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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
AKORN, INC.
(Name of Registrant as Specified In Its Charter)
AKORN, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $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-
11:1
4) Proposed maximum aggregate value of transaction:
1Set forth amount on which the filing fee is calculated and
state how it was determined.
[ ] 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 of 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>
100 Akorn Drive
Abita Springs, Louisiana 70420
______________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 28, 1995
______________________________
TO THE SHAREHOLDERS OF AKORN, INC.:
The annual meeting of shareholders of Akorn, Inc. (the
"Company") will be held at 2:00 p.m., local time, on Saturday,
October 28, 1995 at the Wyndham Garden Midtown located at 125
10th Street, Atlanta, Georgia for the following purposes, more
fully described in the accompanying proxy statement:
1. To elect a board of eight directors.
2. To transact such other business as may properly come
before the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on
September 15, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the annual
meeting and all adjournments thereof.
Your vote is important regardless of the number of shares
you own. Whether or not you plan to attend the annual meeting,
please mark, date and sign the enclosed proxy card and return it
promptly in the enclosed stamped envelope. Furnishing the
enclosed proxy will not prevent you from voting in person at the
meeting should you wish to do so.
By Order of the Board of Directors
/s/ George S. Ellis, M.D.
George S.Ellis, M.D.
Secretary
Abita Springs, Louisiana
September 15, 1995
<PAGE>
AKORN, INC.
100 Akorn Drive
Abita Springs, Louisiana 70420
PROXY STATEMENT
Annual Meeting of Shareholders
To be Held October 28, 1995
This Proxy Statement is furnished to shareholders of Akorn,
Inc. (the "Company") in connection with the solicitation of
proxies on behalf of the Company's Board of Directors for use at
its Annual Meeting of shareholders to be held at the date, time
and place set forth in the accompanying notice and at any
adjournments thereof (the "Meeting"). The date of this Proxy
Statement is September 15, 1995.
On September 15, 1995, the record date for determining
shareholders entitled to notice of and to vote at the Meeting,
the Company had outstanding 14,904,653 shares of common stock
(the Company's only class of authorized capital stock), each of
which is entitled to one vote on all matters to be considered at
the Meeting.
Shares represented by all properly executed proxies on the
enclosed form received in time for the Meeting will be voted at
the Meeting. A proxy may be revoked at any time before it is
exercised by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later
date, or by attending the Meeting and voting in person. Unless
revoked, the proxy will be voted as specified and, if no
specifications are made, will be voted in favor of the proposed
nominees as described herein.
The cost of soliciting proxies in the enclosed form will be
borne by the Company. In addition to the use of the mails,
proxies may be solicited by personal interview, telephone,
telefax and telegraph. Banks, brokerage houses and other
institutions, nominees and fiduciaries will be requested to
forward solicitation materials to the beneficial owners of the
shares of the common stock of the Company; upon request, the
Company will reimburse such persons for reasonable out-of-pocket
expenses incurred in connection therewith.
ELECTION OF DIRECTORS
The Company's by-laws provide for a Board of eight
directors. Eight candidates have been nominated by the Board of
Directors for election at the Meeting. The Board of Directors
recommends that shareholders vote FOR the election of all eight
nominees.
Proxies cannot be voted for more than eight candidates and
not more than eight directors can be elected. In the absence of
contrary instructions, the proxy holders will vote for the
election of the eight nominees listed below. In the
unanticipated event that one or more of such persons is
unavailable as a candidate for director, the persons named in the
accompanying proxy will vote for another candidate nominated by
the Board of Directors.
The following table sets forth as of September 15, 1995 the
age, principal occupation and employment, position with the
Company, directorships in other public corporations, year first
elected a director of the Company, and beneficial ownership of
shares of Company common stock of each nominee for election as
director at the coming meeting. Unless otherwise indicated, (i)
each nominee has been engaged in the principal occupation or
occupations shown for more than the past five years, and (ii) the
shares shown as being beneficially owned are held with sole
voting and investment power.
Name, Age, Principal Occupation Shares Percent
and Directorships in Other Director Beneficially of
Public Corporations Since Owned <F1> Class
________________________________ ______________ ______________ ___________
Daniel E. Bruhl, M.D., 53 1983 285,517<F2> 1.91%
Ophthalmologist; director of
Surgical Care Affiliates, Inc.
J. Ed Campbell, M.D., 71 1975 223,691<F3> 1.50%
Ophthalmologist.
