PREC14A: Preliminary proxy statement in connection with contested solicitations
Published on August 27, 2003
SCHEDULE 14A INFORMATION
CONSENT STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
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 sec. 240.14a-12
EXEGENICS INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BRUCE MEYERS, THE M AND B WEISS FAMILY
LIMITED PARTNERSHIP OF 1996, MELVYN I. WEISS AND MICHAEL STONE
(NAME OF PERSON(S) FILING CONSENT 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)(l) and 0-11.
(1) Title of each class of securities to which Offer and a subsequent merger
applies:
________________________________________________
(2) Aggregate number of securities to which Offer and a subsequent merger
applies:
________________________________________________
(3) Per unit price or other underlying value of Offer and a subsequent merger
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 Offer and a subsequent merger:
________________________________________________
(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:
________________________________________________
PRELIMINARY COPY -- SUBJECT TO COMPLETION
A DEFINITIVE CONSENT STATEMENT WILL BE FILED FOLLOWING SEC REVIEW.
NOTICE OF CONSENT SOLICITATION BY
BRUCE MEYERS, THE M AND B WEISS FAMILY
LIMITED PARTNERSHIP OF 1996, MELVYN I. WEISS AND MICHAEL STONE
To the Stockholders of eXegenics Inc.:
Bruce Meyers, The M and B Weiss Family Limited Partnership of 1996, Melvyn
I. Weiss and Michael Stone are hereby soliciting all of eXegenics' stockholders
to consent to:
o the removal of all the members of the Company's board of directors;
and
o the election of five new directors to serve as members of the
Company's board of directors (the "Nominees").
We are soliciting your consent to these actions because we believe that the
Company's directors and officers have failed to act in the best interest of the
Company's stockholders. Rather, they have allowed the Company's resources to
become depleted while the Company's executive officers were paid high salaries
and the Company's Chief Executive Officer was awarded large bonuses despite the
Company's failure to produce worthwhile results. During fiscal 2002, the Company
paid its directors $1,000 a month, plus $1,000 for each Board meeting they
attended and $750 for each committee meeting they attended. Although the Company
had little revenue and no income, it had three permanent committees, and one ad
hoc committee. The Company's directors also received options to purchase the
Company's common stock. Furthermore, during fiscal 2002, the Board paid Easton
Associates L.L.C., whose chairman is Robert Easton, $62,500 and Gary Frashier
$67,500 in consulting fees. Both Messrs. Easton and Frashier were on the
Company's Board and on its compensation committee when the payments were made.
We believe that, unlike the current directors, if elected, the Nominees will
act in the best interest of the Company's Stockholders.
Like many of you, we have seen the value of our investments in eXegenics'
decline. On March 21, 2001, when Ronald L. Goode became the Company's President
and Chief Executive Officer and was elected to the Company's Board of Directors,
the Company's common stock closed at $3.94 per share, and the Company reported
that as of March 31, 2001, it had approximately $34,000,000 in cash and cash
equivalents and revenues of $333,000 for the three months ended March 31, 2001.
As of June 30, 2003, the Company reported that it had $14,037,000 in cash and
cash equivalents and investments, and did not have any revenues for the three
months ended June 30, 2003. On August 19, 2003, the Company's common stock
closed at $0.54 per share. At one point, the Company was focused on acquiring
drug candidates that could be successfully developed and marketed as
pharmaceutical products to fight human diseases. However, it has failed to
create or acquire any commercially viable drug candidates.
Meanwhile, Dr. Goode's annual salary has increased from $245,512 when he
began with the Company to $405,000 as of January of this year. The Company's
Board also awarded Dr. Goode a bonus of $105,000 because, according to the
Report of Company's Compensation Committee, a copy of which is contained in the
Company's Proxy Statement filed with the Securities and Exchange Commission on
May 19, 2003, he "has managed the Company exceptionally well...." Additionally,
in March 2003, during this period of significant reduction in the Company's
operations, the Company hired a Chief Financial Officer at an annual salary of
$235,000.
Although the Company has spent a lot of money, it has never achieved what
we would consider to be positive results. An example of this is the terminated
merger with Innovative Drug Delivery Systems, Inc. ("IDDS"). On September 19,
2002, the Company announced that it had entered into a merger agreement with
IDDS. At the time Dr. Goode stated that the "merger of eXegenics and IDDS allows
us to fulfill our joint goal of moving rapidly towards the commercialization of
pharmaceuticals that address important medical needs."(1) However, only a few
months later, in November, 2002, the Company and IDDS entered into a Termination
Agreement, pursuant to which the Merger Agreement was terminated. In connection
with the terminated merger, the Company recognized approximately $2,000,000 in
expenses, which included $496,000 in legal fees, $304,000 in fees to a financial
advisor, a $500,000 termination fee which it paid to IDDS and a $500,000 expense
related to establishing a reserve account for a $500,000 note that the Company
received from IDDS. In our opinion, the failed IDDS merger unnecessarily wasted
the Company's resources and demonstrates that the Company has been mismanaged.
