BRADLEY PHARMACEUTICALS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Bradley Pharmaceuticals, Inc.:
The Annual Meeting of Shareholders (the "Meeting") of Bradley
Pharmaceuticals, Inc., a New Jersey corporation (the "Company"), will be held at
CSC The United States Corporation Company, 113 Centre Road, Wilmington,
Delaware, on July 16, 1998 at 11:00 A.M., Local Time, to consider and act upon
the following:
1. To elect five directors of the Company, two by the holders of the Class
A Common Stock of the Company voting separately as a class, and three by the
holders of the Class B Common Stock of the Company voting separately as a class,
to serve until the next Annual Meeting of Shareholders and until their
successors are duly elected and qualified;
2. To ratify and approve a proposal to change the state of incorporation of
the Company from New Jersey to Delaware; and
3. To consider and act upon such other matters as may properly come before
the Meeting or any adjournment thereof.
Only shareholders of record of the Class A and Class B Common Stock of the
Company, each no par value per share, at the close of business on June 1, 1998
shall be entitled to receive notice of, and to vote at, the Meeting, and at any
adjournment thereof. A Proxy and a Proxy Statement for the Meeting are enclosed
herewith.
All shareholders are cordially invited to attend the Meeting. If you do not
expect to be present, you are requested to fill in, date and sign the enclosed
Proxy, which is solicited by the Board of Directors of the Company, and to mail
it promptly in the enclosed envelope to make sure that your shares are
represented at the Meeting. In the event you decide to attend the Meeting in
person, you may, if you desire, revoke you Proxy and vote your shares in person.
By Order of the Board of Directors.
DANIEL GLASSMAN
Chairman and CEO
Dated: June 1, 1998
IMPORTANT
THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER
REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE
UNITED STATES.
<PAGE>
BRADLEY PHARMACEUTICALS, INC.
383 Route 46 West
Fairfield, New Jersey 07004-2402
PROXY STATEMENT
Annual Meeting of Shareholders
July 16, 1998
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Bradley Pharmaceuticals, Inc., a New Jersey
corporation (the "Company"), to be voted at the Annual Meeting of Shareholders
of the Company (the "Meeting") which will be held at CSC The United States
Corporation Company, 113 Centre Road, Wilmington, Delaware, on July 16, 1998, at
11:00 A.M., Local Time, and any adjournment or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders
and in this Proxy Statement.
The principal executive offices of the Company are located at 383 Route 46
West, Fairfield, New Jersey 070054-2402. The approximate date on which this
Proxy Statement and accompanying Proxy is first being sent or given to the
shareholders is June 12, 1998.
The Proxy, in the accompanying form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with the
instructions contained therein and, in the absence of specific instructions,
will be voted FOR the election as directors of the persons who have been
nominated by the Board of Directors, FOR the ratification and approval of a
proposal to change the state of incorporation of the Company from New Jersey to
Delaware, and in accordance with the judgment of the person or persons voting
the proxies on any other matter that may be properly brought before the Meeting.
Each such Proxy granted may be revoked at any time thereafter by writing to the
Secretary of the Company prior to the Meeting, or by execution and delivery of a
subsequent Proxy or by attendance and voting in person at the Meeting, except as
to any matter or matters upon which, prior to such revocation, a vote shall have
been cast pursuant to the authority conferred by such Proxy.
VOTING SECURITIES
At the close of business on June 1, 1998, the record date for the
determination of shareholders entitled to vote at the Meeting (the "Record
Date"), the Company had outstanding 8,185,881 shares of its Class A Common
Stock, no par value per share (the "Class A Common Stock"), and 431,552 shares
of its Class B Common Stock, no par value per share (the "Class B Common
Stock"). There were no other classes of voting securities outstanding at the
Record Date. The holders of such Class A and Class B Common Stock are entitled
to one vote and five votes, respectively, for each share held on such Record
Date, but with respect to the election of Directors, so long as there are at
least 325,000 shares of Class B Common Stock issued and outstanding (of which
there were as of the Record Date), holders of Class A Common Stock, voting
separately as a class, are entitled to elect two directors and holders of Class
B Common Stock, voting separately as a class, are entitled to elect three
directors.
Under the rules of the Securities and Exchange Commission, boxes and a
designated blank space are provided on the Proxy card for shareholders to mark
if they wish to withhold authority to vote for one or more nominees for
director. Votes withheld in connection with the election of one or more of the
nominees for director will be counted as votes cast against such individuals and
will be counted toward the presence of a quorum for the transaction of business.
If no direction is indicated, the Proxy will be voted for the election of the
nominees for director and in favor of the proposal to reincorporate the Company
in Delaware. Under the rules of the National Association of Securities Dealers,
Inc., a broker "non-vote" has no effect on the outcome of the election of
directors or the establishment of a quorum for such election. The form of proxy
does not provide for abstentions with respect to the election of directors;
however, a shareholder present at the Meeting may abstain with respect to such
election. The treatment of broker "non-votes" and abstentions with respect to
the election of directors is consistent with applicable New Jersey law and the
Company's By-Laws.
No person has been authorized to give any information or to make any
representation other than those contained in this Proxy Statement and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company.
A copy of the Company's 1997 Annual Report to Shareholders is also being
mailed to you with this Proxy Statement. Said Annual Report contains the
financial statements of the Company and a report with respect thereto by Grant
Thornton, the Company's independent auditors. Said Annual Report is not deemed a
part of the soliciting material for the Proxy.