George S. Ellis, M.D., 72 1985 279,260<F5> 1.87%
Ophthalmologist.<F4>
Doyle S. Gaw, 64 1975 245,824<F6> 1.64%
Private investor; Chairman of the
Board and Chief Executive Officer
of the Company from 1989 to 1991.
John N. Kapoor, Ph.D., 52 1991 4,270,000<F8> 26.81%
Chairman of the Board and
Chief Executive Officer
of Option Care, Inc.
since August, 1993; President
of E. J. Financial Enterprises,
Inc. since April, 1990;
director of Unimed, Inc. and
Lunar Corp.<F7>
Barry D. LeBlanc, 40 1987 586,563<F9> 3.83%
President of the Company since
1987 and Chief Executive Officer
since December, 1991.
David H. Turner, M.D., 68 1975 244,650<F10> 1.64%
Ophthalmologist.
Lawrence A. Yannuzzi, M.D., 58 1983 195,883<F3> 1.31%
Ophthalmologist.
Directors and officers as a 6,663,701<F11> 39.50%
group (11 Persons)
______________________________
<F1> Beneficial ownership is determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934.
<F2> Includes 64,266 shares held by Dr. Bruhl's pension and
profit sharing plans and 30,000 shares issuable pursuant to
options granted by the Company.
<F3> Includes 30,000 shares issuable pursuant to options granted
by the Company.
<F4> Dr. Ellis also serves as Secretary of the Company.
<F5> Includes 101,500 shares held by Dr. Ellis' wife and 30,000
shares issuable pursuant to options granted by the Company.
<F6> Includes 130,000 shares issuable to Mr. Gaw pursuant to
options granted by the Company.
<F7> Dr. Kapoor also serves as Chairman of the Board of the
Company, a non-officer position. E. J. Financial
Enterprises, Inc. is a privately held financial services and
consulting company; Option Care, Inc., a publicly held
company, is a franchiser of home infusion therapy
businesses; Unimed, Inc., a publicly held corporation, is a
pharmaceutical distributor; and Lunar Corp., also publicly
held, is a medical diagnostic equipment company. Dr. Kapoor
had served as acting Chairman of the Board of Directors of
the Company from April, 1993 to May, 1995; he served as
Chairman of the Board of the Company from December, 1991 to
January, 1993.
<F8> Of such 4,270,000 shares, (i) 3,220,000 are owned directly
by the John N. Kapoor Trust dated September 20, 1989 (the
"Trust") of which Dr. Kapoor is the sole trustee and
beneficiary, (ii) 1,000,000 are issuable pursuant to a
warrant issued to the Trust in 1992, (iii) 30,000 are owned
by a trust, the trustee of which is Dr. Kapoor's wife and
the beneficiaries of which are their children, and (iv)
20,000 are issuable pursuant to options granted by the
Company directly to Dr. Kapoor.
<F9> Includes 483,052 shares issuable to Mr. LeBlanc pursuant to
options granted by the Company, 5,000 shares held by Mr.
LeBlanc's wife and 10,000 shares owned by Mr. LeBlanc's
minor child.
<F10> Includes 50,000 shares held by Dr. Turner's wife and 30,000
shares issuable pursuant to options granted by the Company.
<F11> Of such 6,663,701 shares, 1,783,052 are not presently
outstanding, but are issuable pursuant to option and warrant
rights described in the preceding footnotes and 183,334 are
issuable pursuant to options held by officers of the Company
who are not also directors.
______________________________
During the fiscal year ended June 30, 1995, the Board of
Directors of the Company held four meetings. Each incumbent
director attended at least 75% of the aggregate number of
meetings held during that fiscal year of the Board of Directors
and committees of which he was a member.
The Board of Directors has an Executive Committee, of which
Dr. Kapoor and Mr. LeBlanc are members; an Audit Committee, of
which Drs. Bruhl, Campbell and Mr. Gaw are members; and a
Compensation Committee, of which Drs. Ellis, Turner and Yannuzzi
are members. The Board of Directors also has an Incentive
Compensation Committee, which administers the Company's Incentive
Compensation Program; this committee consists of all directors
excepting Mr. LeBlanc and Dr. Kapoor. The Executive Committee
has all of the powers of the Board when the Board is not in
session, except the power to declare dividends, make or alter by-
laws, fill vacancies on the Board or the Executive Committee, or
change the membership of the Executive Committee. The Audit
Committee, which met once during fiscal 1995, is responsible for
(i) consulting with the independent auditors with regard to the
plan of audit, (ii) reviewing the plan and the results of audits
of the Company by its independent auditors and (iii) discussing
audit recommendations with management and reporting the results
of its reviews to the Board of Directors. The Compensation
Committee met five times during fiscal 1995 to review various
compensation matters with respect to executive officers and
directors.
For services as Chairman of the Board and as a consultant to
the Company, Dr. Kapoor receives fees of $50,000 per year. Each
other director who is not a salaried officer or consultant of the
Company receives a fee for his services as a director of $1,000
per regular meeting of the Board of Directors, $250 per telephone
meeting and $500 per committee meeting, plus reimbursement of his
expenses related to those services. In addition, the chairman of
each committee (other than Dr. Kapoor) receives an annual fee of
$2,500.
All directors of the Company participate in the Company's
Stock Option Plan for Directors, pursuant to which each director
of the Company is granted an option to acquire 5,000 shares of
Company common stock on the day after each annual meeting of
shareholders at which he is elected to serve as a director. Any
director appointed between annual meetings is entitled to receive
a pro rata portion of an option to acquire 5,000 shares. The
plan is administered by the Incentive Compensation Committee.
The Committee may, in its sole discretion, grant an option to
purchase up to 100,000 shares to a person who is not already a
director and who becomes a director at any time; no member of the
Committee is eligible to be granted such an option and any
director who has been granted such an option is not permitted to
serve on the Committee for one year after such grant. Options
granted under the plan expire five years from the date of grant.
The option exercise price is the fair market value of the shares
covered by the option at the time of the grant. Options covering
a total of 277,917 shares are currently outstanding and options
covering 202,083 shares remain available for issuance under the
plan.
Under agreements between the Company and the John N. Kapoor
Trust dated September 20, 1989, the Trust is entitled to
designate two individuals to be nominated and recommended by the
Company's Board of Directors for election as a director. The
Trust has designated only Dr. Kapoor for this purpose and is not
expected to designate a second individual for nomiation as a
director prior to the Meeting.
During the Company's fiscal year ended June 30, 1995, one
former officer of the Company (Wm. Kendall Albert) failed timely
to file with the Securities and Exchange Commission one report as
to the exercise of certain options for shares of Company common
stock, and the sale of such shares, as required by Section 16(a)
of the Securities Exchange Act of 1934.
PRINCIPAL SHAREHOLDERS
As of September 18, 1995, the following person was known by
the Company to own beneficially more than 5% of its common stock
(the only outstanding voting security of the Company). The
information set forth below has been determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934 based
upon information furnished by the persons listed.
Name Shares Beneficially Owned Percent of Class
_____________________ _____________________________ ________________________
John N. Kapoor, Ph.D. 4,270,000<F1> 26.81%
The John N. Kapoor Trust
dated September 20, 1989
____________________
<F1> The nature of the beneficial ownership of such shares is
described in note 8 to the table under Election of
Directors, above. The address of Dr. Kapoor and the Trust
is 225 East Deerpath, Suite 250, Lake Forest, Illinois
60045.
______________________________
EXECUTIVE COMPENSATION
Summary of Executive Compensation
The following table summarizes the compensation paid by the
Company for services rendered during the fiscal years ended June
30, 1993, 1994 and 1995 to each executive officer of the Company
whose total annual salary and bonus for fiscal 1995 exceeded
$100,000:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
_____________________________ ____________________
Year Ended Number of All Other<F1>
Name and Principal Position June 30 Salary Bonus Options Awarded Compensation
________________________________ ___________ _________ ________ ___________________ ________________
<S>
<C> <C> <C> <C> <C>
Barry D. LeBlanc 1995 $207,731 34,000 $2,310
President and Chief Executive 1994 184,362 $24,667 50,000 2,310
Officer 1993 178,024 125,000
Wm. Kendall Albert 1995 $107,115 23,000 37,667
Vice President-Sales and 1994 140,874 16,444 25,000 873
Marketing<F2> 1993 133,554 25,000
Harold O. Koch 1995 $122,247 58,000 1,530
Senior Vice President<F3> 1994 105,602 16,444 25,000 791
1993 99,350 40,000
Timothy J. Toney 1995 $117,292 10,000 2,018
Vice President- 1994 115,000 17,250 359
Manufacturing<F4> 1993 115,000 14,637 5,000
____________________
<FN>
<F1> Represents contributions to the Company's Savings and
Retirement Plan. (See also <F2> below)
<F2> Mr. Albert's employment by the Company ended in February
1995 at which time he received severance payments of
$36,250 which is included in other compensation.
