-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SkeCOpQzl7nZE77oiDIyLOw/QViEnREVNyA4N2iGpve+DyX/V4be9pZm7g1XVhJD bHiCekij1iTBGz9kMcTrDw== 0000950127-99-000162.txt : 19990624 0000950127-99-000162.hdr.sgml : 19990624 ACCESSION NUMBER: 0000950127-99-000162 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990616 FILED AS OF DATE: 19990526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APHTON CORP CENTRAL INDEX KEY: 0000840319 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 953640931 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-19122 FILM NUMBER: 99634626 BUSINESS ADDRESS: STREET 1: 444 BRICKELL AVE STREET 2: STE 51-507 CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3053747338 MAIL ADDRESS: STREET 1: 444 BRICKELL AVE STREET 2: STE 51-507 CITY: MIAMI STATE: FL ZIP: 33131 DEF 14A 1 FOR THE ANNUAL MEETING OF SHAREHOLDERS May 19, 1999 Dear Shareholder: The Annual Meeting of Shareholders of Aphton Corporation will be held on Wednesday, June 16, 1999, at 9:00 A.M. at the offices of White & Case, located at First Union Financial Center, 200 South Biscayne Boulevard, Miami, Florida 33131-2352. The Notice of Annual Meeting and the Proxy Statement are enclosed herewith. Shareholders will be asked to elect one director in one class. The Class 1 nominee is Robert S. Basso whose term of office would expire at the 2002 Annual Meeting of Shareholders. Your Board of Directors recommends that you vote "for" this nominee. Please review the Proxy Statement and at your earliest convenience sign, date and return the enclosed proxy card so that your shares will be represented at the meeting. A prepaid return envelope is enclosed for this purpose. Yours truly, /s/ Philip C. Gevas Philip C. Gevas Chairman, President and Chief Executive Officer PCG/me encl. May 19, 1999 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS June 16, 1999 The Annual Meeting of Shareholders of Aphton Corporation, a Delaware corporation, will be held at the offices of White & Case, located at First Union Financial Center, 200 South Biscayne Boulevard, Miami, Florida 33131-2352, on Wednesday, June 16, 1999, at 9:00 A.M. for the following purposes: (1) To elect one director in one class to hold office until the 2002 Annual Meeting of Shareholders and thereafter until their successor is duly elected and qualified; (2) To transact such other business as may properly come before the meeting. On any business day from June 2, 1999 until June 15, 1999, during ordinary business hours, shareholders may examine the list of shareholders for any purpose germane to the meeting at the Office of the Company's attorneys, White & Case, First Union Financial Center, 200 South Biscayne Boulevard, Miami, Florida 33131. The Board of Directors has fixed the close of business on Wednesday, May 5, 1999, as the record date for determination of shareholders entitled to be notified and to vote at the Annual Meeting. ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. TO ENSURE YOUR REPRESENTATION AT THE MEETING, THE BOARD REQUESTS THAT YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING SELF-ADDRESSED, STAMPED ENVELOPE. YOUR PROXY WILL NOT BE USED IF YOU ARE PRESENT AT THE MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY. By Order of the Board of Directors /s/ Philip C. Gevas Philip C. Gevas Chairman, President and Chief Executive Officer PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS OF APHTON CORPORATION June 16, 1999 INTRODUCTION This Proxy Statement is being mailed on or about May 19, 1999, to shareholders of Aphton Corporation (the "Company") in connection with the solicitation of Proxies by the Company's Board of Directors for use at the Company's Annual Meeting of Shareholders to be held on June 16, 1999, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Shareholders. The accompanying proxy, and all expenses incident to the solicitation, are to be paid by the Company. The persons named in the accompanying proxy have advised the Company that they intend to vote the proxies received by them in their discretion for as many director nominees as the votes represented by such proxies are entitled to elect (see "Election of Directors"). Any shareholder may revoke his or her proxy at any time prior to its use by filing with the Secretary of the Company a written notice of revocation or a duly executed proxy bearing a later date. Only shareholders of record at the close of business on Wednesday, May 5, 1999, will be entitled to notice of and to vote at the meeting or any adjournments thereof. At such record date, the Company had outstanding and entitled to vote 14,433,384 shares of common stock. Each share of stock is entitled to one vote on all matters. ELECTION OF DIRECTORS The Company's Board of Directors presently consists of four directors. The person who is elected director will hold office until the 2002 Annual Meeting of Shareholders and thereafter until their successor is duly elected, and qualified. Set forth below is the names and principal occupations of those persons who are presently directors of the Company, and the respective number of shares of voting stock of the Company beneficially owned, directly or indirectly, by them and by all directors and officers as a group as of May 5, 1999, according to information furnished to the Company by such persons. Mr. Robert S. Basso is the Class 1 nominee for election.
