SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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 Pursuant to 240.14a-11(c) or 240.14a-12
GLOBAL PHARMACEUTICAL CORPORATION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / 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:
___________________________________________________________________________
GLOBAL LOGO
GLOBAL PHARMACEUTICAL CORPORATION
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Tuesday, May 12, 1998 at 10:00 A.M., Eastern
Standard Time, at Mellon Bank Center, 1735 Market Street, 8th Floor, Forum
Room, Philadelphia, Pennsylvania.
The formal Notice of Meeting and the accompanying Proxy Statement set
forth proposals for your consideration this year. You are being asked to elect
directors, to act upon a proposal to approve certain amendments to the
Company's 1995 Stock Incentive Plan and to ratify the appointment of Price
Waterhouse LLP as the independent accountants of the Company.
At the meeting, the Board of Directors will also report on the affairs of
the Company, and a discussion period will be provided for questions and
comments of general interest to stockholders.
We look forward to greeting personally those of you who are able to be
present at the meeting. However, whether or not you are able to be with us at
the meeting, it is important that your shares be represented. Accordingly, you
are requested to sign, date and mail, at your earliest convenience, the
enclosed proxy in the envelope provided for your use.
Thank you for your cooperation.
Very truly yours,
/s/ Max L. Mendelsohn
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MAX L. MENDELSOHN
President and Chief Executive Officer
April 6, 1998
GLOBAL LOGO
GLOBAL PHARMACEUTICAL CORPORATION
Castor and Kensington Avenues
Philadelphia, Pennsylvania 19124
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1998
---------------------
To the Stockholders of Global Pharmaceutical Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Global
Pharmaceutical Corporation (the "Company") will be held on Tuesday, May 12,
1998 at 10:00 A.M., Eastern Standard Time, at Mellon Bank Center, 1735 Market
Street, 8th Floor, Forum Room, Philadelphia, Pennsylvania, for the following
purposes:
(1) To elect seven directors to serve for the ensuing year.
(2) To consider and act upon a proposal to amend the Company's
1995 Stock Incentive Plan to (i) increase the number of shares that may
be issued thereunder and (ii) provide for the annual grant of 5,000
options to purchase Common Stock of the Company to non-employee
directors who were directors of the Company on or prior to September 1,
1995.
(3) To consider and act upon a proposal to ratify the appointment
of Price Waterhouse LLP as the Company's independent accountants for the
fiscal year ending December 31, 1998.
(4) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 1, 1998 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend the Annual Meeting in
person, each stockholder is urged to complete, date and sign the enclosed form
of proxy and return it promptly in the envelope provided. No postage is
required if the proxy is mailed in the United States. Stockholders who attend
the Annual Meeting may revoke their proxy and vote their shares in person.
By Order of the Board of Directors
CORNEL C. SPIEGLER
Secretary
Philadelphia, Pennsylvania
April 6, 1998
GLOBAL PHARMACEUTICAL CORPORATION
Castor and Kensington Avenues
Philadelphia, Pennsylvania 19124
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PROXY STATEMENT
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GENERAL INFORMATION
General
This Proxy Statement (first mailed to stockholders on or about April
6,1998) is furnished to the holders of Common Stock, par value $.01 per share
(the "Common Stock"), Series A Convertible Preferred Stock, par value $100 per
share (the "Series A Preferred") and Series B Convertible Preferred Stock, par
value $100 per share (the "Series B Preferred") of Global Pharmaceutical
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies for use at the Annual Meeting of
Stockholders (the "Annual Meeting"), or at any adjournment thereof, pursuant to
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held on Tuesday, May 12, 1998 at 10:00 A.M., Eastern Standard Time, at
Mellon Bank Center, 1735 Market Street, 8th Floor, Forum Room, Philadelphia,
Pennsylvania.
It is proposed that at the Annual Meeting: (i) seven directors will be
elected, (ii) certain amendments to the Company's 1995 Stock Incentive Plan
(the "1995 Plan") will be adopted to increase by 200,000 the number of shares
that may be issued thereunder and to provide for the annual grant of 5,000
options to purchase Common Stock of the Company to non-employee directors who
were directors of the Company on or prior to September 1, 1995, and (iii) the
appointment of Price Waterhouse LLP as the independent accountants of the
Company for the fiscal year ending December 31, 1998 will be ratified.
Management currently is not aware of any other matters that will come
before the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons designated as proxies intend to vote in accordance with
their best judgment on such matters.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. Proxies will be solicited chiefly by mail; however,
certain officers, directors, employees and agents of the Company, none of whom
will receive additional compensation therefor, may solicit proxies by
telephone, telegram or other personal contact. The Company will bear the cost
of the solicitation of the proxies, including postage, printing and handling,
and will reimburse the reasonable expenses of brokerage firms and others for
forwarding material to beneficial owners of shares of Common Stock, Series A
Preferred and Series B Preferred (collectively, the "Capital Stock")
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope for
the proxy are enclosed. Unless otherwise indicated on the form of proxy, shares
of Capital Stock represented by any proxy in the enclosed form, assuming the
proxy is properly executed and received by the Company prior to the Annual
Meeting, will be voted with respect to the following items on the agenda: (i)
the election of each of the nominees for director as shown on the form of proxy
(ii) the adoption of the proposed amendments to the 1995 Plan and (iii) the
appointment of Price Waterhouse LLP as the independent accountants of the
Company.
Stockholders may revoke the authority granted by their execution of a
proxy at any time prior to the effective exercise of the powers conferred by
that proxy by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date or by voting in person
at the Annual Meeting. Shares of Capital Stock represented by executed and
unrevoked proxies will be voted in accordance with the instructions specified
in such proxies. If no specifications
are given, the proxies intend to vote the shares represented thereby "for" the
election of each of the nominees for director as shown on the form of proxy,
"for" the proposed amendments to the 1995 Plan and "for" the ratification of
the appointment of Price Waterhouse LLP as the independent accountants of the
Company, and in accordance with their best judgment on any other matters that
may properly come before the meeting.
Record Date and Voting Rights
On April 1, 1998, there were 4,286,871 shares of Common Stock, 13,350
shares of Series A Preferred and 50,000 shares of Series B Preferred
outstanding. Only stockholders of record at the close of business on April 1,
1998 (the "Record Date") are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
Each share of Common Stock is entitled to one vote upon each of the
matters to be presented at the Annual Meeting. The holders of shares of Series
A Preferred and Series B Preferred vote, in general, as a single class with the
holders of the Common Stock, on all matters voted on by the stockholders of the
Company, with each holder of Series A Preferred or Series B Preferred entitled
to the number of shares of Common Stock into which that holder's shares would
then be convertible. At the Record Date, each share of Series A Preferred and
Series B Preferred was convertible into approximately 36 shares of Common
Stock. Accordingly, as of the Record Date, the holders of the shares of Common
Stock, Series A Preferred and Series B Preferred are entitled to cast a total
of 6,590,507 votes.
The affirmative vote of the holders of a plurality of the shares present
in person or represented by proxy and entitled to vote at the Annual Meeting is
required for the election of directors. The affirmative vote of the holders of
a majority of the shares present in person or represented by proxy and entitled
to vote at the Annual Meeting is required for the approval of the amendments to
the 1995 Plan and the ratification of the appointment of Price Waterhouse LLP.
Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum, but will not be counted with
respect to the specific matter being voted upon. As a result, abstentions from
the vote to consider the adoption of the amendments to the 1995 Plan and the
ratification of the appointment of Price Waterhouse LLP and broker non-votes
are effectively treated as votes against the proposals, making it more
difficult to obtain the necessary approval for these proposals. "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.
2
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of March 16, 1998 (except as
otherwise noted in the footnotes) regarding the beneficial ownership of the
Company's Capital Stock of: (i) each person known by the Company to own
beneficially more than five percent of the outstanding Common Stock; Series A
Preferred or Series B Preferred (ii) each director and or nominee for election
as a director of the Company; (iii) each executive officer named in the Summary
Compensation Table (see "Executive Compensation"); and (iv) all directors and
executive officers of the Company as a group. Except as otherwise specified,
the named beneficial owner has the sole voting and investment power over the
shares listed.
Series A Series B Percentage of
Common Stock Preferred Stock** Preferred Stock** Aggregate
-------------------- ------------------- ------------------- Voting Power of
No. of No. of No. of Common and
Name and Address of Beneficial Owner Shares Percent Shares Percent Shares Percent Preferred Stock
- -------------------------------------- --------- --------- -------- --------- -------- --------- ----------------
Frederick R. Adler(1) ................ 664,249 14.8 5,000 37.5 0 10.1
1520 South Ocean Boulevard
Palm Beach, FL 33480
Philip R. Chapman(2) ................. 9,091 * 0 250 * *
c/o Adler & Company
100 First Stamford Place
Stamford, CT 06902
Gary Escandon(3) ..................... 104,589 2.4 500 3.7 500 1.0 1.6
c/o Alvaro P. Escandon, Inc.
