<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
/X/ Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNIMED Pharmaceuticals, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
UNIMED Pharmaceuticals, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / 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:
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<PAGE> 2
UNIMED PHARMACEUTICALS, INC.
2150 EAST LAKE COOK ROAD
BUFFALO GROVE, IL 60089
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1996
The Annual Meeting of Stockholders of UNIMED Pharmaceuticals, Inc. (the
"Company"), a Delaware corporation, will be held at The Hyatt Deerfield Hotel,
1750 Lake Cook Road, Deerfield, Illinois 60015 on May 2, 1996, at 10:00 A.M.,
for the following purposes:
1. PROPOSAL NO. 1 - ELECTION OF DIRECTORS. To elect Stephen M.
Simes as a director for a term of three years (expiring in
1999) and until his successor is duly elected and qualified.
2. PROPOSAL NO. 2 - APPROVAL OF AMENDMENTS 1991 STOCK OPTION
PLAN. To approve amendments to the Corporation's 1991 Stock
Option Plan to increase the number of shares covered thereby
by 800,000 shares, and to make certain other changes to the
Plan.
3. PROPOSAL NO. 3 - APPROVAL OF AN AMENDMENT TO THE CORPORATION'S
CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED COMMON
STOCK. To approve an amendment to the Company's Certificate
of Incorporation to increase the Company's authorized Common
Stock from 12,000,000 shares to 30,000,000 shares.
4. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEE LISTED IN
PROPOSAL NO. 1, FOR PROPOSAL NO. 2 AND FOR PROPOSAL NO. 3.
The Board of Directors has fixed March 8, 1996, as the record date for
the Meeting. Only holders of the Company's Common Stock of record at the close
of business on such date will be entitled to notice of, and to vote at, the
Annual Meeting. The stock transfer books will not be closed.
By Order of the Board of Directors,
DAVID E. RIGGS,
Secretary
Dated: April 5, 1996
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOUR
SHARES BE REPRESENTED. PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD IN THE
POSTAGE PAID ENVELOPE PROVIDED. YOUR PROMPT RESPONSE WILL ASSURE A QUORUM AT THE
MEETING, THEREBY SAVING YOUR COMPANY THE EXPENSE OF FURTHER SOLICITATION OF
PROXIES.
<PAGE> 3
UNIMED PHARMACEUTICALS, INC.
2150 EAST LAKE COOK ROAD
BUFFALO GROVE, IL 60089
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1996
GENERAL INFORMATION
The Board of Directors of the Company solicits the proxies of the
holders of its Common Stock for use at the Annual Meeting of Stockholders of the
Company to be held at The Hyatt Deerfield Hotel, 1750 Lake Cook Road, Deerfield,
Illinois 60015 on May 2, 1996, and any and all adjournments thereof. A form of
proxy is enclosed herewith. The Proxy Statement and the form of proxy enclosed
herewith were first sent to stockholders on or about April 5, 1996. Any
stockholder who executes and delivers a proxy may revoke it by written
communication at any time prior to its use or by voting in person at the Annual
Meeting.
The cost of soliciting proxies will be borne by the Company. Directors,
officers and regular employees of the Company may solicit proxies by telephone,
telegram or personal interview. The Company also will bear the expense of
brokers who at the request of the Company mail to their customers copies of the
enclosed Annual Report, Notice of Meeting and Proxy Statement, and enclosed form
of Proxy.
Only holders of issued and outstanding shares of the Company's Common
Stock of record at the close of business on March 8, 1996, are entitled to
notice of, and to vote at, the Annual Meeting. The number of shares of Common
Stock outstanding on March 8, 1996, was 8,570,886. The presence in person or by
properly executed proxy of the holders of a majority of the outstanding shares
of Common Stock entitled to vote is necessary to constitute a quorum. A
plurality of the votes cast in person or by proxy is necessary to elect the one
director, a majority of the votes cast in person or by proxy is necessary to
approve the amendments to the 1991 Stock Option Plan and a majority of the
issued and outstanding shares of Common Stock entitled to vote is necessary to
approve the Amendment to the Certificate of Incorporation.
The stockholders vote at the annual meeting by casting ballots (in
person or by proxy) which are tabulated by a person who is appointed by the
Company before the meeting to serve as the inspector of election at the meeting
and who has executed and verified an oath of office. Abstentions and broker
non-votes are included in the determination of the number of shares present at a
meeting for quorum purposes but are not counted in the tabulations of the votes
cast for the nominee or for the proposals to approve the amendments to the 1991
Stock Option Plan or the Certificate of Incorporation.
<PAGE> 4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes in accordance with
Article FIFTEENTH of the Company's Certificate of Incorporation, as amended.
The class of directors (Class I) whose term will expire at the 1996 Annual
Meeting currently consists of two directors: Stephen M. Simes and Roland
Weiser. Mr. Simes is nominated for election for a term of three years and until
his successor is duly elected and qualified. Mr. Weiser, whose term also
expires at the 1996 annual meeting of stockholders, has agreed to fill the
position which will be vacated by Mr. Hunter upon his retirement, effective at
the 1996 annual meeting. Consequently, Mr. Weiser is not a nominee for election
at the 1996 annual meeting. Pursuant to the bylaws, the Board of Directors has
set the number of directors of the Company at 5, and the number of Class I
directors to one, effective at the 1996 annual meeting. In the event that Mr.
Simes should become unavailable for election for any presently unforeseen
reason, the persons named in the form of proxy will vote for any nominee who
shall be designated by the present Board of Directors.
The information set forth below as to the ages and principal
occupations of these nominees and the other members of the Board of Directors,
and the numbers of shares of Common Stock of the Company beneficially owned by
them, directly or indirectly, has been furnished to the Company by such nominees
or directors.
