<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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNIMED PHARMACEUTICALS, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] No fee required.
[X] 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:
Common Stock
- --------------------------------------------------------------------------------
(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 LOGO
UNIMED PHARMACEUTICALS, INC.
2150 EAST LAKE COOK ROAD
BUFFALO GROVE, IL 60089
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1997
------------------------
The Annual Meeting of Stockholders of UNIMED Pharmaceuticals, Inc. (the
"Company"), a Delaware corporation, will be held at Harris Trust and Savings
Bank, Seminar Rooms 2 & 3, 8th Floor West, 111 West Monroe Street, Chicago,
Illinois 60603, on April 24, 1997, at 10:00 A.M., Chicago time, for the
following purposes:
1. To elect two nominees as directors for a term of three years (expiring
in 2000) and until their successors are duly elected and qualified.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
THE NOMINEES FOR ELECTION AS DIRECTORS ARE JOHN N. KAPOOR, PHD AND ROLAND
WEISER, BOTH OF WHOM ALREADY SERVE AS DIRECTORS OF THE COMPANY. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
The Board of Directors has set February 28, 1997, 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 7, 1997
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 LOGO
UNIMED PHARMACEUTICALS, INC.
2150 EAST LAKE COOK ROAD
BUFFALO GROVE, IL 60089
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1997
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of Unimed
Pharmaceuticals, Inc. (the "Company") to be voted at the Annual Meeting of
Stockholders of the Company to be held at Harris Trust and Savings Bank, Seminar
Rooms 2 & 3, 8th Floor West, 111 West Monroe Street, Chicago, Illinois 60603 on
April 24, 1997, and any and all adjournments thereof. The Proxy Statement and
the form of proxy enclosed herewith were first mailed on or about April 7, 1997
to stockholders of record on February 28, 1997. Any stockholder who executes and
delivers a proxy may revoke it by written communication to the Secretary of the
Company 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 and personal interview. The Company may also hire a proxy solicitor.
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 form of Proxy.
Only holders of issued and outstanding shares of the Company's Common Stock
of record at the close of business on February 28, 1997 are entitled to notice
of, and to vote at, the Annual Meeting. The number of shares of Common Stock
outstanding on February 28, 1997, was 8,783,499. 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
directors.
Each holder of shares of Common Stock is entitled to one vote per share on
all matters properly coming before the Meeting. Stockholders are not permitted
to cumulate votes for purposes of electing directors or otherwise. 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 election of directors.
<PAGE> 4
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 II) whose term will expire at the 1997 Annual Meeting
currently consists of two directors: John N. Kapoor, PhD and Roland Weiser.
Pursuant to the Company's bylaws, the Board of Directors has set the number of
directors of the Company at five, of which the directors are designated as Class
II (term expiring 1997), two directors are designated as Class III (term
expiring 1998) and one directorship designated as Class I (term scheduled to
expire in 1999). Each of Dr. Kapoor and Mr. Weiser is nominated for election for
a term of three years and until his successor is duly elected and qualified. If
a nominee becomes unavailable for election for any 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 following table presents the names, ages and principal occupations of
the nominees and the other members of the Board of Directors. Information
concerning their beneficial ownership of Company Common Stock is presented under
Ownership of Shares below.
MEMBERS OF THE BOARD OF DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE IN 1997
NOMINEES FOR ELECTION AS DIRECTORS
(Class II)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION
---- --- -------- --------------------
<S> <C> <C> <C>
John N. Kapoor, PhD....................... 53 1991 Chairman of the Board of UNIMED
Pharmaceuticals, Inc. since May 1992, and
Chief Executive Officer from May 1992
through October 1993; Chairman of
OptionCare, 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; Chief
Executive Officer of Akorn, Inc., an
ophthalmics company since May 1996, and
director since December 1991; 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 NeoPharm,
Inc., an oncology company.
Roland Weiser............................. 66 1989 President of Intervista, an international
pharmaceutical consulting firm, since 1985;
Senior Vice President of Schering-Plough
Corp. (International) from 1980 to 1984;
Director, GAM Funds, Inc., a diversified
open end investment company.
</TABLE>
2
<PAGE> 5
DIRECTORS WHOSE TERMS EXPIRE IN 1998
(Class III)
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE PRINCIPAL OCCUPATION
---- --- -------- --------------------
<S> <C> <C> <C>
Fred Holubow.............................. 58 1995 Founder and Vice President of Pegasus
Associates, a registered investment
advisory firm, since 1982; Director and
Vice Chairman, Jefferson State Bank, an
Illinois State Bank, and Director of
ThermoRemediation.
