(2) Common stock includes all
outstanding common stock plus, as required for the purpose of determining
beneficial ownership (in accordance with Rule 13d-3(d)(1) of the Securities
Exchange Act of 1934, as amended), all common stock subject to any right of
acquisition, through exercise or conversion of any security, within 60 days of
the record date.
(3) The principal business address for
Medarex, Inc., a New Jersey corporation ("Medarex") is 707 State Road,
Princeton, New Jersey 08540.
(4) Represents 4,960,848 shares of
common stock which Medarex acquired as a result of the Merger. Medarex may be
deemed to have sole voting power and the sole power to dispose of such shares of
common stock. To the extent that the directors of Medarex may be deemed to share
the power to vote (and direct the vote of) or dispose of (or direct the
disposition of) such shares of common stock owned of record by Medarex, each
such director disclaims beneficial ownership of the shares of common stock owned
by Medarex.
(5) Represents 14,882 shares of common
stock issuable upon the exercise of Presently Exercisable Options. Does not
include 4,960,848 shares of common stock owned by Medarex. Mr. Schaller is a
director of Medarex and to the extent that by virtue of his role as director Mr.
Schaller may be deemed to share the power to vote (and direct the vote of) or
dispose of (or direct the disposition of) such shares of common stock owned of
record by Medarex, Mr. Schaller disclaims beneficial ownership of the shares of
common stock owned by Medarex.
(6) Includes 17,879 shares of common
stock issuable upon exercise of Presently Exercisable Options.
(7) Excludes 17,728 shares of common
stock issuable upon exercise of options, which will not vest within 60 days of
August 5, 2008.
(8) Includes 17,879 shares of common
stock issuable upon exercise of Presently Exercisable Options. Does not include
56,223 share of common stock held by an entity, which is owned in part by Dr.
Parekh and his spouse. Dr. Parekh disclaims beneficial ownership of such shares
and is not involved in any decision making with respect to the disposition of
such shares.
(9) Includes 416 shares of common stock
issuable upon exercise of Presently Exercisable Options. Excludes 17,728 shares
of common stock issuable upon exercise of options, which will not vest within 60
days of August 5, 2008.
(10) Includes 181,380 shares of common
stock issuable upon exercise of Presently Exercisable Options. Excludes 72,863
shares of common stock issuable upon exercise of options, which will not vest
within 60 days of August 5, 2008.
(11) Includes 1,791 shares of common
stock owned directly by Mr. Catlin and 45,833 shares of common stock issuable
upon exercise Presently Exercisable options. Excludes 137,500 shares of common
stock issuable upon exercise of options, which will not vest within 60 days of
August 5, 2008.
(12) Includes 43,364 shares of common
stock issuable upon exercise Presently Exercisable options. Excludes 105,461
shares of common stock issuable upon exercise of options, which will not vest
within 60 days of August 5, 2008.
-32-
(13) Includes 27,645 shares of common
stock issuable upon exercise Presently Exercisable options. Excludes 79,840
shares of common stock issuable upon exercise of options, which will not vest
within 60 days of August 5, 2008.
(14) Includes 153,125 shares of common
stock issuable upon exercise Presently Exercisable options. Includes 83,333
Restricted Stock Units, which are fully vested and were settled for stock on a
one-for-one basis upon the consummation of the Merger on March 7, 2008. Includes
74,934 shares of common stock owned directly by Dr. Ryan and 2,666 shares owned
by Dr. Ryan's husband, of which Dr. Ryan disclaims beneficial ownership. Dr.
Ryan's employment with the Company terminated as of May 7, 2008 and she resigned
from the Company's Board of Directors effective July 16, 2008. The information
on the table is based solely upon data derived from publicly filed forms
reporting her beneficial ownership and to the extent that this individual is no
longer required to file forms reporting her beneficial ownership such
information may not be correct.
(15) Includes 486 shares owned directly
by Mr. Marsh and 22,083 shares of common stock issuable upon exercise Presently
Exercisable options. Excludes 20,833 shares of common stock issuable upon
exercise of options, which will not vest within 60 days of August 5, 2008.
Following the Merger, although Mr. Marsh continued with the Company, he was no
longer deemed an executive officer.
(16) Dr. Keilani resigned from AVANT
effective April 17, 2008. The information on the table is based solely upon data
derived from publicly filed forms reporting his beneficial ownership and to the
extent that this individual is no longer required to file forms reporting his
beneficial ownership such information may not be correct.
