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
COLUMBIA LABORATORIES, INC.
(Name of Registrant as Specified in Its Charter)
COLUMBIA LABORATORIES, INC.
(Name of Persons(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on the 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 transactions apply:
(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:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
COLUMBIA LABORATORIES, INC.
2665 SOUTH BAYSHORE DRIVE
MIAMI, FLORIDA 33133
(305) 860-1670
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 20, 1995
To the Stockholders of Columbia Laboratories, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders
("Annual Meeting") of Columbia Laboratories, Inc. ("Company") will be held
at Chemical Bank, 270 Park Avenue, Third Floor Auditorium, New York, New
York 10017 at 10:00 A.M. on July 20, 1995 for the following purposes:
1. To elect six directors;
2. To ratify the appointment of Arthur Andersen & Co. as independent
certified public accountants for the Company for the year ending
December 31, 1995; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
The board has fixed the close of business on June 5, 1995 as the
record date for determination of stockholders who will be entitled to
notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Margaret J. Roell
Secretary
June 12, 1995
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE,
WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING,
PLEASE DATE, SIGN AND COMPLETE THE ENCLOSED PROXY CARD(S) AND RETURN IT
(THEM) IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE>
COLUMBIA LABORATORIES, INC.
2665 SOUTH BAYSHORE DRIVE
MIAMI, FLORIDA 33133
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JULY 20, 1995
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Columbia Laboratories, Inc.
("Company") of proxies to be voted at the Annual Meeting of Stockholders of
the Company to be held on July 20, 1995, and at any adjournments thereof
("Annual Meeting"), for the purposes listed in the preceding Notice of
Annual Meeting of Stockholders. This Proxy Statement and the accompanying
proxy card are being distributed on or about June 12, 1995, to holders of
the Company's Common and Preferred Stock entitled to vote at the Annual
Meeting.
A stockholder giving a proxy has the power to revoke it at any
time before it is exercised at the Annual Meeting by filing with the
Secretary of the Company an instrument revoking it, by delivering a duly
executed proxy card bearing a later date, or by appearing at the meeting
and voting in person. Shares represented by properly executed proxies will
be voted as specified by the stockholder. Unless the stockholder specifies
otherwise, such proxies will be voted FOR the election of directors
nominated in this Proxy Statement and FOR the ratification of Arthur
Andersen & Co. as the Company's independent certified public accountants.
In the event that a quorum is present or represented by proxy at
the Annual Meeting, but sufficient votes to approve any of the proposals
are not received, the persons named as proxies may propose one or more
adjournments of the Annual Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of the votes cast. The persons named as proxies will vote those
proxies which they are entitled to vote FOR any such proposal in favor of
such an adjournment.
VOTING SECURITIES
Only holders of the Company's par value $.01 per share ("Common
Stock"), Series A Convertible Preferred Stock ("Series A Preferred Stock")
and Series B Convertible Preferred Stock ("Series B Preferred Stock"), of
record as of the close of business on June 5, 1995, are entitled to vote at
the Annual Meeting. Each share of Common Stock is entitled to one vote.
Each share of Series A and Series B Preferred Stock is entitled to a number
of votes equal to the number of shares of Common Stock into which it is
convertible (12.36 for the Series A Preferred Stock and 20.57 for the
Series B Preferred Stock). As of the record date, there were 25,543,593
shares of Common Stock outstanding, 1,365 shares of Series A Preferred
Stock outstanding having voting power equal to 16,871 shares of Common
Stock and 2,000 shares of Series B Preferred Stock outstanding having
voting power equal to 41,140 shares of Common Stock. The holders of a
majority of the outstanding shares of Common Stock and shares of Common
Stock into which the Series A and Series B Preferred Stock is convertible,
collectively "Shares", shall constitute a quorum.
A majority of the votes cast by holders of the Shares is required
for approval of the proposals. Abstentions will have the effect of a vote
against a proposal. Broker non-votes will have no effect on the vote.
