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
(Amendment No. )
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
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
COLUMBIA LABORATORIES, INC.
(Name of Registrant as Specified in Its Charter)
COLUMBIA LABORATORIES, INC.
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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
SEPTEMBER 29, 1997
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 The Hotel
Intercontinental, 111 East 48th Street, New York, New York at 10:00 A.M. on
September 29, 1997 for the following purposes:
1. To elect seven directors;
2. To ratify the appointment of Arthur Andersen LLP as independent
certified public accountants for the Company for the year ending
December 31, 1997;
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 August 18, 1997 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
August 25, 1997
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 AND RETURN IT 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
SEPTEMBER 29, 1997
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
September 29, 1997 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 August 25, 1997, 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 LLP 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 August 18, 1997, 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 28,407,069 shares of Common Stock outstanding, 973
shares of Series A Preferred Stock outstanding having voting power equal to
12,026 shares of Common Stock and 1,630 shares of Series B Preferred Stock
outstanding having voting power equal to 33,529 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, except with respect to the election of directors in
which case a plurality of the votes cast is required to elect a director.
Abstentions will have the effect of a vote against a proposal. Broker non-votes
will have no effect on the vote.
On August 18, 1997, the last reported sale price of the Company's
Common Stock on the American Stock Exchange was $ 16.94.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
At the meeting, seven 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 seven 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 three meetings (including regular meetings
and telephonic meetings) during the year ended December 31, 1996. The Board of
Directors has two standing committees. The Audit Committee, consisting of Drs.
Kellner and Nachtigall and Messers. Carvais and Strauss met twice during the
year ended December 31, 1996. 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 and Mr. Strauss, met once during the year ended December 31,
1996. 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 and Committees held during the year ended December 31,
1996.
COMPENSATION OF DIRECTORS
Directors that are not employees of the Company annually 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.
Employee directors receive no additional compensation for serving on the Board
of Directors.
The following table sets forth certain information concerning each
nominee.
WILLIAM J. BOLOGNA (Age 55) 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. 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 Fordham University in 1971.
NICHOLAS A. BUONICONTI (Age 56) 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 Bars. 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,
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<PAGE>
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 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 The Sports
Authority.
JEAN CARVAIS, M.D. (Age 70) has been a director of the Company since
1996. Since 1984, Dr. Carvais has been an independent consultant in the
pharmaceutical industry. Prior to that time, Dr. Carvais was President of The
Research Institute of Roger Bellon, S.A., now a division of Rhone-Poulenc Rorer.
As such, he was involved in the development of a line of anti-cancer drugs,
including Bleomycin and Adriamycin, as well as a new line of antibiotics and
quinolones. Following the acquisition of Roger Bellon, S.A., Dr. Carvais became
a member of Rhone-Poulene's central research committee which directs the
company's worldwide research and development activities. Dr. Carvais is also a
director of Imclone Systems Incorporated.
NORMAN M. MEIER (Age 58) has been President, Chief Executive Officer
and a director of the Company since inception. 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 58) has been a director of the Company since May
1988. Since March 1997, Dr. Kellner has been an independent consultant. From
1996 through February 1997, Dr. Kellner was the chief economist for the Chase
Manhattan's Regional Bank. From 1991 to 1996, Dr. Kellner held the same position
with Chemical and Manufacturers Hanover, Chase's predecessor organizations. Dr.
Kellner had been employed by the Bank since 1970. 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. His
other board memberships include 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. Dr. Kellner is also a
director of Universal Heights, Inc.
LILA E. NACHTIGALL, M.D. (Age 63) 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.
ROBERT C. STRAUSS (Age 56) has been a director of the Company since
January 1997. From March to July 1997, Mr. Strauss was President of IVAX
Corporation. From 1987 through February 1997, Mr. Strauss was President and
Chief Executive Officer of Cordis Corporation, which was acquired by Johnson &
Johnson in 1996. From 1983 through 1987, Mr. Cordis was Vice President and Chief
Financial Officer of Cordis Corporation. Mr. Strauss is also a director of
American Bankers Insurance Co.
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<PAGE>
PROPOSAL 2
RATIFICATION 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,
1997 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.
PRINCIPAL HOLDERS OF SECURITIES
As of August 18, 1997, 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)
---------------- ---------------------------------------
William J. Bologna (2) 2,458,632 8.5%
Norman M. Meier (3) 1,375,800 4.8%
Nicholas A. Buoniconti (3) 1,040,000 3.5%
Jean Carvais (3) 11,000 *
Irwin L. Kellner (3) 113,500 *
Lila E. Nachtigall (3) 34,000 *
Robert S. Strauss (3) 1,000 *
Margaret J. Roell (3) 160,200 *
Dominique de Ziegler (3) 95,000 *
Annick Blondeau (3) 80,000 *
Officers and directors
as a group (10 people) 5,369,132 17.4%
* 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 550,000 shares issuable upon
exercise of options, which are currently exercisable or which may be
acquired within 60 days. Includes 198,062 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
550,000 shares with respect to Mr. Meier, 960,000 shares with respect
to Mr. Buoniconti, 11,000 shares with respect to Mr. Carvais, 74,000
shares with respect to Dr. Kellner, 34,000 shares with respect to Dr.
Nachtigall, 160,000 shares with respect to Ms. Roell, 95,000 shares
with respect to Dr. de Ziegler and 80,000 shares with respect to Dr.
Blondeau.
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<PAGE>
As of August 18, 1997, the following table sets forth information
regarding the number and percentage of Common Stock held by all other 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
---------------- ------------------ ----------------
Strome Susskind Investment
Management, L.P. (1)
100 Wilshire Blvd,
Santa Monica, CA 2,694,185 9.5%
(1) Based on information included on Schedule 13G dated February 13, 1997.
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 four other highest paid
executive officers 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 OPTIONS (1)
- --------------------------- ---- ------ -----------
<S> <C> <C> <C>
Norman M. Meier 1996 $250,000 150,000
President and Chief 1995 218,000 50,000
Executive Officer 1994 180,000 470,000
William J. Bologna 1996 250,000 150,000
Chairman of the Board 1995 218,000 50,000
1994 180,000 470,000
Nicholas A. Buoniconti 1996 200,000 -
Vice Chairman and 1995 167,500 50,000
Chief Operating Officer 1994 135,000 910,000
Margaret J. Roell 1996 135,000 25,000
Vice President - 1995 120,000 15,000
Finance & Administration 1994 120,000 -
Chief Financial Officer
Dominique de Ziegler 1996 203,500 15,000
Vice President- 1995 203,500 25,000
Pharmaceutical 1994 203,500 -
Development
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS DURING 1996
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT
NAME GRANTED IN 1996 ($/SH) DATE VALUE (1)
- ---- ------------ --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Norman M. Meier 150,000 21% $8.06 1/8/2006 $688,935
William J. Bologna 150,000 21% 11.13 8/1/2006 902,190
Nicholas A. Buoniconti - - - - -
Margaret J. Roell 25,000 4% 12.13 10/2/2006 136,385
Dominique de Ziegler 15,000 2% 12.13 10/2/2006 81,831
</TABLE>
(1) 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 equal to the fair market value of the
underlying stock on the date of grant, (ii) an option term of three
years, (iii) an interest rate of 6% that represents the interest rate
on a U.S. Treasury security with a maturity date corresponding to that
of the expected option term, (iv) volatility of 60% 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.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES DURING 1996 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, 1996 DECEMBER 31, 1996
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Norman M. Meier - $ - 520,000 150,000 $5,118,900 $966,000
William J. Bologna - - 520,000 150,000 5,118,900 505,500
Nicholas A. Buoniconti - - 960,000 - 9,541,700 -
Margaret J. Roell - - 125,000 35,000 1,117,250 149,250
Dominique de Ziegler - - 65,000 30,000 544,250 170,550
</TABLE>
EMPLOYMENT AGREEMENTS
In January 1996, the Company entered into five-year employment
agreements with each of William J. Bologna and Norman M. Meier, to serve as
Chairman and President of the Company, respectively. Pursuant to their
respective employment agreements, each such employee is entitled to a base
salary of $250,000. In addition, each such employee was granted options to
purchase 150,000 shares of the Company's Common Stock at exercise prices of
$11.13 and $8.06, respectively. 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.
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 was
originally paid an annual salary of $135,000. As of July 1, 1995, Mr.
