SCHEDULE 14A
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 Under 14a-12
IMPAX LABORATORIES, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
|X| No Fee Required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(I)(4) 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
IMPAX LABORATORIES, INC.
30831 Huntwood Avenue
Hayward, California 94544
- --------------------------------------------------------------------------------
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on Monday, May 22, 2000 at 10:00 A.M., Pacific Standard
Time, at Crowne Plaza Hotel, 1221 Chess Drive, Foster City, CA 94404.
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 and to ratify the appointment of PricewaterhouseCoopers 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,
Charles Hsiao, Ph.D.
Chairman and Co-Chief Executive Officer
April 17, 2000
<PAGE>
IMPAX LABORATORIES, INC.
30831 Huntwood Avenue
Hayward, California 94544
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 2000
- --------------------------------------------------------------------------------
To the Stockholders of Impax Laboratories, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Impax
Laboratories, Inc. (the "Company") will be held on Monday, May 22, 2000 at 10:00
A.M., Pacific Standard Time, at Crowne Plaza Hotel, 1221 Chess Drive, Foster
City, CA 94404, for the following purposes:
(1) To elect nine directors to serve for the ensuing year.
(2) To consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending December 31, 2000.
(3) 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 12, 2000 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
Hayward, California
April 17, 2000
<PAGE>
IMPAX LABORATORIES, INC.
30831 HUNTWOOD AVENUE
HAYWARD, CALIFORNIA 94544
--------------------------------------
PROXY STATEMENT
--------------------------------------
GENERAL INFORMATION
GENERAL
This Proxy Statement (first mailed to stockholders on or about April 17,
2000) is furnished to the holders of Common Stock, par value $.01 per share (the
"Common Stock"), Series 1A Convertible Preferred Stock, par value $.01 per
share, Series 1B Convertible Preferred Stock (collectively with the Series 1A
Convertible Preferred Stock, the "Series 1 Preferred"), and Series 2 Convertible
Preferred Stock, par value $.01 per share (the "Series 2 Preferred"), of Impax
Laboratories, Inc. (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 Monday, May 22, 2000 at 10:00 A.M., Pacific Standard Time, at
Crowne Plaza Hotel, 1221 Chess Drive, Foster City, CA 94404.
At the Annual Meeting stockholders will consider and vote upon: (i) the
election of nine directors to the Board of Directors, and (ii) the ratification
of the appointment of PricewaterhouseCoopers LLP as the independent accountants
of the Company for the fiscal year ending December 31, 2000.
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 1 Preferred and
Series 2 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 and
(ii) ratification of the appointment of PricewaterhouseCoopers 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 and "for" the ratification of the appointment of
PricewaterhouseCoopers 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.
<PAGE>
The enclosed Proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Annual Meeting:
(i) approval of the Minutes of a prior meeting of Stockholders, if such approval
does not amount to ratification of the action taken at the meeting; (ii) the
election of any person to any office for which a bona fide nominee named in this
Proxy Statement is unable to serve or for good cause will not serve; (iii) any
proposal omitted from this Proxy Statement and the form of proxy pursuant to
Rules 14a-8 or 14a-9 under the Securities Exchange Act of 1934; and (iv) matters
incident to the conduct of the Impax Laboratories, Inc. Annual Meeting. In
connection with such matters, the person named in the enclosed proxy will vote
in accordance with their best judgment.
RECORD DATE AND VOTING RIGHTS
On April 12, 2000, there were issued and outstanding 24,869,847 shares of
Common Stock, 220,000 shares of Series 1 Preferred and 150,000 shares of Series
2 Preferred. Only stockholders of record at the close of business on April 12,
2000 (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 1
Preferred and Series 2 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 1 Preferred or Series 2 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 1A Preferred Stock
("Series 1A") was convertible into 50 shares of Common Stock, each share of
Series 1B Preferred Stock ("Series 1B") was convertible into 66.7 shares of
Common Stock and each share of Series 2 Preferred was convertible into 20 shares
of Common Stock. Accordingly, as of the Record Date, the holders of the shares
of Common Stock, Series 1 Preferred and Series 2 Preferred are entitled to cast
a total of 41,711,567 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 ratification of the appointment
of PricewaterhouseCoopers 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 ratification of the appointment of
PricewaterhouseCoopers 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
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of March 31, 2000 (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 that five percent of the outstanding Common Stock, Series 1
Preferred or Series 2 Preferred; (ii) each director and 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.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED +
-------------------------------------------------------------------
SERIES 1 SERIES 2
COMMON STOCK PREFERRED STOCK PREFERRED STOCK
---------------------- ---------------------- ---------------
NAME AND ADDRESS OF BENEFICIAL OWNER NO. OF SHARES PERCENT NO. OF SHARES PERCENT NO. OF SHARES
- ------------------------------------ ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
Barry R. Edwards (1) 118,384 * -- -- -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124
David J. Edwards (2) 1,667 * -- -- -- --
c/o Fleming Capital Management
Robert Fleming, Inc.