On May 15, 2003, The M and B Weiss Family Limited Partnership of 1996 filed
a lawsuit in the Delaware Court of Chancery, as a class action on behalf of all
other similarly situated stockholders of the Company against the Company (as a
nominal defendant) and its directors Joseph M. Davie, Ronald L. Goode and Walter
M. Lovenberg and as a derivative action on behalf of the Company against the
directors. The complaint alleges, among other things, that the defendants have
mismanaged the Company, have made unwarranted and wasteful loans and payments to
certain directors and third parties, have disseminated a materially false and
misleading proxy statement in connection with the 2003 annual meeting of the
Company's stockholders, have wasted the Company's assets by paying high salaries
and/or excessive bonuses to its executive officers and have breached their
fiduciary duties to the Company and its stockholders. The complaint seeks, among
other things, a court order mandating that the defendants cooperate with parties
proposing bona fide transactions to maximize stockholder value, make corrective
disclosures with respect to the proxy statement for the 2003 annual meeting, and
account to the Company and plaintiffs for damages suffered as a result of the
actions alleged in the complaint. The plaintiffs are, in addition, seeking an
award of costs and attorneys' fees and expenses. On June 9, 2003, the defendants
filed a joint motion with the Delaware Court of Chancery to dismiss the
complaint for failure to state a claim and for failure to make the statutorily
required demand on the Company to assert the subject claims. In prior
- ----------
(1) Statement of Ronald Goode contained in a press release issued by the Company
and IDDS on September 20, 2002.
discussions with the Company and its board of directors, the plaintiffs have
proposed the settlement of the claims in exchange for the resignations of the
Company's board of directors and officers, appointment of two of the plaintiffs'
nominees to the Company's board of directors, the holding of a special meeting
of the Company's shareholders to elect a new board of directors with a slate of
directors suggested by plaintiffs and the payment by the Company of an aggregate
of $500,000 to Dr. Goode and Mr. Riggs in settlement of all their claims against
the Company.
On May 29, 2003, Foundation Growth Investments, LLC ("Foundation Growth"),
through its wholly-owned subsidiary, El Acquisition Inc., commenced a tender
offer all of the outstanding shares of the Company's common stock and all of the
outstanding shares of the Company's shares of Series A Convertible Preferred
Stock at a price of $0.40 per share (the "Offer"). The Company's board has
rejected the Offer. On June 18, 2003, Foundation Growth also filed a preliminary
Consent Statement with the Securities and Exchange Commission. The Consent
Statement seeks consents of the Company's stockholders to, among other things,
remove all of the Company's directors and appoint a new slate of directors. In
June, 2003, Foundation Growth reduced the Offer to $0.37 per share and extended
the time to tender. On July, 31, 2003, Foundation Growth increased the Offer to
$0.51 per share. On August 22, 2003, Foundation increased the Offer to $0.60 per
share. We believe the Offer is still inadequate given the Company's book
value as of March 31, 2003 was $0.96 per share. As such, the Company's
stockholders should not tender their shares and should not respond to
Foundation's consent solicitation.
On July, 16, 2003, the Company and AVI Biopharma, Inc. ("AVI") entered into
an Agreement and Plan of Merger, pursuant to which AVI would acquire the
Company. AVI, since its inception in 1980, has devoted its resources to research
and development, has been unprofitable, has no material revenues and does not
anticipate becoming profitable in the foreseeable future. For the year ended
December 31, 2003, AVI had a net loss of $1.14 per share. As of June 30, 2003,
AVI had an accumulated deficit of approximately $123,494,000, According to AVI's
10-Q for the period ended June 30, 2003, AVI's "ability to achieve a profitable
level of operations in the future will depend in large part on its completing
product development of its cancer vaccine, antisense and/or drug delivery
products, obtaining regulatory approvals for such products and bringing these
products to market. During the period required to develop these products, the
Company will require substantial financing."
In connection with the Merger, on July 25, 2003, AVI, through a wholly
owned subsidiary, commenced a tender offer of the Company's outstanding common
and preferred stock. We believe the consideration offered to the Company's
shareholders, 0.123 of a share of AVI's common stock for each share of the
Company's common stock and 0.185 of a share of AVI's common stock for each share
of the Company's Series A Convertible Preferred, is inadequate. Consummation of
the merger would result in the Company's shareholders receiving shares of common
stock of a highly speculative company at a de minimus premium, if any, over the
current trading price of the Company's stock. Consummation of the proposed
merger could also potentially result in the extinguishment of the derivative
claims against the Company's directors alleged in the lawsuit brought by The M
and B Weiss Family Limited Partnership of 1996. If the merger with AVI is
completed, Dr. Goode will be paid $607,500 paid in 18 installments, and the
Company's Chief Financial Officer will be paid $235,000 over 12 months. While
the AVI merger may be in the best interest of the Company's directors and
officers,
it is clearly not in the best interests of the Company's stockholders
and, therefore, the Company's stockholders should not tender their stock in the
Company.
YOU MAY WITHDRAW ANY SHARES YOU HAVE TENDERED AT ANY TIME BEFORE AVI
ACCEPTS THE SHARES FOR EXCHANGE IN THE EXCHANGE OFFER BY FAXING OR SENDING A
NOTICE OF WITHDRAWAL TO MELLON INVESTOR SERVICES LLC 85 CHALLENGER ROAD 2ND
FLOOR RIDGEFIELD, NEW JERSEY 07660, (866) 323-8164 PHONE, (201) 373-5387 FAX.
THE NOTICE OF WITHDRAWAL MUST SPECIFY YOUR NAME, THE NUMBER OF SHARES TO BE
WITHDRAWN AND THE NAME IN WHICH THE CERTIFICATE ARE REGISTERED, IF DIFFERENT
FROM YOUR NAME. IF YOU HAVE DELIVERED TO AVI'S EXCHANGE AGENT CERTIFICATES FOR
SHARES TO BE WITHDRAWN, YOU MUST ALSO INDICATE THE SERIAL NUMBER SHOWN ON THE
PARTICULAR CERTIFICATES EVIDENCING THE SHARES TO BE WITHDRAWN.
The results of our request for consent will be communicated to you by the
issuance of a press release. Additionally, in accordance with applicable law,
prompt notice of the results will be provided to stockholders who have not
executed consents.
Please consent with respect to all shares for which you were entitled to
give consent as of the ______ ___, 2003 record date, as set forth on your WHITE
consent card, in favor of the Nominees as described in the accompanying consent
statement.
