SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MYMETICS CORPORATION
(Name of Registrant as Specified in Its Charter)
(Names of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check appropriate box):
[X] No filing fee
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computes pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by Registration
Statement Number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
MYMETICS CORPORATION
706 Giddings Avenue, Suite 1C
Annapolis, Maryland 21401-1472
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
To the Stockholders of
Mymetics Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of
Mymetics Corporation (the "Company") will be held at 50-52 Av du Chanoine
Cartellier, 69230 Saint-Genis Laval, France at 11:00 a.m., Central Europe Time,
June 20, 2002, for the following purposes:
1. To elect two (2) directors of the Company to hold office until
the 2005 Annual Meeting of Stockholders and until their
respective successors are duly elected and qualified.
2. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors (the "Board") has fixed the close of business on April
25, 2002, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting and any adjournment thereof. The
Board is soliciting the enclosed Proxy. Please carefully read the accompanying
Proxy Statement for more information regarding the business to be transacted at
the Annual Meeting.
By Order of the Board of Directors,
/s/ John M. Musacchio
-----------------------------------
John M. Musacchio
Secretary
April 30, 2002
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. INSTRUCTIONS FOR THE
PROPER EXECUTION OF PROXIES ARE SET FORTH IN THE PROXY STATEMENT.
2
MYMETICS CORPORATION
-----------------
PROXY STATEMENT
-----------------
This statement is furnished in connection with the solicitation by the
management of Mymetics Corporation (the "Company") of proxies for use at the
Annual Meeting of Stockholders to be held at 50-52 Av du Chanoine Cartellier,
69230 Saint-Genis Laval, France on June 20, 2002, and any adjournments thereof.
If the Proxy is properly executed and received by the Company prior to the
meeting or any adjournment thereof, the shares of common stock of the Company,
par value $.01 per share (the "Common Shares"), represented by your Proxy will
be voted in the manner directed. In the absence of voting instructions, the
Common Shares will be voted for the nominees for director. We presently do not
know of any other business to be transacted at the Annual Meeting other than the
election of two Class II directors. If any other matters properly come before
the Annual Meeting, or if any of the persons nominated to serve as directors
should decline or be unable to serve, the persons named in the Proxy will vote
on these matters in accordance with their discretion. The Proxy may be revoked
at any time prior to its use by filing a written notice of revocation of Proxy
or a Proxy bearing a date later than the date of the Proxy with the Secretary of
the Company, John M. Musacchio at 50-52 Av du Chanoine Cartellier, 69230
Saint-Genis Laval, France, or by attendance at the meeting and voting your
Common Shares in person. If you attend the meeting and have submitted a Proxy,
you need not revoke your Proxy and vote in person unless you elect to do so.
The holders of a majority of the Common Shares outstanding and entitled
to vote at the Annual Meeting must be present in person or represented by Proxy
in order for a quorum to be present. Each Common Share is entitled to one vote
on each of the matters properly presented at the Annual Meeting. Cumulative
voting in the election of directors is not permitted. Assuming a quorum is
present, directors will be elected by a plurality of votes cast at the meeting.
Under applicable law, abstentions and broker non-votes will be counted for
purposes of establishing a quorum, but will have no effect on the vote for
election of directors or the vote as to any other matters properly discussed and
voted on at the Annual Meeting.
The close of business on April 25, 2002 has been fixed as the record
date (the "Record Date") for the determination of stockholders entitled to
notice of, and to vote at, the Annual Meeting. On the Record Date, there were
32,878,646 Common Shares of the Company issued and outstanding. In addition,
holders as of the Record Date of outstanding shares of preferred stock of the
Company's subsidiary, 6543 Luxembourg S.A. (the "S.A. Preferred Shares"), a
joint stock company organized under the laws of Luxembourg, are entitled to one
vote at the Annual Meeting for each Common Share issuable upon conversion of
their S.A. Preferred Shares. Because an aggregate of 16,393,316 Common Shares
are issuable upon conversion of all outstanding S.A. Preferred Shares, a total
of 49,271,962 shares are entitled to vote at the Annual Meeting.
Proxies will be solicited primarily by mail and may also be solicited
personally and by telephone by directors, officers and regular employees of the
Company without additional remuneration therefor. The Company may also reimburse
banks, brokers, custodians, nominees and fiduciaries for their reasonable
charges and expenses in forwarding Proxies and Proxy materials to the beneficial
owners of the Common Shares. All costs of solicitation of Proxies will be borne
by the Company. The Company presently does not intend to employ any other party
to assist in the solicitation process. The Proxy Statement and form of Proxy are
being mailed to stockholders commencing on or about May 7, 2002.
Since our primary operations are conducted in Europe, we have disclosed
certain financial information contained in this Proxy Statement, including the
compensation of our Chief Executive Officer, in Euros (E). On April 25, 2002, 1
Euro was convertible into 0.897803 United States Dollars.
3
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about the beneficial
ownership of our common stock as of April 8, 2002, by: (a) each of our named
executive officers; (b) each of our directors; (c) each person known to us to be
the beneficial owner of more than 5% of our outstanding voting securities; and
(d) all of our executive officers and directors as a group. The following is
based solely on statements and reports filed with the Securities and Exchange
Commission or other information the Company believes to be reliable.
There were 49,271,962 Common Shares beneficially owned on April 8,
2002. This assumes the conversion of all 16,393,316 outstanding S.A. Preferred
Shares, ownership of which is deemed to constitute beneficial ownership of the
underlying Common Shares, into Common Shares. We have determined beneficial
ownership in accordance with the rules of the Securities and Exchange
Commission. Except as indicated by the footnotes below, the Company believes,
based on the information furnished to it, that the persons and entities named in
the tables below have sole voting and investment power with respect to all
Common Shares that they beneficially own, subject to applicable community
property laws.
In computing the number of Common Shares beneficially owned by a person
and the percentage ownership of that person, Common Shares subject to options or
warrants held by that person that are currently exercisable or exercisable
within 60 days of April 8, 2002, are deemed outstanding. These Common Shares,
however, are not deemed outstanding for the purposes of computing the percentage
ownership of any other person.
Name and Address of Amount and Nature of
Beneficial Owner Title of Class Beneficial Ownership Percent of Class
---------------- -------------- -------------------- ----------------
MFC Bancorp Ltd. Common Shares 5,089,066(1) 9.98%
Millennium Tower
21st Floor
Handelskai 94-96
1200 Vienna, Austria
MFC Merchant Bank S.A. Common Shares 5,089,066(2) 9.98%
Kasernenstrasse 1
9100 Herisau, Switzerland
Martine Reindle Common Shares 8,519,874(3) 17.29%
CP 18
CH - 1295 Mies, Switzerland
Ernst Lubke Common Shares 3,126,767(3) 6.35%
Route du Muids
CH - 1273 Arzier, Switzerland
Peter P. McCann(4) Common Shares -- *
Chief Executive Officer, President
and Director
Pierre-Francois Serres(4) Common Shares 11,144,393(5) 22.61%
Chief Scientific Officer and Director
John M. Musacchio(4) Common Shares 130,050(6) *
Chief Operating Officer, Chief
Financial Officer, Secretary and
Director
4
Patrice Pactol(4) Common Shares 2,147,151(7) 4.36%
Director
Robert Demers(4) Common Shares 10,000(8) *
Director
Michael K. Allio(4) Common Shares 60,000(9) *
Director
All executive officers and directors Common Shares 13,491,594 27.26%
as a group (6 persons)
- --------------
* Denotes less than one percent.
(1) Includes 3,383,333 Common Shares and 1,705,733 share purchase warrants
indirectly owned through MFC Merchant Bank S.A., a wholly-owned subsidiary
of MFC Bancorp Ltd.
(2) Includes 3,383,333 Common Shares and 1,705,733 share purchase warrants,
each of which entitles the holder to purchase one Common Share.
(3) Includes 297,221 Common Shares owned by Aralis Participations S.A. Martine
Reindle is the Chairperson, a substantial equityholder and a member of the
Board of Directors of Aralis Participations S.A. Ernest Lubke is an
officer, a substantial equityholder and a member of the Board of Directors
of Aralis Participations S.A. Accordingly, Ms. Reindle and Mr. Lubke may be
deemed to have or share voting and/or investment power over the Common
Shares owned by Aralis Participations S.A.
(4) Address is C/o Mymetics Corporation, 706 Giddings Avenue, Suite 1C,
Annapolis, Maryland 21401-1472.
(5) Includes 10,000 Common Shares which Dr. Serres presently has the right to
acquire pursuant to vested stock options granted under the Company's 2001
Stock Option Plan.
(6) Includes 120,000 Common Shares which Mr. Musacchio presently has the right
to acquire pursuant to vested stock options granted under the Company's
1994 Stock Option Plan, and 10,000 Common Shares which Mr. Musacchio
presently has the right to acquire pursuant to vested stock options granted
under the Company's 2001 Stock Option Plan.
(7) Includes 10,000 Common Shares which Mr. Pactol presently has the right to
acquire pursuant to vested stock options granted under the Company's 2001
Stock Option Plan.
(8) Includes 10,000 Common Shares which Mr. Demers presently has the right to
acquire pursuant to vested stock options granted under the Company's 2001
Stock Option Plan.
(9) Includes 60,000 Common Shares which Mr. Allio presently has the right to
acquire pursuant to vested stock options granted under the Company's 2001
Stock Option Plan.
PROPOSAL 1
ELECTION OF DIRECTORS
The number of directors of the Company is established at six. The
number of directors was, in accordance with our bylaws, increased from five to
six directors by the Board of Directors of the Company (the "Board") at a
meeting on February 7, 2002. The votes of a plurality of the Common Shares
present in person or voted by Proxy at the Annual Meeting are required to elect
the directors.
Our Board is divided into three classes, designated as Class I, Class
II and Class III. The term of the Class I directors will expire at the 2004
Annual Meeting, the term of the Class II directors will expire at the 2002
Annual Meeting and the term of the Class III directors will expire at the 2003
Annual Meeting. The directors to be elected at this Annual Meeting will
accordingly be designated Class II directors and will serve until the Annual
Meeting in 2005, or until their earlier resignation or removal. Our Board has
nominated John M. Musacchio and Patrice Pactol, each of whom is presently a
member of the Board, for election as Class II directors at the Annual Meeting.
Both of these nominees have consented to be named as nominees and to serve if
elected.
5
Directors and Officers
The following table sets forth information regarding each nominee for election
as a director, each director whose term of office will continue after the Annual
Meeting and the officers of the Company.
