|
8.
|
Pursue
medical pipeline indications such as heartburn (GERD) and spinal disk
repair with the Company’s platform technology.
|
THE
NOMINEES ARE COMMITTED TO ACTING IN THE BEST INTERESTS OF THE STOCKHOLDERS.
REPRESENTATIVES
OF THE NEWLY PROPOSED BOARD OF DIRECTORS AND THEIR PROPOSED CHIEF FINANCIAL
OFFICER, WILLIAM KACHIOFF, WILL EXPLAIN THEIR TURN-AROUND STRATEGY AND FINANCIAL
MODEL IN MORE DETAIL AT THE ANNUAL MEETING.
THE PROXY
ORGANIZER BELIEVES THAT YOUR VOICE IN THE FUTURE OF THE COMPANY CAN BEST BE
EXPRESSED THROUGH THE ELECTION OF THE NOMINEES. ACCORDINGLY, THE PROXY
ORGANIZER URGES YOU TO VOTE YOUR BLUE PROXY CARD FOR THE NOMINEES.
IF YOUR
SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK NOMINEE OR
OTHER INSTITUTION ON THE RECORD DATE, ONLY IT CAN VOTE SUCH SHARES AND ONLY
UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE
CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO
EXECUTE ON YOUR BEHALF THE BLUE PROXY CARD AS SOON AS
POSSIBLE.
IMPORTANT
The
election of the Nominees requires the affirmative vote of a PLURALITY of the
votes cast, assuming a quorum is present or otherwise represented at the
Annual Meeting. As a result, your vote is extremely important in
deciding the future of the Company. The Proxy Organizer urges you to
mark, sign, date and return the enclosed blue proxy card to vote for the
election of the Nominees.
THE PROXY
ORGANIZER URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY THE COMPANY.
IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PROXY BY DELIVERING
A LATER-DATED BLUE PROXY CARD TO THE PROXY ORGANIZER, OR BY VOTING
IN PERSON AT THE ANNUAL MEETING. SEE "VOTING PROCEDURES" AND "PROXY
PROCEDURES" BELOW.
Only
holders of record of the Company's voting securities as of the close of business
on October 1, 2008 (the "Record Date") are entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof. As
of August 1, 2008, there were 16,514,163 shares of common stock outstanding and
no shares of preferred stock outstanding. Stockholders of record at
the close of business on the Record Date will be entitled to one vote at the
Annual Meeting for each share of common stock (the "Common Stock") held on the
Record Date.
As of
September 8, 2008, the Proxy Organizer beneficially owned an aggregate of
171,096 shares of Common Stock, representing approximately 1.04% of the
outstanding shares of Common Stock. The Proxy Organizer intends
to vote such shares “for” all proposals described in this Proxy Statement.
According
to the Company’s SEC filings, most of its shareholders own less than 1% of the
Company’s common stock.
VOTE FOR
ALL PROPOSALS BY RETURNING YOUR COMPLETED BLUE PROXY CARD TODAY. If
you have any questions, you can reach the Proxy Organizer's proxy solicitation
firm of MacKenzie Partners, Inc. at (212) 929-5500 or via e-mail at
proxy@mackenziepartners.com.
BACKGROUND
OF THE PROXY SOLICITATION
Proxy
Organizer is submitting this Proxy Statement which the Proxy Organizer is
independently financing. The Proxy Organizer believes that
independently financed proxy solicitations do not require the Company’s approval
for submission to the Securities and Exchange Commission or for submission to
the Company’s shareholders for a vote on the proposals in Proxy Organizer’s
Proxy Statement at the Company’s Annual Meeting. Proxy Organizer
believes this Proxy Statement complies with all substantive and procedural
requirements of Article II, Section 2.1 and Section 141(k) of the Delaware
General Corporation Law. Under Delaware General Corporation Law
Section 222(a), Proxy Organizer
believes
that Proxy Organizer
is able to raise for the first time and to
present any proposals he desires at the Annual Meeting. The company
received notice of the Proxy Statement and the proposals contained therein,
through the filing of the Proxy Statement with the SEC on August 11,
2008.
In
opposition to the current Board of Directors of the Company, the Proxy Organizer
is seeking to solicit the proxies of Stockholders to be used to:
1. Amend
the bylaws to allow a majority of shareholder to fill vacancies and newly
created directorships on the Board of Directors;
2. Amend
the bylaws to increase the number of Directors to 11;
3. Remove
three of the current Directors for cause;
4. Elect
four new Directors to fill the newly created directorships pursuant
to proposal #2 of this Proxy Statement or, in the alternative, if proposal #2 is
defeated, elect three new Directors to fill the three vacancies created by the
removal contained in Proposal #3 of this Proxy Statement; and
5. Vote
on the election of two new Class II Directors to serve for three year terms
until the annual meeting of Stockholders in 2011 or until their successors are
duly elected and qualified.