New York, New York Very truly yours,
____________, 2003
Bruce Meyers,
The M and B Weiss Family
Limited Partnership of 1996, Melvyn I. Weiss
and Michael Stone
IMPORTANT
PLEASE READ THIS CAREFULLY
1. If you hold your shares in your own name, please sign, date and mail the
enclosed WHITE consent card to Bruce Meyers, Meyers Associates L.P., 45
Broadway, 2nd Floor, New York, New York 10006 in the postage-paid envelope
provided.
2. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can execute a consent representing your shares and
only on receipt of your specific instructions. Accordingly, you should contact
the person responsible for your account and give instructions for a WHITE
consent card to be signed representing your shares. We urge you to confirm in
writing your instructions to the person responsible for your account and provide
a copy of those instructions to us in care of Bruce Meyers so that we will be
aware of all instructions given and can attempt to ensure that those
instructions are followed.
If you have any questions or require any assistance in executing your
consent, please call:
Bruce Meyers
Meyers Associates, L.P.
45 Broadway, 2nd Floor
New York, New York 10006
212-742-4334
PRELIMINARY COPY -- SUBJECT TO COMPLETION
AUGUST 27, 2003
A DEFINITIVE CONSENT STATEMENT WILL BE FILED
FOLLOWING SEC REVIEW.
CONSENT STATEMENT
OF
BRUCE MEYERS,
THE M AND B WEISS FAMILY limited PARTNERSHIP OF 1996,
MELVYN I. WEISS AND MICHAEL STONE
Bruce Meyers, The M and B Weiss Family Limited Partnership of 1996, Melvyn
I. Weiss and Michael Stone, ("we" or "our") are furnishing this consent
statement in connection with their solicitation of written consents from the
holders of common stock, par value $0.01 per share, and Series A Convertible
Preferred Stock, par value $0.01 per share (collectively, the "Shares"), of
eXegenics Inc., a Delaware corporation (the "Company"), to take the following
actions without a stockholders' meeting in accordance with Delaware law to:
o remove all of the members of the board of directors of the Company;
and
o elect Robert A. Baron, Robert S. Benou, John J. Huntz, Jr., John A.
Paganelli and David L. Spencer, M.D. (the "Nominees") to serve as all
the members of the board of directors of the Company.
WE ARE MAKING THIS SOLICITATION AND NOT THE COMPANY AND ARE ASKING THE
STOCKHOLDERS OF THE COMPANY TO EXPRESS THEIR CONSENT TO THE PROPOSALS ON THE
ACCOMPANYING WHITE CONSENT CARD.
The Company must receive properly completed and duly delivered unrevoked
written consents to this proposal from the holder of record as of the close of
business on __________, the record date for this consent solicitation of a
majority of the outstanding shares then outstanding to approve the proposal to
remove the Company's directors and elect the Nominees. See "Consent Procedure."
Abstentions and non-votes will be counted as a vote against the Proposals.
This consent statement and the related WHITE consent card are first being
sent or given on or about _______ ___, 2003 to all holders of record of Shares
on the record date for this consent solicitation.
VOTING SECURITIES
The common stock, par value $0.01 per share, and the Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company constitute the voting
securities of the Company. The Series A Convertible Preferred Stock is
convertible share-for-share into the common stock of the Company. Only holders
of the Company's common stock and Series A
1
Convertible Preferred Stock are entitled to execute consents. The Company's
14F-1, which was filed with the Securities and Exchange Commission on July 25,
2003, states that as of July 17, 2003 there were 16,184,486 shares of the
Company's common stock issued and outstanding and 910,857 shares of Series A
Preferred Stock were issued and outstanding. Cumulative voting is not permitted.
APPRAISAL RIGHTS
The Company's stockholders are not entitled to appraisal rights in
connection with the Proposals.
ADOPTION OF THE PROPOSALS IS REQUIRED TO REPLACE THE COMPANY'S CURRENT
BOARD OF DIRECTORS. ACCORDINGLY, WE URGE YOU TO PROMPTLY SIGN, DATE AND MAIL THE
ENCLOSED WHITE CONSENT CARD. IF ELECTED, THE NOMINEES WOULD COMPRISE THE ENTIRE
BOARD.
PROPOSAL NO. 1
REMOVAL OF DIRECTORS
We are seeking stockholder consents without a meeting to immediately remove
each member of the Company's existing Board.
We believe that the current members of the Board have not acted in the best
interest of the Company's stockholders. Rather, the Board has increased
Mr. Goode's salary and awarded him bonuses at time when the Company's revenues
and stock price continued to decline. Today, the Company's operations have all
but ceased. Additionally, during 2002, the Company paid consulting fees to
Gary E. Frashier and Easton Associates LLC a company chaired by Robert Easton.
Both Mr. Easton and Mr. Frashier were on the Company's Board when these fees
were paid.
WE URGE YOU TO CONSENT TO THE REMOVAL OF ALL OF THE COMPANY'S DIRECTORS.
PROPOSAL NO. 2
ELECTION OF NOMINEES
This Proposal includes the election to the Company's board of directors of
the five Nominees named below, each of whom has consented to being named as a
Nominee and to serve as a director, if elected. If elected, the Nominees will
serve until the next annual meeting of the Company's stockholders, and until his
successor shall have been duly elected and qualified or until his earlier death,
resignation or removal.
Each director of the Company has an obligation under Delaware law to
discharge his duties as a director on an informed basis, in good faith and in a
manner the director honestly believes to be in the best interests of the
Company.
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Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each Nominee.
