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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
AMERICAN BIOGENETIC SCIENCES, INC.
(Name of Registrant as Specified In Its Charter)
[NAME OF PERSON FILING]
(Name of Person(s) Filing Proxy Statement if other than Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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AMERICAN BIOGENETIC SCIENCES, INC.
1375 AKRON STREET
COPIAGUE, NEW YORK 11726
NOTICE OF SOLICITATION OF CONSENTS
To the Stockholders of American Biogenetic Sciences, Inc.:
This Notice of Solicitation of Consents and accompanying Consent
Solicitation Statement (the "Consent Statement") are furnished to you by
American Biogenetic Sciences, Inc. (the "Company") in connection with its
solicitation of written consents ("Consents") from the holders of the Company's
Class A Common Stock and Class B Common Stock (collectively, the "Common Stock")
to take action without a stockholders' meeting.
Specifically, the Company is asking holders of its Common Stock to consent
to (i) amend the Company's Restated Certificate of Incorporation to authorize
the issuance of up to 10,000,000 shares of Preferred Stock; and (ii) the sale of
up to 7,000 shares of a newly designated Series A Preferred Stock, together with
up to 7,000,000 warrants to purchase the Class A Common Stock. The Company
currently has no authorized stock other than the Class A Common Stock and Class
B Common Stock.
The Company is seeking your consent at this time for two reasons. First,
the Board of Directors believes that the authorization of the Preferred Stock is
in the best interests of the Company and its stockholders and believes that it
is advisable to authorize such shares and have them available in connection with
possible future transactions, such as financings, strategic alliances, corporate
mergers, acquisitions, possible funding of new product programs or businesses.
Second, the Board of Directors presently anticipates that it will designate
7,000 of the 10,000,000 shares of Preferred Stock as Series A Convertible
Preferred Stock, $.001 par value per share (the "Series A Preferred Stock"), and
that it will issue all the shares of Series A Preferred Stock to Biotechnology
Value Fund, L.P., and/or affiliated entities ("BVF") and to Mr. Alfred J. Roach,
the Company's Chairman, in a negotiated private placement transaction more fully
described in the Consent Statement (the "Sale").
The Company intends to use the proceeds from the Sale for working capital
and general corporate purposes.
The Board of Directors requests that you indicate your written consent to
the proposed corporate action by marking, signing and dating the enclosed
consent card, and promptly mailing it in the enclosed envelope (which needs no
postage if mailed in the United States) so that it will be received by the
Company on or before March 2, 2000.
The Board of Directors has established the close of business on February 7,
2000 as the record date for determining stockholders entitled to submit Consents
(the "Record Date"). The proposed corporate action may be taken only if holders
of record on the Record Date of shares representing at least a majority of the
votes represented by all outstanding shares of Class A Common Stock and Class B
Common Stock voting together as one class, with Class A Common Stock having one
vote per share and Class B Common Stock having ten votes per share, submit to
the Company a written consent to such action within 60 days after the earliest
dated Consent is delivered to the Company. It is planned, however, that Consents
will be finally tabulated on March 2, 2000. Accordingly, for Consents to the
proposed Amendment to be included in the tabulation, they should be received by
the Company on or before March 2, 2000. The Company retains the right to extend
such date, subject to the limitations discussed above.
If your shares of Common Stock are held in the name of a brokerage firm,
bank nominee or other institution, only that entity can execute a Consent with
respect to your shares. Accordingly, please contact the person responsible for
your account and give instructions for a Consent to be signed representing your
shares.
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The Board of Directors unanimously recommends that you vote FOR the two
proposals.
By Order of the Board of Directors
Timothy J. Roach, Secretary
February 11, 2000
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AMERICAN BIOGENETIC SCIENCES, INC.
CONSENT SOLICITATION STATEMENT
This Consent Solicitation Statement ("Consent Statement") is being
furnished in connection with the solicitation of consents by the Board of
Directors of American Biogenetic Sciences, Inc, a Delaware corporation with its
principal executive offices at 1375 Akron Street, Copiage, N.Y. 11726 (the
"Company"), for the purposes of approving (i) a proposed amendment to Article 4
of the Company's Restated Certificate of Incorporation to authorize the issuance
of up to 10,000,000 shares of so called "blank check" Preferred Stock (the
"Amendment"); and (ii) a proposed sale of 7,000 shares of a newly designated
Series A Preferred Stock, together with up to 7,000,000 warrants to purchase the
Class A Common Stock (the "Sale", and collectively with the Amendment, the
"Proposals"). It is expected that this Consent Statement will be first mailed to
stockholders on or about February 11, 2000.