320 Park Avenue
New York, NY 10022
Nigel Fleming, Ph.D. -- -- -- -- -- --
2360 Pacific Avenue, #504
San Francisco, CA 94115
Charles Hsiao, Ph.D. (3) 4,942,974 19.2 -- -- 5,000 3.3
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544
Larry Hsu, Ph.D. (4) 2,691,383 10.5 -- -- -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544
Brian Keng (5) -- -- -- -- -- --
c/o China Development
Industrial Bank
3945 Freedom Circle, Suite 1150
Santa Clara, CA 95054
Jason Lin (6) 4,269,357 14.7 55,000 25.0 30,000 20.0
c/o Uni-President Enterprises Corp.
301 Chung Cheng Road
Yeong Kang
Tainan Hslen, Taiwan R.O.C.
Michael Markbreiter (7) 11,667 * -- -- -- --
c/o Kingdon Capital
Management Corp.
152 West 57th Street
New York, NY 10019
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED +
-------------------------------------------------------------------
SERIES 1 SERIES 2
COMMON STOCK PREFERRED STOCK PREFERRED STOCK
---------------------- ---------------------- ---------------
NAME AND ADDRESS OF BENEFICIAL OWNER NO. OF SHARES PERCENT NO. OF SHARES PERCENT NO. OF SHARES
- ------------------------------------ ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
Oh Kim Sun (8) 5,745,324 20.7 40,000 18.2 10,000 6.7
c/o Chemical Company of
Malaysia Berhad
Wisma Sine Darby
14 Jalan Faja Laut
50708 Kuala Lumpur, Malaysia
May Chu (9) 53,373 * -- -- -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544
Marc Feinberg (10) 4,136 * -- -- -- --
103 Swarthmore Drive
Moorestown, NJ 08057
Mitchell Goldberg (11) 38,175 * -- -- -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124
Pieter Groenewoud (12) 13,652 * -- -- -- --
4 Westover Court
Yardley, PA 19067
Cornel C. Spiegler (13) 65,374 * -- -- -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124
Joseph A. Storella (14) 52,000 * -- -- -- --
c/o Impax Laboratories, Inc.
3735 Castor Avenue
Philadelphia, PA 19124
Bear Stearns Asset Management, Inc. (15) 1,918,554 7.7 -- -- -- --
575 Lexington Avenue
New York, NY 10167
Chemical Company of Malaysia Berhad (16) 5,741,154 20.8 40,000 18.2 10,000 6.7
Wisma Sine Darby
14 Jalan Faja Laut
50708 Kuala Lumpur, Malaysia
Chiin Hsiao Children Irrevocable Trust 2,601,924 10.5 -- -- -- --
c/o Laurie A. Miller, Esquire
3542 Oak Knoll Drive
Redwood City, CA 94062
China Development Industrial Bank (17) 4,269,357 14.7 55,000 25.0 30,000 20.0
c/o Brian Keng
3945 Freedom Circle, Suite 1150
Santa Clara, CA 95054
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED +
-------------------------------------------------------------------
SERIES 1 SERIES 2
COMMON STOCK PREFERRED STOCK PREFERRED STOCK
---------------------- ---------------------- ---------------
NAME AND ADDRESS OF BENEFICIAL OWNER NO. OF SHARES PERCENT NO. OF SHARES PERCENT NO. OF SHARES
- ------------------------------------ ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Hsiao (18) 1,658,800 6.6 -- -- -- --
c/o Impax Laboratories, Inc.
30831 Huntwood Avenue
Hayward, CA 94544
Robert Fleming, Inc. (19) 4,625,000 15.7 50,000 22.7 75,000 50.0
Fleming US Discovery Fund III, L.P. 3,986,052 13.6 43,093 19.6 64,637 43.1
Fleming US Discovery Offshore Fund III, L.P. 638,548 2.1 6,907 3.1 10,363 6.9
c/o Robert Fleming, Inc.
320 Park Avenue 11th Floor
New York, NY 10022
Kingdon Capital Management (20) 1,882,353 7.6 -- -- -- --
Kingdon Offshore, N.V. 1,129,412 4.6
Kindon Associates, L.P. 376,471 1.5
Kingdon Partners, L.P. 376,470 1.5
152 West 57th Street
New York, NY 10019
Hsu Children Irrevocable Trust 1,334,320 5.4 -- -- -- --
c/o Laurie A. Miller, Esquire
3542 Oak Knoll Drive
Redwood City, CA 94062
Laurie A. Miller, Esquire (21) 4,037,153 16.2 -- -- -- --
3542 Oak Knoll Drive
Redwood City, CA 94062
Uni-President Enterprises Corp.(22) 4,269,357 14.7 55,000 25.0 30,000 20.0
c/o Jason Lin
301 Chung Cheng Road
Yeong Kang
Tainan Hslen, Taiwan R.O.C.
