SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant To Section 14(A) Of The Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IMMUNOMEDICS, INC.
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(Name of Registrant as Specified in Its Charter and of Person Filing Proxy
Statement)
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid
________________________________________________________________________________
[ ] 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:
________________________________________________________________________________
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IMMUNOMEDICS, INC.
300 American Road
Morris Plains, New Jersey 07950
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD August [__], 2005
To our Stockholders:
You are cordially invited to attend a Special Meeting of stockholders of
Immunomedics, Inc., a Delaware corporation (the "Company"), which will be held
at our executive offices located at 300 American Road, Morris Plains, New Jersey
07950 on August [__], 2005, at [__], local time, or at any and all adjournments
thereof (the "Special Meeting").
The purpose of the Special Meeting is to request stockholder approval of:
(i) Proposal 1 to amend our Certificate of Incorporation to increase the number
of shares of common stock authorized therein from 70 million shares to 110
million shares (the "Amendment"), an increase of 40,000,000 shares; and (ii)
Proposal 2 to authorize the issuance of shares of common stock upon the
conversion into common stock of our 5% Senior Convertible Notes due 2008 (the
"2008 Notes"), at the election of the holders of the 2008 Notes at any time or
from time-to-time prior to April 29, 2008, and the issuance of shares of common
stock upon the exercise of our common stock purchase warrants (the "Warrants"),
at the election of the holders of the Warrants at any time or from time-to-time
prior to April 29, 2008, that were issued on April 29, 2005, in a private
placement effected with a limited number of qualified institutional buyers and
institutional accredited investors (the "April Financing"). These matters are
more fully discussed in the Proxy Statement accompanying this Notice.
Our Board has unanimously determined that Proposal 1 and Proposal 2 are
advisable and in the best interest of the Company and recommends that you vote
FOR Proposal 1 and FOR Proposal 2. The Board has fixed the close of business on
July [__], 2005, as the record date for determining those stockholders who will
be entitled to notice of, and to vote at, the Special Meeting.
Only stockholders of record on the record date will be entitled to notice
of, and to vote at, the Special Meeting or any adjournment or postponement
thereof. If you wish to attend the Special Meeting in person, please bring with
you the admission ticket attached to the enclosed proxy card or other proof of
share ownership as of the record date described in the attached proxy statement.
Whether or not you plan to attend the Special Meeting, your stock should be
represented. To insure that your vote is counted we urge you to complete, sign
and mail promptly the enclosed proxy card in the accompanying postage prepaid
envelope. Alternatively, you may vote your shares via telephone or the Internet
as described on the enclosed proxy card. Proxies forwarded to you by or for
brokers or fiduciaries should be voted and returned as requested by them. Voting
by proxy card, telephone or Internet will not limit your right to attend the
Special Meeting or to vote in person, but will insure your representation if you
cannot attend. You may revoke your proxy in writing at any time prior to the
time it is voted. You may also revoke your proxy by attending the Special
Meeting and voting in person; your proxy will not automatically be revoked by
your attendance at the Special Meeting.
A notice of the Special Meeting, proxy statement and proxy card are
enclosed with this letter. We encourage you to read the notice of the Special
Meeting and proxy statement so that you may be informed about the business to
come before the Special Meeting. We hope that you will find it convenient to
attend the Special Meeting in person.
To insure that your shares are represented and that your vote is counted
at the Special Meeting and to insure the presence of a quorum, please vote by
telephone, Internet or by completing and mailing the enclosed proxy card in the
return postage prepaid envelope provided. If you do attend the Special Meeting,
you may withdraw your proxy should you wish to vote in person. Your vote is
important and the Company appreciates your cooperation in considering and acting
on the matters presented.
Sincerely yours,
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By: /s/ Cynthia L. Sullivan
------------------------------------
Cynthia L. Sullivan,
President and Chief Executive Officer
July [__], 2005
Morris Plains, New Jersey
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STOCKHOLDERS SHOULD CAREFULLY READ THE ENTIRE PROXY STATEMENT
PRIOR TO RETURNING THEIR PROXIES
PROXY STATEMENT FOR THE SPECIAL MEETING OF STOCKHOLDERS OF
IMMUNOMEDICS, INC.
TO BE HELD August [__], 2005
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Immunomedics, Inc., a Delaware
corporation (the "Company"), of proxies to be voted at a Special Meeting of
stockholders to be held at the Company's executive offices located at 300
American Road, Morris Plains, New Jersey 07950 on August [__], 2005, at 10:00
a.m. local time or at any and all adjournments or postponements thereof (the
"Special Meeting"), for the purpose set forth in the accompanying Notice of
Special Meeting of Stockholders (the "Notice"). This Proxy Statement and the
proxy card will be first mailed to stockholders on or about August [__], 2005.
VOTING RIGHTS AND SOLICITATION
As of July [__], 2005 (the "Record Date"), there were outstanding [__]
shares of our common stock held by approximately [__] holders of record and [__]
beneficial owners. Only holders of shares of common stock on the Record Date
will be entitled to notice of, and to vote at, the Special Meeting. Holders of
our common stock are entitled to one vote on each matter presented at the
Special Meeting for each share held of record. The presence in person or by
proxy of holders of a majority of the shares outstanding and entitled to vote as
of the Record Date shall be required for a quorum to transact business at the
Special Meeting. If a quorum should not be present, the Special Meeting may be
adjourned until a quorum is obtained.
Assuming a quorum is present, (i) Proposal 1 requires for approval the
affirmative vote, in person or by proxy, of holders of record of a majority of
the shares outstanding and entitled to vote as of the Record Date and (ii)
Proposal 2 requires the affirmative vote, in person or by proxy, of holders of
record of a majority of the shares present at the Special Meeting. We are not
requesting an amendment to the number of authorized preferred shares, which will
remain at 10 million shares.
The expense of preparing, printing and mailing this Proxy Statement, the
exhibits hereto and the proxies solicited hereby will be borne by the Company.
In addition to the use of the mails, proxies may be solicited by officers and
directors and regular employees of the Company, without additional remuneration,
by personal interviews, telephone, telegraph or facsimile transmission. The
Company will also request brokerage firms, nominees, custodians and fiduciaries
to forward proxy materials to the beneficial owners of shares of common stock
held of record and will provide reimbursements for the cost of forwarding the
material in accordance with customary charges.
Proposal 1 and Proposal 2 are not considered routine matters. Therefore,
brokerage firms may not vote shares for which no proxy is received. This is
called a "broker non-vote". Broker non-votes will be counted for quorum
purposes. Broker non-votes will have the effect of a vote against Proposal 1,
but not Proposal 2, because Proposal 1 requires the affirmative vote of a
majority of the outstanding shares, rather than a majority of the quorum.
The Company has entered into an agreement with [ ] to assist in
the solicitation of proxies and to provide related advice and informational
support. The total expense of this engagement, including customary
disbursements, is not expected to exceed $[ ] in the aggregate.
Proxies given by stockholders of record for use at the Special Meeting may
be revoked at any time prior to the exercise of the powers conferred. In
addition to revocation in any other manner permitted by law, stockholders of
record giving a proxy may revoke the proxy by writing at any time up to and
including the last business day preceding the day of the Special Meeting, or any
adjournment thereof, at which the proxy is to be used, or with the secretary of
the Special Meeting on the day of the Special Meeting or adjournment thereof.
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ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
SPECIFIED ON SUCH PROXIES. THERE WILL NOT BE ANY MATTERS PRESENTED AT THE
SPECIAL MEETING OTHER THAN THOSE RELATING TO THE PROPOSALS SET FORTH IN THIS
PROXY STATEMENT AND ACCOMPANYING NOTICE.
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QUESTIONS AND ANSWERS ABOUT
THE PROXY MATERIALS AND THE SPECIAL MEETING
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WHY ARE WE CALLING THIS
SPECIAL MEETING? Proposal 1 - To amend our Certificate of
Incorporation to increase the number of authorized
shares of common stock from 70 million to 110
million shares, an increase of 40 million shares;
and
Proposal 2 - To authorize issuance of shares of
our common stock upon the conversion into common
stock of our 2008 Notes, at the election of the
holders thereof (the "Noteholders") at any time or
from time-to-time prior to April 29, 2008, and the
exercise into common stock of our Warrants, at the
election of the holders thereof (the
"Warrantholders") at any time or from time-to-time
prior to April 29, 2008. We refer to conversion of
Notes and exercise of Warrants throughout this
proxy statement simply as the "conversion" of
Notes and Warrants.
WHO CAN VOTE? For each share of our common stock that you owned
as of the close of business on July [_], 2005, the
Record Date for this Special Meeting, you are
entitled to one vote on each matter to be voted
upon at the Special Meeting. On the Record Date,
there were [___] shares of Immunomedics common
stock issued and outstanding.
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HOW DO I VOTE? If your shares are registered directly in your
name, you may vote:
o Over the Internet or by Telephone. If you
are a registered stockholder (that is, if
you hold your stock directly and not in
street name), you may vote by telephone or
over the Internet by following the
instructions included on the proxy card.