On June 5, 1995, the last reported sale price of the Company's
Common Stock on the American Stock Exchange was $7.44.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
At the meeting, six directors will be elected by the stockholders
to serve until the next annual meeting of stockholders or until their
successors are elected and qualified. The accompanying form of proxy, when
properly executed and returned to the Company, will be voted FOR the
election as directors of the six persons named below, unless the proxy
contains contrary instructions. Proxies cannot be voted for a greater
number of persons than the number of nominees named in the Proxy Statement.
Management has no reason to believe that any of the nominees is unable or
unwilling to serve, if elected. However, in the event that any of the
nominees should become unable or unwilling to serve as a director, the
proxy will be voted for the election of such person or persons as shall be
designated by the Board of Directors.
The Board of Directors held five meetings (including regular
quarterly meetings and telephonic meetings) during the year ended December
31, 1994. The Board of Directors has two standing committees. The Audit
Committee, consisting of Mr. Kidd and Drs. Kellner and Nachtigall, met
twice during the year ended December 31, 1994. The Audit Committee is
responsible for recommending to the Board of Directors the engagement of
independent certified public accountants, reviewing the scope of, and the
budget for, the annual audit and tax return preparation and reviewing the
results of the audit engagement, including the financial statements, with
the independent certified public accountants. The Compensation/Stock Option
Committee, consisting of Drs. Kellner and Nachtigall, met three times
during the year ended December 31, 1994. The Compensation/Stock Option
Committee is responsible for determining the salaries of senior executives
and the granting of options to purchase shares of Common Stock to the
Company's employees, directors and consultants. Each of the directors of
the Company participated in at least 75% or more of the meetings of the
Board of Directors held during the year ended December 31, 1994.
COMPENSATION OF DIRECTORS
Directors that are not employees of the Company receive options to
purchase 10,000 shares of Common Stock for serving on the Board of
Directors and options to purchase an additional 1,000 shares of Common
Stock for each committee served on. No other fees are paid to the
non-employee directors.
The following table sets forth certain information concerning each
nominee.
WILLIAM J. BOLOGNA (Age 52) has been a director of the Company
since inception and was elected Chairman of the Company's Board of
Directors in January 1992. From December 1988 to January 1992, Mr. Bologna
served as Vice Chairman of the Company's Board of Directors. In addition,
since 1980, he has been Chairman of Bologna & Hackett ("B&H"), an
advertising agency specializing in pharmaceutical products which has in the
past performed services for various international pharmaceutical companies.
B&H ceased operations in May 1991 and has remained inactive since that
date; however, B&H has not yet been dissolved. Prior to 1980, Mr. Bologna
was employed by William Douglas McAdams, Inc., a company engaged in the
marketing of pharmaceuticals, in a variety of positions, including Senior
Vice President. In 1965, Mr. Bologna received his B.S. in Pharmacy from
Fordham University. He received an MBA in Finance from Columbia University
in 1971.
NICHOLAS A. BUONICONTI (Age 54) has been a director of the Company
since June 1991 and was elected Vice Chairman and Chief Operating Officer
of the Company in April 1992. Mr. Buoniconti, an attorney, is a member of
the Massachusetts and Florida Bar. From January 1990 to April 1992, he was
a member of the law firm of Nicholas A. Buoniconti, P.A. He held the
position of President and Chief Operating Officer of UST, a Fortune 500
company, from May 1987 to December 1989. From 1985 to 1987, Mr. Buoniconti
served as President and Chief Operating Officer of U.S. Tobacco (which
changed its name to UST), as well as serving on the Board of Directors from
1978 to 1989. He has served as a member of the Board of Directors of the
Miami Project to Cure Paralysis, and is heavily involved in the fund-raising
efforts
2
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for the Project through the Marc Buoniconti Fund, named for his son.
Mr. Buoniconti is a former All-Pro linebacker for the Miami Dolphins. Since
1978, he has co-hosted "Inside the NFL" on the Home Box Office cable
network. Mr. Buoniconti is also a director of American Bankers Insurance
Co. and Simmons Outdoor Corporation.