OWNERSHIP OF COMMON STOCK BY DIRECTORS, EXECUTIVE OFFICERS
AND FIVE PERCENT BENEFICIAL HOLDERS
The following table sets forth certain information as of December 31, 1997,
regarding the ownership of the Company's Class A and Class B Common Stock by (i)
each director of the Company, (ii) each executive officer of the Company named
in the Summary Compensation Table set forth elsewhere in this Proxy Statement,
(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. The effect of
the assumption that such stockholder is the beneficial owner of such shares is
also reflected in the following table. For a more complete description of the
method used to determine such beneficial ownership, see footnote 2 to the
following table:
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Owner(1)(2) Percent of Class(2)
<S> <C> <C> <C> <C>
Name and Address of Class A Class B Class A Class B
Beneficial Owner Common Stock Common Stock Common Stock Common Stock
Daniel Glassman ......... 1,098,142(3) 316,736(4) 12.76% 73.39%
383 Route 46 West
Fairfield, NJ
Iris S. Glassman ........ 231,373(5) 37,283(6) 2.69% 8.64%
383 Route 46 West
Fairfield, NJ
David Hillman ........... 117,433(7) 43,610 1.36% 10.11%
383 Route 46 West
Fairfield, NJ
Phillip McGinn .......... 6,258(8) -0- * --
383 Route 46 West
Fairfield, NJ
Alan G. Wolin ........... 65,730(9) -0- * --
383 Route 46 West
Fairfield, NJ
Robert S. Dubin ......... 7,500(11) -0- *
383 Route 46 West
Fairfield, NJ
Gene L. Goldberg ........ 54,722(10) 10,192 * 2.36%
383 Route 46 West
Fairfield, NJ
Maurice Woosley ......... 7,752(12) -0- * --
383 Route 46 West
Fairfield, NJ
Berlex Laboratories, Inc. 1,450,000(13) -0- 16.85% --
110 East Hanover Avenue
Cedar Knolls, NJ
All executive officers .. 1,589,180(3)(4)(5) 407,821(4)(6) 18.47% 94.50%
and directors as a group (6)(7)(8)(9)
(10 persons)
</TABLE>
* Represents less than one percent. (Footnotes appear on next page)
<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 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 percentages 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, 54,117 shares are owned
indirectly by Mr. Glassman through affiliates and 721,089 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, 6,800 shares owned indirectly by Mrs. Glassman
through affiliates, 25,220 shares owned indirectly by Mrs. Glassman as trustee
for her children's trusts and 162,070 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 65,568 shares underlying exercisable options. Mr.
Hillman's affiliate has disclaimed beneficial ownership over shares owned by it.
(8) Includes 5,000 shares underlying presently exercisable options.
(9) Includes 2,300 shares underlying presently exercisable options.
(10) Includes 10,192 shares issuable upon conversion of a like number of
shares of Class B Common Stock. Of these shares 44,446 shares underlie presently
exercisable options.
(11) Includes 7,500 shares underlying presently exercisable options.
(12) Includes 6,000 shares underlying presently exercisable options.
(13) Pursuant to agreement with the Company, these shares are to be voted
by Berlex Laboratories, Inc. ("Berlex") on a pro rata basis with all other
shares of Class A Common Stock that are voted. For example, if 70% of the Class
A shares that vote on a proposal vote in favor and 30% vote against, then 70% of
the shares owned by Berlex will be voted in favor of the proposal and 30% of the
shares owned by Berlex will be voted against the proposal. However, Berlex may
vote in its sole discretion on each of the following matters:
a. any matter in connection with which Berlex has dissenter or
appraisal rights and Berlex has exercised such dissenter or appraisal
rights;
b. any matter voted upon after a bankruptcy proceeding is pending with
respect to the Company (whether initiated voluntarily or involuntarily)
under the U.S. Bankruptcy Code, as amended;
c. any matter which, if approved, would discriminate against any
holder of five percent (5%) or more of the outstanding capital stock of the
Company (including Seller); and
d. the proposal to reincorporate the Company in the State of Delaware,
with respect to which Berlex has agreed to vote all of its shares in favor
(see Proposal 2 in this Proxy Statement).
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
At the meeting, five directors are to be elected to serve until the next
Annual Meeting of Shareholders and until their successors shall be duly elected
and shall qualify. Two directors are to be elected by the holders of the Class A
Common Stock, voting separately as a class, and three directors are to be
elected by the holders of the Class B Common Stock, voting separately as a
class. Unless otherwise specified, all proxies received will be voted in favor
of the election of the nominees of the Board of Directors named below as
directors of the Company for each respective class of stock. All of the nominees
are presently directors of the Company. The term of the current directors
expires at the Meeting. Should any of the nominees not remain a candidate for
election at the date of the Meeting (which contingency is not now contemplated
or foreseen by the Board of Directors), proxies solicited hereunder will be
voted in favor of those nominees who do remain candidates and may be voted for
substitute nominees selected by the Board of Directors. Assuming a quorum is
present with respect to each of the Class A and Class B Common Stock, a vote of
a majority of the shares of Class A Common Stock present, in person or by proxy,
at the Meeting, is required to elect the Class A nominees as directors and a
vote of a majority of the shares of Class B Common Stock present, in person or
by proxy, at the Meeting, is required to elect the Class B nominees as
directors.
Nominees for Election by the Holders of Class A Common Stock
Dr. Philip W. McGinn, Jr.
Dr. Philip McGinn, age 71, 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.
Alan G. Wolin, Ph.D., age 65, 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.
Nominees for Election by the Holders of Class B Common Stock
Daniel Glassman
Daniel Glassman, age 55, 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 since January
1985 and 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 Dermatologics, Inc.,
Bradley Pharmaceuticals Overseas, Ltd. and Bradley Pharmaceuticals (Canada),
Inc., each a subsidiary of the Company.