Expiration of Term
Name Current Position with the Company Age as a Director
- ---- --------------------------------- --- -------------
Peter P. McCann Chief Executive Officer, President and 58 2003 (Class III)
Director (appointed February 7, 2002)
Pierre-Francois Serres Chief Scientific Officer and Director 52 2003 (Class III)
(appointed March 28, 2001)
Patrice Pactol(1) Director (appointed March 28, 2001) 41 2002 (Class II)
John M. Musacchio(1) Chief Operating Officer, Chief Financial 54 2002 (Class II)
Officer, Secretary and Director (appointed May
16, 2001)
Robert Demers Director (elected July 19, 2001) 64 2004 (Class I)
Michael K. Allio Director (elected July 19, 2001) 38 2004 (Class I)
(1) Nominee for Class II Director whose term would expire in 2005.
Dr. Peter P. McCann became our Chief Executive Officer, President and a
Director on February 7, 2002. Dr. McCann previously was employed with Marion
Merrell Dow Inc., where he served in a number of senior executive capacities.
From 1993-1998, Dr. McCann served as President of British Biotech Inc., the
North American operating unit of British Biotech Pharmaceuticals (the largest
biotech company in Europe). In this capacity, he established British Biotech
Inc. in Annapolis, Maryland, where he directed the company's phase II and phase
III clinical trials of two major cancer drugs at more than 200 medical centers
in the United States and Canada. Dr. McCann served as Interim President of the
University of Maryland Biotechnology Institute, one of the 13 operating units of
the University System of Maryland, from 1998-1999. From 1999-2001, Dr. McCann
served as President and Chief Executive Officer of Oncostasis, Inc., a
genomics-based cancer therapeutics company created to identify and develop new
therapies.
Dr. Pierre-Francois Serres became our Chief Scientific Officer on
February 7, 2002 and has been aDirector since March 28, 2001. Dr. Serres
previously served as the Company's Chief Executive Officer and President and was
the founder, Chief Executive Officer and President of our subsidiary, Hippocampe
S.A. (now Mymetics S.A.), a French human and veterinary research and development
company. He is also the founder and co-manager of Scericia S.C.E.R, which
performs studies and research in clinical immunology. Prior to that he worked as
a scientific manager at Indicia Diagnostics S.A.
Patrice Pactol became a Director on March 28, 2001. Mr. Pactol was
previously a Director and the coordinator for bioinformatics and computing of
Mymetics S.A. Prior to that he was consultant in veterinary and human biology
and a sales executive for a pharmaceutical company.
John M. Musacchio has been our Chief Operating Officer, Chief Financial
Officer and a Director since May 16, 2001, and our Secretary since May 26, 2001.
Mr. Musacchio is currently a Vice President of MFC Bancorp Ltd., an independent
financial services group which beneficially owns 9.98% of the Common Shares of
the Company. He has 25 years of industrial and professional service business
operating experience on an international scale, having held positions as
principal, director and officer in both private and publicly traded companies.
His management experience includes the segments of operations, marketing,
corporate development and planning.
Robert Demers is a securities attorney with 40 years of experience. Mr.
Demers is the founder and President of the Demers Counseil Inc., a member of the
Montreal Exchange, the Toronto Stock Exchange and the
6
Investment Dealer Association of Canada. Prior to that, he served as the
President of Maison Placements Canada Inc., an institutional research firm. He
has served as the Chairman of the Quebec Securities Commission and as President
and Governor of the Montreal Stock Exchange. He is currently serving as Director
of numerous public and private companies, as well as several non-profit
organizations.
Michael K. Allio is an independent business consultant concentrating on
advising his clients on strategic, business development and process improvement
projects. He was previously the Vice President and Principal of TracRac
Incorporated, a design and fabrication company. Prior to that, he was the Vice
President and Senior Consultant of Robert J. Allio & Associates, Inc., a
management consulting firm, and Manager of Creative Promotions for Revlon
Incorporated.
The Board recommends a vote "FOR" each of the nominees set forth above.
Meetings and Committees of the Board
During the fiscal year ended December 31, 2001 the Board met twice and
did not take any action by unanimous written consent. All directors attended at
least 75% of the total number of meetings of the Board and the committees on
which they served during 2001. The Board has two committees, an Audit Committee
and a Nominating Committee, both of which were established in September 2001.
The Audit Committee reviews our internal accounting procedures and
external reporting process, and consults with and reviews the services provided
by Peterson Sullivan, P.L.L.C, our independent public accountants. The Audit
Committee did not meet or take any action by unanimous written consent in 2001.
Its current members are Messrs. Demers (Chairman), Pactol and Allio.
The Nominating Committee confers, advises and makes recommendations to
the Board with respect to (a) nominations to fill vacancies on the Board, (b)
director compensation and (c) charters for, and appointments to, committees of
the Board. The Nominating Committee did not meet or take any action by unanimous
written consent in 2001. Its current members are Messrs. Serres, Musacchio and
Allio.
Audit Committee Charter
The Board has adopted a written charter for the Audit Committee. A copy
of the charter of the Audit Committee is attached to this Proxy Statement as
Exhibit A. Each member of the Audit Committee is an "independent director" as
defined in Rule 4200(a)(15) of the National Association of Securities Dealers,
Inc. listing standards.
Report of the Board with Respect to Audit Matters
The Company's management has the primary responsibility for the
Company's financial statements and the reporting process. The independent public
accountants are responsible for expressing an opinion on the conformity of the
Company's audited financial statements to generally accepted accounting
principles. The Board, on the recommendation of the Audit Committee, has
appointed Peterson Sullivan, P.L.L.C. as the Company's certified independent
public accountants.
Our Audit Committee has reviewed and discussed with management and
Peterson Sullivan, P.L.L.C. the audited financial statements of the Company for
the prior fiscal year ended December 31, 2001. The Audit Committee has discussed
with Peterson Sullivan, P.L.L.C. the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees). In
addition, the Audit Committee has received from Peterson Sullivan, P.L.L.C. the
written disclosures required by Independence Standards Board No. 1 (Independence
Discussions with Audit Committees) and discussed with Peterson Sullivan,
P.L.L.C. its independence. The Audit Committee has satisfied itself as to the
independence of Peterson Sullivan, P.L.L.C.
7
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board, and the Board approved, the inclusion of the
audited financial statements in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 filed with the Securities and Exchange
Commission.
By the Audit Committee of the Board of Directors
Robert Demers
Patrice Pactol
Michael K. Allio
COMPENSATION OF DIRECTORS
Employee directors are not compensated for their role as directors. The
outside directors of the Company receive an annual fee of $7,500, a fee of $750
for each meeting they attend and a fee of $250 for each committee meeting they
attend. All directors receive reimbursement for their actual expenses incurred
in attending such meetings.
In addition, pursuant to the Company's 2001 Stock Option Plan, all
directors are entitled to receive stock options pursuant to the terms and
provisions of such plan. Upon election as director, each director receives
10,000 stock options. For each subsequent year of service after the initial
year, each director receives 1,250 additional stock options. During the fiscal
year ended December 31, 2001, 100,000 stock options were granted to directors
under the Company's 2001 Stock Option Plan. Of these 100,000 stock options,
50,000 were granted to Michael Allio pursuant to a consulting arrangement
described below.
Consulting Agreement with Michael Allio
In August, 2001, we entered into a Consulting Agreement with Michael
Allio, one of our Directors. Pursuant to this agreement, Mr. Allio agreed to
provide us with strategic management consulting. Mr. Allio's engagement under
this agreement includes, without limitation, developing the scope of the
business, establishing a European-North American operations team, directing and
coordinating initial corporate identity and branding efforts, and crafting a
coherent business plan. Furthermore, Mr. Allio's services include assisting
the Company in establishing a viable U.S. identity and entity and exploring
strategic partnerships in the U.S., Europe and possible elsewhere. In
consideration for those services, Mr. Allio receives $12,000 per month, plus
reimbursement of reasonable business expenses. Pursuant to the Consulting
Agreement, Mr. Allio was also granted options to purchase 50,000 Common Shares
at an exercise price of $2.50 per share, all of which are currently vested. The
Consulting Agreement may be terminated by either party on 15 days' prior written
notice. In addition, upon the successful listing of the Company's Common Shares
on the NASDAQ National Market, the Company has agreed to grant Mr. Allio options
to purchase 100,000 Common Shares (at an exercise price equal to the then fair
market value of such shares), which options will be fully vested upon issuance.
Services Agreement with MFC Merchant Bank, S.A.
In May 2001, we entered into a Services Agreement with MFC Merchant
Bank, S.A. ("MFC Bank") pursuant to which MFC Bank agreed to provide us with the
services of Mr. Musacchio, our Secretary, Chief Operating Officer, Chief
Financial Officer and a Director. In consideration for such services, we agreed
to pay MFC Bank (E) 5,000 per month.
EXECUTIVE COMPENSATION
The following table sets forth for the last three fiscal years
information on the annual compensation earned by Jim Soo Choi, who served as our
President until March 28, 2001, and Dr. Pierre-Francois Serres, who became our
President and Chief Executive Officer on March 28, 2001. No named executive
officer, other than Dr. Serres, received aggregate annual consideration (salary
and bonus) from the Company in excess of $100,000 during the fiscal year ended
December 31, 2001.
8
Summary Compensation Table
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Annual Compensation Long Term Compensation
-------------------------------------------------------------------------------------
Awards Payouts
- ---------------------------------------------------------------------------------------------------------------------
Securities All
Underlying Other
Name and Principal Position Year Salary Bonus Options/SARs Compensation
- ---------------------------------------------------------------------------------------------------------------------
Pierre-Francois Serres(1) 2001 (E) 86,181 -- 10,000 (E) 1,630(3)
2000 (E) 73,176(2) -- -- --
1999 (E) 35,817(2) -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Jim Soo Choi (1) 2001 -- -- -- --
2000 -- -- -- --
1999 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
- --------------
(1) Mr. Choi was our President from December 1999 to March 28, 2001 and was
replaced by Dr. Pierre-Francois Serres, who became our President and Chief
Executive Officer on March 28, 2001.
(2) This represents amounts paid to Dr. Serres by our subsidiary, Mymetics
S.A., prior to our acquisition of Mymetics S.A.
(3) Mr. Serres received (E) 1,630 for his participation on the Board of
Directors of our subsidiary, Mymetics S.A., prior to our acquisition of
Mymetics S.A.
Option Grants in Last Fiscal Year
The following table summarizes the stock options granted to Dr.
Pierre-Francois Serres during the fiscal year ended December 31, 2001, including
the potential realizable value over the 10 1/2-year term of the options, based
on assumed rates of stock appreciation of 5% and 10%, compounded annually. The
potential realized value at assumed annual rates of stock price appreciation for
the option term represents hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and 10%
assumed annual rates of stock price appreciation are required by the rules of
the Securities and Exchange Commission and do not represent our estimate or
projection of our future common stock prices. Potential realizable value is
based upon a fair market value of $3.15 for our common stock on the grant date
of the options, which fair market value is equal to the closing price of our
common stock on the date of grant. Actual gains, if any, on stock option
exercises are dependent on the future performance of our common stock and
overall stock market conditions. The actual value realized may be greater or
less than the potential realizable value set forth in the table. Mr. Choi, who
served as our President until March 28, 2001, did not receive any options to
purchase our common stock during the fiscal year ended on December 31, 2001.
