock
may be warranted. Like the presently authorized but unissued shares of the
Company, the additional shares will be available without further action by the
stockholders. Stockholders do not presently have preemptive rights with respect
to the current authorized Common Stock. The Company has no other present
arrangements, commitments or understandings with respect to the sale of any
additional shares, except in connection with the options outstanding under the
Company's stock option plans.
Although a proposal to increase the authorized capital stock of a company may
be construed as having an anti-takeover effect, neither the management of the
Company nor its Board of Directors views this proposal in that perspective. The
proposal has not been
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<PAGE>
prompted by an effort by anyone to gain control of the Company, and the Company
is not aware of such an attempt. However, under certain circumstances, the
Company could use the additional shares to frustrate persons seeking to effect a
takeover or otherwise gain control of the Company by, for example, privately
placing such shares with purchasers who might side with the Board of Directors
in opposing a hostile takeover bid. The additional shares could also be used to
dilute the stock ownership of a person or entity seeking to gain control of the
Company, should the Board consider the action of such person not to be in the
best interests of the stockholders and the Company. Such uses of the Common
Stock could render more difficult or discourage a tender offer or other attempt
to acquire control if such transaction were to be opposed by the Board. In
addition, the Company's Restated Certificate of Incorporation currently
authorizes the Board to issue, without stockholder approval, 5,000,000 shares of
Preferred Stock with such powers, preferences and rights as shall be fixed by
the Board. Currently undesignated and unissued shares of Preferred Stock could
be used in anti-takeover efforts as described above and could be given voting
power sufficient to block proposals advanced by a substantial stockholder. The
Board is not aware of any pending or threatened effort to obtain control of the
Company.
Vote Required
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock (voting as a separate class) and the affirmative vote of
holders of a majority of the outstanding Common Stock and Class A Preferred
Stock (voting as a single class) is required for the adoption of this proposal.
Abstentions and broker non-votes have the same legal effect as a vote cast
against this proposal.
THE BOARD OF DIRECTORS DEEMS "PROPOSAL NO. 1 - APPROVAL OF AMENDMENT TO THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION INCREASING THE AUTHORIZED NUMBER
OF SHARES OF COMMON STOCK FROM 20,000,000 TO 35,000,000" TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL THEREOF.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Special Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
THOMAS MIZELLE
Secretary
Dated: July __, 1996
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<PAGE>
PRELIMINARY COPY
VION PHARMACEUTICALS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1996
John A. Spears and Thomas Mizelle, and each of them, as the true
and lawful attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote all shares of
Common Stock or Class A Convertible Preferred Stock of Vion Pharmaceuticals,
Inc. held of record by the undersigned on July 1, 1996, at the Special Meeting
of Stockholders to be held at 4:00 p.m. on Wednesday, August 14, 1996, at the
Company's offices at 4 Science Park, New Haven, Connecticut, and at any
adjournments thereof. Any and all proxies heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS
DESIGNATED BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY
WILL BE VOTED FOR PROPOSAL NO. 1.
1. Proposal No. 1 - Approval of Amendment to the Company's
Restated Certificate of Incorporation increasing the authorized number of shares
of Common Stock from 20,000,000 to 35,000,000:
/ / FOR
/ / AGAINST
/ / ABSTAIN
Discretionary authority is hereby granted with respect to such
other matters as may properly come before the meeting.
<PAGE>
IMPORTANT: Please sign exactly as name appears below. Each joint owner should
sign. Executors, administrators, trustees, etc. should give full
title as such. If signor is a corporation, please give full
corporate name by duly authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated __________, 1996
----------------------------------
Signature
----------------------------------
Signature if held jointly
The above-signed acknowledges receipt of the Notice of Special Meeting of
Stockholders and the Proxy Statement furnished therewith.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
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