MEMBERS OF THE BOARD OF DIRECTORS*
DIRECTORS WHOSE TERMS EXPIRE IN 1996
(Class I)
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE (IF OVER
1%) OF SHARES OF COMMON STOCK
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE BENEFICIALLY OWNED AS OF 3/8/96+
<S> <C> <C> <C> <C>
Stephen M. Simes 44 President and Chief Executive Officer of the 1994 112,500(1)
Company since October, 1994; Senior Vice
President, Bio-Technology General Corp., 1993-
1994. Gynex Pharmaceuticals, Inc. 1984 through
1993, various positions, most recently Chairman,
President and Chief Executive Officer.
Roland Weiser(2) 65 President of Intervista, an international 1989 45,950(1)
pharmaceutical consulting firm, since 1985; Senior
Vice President of Schering-Plough Corp.
(International) from 1980 to 1984; Director, GAM
Funds, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Footnotes follow table.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
(Class II)
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE (IF OVER
1%) OF SHARES OF COMMON STOCK
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE BENEFICIALLY OWNED AS OF 3/8/96+
<S> <C> <C> <C> <C>
Robert D. Hunter(2) 71 Founding and Executive partner of R.D. Hunter & 1984 47,528(1)(3)
Company, Certified Public Accountants, since
1956.
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE (IF OVER
1%) OF SHARES OF COMMON STOCK
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE BENEFICIALLY OWNED AS OF 3/8/96+
<S> <C> <C> <C> <C>
John N. Kapoor, 52 Chairman of the Board of UNIMED 1991 2,332,429(1)(4)
Ph.D. Pharmaceuticals, Inc. since May, 1992, and Chief 25.7%
Executive Officer from May 1992 through October,
1993; Chairman of Option Care, Inc., a franchisor
of home infusion therapy businesses, since October
1990; President of EJ Financial Enterprises, Inc., a
consulting and private investment firm, since 1990;
Chairman of Lyphomed, Inc., a pharmaceutical
company, from 1983 to 1990; Director of Lunar
Corp., a manufacturer and marketer of X-ray and
ultrasound systems; Director of Akorn, Inc., an
ophthalmic company and NeoPharm, Inc., an
oncology company.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
(Class III)
<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE (IF OVER
1%) OF SHARES OF COMMON STOCK
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE BENEFICIALLY OWNED AS OF 3/8/96+
<S> <C> <C> <C> <C>
Fred Holubow 57 Founder and Vice President of Pegasus Associates, 1995 27,500(1)
a registered investment adviser, since 1982;
Director and Vice Chairman, Jefferson State Bank,
an Illinois State Bank, and Director of
ThermoRemediation and Bio-Technology General
Corp.
James J. Lempenau 66 Chartered Financial Analyst; President and Director 1983 57,328(1)
since 1981 of The Income Builder, Inc., investment
advisors.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Beneficial and percentage ownership have been determined pursuant to
Rule 13d-3 under the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), as required by Regulation 14A of the Exchange
Act.
(1) Includes incentive stock options and nonqualified stock options
exercisable within 60 days of March 8, 1996, to purchase 160,000,
112,500, 42,328, 42,328, 41,170 and 17,500 shares of Common Stock held
by directors Kapoor, Simes, Lempenau, Hunter, Weiser and Holubow,
respectively.
(2) Mr. Hunter will retire from the Board, effective at the 1996 annual
meeting of stockholders. Mr. Weiser will fill the balance of Mr.
Hunter's term of office (to the 1997 annual meeting of stockholders).
The Company has agreed to retain Mr. Hunter as a consultant for a
period of one year, beginning after the annual meeting, for cash
compensation of $7,000 and grant an option to purchase 15,000 shares of
Company Common Stock at the closing price on May 2, 1996. That option
will be exercisable until August 1, 1997,
-3-
<PAGE> 6
but only if the amendment to the stock option plan (Proposal No. 2) is
approved by the stockholders, and two options now held by him for an
aggregate of 15,000 shares are not exercised.
(3) Includes 2,100 shares of Common Stock owned of record by Mr. Hunter's
wife.
(4) Includes 1,667,429 shares of Common Stock beneficially owned by the
John N. Kapoor Trust (the "Trust"), an affiliate of Dr. Kapoor.
Includes 505,000 shares of Common Stock held by a limited partnership
created for the benefit of Dr. Kapoor's family members, of which Dr.
Kapoor is the General Partner.
The Board of Directors of the Company held four meetings during the
1995 fiscal year. The Company has an Audit Committee and a Salary and
Compensation Committee. During the 1995 fiscal year the Audit Committee met once
and the Salary and Compensation Committee met once. The Compensation Committee
also conferred numerous times by telephone during the year. The Audit Committee
consists of Robert D. Hunter (Chairman), Fred Holubow and James J. Lempenau. The
Audit Committee acts as a liaison between the Company and its independent
auditors and reports on matters pertaining to the Company's independent audit
and the Company's accounting policies. The Salary and Compensation Committee,
which consists of Roland Weiser (Chairman), Fred Holubow and James J. Lempenau,
was formed to evaluate executive officer compensation, and determines the
compensation of the executive officers of the Company for each year. The Company
does not have a nominating committee.
The Trust has the right to nominate two persons to the Board of
Directors as long as the Trust owns beneficially 880,000 shares of securities of
the Company entitled to vote for the election of directors (the "Voting
Securities"). The Trust may continue to nominate one person as long as the Trust
owns beneficially less than 880,000 shares, but at least 220,000 shares, plus an
additional number of shares equal to 5% of future issuances of Voting Securities
(other than shares issued upon the exercise of options and warrants outstanding
on the date the Trust agreed to purchase Common Stock of the Company). Dr.
Kapoor is the Trust's representative on the Board of Directors.
The Company's By-laws permit any stockholder to nominate one or more
persons for election as directors at an Annual Meeting of stockholders, provided
such stockholder's intent to make such nomination(s) has been personally
delivered or mailed to the Secretary of the Company no later than 60 days in
advance of the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE RE-ELECTION OF
STEPHEN M. SIMES TO THE COMPANY'S BOARD OF DIRECTORS.