17 Prospect Street
Highlands, NJ 07732
George F. Keane(4) ................... 31,667 * 0 0 *
c/o The Common Fund
450 Post Road East
Westport, CT 06881
Michael Markbreiter(5) ............... 0 * 0 0 *
c/o Kingdon Capital
Management Corp.
152 West 57th Street
New York, NY 10019
Max L. Mendelsohn(6) ................. 157,031 3.6 120 * 50 * 2.4
c/o Global Pharmaceutical
Corporation
Castor and Kensington Avenues
Philadelphia, PA 19124
John W. Rowe, M.D.(7) ................ 26,667 * 0 0 *
c/o Mount Sinai Medical Center
1 Gustave L. Levy Place
New York, NY 10029
Udi Toledano(8) ...................... 225,697 5.2 500 3.7 250 * 3.4
545 Madison Avenue
Suite 800
New York, NY 10022
Richard N. Wiener(9) ................. 12,424 * 250 1.9 0 *
Stern, Wiener & Levy
950 Third Avenue
New York, NY 10022
3
Series A Series B Percentage of
Common Stock Preferred Stock** Preferred Stock** Aggregate
----------------------- ------------------- ------------------- Voting Power of
No. of No. of No. of Common and
Name and Address of Beneficial Owner Shares Percent Shares Percent Shares Percent Preferred Stock
- ----------------------------------------- ------------ --------- -------- --------- -------- --------- ----------------
Marc Feinberg(10) ....................... 23,136 * 100 * 0 *
c/o Global Pharmaceutical
Corporation
Castor and Kensington Avenues
Philadelphia, PA 19124
Cornel Spiegler(11) ..................... 42,837 * 50 * 0 *
c/o Global Pharmaceutical
Corporation
Castor and Kensington Avenues
Philadelphia, PA 19124
Joseph A. Storella(12) .................. 30,773 * 200 1.5 0 *
c/o Global Pharmaceutical
Corporation
Castor and Kensington Avenues
Philadelphia, PA 19124
Gary R. Dubin(13) ....................... 529,876 12.4 0 0 8.0
4748 Tivoli Avenue
Sarasota, FL 34235
Merck KGaA(14) .......................... 250,000 5.7 0 0 3.7
Frankfurter Strasse 250
D-64239
Darmstadt, Germany
Bear Stearns Asset Management
Inc. (15) .............................. 458,318 10.2 5,000 37.5 260 * 7.0
575 Lexington Avenue
New York, NY 10167
Kingdon Capital Management
Corporation(16) ........................ 1,454,545 25.3 0 40,000 80.0 22.0
M. Kingdon Offshore N.V. (17) ........... 872,727 16.9 0 24,000 48.0 13.2
Kingdon Associates, L.P. (18) ........... 290,909 6.4 0 8,000 16.0 4.4
Kingdon Partners, L.P. (18) ............. 290,909 6.4 0 8,000 16.0 4.4
c/o Kingdon Capital
Management Corp.
152 West 57th Street
New York, NY 10019
T. Rowe Price Associates, Inc.(19). 427,400 10.0 0 0 6.5
100 E. Pratt Street
Baltimore, MD 21202
All directors and executive
officers as a group
(15 Persons) (1) (2) (3) (4) (5)
(6) (7) (8) (9) (10) (11) (12) .......... 1,387,299 28.5 6,750 50.6 1,050 2.1 20.2
- ------------
* Less than one percent.
** At the option of each holder, as of April 1, 1998, each share of Series A
Preferred and Series B Preferred was convertible at any time into approximately
36.36 shares of the Company's Common Stock.
4
(1) Includes 136,495 shares of Common Stock held by 1520 Partners, Ltd., a
limited partnership of which Mr. Adler is the general partner. Mr. Adler may be
deemed to be the beneficial owner of the shares of Common Stock held by 1520
Partners, Ltd., with respect to which shares Mr. Adler disclaims beneficial
ownership. Also includes a warrant to purchase 17,500 shares of Common Stock
which may be exercised within 60 days and 181,818 shares of Common Stock which
are issuable upon the conversion of 5,000 shares of Series A Preferred.
(2) Consists of 9,091 shares of Common Stock which are issuable upon the
conversion of 250 shares of Series B Preferred. Does not include 50,000 shares
of Common Stock owned by a limited partnership of which Mr. Chapman's wife is
the sole general partner.
(3) Includes 7,500 shares of Common Stock owned by the Alvaro P. Escandon Inc.
Money Purchase Pension Plan dated 12/1/80, with respect to which Mr. Escandon
disclaims beneficial ownership. Also includes a warrant to purchase 3,500
shares of Common Stock which may be exercised within 60 days, 18,181 shares of
Common Stock which are issuable upon the conversion of 500 shares of Series A
Preferred and 18,181 shares of Common Stock which are issuable upon the
conversion of 500 shares of Series B Preferred .
(4) Includes options immediately exercisable for 26,667 shares of Common Stock
(5) Mr. Markbreiter is a portfolio manager for Kingdon Capital Management
Corp., the general partner of M. Kingdon Offshore, N.V., Kingdon Associates,
L.P. and Kingdon Partners, L.P. See also Note 16.
(6) Includes options to purchase 64,584 shares of Common Stock and a warrant
to purchase 3,500 shares of Common Stock which may be exercised within 60 days.
Also includes 4,363 shares of Common Stock which are issuable upon the
conversion of 120 shares of Series A Preferred and 1,818 shares of Common Stock
which are issuable upon the conversion of 50 shares of Series B Preferred.
(7) Consists of options immediately exercisable for 26,667 shares of Common
Stock.
(8) Includes 68,568 shares of Common Stock owned by Mr. Toledano's wife and
22,529 shares of Common Stock owned by a trust for the benefit of minor
children of Mr. Toledano, all of which shares Mr. Toledano disclaims beneficial
ownership. Also includes a warrant to purchase 14,000 shares of Common Stock
exercisable within 60 days, 18,181 shares of Common Stock which are issuable
upon the conversion of 500 shares of Series A Preferred and 9,091 shares of
Common Stock which are issuable upon the conversion of 250 shares of Series B
Preferred.
(9) Consists of 9,091 shares of Common Stock which are issuable upon the
conversion of 250 shares of Series A Preferred and options immediately
exercisable for 3,333 shares of Common Stock.
(10) Includes 3,636 shares of Common Stock which are issuable upon conversion
of 100 shares of Series A Preferred and options to purchase 19,000 shares of
Common Stock which may be exercised within 60 days.
(11) Includes 1,818 shares of Common Stock which are issuable upon the
conversion of 50 shares of Series A Preferred, options to purchase 31,000
shares and a warrant to purchase 3,500 shares of Common Stock which may be
exercised within 60 days.
(12) Includes 7,273 shares of Common Stock which are issuable upon the
conversion of 200 shares of Series A Preferred and options to purchase 23,000
shares of Common Stock which may be exercised within 60 days.
(13) Includes 137,489 shares of Common Stock owned by the Dubin Family Trust
for the benefit of Mr. Dubin's wife and grandchildren.
(14) Includes 100,000 shares of Common Stock currently exercisable pursuant to
common stock purchase warrants. Does not include a currently indeterminate
number of shares of Common Stock
5
underlying another series of common stock purchase warrants (the "Merck B
Warrants") issued to Merck KGaA. The actual number of shares contingently
issuable under the Merck B Warrants are to be based upon future gross profit of
the Company arising from (i) an agreement between a subsidiary of Merck KGaA
and the Company and (ii) other products mutually agreed to by the Company and
Merck KGaA, but in no event in excess of 700,000 shares.
(15) The source of this information is the Schedule 13G, dated February 19,
1998 filed with the Securities and Exchange Commission. Such Schedule 13G
reported that Bear Stearns Asset Management, Inc. has sole power to dispose or
direct the disposition of 458,318 shares which is beneficially owned. Includes
181,818 shares of Common Stock which are issuable upon the conversion of 5,000
shares of Series A Preferred and 9,455 shares of Common Stock which are
issuable upon the conversion of 260 shares of Series B Preferred.
(16) The source of this information is the Schedule 13D dated March 18, 1998
filed with the Securities & Exchange Commission. Such Schedule 13D reported
that Kingdon Capital Management Corporation ("KCMC") is deemed to be the
beneficial owner of 40,000 shares of Series B Preferred (convertible into
1,454,545 shares of Common Stock). KCMC has the sole power to vote, direct the
vote, dispose of or direct the disposition of all the shares of Series B
Preferred that it is currently deemed to beneficially own. The owners of record
of these shares of Series B Preferred are as follows:
Convertible into
Common Stock as
Series B Preferred Follows:
-------------------- -----------------
M. Kingdon Offshore N.V. ......... 24,000 872,727
Kingdon Associates, L.P. ......... 8,000 290,909
Kingdon Partners, L.P. ........... 8,000 290,909
(17) Consists of 872,727 shares of Common Stock which are issuable upon
conversion of 24,000 shares of Series B Preferred. These shares are
beneficially owned by KCMC, its general partner.