James J. Lempenau......................... 67 1983 Chartered Financial Analyst; President and
Director since 1981 of The Income Builder,
Inc., an investment advisory firm.
</TABLE>
The Board of Directors of the Company held six meetings during 1996. The
Company has an Audit Committee and a Salary and Compensation Committee. During
fiscal 1996, the Audit Committee met twice and the Salary and Compensation
Committee met three times. The Salary and Compensation Committee also conferred
numerous times by telephone during the year. The Audit Committee consists of
James J. Lempenau, Chairman, Roland Weiser and Fred Holubow. 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, evaluates and
determines executive officer compensation. The Company does not have a
nominating committee. Each director attended or participated in at least 75% of
the board meeting and meetings of committees of which he is a member.
As a result of the resignation in mid-January 1997 of Stephen Simes as a
Class I director, President and Chief Executive Officer of the Company, there
exists a vacancy in the Class I group of directors. The Board of Directors has
determined not to fill the vacancy at this time.
The John N. Kapoor Trust, an affiliate of John N. Kapoor, Ph.D., Chairman
of the Company, 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
JOHN N. KAPOOR, PHD AND MR. ROLAND WEISER TO THE COMPANY'S BOARD OF DIRECTORS.
3
<PAGE> 6
EXECUTIVE COMPENSATION
The following table summarizes the compensation for services to the Company
for fiscal 1996 to Robert E. Dudley, the chief executive officer of the Company,
and Stephen Simes, the past president and Chief Executive Officer (together the
"1996 Named Officers"). No other person who served as an executive officer of
the Company in fiscal 1996 received more than $100,000 in salary and bonus in
fiscal 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------- --------------------
RESTRICTED
OTHER ANNUAL STOCK OTHER
SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ $(1) $ #(2) $(3)
--------------------------- ---- ------ ----- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert E. Dudley(4).......... 1996 150,000 45,000 7,200 0 100,000 4,750
Chief Executive 1995 140,000 42,000 7,200 0 100,000 51,765
Officer 1994 8,227 0 300 0 0 0
Stephen M. Simes(5).......... 1996 220,000 88,000 12,000 0 360,000 10,604
Past President and 1995 200,000 80,000 9,890 0 360,000(6) 10,570
Chief Executive Officer 1994 37,712 0 1,700 0 300,000(6) 0
</TABLE>
- ---------------
(1) Represents the compensation portion of car allowances advanced to the 1996
Named Officers.
(2) The stock options become exercisable 25% on the anniversary 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 ($4,750 per officer) made by the
Company to its 401(k) Plan for each of the executive officers listed above.
For Dr. Dudley in 1995, this amount 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). For Mr. Simes, this amount also includes insurance premiums of
$4,181 and $1,673 of taxes associated with those premiums.
(4) Dr. Dudley joined the Company in December 1994. He was elected chief
executive officer on January 13, 1997. Dr. Dudley's Employment Agreement is
described under "Certain Transactions."
(5) Mr. Simes joined the Company on October 25, 1994 and resigned as President
and Chief Executive Officer on January 13, 1997. The employment agreement
entered into between Mr. Simes and the Company provides for salary
continuation through February 12, 1998. In addition, options to purchase
190,000 shares of Common Stock were vested and his remaining options to
purchase 170,000 shares of Common Stock were terminated.
(6) The 360,000 options granted to Mr. Simes in 1995 represent 60,000 new
options and a repricing of 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 were to vest as described in note (2) above.
It was an additional condition of the exercise of 100,000 of these 250,000
options that the price of the Common Stock shall have equalled or exceeded
$5.00 per share for ten consecutive trading days. This condition was
satisfied on June 22, 1995. At December 31, 1996, options to purchase
190,000 shares of Common Stock were vested. On January 13, 1997, options to
purchase 170,000 shares of Common Stock terminated.
OPTION GRANTS IN FISCAL YEAR 1996
No options to purchase shares of Common Stock were granted to the 1996
Named Officers during the fiscal year ended December 31, 1996.