NORMAN M. MEIER (Age 56) has been President, Chief Executive Officer
and a director of the Company since inception. In addition, since 1980, Mr.
Meier has been an officer and director of B&H. B&H ceased operations in May
1991 and has remained inactive since that date; however, B&H has not yet
been dissolved. From 1971 to 1977, Mr. Meier was Vice President of Sales
and Marketing for Key Pharmaceuticals, Inc., a company which had been
engaged in the marketing and sales of pharmaceuticals until its sale to
Schering-Plough Corporation in June 1986. From 1977 until June 1986, Mr.
Meier served as a consultant to Key Pharmaceuticals, Inc. In 1960, Mr.
Meier received his B.S. in Pharmacy from Columbia University. He received
his M.S. in Pharmacy Administration from Long Island University in 1964.
Mr. Meier is also a director of Universal Heights, Inc.
IRWIN L. KELLNER (Age 56) has been a director of the Company since May
1988. Dr. Kellner is the chief economist of Chemical Banking, formed by the
merger of Chemical Bank with Manufacturers Hanover Trust Company ("MHT").
Dr. Kellner has been employed by MHT since 1970. From 1980 to 1991, Dr.
Kellner was the Chief Economist of MHT. Dr. Kellner, a past president of
the Forecasters Club of New York and the New York Association of Business
Economists, holds membership, and has held a variety of posts, in several
professional associations, including the American Economic Association,
American Statistical Association and the National Association of Business
Economists. Dr. Kellner is also a governor of the Money Marketeers. His
other board memberships include the Juvenile Diabetes Foundation, the
Children's AIDS Network, North Shore University Hospital, the Don Monti
Memorial Research Foundation and Touro College's Barry Z. Levine School of
Health Sciences.
JOHN E. A. KIDD (Age 50) has been a director of the Company since
April 1988 and served as Chairman of the Board of Directors of the Company
from December 1988 to December 1991. From 1988 to 1990, Mr. Kidd was a
director of Care Plus, Inc., a publicly owned health care company traded
over-the-counter. For approximately the past five years, Mr. Kidd has been
an Executive Director of a number of public companies located in the United
Kingdom, in which an investment company controlled by his family had been a
major investor.
LILA E. NACHTIGALL, M.D. (Age 61) has been a director of the Company
since November 1992. Dr. Nachtigall has been employed by the New York
University School of Medicine since 1961. Dr. Nachtigall is currently a
Professor of Obstetrics and Gynecology. In addition, Dr. Nachtigall is the
Clinic Coordinator of GYN-Endocrine Clinic at Bellevue Hospital and
Co-director of the GYN-Endocrine Program and Director of Women's Wellness
Division at New York University Medical Center.
PROPOSAL 2
APPROVAL OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Arthur Andersen
LLP as independent certified public accountants to audit the books, records
and accounts of the Company and its subsidiaries for the year ending
December 31, 1995 and proposes that the stockholders ratify such
appointment.
Arthur Andersen LLP has served as the Company's independent
certified public accountants since 1990. Representatives of Arthur Andersen
LLP will attend the Annual Meeting to make any statement they consider
appropriate and to respond to appropriate questions raised at the Annual
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
3
<PAGE>
PRINCIPAL HOLDERS OF SECURITIES
As of June 5, 1995, directors and named executive officers,
individually and as a group, beneficially owned Common Stock as follows:
NAME OF SHARES, NATURE OF INTEREST
BENEFICIAL OWNER AND PERCENTAGE OF EQUITY SECURITIES(1)
---------------- --------------------------------------
Norman M. Meier 825,800 3.2%
William J. Bologna (2) 1,938,632 7.6%
Nicholas A. Buoniconti 80,000 *
Irwin L. Kellner (3) 101,500 *
John E. A. Kidd (3) 225,936 *
Lila E. Nachtigall (3) 57,000 *
Margaret J. Roell (3) 100,200 *
Officers and directors
as a group (7 people) 3,329,068 12.8%
* Represents less than 1 percent.
