<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] 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 Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
BARR LABORATORIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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:
------------------------------------------------------------------------
<PAGE> 2
[BARR LOGO]
BARR LABORATORIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
The Annual Meeting of Shareholders of Barr Laboratories, Inc. will be held
on October 28, 1999 at 10:00 a.m. at the Plaza Hotel, 5th Avenue and Central
Park South, New York, NY for the following purposes:
1. To elect a Board of eight Directors to serve until the next Annual
Meeting of Shareholders and until their successors are elected and
qualified;
2. To transact such other business as may properly come before the
meeting.
Owners of record at the close of business on August 31, 1999 will be
entitled to vote at the meeting or at any adjournments or postponements
thereof.
Each shareholder is requested to sign and date the enclosed proxy card and
to return it without delay in the enclosed postage-paid envelope. Any
shareholder present at the Annual Meeting may withdraw the proxy and vote
personally on each matter brought before the Annual Meeting.
By Order of the Board of Directors
Paul M. Bisaro
Secretary
2 Quaker Road
P.O. Box 2900
Pomona, New York 10970-0519
September 27, 1999
<PAGE> 3
BARR LABORATORIES, INC.
2 Quaker Road
P.O. Box 2900
Pomona, New York 10970-0519
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 28, 1999
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the management of Barr Laboratories, Inc., a New York corporation
(the "Company"), for use at the 1999 Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held at 10:00 a.m. on October 28, 1999 at
the Plaza Hotel, 5th Avenue and Central Park South, New York, NY and at any
adjournment or postponement thereof. It is anticipated that this Proxy
Statement, together with the form of proxy, will first be mailed to the
Company's shareholders on or before September 27, 1999.
A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised by (i) attending the Annual Meeting and voting in person,
(ii) duly executing and delivering a proxy for the Annual Meeting bearing a
later date or (iii) delivering written notice of revocation to the Secretary of
the Company prior to use of the enclosed proxy at the Annual Meeting.
The Company will bear the cost of this solicitation of proxies, including
expenses in connection with the preparing, assembling and mailing of proxy
solicitation materials and the charges and expenses of brokerage firms and
others for forwarding solicitation materials to beneficial owners. In addition
to solicitation by mail, proxies may be solicited personally or by telephone or
telegraph by Directors, Officers or employees of the Company, who will receive
no additional compensation for such services. The Company has retained
Continental Stock Transfer & Trust Company to aid in the solicitation of proxies
for which the Company expects to pay approximately $25,000, plus reimbursable
expenses.
RECORD DATE
The close of business on August 31, 1999 is the record date for
determination of holders of the Company's Common Stock, $.01 par value (the
"Common Stock"), entitled to notice of and to vote at the Annual Meeting and any
adjournment or postponement thereof. On that date there were outstanding and
entitled to vote 22,829,884 shares of Common Stock, each entitled to one vote.
1
<PAGE> 4
ACTION TO BE TAKEN UNDER THE PROXY
The persons acting under the proxy will vote the shares represented thereby
for the election of the Company's nominees as Directors, or, if otherwise
directed by the person executing the proxy, in accordance with each direction.
The Board of Directors does not know of any other business to be brought before
the meeting, but it is intended that, as to any such other business, a vote may
be cast pursuant to the proxy in accordance with the judgment of the person or
persons acting thereunder. Directors are elected by a plurality of votes cast.
Abstentions, broker non-votes and withheld votes will not be considered as cast
votes.
PROPOSAL 1. ELECTION OF DIRECTORS
If all of the Company's nominees are elected, the Board of Directors of the
Company will consist of Bruce L. Downey (Chairman), Edwin A. Cohen
(Vice-Chairman), Paul M. Bisaro, Robert J. Bolger, Michael F. Florence, Jacob M.
Kay, Bernard C. Sherman and George P. Stephan, who will serve as Directors until
the 2000 Annual Meeting of Shareholders and until their respective successors
are duly elected and qualified. If any nominee becomes unable or declines to
accept nomination or election, which is not anticipated, it is intended that the
persons acting under the proxy will vote for the election in his stead of such
other person as the Board of Directors recommends. The Company does not have a
standing nominating committee; the current nominees for Directors have been
proposed by the Company's Chairman and the Company's principal shareholder.
Four meetings of the Board of Directors were held during the fiscal year
ended June 30, 1999. In addition, there were 11 committee meetings. No Director
attended fewer than 75% of the total number of meetings of the Board and all
committees on which the Director served.
