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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB/A
AMENDMENT NO. 1
(Amendment includes a corrected "Environmental Matters"
section to Part I - Item 1 and Part III - Items 10
through 13 in their entirety)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year Commission File
ended December 31, 1996 Number 000-18881
BRADLEY PHARMACEUTICALS, INC.
-----------------------------
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-2581418
-------------------------------- ---------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
383 ROUTE 46 WEST
FAIRFIELD, NEW JERSEY 07004
-------------------------------- ---------------------------
(Address of principal (Zip Code)
executive offices)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(201) 882-1505
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
CLASS A COMMON STOCK, NO PAR VALUE PER SHARE
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein
YES NO X
--- ---
The aggregate market value of the voting stock held by
nonaffiliates of the Registrant as of June 18, 1997 was
approximately $8,776,845.
As of the close of business on June 18, 1997, there were
7,633,657 shares of the Registrant's Class A Common Stock, no par
value per share, and 431,552 shares of the Registrant's Class B
Common Stock, no par value per share, outstanding.
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<PAGE>
RECENT DEVELOPMENTS
-------------------
On June 2, 1997, the Board of Directors of the Company
authorized the issuance of 254,311 shares of Class B Common Stock
(the "Reissued Class B Stock") to Daniel Glassman, the Company's
President and Chief Executive Officer. The Reissued Class B
Stock was issued to Mr. Glassman in consideration for, among
other things, Mr. Glassman's delivery to the Company, for
cancellation, of 254,311 shares of Class A Common Stock of the
Company. The issuance of the Reissued Class B Stock to Mr.
Glassman was the result of the Board of Directors' decision to
restore management status quo following the Board's recently
learning that Mr. Glassman had pledged (the "Pledge"), in April
1995, 254,311 shares of Class B Common Stock then owned by Mr.
Glassman (the "Pledged Shares") to secure certain obligations of
Mr. Glassman to an unaffiliated third party lender. Mr. Glassman
has delivered to the Company a letter in which he states that the
Pledge was an inadvertent error on his part and that had he been
aware of the potential ramifications of the Pledge, he would have
pledged other collateral to secure the obligations in question.
Pursuant to the Company's Certificate of Incorporation,
as amended (the "Charter"), the Pledged Shares automatically
converted into shares of Class A Common Stock upon the Pledge by
Mr. Glassman. Consequently, the number of outstanding shares of
Class B Common Stock following the Pledge was reduced by 254,311
shares. Pursuant to the Charter, holders of the Company's Class
B Common Stock are entitled to elect a majority of the Company's
directors so long as there are at least 325,000 shares of Class B
Common Stock issued and outstanding; otherwise, all holders of
Class A and Class B Common Stock, voting as a single class, are
entitled to elect all of the Company's directors. During
November 1995, and pursuant to matters unrelated to the Pledge,
an aggregate of 428,358 other shares of Class B Common Stock were
returned to, and retired by, the Company. As a result thereof,
the number of outstanding shares of Class B Common Stock fell
below the aforementioned 325,000 share threshold. In light of
the Company's being unaware of the Pledge, holders of the
Company's Class A and Class B Common Stock, voting as separate
classes, elected two directors and three directors, respectively,
at the Company's Annual Stockholders' Meeting held in May 1996
(the "1996 Annual Meeting"), rather than voting together as a
single class to elect all of the Company's directors.
Accordingly, since the 1996 Annual Meeting, only the two
directors of the Company elected by the holders of the Class A
Common Stock (the "Class A Directors") have been duly and validly
elected. Prior to June 3, 1997, the Company's By-Laws stated
that the Company shall have three directors. Since their
election by stockholders at the 1996 Annual Meeting, the two
Class A Directors, each of whom was an independent director,
voted in favor of all matters approved by the Board of Directors.
Prior to the authorization of the issuance of the Reissued Class
B Stock to Mr. Glassman, the Class A Directors appointed David
Hillman, Secretary of the Company, as the third director of the
Company.
Since the issuance of the Reissued Class B Stock to Mr.
Glassman caused the number of issued and outstanding shares of
Class B Common Stock to increase to 431,552 shares (above the
325,000 share threshold set forth in the Company's Charter), the
holders of Class B Common Stock became entitled to elect a
majority (consisting of three) of the Company's directors.
Following the issuance to Mr. Glassman of the Reissued Class B
Stock, the directors of the Company amended the Company's By-Laws
to provide that the Board of Directors shall be comprised of five
persons and the holders of the outstanding Class B Common Stock,
acting separately as a class in accordance with the Company's
Charter, elected, by majority written consent in lieu of a
meeting, Daniel Glassman and Iris S. Glassman as directors of the
Company and David Hillman was designated as a director elected by
the holders of the Class B Common Stock.
At a Special Meeting of Stockholders held in August
1996, it was reported that an amendment (the "Option Plan
Amendment") to the Company's 1990 Stock Option Plan, as amended
(the "Plan"), had been approved by stockholders increasing, from
1,500,000 shares to 2,600,000 shares, the number of shares of
Class A Common Stock authorized for issuance under the Plan.
Given the ramifications of the Pledge, and in particular, that
the 254,311 Class B shares voted in favor of the Option Plan
<PAGE>
Amendment by Mr. Glassman were counted as 1,271,555 votes (giving
effect to the 5:1 voting power attributable to Class B shares)
but should have been counted as only 254,311 shares of Class A
Common Stock voting in favor of the Option Plan Amendment, there
was an insufficient number of shares of Common Stock of the
Company voting to approve the Option Plan Amendment.
Accordingly, the Board of Directors has determined to treat the
Option Plan Amendment as having been rejected by the Company's
stockholders. Options under the Plan to acquire an aggregate of
140,000 shares of Class A Common Stock granted by the Company in
reliance upon the Option Plan Amendment having been approved by
stockholders have been returned voluntarily to the Company by the
relevant optionees for cancellation. As a consequence of
believing, in good faith, that the Option Plan Amendment had been
approved by stockholders, between August 15, 1996 and December
31, 1996, there were outstanding options to acquire under the
Plan in excess of 1,500,000 shares of Class A Common Stock. As a
result of options to acquire an aggregate of 423,354 shares of
Class A Common Stock under the Plan being cancelled during 1996
due to optionees leaving the employ of the Company, there are
outstanding, as of the date of this report, options to acquire an
aggregate of 1,485,365 of Class A Common Stock under the Plan.
PART I
ITEM 1. ENVIRONMENTAL MATTERS
On April 8, 1994, the Company was apprised by the New York
State Department of Environmental Conservation ("NYSDEC") that
Doak's current leased manufacturing facility located on adjoining
parcels at 62 Kinkel Street and 67 Sylvester Street, Westbury,
New York is located in the New Cassel Industrial Area, which has
been designated by the NYSDEC on the Registry of Inactive
Hazardous Waste Sites (the "Registry"). The real property on
which Doak's current manufacturing facility is situated is owned
by and leased to the Company by Dermkraft, Inc., an entity owned
by the former controlling shareholders and officers of Doak.
On February 7, 1995, the Company was apprised by NYSDEC that
the current manufacturing facility will be excluded from the
Registry. By letter dated April 21, 1995, the NYSDEC notified
the Company that it intended to investigate the Company's current
manufacturing facility to determine if hazardous substances had
previously been deposited on that property. By letter dated
October 24, 1995, NYSDEC notified Dermkraft, Inc. that the
Company's current manufacturing facility is included in or near
an inactive hazardous waste site described as "Kinkel and
Sylvester Streets" and that NYSDEC intends to conduct a
Preliminary Site Assessment to study the site and immediate
vicinity. The Company has been advised that NYSDEC has made a
preliminary determination to include the 62 Kinkel Street portion
of the current manufacturing facility on the Registry and that
the 67 Sylvester Street portion of the facility will not be
included, but those determinations could change before they are
finalized. Thereafter, by letter dated May 3, 1996 and addressed
to Dermkraft, Inc., the NYSDEC notified Dermkraft that the site
at 62 Kinkel street has been listed on the Registry due to the
presence of trichloroethylene ("TCE") in soils and groundwater
due to the use of TCE by LAKA Tools and Stamping and LAKA
Industries, a former tenant from 1971 through 1984. The NYSDEC
documents refer to Doak Dermatologics as the current tenant but
do not refer to any activities of Doak Dermatologics or the
Company as a basis for the listing in the Registry. The Company
cannot at this time determine whether the cost associated with
the investigation and required remediation, if any, of the
current manufacturing facility will be material. With respect to
the former manufacturing facility on Magnolia Avenue, which
remains designated by the NYSDEC as part of the Registry,
management believes that Doak will not be obligated to contribute
to any remediation costs, if any are required.
-2-
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are
as follows:
Age Position(s)
--- -----------
Daniel Glassman 55 Chairman of the Board,
President and Chief Executive
Officer
Albert Fleischner, Ph.D. 56 Vice President,
Pharmaceutical Research and
Development
Alan V. Gallantar 39 Senior Vice President -
Director of Corporate
Planning and Development
Iris S. Glassman 54 Treasurer and Director
Gene Goldberg 59 Senior Vice President -
Marketing & Business Planning
David Hillman 56 Secretary and Director
Lawrence Lenz 50 Vice President - Finance and
Chief Financial Officer
Dr. Philip McGinn 71 Director
MaryKay Scucci 38 Chief Operating Officer -
Doak Dermatologics, Inc.