All directors and executive officers as a
group (15) 18,007,466 53.0 95,000 43.2 45,000 30.0
</TABLE>
- ----------
* Less than one percent
+ Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and includes voting or
investment power with respect to the Capital Stock. Shares currently
exercisable or exercisable within 60 days of the date hereof are deemed
outstanding for computing the share ownership and percentage ownership of
the person holding such securities, but are not deemed outstanding for
computing the percentage of any other person.
(1) Includes options to purchase 117,384 shares of common stock which may be
exercised within 60 days.
(2) Consists of options to purchase 1,667 shares of common stock which may be
exercised within 60 days. Mr. David Edwards is an employee of Fleming
Capital Management, a subsidiary of Robert Fleming, Inc. See also Note 19.
(3) Includes 500,370 shares of common stock held in trust for the benefit of
John Hsiao's children, 250,185 shares of common stock held in trust for the
benefit of Richard Hsiao's children, options to
5
<PAGE>
purchase 83,395 shares of common stock which may be exercised within 60
days, 5,000 shares of Series 2 Preferred which are immediately convertible
into 100,000 shares of common stock and warrants immediately convertible
into 667,160 shares of common stock. Does not include 2,601,924 shares of
common stock held in the Chiin Hsiao Children Irrevocable Trust, as to
which shares Dr. Hsiao does not have voting or dispositive power.
(4) Includes options to purchase 83,395 shares of common stock which may be
exercised within 60 days and warrants immediately convertible into 667,160
shares of common stock. Does not include 1,334,320 shares of common stock
held in the Hsu Children Irrevocable Trust, as to which shares Dr. Hsu does
not have voting or dispositive power.
(5) Mr. Brian Keng is an employee of China Development Industrial Bank. Does
not include shares beneficially owned by China Development Industrial Bank.
See also Note 17.
(6) Because of Mr. Jason Lin's role as President of Uni-President Enterprises
Corporation, he may also be deemed to beneficially own the shares of Series
1B and Series 2 Preferred Stock owned by Uni-President Enterprises
Corporation. Includes 55,000 shares of Series 1B Preferred Stock which
shares are immediately convertible into 3,669,357 shares of common stock
and 30,000 shares of Series 2 Preferred Stock which shares are immediately
convertible into 600,000 shares of common stock. See also Note 22.
(7) Consists of options to purchase 11,667 shares of common stock which may be
exercised within 60 days. Does not include shares beneficially owned by
Kingdon Capital Management Corporation ("KCMC"), the general partner of M.
Kingdon Offshore, N.V., Kingdon Associates, L.P. and Kingdon Partners, L.P.
(collectively, "Kingdon"), with which Mr. Markbreiter is associated See
also Note 20.
(8) Because Mr. Oh Kim Sun is a substantial stockholder of the Chemical Company
of Malaysia, he may also be deemed to beneficially own the shares of Series
1B and Series 2 Preferred Stock owned by the Chemical Company of Malaysia.
Includes 40,000 shares of Series 1B Preferred Stock which shares are
immediately convertible into 2,668,623 of common stock, 10,000 shares of
Series 2 Preferred Stock which shares are immediately convertible into
200,000 shares of common stock and options to purchase 4,170 shares of
common stock which may be exercised within 60 days.
(9) Consists of options to purchase 53,373 shares of common stock which may be
exercised within 60 days.
(10) Mr. Feinberg served as Vice President, Quality Assurance until December
1999.
(11) Consists of options to purchase 38,175 shares of common stock which may be
exercised within 60 days.
(12) Mr. Groenewoud served as Vice President, Product Development until January
2000. Includes options to purchase 10,633 shares of common stock which may
be exercised within 60 days.
(13) Includes options to purchase 53,537 shares of common stock which may be
exercised within 60 days and a warrant to purchase 3,500 shares of common
stock immediately exercisable.
(14) Includes options to purchase 51,000 shares of common stock which may be
exercised within 60 days.
(15) The source of this information is the Schedule 13G, dated February 14, 2000
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 1,693,554 shares which it beneficially owned.
Includes a warrant to purchase 225,000 shares of common stock immediately
exercisable.
(16) Includes shares of Series 1B Preferred Stock immediately convertible into
2,668,623 shares of common stock and shares of Series 2 Preferred Stock
immediately convertible into 200,000 shares of common stock.
6
<PAGE>
(17) Consists of shares of Series 1B Preferred Stock immediately convertible
into 3,669,357 shares of common stock and shares of Series 2 Preferred
Stock immediately convertible into 600,000 shares of common stock.
(18) Includes a warrant to purchase 266,864 shares of common stock immediately
exercisable. Mr. John Hsiao is an employee of the Company and the brother
of Charles Hsiao, the Chairman and the Co-Chief Executive Officer of the
Company.
