As filed, via EDGAR, with the Securities and Exchange Commission on
May 29, 2002.
File No.:________
ICA No.: _________
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant |_|
Filed by a party other than the registrant |X|
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 pursuant to
Rule 14a-11(c) or Rule 14a-12
DOR BIOPHARMA, INC.
(Name of Registrant as Specified in Its Charter)
STEVE H. KANZER
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
SECOND CONSENT STATEMENT
OF
STEVE H. KANZER
FOR
DOR BIOPHARMA, INC.
This Consent Solicitation Statement (this "Consent Statement") is
furnished to you by Steve H. Kanzer (the "Solicitor") in connection with a
solicitation of written consents from the holders of common stock, par value
$0.001 per share (the "Common Stock"), and Series B convertible preferred stock,
par value $0.05 per share (the "Preferred Stock"; together with the Common
Stock, the "Stock"), of DOR Biopharma, Inc., a Delaware corporation ("DOR" or
the "Company"), to take the following actions without a meeting of DOR's
stockholders, as permitted by the Delaware General Corporation Law (the "DGCL"):
1. Remove (i) all current members of DOR's Board of Directors (the
"Board of Directors") other than Steve H. Kanzer, Paul Rubin, M.D., Richard
Dunning, Peter Kliem, Guy Rico, and Steven Thornton (the "Remaining Directors"),
and (ii) any other person or persons (other than the persons elected pursuant to
this consent) elected or appointed to the Board of Directors prior to the
effective time of this stockholder action in addition to or in lieu of any of
such current members (including any persons elected or appointed in lieu of the
Remaining Directors) to fill any newly-created directorship or vacancy on the
Board of Directors or otherwise (the "Director Removal Proposal").
2. Elect Gilbert Goldstein, Larry J. Kessel, M.D. and Peter Salomon,
M.D., FACG (collectively, the "Nominees") as directors of DOR to serve until
their respective successors are duly elected and qualified (the "Director
Election Proposal").
3. Repeal any By-Laws adopted by the Board of Directors subsequent
to May 29, 2002, and prior to the effectiveness of the Solicitor Proposals (as
defined below), other than the amendment to the By-Laws contemplated by this
Consent Statement (the "By-Laws Proposal"; collectively with the Director
Removal Proposal, and the Director Election Proposal, the "Solicitor
Proposals").
Call for a Special Meeting of Stockholders
Resolved, that the stockholders owning a majority of the shares of capital stock
of DOR issued and outstanding as of May 29, 2002 do hereby call for a special
meeting of stockholders at 10:00am central time on the first business day that
is twenty (20) days after the date on which Steve H. Kanzer receives a number of
consents constituting a majority of the shares of capital stock of DOR as of May
29, 2002 for the purpose of considering the Solicitor Proposals, unless such
proposals are adopted by written consent in lieu of a meeting.
The Solicitor asks that stockholders of DOR consent to each of the
Solicitor Proposals by marking the enclosed blue consent form appropriately,
signing and dating it, and returning it promptly in accordance with the
instructions set forth below.
This Consent Statement and the enclosed consent form are first being
furnished to DOR's stockholders on or about May __, 2002.
SUMMARY OF CONSENT PROCEDURE
On May 24, 2002 the Solicitor filed an initial Consent Statement
(the "Initial Consent Statement") with the Securities and Exchange Commission
("SEC") seeking the nearly identical resolutions contained herein by written
consent of majority of the stockholders of DOR. Simultaneous therewith, on May
24, 2002 the Solicitor delivered by U.S. mail, facsimile and overnight mail the
Solicitor's own written consent as a stockholder taken in lieu of a meeting to
DOR Biopharma, Inc. Under the DGCL, the record date of a written consent unless
fixed by the board of directors of the corporation is the date on which the
first consent is delivered to the corporation but may not be dated more than
sixty (60) days following the delivery of the first written consent. Pursuant to
SEC regulations, the Solicitor will not be permitted to solicit written consents
from stockholders of DOR pursuant to the Initial Consent Statement until such
date and time that the Initial Consent Statement is reviewed and declared
effective for use by the SEC. Accordingly, until the Initial Consent Statement
is declared effective by the SEC, the Solicitor's sixty (60) day "window" to
solicit consents under the Initial Consent Statement is reduced by each passing
day. In the event that the SEC review process extends beyond sixty (60) days
from May 24, 2002, the Solicitor may be effectively precluded from seeking any
consents based upon the record date of May 24, 2002 utilizing the date of
delivery of the Solicitor's initial written consent.
On May 29, 2002, subsequent to the filing if the Initial Consent
Statement and delivery of the Solicitor's initial written consent to DOR, the
Chairman of DOR called a special meeting of the board of directors to take place
on May 30, 2002, specifically including the purpose of amending the bylaws of
DOR. A draft of such new amended and restated bylaws of DOR (the "Draft Amended
and Restated Bylaws") were circulated to the board of directors of DOR by the
Chairman of DOR, for their consideration at the upcoming board of directors
meeting called for May 30, 2002. As of the date of this writing, May 29, 2002,
the Draft Amended and Restated Bylaws have not been considered for approval by
the board of directors of DOR.
Among other amendments, such as the inclusion of a prenotification
period for the nomination of individuals to serve on the board of directors, the
Draft Amended and Restated Bylaws, if approved by the board of directors as
drafted, eliminate the ability of the stockholders of DOR to call a special
meeting of stockholders which would also effectively eliminate the ability of
the stockholders to act by written consent in lieu of a meeting without the
consent of the board of directors of DOR. In light of such potential
disenfranchisement of the stockholders of DOR and the potential for a protracted
review process by the SEC in light of the Draft Amended and Restated Bylaws,
that the Initial Consent Statement and this Second Consent Statement seek to
revoke and declare null and void, the Solicitor decided to file this Second
Consent Statement which is in addition to, and specifically not in lieu of the
Initial Consent Statement. This Second Consent Statement is intended to be a
protective "back-up" measure by the Solicitor in the event that a protracted SEC
review process substantially curtails or eliminates the sixty (60) day window
beginning May 24, 2002 for the Solicitor to seek written consents pursuant to
the Initial Consent Statement.