Robert A. Baron has been the President of Cash City, Inc. since 1999. Cash
City is a payday advance and check cashing business. From 1997 to 1999 Mr. Baron
was the President of East Coast Operations for CSS/TSC, Inc., a distributor of
blank t-shirts and fleece and accessories and a subsidiary of Tultex, Inc., a
publicly held company. From 1986 to 1997, Mr. Baron was the chairman of T-Shirt
City, Inc., a privately held company. From 1993 to 1997, Mr. Baron was a member
of the Board of Directors of Suburban Bank Corp. When Mr. Baron was on
Suburban's board, its common stock was traded on Nasdaq. Mr. Baron has a B.S. in
Business from Ohio State University.
Robert S. Benou has been a director of Conolog Corporation, a publicly held
company that provides engineering technical personnel placement and manufactures
a line of digital signal processing systems, since 1968 and served as its
President from 1968 until May 2001 when he was elected Conolog's Chairman and
Chief Executive Officer. Mr. Benou has also been a member of the Board of
Directors of Diversified Security Solutions, Inc., since June, 2001. Diversified
Security Solutions, Inc. is a publicly held company that is a
single-source/turn-key provider of technology-based security solutions for
medium and large companies and government agencies. Mr. Benou is also a member
of Diversified Security Solutions' audit committee. Mr. Benou is a graduate of
Victoria College and holds a BS degree from Kingston
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College, England and a BSEE from Newark College of Engineering, in addition to
industrial management courses at Newark College of Engineering.
John J. Huntz., Jr. has been the Managing Director of Fuqua Ventures since
1998. As Managing Director, Mr. Huntz develops and manages a portfolio of
investments. From 1992 until 1997, Mr. Huntz served as Executive Vice President
and Chief Operating officer of Fuqua Enterprises, Inc., a public company whose
common stock is traded on the New York Stock Exchange. Mr. Huntz has also served
as Director of Capital Resources for Arthur Young & Company. Mr. Huntz currently
serves on the Board of Directors of the National Venture Capital Association;
Manhattan Associates, GMP Companies, Proficient Systems and Pythagoras
Participations. He is also on the Securities and Exchange Commission's Executive
Committee on Small Business Capital Formation. Mr. Huntz received a BBA from
Niagara University and a MBA from Sacred Heart University.
John A. Paganelli was President and Chief Executive Officer of Transamerica
Life Insurance Company of New York from 1992 to 1997. Since 1987, Mr. Paganelli
has been a partner in RFG Associates, a financial planning organization. Mr.
Paganelli is the Manager of Pharos Systems Partners, LLC, a company formed to
raise capital to purchase the controlling interest in Pharos Systems
International, a software development company. Mr. Paganelli is Chairman of the
Board of Pharos Systems International. He was Vice President and Executive Vice
President of PEG Capital Management, an investment advisory organization, from
1987 until 2000. From 1980 to the present, Mr. Paganelli has been an officer and
director-shareholder of Mike Barnard Chevrolet, Inc., an automobile dealership.
Mr. Paganelli has been on the Board of Directors of Mid Atlantic Medical
Services, Inc. since 1999. Mid Atlantic is listed on the New York Stock Exchange
and through its wholly-owned subsidiaries is in the business of selling various
forms of health insurance. Mr. Paganelli is also on the Board of Directors of
Mid Atlantic's subsidiary, MAMSI Life and Healthy Insurance Company. Mr.
Paganelli holds an A.B. from Virginia Military Institute.
David Lee Spencer, M.D. has been an orthopedic surgeon since 1977. Dr.
Spencer has been a Clinical Associate in orthopedic surgery at the University of
Illinois since 1999. Dr. Spencer is also an attending surgeon at the University
of Illinois Hospital Medical Center and Lutheran General Hospital. Dr. Spencer
received his B.A. and M.D. degrees from the University of Iowa.
WE URGE YOU TO CONSENT TO THE ELECTION OF EACH OF THE NOMINEES.
PRINCIPAL STOCK HOLDERS
The following information was derived solely from a review of public
filings made with the Securities and Exchange Commission, except for the
information for Bruce Meyers. Unless otherwise indicated, the following table
sets forth certain information as of July 17, 2003 with respect to ownership of
the outstanding common stock of the Company by (i) all persons known to the
Company to own beneficially more than 5% of the outstanding common or preferred
stock of the Company, including their addresses, (ii) each director and
executive officer of the
4
Company and (iii) all directors and executive officers of the Company as a
group. Unless otherwise indicated, each person in the table has sole voting
power and investment power of the shares listed as owned by such person.
* Less than 1%.
(1) Except as otherwise indicated, the address of each beneficial owner is c/o
eXegenics Inc., 2110 Research Row, Dallas, Texas 75235.
(2) Calculated on the basis of 16,184,486 shares of common stock outstanding as
of July 17, 2003, except that shares of common stock underlying options and
warrants exercisable within 60 days of the date hereof are deemed to be
outstanding for purposes of calculating the percentage of beneficial
ownership of securities of the holder of such options or warrants. This
calculation excludes shares of common stock issuable upon the conversion of
Preferred Stock.
(3) Calculated on the basis of 910,857 shares of Preferred Stock outstanding.
(4) Calculated on the basis of an aggregate of 16,184,486 shares of common
stock and 910,857 shares of the Preferred Stock outstanding as of July 17,
2003, except that shares of common stock underlying options and warrants
exercisable within 60 days of the date hereof are deemed to be outstanding
for purposes of calculating the percentage of beneficial ownership of
securities of the holder of such options or warrants.