- --------------------------------------------------------------------------------------------------------------------
Individual Grants Potential Realizable Value
At Assumed Annual Rates of
Stock Price Appreciation
for Option Term
- --------------------------------------------------------------------------------------------------------------------
Name Number of Percent of Total Exercise Expiration 5% ($) 10% ($)
Securities Options Granted Price Date
Underlying to Employees
Options Granted in Fiscal
Year 2001
- --------------------------------------------------------------------------------------------------------------------
Pierre-Francois 10,000 10% $3.15 1/19/12 $21,077 $54,190
Serres
- --------------------------------------------------------------------------------------------------------------------
9
Aggregate Option Exercises in Last Fiscal Year and
Option Values at December 31, 2001
Dr. Serres, our only named executive officer that holds any stock
options, did not exercise any options during 2001. The following table provides
information concerning the number and value of unexercised options held by Dr.
Serres at December 31, 2001.
- ---------------------------------------------------------------------------------------------------------------------
Name Shares Value Number of Securities Value of
Acquired Realized Underlying Unexercised Unexercised
on Exercise Options at December 31, 2001 In-the-Money Options at
December 31, 2001(2)
- ---------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
Dr. Pierre- - - - - 10,000(1) - - - -(3) - -(3)
Francois
Serres
- --------------------------------------------------------------------------------------------------------------------
- --------------
(1) These options are fully vested and exercisable at $3.15 per share.
(2) The value of unexercised in-the-money options held at December 31, 2001
represents the total gain which an option holder would realize if he or she
exercised all of the in-the-money options held at December 31, 2001, and is
determined by multiplying the number of shares of common stock underlying
the options by the difference between an assumed fair market value per
share and the per share option exercise price. An option is in-the-money if
the exercise price per share of the option is below the assumed fair market
value per share.
(3) The fair market value of the stock underlying Dr. Serres' options was $2.26
per share on December 31, 2001, based on the closing market price of our
common stock on such date. The exercise price of Dr. Serres' options is
$3.15 per share. Accordingly, none of Dr. Serres options were in-the-money
on December 31, 2001.
Employment Agreements
On May 3, 2001, Dr. Serres entered into an employment agreement with
the Company pursuant to which he receives a monthly salary of seven thousand six
hundred and twenty-two Euros ((E) 7,622) and normal benefits. In addition, Dr.
Serres may participate in the Company's 2001 Stock Option Plan, as well as
receive discretionary bonuses as approved by the Board. The employment agreement
has no term, but is terminable by either party on three months' prior notice. If
the Company terminates Dr. Serres without "cause" (as defined in the agreement)
or if Dr. Serres dies or resigns as a result of a change in the control of the
Company, the employment agreement, which is governed by French law, provides for
continuation payments of Dr. Serres' base salary for a period of 24 months. In
addition, Dr. Serres will also have certain rights under the National Collective
Bargaining Agreement for the Pharmaceutical Industry (Convention Collective
National de l'Industry Pharmaceutique).
On March 18, 2002, we entered into an employment agreement with our
Chief Executive Officer, Dr. McCann, pursuant to which he receives an annual
salary of one hundred seventy thousand U.S. Dollars ($170,000) and normal
benefits. In addition, Dr. McCann may participate in the Company's 2001 Stock
Option Plan, as well as receive discretionary bonuses as approved by the Board.
The employment agreement provides for an initial term of one year, with
automatic one-year renewal periods unless either Dr. McCann or the Company elect
to terminate the agreement by providing 60 days' prior notice. If the Company
terminates Dr. McCann during the initial one-year term without "cause" (as
defined in the agreement), the employment agreement, which is governed by
Delaware law, requires the Company to continue to pay Dr. McCann's base salary
for the greater of (a) the remainder of the initial one-year term or (b) six
months. If the Company terminates Dr. McCann without cause during a renewal
period, the Company must continue to pay Dr. McCann his base salary for a period
of 24 months from the date of such termination. In addition, if Dr. McCann
resigns due to a substantial change in the ownership of the Company or the
membership of the Board, the Company must continue to pay Dr. McCann his base
salary for a period of one year following the date of such resignation.
On March 18, 2002, we entered into an employment agreement with Dr.
Joseph D. Mosca, pursuant to which Dr. Mosca receives an annual salary of one
hundred twenty-five thousand U.S. Dollars ($125,000) and normal benefits. In
addition, Dr. Mosca may participate in the Company's 2001 Stock Option Plan, as
well as receive discretionary bonuses as approved by the Board. The employment
agreement provides for an initial term of one year, with automatic one-year
renewal periods unless either Dr. Mosca or the Company elect to terminate the
10
agreement by providing 60 days' prior notice. If the Company terminates Dr.
Mosca during the initial one-year term without "cause"(as defined in the
agreement), the employment agreement, which is governed by Delaware law,
requires the Company to continue to pay Dr. Mosca's his base salary for the
greater of (a) the remainder of the initial one-year term or (b) six months. If
the Company terminates Dr. Mosca without cause during a renewal period, the
Company must continue to pay Dr. Mosca his base salary for a period of 12 months
from the date of such termination.
Compensation Committee Interlocks and Insider Participation
During 2001, we did not have a compensation committee nor any other
committee performing similar functions. Dr. Serres' employment agreement and
compensation package for fiscal year 2001 was negotiated by Mr. Musacchio on
behalf of the Board. After our annual stockholder meeting in July, 2001, the
Board reviewed the compensation terms for Dr. Serres and did not recommend any
changes to the employment agreement. None of our executive officers serves as a
member of the Board or compensation committee of any entity that has one or more
executive officers serving on our Board.