(19) Consists of shares of series 1A Preferred Stock immediately convertible
into 2,500,000 shares of common stock, warrants to purchase an aggregate of
625,000 shares of common stock which may be exercised within 60 days and
shares of Series 2 Preferred Stock immediately convertible into 1,500,000
shares of common stock.
(20) KCMC, the general partner of Kingdon, is deemed to be the beneficial owner
of the 1,882,353 shares of common stock held by Kingdon.
(21) Includes options for 23,518 shares of common stock which may be exercised
within 60 days and 3,936,244 shares of common stock owned by the Chiin
Hsiao Children Irrevocable Trust and the Hsu Children Irrevocable Trust,
for which Laurie A. Miller, who is corporate counsel to Impax, serves as
trustee, and therefore may be deemed to beneficially own the shares held by
the trust. Ms. Miller disclaims beneficial ownership of these shares.
(22) Consists of shares of Series 1B Preferred Stock immediately convertible
into 3,669,357 shares of common stock and shares of Series 2 Preferred
Stock immediately convertible into 600,000 shares of common stock.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Nine 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 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 become a director and their
principal occupations or employment during the past five years are as follows:
<TABLE>
<CAPTION>
Director
Name Age since Position
---- --- ----- ---------
<S> <C> <C> <C>
Barry R. Edwards 43 1999 Co-Chief Executive Officer and Director
David J. Edwards 34 1999 Director
Nigel Fleming, Ph.D. 45 1999 Director
Charles Hsiao, Ph.D. 56 1999 Chairman, Co-Chief Executive Officer and Director
Larry Hsu, Ph.D. 51 1999 President, Chief Operating Officer and Director
Brian Keng 45 1999 Director
Jason Lin 56 1999 Director
Michael Markbreiter 38 1997 Director
Oh Kim Sun 51 1999 Director
</TABLE>
7
<PAGE>
BARRY R. EDWARDS has been Co-Chief Executive Officer since December 14,
1999, and a Director since January 1999. Previously, Mr. Edwards has served as
President since August 1998 and Chief Executive Officer since January 1999. From
1996 to 1998, Mr. Edwards was Vice President, Marketing and Business Development
for Teva Pharmaceuticals USA, a manufacturer of generic drugs. From 1991 to
1996, Mr. Edwards served as Executive Director of Gate Pharmaceuticals, a
division of Teva Pharmaceuticals USA. Prior to 1991, Mr. Edwards held a number
of management functions in strategic planning, corporate development, business
development and marketing at Teva Pharmaceuticals USA.
DAVID J. EDWARDS has been a Director of Impax Laboratories, Inc. since May
12, 1999, Vice President at Fleming Asset Management since 1994 and a Director
of Alyn Corporation since 1999. Prior to that time, Mr. Edwards was an Associate
with Booz Allen & Hamilton, a strategic management consulting company based in
New York. From 1987 to 1999, Mr. Edwards was a Process Engineer with Exxon
Chemical Corporation. Mr. Edwards received a MBA from Harvard Business School
and a Masters in Engineering from Cambridge University.
NIGEL FLEMING, PH.D. has served as a Director of Impax Laboratories, Inc.
since December 14, 1999, and has been Chief Financial Officer and a director of
Bay Area Psychological Testing (BAPTA) since January, 1999. Dr. Fleming
co-founded Biovision, Inc. in 1996 and served as Managing Director and a
director of Biovision from 1996 to 1999. Dr. Fleming also served as Chairman,
President and Chief Executive Officer of Agricola Technologies, Inc. from July
1996, to the present. In November 1986, Dr. Fleming founded Genica
Pharmaceuticals Corporation, where he served at various times as Chairman, Chief
Executive Officer, Board Member and Vice-President - Business Development from
1986 through 1995, when the company was sold to Athena Neurociences (now Elan
Pharmaceuticals), where Dr. Fleming was Director of Business Development for
approximately two years. Dr. Fleming obtained his Ph.D. in Clinical Biochemistry
form the University of Cambridge in England, and was a lecturer at Harvard
Medical School for a number of years.
CHARLES HSIAO, PH.D. has been Chairman, Co-Chief Executive Officer and
Director since December 14, 1999. Dr. Hsiao co-founded Impax Pharmaceuticals,
Inc. in 1994, and has served as Chairman, Chief Executive Officer and a Director
since its inception. Dr. Hsiao co-founded IVAX Corporation in 1986 with two
partners. By October 1994, when he left the Vice-Chairman position at IVAX, this
company had become the world's largest generic pharmaceutical company with
approximately 7000 employees and $1 billion in worldwide sales. Dr. Hsiao's
technical expertise is in the area of formulation and development of oral
controlled-release dosage form. Dr. Hsiao obtained his Ph.D. in pharmaceutics
from University of Illinois.