This Second Consent Statement is similar to the Initial Consent
Statement in form and objectives with one essential difference. Pursuant to this
Second Consent Statement, the Solicitor does not intend to deliver his own
written consent as a stockholder or any other stockholder written consent to DOR
until after this Second Consent Statement is declared effective by the SEC.
Pursuant to this Second Consent Statement, Solicitor's effective sixty (60) day
window may be preserved since the record date will not begin and the sixty (60)
day window to receive later dated written consents will not begin to expire
until this Second Consent Statement is approved by the SEC and delivery of the
first written consent is delivered to DOR.
This Second Consent Statement also seeks to revoke any amendment to
the bylaws of DOR effective after May 24, 2002. This will necessarily include
the Draft Amended and Restated Bylaws if such bylaws are approved by the board
of directors of DOR on or after May 30, 2002. Although the record date of this
Second Consent Statement will be after the date of enactment of the Draft
Amended and Restated Bylaws, the Solicitor believes that the Solicitor's prior
notice given to the Board of Directors of DOR pursuant to the Initial Consent
Statement dated May 24, 2002 and this Second Consent Statement filed with the
SEC on May 29, 2002, should not disenfranchise powers held by the stockholders
of DOR that are stockholders of record as of such dates and continue to remain
stockholders as of the record date as established by the later delivery of the
first written consent delivered by the Solicitor after the effectiveness of this
Second Consent Statement and as may be amended. It is the Solicitor's belief
that such outcome is in accordance with both the letter and intent of the laws
of the State of Delaware and regulations of the SEC.
The Solicitor's Proposals will become effective on the date when the
written consents of holders of a majority of the shares of Stock outstanding on
the record date as determined in accordance with Delaware law (the "Record
Date") are delivered to DOR, so long as each of those consents is delivered to
DOR within 60 days of the earliest dated consent delivered to DOR. Section
213(b) of the DGCL provides that a corporation's board of directors may fix a
record date for a consent solicitation, but that the date selected may not be
more than ten days after the date upon which the resolution fixing the record
date is adopted by the board. Section 213(b) also provides that if the board
does not fix a record date, the record date will be the first date on which a
signed written consent is delivered to the corporation. The written consents
accompanying this Second Consent Statement specifically state that they shall
not be considered validly delivered to DOR until after this Second Consent
Statement, as amended, is declared effective by the SEC. Accordingly, the Record
Date pursuant to the Second Consent Statement will not be until after this
Second Consent Statement is declared effective by the SEC. The written consents
will take effect when shares representing a majority of the shares of DOR
entitled to vote are received by the Solicitor and delivered to DOR. The
solicitation period will terminate after 60 days from the date when the SEC
declares this proxy statement effective.
Although the Record Date will be after the date in which the Draft
Amended and Restated Bylaws are adopted by the Board of Directors of DOR, if so
adopted, the Solicitor believes that his prior notification to DOR on May 24,
2002 in the form of his filing of the Initial Consent Statement and delivery to
DOR of the accompanying written consent associated therewith and prior
notification on May 29, 2002 in the form of filing this Second Consent Statement
with the SEC, should not disenfranchise stockholders of record of such date that
continue to be stockholders of record as of the later Record Date pursuant to
the Bylaws of DOR in effect on May 24, 2002 and May 29, 2002. In particular, the
stockholders of DOR currently have the right to (a) call a special meeting of
stockholders "at the request in writing . . . of the stockholders owning a
majority of the shares of capital stock of [DOR] issued and outstanding and
entitled to vote." Article II, Section 4, Bylaws of DOR (as successor to
Biological Therapeutics, Inc. (a Delaware corporation)) and (b) the right to act
by written consent "without a meeting, without prior notice, and without a vote,
if a written consent, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present or represented by proxy or
voted." Article II, Section 10, Bylaws of DOR (as successor to Biological
Therapeutics, Inc.
To the Solicitor's knowledge, at the close of business on May 29,
2002, there were approximately 20,825,710 shares of Common Stock and 108,442
shares of Preferred Stock outstanding and entitled to vote. Each holder of
Common Stock is entitled to one vote for each share of Common Stock held by it
as of the Record Date. Each holder of Preferred Stock is entitled to one vote
for each share of Common Stock into which a share of Preferred Stock was
convertible as of the Record Date. As of the record date, the Solicitor believes
each share of Preferred Stock is convertible into 13.55 shares of Common Stock.
Consequently, as of the Record Date, the Preferred Stock was entitled to an
aggregate of 1,469,404 votes. The total voting power represented by the Common
Stock and the Preferred Stock as of the Record Date is 22,295,114, with
11,147,557 votes constituting the majority required for adoption of the
Solicitor Proposals.
As of the May 29, 2002, Mr. Kanzer owned 391,674 shares of Common Stock,
and options exercisable within 60 days for 416,800 shares of Common Stock,
representing in the aggregate approximately 3.62% of the voting power of the
outstanding Stock as of the Record Date. As of the Record Date, Mr. Goldstein
owned 50,423 shares of Common Stock representing in the aggregate approximately
0.23% of the voting power of the outstanding Stock as of the Record Date. Mr.