(1) Includes shares issuable upon exercise of both options and
warrants which are currently exercisable or which may be acquired
within 60 days and shares issuable upon conversion of the Series A
and Series B Preferred Stock (12.36 for the Series A Preferred
Stock and 20.57 for the Series B Preferred Stock).
(2) Includes 20,570 shares issuable upon conversion of 1,000
shares of Series B Preferred Stock. Includes 98,062 shares
beneficially owned by Mr. Bologna's spouse.
(3) Includes shares issuable upon exercise of options, which
are currently exercisable or which may be acquired within 60 days,
to purchase 62,000 shares with respect to Dr. Kellner, 175,936
shares with respect to Mr. Kidd, 57,000 shares with respect to Dr.
Nachtigall and 100,000 shares with respect to Ms. Roell.
As of June 5, 1995, the following table sets forth information
regarding the number and percentage of Common Stock held by all persons who
are known by the Company to beneficially own or exercise voting or
dispositive control over 5% or more of the Company's outstanding Common
Stock:
NUMBER OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED PERCENT OF CLASS
---------------- ------------------ ----------------
Dominion Capital, Inc./
Dominion Resources, Inc. (1)
901 East Byrd Street, 17th Floor
Richmond, VA 23219 1,292,123 5.1%
(1) Based on information included on Schedule 13D dated January
10, 1995. Includes warrants to purchase 150,000 shares of the
Company's Common Stock.
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<PAGE>
EXECUTIVE COMPENSATION
The tables, graph and descriptive information set forth below are
intended to comply with the Securities and Exchange Commission's
compensation disclosure requirements applicable to, among other reports and
filings, annual proxy statements. This information is being furnished with
respect to the Company's Chief Executive officer ("CEO") and its three most
highly compensated executive officers, other than the CEO, whose salary and
bonus exceeded $100,000 for the most recent fiscal year (collectively, the
"Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS (3)
- --------------------------- ---- ------ --------- -----------
<S> <C> <C> <C> <C>
Norman M. Meier 1994 $ 180,000 $ - 470,000
President and Chief 1993 180,000 - 200,000
Executive Officer 1992 180,000 45,100 -
William J. Bologna 1994 180,000 - 470,000
Chairman of the Board 1993 180,000 - 200,000
1992 180,000 45,100 -
Nicholas A. Buoniconti 1994 135,000 - 910,000
Vice Chairman and 1993 135,000 - 200,000
Chief Operating Officer 1992 95,625(2) - 675,000
Margaret J. Roell 1994 120,000 - -
Vice President - 1993 120,000 - 20,000
Finance & Administration 1992 120,000 - 50,000
Chief Financial Officer
<FN>
(1) These amounts are accrued as of year end and paid during the following year.
(2) Mr. Buoniconti was hired as of April 15, 1992.
(3) The options granted in 1993 and 1992 to Messrs. Meier, Bologna and
Buoniconti, were cancelled in 1994. See Ten Year Option Repricings Chart
on the following page.
</FN>
</TABLE>
<TABLE>
<CAPTION>
OPTION GRANTS DURING 1994
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED (1) IN 1994 ($/SH) DATE VALUE (2)
- ----- ----------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Norman M. Meier 470,000 24% $4.375 9/28/2004 $1,640,300
William J. Bologna 470,000 24% 4.375 9/28/2004 1,640,300
Nicholas A. Buoniconti 910,000 47% 4.375 9/28/2004 3,175,900
Margaret J. Roell - - - - -
<FN>
(1) These options were granted in connection with Messrs.
Meier, Bologna and Buoniconti each investing $200,000 into the
Company. In connection therewith, options to purchase 450,000,
450,000 and 910,000 shares of Common Stock previously granted to
Messrs. Meier, Bologna and Buoniconti, respectively, were cancelled.
