ISS Recommends Vote Against VaxGen Proposals—Applauded by MedCap

Business Wire,  March 20, 2008  

• E-mail
• Print
• Link

ISS Recommends Vote Against the Merger with Raven and the New Equity Incentive Plan

SAN FRANCISCO -- MedCap Management & Research LLC and its affiliates ("MedCap"), a substantial VaxGen Inc. (VXGN) shareholder, today announced that it agrees entirely with the newly published recommendations by RiskMetrics Group/ISS Governance Services. For the upcoming March 28, 2008 special meeting for VaxGen, ISS counters the VaxGen management and board recommendations--ISS recommends a vote AGAINST both Item 1 (Issuance of Shares in Connection with Acquisition) and Item 2 (Omnibus Stock Plan) in its report dated March 14, 2008. MedCap also urges a vote AGAINST both proposals.

The rationale for recommending a vote against the merger agreement with Raven by opposing Item 1 is quite clear in the ISS report, which states "Based on our review of the terms of the transaction, in particular, the 41.4 percent decline in stock price following the merger announcement, lack of a strategic rationale with respect to future synergies, and the possibility of receiving higher liquidation proceeds than the current stock price, we recommend that shareholders vote AGAINST the merger proposal." Thus, it concludes, "Vote AGAINST Item 1."

Furthermore, ISS recommends voting against Item 2, the 2008 Equity Incentive Plan. The ISS report states, "the estimated shareholder value transfer of the company's plans of 22 percent is above the allowable cap for this company of 20%." Thus, it concludes, "Vote AGAINST Item 2."

MedCap agrees with ISS and urges all shareholders to vote against the proposals; and if shareholders have already voted and wish to change their votes to vote against the proposals, they may do so by voting again before the upcoming meeting or voting at the special meeting scheduled for March 28, 2008.

Furthermore, given the contentious nature of the upcoming vote on March 28, 2008, MedCap requests the company to identify and publicly announce a truly Independent Inspector of Elections prior to the meeting, which it has not yet done.

About MedCap

MedCap Management & Research LLC, headquartered in San Francisco, California, is the General Partner of MedCap Partners L.P., a private investment fund focused primarily on public companies in the life sciences, medical technology and healthcare sectors.

COPYRIGHT 2008 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning