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 |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 Under Rule 14a-12
SIGA TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(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 (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:
--------------------------------------------------------------------
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 408
New York, New York 10170
(212) 672-9100
November 17, 2006
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
SIGA Technologies, Inc. which will be held at the offices of Kramer Levin
Naftalis & Frankel LLP, 1177 Avenue of the Americas, 29th Floor, New York, New
York 10036 at 10:30 a.m. (local time) on Tuesday, December 19, 2006, and at any
adjournment or postponement thereof. On the following pages you will find the
formal notice of annual meeting and proxy statement.
To assure that you are represented at the Annual Meeting, whether or not
you plan to attend the meeting in person, please read carefully the accompanying
proxy statement, which describes the matters to be voted upon, and please
complete, date, sign and return the enclosed proxy card promptly.
I hope that you will attend the meeting and I look forward to seeing you
there.
Sincerely,
/s/ Donald G. Drapkin
---------------------
DONALD G. DRAPKIN
Chairman of the Board
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 408
New York, New York 10170
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 19, 2006
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of SIGA Technologies, Inc., a Delaware corporation ("SIGA"),
will be held on Tuesday, December 19, 2006, at 10:30 a.m. (local time), at the
offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas,
29th Floor, New York, New York 10036, and at any adjournment.
At the Annual Meeting, SIGA's stockholders will be voting on proposals to
do the following:
1. To elect ten directors to the Board of Directors of SIGA;
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm of SIGA for the fiscal
year ending December 31, 2006; and
3. To transact such other business as may properly come before the
Annual Meeting or at any adjournment or postponement thereof.
Stockholders of record at the close of business on November 6, 2006 are
entitled to notice of, and to vote at, the Annual Meeting or any adjournment or
postponement thereof. A list of such stockholders will be available at the
Annual Meeting and for any purpose related to the Annual Meeting, during the ten
days prior to the Annual Meeting, at SIGA's office, during ordinary business
hours.
All stockholders are cordially invited to attend the Annual Meeting. If
you do not expect to be present at the Annual Meeting, you are requested to fill
in, date and sign the enclosed proxy and mail it promptly in the enclosed
envelope to make sure that your shares are represented at the Annual Meeting. In
the event you decide to attend the Annual Meeting in person, you may, if you
desire, revoke your proxy and vote your shares in person.
YOUR VOTE IS IMPORTANT
IF YOU ARE UNABLE TO BE PRESENT PERSONALLY, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ Thomas N. Konatich
----------------------
Thomas N. Konatich
Secretary
New York, New York
November 17, 2006
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 408
New York, New York 10170
--------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 19, 2006
--------------
This proxy statement is furnished to stockholders of SIGA Technologies,
Inc. ("SIGA") in connection with the solicitation of proxies, in the
accompanying form, by the Board of Directors of SIGA (the "Board of Directors")
for use in voting at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of
the Americas, 29th Floor, New York, New York 10036, on Tuesday, December 19,
2006, at 10:30 a.m., and at any adjournment or postponement thereof.
This proxy statement, and the accompanying form of proxy, are first being
mailed to stockholders on or about November 27, 2006.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Purpose of the Annual Meeting
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders. Each proposal is described in more detail in this proxy statement.
Record Date and Outstanding Shares
The Board of Directors has fixed the close of business on November 6, 2006
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting. Only stockholders of
record at the close of business on the Record Date will be entitled to vote at
the Annual Meeting or any and all adjournments or postponements thereof. As of
the Record Date, SIGA had issued and outstanding 31,796,454 shares of common
stock, par value $.0001 per share ("Common Stock").
Voting at the Annual Meeting
Each share of Common Stock outstanding on the Record Date will be entitled
to one vote on each matter submitted to a vote of the stockholders. Cumulative
voting by stockholders is not permitted.
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
For the election of directors, a plurality of the votes cast is required.
Abstentions and broker "non-votes" are not considered for the purpose of the
election of directors.
For the ratification of the appointment of PricewaterhouseCoopers LLP as
the independent registered public accounting firm of SIGA for the fiscal year
ending December 31, 2006, the affirmative vote of a majority of the total votes
cast on such proposal in person or by proxy at the Annual Meeting is required.
Abstentions and broker "non-votes" for such proposal are not considered to have
been voted on the proposal.
1
Revocability and Voting of Proxies
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to the Annual Meeting or at the Annual Meeting
prior to the vote pursuant to the proxy. A proxy may be revoked by any of the
following methods:
o by writing a letter delivered to Thomas N. Konatich, Secretary of SIGA,
stating that the proxy is revoked;
o by submitting another proxy with a later date; or
o by attending the Annual Meeting and voting in person.
Please note, however, that if a stockholder's shares are held of record by
a broker, bank or other nominee and that stockholder wishes to vote at the
Annual Meeting, the stockholder must bring to the Annual Meeting a letter from
the broker, bank or other nominee confirming that stockholder's beneficial
ownership of the shares.
Unless we receive specific instructions to the contrary or unless such
proxy is revoked, shares represented by each properly executed proxy will be
voted: (i) FOR the election of each of SIGA's nominees as a director; (ii) FOR
the ratification of the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm of SIGA for the fiscal year ending
December 31, 2006; and (iii) with respect to any other matters that may properly
come before the Annual Meeting, at the discretion of the proxy holders. SIGA
does not presently anticipate that any other business will be presented for
action at the Annual Meeting.
Solicitation
SIGA will pay the costs relating to this proxy statement, the proxy card
and the Annual Meeting. SIGA may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to beneficial owners. Directors, officers and regular
employees may also solicit proxies by telephone, facsimile or other means or in
person. They will not receive any additional payments for the solicitation.
2
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Ten directors are to be elected at the Annual Meeting to hold office until
the next Annual Meeting of Stockholders and until their successors have been
duly elected and qualified. Unless otherwise instructed, the proxy holders will
vote the proxies received by them FOR the election of the ten persons named in
the table below as directors of SIGA. Proxies cannot be voted for a greater
number of persons than the nominees named. In the event that any of the below
listed nominees for director should become unavailable for election for any
presently unforeseen reason, the persons named in the accompanying proxy form
have the right to use their discretion to vote for a substitute.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION (ITEM 1 OF THE ENCLOSED PROXY CARD) OF MR. DRAPKIN, MR. ANTAL, MR.
CONSTANCE, DR. MJALLI, DR. OZ, DR. ROSE, MR. SAVAS, MS. SLOTKIN AND DR. WEINER
AS DIRECTORS.
Director Nominee Information
The following table sets forth biographical information of each director
nominee, including their ages, data on their business backgrounds and the names
of public companies and other selected entities for which they also serve as
directors:
Name Age Position
---- --- --------
Donald G. Drapkin* 58 Chairman of the Board
James J. Antal* 55 Director
Thomas E. Constance* 69 Director
Adnan M. Mjalli, Ph.D. 42 Director
Mehmet C. Oz, M.D. * 44 Director
Eric A. Rose, M.D. * 54 Director
Paul G. Savas* 43 Director
Judy S. Slotkin* 53 Director
Michael A. Weiner, M.D. * 60 Director
Scott M. Hammer, M.D. * 59 Director
* Determined by the Board of Directors to be independent pursuant to
Rule 4200 of the NASD Marketplace Rules.
Donald G. Drapkin has served as Chairman of the Board and a director of
SIGA since April 19, 2001. Mr. Drapkin has been Vice Chairman and a director of
MacAndrews & Forbes Holdings Inc. and various of its affiliates since 1987.
Prior to joining MacAndrews & Forbes, Mr. Drapkin was a partner in the law firm
of Skadden, Arps, Slate, Meagher & Flom LLP for more than five years. Mr.
Drapkin is also a director of the following corporations which file reports
pursuant to the Securities Exchange Act of 1934: Anthracite Capital, Inc.,
Playboy Enterprises, Inc., Revlon Consumer Products Corporation, Revlon Inc. and
Nephros, Inc. Mr. Drapkin is also a director of PharmaCore, Inc. and TransTech
Pharma, Inc.
James J. Antal has served as a director of SIGA since November 2004. Mr.
Antal has been an active consultant and founding investor in several Southern
California based emerging companies since his retirement from Experian in 2002.
He has served as Chief Financial Advisor to Black Mountain Gold Coffee Co.