Goldstein's three adult children own approximately 16,807 shares of Common
Stock, as to which Mr. Goldstein disclaims beneficial ownership. As of the
Record Date, Dr. Kessel owned no shares of Common Stock, although his wife owns
12,500 shares of Common Stock as to which Dr. Kessel disclaims beneficial
ownership. As of the Record Date, Dr. Salomon does not own any shares of Common
Stock. Accordingly, taken together the Solicitor and the Nominees own a total of
858,897 shares of Common Stock and options exercisable within 60 days,
representing in the aggregate approximately 3.85% of the outstanding Stock as of
the Record Date.
The Solicitor recommends that you consent to each of the Solicitor
Proposals by marking the enclosed blue consent form appropriately, signing and
dating it, and returning it promptly in the postage-paid envelope provided.
Failure to sign and return your consent will have the same effect as voting
against the Solicitor Proposals.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, you should contact the person responsible for your account
and give instructions for the consent form representing your shares to be
marked, dated, signed and mailed. Only that institution can execute a consent
form with respect to your shares held in the name of that institution and only
upon receipt of specific instructions from you. The Solicitor urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of those instructions to the Solicitor at the address set
forth below so that the Solicitor is aware of all instructions given and can
attempt to ensure that those instructions are followed.
The Solicitor currently intends to cease the solicitation of consents once
he has determined that valid and unrevoked consents representing a majority of
the voting power represented by issued and outstanding shares of Stock as of the
Record Date have been obtained and to deliver those consents to DOR in the
manner required by Section 228 of the DGCL as soon as practicable thereafter.
Once the Solicitor Proposals for which consents are given become effective, a
stockholder will be unable to revoke his or her consent.
If the Solicitor Proposals become effective, as required by the DGCL, DOR
will promptly notify by mail the stockholders who have not consented to the
Solicitor Proposals.
Please return your completed consent form (or institution instructions),
and direct any questions, to Steve H. Kanzer at the following coordinates:
Steve H. Kanzer
C/O Accredited Ventures, Inc.
801 Brickell Ave., Suite 900
Miami, FL 33131
Phone: (305) 789-6692
Facsimile: (305) 789-6664
WHY YOU SHOULD CONSENT TO THE SOLICITOR PROPOSALS
The Solicitor is concerned about the Company's current rate of spending and
headcount relative to its available working capital. According to the Company's
most recent 10QSB filing on May 15, 2002, the Company had $4.7 million in
working capital, with a quarterly loss of $1.9 million (an increase of 61% from
a loss of $1.2 million for the first quarter 2001). The Solicitor disagrees in
particular with the Company's rate of spending in the areas of management
salaries, headcount, legal and accounting expenditures, and research and
development relating to early stage, as opposed to late stage, pharmaceutical
product opportunities. In addition, according to the Company's most recent 10QSB
filing, "the Company may also seek to obtain funds from possible future public
or private sales of our securities". The Solicitor would consider such a sale
currently to be inadvisable given the Company's low stock price.
The Solicitor believes that DOR has substantial inherent value, and sufficient
working capital to meet its objectives, if properly focused. The Solicitor is
proposing the removal of all directors who are or were members of management and
replacing such directors with directors that are independent of the Company's
current or former management. If the consent solicitation is successful, the
Solicitor is hopeful that the reconstituted board will direct management to: (i)
institute a significant cost cutting program, reduction of Company management
and reduction in headcount from its current level of 22 full-time employees;
(ii) preserve the Company's existing capital ($4.7 million as of the most recent
10QSB filing); (iii) focus the Company's remaining existing financial and human
resources on completing the ongoing pivotal phase III clinical trial of orBecTM1
for Intestinal Graft-Vs-Host Disease (IGVHD) and Phase II trial for Crohn's
disease; and (iv) as a consequence, hopefully avoid the need for any immediate
dilutive financing transaction(s).
RESULTS OF THE DOR 2002 ANNUAL MEETING OF SHAREHOLDERS
At DOR's Annual Meeting of Stockholders held on May 23, 2002 (the "2002
Annual Meeting"), Mr. Kanzer nominated three individuals to be considered for
election to the board of directors of DOR, Mr. Goldstein, Dr. Kessel and a third
individual, Mr. Nicholas Stergis. At the 2002 Annual Meeting, Mr. Kanzer voted
his 380,258 shares of Common Stock and voting proxies from eight (8) additional
stockholders of record representing an additional approximately 7,948,850 shares
of Common Stock and shares of Common Stock into which the Preferred Stock is
convertible in favor of election of Mr. Goldstein, Dr. Kessel and Mr. Stergis.
At the 2002 Annual Meeting, the approximately 8,099,621 total votes cast in
favor of Mr. Goldstein, Dr. Kessel and Mr. Stergis were not sufficient to
successfully elected these individuals to the board of directors due to the
approximately 11,500,000 majority of votes cast in favor of the reelection of
Mr. Colin Bier, the current Chairman and Chief Executive Officer of DOR, Mr.
Michael Rosen, the current President and Chief Operating Officer of DOR and
Kenneth Tempero, M.D., Ph.D., the former Chairman of DOR, whom this Consent
seeks to remove from the board of directors. Of the 11,500,000 shares voting in
favor of Messrs. Bier, Rosen and Dr. Tempero, approximately 8,400,000 shares
were voted by transfer agents and various brokerage firms holding shares of
Common Stock in "street name" on behalf of other beneficial owners. The
Solicitor believes that most of these transfer agents and brokerage firms have
abided by the common practice of voting such "street name" shares for which the
beneficial owners fail to respond to a Company proxy in a so-called "uncontested
election" in favor of the slate of directors recommended by the Company absent
alternative instructions received from the beneficial owners. The precise number
of votes cast under standing instructions as described is not known by the
Solicitor.