Alan G. Wolin, Ph.D. 64 Director
Daniel Glassman is the founder of the Company and has
served as its Chief Executive Officer since the Company's
inception in January 1985. Mr. Glassman has also served as the
Company's Chairman of the Board from January 1985 through April
1995 and from June 2, 1997 through the date of this report. Mr.
Glassman has also served as President of the Company since
February 1991. Mr. Glassman, a registered pharmacist, is also
Chairman of the Board of Banyan Communications Group, Inc., a
communications company controlled by Mr. Glassman ("Banyan").
Banyan encompasses two marketing research organizations (Danis
Research and Hospital Research Associates) and an advertising
agency (Daniel Glassman Advertising). Mr. Glassman has operated
these companies for more than the last eighteen years. Mr.
Glassman was previously Vice President for Client Services for
Medicus Communications, Inc., where he directed marketing
programs for pharmaceutical companies such as Procter & Gamble,
Rorer, Schering-Plough Corporation, and Merrill-Dow, Inc. Mr.
Glassman is the husband of Iris Glassman, the Treasurer and a
director of the Company. Mr. Glassman is also Chairman of the
Board, President and Chief Executive Officer of Doak, Bradley
Pharmaceuticals (Canada), Inc. and Bradley Pharmaceuticals,
Overseas, Ltd., Inc., each a subsidiary of the Company.
Iris S. Glassman has served as Treasurer of the Company
since its inception in 1985. Mrs. Glassman has also served as a
director of the Company from January 1985 through April 1995 and
from June 2, 1997 through the date of this report. Mrs. Glassman
is the wife of Daniel Glassman and has fifteen years of
diversified administrative and financial management experience,
including serving in the capacity of Secretary of Banyan.
-3-
<PAGE>
Albert Fleischner, Ph.D. has served as Vice President,
Pharmaceutical Research and Development of the Company since
August 1994. From 1988 to 1994, Dr. Fleischner served as
Director, Pharmaceutics and Chemical Process Development, at
Roberts Pharmaceuticals Corp., a New Jersey based pharmaceuticals
company. Prior thereto, Dr. Fleischner served in research and
development positions with Ford Laboratories and Schering-Plough
Corporation. Dr. Fleischner also owned and operated Fleischner
Pharmacies, a community drug chain of four stores from June 1963
to April 1973.
Alan V. Gallantar, a certified public accountant, has
served as Senior Vice President - Director of Corporate Planning
and Development of the Company since May 1, 1997. From January
1994 through April 30, 1997, Mr. Gallantar served as Chief
Financial Officer of the Company and from September 1992 through
January 1994, Mr. Gallantar served as Controller of the Company.
From 1991 to 1992, Mr. Gallantar served as a financial consultant
to the Company. From 1989 to 1991, Mr. Gallantar served as a
Divisional Controller for Paine Webber, Inc. and prior thereto in
several financial positions with Chase Manhattan Bank, N.A.,
Philip Morris Inc. and Deloitte & Touche.
Gene L. Goldberg has served as Senior Vice President -
Marketing and Business Planning of the Company since January 1,
1997. For more than the past five years, Mr. Goldberg has also
served as Executive Vice President of Daniel Glassman
Advertising, a division of Banyan.
David Hillman has served as Secretary of the Company
since 1985 and as a director of the Company from January 1990
through April 1995 and from April 29, 1997 through the date of
this report. For more than the past five years, Mr. Hillman has
also served as a director of Banyan and since 1990, as President
of Banyan's Health Care Division and Treasurer of Banyan. Mr.
Hillman, a registered pharmacist, has also served as President of
Hospital Research Associates, a division of Banyan engaged in the
business of conducting market research for the pharmaceutical
industry since 1983. Mr. Hillman has over sixteen years of
market research, sales and marketing experience, including
product group manager for Lederle Laboratories.
Lawrence Lenz has served as Chief Financial Officer and
Vice President - Finance of the Company since May 1, 1997 and
February 11, 1997, respectively. For more than 16 years prior
thereto, Mr. Lenz served as Vice President of C.M. Offray & Sons,
Inc., a New Jersey based manufacturer and distributor of ribbons.
Prior to his affiliation with C.M. Ofray & Sons, Inc., Mr. Lenz
served as Senior Financial Manager of General Foods.
Dr. Philip McGinn has served as a director of the
Company since December 1996. Since 1984, Dr. McGinn has also
served as President of Worldwide Marketing and Translation
Services, Inc., a New Jersey based company providing consulting
services in new product and company acquisitions, marketing,
market analysis, promotional planning, sales training, management
development and business, educational and translation services.
Dr. McGinn also served as Associate Dean, School of Health
Professions, Long Island University from 1990 to 1996.
Alan G. Wolin, Ph. D., has served as a director of the
Company since May 12, 1997. Since 1988, Dr. Wolin has served as
an independent consultant to various companies in the food, drug
and cosmetic industries. Between 1962 and 1987, Dr. Wolin served
M&M/Mars, the world's largest candy company, in various
capacities, including Director of Consumer Quality Assurance and
Quality Coordination. In his capacity as Director of Consumer
Quality Assurance and Quality Coordination, Dr. Wolin was
responsible for ensuring consumer quality and public health
issues relating to M&M/Mars' products.
-4-
<PAGE>
MaryKay Scucci has served as Chief Operating Officer of
the Company's Doak Dermatologics, Inc. subsidiary since January
1997. For more than five years prior thereto, Ms. Scucci held
several senior executive positions with Schering Berlin, Inc. and
its Berlex and Berlichem operating subsidiaries. Schering
Berlin, Inc. is the United States holding company of Schering,
AG, a multibillion dollar international organization.
Directors of the Company are scheduled to hold office
until the next Annual Meeting of Stockholders of the Company and
until their respective successors shall have been duly elected
and qualified.
Significant Employees
---------------------
Gene Carpenter has served as Regional Sales Director of
the Company since January 1994. From May 1988 through December
1993, Mr. Carpenter served as National Sales Manager of Poly
Pharmaceuticals, Inc., a Mississippi based pharmaceutical
company. Prior thereto, Mr. Carpenter served as Regional Sales
Manager of Savage Laboratories, Inc., Houston, Texas.
Robert Corbo has served as Quality Assurance/Control
Director of the Company since March 1993. From 1989 to 1993, Mr.
Corbo served as Quality Assurance/Control manager for Par
Pharmaceuticals, a New York based generic pharmaceutical
manufacturer.
Brian Newby has served as Controller of the Company
since June 1997. From April 1994 to June 1997, Mr. Newby served
as the Company's in-house accountant. From July 1991 to April
1994, Mr. Newby served as Controller for Wilpage Medical, a
Caldwell, New Jersey based medical company.
Glenn Wilson has served as plant supervisor at the
Company's Doak Dermatologics, Inc. subsidiary since April 1994.
From 1990 to 1994, Mr. Wilson served as production manager for
Gemini Pharmaceuticals, a New York based pharmaceutical company.
Maurice Woosley has served as President and Vice
President of the Company's international division since January
1997. From May 1996 to December 1996, Mr. Woosley served as Vice
President of the Company's international division. From November
1994 to April 1996, Mr. Woosley served as Worldwide Marketing
Director of Datascope, Inc., a New Jersey based medical device
manufacturer. From September 1990 to October 1994, Mr. Woosley
served as Global Marketing Director for Davis & Geck, a New
Jersey based medical product manufacturer.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
As a consequence of the Pledge, Daniel Glassman, the
Company's President, Chairman of the Board and Chief Executive
Officer, may be deemed to have failed to file a Form 4 in May
1995 disclosing the Pledge and its ramifications (while the
Pledge resulted in shares of Class B Common Stock being converted
into shares of Class A Common Stock, it did not result in any
increase or decrease in the total number of shares of capital
stock outstanding). Each subsequently filed Form 4 by Mr.
Glassman (Form 4's were filed in each month from May 1995 through
December 1995, in January, April, June, July, August, October,
November and December 1996 and in January, February and March
1997) failed to take into account or give effect to the Pledge.
Mr. Glassman has advised the Company that he will amend each of
his Form 4 filings since the Pledge to appropriately disclose and
give effect to the Pledge.
To the Company's knowledge, none of the Company's other
directors, executive officers or beneficial owners of 10% or more
of any class of equity securities of the Company registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), failed to file, on a timely basis,
any reports required by Section 16(a) of the Exchange Act during
Fiscal 1996.
-5-
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
Summary Compensation Table
--------------------------
The following table shows all the cash compensation
paid by the Company, as well as certain other compensation paid
or accrued during the fiscal years ended December 31, 1996, 1995
and 1994, to Daniel Glassman, the Company's President and Chief
Executive Officer, and Alan V. Gallantar, who served as the
Company's Corporate Vice President and Chief Financial Officer
during the fiscal years ended December 31, 1996, 1995 and 1994.
No other executive officer of the Company earned total annual
salary and bonus for Fiscal 1996 in all capacities in which such
person served the Company in excess of $100,000. There were no
restricted stock awards, long-term incentive plan payouts or
other compensation paid during Fiscal 1996 to the executive
officers named in the following table except as set forth below:
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------
NAME AND SECURITIES
PRINCIPAL UNDERLYING
POSITION YEAR SALARY BONUS OPTIONS(1)
-------- ---- ------ ----- ----------
Daniel Glassman 1996 $122,500 -0- 404,500(3)
President and 1995 $ 75,200 -0- 359,589(4)
Chief Executive 1994 $ 67,000 -0- 300,000
Officer
Alan V. 1996 $118,600 -0- 44,000(5)
Gallantar
Corporate 1995 $ 54,000 -0- -0-
Vice President
and
Chief Financial 1994 $ 32,900 -0- 23,000
Officer(2)
-----------------
(1) All of these options are exercisable into shares of Class A
Common Stock.