LARRY HSU, PH.D. has been President, Chief Operating Officer and Director
since December 14, 1999. Dr. Hsu co-founded Impax Pharmaceuticals, Inc. in 1994
and served as its President, Chief Operating Officer and a member of the Board
of Directors since its inception. From 1980 to 1995, Dr. Hsu worked at Abbott
Laboratories for 15 years. During the last four years at Abbott, Dr. Hsu was the
Director of Product Development in charge of formulation development, process
engineering, clinical lot manufacturing and production technical support of all
dosage forms, managing a staff of approximately 250 people. Dr. Hsu's technical
expertise is in the area of formulation and development of injectable products,
particularly products that require lyophilization technology, such as
anti-cancer drugs and biotechnology products. Dr. Hsu obtained his Ph.D. in
pharmaceutics from University of Michigan.
BRIAN KENG has served as a Director of Impax Laboratories, Inc. since
December 14, 1999. Mr. Keng is the President and CEO of CDIB Capital (USA), Inc.
He has served as General Manager and First Vice President of the Overseas
Business Department of China Development Corporation since 1995 and served in
the same positions in the Corporation Planning Department of China Development
Corporation. Mr. Keng has also worked in the Business Planning Department for
China Securities Investment Trust Corporation and worked in the Trust and
Funding Departments of the International Commercial Bank of China.
JASON LIN has served as a Director of Impax Laboratories Inc. since
December 14, 1999. Mr Lin is the President of the Uni-President Enterprises
Corporation. Mr. Lin has served as Chairman of President Baseball Team Corp., a
Chinese Professional baseball league, for approximately ten years. He
8
<PAGE>
has also served as Chairman of President Coffee Corp. in Taiwan for
approximately two years, and as Chairman of Presicarre Co. for approximately
three years.
MICHAEL MARKBREITER has served as a Director of Impax Laboratories, Inc.
since 1997, and has been a portfolio manager for private equity investments for
Kingdon Capital Management Corp., a New York hedge fund, from August 1995 to
December 1998. 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 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.
OH KIM SUN has served as a Director of Impax Laboratories, Inc. since
December 14, 1999. He has been employed with Chemical Company of Malaysia Berhad
(CCM), since 1983 and currently serves as Group Executive Director of CCM, a
Malaysian corporation whose stock is listed on the Kuala Lumpur Stock Exchange.
Mr. Oh is also a director of Nortran Pharmaceuticals, Inc. and Immune Network
Research Ltd., both of which are Canadian corporations listed on the Vancouver
Stock Exchange. Mr Oh is a fellow member of The Institute of Chartered
Accountants of England and Wales and the Malaysian Association of Certified
Public Accountants.
COMMITTEES
The Board of Directors of the Company has an Audit Committee, Compensation
Committee and Stock Option Committee. During the fiscal year ended December 31,
1999, each director then in office 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 13 meetings during the fiscal year ended December
31, 1999.
The Audit Committee, established in October 1995, currently consists of Mr.
David Edwards, as Chairman, and Messrs. Brian Keng and Oh Kim Sun. 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 one time during the fiscal year ended December 31, 1999.
The Compensation Committee, established in October 1995, currently consists
of Dr. Nigel Fleming, as Chairman, and Messrs. David Edwards and Brian Keng. 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 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 Stock Option ("1995 Plan") Plan. The Compensation
Committee met three times during the fiscal year ended December 31, 1999.
The Stock Option Committee, established in March 1997, currently consists
of Dr. Nigel Fleming, as Chairman, and Messrs. Brian Keng and David Edwards.
Except with regard to director option grants, the Stock Option Committee reviews
the stock option benefits of all officers of the Company and other participants
in the 1995 Stock Option Plan and 1999 Equity Incentive Plan ("1999 Plan"),
reviews general policy matters relating to stock options, grants stock options
to officers of the Company and other participants in the 1995 Plan and 1999 Plan
and administers the 1995 Plan and 1999 Plan. The Stock Option Committee met
seven times during the fiscal year ended December 31, 1999.
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, 1999. The Company's non-employee directors were paid $500 (plus reasonable
expenses) for each attended meeting of the Board of Directors.
9
<PAGE>
Pursuant to the terms of the 1999 Plan, each non-employee director is granted
options to purchase 2,000 shares of Common Stock annually. In addition a
non-employee director, when first selected, is granted an option to purchase
10,000 shares. All of these options vest ratably over three years commencing on
the first anniversary of the grant date, are exercisable at the fair value
market value on the date of grant. The Company reimbursed its directors for
their respective out-of-pocket expenses incurred in attending board and
committee meetings. On December 15, 2000, pursuant to the 1999 Plan, Nigel
Fleming, Ph.D. was granted an option to purchase 12,000 shares of Common Stock
at an exercise price of $4.00 per share and Messrs. David Edwards, Brian Keng,
Jason Lin, Michael Markbreiter and Oh Kim Sun were each granted options to
purchase 2,000 shares of Common Stock at an exercise price of $4.00 per share.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who beneficially own more than 10%
of the Company's Common Stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% shareholders are required by regulation of the Securities and
Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representatives that no other
reports were required during 1999, 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.
VOTE REQUIRED
The nine 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 NINE
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.
10
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned by or paid to the
Company's Chairman, each Co-Chief Executive Officer, the President and Chief
Operating Officer and the Company's other six most highly compensated executive
officers for 1999, 1998 and 1997, including two executive officers who left the
Company in December 1999 and January, 2000.
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
------------------------------------------- ------------------
Other Annual Common Stock
Compensation Underlying Options
Name and Principal Position Year Salary ($) Bonus ($) $ (#)
-------------------------------------- ------ ------------ ----------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Charles Hsiao, Ph.D. 1999 122,292 (1) -- -- 333,580
Chairman and Co-Chief Executive
Officer
Barry R. Edwards 1999 167,848 45,550 11,753(2) 370,000
Co-Chief Executive Officer 1998 93,363 10,000 5,472(3) 62,175
Larry Hsu, Ph.D. 1999 122,292(4) -- -- 333,580
President and Chief Operating
Officer
Cornel C. Spiegler 1999 150,191 13,761 3,492(5) 20,000
Chief Financial Officer 1998 138,926 1,391 3,522(5) 10,870
1997 136,660 -- 3,259(5) 36,000(9)
Joseph A. Storella 1999 148,027 11,463 5,554(5) 12,000
Vice President Operations 1998 135,922 1,365 5,746(5) 10,000
1997 133,100 -- 5,317(5) 36,000(9)
Marc Feinberg (6) 1999 131,510 8,854 3,233(5)
Vice President, Quality 1998 131,514 1,365 3,269(5)
1997 133,100 -- 3,025(5) 36,000(9)
Pieter Groenewoud (7) 1999 127,116 8,570 3,268(5) 4,000
Vice President, 1998 127,704 1,200 3,280(5) 11,000
Product Development 1997 92,146 -- 3,031(5) 25,000(9)
Mitchell Goldberg 1999 118,145 19,024 1,287(5)
Vice President, Sales 1998 111,237 21,100 1,371(5) 2,175
1997 95,111 -- 813(5) 36,000(9)
May Chu 1999 104,583(8) -- -- 66,716
Vice President, Quality Affairs
</TABLE>
- ----------
(1) This amount represents Dr. Hsiao's salary for the entire year 1999.
(2) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments and $8,958 in
car allowance.
(3) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments and $3,336 in
car allowance.
(4) This amount represents Dr. Hsu's salary for the entire year 1999.
(5) Represents life insurance and long-term disability insurance along with
gross-up tax payments with respect to such insurance payments.
(6) Mr. Feinberg has served as Vice President, Quality Assurance from October
1996 through December 1999.
(7) Mr. Groenewoud has served as Vice President, Product Development since May
1996 through January 2000.
(8) This amount represents Mrs. Chu's salary for the entire year 1999.
(9) Represents cancellation of old options and the issuance of identical
repriced new options having an exercise price of $3.125 per share.
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<PAGE>
The following table sets forth information on option grants in the fiscal
year ended December 31, 1999 to the persons named in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL OPTIONS
SECURITIES GRANTED TO
UNDERLYING OPTIONS EMPLOYEES IN FISCAL EXERCISE
NAME GRANTED YEAR PRICE $/SH EXPIRATION DATE
- ---- ----------- --------- ---------- ---------------
<S> <C> <C> <C> <C>
Charles Hsiao, Ph.D. 333,580(1) 25.6 0.82(1) 4/2/09
Barry R. Edwards 100,000 7.7 2.1875 2/12/09
270,000 20.7 3.875 12/14/09
Larry Hsu, Ph.D. 333,580(1) 25.6 0.75(1) 4/2/09
May Chu 66,716(1) 5.1 0.75(1) 4/2/09
Cornel Spiegler 8,000 * 2.1875 2/12/09
12,000 3.3125 7/20/09
Joseph Storella 12,000 * 2.1875 2/12/09
Pieter Groenewoud 4,000 * 2.1875 2/12/09
Mitchell Goldberg -- -- -- --
Marc Feinberg -- -- -- --
</TABLE>
- ----------
* Less than one percent.
(1) These amounts are on as converted basis after giving effect to the
conversion factor of 3.3358 shares of Global Pharmaceutical Corporation for
one share of Impax Pharmaceuticals, Inc.