(5) Mr. Meyers' address is c/o Meyers Associates, L.P., 45 Broadway, New York,
New York 10004. The amount shown for Mr. Meyers is as of August 20, 2003
and includes: 859,645 shares owned by Mr. Meyers; 4,740 shares owned by the
Bruce Meyers Keogh; 33,800 shares of the Company's common stock owned by
the Joseph Rita and Bruce Meyers Foundation for Life Inc. (Mr. Meyers is
the Chairman of the Board of the Joseph Rita and Bruce Meyers Foundation
for Life), 35,433 shares of the Company's common stock issuable upon the
conversion of 35,433 shares of preferred stock owned by Bruce Meyers; and
the following securities owned by Meyers Associates L.P. of which
Mr. Meyers, is an executive officer, the sole shareholder and director of
the general partner of Meyers Associates, L.P.; 156,365 shares of common
stock, and 250,000 shares of common stock issuable upon the exercise of
currently exercisable five-year warrants issued in 2002 to Meyers
Associates L.P. A portion of the shares beneficially owned by Mr. Meyers
were obtained for services provided by Meyers Associates, L.P. a
registered broker dealer. The services provided by Meyers Associates, L.P.
included acting as financial advisor, placement agent and/or underwriter
to the Company. The percent of the class of common stock of the Company
owned by Mr. Meyers is Based on the Company's having 16,469,919 shares of
common stock outstanding, which assumes the conversion of 35,433 shares
of the Company's preferred stock, owned by Bruce Meyers, into 35,433 shares
of the Company's common stock and the conversion of currently exercisable
warrants issued to Meyers Associates LP into 250,000 shares of the
Company's common stock.
(6) Ownership consists of options to purchase 50,000 shares of common stock
currently exercisable.
(7) Ownership consists of options to purchase 125,000 shares of common stock
currently exercisable.
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(8) Ownership consists of 111,700 shares of common stock and options to
purchase 633,330 shares of common stock that are currently exercisable or
exercisable within 60 days of July 17, 2003. Does not include options to
purchase 66,670 shares of common stock not exercisable within 60 days of
July 17, 2003.
(9) Ownership consists of 4,500 shares of common stock and options to purchase
205,000 shares of common stock currently exercisable or exercisable within
60 days of July 17, 2003. Does not include options to purchase 31,500
shares of common stock not exercisable within 60 days of July 17, 2003.
(10) Ownership consists of 7,200 shares of common stock and options to purchase
75,000 shares of common stock currently exercisable or exercisable within
60 days of July 17, 2003. Does not include options to purchase 150,000
shares of common stock not exercisable within 60 days of July 17, 2003.
(11) Ownership consists of 167,900 shares of common stock and options to
purchase 590,000 shares of common stock currently exercisable or
exercisable within 60 days of July 17, 2003.
(12) Ownership consists of 1,000 shares of common stock and options to purchase
shares of 60,000 shares of common stock currently exercisable or
exercisable within 60 days of July 17, 2003.
(13) Ownership consists of 1,000 shares of common stock and all options to
purchase shares of common stock have expired.
(14) Ownership consists of 293,300 shares of common stock and options to
purchase an aggregate of 1,738,330 shares of common stock, which are
currently exercisable or exercisable within 60 days of July 17, 2003. Does
not include options to purchase 248,170 shares of common stock not
exercisable within 60 days of July 17, 2003.
SHARES HELD BY PARTICIPANTS AND THE NOMINEES
The following table sets forth, as of August 20, 2003 certain information
regarding beneficial ownership of the Company's common and preferred stock by
the persons who are soliciting your consent and the Nominees, Robert A. Baron,
Robert Benou, John J. Huntz, Jr., John A. Paganelli and David Lee Spencer, M.D.
Unless otherwise noted, the nature of the beneficial ownership is common stock.
* Less than 1%.
6
(a) Calculated on the basis of 16,184,486 shares of common stock outstanding as
of July 17, 2003, except that shares of common stock underlying options and
warrants exercisable within 60 days of the date hereof are deemed to be
outstanding for purposes of calculating the percentage of beneficial
ownership of securities of the holder of such options or warrants.
(b) Calculated on the basis of 910,857 shares of Preferred Stock outstanding.
(c) For the details of Mr. Meyers holdings, please see the footnotes to the
Principal Stockholders table.
(d) Based on 16,469,919 shares of the Company's common stock being issued and
outstanding, which assumes the conversion of 35,433 shares of the Company's
preferred stock, owned by Bruce Meyers, into 35,433 shares of the Company's
common stock and the conversion of currently exercisable warrants issued to
Meyers Associates L.P. into 250,000 shares of the Company's common stock.
(e) Melvyn and Barbara Weiss are the general partners of The M and B Weiss
Family Limited Partnership of 1996.
(f) This includes 4,400 shares of the Company's common stock owned by The M and
B Weiss Family Limited Partnership of 1996 and 20,000 shares of the
Company's common stock owned by the M and B Weiss Family Foundation, Inc.
(the "Foundation"). Mr. Weiss' wife and children are also officers of the
Foundation and members of its board.
INFORMATION ON BRUCE MEYERS,
THE M AND B WEISS FAMILY LIMITED PARTNERSHIP OF 1996,
MELVYN I. WEISS AND MICHAEL STONE(2)
Bruce Meyers is the sole stockholder, officer and director of the corporate
general partner of Meyers Associates, L.P. Bruce Meyers' principal occupation is
that of a registered representative. Mr. Meyers' business address is Meyers
Associates, L.P., 45 Broadway, New York, New York 10006.
The M and B Weiss Family Limited Partnership of 1996 is a Delaware limited
partnership. The General Partner of the Limited Partnership are Melvyn I. Weiss
and Barbara Weiss. The address for The M and B Weiss Family Limited Partnership
of 1996 is c/o Milberg Weiss Bershad Hynes & Lerach LLP, One Pennsylvania Plaza,
New York, New York 10119.
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(2) Except as disclosed in this Consent Statement, neither Bruce Meyers, The
M and B Weiss Family Limited Partnership of 1996, Melvyn I. Weiss, nor Michael
Stone is, or was within the past year, party to any contract, arrangement or
understandings with any person with respect to any securities of the Company,
including but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loans or guarantees of profit, division of losses
or profits or the giving or withholding of proxies.