Buoniconti's annual salary was increased to $200,000. 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
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<PAGE>
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, the exercise price of the options was reduced to $4.375.
In July 1995, the Company entered into a three-year employment
agreement with Dominique de Ziegler, to serve as director of research
development. Pursuant to this agreement, Dr. de Ziegler is paid an annual salary
of $203,500. As additional compensation, Dr. de Ziegler was granted options to
purchase 25,000 shares of the Company's Common Stock at an exercise price of
$7.25 per share. Pursuant to the terms of such agreement, Dr. de Ziegler 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.
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 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 continuing to
develop compensation policies and 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 to 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. 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 were approximately 20% lower
than the average salaries of a comparative group of companies. The comparative
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. As a result of the study and the continued progress the Company
is making, specifically the signing of the strategic alliance agreement with
American Home Products in May 1995, Messrs. Meier and Bologna's annual salaries
were increased to $250,000 and Mr. Buoniconti's annual salary was increased to
$200,000. No pay raises were received in 1996.
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 1996,
no amounts were awarded for 1996.
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<PAGE>
LONG-TERM INCENTIVE COMPENSATION. Under the 1996 Long-term Incentive
Compensation Plan 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.
As additional compensation, during 1996, Messrs. Meier and Bologna were
each granted options to purchase 150,000 shares of Common Stock at $8.06 and
$11.13 per share, respectively, and Ms. Roell and Dr. de Ziegler were granted
options to purchase 25,000 shares of Common Stock each at $12.13 per share
SECTION 162(M). With certain exceptions, Section 162(m) of the
Code denies a deduction to publicly held corporations for compensation paid to
certain executive officers in excess of $1 million per executive per taxable
year. The Company believes that options granted pursuant to the 1988 Plan should
qualify for a special transition rule which exempts from the deduction
limitations of Section 162(m) compensation paid under certain previously
approved plans. One such exception (the "Exemption") applies to certain
performance-based compensation provided that such compensation has been approved
by stockholders in a separate vote and certain other requirements are met. The
Company believes that Stock Options and SARs as well as Restricted Stock awards
that constitute Performance Based Awards granted under the 1996 Performance Plan
qualify for the Exemption.
COMPENSATION AND STOCK OPTION COMMITTEE
Dr. Irwin L. Kellner, Chairman , Lila E. Nachtigall, M.D. &
Robert S. Strauss
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<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, 1992
in each of the Common Stock, the stocks comprising the Russell Index and the
stocks of the pharmaceutical companies.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Columbia Laboratories, Inc., Russell 2000 Index And Value Line Drugs Index
(Performance Results Through 12/31/96)
[PERFORMANCE GRAPH OMITTED]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
COLUMBIA LABORATORIES, INC. $100.00 $ 66.18 $ 76.38 $ 60.29 $105.88 $170.59
RUSSELL 2000 INDEX $100.00 $118.41 $140.80 $138.01 $177.25 $206.48
DRUGS $100.00 $ 83.06 $ 70.59 $ 83.11 $132.15 $163.66
</TABLE>
Assumes $100 invested at the close of trading 12/91 in Columbia Laboratories,
Inc. common stock, Russell 2000 Index, and Drugs. Cumulative total return
assumes reinvestment of dividends.
Source: Value Line, Inc.
Actual 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.
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<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. The due
dates of these notes have subsequently been extended through December 7, 1999.
There are no interlocks between the Company and any other companies.
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 $900 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, 1996 (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, 1998.
By Order of the Board of Directors
Margaret J. Roell
Secretary
Date: August 25, 1997
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<PAGE>
PROXY
COLUMBIA LABORATORIES, INC.
ANNUAL MEETING OF STOCKHOLDERS-SEPTEMBER 29, 1997
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 August 18, 1997 at the Annual Meeting of Stockholders to be held
on September 29, 1997, 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 below.)
William J. Bologna, Nicholas A. Buoniconti, Norman M. Meier, Jean Carvais,
Irwin L. Kellner, Lila E. Nachtigall, Robert S. Strauss
- --------------------------------------------------------------------------------
Item 2. To ratify the selection of Arthur Andersen LLP as the independent
public accountants for the fiscal year ending December 31, 1997.
[ ] 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 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, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENVELOPE PROVIDED.