The following table sets forth information with respect to unexercised
stock options held at December 31, 1999 by the persons named in the Summary
Compensation Table. There were no exercises of options to purchase Common Stock
by such individuals during the fiscal year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
NAME FISCAL YEAR END (#) FISCAL YEAR END ($)
- ---- ----------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Charles Hsiao, Ph.D. -- 333,580 --(1) 1,310,969(1)
Barry R. Edwards 34,375 15,625 --(2) --(2)
-- 12,175 -- 33,481(3)
27,778 72,222 71,181(4) 185,069(4)
-- 270,000 -- 236,250(5)
Larry Hsu, Ph.D. -- 333,580 --(6) 1,334,320(6)
May Chu 40,030 80,059 160,120(6) 320,236(6)
Cornel Spiegler 36,000 -- 58,500(7) --(7)
-- 10,870 --(0) 29,893(3)
2,222 5,778 5,694(4) 14,806(4)
1,667 10,333 2,396(8) 14,854(8)
Joseph Storella 36,000 -- 58,500(7) --(7)
-- 10,000 --(3) 27,500(3)
3,333 8,667 8,541(4) 22,209(4)
Mitchell Goldberg 33,000 3,000 53,625(7) 4,875(7)
-- 2,175 --(3) 5,981(3)
Pieter Groenewoud 25,000 -- 40,625(7) --(7)
11,000 -- 11,000(9) --(9)
1,111 2,889 2,847(4) 7,403(4)
Marc Feinberg 36,000 -- 58,500(7) --(7)
</TABLE>
- ----------
(1) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of $0.82.
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<PAGE>
(2) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of $5.00.
(3) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of $2.00.
(4) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the Exercise price of
$2.1875.
(5) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of
$3.875.
(6) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of $0.75.
(7) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of
$3.125.
(8) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of
$3.3125.
(9) Computed based on the difference between the closing price per share of the
Common Stock at $4.75 on December 31, 1999 and the exercise price of $3.75.
EMPLOYMENT AGREEMENTS
At the closing of the merger between Global Pharmaceutical Corporation and
Impax Pharmaceuticals, Inc., effective December 14, 1999, each of Mr. Barry R.
Edwards and Drs. Hsiao and Hsu entered into a new employment agreement with the
Company. Each of these employment agreements has substantially the same terms.
Mr. Edward's and Dr. Hsiao's agreements provide that they will serve as Co-Chief
Executive Officers of the Company and, in the case of Dr. Hsiao, Chairman of the
Board. Dr. Hsu's Agreement provides that he will serve as President and Chief
Operating Officer of the Company. The other material terms of these employment
agreements are described below.
Each employment agreement will be for an initial term of three years, and
will be renewed automatically for successive one-year terms unless terminated by
either party at least six months prior to the expiration of the initial term or
any renewal term. Each of the executives will receive an annual salary of
$175,000, and will be entitled to a bonus based on criteria established by the
Board of the Company. Any bonus paid to one of these three executives must be
similarly paid at the same time to the other two executives.
Any of the executives may be terminated by the Company, either with or
without cause. The executive may terminate his own employment for any reason, or
for good reason. These terms are defined more fully in the employment
agreements. In general, cause means:
o a material breach of the provisions of the employment agreement
relating to proprietary information, trade secrets, confidentiality
and non-competition;
o a material breach of any other provision of the employment agreement
that is not remedied within 30 days of such breach;
o any act of fraud or embezzlement against the Company; or
o any indictment of the executive for a felony or other crime that would
cause injury to the reputation of the Company.
In general, good reason means:
o assignment of duties or a reduction in duties which is inconsistent
with the executive's position;
o a material reduction in executive's salary or benefits not agreed to
by the executive;
o a relocation that would require executive to have commute of more than
50 miles; or
o a change in control of the Company.
In general, a change in control is defined as:
13
<PAGE>
o the acquisition by any person or entity of ownership or control of
more than 50% of the voting power of the Company;
o a sale or disposition of assets totaling more than 50% of the value of
the Company;
o a merger or reorganization in which the Company's stockholders
immediately prior to the merger do not own a least 51% of the voting
power of the Company after the merger;
o any transaction where the Company's stockholders immediately prior to
the transaction do not own at least 51% of the voting power of the
Company after the transaction; or
o any other transaction that the Board determines would materially alter
the structure, ownership or control of the Company.
If the executive is terminated without cause or terminates his employment
for good reason, he will be entitled to receive a payment of all accrued and
unpaid salary and benefits plus salary and benefits for the next six months or,
if less, the remainder of the term of the employment agreement.
The executives have also agreed to keep all proprietary information of the
Company confidential and to assign all proprietary information or intellectual
property developed by the executive during the course of his employment to the
Company. Each executive has also agreed that during the term of the employment
agreement and for a period of two years following the termination of his
employment, he will not engage in a business competitive with that of the
Company or entice any of the Company's customers, suppliers or business partners
to end their relationship with the Company.
In addition to the terms previously described, Mr. Edward's employment
agreement provides that he will receive an option to purchase 270,000 shares of
common stock at the prevailing market price at the time the option is granted.
The shares covered by this option vest and are exercisable on the following
schedule: (i) first year - 0%; (ii) second year - 10%; (iii) third year - 40%;
(iv) fourth year - 50%.
Cornel C. Spiegler has entered into a three-year employment agreement with
the Company for the position of Chief Financial Officer and Vice President -
Administration, effective September 1995. Mr. Spiegler's employment agreement
provides for a base annual salary of $125,000, which may be increased annually
at the discretion of the Board of Directors, as well as stock options and a
customary benefits package.