The
Nominees, if elected, plan to change the existing management and operations
of the Company to effectuate the plan described in this Proxy Statement.
Each of the Nominees has consented to being named in the Proxy Statement,
and if so elected, to serve as a Director and is fully committed,
if elected, to take such action as the Nominees deem advisable and in the
best interests of the Stockholders and which they believe will maximize
stockholder value and improve the Company's future viability and
growth.
PROPOSAL
#1 – FIRST AMENDMENT TO THE BYLAWS
The
Company’s Bylaws currently contain this provision:
3.3
Director
Resignations, Newly Created Directorships and Vacancies
.
(a) Any
director may resign at any time upon written notice to the attention of the
secretary of the Corporation or, if there is no secretary in office, then to the
attention of any other corporate officer or to the Board of Directors as a
whole. When one or more directors so resigns and the resignation is effective at
a future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in this
section in the filling of other vacancies.
(b) Subject
to the rights of the holders of any series of preferred stock then outstanding,
newly created directorships resulting from any increase in the authorized number
of directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, removal from office or other cause shall, unless
otherwise required by law or by resolution of the Board of Directors, be filled
only by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall serve for a term expiring at the next
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires or until such director’s successor shall have
been duly elected.
(c) Whenever
the holders of any class or classes of stock or series thereof are entitled to
elect one or more directors by the provisions of the Certificate of
Incorporation, vacancies and newly created directorships of such class or
classes or series may be filled by a majority of the directors elected by such
class or classes or series thereof then in office, or by a sole remaining
director so elected.
(d) If
at any time, by reason of death or resignation or other cause, the Corporation
should have no directors in office, then any officer or any stockholder or an
executor, administrator, trustee or guardian of a stockholder, or other
fiduciary entrusted with like responsibility for the person or estate of a
stockholder, may call a special meeting of stockholders in accordance with the
provisions of the Certificate of Incorporation or these Bylaws, or may apply to
the Court of Chancery for a decree summarily ordering an election as provided in
Section 211 of the DGCL.
(e) If,
at the time of filling any vacancy or any newly created directorship, the
directors then in office constitute less than a majority of the Whole Board (as
constituted immediately before any such increase), then the Court of Chancery
may, upon application of any stockholder or stockholders holding at least 10% of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office as aforesaid, which election shall be governed by
the provisions of Section 211 of the DGCL as
applicable .
This
means that upon the removal of any Directors, the remaining Directors of
the Company have the sole and exclusive power to fill those vacancies.
The Proxy
Organizer proposes to amend the Bylaws of the Company (the "Bylaws") to
allow a majority of the Stockholders to fill vacancies on the Board of Directors
resulting from the removal of any Directors. The new Bylaw provision
will read as follows:
3.3
Director
Resignations, Newly Created Directorships and
Vacancies
resulting from any increase in the authorized number of directors elected
by the stockholders having the right to vote as a single class may be filled by
a majority of the shareholders. Whenever the holders of any class or classes of
stock or series thereof are entitled to elect one or more directors by the
provisions of the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
the shareholders. The directors so chosen shall hold office until the next
annual election of the each director’s respective class or until their
successors are duly elected and shall qualify, unless sooner replaced.
This new
bylaw provision will allow a majority of the Stockholders to fill vacancies on
the Board of Directors resulting from the removal of any Directors both for the
purposes of this proxy as well as in the future. The Proxy Organizer
believes this new provision gives the Stockholders more power to vote on the
members of the Board of Directors of the Company. The Proxy Organizer
intends to vote, and recommends that you vote, for this proposal.
PROPOSAL
#2 – SECOND AMENDMENT TO THE BYLAWS
The
Company’s Bylaws currently contain this provision:
3.1
Number of
Directors
.
The
number of directors constituting the Whole Board shall be fixed from time to
time, within the limits specified in the Certificate of Incorporation, by a
resolution adopted by at least two-thirds (2/3) of the Whole Board, or by the
affirmative vote of holders of at least 66 2/3% of the shares entitled to vote
thereon at an annual meeting. No decrease in the number of authorized directors
shall shorten the term of any incumbent director.