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(2) The estimated grant date present value reflected in the
above table is determined using the Black-Scholes model. The
material assumptions and adjustments incorporated in the
Black-Scholes model in estimating the value of the options
reflected in the above table include the following: (i) an
exercise price of $4.375, equal to the fair market value of the
underlying stock on the date of grant, (ii) an option term of ten
years, (iii) an interest rate of 7.46% that represents the
interest rate on a U.S. Treasury security with a maturity date
corresponding to that of the option term, (iv) volatility of
65.104% calculated using daily stock prices for the one-year
period prior to the grant date and (v) no annualized dividends
paid with respect to a share of Common Stock at the date of grant.
The ultimate values of the options will depend on the future price
of the Company's Common Stock, which cannot be forecast with
reasonable accuracy. The actual value, if any, an optionee will
realize upon exercise of an option will depend on the excess of
the market value of the Company's Common Stock over the exercise
price on the date the option is exercised.
</FN>
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES DURING 1994 AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES ACQUIRED VALUE DECEMBER 31, 1994 DECEMBER 31, 1994
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Norman M. Meier - $ - - 470,000 $ - 256,250
William J. Bologna - - - 470,000 - 256,250
Nicholas A. Buoniconti - - - 910,000 - 568,750
Margaret J. Roell - - 75,000 45,000 3,125 3,125
</TABLE>
<TABLE>
<CAPTION>
TEN YEAR OPTION REPRICINGS
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE EXERCISE ORIGINAL
UNDERLYING OF STOCK AT PRICE AT OPTION TERM
OPTIONS TIME OF TIME OF REMAINING AT
REPRICED OR REPRICING OR REPRICING OR NEW DATE OF
AMENDED AMENDMENT AMENDMENT EXERCISE REPRICING OR
NAME DATE (#) ($) ($) PRICE ($) AMENDMENT
- ---- -------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Norman M. Meier 9/28/94 100,000 $4.375 $4.50 $4.375 6.5 years
9/28/94 200,000 4.375 5.50 4.375 9 years
9/28/94 120,000 4.375 13.25 4.375 3 months
9/28/94 29,244 4.375 14.58 4.375 3 months
William J. Bologna 9/28/94 100,000 4.375 4.50 4.375 6.5 years
9/28/94 200,000 4.375 5.50 4.375 9 years
9/28/94 120,000 4.375 13.25 4.375 3 months
9/28/94 29,244 4.375 14.58 4.375 3 months
Nicholas A. Buoniconti 9/28/94 400,000 4.375 4.875 4.375 7.5 years
9/28/94 200,000 4.375 5.500 4.375 9 years
9/28/94 25,000 4.375 5.750 4.375 7 years
9/28/94 10,000 4.375 8.000 4.375 7 years
9/28/94 250,000 4.375 8.000 4.375 7.5 years
9/28/94 25,000 4.375 9.000 4.375 7 years
</TABLE>
EMPLOYMENT AGREEMENTS
In January 1990, the Company entered into five-year employment
agreements with each of John E.A. Kidd, William J. Bologna and Norman M.
Meier, to serve as Chairman, Vice-Chairman and President of the Company,
respectively. Pursuant to their respective employment agreements, each such
employee is entitled
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to a base salary of $180,000 per year and a bonus equal to one-half of
1% of the Company's net revenues. Net revenues are defined to be gross
sales less discounts, allowances and returns. In addition, each such
employee was granted options to purchase 150,000 shares of the Company's
Common Stock at an exercise price of $13.25 with respect to Mr. Kidd and
$14.58 with respect to each of Messrs. Meier and Bologna. Pursuant to
the terms of such agreements, each employee has agreed to dedicate his
services on a substantially full-time basis and has agreed for the term
of his agreement and for two years thereafter not to compete with the
Company. As of December 31, 1991, contemporaneously with his resignation
as Chairman of the Board, Mr. Kidd's contract was amended such that he
will receive a salary of $1,000 per year for performing certain investor
relations tasks for the Company. In June 1993, Messrs. Bologna and
Meier's employment agreements were amended such that effective January 1,
1993, the provisions pursuant to which they would have received an
aggregate bonus equal to one percent of sales in 1993 and 1994 were
cancelled. If the Company would have had pre-tax earnings during 1994,
Messrs. Bologna and Meier would have been eligible to participate in the
incentive compensation plan approved by the shareholders at the 1993 annual
meeting of the Company. During 1994, in connection with Messrs. Meier and
Bologna each investing $200,000 into the Company, these options were
cancelled and new options were granted.