AUDIT COMMITTEE
The functions of the Audit Committee are to assist the Board in overseeing
and reviewing the Company's internal accounting controls, to review the audited
financial statements and to investigate and make recommendations to the Board
with respect to the appointment of independent auditors. The Committee, which
met four times during the fiscal year ended June 30, 1999, is composed of
Messrs. Stephan and Bolger.
COMPENSATION COMMITTEE
The Compensation Committee is responsible for reviewing and authorizing the
granting of stock options to Officers and other key employees under the
Company's stock option plans and for reviewing compensation to be paid to
Officers and other key personnel of the Company. Current members of the
Committee, none of whom is an employee of the Company, are Messrs. Florence and
Stephan. Four meetings of the Committee were held during the fiscal year ended
June 30, 1999.
2
<PAGE> 5
BUSINESS DEVELOPMENT COMMITTEE
The Business Development Committee is responsible for evaluating and
providing advice to management on the merits of various business ventures,
including but not limited to, mergers, acquisitions, joint ventures, strategic
partnerships and other business arrangements. Current members of the Committee
are Messrs. Downey, Cohen, Bisaro and Kay. Three meetings of the Committee were
held during the fiscal year ended June 30, 1999.
COMPENSATION OF DIRECTORS
Directors, excluding Dr. Sherman, Mr. Downey and Mr. Bisaro received
quarterly retainers of $3,750 and a fee of $750 for attending Board meetings and
Committee meetings held in September 1998 and December 1998. At the December
Board Meeting, director's compensation was modified. Beginning with the March
1999 meeting, each director excluding Dr. Sherman, Mr. Downey and Mr. Bisaro,
received $7,500 covering his attendance at the Board Meetings and participation
in Committee Meetings. In addition, beginning with the August 1999 meeting, Dr.
Sherman will receive a quarterly payment of $7,500 for his attendance at Board
meetings. During fiscal 1999, Mr. Bolger received $16,100 for consulting
services provided to the Company. During fiscal 1999, Mr. Cohen was paid
$200,000 pursuant to his consulting agreement with the Company. Under the
Company's 1993 Stock Option Plan for Non-Employee Directors, as amended, each
Director who is not an employee of the Company (other than a Director who owns
40% or more of the Common Stock) receives an annual option grant to purchase
7,500 shares at an option price equal to 100% of the fair market of the Common
Stock on the date of grant. Each option has a ten-year term and becomes
exercisable on the date of the first annual shareholders' meeting immediately
following the date of the grant. In the case of the first grant (the date of the
1993 Annual Meeting of Shareholders), the number of shares covered by each grant
was 27,000. On December 9, 1998, each participating Director received a grant of
an option to purchase 7,500 shares at an exercise price of $48.625 per share.
Beginning with the Annual Meeting of Shareholders on October 28, 1999, each
participating director will receive an option to purchase 5,000 shares.
3
<PAGE> 6
INFORMATION ON NOMINEES
BRUCE L. DOWNEY, 51, became the Company's President, Chief Operating
Officer and a member of the Board of Directors in January 1993 and was elected
Chairman of the Board and Chief Executive Officer in February of 1994. Prior to
assuming these positions, from 1981 to 1993, Mr. Downey was a partner in the law
firm of Winston & Strawn and a predecessor firm of Bishop, Cook, Purcell and
Reynolds. Mr. Downey is a Director of Warner Chilcott, plc.
EDWIN A. COHEN, 67, founded the Company in 1970. Mr. Cohen served as
President, Chairman of the Board and Chief Executive Officer until 1994. In
February of 1994, he was elected to the position of Vice Chairman of the Board
and became a consultant to the Company.
PAUL M. BISARO, 38, was elected a Director of the Company in June 1998. Mr.
Bisaro is employed by the Company as Senior Vice President - Strategic Business
Development, General Counsel and Secretary. Prior to joining the Company in 1992
as General Counsel, Mr. Bisaro was associated with the law firm of Winston &
Strawn, and a predecessor firm, Bishop, Cook, Purcell and Reynolds. Prior to his
association with Winston & Strawn, Mr. Bisaro was a consultant with Arthur
Andersen & Co.
ROBERT J. BOLGER, 77, was elected a Director of the Company in February
1988. Mr. Bolger has been President of Robert J. Bolger Associates, a marketing
consulting company since January 1988. From 1962 through 1987, he served as
President of the National Association of Chain Drug Stores, a major trade
association.