(18) Consists of 290,909 shares of Common Stock which are issuable upon
conversion of 8,000 shares of Series B Preferred. These shares are beneficially
owned by KCMC, its general partner.
(19) The source of this information is the Schedule 13G, dated February 12,
1998 filed with the Securities & Exchange Commission. Such Schedule 13G
reported that these securities are owned by various individual and
institutional investors which T. Rowe Price Associates, Inc. ("Price
Associates") serves as investment adviser with power to direct investments
and/or sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates is deemed
to be a beneficial owner of such securities; however, Price Associates
expressly disclaims beneficial ownership of such securities.
6
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Seven directors (constituting the entire Board) are to be elected at the
Annual Meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below (all of whom are currently directors of the
Company) to serve until the next annual meeting of stockholders and until their
respective successors shall have been duly elected and qualified. If any of
these nominees becomes unavailable for any reason, or if a vacancy should occur
before the election, the shares represented by the proxy will be voted for the
person, if any, who is designated by the Board of Directors to replace the
nominee or to fill the vacancy on the Board. All nominees have consented to be
named and have indicated their intent to serve if elected. The Board of
Directors has no reason to believe that any of the nominees will be unable to
serve or that any vacancy on the Board of Directors will occur.
The nominees, their ages and the year in which each became a director and
their principal occupations or employment during the past five years are as
follows:
Director
---------
Name Age Since Position
- ----------------------------- ----- --------- ---------------------------
Philip R. Chapman ........... 36 1995 Director
Gary Escandon ............... 50 1995 Director
George F. Keane ............. 68 1995 Director
Michael Markbreiter ......... 35 1997 Director
Max L. Mendelsohn ........... 64 1993 President, Chief Executive
Officer and Director
John W. Rowe, M.D. .......... 53 1995 Director
Udi Toledano ................ 47 1995 Director
- ------------
Philip R. Chapman has been a principal in Adler & Company, a venture
capital management firm, since 1991 and became a General Partner in 1995. Mr.
Chapman is the son-in-law of Frederick R. Adler, a beneficial owner of greater
than 5% of the outstanding voting shares. Prior to joining Adler & Company, Mr.
Chapman was a senior consultant with Booz Allen & Hamilton International, a
management consulting company based in London. Since May 1997, Mr. Chapman has
served as a director of Shells Seafood Restaurants, Inc., a chain of seafood
restaurants. Mr. Chapman is a director of Integrated Packaging Assembly Corp.,
a semi-conductor packaging company, as well as of a number of private
companies. Mr. Chapman served as Executive Vice President and President of the
Company during a portion of 1995.
Gary Escandon is President of Alvaro P. Escandon Inc., a domestic and
international supplier of home furnishing textile piece goods that he organized
in 1978. From 1991 to 1995, Mr. Escandon was President of Refreshment Service
Corp. and from 1974 to 1978, served as Director of Sales Promotion at The
Mennen Company, a manufacturer of health and beauty aids. From 1972 to 1974,
Mr. Escandon served as Sales Promotion Coordinator at Bristol-Myers Company.
Mr. Escandon has served on the Board of Trustees of Muhlenberg College since
1993.
George F. Keane was the founding Chief Executive Officer of the Common
Fund and served in that capacity from 1971 to 1993 and as President Emeritus
and Senior Investment Advisor until June 1996. As a non-profit organization,
the Common Fund invests funds on behalf of a consortium of educational
institutions. Since 1988, Mr. Keane has been the President of Endowment
Advisers, Inc., a registered investment advisor, and he is currently President
Emeritus and Senior Investment Advisor of Endowment Advisers, Inc. Mr. Keane
has served as Chairman of the Board of Trigen Energy since July 1994. Mr. Keane
also serves on several other boards, including as a director and Chairman of
the Investment Committee of the United Negro College Fund since 1982; a
director of RCB Trust Company since 1991; a director of the Bramwell Funds,
Inc., a registered investment
7
company, since August 1994; a director of Universal Stainless & Alloy Products,
Inc., a manufacturer of specialty steel products, since 1994; a director of the
National Association of College and University Business Officers since 1993; a
director of the School, College and University Underwriters Ltd., Bermuda since
1986; a director of the United Educators Risk Retention Group since 1989; a
member of the Investment Advisory Committee for New York State Common
Retirement Fund since 1982; a trustee of the Nicholas-Applegate Investment
Trust, a registered investment company, since January 1993; a trustee of
Fairfield University since 1993; and a trustee of Endowment Realty Investors,
Inc., a real estate investment trust, since January 1988.
Michael Markbreiter has been a portfolio manager for private equity
investments for Kingdon Capital Management Corp., a manager of investment fund
since August 1995. In April 1994, Mr. Markbreiter co-founded Ram Investment
Corp., a venture capital company. From March 1993 to January 1994, Mr.
Markbreiter served as a portfolio manager for Kingdon Capital Management Corp.
From December 1989 to February 1993, Mr. Markbreiter was an analyst at Alliance
Capital Management Corp. From July 1993 to September 1989, Mr. Markbreiter was
an Executive Editor for Arts of Asia magazine. Mr. Markbreiter has served as a
Director of Alyn Corporation, an advanced materials producer, since May 1996.
Mr. Markbreiter graduated from Cambridge University with a degree in
Engineering.
Max L. Mendelsohn has been President and Chief Executive Officer of the
Company since September 1995. From 1970 to 1990, Mr. Mendelsohn was President
and Chief Executive Officer of Barre-National, Inc., a manufacturer of liquid
pharmaceutical products. From 1991 to 1995, Mr. Mendelsohn served as Vice
President of Business Development of Pharmakinetics Laboratories, Inc., a
provider of clinical and analytical services to United States and Canadian
pharmaceutical companies. Mr. Mendelsohn has been a director of the Generic
Pharmaceutical Industry Association since 1987 and has served as
Secretary-Treasurer of that organization since March 1997.
John W. Rowe, M.D. is President and Chief Executive Officer of The Mount
Sinai School of Medicine and The Mount Sinai Medical Center in New York City,
where he also serves as a Professor of Medicine and of Geriatrics and Adult
Development. Before joining Mount Sinai in 1988, Dr. Rowe was Professor of
Medicine and the founding Director of the Division on Aging at Harvard Medical
School and Chief of Gerontology at Beth Israel Hospital. He has authored over
200 scientific publications, most of them concerning the basic biology and
physiology of the aging process, as well as several textbooks on geriatric
medicine. Since 1985, Dr. Rowe has been a director of the MacArthur Foundation
Research Network on Successful Aging. From 1987 to 1993, Dr. Rowe served on the
Board of Governors of the American Board of Internal Medicine. Since 1989, Dr.
Rowe has been a member of the Institute of Medicine of the National Academy of
Sciences and Chair, Council on Biomedical Research and Development of the New
York Academy of Medicine. Dr. Rowe has been a participant and a member of
numerous medical committees and advisory panels and is the recipient of many
awards and honors within the medical community.
Udi Toledano has been the President of Andromeda Enterprises, Inc., a
private investment company, since December 1993 and Chairman of the Board of
Alyn Corporation, a manufacturer of advanced materials, since January 1997.
Since May 1996, Mr. Toledano has served as a director of HumaScan Inc., a
manufacturer of medical devices. Mr. Toledano was the President of CR Capital
Inc., a private investment company, from 1983 to December 1993. Mr. Toledano
has been a director of Universal Stainless & Alloy Products, Inc., a
manufacturer of specialty steel products, since July 1994.
Committees
The Board of Directors of the Company has an Executive Committee, Audit
Committee, Compensation Committee and Stock Option Committee. During the fiscal
year ended December 31, 1997, each director then in office, except for Mr.
Frederick R. Adler, attended not less than 75% of the aggregate number of
meetings of the Board of Directors and meetings of the committee of the Board
on which he served which were held while such person served in office. The
Board of Directors held five meetings during the fiscal year ended December 31,
1997.
8
The Executive Committee, established in September 1995, consisted of
Messrs. Mendelsohn, Chapman and Toledano during the fiscal year 1997. The
Executive Committee has all the powers of the Company's Board of Directors
except that it is not authorized to amend the Company's Certificate of
Incorporation, declare any dividends or issue shares of the capital stock of
the Company. The Executive Committee met seven times during the fiscal year
ended December 31, 1997, with all members of the Committee in attendance. In
January 1998, Mr. Markbreiter was added as a member of the Executive Committee.