In April 1992, the Company entered into a five-year employment
agreement with Nicholas A. Buoniconti, to serve as Vice Chairman and Chief
Operating Officer of the Company. Pursuant to this agreement, Mr.
Buoniconti is paid an annual salary of $135,000. As additional
compensation, Mr. Buoniconti was granted options to purchase 250,000 and
400,000 shares of the Company's Common Stock at exercise prices of $8.00
and $4.88 per share, respectively, which options vest over five years.
Pursuant to the terms of such agreement, Mr. Buoniconti agreed to dedicate
his services on a substantially full-time basis and has agreed for the term
of his agreement and for two years thereafter not to compete with the
Company. During 1994, in connection with Mr. Buoniconti investing $200,000
into the Company, these options were cancelled and new options were granted.
In June 1991, the Company entered into a two-year employment
agreement with Margaret J. Roell, its Vice-President -- Finance and
Administration, Chief Financial Officer, Secretary and Treasurer, with
provision for extension of the agreement for an additional two years.
Pursuant to this agreement, Ms. Roell is paid an annual salary of $120,000.
As additional compensation, Ms. Roell was granted options to purchase
50,000 shares of the Company's Common Stock at an exercise price of $5.75.
One half of such options became exercisable in June 1992 with the remainder
exercisable beginning in June 1993. In June 1993, Ms. Roell's contract was
renewed under the same terms for an additional two years.
The exercise price of all of the options granted pursuant to the
aforementioned employment agreements are based on the closing price of the
Company's Common Stock on the American Stock Exchange on the day prior to
grant.
COMPENSATION/STOCK OPTION COMMITTEE REPORT
The present Compensation/Stock Option Committee (the "Committee")
was formed late in 1991. For the chief executive officer and the other
executive officers, except for Mr. Buoniconti, 1992, 1993 and 1994
compensation was determined pursuant to employment agreements entered into
prior to the formation of the Committee. As a result, these agreements were
approved by the Board of Directors. Mr. Buoniconti's employment agreement
was approved by both the Committee and the Board of Directors on April 14,
1992. The principal elements of the Corporation's executive compensation
program include base salary, annual incentive compensation and long-term
incentive compensation. Historically, as a result of the size and stage of
the Company, the Company's compensation policies and practices have been
informal and subjective and have not been tied to the Company's financial
performance.
Under the supervision of the Committee, the Company is developing
compensation policies and
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<PAGE>
programs which seek to align closely the financial interests of the
Company's senior management with those of the Company and its shareholders.
In this regard, during 1993, the Committee engaged Hewitt Associates to
make an analysis of competitive compensation levels paid senior executives
and the appropriateness of granting stock options in lieu of other benefits
(i.e., cash, pension, profit sharing, etc.). As a result of the study, the
Committee recommended a program of compensation for all key employees that
places greater emphasis on incentive stock based pay.
BASE SALARY. The base salaries of each of the named executive
officers are as stated in their individual employment contracts. None of
these individuals have received an increase in base salary during the last
five years. Based on the results of the consultant's study both Mr. Meier's
base salary and the aggregate cash salaries of Messrs. Meier, Bologna and
Buoniconti are approximately 20% lower than the average salaries of a
comparator group of companies. The comparator group of companies represent
companies in the pharmaceutical industry with similar revenues, "lives" and
profitability to that of the Company. The companies are not the same
companies included in the comparative performance graph, as the peer index
used in the performance graph includes companies with significantly greater
revenues and profitability than that of the Company, therefore, comparisons
of executive compensation with these companies would not be meaningful.
ANNUAL INCENTIVE COMPENSATION. During 1993, the Company's shareholders
approved an Incentive Compensation Plan covering all employees pursuant to
which the Company will award an aggregate of 5% of the Company's pretax
earnings for any year to designated Company employees. As a result of the
net loss in 1994, no amounts were awarded for 1994.
