SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. [ ])
Filed by the Registrant [X]
Filed by a 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 Under Rule 14a-12
Amarillo Biosciences, Inc.
(Name of Registrant as Specified in Its Charter)
---------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
AMARILLO BIOSCIENCES, INC.
4134 BUSINESS PARK DRIVE
AMARILLO, TEXAS 79110
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 27, 2005
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Amarillo Biosciences, Inc. (the
"Company") will be held in the Colorado Room of the Ambassador Hotel, 3100 I-40
West, Amarillo, Texas on the 27th day of May, 2005 at 10:00 A.M., local time,
for the following purposes:
1. To elect five Directors to serve until the next Annual Meeting and
until their respective successors are elected and qualify.
2. To consider and vote upon an amendment to the Company's Article of
Incorporation to increase by 30,000,000 (to an aggregate of 50,000,000) the
number of shares of the Company's voting common stock, par value $0.01,
authorized for issuance.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record as of the close of business on April 7, 2005
are entitled to receive notice of and to vote at the meeting. A list of such
stockholders shall be open to the examination of any stockholder during ordinary
business hours, for a period of ten days prior to the meeting, at the principal
executive offices of the Company,4134 Business Park Drive, Amarillo, Texas
79110.
By Order of the Board of Directors
EDWARD L. MORRIS
Secretary
Amarillo, Texas
April 25, 2005
If you do not expect to be present at the meeting, please fill in, date
and sign the enclosed Proxy and return it promptly in the enclosed return
envelope.
AMARILLO BIOSCIENCES, INC.
4134 BUSINESS PARK DRIVE
AMARILLO, TEXAS 79109
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Amarillo Biosciences, Inc. a Texas corporation (the "Company"), for
use only at the Annual Meeting of Stockholders to be held in the Colorado Room
of the Ambassador Hotel, 3100 I-40 West, Amarillo, Texas on the 27th day of May,
2005, at 10:00 A.M., local time, and at any adjournments thereof. The
approximate date on which this Proxy Statement and the accompanying Proxy were
first given or sent to security holders was April 25, 2005.
Each Proxy executed and returned by a stockholder may be revoked at any
time thereafter, by written notice to that effect to the Company, attention of
the Secretary, prior to the Annual Meeting, or to the Chairman, or the
Inspectors of Election, at the Annual Meeting, or by the execution and return of
a later-dated proxy, except as to any matter voted upon prior to such
revocation.
The Proxies in the accompanying form will be voted in accordance with the
specifications made and where no specifications are given, such Proxies will be
voted FOR the nominees for election as directors named herein, and for proposal
two, regarding amendment of the Company's Articles of Incorporation. In the
discretion of the proxy holders, the Proxies will also be voted FOR or AGAINST
such other matters as may properly come before the meeting. The management of
the Company is not aware that any other matters are to be presented for action
at the meeting. Election of directors will be determined by a plurality of the
votes of the shares of common stock, par value $.01 per share (the "Common
Stock"), present in person or represented by proxy at the Annual Meeting and
entitled to vote. Accordingly, in the case of shares that are present or
represented at the Meeting for quorum purposes, not voting such shares for a
particular director, including by withholding authority on the Proxy, will not
operate to prevent the election of such director if he otherwise receives a
plurality of the votes. Proposal number two, approval of Amendment to the
Company's Articles of Incorporation requires the affirmative vote of two-thirds
(2/3) of all of the issued and outstanding shares of common stock of the
Company, regardless of how many shares are actually represented at the Annual
Meeting in person or by proxy; accordingly, in the case of sharers that are
present or represented at the meeting for quorum purposes not voting such shares
for proposition number two, including by withholding authority on the proxy, may
operate to prevent the passage of such proposal.
Votes will be counted manually by an election judge, who will be the Company's
Secretary or an Assistant Secretary, and who will execute an affidavit
certifying the vote as to each proposal.
VOTING SECURITIES
The Board of Directors has fixed the close of business on April 7, 2005 as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting. The issued and outstanding stock of the
Company on April 7, 2005 consisted of 16,020,614 shares of Common Stock, each
entitled to one vote. A quorum of the stockholders is constituted by the
presence, in person or by proxy, of holders of record of Common Stock,
representing a majority of the number of votes entitled to be cast.
PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned as of April 1, 2005, by each person who is known by the
Company to own beneficially more than 5% of the Company's outstanding Common
Stock.
1
Name and Address of Beneficial Owner Number of Shares Percentage of
Beneficially Owned Class
- ---------------------------------------------------- ----------------------- -----------------
Hayashibara Biochemical Laboratories, Inc. 3,290,781 20.5%
2-3 Shimoishii 1 - chome
Okayama 700, Japan
Hy Ochberg 750,000 4.7%
102 NE 2nd Street, Suite 253
Boca Raton, FL 33432
Cheryl A. Ulie 917,000 5.7%
8843 SE 77th Place
Mercer Island, WA 98040
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth, as of April 1, 2005, beneficial ownership
of shares of Common Stock of the Company by each director, and by all directors
and executive officers as a group.
Name Total Number of Percentage of
Shares Beneficially Common Stock
Owned Owned
- ---------------------------------------------------- ----------------------- -------------------
Joseph Cummins 248,756 1.6%
Dennis Moore 50,174 *
Katsuaki Hayashibara 48,240 *
Stephen Chen 7,900 *
James Page -- --
Total Group (all directors and executive 397,170 2.5%
officers - 5 persons)
* Less than 1%
PROPOSAL ONE
ELECTION OF DIRECTORS
Five directors will be elected at the meeting to hold office until the
next Annual Meeting of Stockholders and until their respective successors are
elected and qualify. The By-Laws of the Company permit the Board of Directors to
fix the number of directors at no less than one nor more than thirty persons and
the Board of Directors has fixed the number of directors at five persons. The
Proxies solicited by this proxy statement may not be voted for a greater number
of persons than the number of nominees named. It is intended that these Proxies
will be voted for the following nominees, but the holders of these Proxies
reserve discretion to cast votes for individuals other than the nominees for
director named below in the event of the unavailability of any such nominee. The
Company has no reason to believe that any of the nominees will become
unavailable for election. Set forth below are the names of the nominees, the
principal occupation of each, the year in which first elected a director of the
Company and certain other information concerning each of the nominees.
2
The name of, and certain information with respect to, all directors,
executive officers and all persons nominated or chosen to become a director are
as follows (all of the following have been nominated to serve as directors):
Name and Age Director Principal Occupation for the Past Five Years
Since
- ------------------------------------------ ----------- -----------------------------------------------------
Joseph Cummins, DVM, PhD (1)(3), 62 1984 Chairman of the Board of the Company since June
1984. Has served as President of the Company since
December 1994 and as Chief Financial Officer since
October 1997. Received a PhD degree in microbiology
from the University of Missouri in 1978 and a
doctor of veterinary medicine degree from Ohio
State University in 1966.
Stephen Chen, PhD (2)(4), 55 1996 President and Chief Executive Officer of STC
International, Inc., a health care investment firm,
since May 1992. From August 1989 to May 1992,
Director of Pharmaceutical Research and Development
for the Ciba Consumer Pharmaceuticals Division of
Ciba-Geigy.
Katsuaki Hayashibara (3)(4)(5), 60 1994 Named Director of the Overseas Business Development
Division of Hayashibara Company, Ltd. in January
1997. Served as Director of Research and
Development for Hayashibara Biochemical
Laboratories, Inc. since 1988.
Dennis Moore, DVM (1)(4)(5), 58 1986 Doctor of veterinary medicine since 1972 and was in
private practice from 1972 to 1995. Management of
personal investments since 1995.
James Page, MD (1)(2)(5), 77 1996 Prior to retiring in 1991 as a Vice President with
Adria Laboratories, Inc., held various upper
management level positions with Carter Wallace,
Inc., Merck Sharpe & Dohme Research Laboratories
and Wyeth Laboratories.
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Finance Committee.
(4) Member of the Audit Committee.
(5) Member of the Stock Option Plans Administration Committee.
3
PROPOSAL TWO
APPROVAL OF AMENDMENT TO
THE COMPANY'S ARTICLES OF INCORPORATION
At the Annual Meeting, the Company's shareholders will be asked to consider
and vote upon an amendment to the Company's Articles of Incorporation (the
"Articles"). The amendment was approved by the Company's Board of Directors on
March 10, 2005, subject to shareholder approval.
The purpose of the amendment is to increase the number of shares of the
Company's $0.01 par value voting common stock by 30,000,000 shares, resulting in
an aggregate of 50,000,000 authorized common shares.
Increase in Authorized Shares of Common Stock. The Articles currently
authorize the issuance of twenty million (20,000,000) shares of capital stock,
$0.01 par value. The proposal before the shareholders is to amend the Articles
to increase the number of common shares authorized from 20,000,000 to 50,000,000
(an increase of 30,000,000 shares). The reason for the proposed amendment is
that the Board anticipates a need in the future for additional authorized shares
to assist the Company in the raising of additional capital. No specific
purchasers or investors have been identified, and no terms have been negotiated.
The current total authorized shares available for future issuance is 3,979,386
shares, and the Board believes this number to be inadequate to satisfy the
Company's long-term requirements.
Article Four of the Articles of Incorporation of the Company will be
amended as follows, if proposal two is approved: In the first paragraph under
Article Four, "twenty million (20,000,000) shares of capital stock, one cent
($0.01) par value," shall be amended to read "fifty million (50,000,000) shares
of capital stock, one cent ($0.01) par value."
In addition to its authorized common stock, the Company is currently
authorized to issue up to ten million (10,000,000) shares of preferred stock,
$0.01 par value. The Board of Directors of the Company has authority to
establish series of the unissued preferred stock of the Company by fixing and
determining designations, preferences, limitations and relative rights,
including voting rights, of the shares of any series so established. To date,
the Company has not issued any shares of preferred stock, and no such issuance
is currently pending or contemplated.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION.
Compliance with Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires directors and officers of the Company and persons who
own more than 10 percent of the Company's Common Stock to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of the Common Stock. Directors,
officers and more than 10 percent shareholders are required by the Exchange Act
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended December 31, 2004, all filings
applicable to its directors, officers and more than 10 percent beneficial owners
were timely filed.
4
Board of Directors
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating details. Members of the Board are kept
informed of the Company's business by various reports and documents sent to them
as well as by operating and financial reports made at Board and Committee
meetings. Five meetings of the Board of Directors were held during 1998. The
only incumbent director who attended fewer than 75% of the meetings of the Board
of Directors, and meetings of Committees of the Board on which they served, was
Katsuaki Hayashibara
Ten times during 2004, the Board of Directors conducted business by
unanimous written consent, in lieu of holding a meeting.
Audit, Nominating, and Compensation Committees
The Company has standing Audit, Nominating, and Compensation Committees of
the Board of Directors.
The Audit Committee consists of Stephen Chen, Katsuaki Hayashibara and
Dennis Moore. The function of the Audit Committee is to serve as an advisory
committee to the Board of Directors of the Company; to review financial
statements and other reports prepared by the Company and any reports or other
communications rendered by the Company's independent certified public accounts
and to coordinate with the accountants any matters raised from time to time by
the accountants; to meet with the representative of the Company's independent
certified public accountants at least annually; and to take under advisement any
matters referred by the accountants. The Audit Committee met one time during
2004.
The Company did not have a Nominating Committee in 2004 or prior years,
since 1999, but a Nominating Committee was created by the Board of Directors of
the Company on February 26, 2005. Current members of the Nominating Committee
are Joseph M. Cummins, Katsuaki Hayashibara, and Dennis Moore. The function of
the Nominating Committee is to nominate a slate of directors to stand for
election as Directors of the Company at the Company's annual shareholders
meeting. The nominees set forth in these Proxy Materials for election as
directors were named by the Nominating Committee. The Committee will consider
nominees recommended by security holders for election to the Board of Directors
in 2006, and subsequent years. Security holders shall follow the following
procedures in submitting recommendations for nominees to the Board of Directors:
the proposed nominee's name, address, telephone number, employer, present
occupation and general business or scientific qualifications shall be mailed or
faxed to the Company, in written form. The Nominating Committee will review such
submissions, and if they determine that the Company would benefit by having such
person on its Board of Directors, the Nominating Committee will send to the
nominee a more detailed Questionnaire, which will solicit from said nominee
relevant data required by rules and regulations of the Securities and Exchange
Commission, and other data or information which they deem to be material. Upon
receipt of the completed Questionnaire, the Nominating Committee will determine
whether to include such persons among the nominees recommended by the Nominating
Committee for election as a director at the ensuing annual shareholders meeting.
The Compensation Committee consists of Stephen Chen and James Page. The
function of the Compensation Committee is to serve as an advisory committee to
the Board of Directors of the Company regarding all matters of director, officer
and employee compensation, and to report to the Board of Directors from time to
time as they might deem necessary, with any recommendations for changes in level
of compensation or fringe benefits for officers, directors or employees. The
Compensation Committee met one time in 2004.
5
DIRECTORS' FEES AND COMPENSATION DURING 2004
Cash Compensation Security Grants
------------------------------------- -------------------
Name Meeting Fees Consulting Fees Number of
(1) (2) Securities
Underlying Options
- ------------------------------- ---------------- ----------------- -------------------
Stephen Chen, Ph.D. -- 150,000 --
Katsuaki Hayashibara -- 150,000 --
Dennis Moore, D.V.M. -- 150,000 --
James Page, M.D. -- 150,000 --
Dr. Joseph M. Cummins -- 150,000 --
(1) Directors do not receive compensation for attendance at directors'
meetings, but may claim reimbursement for actual out-of-pocket expenses
incurred in connection with their attendance at such meetings.
(2) Each director may receive $1,200 per day for employment on special
projects or assignments, prorated for partial days.
EXECUTIVE COMPENSATION
The following table presents the compensation paid by the Company to the
named executive officers for 2002 through 2004.
Summary Executive Compensation Table
Annual Compensation
----------------------------------------
Name and Principal Position Year Salary Bonus Securities Underlying
Options
- ------------------------------------------- --------- -------- ------ ---------------------
Dr. Joseph M. Cummins, Chairman 2002 $121,338 -- 150,000
of the Board, President and Chief
Executive Officer
2003 103,779 -- 290,000
2004 74,716 -- 650,000
Option Grants in 2004
The following table sets forth certain information relating to options
granted in 2004 to the executive officers named above, to purchase shares of
Common Stock of the Company.
Name Number of Shares % of Total Exercise or Expiration
of Common Stock Options Granted Base Price Date
Underlying Options to Employees ($/Sh)
Granted (#) in 2004
- ------------------------- ------------------- --------------- ------------- ----------
Dr. Joseph M. Cummins 500,000 57% $0.23 5/31/2009
4134 Business Park Drive 150,000 17% $0.27 8/27/2009
Amarillo, TX 79110
(1) The fair market value of the Common Stock on the date of the grant.
6
Aggregated Option Exercises at December 31, 2004
And Year-End Option Values
The following table sets forth information for the executive officers
named above, regarding the exercise of options during 2004 and unexercised
options held at the end of 2004.
Name Shares Value Number of Shares of Common Value of Unexercised
Acquired on Realized ($) Stock Underlying In-The-Money
Exercise (#) Unexercised Options at Options at
December 31, 2004 (#) December 31, 2004 ($) (1)
Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------- ----------------- ------------ --------------------------- -----------------------------
Joseph Cummins -- -- 988,486 / None $375,625 / None
(1) Calculated based on the closing price of the Common Stock ($0.38) as
reported by NASDAQ on December 31, 2004.
CERTAIN TRANSACTIONS
As of December 31, 2004, the outstanding amount of the Company's
indebtedness to Hayashibara Biochemical Laboratories, Inc. ("HBL") (including
accrued interest) was $2,446,351. HBL owns 3,290,781 shares, approximately 20.5%
of the Company's Common Stock. In addition to the Development Agreement, HBL and
the Company are parties to various license and manufacturing and supply
agreements pursuant to which the Company licenses certain technology to or from
HBL and HBL supplies formulations of its IFN" to the Company.
During the years ended December 31, 2004 and 2003, the Company paid
$8,402.00 and $22,686.00, respectively, for legal services rendered by
SandersBaker, P.C. Edward Morris, the Secretary of the Company, is a member of
such firm.
Although the Company believes that the foregoing transactions were on
terms no less favorable to the Company than would have been available from
unaffiliated third parties in arm's length transactions, there can be no
assurance that this is the case. All future transactions and loans between the
Company and its officers, directors and 5% shareholders will be on terms no less
favorable to the Company than could be obtained from independent third parties.
There can be no assurance, however, that future transactions or arrangements
between the Company and its affiliates will be advantageous, that conflicts of
interest will not arise with respect thereto or that if conflicts do arise, that
they will be resolved in favor of the Company.
INDEPENDENT PUBLIC ACCOUNTANTS
Lopez, Blevins, Bork & Associates, LLP, of Houston, Texas, serve as the
Company's independent public accountants.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the Company's proxy
statement for the 2006 annual meeting of stockholders provided they are received
by the Company no later than December 16, 2005, and are otherwise in compliance
with applicable Securities and Exchange Commission regulations.
7
GENERAL
So far as is now known, there is no business other than that described
above to be presented for action by the stockholders at the meeting, but it is
intended that the proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. It is
expected that the solicitations will be made primarily by mail, but regular
employees or representatives of the Company may also solicit proxies by
telephone or telegraph and in person, and arrange for brokerage houses and other
custodians, nominees and fiduciaries to send proxy material to the principals at
the expense of the Company.
EDWARD L. MORRIS
Secretary
8
ANNUAL MEETING OF STOCKHOLDERS OF
AMARILLO BIOSCIENCES, INC.
May 27, 2005
Please date, sign and mail
your proxy card in the envelope
provided as soon as possible.
Please detach along perforated line and mail in the envelope provided.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE |X|
- --------------------------------------------------------------------------------
1. Election of Directors: NOMINEES:
|_| FOR ALL NOMINEES O Joseph M. Cummins
O Stephen Chen
|_| WITHHOLD AUTHORITY O James Page
FOR ALL NOMINEES O Dennis Moore
O Katsuaki Hayashibara
|_| FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: (X)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
To change the address on your account, please check the box at right and |_|
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method.
- --------------------------------------------------------------------------------
2. Approve an Amendment to the Company's Articles of FOR AGAINST ABSTAIN
Incorporation to Increase the Number of Authorized |_| |_| |_|
Shares of Common Stock from 20,000,000 to 50,000,000.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy is solicited on behalf of the Board of Directors of the Company. This
proxy, when properly executed, will be voted in accordance with the instructions
given above. If no instructions are given, this proxy will be voted "FOR"
election of the Directors and "FOR" proposal 2.
Signature of Stockholder ________________________ Date: ___________________
Signature of Stockholder ________________________ Date: ___________________
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
COMMON STOCK PROXY
AMARILLO BIOSCIENCES, INC.
Annual Meeting of Stockholders
To Be Held May 27, 2005
This proxy is solicited on behalf of the Board of Directors
Revoking any such prior appointment, the undersigned, a stockholder of
Amarillo Biosciences, Inc., hereby appoints Joseph M. Cummins, Stephen Chen,
James Page, Dennis Moore, and Katsuaki Hayashibara, and each of them, attorneys
and agents of the undersigned, with full power of substitution, to vote all
shares of the Common Stock of the undersigned in said Company at the Annual
Meeting of Stockholders of said Company to be held in the Colorado Room,
Ambassador Hotel, 3100 I-40 West, Amarillo, Texas on May 27, 2005 at 10:00 A.M.
local time and at any adjournments thereof, as fully and effectually as the
undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their substitutes
may lawfully do in place of the undersigned as indicated below.
This proxy when properly executed will be voted as directed. If no
direction is indicated, this proxy will be voted for proposals (1) and (2), and
will be voted in the discretion of the proxy holders on other matters to
properly come before the meeting.
(Continued and to be signed on the reverse side)