The Audit Committee, established in October 1995, currently consists of
Mr. Toledano, as Chairman, and Messrs. Adler, Chapman, Escandon and Keane and
Dr. Rowe. The Audit Committee reviews with the Company's independent
accountants the scope and timing of their audit services, any other services
they are asked to perform, the report of independent accountants on the
Company's financial statements following completion of their audit and the
Company's policies and procedures with respect to internal accounting and
financial controls. In addition, the Audit Committee makes an annual
recommendation to the Board of Directors concerning the appointment of
independent accountants for the ensuing year. The Audit Committee met two times
during the fiscal year ended December 31, 1997 with all members of the
Committee in attendance except for Mr. Adler.
The Compensation Committee, established in October 1995, currently
consists of Mr. Escandon, as Chairman, and Messrs. Adler, Keane and Mendelsohn.
The Compensation Committee reviews and makes recommendations to the Board of
Directors regarding the compensation and benefits of all officers of the
Company and reviews general policy matters relating to compensation and
benefits of employees of the Company. Prior to the formation of the Stock
Option Committee in March 1997, the Compensation Committee also administered
the 1995 Plan. The Compensation Committee met three times during the fiscal
year ended December 31, 1997 with all members of the Committee in attendance.
The Stock Option Committee, established in March 1997, currently consists
of Mr. Escandon, as Chairman, and Messrs. Adler and Keane. The Committee
reviews the stock option benefits of all officers of the Company and other
participants in the 1995 Plan and makes recommendations to the Board of
Directors, reviews general policy matters relating to stock options proposed to
be granted to employees of the Company and administers the 1995 Plan. The Stock
Option Committee met three times during the fiscal year ended December 31, 1997
with all members of the committee in attendance.
In March 1997, the Board of Directors authorized the formation of the
Scientific Advisory Board to be chaired by Dr. Rowe. The Scientific Advisory
Board has not held a meeting to date. See "Certain Transactions".
Compensation of Directors
Members of the Board of Directors of the Company received no annual
remuneration for acting in that capacity during the fiscal year ended December
31, 1997. The Company's non-employee directors were paid $500 (plus reasonable
expenses) for each attended meeting of the Board of Directors. Pursuant to the
terms of the 1995 Plan, each non-employee director who was not a director of
the Company on or before September 1, 1995 is granted an option to purchase
10,000 shares of Common Stock on the first business day after the Annual
Meeting of Stockholders at which such non-employee director is elected. In June
1997, pursuant to the 1995 Plan, each of Mr. Keane and Dr. Rowe were granted
options to purchase 10,000 shares of Common Stock at an exercise price of $8.50
per share. The 1995 Plan was amended in March 1997 to provide that each person
who is elected as a director at any time other than at an Annual Meeting of
Stockholders shall receive options to purchase 10,000 shares of Common Stock on
the date of such election in lieu of the Director options to be granted after
the Company's next Annual Meeting. In accordance with such amendment, Mr.
Weiner received options in March 1997 to purchase 10,000 shares of Common Stock
at an exercise price of $8.50 and Mr. Markbreiter received options in December
1997 to purchase 10,000 shares of Common Stock at an exercise price of $3.125.
On October 15, 1997, the
9
Board of Directors decided, with "interested" Board members abstaining from the
vote, to grant new options ("New Options") to all employees and directors
holding outstanding incentive stock options or non-incentive stock options to
purchase the Corporation's Common Stock which had been granted at exercise
prices in excess of the then current fair market value of the Common Stock in
order to effectuate the intent and purpose of the 1995 Plan and to create
greater incentives among such employees and directors. In exchange for the
cancellation of each Old Option, an identical New Option was granted having an
exercise price, subject to the Option Plan, of $3.125 per share, the closing
price of the Common Stock as reported on the Nasdaq SmallCap Market on December
19, 1997.
On February 24, 1998, the Board of Directors approved certain amendments
(the "Amendments") to the 1995 Plan, which Amendments are presented to the
stockholders as Proposal 2 hereof, to provide for the increase of the number of
shares that may be issued under the 1995 Plan and the annual grant of 5,000
options to purchase Common Stock of the Company to non-employee directors who
were directors of the Company prior to September 1, 1995. In the event that
these Amendments to the 1995 Plan are approved, Messrs. Chapman, Escandon and
Toledano would be eligible for such grants.
Section 16(a) Beneficial Ownership Reporting Compliance
To the Company's knowledge, the Company's directors, officers and
beneficial owners of ten percent or more of the Company's Common Stock are in
compliance with the reporting requirements of Section 16(a) under the
Securities Exchange Act of 1934, as amended, except for a late filing of a Form
4 by George F. Keane, Schedule 13G by Gary Dubin and Schedule 13D by Kingdon
Capital Management Corp.
Vote Required
The seven nominees receiving the highest number of affirmative votes of
the shares present in person or represented by proxy and entitled to vote for
them shall be elected as directors. Only votes cast for a nominee will be
counted, except that the accompanying proxy will be voted for all nominees in
the absence of instructions to the contrary. Abstentions, broker non-votes and
instructions on the accompanying proxy card to withhold authority to vote for
one or more nominees will not be counted as a vote for any such nominee.
THE BOARD OF DIRECTORS DEEMS THE ELECTION AS DIRECTORS OF THE SEVEN
NOMINEES LISTED ABOVE TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THESE
NOMINEES.
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned by or paid to the
Company's current President and Chief Executive Officer and the Company's other
three most highly compensated executive officers for 1995, 1996 and 1997. No
other person received in excess of $100,000 of compensation from the Company
during 1997.
10
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
------------------------------------------------------- -------------------
Other Annual Common Stock
Compensation Underlying Options
Name and Principal Position Year Salary ($) Bonus ($) $ (#)
- --------------------------------------- ------ ------------------ ----------------- -------------- -------------------
Max L. Mendelsohn, President and 1997 $ 153,578 -- 18,172 (1) 65,000 (2)
Chief Executive Officer 1996 $ 150,001 (3) -- 23,368 (4) --
1995 $ 50,193 (5) -- -- 65,000
Cornel C. Spiegler, Chief Financial 1997 $ 135,660 -- -- 36,000 (2)
Officer and Vice President-- 1996 $ 131,144 -- -- --
Administration 1995 $ 31,250 (6) $ 25,000 (7) -- 36,000
Joseph A. Storella, Vice President -- 1997 $ 133,100 -- -- 36,000 (2)
Operations 1996 $ 78,500 (8) -- -- 36,000
Marc M. Feinberg, Vice President -- 1997 $ 133,100 -- -- 36,000 (2)
Quality Assurance and Regulatory 1996 $ 26,000 (9) -- -- 36,000
Affairs
- ------------
(1) Represents life insurance and long-term disability along with gross-up tax
payments with respect to such insurance payments.
(2) Represents the cancellation of the Old Options and the issuance of
identical repriced New Options having an exercise price of $3.125 per
share.
(3) The salary excludes $28,558 that was earned by Mr. Mendelsohn in 1995 and
paid to him in 1996.
(4) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments in the
amount of $17,895 for 1996 and $5,473 paid in 1996 for life insurance and
related gross-up tax payments for premiums due in 1997.
(5) Mr. Mendelsohn has served as President and Chief Executive Officer of the
Company since September 1995. The salary includes $28,558 that was earned
by Mr. Mendelsohn in 1995 and paid to him in 1996.
(6) Mr. Spiegler has served as Chief Financial Officer and Vice President -
Administration of the Company since September 1995.
(7) Bonus earned in 1995 and paid in 1996.
(8) Mr. Storella has served as Vice President - Operations of the Company since
May 1996.
(9) Mr. Feinberg has served as Vice President - Quality Assurance and
Regulatory Affairs since October 1996.
The following table sets forth information on option grants in the fiscal
year ended December 31, 1997 to the persons named in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
% of Total Options
Number of Securities Granted to
Underlying Options Employees in Exercise
Name Granted(1) Fiscal Year Price ($/SH) Expiration Date
- ---------------------------- ---------------------- ------------------- -------------- ----------------
Max L. Mendelsohn .......... 12,500 3.9% $3.125 09/01/05
52,500 16.5% $3.125 12/19/05
Cornel C. Spiegler ......... 36,000 11.4% $3.125 09/27/05
Joseph A. Storella ......... 36,000 11.4% $3.125 05/20/06
Marc M. Feinberg ........... 36,000 11.4% $3.125 10/14/06
- ------------
(1) Represents cancellation of Old Options and issuance of identical repriced
New Options.