The Proxy
Organizer proposes to amend the Bylaws of the Company (the "Bylaws") to increase
the Company’s Board of Directors to 11 Directors. The Nominees will
become the Directors for the four newly created Director
positions. The new Bylaw provision will read as follows:
3.2 Number of
Directors
. The number of directors of the Corporation shall
not be fewer than three (3) nor more than eleven (11), until changed by
amendment of the certificate of incorporation or by a bylaw amending this
Paragraph 3.1 duly adopted by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote. The exact number of
directors shall be fixed from time to time, within the limits specified in the
certificate of incorporation or in this Section 3.1, by a bylaw or
amendment thereof duly adopted by the affirmative vote of the majority of the
shares present in person or represented by proxy at a duly held meeting and
entitled to vote thereon or by approval of the majority of the shares entitled
to vote, or by approval of the board of directors.
This new
bylaw provision will allow a majority of the Stockholders to fill the newly
created seats on the Board of Directors for the purposes of this proxy as well
as in the future. The Proxy Organizer believes this new provision
gives the Stockholders more power to vote on the members of the Board of
Directors of the Company. The Proxy Organizer intends to vote, and
recommends that you vote, for this proposal.
PROPOSAL
#3 – REMOVAL OF DIRECTORS
The Proxy
Organizer proposes to remove Lon E. Otremba, Beverly A. Huss, and Robert B.
Shermano as Directors of the Company under Delaware Corporations Law §141(k)(1)
for cause.
Delaware
General Corporation Law §141(k)(1) reads as follows:
(k) Any
director or the entire board of directors may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote at an election
of directors, except as follows:
(1)
Unless the certificate of incorporation otherwise provides, in the case of a
corporation whose board is classified as provided in subsection (d) of this
section, shareholders may effect such removal only for cause.
The
Company’s Board is classified as provided in subsection (d) of Delaware General
Corporation Law §141(k)(1) and, therefore, Directors may be removed only for
cause.
The Proxy
Organizer believes that these three Directors should be removed for cause
because of their breach of fiduciary duty, breach of duty of loyalty, and waste
of corporate assets as described in “What Went Wrong with Artes
Medical?” The Directors have received adequate notice through this
Proxy Statement. Further, each Director has the opportunity to meet
the accusation at the Annual Meeting.
The Proxy
Organizer believes this proposal is in the best interests of the Stockholders as
the Stockholders will then be able to replace the existing Directors of the
Company. Therefore, the Proxy Organizer intends to vote, and recommends
that you vote, for this proposal.
PROPOSAL
#4 –
ELECTION
OF FOUR NEW DIRECTORS TO FILL THE NEWLY CREATED DIRECTORSHIPS OR,
ALTERNATIVELY,
ELECTION OF THREE NEW DIRECTORS TO FILL VACANCIES CREATED BY
REMOVAL
The
Proxy Organizer proposes to e
lect
four new Directors to fill the newly created directorships pursuant to proposal
#2 of this Proxy Statement or, in the alternative, if proposal #2 is defeated,
elect three new Directors to fill the three vacancies created by the removal
contained in Proposal #3 of this Proxy Statement. The three or four new
Directors will serve until their respective Class terms expire or until their
successors are duly elected and qualified. The Proxy Organizer
proposes to elect Terry Knapp, M.D., Dr. H. Michael Shack, Eric Donsky, and Dr.
Johan Brahme to fill the vacancies created by the increase to the number
Directors of the Company. Should proposal #2 be unsuccessful, Dr.
Johan Brahme will be removed as a Nominee. Should Proposal #2 and
Proposal #3 both be successful, the Board will only include eight of the maximum
eleven directors.
The Proxy
Organizer believes these four Director nominees are qualified to serve on the
Company’s Board of Directors pursuant to their experience described in their
biographies in Proposal #5 below.
Each
Nominee, if elected, would hold office until the next annual meeting of
shareholders for their respective class or until a successor has been
elected and qualified. Although the Proxy Organizer does not
anticipate that any of the persons named below will be unable or unwilling
to stand for election, in the event of such occurrence, proxies may be
voted for a substitute designated by the Proxy Organizer. To the
extent current members of the Board of Directors do not agree to serve with the
Proxy Organizer’s Nominees if the campaign is successful, any vacancies on the
Company’s Board of Directors created by resignation of such directors are likely
to remain vacant. The Proxy Organizer currently has no intention to
fill any such vacancies. See Appendix I for additional
information about the Nominees, including their ownership, purchase and
sale of securities issued by the Company.