-4-
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation for services to the
Company for the fiscal year ended December 31, 1995, by the chief executive
officer and two highly compensated senior executive officers (the "Named
Executive Officers"). No other person who served as an executive officer of the
Company in fiscal 1995 received more than $100,000 in salary and bonus in fiscal
1995.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
----------------------------------- ---------------------
Restricted
Other Annual Stock Other
Name and Principal Salary Bonus Compensation Awards Options Compensation
Position Year $ $ $ (1) $ # (2) $ (3)
- ------------------ ---- ------ ----- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen M. Simes (4) 1995 200,000 80,000 9,890 0 360,000(5) 10,570
President and Chief 1994 37,712 0 1,700 0 300,000(5) 0
Executive Officer
David E. Riggs (6) 1995 114,583 42,917 6,600 0 90,000(7) 4,620
Senior Vice 1994 112,984 0 7,200 0 80,000(7) 0
President, CFO, 1993 105,333 13,333 7,200 0 0 0
Secretary and
Treasurer
Robert E. Dudley (8) 1995 140,000 42,000 7,200 0 100,000 51,765
Vice President 1994 8,227 0 300 0 0 0
</TABLE>
- ------------------------
(1) Represents the compensation portion of car allowances advanced.
(2) The stock options become exercisable 25% on the anniversary date of the
date of grant and an additional 25% on each anniversary date thereafter
until exercisable in full. Exercisability will be accelerated in the
event of a "change of control."
(3) Represents the matching contribution ($4,620 per officer) made by the
Company to its 401(k) Plan for each of the executive officers listed
above. In addition to the 401(k) matching contribution, for Mr. Simes
this amount represents insurance premiums paid ($4,018) and the taxes
associated with these premiums ($1,932). For Dr. Dudley, this number
represents the Company 401(k) matching contribution, expenses paid by
the Company related to Dr. Dudley's relocation ($35,469) and the taxes
associated with those relocation expenses($11,676).
(4) Mr. Simes joined the Company on October 25, 1994. An employment
agreement entered into between Mr. Simes and the Company provides for
severance payments, upon termination, of one year of base salary.
(5) The 360,000 options granted to Mr. Simes in 1995 represent 60,000 new
options and a repricing of the 300,000 options granted to him in 1994.
Of the 300,000 options granted to Mr. Simes in 1994, 50,000 options
vested one day after grant and 250,000 options will vest under the
schedule described in note (2) above. It was an additional condition of
the exercise of 100,000 of these 250,000 options
-5-
<PAGE> 8
that the price of the Company's stock shall have equalled or exceeded
$5.00 per share for ten consecutive trading days. This condition was
satisfied on June 22, 1995.
(6) Effective November 1, 1995, Mr. Riggs began devoting 50% of his time to
the Company.
(7) Options granted to Mr. Riggs in 1994 represent 30,000 new options and a
repricing of the 50,000 options granted to him in 1992. Options granted
to Mr. Riggs in 1995 represent 10,000 new options, and a repricing of
the options granted and repriced in 1994.
(8) Dr. Dudley joined the Company in December 1994. An employment agreement
entered into between Dr. Dudley and the Company provides for severance
payments, upon termination, equal to 75% of his annual salary.
The Company and EJ Financial Enterprises, Inc. ("EJ Financial"), an
affiliate of Dr. John N. Kapoor, entered into an agreement, terminating in March
1996, pursuant to which EJ Financial provides independent consulting services to
the Company at a fee to be determined on a yearly basis. The Company paid
$50,000 to EJ Financial under the contract with respect to fiscal 1995, $106,250
for fiscal 1994 and $150,000 for fiscal 1993. The agreement is terminable by
either party upon thirty days' prior written notice. EJ Financial principally
provides consulting support on strategic corporate objectives and operations,
including sales and marketing strategies, new product strategies and key
contacts within the industry and financial community. EJ Financial is engaged in
a number of business activities, including consulting services to the Company
and the payment to EJ Financial is not intended primarily to furnish
compensation to Dr. Kapoor.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to grants of
options to purchase Common Stock granted to the Named Executive Officers during
the fiscal year ended December 31, 1995:
<TABLE>
<CAPTION>
Individual Grants
-----------------
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Option Term
----------------------------
Percent of
Total Options
Options Granted to Exercise Expira-
Granted Employees Price tion 5% 10%
Name # in Fiscal Year $/Sh Date $ $
- ---- --- -------------- ------ ------ --- ---
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Simes 300,000 38.03 2.75 1/19/05 518,838 1,314,838
60,000 7.61 5.25 9/22/05 348,102 652,029
David E. Riggs 80,000 10.14 2.75 1/19/05 138,357 350,623
10,000 1.27 5.25 9/22/05 58,017 108,671
Robert E. Dudley 60,000 7.61 2.75 1/19/05 103,768 262,968
40,000 5.07 5.25 9/22/05 232,068 434,686
</TABLE>
-6-
<PAGE> 9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information with respect to stock
options exercised during the fiscal year ended December 31, 1995, and the value
at December 31, 1995, of unexercised stock options held by the Named Executive
Officers:
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised Options
Options In-the-Money
at Fiscal at Fiscal
Year-End Year End*
Shares Acquired Value Exercisable/ Exercisable/
On Exercise Realized Unexercisable Unexercisable
Name # $ # $
- ---- --------------- -------- ------------- -------------------
<S> <C> <C> <C> <C>
Stephen M. Simes 0 0 112,500/247,500 435,938/809,063
David E. Riggs 0 0 45,000/45,000 174,375/149,375
Robert E. Dudley 0 0 0/100,000 0/287,500
</TABLE>
- --------------------
* Represents the fair market value at December 31, 1995, of the Common Stock
underlying the options minus the exercise price.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive an annual stipend
of $6,000 for serving on the Board and its committees, an additional $1,000 for
each directors' meeting which they attend (excluding meetings held by
telephone), $500 for each committee meeting they attend (excluding meetings held
by telephone) and reimbursement of out-of-pocket expenses in connection with
their attendance at directors' meetings. The 1991 Stock Option Plan provides for
a grant of options to purchase 10,000 shares of Common Stock to each new
director who is not an officer on the date he first becomes a director, and
annual stock option grants of 7,500 shares of Common Stock to directors who are
not officers.