SHARES BENEFICIALLY YEAR FIRST OWNED AS OF NAME AND PRINCIPAL OCCUPATION AGE ELECTED MAY 5, 1999 PERCENT OF CLASS ----------------------------- --- ------- ------------ ---------------- Philip C. Gevas, Class 3 Chairman, President and Chief Executive Officer Aphton Corporation 65 1981 1,859,050 12.9 William A. Hasler, Class 3 Co-Chief Executive Officer and Vice-Chairman Aphton Corporation 57 1991 35,000 (1) Robert S. Basso, Class 1 President Correspondent Services Corporation. 54 1988 30,166 (1) Nicholas John Stathis, Class 2 Attorney 75 1994 50,000 (1) All Directors and Officers as a group (12 persons) 2,088,416 14.5 - ---------------------------- (1) Less than 1% of total outstanding shares.
Mr. Gevas has served the Company and continues to serve in the capacities of Chairman, President and Chief Executive Officer and has been a director of the Company since its inception. William A. Hasler was elected Vice Chairman in October, 1996 and has been a director of the Company since October, 1991. Mr. Hasler was appointed Co-Chief Executive Officer of Aphton Corporation in July, 1998. Previously, he was the Dean of both the Graduate and Undergraduate Schools of Business at the University of California, Berkeley since 1991. Prior thereto, Mr. Hasler was Vice Chairman of KPMG Peat Marwick, responsible for management consulting worldwide. Mr. Hasler also is a director of Solectron Corporation, Walker Interactive Systems, TCSI Corporation, Tenera, Inc. and is a Public Governor of the Pacific Exchange. Mr. Basso has been a director of the Company since February, 1988. He has been employed in his present capacities with Correspondent Services Corporation since January, 1990. Prior thereto, for more than ten years, Mr. Basso was employed by Merrill Lynch as President of a wholly-owned subsidiary and in other executive management capacities. Nicholas John Stathis, Esq. has been a director of the Company since January, 1994. Mr. Stathis is retired from the law firm of White & Case, where he was of counsel from 1989 to 1993. Prior to that he was partner, Botein, Hays & Sklar, from 1984 to 1989. Directors do not receive any fees for services on the Board. Board members are reimbursed for their expenses for each meeting attended. If for any reason Mr. Basso should not be available as a candidate for director, an event that the Board of Directors does not anticipate, the persons named in the enclosed proxy will vote for such other candidate as may be nominated by the Board and discretionary authority to do so is included in the Proxy. COMMITTEE MEETINGS OF THE BOARD OF DIRECTORS The Company's Board of Directors held six general meetings and three committee meetings during the year ended January 31, 1999. The Board of Directors has two standing committees: an Audit Committee, consisting of Messrs. Basso (Chairman), Hasler and Stathis; and a Compensation Committee, consisting of Messrs. Basso (Chairman) and Stathis. The Audit Committee reviews the financial statements of the Company, reviews the independent accountants' scope of engagement, performance and fees and reviews the adequacy of the Company's internal financial control procedures. This Committee held three meetings during fiscal 1999. The Compensation Committee reviews and recommends remuneration arrangements for various key executives. This Committee held three meetings during fiscal 1999. Each Committee member attended all of the meetings of the Committee on which he was a member during fiscal 1998. THE COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board approves compensation objectives, policy and compensation for the Company's executive officers, including the individuals named in the Summary Compensation table below. The Compensation Committee is comprised of Messrs. Basso and Stathis. The Compensation Committee seeks to provide rewards which are closely linked to Company and individual performance and ensure that compensation is at a level which enables the Company to attract and retain the high quality employees it needs. In addition, the committee considers performance factors particular to each executive officer, such as the performance where such officer had responsibility and individual managerial accomplishments. Compensation of the Chief Executive Officer The Compensation Committee believes that Mr. Gevas' total compensation as Chief Executive Officer reflects his performance in meeting or exceeding the goals established by the Committee. In determining Mr. Gevas' total compensation, the Compensation