4
<PAGE> 7
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, 1996, and the value at
December 31, 1996, of unexercised stock options held by the 1996 Named 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>
Robert E. Dudley..................... 0 0 25,000/75,000 106,250/243,750
Stephen M. Simes..................... 0 0 190,000/170,000 807,500/610,000
</TABLE>
- -------------------------
* Represents the fair market value at December 31, 1996 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 non-employee directors, Roland Weiser, Chairman, Fred Holubow and 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. 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 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, 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
CEO) or functional goals (for the other officers). Options for Company stock are
long-term incentives granted 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 and 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 1996 survey used by
the Committee, was prepared
5
<PAGE> 8
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 1996 salary for the then President/CEO, Stephen Simes, 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
Mr. Simes. The Committee also reviewed the salaries recommended by Mr. Simes 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.
On January 13, 1997, Mr. Simes resigned his position as President and CEO
and director of the Company to pursue other business interests. Dr. Robert
Dudley, the then Vice President of Clinical & Regulatory Affairs, was appointed
by the Board of Directors as CEO. The 1997 salary for Dr. Dudley, was based upon
his base salary in effect on January 13, 1997 (in accordance with his employment
agreement) plus an additional $4,000 per month for accepting the additional
responsibilities of CEO. The minimum total additional compensation for Dr.
Dudley as CEO was set at $25,000 regardless of his tenure in this position.
INCENTIVE BONUS AWARDS
Bonus awards for 1996 were granted on the basis of financial goals and new
product acquisition objectives established in early 1996. For Mr. Simes, the
Committee considered the potential impact of the goals achieved, and recommended
to the Board that the maximum 40% bonus be granted. Mr. Simes 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 1997.
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 typically 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 1995, 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 April 1997. Additional options will be granted
from the pool in April 1997.
Respectfully submitted,
Salary and Compensation Committee
Fred Holubow
James J. Lempenau
Roland Weiser (Chairman)
6
<PAGE> 9
PERFORMANCE GRAPH
The following performance graph compares the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock to 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, 1996.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG
UNIMED PHARMACEUTICALS, INC., NASDAQ (US) STOCK MARKET INDEX
AND NASDAQ PHARMACEUTICALS STOCK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD UNIMED NASDAQ NASDAQ
(FISCAL YEAR COVERED) PHARMACEUTICALS, MARKET PHARMACEUTICALS
INC. INDEX-U.S. COS. INDEX
<S> <C> <C> <C>
1991 100 100 100
1992 121.62 116.38 83.22
1993 43.24 133.60 74.18
1994 27.70 130.59 55.83
1995 71.62 184.68 102.14
1996 75.68 227.17 102.25
</TABLE>
ASSUMES $100 INVESTED ON JANUARY 1, 1992 IN UNIMED COMMON STOCK, NASDAQ
(US) STOCK MARKET INDEX, AND NASDAQ PHARMACEUTICAL INDEX.
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
7
<PAGE> 10
OWNERSHIP OF SHARES
The following table presents information as of February 28, 1997 with
respect to the beneficial ownership of the Company's Common Stock by all
directors, all 1996 Named Officers, all persons known to the Company to own
beneficially 5% or more of the Company's Common Stock, and all current officers
and directors as a group. The Company's only class of equity securities
outstanding is its Common Stock:
<TABLE>
<CAPTION>
SHARES OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------------ -------------------- ----------
<S> <C> <C>
John N. Kapoor, Ph.D.(2).................................... 2,384,429 25.29%
EJ Financial Enterprises, Inc.
225 E. Deerpath, Suite 250
Lake Forest, IL 60045
James J. Lempenau(3)........................................ 64,828 *
Roland Weiser(3)............................................ 52,010 *
Fred Holubow(3)............................................. 35,000 *
Robert E. Dudley(3)......................................... 40,000 *
Stephen M. Simes(3)......................................... 190,000 2.1%
All Directors and Executive Officers as a group (7
persons).................................................. 2,643,767(4) 28.85%
</TABLE>
- ---------------
* Less than 1%
(1) Beneficial and Percentage Ownership have been determined pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Under this Rule, shares of Common Stock that may be acquired upon
exercise of stock options within 60 days of the measurement date are deemed
beneficially owned by the optionholder and included in calculating the
optionholder's percentage ownership of Common Stock.
(2) Includes 1,669,429 shares of Common Stock beneficially owned by the John N.
Kapoor Trust (the "Trust"), an affiliate of Dr. Kapoor; 485,000 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; 20,000
shares held in trust for family members of which Dr. Kapoor's spouse is the
Trustee; and 210,000 shares of Common Stock that may be purchased under
stock options exercisable within 60 days of February 28, 1997.