The Proxy
Organizer intends to vote, and recommends that you vote, for this
proposal.
PROPOSAL
#5 - ELECTION OF DIRECTORS
According
to the Company's proxy statement prepared in connection with the 2007
Annual Meeting of the Company, as filed with the SEC on April 30, 2007 (the
"Company's Proxy Statement"), the Company currently has seven Directors, of
which the terms of the Class II Directors will expire at the Annual Meeting of
the Stockholders. Christopher J. Reinhard and John R. Costantino are
both Class II Directors for the Company and their terms will expire at this
Annual Meeting. The Proxy Organizer proposes that the Stockholders
elect Robert Binkele and Charles A. Schliebs to fill the vacancies of the Class
II Directors. The Proxy Organizer believes these two Director
nominees are qualified to serve on the Company’s Board of Directors pursuant to
their experience described in their biographies below.
Each
Nominee, if elected, would hold office until the next annual meeting of
shareholders for their respective class or until a successor has been
elected and qualified. Although the Proxy Organizer does not
anticipate that any of the persons named below will be unable or unwilling
to stand for election, in the event of such occurrence, proxies may be
voted for a substitute designated by the Proxy Organizer. To the
extent current members of the Board of Directors do not agree to serve with the
Proxy Organizer’s Nominees if the campaign is successful, any vacancies on the
Company’s Board of Directors created by resignation of such directors are likely
to remain vacant. The Proxy Organizer has no plan to fill any such
vacancies. See Appendix I for additional information about the
Nominees, including their ownership, purchase and sale of securities issued
by the Company.
If
elected, the Nominees intend to remove the current Chief Financial Officer of
the Company and to appoint William Kachioff as the new Chief Financial Officer
of the Company. Background information about Mr. Kachioff is set
forth below.
CHARLES A. SCHLIEBS
- Mr.
Schliebs is the co-founder and Managing Director of iNetworks Advisors, Inc.,
iNetworks BioOpportunity Fund, LP, and iNetworks Private Fund,
LP. iNetworks is a venture capital/private equity group investing
primarily in healthcare/life science ventures in North America. Prior
to co-founding iNetworks, Mr. Schliebs was a partner from 1988 through 1999 with
Jones Day, a 2,300-lawyer, international law firm, where he directed the firm’s
life sciences practice group worldwide. Mr. Schliebs’ substantive
expertise was as a securities/corporate finance partner and international
business law specialist, and his industry specialization was healthcare/life
sciences, counseling primarily multinational healthcare/life science
companies. While at Jones Day, Mr. Schliebs was the lawyer
responsible for all client service worldwide to Bayer AG, the international
pharmaceutical and chemical conglomerate. Prior to joining Jones Day,
Mr. Schliebs served in a variety of executive positions at New York Stock
Exchange companies such as Hospital Corporation of America (“HCA”), where he
co-founded HCA Venture Capital, the company’s in-house venture arm, investing in
emerging healthcare companies. Over a 24 year legal career, Mr.
Schliebs represented a wide variety of healthcare, pharmaceutical, medical
device, diagnostic and laboratory/scientific companies.
After
concluding his legal career, Mr. Schliebs joined the board of directors of
Sunquest Information Systems, Inc., a NASDAQ listed Tucson, Arizona based
healthcare information systems company. In his board role, he oversaw
the sale of the company to Misys plc for three times the price of the company’s
stock at the time he was asked to join the board. In addition to
serving on the boards of for-profit companies in fields ranging from
cardiovascular devices to medical simulation to healthcare IT, he serves on a
variety of boards involving entrepreneurship and social issues, including
Chatham University’s Center for Women’s Entrepreneurship, Pittsburgh’s Institute
for Cross-Cultural Ethics, and the President’s Visiting Committee on Social
Justice at West Virginia University.
Mr.
Schliebs received his J.D. from the Vanderbilt University School of Law, and
holds two undergraduate degrees from the University of Pennsylvania, a B.A. and
a B.S. in Economics from the Wharton School.
TERRY KNAPP, M.D.
- While in
Plastic Surgery specialty training at Stanford University, Dr. Knapp developed
and patented the enabling technology for Collagen Corporation, which he
co-founded in 1975. While serving as Collagen Corporation’s first VP
of Regulatory and Clinical Affairs, he developed the clinical and regulatory
strategies that resulted in the first U.S. product approval by the FDA of a
Class III medical device under the Medical Device Act of 1976.