(17) Dr. Cooke resigned from the
Company as of February 11, 2008. The information on the table is based solely
upon data derived from publicly filed forms reporting his beneficial ownership
and to the extent that this individual is no longer required to file forms
reporting his beneficial ownership such information may not be
correct.
(18) Dr. Ellis resigned from the
Company as of July 31, 2007. The information on the table is based solely upon
data derived from publicly filed forms reporting his beneficial ownership and to
the extent that this individual is no longer required to file forms reporting
his beneficial ownership such information may not be correct.
(19) Please refer to footnotes 5 - 13.
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires AVANTs directors, officers and key
employees, and persons who are beneficial owners of more than 10% of a
registered class of our equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the SEC).
Officers, directors and greater than 10% beneficial owners are required by SEC
regulations to furnish AVANT with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us, and written representations that no other reports were required
during the fiscal year ended December 31, 2007, all Section 16(a) filing
requirements applicable to such persons were satisfied.
-33-
Transactions with Related Persons
It is our policy that all employees
and directors, as well as their family members, must avoid any activity that is
or has the appearance of conflicting with AVANTs business interest. This policy
is included in our Code of Business Conduct and Ethics. All directors and
officers of AVANT complete a directors and officers questionnaire at the
beginning of each year, in which they are asked to disclose family relationships
and other related party transactions. Our Audit Committee must review and
approve all related party transactions, as defined in Item 404 of Regulation
S-K. Our Audit Committees procedures for reviewing related party transactions
are not in writing. In fiscal 2007, there were no related party transactions.
THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE
FOR THE ELECTION OF THE DIRECTOR NOMINEES
PROPOSAL 2: RATIFY THE APPOINTMENT
OF
PRICEWATERHOUSECOOPERS LLP AS OUR
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER
31, 2008
(Proposal No. 2)
The Audit
Committee has reappointed PricewaterhouseCoopers LLP as our independent
registered public accounting firm to audit the financial statements of the
Company for the fiscal year ending December 31, 2008, and has further directed
that management submit their selection of independent registered public
accounting firm for ratification by our stockholders at the Annual Meeting of
Stockholders. Neither the accounting firm nor any of its members has any direct
or indirect financial interest in or any connection with us in any capacity
other than as public registered accounting firm.
Principal Accountant Fees and
Services
Audit Fees
Represents fees for professional services provided in connection with the
audit of AVANTs annual audited financial statements and reviews of AVANTs
quarterly financial statements, advice on accounting matters directly related to
the audit and audit services provided in connection with other statutory or
regulatory filings. Fees, including out of pocket expenses, for the fiscal years
2007 and 2006 audit, including assurance services provided in connection with
the assessment and testing of internal controls pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, quarterly reviews of Forms 10-Q during fiscal years
2007 and 2006 and in connection with the Celldex Merger entered into in 2007
were $443,400 and $374,550, respectively.
-34-
Audit-Related Fees
Audit-related fees are for assurance and other activities not explicitly
related to the audit of AVANTs financial statements, and consisted principally
of fees for consultations concerning financial accounting and reporting
standards. There were no audit-related fees billed by PricewaterhouseCoopers LLP
for fiscal 2007 and 2006.
Tax Fees
Tax fees
are associated with tax compliance, tax advice, tax planning and tax preparation
services. In 2007 and 2006, we engaged another public accounting firm to perform
these services.
All Other Fees
Other
fees of $1,500 were billed by PricewaterhouseCoopers LLP in fiscal years 2007
and 2006.
The Audit
Committee is responsible for appointing, setting compensation and overseeing the
work of the independent auditors. The Audit Committee has established a policy
regarding pre-approval of all auditing services and the terms thereof and
non-audit services (other than non-audit services prohibited under Section
10A(g) of the Exchange Act or the applicable rules of the SEC or the Public
Company Accounting Oversight Board) to be provided to AVANT by the independent
auditor. However, the pre-approval requirement may be waived with respect to the
provision of non-audit services for AVANT if the de minimus provisions of
Section 10A(i)(1)(B) of the Exchange Act are satisfied.
The Audit
Committee has considered whether the provision of Audit-Related Fees, Tax Fees,
and all other fees as described above is compatible with maintaining
PricewaterhouseCoopers, LLPs independence and has determined that such services
for fiscal years 2007, 2006 and 2005 were compatible. All such services were
approved by the Audit Committee pursuant to Rule 2-01 of Regulation S-X under
the Exchange Act to the extent that rule was applicable.