<F3> Mr. Koch became an executive officer of the Company in
February 1993 and became Senior Vice President in January
1995.
<F4> Mr. Toney became an executive officer of the Company in
February 1993; he also serves as president of Akorn
Manufacturing, Inc., the Company's manufacturing
subsidiary.
</FN>
</TABLE>
______________________________
Stock Option Grants
The following table provides information concerning the
grant of options to purchase Company common stock to the
executive officers named in the Summary Compensation Table during
the fiscal year ended June 30, 1995. All options are exercisable
at the fair market value of the shares on the date of grant.
Twenty-five percent of all the options granted, except the 35,000
issued to Mr. Koch, became exercisable on the date of grant and
25% of the options become exercisable on the first, second and
third anniversaries of the date of grant. Thirty-three percent
of the 35,000 options issued to Mr. Koch became exercisable on
the date of grant and 33% of such options become exercisable on
the first and second anniversaries of the date of grant. If
there is a reorganization, merger or consolidation involving the
Company in which the Company is not the surviving corporation or
a transfer of substantially all of the property or more than two-
thirds of the stock of the Company, all options will become
immediately exercisable in full.
Fiscal 1995 Option Grants
<TABLE>
<CAPTION>
No. of Options % of Total Options Granted Exercise Expiration
Name Granted to Employees in 1995 Price Date
_________________ ___________________ ____________________________ ____________ ___________
<S> <C> <C> <C> <C>
Barry D. LeBlanc 34,000 14.3 $2.81 08/20/99
Wm. Kendall Albert 23,000 9.7 2.81 08/20/99
Harold O. Koch 23,000 9.7 2.81 08/20/99
Harold O. Koch 35,000 14.7 3.50 10/29/99
Timothy J. Toney 10,000 4.2 3.50 10/29/99
______________________________
</TABLE>
Aggregate Option Exercises in Fiscal 1995 and
Option Values as of June 30, 1995
<TABLE>
<CAPTION>
No. of Unexercised Value of Unexercised
No. of Shares Options at In-the-Money Options
Acquired Value June 30, 1995 at June 30, 1995
___________________________ ___________________________
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
_________________ _______________ __________ ___________ ______________ ____________ ______________
<S> <C> <C> <C> <C> <C> <C>
Barry D. LeBlanc 0 $0 481,969 50,500 $179,743 $ 9,375
Wm. Kendall Albert 34,917 38,084 100,000
Timothy J. Toney 0 0 40,833 9,167 2,917 208
Harold O. Koch 0 0 91,583 56,417 9,271 5,104
</TABLE>
______________________________
Employment Agreement
In connection with the Company's acquisition of Akorn Manufacturing, Inc.
(formerly Taylor Pharmacal Company) ("AMI") in January, 1992, AMI entered into
an employment agreement with Timothy J. Toney, who was at that time an officer
of AMI. Pursuant to the agreement, which expired on December 13, 1994, Mr.
Toney was employed as president of AMI at an annual salary of $115,000 and was
entitled to an annual cash bonus equal to the lesser of (i) 15% of his annual
salary or (ii) 2.55% of AMI's adjusted pre-tax earnings. Also pursuant to the
agreement, Mr. Toney was eligible for benefits under the Company's incentive
compensation program, health and accident insurance, vacation benefits, and
other benefits available to employees of AMI. This contract was not renewed and
subsequent to December 13, 1994 Mr. Toney continues to be employed as President
of AMI, as well as Vice President - Manufacturing of the Company.
TRANSACTIONS WITH SHAREHOLDERS AND DIRECTORS
Under an agreement that was in effect from November 1990 through December
31, 1994, EJ Financial Enterprises, Inc., which is controlled by John N. Kapoor,
provided consulting services to the Company for a monthly fee of $4,167, plus
expenses. This agreement has been renewed, with the monthly fee reduced to
$1,500, for a term expiring on December 31, 1995, unless earlier terminated by
either party on 30 days' notice.