11
The following table sets forth information with respect to unexercised
stock options held at December 31, 1997 by the persons named in the Summary
Compensation Table. There were no exercises of options to purchase Common Stock
by such individuals during the fiscal year ended December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised
Options Held at in-the-Money Options at
Fiscal Year End (#) Fiscal Year End($)(1)
------------------------------- ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------- ------------- --------------- ------------- --------------
Max L. Mendelsohn .......... 50,556 14,444 $15,799 $ 4.514
Cornel C. Spiegler ......... 27,000 9,000 $ 8,438 $ 2.813
Joseph A. Storella ......... 19,000 17,000 $ 5,938 $ 5.313
Marc M. Feinberg ........... 14,000 22,000 $ 4,375 $ 6.875
- ------------
(1) Computed based in the difference between the closing bid price per share
of the Common Stock of $3.4375 on December 31, 1997 and the exercise price
of $3.125.
Stock Option Committee Report on Repricing of Options
The Stock Option Committee endorses the position that equity ownership by
management is beneficial in aligning management's and stockholders' interest in
the enhancement of stockholder value and, accordingly, endorses the stock
option program currently in place. The Committee strongly believes that the
compensation program should provide employees and certain directors with an
opportunity to increase their ownership and potentially gain financially from
Company stock price increases.
The 1995 Plan provides that the exercise price of options granted
thereunder prior to the second anniversary of the Company's initial public
offering shall be the greater of Fair Value and $8.50, the initial public
offering price of the Company's Common Stock. All options under the 1995 Plan
were granted at exercise prices ranging from $8.50 to $11.25, December 19,
1997, the closing price of the Common Stock as reported by Nasdaq was $3.125
per share. Accordingly, because the exercise price of the options granted under
the 1995 Plan are substantially in excess of the market price of the Company's
Common Stock, the grant of options under the 1995 Plan has not served the
Committee's compensation strategy.
The decision by disinterested members of the Board of Directors to reprice
all outstanding options effective December 19, 1997 by canceling all Old
Options and issuing New Options with an exercise price of then-current market
price of $3.125 per share to all employees and those affected directors holding
outstanding Old Options was intended to effectuate the intent and purpose of
the 1995 Plan and to create greater incentives among employees and directors.
The Committee believes that the repricing of all outstanding stock options
meets the compensation strategy and business needs of the Company by
emphasizing increased value for stockholders and retaining key employees and
directors.
Stock Option Committee
Gary Escandon
Frederick R. Adler
George F. Keane
12
Employment Agreements
Max L. Mendelsohn, Pieter J. Groenewoud and Cornel C. Spiegler have
entered into three-year employment agreements with the Company for the position
of President and Chief Executive Officer; Vice President, Product Development;
and Chief Financial Officer and Vice President--Administration; respectively,
effective September 1995, May 1996, and September 1995. Messrs. Mendelsohn's,
Groenewoud's and Spiegler's employment agreements provide for a base annual
salary of $150,000, $90,000 and $125,000, respectively, which may be increased
annually at the discretion of the Board of Directors, as well as stock options
and a customary benefits package. Under Mr. Mendelsohn's employment agreement,
he may be eligible for a performance-based bonus equal to $30,000 which amount
was not earned in 1997.
At the Company's option, the term of each of Messrs. Mendelsohn's,
Groenewoud's and Spiegler's employment agreement may be extended for one
additional year. The employment agreements of Messrs. Mendelsohn, Groenewoud
and Spiegler prohibit them from (i) competing with the Company for one year
following termination of employment with the Company and (ii) disclosing
confidential information or trade secrets in any unauthorized manner. If one of
those employees is discharged without cause (as defined in such employee's
agreement), the Company shall continue to pay such employee at his then current
salary for the longer of six months or the remainder of the agreed upon
employment period.
In connection with his employment agreement, the Company granted Mr.
Mendelsohn an option to purchase 12,500 shares of Common Stock at $5.75 per
share and granted to him in December 1995 an additional option to purchase
52,500 shares of Common Stock at $8.50 per share. The options vest in equal
monthly installments on the last day of each month occurring in the 36-month
period beginning September 1, 1995, subject to Mr. Mendelsohn's continued
employment. The options will become fully vested if Mr. Mendelsohn's employment
is terminated under certain circumstances, including a termination by the
Company without cause. In conjunction with the repricing of all of the
Company's stock options, Mr. Mendelsohn's options were cancelled effective
December 19, 1997 and replaced with identical repriced New Options having an
exercise price of $3.125 per share. On January 27, 1998, Mr. Mendelsohn's
employment agreement was extended by two years through September 1, 2000 at an
annual salary of $165,000 and an option to purchase 25,000 shares of Common
Stock at $3.75 per share was granted. Of the 25,000 shares granted, 5,000
shares became fully vested on January 27, 1998, 10,000 shares will become
vested on September 1, 1999 and the remaining 10,000 shares will become vested
on September 1,2000.
In December 1995, in connection with his employment agreement, the Company
granted Mr. Groenewoud an option to purchase 25,000 shares of Common Stock at
$8.50 per share. One-third of the option vested on October 1, 1996 and the
remaining two-thirds vests in monthly installments over the 24-month period
beginning on October 1, 1996, in each case based on Mr. Groenewoud's continued
employment during that time. In conjunction with the repricing of all of the
Company's stock options, Mr. Groenewoud's options were cancelled effective
December 19, 1997 and replaced with identical repriced New Options having an
exercise price of $3.125 per share. On January 27, 1998, Mr. Groenewoud was
granted an option to purchase 11,000 shares of Common Stock at $3.75 per share
to be vested in monthly installments through October 1, 1998.
In connection with his employment agreement, in December 1995 the Company
granted Mr. Spiegler an option to purchase 36,000 shares of Common Stock at
$8.50 per share. One-third of the option vested on September 27, 1996 and the
remaining two-thirds vests in monthly installments over the 24-month period
beginning on September 27, 1996, in each case based on Mr. Spiegler's continued
employment during that time. In conjunction with the repricing of all of the
Company's stock options, Mr. Spiegler's options were cancelled effective
December 19, 1997 and replaced with identical repriced New Options having an
exercise price of $3.125 per share.
At various times during 1996 and 1997, Joseph Storella, Marc Feinberg,
Mitchell Goldberg and Seymour Hyden entered into three-year employment
agreements with the Company for the position
13
of Vice President-Operations; Vice President-Quality Assurance and Regulatory
Affairs; Vice President-Sales and Marketing; and Vice President-Scientific and
Technical Affairs; respectively. Messrs. Storella's, Feinberg's and Goldberg's
and Dr. Hyden's employment agreements provide for a base annual salary of
$130,000, $130,000, $110,000 and $130,000, respectively, which may be increased
annually at the discretion of the Board of Directors, as well as stock options
and a customary benefits package. Under Mr. Goldberg's employment agreement, he
received a sign-on bonus of $10,000. In addition, he may be eligible for
certain performance-based bonuses in 1997 in the amount of $5,000 per quarter
in the event that the Company reaches certain projected sales goals, which
amount shall be proportionally increased in the event that such goals are
exceeded, and $10,000 per quarter in 1998 in the event that such projections
are met. In January, 1998, Mr. Goldberg was paid a sales bonus of $10,000
regarding the 1997 sales performance.
The term of each of Messrs. Storella's, Feinberg's and Goldberg's and Dr.
Hyden's employment agreement may be extended. The employment agreements of
Messrs. Storella, Feinberg and Goldberg and Dr. Hyden prohibit them from (i)
competing with the Company for one year following termination of employment
with the Company and (ii) disclosing confidential information or trade secrets
in any unauthorized manner. If Mr. Goldberg is discharged without cause (as
defined in his agreement), the Company shall continue to pay Mr. Goldberg his
then current salary for the lesser of six months or the remainder of the agreed
upon employment period. If Messrs. Storella or Feinberg or Dr. Hyden is
discharged without cause (as defined in such employee's agreement), the Company
shall continue to pay such employee his then current salary for a period of six
months.
In 1996, in connection with his employment agreement, the Company granted
Mr. Storella an option to purchase 36,000 shares of Common Stock at $9.13 per
share. One-third of the option vests on May 20, 1997 and the remaining
two-thirds vests in monthly installments over the 24-month period beginning on
May 20, 1997, in each case based on Mr. Storella's continued employment during
that time. In conjunction with the repricing of all of the Company's stock
options, Mr. Storella's options were cancelled effective December 19, 1997 and
replaced with identical repriced New Options having an exercise price of $3.125
per share.
In 1996, in connection with his employment agreement, the Company granted
Mr. Feinberg an option to purchase 36,000 shares of Common Stock at $8.50 per
share. One-third of the option vests on October 14, 1997 and the remaining
two-thirds vests in monthly installments over the 24-month period beginning on
October 14, 1997, in each case based on Mr. Feinberg's continued employment
during that time. In conjunction with the repricing of all of the Company's
stock options, Mr. Feinberg's options were cancelled effective December 19,
1997 and replaced with identical repriced New Options having an exercise price
of $3.125 per share.
In 1997, in connection with his employment agreement, the Company granted
Mr. Goldberg an option to purchase 36,000 shares of Common Stock at $8.50 per
share. One-third of the option vests on March 17, 1998 and the remaining
two-thirds vests in monthly installments over the 24-month period beginning on
March 17, 1998, in each case based on Mr. Goldberg's continued employment
during that time. In conjunction with the repricing of all of the Company's
stock options, Mr. Goldberg's options were cancelled effective December 19,
1997 and replaced with identical repriced New Options having an exercise price
of $3.125 per share.
In 1997, in connection with his employment agreement, the Company granted
Dr. Hyden an option to purchase 36,000 shares of Common Stock at $8.50 per
share. One-third of the option vests on March 31, 1998 and the remaining
two-thirds vests in monthly installments over the 24-month period beginning on
March 31, 1998, in each case based on Dr. Hyden's continued employment during
that time. In conjunction with the repricing of all of the Company's stock
options, Mr. Hyden's options were cancelled effective December 19, 1997 and
replaced with identical repriced New Options having an exercise price of $3.125
per share.
14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Merck KGaA Relationship
The Company has entered into agreements with Merck KGaA, a German
corporation and a stockholder of the Company, and two of its indirect
subsidiaries, Genpharm, Inc. ("Genpharm") and Dey Laboratories, Inc. ("Dey"),
concerning the Company's serving as a secondary site manufacturer for a minimum
of 30% of Genpharm's United States requirements of Ranitidine, the generic
version of the brand name drug Zantac (the "Genpharm Agreement"), and the
distribution of certain of the Company's generic products through Dey. During
1997, the agreement with Dey was terminated. Merck KGaA owns 150,000 shares of
Common Stock of the Company, holds warrants to acquire 100,000 shares and has
the right to acquire warrants to purchase additional shares. See "Beneficial
Ownership of Common Stock by Certain Stockholders and Management."
In January 1997, the Company entered into an amendment to the Genpharm
Agreement (the "Amendment"), pursuant to which the Company shall supply
packaging with respect to Genpharm's United States Ranitidine 1 production
requirements based on a five-year cost-plus and percentage of profits
compensation arrangement following Genpharm's receipt of the requisite FDA
Ranitidine approvals. In addition to the manufacture and distribution of
Ranitidine, the Amendment provides the Company with the opportunity to develop
products with the assistance of Merck KGaA that are marketed outside the U.S.
The Company paid legal fees in the amount of $18,040 to Stern, Wiener and Levy
during 1997 in connection with the amendment to the Genpharm Agreement. Richard
Wiener, a director of the Company, was a partner at Stern, Wiener & Levy.
Scientific Advisory Board
In March 1997, the Board of Directors authorized the formation of a
Scientific Advisory Board to be chaired by Dr. Rowe. As Chairman, Dr. Rowe will
receive an initial stipend of $30,000 along with options to purchase 15,000
shares of Common Stock having an exercise price equal to the fair market value
on the date of the grant. Dr. Rowe will also receive an annual grant of an
option to purchase 5,000 shares of Common Stock as well as an option to
purchase 1,000 shares of Common Stock for each meeting attended, with a maximum
of four meetings per year. Each other member of the Scientific Advisory Board
will receive an option to purchase 2,000 shares of Common Stock on the date of
joining the board, a stipend of $1,000 per meeting and a grant of an option to
purchase 750 shares of Common Stock for each meeting attended, with a maximum
of four meetings per year.
PROPOSAL NO. 2--ADOPTION OF CERTAIN AMENDMENTS
TO THE COMPANY'S 1995 STOCK INCENTIVE PLAN
The Board of Directors has unanimously adopted, subject to stockholder
approval, certain amendments to the Company's 1995 Plan which would (i)
increase the number of shares of Common Stock that may be issued thereunder
from 550,000 shares to 750,000 shares and (ii) provide for the annual grant of
5,000 options to purchase Common Stock of the Company to non-employee directors
who were directors of the Company on or prior to September 1, 1995. A copy of
sections of the 1995 Plan, marked to reflect the Amendments, is annexed hereto
as Appendix A. In June 1996, the Company's Stockholders approved an amendment
to increase the number of shares of Common Stock from 400,000 shares to 550,000
shares. As of March 16, 1998, the number of shares available for future grants
under the 1995 Plan was 79,700, with no shares of Common Stock having been
issued under the 1995 Plan.
The 1995 Plan, as amended hereby, was adopted by the Company's Board of
Directors for the purpose of securing for the Company and its stockholders the
benefits of ownership of Company stock options by directors who are not
employees, and who were not directors on or before September 1, 1995 ("Eligible
Directors"), directors who are not employees and who were directors of the
Company on or before September 1, 1995 ("Pre-IPO Directors"), officers and
other key employees ("Key Employees") of the Company (and any subsidiary
corporations) who are expected
15
to contribute to the Company's future growth and success. At March 16, 1998,
four Eligible Directors, three Pre-IPO Directors (assuming approval of the
Amendments by the Company's Stockholders) and approximately 56 Key Employees
were eligible to participate in the 1995 Plan. No award may be granted under
the 1995 Plan after September 14, 2005.
The Company may in its sole discretion grant options to Key Employees and
must grant options to the Company's Eligible Directors and (if the Amendments
are approved by the Company's Stockholders) Pre-IPO Directors, subject to
specified terms and conditions and in accordance with a specified formula.
Options granted to Key Employees may be either incentive stock options ("ISOs")
meeting the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or non-qualified stock options ("NQSOs") not meting
the requirements of Section 422 of the Code. Options granted to Eligible
Directors and (if the Amendments are approved by the Company's Stockholders)
Pre-IPO Directors are NQSOs.
The 1995 Plan provides that it may be administered by the Board of
Directors or a committee appointed by the Board. The Board has designated the
Stock Option Committee (the "Committee") to administer the 1995 Plan. Subject
to the terms of the 1995 Plan, the Committee will determine the Key Employees
who will receive grants of options, the number of shares of Common Stock
subject to each option, the grant date, the expiration date and the terms and
conditions for the options. Options granted to Eligible Directors and (if the
Amendments are approved by the Company's Stockholders) Pre-IPO Directors are
governed by the formula discussed below. The Committee has the authority to
construe and interpret the provisions of the 1995 Plan and the options granted
thereunder. Each grant of options are to be evidenced by a stock option
agreement executed by the Company and the Eligible Director, Pre-IPO Director
or Key Employee, as the case may be, at the time of grant, in accordance with
the terms and conditions of the 1995 Plan.
An option granted to a Key Employee expires on the date determined by the
Committee, which date may not exceed ten years from the date the option is
granted. Unless otherwise specified by the Committee for a particular grant,
options granted to Key Employees vest equally over four years, commencing on
the first anniversary of the date of grant, in each case assuming the recipient
has been continuously employed by the Company or any subsidiary during that
time.
If a Key Employee's employment with the Company is terminated for any
reason other than death or disability or a discharge for cause, any outstanding
option, to the extent that it was exercisable on the date of such termination,
may be exercised by the holder within three months after such termination (or
such shorter time as may be specified by the Committee), but in no event later
than the expiration of the option. If a Key Employee dies or becomes totally
and permanently disabled while an employee of the Company or a subsidiary, or
dies within three months after the Key Employee ceases to be such an employee,
any outstanding option, to the extent that it has vested may be exercised by
the Key Employee (his estate, or by the person to whom the option is
transferred by will or the laws of descent and distribution, as the case may
be) within the period of one year after the date of death or the date the Key
Employee ceases to be an employee because of such disability (or within such
lesser period as may be specified by the Committee). If a Key Employee is
discharged for "cause" (as defined in the 1995 Plan), the right of such Key
Employee to exercise an option will terminate immediately upon cessation of
such services.
The 1995 Plan provides for a one-time grant to Eligible Directors
immediately prior to the Company's initial public offering (the "Initial
Grant"), pursuant to which each of two directors were granted an option to
purchase 30,000 shares in December 1995. The formula pursuant to which Eligible
Directors are granted options under the 1995 Plan provided that on the first
business day following the 1996 annual meeting of stockholders and on the first
business day following each successive annual meeting of stockholders, each
person who is elected as a director after that meeting and is an Eligible
Director, and each person who continues to serve as director after that meeting
and is an Eligible Director, shall be granted an option to purchase 10,000
shares of Common Stock (the "Eligible Director Options") in recognition of
service as a director. Each person who is elected as a director at any time
other than at an Annual Meeting of Stockholders shall
16
receive options to purchase 10,000 shares of Common Stock on the date of such
election in lieu of the Eligible Director Options to be granted after the
Company's next Annual Meeting. The Amendments, if adopted, automatically would
grant to each Pre-IPO Director on the first business day following the 1998
Annual Meeting of Stockholders and on the first business day following each
successive Annual Meeting of Stockholders (to the extent such Pre-IPO Director
continues to serve as a director after that meeting), an option under the 1995
Plan to purchase 5,000 shares of Common Stock (the "Pre-IPO Director Options"
and, together with the Eligible Director Options, the "Director Options").