SALARY AND COMPENSATION COMMITTEE REPORT
The Salary and Compensation Committee of the Board of Directors,
consisting of three outside directors, Mr. Roland Weiser, Chairman, Mr. Fred
Holubow and Mr. James J. Lempenau, has issued the following report with respect
to Executive Compensation:
The Company's compensation policies applicable to its executive
officers are administered by the Compensation Committee of the Board of
Directors. All members of the Committee are non-employee directors. These
policies are designed to strengthen the capabilities and financial performance
of the Company by aligning the financial interests of its executive officers
with those of its stockholders.
The three primary components of executive compensation are base salary,
incentive bonuses and long-term compensation consisting of stock option grants.
All three are administered according to Compensation Guidelines approved by the
Board of Directors. These guidelines provide that a significant portion of
management's
-7-
<PAGE> 10
compensation be tied to the performance of the Company. Base salaries are
expected to be in the upper half of comparable companies. Bonuses, in cash or
shares, are awarded at the discretion of the Board, in reward for the
achievement of yearly goals, which move the Company towards its longer term
strategic directives. Such bonuses are calculated on the basis of measurable
goals, some quantitative, and others related to strategic objectives (for the
President/CEO) or functional goals (for the other officers). Options for Company
stock are long-term incentives at the discretion of the Board, that benefit
management only if the stockholders benefit by higher prices of the Company
stock.
The Committee recommends the salaries of the executive officers, the
yearly incentive bonus program and administers the 1991 amended stock option
plan under which the employee stock options are granted. All components of
executive compensation are reviewed for competitiveness by referring to a
survey prepared by an independent professional organization. The
1995 survey used by the Committee, was prepared by executive compensation
consultants and covered 60 public companies in the biotechnology industry, all
being below the 25 largest companies, in terms of market capitalization.
BASE SALARY
The 1994 salaries reported for officers of the Company were negotiated
for new hires, on the basis of previous salary, experience and competitive
data. For the other officers, increases were granted on merit. Since those
salaries were set in the fall of 1994, there were no changes for 1995. For 1996
the new salary for the President/CEO was determined by the Committee,
considering the performance of the Company in 1995. This determination and
recommendation to the Board was made out of the presence of the CEO. The
Committee also reviewed the salaries recommended by the CEO for the executive
officers reporting to him and recommended these for approval to the Board. All
these salaries were evaluated for competitiveness to the previously mentioned
industry survey.
INCENTIVE BONUS AWARDS
Bonus awards for 1995 were granted on the basis of financial goals and
new product acquisition objectives established in early 1995. For the CEO, the
Committee considered the potential impact of the goals achieved, and recommended
to the Board that the maximum 40% bonus be granted. The CEO was not present at
these meetings. For the other officers, bonus awards were reviewed by the
Committee as recommended by the CEO for approval by the Board in January 1996.
At this time also the Board, with the Committee's recommendations, set the 1996
Incentive Bonus Criteria, giving priority to corporate development and certain
key financial goals.
STOCK OPTION PLAN GRANTS
The Board has determined that all employees should have an interest in
the Company and its stock. Therefore, options are granted to every employee at
the time of hire. The number of options granted to new employees varies directly
with responsibilities and salary level. Awards are normally made annually at
fair market value at the time of grant.
In September 1995, the Board recommended to the Committee that a pool
of shares be set aside each year, and as a guideline this pool will be equal to
a maximum of 1% of the outstanding stock of the Corporation. This pool is to be
used as an allotment for existing employees, with option grants to new employees
and others exempt from this established annual pool. However, the Committee may
use another percentage from time to time, as may be confirmed by the Board.
In September also, the Committee granted options to employees using the
new guidelines and determined that the next regular grant of stock options to
existing employees take place in January 1997.
-8-
<PAGE> 11
REPRICING OF EXISTING OPTIONS
In January 1995, and as part of the redirection of the Company's
resources and the installation of new management, additional options were
granted to the field force and key executives and existing options to employees
were replaced with new options priced to current market levels. To provide
strong motivating incentives to the employees concerned, the Committee, on
recommendation of management, determined on March 15, 1995, that it is in the
best interest of the Company to accelerate the vesting of the replacement stock
options granted in January to these employees, so that the options granted in
replacement would vest on the same dates as the options they had replaced.
The following table sets forth information with respect to stock
options granted to the Named Executive Officers where the exercise price has
been adjusted (repriced) during the fiscal year ended December 31, 1995 and with
respect to all repricings of options held by any current executive officers
during the last ten completed fiscal years:
<TABLE>
<CAPTION>
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price New Remaining
Options Time of at Time of Exercise at Date of
Name Date Repriced (#) Repricing ($) Repricing ($) Price ($) Repricing
- ---- ---- ------------ ------------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Simes 1/19/95 300,000 2.75 3.38 2.75 9.75 Years
David E. Riggs 1/19/95 80,000 2.75 3.38 2.75 9.75 Years
David E. Riggs 10/11/94 20,000 3.38 7.75 3.38 7.83 Years
10/11/94 30,000 3.38 8.00 3.38 7.58 Years
</TABLE>
The Committee was pleased to welcome Mr. Fred Holubow as a new member
in 1995.