(3) Includes incentive stock options and nonqualified stock options exercisable
within 60 days of February 28, 1997 to purchase shares of Common Stock as
follows: 49,828 shares by Mr. Lempenau; 48,670 shares by Mr. Weiser; 25,000
shares by Mr. Holubow; 40,000 shares by Dr. Dudley; and 190,000 shares by
Mr. Simes.
(4) Includes shares owned beneficially (including an aggregate of 440,998 shares
of Common Stock that may be purchased under stock options exercisable within
60 days of February 28, 1997) and of record by the officers and directors
(other than Mr. Simes who resigned from the Company in January 1997).
CERTAIN TRANSACTIONS
The Company and EJ Financial Enterprises, Inc. ("EJ Financial"), an
affiliate of Dr. John N. Kapoor, entered into an agreement, terminating March
27, 1997, 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 $50,00 to EJ Financial under the contract with respect to fiscal 1996,
$50,000 for fiscal 1995 and $106,250 for fiscal 1994. The agreement may be
terminated by either party upon 30 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.
8
<PAGE> 11
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.
Dr. Dudley is employed by the Company under an Employment Agreement dated
November 3, 1994. Under this agreement, Dr. Dudley received a base salary of
$140,000 per year in 1995 and $150,000 in 1996 plus an automobile allowance of
$7,200 per year, may receive bonuses based on a multiple of his annual salary,
as may be determined by the Board, and may participate in the Company's
insurance and retirement programs. The Agreement also provided for the grant of
options to purchase 60,000 shares of Common Stock under the 1991 Stock Option
Plan, as amended. The Company paid for Dr. Dudley to relocate to the
metropolitan Chicago area from New Jersey. Dr. Dudley may be terminated
immediately for cause (as defined in the Employment Agreement) or upon 30 days
notice without cause. If Dr. Dudley is terminated without cause, he is to
receive his then current base salary and benefits for up to nine months after
the date of termination. On January 13, 1997, the Board appointed Dr. Dudley
Chief Executive Officer of the Company and increased his base compensation by
$4,000 per month (and not less than $25,000 in the aggregate) during the period
that he serves in that capacity.
In February 1996, the Trust exercised warrants to purchase 800,000 shares
of 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires officers, directors, and persons
who own more than 10% of the Company's equity securities to file statements of
beneficial ownership (Form 3) and statements of changes in beneficial ownership
(Forms 4 or 5) with the Securities and Exchange Commission (the SEC) and to
furnish the Company with copies of all such forms they file.
To the Company's knowledge based solely on the review of the copies of such
forms received by it, the Company believes that during 1996 all filing
requirements applicable to its officers, directors, and greater than 10%
beneficial owners were complied with and were timely filed.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Coopers & Lybrand LLP was the Company's independent public accountant for
the 1996 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 or she so desires. This representative also is available
to respond to appropriate questions. The Company has not yet selected its
independent public accountant for the 1997 fiscal year.
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.
9
<PAGE> 12
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 Dr. Kapoor and Mr. Weiser into the
class of directors whose term will expire in 2000.
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, 1996 IS AVAILABLE WITHOUT CHARGE FROM THE CORPORATE SECRETARY,
UNIMED PHARMACEUTICALS, INC., 2150 EAST LAKE COOK ROAD, BUFFALO GROVE, ILLINOIS
60089, TELEPHONE: (847) 541-2525.
1998 ANNUAL MEETING
Proposals of stockholders intended to be represented at the next Annual
Meeting of Stockholders to be held in 1998 must be received by the Company on or
before December 3, 1997 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 7, 1997
PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD NOW
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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 APRIL 24, 1997.
The undersigned hereby appoints Dr. John N. Kapoor, Dr. Robert Dudley, 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 Harris Trust and Savings Bank,
Seminar Rooms 2 & 3, 8th Floor West, 111 West Monroe Street, Chicago, Illinois
60603 on April 24, 1997 at 10:00 a.m., Chicago time, 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 NOMINEES LISTED ON THE
REVERSE SIDE AND AT THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME
BEFORE THE MEETING.
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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.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN.
1. For the election of JOHN N. KAPOOR, PhD. and ROLAND WEISER as Class II
directors, to hold office until the Annual Meeting in 2000 or until their
successors are duly elected and qualified.
TO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE, LINE THROUGH OR OTHERWISE
STRIKE OUT THE NAME OF THE NOMINEE.
2. To transact such other business as may properly come before the meeting.
Signatures:
------------------------
------------------------
Dated: , 1997
------------------
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.
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