Please see Annex I for the purchases and sales of the Company's stock by
Bruce Meyers, The M and B Weiss Family Limited Partnership of 1996, Melvyn I.
Weiss and Michael Stone.
7
Melvyn I. Weiss is an attorney and senior partner of Milberg Weiss Bershad
Hynes & Lerach LLP ("Milberg Weiss"). Milberg Weiss represents The M and B Weiss
Family Limited Partnership of 1996 in connection with its lawsuit against the
Company (as a nominal defendant) and Ronald L. Goode, Joseph M. Davie and
Walter Lovenberg. Milbery Weiss also represents Bruce Meyers, The M and B
Weiss Family Limited Partnership of 1996, Melvyn I. Weiss and Michael Stone in
connection with this consent solicitation. Mr. Weiss' business address is
Milberg Weiss Bershad Hynes & Lerach LLP, One Pennsylvania Plaza, New York,
New York 10119.
Michael Stone's business address is North American Home Health Supply,
Inc., 16129 Cohasset, Van Nuys, CA 91406. Mr. Stone's principal occupation is
president of the North American Home Health Supply, Inc.
CERTAIN TRANSACTIONS BETWEEN
THE COMPANY AND THE PARTICIPANTS
Except as this consent statement discloses, we nor the Nominees, have any
arrangement or understanding with any person (1) with respect to any future
employment by the Company or its affiliates or (2) with respect to future
transactions to which the Company or any of its affiliates will or may be a
party, nor do we or the Nominees have any material interest, direct or indirect,
in any transaction that has occurred since January 1, 2002 or any currently
proposed transaction, or series of similar transactions, which the Company or
any of its affiliates was or is to be a party and in which the amount involved
exceeds $60,000.
Bruce Meyers is an executive officer, the sole stockholder and director of
the general partner of Meyers Associates, L.P. On August 13, 2002, Meyers
Associates, L.P. and the Company entered into an agreement for financial
advisory services. Pursuant to the terms of this agreement, the Company paid
Meyers Associates $128,000. In addition, the Company issued Meyers Associates
warrants to purchase 125,000 shares of the Company's common stock at the
purchase price of $1.00 per share, with an expiration date of August 13, 2007,
and additional warrants to purchase 125,000 shares of the Company's common stock
at a purchase price of $0.55 per share, with an expiration date of August 13,
2007. Meyers Associates also received reimbursement for reasonable out-of-pocket
expenses.
On May 15, 2003, The M and B Weiss Family Limited Partnership of 1996 filed
a lawsuit in the Delaware Court of Chancery, as a class action on behalf of all
other similarly situated stockholders of the Company against the Company (as a
nominal defendant) and its directors Joseph M. Davie, Ronald L. Goode and Walter
M. Lovenberg and as a derivative action on behalf of the Company against the
directors. The complaint alleges, among other things, that the defendants have
mismanaged the Company, have made unwarranted and wasteful loans and payments to
certain directors and third parties, have disseminated a materially false and
misleading proxy statement in connection with the 2003 annual meeting of the
Company stockholders, have wasted the Company's assets by paying high salaries
and/or excessive bonuses to its executive officers and have breached their
fiduciary duties to the Company and its stockholders. The complaint seeks,
among other things, court order mandating that the defendants cooperate with
parties proposing bona fide transactions to maximize stockholder value make
corrective disclosures with respect to the proxy statement for the 2003 annual
meeting, and account to the Company and plaintiffs for damages suffered as a
result of the actions alleged in the complaint.
8
The plaintiffs are, in addition, seeking an award of costs and attorneys'
fees and expenses. On June 9, 2003, the defendants filed a joint motion with the
Delaware Court of Chancery to dismiss the complaint for failure to state a claim
and for failure to make the statutorily required demand on the Company to assert
the subject claims. In prior discussions with the Company and its board of
directors, the plaintiffs have proposed the settlement of the claims in exchange
for the resignations of the Company's board of directors and officers,
appointment of two of the plaintiffs' nominees to the Company's board of
directors, the holding of a special meeting of the Company's shareholders to
elect a new board of directors with a slate of directors suggested by plaintiffs
and the payment by the Company of an aggregate of $500,000 to Dr. Goode and Mr.
Riggs in settlement of all their claims against the Company.
In a letter to the Company, dated July 23, 2003, Michael Stone, pursuant to
Section 220 of the Delaware General Corporation Law, requested that the Company
make available to his designated representative for inspection and copying
various documents and the Company's shareholder list and ledger.
Preliminary conversations have occurred between Melvyn I. Weiss and
John A. Paganelli regarding the possibility of Mr. Paganelli becoming the
Company's chief executive officer if the Nominees are elected. While Mr.
Paganelli expressed a willingness to so serve if he were elected, no terms
or conditions were discussed. No binding agreement has been entered into
between or among the Proponents and the Nominees with respect to this matter.
SOLICITATION OF CONSENTS
The employees and agents of Bruce Meyers, The M and B Weiss Family Limited
Partnership of 1996, Melvyn I. Weiss and Michael Stone may make solicitations of
consents. Consents will be solicited by mail, advertisement, telephone,
facsimile, other electronic means and in person. None of those persons will
receive additional compensation for their solicitation efforts.
Banks, brokers, custodians, nominees and fiduciaries will be requested to
forward solicitation material to beneficial owners of Shares. We will reimburse
banks, brokers, custodians, nominees and fiduciaries for their reasonable
expenses for sending solicitation material to the beneficial owners.
We will bear the costs of this consent solicitation and will seek
reimbursement of these costs from the Company. The question of such
reimbursement will not be submitted to a vote of the Company's stockholders.