(2003-2005), and as Chief Financial Officer of Pathway Data, Inc. (2005 to
present). Mr. Antal joined the Board of Directors and serves as the Chairman of
the audit committee for ClevelandBioLabs, effective upon the completion of the
CBLI IPO, which occurred in July, 2006. Mr. Antal was the Chief Financial
Officer and Chief Investment Officer from 1996 to 2002 for Experian, a $1.6
billion global information services subsidiary of UK-based GUS plc. Prior to the
GUS acquisition of Experian (the former TRW Inc. Information Systems and
Services businesses), Mr. Antal held various finance positions with TRW from
1978 to 1996, including Senior VP of Finance for TRW Information
3
Systems and Services and TRW Inc. Corporate Director of Financial Reporting and
Accounting. He earned his undergraduate degree in accounting from The Ohio State
University in 1973, and became a certified public accountant (Ohio) in 1974. He
engaged in active practice as a CPA with Ernst & Ernst until 1978. Mr. Antal has
served as a director of First American Real Estate Solutions, an Experian joint
venture with First American Financial Corp.
Thomas E. Constance has served as a director of SIGA since April 19, 2001.
Mr. Constance is Chairman and, since 1994, a partner of Kramer Levin Naftalis &
Frankel LLP, a law firm in New York City. Mr. Constance serves as a Trustee of
the M.D. Sass Foundation and St. Vincent's Services. He also serves on the
Advisory Board of Directors of Barington Capital, L.P.
Adnan M. Mjalli, Ph.D. has served as a director of SIGA since January
2004. Dr. Mjalli founded TransTech Pharma, Inc., a privately held drug discovery
company in High Point, North Carolina, in 1999 and has since served as its
President and Chief Executive Officer. He also serves as Chairman of the Board
of PharmaCore, Inc. where he previously served as President and CEO from
December of 1998 to November 2000. Dr. Mjalli obtained his Ph.D. in medicinal
chemistry in 1989 from the University of Exeter, UK. His postdoctoral work was
carried out at the University of Rochester. Prior to founding TransTech Pharma,
he held various positions of increasing responsibility in research and senior
management at several pharmaceutical and biotechnology companies, including
Merck & Co., Inc.
Mehmet C. Oz, M.D. has served as a director of SIGA since April 19, 2001.
Dr. Oz has been a Cardiac Surgeon at Columbia University Presbyterian Hospital
since 1993 and a Professor of Surgery and Vice Chairman for Cardiovascular
Services of the Department of Surgery there since July 2001. Dr. Oz directs the
following programs at New York University Presbyterian Hospital, Columbia
University: the Cardiovascular Institute, the complementary medicine program,
the clinical profusion program and clinical trials of new surgical technology.
Dr. Oz received his undergraduate degree from Harvard University in 1982, and,
in 1986, he received a joint M.D./M.B.A. degree from the University of
Pennsylvania Medical School and the Wharton School of Business.
Eric A. Rose, M.D. has served as a director of SIGA since April 19, 2001.
From April 19, 2001 until June 21, 2001, Dr. Rose served as Interim Chief
Executive Officer of SIGA. Dr. Rose is currently Chairman of the Department of
Surgery and Surgeon-in-Chief of the Columbia Presbyterian Center of New York
Presbyterian Hospital, a position he has held since August 1994. Dr. Rose is a
past President of the International Society for Heart and Lung Transplantation.
Dr. Rose was recently appointed as Morris & Rose Milstein Professor of Surgery
at Columbia University's College of Physicians and Surgeons' Department of
Surgery. Dr. Rose is a director of PharmaCore, Inc., TransTech Pharma, Inc. and
a former director of Nexell Therapeutics Inc. (f/k/a VimRx). Dr. Rose is a
graduate of both Columbia College and Columbia University College of Physicians
& Surgeons.
Paul G. Savas has served as a director of SIGA since January 2004. Mr.
Savas has been an Executive Vice President of Finance at MacAndrews & Forbes
Holdings, Inc. and its affiliates since May 2006. Prior to that he served in
various positions at MacAndrews & Forbes and its affiliates, including as Senior
Vice President of Finance from October 2002 until May 2006, Vice President from
1998 until 2002, and Director of Corporate Finance from 1994 until 1998. Mr.
Savas is a director of Rev Holdings LLC, Clarke American Corp., TransTech
Pharma, Inc. and PharmaCore, Inc.
Judy S. Slotkin has served as a director of SIGA since November 2004. Ms.
Slotkin was Co-Head of the Finance Committee of the Modern Africa Fund, a $120
million private equity fund, from 1998 until 2003. Ms. Slotkin was formerly
Department Head in the Corporate Finance Division of Citigroup (Citibank
Investment Bank) where she was responsible for various businesses and the first
head of the group's Capital Markets Desk. Prior to that, Ms. Slotkin held
various positions in the Citigroup (Citibank) commercial bank. Ms. Slotkin is a
director of Nephros, Inc. Ms. Slotkin received her undergraduate degree in
accounting from Fairleigh Dickinson University in 1976 and in 1980 she received
her MBA in Finance from Fordham University.
Michael A. Weiner, M.D. has served as a director of SIGA since April 19,
2001. Dr. Weiner is the Hettinger Professor of Pediatrics at Columbia University
College of Physicians and Surgeons since 1996. Dr. Weiner is also the Director
of Pediatric Oncology at New York Presbyterian Hospital. Dr. Weiner was a
director of Nexell Therapeutics, Inc. (f/k/a VimRx) from March 1996 to February
1999. Dr. Weiner is a 1972
4
graduate of the New York State Health Sciences Center at Syracuse and was a post
graduate student at New York University and Johns Hopkins University.
Dr. Hammer is the Harold C. Neu Professor of Medicine, Professor of
Epidemiology and Chief of the Division of Infectious Diseases at the Columbia
University Medical Center (CUMC), a position he has held since 1999. Dr.
Hammer's major investigative interest is the treatment and prevention of HIV
disease. He is an investigator in the National Institutes of Health sponsored
AIDS Clinical Trials Group (ACTG), a multicenter organization which performs
clinical trials designed to improve the understanding and treatment of HIV
infection and its complications. As an ACTG investigator, Dr. Hammer chaired the
two largest national trials of antiretroviral therapy carried out by that group
in the 1990's, studies which contributed to the current standard of care of HIV
infection. In addition to his interest in the treatment of persons with
established HIV infection, Dr. Hammer is an investigator in the National
Institutes of Health sponsored HIV Vaccine Trials Network (HVTN), a multicenter
organization whose mission is to develop an effective preventive HIV vaccine. He
is Chair of the AIDS Vaccine Research Working Group, an advisory committee to
the Division of AIDS, NIAID. He is a former Chair of the Antiviral Products
Advisory Committee of the Food and Drug Administration and currently serves on
the Editorial Board of the New England Journal of Medicine. Dr. Hammer is Chair
of the International AIDS Society-USA's Antiretroviral Guidelines Panel, is a
member of the Governing Council of the International AIDS Society, is a member
of the World Health Organization's Strategic and Technical Advisory Committee
for HIV/AIDS, serves as Co-Chair of the Steering Committee of the WHO's Global
HIV Drug Resistance Surveillance Program, and continues in his role as
Guidelines Development Group Chair of the WHO's Antiretroviral Guidelines for
Resource Limited Settings. He has served as a member of the International
Advisory Committees of the Swiss HIV Cohort Study, the French National
Association for AIDS Research and the HIV-NAT (Netherlands-Australia-Thailand)
Collaborative Research Network. In his role as Chief of the Division of
Infectious Diseases at CUMC, he is dedicated to fellow and faculty growth and to
the development of state-of-the-art infection surveillance at the institutional
and regional levels to improve and protect the public health.
Meetings of the Board of Directors
The Board of Directors of SIGA held six meetings during 2005. During 2005,
one director attended fewer than 75% of the aggregate of the meetings of the
Board of Directors and committees thereof, upon which such director served
during the period for which he has been a director or committee member. In
addition, 2 actions were taken during 2005 by unanimous written consent of the
directors.
Those members of the Board of Directors who are independent as defined by
Rule 4200 of the NASD Marketplace Rules (the "Independent Directors") are also
required, pursuant to Rule 4350(c)(2) of the NASD Marketplace Rules, to
regularly convene executive sessions where only such Independent Directors are
present. Such meetings may be in conjunction with regularly-scheduled meetings
of the Board of Directors. Each member of the Board of Directors is also
expected to attend the annual meeting of stockholders of SIGA. Seven members of
the Board of Directors attended SIGA's 2005 annual meeting of stockholders.
Committees of the Board of Directors
The Board of Directors currently has, and appoints the members of,
standing Audit, Compensation and Nominating and Corporate Governance Committees.
Each member of the Audit, Compensation and Nominating and Corporate Governance
Committees is an Independent Director. Each of these committees has a written
charter approved by the Board of the Directors in March 2004. A copy of each
charter is posted on SIGA's website at www.siga.com under the "Corporate
Governance" section.