Dr. Knapp
currently serves as Chairman of the Board of VisioNetx, Inc., a private spin-off
from AcuNetx in the field of human impairment testing. Dr. Knapp also has
co-founded, and serves as President of the DRL Foundation, Inc., a
not-for-profit foundation providing reconstructive surgery and telehealth to
developing nations.
Dr. Knapp
served as a Director of Collagen Corporation from 1990 through
1996. Dr. Knapp joined Collagen Corporation and A/W Company of
Washington University, St. Louis, in co-founding LipoMatrix, Inc., in 1992 to
provide a rationally designed, safe breast implant for women. From
1992 through 1995, Dr. Knapp served as Chairman, President and CEO of
LipoMatrix. Dr. Knapp established LipoMatrix in both the U.S.A. and
in Neuchâtel, Switzerland, where he built the entire corporate
infrastructure. In 1995, LipoMatrix achieved distinction as the first
ISO9001 certified breast implant company in the world. While with
LipoMatrix, Dr. Knapp invented the method of tagging medical devices with small
passive RFID transponders to provide long-term non-invasive device
identification. Dr. Knapp serves as a founding member of the Board to
the Bard Center for Entrepreneurship Development at the University of Colorado,
Denver. He recently served on the Advisory Board for the Governor’s Office of
Life Sciences and Biotechnology, a component of the Colorado Office of
Innovation and Technology. Dr. Knapp also served as a Director of Image Guided
Technology, Inc. (NASDAQ: IGTI) until its sale to Stryker Corporation. As
founder, Chairman and CEO of PrivaComp, Inc., Dr. Knapp was a finalist for Ernst
& Young’s 2002 Entrepreneur of the Year in the Rocky Mountain
region. Dr. Knapp served as Chief Executive Officer of AcuNetx, Inc.,
a publicly traded, diverse medical device and information technology company
with unique products in the fields of eye movement capture and analysis,
occupational safety, and osteoplastic surgery and distraction
osteogenesis.
During 17
years of reconstructive plastic surgery practice, Dr. Knapp established two
craniofacial anomalies panels, established and managed a nationally accredited
and Medicare certified outpatient surgery center, and served the community in
numerous capacities. Dr. Knapp has been a volunteer surgeon for Interplast, Inc.
on 35 trips to developing nations to provide reconstructive surgery for
children. Dr. Knapp founded Vector Health Programs, a community
nonprofit, in 1979, and it rapidly became the 13th Medicare accredited hand and
upper extremity rehabilitation center in the U.S.
Dr. Knapp
has authored numerous scientific articles, book chapters and op-ed pieces for
medical journals, and more than fifteen issued and several pending U.S. and
foreign patents, most of them relating to transponder usage for patient-based
global medical informatics systems, Internet-based medical communications
channels, and for implantable bio-sensor RFID transponder-based data acquisition
for physiologic parameter monitoring.
In 1970,
Dr. Knapp completed his MD degree at University of Florida. In 1998,
Dr. Knapp became the eighteenth graduate in the history of the University of
Florida College of Medicine to be inducted into its Wall of Fame “for noteworthy
contributions to medicine, education and to the benefit of the medical
consumer.”
ROBERT BINKELE
– Mr. Binkele,
is the founder and CEO of the Estate Planning Team, Inc. Estate
Planning Team, Inc. has grown to service over 2,200 securities advisors, CPAs,
attorneys and other professionals nationwide with tax deferral, estate, and
pension planning for their clients. Mr. Binkele is also a branch
manager and investment advisor for J.P. Turner & Co., LLC. Prior
to J.P. Turner & Co, LLC, Mr. Binkele was a branch manager with Brookstreet
Securities Corporation. Prior to Brookstreet Securities Corporation,
Mr. Binkele was a top wealth manager at Raymond James Financial Services, Inc.
While at Raymond James Financial Services, Inc., he was a member of the Raymond
James President’s Council and a member of the US Allianz Chairman’s
Council.
Mr.
Binkele earned his Bachelor of Science degree with a major in FCS finance from
the University of Utah where he was honored as an Academic All
American. He currently serves as the President of the Palm Springs
Chapter of the University of Utah Alumni Association.
DR. H. MICHAEL SHACK
- Dr. Shack, the Proxy
Organizer and stockholder in Artes Medical since January 2007, is the founder
and has been the operator or Dr. H. Michael Shack & Associates, an optometry
practice in Newport Beach, California, since 1972. Dr. Shack assisted
Dr. Max Shapiro in research to obtain FDA Approval for the first cosmetic
soft contact to be marketed in the United States by Bausch & Lomb,
Inc.
