Largest Shareholder of SciClone Pharmaceuticals, Inc. Votes Against Company's Proposals
RADFORD, Va., May 17, 2002 (BW HealthWire) -- SciClone Pharmaceuticals, Inc.'s largest shareholder, Randal J. Kirk, today announced that he is voting against all management proposals contained in SciClone's 2002 proxy statement that he believes either potentially jeopardize sound corporate governance, diminish or harm shareholder rights and interests, or potentially enrich management at the expense of shareholders.
Mr. Kirk owns personally or through investment entities two million shares of SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) common stock, or approximately 6.1% of the company's outstanding voting shares ("The Kirk Shares"). SciClone's Annual Meeting of Shareholders is scheduled for May 30, 2002.
SciClone Pharmaceuticals, Inc.'s 2002 proxy statement contains six management proposals, two of which relate respectively to the election of directors and the approval and ratification of the appointment of the independent accountant. The Kirk Shares voted to withhold regarding the proposed director slate and voted in favor of the proposed independent accountant. The Kirk Shares voted against the remaining four SciClone management proposals which, among other things, call for the reincorporation of the company to Delaware from California, and, subject to such re-incorporation, the elimination of shareholder cumulative voting for directors; the elimination of the rights of shareholders to act by written consent; increasing the required percentage of voting shareholders to call a special meeting of shareholders from 10% to 25%; increasing by more than 28% the maximum aggregate number of common shares that may be issued under the company's 1995 equity incentive plan; and amending the company's 1995 non-employee director stock option plan.
Mr. Kirk stated, "Simply put, these four management proposals are not in the best interest of shareholders. The proposals could have the effect of impeding shareholders from realizing enhanced value on their shares and stymie business and market opportunities that could lead to enhanced value for all SciClone shareholders. Management's proposal to significantly add to the shares of common stock that may be issued under the company's 1995 equity incentive plan could prove highly dilutive to current shareholders. Furthermore, the proposal to amend the company's 1995 non-employee director stock option plan provides certain insider parties with an ability -- not available to the company's public shareholders -- to lock in enormous potential shareholder value with virtually no investment risk. The 1995 plan, as it currently exists, provides sufficient compensation to non-employee directors."
"My substantial investment in SciClone reflects my confidence in the company's prospects and, in particular, the potential of its lead product, Zadaxin(TM). I am highly optimistic that SciClone's management and board will have opportunities to grow the company and, in turn, increase the company's value to stockholders. Since stockholders provide the equity capital and assume the inherent investment risks, the stockholders should be the ones ultimately entitled to determine, based on all the facts, what is an attractive value relative to their investments. After careful consideration of certain management proposals, my conclusion is that, if the provisions in question are adopted, the abilities of stockholders to exercise their rights would be impaired and a transfer of a portion of the company's value away from stockholders to certain SciClone management and directors could occur. I do not think such possibilities are in the best interests of SciClone stockholders or the company," Mr. Kirk asserted.
Well...that's a step in the right direction for a change....
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