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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LANNETT COMPANY, INC.
(Name of registrant as specified in its charter)
Robert J. Gordon
Jaffe, Raitt, Heuer & Weiss
Professional Corporation
One Woodward Ave., Ste. 2400
Detroit, Michigan 48226
Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
(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:
__________________________________
(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>
LANNETT COMPANY, INC.
Annual Meeting of Stockholders
To be held May 10, 1999
<PAGE>
LANNETT COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 1999
To the Stockholders:
The annual meeting (the "Meeting") of the stockholders of Lannett
Company, Inc. (the "Company") will be held at the Company's administrative
offices, 500A State Road, Bensalem, Pennsylvania 19020, on Monday, May 10,
1999, at 11:00 a.m., local time, for the following purposes:
(1) to elect three Directors to serve until the next annual
meeting of the stockholders; and
(2) to transact such other business as may properly come before
the Meeting.
A Proxy Statement containing information relevant to the Meeting
appears on the following pages. Only holders of record of the Company's
common stock at the close of business on March 22, 1999, are entitled to
notice of, and to vote at, the Meeting or at any adjournment.
All stockholders are cordially invited to attend the Meeting in
person. Whether or not you expect to attend the Meeting, please sign, date
and mark the enclosed proxy card which is being solicited by the Board of
Directors and return it as soon as possible in the postage-paid envelope
provided. If you wish to vote in accordance with the Board of Director's
recommendations, you need only sign, date and return the proxy card. If you
attend the Meeting, you may revoke your proxy and vote your own shares.
By Order of the Board of Directors
AUDREY FARBER
Secretary
Dated: April 9, 1999
<PAGE>
LANNETT COMPANY, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 1999
GENERAL INFORMATION
Introduction
This Proxy Statement has been prepared by the management of
Lannett Company, Inc. (the "Company"), and is furnished in connection with
the solicitation by the Board of Directors of proxies to be used at the
annual meeting (the "Meeting") of the stockholders of the Company to be held
at the Company's administrative offices, 500A State Road, Bensalem,
Pennsylvania 19020, on Monday, May 10, 1999, at 11:00 a.m., local time, or at
any adjournment, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders and in this Proxy Statement. The Company began
distributing this Proxy Statement and the accompanying materials to the
stockholders on April 9, 1999. The mailing address of the Company's principal
executive offices is 9000 State Road, Philadelphia, Pennsylvania 19136.
Voting Rights
Only holders of record of the Company's common stock (the "Common
Stock") at the close of business on March 22, 1999 (the "Record Date") are
entitled to receive notice of, and to vote at, the Meeting or at any
adjournment. On the Record Date, there were 5,206,162 shares of the Common
Stock issued and outstanding. A list of all stockholders entitled to vote at
the Meeting will be available for inspection by any stockholder at the
Meeting and for a period of ten days prior to the Meeting at the Company's
principal executive offices. Shares cannot be voted at the Meeting or at any
adjournment unless the holder is present in person or represented by proxy.
Quorum
The presence at the Meeting, whether in person or by proxy, of the
holders of a majority of the shares of Common Stock outstanding and entitled
to vote on the Record Date will constitute a quorum. If a quorum is not
present, the vote of a majority of the shares of Common Stock present at the
Meeting, whether in person or by proxy, may without notice adjourn the
Meeting from day to day, or for such longer periods not exceeding fifteen
days each, until a quorum can be obtained.
Solicitation
The Board of Directors invites you to use the proxy card which
accompanies this Proxy Statement to vote the shares of Common Stock owned by
you on the Record Date with respect to
<PAGE>
each matter on which a vote is to be taken at the Meeting. To do so, sign,
date and mark the enclosed proxy card and return it as soon as possible in
the envelope provided. If you wish to vote in accordance with the Board of
Director's recommendations, you need only sign, date and return the proxy
card.
Proxies may also be solicited by telephone, telegraph or in person
by directors, officers and employees of the Company. The costs of soliciting
proxies, whether by mail, telephone, telegraph, in person or otherwise, will
be borne by the Company. The Company will reimburse brokerage houses and
other nominees for expenses incurred in sending proxy materials to beneficial
owners.
Revocation
Any proxy given pursuant to this solicitation may be revoked at
any time before it is voted by (a) delivering to the Secretary of the
Company, at or before the time and date of the Meeting, (i) a written notice
of revocation bearing a later date than the proxy, or (ii) a duly-executed
proxy bearing a later date relating to the same shares; or (b) attending the
Meeting and voting in person (attendance at the Annual Meeting will not in
and of itself constitute revocation of a proxy).
Voting Proxies
Shares of Common Stock represented by properly executed proxies
received prior to the Meeting will be voted in accordance with the choices
specified in the proxy. Unless contrary instructions are indicated in the
proxy, the shares will be voted as indicated in this Proxy Statement in
accordance with the recommendations of the Board of Directors. While the
Notice of Annual Meeting indicates that business other than those matters set
forth in this Proxy Statement may come before the Meeting, the Board of
Directors knows of no other matters to be voted on at the Meeting. If any
other matters properly come before the Meeting, the proxies solicited by this
Proxy Statement grant discretionary authority to the proxyholders to vote
with respect to such matters in accordance with their best judgment.
ELECTION OF DIRECTORS
Nominees
The Company's bylaws provide that the number of directors of the
Company may be determined by the stockholders, or in the absence of such
determination, by the Board of Directors. The Board of Directors has
determined that the functions of the Board can be adequately served by three
directors. The Board of Directors nominates the three persons named below for
election to the Board of Directors. Stockholders attending the meeting may
determine that the Company should have fewer or more than three directors and
may nominate and vote for that number of persons to fill such vacancies. If,
due to circumstances not now foreseen, any of the nominees named below are
unable or unwilling to serve for any reason, the proxies will be voted for
such other person or persons as the Board of Directors may deem advisable. In
any event, the proxies will be voted for only the three nominees named in
this Proxy Statement or their substitutes. Each director elected at the
Meeting will
2
<PAGE>
serve for a term commencing on the date of the Meeting and continuing until
his successor is elected and qualified or until his earlier resignation or
removal.
The following list identifies each nominee for election to the
Board of Directors and sets forth certain information regarding each nominee.
Each nominee is currently serving as a director of the Company.
Roy English, 67, has served as a Director of the Company since
February 1993. Mr. English is a pharmacist by profession. For many years
prior to 1987, Mr. English owned and operated Major Pharmaceuticals -
Kentucky (formerly Murray Drug Corp.), a generic drug distributor. In 1987,
Mr. English sold Murray Drug Corp. From 1987 through 1989, Mr. English served
as President of Major Pharmaceuticals - Kentucky. Mr. English provided
consulting services to Major Pharmaceuticals from 1989 to August 1993. In
1988, Mr. English formed English Farms, Inc., a closely-held family
corporation which sells food products and is currently Chairman of its Board.
In 1991, Mr. English purchased 50% of Southeastern Book Co., an entity which
buys and sells used college text books. He served as President of such
Company for several years and as a director until he sold his interest during
1997.
David Farber, 39, was elected a Director of the Company in August
1991. Mr. Farber is the owner and President of TVO, Inc. From October 1990 to
November 1994, when he sold it, Mr. Farber was the President and owner of
Vital Foods, Inc., an eight store chain of health food stores in the Detroit,
Michigan area. Prior to that, Mr. Farber was employed by Michigan Pharmacal
Corporation for 13 years; the most recent six years as Executive Vice
President and, prior to that, as Production Manager. David Farber is the son
of William Farber.
William Farber, 67, was elected as Chairman of the Board of
Directors in August 1991. From April 1993 to the end of 1993, Mr. Farber was
the President and a director of Auburn Pharmaceutical Company. In 1980, Mr.