Stockholders with shares registered directly
with us may vote (i) by telephone by dialing
[(8XX) XXX-XXXX] (toll free from the United
States and Canada) or (ii) by Internet by
going to the website of our tabulator,
www.voteproxy.com. If you vote by telephone
or on the Internet, you do not have to mail
in your proxy card. If you wish to attend
the meeting in person, however, you will
need to bring the admission ticket attached
to the proxy card with you. Internet and
telephone voting are available 24 hours a
day. Votes submitted through the Internet or
by telephone must be received by 1:00 a.m.
(Eastern Time) on the day of the Special
Meeting. You must specify how you want your
shares voted or your Internet or telephone
vote cannot be completed and you will
receive an error message. Your shares will
be voted according to your instructions.
o By Mail. Complete and sign the enclosed
proxy and mail it in the enclosed postage
prepaid envelope to American Stock Transfer
& Trust Company. Your proxy will be voted
according to your instructions. If you do
not specify how you want your shares voted,
they will be voted as recommended by our
Board.
o In Person at the Meeting. If you attend the
Special Meeting, you may deliver your
completed proxy card in person or you may
vote by completing a ballot, which will be
available at the Special Meeting.
If your shares are held in "street name" (held for
your account by a broker or other nominee) you may
vote:
o Over the Internet. You will receive
instructions from your broker or other
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nominee if you are permitted to vote over
the Internet.
o By Mail. You will receive instructions from
your broker or other nominee explaining how
to cast your vote.
o In Person at the Meeting. Contact the broker
or other nominee who holds your shares to
obtain a broker's proxy card and bring it
with you to the Special Meeting. You will
not be able to enter the Special Meeting or
vote unless you have a proxy from your
broker issued in your name giving you the
right to vote the shares.
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IF I VOTE BY PROXY, HOW
CAN I CHANGE MY VOTE? You may revoke your proxy and change your vote at
any time before the Special Meeting. To do this,
you must do one of the following:
o Vote over the Internet or by telephone as
instructed above. Only your latest vote is
counted.
o Sign and date a new proxy and submit it as
instructed above. Only your latest proxy
vote is counted.
o Attend the Special Meeting and vote in
person. Attending the Special Meeting will
not revoke your proxy unless you
specifically request it.
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WILL MY SHARES BE VOTED
IF I DO NOT RETURN MY
PROXY? If your shares are registered directly in your
name, your shares will not be voted if you do not
vote yourself over the Internet, by telephone or
return your proxy, or attend and vote at the
Special Meeting. If you have misplaced your proxy,
you may obtain another by contacting American
Stock Transfer & Trust Company at 1-877-777-0800,
or writing them at 59 Maiden Lane, New York, New
York 10038.
If your shares are held in "street name," and you
do not give a proxy to your brokerage firm to vote
your shares, your brokerage firm will leave your
shares unvoted because neither Proposal 1 nor
Proposal 2 are considered routine matters for
which brokers are permitted to vote on your
behalf. Therefore, we encourage you to provide
voting instructions to your brokerage firm by
submitting your proxy. This ensures your shares
will be voted at the Special Meeting according to
your instructions. You should receive directions
from your brokerage firm about how to submit your
proxy to them at the time you receive this proxy
statement.
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HOW WILL ABSTENTIONS BE
TREATED Abstentions will be treated as shares present for
quorum purposes and entitled to vote, so they will
have the same practical effect as votes against
Proposal 1 but not Proposal 2, because Proposal 1
requires the affirmative vote of a majority of the
outstanding shares, rather than a majority of the
quorum.
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HOW WILL BROKER
NON-VOTES BE TREATED Broker non-votes will be counted for quorum
purposes. Broker non-votes will have the effect of
a vote against Proposal 1, but not Proposal 2,
because Proposal 1 requires the affirmative vote
of a majority of the outstanding shares, rather
than a majority of the quorum.
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WHAT DOES IT MEAN IF I
RECEIVE MORE THAN ONE
PROXY CARD? It means that you have more than one account in
which our stock is held, which may be at the
transfer agent, with stockbrokers or otherwise.
Please vote over the Internet, by telephone or
complete and return all proxies for each account
to ensure that all of your shares are voted.
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HOW MANY SHARES
MUST BE PRESENT TO
HOLD THE A majority of our outstanding shares of common
stock as of the Record Date must be present at the
Special Meeting to hold the Special Meeting and
conduct business. This is called a quorum. Shares
will be counted as present at the Special Meeting
if the
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SPECIAL MEETING? stockholder votes over the Internet, by telephone,
completes and submits a proxy or is present in
person at the Special Meeting. Shares that are
present that vote to abstain or do not vote are
counted as present for establishing a quorum. If a
quorum is not present, we expect that the Special
Meeting will be adjourned until we obtain a
quorum.
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WHAT VOTE IS REQUIRED TO
APPROVE THE PROPOSALS
AND HOW ARE VOTES
COUNTED? PROPOSAL 1. To amend the Company's certificate
incorporation to increase the number of authorized
shares of common stock from 70 million shares to
110 million shares, a quorum must be present or
represented by proxy at the Special Meeting and
stockholders holding a majority of our outstanding
common stock must vote FOR this proposal. If your
broker holds your shares in "street name," and if
you do not vote your shares, your brokerage firm
does NOT have the authority to vote your shares
and will therefore be treated as a no vote.
PROPOSAL 2. To authorize issuance of shares of our
common stock upon the conversion into common stock
of our 2008 Notes, at the election of the
Noteholders at any time or from time-to-time prior
to April 29, 2008, and the exercise into common
stock of our Warrants, at the election of the
Warrantholders at any time or from time-to-time
prior to April 29, 2008, a quorum must be present
or represented by proxy at the Special Meeting,
and stockholders holding a majority of the shares
voting at the Special Meeting, in person or by
proxy, must vote FOR this proposal. If your broker
holds your shares in "street name," and if you do
not vote your shares, your shares will be counted
for purposes of determining whether a quorum is
present, but will not be counted for the outcome
of the vote.
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HOW DOES THE BOARD OF
DIRECTORS RECOMMEND THAT
I VOTE? Our Board Recommends that you vote:
FOR PROPOSAL 1. The Board unanimously recommends a
vote FOR Proposal 1 to increase our authorized
shares of common stock from 70 million shares to
110 million shares, an increase to 40 million
shares.
FOR PROPOSAL 2. The Board unanimously recommends a
vote FOR Proposal 2 to authorize issuance of
shares of our common stock upon the conversion
into common stock of our 2008 Notes, at the
election of the Noteholders at any time or from
time-to-time prior to April 29, 2008, and the
exercise into common stock of our Warrants, at the
election of the Warrantholders at any time or from
time-to-time prior to April 29, 2008.
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WHY IS THE COMPANY
SEEKING STOCKHOLDER
APPROVAL? PROPOSAL 1. It is critical to our business and
strategy to have common stock available to fund
our operations and expansion plans, including for
use in licensing agreements, joint ventures, the
development of strategic relationships and
acquisitions (none of which is currently the
subject of any agreement, arrangement or
understanding) and for use in compensating and
motivating key employees. Under Delaware corporate
law, we need stockholder approval to amend our
Certificate of Incorporation to increase the
number of authorized shares of common stock.
Currently, the Company has no shares of common
stock that are not issued or reserved for
issuance. For that reason, we are seeking
stockholder approval to increase our authorized
shares of common stock from 70 million shares to
110 million shares, an increase of 40 million
shares. In addition, in connection with the
issuance of the 2008 Notes and Warrants, we agreed
in the indenture pursuant to which we issued the
2008 Notes, and the related purchase agreements
for the 2008 Notes and Warrants we entered into
with the investors, to seek stockholder approval
of an increase in our authorized common stock by
not less than 5.5 million shares to permit the
conversion of the 2008 Notes and Warrants. (See
also "Why we are seeking to Increase our
Authorized Capital by 40 million shares when we
are only required to
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seek a 5.5 million share increase" below.)
PROPOSAL 2. We are seeking stockholder approval of
Proposal 2 as part of a plan we submitted to the
Nasdaq Staff in response to their letter notifying
us that they will delist our shares. We believe
that if stockholders adopt Proposal 1 and Proposal
2 and holders of the 2008 Notes and Warrants agree
to certain amendments to the indenture and warrant
agreement, we may remain listed on the Nasdaq.
In particular, the Nasdaq Staff stated that they
believe that the offering of 2008 Notes and
Warrants violated their rule (the "Nasdaq 20%
Rule") that we obtain stockholder approval for
transactions other than a public offering prior to
the issuance of listed securities potentially in
an amount in excess of 20% of our issued and
outstanding stock if such issuance is, actually or
potentially, at a price that is less than the
greater of book or market value of the stock on
the date of issuance. The initial conversion price
of the 2008 Notes and Warrants was in excess of
the greater of book and market value of the common
stock on the date of issuance, April 29, 2005.
However, the Nasdaq Staff stated that one of the
anti-dilution provisions of the indenture and
warrant agreement violated the Nasdaq 20% Rule
because the conversion price of the 2008 Notes and
Warrants could potentially be reduced to below the
closing date market price of our stock. In
addition, the Nasdaq Staff stated that our
agreement to seek stockholder approval as we
agreed to do in the purchase agreements and
indenture, was flawed because the indenture gives
the Noteholders the right to specified increases
in interest rates and a "put" right to us if the
increase in our common stock (reflected in
Proposal 1) is not approved by January 15, 2007,
in violation of the Nasdaq Staff interpretation of
the Nasdaq 20% Rule.
