- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14F-1
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 14(F)-1 THEREUNDER
SIGA TECHNOLOGIES, INC.
(Exact name of company as specified in its charter)
Delaware 0-23047 13-3864870
(State or other jurisdiction of (Commission (IRS Employer Id. No.)
incorporation or organization) File Number)
420 Lexington Avenue, Suite 620
New York, NY 10170
(Address of principal executive offices, including zip code)
(212) 672-9100
(Company's telephone number, including area code)
April 9, 2001
1
INTRODUCTION
This Statement is being furnished to all holders of record at the close of
business on April 6, 2001 of the common stock, par value $0.0001 per share
("Common Stock"), of Siga Technologies, Inc. (the "Company") in accordance with
the requirements of Section 14(f) of the Securities Exchange Act of 1934
("Exchange Act") and Rule 14f-1 promulgated thereunder.
The Company anticipates that a Special Meeting of the Board of Directors
of the Company will be held on or about April 17, 2001 to effectuate, among
other things, a restructuring of the Board. At or immediately after such
meeting, it is anticipated that Jeffrey Rubin, Eric I. Richman and Thomas N.
Lanier will resign as directors of the Company, and that Donald G. Drapkin,
Thomas E. Constance, Eric A. Rose, M.D., Gabriel M. Cerrone, Mehmet C. Oz, M.D.
and Michael Weiner, M.D. will be appointed by the existing members of the Board
as new directors. On or about April 18, 2001, it is anticipated that Joshua D.
Schein, Ph.D. and Judson A. Cooper will resign as directors of the Company. The
persons appointed as the new directors will not begin to serve as such, until
after the expiration of the 10-day period beginning on the later of the date of
the filing of this Statement with the Securities and Exchange Commission
pursuant to Rule 14f-1 or the date of mailing of this Statement to the Company's
stockholders.
By virtue of the change in the composition of the Board, there may be
deemed to be, on the date the new directors referred to above take office, a
change in control of the Company.
As of April 6, 2001, the Company had issued and outstanding 7,548,808
shares of Common Stock, par value $.0001 per share, the Company's only class of
voting securities which would be entitled to vote for directors at a
stockholders meeting if one were to be held, each share being entitled to one
vote.
This information statement is being mailed to stockholders of record as of
April 6, 2001 and filed with the Securities and Exchange Commission on April 9,
2001.
NO ACTION IS REQUIRED BY OUR STOCKHOLDERS IN CONNECTION WITH THE
APPOINTMENT OF ANY DIRECTOR
NO PROXIES ARE BEING SOLICITED AND YOU
ARE REQUESTED NOT TO SEND THE COMPANY A PROXY
CHANGE IN CONTROL
The following description of the agreements into which the Company has
entered are summaries and are qualified in their entirety by references to the
agreements which the Company filed as exhibits to its Annual Report on Form
10-KSB for the year ended December 31, 2000 filed with the SEC on April 9, 2001.
You are urged to review the full text of those documents in their entirety.
On March 30, 2001, Joshua D. Schein, Ph.D., the Company's Chief Executive
Officer and a director and Judson A. Cooper, the Company's Chairman of the Board
entered into an agreement with, among others, Donald G. Drapkin, a beneficial
owner of more than 5% of the Company's common stock, in which Messrs. Schein and
Cooper agreed to resign from the Company and use their best efforts to cause
each of the current directors of the Company to resign. Provided that such
condition is satisfied, it is expected that Mr. Drapkin will be appointed
Chairman of the Board and Eric A. Rose, M.D. will be appointed as Interim Chief
Executive Officer. In addition, it is anticipated that Thomas E. Constance,
Gabriel M. Cerrone, Mehmet C. Oz, M.D. and Michael Weiner, M.D. will be
appointed as directors. Each of the parties to the agreement have agreed to lock
up their respective shares of common stock and options of the Company for 24
months subject to certain
2
conditions and exceptions. Each of Messrs. Schein and Cooper also granted to Mr.