Farber formed Major Pharmaceutical Corporation, a generic pharmaceutical
buying group, and served as its Director of Purchasing from 1990 through
March 1993. Mr. Farber founded, and, from 1965 through 1990, served as the
Chief Executive Officer of Michigan Pharmacal Corporation. Mr. Farber is a
registered pharmacist in the State of Michigan. William Farber is the father
of David Farber and the husband of Audrey Farber, Secretary of the Company.
To the best of the Company's knowledge, there are no material
proceedings to which any nominee is a party, or has a material interest,
adverse to the Company. To the best of the Company's knowledge, there have
been no events under any bankruptcy act, no criminal proceedings and no
judgments or injunctions that are material to the evaluation of the ability
or integrity of any nominee during the past five years.
Board Meetings and Committees
The Board met twice during the fiscal year ended June 30, 1998
("Fiscal 1998"). Each director attended all Board of Director meetings held
in Fiscal 1998. Based on the number of Directors on the Board, the Directors
have agreed that separate audit, nominating, compensation or other committees
on the Board of Directors would not be useful.
3
<PAGE>
Required Vote
Directors will be elected by a plurality of the votes of the
shares of Common Stock cast in person or by proxy at the Meeting. Abstentions
and broker non-votes will have no effect on the election of directors.
Proxies will be tabulated by the Company's transfer agent. The Judge of
Elections appointed at the Meeting will combine the proxy votes with the
votes cast in person at the Meeting.
Recommendation
The Board of Directors recommends a vote in favor of, and, unless
instructed otherwise, the proxies solicited by the Board of Directors will be
voted FOR, the election of the three nominees listed above.
MANAGEMENT AND COMPENSATION
Executive Officers
The executive officers of the Company are set forth below.
Name Age Position
- ---- --- --------
William Farber 67 Chairman
Vlad Mikijanic 47 Vice President of Technical Affairs
Jeffrey Moshal 34 Vice President-Finance and Treasurer
Alan Saidel 39 Vice President/Operations and Manufacturing
Vlad Mikijanic was elected Vice President of Technical Affairs in
August 1991. For the prior 17 years, Mr. Mikijanic was employed by Zenith
Laboratories in various positions including Corporate Director of Quality
Control/Quality Assurance, a position which he held at Zenith for three
years.
Jeffrey Moshal was elected Vice President-Finance and Treasurer in
April 1996. Mr. Moshal joined the Company in August 1994 as Director of
Financial Operations. For the prior seven years, Mr. Moshal was employed by
Grant Thornton LLP, primarily serving manufacturing clients. Mr. Moshal is a
Certified Public Accountant.
Alan Saidel, was elected Vice President-Operations and
Manufacturing on July 13, 1998. Mr. Saidel joined the Company in February
1996 as Director of Operations and Manufacturing. Mr. Saidel has 16 years of
experience in the pharmaceutical industry. Mr. Saidel has previously been
employed at Barr Laboratories, Inc., Mutual Pharmaceuticals, Inc. and
Pal-Pak, Inc., where he held the position of Director of Manufacturing and
Operations.
4
<PAGE>
See "ELECTION OF DIRECTORS - Nominees" above for a description of
matters pertaining to Mr. William Farber.
To the best of the Company's knowledge, there are no material
proceedings to which any executive officer is a party, or has a material
interest, adverse to the Company. To the best of the Company's knowledge,
there have been no events under any bankruptcy act, no criminal proceedings
and no judgments or injunctions that are material to the evaluation of the
ability or integrity of any executive officer during the past five years.
Executive Compensation
Summary Compensation Table
The following table summarizes all compensation paid to or earned
by the Chief Executive Officer of the Company and each other executive
officer whose total annual salary and bonus from the Company exceeded
$100,000 during Fiscal 1998.