Report of the Compensation Committee on Executive Compensation
We did not have a compensation committee or any other committee
performing similar functions during 2001. With the exception of Dr. Serres'
employment agreement described above under "Compensation Committee Interlocks
and Insider Participation," since our annual stockholder meeting in July, 2001,
the compensation arrangements of our executive officers have been structured by
the Board on a case by case basis. At its meeting in May, 2002, the Board
expects to form a compensation committee to review and set more formal
compensation policies.
By the Board of Directors
John M. Musacchio
Patrice Pactol
Pierre-Francois Serres
Peter P. McCann
Michael K. Allio
Robert Demers
Certain Relationships and Related Party Transactions
Pursuant to certain agreements (the "Bank Agreements") made between
Mymetics S.A. (formerly Hippocampe S.A.) ("Mymetics S.A.") and MFC Bank, MFC
Bank acted as an advisor in the share exchange (the "Share Exchange") that
became effective on March 28, 2001 pursuant to two separate Share Exchange
Agreements (the "Share Exchange Agreements") both dated December 13, 2000
between the Company and the stockholders of Mymetics S.A. Pursuant to the Share
Exchange Agreements, the Company acquired approximately 99.9% of the outstanding
shares of Mymetics S.A. in consideration of an aggregate of approximately
33,311,398 Common Shares, representing approximately 72% of the currently issued
and outstanding shares of our common stock. MFC Bank received certain
compensation in consideration of its advisory services described above,
including 2,017,854 Common Shares of the Company issued in connection with the
Share Exchange.
Our subsidiary, Mymetics S.A., has a credit facility with MFC Bank,
pursuant to which MFC Bank has received certain fees as well as share purchase
warrants exercisable any time prior to July 31, 2003, into 6,730,599 Common
Shares of the Company, subject to final adjustment, at an exercise price of
approximately Euro 0.2319.
We assumed the rights and obligations of Mymetics S.A. under the Bank
Agreements effective upon the closing of the Share Exchange. Pursuant to the
Bank Agreements, MFC Bank has agreed to attempt to raise additional capital on a
best efforts basis to fund working capital requirements following the Share
Exchange. MFC Bank will be paid customary fees and expenses, and will receive
additional share purchase warrants in connection with the provision of these
services. MFC Bank will have a right of first refusal until 24 months after the
closing of the Share Exchange on any financing and capital raising activities of
the Company.
11
MFC Bank will also act as the trustee under the Voting and Exchange
Trust Agreement dated March 28, 2001, among the Company, 6543 Luxembourg S.A., a
company established under the laws of Luxembourg, and MFC Bank. MFC Bank will be
paid customary fees and expenses in relation thereto.
MFC Bank is a wholly-owned subsidiary of MFC Bancorp Ltd., which
currently beneficially owns approximately 9.98% of the outstanding Common Shares
of the Company. Mr. Musacchio, a member of our Board, is a Vice President of MFC
Bancorp Ltd.
In August, 2001, we entered into a Consulting Agreement with Michael
Allio, one of our directors. For the terms and conditions of this consulting
arrangement see "Compensation of Directors - Consulting Agreement with Michael
Allio."
Performance Graph
The table and graphical information set forth below compares the value
of our common stock to the NASDAQ Composite Index and the NASDAQ Biotechnology
Index. Each of the total cumulative returns presented assumes a $100.00
investment on December 31, 1996 and reinvestment of dividends. The comparisons
shown below are based upon historical data. The stock price performance shown is
not indicative of, nor intended to forecast, the potential future performance of
our common stock. We obtained the information used to produce the table and
graph from the NASDAQ, a source believed to be reliable, but we are not
responsible for any errors or omissions in such information.
Fiscal Year Ended December 31
Company or Index 1997 1998 1999 2000 2001
- ---------------- ---- ---- ---- ---- ----
Mymetics Corporation 88.86 177.73 207.35 144.43 133.89
NASDAQ Composite Index 121.64 169.84 315.20 191.36 151.07
NASDAQ Biotechnology Index 99.93 144.18 290.72 357.39 299.62
Notwithstanding anything to the contrary set forth in any of our
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by us under those statutes, the Report of the
Compensation Committee and Stockholder Return Performance Graph shall not be
deemed filed with the SEC and shall not be deemed incorporated by reference into
any of those prior filings or into any future filings made by us under those
statutes.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934, as amended
("Section 16"), requires our executive officers, directors and persons who own
more than 10% of a registered class of our equity securities to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
(the "SEC") within specified due dates. These persons are required by SEC
regulations to furnish us with copies of all such reports they file. Based
solely on the review of the copies of such reports furnished to us, we believe
that, with respect to our fiscal year ended December 31, 2001, all of our
executive officers, directors and 10% stockholders filed all required reports
under Section 16(a) in a timely manner, except that (a) Messrs. Allio, Demers
and Musacchio failed to file their respective Form 3 in a timely manner upon
initially becoming reporting persons under Section 16, (b) Messrs. Pactol and
Serres failed to file their respective Form 3 upon initially becoming reporting
persons under Section 16, (c) Messrs. Allio, Demers, Musacchio, Patrol and
Serres failed to file a Form 4 or 5 in connection with their respective receipt
of stock option grants and (d) Aralis Participations S.A., Ernst Lubke, Martin
Reindle and MFC Bancorp Ltd. failed to file a Form 4 or 5 in connection with
their respective dispositions of our common stock.