For services performed by Dr. Kapoor in connection with the Company's
acquisition of Akorn Manufacturing, Inc., the John N. Kapoor Trust dated
September 20, 1989 received, among other things, 125,000 shares of Company
common stock which were subject to forfeiture if the market price of the Company
common stock were not to reach $5.00 by January 15, 1996. At the time of this
issuance, the market price of Company common stock was $3.50 per share. In
August 1995, the Company, the Trust and Dr. Kapoor entered into an agreement
under which (i) the forfeiture period was extended to January 15, 1998, (ii)
forfeiture would not occur in the event that persons unaffiliated with Dr.
Kapoor acquire beneficial ownership of more than 50% of the outstanding common
stock of the Company, and (iii) Dr. Kapoor waived his right to receive $40,000
otherwise payable to him by the Company for serving as Chairman of the Board in
fiscal 1996.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
A representative of Deloitte & Touche, the Company's independent
accountant for the fiscal year ended June 30, 1995, is expected to attend the
Meeting, will have an opportunity to make a statement if he wishes to do so, and
will be available to respond to appropriate questions.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of a majority of the outstanding
shares of common stock of the Company is necessary to constitute a quorum.
Shareholders voting, or abstaining from voting, by proxy on any issue will be
counted as present for purposes of constituting a quorum. If a quorum is
present, (i) the election of the eight directors to be elected at the Meeting
will be determined by plurality vote (that is, the eight nominees receiving the
largest number of votes will be elected) and (ii) a majority of votes actually
cast will decide any other matter properly brought before the Meeting for a vote
of shareholders. Shares for which proxy authority to vote for any nominee for
election as a director is withheld by the shareholder and shares that have not
been voted by brokers who may hold shares on behalf of the beneficial owners
("broker non-votes") will not be counted as voted for the affected nominee.
With respect to any matter other than the election of directors, shares that are
not voted as a result of abstentions and broker non-votes will not be considered
cast in determining whether or not a majority of votes has been cast.
Other Business
Management is unaware of any matter for action by shareholders at the
Meeting other than those described in the accompanying notice. The enclosed
proxy, however, will confer discretionary authority with respect to any other
matter that may properly come before the Meeting or any adjournment thereof. It
is the intention of the persons named in the enclosed proxy to vote in
accordance with their best judgment on any such matter.
Shareholder Proposals
Any shareholder who desires to present a proposal qualified for inclusion
in the Company's proxy materials for the 1996 annual meeting must forward the
proposal in writing to the President of the Company at the address shown on the
first page of this proxy statement in time to arrive at the Company no later
than May 18, 1996.
By Order of the Board of Directors
/s/ George S. Ellis, M.D.
George S. Ellis, M.D.
Secretary
Abita Springs, Louisiana
September 15, 1995
PROXY This Proxy is Solicited on Behalf of the Board of Directors of
AKORN, INC.
The undersigned hereby constitutes and appoints John N. Kapoor, Ph.D.
or Barry D. LeBlanc, or either of them, proxies for the undersigned, with
full power of substitution, to represent the undersigned and to vote, as
designated below, all of the shares of Common Stock of Akorn, Inc.
(the "Company") that the undersigned is entitled to vote held of record by
the undersigned on September 15, 1995, at the annual meeting of shareholders
of the Company to be held on October 28, 1995 (the "Annual Meeting"), and at
any and all adjournments thereof.
The Board of Directors recommends a vote FOR the nominees listed below.
1. Election of Directors.
FOR __ all nominees listed below (except as WITHHOLD AUTHORITY ___ to
marked to the contrary below) vote for all nominees
listed below
INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below:
Daniel E. Bruhl, M.D. George S. Ellis, M.D. John N. Kapoor, Ph.D.
David H. Turner, M.D. J. Ed Campbell, M.D. Doyle S. Gaw
Barry D. LeBlanc Lawrence A. Yannuzzi, M.D.
2. In their discretion to vote upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
(Please See Reverse Side)
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR the nominees listed over. The individuals designated above will vote
in their discretion on any other matter that may properly come before the
meeting.
Date: ____________________, 1995
__________________________________
Signature of Shareholder
___________________________________
Signature if held jointly
Please sign exactly as name
appears on the certificate or
certificates representing
shares to be voted by this
proxy, as shown on the label
to the left. When signing as
executor, administrator,
attorney, trustee, or guardian
please give full title as
such. If a corporation,
please sign full corporation
name by president or other au-
thorized officer. If a
partnership, please sign in
partnership name by authorized
persons.
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