Dr. Shack
obtained a Doctorate of Optometry in 1972 from the University of Southern
California School of Optometry .
ERIC DONSKY
– Mr. Donsky has
15 years experience in building biotechnology and life science companies as a
founder and senior manager. Mr. Donsky is the CEO of OcuSense, Inc.,
an in-vitro diagnostics company commercializing novel, laboratory-on-a-card
technologies that enable eye care practitioners to quantitatively measure
biomarkers in tears at the point-of-care so physicians can personalize treatment
and objectively track patient outcomes. The Company’s TearLab™ product platform
is the first and only system of its kind in the eye care markets. OcuSense is a
subsidiary of a public company trading on NASDAQ and TSX and is also certified
under ISO 13485. Mr. Donsky also founded Molecular BioSciences (“MBI”). MBI
developed a cardiovascular device that was licensed to Medtronic. Mr. Donsky was
the founding CEO of Zolaris BioSciences, Inc., an early-stage biotechnology
company focused on the discovery and development of therapeutics for the
treatment of rheumatoid arthritis, multiple sclerosis, and infectious
diseases. Prior to founding Zolaris, Mr. Donsky was the founding CEO
of Applied CarboChemicals, Inc. (“ACC”), an industrial biotechnology company
that pioneered the production of chemicals and plastics from renewable
resources. ACC has developed the only process capable of economically
manufacturing succinic acid through fermentation.
Mr.
Donsky graduated from Boston University in 1987 with a B.S. in Business
Administration.
JOHAN BRAHME, M.D.
– Dr. Johan
Brahme is a
board
certified Plastic Surgeon and
member of the American Society for Plastic
Surgery (ASPS). He works in La Jolla, California and is a
partner at the La Jolla Cosmetic Surgery Center. Dr. Brahme was among
the first U.S. surgeons to incorporate Artefill in his practice and has become
an enthusiastic supporter of the product, as well as a longtime shareholder in
Artes Medical.
Dr.
Brahme and his colleagues are in the process of establishing their La Jolla
Cosmetic Surgery Center as the leading ‘Center of Excellence’ for hands-on,
peer-to-peer ArteFill injection training as well as organizing practice
development seminars regarding the use of injectable wrinkle treatments and
other minimal invasive skin rejuvenation procedures.
Dr.
Brahme has extensive experience with the clinical use of ArteFill, both in
cosmetic and reconstructive applications. Dr Brahme is an innovator and has
lectured on the use of ArteFill and its various potential applications on many
occasions, both nationally and internationally. He will be instrumental in
providing valuable feedback to the Company as to product performance, market
perception and training/marketing strategies.
Dr.
Brahme received his surgical training at the UCSD School of Medicine and
graduated with honors from both the general surgery and plastic surgery program
in. Dr. Brahme has an extensive research background and has published in leading
peer reviewed medical journals. Dr. Brahme has also been an active
participant in the international surgical relief programs Interface and Fresh
Start.
Dr.
Brahme is an Associate Clinical Professor of Surgery at UC San Diego School of
Medicine and is the past President of the San Diego Plastic Surgery Society.
WILLIAM KACHIOFF (Proposed Chief
Financial Officer)
– Mr. Kachioff is currently a partner of Tatum, LLC, a
national executive services firm focused on the office of the Chief Financial
Officer. Mr. Kachioff has 18 years of experience with extensive
operational, financial and management experience. Mr. Kachioff is the
acting Chief Financial Officer at Clarient, Inc. From 2002 through
2006, Mr. Kachioff was the Chief Financial Officer of Microislet,
Inc. From 1998 through 2001, Mr. Kachioff was the Chief Financial
Officer of Cutera, Inc. Mr. Kachioff has experience in all aspects of
financial management, SEC reporting, accounting, legal affairs, treasury, and
investor relations for early-stage to mature life science
businesses. Mr. Kachioff has completed a wide variety of financing
transactions of approximately $100 million. Mr. Kachioff built and
managed responsive finance operations teams and systems for both public and
private companies.
The Proxy
Organizer intends to vote, and recommends that you vote, for this proposal.
INFORMATION
REGARDING ALL NOMINEES
All
transactions in securities of the Company engaged in by any Nominee during
the past two years, as well as current ownership of any such securities by
any Nominee, are listed on Appendix I. No Nominee is a beneficial owner of
shares of common stock of the Company. In addition, and except as
stated herein, no Nominee or any of their associates has any agreement
or understanding with respect to future employment by the Company, and no
such person has any agreement or understanding with respect to any
future transactions to which the Company will or may be a
party.