Audit Committee. The Audit Committee, which currently consists of
directors Paul G. Savas, Judy S. Slotkin and James J. Antal, held ten meetings
during 2005. The Board of Directors has determined that each of the members of
the Audit Committee is "independent" under the applicable laws, rules and
regulations. The Company has determined that Mr. Savas is an "Audit Committee
financial expert" within the meaning of Regulation S-K promulgated by the
Securities and Exchange Commission (the "SEC"). The purpose of the Audit
Committee is to assist the Board of Directors in the oversight of the integrity
of the financial statements of SIGA, SIGA's compliance with legal and regulatory
matters, the independent registered public accounting firm's qualifications and
5
independence, and the performance of SIGA's independent registered public
accounting firm. The primary responsibilities of the Audit Committee are set
forth in its charter, and include various matters with respect to the oversight
of SIGA's accounting and financial reporting process and audits of the financial
statements of SIGA on behalf of the Board of Directors. The Audit Committee also
selects the independent registered public accounting firm to conduct the annual
audit of the financial statements of SIGA; reviews the proposed scope of such
audit; reviews accounting and financial controls of SIGA with the independent
registered public accounting firm and our financial accounting staff; and
reviews and approves transactions between us and our directors, officers, and
their affiliates. A copy of the Audit Committee charter is available on SIGA's
website (as described above). Also see "Audit Committee Report."
Compensation Committee. The Compensation Committee, which currently
consists of directors Donald G. Drapkin, Paul G. Savas and Mehmet C. Oz, held
one meeting during 2005. The Board of Directors has determined that each of the
members of the Compensation Committee is "independent" within the meaning of the
NASDAQ listing standards. The Compensation Committee functions include reviewing
and approving the compensation and benefits for SIGA's executive officers,
administering SIGA's stock plans and making recommendations to the Board of
Directors regarding these matters. A copy of the Compensation Committee charter
is available on SIGA's website. Also see "Compensation Committee Report."
Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee (the "Nominating Committee"), which currently
consists of directors Judy S. Slotkin, James J. Antal and Michael A. Weiner, was
formed in March 2004 and held three meetings in 2005. The Board of Directors has
determined that each of the members of the Nominating Committee is "independent"
within the meaning of the NASDAQ listing standards. The Nominating Committee is
responsible for searching for and recommending to the Board of Directors
potential nominees for director positions, making recommendations to the Board
of Directors regarding the size and composition of the Board of Directors and
its committees, monitoring the Board of Director's effectiveness and developing
and implementing SIGA's corporate governance procedures and policies. A copy of
the Nominating and Corporate Governance Committee charter is available on SIGA's
website.
In selecting candidates for the Board of Directors, the Nominating
Committee begins by determining whether the incumbent directors whose terms
expire at the annual meeting of stockholders desire and are qualified to
continue their service on the Board of Directors. SIGA is of the view that the
continuing service of qualified incumbents promotes stability and continuity in
the board room, giving SIGA the benefit of the familiarity and insight into
SIGA's affairs that its directors have accumulated during their tenure, while
contributing to the Board of Director's ability to work as a collective body.
Accordingly, it is the policy of the Nominating Committee, absent special
circumstances, to nominate qualified incumbent directors who continue to satisfy
the Nominating Committee's criteria for membership on the Board of Directors,
whom the Nominating Committee believes will continue to make important
contributions to the Board of Directors and who consent to stand for re-election
and, if re-elected, to continue their service on the Board of Directors. If
there are positions on the Board of Directors for which the Nominating Committee
will not be re-nominating an incumbent director, or if there is a vacancy on the
Board of Directors, the Nominating Committee will solicit recommendations for
nominees from persons whom the Nominating Committee believes are likely to be
familiar with qualified candidates, including members of the Board of Directors
and management of SIGA. The Nominating Committee may also engage a professional
search firm to assist in the identification of qualified candidates, but did not
do so in 2005. As to each recommended candidate that the Nominating Committee
believes merits serious consideration, the Nominating Committee will collect as
much information, including without limitation, soliciting views from other
directors and SIGA's management and having one or more Nominating Committee
members interview each such candidate, regarding each candidate as it deems
necessary or appropriate in order to make an informed decision with respect to
such candidate. Based on all available information and relevant considerations,
the Nominating Committee will select, for each directorship to be filled, a
candidate who, in the view of the Nominating Committee, is most suited for
membership on the Board of Directors. In making its selection, SIGA will
evaluate candidates proposed by stockholders under criteria similar to the
evaluation of other candidates, except that the Nominating Committee may
consider, as one of the factors in its evaluation of stockholder recommended
nominees, the size and duration of the interest of the recommending stockholder
or stockholder group in the equity of SIGA. This consideration may also include
how long the recommending stockholder intends to continue holding its equity
interest in SIGA.
6
The Nominating Committee has adopted a policy with regard to the minimum
qualifications that must be met by a Nomination Committee-recommended nominee
for a position on SIGA's Board of Directors, which policy is described in this
paragraph. The Nominating Committee generally requires that all candidates for
the Board of Directors be of high personal integrity and ethical character. The
Nominating Committee requires that candidates not have any interests that would,
in the view of the Nominating Committee, materially impair his or her ability to
(i) exercise independent judgment or (ii) otherwise discharge the fiduciary
duties owed as a director to SIGA and its stockholders. In addition, candidates
must be able to represent fairly and equally all stockholders of SIGA without
favoring or advancing any particular stockholder or other constituency of SIGA.
Candidates must have demonstrated achievement in one or more fields of business,
professional, governmental, communal, scientific or educational endeavor.
Candidates are expected to have sound judgment and a general appreciation
regarding major issues facing public companies of a size and operational scope
similar to SIGA, including contemporary governance concerns, regulatory
obligations of a public issuer, strategic business planning, competition in a
global economy, and basic concepts of corporate finance. Candidates must also
have, and be prepared to devote, adequate time to the Board and its committees.
It is expected that, taking into account their other business and professional
commitments, including their service on the boards of other companies, each
candidate will be available to attend meetings of the Board and any committees
on which the candidate will serve, as well as SIGA's annual meeting of
stockholders. SIGA also requires that at least a majority of the directors
serving at any time on the Board are independent, as defined under the rules of
the NASDAQ stock market and that at least three of the directors satisfy the
financial literacy requirements required for service on the Audit Committee
under the rules of the NASDAQ stock market.
The Nominating Committee has adopted a policy with regard to the
consideration of director candidates recommended by stockholders, the material
elements of which policy are described in this paragraph. The Nominating
Committee will consider recommendations for nomination for director submitted by
holders of SIGA's shares entitled to vote generally in the election of
directors. The Nominating Committee will give consideration to these
recommendations for positions on the Board where the Nominating Committee has
not determined to re-nominate a qualified incumbent director. While the
Nominating Committee has not established a minimum number of shares that a
stockholder must own in order to present a nominating recommendation for
consideration, or a minimum length of time during which the stockholder must own
its shares, the Nominating Committee may take into account the size and duration
of a recommending stockholder's ownership interest in SIGA. The Nominating
Committee may also consider whether the stockholder making the nominating
recommendation intends to maintain an ownership interest in SIGA of
substantially the same size as at its interest at the time of making the
recommendation. The Nominating Committee may refuse to consider recommendations
of nominees who do not satisfy the minimum qualifications prescribed by the
Nominating Committee for board candidates.
The Nominating Committee has adopted procedures to be followed by
stockholders in submitting recommendations of candidates for director. The
procedures are posted on SIGA's website at www.siga.com under the "Corporate
Governance" section, and described in this paragraph. A stockholder (or group of
stockholders) wishing to submit a nominating recommendation for an annual
meeting of stockholders should try to ensure that it is received by SIGA, as
provided herein, not later than 120 calendar days prior to the first anniversary
of the date of the proxy statement for the prior annual meeting of stockholders.
All stockholder nominating recommendations should be in writing, addressed to
"the Nominating and Corporate Governance Committee" care of SIGA's Chief
Financial Officer at SIGA's principal headquarters, 420 Lexington Avenue, Suite
408, New York, New York 10170. Submissions should be made by mail, courier or
personal delivery. A nominating recommendation should be accompanied by the
following information concerning each recommending stockholder:
o The name and address, including telephone number, of the recommending
stockholder;
o The number and class of SIGA's shares owned (beneficially or of record) by
the recommending stockholder and the time period for which such shares
have been held;
o A statement from the stockholder as to whether the stockholder has a good
faith intention to continue to hold the reported shares through the date
of SIGA's next annual meeting of stockholders;
o Sufficient information about the proposed nominee for the Nominating
Committee to make an informed decision regarding the qualifications of the
proposed nominee;
7
o Any relationship between the proposed nominee and the recommending
stockholder; and
o Such other information as the Nominating Committee may reasonably request.
The nominating recommendation must be accompanied by the consent of the proposed
nominee to be interviewed by the Nominating Committee, if the Nominating
Committee chooses to do so in its discretion (and the recommending stockholder
must furnish the nominee's contact information for this purpose), and, if
nominated and elected, to serve as a director of SIGA.
