<PAGE> 1
As filed with the Securities and Exchange Commission on November 22, 1995.
Registration No. ___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------
DURAMED PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2590026
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
(513) 731-9900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------------
E. THOMAS ARINGTON
DURAMED PHARMACEUTICALS, INC.
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
(513) 731-9900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
TIMOTHY E. HOBERG
TAFT, STETTINIUS & HOLLISTER
1800 STAR BANK CENTER
425 WALNUT STREET
CINCINNATI, OHIO 45202
---------------------
Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement shall become effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
<PAGE> 2
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / __________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / / __________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per aggregate offering registration fee
unit (1) price(1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 3,200,000 shares $14.50 $46,400,000 $16,000
par value per share
==========================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) and based on the average of the high and low
prices of the Common Stock as reported on the Nasdaq National Market
on November 20, 1995.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 3
PROSPECTUS
3,200,000 SHARES
DURAMED PHARMACEUTICALS, INC.
COMMON STOCK
This Prospectus relates to up to 3,200,000 shares of the common stock,
$.01 par value (the "Common Stock"), of Duramed Pharmaceuticals, Inc. (the
"Company").
On _________, 1995, the closing price of the Common Stock as reported
on the Nasdaq National Market was $_____ per share.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
All of the shares of Common Stock offered hereby (the "Shares") are
being sold for the account of and by the persons named under the caption
"Selling Shareholders." The Selling Shareholders have advised the Company that
these Shares may be sold from time to time in the over-the-counter market or in
negotiated transactions, in each case at prices satisfactory to the seller. See
"Plan of Distribution." The Company will not receive any proceeds from the sale
of the Shares.
---------------------
The date of this Prospectus is _________, 1995.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and may be available at the Commission's
Regional Offices at Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661 and Suite 1300, 7 World Trade Center, New York,
New York 10048. Copies of such materials may also be obtained from the Public
Reference Section, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. This Prospectus does not contain all
the information set forth in the Registration Statement filed by the Company
with respect to the offering made hereby. Copies of such Registration Statement
are available from the Commission.
The Company's Common Stock is quoted on the Nasdaq National Market and
reports and other information concerning the Company also may be inspected and
copied at the offices of The Nasdaq Stock Market, Inc., 9513 Key West Avenue,
Rockville, Maryland 20850.
---------------------
No person has been authorized to give any information or to make on
behalf of the Company or the Selling Shareholders any representations, other
than those contained in this Prospectus, in connection with the offer made
hereby, and, if given or made, any such other information or representation must
not be relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any security other than the securities offered
hereby, or an offer to sell or solicitation of an offer to buy such securities
in any jurisdiction in which such offer or solicitation is not qualified or to
any person to whom such offer or solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents are incorporated by reference herein:
1. The Company's annual report on Form 10-K for the year ended
December 31, 1994.
2. The Company's quarterly reports on Form 10-Q for the quarters
ended March 31, June 30 and September 30, 1995.
3. The Company's Current Reports on Form 8-K dated April 5, 1995,
October 12, 1995 and November 15, 1995.
4. The descriptions of the Company's Common Stock and related
Preferred Stock Purchase Rights contained in the Company's Forms
8-A dated December 11, 1986 and January 11, 1989, including any
amendments or reports filed for the purpose of updating such
descriptions.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of
this Prospectus and prior to the
-2-
<PAGE> 5
termination of the offering made hereunder shall be deemed to be incorporated
herein by reference and made a part hereof from the date of filing of such
material. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information incorporated by
reference herein (not including exhibits unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Any request for delivery of such information should be directed
to Mr. Timothy J. Holt, Senior Vice President-Finance and Administration,
Duramed Pharmaceuticals, Inc., 7155 East Kemper Road, Cincinnati, Ohio 45249;
telephone (513) 731-9900.
THE COMPANY
Duramed Pharmaceuticals, Inc. presently manufactures and sells a
limited line of prescription generic drug products in tablet, capsule and liquid
forms to customers throughout the United States. Products sold by the Company
include those of its own manufacture and those which it markets under certain
arrangements with other drug manufacturers. The Company sells its products to
drug wholesalers, private label distributors, drug store chains, health
maintenance organizations, hospitals, nursing homes, retiree organizations, mail
order distributors, other drug manufacturers, mass merchandisers and
governmental agencies.