The Audit
Committee is responsible for reviewing and discussing the audit financial
statements with management, discussing with the independent auditors the matters
required in Auditing Standards No. 61, receiving written disclosures from the
independent auditors required by ISB No. 1 and discussing with the independent
auditors their independence, and recommending to the Board of Directors that the
audit financial statements be included in the Companys annual report of Form
10-K.
Changes in Independent Accountants
On March
7, 2008, the Company completed the merger of Callisto Merger Corporation
(Merger Sub), a wholly owned subsidiary of the Company with and into Celldex
Therapeutics, Inc. (Celldex), a privately-held company (the Merger).
Pursuant to the terms of the Merger, shares of the Companys common stock were
issued to the shareholders of Celldex and Celldex became a wholly-owned
subsidiary of the Company. The Merger was accounted for using the purchase
method of accounting and was treated as an acquisition by Celldex of the Company
with Celldex being considered the accounting acquirer based on the application
of criteria specified in Statement of Financial Accounting Standards (SFAS)
No. 141, Business Combination, (SFAS 141), even though the Company was the
issuer of common stock and the surviving legal entity in the transaction.
Because Celldex was determined to be the acquirer for accounting purposes, the
historical financial statements of Celldex became the historical financial
statements of the combined company as of the closing of the Merger.
-35-
Celldexs
financial statements for 2006 and 2007 were audited by Ernst & Young LLP
(E&Y). Since 1994, the Companys financial statements were audited by
PricewaterhouseCoopers (PwC). As of March 7, 2008, the effective date of the
Merger, the Audit Committee of the Company authorized PwC to continue as the
Companys independent accountants for 2008. The Staff of the Securities and
Exchange Commission takes the position that in a transaction such as the Merger,
there is always a change of independent accountants (unless the same firm had
served as the independent accountants of both the acquiring and the acquired
companies). Accordingly, the Company filed a Current Report on Form 8-K on June
9, 2008 to report that when the Companys Audit Committee authorized PwC
continue as the Companys independent accountants, as a technical matter that
authorization resulted in E&Y being dismissed as Celldexs independent
accountants.
During
the past two years, E&Ys report on the financial statements of Celldex did
not contain an adverse opinion or disclaimer of opinion, was not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the two fiscal years
preceding the dismissal of E&Y:
-
There were no
disagreements between Celldex or the Company and E&Y on any
matter of accounting principles or practices, financial
statement disclosure, or auditing
scope or
procedure, which disagreement(s), if not resolved to the satisfaction of
E&Y,
would have caused it to make reference
to the subject matter of the disagreement(s) in
connection with its report.
-
None of the
reportable events listed in paragraphs (a)(1)(v)(A) through (D) of
Item 304 of Regulation S-K promulgated by the
Securities and Exchange Commission
(Item 304)
occurred, except as set forth below.
-
Response to
paragraph (a)(1)(v)(A) of Item 304
- On
May 7, 2008, E&Y
reported to the
Companys management and Audit Committee that it had noted
the following material weaknesses in Celldexs internal
control over financial
reporting: (i) during
2007, Celldex did not maintain an effective segregation of
duties (specifically, certain authority and responsibility
were not appropriately
assigned and delegated
to employees within the organization); and (ii) during
2007, Celldex did not maintain effective internal control
over the financial
statement closing process
(specifically, Celldex did not maintain formal, written
policies and procedures governing the financial close and
reporting process to
ensure an accurate and
timely financial statement closing process). The latter
control
deficiency resulted in misstatements to general and administrative expense,
research and development expense and accrued liability accounts and related
financial statement disclosures. Management of the Company had already noted
those material weaknesses as of March 31, 2008, and there was no
disagreement with E&Y concerning these matters. These material
weaknesses were discussed with the Companys Audit Committee. The Company
has authorized E&Y to respond fully to the inquiries of the successor
accountant with respect to these matters, without limitations.
-36-
The
Company provided E&Y with a copy of the disclosures that the Company is
making herein in response to Item 304 and requested that E&Y furnish to the
Company a letter addressed to the Securities and Exchange Commission stating
whether it agrees with the statements made by the Company in response to Item
304 and, if not, stating the respects in which it does not agree. The Company
filed the letter received from E&Y in response to that request as an exhibit
to the Current Report on Form 8-K filed with the Commission on June 9, 2008.