Compensation Committee Interlocks and Insider Participation
None.
Code of Ethics
SIGA has adopted a code of ethics and business conduct that applies to its
officers, directors and employees, including without limitation, our Chief
Executive Officer, Chief Financial Officer and Chief Scientific Officer. The
Code of Ethics and Business Conduct is available on SIGA's website at
www.siga.com under the "Corporate Governance" section.
Stockholder Communications with the Board of Directors
SIGA stockholders may send communications to the Board, any committee of
the Board or an individual director. The process for so communicating is posted
on SIGA's website at www.siga.com under the "Corporate Governance" section.
8
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee have been appointed by the Board of
Directors. During the 2005 fiscal year, the Audit Committee consisted solely of
independent directors, as defined in Rule 4200(a)(15) of the NASD Marketplace
Rules. The Audit Committee operates under a written charter that was amended and
restated by the Board of Directors in March 2004 in order to assure continued
compliance by SIGA with SEC and NASDAQ rules enacted in response to requirements
of the Sarbanes-Oxley Act.
The Audit Committee assists the Board of Directors in monitoring the
integrity of SIGA's financial statements, the independent registered public
accounting firm's qualifications and independence, the performance of the
independent registered public accounting firm, and the compliance by SIGA with
legal and regulatory requirements. Management is responsible for SIGA's internal
controls and the financial reporting process. The independent registered public
accounting firm is responsible for performing an independent audit of SIGA's
financial statements in accordance with generally accepted auditing standards
and for issuing a report on those financial statements. The Audit Committee
monitors and oversees these processes.
In this context, the Audit Committee has reviewed and discussed the
audited financial statements for the year ended December 31, 2005 with
management and with PricewaterhouseCoopers LLP, SIGA's independent registered
public accounting firm. The Audit Committee has discussed with
PricewaterhouseCoopers LLP the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communications with Audit Committees), which
includes, among other items, matters related to the conduct of the audit of
SIGA's annual financial statements.
The Audit Committee has also received the written disclosures and the
letter from PricewaterhouseCoopers LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and has
discussed with PricewaterhouseCoopers LLP the issue of their independence from
SIGA and management. In addition, the Audit Committee has considered whether the
provision of non-audit services by the independent registered public accounting
firm in 2005 is compatible with maintaining the auditors' independence and has
concluded that it is.
Based on its review of the audited financial statements and the various
discussions noted above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in SIGA's Annual
Report on Form 10-K for the year ended December 31, 2005. The Audit Committee
has also recommended, subject to stockholder ratification, the selection of
SIGA's independent registered public accounting firm for the year ending
December 31, 2006.
The members of the Audit Committee are Paul G. Savas, Judy S. Slotkin and
James J. Antal, none of whom is or, during the fiscal year 2005, was, an
employee of SIGA.
Respectfully submitted by the Audit Committee,
Paul G. Savas, Chairman
James J. Antal
Judy S. Slotkin
9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During the year ended December 31, 2005, the Compensation Committee was
comprised of Donald G. Drapkin, Paul G. Savas and Mehmet C. Oz. The Compensation
Committee's duties include determination of the Company's compensation and
benefit policies and practices for executive officers and key managerial
employees. In accordance with rules established by the SEC, the Company is
required to provide certain data and information in regard to the compensation
provided to the Company's Chief Executive Officer and the four other most highly
compensated executive officers.
Compensation Policies
The overall objectives of the Company's compensation program are to
attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy, to
maximize the link between executive and stockholder interests through a stock
option plan and to recognize individual contributions as well as overall
business results. To achieve these objectives, the Company has developed an
overall compensation strategy and specific compensation plans that tie a
substantial portion of an executive's compensation to performance.
The key elements of the Company's compensation program consist of fixed
compensation in the form of base salary, and the discretion to award variable
compensation in the forms of annual incentive compensation and stock option
awards. The Compensation Committee's policies with respect to each of these
elements are discussed below. In addition, while the elements of compensation
described below are considered separately, the Compensation Committee takes into
account the full compensation package afforded by the Company to the individual,
including pension benefits, insurance and other benefits, as well as the
programs described below.
Base Salaries
Base salaries for executive officers are determined based upon the
Compensation Committee's evaluation of the responsibilities of the position held
and the experience of the individual, and by reference to historical levels of
salary paid by the Company.
Salary adjustments are based on a periodic evaluation of the performance
of the Company and each executive officer, as well as financial results of the
business. The Compensation Committee takes into account the effect of any
corporate transactions that have been consummated during the relevant year and,
where appropriate, also considers non-financial performance measures. These
include the Company's market share, scientific developments and improvements in
relations with employees.
Annual Incentive Compensation Awards
Annual incentive compensation is payable pursuant to contractual
provisions with certain executives which provide eligibility to receive
performance based bonuses and/or discretionary bonuses. The annual incentive
compensation earned by the executives with respect to 2005 was discretionary and
determined by the Compensation Committee.
Other Incentive Compensation Awards
The principal component of executive compensation is the granting of stock
options, which are intended as a tool to attract, provide incentive to and
retain those executives who make the greatest contribution to the business, and
who can have the greatest effect on the Company's long-term profitability. The
exercise price of stock options is set at a price equal to the market price of
the Common Stock at the time of the grant. The options therefore do not have any
value to the executive unless the market price of the Common Stock rises.
Chief Executive Officer Compensation
Dr. Kasten began service as Chief Executive Officer on July 2, 2004 and
resigned his position effective April 30, 2006. The compensation of Dr. Kasten
had been governed by the terms of his Employment Agreement dated as of July 2,
2004, which terms were modified as of his resignation, all as described below
under the heading "Employment Contracts."
10
Tax Deductibility Of Executive Compensation
The Compensation Committee attempts to ensure full deductibility of
compensation notwithstanding the limitation on the deductibility of certain
compensation in excess of one million dollars under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Company's stock
options are designed so as to cause stock options and bonuses granted there
under to be exempt from the limitations contained in Section 162(m) of the Code.
Respectfully submitted by the Compensation Committee,
Donald G. Drapkin
Paul G. Savas
Mehmet C. Oz
11
COMMON STOCK PERFORMANCE
The following line graph compares the cumulative total stockholder return
through December 31, 2005, assuming reinvestment of dividends, by an investor
who invested $100 on December 31, 2000 in each of (i) the Common Stock, (ii) the
NASDAQ National Market-US; and (iii) the NASDAQ Pharmaceutical Index.
[LINE CHART OMITTED]
Value of Initial Investment 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
- -------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
SIGA Technologies, Inc. $ 100.00 $ 91.77 $ 45.25 $ 72.47 $ 52.53 $ 30.06
NASDAQ Composite Index $ 100.00 $ 83.80 $ 45.81 $ 66.77 $ 70.86 $ 72.87
NASDAQ Biotech Composite Index $ 100.00 $ 78.95 $ 54.06 $ 81.09 $ 88.06 $ 89.27
12
MANAGEMENT
Officers
The following table sets forth certain information with respect to the
executive officers of SIGA:
Name Age Position
---- --- --------
Bernard L. Kasten Jr. M.D. (1) 60 Director, Chief Executive Officer
Thomas N. Konatich (2) 60 Vice President, Chief Financial Officer, Secretary and Treasurer
Dennis E. Hruby, Ph.D. 54 Vice President, Chief Scientific Officer
John R. Odden (3) 52 Vice President - Business Development
(1) Dr. Kasten became Chief Executive Officer in the third quarter of
2004. Dr. Kasten resigned as Chief Executive Officer of SIGA
effective as of April 30, 2006.
(2) Mr. Konatich was appointed to serve in an additional capacity as
Acting Chief Executive Officer effective as of May 1, 2006.
(3) Mr. Odden became Vice President -- Business Development in the third
quarter of 2004. He resigned as Vice President Business Development
in September, 2005.
Bernard L. Kasten, Jr., M.D. has been a director of SIGA since May 23,
2003 and was Chief Executive Officer from the third quarter of 2004 through
April 30, 2006. Prior to becoming Chief Executive Officer of SIGA and since
February 2002, Dr. Kasten has been Vice President, Medical Affairs of medPlus
Inc., a healthcare information technology company and a wholly-owned subsidiary
of Quest Diagnostics, Inc., a diagnostic testing, information and services
company. Since 1975, Dr. Kasten has been a Diplomat of the American Board of
Pathology with a sub-specialty certification 1976 in Medical Microbiology. Dr.