The Board has established the close of business on February 7, 2000 as the
Record Date for determining stockholders of record entitled to submit Consents.
The unrevoked, signed and dated Consents representing at least a majority
of the votes of all outstanding shares of Class A Common Stock and Class B
Common Stock on the Record Date, voting together as one class (with Class A
Common Stock having one vote per share and Class B Common Stock having ten votes
per share) are necessary to effect the Amendment and constitute approval of the
Sale. On the Record Date, the Company had outstanding and entitled to vote
39,708,907 shares of Class A Common Stock and 3,000,000 shares of Class B Common
Stock, each entitled to vote upon matters to be acted upon by stockholder vote.
Mr. Alfred J. Roach, as the holder of all of the Class B Common Stock and
4,522,250 shares of Class A Common Stock, has the power to cast 34,522,250 votes
of the total of 69,708,907 votes entitled to be cast, or 49.5%, slightly less
than a majority of all the votes entitled to be cast. Accordingly Mr. Roach, who
has signed an agreement with BVF agreeing that he will execute a Consent, as a
practical matter has the power to assure stockholder approval.
The Proposals will be adopted if the requisite number of Consents are
delivered to the Secretary of the Company at the Company's principal executive
offices within 60 days after the earliest dated Consent is delivered to the
Company. It is planned, however, that Consents will be finally tabulated on
March 2, 2000. Accordingly, for Consents to the Proposals to be included in the
tabulation, they should be received by the Company on or before March 2, 2000.
The Company retains the right to extend such date, subject to the limitations
discussed above.
CONSENT PROCEDURE; EFFECTIVENESS
Section 228 of the Delaware General Corporation Law ("DGCL") states that,
unless otherwise provided in a corporation's certificate of incorporation, any
action that may be taken at any annual or special meeting of stockholders, may
be taken without a meeting, without prior notice and without a vote, if consents
in writing, setting forth the action so taken, shall be signed and dated by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such 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 offices in
Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the books in which proceedings of meetings of
stockholders are recorded. The Company's Restated Certificate of Incorporation
does not prohibit the use of such consents.
If the Proposals are adopted by less than unanimous consent of the
Company's stockholders, the Company will give prompt notice of the adoption of
the Proposals to those stockholders who have not returned executed Consents to
the Proposals to the Company and who, if the action had been taken at a meeting,
would have been entitled to notice of such meeting if the record date for such
meeting had been the date that written consents signed by a sufficient number of
holders to take the action were delivered to the Company.
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SOLICITATIONS OF CONSENTS
Solicitations of Consents will be made by the Company. The Company will
bear all expenses of this solicitation. In addition to the use of the mails,
Consents may be solicited without extra compensation by directors, officers and
employees of the Company by telephone, telecopy, telegraph or personal
interview. The Company has retained W.F. Doring & Co., Inc., 150 Bay Street,
Jersey City, New Jersey 07302 to aid in the solicitation of Consents. For its
services, W.F. Doring & Co., Inc. will receive a fee of $2,500 plus
reimbursement for certain out-of-pocket expenses.
Brokers, custodians, nominees and fiduciaries will be requested to forward
solicitation material to beneficial owners of the Common Stock. The Company will
reimburse brokers, custodians, nominees and fiduciaries for their reasonable
expenses for sending solicitation material to the beneficial owners of Common
Stock.
REVOCATION OF CONSENTS
An executed Consent may be revoked by a properly signed and dated written
revocation delivered to the Company at any time before sufficient Consents have
been delivered to the Company to authorize the Proposals. A revocation may be in
any written form 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 which is properly completed and timely delivered will
also constitute a revocation of any earlier Consent. The revocation should be
delivered to the Secretary of the Company at 1375 Akron Street, Copiague, New
York 11726 or any party who may oppose this solicitation.
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights
with respect to the Proposals.
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PROPOSAL NO. 1
TO AUTHORIZE AN AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO
AUTHORIZE 10,000,000 SHARES OF PREFERRED STOCK
The Company's Board of Directors (the "Board"), by written consent dated as
of January 20, 2000, unanimously adopted a resolution approving and recommending
to the stockholders their approval of a proposed amendment to Article 4 of the
Company's Restated Certificate of Incorporation (the "Amendment") which would
authorize the issuance of up to 10,000,000 shares of so called "blank check"
Preferred Stock (the "Preferred Stock"). Set forth on Exhibit A hereto and
incorporated herein by reference is the complete text of the proposed additional
language to be added to Article 4.