12
INDEPENDENT ACCOUNTANTS AND AUDITORS
Peterson Sullivan P.L.L.C., Certified Public Accountants, has been
selected by the Board to examine the consolidated financial statements of the
Company and its subsidiaries for the fiscal year ending December 31, 2002.
Peterson Sullivan P.L.L.C. examined the consolidated financial statements of the
Company and its subsidiaries for the year ended December 31, 2001.
Representatives of Peterson Sullivan P.L.L.C. are not expected to be present at
the Annual Meeting.
AUDIT FEES
The aggregate fees billed by Peterson Sullivan P.L.L.C., the Company's
certified independent public accountants, for professional services rendered for
the audit of the Company's annual financial statements for the fiscal year ended
December 31, 2000 and for the review of the financial statements including the
Company's quarterly reports on Form 10-Q for such fiscal year were $91,032.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Peterson Sullivan P.L.L.C. did not bill the Company for any
professional services rendered for information technology services relating to
financial information system design and implementation for the fiscal year ended
December 31, 2001.
ALL OTHER FEES
The aggregate fees billed by Peterson Sullivan P.L.L.C. for
professional services rendered for fiscal year ended December 31, 2001, other
than for services described above under "Audit Fees" or "Financial Information
System Design and Implementation Fees", were $8,877.
The Board, in fulfilling its audit responsibilities, has considered
whether the provision of non-audit services by Peterson Sullivan P.L.L.C. is
compatible with maintaining their independence.
FUTURE STOCKHOLDER PROPOSALS
Any proposal that a stockholder intends to present at the 2003 annual
meeting of stockholders must be received by the Company on or before December
30, 2002 in order to be considered for inclusion in the proxy statement relating
to the 2003 annual meeting. Proposals submitted by a stockholder of the Company
for consideration at the 2003 annual meeting of stockholders, other than in
accordance with SEC Rule 14a-8, will not be considered at such meeting unless
the Secretary of the Company has received written notice of the matter proposed
to be presented from the stockholder on or prior to March 15, 2003, and proxies
solicited by the Board will confer discretionary authority with respect to any
matters as to which the Company does not receive written notice on or prior to
such date.
OTHER MATTERS
The Board knows of no matter, other than those mentioned in the Proxy
Statement, to be brought before the meeting. If other matters properly come
before the meeting, it is the intention of the Proxy holders to vote the Proxies
in accordance with their judgment. If there are insufficient votes to approve
any of the proposals contained herein, the Board may adjourn the meeting to a
later date and solicit additional Proxies. If a vote is required to approve such
adjournment, the Proxies will be voted in favor of such adjournment.
13
A copy of the Company's Annual Report on Form 10-K to the Securities
and Exchange Commission will be provided to stockholders without charge upon
written request directed to Stockholders Information, Mymetics Corporation,
50-52 Av du Chanoine Cartellier, 69230 Saint-Genis Laval, France.
DATE: April 30, 2002 BY ORDER OF THE BOARD OF DIRECTORS
/s/ John M. Musacchio
------------------------------------
John M. Musacchio
Secretary
14
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF MYMETICS CORPORATION
I. Composition of the Audit Committee: The Audit Committee shall be
comprised of at least three directors, each of whom shall not be an
officer or employee of the Company or its subsidiaries, and shall not
have any relationship which, in the opinion of the Board of Directors,
would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director.
II. Purposes of the Audit Committee: The purposes of the Audit Committee
are to assist the Board of Directors:
1. in its oversight of the Company's accounting and financial
reporting principles and policies and internal audit controls
and procedures;
2. in its oversight of the Company's financial statements and the
independent audit thereof;
3. in selecting and nominating the outside auditors to be
proposed for shareholder approval in any proxy statement,
evaluating and, where deemed appropriate, replacing the
outside auditors; and
4. in evaluating the independence of the outside auditors.
The function of the Audit Committee is oversight. The management of the
Company is responsible for the preparation, presentation and integrity
of the Company's financial statements. Management and internal auditing
department are responsible for maintaining appropriate accounting and
financial reporting principles and policies and internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. The outside auditors are responsible
for planning and carrying out a proper audit and reviews, including
review of the Company's quarterly financial statements prior to the
filing of each quarterly report on Form 10-K, and other procedures. In
fulfilling their responsibilities hereunder, it is recognized that
members of the Audit Committee are not full-time employees of the
Company and are not, and do not represent themselves to be, accountants
or auditors by profession or experts in the fields of accounting or
auditing. As such, it is not the duty or responsibility of the Audit
Committee or its members to conduct "field work" or other types of
auditing or accounting reviews or procedures, and each member of the
Audit Committee shall be entitled to rely on (i) the integrity of those
persons and the organizations within and outside the Company that it
receives information from and (ii) the accuracy of the financial and
other information provided to the Audit Committee by such persons or
organizations absent actual knowledge to the contrary (which shall be
promptly reported to the Board of Directors).
The outside auditors for the Company are ultimately accountable to the
Board of Directors (as assisted by the Audit Committee). The Board of
Directors, with the assistance of the Audit Committee, has the ultimate
authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditors (or to nominate the outside
auditors to be proposed for shareholder approval in the proxy
statement).
The outside auditors shall submit to the Company annually a formal
written statement delineating all relationships between the outside
auditors and the Company ("Statement as to Independence").