Kasten's staff appointments have included service in the Division of Laboratory
Services at The Cleveland Clinic; Associate of Pathology and Laboratory Services
at the Bethesda Hospital Systems in Cincinnati, Ohio and Chief Laboratory
Officer at Quest Diagnostics Incorporated. Dr. Kasten was a founder of Plexus
Vaccine Inc., a vaccine company of which SIGA acquired substantially all of the
assets in May 2003. Dr. Kasten is also a director of Seracare Life Sciences,
Inc. Dr. Kasten is an author of "Infectious Disease Handbook" 5th Edition, 2003,
Lexi-Comp Inc.
Thomas N. Konatich has served as Vice President, Chief Financial Officer
and Treasurer since April 1, 1998. He was named Secretary of SIGA on June 29,
2001 and from October 5, 2001 until July 2, 2004 was our Acting Chief Executive
Officer. Mr. Konatich resumed the position of Acting Chief Executive Officer on
May 1, 2006. From November 1996 through March 1998, Mr. Konatich served as Chief
Financial Officer and a director of Innapharma, Inc., a privately held
pharmaceutical development company. From 1993 through November 1996, Mr.
Konatich served as Vice President and Chief Financial Officer of Seragen, Inc.,
a publicly traded biopharmaceutical development company. Mr. Konatich has an MBA
from the Columbia Graduate School of Business.
Dennis E. Hruby, Ph.D. has served as Vice President - Chief Scientific
Officer since June 2000. From April 1, 1997 through June 2000, Dr. Hruby was our
Vice President of Research. From January 1996 through March 1997, Dr. Hruby
served as a senior scientific advisor to SIGA. Dr. Hruby is a Professor of
Microbiology at Oregon State University, and from 1990 to 1993 was Director of
the Molecular and Cellular Biology Program and Associate Director of the Center
for Gene Research and Biotechnology. Dr. Hruby specializes in virology and cell
biology research, and the use of viral and bacterial vectors to produce
recombinant vaccines. He is a member of the American Society of Virology, the
American Society for Microbiology and a fellow of the American Academy of
Microbiology. Dr. Hruby received a Ph.D. in microbiology from the University of
Colorado Medical Center and a B.S. in microbiology from Oregon State University.
John R. Odden had served as Vice President -- Business Development of SIGA
from the third quarter of 2004 until September, 2005. From October 2002 until he
became Vice President -- Business Development of SIGA in the third quarter of
2004, he was Vice President, Business Development for Quest Diagnostics, Inc.
and its MedPlus, Inc. division, the nation's leading provider of diagnostics
testing, information and services, where he was responsible for launching a
national biosurveillance solution for homeland security and managing
relationships with
13
major healthcare information technology companies. From 1996 through October
2002, he held a series of progressive leadership roles at First Consulting
Group, a leading provider of consulting and systems integration services for
life sciences, healthcare and government health services businesses. Mr. Odden
has a B.S. in mathematics from the California Institute of Technology.
Summary Compensation Table
The following table sets forth the total compensation paid or accrued for
the years ended December 31, 2005, 2004 and 2003, for each person who acted as
SIGA's Chief Executive Officer at any time during the year ended December 31,
2005, and its most highly compensated executive officers, other than its Chief
Executive Officer, whose salary and bonus for the fiscal year ended December 31,
2005 were in excess of $100,000 each.
Summary Compensation Table
Long-Term
Compensation
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Comensation ($) Bonus ($) Options (#)
- --------------------------- ------- ------------ ----------------- ----------- ---------------
Bernard L. Kasten, M.D. 2005 250,000 -- -- --
Chief Executive Officer (1) 2004 113,636 -- -- 2,500,000
2003 -- -- -- --
Thomas N. Konatich 2005 230,000 -- 35,000 --
Chief Financial Officer (2) 2004 218,485 -- 50,000 150,000
2003 210,000 -- -- --
Dennis E. Hruby, Ph.D. 2005 225,000 -- 112,500 --
Chief Scientific Officer 2004 213,363 -- 63,000 150,000
2003 210,000 -- -- --
(1) Dr. Kasten became Chief Executive Officer in the third quarter of 2004.
His annual salary was $250,000. Dr. Kasten resigned as Chief Executive
Officer of SIGA effective as of April 30, 2006.
(2) Mr. Konatich was appointed to serve in an additional capacity as Acting
Chief Executive Officer effective as of May 1, 2006.
Option Grants for the Year Ended December 31, 2005
No options were granted during the year ended December 31, 2005 to anyone who
served as Chief Executive Officer and its three highest paid employees.
14
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
The following table provides certain summary information concerning stock
options held as of December 31, 2005 by SIGA's Chief Executive Officer and its
three most highly compensated executive officers, other than its Chief Executive
Officer. No options were exercised during fiscal 2005 by any of the officers.
Value of Unexercised
Number of Securities Underlying In-The-Money Options
Unexercised Options # At fiscal Year-End ($) (1)
--------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Bernard L. Kasten, M.D. 933,332 1,666,668 -- --
Thomas N. Konatich 545,000 -- -- --
Dennis E. Hruby, Ph.D. 550,000 75,000 -- --
(1) Based upon the closing price on December 31, 2005, as reported on the
Nasdaq SmallCap Market and the exercise price per option.
Long-Term Incentive Plans--Awards in Last Fiscal Year
As of January 1, 1996, we adopted our 1996 Incentive and Non-Qualified
Stock Option Plan. An amendment and restatement of such plan, as amended, was
adopted on May 3, 2001 and was further refined by the Board of Directors on June
29, 2001 (the "Plan"). The Plan was approved by our stockholders at an annual
meeting on August 15, 2001, and amended on January 8, 2004, to increase the
maximum number of shares of common stock available for issuance under the Plan
to 10,000,000. Stock options may be granted to key employees, consultants and
outside directors pursuant to the Plan. The Plan was amended again at our annual
meeting on May 26, 2005, when our stockholders voted to increase the maximum
number of shares of common stock available for issuance under the Plan from
10,000,000 to 11,000,000.
The Plan is administered by our Compensation Committee which determines
persons to be granted stock options, the amount of stock options to be granted
to each such person, and the terms and conditions of any stock options as
permitted under the Plan. The members of the Compensation Committee are Mehmet
C. Oz, M.D., Paul G. Savas and Donald G. Drapkin. See "Committees of the Board
of Directors" above for more information.
Both Incentive Options and Nonqualified Options may be granted under the
Plan. An Incentive Option is intended to qualify as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). Any Incentive Option granted under the Plan will have an
exercise price of not less than 100% of the fair market value of the shares on
the date on which such option is granted. With respect to an Incentive Option
granted to an employee who owns more than 10% of the total combined voting stock
of SIGA or of any parent or subsidiary of SIGA, the exercise price for such
option must be at least 110% of the fair market value of the shares subject to
the option on the date the option is granted.
The Plan, as amended, provides for the granting of options to purchase
11,000,000 shares of common stock, of which 9,399,561 options were outstanding
as of December 31, 2005.
15
During the fiscal year ending December 31, 2005, the named Directors and
Officers of SIGA received long-term incentive compensation under the Plan as
shown in the following table.
(a) (b) (c) (d) (e) (f)
--- --- --- --- --- ---
Estimated Future Payouts Under
Number of Performance or Non-Stock Price Based Plans
Shares, Units or Other Period Until ---------------------------
Other Rights Maturation of Threshold Target Maximum
Name (#) Payout ($ or #) ($ or #) ($ or #)
- ---- --- ------ -------- -------- --------
Donald G. Drapkin 10,000 6/2/2015 N/A N/A N/A
James J. Antal 10,000 6/2/2015 N/A N/A N/A
Thomas E. Constance 10,000 6/2/2015 N/A N/A N/A
Adnan M. Mjalli, Ph.D. 10,000 6/2/2015 N/A N/A N/A
Mehmet C. Oz, M.D. 10,000 6/2/2015 N/A N/A N/A
Eric A. Rose, M.D. 10,000 6/2/2015 N/A N/A N/A
Paul G. Savas 10,000 6/2/2015 N/A N/A N/A
Judy S. Slotkin 10,000 6/2/2015 N/A N/A N/A
Michael Weiner, M.D. 10,000 6/2/2015 N/A N/A N/A
Employment Contracts and Directors Compensation
Directors' Compensation
Directors who are not currently receiving compensation as officers or
employees of the Company or any of its affiliates receive $1,000 per meeting for
board meetings and will be reimbursed for expenses incurred by them in
connection with serving on our Board of Directors. The chairman of the Audit
Committee will receive $1,000 per meeting for meetings of the Audit Committee
and all other members of the Audit Committee will receive $500 per meeting for
meetings of the Audit Committee. Members of Compensation Committee and
Nominating and Corporate Governance Committee will receive $500 per meeting for
meetings of the Compensation Committee and Nominating and Corporate Governance
Committee.