The Company currently has no authorized stock other than Class A Common
Stock and Class B Common Stock. Upon adoption of the Amendment, the Board, will,
without further action by the stockholders, be authorized to issue up to
10,000,000 shares of Preferred Stock from time to time, for such consideration
and on such terms as the Board may determine.
The Board of Directors believes that the authorization of the Preferred
Stock is in the best interests of the Company and its stockholders and believes
that it is advisable to authorize such shares and have them available in
connection with possible future transactions, such as financings, strategic
alliances, corporate mergers, acquisitions, possible funding of new product
programs or businesses and other uses not presently determinable and as may be
deemed to be feasible and in the best interests of the Company. In addition, the
Board of Directors believes that it is desirable that the Company have the
flexibility to issue shares of Preferred Stock without further stockholder
action, except as otherwise provided by law.
The term "blank check" Preferred Stock refers to stock for which the
designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof are determined by the Board
of Directors. Thus, if the Preferred Stock Amendment is approved, the Board of
Directors would be entitled to authorize the creation and issuance of up to
10,000,000 shares of Preferred Stock in one or more series with such limitations
and restrictions as may be determined in the Board's sole discretion, without
further authorization by the Company's stockholders. Stockholders will not have
preemptive rights to subscribe for shares of Preferred Stock.
The Board of Directors is required by Delaware law to make any
determination to issue shares of Preferred Stock based upon its judgment as to
the best interests of the stockholders and the Company. Although the Board of
Directors has no present intention of doing so, it could issue shares of
Preferred Stock (within the limits imposed by applicable law) that could,
depending on the terms of such series, make more difficult or discourage an
attempt to obtain control of the Company by means of a merger, tender offer,
proxy contest or other means. When in the judgment of the Board of Directors
such action would be in the best interests of the stockholders and the Company,
the issuance of shares of Preferred Stock could be used to create voting or
other impediments or to discourage persons seeking to gain control of the
Company, for example, by the sale of Preferred Stock to purchasers favorable to
the Board of Directors. In addition, the Board of Directors could authorize
holders of a series of Preferred Stock to vote either separately as a class or
with the holders of Common Stock, on any merger, sale or exchange of assets by
the Company or any other extraordinary corporate transaction. The existence of
the additional authorized shares could have the effect of discouraging
unsolicited takeover attempts. The issuance of new shares could also be used to
dilute the stock ownership of a person or entity seeking to obtain control of
the Company should the Board of Directors consider the action of such entity or
person not to be in the best interests of the stockholders and the Company. Such
issuance of Preferred Stock could also have the effect of diluting the earnings
per share and book value per share of the Common Stock held by the holders of
Common Stock.
The authorization of new shares of Preferred Stock will not, by itself,
have any effect on the rights of the holders of shares of Common Stock.
Nonetheless, the issuance of the Preferred Stock could affect the holders of
shares of the Common Stock in a number of respects, including: (i) if voting
rights are granted to the
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Preferred Stock, the voting power of the Common Stock will be diluted, (ii) the
issuance of Preferred Stock may result in a dilution of earnings per share of
the Common Stock, (iii) dividends payable on the Preferred Stock will reduce the
amount of funds available for payment of dividends on the Common Stock, and (iv)
future amendments to the Restated Certificate of Incorporation affecting the
Preferred Stock may require approval by the separate vote of the holders of the
Preferred Stock (in addition to the approval of the holders of shares of the
Common Stock) before action can be taken by the Company.
The Board reserves the right, notwithstanding stockholder approval and
without further action by stockholders, to not proceed with the Amendment (or
with the sale transaction described below) if, at any time prior to filing the
Amendment with the Secretary of State of the State of Delaware, the Board, in
its sole discretion, determines that the Amendment is no longer in the best
interests of the Company and its stockholders. The Board may consider a variety
of factors in determining whether or not to implement the Amendment including,
but not limited to, overall trends in the stock market, recent changes and
anticipated trends in the market price per share of the Company's Class A Common
Stock, business and transactional developments and the Company's actual and
projected financial performance.