We may not succeed in staying listed on Nasdaq.
Having received the Nasdaq letter notifying us of
the Nasdaq Staff's determination, to delist our
securities, we are attempting to effect a plan
that would address Nasdaq's concerns and are also
appealing that determination. If Nasdaq were to
entertain our efforts to effect such a plan, we
believe we would need to receive stockholder
approval of both Proposal 1 and Proposal 2 and
succeed in agreeing with the holders of the 2008
Notes and Warrants to amendments to the indenture
and warrant agreement that would satisfy Nasdaq's
concerns. As a result, we believe approval of
Proposal 2 alone is not sufficient to continue the
Company's listing with the Nasdaq. In addition, we
may not be successful in appealing the Nasdaq
delisting determination. As a result of the above,
we cannot assure you that we will be successful in
staying listed with Nasdaq.
Furthermore, we have applied for, and are
continuing to pursue, the transfer of our common
stock listing to the American Stock Exchange
("AMEX"). No assurances can be given with respect
to the timing or success of our AMEX listing
application.
If our stock is not accepted for listing on either
the Nasdaq National Market or the AMEX, we cannot
assure you that it would then be available for
trading on the OTC Bulletin Board. In that event,
stockholders may have difficult time getting a
quote for the sale or purchase of our stock, the
sale or purchase our stock would likely be made
more difficult, and the trading volume and
liquidity of our stock would likely decline. The
absence of such a listing may adversely affect
either or both of the acceptance of our common
stock for as currency or the value accorded it by
the other party and would result in adverse
publicity.
Listing on a recognized national trading market,
like the AMEX or Nasdaq, can also affect the
Company's ability to benefit from the use of its
common stock as consideration in connection with
any future financing or strategic relationships it
may undertake. The absence of such a listing may
adversely affect either or both of the acceptance
of our common stock for such purpose or the value
accorded it by the other
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party and would result in adverse publicity.
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WHAT WILL HAPPEN IF THE
PROPOSALS ARE NOT
APPROVED? WHAT ARE THE
"ALTERNATIVES"? PROPOSAL 1. If Proposal 1 is not approved, we will
not have available unissued shares of common stock
for future issuance in connection with our
business and in furtherance of opportunities that
may become available to us. Having a sufficient
number of authorized and unissued shares is, in
the opinion of our Board of Directors, important
to our business and strategy.
We currently have no authorized common stock that
is not issued and outstanding or reserved for
issuance. We require available common stock to
fund our operations and expansion plans, including
for use in licensing agreements, joint ventures,
the development of strategic relationships and
acquisitions (none of which is currently the
subject of any agreement, arrangement or
understanding) and for use in compensating and
motivating key employees.
If Proposal 1 is not approved, we will be subject
to interest rate increases and a "put" right
regarding the 2008 Notes. Under the terms of the
indenture, we are required by August 29, 2005, to
increase our authorized common stock by not less
than 5.5 million shares (which 5.5 million shares
would, together with the approximately 8.9 million
shares we reserved on April 29, 2005, permit us to
convert all 2008 Notes at the initial conversion
price) or be subject to successive 1% monthly
increases in the initial interest rate (5% per
annum) capped at 15% per annum, and eventually be
subject to a "put" right, whereby the Noteholders
may require the Company to repurchase the 2008
Notes. Pursuant to the terms of the indenture, we
escrowed $14.3 million of the proceeds of the sale
of the 2008 Notes and Warrants in the event we are
required to repurchase the 2008 Notes pursuant to
the "put" right described in the prior sentence.
In addition to the 5.5 million shares required for
full conversion of the 2008 Notes sold in the
April Financing, we require at the initial
conversion rate and exercise price, approximately
up to 6.3 million shares for exercise of the
Warrants and conversion of the "option" 2008 Notes
and "option" Warrants (together with the "option
2008 Notes", the Option); the investors were
granted in the April Financing the right to
purchase on or before August 27, 2005, up to an
additional 20% of the amount of 2008 Notes and
Warrants purchased in the April Financing.
PROPOSAL 2. If Proposal 2 is not approved, we will
not under any circumstances be able to address the
Nasdaq's position regarding delisting. Even if
Proposal 2 is approved, there is no assurance we
will be successful in continuing our Nasdaq
listing. If we lose our Nasdaq listing, our shares
would nor then trade on the Nasdaq National Market
not would our shares be eligible for trading on
the Nasdaq SmallCap Market. We have applied for
the transfer of the listing of our common stock to
the AMEX, but we cannot assure you that that
application will be approved.
In addition, if Proposal 1 is approved but
Proposal 2 is not approved, we would be subject to
the terms of the indenture described in the
preceding paragraph. That is, a vote to increase
the authorized common stock by 40 million shares
(i.e. Proposal 1), does not automatically allow us
to issue the additional 5.5 million shares
required in connection with the April Financing
(which is the subject of Proposal 2). Only
stockholder approval of both Proposals 1 and 2
would allow us to issue the additional 5.5 million
shares of common stock required in connection with
the April Financing.
If stockholders approve Proposal 1 but decline to
approve Proposal 2, we may be required to decline
to authorize the issuance of common stock upon
conversions of 2008 Notes or exercises of
Warrants. In any such case, we would be subject to
the interest rate increases and "put" rights of
the holders of the Notes under the indenture and
may be deemed to be in default under the warrant
agreement.
GENERAL. As a result, if neither Proposal is
approved, we will likely face several adverse
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consequences. These adverse consequences include
the following:
o not having common stock available for our
business and strategy as described
above;
o having higher cash expenses due to the
increase in the interest rate on the 2008
Notes, which interest expense we will also
not be able to satisfy by the payment of
common stock as the indenture would
otherwise permit;
o having to potentially repurchase the 2008
Notes in satisfaction of the holders' "put"
rights in 2007, for which only a portion of
the necessary funds is in escrow;
o as a result of the above, having less cash
(possibly an insufficient amount)to fund the
ongoing clinical trials of our lupus drug,
epratuzumab, and to fund any of our other
operations at that time;
o possibly being in default under the warrant
agreement;
o the delisting of our stock from the Nasdaq
National Market (which may also occur if we
are not successful in seeking an amendment
to the indenture and warrant agreement even
if stockholders approve both Proposals) and
which may occur even if we are successful in
these efforts; and
o a decreased likelihood that our stock will
be accepted for listing on the AMEX.
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WHY ARE WE SEEKING TO
INCREASE OUR AUTHORIZED
CAPITAL BY 40 MILLION
SHARES WHEN WE ARE ONLY
REQUIRED UNDER THE TERMS
OF THE APRIL FINANCING
TO SEEK A 5.5 MILLION
SHARE INCREASE? We are seeking to increase our authorized shares
of common stock by 40 million shares even though
we are only required under the terms of the April
Financing to seek a 5.5 million share increase for
the following reasons:
o having available unissued shares is critical
to our business, strategy and continued
operations as described above;
o having the right, at our sole discretion, to
satisfy interest expense on the 2008 Notes
by paying it in common stock, as the
indenture permits;
o having available common stock for continued
use in motivating our key employees; and
o being able to satisfy our obligations under
the April Financing with respect to the
issuance of common stock should the
investors exercise their option to increase
their investment in the Company by up to 20%
of the amount invested (the "Option").
The 5.5 millions shares that will be set aside for
such purposes in accordance with our obligations
under the April Financing, if approved by the
stockholders, will be sufficient, when added to
8.9 million shares of common stock we currently
have remaining of our authorize common stock, for
all purposes related to the terms of the April
Financing
As a result of the above, our Board of Directors
believes it is critical to our business, strategy
and continued operations that our stockholders
approve both of the Proposals. We believe that
listing our stock on either the Nasdaq or the AMEX
markets is an
12
important part of our business strategy and helps
our stockholders by providing a readily available
trading market with readily available current
quotations. We cannot assure you, however, that
even if both Proposals are approved by our
stockholders we will remain listed on the Nasdaq
or achieve listing on the AMEX. Even if both
Proposals are approved by our stockholders, the
Nasdaq may not change their position regarding the
delisting of our stock. If our stock is not
accepted for listing on either the Nasdaq National
Market or the AMEX, we cannot assure you that it
would then be available for trading on the OTC
Bulletin Board. In that event, stockholders may
have difficult tiem getting a quote for the sale
or purchase of our stock, the sale or purchase our
stock would likely be made more difficult, and the
trading volume and liquidity of our stock would
likely decline. The absence of such a listing may
adversely affect either or both of the acceptance
of our common stock for as currency or the value
accorded it by the other party and would result in
adverse publicity.
Listing on a recognized national trading market,
like the AMEX or Nasdaq, can also affect the
Company's ability to benefit from the use of its
common stock as consideration in connection with
any future financing or strategic relationships it
may undertake. The absence of such a listing may
adversely affect either or both of the acceptance
of our common stock for such purpose or the value
accorded it by the other party and would result in
adverse publicity.
--------------------------------------------------------------------------------
ARE THERE OTHER MATTERS
TO BE VOTED ON AT THE
SPECIAL MEETING? Under our bylaws, no other business besides that
related to the purpose specified in the Notice may
be transacted at this Special Meeting.