Committee considered the Company's overall performance and Mr. Gevas' individual performance by the measures described above for determining executive officers' compensation. It also considered the compensation and company performance of the chief executive officers of other leading companies, as well as incentives for future performance. The Company's performance as measured in the context of the biotechnology/biopharmaceutical industry and Mr. Gevas' contributions thereto, both management and scientific, have met or exceeded the Company objectives. This performance included the structuring and negotiation with another significant pharmaceutical company for a strategic alliance. The following stock price performance graph is provided as required by the Securities and Exchange Commission. The graph compares the Company's stock price appreciation with the stock price appreciation of both the Nasdaq Composite Index and a peer group of biotechnology/ biopharmaceutical companies which, like Aphton, had an initial public offering (IPO) during 1991, and includes the measurement point as defined and required by the SEC. The foregoing report has been furnished by the Compensation Committee consisting of Messrs. Basso (Chairman) and Stathis. STOCK PRICE PERFORMANCE GRAPH The following graph illustrates a comparison of the cumulative total stockholder return (change in stock price) of Aphton's Common Stock with the CRSP Total Return Index for the Nasdaq Stock Market (the Nasdaq Composite Index) and a Peer Group composed of other biotechnology/biopharmaceutical companies which had IPOs during the same year as Aphton (and are still publicly traded). The following graph commences in 1991, with a $100 investment in the Company, the Nasdaq index and the Peer Group (whose composition reflects the average of the share values as reported on the dates shown). Five year graphic comparisons are required by the Securities and Exchange Commission (SEC). An additional comparison commencing with a $100 investment in the Company, the Nasdaq index and the Peer Group at the required measurement date of January 31, 1993 is included. These graphs are not intended to forecast or be indicative of possible future performances of the Company's Common Stock. Aphton believes that the best date for Aphton shareholders to begin comparisons is the first date of trading in the Company's stock. Aphton also believes that the best peer group for graphic comparisons is the biotechnology/ biopharmaceutical companies which, like Aphton, had IPOs during 1991 (the initial date of investments of $100). However, Aphton is not aware of any such published "third-party" index or listing; thus, the Peer Group names and graph was prepared by the Company based on data provided to Aphton by Nasdaq. The Peer Group is composed of Cygnus Therapeutic Systems, Regeneron Pharmaceuticals, Cephalon Inc., Medimmune Inc., Isis Pharmaceuticals, ImmuLogic Pharmaceutical, ICOS Corp., Cambridge NeuroScience, Genelabs Technologies, COR Therapeutics, Curative Technologies, Alkermes, Osteotech, Vertex, Genetic Therapy, Biomatrix, IDEC Pharmaceuticals, Sepracor Inc., CellPro Inc., Anergen Inc., Alteon Inc., ImClone Systems, Cytel, Magainin Pharmaceuticals and Genta. Other biotechnology/biopharmaceutical companies which had IPOs in 1991 are not included here if they no longer exist or are no longer publicly traded. Because of this, Aphton's relative stock price performance is negatively impacted from what is commonly called in the financial industry a "survivor bias." [TABLE]
1991 1/31 1/29 1/31 1/31 1/31 1/31 1/30 1/29 PERIOD FROM IPO IPO 1992 1993 1994 1995 1996 1997 1998 1999 --------------- --- ---- ---- ---- ---- ---- ---- ---- ---- Aphton Corporation 100 304 220 350 139 146 318 177 223 All US & Foreign on NASDAQ* 100 131 147 171 161 227 296 348 535 Biotech Peer Group 100 160 136 118 63 133 128 139 179 1/31 1/31 1/31 1/31 1/30 1/29 FIVE YEARS ENDED 1/31/99 1994 1995 1996 1997 1998 1999 ------------------------- ---- ---- ---- ---- ---- ---- Aphton Corporation 100 40 42 91 51 64 All US & Foreign on NASDAQ* 100 94 133 173 204 312 Biotech Peer Group 100 53 113 108 118 152
EXECUTIVE COMPENSATION The following table sets forth, for each of the last five fiscal years, the annual compensation paid by the Company, together with long-term and other compensation, for the Chief Executive Officer, the Co-Chief Executive Officer and the other highest compensated Executive Officers of the Company in all capacities in which they served.
SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION LONG-TERM COMPENSATION ------------------------------- -------------------------------------- AWARDS PAYOUTS ---------------------- ----------- OTHER LONG-TERM FISCAL ANNUAL RESTRICTED INCENTIVE ALL OTHER NAME, AGE AND PERIOD COMPEN- STOCK OPTIONS/ PLAN COMPEN- PRINCIPAL POSITION END SALARY($) BONUS($) SATION($) AWARD(s)($) SARs(#) PAYOUTS($) SATION($) - ------------------------ --- --------- -------- --------- ----------- -------- ---------- ----------- Philip C. Gevas (65) 1999 200,000 200,000 - - - - - Chief Executive *1998 150,000 200,000 - - - - - Officer, President and 1997 200,000 200,000 - - - - - Chief Financial Officer 1996 200,000 200,000 - - - - - 1995 180,000 200,000 - - - - - William A. Hasler (57), 1999 105,000 - - - - - - Vice Chairman of the (Note 1) (Note 2) Board of Directors and Co-Chief Executive Officer Dov Michaeli, M.D., 1999 150,000 60,000 - - - - - Ph.D. (61) Senior Vice *1998 112,500 60,000 - - - - - President, Director of 1997 150,000 60,000 - - - - - Medical Science 1996 150,000 60,000 - - - - - 1995 150,000 60,000 - - - - - Paul Broome, MB., 1999 135,000 30,000 - - - - - Ch.B., MFPM (47) *1998 93,750 30,000 - - - - - Vice President and 1997 135,000 30,000 - - - - - Medical Director, 1996 132,300 26,450 - - - - - Clinical Trials and 1995 112,500 25,000 - - - - - Regulatory Affairs - - Richard Ascione, 1999 125,000 30,000 - - - - - Ph.D.(61) Vice *1998 87,500 25,000 - - - President, Director of 1997 125,000 25,000 - - - - - Laboratory of 1996 125,000 25,000 - - - - - Molecular Medicine 1995 112,500 25,000 - - - - - - ---------------------------------------- Note 1. For the seven months ended January 31, 1999 Note 2. Subsequent to January 31, 1999, Mr. Hasler was granted 150,000 warrants to purchase common stock. *Nine month fiscal period ended January 31, 1998
OPTION GRANTS IN LAST FISCAL YEAR No options or stock appreciation rights were granted during the year ended January 31, 1999. OPTION EXERCISES AND FISCAL YEAR-END VALUES The following table sets forth information concerning the unexercised options held as of the end of the fiscal year. None of these officers exercised options during the fiscal year.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION/SAR VALUE NUMBER OF UNEXERCISED VALUE OF UNEXERCISED OPTIONS/ IN-THE-MONEY OPTIONS/ SARs AT FY-END(#) SARs AT FY-END($)(1) SHARES ---------------------------- ---------------------- ACQUIRED ON VALUE NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- ----------- ----------- ------------- ----------- ------------- Philip C. Gevas - - 600,000 - - - Dov Michaeli, M.D, Ph.D. - - 370,000 - 1,537,500 - Richard Ascione, Ph.D. - - - 50,000 - - Paul Broome, MB., Ch.B., MFPM - - - 50,000 - - (1) Market value of shares covered by in-the-money options on January 31, 1999, less option exercise price. Options are in-the-money if the market value of the shares covered thereby is greater than the option exercise price. The market value is the closing price at January 31, 1999, as quoted by Nasdaq.
LONG-TERM INCENTIVE PLANS - AWARDS IN FISCAL YEAR No long-term incentive plan awards were granted during the year ended January 31, 1999. PRINCIPAL SHAREHOLDERS To the Company's knowledge, except as hereinafter described, no single shareholder of record owned or beneficially owned, as of May 5, 1999, more than 5% of the Company's common stock. As of May 5, 1999, Cede & Co., a nominee of securities depositories for various segments of the financial industry, held approximately 9,930,000 shares, representing approximately 69% of the Company's outstanding common stock, none of which was owned beneficially by Cede & Co. The Company believes that each of the entities or individuals named below beneficially owns 5% or more of the Company's common stock, based on a review of filings made with the SEC. NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES % OF COMMON STOCK ------------------- ---------------- ----------------- Smith Barney Mutual Funds Management, Inc 1,481,900 10.3 388 Greenwich Street Legal Dept, 20th Floor New York, New York 10013 Philip C. Gevas 1,859,050 12.9 P. O. Box 1049 Woodland, CA 95776 Richard L. Littenberg, M.D. 1,146,250 7.9 P. O. Box 1049 Woodland, CA 95776 Robert J. Scibienski, Ph.D. 1,413,800 9.8 P. O. Box 1049 Woodland, CA 95776 All Executive Officers and 2,088,416 14.5 Directors as a group (7 persons) SHAREHOLDER PROPOSALS If a shareholder intends to have a proposal presented at the next Annual Meeting of Shareholders, such a proposal must be received by the Company at its principal executive offices prior to the end of fiscal year 1999. MISCELLANEOUS PricewaterhouseCoopers LLP has been the Company's independent accountants for a number of years and has been selected to continue in such capacity for the current fiscal year. It is anticipated that a representative from PricewaterhouseCoopers LLP will be available to answer questions raised at the Annual Meeting of Shareholders and will be afforded the opportunity to make any statements the representative may desire to make. The Board of Directors knows of no other matters that are likely to come before the meeting. If any such matters should properly come before the meeting, however, it is intended that the persons named in the accompanying form of proxy will vote such proxy in accordance with their best judgment on such matters. By Order of the Board of Directors /s/ Philip C. Gevas Philip C. Gevas Chairman and Secretary -----END PRIVACY-ENHANCED MESSAGE-----