MICHAEL F. FLORENCE, 62, was elected a Director of the Company in February
1988. Mr. Florence is President of Sherfam, Inc. and has been since 1989. He is
also Vice President of Shermfin Corp., Vice President of Apotex, Inc. and Vice
President of Sherman Delaware, Inc. From January 1964 through April 1989, Mr.
Florence was a partner in Wm. Eisenberg & Co., Canadian Chartered Accountants.
He is President and a Director of Citadel Gold Mines, Inc., and a Director of
Nutrition for Life International, Inc. Mr. Florence and Dr. Sherman are
brothers-in-law.
JACOB ("JACK") M. KAY, 57, was elected a Director of the Company in
December 1994. Mr. Kay is President of Apotex, Inc., and also serves as Chair of
the Canadian Drug Manufacturers Association. He is also a Director of Humber
River Regional Hospital (Toronto), Chair of the Canadian Schizophrenia
Foundation and, a Director of Cangene Corporation.
4
<PAGE> 7
BERNARD C. SHERMAN, 57, was Chairman of the Board of the Company from July
1981 to January 1993. He remains a Director of the Company. Dr. Sherman is Chief
Executive Officer and Chairman of the Board of Apotex, Inc., a Canadian
manufacturer of generic and brand name drugs. He is also Chairman of the Board
of Cangene Corp., President of Sherman Delaware, Inc., President of Shermfin
Corp., President of Apotex Holdings, Inc. and a Director of Citadel Gold Mines,
Inc.
GEORGE P. STEPHAN, 66, was elected a Director of the Company in February
1988. Currently, he is a business consultant and director. From 1994 to April
1999, he was Managing Director of Stonington Group LLC, financial intermediaries
and consultants. Mr. Stephan is also a director of Kollmorgen Corporation
(NYSE), a diversified technology company in which he served as Chairman of
Kollmorgen Corporation's Board of Directors from 1991 to 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE ABOVE NOMINEES.
5
<PAGE> 8
OWNERSHIP OF SECURITIES
The following table sets forth information regarding the beneficial
ownership of the Company's voting securities on June 30, 1999, except as noted
below, by (i) each person who beneficially owns more than 5% of the Company's
voting securities; (ii) each Director of the Company; (iii) each Officer of the
Company named in the Summary Compensation Table; and (iv) all Directors and
Officers of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER NUMBER OF SHARES COMMON PERCENT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bernard C. Sherman(1) 9,914,426(2) 41.2%
150 Signet Drive, Weston, Ontario, Canada M9L 1T9
Edwin A. Cohen(1) 402,633(3) 1.7%
Bruce L. Downey(1) 346,841(3) 1.4%
George P. Stephan(1) 112,500(3) *
Robert J. Bolger(1) 40,500(3) *
Michael F. Florence(1) 15,700(3) *
Jacob M. Kay(1) 40,500(3) *
Paul M. Bisaro(1) 123,520(3) *
Salah U. Ahmed 56,321(3) *
Timothy P. Catlett 48,964(3) *
Mary E. Petit 64,687(3) *
All Directors and Officers
as a group (17 persons) 11,440,786(3) 47.6%
</TABLE>
* Less than 1%
(1) A Director of the Company
(2) Consists of 9,914,426 common shares held of record by Sherman Delaware,
Inc. ("SDI"), all of which have been pledged to banks to secure a guaranty
by SDI.