--------------------------------------------------------------------------------
WHERE DO I FIND THE
VOTING RESULTS OF THE
SPECIAL MEETING? We will announce preliminary voting results at the
Special Meeting based on the proxies tabulated by
our registrar. We will publish final results in a
Form 8-K and in our Annual Report on Form 10-K for
the year ending June 30, 2005, which we are
required to file with the Securities and Exchange
Commission (the "SEC") on or before September 13,
2005. To request a printed copy of the Form 10-K,
please write to Investor Relations, Immunomedics,
Inc., 300 American Road, Morris Plains, New Jersey
07950, or e-mail Investor Relations at
investor@immunomedics.com. You will also be able
to find a copy on the Internet through our website
at www.Immunomedics.com or through the SEC's
electronic data system called EDGAR at
www.sec.gov.
--------------------------------------------------------------------------------
WHO WILL PAY THE COSTS
OF SOLICITING THESE
PROXIES? We will pay the costs of soliciting proxies. In
addition to the mailing of these proxy materials,
our directors, officers and employees may solicit
proxies by telephone, e-mail and in person,
without additional compensation. Upon request, we
will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses for distributing
proxy materials to stockholders.
The Company has entered into an agreement with
[ ] to assist in the solicitation
of proxies and provide related advice and
informational support. The total expense of this
engagement, including customary disbursements, is
not expected to exceed $[ ] in the
aggregate.
--------------------------------------------------------------------------------
HOW CAN I RECEIVE FUTURE
PROXY STATEMENTS AND
ANNUAL REPORTS OVER THE This Proxy Statement is available on our Internet
site at www.Immunomedics.com. Most stockholders
can elect to view future proxy statements and
annual reports over the Internet instead of
receiving printed copies in the mail. If you hold
your shares directly and not through a broker, a
"stockholder of record", you can choose this
option when you vote over the Internet and save us
the cost of producing and mailing
13
INTERNET INSTEAD
OF IN THE MAIL? these documents. If you are a stockholder of
record and choose to view future proxy statements
and annual reports over the Internet, you will
receive a proxy in the mail next year with
instructions containing the Internet address to
access those documents. If your shares are held
through a broker or other nominee, you should
check the information provided by them for
instructions on how to elect to view future proxy
statements and annual reports over the Internet.
14
INFORMATION CONCERNING THE PROPOSALS
Our Board has unanimously adopted resolutions recommending:
(i) Proposal 1, which is to request stockholder approval of an amendment
to our Certificate of Incorporation to increase the Company's number of
authorized shares of common stock from 70 million shares to 110 million shares,
an increase of 40 million shares (with no change to our preferred stock); and
(ii) Proposal 2, which is to authorize the issuance of shares of common
stock upon the conversion into common stock of our 2008 Notes and upon the
exercise of our Warrants in accordance with the April Financing. As of May 6,
2005, the Company had 54,073,059 shares of common stock and no preferred stock
outstanding.
Our Board believes it is important to the Company that we increase our
authorized shares of common stock by 40 million shares and that the issuance of
shares of our common stock upon the conversion of the 2008 Notes and Warrants be
authorized.
The Board believes that the Proposals are important to the Company's
business, strategy and ongoing operations for the following reasons:
o it is critical to have common stock available to fund our operations
and expansion plans, including for use in licensing agreements,
joint ventures, the development of strategic relationships and
acquisitions;
o we reserve unissued common stock in connection with the grant of
options under our stock option plans, which is an important way we
compensate and motivate our key employees;
o if neither Proposal is approved, we will likely face several adverse
consequences, including the following:
o having higher cash expenses due to the increase in the
interest rate on the Notes, which interest expense we will
also not be able to satisfy by the payment of common stock as
the indenture would otherwise permit;
o having to potentially repurchase the Notes in satisfaction of
the holders' put rights in 2007, for which only a portion of
the necessary funds is in escrow;
o as a result of the above, having less cash (possibly an
insufficient amount) to fund the ongoing clinical trials of
our lupus drug, epratuzumab, and to fund any of our other
operations at that time;
o possibly being in default under the Warrant Agreement;
o the delisting of our stock from the Nasdaq (which may also
occur if we are not successful in seeking an amendment to the
indenture and warrant agreement even if stockholders approve
both Proposals); and
o decreasing the likelihood that our stock will be accepted for
listing on the AMEX.
We believe that listing our stock on either the Nasdaq or the AMEX markets
is an important part of our business and strategy and helps our stockholders by
providing a readily available trading market with current quotations. We cannot
assure you, however, that even if both Proposals are approved by our
stockholders we will remain listed on the Nasdaq or achieve listing on the AMEX.
Even if both Proposals are approved by our stockholders, the Nasdaq may not
change their position regarding the delisting of our stock. If our stock is not
accepted for listing on either the Nasdaq National Market or the AMEX, we cannot
assure you that it would then be available for trading on the OTC Bulletin
Board. In that event, stockholders may have difficult time getting a quote for
the sale or purchase of our stock, the sale or purchase our stock would likely
be made more difficult, and the trading volume and liquidity of our stock would
likely decline. The absence of such a listing may adversely affect either or
both of the
15
acceptance of our common stock for as currency or the value accorded
it by the other party and would result in adverse publicity.
Listing on a recognized national trading market like the Amex or Nasdaq
will also affect the Company's ability to benefit from the use of its common
stock as consideration in connection with any future financing or strategic
relationship it may undertake. The absence of such a listing may adversely
affect either or both of the acceptance of our common stock for such purpose or
the value accorded it by the other party and would result in adverse publicity.
If Proposal 1 is adopted, the share increase will become effective upon
filing an amended Certificate of Incorporation with the Secretary of State of
the State of Delaware. If Proposal 2 is adopted, it will become effective
immediately. If Proposal 1 is adopted but Proposal 2 is not adopted by the
stockholders, the number of the Company's authorized shares will increase, but
none of them will be issuable in connection with the conversion of the 2008
Notes or Warrants, including any Option to purchase 2008 Notes or Warrants. In
that event, , we will be subject to the "alternatives," under the indenture,
which are an increase in the interest rate on the 2008 Notes from 5% to a
maximum of 15% annually, in 1% monthly increments, beginning on August 27, 2005,
and eventually, on January 15, 2007, a right of the Noteholders to "put" their
Notes to us at any time and from time-to-time in the future. It could also
result in us being deemed to be in default under the 2008 Notes, in which event
the holders thereof could demand immediate repayment of the funds they invested
in the April Financing. As a result of the above, the Board believes it is
important and in the Company's best interest for stockholders to approve both
Proposal 1 and Proposal 2.
Background Information
Clinical Trials
On January 5, 2005, the Company received notice from the U.S. Food and
Drug Administration approving Fast Track Product designation of epratuzumab for
the treatment of patients with moderate and severe systemic lupus erythematosus.
Accordingly, the Company's requirement for substantial additional capital for
research and development expenses and initially to fund commencement of Phase
III clinical trials of epratuzumab for the treatment of patients with moderate
and severe lupus increased substantially. We decided that the April Financing,
both as to its amount and timing, was vital to the execution of our development
plans for epratuzumab, and to allowing us flexibility and leverage to advance
trials, as well as to affording us a base to negotiate with potential strategic
development partners. Our choice to pursue the foregoing and to complete the
April Financing at that juncture in our research and development program has
allowed us to continue evaluating potential strategic partnerships without
delaying the Phase III clinical trials.
The April Financing
On April 29, 2005, we issued $37,675,000 million principal amount of 2008
Notes and Warrants in a private placement exempt from the registration
requirements of the Securities Act of 1933. For each $1,000 principal face
amount of 2008 Notes purchased, the purchaser received a Warrant to purchase
approximately 76.39 shares of common stock. The Warrants are detachable from the
2008 Notes and may be traded separately subject to certain restrictions on
transfer. The Warrants expire in any event on April 27, 2008 and are exercisable
at $2.98 per share of common stock, subject to specified adjustment. Each
purchaser was also granted a 120-day option to purchase up to an amount equal to
20% of the 2008 Notes and Warrants purchased by such purchasers at the initial
closing ("Option") at the offering price plus accrued interest. At closing, we
retired our outstanding $10 million principal amount of 3.25% Convertible Notes
due January 2006 (the "Prior Notes") by paying to the holder thereof
approximately $5.09 million from the proceeds of the offering and issuing to the
holder a 2008 Note in the original principal amount of $5.0 million (the cash
represented $5 million face value of the Prior Notes plus interest accrued on
the 2006 Notes through April 29, 2005).
We have reserved approximately 8.9 million shares of our authorized and
unissued common stock for conversion of the 2008 Notes, which represents all of
our currently available authorized and unissued common stock. To convert all of
the 2008 Notes outstanding at the initial conversion price, we require
approximately 14.39 million shares of common stock, or approximately 5.5 million
shares more than we currently have available under Delaware law. The Notes are
exercisable at the option of the holders on a first-come, first served basis up
to the 8.9 million shares reserved for issuance as described above, subject to
the share increase that is the topic of
16
Proposal 1 and which remains subject to both Proposals. The Warrants are
exercisable commencing on the effective date of filing with the Secretary of
State of the State of Delaware effecting a share increase of not less than 5.5
million shares. At the closing of the April Financing on April 29, 2005, we
deposited with an escrow agent in an interest bearing account $14.3 million of
the net proceeds of the April Financing, which amount represents the approximate
portion of the original principal amount of the 2008 Notes that we would be
unable to convert in the event we do not obtain an affirmative stockholder vote
on Proposal 1.