Drapkin their irrevocable proxy to vote their respective shares for the 24 month
lock up period subject to certain exceptions. In addition, Messrs. Schein and
Cooper have agreed to serve as consultants to the Company.
Messrs. Schein and Cooper have each entered into a separation agreement
with the Company pursuant to which they have agreed to terminate their
employment agreements and waive their right to any payments under the change of
control provisions under such agreements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGMENT
The following table sets forth certain information regarding the
beneficial ownership of the common stock as of April 6, 2001 of (i) each person
known to the Company to beneficially own more than 5% of the common stock, (ii)
each director and director nominee of the Company, (iii) each executive officer
of the Company for whom information is given in the Summary Compensation Table,
and (iv) all directors and executive officers of the Company as a group.
Name and Address of Amount of Beneficial
Beneficial Owner (1) Ownership(2) Percentage of Total
- ------------------------------ -------------------- -------------------
Judson Cooper 1,144,117(3) 13.2%
Joshua D. Schein, Ph.D 1,141,017(3) 13.2%
Richard B. Stone 556,615 6.3%
135 East 57th Street
11th Floor
New York, NY 10022
Jeffrey Rubin 65,000 *
Thomas Lanier 5,000 *
Eric Richman 0 *
Dennis Hruby 52,500 *
Thomas N. Konatich 133,750 1.7%
Thomas E. Constance 0 *
919 Third Avenue
41st Floor
New York, NY 10022
Eric A. Rose, M.D. 0 *
112 East 78th Street
New York, NY 10021
Mehmet C. Oz, M.D. 0 *
Michael Weiner, M.D. 0 *
Gabriel M. Cerrone (4) 574,700 7.1%
265 E. 66th Street
Suite 16G
New York, NY 10021
Panetta Partners Ltd. (4) 574,700 7.1%
265 E. 66th Street,
Suite 16G
New York, NY 10021
Donald G. Drapkin 1,279,032(5)(6)(7) 17.3%
35 East 62nd Street
New York, NY 10021
Howard Gittis 787,590(5)(7) 9.99%
35 East 62nd Street
New York, NY 10021
3
All Officers and 2,455,134 24.5%
Directors as a group
(seven persons) (8)
Less than 1% of the outstanding shares of common stock.
(1) Unless otherwise indicated the address of each beneficial owner
identified is 420 Lexington Avenue, Suite 620, 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) Includes currently exercisable options to purchase 662,501 shares of
common stock owned directly and 50% beneficial ownership of 12,500
additional options held by Prism Ventures LLC, an entity jointly
owned by Mr. Cooper and Dr. Schein.
(4) Includes 513,200 shares issuable upon exercise of warrants. Gabriel
M. Cerrone, as the sole general partner of Panetta Partners, Ltd.,
may be deemed to beneficially own the shares owned by Panetta
Partners, Ltd.
(5) Includes shares issuable upon conversion of 6% convertible
Debentures due January 31 2002, plus accrued interest as of January
31, 2001 and shares issuable upon exercise of a warrant.
(6) Includes shares owned by Joshua D. Schein and Judson A. Cooper for
which Mr. Drapkin has beneficial ownership by virtue of an
irrevocable proxy granted to him by Messrs. Schein and Cooper
pursuant to the transaction which is the subject of this Information
Statement on Schedule 14f-1.
(7) The debentures and warrants each provide that except in certain
circumstances, they are not convertible or exercisable, as the case
may be, if as a result of such action, the number of shares of
common stock beneficially owned by such person would exceed 9.99% of
the outstanding shares of common stock. If not for such 9.99%
limitation, Mr. Drapkin could be deemed to beneficially own
1,986,434 shares or 24.4% and Mr. Gittis could be deemed to
beneficially own 809,524 shares or 10.2% (excluding, in each case,
shares issuable upon conversion of any amounts other than principal
of such debentures).
(8) Includes an aggregate of 1,490,002 currently exercisable options to
purchase shares of common stock.
