<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Duramed Pharmaceuticals, Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total Fee Paid:
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/ / 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
PRELIMINARY COPY
DURAMED PHARMACEUTICALS, INC.
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
Dear Stockholder:
We are pleased to invite you to attend a Special Meeting of
Stockholders of Duramed Pharmaceuticals, Inc., to be held at
___________________________________________________________ at 9:00 a.m. (EST),
on January 4, 1996 for the purpose of considering and acting upon the following:
1. A proposal to issue 120,000 additional shares of the Company's 8%
Cumulative Convertible Preferred Stock, Series C (the "Series C
Stock"), with the effect that, upon conversion of all shares of
Series C Stock, the holders of the Series C Stock could own in excess
of 20% of the number of shares of the Company's common stock
outstanding prior to the issuance of the Series C Stock.
2. Such other matters as may properly come before the meeting.
Only stockholders of record at the close of business on November 22,
1995 are entitled to receive notice of, and to vote at, the meeting.
By Order of The Board of Directors
E. THOMAS ARINGTON
President and Chief Executive Officer
Cincinnati, Ohio
December __, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN AND
DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES OR CANADA. PROXIES MAY BE
REVOKED BY WRITTEN NOTICE OF REVOCATION, THE SUBMISSION OF A LATER DATED PROXY,
OR ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE> 3
PRELIMINARY COPY
DURAMED PHARMACEUTICALS, INC.
7155 EAST KEMPER ROAD
CINCINNATI, OHIO 45249
(513) 731-9900
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Duramed Pharmaceuticals, Inc. (the "Company") of
proxies to be voted at a Special Meeting of Stockholders to be held on January
4, 1996. This Proxy Statement and the accompanying Proxy card are first being
mailed to stockholders of the Company on or about December __, 1995.
OUTSTANDING VOTING SECURITIES
The number of voting securities of the Company outstanding on November
22, 1995, the record date for the meeting, was _________ shares of common stock,
$.01 par value (the "Common Stock"), all of one class and each entitled to one
vote, owned by approximately _____ stockholders of record. A list of
stockholders of the Company may be examined at the offices of the Company at the
address given above.
PROXIES AND VOTING
The persons named as proxies were selected by the Board of Directors of
the Company and are directors or officers of the Company.
When the enclosed form of proxy is properly executed and returned, the
shares it represents will be voted as specified at the meeting. Any stockholder
giving a proxy has the power to revoke it at any time before it is voted by
giving written notice to the Company, by giving a later dated proxy indicating a
desire to vote differently or by appearing at the meeting and casting a ballot.
There are no rights of appraisal or similar rights of dissenting stockholders
with respect to any matter to be acted upon at the Special Meeting.
The cost of solicitation of proxies will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation may be
made by officers and regular employees of the Company by personal interview,
telephone and telegraph. Banks, brokerage houses and other custodians, nominees
or fiduciaries will be reimbursed for their reasonable expenses incurred in
forwarding soliciting material to their principals and in obtaining
authorizations for the execution of the proxies.
In accordance with the General Corporation Law of the State of
Delaware, the affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting will be sufficient to approve the proposal
to be presented at the Special Meeting. Abstentions will have the effect of
negative votes, and broker non-votes will be deemed to be absent shares. Votes
at the meeting will be tabulated by financial management employees of the
Company. The Company has not established a procedure for confidential voting.
<PAGE> 4
THE PROPOSAL
GENERAL
In November 1995, the Company entered into a private placement
agreement for the sale of up to 250,000 shares of 8% Cumulative Convertible
Preferred Stock, Series C. Between November 14 and November 16, 1995, seven
institutional investors purchased 120,000 shares of Series C Stock at a price of
$100 per share, for a total purchase price of $12,000,000. The purpose of the
Special Meeting is to obtain stockholder approval of the proposal (the
"Proposal") to issue to eight other institutional investors (each of whom has
executed a purchase contract) 120,000 additional shares of Series C Stock,
also at a price of $100 per share. The existing and proposed purchasers of the
Series C Stock are hereinafter referred to as the "Investors." (See "Principal
Stockholders and Holdings of Management.") The Company's Board of Directors
unanimously recommends that stockholders vote "FOR" the Proposal.