(2) Mr. Gallantar was promoted to the office of Senior Vice
President - Director of Corporate Planning and Development
of the Company on May 1, 1997. Mr. Gallantar ceased serving
as the Company's Corporate Vice President and Chief
Financial Officer as of May 1, 1997.
(3) Of these shares, 31,500 shares underlie options granted on
December 5, 1996 to replace a like number of options
previously granted to Mr. Glassman which expired by their
terms. These options are exercisable at any time prior to
December 4, 2001 at an exercise price of $0.825 per share,
110% of the fair market value for shares of Class A Common
Stock on the date of grant. The remaining 373,000 shares
underlie options which were repriced by the Company on April
18, 1996. These repriced options vest at various times
through 1998 and are exercisable at various times through
2000 at an exercise price of approximately $1.44 per share,
110% of the fair market value for shares of Class A Common
Stock on the date of repricing. See "Report on Repricing of
Options" below.
(4) Of these shares, 341,589 shares underlie options granted on
December 5, 1995. These options are exercisable at any time
prior to December 4, 2000 at an exercise price of $1.16875
per share, 110% of the fair market value for shares of Class
A Common Stock on the date of grant. These options were
granted by agreement with the Company in consideration for
Mr. Glassman's agreement to retire 341,589 shares of Class B
Common Stock previously distributed to him. The remaining
18,000 shares underlie options granted on September 12,
1995, which options expire during 2000 and vest in equal,
one third increments in 1996, 1997 and 1998. The exercise
price for these 18,000 options was originally $3.7125 per
share, approximately 110% of the fair market value for
shares of Class A Common Stock on the original date of
grant. These 18,000 options comprise a portion of the
373,000 options owned by Mr. Glassman which were repriced by
the Company on April 18, 1996. See "Report on Repricing of
Options" below.
(5) These shares underlie options which were repriced by the
Company on February 21, 1996. These repriced options (of
which approximately 86% have already vested) vest at various
times through December 30, 1997 and are exercisable at an
exercise price of $1.47 per share, the fair market value for
shares of Class A Common Stock on the date of repricing.
See "Report on Repricing of Options" below.
-6-
<PAGE>
Option Grants in Fiscal 1996
----------------------------
The following table sets forth information concerning
outstanding options to purchase shares of the Company's Class A
Common Stock granted during Fiscal 1996 by the Company to Daniel
Glassman, the only executive officer of the Company granted
options during Fiscal 1996. Neither options to purchase shares
of Class B Common Stock nor stock appreciation rights were
granted by the Company during Fiscal 1996. The exercise prices
for all options reported below are not less than 110% of the per
share market prices for Class A Common Stock on their dates of
grant.
INDIVIDUAL GRANTS
-----------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED 1996(1) ($/SH) DATE
---- ---------- ---------- -------- ----------
Daniel 31,500 3.94% $0.825 12/04/01
Glassman 373,000(2) 46.70% $1.440 12/04/00
-------------------
(1) This figure includes 533,320 options previously granted to
employees which, at the election of the employee/optionees,
were repriced during Fiscal 1996.
(2) These shares underlie options that were repriced by the
Company on April 18, 1996. See "Report on Repricing of
Options" below.
Aggregated Option Exercises in Fiscal 1996 and
Fiscal Year-End Option Values
----------------------------------------------
The following table presents the value, on an aggregate
basis, as of December 31, 1996, of outstanding stock options held
by the executive officers of the Company listed in the Summary
Compensation Table above. No stock options were exercised by the
executive officers listed below during Fiscal 1996.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
---------------------- ---------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Daniel 634,089 112,000 $64,646 $ -0-
Glassman
Alan V. 36,333 7,667 $ -0- $ -0-
Gallantar
---------------------
(1) Based on the closing sale price of $1.313 per share of Class A
Common Stock on December 31, 1996, as reported by NASDAQ.
Employment Contracts and
Termination of Employment and Change-in-Control Arrangements
------------------------------------------------------------
The Company does not have any employment contracts or
termination of employment or change-in-control arrangements with
any of its executive officers.
-7-
<PAGE>
Compensation of Directors
-------------------------
Directors who are not officers or employees of the
Company receive a director's fee of $600 for each meeting of the
Board of Directors, or a committee thereof, attended by such
director, plus out-of-pocket costs. Directors who are also
officers or employees of the Company receive no additional
compensation for their services as directors.
On December 5, 1996, concurrently with Dr. Philip
McGinn's appointment as a director of the Company, Dr. McGinn was
granted options to purchase up to 15,000 shares of Class A Common
Stock of the Company. These options vest in three equal and
annual installments commencing on December 5, 1997 and expire on
December 4, 2006. These options are exercisable at $0.6875 per
share (the fair market value per share of Class A Common Stock as
of the date of grant).
On January 5, 1996, Mr. David Hillman was granted
options to purchase up to 53,568 shares of Class A Common Stock
of the Company at an exercise price of $1.1875 per share (the
fair market value per share of Class A Common Stock as of the
date of grant). These options vested immediately and expire
January 4, 2006. These options were granted by agreement with
the Company in consideration for Mr. Hillman's agreement to
retire 53,568 shares of Class B Common Stock previously owned by
him.
Report on Repricing of Options
------------------------------
On February 16, 1996, the Board of Directors of the
Company agreed to reprice all outstanding stock options
(consisting solely of options outstanding under the Company's
1990 Stock Option Plan, as amended) so that the exercise price of
such options would be recast to be the closing price of the
Company's Class A Stock as published in The Wall Street Journal
-----------------------
on the day the stock options were returned to the Company, if
such options were returned prior to 1:00 p.m., or the next days'
closing price as published in The Wall Street Journal if such
-----------------------
options were returned after 1:00 p.m. This repricing concluded
on June 30, 1996. The weighted average exercise price of all
repriced options (after giving effect to the repricing) was
approximately $1.46. This repricing (during a period when the
Company's Board of Directors determined that the Company's stock
price was depressed) was authorized by the Board of Directors to
provide, among other things, an incentive for the Company's
associates and consultants to share in the Company's future
growth and remain with the Company.
The following table sets forth certain information
regarding options that were repriced by the executive officers of
the Company listed in the Summary Compensation Table above and
the directors of the Company.
WEIGHTED WEIGHTED
AVERAGE AVERAGE
NUMBER OF EXERCISE PRICE PRICE
OPTIONS BEFORE AFTER
OPTIONEE REPRICED REPRICING REPRICING
-------- ---------- -------------- -----------
Daniel Glassman 373,000 $3.72 $1.44
Alan V. 44,000 $2.72 $1.47
Gallantar
Iris S. Glassman 145,192 $3.41 $1.31
David Hillman 28,750 $3.17 $1.54
Alan G. Wolin 2,300 $3.09 $1.69
-8-
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information as
of June 18, 1997, regarding the ownership of the Company's Class
A and Class B Common Stock by (i) each director of the Company,
(ii) the executive officers of the Company named in the Summary
Compensation Table set forth elsewhere in this Annual Report on
Form 10-KSB, (iii) each beneficial owner of more than five
percent of the Class A and Class B Common Stock of the Company
known by management and (iv) all directors and executive officers
of the Company, as a group, and the percentage of outstanding
shares of Class A and Class B Common Stock beneficially held by
them on that date.
Since each share of Class B Common Stock may be
converted at any time by the holder into one share of Class A
Common Stock, the beneficial ownership rules promulgated under
the Securities Exchange Act of 1934, as amended, require that all
shares of Class A Common Stock issuable upon the conversion of
Class B Common Stock by any stockholder be included in
determining the number of shares and percentage of Class A Common
Stock held by such stockholder.
AMOUNT AND NATURE OF
BENEFICIAL
OWNER(1)(2) PERCENT OF CLASS(2)
---------------------- ---------------------
CLASS A CLASS B CLASS A CLASS B
NAME OF ADDRESS OF COMMON COMMON COMMON COMMON
BENEFICIAL OWNER STOCK STOCK STOCK STOCK
------------------ ----------- ---------- ---------- ----------
Daniel Glassman 1,070,621(3) 311,736(4) 12.42% 72.24%
383 Route 46 West
Fairfield, NJ
Iris S. Glassman 208,607(5) 37,283(6) 2.67% 8.64%
383 Route 46 West
Fairfield, NJ
David Hillman 132,183(7) 43,610 1.71% 10.11%
383 Route 46 West
Fairfield, NJ
Phillip McGinn -0- -0- - -
383 Route 46 West
Fairfield, NJ
Alan G. Wolin 54,902(8) -0- * -
383 Route 46 West
Fairfield, NJ
Alan V. Gallantar 63,100(9) -0- * -
383 Route 46 West
Fairfield, NJ
Berlex 1,000,000 -0- 13.11% -
Laboratories, Inc.
110 East Hanover
Avenue
Cedar Knolls, NJ
All executive 1,645,419(3) 402,821(4) 22.67% 93.34%
officers and (4)(5) (6)
directors as a (6)(7)
group (10 (8)(9)
persons) (10)
----------------------------
* Represents less than one percent. (Footnotes appear on next page)
-9-
<PAGE>
(1) Unless otherwise indicated, the stockholders identified in
this table have sole voting and investment power with
respect to the shares beneficially owned by them.