4
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The Company anticipates that a Special Meeting of the Board of Directors
of the Company will be held on or about April 17, 2001 to effectuate, among
other things, a restructuring of the Board. At or immediately after such
meeting, it is anticipated that Jeffrey Rubin, Eric I. Richman and Thomas N.
Lanier will resign as directors of the Company and members of committees of the
Board, and that Donald G. Drapkin, Thomas E. Constance, Eric A. Rose, M.D.,
Gabriel M. Cerrone, Mehmet C. Oz, M.D. and Michael Weiner, M.D. will be
appointed by the existing members of the Board as new directors. On or about
April 18, 2001, it is anticipated that Joshua D. Schein, Ph.D. and Judson A.
Cooper will resign as directors of the Company. The following table sets forth,
as of April 9, 2001, the name and age of each current director and each director
nominee, position(s) with the Company, the period they have served as a
director, any family relationships with any other director or executive officer
of the Company, 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
Joshua D. Schein, Ph.D. 40 Chief Executive Officer, Secretary and Director
Judson A. Cooper 42 Chairman of the Board, Executive Vice President
Eric Richman 40 Director
Thomas Lanier 41 Director
Jeffrey Rubin 33 Director
Donald G. Drapkin 53 Director Nominee
Thomas E. Constance 64 Director Nominee
Eric A. Rose, M.D. 50 Director Nominee
Gabriel M. Cerrone 29 Director Nominee
Mehmet C. Oz, M.D. 40 Director Nominee
Michael Weiner, M.D. 54 Director Nominee
Joshua D. Schein, Ph.D. has served as our Chief Executive Officer since
August 1998 and as acting Chief Executive Officer from April 1998 to August
1998. Dr. Schein has also served as Secretary and a Director since December
1995. Dr. Schein served as Chief Financial Officer from December 1995 until
April 1998. From December 1995 to June 1998, Dr. Schein was a Director of
DepoMed, Inc., a publicly traded biotechnology company. From January 1996 to
August 1998, Dr. Schein was an executive officer and a director of Virologix
Corporation, a private biotechnology company. From June 1996 to September 1998,
Dr. Schein was an executive officer and a director of Callisto Pharmaceuticals,
Inc. From 1994 to 1995, Dr. Schein served as a Vice President of Investment
Banking at Josephthal, Lyon and Ross, Incorporated, an investment banking firm.
From 1991 to 1994, Dr. Schein was a Vice President at D. Blech & Company,
Incorporated, a merchant and investment banking firm focused on the
biopharmaceutical industry. Dr. Schein received a Ph.D. in neuroscience from the
Albert Einstein College of Medicine and an MBA from the Columbia Graduate School
of Business. Dr. Schein is a principal of Prism Ventures LLC ("Prism"), a
privately held limited liability company.
Judson A. Cooper has served as our Chairman of the Board of Directors
since August 1998 and as acting Chairman of the Board from April 1998 to August
1998. Mr. Cooper has also served as a Director since December 1995 and Executive
Vice President since November 1996. From December 1995 until November 1996 Mr.
Cooper served as President. From August 1995 to June 1998, Mr. Cooper was a
Director of DepoMed, Inc., a publicly traded biotechnology company. From January
1996 to August 1998, Mr. Cooper was an executive officer and a director of
Virologix Corporation, a private biotechnology company. From June 1996 to
September 1998, Mr. Cooper was an executive officer and a director of Callisto
Pharmaceuticals, Inc. Mr. Cooper was a private investor from September 1993 to
December 1995. From 1991 to 1993, Mr. Cooper served as a Vice President of D.
Blech & Company, Incorporated. Mr. Cooper is a graduate of the Kellogg School of
Management. Mr. Cooper is a principal of Prism.
5
Eric Richman has been a Director since November 2000. Since June 2000, Mr.
Richman has been Vice President, Corporate Development at OptiMEMS, Inc., a
development stage optical switch company. Prior to that, from 1998 to 2000, he
was Director, International Commercialization with MedImmune, Inc. From 1993 to
1998, Mr. Richman was MedImmune's Senior Director of Transplantation Products.