Iris S. Glassman
Iris S. Glassman, age 55, has served as Treasurer of the Company since its
inception in 1985. Mrs. Glassman has also served as a director of the Company
since January 1985. Mrs. Glassman is the wife of Daniel Glassman and has fifteen
years of diversified administrative and financial management experience,
including serving as Secretary of Banyan.
David Hillman
David Hillman, age 57, has served as Secretary of the Company since 1985
and as a director of the Company since January 1990. 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.
Other Executive Officers of the Company
Robert Dubin, R.Ph
Robert Dubin, R.Ph, age 50, has served as Vice President, Sales and
Contract Administration since 1997. Prior experience as a manufacturer of food
products for a major U.S. food distributor. Previously held Consultant
Pharmacist position for a major group of nursing homes in the Chicago area; also
owner/operator of 15 pharmacies and health clinics.
Gene L. Goldberg
Gene L. Goldberg, age 60, 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.
Maurice Woosley
Maurice Woosley, age 57, has served as President of the Company's
international division and Vice President since January 1997. From May 1986 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.
BOARD OF DIRECTORS AND COMMITTEES
During the year ended December 31, 1997, there were six (6) meetings of the
Board of Directors. All directors attended at least 75% of these meetings.
The Board of Directors has designated from among its members an Audit
Committee, which consists of Messrs. Hillman and McGinn and Dr. Wolin. The Audit
Committee, which reviews the Company's financial and accounting practices and
controls, held one (1) meeting during 1997. The Company does not have a
nominating committee.
The current members of the Compensation Committee are Mr. Glassman, Mrs.
Glassman and Dr. McGinn. Except for Mr. Glassman and Mrs. Glassman, no member of
the Compensation Committee was at any time during 1997, or formerly, an officer
or employee of the Company or any subsidiary of the Company, nor had any
relationship with the Company requiring disclosure under Item 404 of Regulation
S-K under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
No executive officer of the Company has served as a director or member of
the Compensation Committee (or other committee serving an equivalent function)
of any other entity, one of whose executive officers served as a director of or
member of the Compensation Committee of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1997 and 1996, the Company received administrative support services
(consisting principally of advertising services, mailing, copying, data
processing and other office service) which were charged to operations and paid
from Banyan, an affiliated company, amounting to approximately $135,000 and
$280,000, respectively. At December 31, 1996, $11,000 was due the Company from
Banyan. At December 31, 1997, there were no outstanding balances between the
Company and Banyan.
The Company rents its Fairfield, New Jersey operating facility from Daniel
Glassman and Iris S. Glassman pursuant to a lease expiring on January 31, 2013.
Rent expense, including an allocated portion of real estate taxes, was
approximately $194,000 and $176,000, respectively, for 1997 and 1996.
During 1997 and 1996, 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 1997 and 1996, Mr. Glassman received
compensation from the Company and Banyan.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
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, 1997, 1996 and 1995, to Daniel Glassman, the Company's President
and Chief Executive Officer, Robert Dubin, Vice President of Sales, Gene L.
Goldberg, Senior Vice President of Marketing and Business Planning and Maurice
Woosley, President, Bradley International. No other executive officer of the
Company earned total annual salary and bonus for 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
1997 to the executive officers named in the following table except as set forth
below:
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Securities
Name and Principal Position Year Salary Bonus Underlying Options(1)
<S> <C> <C> <C> <C>
Daniel Glassman ............. 1997 $128,900 -0- -0-
President and Chief ....... 1996 $122,500 -0- 404,500(2)
Executive Officer ......... 1995 $114,542 -0- 359,589(3)
Robert Dubin
Vice President of Sales ... 1997 $100,600 -0- -0-
and Contract Administration 1996 $ 70,600 20,000 7,500
1995 $ 50,900 -0- 7,500
Gene L. Goldberg
Senior Vice President ..... 1997 $129,400 -0- -0-
Marketing and Business .... 1996 N/A N/A N/A
Planning .................. 1995 N/A N/A N/A
Maurice Woosley
President, Bradley ........ 1997 $114,500 -0- -0-
International ............. 1996 $ 68,800(4) -0- 18,000
1995 N/A N/A N/A
</TABLE>
(1) All of these options are exercisable into shares of Class A Common
Stock.
(2) 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.
(3) 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 $3.7125 per
share, approximately 110% of the fair market value for shares of Class A Common
Stock on the original date of grant. These 18,000 options comprise a portion of
the 373,000 options owned by Mr. Glassman which were repriced by the Company on
April 18, 1996.
(4) Represents salary for portion of the year employed by the Company.
Option Grants in 1997
The following table sets forth information concerning
outstanding options to purchase shares of the Company's Class A Common Stock
granted during 1996 by the Company to Alan Wolin, a director during 1997.
Neither options to purchase shares of Class B Common Stock nor stock
appreciation rights were granted by the Company during 1997. The exercise prices
for all options reported below are not less than 110% of the per share market
prices for Class A Common Stock on their dates of grant.
<TABLE>
<CAPTION>
Individual Grants
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in or Base Expiration
Name Granted 1997 Price ($/Sh) Date
- ---- ---------- ------------ ------------ -------
<S> <C> <C> <C> <C>
Alan G. Wolin 15,000 22.06% $1.25 05/11/07
</TABLE>
Aggregated Option Exercises in 1997
and Year-End Option Values
The following table presents the value, on an aggregate basis,
as of December 31, 1997, 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 1997.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised In-the-Money
Unexercised Options at Options at
Year-End Year-End(1)
---------------------- ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Daniel Glassman 721,089 6,000 $521,208 $3,337
</TABLE>
(1) Based on the closing sale price of $2.00 per share of Class A Common
Stock on December 31, 1997 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.
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.