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
- ----------------------------------------------------------------------- ---------------------- --------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Restricted LTIP All Other
Principal Fiscal Other Annual Stock Options/ Payouts Compensation
Position Year Salary Bonus Compensation Awards(s) SARs Amount Amount
-------- ------ ------ ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William Farber 1998 0 0 0 0 0 0 0
Chairman of the
Board 1997 0 0 0 0 0 0 0
1996 0 0 0 0 0 0 0
Vlad Mikijanic 1998 110,660 1,500 7,200(1) 0 0 0 3,320(3)
Vice President/
Technical Affairs 1997 107,240 1,400 7,200(1) 0 0 0 3,223(3)
1996 104,284 1,200 7,200(1) 0 0 0 3,129(3)
Jeffrey M. Moshal 1998 105,000 1,500 7,200(1) 0 100,000(2) 0 3,150(3)
Vice President/
Finance and
Treasurer
5
<PAGE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
- ----------------------------------------------------------------------- ---------------------- --------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Restricted LTIP All Other
Principal Fiscal Other Annual Stock Options/ Payouts Compensation
Position Year Salary Bonus Compensation Awards(s) SARs Amount Amount
-------- ------ ------ ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alan Saidel Vice 1998 101,523 1,500 7,200 (1) 0 50,000(2) 0 16,652(3)
President/
Operations and
Manu-facturing
(1) Represents payments to Mr. Mikijanic, Mr. Moshal and Mr. Saidel for
automobile leasing and expenses, for the periods presented.
(2) The Options/SARs represent 100,000 and 50,000 of incentive stock options
which were granted to Mr. Moshal and Mr. Saidel on October 13, 1997
pursuant to the Company's 1993 Long Term Incentive Stock Plan. The
options are exercisable one-third on or after October 13, 1998, one-third
on or after October 13, 1999, and one-third on or after October 13, 2000.
(3) Represents contributions to the Company's 401(k) Plan for Mr.
Mikijanic's, Mr. Moshal's and Mr. Saidel's benefit (3% of Mr.
Mikijanic's, Mr. Moshal's and Mr. Saidel's salary), and $13,000 paid to
Mr. Saidel for child care expenses.
</TABLE>
<TABLE>
<CAPTION>
Option Exercises and Fiscal Year End Option Value
(a) (b) (c) (d) (e)
Value of
Unexercised
Number of Securities In-the-Money
Shares Underlying Unexercised Options at
Acquired Options at FY-End FY-End
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable(3)
---- -------- -------- ---------------------- ----------------
<S> <C> <C> <C> <C>
Vlad Mikijanic -- -- 8,000(1) $0
Vice President of
Technical Affairs
Jeffrey M. Moshal -- -- 0/100,000(2) $0/$50,000
Vice President-
Finance and Treasurer
Alan Saidel -- -- 0/50,000(2) $0/$25,000
Vice President -
Operations and
Manufacturing
6
<PAGE>
<FN>
(1) The options represent 4,000 shares granted Mr. Vikijanic on February
16, 1993 and 4,000 shares granted him on April 27, 1994 pursuant to the
Company's 1993 Long Term Incentive Stock Plan. The options have an
exercise price of $4.375 per share and $3.78125 per share, respectively.
(2) The options represent 100,000 and 50,000 of incentive stock options which
were granted to Mr. Moshal and Mr. Saidel on October 13, 1997 pursuant to
the Company's 1993 Long Term Incentive Stock Plan. The options are
exercisable one-third on or after October 13, 1998, one-third on or after
October 13, 1999, and one-third on or after October 13, 2000.
(3) Computed by reference to the average of the bid and asked prices of such
stock as quoted by the National Quotation Bureau on June 30, 1998, which
was $1.875 per share.
</TABLE>
Compensation of Directors
Directors received compensation of $300 per meeting attended, for
services provided as directors of the Company or for committee participation
or special assignments during Fiscal 1998. Directors are reimbursed for
expenses incurred in attending Board meetings.