Respectfully submitted,
Salary and Compensation Committee
Fred Holubow
James J. Lempenau
Roland Weiser (Chairman)
-9-
<PAGE> 12
PERFORMANCE GRAPH
The following performance graph is a line graph comparing the yearly
percentage change in the Company's cumulative total shareholder return on the
Company's Common Stock against the cumulative return of the NASDAQ (U.S.) Stock
Market Index and the NASDAQ Pharmaceutical Stock Index for the five fiscal years
ended December 31, 1995.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG
UNIMED PHARMACEUTICALS, INC., NASDAQ (US) STOCK MARKET INDEX
AND NASDAQ PHARMACEUTICALS STOCK INDEX
<TABLE>
<CAPTION>
- ------------------------------
Year NASDAQ INDEX Unimed
- ------------------------------
<S> <C> <C> <C>
1990 100 100 100
1991 161 266 750
1992 187 221 900
1993 215 197 320
1994 210 148 205
1995 296 271 530
- ------------------------------
</TABLE>
ASSUMES $100 INVESTED ON DECEMBER 31, 1990 IN UNIMED PHARMACEUTICALS COMMON
STOCK, NASDAQ (US) STOCK MARKET INDEX AND NASDAQ PHARMACEUTICAL INDEX
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
-10-
<PAGE> 13
OWNERSHIP OF SHARES
No person is known to the Company to be the beneficial owner of more
than 5% of the Company's Common Stock except as follows:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent
Title of Class Beneficial Holder Ownership of Class
- -------------- ------------------- ---------- --------
<S> <C> <C> <C>
Common Stock John N. Kapoor, Ph.D. 2,332,429(1)(2) 25.7%
EJ Financial Enterprises, Inc.
225 E. Deerpath, Suite 250
Lake Forest, IL 60045
</TABLE>
- --------------------
(1) Includes 1,667,429 shares of Common Stock beneficially owned by the
John N. Kapoor Trust, an affiliate of Dr. Kapoor. Includes 505,000
shares of Common Stock held by a limited partnership created for the
benefit of Dr. Kapoor's family, of which he is the general partner, and
160,000 subject to options which are exercisable or become exercisable
within 60 days of March 8, 1996.
Set forth below is information concerning the number of shares of the
Company Common Stock owned beneficially by all Company directors and executive
officers (8 individuals) as a group as of March 8, 1996, and by the Named
Executive Officers who own shares of Common Stock, except with respect to Dr.
John N. Kapoor, whose individual share ownership is reported both in the table
immediately above and in the information on directors under the heading
"Election of Directors":
<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Name of Beneficial Owner Ownership Percent of Class
------------------------ ------------------------------- ----------------
<S> <C> <C>
All Directors and Executive
Officers as group (8 individuals) 2,683,235(1) 29.5%
Stephen M. Simes 112,500(2) (3)
David E. Riggs 45,000(2) (3)
Robert E. Dudley 15,000(2) (3)
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes shares beneficially owned by Dr. Kapoor (as shown both in the
table above and under the section entitled "Election of Directors"),
and shares beneficially owned by other directors as described under
that section. Includes an aggregate of 475,826 shares subject to
exercisable options or options which become exercisable within 60 days
of March 8, 1996.
(2) Includes nonqualified stock options exercisable and to become
exercisable within 60 days of March 8, 1996 for 112,500 shares for Mr.
Simes, 45,000 shares for Mr. Riggs, and 15,000 shares for Dr. Dudley.
(3) Less than 1%.
-11-
<PAGE> 14
PROPOSAL NO. 2
APPROVAL OF AMENDMENTS TO 1991 STOCK OPTION PLAN
TO INCREASE SHARES COVERED THEREUNDER
BY 800,000 SHARES, AND TO MAKE
CERTAIN OTHER AMENDMENTS TO THE PLAN
The 1991 Stock Option Plan (the "Option Plan") permits the grant of
options to officers, directors and employees of the Company and to consultants
who render bona fide consulting services not related to raising capital. The
Option Plan was originally approved by the stockholders at the 1991 annual
meeting. The Option Plan was amended in 1992 to increase the shares reserved
thereunder from 250,000 to 1,000,000, and to make other changes, and in 1994 to
add consultants to the list of persons eligible to receive option grants, and
such amendments were approved by the stockholders at the 1993 and 1994 annual
meetings. At March 8, 1996, 18,625 shares had been issued upon exercise of
options granted under the Option Plan, options covering 981,204 shares were
outstanding and only 171 shares remained available for grant under the Option
Plan.
The Option Plan was amended by the Board of Directors in March 1996,
subject to approval of the stockholders. The amendments increase to 1,800,000
the number of shares of Common Stock reserved for issuance under the Option
Plan, an increase of 800,000 shares of Common Stock, permit the Board of
Directors to specify, at the time of grant, varying vesting schedules for
options granted to persons other than outside directors, and specify that the
fair market value for purposes of the Plan will be determined at the closing
price of the stock on such date with respect to securities traded on NASDAQ (of
which the Company is one). Assuming the amendments are approved, the 800,000
shares of Common Stock underlying the options issuable under the Option Plan
would have had a market value of $5,700,000 on March 8, 1996, based upon the
closing price of the Common Stock as reported on the NASDAQ national market
system on that date. The Option Plan and the reasons for the proposed amendments
are discussed below.
The Board of Directors believes that to continue to implement the
Company's business strategy, it will be necessary to attract additional
employees as the Company grows, and to continue significant incentives to the
core group of employees who are now with the Company, and that stock options are
an essential element to attracting and keeping those key employees. Furthermore,
stock options enable employees to share in the success of the Company and, as an
alternative to additional cash compensation, conserve the Company's working
capital. Since there are only 171 shares available, the Board of Directors has
increased the shares reserved by 800,000 shares.
The Option Plan is administered by a committee of "disinterested
directors" within the meaning of Rule 16b-3(c)(2)(i) under the Securities
Exchange Act of 1934, as amended. If any options expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for the purposes of the Option Plan.
The exercise price of an option is determined by the committee on the
date the option is granted. The exercise price of an Incentive Option may not be
less than 100% of the fair market value per share of the Common Stock on the
date of the grant. In the case of a participant who owns more than 10% of the
total combined voting power of the Common Stock at the time an Incentive Option
is granted, the option price will not be less than 110% of the fair market value
of a share of Common Stock on the date of grant. The exercise price of a
Non-Qualified Option may not be less than 85% of the fair market value per share
on the date of grant. In the case of a participant who is an Outside Director,
the initial per share option price will be 100% of the fair market value per
share on the date of grant. With respect to Incentive Options, in general the
aggregate fair market value of shares with respect to which the Incentive
Options will become exercisable for the first time during any calendar year by
any optionee cannot exceed $100,000; however, to the extent this limit is
exceeded, an Incentive Option will be treated as a Non-Qualified Option.