Costs related to the solicitation of consents include expenditures for
attorneys, accountants, printing, advertising, postage and related expenses and
fees. These costs are expected to aggregate approximately $100,000.
CONSENT PROCEDURE
Section 228 of the DGCL states that, unless the certificate of
incorporation of a Delaware corporation otherwise provides, any action required
to be taken at any annual or special meeting of stockholders of that
corporation, or any action that may be taken at any annual or special meeting of
those stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, is signed by the
9
holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take that action at a meeting at
which all shares entitled to vote thereon were present and voted, and those
consents are delivered to the corporation by delivery to its registered office
in Delaware, its principal place of business or an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
The Company's charter does not prohibit, and therefore permits, the Company's
stockholders to act by written consent.
Section 213(b) of the DGCL provides that the record date for determining
the stockholders of a Delaware corporation entitled to consent to corporate
action in writing without a meeting, when no prior action by the corporation's
board of directors is required and that board has not fixed that record date,
will be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in Delaware, its principal place of business or an
officer or agent of the corporation having custody of the book in which
proceedings of meetings of the stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Pursuant to the Company's bylaws, any
stockholder of record seeking to have the stockholders of the Company authorize
or take corporate action by written consent is required to request that the
Company's board fix a record date to establish those stockholders that are
entitled to give their consent. The Company's board must reasonably promptly,
but in all events within 10 business days after the date on which the request is
received, adopt a resolution fixing the record date for the solicitation, which
record date must be no more than 10 days after the date of the resolution. If
the board does not fix a record date within 10 business days after the receipt
of the request, the record date for the solicitation will be the date on which
the first signed consent is delivered to the Company. Michael Stone as a
stockholder of record of 3,057 shares of the Company's common stock, has
requested that the board fix a record date for this consent solicitation. If the
board does not timely fix a record date for the solicitation, that record date
will be the date on which the first signed consent is delivered to the Company.
Each Proposal will become effective only if executed consents to that
Proposal are returned by holders of record on the record date for this consent
solicitation of a majority of the total number of Shares then outstanding. The
failure to execute and return a consent will have the same effect as voting
against the Proposals.
If your Shares are registered in your own name, please sign, date and mail
the enclosed WHITE consent card to Bruce Meyers in the post-paid envelope
provided. If your Shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a WHITE consent card with respect to your
Shares and only on receipt of specific instructions from you. Accordingly, you
should contact the person responsible for your account and give instructions for
a WHITE consent card to be signed representing your Shares. We urge you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of those instructions to Bruce Meyers so we will be aware
of all instructions given and can attempt to ensure that those instructions are
followed.
10
If you have any questions or require any assistance in executing your
consent, please call: Bruce Meyers at (212) 742-4334.
If either of the Proposals become effective as a result of this consent
solicitation, prompt notice will be given under section 228(e) of the DGCL to
stockholders who have not executed consents.
We will pay all costs of our solicitation of consents but will seek
reimbursement of these costs from the Company. The question of such
reimbursement will not be submitted to a vote of the Company's shareholders. The
consents are being solicited in accordance with the applicable provisions of the
Delaware General Corporation Law. Holders of record of the Shares as of the
close of business on the record date for this consent solicitation are entitled
to consent to our Proposals. To be effective, the requisite consents must be
delivered to the Company within 60 days of the earliest dated consent delivered
to the Company.
An executed consent card may be revoked at any time by marking, dating,
signing and delivering a written revocation before the time that the action
authorized by the executed consent becomes effective. A revocation may be in any
written form validly signed by the record holder as long as it clearly states
that the consent previously given is no longer effective. The delivery of a
subsequently dated consent card that is properly completed will constitute a
revocation of any earlier consent. The revocation may be delivered either to the
Company or to Bruce Meyers, Meyers Associates, L.P., 45 Broadway, 2nd Floor, New
York, New York, 10006. Although a revocation is effective if delivered to the
Company, we request that either the original or photostatic copies of all
revocations of consents be mailed or delivered to Bruce Meyers at his address
set forth above, so that we will be aware of all revocations and can more
accurately determine if and when consents to the Proposals have been received
from the holders of record on the record date for this consent solicitation of a
majority of the outstanding Shares.
SPECIAL INSTRUCTIONS
If you were a record holder of Shares as of the close of business on the
record date for this consent solicitation, you may elect to consent to, withhold
consent to or abstain with respect to each Proposal by marking the "CONSENTS,"
"DOES NOT CONSENT" or "ABSTAIN" box, as applicable, underneath each Proposal on
the accompanying WHITE consent card and signing, dating and returning it
promptly in the enclosed post-paid envelope. In addition, you may withhold
consent to the election of any individual Nominee by writing that person's name
on the consent card.
IF A STOCKHOLDER EXECUTES AND DELIVERS A WHITE CONSENT CARD, BUT FAILS TO
CHECK A BOX MARKED "CONSENTS," "DOES NOT CONSENT" OR "ABSTAIN" FOR A PROPOSAL,
THAT STOCKHOLDER WILL BE DEEMED TO HAVE CONSENTED TO THAT PROPOSAL, EXCEPT THAT
THE STOCKHOLDER WILL NOT BE DEEMED TO CONSENT TO THE ELECTION OF ANY CANDIDATE
WHOSE NAME IS WRITTEN IN THE SPACE THE INSTRUCTION TO THE ELECTION PROPOSAL
PROVIDES ON THE CARD.
11
YOUR CONSENT IS IMPORTANT. PLEASE MARK, SIGN AND DATE THE ENCLOSED WHITE
CONSENT CARD AND RETURN IT IN THE ENCLOSED POST-PAID ENVELOPE PROMPTLY. FAILURE
TO RETURN YOUR CONSENT WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE
PROPOSALS.