Non-employee directors will receive an initial grant of 25,000 options,
upon such non-employee director's first election to the Board of Directors,
which such options will be granted under SIGA's Amended and Restated 1996
Incentive and Non-Qualified Stock Option Plan. In addition, non-employee
directors will receive an annual grant of 10,000 options under SIGA's Amended
and Restated 1996 Incentive and Non-Qualified Stock Option Plan, made at each
Annual Meeting and commencing with the 2005 Annual Meeting. All such options
have an exercise price equal to the fair market value of the underlying SIGA
shares on the date of grant.
16
Equity Compensation Plan Information
The following table sets forth certain compensation plan information with
respect to both equity compensation plans approved by security holders and
equity compensation plans not approved by security holders as of December 31,
2005:
Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation
exercise of exercise price of plans (excluding
outstanding options, outstanding options, securities reflected in
Plan Category warrants and rights warrants and rights column (a))
(a) (b) (c)
Equity compensation plans
approved by security holders (1) 9,399,561 $2.00 1,385,398
Equity compensation plans not
approved by security holders 250,000 $2.00 --
Total 9,649,561 $2.00 1,385,398
(1) SIGA Technologies, inc., Amended and Restated 1996 Incentive and
Non-Qualified Stock Option Plan.
Employment Contracts
Dr. Bernard L. Kasten, SIGA's Chief Executive Officer, was employed by
SIGA under an employment agreement dated July 2, 2004. Dr. Kasten received an
annual base salary of $250,000 and his employment agreement also provided for
additional bonus payments at the discretion of the Board of Directors. On July
2, 2004, he received options to purchase 2,500,000 shares of common stock with
an exercise price of $1.30 per share, of which 500,000 shares vested on the date
of grant; with respect to the next 1,000,000 shares, an additional 166,666
shares vested on the end of each six (6) month period after date of grant until
the end of the sixth six (6) month period at which time 166,667 shares were to
vest. Effective April 30, 2006, SIGA and Dr. Kasten reached an agreement for Dr.
Kasten's resignation. In connection with such agreed upon resignation, SIGA and
Dr. Kasten entered into a Separation Agreement dated March 31, 2006 (the
"Separation Agreement"). Under the provisions of the Separation Agreement, Dr.
Kasten received his salary on the existing terms and conditions as set forth in
his Employment Agreement with SIGA, dated July 2, 2004 (the "Employment
Agreement") in lieu of any other severance or payment, through September 16,
2006 (the "Separation Period"). Concurrently with the execution of the
Separation Agreement, SIGA and Dr. Kasten also amended Dr. Kasten's Incentive
Stock Option Agreement such that Dr. Kasten's "Milestone Options" (as such term
is defined in the Employment Agreement) were cancelled and Dr. Kasten's "Time
Vested Options" (as such term is defined in the Employment Agreement) were
amended such that with respect to the Time Vested Options which have not vested
as of the date of the Separation Agreement, such options will vest as follows:
with respect to 166,666 shares as of July 2, 2006 and with respect to the
remaining 83,334 shares, as of January 2, 2007. Time Vested Options granted to
Dr. Kasten which have vested prior to the date of the Separation Agreement shall
remain unchanged. Dr. Kasten will also be permitted to continue to receive
medical and/or dental insurance benefits under the relevant SIGA plans until (i)
the end of the Remaining Tenure (defined as the earlier of April 30, 2006 or Dr.
Kasten's obtaining new employment), (ii) he becomes entitled to Medicare or
(iii) he becomes eligible for coverage under medical and/or dental insurance
benefit plans, as the case may be, of another employer through his future
employment, whichever occurs first. The Separation Agreement also contains
mutual non-disparagement and release terms, requires that Dr. Kasten remain
available to SIGA on a reasonable basis for transitional purposes during the
Separation Period and requires SIGA to indemnify Dr. Kasten under the terms of
its certificate of incorporation and bylaws for acts relating to his employment.
17
Thomas N. Konatich, SIGA's Acting Chief Executive Officer, Vice President,
Chief Financial Officer, Secretary and Treasurer, is employed by SIGA under an
employment agreement dated April 1, 1998, as amended on January 19, 2000, as
amended and restated on October 6, 2000, as amended as of January 31, 2002, as
amended on November 5, 2002, as amended on July 29, 2004 and as amended on
February 1, 2006. This employment agreement expires on June 30, 2007. Mr.
Konatich has previously also served as SIGA's Acting Chief Executive Officer,
which duties concluded on July 2, 2004. Mr. Konatich receives an annual base
salary of $230,000 and received a one-time payment of $50,000 for his initial
service as Acting Chief Executive Officer. His employment agreement also
provides for an additional bonus payment at the discretion of the Board of
Directors and not to exceed 25% of his annual base salary amount. He received
options to purchase 95,000 shares of common stock, at $4.44 on April 1, 1998.
The options vested on a pro rata basis on the first, second, third and fourth
anniversaries of the agreement. On January 19, 2000, he received an additional
grant to purchase 100,000 shares at an exercise price of $2.00 per share. These
options vest on a pro rata basis each quarter through January 19, 2002. On
January 31, 2002, Mr. Konatich was granted an "Incentive Stock Option" to
purchase 50,000 shares at an exercise price of $3.94 per share. Such options
vest in eight equal quarterly installments beginning on April 20, 2002. On
November 5, 2002, Mr. Konatich was granted an Incentive Stock Option to purchase
150,000 shares at an exercise price of $2.50 per share. 75,000 of these options
vested immediately and 75,000 options vested on September 1, 2003. On July 29,
2004, Mr. Konatich was granted an Incentive Stock Option to purchase 150,000
shares at an exercise price of $1.40 per share. 75,000 of these options vested
immediately and with the remaining 75,000 options vesting on a pro rata basis
from January 1, 2005 through December 31, 2005 with no provision for
acceleration under any circumstances. Mr. Konatich is also eligible to receive
additional stock options and bonuses at the discretion of the Board of
Directors. SIGA may terminate the employment agreement with or without cause (as
such term is defined in the employment agreement), provided that upon any
termination without cause, SIGA will be obligated to continue to pay Mr.
Konatich's salary and all other amounts due under the employment agreement for
the remainder of the term. If Mr. Konatich is terminated due to a change of
control (as such term is defined in the employment agreement), SIGA is required
to pay Mr. Konatich a change in control amount (as such term is defined in the
employment agreement) plus his accrued and unpaid base salary, and, upon the
first event constituting a change of control, all stock options and other
stock-based grants to Mr. Konatich shall immediately and irrevocably vest and
become exercisable upon the date of such event.
Dr. Dennis E. Hruby, Chief Scientific Officer, is employed by SIGA under
an employment agreement dated January 1, 1998, as amended on June 16, 2000, as
amended on January 31, 2002, as amended on October 3, 2002 and as amended on
July 29, 2004. This employment agreement expires on December 31, 2007. Dr. Hruby
receives a base salary of $225,000 per year and his employment agreement also
provides for additional bonus payments at the discretion of the Board of
Directors and not to exceed 50% of his base salary amount. Dr. Hruby received
options to purchase 10,000 shares of common stock at an exercise price of $5.00
per share on April 1, 1997 and 40,000 shares of common stock at an exercise
price of $4.63 per share on April 1, 1998. The options became exercisable on a
pro rata basis on the first, second, third and fourth anniversaries of the
agreement. Under the June 16, 2000 amendment, Dr. Hruby was granted options to
purchase 125,000 shares of SIGA's common stock at $2.00 per share. The options
vest ratably over the remaining term of the amendment. The January 31, 2002
amendment changed the terms of the lock-up agreed to in the June 16, 2000
amendment to the employment agreement limiting Hruby's ability to sell SIGA
stock. On January 31, 2002, Dr. Hruby was granted an "Incentive Stock Option" to
purchase 50,000 shares at an exercise price of $3.94 per share. Such options
vest in four equal annual installments beginning on August 15, 2002. As part of
the October 3, 2002 amendment, Dr. Hruby was granted an option to purchase
300,000 shares of common stock. Options with respect to 75,000 shares vested
upon the signing of the amendment and an additional 75,000 shares shall vest on
a pro rata basis on September 1 of each 2003, 2004 and 2005. The options have an
exercise price of $2.50 per share. Dr. Hruby surrendered his option to purchase
up to 50,000 shares of common stock of SIGA at an exercise price of $3.94 that
he was granted under an earlier amendment. On July 29, 2004, Dr. Hruby was
granted an Incentive Stock Option to purchase 150,000 shares at an exercise
price of $1.40 per share, which options shall vest in 75,000 share increments on
December 31 of each year, commencing December 31, 2005. Dr. Hruby is eligible to
receive additional stock options and bonuses at the discretion of the Board of
Directors. SIGA may terminate the employment agreement with or without cause (as
such term is defined in the employment agreement), provided that upon any
termination without cause SIGA will be obligated to continue to pay Dr. Hruby's
salary for the remainder of the term. In addition, SIGA shall have the right
18
to terminate Dr. Hruby's employment upon one (1) year written notice with such
termination being treated as a termination for cause. If Dr. Hruby is terminated
due to a change of control (as such term is defined in the employment
agreement), SIGA shall pay Dr. Hruby a change in control amount (as such term is
defined in the employment agreement) plus his accrued and unpaid base salary,
and, upon the first event constituting a change of control, all stock options
and other stock-based grants to Dr. Hruby shall immediately and irrevocably vest
and become exercisable upon the date of such event.