(2) Each named person and all executive officers and directors,
as a group, are deemed to be the beneficial owners of
securities that may be acquired within 60 days through the
exercise of options, warrants or exchange or conversion
rights. Accordingly, the number of shares and percentage
set forth opposite each stockholder's name under the columns
"Class A Common Stock" includes shares of Class A Common
Stock issuable upon exercise of presently exercisable
warrants and stock options and shares of Class A Common
Stock issuable upon conversion of shares of Class B Common
Stock. The shares of Class A Common Stock so issuable upon
such exercise, exchange or conversion by any such
stockholder are not included in calculating the number of
shares or percentage of Class A Common Stock beneficially
owned by any other stockholder.
(3) Includes 311,736 shares issuable upon conversion of a like
number of shares of Class B Common Stock. Of these shares,
64,096 shares are owned indirectly by Mr. Glassman through
affiliates and 684,089 shares underlie presently exercisable
options owned by Mr. Glassman. Mr. Glassman's affiliates
have disclaimed beneficial ownership over all of these
shares. Mr. Glassman disclaims beneficial ownership over
shares and options owned by his wife, Iris S. Glassman.
(4) Includes 26,098 shares owned indirectly by Mr. Glassman
through affiliates. Mr. Glassman's affiliates have
disclaimed beneficial ownership over these shares. Does not
include 16,403 shares beneficially owned by Iris S.
Glassman, Mr. Glassman's wife.
(5) Includes 37,283 shares issuable upon conversion of a like
number of shares of Class B Common Stock, 6,700 shares owned
indirectly by Mrs. Glassman through affiliates, 25,220
shares owned indirectly by Mrs. Glassman as trustee for her
children's trusts and 139,404 shares underlying presently
exercisable options. Mrs. Glassman disclaims beneficial
ownership over all shares beneficially owned by her husband,
Daniel Glassman.
(6) Includes 20,880 shares owned indirectly by Mrs. Glassman as
trustee for the Bradley Glassman 1995 Trust. Mrs. Glassman
disclaims beneficial ownership over all shares of Class B
Common Stock beneficially owned by her husband, Daniel
Glassman.
(7) Includes 43,610 shares issuable upon conversion of a like
number of shares of Class B Common Stock, 1,780 shares owned
indirectly by Mr. Hillman through an affiliate and 80,318
shares underlying presently exercisable options. Mr.
Hillman's affiliate has disclaimed beneficial ownership over
shares owned by it.
(8) Includes 2,300 shares underlying presently exercisable
options and 1,800 shares owned indirectly by Dr. Wolin
through affiliates.
(9) Includes 38,000 shares underlying presently exercisable
options and 25,000 shares owned indirectly by Mr. Gallantar
through an affiliate.
(10) Includes 55,380 shares underlying presently exercisable options
owned by two executive officers.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During Fiscal 1996 and 1995, the Company received
administrative support services (consisting principally of
advertising services, mailing, copying, data processing and other
office service) which were charged to operations from Banyan, an
affiliated company controlled by Daniel Glassman, the President
and Chief Executive Officer of the Company, amounting to
approximately $280,000 and $517,000, respectively. During Fiscal
1996 and Fiscal 1995, the Company paid Banyan $291,000, and
$440,000, respectively, for such services. At December 31, 1996,
$11,000 was due the Company from Banyan. At December 31, 1995,
there were no outstanding balances between the Company and
Banyan.
On December 31, 1990, the Company issued a promissory
note in the amount of $123,975 for the cumulative amounts of
previously issued demand loans made to the Company by Mr.
Glassman. This note was satisfied in its entirety in 1995.
In connection with the Company's satisfaction in June
1996 of the $1.87 million current liability then owning to
Berlex, the Company borrowed $100,000 from various trusts
established for the benefit of the children of Mr. Glassman and
Iris S. Glassman, Mr. Glassman's wife and Treasurer and a
Director of the Company. This $100,000 loan was repaid on
September 30, 1996 together with accrued interest at the rate of
16% per annum (approximately $4,100).
The Company rents its Fairfield, New Jersey operating
facility from Daniel Glassman and Iris S. Glassman pursuant to a
lease expiring on July 31, 1997. This lease is renewable, at the
-10-
<PAGE>
option of the Company, for an additional one year term at a base
rent of $178,296 per annum. Rent expense, including an allocated
portion of real estate taxes, was approximately $176,000 and
$173,000, respectively, for Fiscal 1996 and Fiscal 1995.
During Fiscal 1996 and Fiscal 1995, Daniel Glassman,
the Company's President and Chief Executive Officer also served
as Chief Executive Officer of Banyan. As such, Mr. Glassman
allocated a portion of his working time to the business of each
of the Company and Banyan (Mr. Glassman estimates that less than
5% of his time is spent on Banyan business). During Fiscal 1996
and Fiscal 1995, Mr. Glassman received compensation from the
Company and Banyan.
During Fiscal 1996 and Fiscal 1995, Alan V. Gallantar,
the Company's then Chief Financial Officer (and current Senior
Vice President and Director - Corporate Planning and Development)
also served as Chief Financial Officer of Banyan. As such, Mr.
Gallantar allocated a portion of his working time to the business
of each of the Company and Banyan (Mr. Gallantar estimates that
less than 5% of his time was spent on Banyan business). During
Fiscal 1995, renumeration paid to Mr. Gallantar by the Company
and Banyan was approximately $54,000 and $74,000, respectively.
The Company reimbursed Banyan for the costs of Mr. Gallantar's
services. Effective January 1, 1996, Mr. Gallantar began
deriving his compensation solely from the Company.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a) See Index to Financial Statements and Schedules on Page
F-1.
(b) During the fourth quarter of Fiscal 1996, the Company
filed the following Current Reports on Form 8-K with
respect to the items and financial statements listed
below:
Date of Report Items Responded To Financial Statements
-------------- ------------------ --------------------
Filed
-----
September 30, 1996 Item 1 None
December 23, 1996 Item 5 None
(c) Exhibits
Exhibit
Number Description of Document
-------- -----------------------
3.1 Certificate of Incorporation of the Company, as
amended
3.2 By-laws of the Registrant, as amended
4.1 Placement Agent's Unit Purchase Option (Incorporated
by reference to Exhibit 4.5 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1993)
10.1 1990 Stock Option Plan, as amended
10.2 Form of 11% Subordinated Note dated June 14, 1990
(Incorporated by reference to exhibit 10.6 to the
Company's Registration Statement on Form S-1,
Registration No. 33-36120)
10.3 Asset Purchase Agreement between the Company and
Hoechst Roussel Pharmaceuticals Incorporated
(Incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1,
Registration No. 33-36120)
10.4 Asset Purchase Agreement dated December 15, 1992
between the Company, Upsher Smith and Kenneth
Evenstad (Incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K for an
event dated December 15, 1992)
-11-
<PAGE>
10.5 Manufacturing Agreement dated December 15, 1992
between the Company, Upsher Smith and Kenneth
Evenstad (Incorporated by reference to Exhibit 10.2
to the Company's Current Report on Form 8-K for an
event dated December 15, 1992)
10.6 Asset Purchase Agreement dated March 30, 1993 between
the Company and Tsumura Medical Inc. (Incorporated by
reference to Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1992)
10.7 Trademark Security Agreement dated March 30, 1993
between the Company and Tsumura International Inc.
(Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1993)
10.8 Purchase Agreement dated November 10, 1993 between
Berlex and the Company, as amended by Amendments
Numbers One and Two thereto, dated November 19, 1993
and December 9, 1993, respectively (Incorporated by
reference to Exhibits 10.1 through 10.3 to the
Company's Current Report on Form 8-K for an event
dated December 10, 1993)
10.9 Trademark Security Agreement dated December 9, 1993
between Berlex and the Company (Incorporated by
reference to Exhibit 10.4 to the Company's Current
Report on Form 8-K for an event dated December 10,
1993)
10.10 Supply and Distribution Agreement dated December 9,
1993 between Berlex and the Company (Incorporated by
reference to Exhibit 10.5 to the Company's Current
Report on Form 8-K for an event dated December 10,
1993)
10.11 Stock Purchase Agreement dated as of January 31, 1994
among the Company, Doak and the Krafchuks
(Incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K for an event
dated February 14, 1994)
10.12 Form of Plan of Merger dated as of January 31, 1994
between Doak and BP (Incorporated by reference to
Exhibit 10.2 to the Company's Current Report on Form
8-K for an event dated February 14, 1994)
10.13 Consulting Agreement dated as of January 31, 1994
between the Company and Dr. Krafchuk (Incorporated by
references to Exhibit 10.3 to the Company's Current
Report on form 8-K for an event dated February 14,
1994)
10.14 Consulting Agreement dated as of January 31, 1994
between the Company and Mrs. Krafchuk (Incorporated
by reference to Exhibit 10.4 to the Company's Current
Report on Form 8-K for an event dated February 14,
1994)
10.15 Lease Modification Agreement dated as of February
1994 between Dermkraft, Inc, and Doak (Incorporated
by reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K for an event dated February 14,
1994)
10.16 Purchase and Assignment Agreement between Upjohn and
the Company. (Incorporated by reference to Exhibit
10.21 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
10.17 Amendment No. 4 dated January 6, 1996 to the Asset
Purchase Agreement dated November 10, 1993 between
Berlex Laboratories, Inc. and the Company
(Incorporated by reference to Exhibit 10.1 to the
Company's current Report on Form 8-K for an event
dated January 5, 1996)
10.18 Security Agreement, dated as of January 5, 1995,
between the Company and Berlex Laboratories, Inc.
(Incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K for an event
dated January 5, 1996)
-12-
<PAGE>
10.19 Amendment to Trademark Security Agreement, dated as
of January 5, 1995, between the Company and Berlex
Laboratories, Inc. (Incorporated by reference to
Exhibit 10.3 to the Company's Current Report on Form
8-K for an event dated January 5, 1996)
10.20 Settlement Agreement, dated as of September 30, 1996,
among the Company, Stiefel Canada, Inc., Trans
CanaDern, Inc. and Louis Vogel et. al. (Incorporated
by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K for an event dated September 30,
1996)
10.21 Amendment No. 5 dated as of December 23, 1996, to
Asset Purchase Agreement between the Company and
Berlex (Incorporated by reference to Exhibit 10.1 to
the Company's Current Report on Form 8-K for an event
dated December 23, 1996).
10.22 Security Agreement and subsidiary Security Agreement,
dated as of December 23, 1996, among Doak
Dermatologics, Inc. and Berlex (Incorporated by
reference to Exhibit 10.2 to the Company's Current
Report on Form 8-K for an event dated December 23,
1996).
10.23 Confession of Judgement from the Company and Doak
Dermatologics, Inc. with respect to the March 1997
payment (Incorporated by reference to Exhibit 10.3 to
the Company's Current Report on Form 8-K for an event
dated December 23, 1996).
11.1 Statement Regarding Computation of Per Share Income
21.1 Subsidiaries of the Registrant
-13-
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has duly
caused this Amendment No. 1 to Form 10-KSB/A to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: June 27, 1997 BRADLEY PHARMACEUTICALS, INC.
By: /s/ Daniel Glassman
---------------------------
Daniel Glassman, President
-14-
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
3.1 Certificate of Incorporation of the Company, as
amended
3.2 By-laws of the Registrant, as amended
10.1 1990 Stock Option Plan, as amended
11.1 Statement Regarding Computation of Per Share Income
21.1 Subsidiaries of the Registrant
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
BRADLEY PHARMACEUTICALS, INC.
TO: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2 and Section 14A:9-4
of the New Jersey Business Corporation Act, the undersigned
officers of BRADLEY PHARMACEUTICALS, INC. (the "Corporation"), a
Corporation of the State of New Jersey, execute the following
Certificate of Amendment of the Corporation's Certificate of
Incorporation:
1. The name of the Corporation is BRADLEY PHARMACEUTICALS, INC.
2. The Certificate of Incorporation was filed in the office of
the New Jersey Secretary of State on January 9, 1985.
3. Article III of the Certificate of Incorporation is amended
to read as follows:
"The Corporation is authorized to issue Two Thousand Five
Hundred (2,500) shares of capital stock without nominal or
par value."
4. One Hundred (100) shares are entitled to vote on the
Amendment. One Hundred (100) shares voted for the Amendment
and Zero (0) shares voted against the Amendment.
IN WITNESS WHEREOF, the President and Secretary of the above
named Corporation have executed this Certificate of Amendment.
ATTEST:
/s/ Iris Glassman /s/ Daniel Glassman
------------------------- -------------------------
IRIS GLASSMAN, DANIEL GLASSMAN,
Secretary President
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
BRADLEY PHARMACEUTICALS, INC.
TO: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2 and Section 14A:9-4
of the New Jersey Business Corporation Act, the undersigned
officer of BRADLEY PHARMACEUTICALS, INC. (the "Corporation"), a
corporation of the State of New Jersey, executes the following
Certificate of Amendment to the Corporation's Certificate of
Incorporation and certifies as follows:
1. The name of the Corporation is BRADLEY
PHARMACEUTICALS, INC.
2. The Certificate of Incorporation of the
Corporation was filed in the office of the New Jersey Secretary
of State on January 9, 1985 and was amended on March 6, 1990.
3. Paragraphs 1, 2, 3(ii), 4 and 5 of Article III of
the Certificate of Incorporation are amended to read as follows:
"1. The Corporation shall have the authority, to
be exercised by the Board of Directors, to issue twenty
seven million, three hundred thousand (27,300,000)
shares of Common Stock, each share having no par value,
and two million (2,000,000) shares of Preferred Stock,
each share having no par value."
"2. The authorized shares of Common Stock of the
Corporation shall be divided into two classes, of which
twenty six million, four hundred thousand (26,400,000)
shares shall be designated Class A Common Stock and
nine hundred thousand (900,000) shares shall be
designated Class B Common Stock."
"3. The rights, preferences and limitations of
the Class A Common Stock and the Class B Common Stock
shall be equal and identical in all respects except
that, unless otherwise provided by law:
(ii) holders of Class A Common Stock and holders of
Class B Stock shall vote together as a single
class upon any and all matters submitted to the
shareholders of the Corporation for a vote,
provided, however, that holders of Class A Common
Stock and holders of Class B Common Stock shall
vote as two separate classes to authorize any
proposed amendment to the Corporation's
Certificate of Incorporation that amends, restates
or repeals this Article III, Section 3 or has the
effect of an amendment, restatement or repeal, and
provided, further, that, notwithstanding anything
to the contrary contained herein, so long as there
are at least three hundred twenty-five thousand
(325,000) shares of Class B Common Stock issued
and outstanding, the holders of Class B Common
Stock shall vote as a separate class to elect a
majority (consisting of the sum of one plus one-
half of the total number of directors) of the
directors of the Corporation (who shall be known
as 'Class B Directors'), to remove any Class B
Director with or without cause at any time and to
fill all vacancies among Class B Directors, and
the holders of Class A Common Stock and voting
Preferred Stock, if any, shall vote together as a
single class to elect the remainder of the
directors of the Corporation (who shall be known
as 'Class A Directors'), to remove any Class A
Director with or without cause at any time and to
fill all vacancies among Class A Directors."
4. Upon the filing of this Amendment, each
outstanding share of the Common Stock of the Corporation shall be
reclassified as one-fourth (1/4) share of Common Stock,
reflecting a one-for-four reverse stock split.
5. Three million six hundred thousand (3,600,000)
shares were entitled to vote on the Amendment, a majority of
which shares voted for the Amendment and none of which shares
voted against the Amendment. The foregoing Amendment was adopted
by the shareholders of the Corporation on October 23, 1991 by
written consent.
IN WITNESS WHEREOF, the Chairman of the Board of the
above named Corporation has executed this Certificate of
Amendment this 24th day of October, 1991 and certifies that the
statements made herein are true under penalties of perjury.
/s/ Daniel Glassman
---------------------------
Daniel Glassman,
Chairman of the Board
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
BRADLEY PHARMACEUTICALS, INC.
TO: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2 and Section 14A:9-4
of the New Jersey Business Corporation Act, the undersigned
officer of BRADLEY PHARMACEUTICALS, INC. (the "Corporation"), a
corporation of the State of New Jersey, executes the following
Certificate of Amendment to the Corporation's Certificate of
Incorporation and certifies as follows:
1. The name of the Corporation is BRADLEY
PHARMACEUTICALS, INC.
2. The Certificate of Incorporation of the
Corporation was filed in the office of the New Jersey Secretary
of State on January 9, 1985.
3. Article III of the Certificate of Incorporation is
amended to read as follows:
"1. The Corporation shall have the authority, to be
exercised by the Board of Directors, to issue Thirty Million
(30,000,000) shares of Common Stock, each share having no
par value, and Two Million (2,000,000) shares of Preferred
Stock, each share having no par value.
2. The authorized shares of Common Stock of the
Corporation shall be divided into two classes, of which
twenty six million four hundred thousand (26,400,000) shares
shall be designated Class A Common Stock and three million
six hundred thousand (3,600,000) shares shall be designated
Class B Common Stock.
3. The rights, preferences and limitations of the
Class A Common Stock and the Class B Common Stock shall be
equal and identical in all respects except that, unless
otherwise provided by law:
(i) each share of Class A Common Stock shall entitle
the holder thereof to one vote upon any and all
matters submitted to the shareholders of the
Corporation for a vote, and each share of Class B
Common Stock shall entitle the holder thereof to
five votes upon any and all matters submitted to
the shareholders of the Corporation for a vote,
except the election of directors, as to which each
share of Class B Common Stock shall entitle the
holder thereof to one vote,
(ii) holders of Class A Common Stock and holders of
Class B Common Stock shall vote together as a
single class upon any and all matters submitted to
the shareholders of the Corporation for a vote,
provided, however, that holders of Class A Common
Stock and holders of Class B Common Stock shall
vote as two separate classes to authorize any
proposed amendment to the Corporation's
Certificate of Incorporation that amends, restates
or repeals this Article III, Section 3 or has the
effect of an amendment, restatement or repeal, and
provided, further, that, notwithstanding anything
to the contrary contained herein, so long as there
are at least one million three hundred thousand
(1,300,000) shares of Class B Common Stock issued
and outstanding, the holders of Class B Common
Stock shall vote as a separate class to elect a
majority (consisting of the sum of one plus one-
half of the total number of directors) of the
directors of the Corporation (who shall be known
as 'Class B Directors'), to remove any Class B
Directors with or without cause at any time and to
fill all vacancies among Class B Directors, and
the holders of Class A Common Stock and voting
Preferred Stock, if any, shall vote together as a
single class to elect the remainder of the
directors of the Corporation (who shall be known
as 'Class A Directors'), to remove any Class A
Director with or without cause at any time and to
fill all vacancies among Class A Directors,
(iii) each share of Class B Common Stock shall convert
into one share of Class A Common Stock upon, and
as of the date of, the delivery to the Corporation
of the written demand by the holder thereof for
such conversion, which demand may be delivered at
any time, and
(iv) each share of Class B Common Stock shall convert
automatically into one share of Class A Common
Stock upon the sale, pledge, hypothecation or any
other transfer of any interest therein including,
without limitation, into a trust and by the
operation of any will or the laws of descent and
distribution (a 'Transfer'), except upon a
Transfer to a person who immediately prior to such
Transfer is a holder of a share or shares of Class
B Common Stock.