Comparative Stock Performance
The comparative stock performance graph below compares the
cumulative stockholder return on the Common Stock of the Company for the period
from December 31, 1992 through the year ended December 31, 1997 with the
cumulative total return on (i) the Total Return Index for the Nasdaq Stock
market (U.S. Companies) (the "Nasdaq Composite Index"), and (ii) the Nasdaq
Pharmaceutical Index (assuming the investment of $100 in the Company's Common
Stock, the Nasdaq Composite Index and the Nasdaq Pharmaceutical Index on
December 31, 1992 and reinvestment of all dividends). Measurement points are on
the last trading day of the Company's years ended December 31, 1992, 1993, 1994,
1995, 1996 and 1997.
<PAGE>
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Bradley Pharmaceuticals, $100.00 $136.00 $134.00 $ 40.00 $ 48.00 $ 72.00
Inc.
Nasdaq Composite Index $100.00 $115.00 $111.00 $155.00 $191.00 $232.00
Nasdaq Pharmaceutical Index $100.00 $ 89.00 $ 67.00 $123.00 $123.00 $127.00
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR
<PAGE>
PROPOSAL II
REINCORPORATION IN DELAWARE
Pursuant to Amendment No. 6 dated September 19, 1997 to an
Asset Purchase Agreement dated November 10, 1993 between the Company and Berlex
Laboratories, Inc. ("Berlex"), the Company agreed to submit to its shareholders
at the Meeting, and use its best efforts to cause its shareholders to approve, a
proposal to reincorporate the Company in Delaware. Berlex agreed to vote all of
its shares of the Company's Class A Common Stock in favor of such proposal.
In order to effect the reincorporation in Delaware, the
Company caused to be filed in the Office of the Secretary of State a certificate
of incorporation under the name "Bradley Pharmaceuticals, Inc." (the "Delaware
Company"). Daniel Glassman, the Chairman, President and Chief Executive Officer
of the Company, was named the sole Director, Chairman, President and Chief
Executive Officer of the Delaware Company. As director, he caused the Delaware
Company to adopt By-Laws. Assuming the approval of this Proposal by the holders
of a majority of the outstanding shares of the Company's Class A and Class B
stock, voting separately by class, the reincorporation will be effected by a
merger (the "Merger") of the Company with and into the Delaware Company,
pursuant to which the Delaware Company will be the surviving corporation. Daniel
Glassman, Iris Glassman, David Hillman and Gene L. Goldberg, who own in the
aggregate 94.5% of the outstanding Class B Stock, have indicated their intention
to vote in favor of reincorporation, thereby assuring approval by the holders of
a majority of the Class B Stock.
Immediately following and pursuant to the Merger, each share
of Class A and Class B Stock of the Company will be converted into one share of
Class A Stock or Class B Stock, respectively, of the Delaware Company, and the
directors and officers of the Delaware Company will be identical to those of the
Company, which will cease to exist as a separate entity as a result of the
Merger. The Delaware Company will succeed to all of the Company's assets,
liabilities and business operations. Included with this Proxy Statement as
Exhibits A, B and C, respectively, are the Certificate of Incorporation of the
Delaware Company, the By-Laws of the Delaware Company and the Articles and Plan
of Merger pursuant to which the Merger will be effected.
The following outlines the material differences between the
Company and the Delaware Company by virtue of differences in their respective
Certificate of Incorporation and By-Laws and in the laws of Delaware and New
Jersey. The Company is presently incorporated under the laws of the state of New
Jersey and is presently governed by its Certificate of Incorporation, its
By-laws and the New Jersey Business Corporation Act ("NJBCA"). The Company will,
in connection with this proposal, merge into the Delaware Company which was
formed solely for the purpose of the Merger. The surviving corporation in the
merger will be the Delaware Company and thus, the applicable law with respect to
such matters as the rights and obligations of the Company and the shareholders
be the Delaware General Corporation Law ("DGCL").
Certain differences exist between the NJBCA and the DGCL with
respect to shareholders' rights. While it is impractical to compare all these
differences, the following discussion summarizes certain of the significant
differences. The following does not purport to be a complete statement of the
rights and/or obligations of the shareholders or the Delaware Company under
applicable Delaware law, the Certificate of Incorporation of the Delaware
Company or the By-Laws of the Company, or a complete description of the specific
provisions referred to herein.
Special Meetings of Shareholders.
The NJBCA provides that a special meeting of shareholders may
be called by the president, Board of Directors, any shareholder, director,
officer or other person as may be provided in the by-laws, and upon application
of the holder or holders of not less than 10% of all the shares entitled to vote
at a meeting, the Superior Court, for good cause shown, may order a special
meeting to be called. The DGCL provides that only the board of directors or such
person or persons as may be authorized by the certificate of incorporation or
by-laws may call special meetings of the shareholders. The By-Laws of the
Delaware Company provide that special meetings of shareholders may be called by
the Chairman or President or the Secretary upon the written request of a
majority of the Board of Directors, provided that any such request must state
the purpose(s) of the proposed meeting.
Shareholder Action by Written Consent.
The NJBCA states that shareholders may act on all matters
without a meeting and without prior notice and a vote with the written consent
of holders of the minimum number of votes required for approval at the meeting
at which all shareholders are present and voting. The DGCL permits shareholders
to act on all matters without a meeting, without prior notice and without a vote
if a consent is signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to approve the action at a
meeting at which all shareholders were present and voting.
Amendments to Certificate of Incorporation.
The NJBCA provides that an amendment to a New Jersey
corporation's Certificate of Incorporation must be approved by the affirmative
vote of a majority of the votes cast by the shareholders entitled to vote
thereon, unless the certificate of incorporation requires a greater percentage.