The Proposal is necessary in order for the Company to comply with the
requirements of the Nasdaq National Market, on which the Company's Common Stock
is traded. Neither the Delaware General Corporation Law nor the Company's
Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), requires stockholder approval for the issuance of the Series C
Stock or the Common Stock into which it is convertible. However, because the
Series C Stock is potentially convertible, at a discount from the Common Stock's
market value, into an aggregate number of shares of Common Stock equal to more
than 20% of the number of shares of Common Stock outstanding before the issuance
of the Series C Stock, stockholder approval of the portion of the issuance which
may cause the 20% limit to be exceeded is required to maintain the Common
Stock's listing on the Nasdaq National Market.
Each share of Series C Stock is convertible, at a 15% discount from the
market value of the Company's Common Stock on the date of conversion, into a
minimum of five and a maximum of 13.33 shares of Common Stock. See "The Series C
Stock - Conversion." As of November 14, 1995, the Company had 8,068,969 shares
of Common Stock outstanding. The 120,000 shares of Series C Stock issued between
November 14 and November 16, 1995 are convertible into a minimum of 600,000
shares and a maximum of 1,600,000 shares of Common Stock, representing 7.4% and
19.8%, respectively, of the Common Stock outstanding on November 14, 1995. The
issuance and conversion of the additional 120,000 shares of Series C Stock which
are the subject of the Proposal also will result in the issuance of between
600,000 and 1,600,000 additional shares of Common Stock. The aggregate number of
shares of Common Stock issuable upon conversion of the Series C Stock will be
between 1,200,000 and 3,200,000 shares, representing approximately 14.9% and
39.6% of the Common Stock outstanding on November 14, 1995 before giving effect
to the conversion of the Series C Stock.
REASONS FOR THE PROPOSAL
The Company's Board of Directors believes that approval of the Proposal
is in the best interests of both the Company and its stockholders. The
$12,000,000 to be received from the sale of the additional shares of Series C
Stock will be of substantial assistance to the Company in its efforts to
implement its operating plan and to achieve the growth necessary for long-term
profitability.
As stockholders of the Company are aware, in 1991 the Company's
financial base was nearly exhausted as a result of charges incurred in 1990 due
to product recalls and related inventory write-offs and as a result of
substantially reduced revenue levels in 1991 due to the withdrawal of all
Abbreviated New Drug Applications ("ANDAs") except those for two of the
Company's products. From that time and through much of 1993, the Company's
efforts were focused on three primary pursuits: continued execution of a plan
to, at a minimum, generate sufficient cash flows to meet current obligations
exclusive of bank debt and related interest; seeking other sources of revenue;
and continuing discussions with potential sources of capital in an effort to
secure the resources needed to fund the Company's recovery. Additionally, the
Company's product development efforts were focused primarily
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<PAGE> 5
on development of a new formulation for conjugated estrogens products under an
agreement with Schein Pharmaceutical, Inc.
With improving sales and operating results commencing in 1993, the
Company's operating plan was modified to begin to address the expanded product
development, sales and marketing, and general corporate activities required for
long-term success. Necessarily, however, the Company also continued discussions
regarding potential sources of capital in an effort to secure resources for its
operating plan.
The Company believes it has made significant progress over the last
four years. Pursuant to a 1992 agreement with Schein Pharmaceutical, Inc., the
Company has developed a new formulation for conjugated estrogens tablets,
designed to meet the bioequivalence guidance established by the federal Food and
Drug Administration ("FDA") in 1991, and has filed an ANDA with the FDA for the
.625 mg strength conjugated estrogens tablets. In 1994 the Company entered into
agreements with Ortho-McNeil Pharmaceutical Corporation ("Ortho-McNeil")
pursuant to which the Company received non-exclusive distribution rights to
certain Ortho-McNeil products and Ortho-McNeil and its parent, Johnson &
Johnson, provided substantial financial assistance and guarantees for the
construction of the Company's new hormone replacement therapy facility. The
Company's financial position has improved from a capital deficiency of $14.5
million at December 31, 1992 to a positive stockholders' equity of $1.1 million
at September 30, 1995, and the Company has made substantial progress in reducing
its debt to its unsecured creditors.
Despite these accomplishments, the Company has remained in need of
additional capital. Its growth since 1993 has been financed largely by debt,
with total indebtedness increasing from $19.4 million at December 31, 1992 to
$32.0 million at September 30, 1995. Furthermore, its current product line has
been limited and its current operating results have been heavily dependent on
the performance of its Methylprednisolone product. FDA approval of the Company's
ANDA for conjugated estrogens has not yet been received. The Company's future
profitability is dependent in great part upon its ability to develop internally,
or acquire through joint ventures or otherwise, new generic products.