Mr. Richman was part of the founding team at MedImmune holding various other
administrative, financial and strategic planning positions since joining
MedImmune in 1988. Mr. Richman was a key member on the launch teams for the
company's biotechnology products, both domestically and internationally. Mr.
Richman received a B.S. degree in Biomedical Science in 1984 from the Sophie
Davis School of Biomedical Education and a Master of International Management in
1987 from the American Graduate School of International Management.
Thomas Lanier has been a Director since January 2000. Since 1996, Mr.
Lanier has been an International Advisor for the U.S. Department of the Treasury
during which time he co-wrote the U.S. Treasury's guide to external debt
issuance for emerging market borrowers. From 1988 until 1996 Mr. Lanier worked
for Chemical Bank as a U.S. Government Bond Trader (1988-1993), Emerging Markets
Salesperson (1993-1994) and Emerging Markets Debt Trader (1994-1996). In 1981
Mr. Lanier graduated from the United States Military Academy at West Point with
a Bachelor of Science Degree and prior to leaving the Army in 1986, also
graduated from the U.S. Army Airborne School and the U.S. Army Flight School as
well as planning, organizing and controlling logistical operations on an
international project for the Army Chief of Staff. In 1998, Mr. Lanier received
a Masters of Business Administration with an emphasis in finance and marketing
from the Fuqua School of Business, Duke University.
Jeffrey Rubin has been a director since November 1998. Mr. Rubin is
Principal and Managing Director of The Whitestone Group, an asset management and
investment banking firm he formed in January 1998. From 1994 to 1997, Mr. Rubin
was founder and a director of the Fastcast Corporation, a company specializing
in optical technologies. From 1989 to 1994, Mr. Rubin was a Vice President of
American European Corporation, an import/export company. Mr. Rubin received a
Bachelor of Arts degree in 1989 from the University of Michigan.
Donald G. Drapkin has been a Director and Vice Chairman 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 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.; Black Rock Asset Investors;
Genta Inc.; The Molson Companies Limited; Panavision, Inc.; Playboy Enterprises,
Inc.; Playboy.com, Inc.; ProxyMed, Inc.; Revlon Consumer Products Corporation;
Revlon, Inc.; The Warnaco Group, Inc.; and Weider Nutrition International Inc.
Thomas E. Constance is a member of the Boards of Directors of Uniroyal
Technology Corp., the Kroll-O'Gara Company and Callisto Pharmaceuticals, Inc.
Mr. Constance is Chairman 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 Barington
Capital, L.P.
Eric A. Rose, M.D. 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 & Surgeons' Department of Surgery. Dr. Rose
is also a
6
Director of the following corporation that files reports pursuant to the
Securities Exchange Act of 1934: Nexell Therapeutics Inc. Dr. Rose is a graduate
of both Columbia College and the Columbia University College of Physicians &
Surgeons.
Gabriel M. Cerrone has been Senior Vice President of Investments of
Fahnestock & Co., Inc., a financial services firm since March 1999. From March
1998 to March 1999 Mr. Cerrone was Managing Director of Investments at Barington
Capital, L.P., a merchant bank, and, from June 1994 to February 1998, he was
Senior Vice President of Investments at Blair & Company, a financial services
firm focusing on microcap companies. Mr. Cerrone is a member of the Board of
Directors of Callisto Pharmaceuticals, Inc. (a private biotechnology company)
and Macro Holdings, LLC (a real estate management and investment company) and he
is the sole general partner of Panetta Partners, Ltd. (an investor in, and
consultant to, primarily emerging technology companies). Mr. Cerrone is a 1994
graduate of the Stern School of Business.
Mehmet C. Oz, M.D. Dr. Oz has been a Cardiac Surgeon at Columbia
University Presbytarian Hospital since 1993, and Dr. Oz has also been an
Associate Professor of Surgery since July 2000. Dr. Oz directs the following
programs at Columbia University Presbytarian Hospital: the mechanical device
program; the complimentary 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.
and M.B.A. from the University of Pennsylvania Medical School and the Wharton
School of Business.