Employment Contracts
The Company and Vlad Mikijanic entered into a five-year Employment
Agreement as of February 1, 1994, which provided for an initial salary of
$100,000 with annual salary increases of 3% and an automobile allowance of
$7,200 per annum.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William Farber, a principal shareholder and a director of the
Company, has provided the Company with a financing package aggregating
$6,250,000, which the Company has used to renovate its manufacturing
facility, to acquire new equipment, to remove hazardous waste materials, to
retain new management and to provide working capital. The financing package
was the Company's primary source of funds with which it operated during
Fiscal 1993. The package consists of a $4,250,000 revolving line of credit,
bearing interest at the prime rate published by Michigan National Bank plus
1% per annum, and a $2,000,000 convertible debenture, bearing interest at 9%
per annum due December 23, 1999. The financing package has been amended
several times. On December 30, 1998, the Company amended the revolving line
of credit to extend the maturity date to October 1, 2000. During Fiscal 1998,
the Company amended the debenture to defer payment of interest accrued from
April 1, 1995 through June 30, 1998 until January 15, 1999, at which time the
Company began making interest payments in monthly installments with the
balance due on December 23, 1999.
Mr. Farber has the right to acquire 4,000 shares of Common Stock
for each $1,000 of principal and accrued interest owed on the debenture,
which, at February 1, 1999, would permit him to acquire 10,460,000 shares on
conversion of the debenture. As of February 1, 1999 Mr. Farber was the holder
of 1,024,486 shares of Common Stock, or approximately 19.68% of the Company's
issued and outstanding shares.
Prior to the election of Mr. Farber as a director, the Company's
Board of Directors determined that the value of the debenture at the time of
its issuance did not exceed its face amount. In making
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<PAGE>
such determination, the directors considered the prices at which the Common
Stock had been trading immediately prior to Mr. Farber's purchase of a
significant block of such stock, the Company's dim prospects without the
financing facility and the valuation placed on the Company by an investment
banker engaged by Mr. Farber. At the time of issuance, the inter-dealer
prices quoted for the Common Stock exceeded the conversion price for the
Debenture. If Mr. Farber exercises the conversion feature of the Debenture,
the per share earnings will be significantly diluted. It is likely that Mr.
Farber will exercise the conversion feature prior to its expiration so long
as quoted market prices for the Common Stock continue to exceed the
conversion price.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of February 1, 1999,
information regarding the security ownership of the directors and certain
executive officers of the Company and persons known to the Company to be
beneficial owners of more than five (5%) percent of the Common Stock:
<TABLE>
<CAPTION>
Excluding Options Including Options
and Debentures and Debentures
------------------------ ------------------------
Name and Address of Number Percent Number Percent
Beneficial Owner Office of Shares of Class of Shares of Class
- ------------------- ------ --------- -------- --------- --------
Directors/Executive Officers:
<S> <C> <C> <C> <C> <C>
Roy English Director 34,000(1) .65% 34,000(1) .22%
c/o Lannett Company, Inc.
9000 State Road
Philadelphia, PA 19136
David Farber(2) Director 71,872(3) 1.38% 71,872(3) .46%
c/o Lannett Company, Inc.
9000 State Road
Philadelphia, PA 19136
William Farbe(2) Chairman of 1,024,486 19.68% 11,484,486(4) 73.31%
c/o Lannett Company, Inc. the Board
9000 State Road
Philadelphia, PA 19136
Vlad Mikijanic Vice President of 0 0 8,000(5) .05%
9000 State Road Technical Affairs
Philadelphia, PA 19136
Jeffrey Moshal Vice President 200 0% 33,534(6) .21%
9000 State Road Finance and
Philadelphia, PA 19136 Treasurer
Alan Saidel Vice President 0 0% 16,666(6) .11%
9000 State Road Operations and
Philadelphia, PA 19111 Manufacturing
8
<PAGE>
<CAPTION>
Excluding Options Including Options
and Debentures and Debentures
------------------------ ------------------------
Name and Address of Number Percent Number Percent
Beneficial Owner Office of Shares of Class of Shares of Class
- ------------------- ------ --------- -------- --------- --------
Directors/Executive Officers:
<S> <C> <C> <C> <C> <C>
All directors and 1,130,558 21.71% 11,648,558(7) 74.36%
executive officers as
a group (6 persons)
Other 5% Shareholders:
Samuel Gratz 839,400(8) 16.12% 839,400(8) 5.4%
1139 Kerper Street
Philadelphia, PA 19111
<FN>
(1) Includes 3,500 shares owned by the spouse of Mr. English.