(3) Includes shares of common stock which Directors and Officers have currently
exercisable rights to acquire through the exercise of incentive and
non-qualified options, in the amount of 233,334 shares for Mr. Downey,
168,084 shares for Mr. Cohen, 101,250 shares for Mr. Stephan, 40,500 shares
for Mr. Bolger, 15,250 shares for Mr. Florence, 40,500 shares for Mr. Kay,
45,126 shares for Mr. Ahmed, 117,040 shares for Mr. Bisaro, 35,035 shares
for Ms. Petit, 46,729 shares for Mr. Catlett and 1,021,322 shares for all
Directors and officers as a group.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth as to the Chairman and Chief Executive
Officer, and the four other Executive Officers earning the highest aggregate
compensation in the fiscal year ended June 30, 1999, the compensation earned,
awarded or paid for services rendered to the Company in all capacities during
each of the three fiscal years ended June 30, 1999, in which each such person
served as an Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------------------------------------
Stock All Other
Name & Year Salary Bonus ($) Options Compensation
Principal Position ($)(1) (#)(2) ($)(3)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Bruce L. Downey 1999 548,654 300,000 40,000 15,000
Chairman,CEO 1998 498,846 300,000 40,000 15,000
& President 1997 449,038 225,000 59,999 15,000
Paul M. Bisaro 1999 239,731 95,000 20,000 17,000
Senior Vice President 1998 229,539 90,000 10,000 15,000
Strategic Business 1997 193,904 80,000 22,498 15,000
Development, General
Counsel & Secretary
Mary E. Petit 1999 239,731 95,000 15,000 17,000
Senior Vice President 1998 229,539 90,000 15,000 15,000
Operations 1997 193,904 80,000 22,498 15,000
Timothy P. Catlett 1999 224,596 90,000 15,000 16,250
Senior Vice President 1998 209,307 80,000 15,000 15,000
Sales & Marketing 1997 179,711 70,000 22,498 15,000
Salah U. Ahmed 1999 189,461 105,000 15,000 16,000
Vice President 1998 169,539 95,000 10,000 15,000
Product Development 1997 - - - -
</TABLE>
(1) Includes amounts deferred by the employee under the Company's Savings and
Retirement Plan.
(2) Stock options adjusted for the May 1997 3-for-2 stock split effected in the
form of a 50% stock dividend.
(3) The amounts shown in this column represent the Company's annual
contributions to its Savings and Retirement Plan.
7
<PAGE> 10
OPTION GRANTS
The following table shows all stock options that were granted to the
Officers named in the Summary Compensation Table during the fiscal year ended
June 30, 1999. The exercise price of all such options was the fair market value
on the date of the grant.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants (1)
----------------- Potential Realizable Value at
Number of % of Total Assumed Annual Rates
Shares Options Of Stock Price Appreciation
Underlying Granted to Per Share for Option Term
Options Employees In Exercise or Expiration ---------------
Name Granted (#) Fiscal Year Base Price Date 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bruce L. Downey 40,000 14% $33.91 9/09/08 $853,033 $2,161,752
Paul M. Bisaro 20,000 7% $33.91 9/09/08 426,516 1,080,876
Mary E. Petit 15,000 5% $33,91 9/09/08 319,887 810,657
Timothy P. Catlett 15,000 5% $33.91 9/09/08 319,887 810,657
Salah U. Ahmed 15,000 5% $33.91 9/09/08 319,887 810,657
All Shareholders (2) $571,900,684 $1,499,308,620
</TABLE>
(1) Consists of options granted under the Company's 1993 Stock Incentive Plan,
as amended. All options listed were granted on September 9, 1998. This plan
permits the Compensation Committee in its discretion to cancel any option
granted under such plan and re-grant it at a lower price, however, no such
action was taken during the fiscal year.
(2) Potential realizable values for all shareholders are based on 22,805,628
shares outstanding as of June 30, 1999, and the per share market price of
$39.875 on that date.
Note: The dollar amounts under the 5% and 10% columns in the table above
are the result of calculations required by the Securities and Exchange
Commission's rules and therefore are not intended to forecast possible
future appreciation of the stock price of the Company. Although permitted
by the SEC's rules, the Company did not use an alternate formula for a
grant date valuation because the Company is not aware of any formula which
will determine with reasonable accuracy a present value based on future
unknown or volatile factors.
8
<PAGE> 11
OPTION EXERCISES AND OPTION VALUES
The following table provides information as to the value of options
exercised and options held by Officers named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END JUNE 30, 1999 OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Subject to Value of Unexercised In-the-
Unexercised Options at Year-End Money Options at Year-End(2)
Shares Acquired Value ------------------------------- ----------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bruce L. Downey 224,995 $9,529,944 233,334 86,665 $6,189,367 $656,013
Paul Bisaro 6,600 218,246 117,040 34,165 3,345,011 275,100
Mary Petit 25,960 601,825 35,035 32,499 793,260 245,992
Timothy P. Catlett - - 46,729 32,499 1,092,712 245,992
Salah U. Ahmed 7,329 199,349 45,126 27,665 1,142,126 214,398
</TABLE>
(1) Valued at the difference between the fair market value of the shares at the
time of exercise and the options' grant price.
(2) Valued at the difference between the fair market value of the shares at
June 30, 1999 ($39.875) and the options' grant price.
Note: All options granted to these individuals are in the money based on the
June 30, 1999 closing price of $39.875 per share.