If both Proposals are not approved by our stockholders, and we are not
permitted to issue shares of common stock upon conversion of the 2008 Notes, we
will be subject to the "alterations" under the indenture which are an increase
in the interest rate on the 2008 Notes from 5% to a maximum of 15% annually, in
1% monthly increments beginning on August 27, 2005, and eventually, on
January 15, 2007, a right of the Noteholders to "put" their Notes to us at any
time and from time-to-time in the future.
Interest
Interest on the 2008 Notes is payable semi-annually in arrears and, if
Proposal 1 is approved, may be paid at our discretion, in cash or shares of our
common stock that would be valued at 95% of the daily volume weighted average
price of our common stock over the three trading day period ending on the
trading day prior to the interest payment date. The initial conversion price of
the 2008 Notes is $2.62. The 2008 Notes are exercisable at the option of the
holders on a first-come, first served basis up to the 8.9 million shares
reserved for issuance as described above, subject to the share increase that is
the topic of Proposal 1 and which remains subject to both Proposals. Therefore,
if Proposal 1 is approved, but Proposal 2 is not, the Company may have to refuse
to honor conversions of the 2008 Notes or Warrants and may therefore be in
default under the indenture and the warrant agreement. If both Proposal 1 and
Proposal 2 are approved, we may also cause the holders to convert the 2008 Notes
into shares of common stock prior to the maturity date, if for at least 20
trading days in any consecutive 30 trading day period, the current stock price
exceeds 150% of the conversion price on such 30th trading day. Upon conversion,
in addition to principal and accrued but unpaid interest, holders will receive a
lump sum payment equal to the amount of interest that would have otherwise
accrued on the 2008 Notes for the remainder of the 3 year term, payable at our
election in cash or in shares of common stock (valued as set forth below).
Immunomedics' Right to Elect to Cause Conversion of the 2008 Notes; Noteholders'
Right to Elect to Convert the 2008 Notes
Under the indenture, we have the right under certain circumstances to
require the Noteholders to convert their 2008 Notes into our common stock. If
the 2008 Notes are converted into common stock at our election, the stock issued
upon conversion will be valued at the greater of (i) $3.93 (subject to
adjustment as provided in the indenture) and (ii) 95% of the daily volume
weighted average price of our common stock for the three day period beginning on
and including the trading day prior to the conversion date, to and including the
trading day following the conversion date. If the conversion is at the holder's
option, the stock issued upon conversion will be valued at the greater of (i)
$2.38, and (ii) 95% of the daily volume weighted average price of our common
stock for the three day period beginning on and including the trading day prior
to the conversion date, to and including the trading day following the
conversion date.
Anti-Dilution Provisions
If, while any Notes or Warrants are outstanding, we issue common stock or
securities convertible into or exchangeable or exercisable for common stock, at
a price per share less than the then applicable conversion or exercise price in
effect for the 2008 Notes and Warrants, respectively, the conversion price of
the outstanding 2008 Notes and Warrants will be adjusted to such price. This
type of provision is often termed a "full ratchet" anti-dilution provision and
was a subject of the Nasdaq Staff's delisting declaration. In addition, the 2008
Notes and Warrants contain customary anti-dilution provisions relating to stock
dividends, stock splits, and similar matters.
Participation
Furthermore, if we propose to issue additional securities in the future
(other than under the Option described above and in certain other limited
circumstances) for a price per share less than the conversion price or exercise
17
price at that time in effect with respect to the 2008 Notes and Warrants, we are
required to give the holders thereof at least 10 days' prior notice detailing
the proposed issuance. Each holder shall have the option, exercisable within
five days of such notice, to subscribe for an amount of securities equal to such
holder's pro rata percentage of shares outstanding on an as-if-converted basis
on terms not materially less beneficial to the holder than those set forth in
the notice.
Registration Rights
We entered into a registration rights agreement with the holders of the
2008 Notes, Warrants and common stock issuable upon conversion of the 2008 Notes
or Warrants to register the resale of these securities pursuant to a shelf
registration statement that we have agreed to use our best efforts to file by
August 29, 2005, and cause to be effective under the Securities Act of 1933 by
October 27, 2005. If, on or prior to August 29, 2005, we have not filed the
shelf registration statement with the SEC, or if on or prior to October 27,
2005, the shelf registration statement has not been declared effective by the
SEC, we will be subject to successive 0.5% per month increases in the interest
rate payable on the 2008 Notes, to a maximum of an additional 2.0% per annum.
Lock-ups
Pursuant to the terms of the April Financing, the Company and two of our
executive officers and directors (Dr. David M. Goldenberg and Ms. Cynthia L.
Sullivan) agreed (subject to certain limited exceptions) not to offer or sell,
directly or indirectly, any shares of common stock or Company debt securities
owned by them until the later of (i) 90 days from the initial closing date, and
(ii) the date on which all of the 2008 Notes and common stock issuable upon
conversion of the 2008 Notes or Warrants are registered under the Securities Act
of 1933.
Nasdaq Additional Listing Notification
On May 19, 2005, the Company received a letter from the Staff notifying
the Company that the April Financing was deficient with respect to its standard
for continued listing. The Staff stated that it believed that the April
Financing did not comply with Nasdaq Marketplace Rule 4350(i)(1)(D)(ii) (the
"Rule"). The Rule provides that stockholders must approve an issuance of
securities other than a public offering when the sale, issuance or potential
issuance by the company of common stock or securities convertible into or
exercisable for common stock equals 20% or more of the common stock or 20% or
more of the voting power outstanding before the issuance for less than the
greater of book or market value of the stock outstanding before the issuance of
the stock or securities. During the weeks following the Company's receipt of the
May 19 letter, the Company engaged in various discussions with, and submitted
various letters in response to, the Nasdaq Staff making all possible efforts to
address the issues raised by the May 19 letter, including a specific written
plan and timetable. Although the Company believed it had submitted a detailed
plan and timetable responsive to various discussions with the Nasdaq Staff, the
Company received a notice of delisting from the Nasdaq on June 10, 2005.
The position of the Nasdaq Staff is that the "full ratchet" anti-dilution
provision of the indenture and warrant agreement could potentially reduce the
conversion price to below market value without shareholder approval. As a
result, the Nasdaq Staff stated that the April Financing violated the Rule. The
Company did agree in the indenture to call a special meeting of stockholders to
increase its authorized and unissued common stock sufficient to cover the
conversion of all Notes and Warrants by obtaining approval at the special
meeting of stockholders and by then amending its certificate of incorporation to
effect that share increase, with the proviso that, (1) if it did not effect that
share increase within 120 days following the April 29, 2005, closing additional
interest would accrue on the Notes at an annual rate of 1%, increasing by 1%
annually every 30 days thereafter to a maximum aggregate interest rate of 15%
and (2) if the share increase did not occur by January 15, 2007, holders would
have the right to require the Company to purchase the 2008 Notes, in whole or in
part, at any time or from time-to-time, at 100% of their principal amount plus
any accrued and unpaid interest to the repurchase date. The Nasdaq Staff stated
that the contemplated stockholder vote did not comply with its interpretation of
the Rule for two reasons. First, because holders of the 2008 Notes could convert
their 2008 Notes into common stock and vote it at such a meeting, the Nasdaq
Staff stated that the limitation on issuing shares in violation of the 20%
threshold was artificial, a so-called "artificial cap." Second, the Nasdaq Staff
stated that, because the indenture contains so-called "alternative outcomes"
(i.e., the potential interest rate increase and holder "put" right), the effect
of the stockholder vote to
18
approve the share increase would be invalid because the presence of these
alternative outcomes would have a coercive effect on the stockholder vote.
The Nasdaq Staff stated the position described above notwithstanding the
following:
o Details regarding the material terms of the April Financing were
delivered by the Company to the Nasdaq Staff as far in advance of
the April 29, 2005 closing date as was possible in view of the
dynamic financing environment surrounding the transaction, albeit
less than 15 days before the closing as is required by the Rule. The
Staff, however, did not at that time advise the Company that the
April Financing failed to comply with the Rule.
o The "full-ratchet" anti-dilution provision specifically referenced
by the Staff in its delisting letter is common to many comparable
financings. The Company informed the Nasdaq Staff that its April
Financing reflected that marketetplace both as to the terms it
contained and the requirement that it act rapidly to accept those
terms or face the prospect of possibly losing the opportunity to
complete the financing and satisfy its funding needs.
o Delaware corporation law, to which the Company is subject, prohibits
the Company from issuing common stock in excess of 20% of that which
was outstanding at the time of the closing of the April Financing.
On April 29, 2005, the Company had approximately 8.9 million shares
of authorized common stock available for partial conversion of the
2008 Notes, which represents approximately 17% of the number of
shares that were outstanding prior to the April Financing.
Therefore, the Company could not issue in excess of 20% of the
outstanding common stock, as a matter of controlling state law,
whether or not anti-dilution protections were triggered. The Company
believes, and so advised the Nasdaq Staff, that the limitation
imposed on it under Delaware law is a unique, legally mandated
situation, and not an "artificial cap" as described in the Nasdaq
Staff's interpretation of the Rule.
o The Company offered to agree with the Nasdaq that it would not take
any action that would trigger the application of the Rule.