As
discussed above, when the Companys Audit Committee authorized PwC to continue
as the Companys independent accountants, PwC became engaged as the Companys
independent registered public accounting firm as of March 7, 2008. During the
two most recent fiscal years and through March 7, 2008, Celldex had not
consulted with PwC regarding either (i) the application of accounting principles
to a specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on Celldexs financial statements, and neither a
written report was provided to Celldex nor oral advice was provided that PwC
concluded was an important factor considered by Celldex in reaching a decision
as to the accounting, auditing or financial reporting issue; or (ii) any matter
that was either the subject of a disagreement, as that term is defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of
Regulation S-K, or a reportable event, as that term is defined in Item
304(a)(1)(v) of Regulation S-K.
THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE
FOR THE
RATIFICATION OF THE INDEPDENT REGISTERED PUBLIC
ACCOUNTING FIRM
PROPOSAL 3: AMEND
THE
CERTIFICATE OF
INCORPORATION
(Proposal No. 3)
On July
17, 2008, our Board of Directors adopted, subject to stockholder approval, an
amendment to our Certificate of Incorporation to change the name of the Company
from AVANT Immunotherapeutics, Inc. to Celldex Therapeutics, Inc. A copy of
the Certificate of Amendment is attached hereto as Annexure A. The Board of
Directors determined that, due to strategic considerations, it is in the best
interest of the Company and its stockholders to re-brand the business of the
Company under the name Celldex Therapeutics, Inc.
-37-
The
ticker symbol of the Company (AVAN) is expected to change as a result of the
proposed name change. We will publicly announce the new ticker symbol at such
time as we receive it.
Stockholders will not be required to submit their stock certificates for
exchange as a result of this proposed name change. Following the effective date
of the amendment changing the Companys name, all new stock certificates issued
by the Company will be overprinted with the Companys new name.
If
stockholders approve the proposal at the Annual Meeting, the Company will
implement the name change on or about September 25, 2008.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE
CERTIFICATE OF AMENDMENT.
STOCKHOLDER PROPOSALS
Stockholder Proposals for 2009
Annual Meeting
Any
stockholder proposals submitted pursuant to Exchange Act Rule 14a-8 for
inclusion in AVANTs proxy statement and form of proxy for our 2009 annual
meeting must be received by AVANT on or before December 21, 2008 in order to be
considered for inclusion in our proxy statement and form of proxy. Such proposal
must also comply with the requirements as to form and substance established by
the SEC if such proposals are to be included in the proxy statement and form of
proxy. Any such proposal shall be mailed to: AVANT Immunotherapeutics. Inc., 119
Fourth Avenue, Needham, MA 02494-2725, Attn.: Secretary.
Our
by-laws state that the stockholder must provide timely written notice of such
nomination or proposal and supporting documentation as well as be present at
such meeting, either in person or by a representative. A stockholders notice
shall be timely received by AVANT at our principal executive office not less
than seventy-five (75) days nor more than one hundred twenty (120) days prior to
the anniversary date of the immediately preceding annual meeting (the
Anniversary Date); provided, however, that in the event the annual meeting is
scheduled to be held on a date more than thirty (30) days before the Anniversary
Date or more than sixty (60) days after the Anniversary Date, a stockholders
notice shall be timely if received by AVANT at our principal executive office
not later than the close of business on the later of (1) the seventy-fifth
(75
th
) day prior to the scheduled date of such annual meeting or (2)
the fifteenth (15
th
) day following the day on which such public
announcement of the date of such annual meeting is first made by AVANT. Proxies
solicited by our Board of Directors will confer discretionary voting authority
with respect to these proposals, subject to SEC rules and regulations governing
the exercise of this authority. Any such proposal shall be mailed to: AVANT
Immunotherapeutics. Inc., 119 Fourth Avenue, Needham, Massachusetts 02494-2725,
Attn.: Secretary.
-38-
ANNUAL REPORT
Copies of our Annual Report on Form
10-K (including audited financial statements), as amended, filed with the
Securities and Exchange Commission may be obtained without charge by writing to
Corporate Secretary, AVANT Immunotherapeutics, Inc., 119 Fourth Avenue, Needham,
MA 02494. A request for a copy of our Annual Report on Form 10-K must set forth
a good-faith representation that the requesting party was either a holder of
record or a beneficial owner of our common stock on August 15, 2008. Exhibits to
the Form 10-K will be mailed upon similar request and payment of specified fees
to cover the costs of copying and mailing such materials.
Our audited financial statements for
the fiscal year ended December 31, 2007 and certain other related financial and
business information are contained in our 2007 Annual Report to Stockholders,
which is being made available to our stockholders along with this proxy
statement, but which is not deemed a part of the proxy soliciting material.