LONG-TERM INCENTIVE COMPENSATION. Under the 1988 Stock Option Plan,
as amended, the Committee grants stock options to senior management
and certain key employees. The amount of the grants are based on individual
performance, including managerial effectiveness, initiative, teamwork and
quality control, and are at such amounts as reflect what the Committee
believes are necessary to attract, retain and motivate senior management
and other key employees and historically have not been tied to the
Company's financial performance. Through the grant of stock options, the
objective of aligning senior management's long-range interests with those
of the Company and its shareholders are met by providing the executive
officers with the opportunity to continue to build a meaningful stake in
the Company.
During 1994, Messrs. Meier, Bologna and Buoniconti were granted
options covering 470,000, 470,000 and 910,000 options, respectively. These
options were granted in connection with Messrs. Meier, Bologna and
Buoniconti each investing $200,000 into the Company. In connection
therewith, options to purchase 450,000, 450,000 and 910,000 shares of
Common Stock previously granted to Messrs. Meier, Bologna and Buoniconti,
respectively, were cancelled.
SECTION 162(M). On December 20, 1993, the IRS published proposed
regulations on Code Section 162(m), which was added by the Omnibus Budget
Reconciliation Act of 1993 to place a $1 million limit on the deductibility
of certain executive compensation. The Company does not anticipate being
effected by the provisions of Section 162(m) for the following reasons:
first, since both the Company's 1988 Stock Option Plan, as amended, and the
Incentive Compensation Plan have been approved by the Company's shareholders
and are administered by the Committee, the Company should be covered by the
transition relief provisions until 1997, which, assuming no material changes
to the plans, relieve the Company of the provisions of Section 162(m) until
that time. Second, the highest executive officer base salary the Company
currently pays is $180,000. Third, the Company currently has net operating
loss carryforwards of approximately $40 million; therefore, the Company does
not expect to pay income taxes in the foreseeable future.
COMPENSATION AND STOCK OPTION COMMITTEE
Dr. Irwin L. Kellner, Chairman & Lila E. Nachtigall, M.D.
8
<PAGE>
COMPARATIVE PERFORMANCE BY THE COMPANY
The Securities and Exchange Commission requires the Company to
present a chart comparing the cumulative total shareholder return on its
Common Stock with the cumulative total shareholder return of (i) a broad
equity market index, and (ii) a published index or peer group. The
following chart compares the Common Stock with (i) the Russell 2000 Index,
and (ii) a group of public pharmaceutical companies, and assumes an
investment of $100 on January 1, 1990 in each of the Common Stock, the
stocks comprising the Russell Index and the stocks of the pharmaceutical
companies.
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Columbia Laboratories, Inc, Russell 2000 Index And Drugs
(Performance Results Through 12/31/94)
1989 1990 1991 1992 1993 1994
------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Columbia Laboratories, Inc. $100.00 $ 33.06 $ 56.20 $ 37.19 $ 39.67 $ 33.88
Russell 2000 Index $100.00 $ 80.49 $117.56 $139.21 $165.52 $162.24
Drugs $100.00 $119.06 $192.60 $159.34 $145.73 $158.94
<FN>
Assumes $100 invested at the close of trading 12/89 in Columbia Laboratories,
Inc common stock, Russell 2000 Index, and Drugs.
*Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
(1) The total return for each of the Company's Common Stock, the
Russell 2000 Index and the pharmaceutical companies assumes the
reinvestment of dividends, although dividends have not been declared on the
Company's Common Stock.
(2) The pharmaceutical companies include: American Home Products,
Amgen, ALZA Corp., Biogen Inc., Bristol-Myers Squibb, Chiron Corp., Forest
Labs, Genetech, Gensia Pharmaceuticals, Genzyme, Glaxo, ICN Pharmaceutical,
IVAX Corp., Eli Lilly, Marion Merrell Dow, Merck, Mylan Labs, Novo-Nordisk,
Pfizer, Rhone-Poulenc Rorer, Roberts Pharmaceutical, Smith Kline Beecham,
Schering-Plough, Upjohn, Warner-Lambert and Xoma.