-12-
<PAGE> 15
The exercise price of an option is payable in full in cash or, to the
extent of 50% of the exercise price, Common Stock of the Company. The Company
has the right to delay issuance of shares upon exercise of a Non-Qualified
Option of an employee until the optionee makes appropriate arrangements with the
Company to satisfy all applicable tax withholding obligations.
A participant may exercise 25% of the shares of Common Stock subject to
an option on the anniversary date of the grant and an additional 25% on each
successive anniversary date until the option is fully exercisable. Options will
be granted for such term as the committee shall determine, not in excess of ten
years. In the case of a participant who owns more than 10% of the total combined
voting power of the Common Stock at the time an Incentive Option is granted, the
term will not exceed five years. The term of each option granted to an Outside
Director will be up to ten years. The Option Plan provides that, in the event of
termination of employment for reasons other than death or discharge for cause,
Incentive Options and Non-Qualified Options granted under the Option Plan will
terminate three months following such termination of employment. In such case,
options granted under the Option Plan are only exercisable to the extent that
they were exercisable on such termination date. If termination of employment
occurs because of death, all options will be immediately exercisable in full
upon the death of a participant, Incentive Options will terminate one year
following such termination of employment and Non-Qualified Options will remain
exercisable for the term of the original grant. Options granted under the Option
Plan are non-transferable, and except in the case of death, may be exercised
only by the optionee. In the case of death, options may be exercised by the
person or persons to whom the option holder's rights in the options have passed
by will or by laws of descent and distribution.
The Option Plan now permits the committee administering the Option Plan
to accelerate the exercisability of options and extend the period during which
options are exercisable, except in the case of options granted to Outside
Directors. However, the Option Plan does not provide that the committee may
determine varying exercisability provisions at the time of grant. Consequently,
although the committee has the authority under the Option Plan to change any
vesting schedules, it cannot do so until after an option is granted. The Board
believes that the committee should have the same authority at the time an option
is granted as it has immediately after the option is granted, and has amended
the Option Plan to so provide.
The Option Plan terminates on October 31, 2001 or at such earlier time
as the Board may determine. Any option outstanding under the Option Plan at the
time of the termination of the Option Plan shall remain in effect until such
option shall have been exercised or shall have expired in accordance with its
terms.
The Option Plan provides that in the event of any change in the number
or kind of outstanding shares of the Company's Common Stock by reason of
reorganization, merger, recapitalization, reclassification, stock dividend,
stock split, exchange or combination of shares, or other similar transactions,
in which the Company is the survivor, appropriate adjustment will be made in the
number and kind of shares to which outstanding options relate and in the
exercise price per share. In the event of the execution of a definitive
agreement for the sale by the Company of all or substantially all of its assets
to any person, the consolidation of the Company with any person, or the merger
of the Company with any person as a result of which the Company is not the
surviving entity as a publicly held corporation, each option shall become
immediately exercisable in full.
In addition, each option will become immediately exercisable in full
if: (a) one or more individuals is elected to the Board which election results
in a majority of the directors of the Company consisting of individuals who have
not been directors of the Company for at least two years, unless such
individuals have been nominated as directors by three-fourths of the directors
of the Company who have been directors of the Company for at least two years;
(b) the Company and/or any one or more of its stockholders sells or transfers,
in one or more transactions, related or unrelated, to one or more persons under
circumstances whereby any person and its affiliates own, after such sales and
transfers, at least 20%, but less than 40%, of the shares of the Company having
voting power for the election of directors, unless such sale or transfer has
been approved in advance by three-fourths of the directors of the Company who
have been directors of the Company for at least two years; (c) the Company
and/or any one or more of its stockholders sells or transfers, in one or more
transactions, related or unrelated, to one or more persons
-13-
<PAGE> 16
under circumstances whereby any person and its affiliates own, after such sales
and transfers, at least 40% of the shares of the Company having voting power for
the election of directors; or (d) a person commences a "tender offer" (as
defined in Section 14(d)(1) of the Securities Exchange Act of 1934, as amended),
other than a self tender by the Company, for a portion of the shares of the
Company having voting power for the election of directors, which, taken together
with shares owned by such acquirer, and giving effect to all rights to acquire
shares, will represent ownership of at least 20% of the shares of the Company
having voting power for the election of directors, unless such "tender offer"
has been approved in advance by three-fourths of the directors of the Company
who have been directors of the Company for at least two years.
The Company has an effective registration statement under the
Securities Act of 1933, as amended, covering the 1,000,000 shares to be issued
pursuant to options issuable under the Option Plan, and expects to file a new
registration statement covering the additional 800,000 shares, if this Proposal
No. 2 is approved by the stockholders.
The following table sets forth the number of options which are required
to be granted in the future under the Option Plan. This table assumes automatic
grants through 2001 to each of the three non-executive directors who will
continue in office after the 1996 annual meeting, and a grant of 15,000 options
to Robert D. Hunter in connection with his consulting agreement. All other
grants are discretionary and are not determinable at this time.
<TABLE>
<CAPTION>
Name and Position Number of Shares
----------------- ----------------
<S> <C>
Non-executive Directors
as a group (4 members) 150,000
</TABLE>
The Board may not without further approval of the holders of a majority
of the shares of the Common Stock present in person or by proxy at any special
or annual meeting of the stockholders increase the number of share as to which
options may be granted or change the manner in which the initial option prices
are determined.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Options. The Company believes that with respect to Incentive
Options granted under the Option Plan, no income will be recognized by an
optionee for federal income tax purposes at the time such an option is granted
or at the time it is exercised. However, the amount by which the fair market
value of the shares at the time of exercise exceeds the exercise price will be
an adjustment for purposes of calculating the optionee's alternative minimum
taxable income; accordingly, optionees will be required to include such excess
as alternative minimum taxable income in the taxable year of exercise.