To address this situation, the Company is expanding its internal
research and development activities, is actively pursuing the preparation of
ANDAS for several new products and has entered into several joint marketing and
distribution arrangements. However, as the Company has noted in its public
filings, it will need additional resources to carry out its plans for
substantial expansion of its research and development capabilities and to pursue
other planned corporate projects designed to foster long-term growth. While it
is possible that the Company's capital needs could be met from new product
revenues, this is not certain. Accordingly, the Company has sought to obtain the
additional capital required to execute the Company's business plan from other
sources. The sale of the 240,000 shares of Series C Stock follows from this
effort. The Company anticipates that the net proceeds from the sale of the
shares of Series C Stock will be used approximately as follows: debt reduction,
$5 million, product development, $5 million, capital expenditures, $2 million
and working capital, $10 million. The actual allocation of proceeds will be
dependent upon a number of factors which are still being defined, including (i)
the total amount of proceeds available to the Company (in particular, whether
the Proposal is approved), (ii) the outcome of discussions currently in process
between the Company and its bank relating to the schedule for repayment of
certain of the Company's indebtedness, (iii) ongoing discussions between the
Company and certain of its joint venture partners regarding product development
efforts and (iv) the Company's ability to negotiate strategic alliances or
acquisitions on acceptable terms. While the Company in the future may seek
additional capital to support its growth as market conditions and its business
may warrant, the Company believes that the proceeds from the sale of the 240,000
shares of Series C Stock will provide the funding needed to satisfy the most
significant aspects of its business plans for the remainder of 1995 and for
1996.
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<PAGE> 6
THE SERIES C STOCK
The Company's Certificate of Incorporation authorizes the Board of
Directors (the "Board"), without further stockholder action, to provide for the
issuance of up to 500,000 shares of Preferred Stock, par value $.001 per share,
in one or more series, with such designated preferences, rights, qualifications,
powers, restrictions and limitations as may be determined by the Board. In
accordance with this authority the Board authorized the issuance of up to
250,000 shares of Series C Stock, having a stated value of $100 per share, and
established the terms and conditions of those shares described below.
Shares of Series C Stock are or, when issued, will be fully paid and
nonassessable. The Series C Stock is not redeemable, and there is no redemption
or sinking fund obligation with respect to the Series C Stock. There also are no
restrictions on transferability of the Series C Stock The holders of shares of
Series C Stock have no preemptive rights with respect to any securities of the
Company. In addition to the Series C Stock, the Company has issued and
outstanding 74,659 shares of Series B Non-Voting Convertible Preferred Stock
(the "Series B Stock") and has authorized the issuance of 100,000 shares of
Series A Preferred Stock (the "Series A Stock"), none of which has been issued.
The Series B Stock and, if issued, the Series A Stock rank on a parity as to
dividends and upon liquidation with the Series C Stock. The Company also
currently has authorized 75,341 shares of undesignated Preferred Stock which
could be issued in the future in one or more series and which could be
designated as senior to, on a parity with or junior to the Series C Stock as to
dividends and/or upon liquidation.
The following description summarizes certain terms of the Series C
Stock contained in the Certificate of Designation, Preferences and Rights for
the Series C Stock which has been filed with the Secretary of State of Delaware.
This description is qualified in its entirety by reference to the Certificate of
Designation, Preferences and Rights, a copy of which has been filed as an
exhibit to the Company's Registration Statement on Form S-3 (No. 33-____) and
which is incorporated by reference herein.
Dividends. Holders of shares of Series C Stock are entitled to receive,
when and as declared by the Board out of funds legally available therefor, an
annual cash dividend at the rate of 8% per share. Dividends on the Series C
Stock are payable quarterly in arrears on the fifteenth day of each January,
April, July and October, commencing January 15, 1996, and accrue and are
cumulative from the initial date of issuance, with appropriate proration for any
partial dividend period. No dividend may be declared or set apart for any shares
of Series C Stock unless a like dividend is declared or set apart for all
outstanding shares of Series C Stock. Further, so long as any shares of Series C
Stock are outstanding, no dividend may be paid on the Company's Common Stock, or
on any other class of stock ranking junior to the Series C Stock in either
payment of dividends or liquidation (the "Junior Stock"), unless all dividends
on the Series C Stock have been paid in full for past dividend periods and
dividends for the current period have been paid or have been declared and set
apart.