Michael Weiner, M.D. has been a 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 Presbytarian Hospital. Dr. Weiner was
formerly a Director of Nexell Therapeutics (f/k/a VimRx) from March 1996 to
February 1999. Dr. Weiner is a 1972 graduate of the New York State Health
Sciences Center at Syracuse, and he was a post graduate student at New York
University and Johns Hopkins.
MANAGEMENT
Set forth below, for each executive officer of the Company, is information
regarding their age as of April 5, 2001, position(s) with the Company, the
period they have served as an officer and any family relationship with any other
director or executive officer of the Company.
Name Age Position
Joshua D. Schein, Ph.D. 40 Chief Executive Officer, Secretary and Director
Judson A. Cooper 42 Chairman of the Board and Executive Vice President
Thomas N. Konatich 55 Chief Financial Officer and Treasurer
Dennis E. Hruby, Ph.D. 49 Vice President - Chief Scientific Officer
Executive Officers who are not Directors
Thomas N. Konatich has served as Chief Financial Officer and Treasurer
since April 1, 1998. 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. From 1988 to 1993, he
was Treasurer of Ohmicron Corporation, a venture capital financed environmental
biotechnology firm. Mr. Konatich has an MBA from the Columbia Graduate School of
Business.
Dennis F. 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.
Management is not aware of any family relationships among any of the
executive officers.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective January 15, 1998, the Company entered into a consulting
agreement with Prism Ventures LLC pursuant to which Prism agreed to provide
certain business services to the Company, including business development,
operations and other advisory services, licensing, strategic alliances, merger
and acquisition activity, financings and other corporate transactions. Pursuant
to the terms of the agreement, Prism received an annual fee of $150,000 and
16,667 stock options per year. The agreement expired on January 15, 2001, and
was cancelable by the Company only for cause as defined in the agreement. Mr.
Cooper and Dr. Schein are the members of Prism. In October of 1998, the Company
and Prism agreed to suspend the agreement for as long as the two principals are
employed by the Company
7
under the provisions of their amended employment agreements. During 2000,
Prism received no payments pursuant to the agreement.
Effective September 9, 1999 the Company entered into a consulting
agreement with Stefan Capital, LLC pursuant to which Stefan has agreed to
provide certain business services to the Company. Pursuant to the terms of the
agreement, Stefan received five year warrants to purchase 100,000 shares of our
Common Stock at an exercise price of $1.00. None of the warrants may be
exercised before September 9, 2001, at which time 50,000 warrants can be
exercised. Mr. Jeffrey Rubin, one of our directors, is a principal of Stefan.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the 1934 Act and the rules thereunder, the
Company's executive officers and directors and persons who own more than 10% of
a registered class of the Company's equity securities are required to file with
the Securities and Exchange Commission and The Nasdaq Stock Market, Inc. reports
of their ownership of, and transactions in, the Company's Common Stock. Based
solely on a review of copies of such reports furnished to the Company, or
written representations that no reports were required, the Company believes that
during the fiscal year ended December 31, 2000 its executive officers and
directors complied with the Section 16(a) requirements.
8
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the total compensation paid or accrued for
the years ended December 31, 2000, 1999 and 1998 for Siga's Chief Executive
Officer and its four most highly compensated executive officers, other than its
Chief Executive Officer, whose salary and bonus for the fiscal year ended
December 31, 2000 were in excess of $100,000.