If your Shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can execute a consent with respect to those Shares
and only on receipt of specific instructions from you. Thus, you should contact
the person responsible for your account and give instructions for the WHITE
consent card to be signed representing your Shares. You should confirm in
writing your instructions to the person responsible for your account and provide
a copy of those instructions to Bruce Meyers, Meyers Associates, L.P., 45
Broadway, 2nd Floor, New York, New York 10006, so that we will be aware of all
instructions given and can attempt to ensure that those instructions are
followed.
STOCKHOLDER PROPOSALS
Pursuant to the Definitive Proxy Statement, dated April 15, 2003, filed by
the Company, to be considered for inclusion in the proxy statement relating to
the Company's Annual Meeting of Stockholders to be held in 2004, stockholder
proposals must have been received not later than February 18, 2004 nor earlier
than January 29, 2004. Proposals received after February 18, 2004 will not be
voted on at the 2004 Annual Meeting. If a proposal is received before that date,
the proxies that management solicits for the meeting may still exercise
discretionary voting authority on the proposal under circumstances consistent
with the proxy rules of the SEC. All stockholder proposals should be marked for
the attention of Secretary, eXegenics Inc., 2110 Research Row, Dallas, Texas
75235.
If you have any questions or require any assistance in executing your
consent, please call:
Bruce Meyers
Meyers Associates, L.P.
(212) 742-4334
Dated: ______________, 2003
12
ANNEX I
In the last two years Bruce Meyers, Meyers Associates, L.P., The M and
B Weiss Family Limited Partnership of 1996, Melvyn I. Weiss, The M and B
Weiss Family Foundation, Inc. and Michael Stone have purchased or sold the
following securities of the Company.*
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*Bruce Meyers is an executive officer, the sole shareholder and director of the
general partner of Meyers Associates L.P. Melvyn I. Weiss is one of the general
partners of the M and B Weiss Family Limited Partnership of 1996 and is the
President, Treasurer and Chairman of the board of directors of the M and B
Weiss Family Foundation, Inc.
Annex I - 1
Annex I - 2
Annex I - 3
Annex I - 4
Annex I - 5
Annex I - 6
Annex I - 7
Annex I - 8
Annex I - 9
[FORM OF CONSENT CARD]
PRELIMINARY COPY -- SUBJECT TO COMPLETION
A DEFINITIVE CONSENT CARD WILL BE FILED FOLLOWING SEC REVIEW.
WHITE Bruce Meyers, The M and B Weiss Family Limited
CONSENT Partnership of 1996, Melvyn I. Weiss and Michael Stone
CARD Written Consent Solicitation of
eXegenics, Inc. Stockholders
Unless otherwise indicated below, the undersigned, a stockholder of record of
eXegenics Inc. (the "Company") on ________________ , 2003 (the "Record Date"),
hereby consents pursuant to Section 228(a) of the Delaware General Corporation
Law with respect to all shares of common stock and Series A Convertible
Preferred Stock of the Company (the "Shares") held by the undersigned to the
taking of the following actions without a meeting of the stockholders of the
Company:
1. The removal of all directors of Company.
[_] CONSENTS [_] DOES NOT CONSENT [_] ABSTAIN
INSTRUCTION: TO CONSENT, WITHHOLD CONSENT OR ABSTAIN FROM CONSENTING TO THE
REMOVAL OF ALL DIRECTORS, CHECK THE APPROPRIATE BOX ABOVE.
IF NO BOX IS MARKED ABOVE WITH RESPECT TO THIS
PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT
TO SUCH PROPOSAL.
2. The election of the following persons as directors of the Company:
Robert A. Baron, Robert S. Benou, John J. Huntz, Jr., John A. Paganelli and
David L. Spencer.
[_] CONSENTS [_] DOES NOT CONSENT [_] ABSTAIN
INSTRUCTION: TO CONSENT, WITHHOLD CONSENT OR ABSTAIN FROM
CONSENTING TO THE ELECTION OF ALL THE ABOVE-NAMED
PERSONS, CHECK THE APPROPRIATE BOX ABOVE. IF YOU WISH
TO CONSENT TO THE ELECTION OF CERTAIN OF THE
ABOVE-NAMED PERSONS, BUT NOT ALL OF THEM, CHECK THE
"CONSENTS" BOX ABOVE AND WRITE THE NAME OF EACH SUCH
PERSON YOU DO NOT WISH ELECTED IN THE FOLLOWING
SPACE.
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE)
IF NO BOX IS MARKED ABOVE WITH RESPECT TO THIS
PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO CONSENT
TO SUCH PROPOSAL, EXCEPT THAT THE UNDERSIGNED WILL
NOT BE DEEMED TO CONSENT TO THE ELECTION OF ANY
CANDIDATE WHOSE NAME IS WRITTEN-IN IN THE SPACE
PROVIDED ABOVE.
IN THE ABSENCE OF DISSENT OR ABSTENTION BEING INDICATED ABOVE, THE UNDERSIGNED
HEREBY CONSENTS TO EACH ACTION LISTED ABOVE.
Please sign exactly as name appears on stock
certificates or on label affixed hereto. When Shares
are held by joint tenants, both should sign. In case
of joint owners, EACH joint owner should sign. When
signing as attorney, executor, administrator,
trustee, guardian, corporate officer, etc., give full
title as such.
DATED: ___________________
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Signature
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Signature, if held jointly
Title or Authority __________________________________
THIS SOLICITATION IS BEING MADE BY BRUCE MEYERS, THE M AND B WEISS FAMILY
LIMITED PARTNERSHIP OF 1996, MELVYN I. WEISS AND MICHAEL STONE AND NOT ON BEHALF
OF THE COMPANY.
IN ORDER FOR YOUR CONSENT TO BE VALID, IT MUST BE DATED. PLEASE SIGN, DATE AND
MAIL YOUR CONSENT PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED.