UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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
IMMTECH INTERNATIONAL, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
IMMTECH INTERNATIONAL, INC.
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
Dear Fellow Stockholder:
You are cordially invited to attend the 2003 Annual Meeting of
Stockholders of Immtech International, Inc. on January [__], 2004, at [___] at
the American Stock Exchange, 86 Trinity Place, New York, NY 10006. A Notice of
the Annual Meeting, Proxy Statement and Proxy Card are enclosed with this
letter.
We encourage you to read the Notice of Annual Meeting and Proxy
Statement so that you may be informed about the business to come before the
meeting. We hope that you will find it convenient to attend the Annual Meeting
in person.
Whether or not you expect to attend, please promptly sign, date and
mail the enclosed Proxy Card in the return envelope provided to ensure your
representation at the Annual Meeting and the presence of a quorum. If you do
attend the Annual Meeting, you may withdraw your proxy should you wish to vote
in person.
Also enclosed with this Proxy Statement is a copy of our Annual
Report to Stockholders. Additional copies may be obtained by writing to Immtech
International, Inc., 150 Fairway Drive, Suite 150, Vernon Hills, Illinois 60061,
Attention: Mr. Gary C. Parks.
On behalf of the Board of Directors, I would like to express
Immtech's appreciation for your continued support.
Sincerely,
/s/ T. Stephen Thompson
-----------------------
T. Stephen Thompson
President and Chief Executive Officer
December [___], 2003
IMMTECH INTERNATIONAL, INC.
150 Fairway Drive, Suite 150
Vernon Hills, Illinois 60061
================================================================================
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held January [__], 2003
================================================================================
To the Stockholders of Immtech International, Inc.:
The Board of Directors cordially invites you to attend our Annual
Meeting of Stockholders ("Annual Meeting") on January [__], 2004 at [____], at
the American Stock Exchange, 86 Trinity Place, New York, NY 10006, for the
following purposes:
o Election of Directors - to elect seven directors to serve until the next
annual meeting of the stockholders and until their successors are elected
and qualified or their earlier resignation, removal, disqualification or
death,;
o Proposal No. 1 - to approve a two-for-one stock split of the Company's
Common Stock;
o Proposal No. 2 - to approve amendments to and a restatement of the Company's
Certificate of Incorporation substantially in the form attached as Appendix
"A" to the Proxy Statement, to effect the following,
a. increase the authorized common stock of the Company from 30
million to 100 million shares,
b. generally update the current Certificate of Incorporation, as
amended, to reflect current Delaware law,
c. to incorporate into one document previously filed amendments
to the Certificate of Incorporation, and
d. to file with the Delaware Secretary of State an amended and
restated certificate of incorporation reflecting all of the
above;
o Proposal No. 3 - to ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending March 31, 2004;
and
o to transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on November
[__], 2003 will be entitled to notice of the Annual Meeting and to vote on any
matters which come before the meeting or any adjournment or postponement
thereof. Whether or not you plan to attend the Annual Meeting, your stock should
be represented. To insure that your vote is counted, please complete, sign, date
and mail the enclosed Proxy Card in the accompanying envelope even if you plan
to attend the Annual Meeting. Returning the Proxy Card will not limit your right
to vote in person or to attend the Annual Meeting, but will insure your
representation if you cannot attend. Your proxy is revocable at any time prior
to its use.
By order of the Board of Directors,
/s/ Gary C. Parks
-----------------
Gary C. Parks
Secretary, Immtech International, Inc.
December [___], 2003
Vernon Hills, Illinois
IMMTECH INTERNATIONAL, INC.
================================================================================
PROXY STATEMENT
================================================================================
Annual Meeting of the Stockholders
To be held January [__], 2004
The Board of Directors (the "Board") of Immtech International, Inc.,
a Delaware corporation ("Immtech," "we," "us," "our" or the "Company"), hereby
solicits your proxy for use at the 2003 Annual Meeting of Stockholders to be
held on January [__], 2004, at [_____] at the American Stock Exchange, 86
Trinity Place, New York, NY 10006, and at any adjournment or postponement
thereof (the "Annual Meeting"), for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders ("Notice"). This Proxy Statement,
Notice and Proxy Card are first being mailed to stockholders of record as of
November [__], 2003 on or about December [___], 2003.
By completing the attached Proxy Card you appoint Gary C. Parks as
your representative at the Annual Meeting. If you sign and return your Proxy
Card, Mr. Parks will vote your shares as you instruct on the Proxy Card. If you
sign and return your Proxy Card, but fail to instruct how to vote your shares,
Mr. Parks will vote your shares in favor of the slate of directors nominated by
the Board and "for" the proposals set forth on the Proxy Card. This way your
shares will be voted whether or not you attend. We recommend you vote by proxy
in advance of the Annual Meeting even if you plan to attend just in case your
plans change and you are then unable to attend.
The Board does not know of any matters to be presented at the Annual
Meeting other than those listed on the Notice and described in this Proxy
Statement. If a matter comes up for vote that is not covered by your proxy, Mr.
Parks will vote your shares in accordance with his judgment if you have signed
and returned your Proxy Card, and authorized him to do so.
The Board encourages you to attend the Annual Meeting in person. If
you decide to change your vote, you may revoke your proxy any time before your
vote is cast at the Annual Meeting by (i) giving notice of revocation to the
Secretary of Immtech, (ii) submitting a signed proxy bearing a date later than
the date of the Proxy Card or (iii) attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not, in itself, constitute
revocation of a proxy. Our principal executive offices are located at 150
Fairway Drive, Suite 150, Vernon Hills, Illinois 60061 and our telephone number
is (847) 573-0033, or toll free, (877) 898-8038.
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PURPOSE OF THE MEETING
At our Annual Meeting the stockholders will be asked to consider and
vote upon the following matters:
o Election of Directors - to elect seven directors to serve until the next
annual meeting of the stockholders and until their successors are elected
and qualified or their earlier resignation, removal, disqualification or
death;
o Proposal No. 1 - to approve a two-for-one stock split of the Company's
Common Stock;
o Proposal No. 2 - to approve amendments to and a restatement of the company's
Certificate of Incorporation substantially in the form attached as Appendix
"A" to the Proxy Statement, to effect the following,
a. increase the authorized common stock of the Company from 30
million to 100 million shares,
b. generally update the current Certificate of Incorporation, as
amended, to reflect current Delaware law,
c. to incorporate into one document previously filed amendments
to the Certificate of Incorporation, and
d. to file an amended and restated certificate of incorporation
with the Delaware Secretary of State reflecting all of the
above;
o Proposal No. 3 - to ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending March 31, 2004;
and
o to transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
VOTING RIGHTS
The Board has fixed the close of business on November [__], 2003, as
the record date (the "Record Date") for determination of stockholders entitled
to notice of and to vote at the Annual Meeting. Holders of record of our Common
Stock, $0.01 par value ("Common Stock"), Series A Convertible Preferred Stock,
$0.01 par value ("Series A Stock"), Series B Convertible Preferred Stock, $0.01
par value ("Series B Stock") and Series C Convertible Preferred Stock, $0.01 par
value ("Series C Stock") at the close of business on the Record Date will be
entitled to vote together as a single class on all matters that come before the
meeting. At the close of business on the Record Date, there were [__________]
shares of Common Stock, [______] shares of Series A Stock, [__________] shares
of Series B Stock, and [__________] shares of Series C Stock, outstanding. Each
share of Common Stock is entitled to one vote, each share of Series A Stock is
entitled to 5.6561 votes, each share of Series B Stock is entitled to 6.25 votes
and each share of Series C Stock is entitled to 5.6561 votes. Each share of
Series A Stock, Series
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B Stock and Series C Stock is entitled to the number of votes equal to the
number of shares of Common Stock into which such stock is convertible on the
Record Date.
The Series A Stock conversion rate is determined by dividing the
Series A Stock stated value ($25.00) plus accrued but unpaid dividends ($0) as
of the Record Date by the $4.42 conversion rate set forth in the Company's
Certificate of Designation of Series A Convertible Preferred Stock ("Series A
Stock Certificate of Designation"). Under this formula, each share of Series A
Stock is entitled to 5.6561 votes for a total number of votes of [__________]
for the Series A Stock. Holders of Series A Stock are entitled to the number of
votes determined by multiplying the aggregate number of shares of Series A Stock
held by 5.6561, rounded to the nearest whole number.
The Series B Stock conversion rate is determined by dividing the
Series B Stock stated value ($25.00) plus accrued but unpaid dividends ($0) as
of the Record Date by the $4.00 conversion rate set forth in the Company's
Certificate of Designation of Series B Convertible Preferred Stock. Under this
formula, each share of Series B Stock is entitled to 6.25 votes for a total
number of votes of [__________] for the Series B Stock. Holders of Series B
Stock are entitled to the number of votes determined by multiplying the
aggregate number of shares of Series B Stock held by 6.25, rounded to the
nearest whole number.
The Series C Stock conversion rate is determined by dividing the
Series C Stock stated value ($25.00) plus accrued but unpaid dividends ($0) as
of the Record Date by the $4.42 conversion rate set forth in the Company's
Certificate of Designation of Series C Convertible Preferred Stock ("Series C
Stock Certificate of Designation"). Under this formula, each share of Series C
Stock is entitled to 5.6561 votes for a total number of votes of [__________]
for the Series C Stock. Holders of Series C Stock are entitled to the number of
votes determined by multiplying the aggregate number of shares of Series C Stock
held by 5.6561, rounded to the nearest whole number.
A total of [__________] votes representing Common Stock, Series A
Stock, Series B Stock and Series C Stock are entitled to vote at the Annual
Meeting. The presence of holders of a majority of the outstanding shares of
Common Stock, Series A Stock, Series B Stock and Series C Stock entitled to
vote, voting as a single class, represented in person or by proxy, constitute a
quorum for the transaction of business at the Annual Meeting.
Assuming the presence of a quorum at the Annual Meeting, (i) those
director nominees receiving the most votes (a "plurality") will be elected and
(ii) the affirmative vote of the holders of at least a majority of the shares of
Common Stock, Series A Stock, Series B Stock and Series C Stock (each of the
Series A Stock, Series B Stock and Series C Stock voting on an as-if-converted
basis determined as set forth above) voting as a single class represented at the
meeting is required to (a) approve Proposal No. 1, to authorize a two-for-one
stock split, (b) approve Proposal No. 2, the amendment to and restatement of the
Company's Certificate of Incorporation substantially in the form attached, as
Appendix "A" hereto, (c) approve Proposal No. 3, the ratification of the
selection of Deloitte & Touche LLP as our independent auditors, and (d) approve
any other matters that may properly come before the Annual Meeting.
All properly completed Proxy Cards that are received by us, and not
revoked prior to the voting, will be voted at the Annual Meeting in accordance
with the instructions indicated on those proxies. If you sign your Proxy Card
but fail to direct how to vote your shares, then
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your shares will be voted in favor of the slate of directors proposed by the
Board listed herein, in favor of the two-for-one stock split, in favor of the
amendment to and restatement of the Company's Articles of Incorporation
substantially in the form attached as Appendix "A" hereto, and any other matters
properly brought before the Annual Meeting will be voted in accordance with the
judgment of your proxy representative, Mr. Gary C. Parks. If you mark the
appropriate box on the attached Proxy Card to abstain from voting, then your
shares will be counted for purposes of obtaining a quorum but will not be voted
in favor of any matter; abstentions therefor have the effect of a vote against
any proposal other than the election of directors.
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 matters without instruction from
the beneficial owner of the shares. If a broker returns a "non-vote" proxy, then
the shares represented by such proxy will be counted for the purpose of
determining the presence of a quorum only. Brokers who do not receive a
stockholder's instructions are entitled to vote such stockholder's shares for
the election of directors and for Proposal No. 3, ratification of the selection
of Deloitte & Touche LLP as the Company's independent auditors for the fiscal
year ending March 31, 2004. Broker "non-votes" will have no effect on (i) the
outcome of the election of directors because the seven directors receiving the
most "for" votes will be elected or (ii) in the outcome of Proposal 1, Proposal
2 or any other matter properly brought before the Annual Meeting or any
adjournment thereof.
ELECTION OF DIRECTORS
Your vote is requested in favor of seven directors to serve until
the next annual meeting of stockholders and until their successors are elected
and qualified or their earlier resignation, removal, disqualification or death.
The Board, pursuant to the recommendation of the Company's Nominating Committee,
has selected the following seven persons as nominees: T. Stephen Thompson,
Cecilia Chan, Harvey R. Colten, M.D., Judy Lau, Levi H.K. Lee, M.D., Eric L.
Sorkin and Frederick W. Wackerle. If you sign and return your Proxy Card, your
shares shall be voted for the director slate nominated by the Board except to
the extent that you list the name or names of those nominees for whom you
withhold authority.
Each of the nominees has indicated a willingness to serve. Should
any nominee become unavailable prior to the Annual Meeting, your proxy
representative will vote your shares for the person or persons recommended by
the Board.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
BOARD'S NOMINEES FOR DIRECTOR.
Security Ownership of Certain Beneficial Owners, Directors and Management
The following table sets forth, as of November 6, 2003, certain
information regarding the beneficial ownership (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of our
Common Stock based upon the most recent information available to us for (i) each
person known by us to own beneficially more than five (5%) percent of the
outstanding Common Stock, (ii) each director, (iii) each of our executive
officers whose total annual salary and bonus compensation exceeded $100,000 for
the fiscal year ended March 31, 2003 and (iv) all executive officers and
directors as a group. Except as
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otherwise indicated, each listed stockholder directly owned his or her shares
and had sole voting and investment power.
Number of Shares Percentage of
of Common Stock Outstanding Shares
Name and Address Beneficially Owned of Common Stock
---------------------------------------------------- ------------------------------------ ---------------------------
T. Stephen Thompson (1) 418,198 shares 4.41%
c/o Immtech International, Inc.
150 Fairway Drive, Ste. 150
Vernon Hills, IL 60061
Cecilia Chan (2) 286,141 shares 2.98%
c/o Immtech International, Inc.
One North End Ave.
New York, NY 10282
Gary C. Parks (3) 56,875 shares 0.61%
c/o Immtech International, Inc.
150 Fairway Drive, Ste. 150
Vernon Hills, IL 60061
Harvey Colten, M.D. (4) 28,089 shares 0.30%
c/o Office of the Dean Columbia University
College of Physicians and Surgeons
630 West 168th Street
New York, NY 10032
Judy Lau (5) 1,667 shares 0.02
Unit 2905, Shui On Centre
6-8 Harbour Road
Wanchai, Hong Kong
Levi H.K. Lee, M.D.(6) 197,926 shares 2.10%
1405 Lane Crawford House
70 Queens Road Central, Hong Kong
Eric L. Sorkin (7) 300,986 shares 3.13%
c/o Immtech International, Inc.
One North End Ave.
New York, NY 10282
Frederick W. Wackerle(8) 64,675 shares 0.69%
3750 N. Lake Shore Drive
Chicago IL 60613
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Number of Shares Percentage of
of Common Stock Outstanding Shares
Name and Address Beneficially Owned of Common Stock
---------------------------------------------------- ------------------------------------ ---------------------------
All executive officers and directors as a 1,354,557 shares 13.30%
group (8 persons)
Chan Kon Fung 1,246,600 shares 13.35%
Flat B, 16th Floor
132 Broadway
Mei Foo Sun Chuen
Kowloon, Hong Kong
(1) Includes (i) 284,047 shares of Common Stock; (ii) 45,249 shares of
Common Stock issuable upon the conversion of Series A Preferred Stock; (iii)
12,500 shares of Common Stock issuable upon the conversion of Series B Preferred
Stock; (iv) 25,000 shares of Common Stock issuable upon the exercise of warrants
as follows: warrant to purchase 20,000 shares of Common Stock at $6.00 per share
by February 14, 2007 (only after the Series A Preferred Stock has been converted
and vested), and warrant to purchase 5,000 shares of Common Stock at $6.125 per
share by September 25, 2007; and (v) 51,402 shares of Common Stock issuable upon
the exercise of options as follows: vested option to purchase 8,872 shares of
Common Stock at $0.46 per share by March 21, 2006, vested option to purchase
14,195 shares of Common Stock at $1.74 per share by April 16, 2008, the vested
portion of 25,002 shares of an option to purchase 75,000 shares of Common Stock
at $2.55 per share by December 24, 2012, and the vested portion of 3,333 shares
of an option to purchase 40,000 shares of Common Stock at $21.66 per share by
November 5, 2013.
(2) Includes (i) 34,297 shares of Common Stock; (ii) 5,781 shares of Common
Stock issuable upon the conversion of Series B Preferred Stock; (iii) 227,312
shares of Common Stock issuable upon the exercise of warrants as follows: vested
warrant to purchase 51,923 shares of Common Stock at $6.47 per share by July 24,
2004, vested warrant to purchase 173,077 shares of Common Stock at $6.47 per
share by October 12, 2004, and vested warrant to purchase 2,312 shares of Common
Stock at $6.125 per share by September 25, 2007; and (iv) 18,751 shares of
Common Stock issuable upon the exercise of options as follows: the vested
portion of 16,668 shares of an option to purchase 50,000 shares of Common Stock
at $2.55 per share by December 24, 2012, and the vested portion of 2,083 shares
of an option to purchase 25,000 shares of Common Stock at $21.66 per share by
November 5, 2013.
(3) Includes (i) 21,778 shares of Common Stock; (ii) 2,262 shares of Common
Stock issuable upon the conversion of Series A Preferred Stock; (iii) 1,000
shares of Common Stock issuable upon the exercise of warrants as follows:
warrant to purchase 1,000 shares of Common Stock at $6.00 per share by February
14, 2007 (only after the Series A Preferred Stock has been converted); and (iv)
31,835 shares of Common Stock issuable upon the exercise of options as follows:
vested option to purchase 14,195 shares of Common Stock at $1.74 per share by
April 16, 2008, the vested portion of 8,334 shares of an option to purchase
10,000 shares of Common Stock at $10.00 per share by July 19, 2011, the vested
portion of 8,056 shares of an option to purchase 25,000 shares of Common Stock
at $2.55 per share by December 24, 2012, and the vested portion of 1,250 shares
of an option to purchase 15,000 shares of Common Stock at $21.66 per share by
November 5, 2013.
(4) Includes (i) 1,088 shares of Common Stock; and (ii) 27,001 shares of
Common Stock issuable upon the exercise of options as follows: vested option to
purchase 20,000 shares of Common Stock at $10.50 per shares by December 28,
2005, the vested portion of 4,667 shares of an option to purchase 7,000 shares
of Common Stock at $4.75 per share by December 18, 2006, and the vested portion
of 2,334 shares of an option to purchase 7,000 shares of Common Stock at $2.55
per share by December 24, 2007.
(5) Includes the vested portion of 1,667 shares of an option to purchase
20,000 shares of Common Stock at $21.66 per share by November 5, 2013.
(6) Includes (i) 127,910 shares of Common Stock; (ii) 11,312 shares of
Common Stock issuable upon the conversion of Series A Preferred Stock; (iii)
52,037 shares of Common Stock issuable upon the conversion of Series C Preferred
Stock; (iv) vested warrant to purchase 5,000 shares of Common Stock at $6.00 per
share by February
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14, 2007 and (v) the vested portion of 1,667 shares of an option to purchase
20,000 shares of Common Stock at $21.66 per share by November 5, 2013.
(7) Includes (i) 26,288 shares of Common Stock; (ii) 20,362 shares of
Common Stock issuable upon the conversion of Series A Preferred Stock; (iii)
234,000 shares of Common Stock issuable upon the exercise of warrants as
follows: vested warrant to purchase 51, 923 shares of Common Stock at $6.47 per
share by July 24, 2004, vested warrant to purchase 173,077 shares of Common
Stock at $6.47 per share by October 12, 2004, and vested warrant to purchase
9,000 shares of Common Stock at $6.00 per share by February 14, 2007 (only after
the Series A Preferred Stock has been converted); and (iv) 20,336 shares of
Common Stock issuable upon the exercise of options as follows: the vested
portion of 18,002 shares of an option to purchase 27,000 shares of Common Stock
at $4.75 per share by December 18, 2006, and the vested portion of 2,334 shares
of an option to purchase 7,000 shares of Common Stock at $2.55 per share by
December 24, 2007.
(8) Includes (i) 13,098 shares of Common Stock; (ii) 13,575 shares of
Common Stock issuable upon the conversion of Series A Preferred Stock; (iii)
vested warrant to purchase 6,000 shares of Common Stock at $6.00 per share by
February 14, 2007 (only after the Series A Preferred Stock has been converted);
and (iv) 32,002 shares of Common Stock issuable upon the exercise of options as
follows: the vested option to purchase 15,000 shares of Common Stock at $10.50
per share by December 28, 2005, the vested portion of 14,668 shares of an option
to purchase 22,000 shares of Common Stock at $4.75 per share by December 18,
2006, and the vested portion of 2,334 on an option to purchase 7,000 shares of
Common Stock at $2.55 per share by December 24, 2007.
Information about the Nominees, Executive Officers and Key Employees
The tables below set forth the names and ages of our directors,
executive officers and key employees, as well as the positions and offices held
by such persons. A summary of the background and experience of each of these
individuals is set forth after the table.
Name Age Position with Immtech
----------------------- ---- ---------------------------------------------------
T. Stephen Thompson 56 Director, President and Chief Executive Officer
Cecilia Chan 40 Director and Executive Vice President
Harvey R. Colten, M.D. 64 Director
Judy Lau 44 Director
Levi H.K. Lee, M.D. 63 Director
Eric L. Sorkin 44 Director
Frederick W. Wackerle 64 Director
Name Age Position with Immtech
----------------------- ---- ---------------------------------------------------
Gary C. Parks 53 Treasurer, Secretary and Chief Financial Officer
T. Stephen Thompson, President, Chief Executive Officer and
Director. Mr. Thompson has served as a Director since November 27, 1991. He
joined Immtech in April 1991 from Amersham Corporation, where he was President
and Chief Executive Officer. He was responsible for Amersham Corporation's four
North American divisions: Life Sciences, Radiopharmaceuticals, Diagnostics and
Quality and Safety Products. In addition, he had direct responsibility for the
Clinical Reagent (in vitro diagnostic) Division in the United Kingdom. He was
employed by Amersham Corporation from 1986 to 1991. Mr. Thompson has 20 years'
experience in healthcare, with previous positions as President of a small
diagnostic start-up, General Manager of the Infectious Disease and Immunology
Business Unit in the Diagnostic
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Division of Abbott Laboratories from 1981 to 1986, and Group Marketing Manager
for the Hyland Division of Baxter International Inc. from 1978 to 1981. Mr.
Thompson is a member of the Board of Directors of Matritech, Inc. (NASDAQ:
NMPS). Mr. Thompson holds a B.S. from the University of Cincinnati and an MBA
from Harvard University.
Cecilia Chan, Director and Executive Vice President. Ms. Chan has
served as Director since November 16, 2001. She has 18 years of experience in
making investments and business development. She began working on Immtech's
growth strategy in 1998 as a private investor, spearheading Immtech's initial
public offering in April 1999. She joined the Company as Vice President in July,
1999 and was elected to our board of directors in November 2001. Ms. Chan is
responsible for strategic development, creating joint ventures and licensing
agreements, fund raising and directing the Company's uses of capital resources
as it advances through its milestones and various growth stages. Prior to
joining Immtech, Ms. Chan was a Vice President at Dean Witter Realty, Inc. until
1993 and thereafter concentrated her efforts as a private investor until she
joined Immtech. During her eight years at Dean Witter, Ms. Chan completed over
$500 million in investments and was vice-president of public partnerships having
assets in excess of $800 million. Since 1993, Ms. Chan has developed and funded
investments in the United States and the People's Republic of China. She
graduated from New York University in 1985 with a Bachelor of Science degree in
International Business.
Harvey R. Colten, M.D., Director. Dr. Colten has served as Director
since October 30, 2000. He is currently Vice President and Senior Associate Dean
for Translational Research at Columbia University Health Sciences Division and
College of Physicians and Surgeons. Prior to this, he served as Chief Medical
Officer at iMetrikus, Inc., a healthcare Internet company focused on improving
communication between the patient, physician and the medical industry from 2000
until 2002, and prior to that he was Dean of the Medical School and Vice
President for Medical Affairs at Northwestern University from 1997 to 2000. He
previously served as the Harriet B. Spoehrer Professor and Chair of the
Department of Pediatrics and Professor of Molecular Microbiology at Washington
University School of Medicine, St. Louis, Missouri, whose faculty he joined in
1986. He earned a B.A. at Cornell University in 1959, an M.D. from Western
Reserve University in 1963, and an M.A. (honorary) from Harvard in 1978.
Following his clinical training, he was a researcher at the National Institutes
of Health from 1965 to 1970. In 1970, he was appointed to the faculty at the
Harvard Medical School, where he was named Professor of Pediatrics in 1979 and
Chief of the Division of Cell Biology, Pulmonary Medicine, and Director of the
Cystic Fibrosis Program at Children's Hospital Medical Center, Boston. He is a
member of the Institute of Medicine and was Vice-Chair of its Council. He is a
member of the American Society for Clinical Investigation, the Society for
Pediatric Research, the Association of American Physicians, the American
Pediatric Society, the American Association of Immunologists (former secretary
and treasurer), and the American Society for Biochemistry and Molecular Biology.
He is also a Fellow of the American Association for the Advancement of Science,
the American Academy of Allergy and Immunology and the American Academy of
Pediatrics. Dr. Colten is a Diplomat of the American Board of Pediatrics, served
on the American Board of Allergy and Immunology, was a member of the National
Heart, Lung, and Blood Institute Advisory Council, and serves on the Board of
Directors of the Oasis Institute and the March of Dimes Scientific Advisory
Council, in addition to many other Federal and private health groups that advise
on scientific and policy issues. Dr. Colten also served as Vice Chairman of the
Board of Directors of Parents as Teachers National Center. He has been on
editorial boards and advisory committees of several
8
leading scientific and medical journals, including the New England Journal of
Medicine, Journal of Clinical Investigation, Journal of Pediatrics, Journal of
Immunology, Annual Review of Immunology, Proceedings of the Association of
American Physicians and American Journal of Respiratory Cell and Molecular
Biology.
Levi Hong Kaye Lee, M.D., Director. Dr. Lee has served as Director
since October 31, 2003. Dr. Lee has been in private medical practice,
specializing in pediatrics, since 1971. His practice is located in Hong Kong.
Dr. Lee received a B.A. in Biochemistry from the University of California,
Berkeley, in 1962, and received his M.D. from the University of California, San
Francisco, in 1966. Dr. Lee has served in the position of Director of Immtech
Hong Kong Ltd. since June, 2003. He was appointed a Diplomat of the American
Board of Pediatrics in 1971.
Judy Lau, Director. Ms. Lau has served as Director since October 31,
2003. Since July 2002 to date, Ms. Lau has served as the Chairperson of
Convergent Business Group, a Hong Kong-based investment advisory firm with
investments focused in high technology, life sciences, healthcare and
environmental engineering projects in the greater China region. From May of 2001
to July of 2002, Ms. Lau served as General Manager of China Overseas Venture
Capital Co. Ltd., a venture capital firm. From October of 2000 to April of 2001,
Ms. Lau served as Chief Executive Officer of the Good Fellow Group, a Chinese
investment firm; and from March of 1999 to September of 2000, Ms. Lau was the
Managing Director of America Online HK, an Internet Service Provider and Hong
Kong affiliate of Time Warner, Inc. From April of 1998 to February of 1999 Ms.
Lau worked as a consultant to Pacific Century Group Ventures Ltd.
Ms. Lau was named in 2000, one of the thirty-six most influential
Business Women of Hong Kong by Capital Magazine and is a Fellow of the Hong Kong
Association for the Advancement of Science and Technology.
Eric L. Sorkin, Director. Mr. Sorkin has served as Director since
January 6, 2000. He is a private investor. Prior to 1994, Mr. Sorkin worked for
eleven years at Dean Witter Realty Inc., a wholly owned subsidiary of Morgan
Stanley, which grew to hold an investment portfolio of real estate and other
assets of over $3 billion. He became a Managing Director in 1988 and was
responsible for the acquisition, structuring and debt placement of various
investments including real estate, fund management and asset-backed securities.
Mr. Sorkin managed Dean Witter Realty's shopping center portfolio of over two
million square feet, and participated in the development of office, residential,
industrial and retail property and in the acquisition of over five million
square feet of properties. He is a graduate of Yale University with a Bachelor
of Arts degree in Economics.
Frederick W. Wackerle, Director. Mr. Wackerle has served as Director
since December 17, 2001. He is an author, private investor and President of Fred
Wackerle, Inc. He has been an advisor to Chief Executive Officers ("CEOs") and
boards and an executive search consultant for the past 35 years. Mr. Wackerle
specializes in advising corporate boards on management succession and the
recruiting of CEO positions. In the past ten years, he devoted a significant
amount of his time to investing in and advising biotechnology companies on
succession planning, and recruited CEO candidates and board members for
companies that include Biogen, Inc., ICOS Corp., Amylin Pharmaceuticals, Inc.,
Enzon, Inc., Medtronic Inc. and Ventana Medical Systems. Mr. Wackerle frequently
writes management articles for Chicago Crain's Business, recently completed a
book on management succession entitled, "The Right CEO-Straight Talk About
Making CEO Selection Decisions" (Jossey-Bass), and is a graduate of
9
Monmouth College, where he has been active on their Board of Trustees. He is
also a board member of The Rehabilitation Institute of Chicago.
Gary C. Parks, Treasurer, Secretary and Chief Financial Officer. Mr.
Parks joined Immtech in January 1994, having previously served at Smallbone,
Inc., from 1989 until 1993, where he was Vice President, Finance. Mr. Parks was
a Division Controller with International Paper from 1986 to 1989. Prior to that,
he was Vice President, Finance, of SerckBaker, Inc., a subsidiary of BTR plc,
from 1982 to 1986 and a board member of SerckBaker de Venezuela. Mr. Parks holds
a B.A. from Principia College and an MBA from the University of Michigan.
Meetings and Committees of the Board of Directors
During the fiscal year ended March 31, 2003 ("Fiscal Year 2003"),
the Board of Directors held a total of 7 Board meetings and took action by
unanimous written consent on 2 occasions. All of our directors will serve until
the next annual meeting of stockholders and until their successors have been
duly elected and qualified or their earlier resignation, removal,
disqualification or death. There are no arrangements between any director or
executive officer and any other person pursuant to which the director or officer
is to be selected as such. There is no family relationship between the
directors, executive officers or persons nominated or appointed by the Board to
become directors or executive officers.
The Board of Directors has an audit committee, a compensation
committee and a nominating committee. The function, composition, and number of
meetings of each of these committees are described below.
AUDIT COMMITTEE
The audit committee (a) has sole authority to appoint, replace and
compensate our independent auditors and is directly responsible for oversight of
their work; (b) approves all audit fees and terms, as well as any permitted
non-audit engagements; (c) meets and discusses directly with our independent
auditors their audit work and related matters and (d) oversees and performs such
investigations with respect to our internal and external auditing procedures and
affairs as the audit committee deems necessary or advisable and as may be
required by applicable law. The written charter for our audit committee, which
was adopted by the Board of Directors, more specifically sets forth the duties
and responsibilities of the audit committee and is attached as Appendix "B"
hereto. The members of the audit committee are Directors Sorkin (Chairman),
Colten and Wackerle. Each member of the audit committee is "independent" in
accordance with the current listing standards of the American Stock Exchange.
The audit committee held four meetings during Fiscal Year 2003. The audit
committee's report relating to Fiscal Year 2003 appears on pages 26-27 of this
proxy statement.
COMPENSATION COMMITTEE
The compensation committee (a) annually reviews and determines
salaries, bonuses and other forms of compensation paid to our executive officers
and management; (b) selects recipients of awards of incentive stock options and
non-qualified stock options and establishes the number of shares and other terms
applicable to such awards; and (c) construes the provisions of and generally
administers the First Amended and Restated Immtech International, Inc. 2000
Stock Incentive Plan. The written charter for our Compensation Committee, which
10
was adopted by the Board of Directors, is attached as Appendix "C" hereto. The
members of the compensation committee are Directors Wackerle (Chairman), Colten
and Sorkin. The compensation committee held two meetings during Fiscal Year
2003. The compensation committee's report on executive compensation relating to
Fiscal Year 2003 appears on pages 15-17 of this proxy statement.
NOMINATING COMMITTEE
The nominating committee has authority to review the qualifications
of, interview and nominate candidates for election to the Board of Directors.
The nominating committee held one meeting in anticipation of the Company's 2003
Annual Meeting. The written charter for our Nominating Committee, which was
adopted by the Board of Directors, is attached as Appendix "D" hereto. The
members of the nominating committee are Directors Wackerle (Chairman), Colten
and Sorkin. Each member of the nominating committee is "independent" in
accordance with the current listing standards of the American Stock Exchange.
The nominating committee's report appears below on page 11 of this proxy
statement.
MEETING ATTENDANCE
Each Director attended at least 75% of the aggregate of (a) the
total number of meetings of the Board of Directors and (b) the total number of
meetings of all committees of the Board of Directors on which he or she served
(during the periods that he or she served).
11
--------------------------------------------------------------------------------
NOMINATING COMMITTEE REPORT
The members of the Nominating Committee have been appointed by the
Board of Directors. The Nominating Committee is governed by a charter which has
been approved and adopted by the board of directors and which will be reviewed
and reassessed annually by the Nominating Committee.
The following report of the nominating committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference therein.
The nominating committee consists of Directors Colten, Sorkin and
Wackerle (chair). The nominating committee evaluates the efforts of the Company
and its board of directors to maintain effective corporate governance practices.
The committee identifies candidates for election to the board of directors. The
nominating committee has not established procedures for considering nominees
recommended by stockholders.
The primary functions of the nominating committee are to:
- Identify qualified candidates for election to the Board
- Oversee the composition, structure and evaluation of the Board
and its committees
- Develop and maintain a set of corporate governance principles
- Monitor and safeguard the independence of the Board
Respectfully submitted,
The Nominating Committee November 6, 2003
Frederick W. Wackerle, Chairman
Harvey R. Colten, M.D.
Eric L. Sorkin
--------------------------------------------------------------------------------
Compensation of Directors and Executive Officers
Summary Compensation Table. The following table sets forth certain
information regarding the compensation of our Chief Executive Officer, Executive
Vice President and Chief Financial Officer for the fiscal years ended March 31,
2003, 2002 and 2001.
12
Annual Long-Term
Compensation Compensation
------------- -----------------
Name & Principal Position Year Salary ($) Options/SARs (#)
-------------------------------------- --------- ------------- -----------------
T. Stephen Thompson 2003 $150,000 75,000(1)
President, Chief Executive Officer 2002 $150,000 0
and Director 2001 $150,000 0
Cecilia Chan 2003 $120,000 50,000(2)
Executive Vice President and 2002 $120,000 0
Director 2001 $ 75,000 0
Gary C. Parks 2003 $143,250* 25,000(3)
Secretary, Treasurer and Chief 2002 $125,000 10,000(3)
Financial Officer 2001 $125,000 0
(1) On December 24, 2002, Mr. Thompson was issued options to purchase
75,000 shares of Common Stock at an exercise price of $2.55 per share. Such
options vest over three years and expire ten years after date of grant.
(2) On December 24, 2002, Ms. Chan was issued options to purchase 50,000
shares of Common Stock at an exercise price of $2.55 per share. Such options
vest over three years and expire ten years after date of grant.
(3) On July 20, 2001, Mr. Parks was issued options to purchase 10,000
shares of Common Stock at an exercise price of $10.00 per share. Such options
vest over three years and expire ten years after date of grant. On December 24,
2002, Mr. Parks was issued options to purchase 25,000 shares of Common Stock at
an exercise price of $2.55 per share. Such options vest over three years and
expire ten years after date of grant.
Options/SAR Grants in Last Fiscal Year. The following table sets
forth certain information with respect to grants made by the Company of stock
options to the executive officers named above during the fiscal year ended March
31, 2003. No stock appreciation rights ("SARs") were granted to the named
executive officers during such year.
Potential Realizable Value At
Assumed Annual Rates of Stock
Price Appreciation For Option
Individual Grants Term
--------------------------------------------------------------------------------- ---------------------------------
Percent of
Total
Number of Options/SARs
Securities Granted to Exercise
Underlying Employees In or Base
Options/SARs Fiscal Year Price Date
Name Granted 2003 ($/SH) Expiration 5% ($) 10% ($)
------------------------- -------------- -------------- ---------- ------------ ---------------- ---------------
T. Stephen Thompson 75,000 36.95 2.55 12/23/2012 311,526 496,053
Cecilia Chan 50,000 24.63 2.55 12/23/2012 207,684 330,702
Gary C. Parks 25,000 12.32 2.55 12/23/2012 103,842 165,351
The following table sets forth certain information with respect to
option and warrant exercises and values of the named executive officers for the
fiscal year ended March 31, 2003.
----------------------------
* Includes a bonus of $18,250.
13
Number of Securities Underlying Value of Unexercised
Unexercised Options At March 31, In-the Money Options at
2003 March 31, 2003(1)
----------------------------------- ------------------------------
Shares Value
Acquired on Realized
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------------- -------------- ------------ ----------------- ----------------- ------------- ----------------
T. Stephen Thompson 0 0 34,318 88,749 87,211(1) 134,061(2)
Cecilia Chan 0 0 231,479 45,833 8,126(3) 89,374(4)
Gary C. Parks 0 0 21,835 28,360 43,242(5) 44,686(6)
-------------------------------------------------------------------------------------------------------------------------
(1) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $1.53 multiplied by the number of shares
underlying the options.
(2) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $2.55 multiplied by the number of shares
underlying the options.
(3) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $2.55 multiplied by the number of shares
underlying the options.
(4) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $2.55 multiplied by the number of shares
underlying the options.
(5) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $1.84 multiplied by the number of shares
underlying the options.
(6) Based on the March 31, 2003, value of $4.50 per share, minus the
average per share exercise price of $2.55 multiplied by the number of shares
underlying the options.
Employment Agreements
Immtech entered into an employment agreement with Mr. Thompson in
April of 1991 pursuant to which we retained Mr. Thompson as our President and
Chief Executive Officer for an annual base salary of $150,000 (subject to annual
adjustment by the Board), plus certain fringe benefits and reimbursement for
related business expenses. The agreement, which includes confidentiality and
non-disclosure provisions, also grants to Mr. Thompson the right to receive an
annual bonus to be established by the Board in an amount not to exceed 60% of
Mr. Thompson's annual base salary for the year, which Mr. Thompson has declined
for each year to date. Mr. Thompson may accept bonus awards in future years but
will not be paid a bonus for years previously declined. If the Company breaches
the agreement or Mr. Thompson is terminated without cause, he is entitled to all
payments which he would otherwise accrue over the greater of nine months from
the date of termination or the remaining term under the agreement. The original
term of Mr. Thompson's agreement expired on April 9, 1992, and is subject to
automatic successive one-year renewals unless terminated by either party upon 30
days' notice. In the event Mr. Thompson's employment with the Company is
terminated for any reason, he is restricted from competing with the Company in
any business in which the Company (i) is engaged at that time (ii) is planning
to become engaged and has made significant monetary investment in order to be
engaged or (iii) was engaged at any time during his employment. The non-compete
restriction period is 12 months from the date of Mr. Thompson's voluntary
termination or an involuntary termination for cause, or for a period of nine
months from the date of an involuntary termination, not for cause.
14
Except for $12,500 paid to Mr. Thompson during the fiscal year ended
March 31, 1998, Mr. Thompson waived any right to receive salary due under his
employment agreement prior to June 30, 1998. Beginning July 1, 1998, and
continuing until April 30, 1999, Mr. Thompson accepted one-half of his annual
salary as full satisfaction of the salary obligation under his employment
agreement. Effective May 1, 1999, Mr. Thompson resumed his full salary rate of
$150,000 per annum under his employment agreement, but will not be paid amounts
previously waived or declined. Effective September 1, 2003, the Company's
Compensation Committee increased Mr. Thompson's base salary to $210,000 annually
and on November 6, 2003 granted to him incentive options to purchase 40,000
shares of the Company's common stock exercisable at $21.66. The options vest
ratably over 2 years and expire on the 10th anniversary of the date of grant.
Mr. Thompson received no cash bonus for the fiscal year ended March 31, 2003.
Director Compensation for Fiscal Year Ended March 31, 2003
Prior to October 1, 2003, non-employee directors were generally
granted options to purchase 15,000 shares of common stock upon joining the
Board, options to purchase 5,000 shares for each additional year of Board
service and options to purchase 1,000 shares for each committee assignment. Such
options were granted at fair market value and generally had a five year term
with 36 month ratable vesting.
Effective October 1, 2003, each non-employee director will be
granted 20,000 options to purchase shares of Common Stock upon joining the
Board, options to purchase 15,000 shares for each additional year of Board
service, options to purchase 3,000 shares per year for each Board committee
appointment and options to purchase an additional 1,000 shares for serving as
chairperson of a committee. All options are to be granted at fair market value
of the underlying securities on the date of grant and will have a ten-year term
vesting ratably over 24 months. Directors must remain on the Board for such
options to continue to vest. We will continue to reimburse directors for
out-of-pocket expenses incurred with their service as directors.
On December 24, 2002, Mr. Frederick W. Wackerle was granted options
to purchase a total of 7,000 shares of Common Stock for his Board service during
the fiscal year ended March 31, 2003. He received (i) 5,000 for one year of
service on the Board and (ii) 2,000 for Board committee appointments, 1,000 each
for one-year appointment to our Audit Committee and Compensation Committee. All
such options have an exercise price of $2.55, an exercise period of five years
and vest ratably over 36 months.
On December 24, 2002, Mr. Eric L. Sorkin was granted options to
purchase a total of 7,000 shares of Common Stock for his Board service during
the fiscal year ended March 31, 2003. He received (i) 5,000 for one year of
service on the Board and (ii) 2,000 for Board committee appointments, 1,000 each
for one-year appointment to our Audit Committee and Compensation Committee. All
such options have an exercise price of $2.55, an exercise period of five years
and vest ratably over 36 months.
On December 24, 2002 Harvey R. Colten. M.D. was granted options to
purchase a total of 7,000 shares of Common Stock for his Board service during
fiscal year ended March 31, 2003. He received (i) 5,000 for one year of service
on the Board and (ii) 2,000 for Board committee appointments, 1,000 each for
one-year
15
appointment to our Audit Committee and Compensation Committee. All such options
have an exercise price of $2.55, an exercise period of five years and vest
ratably over 36 months.
On November 6, 2003, Dr. Levi H.K. Lee was granted options to
purchase 20,000 shares of Common Stock for joining the Board. Such options have
an exercise price of $21.66, an exercise period of ten years and vest ratably
over 24 months.
On November 6, 2003, Ms. Judy Lau was granted options to purchase
20,000 shares of Common Stock for joining the Board. Such options have an
exercise price of $21.66, an exercise period of ten years and vest ratably over
24 months.
Compensation Committee Report
The Compensation Committee is composed of three independent
directors of the Board. The members of the Compensation Committee are Frederick
W. Wackerle, Chairman, Harvey R. Colten, M.D., and Eric L. Sorkin.
--------------------------------------------------------------------------------
Compensation Committee Report on Executive Compensation
Our Compensation Committee establishes levels of cash compensation
and forms and amounts of non-cash compensation for our executive officers. The
guiding principles of our compensation committee are as follows:
o To provide a reasonable level of compensation sufficient to attract
and retain executive personnel best suited by training, ability and
other relevant criteria for the management requirements of our
company.
o To balance base compensation (non-contingent) and incentive
compensation (contingent upon performance) for the purpose of
motivating executive personnel.
o To determine the extent and method of aligning the financial
interest of our executive personnel with the interest of our
stockholders in the appreciation of their investment.
o Administer the Company's First Amended Restated Immtech
International, Inc. 2000 Stock Incentive Plan, as amended.
o Review compensation plans, programs and policies.
o To use equity incentives to align the interests of our executive
officers with the interests of shareholders.
o Monitor the performance and compensation of executive officers.
The goal of the Company's executive compensation policy is to ensure
that an appropriate relationship exists between executive compensation and the
creation of stockholder value, while at the same time attracting, motivating and
retaining senior management. The Compensation Committee's informal executive
compensation philosophy (which applies generally to all Company management,
including the Chief Executive Officer) considers a number of factors, which may
include:
o Providing levels of compensation competitive with companies at a
comparable stage of development and in the Company's geographic
area,
o Integrating management's compensation with the achievement of
performance goals,
--------------------------------------------------------------------------------
16
--------------------------------------------------------------------------------
and
o Recognizing and providing incentive for individual initiative and
achievement.
The compensation structure of the Company's executive officers,
including its Chief Executive Officer, is based on competitive, market-based pay
practices and performance evaluations, and generally includes a combination of
base salary, discretionary bonuses and stock options. In setting compensation
levels, the Compensation Committee considers data regarding compensation
practices from a group of biotechnology and pharmaceutical companies that are
believed to be generally comparable to the Company. The companies comprising
this group are not necessarily included within the peer group index reflected in
the performance graph illustrated in this Proxy Statement. In setting our Chief
Executive Officer's salary, we applied the same policy as applied in setting the
compensation of our other executive officers. Our Chief Executive Officer's base
salary for the most recent fiscal year was $150,000. Effective September 1,
2003, his salary was increased to $210,000 annually and he received options to
purchase 40,000 shares of common stock and no cash bonus award in this fiscal
year. As it has in the past, the compensation committee considered information
as to compensation levels for officers and senior managers of comparable scope
and responsibility in an industry group of comparably sized companies. The
compensation committee believes Mr. Thompson's salary to be below market
however, Mr. Thompson, in his effort to minimize overhead, has requested his
salary be kept at a reduced rate.
Base salary is not targeted at any particular level within the group
of companies considered. Instead, total salary is determined based on a
subjective assessment of the executive's performance and the Company's needs.
Consistent with its belief that equity ownership by senior management is
beneficial in aligning the interests of senior management with those of the
stockholders, the Company provides potentially significant long-term incentive
opportunities to its senior management through discretionary grants of stock
options, thereby emphasizing the potential creation of long-term stockholder
value. The Compensation Committee considers stock options effective long-term
incentives because an executive can profit only if the value of the Common Stock
increases. In making these grants, the Compensation Committee considers its
subjective assessment of the Company's future prospects, an executive officer's
current level of ownership of the Common Stock, the period during which an
executive officer has been in a key position with the Company, individual
performance and competitive practices within the comparative group of companies.
No contingent compensation was paid to any officer for Fiscal Year
2003.
In Fiscal Year 2003, we granted stock options to the Chief Executive
Officer and other executive officers. These stock option grants were made
pursuant to our First Amended and Restated Immtech International, Inc. 2000
Stock Incentive Plan for the purpose of further increasing incentives for our
officers to increase shareholder value. No stock appreciation rights or other
forms of equity compensation were granted.
Section 162(m) of the Internal Revenue Code generally denies a
deduction to any publicly held corporation for compensation paid to its chief
executive officer and its four other highest-paid executive officers to the
extent that any such individual's compensation exceeds $1 million, subject to
certain exceptions. The Compensation Committee intends to take actions to
minimize the Company's exposure to nondeductible compensation expense under
Section
--------------------------------------------------------------------------------
17
--------------------------------------------------------------------------------
162(m). While keeping this goal in mind, the Compensation Committee also
will try to maintain the flexibility that the Committee believes to be an
important element of the Company's executive compensation program.
The Compensation Committee Report does not constitute soliciting
material and shall not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent the Company
specifically incorporates this Compensation Committee Report by reference
therein.
Respectfully submitted,
The Compensation Committee November 6, 2003
Frederick W. Wackerle, Chairman
Harvey R. Colten, M.D.
Eric L. Sorkin
--------------------------------------------------------------------------------
18
Stock Performance Graph
-----------------------
The following graph shows a comparison of cumulative total
stockholder returns for Immtech's common stock, the S&P 500 Index and the Peer
Group. The graph assumes the investment of $100 on April 26, 1999, the date of
Immtech's initial public offering, and the reinvestment of all dividends. The
data regarding Immtech assumes an investment at the initial public offering
price of $10.00 per share of Immtech's Common Stock. The performance shown is
not necessarily indicative of future performance.
Comparison of Cumulative Total Return
Assumes Initial Investment of $100
March 2003
$400.00 ---------------------------------------------------------------
$350.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$300.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$250.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Dollars [GRAPHIC OMITTED - Line Graph]
$200.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$150.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$100.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$50.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$0.00 ---------------------------------------------------------------
April 26, 1999 2000 2001 2002 2003
[GRAPHIC OMITTED - Line Graph Legend]
The information contained in the graph above shall not be deemed to
be "soliciting material" or to be "filed" with the SEC, nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, or subject to Regulation 14A or 14C promulgated under the Exchange Act,
other than as provided in Item 402 of the SEC's Regulation S-K, or to the
liabilities of Section 18 of the Exchange Act, except to the extent that Immtech
specifically requests that the information be treated as soliciting material or
specifically incorporates it by reference in such filing.
19
TOTAL SHAREHOLDER RETURNS
Total Return To Shareholder's
(Dividends reinvested monthly)
Annual Return Percentage
Years Ended
Company Name / Index Mar 00 Mar 01 Mar 02 Mar 03
Immtech International, Inc. 182.50 -79.65 -16.52 -6.25
S&P 500 Index 11.47 -21.68 0.24 -24.76
Peer Group 250.92 -57.83 -23.54 -68.34
INDEXED RETURNS
Base Years Ended
Period
April 26,
Company Name / Index 1999 Mar 00 Mar 01 Mar 02 Mar 03
Immtech International, Inc. $100 $282.50 $57.50 $48.00 $45.00
S&P 500 Index 100 111.47 87.31 87.52 65.85
Peer Group 100 350.92 147.97 113.14 35.82
Peer Group Companies
Cubist Pharmaceuticals, Inc. (NASDAQ: CBST)
EntreMed, Inc. (NASDAQ: ENMD)
Encysive Pharmaceuticals, Inc. (NASDAQ: ENCY)
Equity Compensation Plans
The following table provides information as of March 31, 2003 with
respect to shares of Immtech common stock that may be issued under its existing
equity compensation plans, including Immtech's 2001 First Amended and Restated
Stock Incentive Plan ("2000 Plan"). For a further description of the 2000 Plan,
please see Note 7 of Immtech's Notes to Consolidated Financial Statements in
Immtech's 2003 Annual Report accompanying this proxy statement.
20
Equity Compensation Plan Information
---------------------------------------------------------------------------------------------------------------------
Number of securities remaining
Number of securities to Weighted-Average available for future issuance
be issued upon exercise exercise price of under equity compensation
of outstanding options, outstanding options, plans (excluding securities
Plan Category warrants and rights warrants and rights(1) reflected in column (a))
-------------------------------- ------------------------- ------------------------- --------------------------------
(a) (b) (c)
Equity compensation plans 698,474 $4.49 630,750 (3)
approved by security
holders (2)
Equity compensation plans not 2,426,227 $7.07 0
approved by security
holders (3)
Total 3,124,701 $6.49 630,750 (3)
(1) As adjusted for reverse stock splits that occurred on each of July 24,
1998 and January 25, 1999.
(2) This category consists solely of options.
(3) This category consists solely of warrants.
PROPOSAL NO. 1 - TWO-FOR-ONE STOCK SPLIT
Our Board has unanimously approved a two-for-one split of our
Common Stock, subject to stockholder approval of the stock split. If approved,
each holder of Common Stock will receive two shares for each one share
currently held.
Reasons for the Stock Split and the Increase in Authorized Shares
We expect that the stock split will increase the number of shares
traded in the public market, which we believe should establish a more liquid
market in our Common Stock.
As of November 6, 2003, 9,339,713 shares of our Common Stock were
issued and outstanding, 5,097,683 shares in the aggregate were reserved for
conversion of outstanding preferred stock and exercise of outstanding stock
options and warrants and 20,660,287 shares were authorized but unissued. Based
on the number of shares of Common Stock outstanding as of November 6, 2003,
post-split we would have 18,679,426 shares of Common Stock outstanding,
10,195,366 shares reserved for conversion of outstanding preferred stock and
conversion of outstanding options and warrants, and 1,125,208 shares of Common
Stock would remain available for such purposes as the Board may approve. No
further vote of stockholders of the Company would be required for their
issuance, except as required under applicable stock exchange rules.
Other than the shares of Common Stock the Company has reserved for
issuance under its existing stock incentive plan, the Company currently has no
specific commitments or agreements to issue any shares of Common Stock pursuant
to any stock offerings, acquisitions, stock dividends or compensation plans,
although it is possible that any such transaction may be pursued in the future.
21
Effect of the Stock Split
The proposed stock split would not change the stockholders' equity
of the Company, nor would the split affect the relative rights of any
stockholder or result in a dilution or diminution of any stockholder's
proportionate interest in the Company. However, since the stock split would
result in each stockholder's interest being represented by a greater number of
shares, it is possible that higher aggregate brokerage commissions may be
payable after the intended stock split upon a sale or transfer of a
stockholder's same relative interest in Common Stock because that interest would
be represented by a greater number of shares.
In connection with the stock split, the number of shares of Common
Stock underlying outstanding stock options, stock warrants and reserved for
issuance under the Company's existing stock incentive plan would be
proportionately adjusted pursuant to the terms of such agreements to reflect the
stock split, and the per share exercise prices of outstanding options and
warrants under such Company agreements would be proportionately reduced.
The stock split will not result in the recognition of a taxable gain
or loss to the stockholders for federal income tax purposes. In addition, the
tax basis for shares in the hands of a stockholder prior to the stock split will
become the tax basis for the total number of shares to be held by such
stockholder immediately after the stock split, and the holding period of the
newly acquired shares will be deemed to be the same as the holding period of the
corresponding shares held prior to the stock split. However, each stockholder
should consult his or her own tax advisor with respect to the particular tax
consequences, if any, to him or her of the stock split, including the
applicability and effect of any state, local or foreign tax laws.
Implementation of the Stock Split
We have notified the American Stock Exchange of the proposed stock
split and will submit an amended listing application to reflect it. We will
publicly announce the results of the stockholder vote with respect to the stock
split as promptly as practicable after the Meeting (or any adjournment). If
approved by the stockholders, we presently intend to also publicly announce the
effective date of the stock split promptly after the Meeting.
On the effective date, for every one issued share of Common Stock
held, two will be issued. We will implement the stock split by issuing an
additional certificate to each stockholder of record as of the close of business
on the effective date. The additional certificate will represent one additional
share for each one held, and stockholders should retain their present
certificates. Stockholders need not return their existing certificates to the
Company or its transfer agent, although they may do so through the transfer
agent if they wish to combine their shares in a single certificate.
The Board reserves the right, even if this stock-split proposal is
approved, not to effect the stock-split or to reduce the number of shares to be
issued if it determines in its sole discretion that implementing the stock split
is no longer in the best interest of the Company.
22
Impact on the Company's Consolidated Financial Statements
The Company's reported amounts of authorized and issued Common Stock
will also be adjusted on a two-for-one basis. The stock split will affect
reported earnings (loss) per share amounts because of the increase in the number
of shares of Common Stock outstanding.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF
PROPOSAL NO. 1, THE TWO-FOR-ONE STOCK SPLIT.
PROPOSAL 2--APPROVAL OF AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
On November 4, 2003, the Board unanimously adopted, subject to
stockholder approval, the Amended and Restated Certificate of Incorporation as
set forth in Appendix "A". The proposed Amended and Restated Certificate of
Incorporation is intended to modernize the Certificate of Incorporation
originally filed on December 18, 1992, as amended, and to integrate in one
document previously filed amendments to the Certificate of Incorporation. The
proposed Amended and Restated Certificate of Incorporation incorporates more
recent provisions of the Delaware General Corporation Law and deletes
unnecessary provisions. If the proposed Amended and Restated Certificate of
Incorporation is approved by the stockholders, it will be filed with the
Delaware Secretary of State and become effective upon such filing.
Summary of Proposed Changes to the Certificate of Incorporation
The following is a summary of the principal changes that the
proposed Amended and Restated Certificate of Incorporation makes to the
Certificate of Incorporation, as amended.
23
Registered Office
As revised, the Amended and Restated Certificate of Incorporation
would permit the Board of Directors to change the Company's registered agent
from time to time as determined by the Board of Directors. The registered agent
designated in the Company's current Certificate of Incorporation is no longer in
business.
Authorized Capital
In connection with Proposal 1 to provide for a two-for-one stock
split, and for other general corporate purposes recognizing the tremendous
growth the Company has experienced in the last calendar year, the Board of
Directors has approved an increase to the authorized capital of the Company from
35 million shares, of which 30 million shares are Common Stock and 5 million
shares are Preferred Stock, to 105 million shares, of which 100 million shares
will be Common Stock with 5 million shares remaining Preferred Stock. There will
be no change to the par value of either the Common Stock or the Preferred Stock;
both will remain at $0.01 par value per share.
If approved by the stockholders of the Company, the additional
authorized shares would be available for future issuance for various corporate
purposes at the discretion of the Board and without further authorization by the
stockholders (subject to the requirements of applicable law or the listing
requirements of the American Stock Exchange). The increase in authorized shares
of Common Stock is recommended by the Board in order to provide a sufficient
reserve of such shares for issuance in (a) public or private offerings as a
means of obtaining additional capital to potentially retire debt or (b) public
or private exchange offers for securities of the Company. The reserve of Common
Stock could also be used for the following purposes, without limitation: (i) as
part or all of the consideration required to be paid for the acquisition of
ongoing businesses or other assets; (ii) in public or private offerings as a
means of obtaining additional capital to strengthen the Company and expand its
business; (iii) in connection with the exercise of options, warrants, rights, or
the conversion of convertible securities of the Company; (iv) in connection with
stock splits and dividends; or (v) with respect to existing or new benefit or
option plans or agreements.
Preferred Stock
On June 30, 1998, the Company filed an amendment to the Certificate
of Incorporation whereby the Board was authorized to provide for the issuance of
Preferred Stock in one or more series and to establish certain rights and
restrictions with respect thereto. The clause, however, is more restrictive than
necessary under the current Delaware General Corporation Law. Accordingly, the
proposed Amended and Restated Certificate of Incorporation similarly authorizes
the Board to provide for the issuance of Preferred Stock in series and to
establish the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations and restrictions thereof.
24
Director Liability
The current Delaware General Corporation Law allows a corporation to
limit the personal liability of directors for monetary damages for breach of
fiduciary duties except for liability (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. Accordingly, the proposed Amended and Restated Certificate of
Incorporation includes a clause limiting the personal liability of directors to
the extent permissible under the Delaware General Corporation Law.
The Board believes it is in the best interest of the Company and its
stockholders to limit the liability of directors for breach of their fiduciary
duties to the fullest extent permissible under the Delaware General Corporation
Law in response to the increasing hazard of unfounded litigation against
directors, such litigation's related expense, and in order to continue to
attract and retain qualified directors.
Indemnification of Directors and Officers
The Certificate of Incorporation, as amended, includes a provision
providing that the Company indemnify all eligible persons to the fullest extent
possible under Section 145 of the Delaware General Corporation Law. The current
Delaware General Corporation Law provides that a corporation may include, in its
certificate of incorporation, bylaws or agreements, provisions expanding rights
to indemnification beyond what is otherwise provided in Section 145 of the
Delaware General Corporation Law. As such, the proposed Amended and Restated
Certificate of Incorporation includes a clause whereby the Company is authorized
to indemnify its agents in excess of the indemnification and advancement
otherwise permitted by Section 145 of the Delaware General Corporation Law, and
subject only to the limits created by applicable Delaware law with respect to
actions for breach of duty to the corporation, its stockholders and others.
The Board believes it is appropriate to continue to provide
mandatory indemnification and to extend the rights to indemnification to the
extent possible to its directors and officers in response to the increasing
hazard of unfounded litigation against directors and officers and its related
expense, and in order to continue to attract and retain qualified directors and
officers in light of these circumstances.
Potential Anti-Takeover Effect of the Amendment
Authorized but unissued shares of Common Stock will continue to be
available for future issuance without stockholder approval. This could render
more difficult or discourage an attempt to obtain control of the Company by
means of an unsolicited proxy contest, tender offer, merger or otherwise. 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 the combination of the
Company with another company. At the present time, the Company is not aware of
any contemplated tender offers or other plans by a third party to attempt to
effect a change in control of the Company, and
25
this proposal is not being made in response to any such attempt. The Company's
charter and bylaws, as well as Delaware law, provide additional anti-takeover
protections for the Company that are described in certain of the Company's
filings with the Securities and Exchange Commission and that are unaffected by
the charter amendment.
The Company's charter currently authorizes the issuance of 5.0
million shares of Preferred Stock, of which 4,280,000 million shares remain
undesignated. The Company's charter provides that the Board has authority to
issue shares of Preferred Stock in one or more series and to fix from time to
time before issuance the number of shares to be included in any series and the
designation, relative powers, preferences and rights and qualifications,
limitations or restrictions of all shares of such series. Holders of Preferred
Stock, if any, may be entitled to certain preferences upon liquidation,
dissolution or winding up of the affairs of the Company. The issuance of
Preferred Stock with voting rights and conversion rights could adversely affect
the voting power of holders of Common Stock and could deter a future takeover
which a majority of stockholders might view to be in their best interests.
The Company has three series of preferred stock designated, Class A
Convertible Preferred Stock, $0.01 par value, ("Class A"), Class B Convertible
Preferred Stock, $0.01 par value ("Class B") and Class C Convertible Preferred
Stock, $0.01 par value ("Class C"). The Company has designated 320,000 preferred
shares as Class A, 240,000 preferred shares as Class B and 160,000 preferred
shares as Class C and therefore 4,280,000 remain undesignated and available. The
initial conversion rate for each of Class A, Class B and Class C are 5.6561,
6.25 and 5.6561, respectively.
While it may be deemed to have potential anti-takeover effects, the
proposed stock split and Certificate of Incorporation amendment are not prompted
by any specific effort or takeover threat currently perceived by the Board.
Reservation of Rights
The Company retains the authority to take or to authorize
discretionary actions as may be appropriate to carry out the purposes and
intentions of this proposal, including without limitation editorial
modifications or any other change to the charter amendment which the Board may
adopt without a stockholder vote in accordance with Delaware law.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF PROPOSAL
NO. 2 -- TO APPROVE THE PROPOSED AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION AS SET FORTH IN APPENDIX "A".
PROPOSAL NO. 3- RATIFICATION OF AUDITORS
The Company's Audit Committee has appointed the firm of Deloitte &
Touche LLP, certified public accountants, to be our independent auditors for the
fiscal year ending March 31, 2004 and the Board of Directors recommends the
stockholders vote for ratification of that appointment. Deloitte & Touche LLP
served in this capacity for the fiscal year ended March 31, 2003.
26
The Audit Committee appoints our independent auditors annually and
the Board of Directors subsequently requests ratification of such appointment by
the stockholders at the Company's annual meeting. The Audit Committee reviews
and approves in advance the scope of the audit, the types of non-audit services
that we will need and the estimated fees for the coming year. The Audit
Committee also reviews and approves any non-audit services provided by our
independent auditors to ensure that any such services will not impair the
independence of the auditors.
Before making its selection, the Audit Committee carefully
considered Deloitte & Touche LLP's qualifications as independent auditors, which
included a review of Deloitte & Touche LLP's performance in prior years, as well
as its reputation for integrity and competence in the fields of accounting and
auditing. The Audit Committee expressed its satisfaction with Deloitte & Touche
LLP in these respects.
Stockholder ratification of the selection of Deloitte & Touche LLP
as the Company's independent auditors is not required by law, the Company's
bylaws or otherwise. However, the Board of Directors is submitting the selection
of Deloitte & Touche LLP to the stockholders for ratification as a matter of
good corporate governance. If the stockholders fail to ratify the selection, the
Audit Committee will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee in its discretion may direct the
appointment of different independent auditors at any time during the year if it
determines that such change would be in the best interests of the Company and
its stockholders.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF
THIS PROPOSAL NO. 3 -- RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MARCH 31, 2004
Independent Auditors
Deloitte & Touche LLP served as our independent auditors for the
fiscal years ended March 31, 2000 through March 31, 2003 and has been selected
by the Audit Committee to continue for the fiscal year ended March 31, 2004,
subject to the ratification of such appointment by our stockholders at the
Annual Meeting. Representatives of Deloitte & Touche LLP will be present at the
Annual Meeting, with the opportunity to make a statement should they desire to
do so, and be available to respond to appropriate questions.
The following table presents the aggregate fees billed for
professional services rendered by Deloitte & Touche LLP in 2002 and 2003. Other
than as set forth below, no professional services were rendered or fees billed
by Deloitte & Touche LLP during the years ended March 31, 2002 or 2003.
27
2002 2003
---- ----
Audit Fees (1) $127,972 $92,681
Audited-Related Fees (2) $25,900 $20,040
Tax Fees (3) $4,600 $4,200
TOTAL ............................................. $158,472 $116,921
(1) Audit fees consist of professional services rendered for the audit of
the Company's annual financial statements and the reviews of the quarterly
financial statements.
(2) Audited-related fees include fees related to assurance and related
services. This category also includes fees for issuance of comfort letters,
comments and assistance with and review of documents filed with the SEC.
(3) Tax fees consist of fees for services rendered to the Company for tax
compliance, tax planning and advice.
For (1) and (2) above, the Audit Committee has determined that the provision of
such non-audit services is compatible with maintaining the independence of the
independent auditors and has determined there is no conflict of interest.
--------------------------------------------------------------------------------
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee have been appointed by the board
of directors. The Audit Committee is governed by a charter, which has been
approved and adopted by the board of directors and which will be reviewed and
reassessed annually by the Audit Committee. The Audit Committee is comprised of
three independent directors.
The following Audit Committee Report does not constitute soliciting
material and shall not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent the Company
specifically incorporates this Audit Committee Report by reference therein.
The Audit Committee assists the board of directors in fulfilling its
oversight responsibilities by reviewing (i) the financial reports and other
financial information provided by the Company to any governmental body or to the
public, (ii) the Company's systems of internal controls regarding finance,
accounting, legal compliance and ethics and (iii) the Company's auditing,
accounting and financial reporting processes.
The Audit Committee discussed and reviewed with the independent
auditors all communications required by generally accepted auditing standards,
including those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements. The Audit Committee has received from and discussed
with the independent auditors their written disclosure and letter regarding
their independence from the Company as required by Independence Standards Board
Standard No. 1.
--------------------------------------------------------------------------------
28
--------------------------------------------------------------------------------
Management is responsible for the preparation and integrity of the
Company's financial statements and the independent auditors are responsible for
the examination of those statements. The Audit Committee reviewed the Company's
quarterly reports on Form 10-Q and audited financial statements for the
Company's fiscal year ended March 31, 2003, and met with both management and the
Company's independent auditors to discuss those quarterly reports and financial
statements.
Based upon these reviews and discussions, the Audit Committee has
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K/A for the year ended March
31, 2003.
Respectfully submitted,
The Audit Committee November 6, 2003
Eric L. Sorkin, Chairman
Harvey R. Colten, M.D.
Frederick W. Wackerle
--------------------------------------------------------------------------------
Compensation Committee Interlocks and Insider Participation
None.
Section 16(A) Beneficial Ownership Reporting Compliance
Federal securities laws require directors, executive officers and
beneficial owners of more than 10% of our Common Stock to file with the SEC
reports of their initial ownership and subsequent acquisitions, dispositions or
other transfers. We must disclose whether any person required to file such a
report may have failed to do so in a timely manner. To our knowledge and except
as previously reported, all of our directors, executive officers and beneficial
owners of more than 10% of our Common Stock subject to such reporting
obligations satisfied their reporting obligations for the fiscal year ended
March 31, 2003.
Annual Report and Financial Statements
A copy of our Annual Report on Form 10-K/A for the fiscal year ended
March 31, 2003, including audited financial statements, accompanies this Notice
of Annual Meeting and Proxy Statement. No portion of the Annual Report on Form
10-K/A is incorporated herein or is considered to be proxy-soliciting material.
We will provide without charge additional copies of our Annual
Report on Form 10-K/A for the fiscal year ended March 31, 2003, to any
stockholder upon written request. Requests should be directed to Immtech
International, Inc., 150 Fairway Drive, Suite 150, Vernon Hills, Illinois 60061,
attn: Mr. Gary C. Parks.
Solicitation of Proxies
Our officers, directors and employees may solicit proxies from
stockholders. We pay no additional compensation to our officers, directors or
employees for such solicitation.
29
Solicitations may be made personally, or by mail, facsimile, telephone,
telegraph or messenger. We may reimburse brokers and other persons holding
shares in their names or in the names of nominees for expenses in sending proxy
materials to beneficial owners and obtaining proxies from such owners. All of
the costs of solicitation of proxies will be paid by Immtech.
Other Matters
The Board does not intend to bring any other business before the
meeting, and the Board is not currently aware of any other matters to be voted
on at the Annual Meeting except as disclosed in the Notice of Annual Meeting of
Stockholders. However, if any other matters are properly presented at the Annual
Meeting, those proxies granting such authority will be voted in respect thereof
in accordance with the judgment of stockholders' proxy representative, Mr. Gary
C. Parks.
Stockholders' Proposals For Next Annual Meeting
Any proposals of stockholders intended to be included in the Proxy
Statement for the 2004 annual meeting of the stockholders must be received by us
not later than July 31, 2004, and must otherwise comply with applicable
requirements and laws. All notices or proposals, whether or not to be included
in our proxy materials, must be sent to our principal executive offices at 150
Fairway Drive, Suite 150, Vernon Hills, Illinois 60061.
If a stockholder intends to submit a proposal at Immtech's Annual
Meeting in 2004, which proposal is not intended to be included in Immtech's
proxy statement and form of proxy relating to that meeting, the stockholder must
give appropriate notice to Immtech not later than July 31, 2004. If such a
stockholder fails to submit the proposal in accordance with the deadline
described above, Immtech will not be required to provide any information about
the nature of the proposal in its proxy statement and the proxy holders will be
allowed to use their discretionary voting authority if the proposal is raised at
Immtech's Annual Meeting in 2004.
Stockholders may contact Immtech's Secretary for a copy of the
relevant bylaw provisions regarding the requirements for making stockholder
proposals and nominating Director candidates.
Stockholders are urged to complete, sign, date and mail the proxy in
the enclosed envelope, postage for which has been provided for mailing in the
United States. Your prompt response is appreciated.
By order of the Board of Directors,
/s/ T. Stephen Thompson
-----------------------
T. Stephen Thompson
Chairman of the Board
Dated: December [___], 2003
30
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
IMMTECH INTERNATIONAL, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON January [__], 2004
The undersigned hereby appoints Gary C. Parks as true and lawful
agent and proxy ("Proxy") to represent the undersigned at the Annual Meeting of
Stockholders of Immtech International, Inc. ("Immtech"), to be held on January
[__], 2004 at [__] at the American Stock Exchange, 86 Trinity Place, New York,
NY 10006 and at any adjournment or postponement thereof, and authorizes said
Proxy to vote all shares of Immtech 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" THE
ELECTION OF THE NAMED NOMINEES FOR DIRECTOR, "FOR" THE TWO-FOR-ONE STOCK
SPLIT, "FOR" THE AMENDMENT TO AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION AS SET FORTH IN APPENDIX "A" HERETO, "FOR" THE RATIFICATION OF THE
INDEPENDENT AUDITORS, AND, WITH RESPECT TO ANY OTHER MATTERS PROPERLY BROUGHT
BEFORE THE ANNUAL MEETING, IN ACCORDANCE WITH THE JUDGMENT OF YOUR PROXY. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF IMMTECH DATED
DECEMBER [___], 2003, SOLICITING PROXIES FOR THE ANNUAL MEETING.
All previous proxies given by the undersigned to vote at the Annual
Meeting or at any adjournment or postponement thereof are hereby revoked.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
P-1
PLEASE SIGN, DATE AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
IMMTECH INTERNATIONAL, INC.
January [__], 2004
\|/ Please Detach and Mail in the Envelope Provided \|/
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE USING DARK INK ONLY.
FOR WITHHOLD
NOMINEES AUTHORITY
----------- -----------
Election of Directors [ ] [ ] Nominees: T. Stephen Thompson
Cecilia Chan
Harvey R. Colten, M.D.
Judy Lau
Levi H.K. Lee, M.D.
Eric. L. Sorkin
Frederick W. Wackerle
To withhold authority to vote for an individual nominee,
print the name of such nominee on the lines provided.___________________________
--------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Proposal No. 1 - to approve a two-for-one stock split [___] [___] [___]
of the Company's Common Stock;
Proposal No. 2 - to approve amendments to and a [___] [___] [___]
restatement of the company's Certificate of
Incorporation substantially in the form attached as
Appendix "A" to the Proxy Statement, to effect the
following,
a. increase the authorized common stock of the
Company from 30 million shares to 100
million shares,
b. generally update the current Certificate of
Incorporation, as amended, to reflect
current Delaware law,
c. to incorporate into one document previously
filed amendments to the Certificate of
Incorporation, and
d. to file with the Delaware Secretary of
State an amended and restated certificate
of incorporation reflecting all of the
above;
Proposal No. 3 - ratification of Deloitte & Touche LLP [___] [___] [___]
as independent auditors.
Other Matters - Discretionary authority is hereby
granted with respect to such other matters as may [___] [___] [___]
properly come before the meeting or any adjournment or
postponement thereof.
SIGNATURE(S): ___________________________________________DATE:__________________
-------------------------------------------
-------------------------------------------
P-2
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.
P-3
APPENDIX A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
IMMTECH INTERNATIONAL, INC.
The following Amendment and Restatement of the Certificate of
Incorporation of Immtech International, Inc. (the "Corporation") was adopted on
January [__], 2004, in the manner indicated below.
In accordance with Section 242(b) and Section 245 of the General
Corporation Law of the State of Delaware, this Restated and Amended Certificate
of Incorporation was declared advisable and adopted by the Board of Directors of
the Corporation on November 4, 2003, and was approved by the consent of the
shareholders of the Corporation at the annual meeting of the stockholders on
January [__], 2004.
The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 18, 1992.
The Certificate of Incorporation, as amended, of Immtech
International, Inc., is amended and restated as follows:
ARTICLE FIRST
The name of the Corporation is Immtech International, Inc.
ARTICLE SECOND
The name and address of the Corporation's registered office in the
State of Delaware is Vanguard Corporate Services, Ltd. located at 15 East North
Street, Dover, DE 19901, in the County of Kent, or such other name and address
as the Board of Directors of the Corporation may from time to time select.
ARTICLE THIRD
The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
ARTICLE FOURTH
Section 1. Authorized Capital Stock. The total number of shares which the
Corporation shall have the authority to issue shall be 105,000,000 shares, of
which 100,000,000 shares shall be Common Stock, $0.01 par value, and 5,000,000
shares shall be Preferred Stock, $0.01 par value.
A-1
APPENDIX A
----------
Section 2. Common Stock. The Board of Directors is hereby authorized to cause
shares of Common Stock to be issued from time to time for such consideration as
may be fixed from time to time by the Board of Directors, or by way of stock
split pro rata to the holders of the Common Stock. The Board of Directors may
also determine the proportion of the proceeds received from the sale of such
stock which shall be credited upon the books of the Corporation to capital or
capital surplus.
Each share of the Common Stock shall be equal in all respects to
every other share of the Common Stock. Subject to any special voting rights of
the holders of Preferred Stock fixed by or pursuant to the provisions of Section
3 of this Article Fourth, the shares of Common Stock shall entitle the holders
thereof to one vote for each share upon all matters upon which stockholders have
the right to vote.
Unless otherwise required by the Act, the holders of shares of
Common Stock shall not be entitled to vote on any amendments to or modifications
of the rights and preferences of any class or series of shares of Preferred
Stock of the Corporation.
No holder of shares of Common Stock shall be entitled as such as a
matter of right to subscribe for or purchase any part of any new or additional
issues of stock, or securities convertible into stock, of any class whatsoever,
whether now or hereafter authorized, and whether issued for cash, property,
services or otherwise.
After the requirements with respect to preferential dividends on
Preferred Stock (fixed by or pursuant to the provisions of Section 3 of this
Article Fourth), if any, shall have been met and after the Corporation shall
have complied with all the requirements, if any, with respect to the setting
aside of sums as sinking funds or redemption or purchase accounts (fixed by or
pursuant to the provisions of Section 3 of this Article Fourth) and subject
further to any other conditions which may be fixed by or pursuant to the
provisions of Section 3 of this Article Fourth, then, but not otherwise, the
holders of Common Stock shall be entitled to receive dividends, if any, as may
be declared from time to time by the Board of Directors.
After distribution in full of the preferential amount (fixed by or
pursuant to the provisions of Section 3 of this Article Fourth), if any, to be
distributed to the holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets, dissolution or winding
up of the Corporation, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders, ratably in proportion
to the number of shares of Common Stock held by each.
Section 3. Preferred Stock. Shares of Preferred Stock may be divided into and
issued in such series, on such terms and for such consideration as may from time
to time be determined by the Board of Directors of the Corporation. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of Preferred Stock shall be identical,
except as to variations between different series in the relative rights and
preferences as permitted or contemplated by the next succeeding sentence.
Authority is hereby vested in the Board of Directors of the Corporation to
establish out of shares of Preferred Stock
A-2
APPENDIX A
----------
which are authorized and unissued from time to time one or more series thereof
and to fix and determine the following relative rights and preferences of shares
of each such series:
(a) the distinctive designation of, and the number of shares which
shall constitute, the series and the "stated value" or "nominal value," if any,
thereof;
(b) the rate of dividend applicable to shares of such series;
(c) the price at and the terms and conditions on which shares of
such series may be redeemed;
(d) the amount payable upon shares of such series in the event of
the involuntary liquidation of the Corporation;
(e) the amount payable upon shares of such series in the event of
the voluntary liquidation of the Corporation;
(f) sinking fund provisions for the redemption or purchase of shares
of such series;
(g) the terms and conditions on which shares of such series may be
converted, if such shares are issued with the privilege of conversion;
(h) the voting powers, if any, of the holders of shares of the
series, which may, without limiting the generality of the foregoing, include (i)
the right to one or less than one vote per share on any or all matters voted
upon by the stockholders and (ii) the right to vote, as a series by itself or
together with other series of Preferred Stock or together with all series of
Preferred Stock as a class, upon such matters, under such circumstances and upon
such conditions as the Board of Directors may fix, including, without
limitation, the right, voting as a series by itself or together with other
series of Preferred Stock or together with all series of Preferred Stock as a
class, to elect one or more directors of the Corporation in the event there
shall have been a failure to pay dividends on any one or more series of
Preferred Stock or under such other circumstances and upon such conditions as
the Board of Directors may determine; provided, however, that in no event shall
a share of Preferred Stock have more than one vote; and
(i) any other such rights and preferences as are not inconsistent
with the Delaware General Corporation Law.
No holder of any share of any series of Preferred Stock shall be
entitled to vote for the election of directors or in respect of any other matter
except as may be required by the Delaware General Corporation Law, as amended,
or as is permitted by the resolution or resolutions adopted by the Board of
Directors authorizing the issue of such series of Preferred Stock.
Except as required by the Act, amendments to or modifications of the
rights and preferences of any series of Preferred Stock shall be approved by the
vote of the shares of such series of Preferred Stock at a duly called meeting of
such series or by the written consent of
A-3
APPENDIX A
----------
holders of such series of Preferred Stock holding a majority of the outstanding
shares of such series.
Section 4. Other Provisions. (a) The relative powers, preferences, and rights of
each series of Preferred Stock shall, in each case, be as fixed from time to
time by the Board of Directors in the resolution or resolutions adopted pursuant
to authority granted in Section 3 of this Article Fourth, and the consent by
class or series vote or otherwise, of the holders of the Preferred Stock or such
of the series of the Preferred Stock as are from time to time outstanding shall
not be required for the issuance by the Board of Directors of any other series
of Preferred Stock whether the powers, preferences and rights of such other
series shall be fixed by the Board of Directors as senior to, or on a parity
with, powers, preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(b) Subject to the provisions of Subsection 1 of this Section 4,
shares of any series of Preferred Stock may be issued from time to time as the
Board of Directors shall determine and on such terms and for such consideration
as shall be fixed by the Board of Directors.
(c) Common Stock may be issued from time to time as the Board of
Directors shall determine and on such terms and for such consideration as shall
be fixed by the Board of Directors.
(d) No holder of any of the shares of any class or series of shares
or securities convertible into such shares of any class or series of shares, or
of options, warrants or other rights to purchase or acquire shares of any class
or series of shares or of other securities of the Corporation shall have any
preemptive right to purchase, acquire, subscribe for any unissued shares of any
class or series or any additional shares of any class or series to be issued by
reason of any increase of the authorized capital stock of the Corporation of any
class or series, or bonds, certificate of indebtedness, debenture or other
securities convertible into or exchangeable for shares of any class or series,
or carrying any right to purchase or acquire shares of any class or series, but
any such unissued shares, additional authorized issue of shares of any class or
series of shares or securities convertible into or exchangeable for shares, or
carrying any right to purchase or acquire shares, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, and upon such terms, as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The Corporation reserves the right to increase or decrease its
authorized capital stock, or any class or series thereof or to reclassify the
same and to amend, alter, change or repeal any provision contained in this
Amended and Restated Certificate of Incorporation or in any amendment hereto, in
the manner now or hereafter prescribed by law, but subject to such conditions
and limitations as are hereinbefore prescribed, and all rights conferred upon
stockholders in this Amended and Restated Certificate of Incorporation or any
amendment thereto, are granted subject to this reservation.
A-4
APPENDIX A
----------
Each share of Common Stock which was issued and outstanding before
June 30, 1998 was converted into 0.645260 issued and outstanding share of Common
Stock, and in lieu of any fractional shares created by the above-provided-for
reverse stock split, the Corporation paid to the holders thereof the fair value
of such fractional shares in cash.
Each share of Series A Preferred which was issued and outstanding
before June 30, 1998 was reclassified into 0.645260 issued and outstanding share
of Common Stock (after giving effect to the above-provided-for-reverse stock
split), and in lieu of any fractional shares created by the above-provided-for
reclassification, the Corporation paid to the holders thereof the fair value of
such fractional shares in cash.
Each share of Series A Preferred which was authorized but not
outstanding prior to June 30, 1998, was eliminated.
Each share of Series B Preferred which was issued and outstanding
before June 30, 1998, was reclassified into 0.770086 issued and outstanding
share of Common Stock (after giving effect to the above-provided-for reverse
stock split), and in lieu of any fractional shares created by the
above-provided-for reclassification, the Corporation paid to the holders thereof
the fair value of such fractional shares in cash.
Each share of Series B Preferred which was authorized but not
outstanding prior to June 30, 1998, was eliminated.
Each share of Common Stock which was issued and outstanding prior to
February 2, 1999, was converted into 0.5 issued and outstanding share of Common
Stock, and in lieu of any fractional shares created by the above-provided-for
reverse stock split, the Corporation paid to the holders thereof the fair value
of such fractional shares in cash. The above-provided-for reverse stock split
did not change the total number of authorized shares of Common Stock or the par
value of Common Stock.
Each share of Common Stock which was issued and outstanding prior to
January __, 2004, was converted into 1.5 issued and outstanding shares of Common
Stock, and in lieu of any fractional shares created by the above-provided-for
stock split, the Corporation paid to the holders thereof the fair value of such
fractional shares in cash.
After giving effect to the January __, 2004 stock split, the
conversion price for the Series A Convertible Preferred Stock, $0.01 par value
("Series A Stock"), was revised from $4.42 to $2.21 resulting in a revised
conversion rate of 11.3122.
After giving effect to the January __, 2004 stock split, the
conversion price for the Series B Convertible Preferred Stock, $0.01 par value
("Series B Stock"), was revised from $4.00 to $2.00 resulting in a revised
conversion rate of 12.00.
After giving effect to the January __, 2004 stock split, the
conversion price for the Series C Convertible Preferred Stock, $0.01 par value
("Series C Stock"), was revised from $4.42 to $2.21 resulting in a revised
conversion rate of 11.3122.
A-5
APPENDIX A
----------
ARTICLE FIFTH
The board of directors of the Corporation shall consist of not more
than seven members.
ARTICLE SIXTH
The Corporation is to have perpetual existence.
ARTICLE SEVENTH
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly authorized to
make, alter or repeal the bylaws of the Corporation.
ARTICLE EIGHTH
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the bylaws
of the Corporation. Election of directors need not be by written ballot unless
the bylaws of the Corporation so provide.
ARTICLE NINTH
To the fullest extent permitted by the laws of the state of Delaware
as the same exist or may hereafter be amended, a director of this Corporation
shall not be personally liable to this Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. If the laws of the
state of Delaware are amended, after approval by the stockholders of this
provision, to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of this
Corporation shall be eliminated or limited to the fullest extend permitted by
the laws of the state of Delaware, as so amended. Any repeal or modification of
this Article NINTH by the stockholders of this Corporation shall not adversely
affect any right or protection of a director of this Corporation existing at the
time of such repeal or modification or with respect to events occurring prior to
such time.
A-6
APPENDIX A
----------
ARTICLE TENTH
This Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of this Corporation), by reason of the
fact that such person is or was a director or officer of this Corporation, or is
or was serving at the request of this Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such act, suit or proceeding if the person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
this Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interests of this
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
This Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of this Corporation to procure a judgment in its
favor by reason of the fact that such person is or was a director or officer of
this Corporation, or is or was serving at the request of this Corporation as a
director or officer of another Corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and a manner he reasonably believed to
be in or not opposed to the best interests of this Corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to this Corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall deem
proper. Any indemnification under this paragraph and paragraph (A) of this
Article TENTH (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that the indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraph A
and this paragraph B of Article TENTH. Such determination shall be made (1) by a
majority vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) by a committee of such
directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (4) by the stockholders.
A-7
APPENDIX A
----------
Expenses incurred by a director or officer in defending a civil or
criminal action, suit or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon the receipt of
an invoice of the expenses and an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized by the General Corporation
Law of the State of Delaware. Expenses incurred by other persons may be so paid
upon such terms and conditions, if any, as the board of directors deems
appropriate.
In addition to the right of indemnification provided for in this
article TENTH, this Corporation may, to the fullest and broadest extent
permitted by applicable law, including, without limitation, the General
Corporation Law of the State of Delaware as it may be amended from time to time,
indemnify all other persons, including employees and agents of the Corporation
or persons serving at the request of this Corporation as an employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise, whom
it may indemnify pursuant thereto.
The right of indemnification provided by this Article TENTH shall
apply as to action by any person in his or her official capacity and as to
action in another capacity while holding such office and shall continue as a to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
The right of indemnification provided by this Article TENTH shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and the
Corporation may provide additional indemnity and rights to its directors,
officers, employees or agents in excess of the indemnification and advancement
otherwise permitted by the General Corporation Law of the State of Delaware, and
subject only to the limits created by applicable Delaware law with respect to
actions for breach of duty to the corporation, its stockholders and others. The
right of indemnification provided herein shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
The right of indemnification provided by this Article TENTH shall be
deemed to be a contract between this Corporation and each director, officer,
employee or agent of this Corporation who serves in such capacity, both as to
action in his official capacity and as to action in another capacity while
holding such office, at any time while this Article TENTH and the relevant
provisions of the General Corporation Law of the State of Delaware and other
applicable law, if any, are in effect, and repeal or modification thereof shall
not affect any rights or obligations then existing with respect to any state of
facts then or theretofore existing or any action, suit or proceeding theretofore
or thereafter brought or threatened based in whole or in part upon any such
state of facts.
A-8
APPENDIX A
----------
Notwithstanding any provision of this Article TENTH to the contrary,
this Corporation may, but shall not be obligated to, purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of this Corporation, or is or was serving at the request of this
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his or her status as such, whether or not this Corporation would have the power
to indemnify him or her against such liability.
For purposes of this Article TENTH, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries, and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Article TENTH.
ARTICLE ELEVENTH
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed herein and by the laws
of the State of Delaware, and all rights conferred upon stockholders herein are
granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned Corporation has caused this
Amended and Restated Certificate of Incorporation to be signed by its duly
authorized officer, who affirms, under penalties of perjury, that the facts
stated herein are true and that this Amended and Restated Certificate of
Incorporation was adopted by a majority of the shareholders in accordance with
Section 242(b) and Section 245.
IMMTECH INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
Dated:
This Amended and Restated Certificate of Incorporation is attested
by the Secretary of the Corporation on this ___ day of _______________, 2004.
Attest:
-------------------------------
Secretary
A-9
APPENDIX B
----------
AUDIT COMMITTEE CHARTER
-----------------------
of
Immtech International, Inc.
Membership
The Audit Committee shall consist of three or more members of the
Board of Directors of Immtech International, Inc., all of whom in the judgment
of the Board of Directors shall be independent in accordance with the rules and
regulations of the Securities and Exchange Commission and the American Stock
Exchange listing standards. Each member shall in the judgment of the Board of
Directors have the ability to read and understand the Company's basic financial
statements or shall at the time of appointment undertake training for that
purpose. At least one member of the Audit Committee shall in the judgment of the
Board of Directors be an "audit committee financial expert" in accordance with
the rules and regulations of the Securities and Exchange Commission and at least
one member (who may also serve as the audit committee financial expert) shall in
the judgment of the Board of Directors have accounting or related financial
management expertise in accordance with the New York Stock Exchange listing
standards.
Purpose
The Audit Committee will assist the Board of Directors with the
oversight of (a) the integrity of the Company's financial statements, (b) the
Company's compliance with legal and regulatory requirements, (c) the independent
auditor's qualifications and independence and (d) the performance of the
Company's internal audit function and the independent auditors.
Responsibilities:
1. Appoint the independent auditor for the purpose of preparing or issuing an
audit report or to perform related work and set their compensation.
2. Pre-approve all audit and permitted non-audit services to be performed by
the independent auditor.
3. Report the pre-approval of any permitted non-audit services to management
for disclosure in the Company's periodic reports.
4. Review with the independent auditor the scope of the prospective audit,
the estimated fees therefor and such other matters pertaining to such
audit as the Audit Committee may deem appropriate.
5. Review and consider whether the provision by the independent auditor of
any permitted non-audit services is compatible with maintaining their
independence; review and approve the non-audit fees of the outside
auditors; and review with them any questions, comments or suggestions they
may have relating to the internal controls, accounting practices or
procedures of the Company or its subsidiaries, and any audit problems or
difficulties and management's response.
B-1
APPENDIX B
----------
6. Receive and review:
(a) at least annually, a report by the independent auditor
describing (i) the independent auditor's internal quality-control
procedures; (ii) any material issues raised by the most recent
internal quality-control review, or peer review, of the firm, or by
any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the firm, and any steps taken to
deal with any such issues; and (iii) in an effort to assess the
auditors' independence, all relationships between the auditors and
the Company; and
(b) all reports and other information that the independent auditor
is required by law, rule or regulation to submit to the Audit
Committee, including periodic reports on (1) all critical accounting
policies and practices to be used by the Company, (2) all
alternative treatments of financial information within generally
accepted accounting principles in effect from time to time ("GAAP")
that have been discussed with management, the ramification of the
use of such alternative disclosures and treatment, and the treatment
preferred by the independent auditors, and (3) other material
written communications between the independent auditors and
management of the Company.
7. Make or cause to be made, from time to time, examinations or reviews as
the Audit Committee may deem advisable with respect to the adequacy of the
systems of internal controls and accounting practices of the Company and
its subsidiaries and with respect to current accounting trends and
developments, and take such action with respect thereto as may be deemed
appropriate.
8. Review with management and the public accounting firm selected as outside
auditors for the Company the annual and quarterly financial statements of
the Company, including the Company's disclosures under "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and any material changes in accounting principles or practices used in
preparing the statements prior to the filing of a report on Form 10-K/A or
10-Q with the Securities and Exchange Commission. Such review to include
the items required by SAS 61, as amended, as in effect at that time in the
case of the annual statements and SAS 71 as in effect at that time in the
case of the quarterly statements. During such review, or otherwise, the
Audit Committee shall work to resolve any disagreements between management
and the outside auditors regarding financial reporting.
9. Review earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies and discuss
Company policies with respect to risk assessment and risk management.
10. Receive from the outside auditors the report required by Independence
Standards Board Standard No. 1 as in effect at that time and discuss it
with the independent auditors.
B-2
APPENDIX B
----------
11. Review the status of compliance with laws, regulations, and internal
procedures, contingent liabilities and risks that may be material to the
Company, the scope and status of systems designed to assure Company
compliance with laws, regulations and internal procedures, through
receiving reports from management, legal counsel and other third parties
as determined by the Audit Committee on such matters, as well as major
legislative and regulatory developments which could materially impact the
Company's contingent liabilities and risks.
12. Establish and maintain procedures for the confidential and anonymous
receipt, retention and treatment of complaints regarding the Company's
accounting, internal controls or auditing matters and establish clear
hiring policies for employees or former employees of the Company's outside
auditor.
13. Obtain the advice and assistance, as appropriate, of independent counsel
and other advisors or necessary to fulfill the responsibilities of the
Audit Committee.
14. Report regularly to the Board of Directors as to the Audit Committee's
accomplishments of its purposes and responsibilities.
15. Conduct an annual performance evaluation of the Audit Committee.
Meetings
The Audit Committee shall meet at least four times each year and at
such other times as it deems necessary to fulfill its responsibilities. The
Audit Committee shall meet regularly in executive session without management
present. In addition, the Audit Committee shall periodically meet with
management, internal auditors and outside auditors to oversee and review their
respective performance.
Report
The Audit Committee shall prepare a report each year concerning its
compliance with this charter for inclusion in the Company's proxy statement
relating to the election of directors.
Respectfully submitted,
The Audit Committee
November 6, 2003
B-3
APPENDIX C
----------
COMPENSATION COMMITTEE CHARTER
------------------------------
of
IMMTECH INTERNATIONAL, INC.
---------------------------
Overview
The Compensation Committee of the Board of Directors (the
"Committee") is comprised solely of directors who are not current or former
employees of Immtech, and each is independent as defined by existing American
Stock Exchange, LLC ("AMEX") listing standards as well as in accordance with the
proposed new AMEX listing standards. The Committee is responsible for
establishing the compensation policies and evaluating the compensation programs
for Immtech's executive officers and other key employees. The Committee may
occasionally engage independent compensation consultants or research firms to
assist them in this process. In carrying out its duties, the Committee pays
particular attention to the state of Immtech as a development-stage company, and
seeks to align compensation with achieving sustained growth and shareholder
value, while at the same time attracting, motivating and retaining key executive
management.
Compensation Philosophy
Development-stage companies such as Immtech recognize the need to
conserve and prioritize cash resources for ongoing product development and
commercialization efforts, resulting in a compensation philosophy of low
cash/high stock options. The compensation program for executive officers is
designed to:
- Emphasize performance-based compensation.
- Align shareholder and executive officers' interests by providing
a significant portion of executive's compensation in Immtech
stock.
- Attract and retain talented and productive employees.
The principal elements of the compensation program include base
salary, annual incentives (bonus), long-term incentives in the form of stock
options and restricted stock grants. Immtech's philosophy is to position the
aggregate of these elements at a level that is commensurate with Immtech's size
and performance relative to peer development-stage pharmaceutical companies.
1. Base Salary. The Committee annually reviews and approves the base salaries of
executive officers after considering individual performance, retention, the
level of responsibility, the scope and complexity of the position and
competitive practice. The Committee's philosophy is to maintain executive base
salaries at competitive levels with companies at comparable stages of
development in the Company's geographic area, which are sufficient to recruit
and retain individuals possessing the skills and values necessary to achieve
Immtech's vision and mission over the long term.
C-1
APPENDIX C
----------
2. Annual Incentive Awards. Bonuses may be awarded in the Committee's discretion
for substantial achievement.
3. Stock Options. Stock options are a fundamental element in the total
compensation program because they emphasize long-term Company performance as
measured by creation of stockholder value and foster a community of interest
between stockholders and employees. Stock options may be granted annually to
executive officers and are based on the individual's responsibilities and
performance, ability to impact financial or scientific performance and future
potential. In making a stock option grant and vesting schedule, the Committee
also considers its subjective assessment of Immtech's future prospects, an
executive officer's current level of ownership in Immtech, the period during
which an executive officer has been in a key position with the Company,
individual performance and competitive practices within the comparative group of
peer companies. All incentive stock option (ISO) grants are made at 100% of fair
market value as at the date of grant.
4. Restricted Stock Grants. The Committee may award restricted stock grants at
its discretion. In making such grants, the Committee will use the same criteria
as it uses in determining stock option grants.
5. Compensation of the Chief Executive Officer. The Chief Executive Officer's
("CEO") compensation is comprised of base salary, a potential bonus and
long-term incentives as described above. The CEO's total compensation is keyed
to: improvement of the Company's financial condition, scientific attainment and
product development, all relative to early-stage, high-growth companies.
In carrying out its duties, the Committee makes all reasonable
attempts to satisfy the conditions to exempt executive compensation from the $1
million deduction limitation under Section 162(m) of the Internal Revenue Code
of 1986, as amended, unless the Committee determines that such compliance in
given circumstances would not be in the best interests of the Company and its
shareholders.
Conclusion
Consistent with its compensation philosophy, the Committee believes
the executive officer compensation program provides incentives to attain
financial performance and is aligned with shareholders' interests.
Respectfully submitted,
The Compensation Committee
November 6, 2003
C-2
APPENDIX D
----------
NOMINATING COMMITTEE CHARTER
----------------------------
of
Immtech International, Inc.
The Nominating Committee's responsibilities and powers as delegated
by the board of directors are set forth in this charter. The Committee relies to
a significant extent on information and advice provided by management and
independent advisors. Whenever the Committee takes an action, it exercises its
independent judgment on an informed basis that the action is in the best
interests of the Company and its stockholders.
Purpose
As set forth herein, the Committee shall, among other things,
discharge the responsibilities of the board of directors relating to the
appropriate size, functioning and needs of the board including, but not limited
to, recruitment and retention of high quality board members, committee
composition and structure, board assessment and related party and conflicts
oversight.
Membership
The Committee shall consist of at least three members of the board
of directors as determined from time to time by the board. Each member shall be
"independent" in accordance with the listing standards of the American Stock
Exchange, as amended from time to time.
The board of directors shall elect the members of this Committee at
the first board meeting practicable following the annual meeting of stockholders
and may make changes from time to time pursuant to the provisions below. Unless
a chair is elected by the board of directors, the members of the Committee shall
designate a chair by majority vote of the full Committee membership.
A Committee member may resign by delivering his or her written
resignation to the chairman of the board of directors, or may be removed by
majority vote of the board of directors by delivery to such member of written
notice of removal, to take effect at a date specified therein, or upon delivery
of such written notice to such member if no date is specified.
Meetings and Committee Action
The Committee shall meet at such times as it deems necessary to
fulfill its responsibilities. Meetings of the Committee shall be called by the
chairman of the Committee upon such notice as is provided for in the bylaws of
the company with respect to meetings of the board of directors. A majority of
the members shall constitute a quorum. Actions of the Committee may be taken in
person at a meeting or in writing without a meeting. Actions taken at a meeting,
to be valid, shall require the approval of a majority of the members present and
voting. Actions taken in writing, to be valid, shall be signed by all members of
the Committee. The Committee shall report its minutes from each meeting to the
board of directors.
The chairman of the Committee shall establish such rules as may from
time to time be necessary or appropriate for the conduct of the business of the
Committee. At each
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meeting, the chairman shall appoint as secretary a person who may, but need not,
be a member of the Committee. A certificate of the secretary of the Committee
setting forth the names of the members of the Committee or actions taken by the
Committee shall be sufficient evidence at all times as to the persons
constituting the Committee, or such actions taken.
Duties and Responsibilities
The Committee's duties and responsibilities include:
- Monitoring and making recommendations regarding committee functions,
contributions and composition.
- Developing the criteria and qualifications for membership on the
board.
- Developing programs for the continuing education of all directors
and for the orientation of new directors.
- Reviewing and making recommendations to the board of directors
regarding director compensation.
- Establishing and periodically reviewing director retirement policies
and making recommendations to the board of directors, regarding
these policies.
- Reviewing and making recommendations to the board of directors
regarding the appropriate level of director and officer liability
insurance and evaluating the appropriateness of providing indemnity
to the Company's officers, directors or agents on a case-by-case
basis, including the appropriateness of advancing fees and expenses.
- Considering all questions regarding a conflict of interest involving
any board members, the company, its subsidiaries or their respective
officers.
- Creating a format to review each of the directors; conducting the
reviews annually in accordance with the format; and distributing the
reviews results to all board members for their review and
consideration.
- Evaluating, on an annual basis, the Committee's performance.
- Making recommendations to the board on methods for enhancing
services to, and improving communications and relations with, the
Company's stockholders.
Powers and Authority
Subject to such specific constraints as may be imposed by the board
of directors, the board of directors delegates to the Committee all powers and
authority that are necessary or appropriate to fulfill its duties and
responsibilities hereunder, including but not limited to:
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- Recruiting, reviewing and nominating candidates for election to the
board of directors or to fill vacancies on the board of directors.
- Reviewing candidates proposed by stockholders, and conducting
appropriate inquiries into the background and qualifications of any
such candidates.
- Administering any director compensation plans.
- Retaining and terminating any professionals (such as search firms,
attorneys and compensation professionals) to assist in evaluating,
designing and documenting of director compensation, including sole
authority to approve the professional's fees and other retention
terms.
- Establishing subcommittees for the purpose of evaluating special or
unique matters.
Reporting
The Committee shall prepare a statement each year concerning its
compliance with this charter for inclusion in the company's proxy statement.
Respectfully submitted,
The Nominating Committee
November 6, 2003
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