OTHER MATTERS
As of the
date of this proxy statement, the Board of Directors does not intend to present
at the Annual Meeting any matters other than those described herein and does not
presently know of any matters that will be presented by other parties. If any
other matter requiring a vote of the stockholders should come before the
meeting, it is the intention of the persons named in the proxy to vote with
respect to any such matter in accordance with the recommendation of the Board of
Directors or, in the absence of such a recommendation, in accordance with the
best judgment of the proxy holder.
By Order of the Board
of Directors
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Avery C. Catlin
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Chief Financial
Officer and Secretary
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Needham, MA
August __, 2008
-39-
AVANT IMMUNOTHERAPEUTICS,
INC.
This Proxy is Solicited on Behalf of
the Board of Directors
For The Annual Meeting of Shareholders on September
25, 2008
The
undersigned hereby appoints Anthony S. Marucci and Avery C. Catlin, and each of
them as proxies, each with full power of substitution and authorizes them to
represent and to vote as designated on the reverse side of this form, all the
shares of Common Stock of AVANT Immunotherapeutics, Inc. held of record by the
undersigned on August 15, 2008, at the Annual Meeting Shareholders to be held on
September 25, 2008, at 9:00 a.m. local time at 1251 Avenue of the Americas, 18th
Floor, New York, NY 10020, or any adjournment or postponement of such meeting.
THIS PROXY WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS LISTED HEREIN.
(Continued and to be signed on the
reverse side)
ANNUAL MEETING OF SHAREHOLDERS
OF
AVANT IMMUNOTHERAPEUTICS,
INC.
September 25, 2008
Please date, sign and mail
your
proxy card in the envelope provided as soon as possible!
↓
Please detach along perforated
line and mail in the envelope provided
↓
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS
A VOTE FOR ALL OF THE PROPOSALS.
Please Mark Your Vote In Blue Or Black As Shown
Here
x
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1.
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ELECTION OF
DIRECTORS
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For All
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Withhold
All
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For All
Except
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o
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o
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Nominees:
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01) Charles R. Schaller,
02)
Herbert J. Conrad,
03) Larry Ellberger,
04) George O. Elston,
05)
Karen Shoos Lipton,
06) Dr. Rajesh B. Parekh, and
07) Harry H.
Penner, Jr.
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2.
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TO
RATIFY THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE YEAR ENDING DECEMBER 31, 2008;
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FOR
o
AGAINST
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3.
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APPROVE AN AMENDMENT TO OUR
CERTIFICATE OF INCORPORATION TO CHANGE OUR NAME TO CELLDEX THERAPEUTICS,
INC.; AND
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FOR
o
AGAINST
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4.
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IN THEIR DISCRETION, UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUALMEETING OR ANY
ADJOURNMENT OR POSTPONEMENT
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PLEASE MARK, SIGN AND DATE THIS
PROXY CARD AND PROMPTLY RETURN IT IN THE ENVELOPEPROVIDED. NO POSTAGE NECESSARY
IF MAILED WITHIN THE UNITED STATES.
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Dated:
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, 2008
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(SIGNATURE)
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(SIGNATURE, IF HELD
JOINTLY)
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NOTE:
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Please sign exactly as your name
appears hereon and mail it promptly even though you may plan to attend the
meeting. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please
sign in the partnership name by authorized person.
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Annexure A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AVANT IMMUNOTHERAPEUTICS, INC.
The corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware does
hereby certify:
FIRST
: That at a meeting of the Board of Directors of AVANT
Immunotherapeutics, Inc.
resolutions were duly
adopted setting forth a proposed amendment of the Certificate of Incorporation
of said corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration thereof. The
resolution setting forth the proposed amendment is as follows:
RESOLVED
, that the Certificate of Incorporation of this corporation be amended by
changing Article One of the Certificate of Incorporation so that, as amended,
said Article shall be and read as follows:
"1.
The
name of the Corporation is Celldex Therapeutics, Inc."
SECOND
: That thereafter, pursuant to resolution of its Board of Directors, said
amendment was submitted for stockholder approval at an annual meeting of the
stockholders of said corporation and held upon notice in accordance with Section
222 of the General Corporation Law of the State of Delaware at which meeting the
necessary number of shares as required by statute were voted in favor of the
amendment.
THIRD
: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF
, said corporation has caused this certificate to be signed
this _______ day of __________, 2008.
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