4. The Board of Directors may divide the Preferred
Stock into any number of series, fix the designation and
number of shares of each such series, and determine or
change the designation, relative rights, preferences, and
limitations of any series of Preferred Stock. The Board of
Directors (within the limits and restrictions of any
resolutions adopted by it originally fixing the number of
shares of any series of Preferred Stock) may increase or
decrease the number of shares initially fixed for any
series, but no such decrease shall reduce the number below
the number of shares then outstanding and shares duly
reserved for issuance."
4. A new Article shall be added to the Certificate of
Incorporation and shall read as follows:
ARTICLE VII
Indemnification
---------------
"For the management of the business and for the conduct
of the affairs of the Corporation, and in further definition,
limitation, and regulation of the powers of the Corporation and
of its directors and of its shareholders of any class or series,
as the case may be, it is further provided that:
1. The management of the business and the conduct of
the affairs of the Corporation, including the election
of the Chairman of the Board of Directors, if any, the
President, the Treasurer, the Secretary, and other
principal officers of the Corporation, shall be vested
in its Board of Directors.
2. The Board of Directors shall have the power to
remove directors for cause and to suspend directors
pending a final determination that cause exists for
removal.
3. The Corporation shall, to the fullest extent
permitted by Section 14A:3-5(8) of the New Jersey
Business Corporation Act, as the same may be amended
and supplemented (the 'Act'), indemnify all corporate
agents against their expenses and liabilities in
connection with any proceeding involving them by reason
of their being or having been corporate agents. The
indemnification provided for herein shall not be deemed
exclusive of any other rights to which corporate agents
may be entitled under any other statute or any By-Law,
agreement, or vote of shareholders and shall continue
as to a person who has ceased to be a corporate agent
and shall inure to the benefit of the heirs, executors,
administrators, and personal representatives of a
corporate agent. The term 'corporate agent' as used
herein shall have the meaning attributed to it by
Section 14A:3-5(1)(a) of the Act and by any other
applicable provision of law.
4. A director or officer of the Corporation shall not
be personally liable to the Corporation or its
shareholders for damages for breach of any duty owed to
the Corporation or its shareholders, except as
expressly provided in Section 14A:2-7(3) of the Act."
5. Upon the filing of this Amendment, each
outstanding share of the Common Stock of the Corporation shall be
reclassified as one thousand four hundred and forty (1,440)
shares of Class B Common Stock.
6. Two thousand four hundred and twenty (2,420)
shares were entitled to vote on the Amendment, all of which
shares voted for the Amendment and none of which shares voted
against the Amendment. The foregoing Amendment was adopted by
the shareholders of the Corporation on February 9, 1990, by
unanimous written consent.
IN WITNESS WHEREOF, the Chairman of the Board of the
above named Corporation has executed this Certificate of
Amendment this 9th day of February, 1990 and certifies that the
statements made herein are true under penalties of perjury.
/s/ Daniel Glassman
----------------------------
Daniel Glassman, Chairman of
the Board
<PAGE>
CERTIFICATE OF INCORPORATION
OF
BRADLEY PHARMACEUTICALS, INC.
THE UNDERSIGNED, who is at least 18 years of age, in
order to form a corporation pursuant to the provisions of the New
Jersey Business Corporation Act, certifies that:
ARTICLE I
Corporate Name
--------------
The name of the corporation is Bradley Pharmaceuticals,
Inc.
ARTICLE II
Purpose
-------
The purpose for which this corporation is organized is
to engage in any activity within the purposes for which
corporations may be organized under the New Jersey Business
Corporation Act.
ARTICLE III
Capital Stock
-------------
The corporation is authorized to issue one hundred
shares of capital stock without nominal or par value.
ARTICLE IV
Registered Office and Agent
---------------------------
The address of the corporation's initial registered
office is 122 Fairfield Road, Fairfield, New Jersey; the name of
the corporation's initial registered agent at that address is
Daniel Glassman.
ARTICLE V
First Board of Directors
------------------------
The first board of directors will consist of three
persons whose names and addresses are as follows:
Daniel Glassman
18 Brittany Road
Montville, New Jersey 07045
Iris Glassman
18 Brittany Road
Montville, New Jersey 07045
David Hillman
74 Braemer Drive
Wayne, New Jersey 07470
ARTICLE IV
Incorporator
------------
The name and address of the incorporator of the
corporation are as follows:
Peter H. Ehrenberg
Lowenstein, Sandler, Brochin,
Kohl, Fisher & Boylan
A Professional Corporation
65 Livingston Avenue
Roseland, New Jersey 07068
IN WITNESS WHEREOF, the undersigned has signed this
Certificate of Incorporation this 7th day of January, 1985
/s/ Peter H. Ehrenberg
-------------------------------
Peter H. Ehrenberg, Incorporator
BY-LAWS
OF
BRADLEY PHARMACEUTICALS, INC.
(as amended)
ARTICLE I
OFFICES
1. Registered Office and Agent. -- The registered
office of the Corporation in the State of New Jersey is at 122
Fairfield Road, Fairfield, New Jersey. The registered agent of
the Corporation at that office is Daniel Glassman.
2. Principal Place of Business.--Branch or
subordinate places of business or offices may at any time be
established by the board at any place or places where the
Corporation is qualified to do business.
3. Other Places of Business.--Branch or subordinate
places of business or offices may at any time be established by
the board at any place or places where the Corporation is
qualified to do business.
ARTICLE II
SHAREHOLDERS
1. Annual Meeting.--The annual meeting of
shareholders shall be held upon not less than ten nor more than
sixty days written notice of the meeting at such time and place
as shall be fixed by the board, in order to elect directors and
transact any other business as shall come before the meeting.
2. Special Meetings.--A special meeting of
shareholders may be called for any purpose by the president or
the board. A special meeting shall be held upon not less than
ten nor more than sixty days written notice of the time, place,
and purposes of the meeting.
3. Action Without Meeting.--The shareholders may act
without a meeting by written consent or consents pursuant to
N.J.S. 14A:5-6. The written consent or consents shall be filed
in the minute book.
4. Quorum.--The presence at a meeting in person or by
proxy of the holders of shares entitled to cast a majority of the
votes of all shares entitled to vote shall constitute a quorum.
ARTICLE III
BOARD OF DIRECTORS
1. Number and Term of Office.--There shall be five
(5) directors who shall hold office for a period of one (1) year
or until their successors are elected and qualified in their
stead, if later. The number of directors may be increased or
decreased from time to time by amendment of this provision of the
By-Laws.
2. Regular Meetings.--A regular meeting of the board
of directors shall be held without notice immediately following
and at the same place as the annual shareholders' meeting for the
purpose of electing offices and conducting any other business as
may come before the meeting. The board may determine to have
additional regular meetings which may be held without notice,
except to members not present at the time of the determination.
3. Special Meetings.--A special meeting of the board
may be called for any purpose at any time by the president or by
two directors. The meeting shall be held upon not less than two
days notice if given by telegraph or orally (either by telephone
or in person), or upon not less than five days notice if given by
depositing the notice in the United States mails, postage
prepaid. The notice shall specify the time and place of the
meeting.
4. Action Without Meeting.--The board may act without
a meeting if, prior or subsequent to the actin, each member of
the board shall consent in writing to the action. The written
consent or consents shall be filed in the minute book.
5. Quorum.--A majority of the entire board shall
constitute a quorum for the transaction of business.
6. Vacancies in Board of Directors.--Any vacancy in
the board, including a vacancy caused by an increase in the
number of directors, may be filled by the affirmative vote of a
majority of the remaining directors, even though less than a
quorum of the board, or by a sole remaining director.
ARTICLE IV
WAIVERS OF NOTICE
Any notice required by these by-laws, by the
certificate of incorporation, or by the New Jersey Business
Corporation Act may be waived in writing by any person entitled
to notice. The waiver, or waivers, may be executed either before
or after the event with respect to which the notice is waived.
Each director or shareholder attending a meeting without
protesting, prior to its conclusion, the lack of proper notice
shall be deemed conclusively to have waived notice of the
meeting.
ARTICLE V
OFFICERS
1. Election.--At its regular meeting following the
annual meeting of shareholders, the board shall elect a chairman
of the board, president, a treasurer, a secretary, and it may
elect any other officers, including one or more vice presidents,
as it shall deem necessary. One person may hold two or more
offices.
2. Duties and Authority of Chairman of the Board.--
The Chairman of the Board may preside at all meetings of
shareholders and at all meetings of the Board of Directors. He
shall be ex officio a member of all standing committees. He shall,
-- -------
with the President of the Corporation, serve as one of the two
chief executive offices of the Corporation and as such shall
have general supervision of the affairs of the Corporation, subject
to the control of the Board od Directors. He shall perform such
other duties and have such other powers as the Board of Directors
may from time to time prescribe. Subject to the control and
direction of the Board of Directors, the Chairman of the Board
may enter into any contract or execute and deliver any instrument
in the name and on behalf of the Corporation.
3. Duties and Authority of President.--If the
Chairman of the Board elects not to preside, the President shall
preside at all meetings of shareholders and at all meetings of
the Board of Directors. The President shall, with the Chairman
of the Board, serve as one of the two chief executive officers of
the Corporation and as such shall have general supervision of the
affairs of the Corporation, subject to the control of the Board
of Directors. He shall be ex officio a member of all standing
-- -------
committees. In the absence of the Chairman of the Board, the
President shall preside at all meetings of stockholders and at all
meetings of the Board of Directors. Subject to the control and
direction of the Board of Directors, the President may enter
into any contract or execute and deliver any instrument in the
name and on behalf of the Corporation. IN general, he shall
perform all duties incident to the office of the President, as
herein defined, and all such other duties as from time to time
may be assigned to him by the Board of Directors.
4. Duties and Authority of Vice President.--The Vice
President shall perform the duties and have the authority as from
time to time may be delegated to him by the President or by the
board. In the absence of the President, or in the event of his
death, inability, or refusal to act, the Vice President shall
perform the duties and be vested with the authority of the
President.
5. Duties and Authority of Treasurer.--The Treasurer
shall have the custody of the funds and securities of the
corporation and shall keep or cause to be kept regular books of
account for the Corporation. The Treasurer shall perform such
other duties and possess such other powers as are incident to his
office or as shall be assigned to him by the Chairman of the
Board, the President or the board.
6. Duties and Authority of Secretary.--The Secretary
shall cause notices of all meetings to be served as prescribed in
these by-laws and shall keep or cause to be kept the minutes of
all meetings of the shareholders and the board. The Secretary
shall have charge of the seal of the Corporation. The Secretary
shall perform such other duties and possess such other powers as
are incident to that office or as are assigned by the Chairman of
the Board, the President or the board.
ARTICLE VI
AMENDMENTS TO AND EFFECT OF BY-LAWS
FISCAL YEAR
1. Force and Effect of By-Laws.--These by-laws are
subject to the provisions of the New Jersey Business Corporation
Act and the Corporation's certificate of incorporation, as it may
be amended from time to time. If any provision in these by-laws
is inconsistent with a provision in that Act or the certificate
of incorporation, the provision of that Act or the certificate of
incorporation shall govern.
2. Amendments to By-Laws.--These by-laws may be
altered, amended, or repealed by the shareholders or the board.
Any by-law adopted, amended, or repealed by the shareholders may
be amended or repealed by the board, unless the resolution of the
shareholders adopting the by-law expressly reserves to the
shareholders the right to amend or repeal it.
3. Fiscal Year.--The fiscal year of the Corporation
shall begin on the first day of February of each year.
BRADLEY PHARMACEUTICALS, INC.
1990 STOCK OPTION PLAN, AS AMENDED
1. Purpose. The purpose of the 1990 Stock Option
Plan of BRADLEY PHARMACEUTICALS, INC. is to provide incentive to
employees of the Corporation, as defined below, to encourage
employee proprietary interest in the Corporation, to encourage
employees to remain in the employ of the Corporation, and to
attract to the Corporation individuals of experience and ability.
2. Definitions.
(a) "Board" shall mean the Board of Directors of
the Company.
(b) "Code" shall mean the Internal Revenue Code
of 1986, as amended.
(c) "Committee" shall mean the Committee
appointed by the Board in accordance with Section 4 of the Plan.
(d) "Common Stock" shall mean the no par value
Class A Common Stock of the Company.
(e) "Company" shall mean Bradley Pharmaceuticals,
Inc., a New Jersey corporation.
(f) "Corporation" shall mean and include the
Company and any parent or subsidiary corporation thereof, within
the meaning of Section 425 of the Code.
(g) "Disability" shall mean the condition of an
Employee who is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or
which has lasted or can be expected to result in death or which
has lasted or can be expected to last for a continuous period of
not less than twelve (12) months, all within the meaning of
Section 22(e)(3) of the Code.
(h) "Employee" shall mean any individual
(including an officer or a director) who is an employee of the
Corporation (within the meaning of Section 422A(a)(2) of the Code
and the regulations thereunder).
(i) "Exercise Price" shall mean the price per
Share of Common Stock, determined by the Board or Committee, as
which an Option may be exercised.
(j) "Fair Market Value" of a Share of Common
Stock as of a specified date shall mean the closing price of a
Share on the principal securities exchange on which such Shares
are traded on the day immediately preceding the date as of which
Fair Market Value is being determined, or on the next preceding
date on which such Shares are traded if no Shares were traded on
such immediately preceding day, or if the Shares are not traded
on a securities exchange, Fair Market Value shall be deemed to be
the average of the high bid and low asked prices of the Shares in
the over-the-counter market on the day immediately preceding the
date as of which Fair Market Value is being determined or on the
next preceding date on which such high bid and low asked prices
were recorded. If the Shares are not publicly traded, Fair
Market Value shall be determined by the Board or Committee. If
no cash shall Fair Market Value be less than the par value of a
Share of Common Stock, and in no event shall Fair Market Value be
determined with regard to restrictions other than restrictions
which, by their terms, will never lapse.
(k) "Incentive Stock Option" shall mean an Option
described in Code Section 422A(b).
(l) "Nonstatutory Stock Option" shall mean an
Option which is not an Incentive Stock Option.
(m) "Option" shall mean a stock option granted
pursuant to the Plan.
(n) "Optionee" shall mean a person to whom an
Option has been granted.
(o) "Plan" shall mean this Bradley
Pharmaceuticals, Inc., 1990 Stock Option Plan.
(p) "Purchase Price" shall mean the Exercise
Price times the number of whole Shares with respect to which an
Option is exercised.
(q) "Share" shall mean one share of Common Stock.
(r) "Ten Percent Shareholder" shall mean any
Employee who, at the time of the grant of an Option, owns (or is
deemed to own, under Section 422A(b)(6) and 425(d) of the Code)
more than ten percent of the total combined voting power of all
classes of outstanding stock of the Corporation.
3. Effective Date. This Plan was approved by the
Board on January 31, 1990, which date shall be the effective date
of the Plan assuming that the Plan is approved by the
shareholders of the Company within twelve months thereafter.
4. Administration. The Plan shall be administered by
the Board or a Committee appointed by the Board consisting of not
less than two members. The Board may from time to time remove
members from, or add members to, the Committee. Vacancies on the
Committee, however caused, shall be filled by the Board. The
Board or Committee shall from time to time at its discretion make
determinations with respect to the persons who shall be granted
Options, the number of Shares to be optioned to each, the
designation of such Options as Incentive Stock Options or
Nonstatutory Stock Options, and the exercise price thereof. All
such determinations an the interpretation and construction by the
Board or the Committee of any Option granted thereunder shall be
binding and conclusive on all Optionees and of their legal
representatives and beneficiaries.
5. Eligibility. Any Employee may be granted
Incentive Stock Options under the Plan and any Employee or
officer, director or consultant of the Corporation may be granted
Non-Statutory Stock Options under the Plan if, in each instance,
the Board or Committee determines that such person performs
services of special importance to the management, operation and
development of the business of the Corporation.
6. Stock. The stock subject to Options granted under
the Plan shall be Shares of authorized but unissued or reacquired
Class A Common Stock. The aggregate number of Shares which may
be issued under Options exercised under this Plan shall not
exceed 1,500,000. The number of Shares subject to Options
outstanding under the Plan at any time may not exceed the number
of Shares remaining available for issuance under the Plan. In
the event that any Option outstanding under the Plan expires for
any reason or is terminated, the Shares allocable to the
unexercised portion of such Option may again be subjected to an
Option under the Plan.
The limitations established by this Section 6
shall be subject to adjustment upon the occurrence of the events
specified and in the manner provided in Section 10 hereof.
7. Terms and Conditions of Options. Options granted
pursuant to the Plan shall be evidenced by written agreements in
such form as the Board or the Committee shall from time to time
determine, which agreements shall comply with and be subject to
the following terms and conditions:
(a) Date of Grant. Each Option shall specify its
effective date (the "date of grant"),which shall be the date of
the action by the Board or Committee relating to the grant of the
Option or nor more than ten days after such date.
(b) Number of Shares. Each Option shall state
the number of Shares to which it pertains and shall provide for
the adjustment thereof in accordance with the provisions of
Section 10 hereof.
(c) Exercise Price. Each Option shall state the
Exercise Price, which price shall be determined by the Board or
Committee, provided, however, that the Exercise Price (i) in the
case of an Incentive Stock Option granted to an Employee who is
not a Ten Percent Shareholder, shall not be less than the par
value nor less than the Fair Market Value of the Shares to which
the Option relates on the date of grant, (ii) in the case of an
Incentive Stock Option granted to an Employee who is a Ten
Percent Shareholder, shall not be less than the par value nor
less than 110% of the Fair Market Value of the Shares to which
the Option relates on the date of grant, and (iii) in the case of
a Nonstatutory Stock Option granted to any Employee or officer or
director of the Corporation, shall not be less than the par value
of the Shares to which the Option relates. The Exercise Price of
an Option shall be subject to adjustment in accordance with
Section 10 hereof.
(d) Exercise of Options and Medium and Time of
Payment. To exercise an Option,the Optionee shall give written
notice to the Company specifying the number of Shares to be
purchased and accompanied by payment in cash or by certified
check of the full Purchase Price therefor and any withholding tax
obligation of the Corporation as provided in Section 15(a)
hereof. No Share shall be issued until full payment therefor has
been made.