The DGCL provides that amendments to a Delaware corporation's certificate of
incorporation must be approved by the affirmative vote of the holders of a
majority of the voting stock of the corporation entitled to vote thereon (and,
if applicable, a majority of the outstanding stock of each class entitled to
vote thereon), unless the certificate of incorporation requires a greater
percentage. Neither the certifi-cate of incorporation of the Company nor of the
Delaware Company requires a greater percentage.
Amendments to By-laws.
The NJBCA provides that a Board of Directors has the power to
make, alter and repeal a corporation's by-laws, unless such power is reserved to
the corporation's shareholders in the corporation's certificate of
incorporation. The Company's By-Laws do not reserve such power to the
shareholders. Under the DGCL, the shareholders of a Delaware corporation and, if
the certificate of incorporation so provides, the Board of Directors, have the
power to adopt, amend or repeal a corporation's by-laws. The Certificate of
Incorporation of the Delaware Company grants the Board of Directors the power to
amend the By-Laws except with respect to any provisions relating to the
classification of directors as Classes A and B or the election of directors.
Board of Directors.
Under the NJBCA, the board of directors may consist of one or
more members, as provided in the by-laws and subject to any provision contained
in the certificate of incorporation. Under the DGCL, the board of directors of a
corporation may consist of one or more members as provided in the by-laws,
unless the certificate of incorporation fixes the number of directors. The
Certificate of Incorporation of the Delaware Company does not fix the number of
directors.
Classification.
Both the NJBCA and the DGCL permit, but do not require, the
adoption of a "classified" Board of Directors with staggered terms under which a
part of the Board of Directors is elected each year. Under the NJBCA, the
authorization for such as classified Board of Directors must be included in the
corporation's certificate of incorporation or an amendment thereto.
Additionally, under the NJBCA, the maximum term of each class of directors is
five years. Contrarily, the DGCL permits the authorization of a classified Board
of Directors to be included in the certificate of incorporation or by-laws of a
corporation or an amendment to either document. Delaware law does not limit the
term of any director. The Board of Directors of the Delaware Company is not
classified.
Removal of Directors.
In general, under the NJBCA, any or all of the directors of a
corporation may be removed for cause, or, unless otherwise provided in the
certificate of incorporation, without cause by the vote of a majority of the
votes cast by the holders of the shares then entitled to vote at an election of
directors; however, if the Board of Directors is classified, shareholders are
not entitled to remove directors without cause. Under the DGCL, any or all of
the directors of a corporation may be removed with or without cause, by the vote
of a majority of the shares then entitled to vote at an election of directors;
however, if the Board of Directors is classified (i.e., having multi-year,
staggered terms, which the Delaware Company does not have), directors may only
be removed for cause, unless the certificate of incorporation provides
otherwise. The Certificate of Incorporation of the Delaware Company does not so
provide.
Vacancies on the Board of Directors.
Under the NJBCA, unless the certificate of incorporation or
by-laws provide otherwise, a vacancy, however caused, and newly created
directorships resulting from an increase in the authorized number of directors
may be filled by the affirmative vote of a majority of the remaining directors.
In addition, under the NJBCA, any directorship not filled by the board may be
filled by the shareholders. Under the DGCL, vacancies may be filled by a
majority of the directors then in office unless the certificate of incorporation
or by-laws provide otherwise. The By-Laws of the Delaware Company provide that
the remaining directors of either class may fill vacancies in their respective
classes.
Liability and Indemnification of Officers and Directors.
Both the NJBCA and the DGCL contain provisions and limitations
regarding directors' liability and regarding indemnification by a corporation of
its officers, directors and employees.
The NJBCA permits a New Jersey corporation to include a
provision in its Certificate of Incorporation which eliminates or limits the
personal liability of a director or officer to the corporation or its
shareholders for monetary damages for breach of fiduciary duties as a director
or officer. However, no such provision may eliminate or limit the liability of a
director or officer for any breach of duty based upon an act or omission (i) in
breach of the director's or officer's duty of loyalty to the corporation or its
shareholders, (ii) not in good faith or involving a knowing violation of law, or
(iii) resulting in receipt by such person of an improper personal benefit. Under
the NJBCA, corporations are also permitted to indemnify directors in certain
circumstances and required to indemnify directors under certain circumstances.
Under the NJBCA, a director, officer, employee or agent may, in general, be
indemnified by the corporation if he has acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In addition, under the
NJBCA, corporations must indemnify a director to the extent the director has
been successful on the merits or otherwise. The Company's Certificate of
Incorporation includes such a provision.
The DGCL permits a Delaware corporation to include a provision
in its Certificate of Incorporation which eliminates or limits the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duties as a director, including conduct which
could be characterized as negligence or gross negligence. However, no such
provision may eliminate or limit the liability of a director (i) for any breach
of the director's duty of loyalty to the corporation or its shareholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) for the unlawful payment of dividends or
unlawful stock purchase or redemption or other violations of Section 174 of the
Delaware Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit. This provision may be extended to persons
other than directors if such persons exercise or perform any of the powers or
duties otherwise conferred or imposed upon the board of directors. The DGCL
further provides that no such provision can eliminate or limit the liability of
a director for any act or omission occurring prior to the date when such
provision becomes effective. Under the DGCL, a corporation has the power to
indemnify a director against judgments, settlements and expenses in any
litigation or other proceeding other than a derivative suit, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to a criminal proceeding, had no
reasonable cause to believe his conduct was unlawful. The indemnification
provisions of the DGCL make mandatory the indemnification of a director to the
extent that the director has been successful on the merits or otherwise, thus
possibly requiring indemnification of settlements in certain instances. The DGCL
also provides that a director may be indemnified by the corporation for expenses
of a derivative suit even if he is not successful on the merits, provided he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, subject, in the case of an
adverse judgment, to court approval. The Delaware Company's Certificate of
Incorporation includes such a provision.
