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:
/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 Section 240.14a-12
Isis Pharmaceuticals, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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PRELIMINARY COPY
ISIS PHARMACEUTICALS, INC.
2292 Faraday Avenue
Carlsbad, CA 92008
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 12, 2001
TO THE STOCKHOLDERS OF ISIS PHARMACEUTICALS, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Isis
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), will be held on
Friday, January 12, 2001 at 8:00 a.m. local time at the Company's offices at
2292 Faraday Avenue, Carlsbad, California 92008, for the following purposes:
1. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of Common
Stock from 50,000,000 to 100,000,000 shares.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on December 13,
2000 as the record date for the determination of stockholders entitled to notice
of and to vote at this Special Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
B. Lynne Parshall
Executive Vice President,
Chief Financial Officer and Secretary
Carlsbad, California
December 21, 2000
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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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ISIS PHARMACEUTICALS, INC.
2292 Faraday Avenue
Carlsbad, CA 92008
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
January 12, 2001
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Isis Pharmaceuticals, Inc., a Delaware corporation (the "Company"), for use at a
Special Meeting of Stockholders to be held on Friday, January 12, 2001 at 8:00
a.m. local time (the "Special Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Special Meeting. The Special Meeting will be held at the Company's offices at
2292 Faraday Avenue, Carlsbad, California 92008. The Company intends to mail
this proxy statement and accompanying proxy card on or about December 21, 2000
to all stockholders entitled to vote at the Special Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies,
including preparation, assembly, printing and mailing of this proxy statement,
the proxy card and any additional information furnished to stockholders. Copies
of solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company or, at the Company's request, Georgeson Shareholder Communications, Inc.
No additional compensation will be paid to directors, officers or other regular
employees for such services , but Georgeson Shareholder Communications, Inc.
will be paid its customary fee, estimated to be about $8,000, if it renders
solicitation services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of the Company's Common Stock at the close of
business on December 13, 2000 will be entitled to notice of and to vote at the
Special Meeting. At the close of business on December 13, 2000, the Company had
outstanding and entitled to vote ____________ shares of Common Stock. Each
holder of record of Common Stock on such date will be entitled to one vote for
each share held on all matters to be voted upon at the Special Meeting.
All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions and broker non-votes will be
counted towards the tabulation of votes cast on proposals presented to the
stockholders and will have the same effect as negative votes.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power
to revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 2292
Faraday Avenue, Carlsbad, California 92008, a written notice of revocation or a
duly executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
STOCKHOLDER PROPOSALS
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2001 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
1
Commission (the "SEC") is December 25, 2000. Stockholders wishing to submit
proposals or director nominations that are not to be included in such proxy
statement and proxy must also do so by December 25, 2000. Stockholders are also
advised to review the Company's Bylaws, which contain additional requirements
with respect to advance notice of stockholder proposals and director
nominations.
PROPOSAL 1
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Restated Certificate of Incorporation to increase the
Company's authorized number of shares of Common Stock from 50,000,000 shares to
100,000,000 shares.
The additional Common Stock to be authorized by adoption of the
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of the holders of Common Stock or the
Company's Series A Preferred Stock or Series B Preferred Stock, except for
effects incidental to increasing the number of shares of the Company's Common
Stock outstanding, such as dilution of the earnings per share and voting rights
of current holders of the Company's Common Stock. If the amendment is adopted,
it will become effective upon filing of a Certificate of Amendment of the
Company's Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware. The complete text of the Certificate of Amendment to the
Restated Certificate that would be filed with the Secretary of State of the
State of Delaware is set forth in Exhibit A to this Proxy Statement. However,
the text of the Certificate of Amendment is subject to revision to include such
changes as may be required by the Secretary of State of the State of Delaware
and as the Board deems necessary and advisable to effect the proposed amendment
of the Company's Restated Certificate of Incorporation.