Duramed is a Delaware corporation formed in 1982. The address of the
principal executive offices of the Company is 7155 East Kemper Road, Cincinnati,
Ohio 45249 and its telephone number is (513) 731-9900.
USE OF PROCEEDS
The Company will receive none of the proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
The following information, regarding the number of shares of Common
Stock beneficially owned by each of the persons listed below as the Selling
Shareholders (the "Selling Shareholders") and the number of shares of the Common
Stock being offered for the account of each Selling Shareholder pursuant to this
Prospectus, has been provided to the Company by the Selling Shareholders.
-3-
<PAGE> 6
<TABLE>
<CAPTION>
Shares of
Common Stock
Shares of and % of Class
Shares of Common Common Stock to be Owned
Name of Selling Stock Beneficially to be After Completion of
Shareholder Owned (1) Offered Hereby (1) this Offering
--------------- ------------------ ------------------ -------------------
<S> <C> <C> <C>
Bulldog Capital Partners, L.P. 200,000 200,000 --
Buttonwood Partners, L.P. 20,000 20,000 --
Drakefield Corp. Inc. 266,666 266,666 --
Everest Capital Fund, L.P. 590,975 454,080 136,895 (1.2%)
Everest Capital International Ltd. 717,625 545,920 171,705 (1.5%)
Jarina Trading, Inc. 266,666 266,666 --
Kensington Partners, L.P. 133,333 133,333 --
Little Wing L.P. 266,666 266,666 --
Maxim Financial Profit Sharing Plan 133,333 133,333 --
Newsun Limited 133,333 133,333 --
Privatinvest Bank AG 133,333 133,333 --
St. Andrews Investors International 400,000 400,000 --
L.D.C
Siata Holding Corp. 133,333 133,333 --
West Highland International 20,000 20,000 --
West Highland Partners, L.P. 93,333 93,333 --
</TABLE>
- ------------------
(1) Includes up to 3,200,000 shares of Common Stock which may be acquired
upon the conversion of up to 240,000 shares of the Company's 8%
Cumulative Convertible Preferred Stock, Series C. The numbers of shares
of Common Stock shown give effect to the cash out of fractional shares.
None of the Selling Shareholders has, or in the past has had, any
position, office or relationship with the Company (other than as a security
holder) or any of its affiliates.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders or
their pledgees or donees. Such sales may be made in the over-the-counter market
or in negotiated transactions, at prices and on terms then prevailing or at
prices related to the then current market price or at negotiated prices. The
Shares may be sold by means of (a) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus
and/or
-4-
<PAGE> 7
(b) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from Selling Shareholders in
amounts to be negotiated immediately prior to the sale which amounts will not be
greater than that normally paid in connection with ordinary trading
transactions.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Taft, Stettinius & Hollister, 1800 Star Bank Center,
Cincinnati, Ohio 45202. Timothy E. Hoberg, a partner of Taft, Stettinius &
Hollister, is Assistant Secretary of the Company. Partners and associates of
that firm beneficially own approximately ______ shares of the Company's Common
Stock.
EXPERTS
The consolidated financial statements and schedule of Duramed
Pharmaceuticals, Inc. appearing in Duramed Pharmaceuticals Annual Report (Form
10-K) for the year ended December 31, 1994 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
-5-
<PAGE> 8
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being registered
hereby:
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . $16,000
Nasdaq National Market listing fee . . . . . . . 17,500
Accounting fees and expenses . . . . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . . . 7,500
Printing expenses . . . . . . . . . . . . . . . 500
Miscellaneous . . . . . . . . . . . . . . . . . 1,500
-------
TOTAL . . . . . . . . . . . . . . . . $48,000
=======
</TABLE>
All of the above expenses other than the SEC registration fee and the
Nasdaq National Market listing fee are estimates. The Company has agreed to pay
all of these expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
allows indemnification by the Registrant to any person made or threatened to be
made a party to any proceedings, other than a proceeding by or in the right of
the Registrant, by reason of the fact that such person is or was a director,
officer, employee or agent of the Registrant, or is or was serving at the
request of the Registrant in a similar capacity with another corporation or
other entity, against expenses, including judgments and fines, if that person
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Registrant and, with respect to criminal actions,
in which that person has no reasonable cause to believe that such person's
conduct was unlawful. Similar provisions apply to actions brought by or in the
right of the Registrant, except that no indemnification shall be made in such
cases when the person shall have been adjudged to be liable to the Registrant
unless determined otherwise by the court in which the action was brought.
Indemnifications are to be made by a majority vote of a quorum of disinterested
directors or the written opinion of independent counsel or by the stockholders
or by the court. Section 145 also authorizes the Registrant to purchase
insurance against such liabilities.
The Registrant's Certificate of Incorporation provides that the
Registrant shall provide indemnification to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement.
II-1
<PAGE> 9
<TABLE>
<CAPTION>
Exhibit No.
-----------
<S> <C>
4.1 Certificate of Designation, Preferences and Rights of
Series A Preferred Stock*
4.2 Certificate of Designation of 8% Cumulative Convertible
Preferred Stock, Series C
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5)
24 Powers of Attorney
</TABLE>
- -----------------
* Filed as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1988 and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
*(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 10
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
*(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
*(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
- --------------
* Paragraph references correspond to those of Item 512 of Regulation S-K.
II-3
<PAGE> 11
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN CINCINNATI, OHIO, AS OF THE 22ND DAY OF NOVEMBER, 1995.
DURAMED PHARMACEUTICALS, INC.
BY: /s/ E. Thomas Arington
-----------------------------------------
E. Thomas Arington
Chairman of the Board, President and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AS OF THE 22ND DAY OF NOVEMBER, 1995.
SIGNATURE TITLE
- --------- -----
/s/ E. Thomas Arington Chairman of the Board, President and
- ------------------------------ Chief Executive Officer
E. Thomas Arington (principal executive officer)
/s/ Timothy J. Holt Senior Vice President, Finance and
- ------------------------------ Administration and Treasurer
Timothy J. Holt (principal financial and accounting officer)
/s/ George W. Baughman* Director
- ------------------------------
George W. Baughman
/s/ Doane F. Darling* Director and Senior Vice President,
- ------------------------------ Corporate Planning
Doane F. Darling
/s/ Stanley L. Morgan* Director
- ------------------------------
Stanley L. Morgan
/s/ S. Sundararaman* Director and Secretary
- ------------------------------
S. Sundararaman
*Pursuant to Power of Attorney
/s/ Timothy J. Holt
- ------------------------------
Timothy J. Holt
Attorney-in-Fact
II-4
<PAGE> 12
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
4.1 Certificate of Designation, Preferences and
Rights of Series A Preferred Stock*
4.2 Certificate of Designation of 8% Cumulative Convertible
Preferred Stock, Series C
5 Opinion of Counsel
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5)
24 Powers of Attorney
_________________________________
*Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1988 and incorporated herein by reference.
<PAGE> 1
EXHIBIT 4.2
CERTIFICATE OF DESIGNATION OF THE
8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C, OF
DURAMED PHARMACEUTICALS, INC.
Duramed Pharmaceuticals, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), does hereby certify as
follows, pursuant to Section 151 of the Delaware General Corporation Law:
FIRST: That pursuant to authority vested in the Board of Directors of
the Company (the "Board") by Article IV of the Certificate of Incorporation of
the Company, the Board, at a meeting duly convened and held on the 6th day of
November, 1995, adopted the resolution attached hereto as Exhibit 1, creating a
series consisting of Two Hundred Fifty Thousand (250,000) shares of its
preferred stock, par value $.001 per share, designated as 8% Cumulative
Convertible Preferred Stock, Series C.
SECOND: That such resolution of the Board, and the creation and
authorization thereby of the 8% Cumulative Convertible Preferred Stock, Series
C, were duly made by the Board pursuant to authority as aforesaid and in
accordance with Section 151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be executed by its duly authorized agents as of this 9th day of
November, 1995.
DURAMED PHARMACEUTICALS, INC.
/s/ E. Thomas Arington
------------------------------
By: E. Thomas Arington
President
ATTEST:
/s/ Timothy E. Hoberg
------------------------------
By: Timothy E. Hoberg
Assistant Secretary
Exhibit 1
TERMS OF 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C
DURAMED PHARMACEUTICALS, INC.(the "Corporation")
1. Designation and Amount. There is hereby established a series
of Preferred Stock to be designated as the "8% Cumulative Convertible Preferred
Stock, Series C" (the "Series C Convertible Preferred Stock") and the number of
shares which shall constitute such series shall be 250,000 shares, with a
stated value (the "Stated Value") of $100 per share.
2. Dividends.
(a) General. The holders of the Series C Convertible
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors out of funds legally available therefor, cumulative preferential
cash dividends, at the rate of 8% of the Stated Value per annum from the date
of issuance (with appropriate proration for any partial dividend period). Such
<PAGE> 2
cumulative dividends shall be payable quarterly in arrears on the fifteenth day
of each January, April, July and October, commencing January 15, 1996.
(b) Dividends Cumulative. Dividends on the Series C
Convertible Preferred Stock shall accrue and be cumulative from the date of
issuance, whether or not earned and whether or not in any dividend period there
shall be surplus or net profits of the Corporation legally available for the
payment of such dividends.
(c) Equality of Shares. No dividend shall be declared or
set apart for any shares of the Series C Convertible Preferred Stock for any
period unless at the same time a like proportionate dividend for the same
period shall be declared or set apart for all shares of the Series C
Convertible Preferred Stock then outstanding and entitled to receive such
dividend.
(d) Restrictions with Respect to Junior Shares. So long
as any shares of the Series C Convertible Preferred Stock shall remain
outstanding, no dividend shall be declared or paid or set apart for payment on
the Common Stock or any other class of stock ranking junior to the Series C
Convertible Preferred Stock in either payment of dividends or liquidation (all
such junior classes of stock including, without limitation, the Common Stock,
hereinafter referred to collectively as the "Junior Stock") unless full
dividends (including interest on any accumulations of dividends) on all
outstanding shares of Series C Convertible Preferred Stock shall have been paid
in full for all past dividend periods and the dividends on all outstanding
shares of Series C Convertible Preferred Stock for the then current dividend
period shall have been paid or declared and sufficient funds set apart for
payment thereof.
3. Liquidation Preference.
(a) General. The Series C Convertible Preferred Stock
shall be preferred over the Common Stock and any other class or series of
Junior Stock. In the event of any liquidation or dissolution or winding up of
the Corporation, the holders of the Series C Convertible Preferred Stock shall
be entitled to receive, after payment or provision for payment of the debts and
other liabilities of the Corporation, out of the assets of the Corporation
available for distribution to its shareholders, all accumulated and unpaid
dividends before any distribution of the assets shall be made to the holders of
the Common Stock or any other class or series of Junior Stock. After payment
of accumulated dividends on the Series C Convertible Preferred Stock shall have
been made in full as provided in the preceding sentence, but not prior thereto,
the Preferred Stock, the Common Stock and any other series or class of Junior
Stock shall, subject to the respective terms and provisions, if any, applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, with the Series C Convertible Preferred Stock sharing therein in
an amount per share of Series C Convertible Preferred Stock equal to the amount
to be distributed on each share of Common Stock multiplied by a fraction the
numerator of which is the Stated Value of such share of Series C Convertible
Preferred Stock and the denominator of which is the then Conversion Price.
(b) Distributions Pro Rata. If upon any liquidation or
dissolution or winding up of the Corporation the amounts payable on or with
respect to the Series C Convertible Preferred Stock together with the amounts
payable on or with respect to all classes or series of stock ranking on a
parity with the Series C Convertible Preferred Stock as to distribution of
assets are not paid in full, the holders of shares of Series C Convertible
Preferred Stock together with all classes or series of stock ranking on a
parity with the Series C Convertible Preferred Stock as to distribution of
assets shall share pro rata in any distribution of assets in respect of the
shares held by them upon such distribution in proportion to the amounts that
would have been distributable to each such class or series if all amounts
payable on or with respect to the Series C Convertible Preferred Stock and any
other class or series of stock that so ranks on a parity with the Series C
Convertible Preferred Stock had been paid in full.
(c) Merger or Consolidation. Neither the merger or
consolidation of the Corporation with another corporation nor the sale or lease
of all or substantially all of the assets
<PAGE> 3
of the Corporation shall be deemed to be a liquidation or dissolution or
winding up of the Corporation.
(d) Notice Required. Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, stating the payment date and the place where the distributable
amount shall be payable and stating the anticipated amount of any such
distributable amount, shall be given by mail, postage prepaid, not less than
thirty (30) days prior to the payment date stated therein, to the holders of
record of the Series C Convertible Preferred Stock at their respective
addresses as the same shall then appear on the books of the Corporation.
4. Conversion.
(a) General. Shares of Series C Convertible Preferred
Stock may be converted at the option of the holder thereof, or otherwise as
provided below, into fully paid and nonassessable shares of Common Stock of the
Corporation at a price (the "Conversion Price") equal to 85% of the Market
Price (as defined below) per share of Common Stock on the date of conversion
(but the Conversion Price shall be not less than $7.50 per share (the "Minimum
Price") or greater than $20.00 per share (the "Maximum Price")) with respect to
the Stated Value of each share of Series C Convertible Preferred Stock. Such
option may be exercised by any holder on or after February 12, 1996 with
respect to up to an aggregate of 50% of the shares of Series C Convertible
Preferred Stock acquired by such holder and on or after March 13, 1996 with
respect to the remaining shares of Series C Convertible Preferred Stock
acquired by such holder. Any shares of Series C Convertible Preferred Stock
not converted into Common Stock prior to November 14, 1997 shall be
automatically converted on such date without any action of the holder thereof.
For purposes of this subparagraph (a) the Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
for the 10 consecutive trading days commencing 12 trading days before the day
in question. "Closing price" on any day when used with respect to the Common
Stock means the reported closing price therefor as reported by Bloomberg, L.P.,
or if not so reported the average of the closing bid and asked prices as
furnished by any member of the National Association of Securities Dealers, Inc.
selected from time to time by the Company for that purpose.
(b) Adjustments. The Minimum and Maximum Prices and the kind
and amounts of securities and property for which the shares of Series C
Convertible Preferred Stock may be converted shall be subject to adjustment
from time to time as follows:
(i) If, at any time after the issuance of the Series C
Convertible Preferred Stock, the Corporation shall (A) declare or pay a
dividend, or make a distribution, to all holders of its Common Stock in shares
of Common Stock, (B) subdivide its outstanding shares of Common Stock into a
greater number of shares, (C) combine its outstanding shares of Common Stock
into a smaller number of shares, or (D) issue by reclassification of its shares
of Common Stock (other than a subdivision or combination thereof or a change in
par value) any securities, the Maximum Price and the Minimum Price in effect
immediately prior to such action shall be adjusted so that the holder of any
share of Series C Convertible Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the kind and number of shares of Common
Stock of the Corporation and/or other securities which he would have owned or
been entitled to receive immediately following such action had such share of
Series C Convertible Preferred Stock been converted immediately prior thereto.
Any adjustment made pursuant to this Paragraph (b)(i) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(ii) If, at any time after the date of issuance of the Series
C Convertible Preferred Stock, the Corporation shall distribute to all or
substantially all holders of its Common Stock either (A) evidences of
indebtedness or assets (excluding cash dividends or distributions) or (B) any
other securities of the Corporation or any rights, warrants or options to
subscribe for, purchase or otherwise acquire securities of the Corporation in a
transaction not covered by Paragraph (b)(i)
<PAGE> 4
above (any of which are referred to herein as "Other Securities"), then and in
any such case the Corporation shall either distribute such Other Securities to
the holders of the Series C Convertible Preferred Stock or reserve for the
benefit of the holders of the Series C Convertible Preferred Stock such amount
of such Other Securities as the holders of all Series C Convertible Preferred
Stock then outstanding would have owned or been entitled to receive immediately
following such action had the shares of Series C Convertible Preferred Stock
been converted into shares of Common Stock immediately prior thereto. In
addition, the Corporation shall either distribute to, or reserve for the
benefit of, the holders of the Series C Convertible Preferred Stock any
principal, interest, dividends or other property payable with respect to such
Other Securities as and when such interest, dividends or other property is
distributed to the holders of Common Stock. If such a reserve is made, as and
when each such share of Series C Convertible Preferred Stock is converted, the
holder of such share shall be entitled to receive from the Corporation his
share of such Other Securities together with the principal, interest, dividends
or other property payable with respect thereto.