19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information regarding the
beneficial ownership of SIGA's voting securities as of October 31, 2006 of (i)
each person known to SIGA to beneficially own more than 5% of the applicable
class of voting securities, (ii) each director and director nominee of SIGA,
(iii) each Named Officer and (iv) all directors and executive officers of SIGA
as a group. As of November 6, 2006, a total of 31,796,454 shares of Common Stock
were outstanding. Each share of Common Stock is entitled to one vote on matters
on which holders of Common Stock are eligible to vote. The column entitled
"Percentage of Total Voting Stock Outstanding" shows the percentage of total
voting stock beneficially owned by each listed party.
The number of shares beneficially owned is determined under rules
promulgated by the Securities and Exchange Commission, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
those rules, beneficial ownership includes any shares as to which the individual
has sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days of October 31, 2006,
through the exercise or conversion of any stock option, convertible security,
warrant or other right. Unless otherwise indicated, each person or entity named
in the table has sole voting power and investment power (or shares that power
with that person's spouse) with respect to all shares of capital stock listed as
owned by that person or entity.
Ownership of Common Stock
The following tables set forth certain information regarding the
beneficial ownership of SIGA's voting securities as of October 31, 2006 of (i)
each person known to SIGA to beneficially own more than 5% of the applicable
class of voting securities, (ii) each director and director nominee of SIGA,
(iii) each Named Officer, and (iv) all directors and officers of SIGA as a
group. As of November 6, 2006, a total of 31,796,454 shares of common stock were
outstanding. Each share of common stock is entitled to one vote on matters on
which common stockholders are eligible to vote. The column entitled "Percentage
of Total Voting Stock" shows the percentage of total voting stock beneficially
owned by each listed party.
Percentage of Percentage of
Name and Address of Amount of Beneficial Common Stock Total Voting
Beneficial Owner (1) Ownership (2) Outstanding Stock Outstanding
- -------------------- ---------------------- ------------------- ---------------------
Beneficial Holders
MacAndrews & Forbes Inc. (3)
35 East 62nd Street
New York, NY 10021 ................................ 5,620,771(4) 16.8% 16.8%
Eliot Rose Asset Management, LLC
10 Weybosset Street
Suite 401
Providence, RI 02903 .............................. 3,216,500 10.1% 10.1%
TransTech Pharma, Inc.
4170 Mendenhall Oaks Parkway
High Point, NC 27265 .............................. 5,296,634(5) 15.8% 15.8%
Officers and Directors
Donald G. Drapkin (6)
35 East 62nd Street
New York, NY 10021 ................................ 1,808,326(7) 5.4% 5.4%
James J. Antal
30952 Steeplechase Dr.
San Juan Capistrano, CA 94704 ..................... 46,154(8) * *
Judy S. Slotkin (19)
888 Park Avenue
NY, NY 10021 ...................................... 35,000(9) * *
20
Percentage of Percentage of
Name and Address of Amount of Beneficial Common Stock Total Voting
Beneficial Owner (1) Ownership (2) Outstanding Stock Outstanding
- -------------------- ---------------------- ------------------- ---------------------
Thomas E. Constance
1177 Avenue of the Americas,
New York, NY 10036 ................................ 263,467(10) * *
Bernard L. Kasten Jr., M.D.(11) ................... 1,712,360(12) 5.2% 5.2%
Adnan M. Mjalli, Ph.D
4170 Mendenhall Oaks Parkway, Suite 110
High Point, NC 27265 .............................. 35,000(13) * --
Mehmet C. Oz, M.D.
177 Fort Washington Ave
New York, NY 10032 ................................ 135,000(14) * *
Eric A. Rose, M.D. (15)
122 East 78th Street
New York, NY 10021 ................................ 800,090(16) 2.5% 2.5%
Paul G. Savas
35 East 62nd Street
New York, NY 10021 ................................ 61,664(17) * *
Michael A. Weiner, M.D.
161 Fort Washington Ave.
New York, NY 10032 ................................ 122,500(14) * *
Thomas N. Konatich ................................ 545,000(18) 1.7% 1.7%
Dennis E. Hruby, Ph.D. ............................ 550,000(18) 1.7% 1.7%
All Executive Officers and Directors as a
group (thirteen persons) .......................... 6,114,561(20) 16.5% 16.5%
- ----------
* Less than 1%
(1) Unless otherwise indicated the address of each beneficial owner identified
is 420 Lexington Avenue, Suite 408, New York, NY 10170.
(2) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated. For purposes of this table, a
person or group of persons is deemed to have "beneficial ownership" of any
shares as of a given date which such person has the right to acquire
within 60 days after such date. For purposes of computing the percentage
of outstanding shares held by each person or group of persons named above
on a given date, any security which such person or persons has the right
to acquire within 60 days after such date is deemed to be outstanding for
the purpose of computing the percentage ownership of such person or
persons, but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person.
(3) MacAndrews & Forbes Inc. is a direct wholly-owned subsidiary of MacAndrews
& Forbes Holdings Inc., a holding company whose sole stockholder is Ronald
O. Perelman.
(4) Includes 1,764,206 shares of common stock issuable upon exercise of
warrants.
(5) Includes 1,824,412 shares of common stock issuable upon exercise of
warrants.
(6) Mr. Drapkin is a director and Vice Chairman of MacAndrews & Forbes
Holdings Inc. and MacAndrews & Forbes Inc. and a director of TransTech
Pharma.
21
(7) Includes 1,135,000 shares of common stock issuable upon exercise of
options, shares of common stock underlying a warrant to purchase up to
347,826 shares of common stock and shares of common stock underlying a
warrant to purchase up to 30,500 shares of common stock (the "Drapkin
September 2001 Investor Warrant"). However, the Drapkin September 2001
Investor Warrant provides that, with certain limited exceptions, such
warrant is not exercisable if, as a result of such exercise, the number of
shares of common stock beneficially owned by Mr. Drapkin and his
affiliates (other than shares of common stock which may be deemed
beneficially owned through the ownership of the unexercised portion of the
Drapkin September 2001 Investor Warrant) would exceed 9.99% of the
outstanding shares of common stock. Does not include shares of common
stock that Mr. Drapkin, as a director and Vice Chairman of Mafco Holdings
Inc. and MacAndrews & Forbes or as director of TransTech Pharma, may be
deemed to beneficially own and as to which Mr. Drapkin disclaims
beneficial ownership.
(8) Includes 35,000 shares of common stock issuable upon exercise of options.
(9) Includes 35,000 shares of common stock issuable upon exercise of options.
(10) Includes 12,200 shares issuable upon exercise of warrants and 235,000
shares of common stock issuable upon exercise of options.
(11) Dr. Kasten became our Chief Executive Officer in the third quarter of
2004. Dr. Kasten resigned as Chief Executive Officer of SIGA effective as
of April 30, 2006.
(12) Includes 1,350 shares of common stock issuable upon exercise of warrants
and 1,350,000 shares of common stock issuable upon exercise of options.
(13) Includes 35,000 shares of common stock issuable upon exercise of options.
Does not include shares of common stock that Dr. Mjalli, as a director of
TransTech Pharma, may be deemed to beneficially own and as to which Dr.
Mjalli disclaims beneficial ownership.
(14) Includes 12,500 shares issuable upon exercise of warrants and 110,000
shares issuable upon exercise of options.
(15) Dr. Rose is a director of TransTech Pharma.
(16) Includes 88,610 shares of common stock issuable upon exercise of warrants
and 610,000 shares of common stock issuable upon exercise of options. Does
not include shares of common stock that Dr. Rose, as a director of
TransTech Pharma, may be deemed to beneficially own and as to which Dr.
Rose disclaims beneficial ownership.
(17) Includes 9,303 shares of common stock issuable upon exercise of warrants
and 35,000 shares issuable upon exercise of options.
(18) Neither of Messrs. Konatich and Hruby own shares of common stock. All
shares listed as beneficially owned by each of Messrs. Konatich and Hruby
are shares issuable upon exercise of stock options.
(19) Does not include 35,605 shares of common stock owned by Ms. Slotkin's
spouse to which she disclaims beneficial ownership.
(20) See footnotes (6)-(21).