The management believes that the issuance and sale of the Preferred Stock
is advisable to increase the working capital in the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU CONSENT TO THE PROPOSED
AMENDMENT
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PROPOSAL NO. 2
TO AUTHORIZE THE SALE OF 7,000 SHARES OF
A NEWLY DESIGNATED SERIES A PREFERRED STOCK,
TOGETHER WITH 7,000,000 WARRANTS
TO PURCHASE CLASS A COMMON STOCK
The Board, by written consent dated as of January 20, 2000, unanimously
adopted resolutions approving and recommending to the stockholders their
approval of the sale of up to 6,000 shares of a newly designated Series A
Preferred Stock, together with up to 6,000,000 warrants to purchase Class A
Common Stock to BVF in the transaction described below. Thereafter, at a meeting
of the Board on February 1, 2000, a majority of the directors (Messrs. Alfred J.
Roach and Timothy J. Roach abstaining) adopted a resolution to increase the
amount of the Series A Preferred Stock to 7,000 shares and the number of
warrants to 7,000,000 warrants and to authorize Mr. Alfred J. Roach, the
Chairman of the Board, to participate as an investor in the Sale transaction.
DESCRIPTION OF SALE TRANSACTION
If the proposed Amendment is approved, the Board of Directors proposes to
designate 7,000 shares of the newly established Preferred Stock as Series A
Convertible Preferred Stock, $.001 par value per share (the "Series A Preferred
Stock") and then to issue 6,000 of the shares of Series A Preferred Stock so
designated to Biotechnology Value Fund, L.P. or affiliated entities ("BVF") and
1,000 shares of the Series A Preferred Stock to Mr. Alfred J. Roach in a
negotiated private placement transaction at an original issue price of $500 per
share. In the same transaction, the Company would also issue to BVF and Mr.
Roach five-year warrants to purchase 6,000,000 and 1,000,000 shares of Class A
Common Stock, respectively, at an exercise price of $1.00 per share (the
"Warrants"). The Company will have the right to call the Warrants at any time if
the market price of the Class A Common Stock exceeds $5.00 over a period of 20
consecutive trading days.
In the fall of 1999, because of continuing operating losses, the Company
determined that it needed to raise additional capital. Over the preceding
several months, Mr. Alfred J. Roach had loaned the Company several hundred
thousand dollars on a demand note basis in order to provide essential working
capital, but management and the Board of Directors determined that that
situation could not continue indefinitely. In the meantime, Nasdaq had initiated
action to delist the Class A Common Stock from the Nasdaq National Market
because its share price was below $1.00 and because the Company's net tangible
assets were below $4 million. The Company appealed the Nasdaq action, and on
December 6, 1999, Nasdaq gave the Company until December 31, 1999 to attempt to
come into compliance with its listing requirements for the Nasdaq SmallCap
Market of $1.00 bid price and $2 million net tangible assets. During November
and December, the Company conducted detailed discussions with several potential
investors or strategic partners in both an attempt to provide needed working
capital and an unsuccessful attempt to satisfy the Nasdaq requirements. In late
December, the Board of Directors and Company management concluded that of the
various options available, the investment transaction with BVF and a
license/investment with Abbott Laboratories were the two most attractive, and
that management should attempt to complete both those transactions.
Accordingly, the basic terms of the proposed Sale to BVF, including price,
were negotiated between Company management and BVF in the last two weeks of
December, 1999, during which time the Class A Common Stock closing bid price was
in a range of approximately $.47 to $.66 per share. On December 31, 1999 the
Company and BVF signed a letter agreement, subject to negotiation of definitive
agreements, authorization of preferred stock and certain other matters, for BVF
to invest between $2-3 million for the purchase of between 4,000 - 6,000 shares
of Series A Preferred Stock and related Warrants. (On December 27, 1999 the
Company also signed a letter of intent with Abbott Laboratories for a product
license and a sale of Class A Common Stock, which were completed on January 27,
2000.)
When the Company and BVF began negotiating the definitive agreements for
the Sale transaction in January 2000, in order to induce BVF to purchase the
full $3 million, at the suggestion of BVF, Mr. Roach agreed that rather than
demand repayment of his demand notes, he would convert $500,000 of the
approximately $776,000 (including additional advances since the fall of 1999)
plus accrued interest owed to
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him into an additional investment in the Company on terms identical to the terms
previously negotiated with BVF and that the balance of the amount owed him
(approximately $276,000 of principal) could be repaid at the rate of $100,000 of
principal and interest per month until repaid in full. Accordingly, in the Sale,
$500,000 of the amount owed Mr. Roach will be converted into 1,000 shares of
Series A Preferred Stock and 1,000,000 Warrants.