THE SOLICITOR PROPOSALS
The Solicitor is seeking written consents from the holders of shares of
Stock to elect the Nominees and adopt the other Solicitor Proposals and to take
the following actions without a stockholders meeting, as permitted by the DGCL
and the Company's By-Laws. The effectiveness of each of the Solicitor Proposals
is subject to, and conditioned upon, the adoption of each of the other Solicitor
Proposals by the holders of record, as of the close of business on the Record
Date, of a majority of the voting power of the shares of Stock then outstanding.
If, however, the By-Laws Proposal is not so adopted, the Solicitor reserves the
right to waive this condition, but only with respect to the By-Laws Proposal.
Board Removal Proposal
This proposal would remove each of the current members of the Board of
directors other than the Remaining Directors (as defined below) and the persons
elected pursuant to this consent. The text of the resolution is as follows:
RESOLVED, that (1) each current member of the Board of Directors of DOR,
other than Steve H. Kanzer, Paul Rubin, M.D., Richard Dunning, Peter Kliem, Guy
Rico, and Steven Thornton (those current members, the "Remaining Directors"),
and (2) any other person or persons (other than the persons elected pursuant to
this consent) elected or appointed to the Board of Directors of DOR prior to the
effective time of this resolution, in addition to or in lieu of any of such
current members (including any persons elected or appointed in lieu of the
Remaining Directors) to fill any newly created directorship or vacancy on the
Board of Directors of DOR, or otherwise, is hereby removed and the office of
each such member of the Board of Directors of DOR is hereby declared vacant.
Delaware law provides that directors of DOR may be removed, with or without
cause, by the holders of a majority of the shares of stock then entitled to vote
at an election of the directors. This Solicitor Proposal would remove three (3)
of the current nine (9) directors (other than the Remaining Directors) so that
the three (3) Nominees would, if elected, constitute, along with the six (6)
Remaining Directors all of the nine (9) members of the Board of Directors. Each
member of the Board of Directors would then serve until a successor is elected
and qualified or until he resigns or is removed.
Director Election Proposal
This proposal would elect Gilbert Goldstein and Drs. Larry J. Kessel and
Peter Salomon as directors of DOR. The text of the resolution is as follows:
RESOLVED, that Gilbert Goldstein, Larry J. Kessel, M.D. and Peter Salomon,
M.D. are hereby elected as directors of DOR, to serve until their respective
successors are duly elected and qualified.
The Solicitor seeks to replace Messrs. Bier, Rosen and Dr. Tempero with
the three (3) Nominees. Pursuant to this Solicitor Proposal, the three (3)
Nominees would, if elected, constitute, along with the six (6) Remaining
Directors all of the nine (9) members of the Board of Directors. The Solicitor
proposes that the Nominees named above, once elected, serve until the next
annual meeting of the stockholders and until their successors have been duly
elected and qualified. Each of the Nominees has consented to serve as a director
of DOR if elected. See "Certain Information Regarding the Solicitor and the
Nominees" for more information about the Nominees.
By-Laws Proposal
This proposal would repeal each provision of any amendment to the By-Laws
adopted subsequent to May 29, 2002 (the day Mr. Kanzer delivered a notice to DOR
of his intention to seek consent of the majority of the stockholders of DOR and
initially filed his consent solicitation documents for review by the Securities
and Exchange Commission ("SEC")), and prior to the effectiveness of the
Solicitor Proposals. This proposal is designed to prevent the existing Board of
Directors from taking actions to amend the By-Laws which might prevent the
stockholders from accomplishing the objectives described in this Consent
Statement. Pursuant to this proposal, the Draft Amended and Restated Bylaws, if
adopted by the board of directors of DOR on or after May 30, 2002 would be
repealed upon effectiveness of the Solicitor Proposals. If the current Board of
Directors adopts any other material amendments they would be repealed upon
effectiveness of the Solicitor Proposals. The Solicitor will provide
stockholders with additional materials regarding the Draft Amended and Restated
Bylaws if adopted by the board of directors and of any other amendments as
described above. The text of the resolution is set forth below.
RESOLVED, that all By-Laws adopted subsequent to May 29, 2002, and prior
to the effectiveness of this resolution are null and void and of no force and
effect.
Section 109 of the DGCL provides that "the power to adopt, amend or repeal
bylaws shall be in the stockholders entitled to vote ...; provided, however, any
corporation may, in its certificate of incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors .... The fact that such power has been
so conferred upon the directors ... shall not divest the stockholders ... of the
power, nor limit their power to adopt, amend or repeal bylaws." The Solicitor
believes that such an unequivocal statement makes it clear that the stockholders
of DOR have the power under Delaware law to repeal By-Laws as provided by the
By-Laws Proposal, whether or not the By-Laws so amended or repealed are known to
the stockholders. To the knowledge of the Solicitor, the Delaware courts have
not addressed the validity of a proposal in the form of the By-Laws Proposal.
Based upon a review of the By-Laws on file with the Commission as of May 29,
2002, the Solicitor does not believe that the invalidity of this proposal would
have an adverse effect on the stockholders or this consent solicitation. Upon
effectiveness of this proposal, all By-Laws adopted subsequent to May 29, 2002,
whether they could be considered as beneficial or detrimental to the
stockholders, will be repealed. If prior to the effectiveness of the Solicitor
Proposals the Board of Directors adopts any material amendments to the By-Laws
that are relevant to the Solicitor Proposals, the Solicitor will forward
additional solicitation materials to DOR's stockholders regarding those actions.
Special Meeting of Stockholders Proposal
Resolved, that the stockholders owning a majority of the shares of capital
stock of DOR issued and outstanding as of May 29, 2002 do hereby call for a
special meeting of stockholders at 10:00am central time on the first business
day that is twenty (20) days after the date on which Steve H. Kanzer receives a
number of consents constituting a majority of the shares of capital stock of DOR
as of May 29, 2002 for the purpose of considering the Solicitor Proposals,
unless (a) such proposals are adopted by written consent in lieu of a meeting,
or (b) Steve H. Kanzer delivers written notice to DOR consenting to the calling
off of such special meeting of stockholders.