Liquidation Preference. In the event of any liquidation, dissolution or
winding up of the Company, the holders of shares of Series C Stock are entitled
to receive (after payment of all debts and other liabilities of the Company),
out of the assets available for distribution, all accumulated and unpaid
dividends on the Series C Stock before any distribution may be made to holders
of Common Stock or any Junior Stock. Thereafter, the Series C Stock will share
with the Company's other outstanding classes of capital stock the remaining
assets to be distributed, with the Series C Stock receiving an amount per share
equal to the amount to be distributed on each share of Common Stock multiplied
by a fraction the numerator of which is $100 and the denominator of which is the
Conversion Price (as defined under "Conversion" below). The holders of Series C
Stock and all series or classes of the Company's capital stock that rank on a
parity upon liquidation with the Series C Stock are entitled to share ratably in
any distribution which is not sufficient to pay in full the aggregate amounts
payable thereon. Neither the merger or consolidation of the Company with another
corporation nor the sale or lease of all or substantially all of the Company's
assets will be considered a liquidation, dissolution or winding up of the
Company.
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<PAGE> 7
Conversion. Each share of Series C Stock is convertible at the option
of the holder, with respect to its stated value of $100, into shares of the
Company's Common Stock at a price (the "Conversion Price") equal to 85% of the
Market Price of the Common Stock on the date of conversion, except that the
Conversion Price may not be less than $7.50 (the "Minimum Price") or more than
$20.00 (the "Maximum Price"). The per share Market Price of the Common Stock on
any date is the average of the reported daily closing prices of the Common Stock
for the 10 consecutive trading days commencing 12 trading days before that date.
A holder's option to convert the holder's shares of Series C Stock may be
exercised on or after February 12, 1996 as to 50% of the shares acquired by the
holder and on or after March 13, 1996 with respect to the remaining shares
acquired. Any shares of Series C Stock which have not previously been converted
will convert automatically into shares of Common Stock on November 14, 1997. No
fractional shares of Common Stock will be issued upon any conversion of shares
of Series C Stock; in lieu thereof, the Company will pay a cash adjustment based
on the then current fair market value of the Common Stock, as determined by the
Company's Board of Directors.
The Minimum and Maximum Prices are subject to adjustment in the event
of the issuance of Common Stock as a dividend or distribution on the Common
Stock or in the event of a combination, subdivision or reclassification of the
Common Stock. Additionally, if the Company distributes to all or substantially
all holders of its Common Stock evidences of indebtedness, assets or any other
securities, or rights, warrants or options to acquire other securities, of the
Company, it also must distribute these to the holders of Series C Stock or must
reserve them for the benefit of the holders of Series C Stock, together with any
interest, dividends or other property payable thereon.
In the event of a merger or consolidation of the Company with or into
another corporation, or the sale or transfer of all or substantially all the
property or assets of the Company, the holders of shares of Series C Stock have
the right to convert those shares into the kind and amount of shares or other
securities or property which they would have received had all shares of Series C
Stock been converted to shares of Common Stock immediately prior to such merger,
consolidation or sale.
The Company is required at all times to reserve sufficient shares of
Common Stock to permit the conversion of all outstanding shares of Series C
Stock.
Voting Rights. So long as any Series C Stock is outstanding, the
Company's Certificate of Incorporation may not be amended in any manner which
would materially alter or change the powers, preferences or rights of the Series
C Stock so as to affect them adversely without the affirmative vote of the
holders of a majority of the outstanding shares of Series C Stock voting
separately as a class. The holders of the Series C Stock have no other voting
rights except as required by law.
Change in Control Provisions. The Company's Certificate of
Incorporation contains certain provisions which could have the effect of
delaying, deferring or preventing a change in control of the Company. The
Certificate of Incorporation requires the affirmative vote of holders of
two-thirds of the Company's voting securities in order to approve a merger or
consolidation with, a sale of all or substantially all of the Company's assets
to, or similar specified transactions with, the beneficial owner of 15% or more
of the Company's voting securities, unless the Company's Board of Directors
approves the transaction prior to the person having become a 15% or greater
beneficial owner. For purposes of this provision the Company's Common Stock
currently is its only class of voting securities. Additionally, the affirmative
vote of at least two-thirds of the Company's outstanding shares of Common Stock
is required to amend the Certificate of Incorporation.