The Company entered into a Securities Purchase Agreement dated as of
February 3, 2000 with BVF and Alfred J. Roach relating to the issuance of the
7,000 shares of Series A Preferred Stock and Warrants for 7,000,000 shares of
Class A Common Stock. BVF subsequently loaned $3,000,000 to the Company,
equaling the purchase price for 6,000 shares of Series A Preferred Stock and
6,000,000 Warrants. Upon receiving stockholder consent to the proposed Sale, the
Company intends to repay BVF's loan and $500,000 of the Company's indebtedness
to Mr. Roach by issuing 6,000 shares of Series A Preferred Stock and 6,000,000
Warrants to BVF and 1,000 shares of Series A Preferred Stock and 1,000,000
Warrants to Mr. Roach. In the event that the Company fails to receive the
requisite number of Consents for approval of the Sale, the Company has agreed to
issue, in lieu of the Series A Preferred Stock and in addition to the Warrants,
6,000,000 shares of Common Stock to BVF and 1,000,000 shares of Common Stock to
Mr. Roach. The Securities Purchase Agreement contains customary representations,
warranties, covenants and agreements for a transaction of this type. The
obligations of the investors are subject to stockholder approval of the creation
of the Preferred Stock as described in Proposal No. 1 and the filing of the
Amendment to amend the Certificate of Incorporation, the execution of the Abbott
agreements, and other customary conditions of closing, including the lack of
material adverse changes in the business or condition, financial or otherwise,
of the Company.
The Company is asking the holders of the Common Stock to consent to the
issuance of the Series A Preferred Stock at such time and on such terms as the
Board may determine.
The Series A Preferred Stock will: (i) have the right to participate with
dividends declared on the Common Stock, if, as and when declared, on an
as-converted basis; (ii) contain customary anti-dilution adjustments for
mechanical adjustments in the event of stock splits and similar transactions;
(iii) contain restrictions on subsequent issuances of other preferred stock
ranking equal to or superior to the Series A Preferred Stock without the consent
of the holders of a majority of such Series A Preferred Stock; (iv) have a
liquidation preference equal to the original issue price of the Series A
Preferred Stock, plus any accrued and unpaid dividends; (v) not be entitled to
vote except as a separate class when its rights are affected; and (vi) be
convertible at any time after the original issue date at the option of the
holder. Each share of Series A Preferred Stock initially would be convertible
into 1,000 shares of Class A Common Stock, or a conversion price of $.50 per
share of Class A Common Stock.
Under the terms of the Securities Purchase Agreement, the Company also
agreed to enter into a Registration Agreement under which it will agree to file
a registration statement within 60 days after closing, registering the Class A
Common Stock issuable upon conversion of the Series A Preferred Stock or
exercise of the Warrants and to use its best efforts to cause that registration
to become effective within 120 days after closing. The Company will bear the
expenses of such registration.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU CONSENT TO THE PROPOSED SALE.
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SECURITY HOLDINGS OF CERTAIN
STOCKHOLDERS, MANAGEMENT AND DIRECTORS
The following table sets forth information as at December 31, 1999 with
respect to the beneficial ownership of the Company's Class A Common Stock and
Class B Common Stock by (i) each person known by the Company to beneficially own
more than 5% of the outstanding shares of Class A Common Stock or Class B Common
Stock, (ii) each director of the Company, (iii) each person who served as the
Company's Chief Executive Officer in 1999 and the four most highly compensated
executive offices at end of 1999, and (iv) all executive officers and directors
of the Company as a group. Each share of Class A Common Stock is entitled to one
vote per share while each share of Class B Common Stock is entitled to ten votes
per share. The Company understands that, except as noted below, each beneficial
owner has sole voting and investment power with respect to all shares
attributable to such owner.