If the optionee makes no disposition of Incentive Option shares within
two years from the date the Incentive Option was granted and one year from the
receipt of the option shares pursuant to the exercise of the Incentive Option
(the "applicable holding period"), any gain recognized upon disposition of the
shares will be long-term capital gain.
If the optionee disposes of shares acquired by exercise of an Incentive
Option before the expiration of the applicable holding period, the optionee will
recognize ordinary income in an amount equal to the difference between the fair
market value of the shares on the date of exercise less the purchase price paid
for the shares or, if less, the difference between the amount received on
disposition of the shares and the adjusted basis of the shares. Any additional
gain on such disposition will be long-term or short-term capital gain, depending
on the holding period of the shares.
If the optionee holds Incentive Option shares for the applicable
holding period, the Company will not be allowed a deduction for federal income
tax purposes with respect to an Incentive Option. However, if the optionee
-14-
<PAGE> 17
does not hold his shares for the applicable holding period, the Company will be
entitled to a deduction for the amount received by the optionee to the extent
that such amount is taxable to the optionee as ordinary income.
If an optionee makes payment of the option price by delivering shares
of the Common Stock, he generally will not recognize any gain as a result of
such delivery, but the amount of gain, if any, which is not so recognized will
be excluded from his basis in the new shares received. However, the use by an
optionee of shares previously acquired pursuant to the exercise of an Incentive
Option to exercise an Incentive Option will be treated as a taxable disposition
of the transferred shares were not held by the optionee for the applicable
holding period.
Non-Qualified Options. The grant of a Non-Qualified Option is not
subject to federal income tax. Upon exercise, the optionee will recognize as
ordinary income, and the Company is entitled to a corresponding deduction for
federal income tax purposes, in an amount equal to the difference between the
fair market value of the shares on the date of exercise and the exercise price.
As to options held by employees, this ordinary income will constitute wages
subject to the withholding of income tax and the Company will make arrangements
to ensure that the amount of the tax required is withheld.
When an optionee disposes of shares received on exercise of a
Non-Qualified Option, the optionee will recognize capital gain or loss
(long-term or short-term, depending on the period the optionee holds the shares)
in an amount equal to the difference between the selling price and the
optionee's tax basis in the shares (generally, the amount of ordinary income the
optionee previously recognized with respect to the shares plus the exercise
price the optionee paid for the shares).
If any optionee makes payment of the option price by delivering shares
of Common Stock, he generally will not recognize any gain as a result of such
delivery, but the amount of gain, if any, which is not so recognized will be
excluded from his basis in the new shares received.
The foregoing general discussion of the federal income tax consequences
of the granting and exercise of options under the Option Plan, and the sale of
Common Stock acquired, is based on an analysis of the Code, as currently in
effect, existing laws, judicial decisions and administrative rulings and
regulations, all of which are subject to change. In addition to being subject to
the federal income tax consequences described above, an optionee may also be
subject to state and/or local income tax consequences in the jurisdiction in
which he or she works and/or resides.
APPROVAL OF THE AMENDMENTS TO THE OPTION PLAN
Each holder of outstanding shares of Common Stock of the Company of
record at the close of business on March 8, 1996, is entitled to one vote per
share held with respect to the adoption of the amendments to the Option Plan.
The affirmative votes of a majority of the votes cast by the holders of shares
of Common Stock of the Company entitled to vote thereon are necessary for
adoption of the amendments to the Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL TO APPROVE THE AMENDMENTS TO THE 1991 STOCK OPTION PLAN
-15-
<PAGE> 18
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has declared advisable an amendment to the
Company's Certificate of Incorporation, as amended (the "Certificate") to
increase the aggregate number of authorized shares of Common Stock from
12,000,000 to 30,000,000 (the "Amendment") and has directed that the Amendment
be submitted to the Stockholders at the annual meeting. The Certificate
presently authorizes the issuance of 12,000,000 shares of Common Stock. The
Amendment would increase the authorized number of shares of Common Stock to
30,000,000.
If the Amendment is approved, the text of the first paragraph of
Article Fourth of the Certificate would read in its entirety as follows:
FOURTH: The total number of shares of stock which the
corporation shall have the authority to issue is thirty
million (30,000,000) shares of Common Stock, of the par value
of $ .25 per share.
Of the Company's 12,000,000 authorized shares of Common Stock,
8,570,886 were issued and outstanding as of the record date and 11,072,013
were reserved for issuance (including the 800,000 shares reserved for the
amendment to the Option Plan), leaving only a limited number of authorized but
unissued shares available for issuance. The Board of Directors is concerned that
there is not presently authorized a sufficient number of shares of Common Stock
to give the Company the flexibility it needs in today's competitive, fast
changing environment. The Board considers it desirable that the Company have a
reasonable amount of Common Stock available for issuance for possible stock
offerings, stock dividends, stock splits, employee benefit plans, corporate
mergers, acquisitions of property and other corporate purposes, although there
are no present agreements, understandings or plans for the issuance of any of
the additional shares that would be authorized by the Amendment. Having the
additional shares available for issuance, without the expense and delay of
obtaining the approval of stockholders at a special meeting, will afford the
Company greater flexibility.
Adoption of the Amendment would enable the Board from time to time to
issue additional shares of Common Stock for such purposes and such consideration
as the Board may approve, without further approval of the Company's stockholders
except as may be required by law or the rules of any national securities
exchange on which the shares of Common Stock are at the time listed. As is true
for shares presently authorized, Common Stock authorized by the Amendment could
be issued in connection with defending the Company against a hostile takeover
bid, and the issuance of shares authorized by the Amendment may, among other
things, have a dilutive effect on earnings per share and on the equity and
voting power of existing holders of Common Stock.
There are no preemptive rights with respect to Common Stock. The
additional authorized shares of Common Stock would have the identical powers,
preferences and rights as the shares now authorized. Under Delaware law,
stockholders will not have any dissenters' or appraisal rights in connection
with the Amendment. If the Amendment is approved by the stockholders, it will
become effective upon executing, acknowledging, filing and recording a
Certificate of Amendment required by the General Corporation Law of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
-16-
<PAGE> 19
CERTAIN TRANSACTIONS
EJ Financial has a consulting agreement with the Company. See
"EXECUTIVE COMPENSATION".