9
<PAGE> 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Regulations of the Securities and Exchange Commission require the
Compensation Committee of the board of directors of a publicly-traded company to
publish in each proxy statement involving the election of directors a report
addressing certain aspects of executive officer compensation for the last
completed fiscal year. The following report is provided pursuant to those
regulations.
The Compensation Committee decides or recommends to the Board for its
decision on all matters of policy relating to compensation of executive
management and approves the salaries of Officers (other than an
Officer-Director, whose salary is approved by the Board). The Committee also
approves grants of stock options.
Compensation programs for executive officers are designed to attract,
retain and motivate employees who will contribute to the achievement of
corporate goals and objectives. Elements of executive compensation include
salaries, bonuses and awards of stock options, with the last two being variable.
In making its decisions or recommendations, the Committee takes into account
factors it deems relevant to the specific compensation component being
considered, including compensation paid by other business organizations of
comparable size in the same industry and related industries, profitability, the
attainment of annual individual and business objectives, an assessment of
individual contributions relative to others and historic compensation awards.
The Committee considered the factors described above in determining Mr.
Downey's total compensation. Specifically, the Committee and the Board
recognized that during fiscal 1999, under Mr. Downey's leadership, the Company,
among other things, met strategic objectives approved by the Board in the
Company's fiscal 1999 Business Plan. In addition, during fiscal 1999, the
Company reported the most successful and profitable year in its history,
resulting from the achievement of several key corporate objectives. These
included the continued market share expansion of Warfarin Sodium and continued
expansion of the Company's product line with the addition of seven new products,
resulting in the more than $135 million in sales for manufactured products. The
benefits of successful execution of the patent challenge strategy, including the
contributions of Tamoxifen and payments resulting from the settlement of the
Ciprofloxacin patent challenge, continued to demonstrate how this unique
business development strategy offers a complement to the traditional generic
pharmaceutical products business. Also during fiscal 1999, the Company made
significant progress in its transition from a pure generic pharmaceutical
manufacturer to a fully integrated, specialty pharmaceutical company, with the
introduction of its first proprietary product, and the formalization of an
initial development pipeline of 10 proprietary products.
Section 162(m) of the Internal Revenue Code limits deductibility of
compensation in excess of $1,000,000 paid in any one year to the Company's chief
executive officer and to each of the other four highest paid executive officers.
Under the Code and corresponding regulations compensation that is based on
attainment of pre-established, objective performance goals and complies with
certain other requirements will be excluded from the $1,000,000 deduction
limitation. Regulations under Section 162(m) provide that gain realized upon the
exercise of stock options can qualify as "performance-based" compensation if
various conditions are satisfied. Certain of those conditions were not satisfied
for some of the options
10
<PAGE> 13
outstanding under the Company's 1993 Stock Incentive Plan and 1986 Stock Option
Plan. With respect to those options, compensation arising from the officer's
exercise of a nonqualified option (or the sale of underlying stock acquired
through the exercise of an incentive stock option before the required holding
period is met) will not be excluded from the $1,000,000 deduction limitation.
When the Company became aware of this situation, it took the action required so
that the gain realized from exercising options granted thereafter will be
excluded from the deductibility limitations under Section 162(m). During the
fiscal year ended June 30, 1999 all taxable income of the Company's chief
executive officer and its other four highest paid executive officers in excess
of $1,000,000 qualified as "performance-based" compensation.
The Compensation Committee
Michael F. Florence
George P. Stephan
EXECUTIVE AGREEMENTS
On January 4, 1993, the Company employed Mr. Downey as President and Chief
Operating Officer. Mr. Downey's Employment Agreement, entered into in 1993,
continues from year-to-year unless terminated by either party. Under the
Agreement, he is paid a base salary, presently $550,000 per year, and is
eligible for an annual bonus at the discretion of the Compensation Committee. If
the Agreement is terminated by the Company without cause or by Mr. Downey for
good reason, he will be entitled to a lump sum payment equal to 18 months base
salary then in effect.
11
<PAGE> 14
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder returns on the
Common Stock (BRL) for the last five fiscal years with the cumulative total
return of the Standard & Poor's Health Care Drugs Index and the Standard &
Poor's 500 Index over the same period, assuming an investment of $100 in the
Common Stock, the S&P Health Care Drugs Index and the S&P 500 Index on June 30,
1994, and reinvestment of dividends.