</FN>
</TABLE>
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993, the Company loaned Messrs. Meier and Bologna, $80,000
and $110,350, respectively. The notes, which bear interest at 10% per annum
and are unsecured but with full recourse, are due on or before December 7,
1996.
During 1994, Messrs. Meier, Bologna and Buoniconti, each invested
$200,000 into the Company, through the purchase of 50,000, 38,663 and
50,000 shares, respectively.
GENERAL
The Board of Directors of the Company knows of no other matters
other than those stated in this Proxy Statement which are to be presented
for action at the Annual Meeting. If any other matters should properly come
before the Annual Meeting, it is intended that proxies in the accompanying
form will be voted on any such matter in accordance with the judgement of
the persons voting such proxies. Discretionary authority to vote on such
matters is conferred by such proxies upon the persons voting them.
The cost of solicitation of proxies, including expenses in
connection with the preparation and mailing of this Proxy Statement, will
be borne by the Company. The Company has retained Corporate Investor
Communications, Inc. ("CIC") to aid in the solicitation of proxies. For
their services CIC will receive a fee estimated at $5,500 plus
reimbursement of reasonable out-of-pocket expenses. The Company does not
otherwise expect to pay any compensation for the solicitation of proxies,
but will reimburse brokers and nominees for their reasonable expenses for
sending proxy material to principals and obtaining their proxies. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone or other means of
communication.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON BEING
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH
PERSON, A COPY OF THE ANNUAL REPORT OF THE COMPANY ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1994 (AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION), INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO. All
such requests should be directed to Margaret J. Roell, Vice
President-Finance and Administration, 2665 South Bayshore Drive, Miami,
Florida 33133.
STOCKHOLDER PROPOSALS
All proposals of stockholders to be included in the Proxy Statement
to be presented at the next Annual Meeting of Stockholders must be
received by the Company not later than January 1, 1996.
By Order of the Board of Directors
Margaret J. Roell
Secretary
Date: June 12, 1995
10
<PAGE>
PROXY
COLUMBIA LABORATORIES, INC.
ANNUAL MEETING OF STOCKHOLDERS--JULY 20, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF COLUMBIA LABORATORIES, INC.
The undersigned hereby appoints each of William J. Bologna and Norman M.
Meier as Proxies, each with the power to appoint a substitute, to represent and
to vote, with all the powers the undersigned would have if personally present,
all the shares of Common Stock $.01 par value per share, or, as the case may be,
shares of Series A and Series B Convertible Preferred Stock, $.01 par value per
share, of Columbia Laboratories, Inc. (the 'Company') held of record by the
undersigned on June 5, 1995, at the Annual Meeting of Stockholders to be held on
July 20, 1995 or any adjournment or adjournments thereof.
Item 1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR ALL THE NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
(INSTRUCTIONS: To withhold authority for any individual nominee, write that
nominee's name in the space provided below.
William J. Bologna, Nicholas A. Buoniconti, Norman M. Meier, Irwin L. Kellner,
John E.A. Kidd, Lila E. Nachtigall
- ------------------------------------------------------------------------------
Item 2. To ratify the selection of Arthur Andersen & Co. as the independent
public accountants for the fiscal year ending December 31, 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the Proxies are authorized to vote upon other business
as may come before the meeting.
(Continued and to be signed on the other side)
<PAGE>
(Continued from other side)
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, the Proxy will be voted
FOR Items 1 and 2.
-----------------------------------------
(Signature)
-----------------------------------------
(Signature if held jointly)
Dated:-----------------------------------
When shares are held jointly, each Shareholder
named should sign. If only one signs, his or her
signature will be binding. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If the
Shareholder is a corporation, the President or a
Vice President should sign in his or her own name,
indicating title. If the Shareholder is a
partnership, a partner should sign in his or her
own name, indicating that he or she is a
'Partner.'
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY
USING THE ENVELOPE PROVIDED.