CLASS A COMMON STOCK(1) CLASS B COMMON STOCK
----------------------------- --------------------------
PERCENT OF PERCENT OF
BENEFICIAL OWNER NO. OF SHARES CLASS NO. OF SHARES CLASS
- ---------------- ------------- ---------- ------------- ----------
Alfred J. Roach(2)......................... 8,833,250(2) 21.4% 3,000,000(2) 100%
John S. North.............................. 249,000 * -- --
Josef C. Schoell........................... 186,500(3) * -- --
Glenna M. Crooks........................... 7,750(3) * -- --
Ellena M. Byrne............................ 338,750(3)(4) * -- --
Timothy J. Roach........................... 680,000(3) 1.7% -- --
Gustav V.R. Born........................... 45,000(3) * -- --
Joseph C. Hogan............................ 35,000(3) * -- --
William G. Sharwell........................ 35,000(3) * -- --
All executive officers and directors as a
group (11 persons, including the
foregoing)............................... 10,624,500(5) 24.9% 3,000,000 100%
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(1) Asterisk indicates less than one percent. Shares of Class A Common Stock
subject to issuance upon conversion of Class B Common Stock into Class A
Common Stock and upon exercise of options that were exercisable on, or
become exercisable within 60 days after, December 31, 1999 are considered
owned by the holder thereof and outstanding for purposes of computing the
percentage of outstanding Class A Common Stock that would be beneficially
owned by such person, but (except for the computation of beneficial
ownership by all executive officers and directors as a group) are not
considered outstanding for purposes of computing the percentage of
outstanding Class A Common Stock owned by any other person.
(2) The address of Mr. Roach is 1375 Akron Street, Copiague, New York 11726.
Beneficial ownership of Class A Common Stock includes 3,000,000 shares of
Class A Common Stock issuable upon conversion of the same number of shares
of Class B Common Stock and 1,310,000 shares of Class A Common Stock subject
to outstanding options.
(3) Includes shares of Class A Common Stock subject to options as follows: John
S. North 150,000; Josef C. Schoell, 177,500; Glenna M. Crooks, 6,250; Ellena
M. Byme, 213,750 (including 28,750 shares subject to options held by her
husband); Timothy J. Roach, 670,000; Gustav V.R. Born, 45,000; Joseph C.
Hogan, 25,000; and William G. Sharwell, 25,000.
(4) Includes 3,000,000 shares of Class A Common Stock issuable upon conversion
of the same number of shares of Class B Common Stock and 2,818,750 shares of
Class A Common Stock subject to outstanding options.
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OTHER INFORMATION
VOTING INSTRUCTIONS
If you wish to Consent to the proposals and were a record holder of Common
Stock on the Record Date, please mark the appropriate "Consent" box on the
accompanying consent card and sign, date and mail it promptly to the Secretary
of the Company in the enclosed envelope.
If you do not wish to Consent to the proposals and were a record holder of
Common Stock on the Record Date, you may mark the appropriate "Consent Withheld"
or "Abstain" box on the accompanying consent card, and sign, date and mail the
card in the enclosed envelope. In addition, by not returning a consent card, a
holder of Common Stock will be deemed not to have consented to the proposals.
When a stockholder whose Consent is solicited specifies a choice with
respect to the proposals, the Consent shall be given in accordance with the
specifications so made. If the stockholder has failed to check a box marked
"Consent Withheld" or "Abstain" with respect to the proposals, such stockholder
shall be deemed to be a "Consent" to the proposals.
Since the holders of record on the Record Date of shares representing at
least a majority of the votes represented by all outstanding shares of Class A
Common Stock and Class B Common Stock must consent to the proposed Amendment in
order for such proposal to be adopted, and the Sale cannot occur unless the
Amendment is approved, a direction to withhold consent, an abstention or a
broker non-vote has the same effect as a "no" vote with respect to both
proposals.
If your shares of Common Stock are held in the name of a brokerage firm,
bank nominee or other institution, only it can sign a Consent with respect to
your shares. Accordingly, please contact the person responsible for your account
and give instructions for a Consent to be signed representing your shares.
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Proposals which stockholders intend to present at the Company's 2000 Annual
Meeting of Stockholders and wish to have included in the Company's proxy
materials pursuant to Rule 14a-8 promulgated under the Securities Exchange Act
of 1934, as amended, must have been received by the Company no later than
January 16, 2000. As to any proposals intended to be presented by a stockholder
without inclusion in the Board of Directors' proxy statement for the Company's
next Annual Meeting of Stockholders, the proxies named in the Board of
Directors' form of proxy for that meeting will be entitled to exercise
discretionary authority on that proposal unless the Company receives notice of
the matter on or before April 1, 2000. However, even if such notice is timely
received, such proxies nevertheless may be entitled to exercise discretionary
authority on that matter to the extent permitted by Securities and Exchange
Commission regulations. Any such proposals, as well as any questions relating
thereto, should be directed to the Secretary of the Company at 1375 Akron
Street, Copiague, New York 11726.