CERTAIN INFORMATION REGARDING THE SOLICITOR AND THE NOMINEES
Set forth below are the name, age, present principal occupation and
employment history of each of the Nominees for at least the past five years. The
information regarding each Nominee has been furnished to the Solicitor by that
Nominee. Each of the Nominees has consented to serve as a director of DOR, and
is at least 18 years of age.
Larry J. Kessel, M.D., 47, currently is in private practice in internal and
geriatric medicine and has been since 1985. He has served as medical director at
Integrated Health Services, a conglomerate involved in geriatric care. He has
been a clinical instructor at Jefferson Medical College since 1984. Dr. Kessel
holds a position on the Board of Directors of Cypress Biosciences, Inc., a
publicly traded biotechnology company.
Peter Salomon, M.D, FACG, 48, is a Board Certified Gastroenterologist in private
practice with Gastroenterology Associates of South Florida. An active clinical
researcher in the treatment of Crohn's disease, Dr. Salomon has seen several
thousand patients suffering from inflammatory bowel disease. Dr. Salomon has
authored numerous peer reviewed publications on the subject of Crohn's disease
and is co-author of the chapter of the leading gastroenterology textbook,
Sleisinger & Fordtran's, Gastrointestinal & Liver Diseases. Dr. Salomon received
his undergraduate degree from New York University in 1981 and his Medical Degree
from New York University in 1985. Dr. Salomon received his training in Internal
Medicine and Gastroenterology at The Mount Sinai Hospital in New York where he
also held a grant from the Crohn's and Colitis Foundation to perform research in
inflammatory bowel disease.
Gilbert Goldstein, 72, is a private investor in the field of real estate
investment and development of shopping centers, office buildings, industrial
parks, condominium projects, and land development. Mr. Goldstein is also
actively involved in venture capital investments. Mr. Goldstein was an officer
in the U.S. Air Force and is a graduate of Pennsylvania State University.
Set forth below are the name, age, present principal occupation and
employment history for at least the past five years of the Solicitor.
Steve H. Kanzer, C.P.A., Esq., 38, has served as a member of the Board of
Directors since June 1996. From December 1997 until November 29, 2001, Mr.
Kanzer was President and Chief Executive Officer of Corporate Technology
Development, Inc., CTD, which was acquired by DOR in November 2001. Since
December 2000, Mr. Kanzer has also been Chairman, Chief Executive Officer and
President of Accredited Equities, Inc., ("Accredited"), a NASD member investment
banking firm specializing in the biopharmaceutical industries that is based in
Miami, Florida. Since January 2001, Mr. Kanzer is Chairman and Chief Executive
Officer of Accredited Ventures, Inc., a venture capital group specializing in
the biopharmaceutical industry. Since December 2000, Mr. Kanzer has severed as
the President and Chief Executive Officer of Vertical Memories, Inc. and General
Fiber, both private medical technology companies. Since January 2001, Mr. Kanzer
has served as the President and Chief Executive Officer of CD4 Biosciences,
Inc., Developmental Therapeutics, Inc., Pipex, Inc. and Solovax, Inc., all
private biotechnology companies. Mr. Kanzer is also President and Chief
Executive Officer of several other private biotechnology companies From 1992
until December 1998, Mr. Kanzer was a founder and Senior Managing Director of
Paramount Capital, Inc., an investment bank specializing in the biotechnology
and biopharmaceutical industries, and Senior Managing Director--Head of Venture
Capital of Paramount Capital Investments, LLC, a biotechnology and
biopharmaceutical venture capital and merchant banking firm that is affiliated
with Paramount Capital, Inc. From 1994 until June 2000, Mr. Kanzer was a founder
and Chairman of Discovery Laboratories, Inc., a publicly traded pharmaceutical
research and development company. Mr. Kanzer is a member of the board of
directors of Atlantic Technology Ventures, Inc., a publicly traded
pharmaceutical research and development company. Prior to joining Paramount
Capital, Inc., Mr. Kanzer was an attorney with Skadden, Arps, Slate, Meagher &
Flom LLP in New York, New York from September 1988 to October 1991. He received
his J.D. from New York University School of Law in 1988 and a B.B.A. in
Accounting from Baruch College in 1985. Mr. Kanzer is currently the designated
nominee of Aries Select, Ltd. and Aries Select I LLC to the board of directors
of DOR. See "Certain Relationships and Transactions", below.
The Solicitor has, during the past 10 years, not been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors).
Certain Relationships AND TRANSACTIONS
Steve H. Kanzer is a director of DOR and the former President and Chief
Executive Officer and a director of CTD, a biotechnology company that DOR
acquired on November 29, 2001. Mr. Kanzer serves on the board of directors of
DOR as a nominee of the Aries Master Fund II and the Aries Domestic Fund, who
subsequently transferred their right to nominate a member to the board of
directors of DOR to Aries Select, Ltd., or Aries, and Aries Select I LLC, or
Aries I, each of which is a principal stockholder of DOR. Aries Select II LLC,
or Aries II, is also a stockholder of DOR. From February 1992 until December
1998, Mr. Kanzer was a Senior Managing Director of Paramount. Paramount Capital
Asset Management, Inc., or PCAM, is the investment manager of Aries and the
managing member of each of Aries I and Aries II. Lindsay A. Rosenwald, M.D. is
the Chairman and sole stockholder of PCAM and Paramount Capital, Inc., or
Paramount. As of May 29, 2002, Dr. Rosenwald beneficially owned approximately
25% of DOR's common stock. Paramount has acted as a placement agent in
connection with certain private placements of DOR's common stock, as a finder in
connection with a private placement of DOR's common stock and warrants, and as a
financial advisor to DOR. In addition, certain officers, employees and
associates of Paramount and its affiliates own securities of DOR and a
subsidiary of DOR. Dr. Rosenwald is also the Chairman and sole stockholder of
Huntington Street Company, or Huntington Street, and June Street Company, or
June Street, and is the sole member of Paramount Capital Drug Development
Holdings LLC, or Paramount Holdings.