Director Options expire ten years from the date of grant and vest ratably over
three years commencing on the first anniversary of the date of grant, assuming
that the recipient continuously serves as a director during that time;
provided, however, one-third of the Initial Grant shall be vested upon its
grant and the remaining two-thirds shall vest ratably over three years
commencing on the first anniversary of the date of grant. All vested options
granted to the directors under the 1995 Plan remain exercisable until their
expiration date.
Options granted under the 1995 Plan must be exercised within ten years of
grant date, except that an ISO granted to a person owning more than 10% of the
total combined voting power of all classes of stock of the Company or of any
parent or subsidiary of the Company (a "Ten Percent Stockholder") must be
exercised within five years of the grant date.
The exercise price of each option granted under the 1995 Plan shall be the
fair market value per share of the Common Stock on the date the option is
granted. On October 15, 1997, the Board of Directors repriced all outstanding
options effective December 19, 1997. See "Stock Option Committee Report on
Repricing of Options."
For ISOs granted to a Ten Percent Stockholder, the exercise price cannot
be less than 110% of the fair market value (the "Fair Value") per share of
Common Stock. The exercise price may be paid in cash (by check) by transferring
shares of Common Stock owned by the option holder and having a Fair Value on
the date of surrender equal to the aggregate exercise price of the option, or
solely with respect to options granted to Key Employees by cash payments in
installments or pursuant to a full recourse promissory note, in either case,
upon the terms and conditions as the Committee determines. Upon the exercise of
any option, the Company is required to comply with all applicable withholding
tax requirements.
The Board may amend or terminate the 1995 Plan at any time (except that
the provisions governing the grant of Options to Eligible Directors and Pre-IPO
Directors, if the Amendments are adopted, may not be amended more than once
every six months other than to comply with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended) and in any respect, except
that the Board or the Committee cannot, without the approval of the
stockholders of the Company, amend the 1995 Plan if stockholder approval is
required pursuant to (i) Rule 16b-3 under the Securities Exchange Act of 1934,
as amended, or (ii) Section 422 of the Code and such amendment would affect the
status of any ISO under Section 422 of the Code. No amendment of the 1995 Plan,
without the option holder's consent, may adversely affect any options
previously granted him or her.
17
The table below indicates stock options that have been granted during the
1997 fiscal year under the 1995 Plan to (i) each person named in the Summary
Compensation Table appearing earlier in this Proxy Statement, (ii) all current
executive officers of the Company as a group, (iii) all current directors who
are not executive officers as a group and (iv) all employees of the Company,
including all current officers of the Company who are not executive officers of
the Company, as a group:
1995 Stock Incentive Plan Benefits Granted During Fiscal 1997
Name and Position Dollar Value ($) (1) Number of Shares (2)
- ----------------------------------------------------------- ---------------------- ---------------------
Max L. Mendelsohn ......................................... $ 97,500 65,000
President and Chief Executive Officer
Cornel C. Spiegler ........................................ $ 54,000 36,000
Chief Financial Officer and Vice President--Administration
Joseph A. Storella ........................................ $ 54,000 36,000
Vice President - Operations
Marc M. Feinberg .......................................... $ 54,000 36,000
Vice President - Quality Assurance and Regulatory Affairs
Executive Officers as a Group ............................. $ 405,000 270,000
Non-Executive Officer Director Group ...................... $ 180,000 120,000
Non-Executive Officer Employee Group ...................... $ 70,200 46,800
- ------------
(1) The closing price of Common Stock on the Nasdaq SmallCap Market on March
5, 1998 was $4.625. The dollar value listed is the excess, if any, of the
closing price of the Common Stock on March 5,1998 over the exercise price
of the options.
(2) Represents cancellation of Old Options and issuance of identical repriced
New Options with an exercise price of $3.125 per share.
Federal Income Tax Consequences
An optionee will not realize taxable income upon the grant of an option.
In general, the holder of an NQSO will realize ordinary income when the option
is exercised equal to the excess of the value of the stock over the exercise
price (i.e. the option spread), and the Company is entitled to a corresponding
deduction. (If an option is exercised within six months after the date of grant
and if the optionee is subject to the six month restrictions on sale of Common
Stock under Section 16(b) of the Securities Exchange Act of 1934, as amended,
the optionee generally will recognize ordinary income on the date the
restrictions lapse, unless early income recognition election is made.) Upon a
later sale of the stock, an optionee will realize capital gain or loss equal to
the difference between the selling price and the value of the stock at the time
the option was exercised (or, if later, the time when ordinary income was
realized in respect of the exercise).
The holder of an ISO will not realize taxable income upon the exercise of
the option (although the option spread included in income for purpose of the
alternative minimum tax). If the stock acquired upon exercise of the ISO is
sold or otherwise disposed of within two years from the option grant date or
within one year from the exercise date, then, in general, gain realized on the
sale is treated as ordinary income to the extent of the option spread at the
exercise date, and the Company receives a corresponding deduction. Any
remaining gain is treated as capital gain. If such stock is sold after the
one-and-two-year holding periods described in the preceding sentence, then any
gain or loss realized upon the sale will be capital gain or loss and the
Company will not be entitled to a deduction. A special basis adjustment applies
to reduce the gain for alternative minimum tax purposes.
The Amendments to the 1995 Plan
The Board of Directors believes that the approval of the Amendments will
serve the best interest of the Company and its stockholders. The Board of
Directors believes that the amendment to
18
increase the number of shares which may be issued under the 1995 Plan will
permit the Stock Option Committee to exercise needed flexibility in the
administration of the 1995 Plan and the granting of options thereunder. In
addition, the Board believes that the ability to grant additional options will
help attract, motivate and retain key employees who are in a position to
contribute to the successful conduct of the business and affairs of the Company
as well as stimulate in such individuals an increased desire to render greater
service to the Company. The Board of Directors further believes that the
amendment to provide for the annual grant of 5,000 options to purchase Common
Stock to Pre-IPO Directors serves, among other things, to recognize their
continuing and increased responsibilities to the Company and to encourage
continued service by such individuals.
Accordingly, the Board of Directors recommends that the stockholders
approve the following resolutions:
RESOLVED, that the total number of shares of the Corporation's Common
Stock which may be issued under the Corporation's 1995 Stock Incentive
Plan (the "Plan") shall be increased to 750,000 shares, and that the first
sentence of Section 4 of the Plan be amended to read in its entirety as
follows:
"Subject to adjustment as provided in Sections 13 and 14 below, the
maximum number of shares of Common Stock of the Company that may be
issued and sold pursuant to Options granted under the Plan is 750,000
shares in the aggregate (one share per Option)"
RESOLVED, that the Plan be amended by restating paragraph (a) of Section 2
thereof to read in its entirety as follows:
"(a) Types of Awards. Under the Plan, the Company may in its sole
discretion grant, with respect to the Company's common stock, par value
$.01 per share ("Common Stock") to key employees (the "Key Employees"),
as authorized by action of the Board of Directors of the Company (or a
committee designated by the Board of Directors), and the Company shall,
subject to the terms and conditions hereof, grant to each director of
the Company who is not an employee and who was not a director on or
before September 1, 1995 (an "Eligible Director") and to each director
of the Company who is not an employee and who was a director on or
before September 1, 1995 (a "Pre-IPO Director"), Options in accordance
with the formula set forth in Section 7 hereof. As used in the Plan, an
"Award" shall mean an Option and an "Award Owner" shall mean the owner
of an Option. Options granted pursuant to the Plan to Key Employees may
be either incentive stock options ("Incentive Stock Options") meeting
the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or non-statutory options ("Non-Statutory Stock
Options"), which are not intended to or do not meet the requirements of
Code Section 422. Options granted to Eligible Directors and Pre-IPO
Directors pursuant to the Plan shall be only Non-Statutory Stock
Options."