By Order of the Board of Directors
Timothy J. Roach, Secretary
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EXHIBIT A
1. The first two paragraphs of Article 4 of the Company's Restated
Certificate of Incorporation, as amended, are to be deleted in their entirety
and replaced with the following:
"4. The aggregate number of shares which the Corporation shall have
authority to issue is 113,000,000, of which (i) 100,000,000 shares, having
a par value of $.001 per share, shall be Class A Common Stock; (ii)
3,000,000 shares, having a par value of $.001 per share, shall be Class B
Common Stock; and (iii) 10,000,000 shares, having a par value of $.001 per
share, shall be Preferred Stock.
PART A -- COMMON STOCK
The relative rights, powers, preferences and limitations of the
Corporation's classes of Common Stock are as follows:"
2. Article 4 of the Company's Restated Certificate of Incorporation, as
amended, is further amended by adding a new Part B immediately after the present
paragraph 4(g) thereof:
PART B -- PREFERRED STOCK
Section 1. General. The Preferred Stock may consist of one or more
series. The Board of Directors may, from time to time, establish and
designate the different series and the variations in the relative rights
and preferences as between the different series provided Part B, Section 2
of this Article 4, but in all other respects all shares of the Preferred
Stock shall be identical. In the event that at any time the Board of
Directors shall have established and designated one or more series of
Preferred Stock consisting of a number of shares less than all of the
authorized number of shares of Preferred Stock, the remaining authorized
shares of Preferred Stock shall be deemed to be shares of an undesignated
series of Preferred Stock until designated by the Board of Directors as
being a part of a series previously established or a new series then being
established by the Board of Directors.
Section 2. Establishment of a Series. Subject to the provisions of
this Article 4, the Board of Directors is authorized to establish one or
more series of Preferred Stock and, to the extent now or hereafter
permitted by the laws of the State of Delaware, to fix and determine the
voting powers, designations, preferences, and relative, participating,
optional, or other special rights and qualifications, limitations or
restrictions of each series, including but not limited to:
(a) the number of shares to constitute such series and the
distinctive designation of such series;
(b) the dividend rate on the shares of such series and preferences,
if any, and the special and relative rights of such shares of such
series as to dividends;
(c) whether or not the shares of such series shall be redeemable,
and, if redeemable, the price, terms and manner of redemption;
(d) the preferences, if any, and the special and relative rights of
the shares of such series upon liquidation of the corporation;
(e) whether or not the shares of such series shall be subject to
the operation of a sinking or purchase fund and, if so, the terms and
provisions of such fund;
(f) whether or not the shares of such series shall be convertible
into shares of any other class or of any other series of the same or any
other class of stock of the corporation and, if so, the conversion price
or ratio and other conversion rights;
(g) the conditions under which the shares of such series shall have
separate voting rights or no voting rights; and
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(h) such other designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions of such series to the full extent now and
hereafter permitted by the laws of the State of Delaware.
Notwithstanding the fixing of the number of shares constituting a
particular series, the Board of Directors may at any time authorize the
issuance of additional shares of the same series.
Section 3. Dividends. Holders of Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors, but only out of
funds legally available for the payment of dividends, cash dividends at the
rates fixed by the Board of Directors for the respective series, payable on
such dates in each year as the Board of Directors shall fix for the
respective series as provided in Part B, Section 2 (hereinafter referred to
as "dividend dates"). Until all accrued dividends on each series of
Preferred Stock shall have been paid through the last preceding dividend
date of each such series, no dividend or distribution shall be made to
holders of Common Stock other than a dividend payable in Common Stock of
the corporation. Dividends on shares of any cumulative series of Preferred
Stock shall accumulate from and after the day on which such shares are
issued, but arrearages in the payment thereof shall not bear interest.
Nothing herein contained shall be deemed to limit the right of the
corporation to purchase or otherwise acquire at any time any shares of its
capital stock.
For purposes of this Article 4, the amount of dividends "accrued" on
any shares of any cumulative series of Preferred Stock as at any dividend
date shall be deemed to be the amount of any unpaid dividends accumulated
thereon to and including such dividend date, whether or not earned or
declared. The amount of dividends "accrued" on any noncumulative series of
Preferred Stock shall mean only those dividends declared by the Board of
Directors, unless otherwise specified for such series by the Board of
Directors pursuant to Part B, Section 2.