(2) William Farber is the father of David Farber and the husband of Audrey
Farber, the Secretary and Treasurer of the Company.
(3) Includes 4,992 shares held by David Farber's minor child, 10,580 shares
held in an individual retirement account, and 1,900 shares held by David
Farber's wife.
(4) Includes 10,460,000 shares of Common Stock subject to issuance upon
conversion of the principal balance and accrued interest of the debenture
held by Mr. Farber. Mr. Farber may convert all or any portion of such
indebtedness at any time prior to payment in full of the outstanding
indebtedness represented by the debenture at a rate of 4,000 shares of
Common Stock for each $1,000 of outstanding indebtedness (adjusted to
reflect the Company's 4 for 1 stock splits in April 1992 and March 1993),
subject to anti-dilution provisions. As of February 1, 1999, the
outstanding principal balance of the debenture plus accrued interest was
$2,615,000.
(5) Represents 4,000 shares of Common Stock subject to currently exercisable
options to purchase shares at an exercise price of $4.375 per share, and
4,000 shares of Common Stock subject to currently exercisable options to
purchase shares at an exercise price of $3.78125 per share.
(6) Represents 33,334 and 16,666 shares of Common Stock subject to currently
exercisable options to purchase shares at an exercise price of $1.375 per
share.
(7) Includes 4,000 shares of Common Stock subject to currently exercisable
options to purchase shares at an exercise price of $4.375 per share, and
4,000 shares of Common Stock subject to currently exercisable options to
purchase shares at an exercise price of $3.78125 per share, 50,000 shares
of Common Stock subject to currently exercisable options to purchase
shares at an exercise price of $1.375 per share, and 10,460,000 shares of
Common Stock subject to issuance on the conversion of the debenture held
by William Farber.
* Includes 496 shares which are held by the wife of Samuel Gratz.
9
<PAGE>
Section 16(a) Compliance
Based solely upon a review of Forms 3, 4 and 5 and amendments
thereto and certain written representations furnished to the Company during
Fiscal 1998, the Company is not aware of the failure to file on a timely
basis any of the reports required by Section 16(a) of the Securities Exchange
Act of 1934.
Independent Public Accountants
Deloitte & Touche L.L.P., were the Company's independent public
accountants for Fiscal 1998. Representatives of Deloitte & Touche L.L.P. are
expected to be present at the Meeting and will have the opportunity to make a
statement if they desire to do so and respond to appropriate questions.
On April 13, 1998, the Company's independent accountants who
previously audited the Company's financial statements for the fiscal year
ended June 30, 1997 and prior years, Grant Thornton LLP, were notified that
the Company had elected not to use their services in connection with the
audit of the Company's 1998 financial statements. Grant Thornton LLP's
reports on the Company's financial statements for the fiscal year ended June
30, 1997 and June 30, 1996 did not contain an adverse opinion or a disclaimer
of opinion; nor were such reports qualified or modified as to uncertainty,
audit scope or accounting principles. During the Company's two most recent
fiscal years ended June 30, 1997 and June 30, 1996 and the subsequent interim
period preceding April 13, 1998, there were no disagreements between the
Company and Grant Thornton LLP on any matter o accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which disagreement, if not resolved to the satisfaction of Grant Thornton LLP
would have caused it to make reference to the subject matter of the
disagreement in connection with its report. The Company did not experience
any of the events listed in Item 304 of regulation S-B and defined as
"reportable events" within the Company's two most recent fiscal years ended
June 30, 1997 and June 30, 1996 and the subsequent interim period preceding
April 13, 1998. A Form 8-K was filed on April 17, 1998.