III. Meetings of the Audit Committee: The Audit Committee shall meet four
times annually, or more frequently if circumstances dictate, to discuss
with management the annual audited financial statements and quarterly
financial statements and quarterly financial results. In addition to
such meetings of the Audit Committee as may be required to discuss the
matters set forth in Article IV, the Audit Committee should meet
separately at least annually with management and the outside auditors
to discuss any matters that the Audit Committee or any of these persons
or firms believe should be discussed privately. The Audit Committee may
request
15
any officer or employee of the Company or the Company's outside counsel
or outside auditors to attend a meeting of the Audit Committee or to
meet with any members of, or consultants to, the Audit Committee.
Members of the Audit Committee may participate in a meeting of the
Audit Committee by means of a conference call or similar communications
equipment by means of which all persons participating in the meeting
can hear each other.
IV. Duties and Powers of the Audit Committee: To carry out its purposes,
the Audit Committee shall have the following duties and powers:
1. with respect to the outside auditor,
(i) to provide advice to the Board of Directors in
selecting, evaluating or replacing outside auditors;
(ii) to review the fees charged by the outside auditors
for audit and non-audit services;
(iii) to ensure that the outside auditors prepare and
deliver annually a Statement as to Independence (it
being understood that the outside auditors are
responsible for the accuracy and completeness of this
Statement), to discuss with the outside auditors any
relationships or services disclosed in this Statement
that may impact the objectivity and independence of
the Company's outside auditors and to recommend that
the Board of Directors take appropriate action in
response to this Statement to satisfy itself of the
outside auditor's independence; and
(iv) to instruct the outside auditors that the outside
auditors are ultimately accountable to the Board of
Directors and Audit Committee;
2. with respect to financial reporting principles and policies
and internal audit controls and procedures,
(i) to advise management and the outside auditors that
they are expected to provide to the Audit Committee a
timely analysis of significant financial reporting
issues and practices;
(ii) to consider any reports or communications (and
management's responses thereto) submitted to the
Audit Committee by the outside auditors, including
reports and communications related to:
o deficiencies noted in the audit in the design
or operation of internal controls;
o consideration of fraud in a financial
statement audit;
o detection of illegal acts;
o the outside auditor's responsibility under
generally accepted auditing standards;
o significant accounting policies;
o management judgments and accounting
estimates;
o adjustments arising from the audit;
o the responsibility of the outside auditor for
other information in documents containing
audited financial statements;
o disagreements with management;
o consultation by management with other
accountants;
o major issues discussed with management prior
to retention of the outside auditor;
o difficulties encountered with management in
performing the audit;
o the outside auditor's judgments about the
quality of the entity's accounting
principles; and
o reviews of interim financial information
conducted by the outside auditor;
16
(iii) to meet with management and/or the outside auditors;
o to discuss the scope of the annual audit;
o to discuss the audited financial statements;
o to discuss any significant matters arising
from any audit or report or communication
referred to in items 2(ii) or 3(ii) above,
whether raised by management, relating to the
Company's financial statements;
o to review the form of opinion the outside
auditors propose to render to the Board of
Directors and shareholders;
o to discuss significant changes to the
Company's auditing and accounting principles,
policies, controls, procedures and practices
proposed or contemplated by the outside
auditors, the internal auditing department or
management; and
o to inquire about significant risks and
exposures, if any, and the steps taken to
monitor and minimize such risks;
(iv) to obtain from the outside auditors assurance that
the audit was conducted in a manner consistent with
the Securities Exchange Act of 1934; and
(v) to discuss with the Company's legal counsel any
significant legal matters that may have a material
effect on the financial statements, the Company's
compliance policies, including material notices to or
inquiries received from governmental agencies; and
3. with respect to reporting and recommendations,
(i) to prepare any report, including any recommendation
of the Audit Committee, required by the rules of the
Securities and Exchange Commission to be included in
the Company's annual proxy statement;
(ii) to review this Charter at least annually and
recommend any changes to the full Board of Directors;
and
(iii) to report its activities to the full Board of
Directors on a regular basis and to make such
recommendations with respect to the above and other
matters as the Audit Committee may deem necessary or
appropriate.
V. Resources and Authority of the Audit Committee: The Audit Committee
shall have the resources and authority appropriate to discharge its
responsibilities, including the authority to engage outside auditors
for special audits, reviews and other procedures and to retain special
counsel and other experts or consultants.
17
---------
PROXY
---------
MYMETICS CORPORATION
706 Giddings Avenue, Suite 1C
Annapolis, Maryland 21401-1472
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MYMETICS
CORPORATION.
The undersigned hereby appoints John M. Musacchio as proxy, with the
power of substitution to represent and to vote as designated below, all the
shares of common stock of Mymetics Corporation held of record by the undersigned
on April 25, 2002, at the Annual Meeting of Stockholders to be held on June 20,
2002 or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR the nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for the nominees
to the contrary below) [ ] listed below [ ]
--- ---
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Patrice Pactol (Class II Director)
John M. Musacchio (Class II Director)
2. In their discretion, the Proxy holders are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN ABOVE,
AND THIS PROXY IS PROPERLY SIGNED, THE SHARES WILL BE VOTED FOR THE PROPOSALS
LISTED ABOVE.
Please sign your name exactly as it appears on your share certificates.
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 partnership name by
authorized person.
DATED , 2002
-----------------
---------------------------------------
Signature
---------------------------------------
Print Name
---------------------------------------
Signature, if jointly held
---------------------------------------
Print Name
---------------------------------------
Number of Shares
Please mark, sign, date and return this
Proxy promptly using the enclosed envelope.
18