(iii) All calculations under this Section 5 shall be made to
the nearest one-tenth of a cent or to the nearest one thousandth of a share, as
the case may be. No adjustment shall be required unless such adjustment would
result in an increase or decrease of at least one percent (1%) of the Minimum
Price and the Maximum Price; provided, however, that any adjustments which by
reason of this subparagraph (iii) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(iv) Whenever the Minimum Price and the Maximum Price are
adjusted or Other Securities are reserved as herein provided, the Corporation
shall mail or cause to be mailed a copy of a statement, verified by its
independent certified public accountants, setting forth the required
adjustments or the nature and amount of Other Securities, as the case may be,
to each person who is a registered holder of Series C Convertible Preferred
Stock at such person's last address as the same appears on the books of the
Corporation. Each adjustment shall remain in effect until a subsequent
adjustment is required hereunder. Failure to give or receive such notice or
any defect therein shall not affect the legality or validity of any action
taken. Following any adjustment to the Minimum Price and the Maximum Price,
the holders of the Series C Convertible Preferred Stock shall be entitled, by
themselves or through attorneys or accountants retained by them, to inspect the
books and records of the Corporation in order to verify such adjustment. Such
inspection shall be at the expense of the holders of the Series C Convertible
Preferred Stock requesting such inspection unless such inspection reveals an
error in the adjustment equal to 5% or more of the Minimum Price and the
Maximum Price, in which case the Corporation shall promptly reimburse the
holders for all expenses incurred in connection therewith.
(v) If at any time, as a result of an adjustment made
pursuant to Paragraph (ii) above, the holders of Series C Convertible Preferred
Stock shall become entitled to purchase any Other Securities, thereafter the
number of such Other Securities purchasable upon conversion of the Series C
Convertible Preferred Stock and the price of the Other Securities shall be
subject to adjustment from time to time and in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Series C
Convertible Preferred Stock contained in Paragraphs (i) and (ii), above.
(c) Merger or Consolidation. In case of a merger or
consolidation of the Corporation with or into another corporation, or the sale
or transfer of all, or substantially all, of the property or assets of the
Corporation, the holders of shares of Series C Convertible Preferred Stock
shall thereafter have the right to convert each of such shares into the kind
and amount of shares of stock or other securities and property (including cash)
receivable (the "Consideration") upon such merger, consolidation or sale by a
holder of the number of shares of Common Stock (whether whole or fractional)
into which such shares of Series C Convertible Preferred Stock might have been
converted immediately prior to such merger, consolidation or sale (all of which
Consideration shall be reserved and become payable upon conversion in the same
manner as for Other Securities pursuant to Paragraph (b)(ii) above and shall be
adjusted as provided in Paragraph (b) above), and shall have no other
conversion rights under these provisions and, in
<PAGE> 5
addition, the Corporation shall reserve, on a current basis as and when
distributed, for payment upon conversion, in the same manner as required for
Other Securities pursuant to Paragraph (b)(ii) above, any interest, dividends,
other stock, securities or property distributable with respect to the
Consideration, the same as if such shares of Series C Convertible Preferred
Stock had been converted immediately prior to such merger, consolidation, or
sale of assets; and effective provision shall be made in the charter of the
resulting or surviving corporation or otherwise, so that the provisions set
forth herein for the adjustment of the conversion terms of the Series C
Convertible Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any of the Consideration deliverable upon conversion of
Series C Convertible Preferred Stock remaining outstanding or other convertible
preferred stock received in place thereof. Any such resulting or surviving
corporation shall expressly assume the obligation to deliver the Consideration,
upon the exercise of the conversion right, (and, to that end, shall reserve
sufficient Consideration to issue, distribute and/or pay the holders of the
Series C Convertible Preferred Stock as if all such stock were converted) as
holders of Series C Convertible Preferred Stock remaining outstanding, or other
convertible preferred stock received by such holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provision
for protection of conversion rights as above provided.