Summary Compensation Table
Annual Compensation
-------------------
Other Annual Long-Term
------------ Compensation
Compensation ------------
------------ Securities
Name and Principal Position Year Salary ($) ($) Underlying Options(#)
- --------------------------- ---- ---------- --- ----------------------
Joshua D. Schein, Ph.D., Chief 2000 250,000 -- 500,000
Executive Officer and Director
1999 225,000 -- 150,000
1998 170,939 -- 16,667
Judson A. Cooper, Executive Vice 2000 250,000 -- 500,000
President and Director
1999 225,000 -- 150,000
1998 170,939 -- 16,667
Dennis E. Hruby, Ph.D., Chief 2000 180,000 -- 125,000
Scientific Officer
1999 170,000 -- --
1998 167,148 -- 40,000
Thomas N. Konatich, Chief Financial 2000 170,000 -- 100,000
Officer
1999 170,000 -- --
1998 120,172 -- 95,000
9
Option Grants for the Year Ended December 31, 2000
The following table sets forth grants of stock options to Siga's Chief
Executive Officer and its four most highly compensated executive officers, other
than its Chief Executive Officer, for the year ended December 31, 2000. The
exercise price per share of each option was equal to the fair market value at
the time of the grant, except for the grant to Dr. Hruby. The grants to Dr.
Hruby were non-Plan grants at a discount of approximately 50% to market.
Option Grants in Last Fiscal Year
Individual Grants
----------------------------------------------------
Percent of
Total
Options
Number of Granted to
Securities Employees Exercise
Underlying in Fiscal Price per
Options Year Share Expiration
Name Granted (#) (%)(1) ($/SH) Date
- ---- ----------- ------ ------ ----
Joshua D. Schein 500,000 43.8 2.00 1/19/10
Judson A. Cooper 500,000 43.8 2.00 1/19/10
Dennis E. Hruby 125,000 (2) 2.00 1/19/10
Thomas N. Konatich 100,000 8.7 2.00 1/19/10
(1) Based on options to purchase an aggregate of 1,144,000 shares of common
stock granted under the Amended 1996 Incentive and Non-Qualified Stock
Option Plan.
(2) Options were granted outside the Amended 1996 Incentive and Non-Qualified
Stock Option Plan
10
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, 2000 by Siga's Chief Executive Officer and
its four most highly compensated executive officers, other than its Chief
Executive Officer. No options were exercised during fiscal 1999 by any of the
officers.
Value of Unexercised
Number of Securities Underlying In-The-Money Options
Unexercised Options# at Fiscal Year-End($)(1)
---------------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
Joshua D. Schein 662,501 37,500 735,938 70,313
Judson A. Cooper 662,501 37,500 735,938 70,313
Dennis Hruby 52,500 122,500 25,000 100,000
Thomas N. Konatich 85,000 110,000 37,500 62,500
(1) Based upon the closing price on December 31, 2000 as reported on the
Nasdaq SmallCap Market and the exercise price per option.
Employment Contracts and Directors Compensation
Dr. Joshua Schein, our Chief Executive Officer, was employed under an
agreement through December 31, 1999 which had a base annual salary of $225,000
and granted him 16,667 options per year, exercisable at the fair market value on
the date of the grant. In January 2000 he entered into a new employment
agreement with the Company which agreement was amended and restated as of
October 6, 2000, would expire January 2005 and was cancelable by the Company
only for cause, as defined in the agreement. The agreement was renewable for
additional one year terms unless cancelled by either party in writing 180 days
prior to cancellation. Dr. Schein received an annual base salary of $250,000 and
he was granted 500,000 fully vested stock options upon signing the new
agreement. The options are exercisable at $2.00 per share, the fair market value
on the date of grant. He was eligible to receive additional stock options and
bonuses at the discretion of the Board of Directors. Under the amended and
restated agreement, in the event of a change of control, Dr. Schein would be
paid his compensation for the remainder of his employment term and would receive
a tax gross-up payment, and all unvested options held by Dr. Schein would become
vested and exercisable. In addition, Dr. Schein would receive a cash payment
equal to 1.5% of the total consideration received by the Company in a sale of
all or substantially all of the assets or stock of the Company, or a transaction
where the holders of the voting capital stock of the Company immediately prior
to the transaction own less than a majority of the voting capital stock of the
acquiring or surviving entity. In the event of a sale, merger or public spin-out
of any subsidiary or material asset of the Company, Dr. Schein would receive a
fee equal to 1.5% of the value of the Company's shares of the subsidiary or
material assets. Pursuant to the Separation Agreement between Dr. Schein and the
Company, dated as of March 30, 2001, the employment agreement between Dr. Schein
and the Company was terminated.