On June 13, 1996, Dominion Resources, Inc. entered into an agreement with The
Aries Fund and the Aries Domestic Fund, L.P., collectively referred to herein as
the Aries Funds, with the Company as a party to the agreement, whereby the Aries
Funds purchased an aggregate of 266,667 shares of the Company's common stock
from Dominion Resources. As part of the transaction, Dominion Resources
transferred to the Aries Funds certain of its rights under an existing agreement
with the Company, including the right to designate one of the directors of the
Company and the right to have the shares registered under the Securities Act.
Upon completion of the transaction, Mr. Kanzer, also the Solicitor, was elected
to the Board of Directors as a designee of the Aries Funds. On June 26, 1996,
the Aries Funds purchased from the Company an additional 333,334 shares of
common stock. The purchase agreements relating to such shares contains various
representations and warranties concerning the Company and its activities and
also various affirmations and negative covenants. The agreements grant to the
Aries Funds the right to have the shares registered under the Securities Act and
restrict the Company from entering into mergers, acquisitions, or sales of the
Company's assets without the prior approval of the Aries Funds and the Aries
Fund nominee on the Board. In 2001, the Aries Funds transferred the shares of
the Company's common stock and the rights under the purchase agreements to Aries
Select, Ltd. and Aries Select I LLC. Aries Select, Ltd. and Aries Select I LLC
each beneficially own in excess of 5% of the Company's common stock, based upon
the shares of common stock and shares of common stock issuable upon exercise of
warrants beneficially owned by each of them.
In connection with a credit agreement entered into by the Company and the Aries
Funds on May 19, 1997, the Company issued to the Aries Funds warrants to
purchase an aggregate of 66,668 shares of common stock. PCAM is the investment
manager of the Aries Funds and the general partner of the Aries Domestic Fund,
L.P. In 2001, the Aries Funds transferred their Company warrants to Aries
Select, Ltd. and Aries Select I LLC, both of which are affiliates of PCAM, or
Paramount, and Lindsay Rosenwald, M.D.
Pursuant to a Financial Advisory Agreement dated as of October 18, 2001 between
Paramount and the Company, Paramount provided to the Company financial advisory
services regarding the merger between the Company and CTD. Paramount received as
compensation for these services, options to purchase 46,000 shares of the
Company's common stock at an exercise price of 1.25 per share. These options
vested immediately upon issuance and expire on February 21, 2011. Additionally
on November 29, 2001, the closing date of the CTD merger, the Company issued
Paramount additional "success fee" options to purchase 54,000 shares of the
Company's common stock at an exercise price of $0.90 per share. These options
vested immediately upon issuance and expire on November 29, 2011.
Except as set forth in this Consent Statement, to the knowledge of the
Solicitor, none of the Solicitor or Nominees (i) owns beneficially, directly or
indirectly any securities of DOR, (ii) owns beneficially, directly or indirectly
any securities of any parent or subsidiary of DOR, (iii) owns any securities of
DOR of record but not beneficially, (iv) has purchased or sold any securities of
DOR within the past two years, (v) has incurred indebtedness for the purpose of
acquiring or holding securities of DOR, (vi) is or has within the past year been
a party to any contract, arrangement or understanding with respect to any
securities of DOR, (vii) since the beginning of DOR's last fiscal year has been
indebted to DOR or any of its subsidiaries in excess of $60,000 or (viii) has
any arrangement or understanding with respect to future employment by DOR or
with respect to any future transactions to which DOR or any of its affiliates
will or may be a party. In addition, to the best knowledge of the Solicitor,
except as set forth in this Consent Statement, since the beginning of DOR's last
fiscal year, none of the Solicitor or Nominees has had or is to have a direct or
indirect material interest in any transaction or proposed transaction with DOR
in which the amount involved exceeds $60,000.
Except as set forth in this Consent Statement, to the knowledge of the
Solicitor, none of the Nominees, since the beginning of DOR's last fiscal year,
has been affiliated with (i) any entity that made or received, or during DOR's
current fiscal year proposes to make or receive, payments to or from DOR or its
subsidiaries for property or services in excess of 5% of either DOR's or that
entity's consolidated gross revenues for its last full fiscal year, or (ii) any
entity to which DOR or its subsidiaries was indebted at the end of DOR's last
full fiscal year in an aggregate amount exceeding 5% of DOR's total consolidated
assets at the end of such year. Except as set forth in this Consent Statement,
none of the Nominees is or during DOR's last fiscal year has been affiliated
with any law or investment banking firm that has performed or proposes to
perform services for DOR.
To the knowledge of the Solicitor, except for Mr. Kanzer, in the case of
CTD, none of the corporations or organizations in which each of the Nominees has
conducted his principal occupation or employment was a parent, subsidiary or
other affiliate of DOR, and no Nominee holds any position or office with DOR or
has any family relationship with any executive officer or director of DOR or has
been involved in any proceedings, legal or otherwise, of the type required to be
disclosed by the rules governing this solicitation.
THE CONSENT PROCEDURE
Section 228 of the DGCL states that, unless otherwise provided in a
corporation's certificate of incorporation, any action that may be taken at any
meeting of stockholders may be taken without a meeting, if consents in writing,
setting forth the action so taken, are signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Those consents must be delivered to the
corporation by delivery to its registered office in Delaware, its principal
place of business or an officer or agent of the corporation having custody of
the book in which proceedings of meetings of stockholders are recorded. In the
case of this consent solicitation, written, unrevoked consents of the holders of
a majority of the outstanding shares of Stock as of the Record Date must be
delivered to DOR as described above to effect the actions as to which consents
are being solicited hereunder. Section 228 of the DGCL further provides that no
written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the earliest dated consent delivered in the
manner required by Section 228, written consents signed by a sufficient number
of holders to take such action are delivered to the corporation in the manner
required by Section 228.