Comparison of Five Year Cumulative Total Return
[BAR GRAPH]
FISCAL YEAR ENDED JUNE 30,
$100 Invested on 06/30/94
<TABLE>
<CAPTION>
JUNE 30,
COMPANY/INDEX NAME 1994 1995 1996 1997 1998 1999
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Barr Laboratories, Inc. $100 $116.10 $207.38 $531.53 $480.19 $481.70
S&P 500 Index 100 126.07 158.85 213.97 278.51 341.88
S&P Health Care Drugs Index 100 155.81 231.72 362.26 541.99 596.12
</TABLE>
12
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended June 30, 1999, the Company sold certain of its
pharmaceutical products and bulk pharmaceutical materials in the amount of
$6,852,469 to companies owned or controlled by Dr. Bernard Sherman, a Director
of the Company. The Company also purchased bulk pharmaceutical materials from a
company owned by Dr. Sherman in the amount of $1,134,000. The Company believes
the amounts of such transactions approximate the amounts of similar transactions
with unaffiliated third parties.
During fiscal 1996, the Company also entered a multi-year agreement with a
company owned by Dr. Sherman to share litigation costs in connection with one of
its patent challenges. For the year ended June 30, 1999, the Company received
$1,438,000 in connection with such agreement.
During the fiscal year ended June 30, 1999, the Company obtained multi-year
directors and officers liability insurance coverage from National Union Fire
Insurance Company of Pittsburgh, Pennsylvania and Federal Insurance Company.
These policies cover the period from October 1, 1998 through September 30, 2001
and insure the Company for certain obligations incurred in the indemnification
of its Directors and Officers under New York law and insure Directors and
Officers where such indemnification is not provided by the Company. The
three-year cost of the policies is $638,957.
The Company has also purchased an insurance policy from Federal Insurance
Company that provides coverage for employees (including officers) who are
fiduciaries of the Company's employee benefit plans against expenses and defense
costs incurred as a result of alleged breaches of fiduciary duty as defined in
ERISA. The one-year cost of the current policy is $6,120.
RECEIPT OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 2000 Annual
Meeting must be received by the Company at 2 Quaker Road, P.O. Box 2900, Pomona,
New York 10970-0519; Attention: The Secretary, not later than May 30, 2000.
OTHER MATTERS
Services performed by Deloitte & Touche LLP, the Company's independent
accountants, for the year ended June 30, 1999, consisted of an audit of the
consolidated financial statements of the Company, and audit of the financial
statements of the Barr Laboratories, Inc. Savings and Retirement Plan,
preparation of the Company's federal and state tax returns, and limited
assistance and consultation in connection with pending accounting and tax
matters.
The Company expects representatives of Deloitte & Touche LLP to be present
at and available to respond to appropriate questions which may be raised at the
Annual Meeting. Representatives of Deloitte & Touche LLP will have the
opportunity to make a statement if they so desire.
13
<PAGE> 16
BARR LABORATORIES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 28, 1999
The undersigned hereby appoints Bruce L. Downey and Edwin A. Cohen, jointly or
individually, proxies with the power of substitution to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders at 10:00
AM, on October 28, 1999, at the Plaza Hotel, 5th Avenue and Central Park South,
New York, NY or adjournments thereof.
1. ELECTION OF DIRECTORS [ ] For all nominees listed below (except as
marked)
[ ] Withhold authority to vote for nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW).
Paul M.Bisaro, Robert J. Bolger, Edwin A. Cohen, Bruce L. Downey, Michael F.
Florence, Jacob M. Kay, Bernard C. Sherman, George P. Stephan
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY COME BEFORE THE MEETING OR ADJOURNMENTS THEREOF.
THIS PROXY, DULY EXECUTED, WILL BE VOTED AS SPECIFIED.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
<PAGE> 17
BARR LABORATORIES, INC. PROXY
The undersigned hereby acknowledge receipt of the Proxy Statement and Notice of
Annual Meeting to be held October 28, 1999.
Date: , 1999
-----------------------------
(SEAL)
----------------------------------
(SEAL)
----------------------------------
(Please sign exactly as your name
appears hereon. If stock is registered
in more than one name, each holder
should sign. When signing as an
attorney, administrator, executor,
guardian or trustee, please add your
title as such. If executed by a
corporation, the proxy should be signed
by a duly authorized officer).
PLEASE DATE AND PROMPTLY RETURN THIS
PROXY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
I PLAN TO ATTEND: Yes No
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