(e) Term and Exercise of Options;
Nontransferability of Options. Subject to Section 10 hereof,
Options may be exercised as determined by the Board or Committee
and as stated in the written agreement evidencing the Option,
provided, however, that no Incentive Stock Option granted to an
Employee who is not a Ten Percent Shareholder shall be
exercisable after the expiration of ten (10) years from its date
of grant, and no Incentive Stock Option granted to an Employee
who is a Ten Percent Shareholder shall be exercisable after the
expiration of five (5) years from its date of grant. During the
lifetime of the Optionee, the Option shall be exercisable only by
the Optionee and shall not be assignable or transferable. In the
event of the Optionee's death, no Option shall be transferable by
the Optionee otherwise than by will or by the laws of descent and
distribution.
(f) Termination of Employment. In the event that
an Optionee shall cease to be employed by the Corporation for any
reason, such Optionee (or the heirs or legatees of such Optionee,
if applicable) shall have the right, subject to the restrictions
of Subsection (e) hereof, to exercise the Option at any time
within three (3) months after such termination of employment
(twelve (12) months if the termination was due to the death or
Disability of the Optionee or, in the case of a Nonstatutory
Stock Option, retirement) to the extent that, on the day
preceding the date of termination of employment, the Optionee's
right to exercise such Option had accrued pursuant to the terms
of the option agreement pursuant to which such Option was
granted, had not previously been exercised or expired.
For this purpose, the employment relationship will be
treated as continuing intact while the Optionee is on military
leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Board and, in the case
of an Optionee who has received an Incentive Stock Option, only
to the extent permitted under Section 422A of the Code and the
regulations promulgated thereunder). Moreover, in the case of an
Optionee who has been granted an Incentive Stock Option,
employment shall, in no event, be deemed to continue beyond the
ninetieth (90th) day after the Optionee ceased active employment,
unless the Optionee's reemployment rights are guaranteed by
statute or by contract.
(g) Rights as a Shareholder. An Optionee or a
transferee of a deceased Optionee shall have no rights as a
shareholder with respect to any Shares covered by his or her
Option until the date of the issuance of a stock certificate for
such Shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property)
or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as
provided in Section 10.
(h) Modification, Extension and Renewal of
Options. Subject to the terms and conditions and within the
limitations of the Plan, the Board or Committee may modify,
extend or renew outstanding Options granted under the Plan, or
accept the cancellation of outstanding Options (to the extent not
theretofore exercised) for the granting of new Options in
substitution therefor. Notwithstanding the foregoing, however,
no modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any
Options theretofore granted under the Plan. Moreover, in the
case of any modification, extension or renewal of an Incentive
Stock Option, all of the requirements set forth herein shall
apply in the same manner as though a new Incentive Stock Option
had been granted to the Optionee on the date of such
modification, extension or renewal, but only if such
modification, extension or renewal is treated, under Section
425(h) of the Code, as the granting of a new option.
(i) Identification of Option. Each Option
granted under the Plan shall clearly identify its status as an
Incentive Stock Option or Non-Statutory Stock Option.
(j) Other Provisions. The option agreements
authorized under the Plan shall contain such other provisions not
inconsistent with the terms of the Plan, including, without
limitation, restrictions upon the exercise of the Option or
transfer of the Shares acquired on exercise, as the Board or
Committee shall deem advisable.
8. Limitation on Annual Awards.
General Rule. The aggregate Fair Market Value
(determined at the time the Option is granted) of stock for which
Incentive Stock Options are exercisable by the same Optionee for
the first time during any calendar year under the terms of the
Plan (and all other plans maintained by the Corporation and its
parent or subsidiary corporations) shall not exceed the sum of
$100,000.
9. Term of Plan. Options may be granted pursuant to
the Plan until January 31, 2000, which is ten years from the
effective date of the Plan.
10. Recapitalization. Subject to any required action
by the shareholders of the Company and the last sentence of
subsection 7(h) hereof, the number of Shares covered by this Plan
as provided in Section 6, the number of Shares covered by each
outstanding Option, and the Exercise Price thereof shall be
proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a subdivision or
consolidation of Shares, stock split, or the payment of a stock
dividend.
Subject to any required action by the shareholders of
the Company and the last sentence of Subsection 7(h) hereof, if
the Company shall be the surviving corporation in any merger or
consolidation, each outstanding Option shall pertain and apply to
the securities to which a holder of the number of Shares subject
to the Option would have been entitled. A dissolution or
liquidation of the Company or a merger or consolidation in which
the Company is not the surviving corporation shall cause each
outstanding Option to terminate, unless the agreement of merger
or consolidation shall otherwise provide, provided that each
Optionee shall, in such event, have the right immediately prior
to such dissolution or liquidation, or merger or consolidation in
which the Company is not the surviving corporation, of a period
of one (1) year from the date of grant of the Option shall have
elapsed, to exercise the Option in whole or in part, subject to
limitations on exercisability under Section 7 hereof to the
extent the Option is exercisable without regard to this sentence
at the date of such dissolution, liquidation, merger or
consolidation.
In the event of a change in the Common Stock as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares
with a different par value or without par value, the shares
resulting from any such change shall be deemed to be Shares of
Common Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be
made by the Board or Committee, whose determination in that
respect shall be final, binding and conclusive.
Except as hereinbefore expressly provided in this
Section 10, the Optionee shall have no rights by reason of any
subdivision of consolidation of shares of stock of any class,
stock split, or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any
class or by reason of any dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another
corporation, and any issue by the Company of shares of stock of
another corporation, and any issue by the Company of shares of
stock of any class or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares subject to the Option.
The grant of an Option pursuant to the Plan shall not
affect ion any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure or to merge or consolidate or
to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
11. Securities Law Requirements. No Shares shall be
issued upon the exercise of any Option unless and until the
Company has determined that: (i) it and the Optionee have taken
all actions required to register the Shares under the Securities
Act of 1933 or perfect an exemption from the registration
requirements thereof; (ii) any applicable listing requirement of
any stock exchange on which the Common Stock are listed has been
satisfied; and (iii) any other applicable provision of state or
Federal law has been satisfied.
12. Amendment of the Plan. The Board or Committee
may, insofar as permitted by law, from time to time, with respect
to any Shares at the time not subject to Options, suspend or
discontinue the Plan or revise or amend it in any respect
whatsoever except that the term of the Plan should not be
extended and, without approval of the shareholders of the
Company, no such revisions or amendment shall:
(a) Increase the number of Shares subject to the
Plan; or
(b) Change the designation in Section 5 of the
Plan of the class of Employees eligible to receive
Incentive Stock Options;
(c) Adversely affect the rights of the holder of
any then outstanding Option, except as may be
expressly permitted by the terms of the Option or
elsewhere in this Plan; or
(d) Amend this Section 12 to defeat its purpose.
13. Application of Funds. The proceeds received by
the Company from the sale of Common Stock pursuant to the
exercise of an Option will be used for general corporate
purposes.
14. No Obligation to Exercise Option. The granting of
an Option shall impose no obligation upon the Optionee to
exercise such Option.
15. Withholding.
(a) Non-Statutory Options. Whenever Shares are
to be delivered upon exercise of a Non-Statutory Option, the
Corporation shall be entitled to require as a condition of
delivery that the Optionee remit to the Corporation an amount
sufficient to satisfy the Corporation's Federal, state and local
withholding tax obligations with respect to the exercise of the
Option.
(b) Incentive Stock Options. The acceptance of
Shares upon exercise of an Incentive Stock Option shall
constitute an agreement by the Optionee (unless and until the
Corporation shall notify the Optionee that it is relieved, in
whole or in part, of its obligations under Section 15(b)) (i) to
notify the Corporation if any or all of such Shares are disposed
of by the Optionee within two years from the date the Option was
granted or within one year from the date the Shares were
transferred to the Optionee pursuant to his exercise of the
Option, and (ii) to remit to the Corporation, at the time of and
in the case of any such disposition, an amount sufficient to
satisfy the Corporation's Federal, state and local withholding
tax obligations with respect to such disposition, whether or not,
as to both (i) and (ii), the Optionee is in the employ of the
Corporation at the time of such disposition.
16. Governing Law. The provisions of this Plan shall
be governed and construed in accordance with the laws of the
State of New Jersey provided, however, that in the case of the
provisions applicable to Incentive Stock Options, such provisions
shall (to the extent possible) be construed in a a manner
conforming to and consistent with the requirements of Section
422A of the Code.
EXHIBIT 11.1
BRADLEY PHARMACEUTICALS, INC.
STATEMENT REGARDING COMPUTATION OF PER SHARE INCOME (LOSS)
YEAR ENDED
DECEMBER 31, 1995
Primary Fully Diluted
------- -------------
Net Loss $(6,921,241) $(6,921,241)
Weighted average
shares outstanding 7,348,975 7,348,975
Net loss per share $(.94) $(.94)
====== ======
YEAR ENDED
DECEMBER 31, 1996
Primary Fully Dilluted
------- --------------
Net Income $1,598,507 $1,598,507
Weighted average
shares outstanding 7,175,348 7,175,348
Net loss per share $.22 $.22
==== ====
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
JURISDICTION OF NAMES(S) UNDER WHICH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY DOES BUSINESS
------------------ --------------- ------------------------
Doak Dermatologics New York Doak Dermatologics
Co., Inc.
Bradley Pharmaceuticals U.S. Virgin Bradley Pharmaceuticals
Overseas, Ltd. Islands Overseas, Ltd.
Bradley Pharmaceuticals Canada Bradley Pharmaceuticals
(Canada) Inc. (Canada) Inc.