Specifically, the Company offered that (1) it would not issue any
shares of its common stock (or securities convertible into or
exercisable for its common stock) other than the limited number of
shares which it was currently obligated to issue upon conversion of
the 2008 Notes and shares and options under the Company's stock
option plan before the Special Meeting and (2) the Company would act
to insure that no such issuance pursuant to (1) above would trigger
the anti-dilution adjustments of the securities issued by the
Company on April 29, 2005. As a practical matter, the Company had
only 8.915 million authorized and unissued shares available on April
29, 2005 (all of which are reserved for conversion of the Notes) and
approximately 6,790 million shares available under its long-term
stock incentive plan. The issuances of shares in either case would
not have triggered the 2008 Notes' anti-dilution protections
pursuant to the terms of the indenture. As a result, the conversion
price of the 2008 Notes could not have been, actually or
potentially, less than the market value of the common stock on April
29, 2005.
o The Company has been, and remains, committed to exploring possible
amendments with the holders of the 2008 Notes and Warrants to
address the Nasdaq concerns and has emphasized that to the Nasdaq
Staff. The Nasdaq Staff stated that, unless the Company would
consider rescinding the offering and thereby offer to return the
funds to the investors, in addition to seeking an amendment, the
Nasdaq Staff would not consider the Company's proposed plan to
regain compliance with the Rule to be sufficient to meet the Staff's
concerns. The Nasdaq Staff stated this notwithstanding the fact that
a successful amendment would, in the Nasdaq's stated view, address
the Nasdaq Staff's concerns, and that the Company does not have a
right, under the indenture or warrant agreement, to unilaterally
rescind the offering.
The Company plans to appeal the Nasdaq decision, pursuant to the Nasdaq's
rules. The initial appeal will temporarily suspend the delisting pending its
resolution. The Company has undertaken, and will continue to undertake, all
possible efforts to address the Staff's concerns and comply with Nasdaq's
continued listing requirements and also to appeal the delisting notification.
The Company believes that despite its best efforts, it may not be able to
satisfy the Nasdaq Staff's requirements for continued listing on the Nasdaq
National Market. In addition, it is premature to evaluate its chances of success
on appeal.
19
Transfer of Listing to the AMEX
The Company believes that despite its best efforts to appeal the Nasdaq
Staff's decision, it may not be able to persuade Nasdaq to accept the Company's
position, nor satisfy the Staff's requirements for continued listing on the
Nasdaq National Market. The Company therefore has explored with the AMEX
("AMEX") the potential for transferring the listing of its common stock to the
AMEX. Informal, non-binding conversations with listing qualifications and
marketing representatives of AMEX indicate that the Company's common stock meets
the AMEX's initial listing standards. The Company will continue to pursue its
application for listing its common stock on the AMEX, which it filed on June 3,
2005.
There is no assurance that the Company's listing application will be
approved by the AMEX or that, if it is approved, such approval will be obtained
before the likely delisting of its common stock from the Nasdaq National Market
becomes effective. The Company's notification of appeal of the Staff's delisting
notice which the Company will file before the June 17 deadline, will have the
effect of temporarily suspending the delisting. Within 45 days of the filing, a
hearing on the appeal will be heard by the Nasdaq listing and qualifications
panel. The Company has a right to appeal any adverse ruling by the panel, but
such an appeal would not necessarily further delay any delisting order.
Proposal 1: Amendment of Certificate of Incorporation to Increase by 40 million
shares the Company's Authorized Capital.
We are requesting stockholder approval to amend our Certificate
Incorporation to increase the number of authorized shares of common stock from
70 million shares to 110 million shares, an increase of 40 million shares. The
requested share increase will allow the Company to utilize the additional shares
of common stock for general corporate purposes, including for possible use in
connection with future financings, strategic relationships and acquisitions
(none of which are currently the subject of any agreement, arrangement or
understanding), as well as the continued use for motivation of our key
employees.
In addition to the above, approval of the additional authorized shares of
common stock will permit us to reserve an additional approximately 8.4 million
shares of common stock required for conversion of all of the 2008 Notes and
exercise of all of the Warrants (at the initial conversion and exercise prices),
including approximately 3.5 million shares of common stock required for exercise
of the investor Options to purchase up to an additional 20% of the 2008 Notes
and Warrants sold in the April Financing. On April 29, 2005, we had available
approximately 8.9 million shares of unrestricted, authorized common stock,
including shares formerly reserved for conversion of our 2006 Notes, reserved
for conversion of the 2008 Notes. Consequentially we currently have no shares of
our authorized common stock that are not issued or reserved for issuance.
The proceeds from the issuance of the 2008 Notes and Warrants, and the
investor Options if exercised, are being, and will be, used to fund pivotal
clinical trials while we continue to search for a strategic partner. At the
initial closing of the April Financing we deposited into escrow approximately
$14.3 million of the net proceeds of the April Financing pending the approval
and implementation of Proposal 1.
If we do not get approval for, and file an amended Certificate of
Incorporation by, August 29, 2005, with respect to a share increase of at least
5.5 million shares of common stock, interest on the 2008 Notes will increase
monthly by an amount equal to 1.0% per annum, and subsequently continue to
increase by a further 100 annualized basis points on the 29th of each successive
month that the share increase has not been effected, up to a maximum aggregate
interest rate of 15% per annum; provided that once the minimum share increase is
effected, interest will revert to 5% (plus any additional interest that may be
assessed pursuant to other terms of the Indenture). If we do not effect the
share increase by January 15, 2007, the holders of the 2008 Notes will have the
right to "put" their 2008 Notes to us, at any time thereafter, in whole or in
part, at a price equal to 100% of the principal amount of the Notes being
repurchased, plus accrued and unpaid interest and additional interest, if any,
to, but not including, the repurchase date. In the event we are required to
repurchase 2008 Notes, we may first use the escrowed funds to effect such
repurchases.
We believe that the share increase above the required 5.5 million shares
is necessary to allow us to (i) cover the exercise of the Warrants, (ii) have
shares available to us for conversion of additional 2008 Notes and exercise of
the additional Warrants in the event the Options are exercised, (iii) utilize
stock to assist in funding our continued
20
operations and expansion plans, including joint ventures, licensing
arrangements, acquisitions and the development of certain strategic
relationships, as well as the continued motivation of our key employees, and
(iv) pay interest on the 2008 Notes in shares if we so elect. While we have no
current plans to effect any specific business transaction with additional
shares, in the event we do effect any such transaction, shares will only be
issued upon approval by our Board of Directors in a manner consistent with the
exercise of its fiduciary duties.
Stockholder approval of Proposal 1 will not assure that we will be able to
raise additional funds sufficient to attain profitable operations. We believe,
however, that approval of Proposal 1 will place the Company in a better position
to obtain additional financing as and if necessary to continue our business
plan, including completion of pivotal clinical trials of epratuzumab for the
treatment of patients with moderate and severe systemic lupus erythematosus.
Summary of Possible Additional Issuances of Shares of Common Stock Under
the April Financing
As of April 29, 2005, we had 8.9 million shares of common stock authorized
(and not issued). Under the terms of the April Financing, we could be required
to issue up to an additional approximately 11.8 million shares (at the initial
conversion and exercise rates), as follows:
Shares issuable upon conversion of the 2008 Notes 14,392,666
Shares issuable upon exercise of the Warrants 2,878,533
Shares issuable upon exercise of the Option Notes 2,878,533
Shares issuable upon exercise of the Option Warrants 575,706
----------
TOTAL SHARES ISSUABLE 20,725,438
Proposal 1 Effect On Existing Stockholders
The common stock to be authorized will have rights identical to the
currently outstanding common stock of the Company. Implementation of Proposal 1
and issuance of the common stock will not negatively affect the rights of
holders of the Company's currently outstanding common stock, except for any
dilutive effects incidental to issuing additional shares of common stock. As
with any future issuance of common stock, the issuance of additional common
stock will have a dilutive effect on the ownership interests of the Company's
existing stockholders such as dilution to any future net income per share and
any future payment of dividends per share, if and when the Company becomes
profitable. The issuance of additional shares of common stock will also have a
dilutive effect on the voting rights of current holders of common stock and, if
and to the extent shares are sold for a price less than the then current market
value of the stock, decrease the market value of the common stock. Furthermore,
the increase in the number of shares of common stock available for sale in the
market, particularly because we have agreed to register such shares for public
resale, may represent an overhang on the market and could depress the market
price of our common stock.
Proposal 2: Requirement for Conversion and Exercise Authorization in Accordance
with the April Financing
We are requesting stockholders to authorize the issuance of shares of
common stock upon the conversion of our 2008 Notes and the exercise of our
Warrants sold to investors in the April Financing, in each case at the election
of holders of the 2008 Notes or Warrants at any time or from time-to-time prior
to April 29, 2008, in accordance with the April Financing.
Nasdaq Marketplace Rule 4350(i)(1)(D)(ii) requires that we obtain
stockholder approval for transactions other than public offerings prior to the
issuance of listed securities in an amount in excess of 20% of our issued and
outstanding stock if such issuance is at, or potentially at, a price that is
less than the greater of book or market value of the stock. While the initial
conversion price of the 2008 Notes and Warrants is in excess of the greater of
book and market value of the common stock on the date of issuance, because we
granted the holders of the 2008 Notes and Warrants the "full ratchet"
anti-dilution protection we are required to seek stockholder approval before
conversion of the 2008 Notes or Warrants.