Except as
described herein, no Nominee nor any of their associates (i) has engaged in
or had a direct or indirect interest in any transaction or series of
transactions since the beginning of the Company's last fiscal year or in
any currently proposed transaction, to which the Company or any of its
subsidiaries is a party, (ii) owns beneficially or of record any
securities of the Company, (iii) borrowed any funds for the purpose of
acquiring or holding any securities of the Company or is presently, or has
been within the past year, a party to any contract, arrangement or
understanding, with any person with respect to securities of
the Company.
AGREEMENTS
WITH NOMINEES
The Proxy
Organizer is entering into letter agreements (the "Nominee Agreements") with
each of the Nominees with respect to their service as Nominees, to stand
for election as Directors of the Company at the Annual Meeting. The
Nominee Agreements each provide, among other things, as follows:
|
·
|
The
Nominee acknowledges that he has agreed to become a member of the
slate of Nominees to stand for election as Directors of the Company
in connection with a proxy contest with management of the Company in
respect of the election of Directors of the Company at the Annual
Meeting;
|
|
·
|
The
Proxy Organizer agrees to pay the costs of the proxy contest;
and
|
|
·
|
The
Nominee agrees to withdraw as a Nominee of the Proxy Organizer if
requested to do so by the Proxy Organizer at any time prior his
election as a Director of
the Company.
|
OTHER
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
Except as
set forth above, the Proxy Organizer is not aware of any other proposals
to be brought before the Annual Meeting. Should other proposals be
brought before the Annual Meeting, the persons named on the blue proxy card
will abstain from voting on such proposals unless such proposals adversely
affect the interests of the Proxy Organizer and/or the Nominees as
determined by the Proxy Organizer in its sole discretion, in which event
such persons will vote on such proposals at their discretion.
VOTING
PROCEDURES
Only
Stockholders of record as of the Record Date are entitled to notice of and
to vote at the Annual Meeting or any adjournments thereof. On March
31, 2008, there were 16,514,163 shares of Common Stock outstanding. Each share
of Common Stock is entitled to one vote on the matters to be presented at
the Annual Meeting.
A
majority of the shares outstanding must be present in person or by proxy to
constitute a quorum at the Annual Meeting. If a share is represented for
any purpose at the Annual Meeting, it is deemed to be present for all other
matters. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum. "Broker
Non-votes" are shares held by brokers or nominees which are present in person or
represented by proxy, but which are not voted on a particular matter because
instructions have not been received from the beneficial owner. Under
applicable Delaware law, the effect of broker nonvotes on a particular matter
depends on whether the matter is one as to which the broker or nominee has
discretionary voting authority. The effect of broker nonvotes on the specific
items to be brought before the Annual Meeting is discussed under each
item.
According
to the Delaware General Corporation Law, directors are elected by a plurality of
the votes cast by the holders of Company's Common Stock at a meeting at which a
quorum is present, when the bylaws of the Company do not state
otherwise. Plurality means that the number of votes cast for a
director in a contest of two or more directors that is greater than the number
cast for any other candidate but not more than half the total votes cast.
According
to the bylaws of the Company and applicable law, removal of a director and
amendments to the bylaws of the Company require a majority vote of the current
outstanding shares of the Company.
PROXY
PROCEDURES
IN ORDER
FOR YOUR VIEWS TO BE REPRESENTED AT THE ANNUAL MEETING, PLEASE MARK, SIGN,
DATE AND RETURN THE ENCLOSED BLUE PROXY CARD AND RETURN IT TO PROXY ORGANIZER
C/O MACKENZIE PARTNERS, INC. IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE.
The
accompanying blue proxy card will be voted at the Annual Meeting in
accordance with your instructions on such card.
Any proxy
may be revoked at any time prior to the time a vote is taken by delivering
to the Secretary of the Company a notice of revocation bearing a later
date, by a duly executed proxy bearing a later date or by attending the Annual
Meeting and voting in person.
Only
holders of record as of the close of business on the Record Date will be
entitled to vote. If you were a Stockholder of record on the
Record Date, you will retain your voting rights of the Annual Meeting even
if you sell such shares after the Record Date. Accordingly, it
is important that you vote the shares held by you on the Record Date, or
grant a proxy to vote such shares on the blue proxy card, even if you sell
such shares after the Record Date.
SOLICITATION
OF PROXIES
Solicitation
of proxies shall be made only by the Proxy Organizer.