In February 1996, the Trust exercised warrants to purchase 800,000
shares of the Company's Common Stock at an exercise price of $2.125 for an
aggregate purchase price of $1,700,000. These warrants were issued in March
1991, and were to expire on March 31, 1996. The Company paid the Trust $22,714
in connection with the early exercise of the warrants, which amount was
determined by multiplying the exercise price of the warrants by an annual
interest rate of 1% over the prime rate for the number of days of the early
exercise.
Mr. Fred Holubow and Mr. Roland Weiser each purchased shares of the
Company's Common Stock (10,000 shares and 2,000 shares, respectively) in the
Company's private placement of 1,400,000 shares completed on February 29,1996.
The price of the shares in the private placement was $6.00 per share. The
closing price on February 29, 1996, for the Common Stock, as reported by NASDAQ,
was $7.125. The shares are restricted, but the Company has agreed to register
all of the shares sold in the private placement for resale, including the shares
purchased by the directors.
Dr. Robert E. Dudley, Vice President, Clinical and Regulatory Affairs,
was required to file a Form 3 report with the Securities and Exchange Commission
within ten days of his appointment to that position. Dr. Dudley began in his
position on December 12, 1994. That report was not filed as required nor was it
reported in a Form 5 report for 1994. Outside directors are automatically
granted options for 7,500 shares under the Corporation's stock option plan at
the conclusion of each annual meeting. Mr. Holubow was appointed as a director
in January 1995, and effective on such appointment, he was granted options for
10,000 shares under the nonqualified stock option plan. Neither the appointment
nor the grant was reported as required. The options so granted to Messrs.
Holubow, Weiser, Lempenau and Hunter at the 1995 annual meeting were not
reported as required. All filings not made, described in this paragraph, have
now been made.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The firm of Coopers & Lybrand was the Company's independent public
accountant for the 1995 fiscal year. A representative from the Company's
independent public accountants customarily attends the Annual Meeting and has
the opportunity to make a statement if he so desires. This representative also
is available to respond to appropriate questions. The Company has not yet
selected its independent public accountant for the 1996 fiscal year.
-17-
<PAGE> 20
MISCELLANEOUS
As of the date of this Proxy Statement, management does not know of any
other matters that will come before the Annual Meeting. In the event that any
other matter properly comes before the Annual Meeting, the persons named in the
enclosed form of proxy intend to vote all proxies in accordance with their best
judgment on such matters.
It is the intention of the persons named in the enclosed form of proxy,
unless otherwise directed by stockholders executing proxies, to vote all
proxies received by them in time FOR the election of Stephen M. Simes into the
class of directors whose term will expire in 1999, FOR APPROVAL OF the
amendments to the Company's stock option plan, described in PROPOSAL NO. 2 and
FOR APPROVAL OF the amendment to the Company's Amended Certificate of
Incorporation, described in PROPOSAL NO. 3.
All shares represented by proxies to be voted at the Annual Meeting
will be voted if received in time.
A COPY OF THE COMPANY'S FORM 10-K ANNUAL REPORT FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995 IS AVAILABLE WITHOUT CHARGE FROM THE CORPORATE
SECRETARY, UNIMED PHARMACEUTICALS, INC., 2150 EAST LAKE COOK ROAD, BUFFALO
GROVE, ILLINOIS 60089, TELEPHONE: (847) 541-2525.
1997 ANNUAL MEETING
Proposals of stockholders intended to be represented at the next Annual
Meeting of Stockholders to be held in 1997 must be received by the Company on or
before December 5, 1996 for inclusion in the Company's Proxy Statement and form
of proxy relating to that Annual Meeting.
UNIMED PHARMACEUTICALS, INC.
DAVID E. RIGGS
Secretary
Dated: April 5, 1996
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD NOW
-18-
<PAGE> 21
PROXY
UNIMED PHARMACEUTICALS, INC.
2150 E. LAKE COOK RD., BUFFALO GROVE, ILLINOIS 60089
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS ON MAY 2, 1996.
The undersigned hereby appoints Stephen M. Simes, John N. Kapoor and
David E. Riggs, and each of them, as proxies with the powers the undersigned
would possess if personally present, and with full power of substitution, to
vote all common shares of the undersigned in Unimed Pharmaceuticals, Inc. at
the Annual Meeting of Stockholders to be held at The Hyatt Deerfield Hotel,
1750 Lake Cook Road, Deerfield, Illinois 60015 on May 2, 1996 at 10:00 a.m. and
at any adjournment thereof, upon all subjects that may properly come before the
meeting, subject to any directions indicated on the reverse side of this card.
IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE: FOR THE ELECTION OF THE
NOMINEE LISTED ON THE REVERSE SIDE; FOR THE APPROVAL OF THE AMENDMENTS TO THE
1991 STOCK OPTION PLAN; FOR APPROVAL OF THE AMENDMENT TO THE CERTIFICATE OF
INCORPORATION; AND AT THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND MAIL PROMPTLY IN
THE ENCLOSED ENVELOPE. IF YOU DO NOT SIGN AND RETURN A PROXY, OR ATTEND THE
MEETING AND VOTE BY BALLOT, YOUR SHARES CAN NOT BE VOTED.
<PAGE> 22
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEE AND FOR PROPOSALS 2 AND 3.
The Board of Directors recommends a vote FOR
1. Election of Directors FOR WITHHOLD
Nominee: Stephen M. Simes / / / /
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of amendments to / / / / / /
1991 Stock Option Plan
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. Approval of amendment to the / / / / / /
Certificate of Incorporation
Signatures:
-------------------------------------
-------------------------------------
Dated:
-------------------------------, 1996
Please sign exactly as name appears above. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian or corporate
officer, please give full title or capacity as such.