21
The approval of Proposal 2 by our stockholders cannot assure that we will
be able to continue to list our shares on Nasdaq. However, we believe we may be
in a better position to satisfy the continued listing requirements of
Nasdaq if Proposal 2 is approved by our stockholders. If our stockholders
approve Proposal 2, they will in effect be approving all of the provisions of
the April Financing.
Proposal 2 Effect On Existing Stockholders
Implementation of Proposal 2 to authorize the issuance of shares of common
stock upon the conversion into common stock of our 2008 Notes and Warrants in
accordance with their terms will not have a dilutive effect to holders of the
Company's currently outstanding common stock, except if the Company enters into
a transaction that triggers the anti-dilution provisions of the April 29
Financing, as described above. If Proposal 2 is not authorized, the Company will
be in violation of NASD Rule 4350(i)(1)(D), which may result in delisting of the
Company from the Nasdaq National Market. If our stock is not accepted for
listing on either the Nasdaq National Market or the AMEX, we cannot assure you
that it would then be available for trading on the OTC Bulletin Board. In that
event, stockholders may have difficult time getting a quote for the sale or
purchase of our stock, the sale or purchase our stock would likely be made more
difficult, and the trading volume and liquidity of our stock would likely
decline. The absence of such a listing may adversely affect either or both of
the acceptance of our common stock for as currency or the value accorded it by
the other party and would result in adverse publicity.
Board Recommendation
Our Board believes it is important to the Company and its and our
stockholders' best interests to approve Proposal 1 to amend our Certificate of
Incorporation to increase the number of authorized shares of our common stock
from 70 million to 110 million shares, an increase to 40 million shares, which
will allow us to fund our operations and expansion plans, including for use in
licensing agreement, joint ventures, the motivation of key employees, the
development of strategic relationships and acquisitions (none of which, other
than the continued motivation of our key employees, are currently the subject of
any agreement, arrangement or understanding). and if Proposal 2 is also
approved, to meet our obligations under the 2008 Notes, Warrants, and Options in
accordance with the April Financing. Accordingly, the Board recommends that you
vote FOR Proposal 1.
Our Board believes it is also important to the Company and its and our
stockholders' best interests to approve Proposal 2 to authorize the issuance of
shares of common stock upon the conversion into common stock of our 2008 Notes
and Warrants in accordance with their terms, which we believe will allow us to
comply with AMEX Guide ss. 711, and if we also obtain amendments to the 2008
Notes and Warrants, may also allow us to retain our listing on the Nasdaq
National Market. Accordingly, the Board recommends that you vote FOR Proposal 2.
Vote Required
To approve Proposal 1, a quorum must be present or represented by proxy at
the Special Meeting and stockholders holding a majority of our outstanding
common stock must vote FOR this proposal.
To approve Proposal 2, a quorum must be present or represented by proxy at
the Special Meeting, and stockholders holding a majority of the shares voting at
the meeting, in person, or by proxy, must vote FOR this proposal.
Abstentions will be treated as shares present for quorum purposes and
entitled to vote, so they will have the same practical effect as votes against
Proposal 1 but will not be counted for the Proposal 2, because Proposal 1
requires the affirmative vote of a majority of the outstanding shares, rather
than a majority of the quorum.
Broker non-votes will be treated as shares present for quorum purposes,
but not entitled to vote. If a broker returns a "non-vote" proxy, then the share
represented by such proxy will be counted for the purpose of determining the
presence of a quorum only. The term "broker non-votes" refers to shares held by
a broker in street name that are present by proxy but are not voted pursuant to
the rules prohibiting brokers from voting on non-routine matter without
instruction from the beneficial owner of the shares. A broker non-vote will
therefore be a vote against Proposal 1, but will not be counted for the outcome
of the vote on Proposal 2 because Proposal 1 requires the affirmative vote of a
majority of the outstanding shares, rather than a majority of the quorum.
22
Security Ownership of Certain Beneficial Owners and Management((1))
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of June 7, 2005 for: (i) each
current director and executive officer, (ii) all of our current directors and
executive officers as a group; and (iii) each stockholder known by us to own
beneficially more than five percent (5%) of our common stock. Beneficial
ownership is determined in accordance with the rules of the SEC, and includes
voting or investment power with respect to the securities.
The SEC deems shares of common stock that may be acquired by an individual
or group by [ ], 2005 (60 days after the record date) pursuant to the exercise
of options, warrants or other convertible securities to be outstanding for the
purpose of computing the percentage ownership of such individual or group, but
such securities are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other stockholder shown in the table. Except as
indicated in footnotes to this table, we believe that the stockholders named in
this table have sole voting and investment power with respect to all shares of
common stock shown to be beneficially owned by them based on information
provided to us by these stockholders. Percentage ownership is based on
54,073,059 shares of common stock outstanding on June 7, 2005.
----------
(1) Based upon information furnished to the Company by the beneficial owners or
otherwise obtained from the stock transfer books of the Company.
23
Shares Beneficially Owned***
----------------------------
Names and addresses** Number Percent
------------------------------------ ---------- -------
Dr. David M. Goldenberg(1) 8,855,796 16.4%
Cynthia L. Sullivan(2) 8,918,006 16.5%
Dr. Morton Coleman(3) 369,000 *
Dr. Marvin E. Jaffe(4) 115,200 *
Richard R. Pivirotto(5) 135,000 `
Mary E. Paetzold(6) 60,800 *
Don C .Stark 0 `
Brian A. Markison 0 `
Dr. Ivan D. Horak(7) 290,000 *
Gerard G. Gorman(8) 275,000 *
---------- -------
All Directors and Executive Officers
as a group (10 persons)(9) 10,315,635 19.1%
FMR Corp.(10) 5,293,400 9.8%
82 Devonshire Street
Boston, MA 02109
Barclays Private Bank Limited (11) 2,749,336 5.1%
59/60 Grosvenor Street
London, W1X 9DA, England
Deborah S. Orlove(12) 3,790,100 7.0%
200 L Street N.W., Suite 675
Washington, D.C. 20036
----------
* Represents beneficial ownership of less than 1% of our outstanding shares
of common stock.
** Except as noted, the address of each of the stockholders listed in the
above table who own more than five percent of our common stock is c/o
Immunomedics, Inc., 300 American Road, Morris Plains, New Jersey 07950.
[All information in the table is based upon reports filed with the SEC or
upon the 2004 Questionnaire for Directors, Officers and Five Percent
Stockholders submitted to us in connection with the preparation of this
proxy statement.]
*** Included with each share of common stock is a Preferred Share Purchase
Right to acquire one one-thousandth of a share of our Series G Junior
Participating Preferred Stock, par value $0.01 per share, which Preferred
Share Purchase Rights are not presently exercisable.
(1) Consists of (i) 1,117,730 shares held by Dr. Goldenberg; (ii) 12,743
shares held by Ms. Sullivan, Dr. Goldenberg's wife; (iii) 10,000 shares
held jointly by Dr. Goldenberg and Ms. Sullivan; (iv) 3,291,769 shares
held by Dr. Goldenberg as beneficial owner of four grantor retained
annuity trusts; (v) 1,555,000 shares held by the David M. Goldenberg
Millennium Trust; (vi) 34,725 shares held by our majority-owned
subsidiary, IBC Pharmaceuticals, Inc., of which Dr. Goldenberg is a
director; (vii) 11,200 shares as to which Ms. Sullivan has voting or
dispositive power as custodian of her children or as trustee for a trust
for their benefit; (viii) 1,550,000 shares which may be acquired by Dr.
Goldenberg upon exercise of options to purchase shares of common stock;
(ix) 1,020,000 shares which may be acquired by Ms. Sullivan upon exercise
of options to purchase shares of common stock; (x) 152,629 shares as to
which Dr. Goldenberg has sole voting power pursuant to an agreement with
Hildegard Gruenbaum Katz (his former wife); and (xi) 100,000 shares held
by David M. Goldenberg Dynasty Trust. Dr. Goldenberg disclaims beneficial
ownership with respect to an aggregate of 2,886,297 shares as listed in
items (ii), (v), (vi), (vii), (ix), (x)and (xi) of the previous sentence.
(2) Consists of (i) 12,743 shares held by Ms. Sullivan; (ii) 1,117,730 shares
held by Dr. Goldenberg, Ms. Sullivan's husband; (iii) 10,000 shares held
jointly by Dr. Goldenberg and Ms. Sullivan; (iv) 3,291,769 shares held as
a trustee of four grantor retained annuity trusts for the benefit of Dr.
Goldenberg; (v) 1,555,000 shares held by the David M. Goldenberg
Millennium Trust; (vi) 34,725 shares held of IBC Pharmaceuticals, Inc., of
which Ms. Sullivan is President; (vii) 11,200 shares to which Ms. Sullivan
has voting or dispositive power as custodian of her children or as trustee
for a trust for their benefit; (viii) 1,550,000 shares which may be
acquired by Dr. Goldenberg upon exercise of options to purchase shares of
common stock; (ix) 1,020,000 shares which may be acquired by Ms. Sullivan
upon exercise of options to purchase shares of common stock; (x) 214,839
shares held as trustee of Escalon Foundation; and (xi) 100,000 shares held
by David M. Goldenberg Dynasty Trust. Ms. Sullivan disclaims beneficial
ownership with respect to an aggregate of 6,320,263 shares as listed in
items (ii), (iv), (vi), (vii), (viii) (x) and (xi) of the previous
sentence.