(d) Notices. If, at any time while shares of Series C
Convertible Preferred Stock are outstanding, the Corporation shall (i) declare
a dividend (or any other distribution) on its Common Stock, other than in cash,
or (ii) reclassify its Common Stock (other than through a subdivision or
combination thereof or a change in par value) or become a party to any
consolidation or merger or sale or transfer of all or substantially all of the
assets of the Corporation, for which approval of the holders of its stock is
required, then the Corporation shall cause to be mailed to registered holders
of Series C Convertible Preferred Stock, at their last addresses as they shall
appear on the books of the Corporation, at least thirty (30) days prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend or distribution,
or, if a record is not to be taken, the date as of which holders of Common
Stock of record to be entitled to such dividend or distribution are to be
determined, or (y) the date on which any such reclassification, consolidation,
merger, sale or transfer is expected to become effective, and the date as of
which it is expected that holders of record of Common Stock shall be entitled
to exchange their Common Stock for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, sale or
transfer. Failure to give or receive the notice required by this Paragraph (d)
or any defect therein shall not affect the legality or validity of any such
dividend, distribution, reclassification, consolidation, merger, sale, transfer
or other action.
(e) Exercise of Conversion Rights. The holder of any
shares of Series C Convertible Preferred Stock may exercise his option to
convert such shares into shares of Common Stock only by surrendering for such
purpose to the Corporation the certificates representing the shares to be
converted, accompanied by written notice that such holder elects to convert
such shares in accordance with the provisions of this Section 5. Said notice
shall also state the name or names (with addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued. Each certificate or certificates surrendered for
conversion shall, unless the shares issuable on conversion are to be issued in
the same name as that in which such certificate or certificates are registered,
be accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or his duly authorized attorney. Each
conversion shall be deemed to have been effected on the date on which such
certificate or certificates shall have been surrendered and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become on said date
the holder or holders of record of the shares represented thereby
notwithstanding that the transfer books of the Corporation may then be closed
or that certificates representing such shares of Common Stock shall not then be
actually delivered to such person. As promptly as practicable on or after the
conversion date, the Corporation shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates representing
the number of shares of Common Stock issuable upon such conversion and shall
pay or cause the
<PAGE> 6
payment of such Other Securities or Consideration or other property as may be
payable upon conversion pursuant to Paragraphs (b)(iii) or (c) of this Section
(4).
(f) Fractional Shares. No fractional shares of Common
Stock shall be issued in connection with the conversion of shares of Series C
Convertible Preferred Stock into Common Stock. Instead of any fractional share
of Common Stock which would otherwise be issuable on conversion, the Company
shall pay a cash adjustment with respect to such fractional share computed on
the basis of the then current fair market value of the Common Stock, as
determined in good faith by the Corporation's Board of Directors.
(g) Tax on Conversion. The issuance of stock certificates
on conversions of shares of Series C Convertible Preferred Stock shall be made
without charge to converting shareholders for any tax in respect of the
issuance thereof except any tax on the income or gain derived by the converting
shareholders as a result of the issuance thereof. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
registration of transfer involved in the issue and delivery of stock in any
name other than that of the holder of the shares of Series C Convertible
Preferred Stock converted, and the Corporation shall not be required to so
issue or deliver any stock certificate unless and until the person or persons
requesting the registration of transfer shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.