In addition to the 39,001,173 shares of Common Stock outstanding at
October 31, 2000, the Company has reserved 3,516,908 shares of Common Stock for
possible issuance under a Form S-3 shelf registration statement currently on
file with the Securities and Exchange Commission. Also as of October 31, 2000,
there were 7,934,467 shares of Common Stock issuable upon exercise of
outstanding options granted under the Company's stock option plans and 1,340,088
shares of Common Stock subject to future issuance under the Company's equity
plans. The Company has also issued warrants and convertible debt which, on
October 31, 2000, would have been exercisable and convertible into an aggregate
of 3,994,759 shares of Common Stock. In addition, the Company has outstanding
129,568 shares of Series A Preferred Stock and 12,497 shares of Series B
Preferred Stock which is convertible into Common Stock on March 31, 2001 and
June 30, 2002, respectively. The Preferred Stock converts into Common Stock at a
premium to market at the time of conversion. If the Company's preferred stock
were convertible on October 31, 2000, it would convert into an aggregate of
1,791,844 shares of Common Stock on such date.
Although at present the Board of Directors has no other plans to issue
the additional shares of Common Stock, it desires to have the shares available
to provide additional flexibility to the Company for business and financial
purposes in the future. The additional shares may be used, without further
stockholder approval, for various purposes including, without limitation,
raising capital, providing equity incentives to employees, directors or
consultants, establishing strategic relationships with other companies and
expanding the Company's business or product lines through the acquisition of
other businesses or products.
The additional shares of Common Stock that would become available for
issuance if the proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board could strategically sell shares of Common Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock has been
prompted by business and financial considerations and not by the threat of any
hostile takeover attempt, nor is the Board currently aware of any such attempts
directed at the Company, nevertheless, stockholders should be aware that
approval of this proposal could facilitate future efforts by the Company to
deter or prevent changes in control of the Company, including transactions in
which the stockholders might otherwise receive a premium for their shares over
then current market prices.
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The affirmative vote of the holders of a majority of the shares of
the Common Stock will be required to approve this amendment to the Company's
Restated Certificate of Incorporation. As a result, abstentions and broker
non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 1
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of October 31, 2000 by: (i) each
director of the Company; (ii) the Company's Chief Executive Officer and its
other four most highly compensated executive officers; (iii) all executive
officers and directors of the Company as a group; and (iv) all those known by
the Company to be beneficial owners of more than five percent of its Common
Stock.
BENEFICIAL OWNERSHIP (1)
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BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF TOTAL (2)
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Citigroup Inc. (3)...............................................3,986,883 10.2
153 Greenwich Street
New York, NY 10043
Novartis Pharma AG (4)...........................................2,354,150 6.0
Lichtstrasse 35
CH-4002, Basel
SWITZERLAND
Stanley T. Crooke (5)............................................1,314,931 3.3
Christopher F. O. Gabrieli (6)...................................1,256,349 3.2
Alan C. Mendelson (7)...............................................40,027 *
William R. Miller (8)...............................................60,000 *
B. Lynne Parshall (9)..............................................283,976 *
Mark B. Skaletsky (10)..............................................47,000 *
Joseph H. Wender (11)...............................................71,000 *
C. Frank Bennett (12)...............................................91,130 *
F. Andrew Dorr (13).................................................36,259 *
David J. Ecker (14)................................................167,679 *
All directors and executive officers as a group (11 persons)(15).3,524,460 8.8
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* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the SEC.
Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, the Company believes that each
of the stockholders named in this table has sole voting and investment
power with respect to the shares indicated as beneficially owned.
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(2) Applicable percentages are based on 39,001,173 shares of Common Stock
outstanding on October 31, 2000, adjusted as required by rules promulgated
by the SEC.