Section 4. Liquidation. Upon the voluntary or involuntary
liquidation of the corporation, before any payment or distribution of the
assets of the corporation shall be made to or set apart for any other class
of stock, the holders of Preferred Stock shall be entitled to payment of
the amount of the preference payable upon such liquidation of the
corporation fixed by the Board of Directors for the respective series as
provided in Part B, Section 2. If, upon any such liquidation, the assets of
the corporation shall be insufficient to pay in full to the holders of the
Preferred Stock the preferential amount aforesaid, then such assets, or the
proceeds thereof, shall be distributed among the holders of each series of
Preferred Stock ratably in accordance with the sums which would be payable
on such distribution if all sums payable were discharged in full. The Board
of Directors is authorized to establish whether or not voluntary sale,
conveyance, exchange or transfer of all or substantially all of the
property and assets of the corporation, the merger or consolidation of the
corporation into or with any other corporation, or the merger of any other
corporation into it, shall be deemed to be a liquidation of the
corporation.
Section 5. Retirement. Any shares of Preferred Stock which shall at
any time have been redeemed, or which shall at any time have been
surrendered for conversion or exchange or for cancellation pursuant to any
sinking or purchase fund provisions with respect to any series of Preferred
Stock, shall be retired and shall thereafter have the status of authorized
and unissued shares of Preferred Stock undesignated as to series.
Section 6. Voting Rights. The Common Stock shall have exclusive
voting power except as required by law and except to the extent the Board
of Directors shall, at the time any series of Preferred Stock is
established, determine that the shares of such series shall vote (a)
together as a single class with shares of Common Stock and/or with shares
of Preferred Stock (or one or more other series thereof) on all or certain
matters presented to the stockholders and/or upon the occurrence of any
specified event or condition, and/or (b) exclusively on certain matters,
or, upon the occurrence of any specified event or condition, on all or
certain matters. The Board of Directors, in establishing a series of
Preferred Stock and fixing the voting rights thereof, may determine that
the voting power of each share of such series may be greater or less than
the voting power of each share of the Common Stock or of other series of
Preferred Stock notwithstanding that the shares of such series of Preferred
Stock may vote as a single class with the shares of other series of
Preferred Stock and/or with the shares of Common Stock.
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AMERICAN BIOGENETIC SCIENCES, INC.
CONSENT
THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (i) acknowledges receipt of the notice dated February
11, 2000, of the solicitation of consents from the stockholders of American
Biogenetic Sciences, Inc., a Delaware corporation (the "Company"), and the
Consent Solicitation Statement related thereto and (ii) votes all shares of the
capital stock of the Company held of record by the undersigned on February 7,
2000, in the manner designated on the reverse side hereof.
THIS CONSENT WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATION MADE ON THE REVERSE SIDE HEREOF. IF NO SPECIFICATION IS MADE, THIS
CONSENT WILL BE VOTED FOR THE PROPOSALS.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL. PLEASE REVIEW CAREFULLY THE CONSENT SOLICITATION STATEMENT DELIVERED
WITH THIS CONSENT.
1. To authorize an Amendment to the Company's Restated Certificate of
Incorporation in order to create a new class of preferred stock.
[ ] CONSENT [ ] CONSENT WITHHELD [ ] ABSTAIN
(continued and to be signed on reverse side)
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(continued from other side)
2. To authorize the sale of 7,000 shares of a newly designated Series A
Preferred Stock, together with 7,000,000 warrants to purchase the Class A
Common Stock.
[ ] CONSENT [ ] CONSENT WITHHELD [ ] ABSTAIN
Dated: February , 2000
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NOTE: PLEASE DATE THIS CONSENT AND
SIGN YOUR NAME OR NAMES EXACTLY AS
SET FORTH HEREON. FOR JOINTLY OWNED
SHARES, EACH OWNER SHOULD SIGN. IF
SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE INDICATE THE CAPACITY IN
WHICH YOU ARE ACTING. CONSENTS
EXECUTED BY CORPORATIONS SHOULD BE
SIGNED BY A DULY AUTHORIZED OFFICER
AND SHOULD BEAR THE CORPORATE SEAL.
PLEASE DATE AND SIGN THIS CONSENT AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.