Dissenter's Rights.
Under the NJBCA, dissenting shareholders who comply with
certain procedures are entitled to appraisal rights in connection with the
merger, consolidation or sale, lease exchange or other disposition of all or
substantially all of the assets of a corporation not in the usual or regular
course of business, unless the certificate of incorporation otherwise provides,
except that such rights are not provided when (i) the shares to vote on such
transaction are listed on a national securities exchange or held of record by
not less than 1,000 holders (or shareholders receive in such transaction cash
and/or securities which are listed on a national securities exchange or held of
record by not less than 1,000 shareholders) or (ii) no vote of the corporation's
shareholders is required for the proposed transaction.
Under the DGCL, dissenting stockholders who follow prescribed
statutory procedures are entitled to appraisal rights in connection with certain
mergers or consolidations, unless otherwise provided in the corporation's
certificate of incorporation, except that such rights are not provided when (i)
the shares of the corporation are listed on a national securities exchange or
designated as a national market system security by the NASD or held of record by
more than 2,000 shareholders and stockholders receive in the merger shares of
the surviving corporation or of any other corporation the shares of which are
listed on a national securities exchange or designated as a national market
system security by the NASD, or held of record by more than 2,000 shareholders
or (ii) the corporation is the surviving corporation and no vote of its
stockholders is required for the merger.
Dividends.
The NJBCA prohibits a corporation from making any distribution
to its shareholders if, after giving effect to such distribution, the
corporation would be unable to pay its debts as they become due in the usual
course of business or the corporation's total assets would be less than its
total liabilities. The DGCL permits a corporation to pay dividends out of any
surplus and, if it has not surplus, out of any net profits for the fiscal year
in which the dividend or for the preceding fiscal year (provided that such
payment will not reduce capital below the amount of capital represented by all
classes of shares having a preference upon the distribution of assets).
Repurchases of Stock.
The NJBCA prohibits a corporation from repurchasing or
redeeming its shares if (i) after giving effect to such repurchase or
redemption, the corporation would be unable to pay its debts as they become due
in the usual course of business or the corporation's total assets would be less
than its total liabilities, (ii) after giving effect to such repurchase or
redemption, the corporation would have no equity outstanding, (iii) the
redemption or repurchase price exceeded that specified in the securities
acquired, or (iv) such repurchase or redemption is contrary to any restrictions
contained in the corporation's certificate of incorporation. Under the DGCL, a
corporation may repurchase or redeem its shares only out of surplus and only if
such purchase does not impair capital. However, a corporation may redeem
preferred stock out of capital if such shares will be retired upon redemption
and the stated capital of the corporation is thereupon reduced in accordance
with the DGCL.
Inspection of Books and Records.
The NJBCA grants the right to inspect a corporation's minutes
of shareholder proceedings and its record of shareholders only for any proper
purpose and only (i) to shareholders of record for at least 6 months preceding
the demand, (ii) to holders of at least 5% of the outstanding shares of any
class or series of the corporation's stock or (iii) to shareholders upon receipt
of court order. The DGCL provides that any stockholder may for a proper purpose
inspect a corporation's stock ledger, a list of its stockholders and its other
books and records.
Business Combinations.
Section 14A:10A-4 of the NJBCA provides, among other things,
that no resident domestic corporation may engage in any business combination
with any "interested shareholder" of such corporation (defined as a holder of
10% or more stock) for a period of five years unless such business combination
is approved by the board of directors prior to the date on which the interested
shareholder made its stock acquisition. In addition to the restrictions stated
in the preceding sentence, no such corporation may engage in a business
combination with an interested shareholder other than one in which (i) the board
of directors has approved such business combination prior to such interested
shareholder's stock acquisition date; (ii) such business combination is approved
by the affirmative vote of the holders of two-thirds of the voting stock not
beneficially owned by that interested shareholder at a meeting called for such
purpose; or (iii) the aggregate amount of cash and the market value, as of the
consummation date, of consideration to be received per share by holders of
outstanding shares of common stock in the business combination is at least equal
to a certain "fair price" as determined by various criteria set forth in the
statute, subject to certain exceptions.
Section 14A:10-5 of the NJBCA provides, among other things,
that any person making an offer to purchase in excess of 10% (or such amount
which, when aggregated with such person's present holdings, exceeds 10%) of any
class of equity securities of any corporation or other issuer of securities
which is organized under the laws of New Jersey must, 20 days before the offer
is made file a disclosure statement with the target company and the Bureau of
Securities in the Division of Consumer Affairs in the Department of Law and
Public Safety of the State of New Jersey (the "Bureau"). Such takeover bid may
not proceed until after receipt of the Bureau's permission, which may not be
denied unless the Bureau, after public hearing, finds that (i) financial
condition of the offeror is such as to jeopardize the financial stability of the
target company, or prejudice the interests of any employees or security holders
who are unaffiliated with the offeror, (ii) the terms of the offer are unfair or
inequitable to the securityholders of the target company, (iii) the plans and
proposals which the offeror has to make any material change in the target
company's business or corporate structure or management, are not in the interest
of the target company's remaining securityholders or employees, (iv) the
competence, experience and integrity of those persons who would control the
operation of the target company are such that it would not be in the interest of
the target company's remaining securityholders or employees to permit the
takeover, or (v) the terms of the takeover bid do not comply with the provisions
of Section 14A:10A of the NJBCA.
Section 203 of DGCL regulates a wide range of transaction
("business combinations") between a corporation and an interested stockholder.