On May 7, 1998 the Company filed on Form 8-K notification of the
engagement of Deloitte & Touche LLP as the Company's new independent
accountant to audit the Company's financial statements.
Stockholder Proposals
Any stockholder proposals to be presented at the next annual
meeting of stockholders to be held in 2000 which are eligible for inclusion
in the Company's proxy statement for such meeting must comply with the rules
and regulations promulgated under the Securities Exchange Act of 1934, as
amended, and must be received by the Company no later than November 15, 1999.
Proposals should be addressed to the Company's Secretary at 9000 State Road,
Philadelphia, Pennsylvania 19136.
10
<PAGE>
1998 Annual Report to Stockholders
The Company's 1998 Annual Report to Stockholders has been mailed
with this Proxy Statement or previously delivered to stockholders.
Other Matters
Management knows of no matters which will be presented for
consideration at the Meeting other than those stated in the Notice of
Meeting. However, if any other matters do properly come before the Meeting,
the proxyholders named in the accompanying proxy will vote the proxy in
accordance with their best judgment regarding such matters.
By Order of the Board of Directors
AUDREY FARBER
Secretary
Dated: April 9, 1999
11
<PAGE>
[PROXY CARD TOP LEFT]
[x] Please Mark Votes
as in this Example
REVOCABLE PROXY
LANNETT COMPANY, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
May 10, 1999
The undersigned stockholder of LANNETT COMPANY, INC. (The "Company") hereby
appoints WILLIAM FARBER the attorney and proxy of the undersigned
stockholder, with full power of substitution, to vote all of the shares of
the Company's common stock standing in the name of the undersigned
stockholder at the close of business on March 22, 1999, at the annual
meeting (the "Annual Meeting") of the Company's stockholders to be held on
Monday, May 10, 1999, and at any adjournment thereof, with all of the powers
the undersigned stockholder would possess if then and there present.
Please be sure to sign and and date /Date /
this Proxy in the box below
Stockholder sign above Co-holder (if any) sign above
[PROXY CARD TOP RIGHT]
With- For All
For hold Except
I. ELECTION OF DIRECTORS [ ] [ ] [ ]
Roy English, David Farber, William Farber
INSTRUCTION: To withhold authority to vote for any
individual nominee, mark "For All Except" and write
that nominee's name in the space provided below.
- ---------------------------------------------------------
II. OTHER BUSINESS
The above-appointed proxy is authorized to vote upon all matters
incidental to the conduct of the Annual Meeting and such other business
as may properly come before the Annual Meeting in accordance with his
best judgment.
The undersigned stockholder acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement dated April 9, 1999.
The giving of this Proxy does not affect the right of the undersigned
stockholder to vote in person should the undersigned stockholder attend the
Annual Meeting. This Proxy may be revoked at any time before it is voted.
This Proxy, when properly executed, will be voted by the above-appointed
proxy in the manner directed herein by the undersigned stockholder. If no
choices are specified, this Proxy will be voted FOR the election of the
nominees listed above. The undersigned stockholder confers upon the
above-appointed proxy the discretionary authority to vote for any other
person or persons for election to the Board of Directors if any of the
nominees listed above are unable to serve or for good cause will not serve as
director due to circumstances not now foreseen.
<PAGE>
[PROXY CARD BOTTOM]
Detach above card, sigh, date and mail in postage paid envolope provided.
LANNETT COMPANY, INC.
Please sign exactly as your name appears hereon. If signing as attorney,
executor, personal representative, trustee or in some other representative
capacity, sign name and give full title. If a corporation, sign in corporate
name by authorized officer. If a partnership, sign in partnership name by
authorized person. When shares are held by joint tenants, both tenants should
sign. Brokers executing proxies should indicate in the space provided above
the number of shares with respect to which authority is conferred by this
Proxy if less than all shares held by such broker as nominee are to be voted.
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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