(3) Includes ______________ shares of Common Stock held by Salomon Smith
Barney Holdings Inc., a wholly-owned subsidiary of Citigroup Inc. Also
includes _____________ shares of Common Stock held by Salomon Brothers
Holding Company Inc., a wholly-owned subsidiary of Salomon Smith Barney
Holdings, Inc., and _____________ shares of Common Stock held by
Salomon Smith Barney Inc., a wholly-owned subsidiary of Salomon Brothers
Holding Company Inc.
(4) Includes 2,219,000 shares of Common Stock held by Novartis Pharma AG,
38,053 shares of Common Stock held by Novartis Pharmaceuticals
Corporation, and 97,097 shares of Common Stock held by Genetic Therapy
Inc. Novartis Pharmaceuticals Corporation and Genetic Therapy Inc. are
Delaware corporations and are directly or indirectly wholly-owned
subsidiaries of Novartis Pharma AG.
(5) Includes 281,483 shares of Common Stock issuable upon exercise of options
held by Dr. Crooke that are exercisable on or before December 30, 2000 and
16,207 shares of Common Stock issuable upon exercise of options held by
Rosanne Crooke, Mr. Crooke's wife, that are exercisable on or before
December 30, 2000. Dr. Crooke disclaims beneficial ownership of the
shares of Common Stock issuable upon exercise of options held by his wife.
(6) Includes 759,566 shares of Common Stock held of record by Bessemer Venture
Partners II ("BVP II"), 329,479 shares of Common Stock held of record by
Bessemer Venture Partners III ("BVP III") and 740 shares of Common Stock
held of record by the Gabrieli Family Foundation ("GFF"). Mr. Gabrieli is
a Manager of Deer II & Co. LLC and of Deer III & Co. LLC, the General
Partners of BVP II and BVP III, respectively, and disclaims beneficial
ownership of the shares of Common Stock held of record by or issuable to
BVP II and BVP III except to the extent of his respective interests
therein. Mr. Gabrieli is a trustee of GFF and disclaims beneficial
ownership of the shares of Common Stock held of record by or issuable to
GFF. Also includes 50,500 shares of Common Stock issuable upon exercise of
options held by Mr. Gabrieli that are exercisable on or before December
30, 2000.
(7) Includes an aggregate of 620 shares of Common Stock held in trust by Mr.
Mendelson's wife for his sons and 25,000 shares of Common Stock issuable
upon exercise of options held by Mr. Mendelson that are exercisable on or
before December 30, 2000. Mr. Mendelson disclaims beneficial ownership of
the shares of Common Stock held in trust by his wife for his sons.
(8) Includes 18,000 shares of Common Stock issuable upon exercise of options
held by Mr. Miller that are exercisable on or before December 30, 2000.
(9) Includes 265,110 shares of Common Stock issuable upon exercise of options
held by Ms. Parshall that are exercisable on or before December 30, 2000,
and an aggregate of 18,554 shares of Common Stock issuable upon exercise
of options which Ms. Parshall transferred to her daughters that are
exercisable on or before December 30, 2000.
(10) Includes 25,000 shares of Common Stock issuable upon exercise of options
held by Mr. Skaletsky that are exercisable on or before December 30, 2000.
(11) Includes 40,000 shares of Common Stock issuable upon exercise of options
held by Mr. Wender that are exercisable on or before December 30, 2000.
(12) Includes 91,007 shares of Common Stock issuable upon exercise of options
held by Dr. Bennett that are exercisable on or before December 30, 2000.
(13) Includes 36,259 shares of Common Stock issuable upon exercise of options
held by Dr. Dorr that are exercisable on or before December 30, 2000.
(14) Includes 33,840 shares of Common Stock held in the Ecker Family Revocable
Trust of which Dr. Ecker is a trustee, 2,491 shares of Common Stock owned
by his daughter, and 2,891 shares of Common Stock owned by his son. Also
includes 128,457 shares of Common Stock issuable upon exercise of options
held by Dr. Ecker that are exercisable on or before December 30, 2000.
(15) Includes shares of Common Stock described in the notes above, as
applicable.