(3) Consists of (i) 60,250 shares held by Dr. Coleman's wife; (ii) 43,750
shares held by certain of his children; and (iii) ] 265,000 shares which
may be acquired by him upon the exercise of options to purchase shares of
common stock.
(4) Consists of 200 shares held directly by Dr. Jaffe and 115,000 shares which
may be acquired by him upon the exercise of options to purchase shares of
common stock.
24
(5) Represents shares which may be acquired upon the exercise of options to
purchase shares of common stock.
(6) Consists of 3,300 shares held by Ms. Paetzold in her individual retirement
account and 57,500 shares which may be acquired by her upon the exercise
of options to purchase common stock.
(7) Represents shares which may be acquired by him upon the exercise of
options to purchase shares of common stock.
(8) Represents shares which may be acquired upon the exercise of options to
purchase shares of common stock.
(9) See Notes 1-8 above.
(10) This information is based solely on a Schedule 13G filed on February 14,
2005 with the SEC.
(11) This information is based solely on a Schedule 13G filed on February 17,
2004 with the SEC.
(12) Consists of (i) 467,465 shares held by Ms. Orlove; (ii) 183,000 shares
held by Escalon Corporation, of which she serves as a director; (iii)
214,839 shares held as trustee of Escalon Foundation; (iv) 2,875,344
shares held as trustee of four trusts for Dr. Goldenberg's other children
and grandchildren; and (v) 49,452 shares as to which Ms. Orlove has voting
or dispositive power as custodian of her children or as a trustee of a
trust for their benefit. Ms. Orlove disclaims beneficial ownership of all
shares except to the extent she holds a pecuniary interest.
No Preemptive or Appraisal Rights
Holders of the Company's common stock have no preemptive rights to
purchase additional shares upon issuance of additional shares by the Company.
Under Delaware law, the Company's stockholders are not entitled to appraisal
rights with respect to the proposed increase in the number of authorized shares.
Potential Anti-Takeover Effect
Additional authorized shares are not sought for anti-takeover purposes.
Increasing the number of authorized shares of the common stock is not motivated
by takeover concerns and is not intended by the Board to be an anti-takeover
measure. The proposed amendment to our Certificate of Incorporation (Proposal 1)
is not in response to any known effort on the part of any party to accumulate
material amounts of stock to acquire control of us or to change our management.
However, the availability of additional authorized but unissued shares of common
stock could enable the Board to make it more difficult for a person or group of
persons to obtain control of the Company by a proxy or tender offer, by issuing
shares in a defensive manner. For example, the existence of authorized but
unissued shares permits the Board to issue such shares without stockholder
approval that would dilute the stock ownership of a person seeking to effect a
change in the composition of the Board or contemplating a tender offer or other
transaction for a combination of the Company with another company.
The Company entered into a rights agreement on March 4, 2002 with American
Stock Transfer and Trust Company as rights agent. However, the proposed
amendment to our Certificate of Incorporation (Proposal 1) is not part of the
rights agreement or any plan by management or the Board to impede a takeover
effort and there are no plans by management to recommend further measures to the
Board or stockholders to discourage tender offers or takeover attempts. The
rights plan will be unaffected by Proposal 1.
Other Matters
Only Proposal 1 and Proposal 2 set forth in the Notice for this Special
Meeting of Stockholders may be presented for vote at the Special Meeting.
Stockholder proposals for the 2005 Annual Meeting of Stockholders of the Company
must be received by the Company at its principal executive offices at, 300
American Road, Morris Plains, New Jersey 07950 by [ ], 2006 for inclusion
in the Proxy Statement and Proxy relating to the 2005 Annual Meeting of
Stockholders, which is expected to be held on or about [ ], 2006.
Request For Vote
It is important that your shares be represented at the Special Meeting,
regardless of the number of shares that you hold. YOU ARE URGED TO PROMPTLY
EXECUTE AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE THAT HAS BEEN ENCLOSED
FOR YOUR CONVENIENCE. Stockholders who are present at the Special Meeting may
revoke their proxies and vote in person or, if they prefer, may abstain from
voting in person and allow their proxies to be voted.
25
By Order of the Board of Directors,
By: /s/ David M. Goldenberg
------------------------------------
David M. Goldenberg
Chairman of the Board of Directors,
Chief Strategic Officer
26
THIS PROXY IS SOLICITED BY AND
ON BEHALF OF THE BOARD OF DIRECTORS
IMMUNOMEDICS, INC.
PROXY - SPECIAL MEETING OF STOCKHOLDERS -
July [ ], 2005
--------------------------------------------------------------------------------
SPECIAL MEETING PROXY CARD
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF IMMUNOMEDICS, INC. FOR THE
SPECIAL MEETING OF THE STOCKHOLDERS TO BE HELD ON [ ], 2005
The undersigned hereby appoints Gerard G. Gorman as true and lawful agent and
proxy ("Proxy") to represent the undersigned at the Special Meeting of
Stockholders of Immunomedics, Inc. (the "Company") on[ ], 2005, at [ ]
and at any adjournment or postponement thereof, and authorizes said Proxy to
vote all shares of the Company shown on the other side of this card with all the
powers the undersigned would possess if personally present thereat.
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1 TO AMEND THE
COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK FROM 70 MILLION TO 110 MILLION SHARES. THE UNDERSIGNED
HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF THE COMPANY DATED [ ],
2005, SOLICITING PROXIES FOR THE SPECIAL MEETING.
All previous proxies given by the undersigned to vote at the Special Meeting or
at any adjournment or postponement thereof are hereby revoked.
PLEASE SIGN, DATE AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Internet and Telephone Voting Instructions
You can vote by telephone OR Internet! Available 24 hours a day 7 days a week!
Instead of mailing your proxy, you may choose one of the two methods outlined
below to vote your proxy.
To vote using the Telephone (within To vote using the Internet
U.S. and Canada)
Call toll free 1-8XX-XXX-XXXX in the Go to the following web site:
United States or Canada any time on a www.voteproxy.com
touch tone telephone. There is NO
CHARGE to you for the call if you [Use the voter control number that is
call from the United States or printed on this proxy card to access
Canada. your account and vote your shares. You
must specify how you want your shares
Follow the simple recorded voted or your Internet vote cannot be
instructions.] completed and you will receive an error
message. Your shares will be voted
according to your instructions.]
--------------------------------------------------------------------------------
If you vote by telephone or Internet, please DO NOT mail back this proxy card.
Proxies submitted by telephone or the Internet must be received by 1:00 a.m.
(CST), on July [ ], 2005.
THANK YOU FOR VOTING
--------------------------------------------------------------------------------
27
Stockholder Name
--------------------------------------------------------------------------------
Proxy - IMMUNOMEDICS, INC.
--------------------------------------------------------------------------------
PLEASE REFER TO THE REVERSE SIDE FOR TELEPHONE AND INTERNET VOTING INSTRUCTIONS.
--------------------------------------------------------------------------------
A. PROPOSAL 1
The Board of Directors recommends a vote FOR the following proposal.
FOR AGAINST ABSTAIN
To approve an amendment to the Company's Certificate [ ] [ ] [ ]
of Incorporation to increase the number of authorized
shares of common stock from 70 million to 110 million
shares.
Discretionary authority is hereby granted with respect to such other matters
related to Proposal 1 as may properly come before the Special Meeting or any
adjournment or postponement thereof.
[ ] [ ] [ ]
B. PROPOSAL 2
The Board of Directors recommends a vote FOR the following proposal.
FOR AGAINST ABSTAIN
To approve the issuance of shares of Common Stock upon [ ] [ ] [ ]
conversion into Common Stock of the 2008 Notes and
exercise of the Warrants issued by the Company on
April 29, 2005.
Discretionary authority is hereby granted with respect to such other matters
related to Proposal 1 as may properly come before the Special Meeting or any
adjournment or postponement thereof.
C. Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREIN. WHEN SIGNING AS ATTORNEY,
ADMINISTRATOR, EXECUTOR, GUARDIAN OR TRUSTEE, PLEASE GIVE YOUR FULL TITLE AS
SUCH. IF A CORPORATION, PLEASE SIGN BY PRESIDENT OR OTHER AUTHORIZED OFFICER AND
INDICATE TITLE. IF SHARES ARE REGISTERED IN THE NAMES OF JOINT TENANTS OR
TRUSTEES, EACH TENANT OR TRUSTEE IS REQUIRED TO SIGN.
Signature 1 - Please keep Signature 2 - Please keep
signature within the box signature within the box Date (mm/dd/yyyy)
------------------------- ------------------------- -----------------
__/__/____
------------------------- ------------------------- -----------------
------------------------------------------------------------------------
ADMISSION TICKET
Please tear off this Admission Ticket. If you plan to attend the Special
Meeting of stockholders, you will need this ticket to gain entrance to the
Special Meeting.
The Special Meeting of stockholders will be held at the following address:
[ ], at[ ]. on [ ], 2005. You must present this ticket to
gain admission to the Special Meeting. You should send in your proxy or vote
electronically even if you plan to attend the Special Meeting.
28