The Proxy
Organizer has retained MacKenzie Partners, Inc. (the "Solicitor") to conduct the
solicitation, for which the Solicitor is to receive a fee of approximately
$75,000, plus reimbursement for its reasonable out-of-pocket
expenses. The Proxy Organizer has agreed to indemnify the Solicitor
against certain liabilities and expenses, including liabilities under federal
securities laws. Proxies may be solicited by mail, courier services,
advertising, telephone, telecopier, e-mail or in person. It is
anticipated that the Solicitor will employ approximately 25
persons to
solicit Stockholders for the Annual Meeting.
Costs
related to the solicitation of proxies, including expenditures for
attorneys, accountants, public relations and financial advisers,
proxy solicitors, payments to nominees, advertising, printing,
transportation and related expenses and filing fees, will be borne by the
Proxy Organizer. Such costs are expected to be approximately $250,000
in total. The Proxy Organizer intends to seek reimbursement for the
costs and expenses associated with the proxy solicitation in the event that
the Nominees are elected to the Board of Directors of the Company, but does
not intend to submit the issue of reimbursement to a vote of security
holders.
CERTAIN
INFORMATION REGARDING PROXY ORGANIZER
On June
30, 2008, the Proxy Organizer determined that he was not satisfied with
current management of the Company and decided to explore available options
to maximize stockholder value. The business address of the Proxy Organizer
is 19 Burning Tree Road, Newport Beach, CA 92660.
All
transactions in the securities of the Company effected within the past two years
by Proxy Organizer will be contained in Appendix I.
DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2009 ANNUAL
MEETING
The
rules of the SEC permit stockholders of the Company, after notice to the
Company, to present proposals for stockholder action in the Company's proxy
statement where such proposals are consistent with applicable law, pertain to
matters appropriate for stockholder action, and are not properly omitted by
Company action in accordance with the proxy rules published by the
SEC. The Company's 2009 annual meeting of stockholders is expected to
be held on or about October 30, 2009. Proposals of stockholders of
the Company that are intended to be presented at the Company’s 2009 annual
meeting must be received by the Company no later than June 2, 2009, in order for
them to be included in the proxy statement and form of proxy relating to that
meeting.
CONCLUSION
If
Proposal #1, amendment of the Bylaws of the Company to allow a majority of
the Stockholders to fill vacancies or newly created directorships on the Board
of Directors, is not passed, Proposals #2, #3, and #4 will become moot as the
Stockholders will not be able to fill vacancies on the Board of
Directors. However, even if Proposal #1 is not successful, Proposal
#5 will still be effective as two Class II Directors’ terms are expiring
and the Proxy Organizer seeks to elect two new Nominees to these Board
seats.
THE PROXY
ORGANIZER STRONGLY URGES YOU TO VOTE FOR THE TWO AMENDMENTS TO THE BYLAWS,
REMOVAL OF THREE OF THE CURRENT BOARD OF DIRECTORS OF THE COMPANY, THE
ELECTION OF THE NOMINEES, AND THE PROPOSED FINANCING BY SIGNING, DATING AND
RETURNING THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED TO YOU
WITH THIS PROXY STATEMENT. IF YOU HAVE SIGNED THE BLUE PROXY CARD AND NO
MARKING IS MADE ON IT, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE
THE SHARES REPRESENTED BY THE BLUE PROXY CARD FOR THE AMENDMENTS TO THE BYLAWS,
THE REMOVAL OF THREE OF THE CURRENT BOARD OF DIRECTORS OF THE COMPANY, AND FOR
THE ELECTION OF ALL OF THE NOMINEES.
PROXY
ORGANIZER
Dr. H.
Michael Shack
Date:
September 30, 2008
IMPORTANT
1. If
your shares are held in your own name, please mark, date and mail the enclosed
blue proxy card to the Proxy Organizer, in the postage-paid envelope provided.
2. If
your shares are held in the name of a brokerage firm, bank nominee or other
institution, only it can vote such shares and only upon receipt of your specific
instructions. Accordingly, you should contact the person responsible
for your account and give instructions for a blue proxy card to be signed
representing your shares.
ONLY YOUR
LATEST DATED PROXY FOR THE ANNUAL MEETING WILL COUNT AT THE ANNUAL MEETING.
If
you have questions or need assistance voting your shares
please
contact:
105
Madison Avenue
New
York, New York 10016
proxy@mackenziepartners.com
Call
Collect: (212) 929-5500
or
Toll-Free
(800) 322-2885
|