The Solicitor currently intends to cease the solicitation of consents once
he has determined that valid and unrevoked consents representing a majority of
the voting power represented by issued and outstanding shares of Stock as of the
Record Date have been obtained. He then intends to deliver those consents to DOR
in the manner required by Section 228 of the DGCL as soon as practicable
thereafter. When the Solicitor Proposals for which consents are given become
effective, a stockholder will be unable to revoke his or her consent.
If the Solicitor Proposals become effective, DOR will be required by the
DGCL, to promptly notify by mail the stockholders who have not consented to the
Solicitor Proposals.
Consents may only be executed by stockholders of record at the close of
business on the Record Date. To the knowledge of the Solicitor, as of the close
of business on the Record Date there were outstanding approximately 20,825,710
shares of Common Stock and 1,469,404 shares of Preferred Stock. Given that the
Solicitor owns in the aggregate shares accounting for less than 4% of the voting
power of the Stock, consents of stockholders owning approximately 47% of the
voting power of the outstanding shares of Stock other than those owned by the
Solicitor on the Record Date are still required to adopt the Solicitor
Proposals. Since the Solicitor must receive consents from the holders of a
majority of the voting power represented by DOR's outstanding shares in order
for the Solicitor Proposals to be adopted, a broker non-vote or direction to
withhold authority to vote on the consent form will have the same effect as a
"no" vote with respect to the Solicitor's solicitation.
Consent Form Special Instructions
If you were a record holder as of the close of business on the Record Date, you
may elect to consent to, withhold consent or abstain with respect to each
Solicitor Proposal by marking the "CONSENT," "WITHHOLD CONSENT," or "ABSTAIN"
box, as applicable, underneath EACH Solicitor Proposal on the accompanying blue
consent form and signing, dating and returning it promptly in the enclosed
postage-paid envelope. Each consent form will be voted in accordance with the
stockholder's instruction on that consent form. As to the Solicitor Proposals
set forth herein, stockholders may consent to an individual Solicitor Proposal
or may withhold their consent by marking the proper box in the consent form. If
any stockholder who has executed and returned the blue consent form has failed
to check a box marked "CONSENT," "WITHHOLD CONSENT," or "ABSTAIN" for any or all
of the Solicitor Proposals, that stockholder's consent form will be voted in
favor of that Solicitor Proposal or those Solicitor Proposals. If the enclosed
consent form is signed and returned and no direction is given, it will be voted
in favor of all of the Solicitor Proposals. If the consent form is signed and
returned and not dated, it will be dated on or about the date it is received.
The Solicitor recommends that you consent to each of the Solicitor
Proposals. Your consent is important. Please mark, sign and date the enclosed
blue consent form and return it promptly in the enclosed postage-paid envelope
to the address set forth under "Summary of Consent Procedure." Failure to return
your consent form will have the same effect as voting against the Solicitor
Proposals.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, you should contact the person responsible for your account
and give instructions for the consent form representing your shares to be
marked, dated, signed and mailed. Only that institution can execute a consent
form with respect to your shares held in the name of the institution and only
upon receipt of specific instructions from you. The Solicitor urges you to
confirm in writing your instructions to the person responsible for your account
and to provide a copy of those instructions to Steve H. Kanzer at the address
set forth under "Summary of Consent Procedure" so that the Solicitor is aware of
all instructions given and can attempt to ensure that such instructions are
followed.
The Solicitor urges each stockholder to ensure that the record holder of
his or her shares marks, signs, dates and returns the enclosed blue consent form
as soon as possible.
REVOCATION; COSTS OF CONSENT SOLICITATION
A consent executed by a stockholder may be revoked at any time before its
exercise by submitting (i) a written, dated revocation of that consent or (ii) a
later dated consent covering the same shares. A revocation may be in any written
form validly signed by the record holder as long as it clearly states that the
consent previously given is no longer effective and must be executed and
delivered prior to the time that the action authorized by the executed consent
is taken. The revocation may be delivered to Steve H. Kanzer, c/o Accredited
Ventures, Inc. 801 Brickell Avenue, Suite 900, Miami, FL 33131.
The purpose of the Solicitor's Proposals being made by the Solicitor in
this Consent Statement is to advance the interests of all of DOR's stockholders.
Therefore, the Solicitor believes that his expenses in connection with the
consent solicitation, which are being paid by the Solicitor, should be
reimbursed by DOR. The Solicitor intend to seek reimbursement of their expenses
from DOR if the Solicitor Proposals become effective. This request will not be
submitted to a stockholder vote. Costs related to the solicitation of consents
to the Solicitor Proposals include expenditures for attorneys and postage and
are expected to aggregate approximately $___. To date, the Solicitor have
incurred costs of approximately $___. The actual costs and expenses could be
materially different than the estimate set for above, and, in particular, could
be substantially higher if for any reason litigation is instituted in connection
with the matters related to this Consent Statement.
Upon the effectiveness of this Proxy Statement, the Solicitor plans to retain a
proxy solicitation firm to aid in the assistance in contacting DOR stockholders.
Your consent is important. No matter how many or how few shares you own,
please consent to the Solicitor Proposals by marking, sign, dating, and mailing
the enclosed blue consent form promptly.
Steve H. Kanzer
May 29, 2002
ANNEX 1
SECURITY OWNERSHIP OF NOMINEES AND THE SOLICITOR
The table below sets forth information regarding the beneficial ownership
of the Company's common stock and Series B preferred stock as of March 25, 2002,
by the following Nominees and the Solicitor.