(h) Securities Reserved. The Corporation shall at all
times reserve and keep available out of its authorized Common Stock (and any
Other Securities or Consideration or property) the full number of shares of
Common Stock (and any Other Securities or Consideration or property)
deliverable upon the conversion of all outstanding shares of Series C
Convertible Preferred Stock. The Corporation shall not enter into any
agreement or take any action which would impair or restrict its legal authority
to issue such shares of Common Stock, Other Securities or Consideration or
property upon conversion or to defeat in any way the right of the holders of
the Series C Convertible Preferred Stock to receive such consideration upon
conversion. In addition, whenever the Corporation is required to reserve any
interest, dividends or other property payable upon conversion of the Series C
Convertible Preferred Stock, the Corporation shall, as to cash, deposit such
amounts in one or more separate accounts for the sole benefit of the holders of
the Series C Convertible Preferred Stock upon conversion and, as to other
property, physically segregate or otherwise set such property aside in such a
manner as to protect the rights of the holders of the Series C Convertible
Preferred Stock to the receipt of such property upon conversion.
(i) Effect of Conversion. All shares of Series C
Convertible Preferred Stock which shall have been converted into shares of
Common Stock shall assume the status of authorized but unissued shares of
Preferred Stock undesignated as to series.
5. Voting Rights.
No holder of Series C Convertible Preferred Stock shall be
entitled to vote on any matter submitted to the shareholders of the Corporation
for their vote, waiver, release or other action, except as may be otherwise
expressly required by law.
6. Amendment.
Notwithstanding the provisions of Section 5 above, so long as
any share of Series C Convertible Preferred Stock is outstanding, the Articles
of Incorporation of the Corporation shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of
the Series C Convertible Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority of the outstanding shares of
Series C Convertible Preferred Stock, voting separately as a class.
<PAGE> 1
EXHIBITS 5 and 23.2
TAFT, STETTINIUS & HOLLISTER
1800 Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202
November 22, 1995
Securities & Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir or Madam:
We have acted as counsel for Duramed Pharmaceuticals, Inc. (the
"Company") in connection with its filing of a Registration Statement on Form
S-3 concerning the registration of up to 3,200,000 shares of common stock, $.01
par value (the "Common Stock"), to be sold by certain Selling Shareholders
identified in the Registration Statement. Such shares of Common Stock may be
issued by the Company upon conversion by the Selling Shareholders of shares of
the Company's Series C Convertible Preferred Stock which have been or may be
issued to and held by such Selling Shareholders.
It is our opinion that the registration of the shares of Common Stock
covered by the Registration Statement and the issuance of such shares by the
Company have been duly authorized by all necessary corporate action by the
Company. The shares of Common Stock which may be issued and sold will be, when
issued in accordance with the terms and conditions of the agreements providing
for their issuance, legally issued, fully paid and non-assessable.
We hereby consent to the filing of this option as an Exhibit to the
aforesaid Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus.
Yours very truly,
/s/ Taft, Stettinius & Hollister
--------------------------------
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement Form S-3 and related Prospectus of Duramed
Pharmaceuticals, Inc., dated November 22, 1995, for the registration of shares
of its common stock and to the incorporation by reference therein of our report
dated February 24, 1995, with respect to the consolidated financial statements
and schedule of Duramed Pharmaceuticals, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1994, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Cincinnati, Ohio
November 21, 1995
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned directors of Duramed Pharmaceuticals, Inc., hereby
appoint E. Thomas Arington and Timothy J. Holt, or either of them, our true and
lawful attorneys and agents, to do any and all acts and things in our name and
on our behalf in our capacities indicated below, which said attorneys and
agents, or each of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations, and requirements of the Securities and Exchange Commission,
in connection with a Registration Statement on Form S-3 relating to the
registration of shares of the Common Stock of the corporation to be offered by
certain Selling Shareholders, including, without limitation, power and
authority to sign for us, or any of us, in our names in the capacities
indicated below, such Registration Statement as well as any and all amendments
(including post-effective amendments) thereto, and we hereby ratify and confirm
all that said attorneys and agents, or each of them, shall do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Power
of Attorney has been signed below by the following persons in the capacities
indicated as of the 20th day of November, 1995.
Signatures Title
- ---------- -----
/s/ E. Thomas Arington Director
- -------------------------------
E. Thomas Arington
/s/ George W. Baughman Director
- -------------------------------
George W. Baughman
/s/ Doane F. Darling Director
- -------------------------------
Doane F. Darling
/s/ Stanley L. Morgan Director
- -------------------------------
Stanley L. Morgan
/s/ S. Sundararaman Director
- -------------------------------
S. Sundararaman