AGREEMENTS RELATING TO THE SALE OF THE SERIES C STOCK
In connection with the sale of the Series C Stock, the Company entered
into Registration Rights Agreements with each of the Investors pursuant to which
it agreed to register under the Securities Act of 1933 (the "Act"), at its
expense, the resale by the Investors of all shares of Common Stock into which
the Series C Stock is convertible. The Company has filed such a registration
statement with the Securities and
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<PAGE> 8
Exchange Commission and is awaiting its effectiveness. If effectiveness has not
been obtained by February 12, 1996, the Company must make monthly payments to
the Investors equal to 3% of the price paid by the Investors for the Series C
Stock until effectiveness is obtained. No payment is required for any period in
respect of which the Company obtains a court judgment that the failure to have
the registration statement declared effective is due to causes beyond the
Company's control. Once effectiveness has been obtained, the Company is
obligated to maintain that effectiveness for three years or until such earlier
time as the Investors may sell all unsold shares during a three-month period
pursuant to Rule 144 under the Act. The Company and the Investors have agreed to
indemnify each other against certain liabilities in connection with the
registration statement, including liabilities under the Act.
The Company also has agreed not to offer any shares of its Common
Stock, or securities convertible into Common Stock, in a discounted transaction
prior to February 7, 1996.
Dean Witter Reynolds, Inc. ("Dean Witter"), Dillon, Read & Co., Inc.
("Dillon Read") and Shoreline Pacific, Institutional Finance Division of
Financial West Group ("Shoreline Pacific") have acted as placement agents for
the Company in connection with the sale of the Series C Stock. The Company has
agreed to pay Dean Witter and Dillon Read an aggregate commission of 7% on the
first $15,000,000 of Series C Stock sold and a commission of 2% of the value of
any additional shares of Series C Stock sold. The Company is obligated to pay
Shoreline Pacific a commission of 4% of the total value of the Series C Stock
sold to the Investors. The Company also has agreed to indemnify Dean Witter,
Dillon Read and Shoreline Pacific against certain liabilities relating to the
sale of the Series C Stock.
OTHER INFORMATION
The Investors are unaffiliated with the Company. No director or officer
of the Company, or any of their associates, has any direct or indirect interest
in the transactions which are the subject of the Proposal.
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PRINCIPAL STOCKHOLDERS AND
HOLDINGS OF MANAGEMENT
The following table sets forth certain information with regard to the
beneficial ownership of the Company's Common Stock by (i) each director and each
executive officer named on the Summary Compensation Table contained in the
Company's Proxy Statement for its 1995 Annual Meeting of Stockholders,
individually, (ii) all directors and executive officers of the Company as a
group, (iii) each of the Company's stockholders known to beneficially own more
than 5% of the outstanding shares of Common Stock and (iv) for informational
purposes only, all other Investors as a group. The left columns give effect to
the conversion of the 120,000 shares of Series C Stock now outstanding; the
right columns give effect to the further conversion of the 120,000 additional
Series C Shares which are the subject of the Proposal. The numbers of shares
outstanding after conversion are based upon 8,068,969 shares of Common Stock
outstanding at November 14, 1995 plus 1,600,000 and 3,200,000 shares of Common
Stock, respectively, issuable upon conversion of 120,000 and 240,000 shares of
Series C Stock at the assumed rate of 13.33 shares of Series C Stock per share
of Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership Assuming Beneficial Ownership Assuming
Conversion of 120,000 Shares of Conversion of 240,000 Shares of
Name Series C Stock Series C Stock
---- ------------------------------- -------------------------------
Number of Shares(1) Percent Number of Shares(1) Percent
<S> <C> <C> <C> <C>
E. Thomas Arington 1,671,562 15.9% 1,671,562 13.8%
7155 East Kemper Road
Cincinnati, OH 45249
George W. Baughman 73,000 * 73,000 *
Doane F. Darling 66,253 * 66,253 *
Stanley L. Morgan 72,000 * 72,000 *
S. Sundararaman 229,216 2.4% 229,216 2.0%
Jeffrey T. Arington 127,709 1.3% 127,709 1.1%
Timothy J. Holt 106,038 1.1% 106,038 *
Ivan E. Pusecker 104,074 1.1% 104,074 *
All directors and 2,449,852 22.5% 2,449,852 19.6%
executive officers
as a group (8 persons)
Everest Capital Fund. L.P. 590,975 6.1% 590,975 5.2%
Corner House
20 Parliament Street
Hamilton, Bermuda HM12
Everest Capital International Ltd. 717,625 7.4% 717,625 6.4%
Corner House
20 Parliament Street
Hamilton, Bermuda HM12
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
All Other Investors (2) 600,000 6.2% 2,200,000 19.5%
</TABLE>
*Less than one percent
_________________
(1) Assumes that all outstanding shares of Series C Stock are convertible
within 60 days after November 14, 1995. Otherwise, excludes shares of
Common Stock subject to options or warrants which cannot be exercised
within 60 days after November 14, 1995. Includes options, warrants or
arrangements to purchase the following numbers of shares: Mr. E. Thomas
Arington, 849,843 shares; Mr. Baughman, 37,000 shares; Mr. Darling,
57,834 shares; Mr. Morgan, 21,000 shares; Mr. Sundararaman, 28,000
shares; Mr. Jeffrey T. Arington, 101,001 shares; Mr. Holt, 77,734
shares; Mr. Pusecker, 60,600 shares; and all directors and executive
officers as a group, 1,228,012 shares.