Judson Cooper, our Chairman of the Board of Directors and Executive Vice
President, was employed under an employment agreement through December 31, 1999
which had a base annual salary of $225,000 and granted him 16,667 options per
year, exercisable at the fair market value on the date of the grant. In January
2000 he entered into a new employment agreement which agreement was amended and
restated October 6, 2000, would expire January 2005 and was cancelable by the
Company only for cause, as defined in the agreement. The agreement was renewable
for additional one year terms unless cancelled by either party in writing 180
days prior to cancellation. Mr. Cooper received an annual base salary of
$250,000 and he was granted 500,000 fully vested stock options upon signing the
new agreement. The
11
options are exercisable at $2.00 per share, the fair market value on the
date of grant. He is eligible to receive additional stock options and bonuses at
the discretion of the Board of Directors. Under the amended and restated
agreement, in the event of a change of control, Mr. Cooper would be paid his
compensation for the remainder of his employment term and would receive a tax
gross-up payment, and all unvested options held by Mr. Cooper would become
vested and exercisable. In addition, Mr. Cooper would receive a cash payment
equal to 1.5% of the total consideration received by the Company in a sale of
all or substantially all of the assets or stock of the Company, or a transaction
where the holders of the voting capital stock of the Company immediately prior
to the transaction own less than a majority of the voting capital stock of the
acquiring or surviving entity. In the event of a sale, merger or public spin-out
of any subsidiary or material asset of the Company, Mr. Cooper would receive a
fee equal to 1.5% of the value of the Company's shares of the subsidiary or
material assets. Pursuant to the Separation Agreement between Mr. Cooper and the
Company, dated as of March 30, 2001, the employment agreement between Mr. Cooper
and the Company was terminated.
Thomas Konatich, Chief Financial Officer and Treasurer, is employed by the
Company under an employment agreement that was to expire April 1, 2000. On
January 19, 2000 the employment agreement was amended and in October 2000, the
agreement was amended and restated. The amended agreement expires on April 1,
2002 and is cancelable by the Company only for cause, as defined in the
agreement. Mr. Konatich receives an annual base salary of $170,000. He received
options to purchase 95,000 shares of Common Stock, at $4.44 on April 1, 1998.
The options vest 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. The
options vest on a pro rata basis each quarter through January 19, 2002. Mr.
Konatich is also eligible to receive additional stock options and bonuses at the
discretion of the Board of Directors. Under the amended and restated agreement,
in the event of a change of control, Mr. Konatich will be paid his compensation
for the remainder of his employment term and will receive a tax gross-up
payment, and all unvested options held by Mr. Konatich will become vested and
exercisable.
Dr. Dennis Hruby, Chief Scientific Officer, has an employment agreement
with the Company which was to expire on December 31, 2000. In May 2000 the
employment agreement was amended extending Dr. Hruby's employment until December
31, 2002, except that the Company may terminated the agreement upon 180 days
written notice, and changing Dr. Hruby's title from Vice President of Research
to Chief Scientific Officer. Dr. Hruby received options to purchase 40,000
shares of Common Stock at an exercise price of $4.63 per share on February 1,
1998. The options become exercisable on a pro rata basis on the first, second,
third and fourth anniversaries of the agreement. Dr. Hruby is eligible to
receive additional stock options and bonuses at the discretion of the Board of
Directors. Under the amended agreement, Dr. Hruby was granted options to
purchase 125,000 shares at an exercise price of $2.00 per share. The options
vest ratably over the remaining term of the amendment.
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SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the Company
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SIGA TECHNOLOGIES, INC.
By: /s/ Joshua D. Schein
----------------------------------
Joshua D. Schein, Ph.D.
Chief Executive Officer
Dated: April 9, 2001
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