At the Company's option, the term of Mr. Spiegler's employment agreement
may be extended for one additional year. The employment agreement of Mr.
Spiegler prohibits him 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.
Spiegler is discharged without cause (as defined in his agreement), the Company
will continue to pay him at his then current salary of the longer of six months
or the remainder of the agreed upon employment period.
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 vested 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 and Mitchell
Goldberg entered into three-year employment agreements with the Company for the
position of Vice President -Operations and Vice President - Sales, respectively.
Messrs. Storella's and Goldberg's employment agreements provide for a base
annual salary of $130,000 and $110,000, 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 was eligible for certain
performance-based bonuses in 1997 in the amount of $5,000 per quarter in the
event the Company reached certain projected sales goals, which amount was to be
proportionally increased in the event that such goals are exceeded, and $10,000
per quarter in 1998 in the event that such projections were met. In January,
1998, Mr. Goldberg was paid a sales bonus of $10,000 regarding the
14
<PAGE>
1997 sales performance. In April 1998, Mr. Goldberg was paid a sales bonus of
$10,000 regarding the quarter ended March 31, 1998 sales performance.
The term of each of Messrs. Storella's and Goldberg's employment agreement
may be extended. The employment agreements of Messrs. Storella and Goldberg
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 Mr. Storella is
discharged without cause (as defined in his agreement), the Company shall
continue to pay him 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 vested 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 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 1999, Mr. Storella's employment agreement was extended for another two
years through May 2002. This agreement provides for an annual salary of $145,000
for the period May 19, 1999 through May 18, 2000, and of $150,500 from May 19,
2000 through May 19, 2001. In connection with his employment agreement, Mr.
Storella was granted an option to purchase 12,000 shares of Common Stock at
$2.1875 per share. The terms of this agreement are substantially the same terms
as the previous employment agreement.
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 vested on March 17, 1998 and the remaining
two-thirds vests in monthly installments over the 24-month period beginning on
March 17, 1997, 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.
PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of
PricewaterhouseCoopers LLP as the independent accountants of the Company for the
fiscal year ending December 31, 2000. PricewaterhouseCoopers LLP audited the
financial statements of the Company for the fiscal year ended December 31, 1999.
A representative of PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending December 31, 2000.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMMENDS 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 2001 must be received by
the Company no later than December 18, 2000 for inclusion in the Board of
Directors' proxy statement and form of proxy relating to that meeting. Any such
proposal must also comply with the proxy rules under the Securities Exchange Act
of 1934,
15
<PAGE>
including Rule 14a-8. Any notice of a shareholder proposal for consideration at
the 2001 Annual Meeting that is submitted to the Company outside the processes
of Rule 14a-8 will be considered untimely for purposes of Rule 14a-4(c)(1) if it
is submitted after March 3, 2001. Rule 14(a)-4(c)(1) provides that discretionary
voting authority may be exercised with respect to such untimely proposals.
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.
16
<PAGE>
IMPAX LABORATORIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 22, 2000.
The undersigned, a stockholder of Impax Laboratories, Inc. (the
"Corporation"), hereby constitutes and appoints Charlie Hsiao, Ph.D. 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, Series 1A Preferred Stock, Series 1B Preferred Stock and
Series 2 Preferred Stock of the Corporation which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Corporation to be held on
Monday, May 22, 2000, 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 below) to vote for all nominees
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: Barry R. Edwards, David J. Edwards, Nigel Fleming, Ph.D., Charles
Hsiao, Ph.D., Larry Hsu, Ph.D., Brian Keng, Jason Lin, Michael
Markbreiter and Oh Kim Sun
(2) PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS |_| FOR |_| AGAINST |_| ABSTAIN
(3) 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.)
<PAGE>
(CONTINUED)
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS INDICATED IN ITEMS 1, 2 AND 3 ABOVE. IF NO INSTRUCTION IS
INDICATED, THIS PROXY WILL BE VOTED FOR ALL LISTED NOMINEES FOR DIRECTORS AND
FOR PROPOSAL 2.
A MAJORITY OF THE ATTORNEYS AND PROXIES NAMED HEREIN PRESENT AND ACTING AT
THE MEETING IN PERSON OR BY THEIR SUBSTITUTES (OR IF ONLY ONE IS PRESENT AND
ACTING THEN THAT ONE) MAY EXERCISE ALL THE POWERS CONFERRED HEREBY.
DISCRETIONARY AUTHORITY IS CONFERRED HEREBY AS TO CERTAIN MATERS AS MAY PROPERLY
COME BEFORE THE MEETING.
ANY AND ALL PROXIES HERETOFORE GIVEN BY THE UNDERSIGNED ARE HEREBY REVOKED.
Receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement
dated April 17, 2000 is hereby acknowledged.
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