(2) Provided for informational purposes only. To the best of the Company's
knowledge, no Investor in this group of Investors owns or will own,
singly or as part of a "group," in excess of 5% of the Company's Common
Stock.
In addition to the shares listed above, The Provident Bank, One East
Fourth Street, Cincinnati, Ohio (the "Bank"), owns 146,718 shares (1.8% of the
8,068,969 shares of Common Stock outstanding on November 14, 1995) of the
Company's Common Stock, 74,659 shares of the Company's Series B Non-Voting
Convertible Preferred Stock (the "Series B Preferred Stock") which are
convertible into 746,590 shares of Common Stock, and warrants exercisable at a
price of $18.125 per share for an additional 200,000 shares of Common Stock.
Because of regulatory requirements, the Series B Preferred Stock may not be
converted if, as a result, the Bank and certain of its affiliates would then own
in excess of 5.0% of any class of the Company's voting capital stock, except
that conversion is permitted immediately prior to and in conjunction with
certain transactions involving the sale of the underlying Common Stock.
PROXY STATEMENT PROPOSALS
Stockholder proposals received by the Company before the close of
business on December 8, 1995 will be considered for inclusion in the Proxy
Statement for the 1996 Annual Meeting.
OTHER BUSINESS
The Company is not aware of any business or matter which may properly
be presented at the meeting other than as discussed herein. However, if any
other matters do come before the meeting, or an adjournment thereof, it is
intended that the proxies will vote thereon in accordance with the
recommendation of the Board of Directors.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, containing the Company's financial
statements, Management's Discussion and Analysis of Financial Condition and
Results of Operations and other information concerning the Company, are
incorporated herein by reference:
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. All other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the date of the Special Meeting
or any adjournment thereof.
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<PAGE> 12
PRELIMINARY COPY
DURAMED PHARMACEUTICALS, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR SPECIAL MEETING
The undersigned hereby appoints E. Thomas Arington, and Doane F.
Darling, and each of them, attorneys with the powers which the undersigned would
possess if personally present, including the power of substitution, to vote all
shares of the undersigned at the Special Meeting of Stockholders of Duramed
Pharmaceuticals, Inc. to be held at ____________________________________________
on January 4, 1996, at 9:00 a.m. (EST), and at any adjournments thereof:
<TABLE>
<S> <C> <C> <C>
1. / / FOR / / AGAINST / / ABSTAIN on the proposal to issue 120,000 additional
shares of the Company's Series C Convertible
Preferred Stock.
</TABLE>
2. Upon such other business as may properly come before the meeting.
The proxy will be voted on the above as specified. IF NO SPECIFICATION IS
MADE, THE PROXY SHALL BE VOTED "FOR" THE PROPOSAL.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
As to any other matter which properly comes before the meeting, said
attorneys shall vote in accordance with their best judgment.
Please mark: I do / / do not / / plan to attend the meeting.
Dated__________________________________, 199_
____________________________________________
____________________________________________
(Signature of Stockholder)
IMPORTANT: Please date and sign exactly as
name appears hereon. If shares are held jointly,
each stockholder named should sign. Executors,
administrators, trustees, etc. should so indicate
when signing. If the signer is a corporation,
please sign full corporate name by duly
authorized officer.