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OTHER MATTERS
The Board of Directors knows of no other matters that will be
presented for consideration at the Special Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named
in the accompanying proxy to vote on such matters in accordance with their
best judgment.
By Order of the Board of Directors
B. Lynne Parshall
Executive Vice President,
Chief Financial Officer and Secretary
December 21, 2000
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EXHIBIT A
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
ISIS PHARMACEUTICALS, INC.
Isis Pharmaceuticals, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify:
FIRST: The name of the Corporation is Isis Pharmaceuticals, Inc.
(the "Corporation").
SECOND: The date on which the Corporation's original Certificate
of Incorporation was filed with the Secretary of State of the State of
Delaware is March 25, 1991.
THIRD: The Board of Directors of the Corporation, acting in
accordance with the provisions of Sections 141 and 242 of the General
Corporation Law of the State of Delaware, adopted resolutions at a meeting
held on December 8, 2000 to amend Article V of the Restated Certificate of
Incorporation of the Corporation to read in its entirety as follows:
The Corporation is authorized to issue two classes of
shares designated respectively "Common Stock" and "Preferred
Stock." The total number of shares of all classes of stock
which the Corporation has authority to issue is 115,000,000
shares, consisting of 100,000,000 shares of Common Stock, each
having a par value of $.001, and 15,000,000 shares of
Preferred Stock, each having a par value of $.001. The
Preferred Stock may be issued in one or more series. The Board
of Directors is authorized to fix the number of shares of any
such series of Preferred Stock and to determine the
designation of any such series (a "Preferred Stock
Designation"), subject to (a) such stockholder approvals as
may be provided for herein and (b) the number of shares of
Preferred Stock authorized at that time by this Article V.
Subject to such stockholder approvals as may be provided for
herein, the Board of Directors is further authorized to
determine or alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock, and to increase or decrease (but
not below the number of shares of such series then
outstanding) the number of shares of any series of Preferred
Stock. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume
the status that they had prior to the adoption of the
resolution or amendment originally fixing the number of shares
of such series.
FOURTH: The foregoing amendment was submitted to the stockholders of
the Corporation for their approval and was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Isis Pharmaceuticals, Inc. has caused this
Certificate of Amendment to be signed by its duly authorized officers this ___
day of ___________, 2001.
By:
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Stanley T. Crooke
Chairman of the Board of Directors
and Chief Executive Officer
ISIS PHARMACEUTICALS, INC.
PROXY SOLICITED BY THE BOARD OF DIRCTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 12, 2001
The undersigned hereby appoints STANLEY T. CROOKE and B. LYNNE PARSHALL,
and each of them, as attorneys and proxies of the undersigned, with full power
of substitution, to vote all of the shares of stock of Isis Pharmaceuticals,
Inc. (the "Company") which the undersigned may be entitled to vote at the
Special Meeting of Stockholders of the Company to be held at the Company's
offices at 2292 Faraday Avenue, Carlsbad, California 92008 on Friday, January
12, 2001 at 8:00 a.m., and at any and all continuations and adjournments
thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the
following instructions, with discretionary authority as to any and all other
matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1 AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
(Continued on other side)
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
SPECIAL MEETING OF STOCKHOLDERS
ISIS PHARMACEUTICALS, INC.
January 12, 2001
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
Please mark your
/ X / votes as in this
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1
FOR AGAINST ABSTAIN
Proposal 1: Amendment of the Certificate of Incorporation / / / / / /
to increase the Company's authorized common
stock from 50,000,000 shares to 100,000,000
shares
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
SIGNATURE___________________________ DATE ________________ SIGNATURE___________________________ DATE ________________
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as your name appears hereon. If the stock is
registered in the names of two or more persons, each should sign.
Executors, administators, trustees, guardians and attorneys-in-fact
should add their titles. If signer is a corporation, please give full
corporate name and have a duly authorized officer sign, stating
title. If signer is a partnership, please sign in partnership name by
authorized person.