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities.
Shares of the Company's common stock that are subject to warrants, options or
other convertible securities that are presently exercisable or exercisable
within 60 days of May 29, 2002 are deemed to be outstanding and beneficially
owned by the person holding the warrants or stock options for the purpose of
computing the percentage of ownership of that person, but are not treated as
outstanding for the purpose of computing the percentage of any other person.
Unless otherwise indicated, each person has sole investment and voting power
with respect to the shares shown below. As of May 29, 2002, the Company had
20,825,710 shares of common stock outstanding.
Common Stock Series B Convertible
Beneficially Percent Preferred Stock Percent
Name and Address of Beneficial Owner Owned of Class Beneficially Owned of Class
------------------------------------ ----- -------- ------------------ --------
Steve H. Kanzer (1) 808,434 3.62%
c/o Accredited Ventures, Inc.
801 Brickell Avenue
Suite 900
Miami, FL 33131
Gilbert Goldstein (2)
c/o G&G Enterprises, Inc.
13161 Burgundy Dr. South
Palm Beach Gardens, FL 33410 50,423 *
Larry J. Kessel, M.D. (3)
8200 Henry Avenue, Suite G-1
Philadelphia, PA 19128 12,500 *
Peter Salomon, M.D., FACG
5258 Linton Blvd., Suite 202
Delray Beach, FL 33433 0 *
All Nominees and the Solicitor as a group 858,857 3.86%
(4 persons)
* Represents less than 1% of outstanding common stock or voting power.
(1) Includes 416,800 shares of common stock issuable upon the exercise within
60 days of the Record Date.
(2) Excludes 16,807 shares of common stock owned by Mr. Goldstein's adult
children as to which Mr. Goldstein disclaims beneficial ownership.
(3) Includes 12,500 shares of common stock owned by Dr. Kessel's wife as to
which Dr. Kessel disclaims beneficial ownership.
DOR BIOPHARMA, INC.
CONSENT OF STOCKHOLDER TO ACTION WITHOUT A MEETING
THIS CONSENT IS SOLICITED BY
STEVE H. KANZER (THE "SOLICITOR")
Unless otherwise indicated below, the undersigned, a stockholder on May
29, 2002 (the "Record Date") of DOR Biopharma, Inc. ("DOR"), hereby consents,
pursuant to Section 228 of the General Corporation Law of the State of Delaware,
with respect to all shares of Common Stock, par value $0.001 per share, of DOR
(the "Common Stock") and Series B Convertible Preferred Stock, par value $0.05
per share, of DOR (the "Preferred Stock," and together with the Common Stock,
the "Stock"), held by the undersigned, to each of the following actions without
a meeting, without prior notice and without a vote.
THE SOLICITOR STRONGLY RECOMMEND THAT YOU CONSENT TO THE FOLLOWING PROPOSALS.
1. (1) each current member of the Board of Directors of DOR, other than Steve
H. Kanzer, Paul Rubin, M.D., Richard Dunning, Peter Kliem, Guy Rico, and
Steven Thornton (the "Remaining Directors"), and (ii) any other person or
persons (other than the persons elected pursuant to this consent) elected
or appointed to the Board of Directors prior to the effective time of this
stockholder action in addition to or in lieu of any of such current
members (including any persons elected or appointed in lieu of the
Remaining Directors) to fill any newly-created directorship or vacancy on
the Board of Directors or otherwise.
|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN
2. Resolved that Gilbert Goldstein, Larry J. Kessel, M.D. and Peter Salomon,
M.D. (collectively, the "Nominees") as directors of DOR to serve until
their respective successors are duly elected and qualified.
|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN
(To withhold consent to the election of either Dr. Kessel, or Dr. Salomon,
or Mr. Goldstein, write his name in the following
space:_______________________.)
3. Resolved, that all By-Laws adopted subsequent to May 29, 2002, and prior
to the effectiveness of this resolution are null and void and of no force
and effect.
|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN
To consent, withhold consent or abstain from consenting to the proposals
set forth above, check the appropriate boxes above. If no box is marked
above with respect to any Proposal, you will be deemed to have consented
to that Proposal.
Call for a Special Meeting of Stockholders
Resolved, that the stockholders owning a majority of the shares of capital stock
of DOR issued and outstanding as of May 29, 2002 do hereby call for a special
meeting of stockholders at 10:00am central time on the first business day that
is twenty (20) days after the date on which Steve H. Kanzer receives a number of
consents constituting a majority of the shares of capital stock of DOR as of May
29, 2002 for the purpose of considering the Solicitor Proposals, unless such
proposals are adopted by written consent in lieu of a meeting.
|_| CONSENT |_| WITHHOLD CONSENT |_| ABSTAIN
Dated:______________________, 2002
_____________________________________
(Signature)
_____________________________________
(Title or authority, if applicable)
_____________________________________
(Signature if held jointly)
Please sign your name exactly as it appears on this consent. If the shares are
registered in more than one name, the signature of each person in whose name the
shares are registered is required. A corporation should sign in its full
corporate name, with a duly authorized officer signing on behalf of the
corporation and stating his or her title. Trustees, guardians, executors, and
administrators should sign in their official capacity, giving their full title
as such. A partnership should sign in its partnership name, with an authorized
person signing on behalf of the partnership. This consent serves to vote all
shares to which the signatory is entitled.
THIS CONSENT SHALL ONLY BE VALID IF DELIVERED TO STEVE H. KANZER AND
SUBSEQUENTLY DELIVERED TO DOR.
PLEASE DATE, SIGN AND MAIL THE CONSENT PROMPTLY, USING THE ENCLOSED ENVELOPE.