22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Thomas E. Constance, a director of SIGA, is Chairman of Kramer Levin
Naftalis & Frankel LLP, a law firm in New York City, which SIGA has retained to
provide legal services.
Adnan M. Mjalli, a director of SIGA, is also President and Chief Executive
Officer of TransTech Pharma.
23
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the firm of
PricewaterhouseCoopers LLP as SIGA's independent registered public accounting
firm to audit the financial statements of SIGA for the fiscal year ending
December 31, 2006, and recommends that stockholders vote for ratification of
this appointment. PricewaterhouseCoopers LLP has audited SIGA's financial
statements since January 1997. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting and will have the opportunity to
make a statement if they desire to do so, and are expected to be available to
respond to appropriate questions. The affirmative vote of a majority of the
total votes cast on such proposal in person or by proxy at the Annual Meeting
will be required to ratify the selection of PricewaterhouseCoopers LLP.
If the stockholders fail to ratify the selection, the Audit Committee will
reconsider its selection of auditors. Even if the selection is ratified, the
Audit Committee, in its discretion, may direct the appointment of a different
independent registered public accounting firm at any time during the year, if it
determines that such change would be in the best interests of SIGA and its
stockholders.
Audit Fees
PricewaterhouseCoopers LLP billed SIGA $184,300 in the aggregate, for
professional services rendered by them for the audit of SIGA's annual financial
statements for the fiscal year ended December 31, 2005, reviews of the interim
financial statements included in SIGA's Forms 10-Q filed during the year ended
December 31, 2005 and consents and reviews of various documents filed with the
SEC during the year ended December 31, 2005.
PricewaterhouseCoopers LLP billed SIGA $213,300 in the aggregate, for
professional services rendered by them for the audit of SIGA's annual financial
statements for the fiscal year ended December 31, 2004, reviews of the interim
financial statements included in SIGA's Forms 10-QSB filed during the year ended
December 31, 2004 and consents and reviews of various documents filed with the
SEC during the year ended December 31, 2004.
Audit Related Fees
There were no Audit Related Fees in 2005 and 2004.
Tax Fees
PricewaterhouseCoopers LLP did not render any professional services for
tax compliance, tax advice or tax planning during either of the fiscal years
ended December 31, 2005 or December 31, 2004.
All Other Fees
PricewaterhouseCoopers LLP did not provide any products or render any
professional services (other than those covered above under "Audit Fees,"
"Audited Related Fees," and "Tax Fees") during either of the fiscal years ended
December 31, 2005 or December 31, 2004.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting Firm
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent registered public accounting
firm. These services may include audit services, audit-related services, tax
services, and other services.
24
SIGA did not make use in fiscal year 2005 of the rule that waives
pre-approval requirements for non-audit services in certain cases if the fees
for these services constitute less than 5% of the total fees paid to the auditor
during the year.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION (ITEM 2 OF THE ENCLOSED PROXY CARD) OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS SIGA'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
25
- ------------------------------------------------------------------------------------------------
New Plan Benefits (1)
- ------------------------------------------------------------------------------------------------
Name and Position Additional Stock Options Granted Dollar Value ($)
- ----------------- -------------------------------- ----------------
- ------------------------------------------------------------------------------------------------
Non-Executive Director Group 90,000 (2) 325,800 (3)
- ------------------------------------------------------------------------------------------------
(1) All other future benefits under the Plan will be made at the
discretion of SIGA's Compensation Committee and, accordingly, are
not determinable at this time.
(2) The option grants reflected in the table above will be made in
accordance with SIGA's previously disclosed Director Compensation
Program.
(3) Current market price on the October 31, 2006.
26
STOCKHOLDER PROPOSALS
Stockholder proposals to be presented at the 2007 Annual Meeting of
Stockholders, for inclusion in SIGA's proxy statement and form of proxy relating
to that meeting, must be received by SIGA at its offices in New York, New York,
addressed to the Secretary, not later than January 1, 2007. Such proposals must
comply with SIGA's By-Laws and the requirements of Regulation 14A of the
Securities Exchange Act of 1934 (the "Exchange Act").
In addition, Rule 14a-4 of the Exchange Act governs SIGA's use of its
discretionary proxy voting authority with respect to a stockholder proposal that
is not addressed in the proxy statement. With respect to SIGA's 2007 Annual
Meeting of Stockholders, if SIGA is not provided notice of a stockholder
proposal prior to March 16, 2007, SIGA will be allowed to use its discretionary
voting authority when the proposal is raised at the meeting, without any
discussion of the matter in the proxy statement.
SECTION 16 BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires SIGA's officers and directors,
and persons who own more than ten percent of a registered class of SIGA's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and greater than
ten-percent stockholders are required by Securities and Exchange Commission
regulation to furnish SIGA with copies of all Section 16(a) reports that they
file.
Based solely upon review of the copies of such reports furnished to SIGA
and written representations from certain of SIGA's executive officers and
directors that no other such reports were required, SIGA believes that during
the fiscal year ended December 31, 2005, no individuals failed to file reports
relating to any transaction as required by Section 16 of the Exchange Act.
AVAILABILITY OF ANNUAL REPORT AND FORM 10-K TO STOCKHOLDERS
SIGA's Annual Report to Stockholders for the year ended December 31, 2005
accompanies this proxy statement. SIGA will provide to any stockholder, upon
written request and without charge, a copy of its most recent Report on Form
10-K, including the financial statements, as filed with the Securities and
Exchange Commission. All requests for such reports should be directed to the
Chief Financial Officer, 420 Lexington Avenue, Suite 408, New York, New York
10170, telephone number (212) 672-9100.
OTHER MATTERS
At the date of this proxy statement, management was not aware that any
matters not referred to in this proxy statement would be presented for action at
the Annual Meeting. If any other matters should come before the Annual Meeting,
the persons named in the accompanying proxy will have discretionary authority to
vote all proxies in accordance with their best judgment, unless otherwise
restricted by law.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Thomas N. Konatich
----------------------
Thomas N. Konatich
Secretary
Dated: November 17, 2006
27
SIGA TECHNOLOGIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 19, 2006
The undersigned hereby appoints Thomas N. Konatich as attorney and proxy
of the undersigned, with full power of substitution, to vote all of the shares
of stock of SIGA Technologies, Inc. which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of SIGA Technologies, Inc. to be held
at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the
Americas, 29th floor, New York, New York 10036, on Tuesday, December 19, 2006,
at 10:30 a.m. (local time), and at any and all postponements, 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 ALL
NOMINEES LISTED IN PROPOSAL NO. 1, AND FOR THE RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
OF SIGA TECHNOLOGIES, INC. FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006. AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTOR NOMINEES LISTED
BELOW, AND "FOR" THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM OF SIGA TECHNOLOGIES, INC. FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2006.
PLEASE VOTE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE: |X|
1. To elect ten directors.
|_| FOR ALL NOMINEES
|_| WITHHOLD AUTHORITY FOR ALL NOMINEES
|_| FOR ALL EXCEPT (See instructions below)
NOMINEES: o Donald G. Drapkin
o Thomas E. Constance
o Adnan M. Mjalli, Ph.D.
o Mehmet C. Oz, M.D.
o Eric A. Rose, M.D.
o Paul G. Savas
o Michael A. Weiner, M.D.
o Judy S. Slotkin
o James J. Antal
o Scott M. Hammer, M.D.
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark "FOR ALL EXCEPT" and fill in circle next to each nominee you wish to
withhold, as shown here: |X|
2. To ratify the selection of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of SIGA Technologies, Inc. for the
fiscal year ending December 31, 2005.
|_| FOR |_| AGAINST |_| ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT MAY BE REVOKED
PRIOR TO ITS EXERCISE.
RECEIPT OF NOTICE OF THE ANNUAL MEETING AND PROXY STATEMENT IS HEREBY
ACKNOWLEDGED, AND THE TERMS OF THE NOTICE AND PROXY STATEMENT ARE HEREBY
INCORPORATED BY REFERENCE INTO THIS PROXY. THE UNDERSIGNED HEREBY REVOKES ALL
PROXIES HERETOFORE GIVEN FOR SAID MEETING OR ANY AND ALL ADJOURNMENTS,
POSTPONEMENTS AND CONTINUATIONS THEREOF.
PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
- -----------------------------------------------------------------
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method.
|_|
Signature of Stockholder:_______________________________________________________
Date:____________________
Signature of Stockholder:_______________________________________________________
Date:____________________
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHERE SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD SIGN. WHEN SIGNING AS EXECUTOR, ADMINISTRATOR,
ATTORNEY-IN-FACT, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF SIGNER
IS A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY DULY AUTHORIZED OFFICER,
GIVING FULL TITLE AS SUCH. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN FULL
PARTNERSHIP NAME BY AUTHORIZED PERSON.