RESOLVED, that the Plan be amended by restating paragraph (a) of Section 7
thereof to read in its entirety as follows:
"(a) Non-discretionary Grants. Notwithstanding anything to the contrary
contained in this Plan, Eligible Directors shall be granted Options
("Director Options") as follows: (i) immediately prior to the initial
public offering of shares of Common Stock, each Eligible Director shall
be granted 30,000 Director Options to purchase 30,000 shares of Common
Stock in the aggregate, subject to vesting as provided in Section 7(d)
below, (ii) on the first business day following the annual meeting of
shareholders of the Company to elect directors in 1996, and thereafter
on the first business day following each successive annual meeting of
shareholders, so long as Director Options remain available for grant,
each person who is elected as a director at that meeting and is an
Eligible Director, and each person who continues to serve as a director
after that meeting, and is an Eligible Director, shall be granted
10,000 Director Options to purchase 10,000 shares of Common
19
Stock in the aggregate, subject to vesting as provided in Section 7(d)
below, and (iii) on the first business day following the annual meeting
of shareholders to elect directors in 1998, and thereafter on the first
business day following each successive annual meeting of shareholders,
so long as Director Options remain available for grant, each Pre-IPO
Director who continues to serve as a director after that meeting shall
be granted 5,000 Director Options to purchase 5,000 shares of Common
Stock in the aggregate, subject to vesting as provided in Section 7(d)
below. Notwithstanding the foregoing, each person who is elected as a
director at any time after the date of the annual meeting of
stockholders and is an Eligible Director shall be granted, on the
effective date of such election, 10,000 Director Options to purchase
10,000 shares of Common Stock in the aggregate, subject to vesting as
provided in Section 7(d) below, so long as Director Options remain
available for grant. Such Director Options shall be granted in lieu of
the Director Options which would otherwise be granted to such Eligible
Director on the first business day following the next annual meeting of
the stockholders pursuant to the first sentence of this Section 7(a)."
RESOLVED, that the Plan be amended by replacing, except to the extent
appearing in the foregoing resolutions, all occurrences of the phrase
"Eligible Director" appearing in the 1995 Plan and the exhibits thereto
with the phrases "Eligible Director and Pre-IPO Director" or "Eligible
Director or Pre-IPO Director" as the context shall reasonably dictate.
Vote Required
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required for adoption of the proposed Amendments to the 1995 Plan.
THE BOARD OF DIRECTORS DEEMS PORPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
PROPOSAL NO. 3--RATIFICATION OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of Price
Waterhouse LLP as the independent accountants of the Company for the fiscal
year ending December 31, 1998. Price Waterhouse LLP audited the financial
statements of the Company for the fiscal year ended December 31, 1997. A
representative of Price Waterhouse LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement if he or she desires to
do so and is expected to be available to respond to appropriate questions from
stockholders.
Vote Required
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting is
required for ratification of the selection of Price Waterhouse LLP as the
Company's independent accountants for the fiscal year ending December 31, 1998.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 3 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the Annual
Meeting of Stockholders of the Company to be held in 1999 must be received by
the Company no later than December 7, 1998 for inclusion in the Board of
Directors' proxy statement and form of proxy relating to that meeting.
20
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend
the Annual Meeting, please sign the proxy and return it in the enclosed
envelope.
By Order of the Board of Directors
CORNEL C. SPIEGLER
Secretary
Dated: April 6, 1998
21
APPENDIX A
Below is the text of the portion of the Company's 1995 Plan as proposed to
be amended pursuant to Proposal No. 2. Proposed language to the 1995 Plan which
requires shareholder approval is set forth underlined and the language proposed
to be deleted is set forth in brackets. The number and heading of the sections
which are proposed to be amended are set forth in bold type.
2. Types of Plan Benefits and Administration
(a) Types of Awards. Under the Plan, the Company may in its sole
discretion grant, with respect to the Company's common stock, par value
$.01 per share ("Common Stock") to key employees (the "Key Employees"), as
authorized by action of the Board of Directors of the Company (or a
committee designated by the Board of Directors), and the Company shall,
subject to the terms and conditions hereof, grant to each director of the
Company who is not an employee and who was not a director on or before
September 1, 1995 (an "Eligible Director") and to each director of the
Company who is not an employee and who was a director on or before
September 1, 1995 (a "Pre-IPO Director"), Options in accordance with the
formula set forth in Section 7 hereof. As used in the Plan, an "Award"
shall mean an Option and an "Award Owner" shall mean the owner of an
Option. Options granted pursuant to the Plan to Key Employees may be either
incentive stock options ("Incentive Stock Options") meeting the
requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-statutory options ("Non-Statutory Stock
Options"), which are not intended to or do not meet the requirements of
Code Section 422. Options granted to Eligible Directors and Pre-IPO
Directors pursuant to the Plan shall be only Non-Statutory Stock Options.
7. Non-discretionary Formula Grants of Awards to Eligible Directors
(a) Non-discretionary Grants. Notwithstanding anything to the contrary
contained in this Plan, Eligible Directors shall be granted Options
("Director Options") as follows: (i) immediately prior to the initial
public offering of shares of Common Stock, each Eligible Director shall be
granted 30,000 Director Options to purchase 30,000 shares of Common Stock
in the aggregate, subject to vesting as provided in Section 7(d) below,
[and] (ii) on the first business day following the annual meeting of
shareholders of the Company to elect directors in 1996, and thereafter on
the first business day following each successive annual meeting of
shareholders, so long as Director Options remain available for grant, each
person who is elected as a director at that meeting and is an Eligible
Director, and each person who continues to serve as a director after that
meeting, and is an Eligible Director, shall be granted 10,000 Director
Options to purchase 10,000 shares of Common Stock in the aggregate, subject
to vesting as provided in Section 7(d) below, and (iii) on the first
business day following the annual meeting of shareholders to elect
directors in 1998, and thereafter on the first business day following each
successive annual meeting of shareholders, so long as Director Options
remain available for grant, each Pre-IPO Director who continues to serve as
a director after that meeting shall be granted 5,000 Director Options to
purchase 5,000 shares of Common Stock in the aggregate, subject to vesting
as provided in Section 7(d) below. Notwithstanding the [prior sentence]
foregoing, each person who is elected as a director at any time after the
date of the annual meeting of stockholders and is an Eligible Director
shall be granted, on the effective date of such election, 10,000 Director
Options to purchase 10,000 shares of Common Stock in the aggregate, subject
to vesting as provided in Section 7(d) below, so long as Director Options
remain available for grant. Such Director Options shall be granted in lieu
of the Director Options which would otherwise be granted to such [director]
Eligible Director on the first business day following the next annual
meeting of the stockholders pursuant to the first sentence of this Section
7(a).
22
Change throughout the 1995 Plan
All occurrences of the phrase "Eligible Director" appearing in the 1995
Plan and the exhibits thereto, except to the extent appearing in the
foregoing paragraphs, are hereby changed to refer to "Eligible Director and
Pre-IPO Director" or "Eligible Director or Pre-IPO Director" as the context
shall reasonably dictate.
23
GLOBAL PHARMACEUTICAL CORPORATION
This Proxy Is Solicited By The Board Of Directors For The Annual Meeting Of
Stockholders To Be Held On May 12, 1998
The undersigned, a stockholder of Global Pharmaceutical Corporation (the
"Corporation"), hereby constitutes and appoints Max L. Mendelsohn and Cornel C.
Spiegler and each of them, the true and lawful proxies and attorneys-in-fact of
the undersigned, with full power of substitution in each of them, to vote all
shares of Common Stock of the Corporation which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Corporation to be held on
Tuesday, May 12, 1998, and at any and all adjournments or postponements
thereof, as follows:
(1) ELECTION OF DIRECTORS
/ / FOR the nominees listed below / / WITHHOLDING AUTHORITY
(except as marked to the contrary to vote for all the nominees
below) listed below
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Nominees: Philip R. Chapman, Gary Escandon, George F. Keane, Michael
Markbreiter, Max L. Mendelsohn, John W. Rowe and Udi Toledano
(2) PROPOSAL FOR THE ADOPTION OF CERTAIN AMENDMENTS TO THE COMPANY'S 1995 STOCK
INCENTIVE PLAN
/ / FOR / / AGAINST / / ABSTAIN
(3) PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LP
/ / FOR / / AGAINST / / ABSTAIN
(4) In their discretion, upon such other business as may properly come before
the meeting and any and all adjournments and postponements thereof.
(Continued on reverse side.)
(Continued)
Shares represented by this Proxy will be voted in accordance with the
instructions indicated in items 1, 2, 3 and 4 above. If no instruction is
indicated, this Proxy will be voted FOR all listed nominees for directors and
FOR Proposals 2 and 3.
Any and all proxies heretofore given by the undersigned are hereby revoked.
Dated:
---------------------------------
--------------------------------------
--------------------------------------
Please sign exactly as your name(s)
appear hereon. If shares are held by two
or more persons each should sign.
Trustees, executors and other
fiduciaries should indicate their
capacity. Shares held by corporations,
partnerships, associations, etc. should
be signed by an authorized person,
giving full title or authority.
Please Date, Sign and Mail in the Enclosed Reply Envelope