An "interested stockholder" is, generally, any person who beneficially owns,
directly or indirectly, 15% of more of the corporation's outstanding voting
stock. "Business combinations" are broadly defined to include (i) mergers or
consolidations with, (ii) sales or other dispositions of more than 10% of the
corporation's assets to, (iii) certain transactions resulting in the issuance or
transfer of any stock of the corporation or any subsidiary to, (iv) certain
transactions which would result in increasing the proportionate share of stock
of the corporation or any subsidiary owned by, or (v) receipt of the benefit
(other than proportionately as a stockholder) of any loans, advances of other
financial benefits by, an interested stockholder. Section 203 of the DGCL
provides that an interested stockholder may not engage in a business combination
with the corporation for a period of three years from the date of becoming an
interested stockholder unless (i) prior to such date the board of directors
approved either the business combination or the transaction which resulted in
the person becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in the person becoming an interested stockholder,
that the person owned at least 85% of the corporation's voting stock outstanding
at the time the transaction commenced (excluding shares owned by officers and
directors and shares owned by certain employee stock plans) or (iii) on or
subsequent to such date the business combination is approved by the board of
directors and authorized by the affirmative vote of at least 66 2/3% of the
outstanding voting stock not owned by the interested stockholder. These
restrictions placed on interested stockholders do not apply to a corporation
whose certificate of incorporation contains a provision expressly electing not
to be governed by the statute.
Dissolution.
Each of the NJBCA and the DGCL provides that a corporation may
be voluntarily dissolved by (i) the written consent of all its shareholders or
(ii) the adoption by the corporation's board of directors of a resolution
recommending that the corporation be dissolved and submission of the resolution
to a meeting of shareholders, at which meeting the resolution is adopted. The
NJBCA requires the affirmative vote of the majority of votes cast (assuming the
number of votes cast constitutes a quorum), while the DGCL requires the
affirmative vote of a least a majority of the outstanding stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE RATIFICATION AND APPROVAL OF THE
PROPOSAL TO REINCORPORATE IN DELAWARE
ANNUAL REPORT
All shareholders of record of the Company as of the Record
Date are concurrently being sent a copy of the Company's Annual Report to
Shareholders for 1997. This Annual Report contains certified financial
statements of the Company for the years ended December 31, 1997 and 1996.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL
HOLDER OF ITS CLASS A AND CLASS B COMMON STOCK AS OF THE RECORD DATE, ON THE
WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-KSB, AS AMENDED, FOR 1997, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO BRADLEY
PHARMACEUTICALS, INC., 383 ROUTE 46 WEST, FAIRFIELD, NEW JERSEY 07004-2402,
ATTENTION: CORPORATE SECRETARY.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by December 31, 1998 in
order to be considered for inclusion in proxy materials distributed in
connection with the next Annual Meeting of Shareholders.
MISCELLANEOUS
As of the date of this Proxy Statement, the Board of Directors
of the Company does not know of any other matter to be brought before the
Meeting. However, if any other matters not mentioned in the Proxy Statement are
properly brought before the Meeting or any adjournments thereof, the persons
named in the enclosed Proxy or their substitutes will have discretionary
authority to vote proxies given in said form, or otherwise act, in respect of
such matters in accordance with their best judgment.
All of the costs and expenses in connection with the
solicitation of proxies with respect to the matters described herein will be
borne by the Company. In addition to solicitation of proxies by use of the
mails, directors, officers and employees (who will receive no compensation
therefor in addition to their regular remuneration) of the Company may solicit
the return of proxies by telephone, telegram or personal interview. The Company
will request banks, brokerage houses and other custodians, nominees and
fiduciaries to forward copies of the proxy material to their principals and to
request instructions for voting the proxies. The Company may reimburse such
banks, brokerage houses and other custodians, nominees and fiduciaries for their
expenses in connection therewith.
It is important that proxies be returned promptly.
Shareholders are, therefore, urged to fill in, date, sign and return the Proxy
immediately. No postage need be affixed if mailed in the enclosed envelope in
the United States.
By Order of the Board of Directors,
DANIEL GLASSMAN
Chairman & CEO
June 1, 1998
<PAGE>
CERTIFICATE OF INCORPORATION
OF
BRADLEY PHARMACEUTICALS, INC.
* * * * * * * * *
ARTICLE I
The name of the Corporation is Bradley Pharmaceuticals, Inc.
ARTICLE II
The address of this Corporation's registered office in the State of
Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle.
The name of the Corporation's registered agent at such address is Corporation
Service Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV
The aggregate number of shares of stock which the corporation shall have
authority to issue is Twenty Nine Million Three Hundred Thousand (29,300,000)
shares of stock, of which Twenty Seven Million Three Hundred Thousand
(27,300,000) shall be shares of Common Stock, with a par value of $.01 per
share, and Two Million (2,000,000) shall be shares of Preferred Stock, with a
par value of $.01 per share.
A. Common Stock. This Corporation's Twenty Seven Million Three Hundred
Thousand (27,300,000) shares of common stock, with a par value of $.01 per
share, shall not have cumulative voting or preemptive rights and shall be
entitled to one vote for each share in the election of directors and on any
other matter presented to the stockholders, except to the extent provided as
follows:
1. 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.
2. 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, 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 the 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 IV, Section A 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.
Upon dissolution, whether voluntary or involuntary, the holders of shares
of Preferred Stock shall first be entitled to receive, out of the net assets of
this Corporation, any amount set forth in the Board of Director's resolution
authorizing the series of Preferred Stock of which such shares are a part, plus
unpaid accumulated dividends, if any, without interest. All of the assets, if
any, thereafter remaining shall be distributed among the holders of the Common
Stock. The consolidation or merger of this Corporation at any time, or from time
to time, with any other corporation or corporations, or a sale of all or
substantially all of the assets of this Corporation shall not be construed as a
dissolution, liquidation or winding up of the Corporation within the meaning
hereof.
ARTICLE V
The name and address of the incorporator is W. Raymond Felton, Esq., c/o
Greenbaum, Rowe, Smith, Ravin, Davis & Himmel, LLP, 99 Wood Avenue South,
Iselin, New Jersey 08830.
ARTICLE VI
The period of existence of the Corporation is unlimited.
ARTICLE VII
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter or repeal the
by-laws of the Corporation; provided, however, that the Board of Directors shall
not have the authority to alter or repeal any by-law provision relating to the
classification or election of directors.
ARTICLE VIII
Elections of directors need not be by written ballot unless the by-laws of
the Corporation shall so provide. Meetings of stockholders may be held within or
without the State of Delaware, as the by-laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the by-laws of the Corporation.
ARTICLE IX
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE X
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 or the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
The undersigned, being the incorporator hereinbefore named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, do make this certificate, hereby declaring and certifying that this is
my act and deed and the facts herein stated are true, and accordingly have
hereunto set our hand this 14th day of May, 1998.
W. Raymond Felton, Incorporator
<PAGE>
BRADLEY PHARMACEUTICALS, INC.
* * * *
B Y - L A W S
* * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington, County
of New Castle, State of Delaware.
Section 2. The Corporation may also have offices at such other places both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of directors
shall be held in the City of Wilmington, State of Delaware at such place as may
be fixed from time to time by the Board of Directors, or at such other place
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year 1999,
shall be held on the first Monday of May, if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 10:00 a.m., or at such other
date and time as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting, at which they shall elect a Board of
Directors and transact such other business as may properly be brought before the
meeting.
Section 3. Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at such
meeting not less 10 than nor more than 60 days before the date of the meeting.
Section 4. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the last known address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder who
makes a written request to the Corporation to do so by certified mail, return
receipt requested, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the President and shall be called by the
Chairman or the President or, at the request in writing of a majority of the
Board of Directors, by the Secretary. Such request shall state the purpose or
purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called
shall be given not less 10 than nor more than 60 days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
<PAGE>
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Certificate of
Incorporation. Notwithstanding the foregoing, as to matters on which the
Corporation's Class A stockholders and Class B stockholders vote as separate
classes pursuant to the Certificate of Incorporation, the holders of a majority
of each such class issued and outstanding and entitled to vote, present in
person or by proxy, shall constitute a quorum. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power voting as a single class to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section 9. When a quorum is present at any meeting, the vote of the holders
of a majority of the stock which has voting power present in person or
represented by proxy and which votes on a question shall decide such a question
brought before such meeting, unless the question is one upon which by express
provision of the Delaware General Corporation Law ("GCL") or of the Certificate
of Incorporation, a different vote is required in which case such express
provision shall govern and control the decision of such question. The holder of
any shares who abstains as to a question shall be deemed not to have voted for
this purpose.
<PAGE>
Section 10. Unless otherwise provided in the Certificate of Incorporation,
each stockholder shall, at every meeting of the stockholders, be entitled to one
vote in person or by proxy for each share of the capital stock having voting
power held by such stockholder, but no proxy shall be voted after three years
from its date, unless the proxy provides for a longer period. Section 11. Unless
otherwise provided in the Certificate of Incorporation, any action required to
be taken at any annual or special meeting of stockholders of the Corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole board
shall be at least three (3) and not more than eleven (11), with the Board of
Directors to establish the number of directors from time to time. In the event
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. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the class of directors to be filled then in office, though less than a quorum,
or by a sole remaining director in such class, and the directors so chosen shall
hold office until the next annual election and until their successors are duly
elected and shall qualify, unless sooner displaced. If there are no directors of
a class in office, then an election of directors may be held in the manner
provided by GCL.
Section 3. The business of the Corporation shall be managed by or under the
direction of its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Board of Directors of the Corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected Board of Directors shall
be held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected Board of Directors,
or in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors, or as shall be specified in a written waiver signed by all
of the directors.
Section 6. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as shall from time to time be determined
by the Board.
Section 7. Special meetings of the Board may be called by the Chairman,
President or Chief Executive Officer on five days' notice to each director,
either personally or by mail or by facsimile communication; special meetings
shall be called by the Chairman, President, Chief Executive Officer or Secretary
in like manner and on like notice on the written request of a majority of the
Class B Directors unless the Board includes only one Class B Director, in which
case special meetings shall be called by the Chairman, President, Chief
Executive Officer or Secretary in like manner and on like notice on the written
request of the sole Class B Director.
Section 8. At all meetings of the Board of Directors, a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by GCL or by the Certificate of Incorpora-tion. If a
quorum shall not be present at any meeting of the Board of Directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the Certificate of Incorporation
or these By-Laws, any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the Board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or Committee.
Section 10. Unless otherwise restricted by the Certificate of Incorporation
or these By-Laws, members of the Board of Directors, or any committee designated
by the Board of Directors, may participate in a meeting of the Board of
Directors, or any committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can speak to and hear each other, and such participation in a meeting
shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. The Board of Directors may, by resolution passed by a majority
of the whole Board, designate one or more committees, each committee to consist
of one or more of the directors of the Corporation. The Board may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation (except
that a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors
as provided in Section 153(a) of the GCL fix any of the preferences or rights of
such shares relating to dividends, redemption, dissolution, any distribution of
assets of the Corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation), adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation; and,
unless the resolution or the Certificate of Incorporation expressly so provides,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Section 12. Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the Certificate of Incorporation
or these By-Laws, the Board of Directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise provided in the Certificate of Incorporation,
a director of either class may be removed with or without cause by the holders
of a majority of shares entitled to vote for the election of such a class of
directors.
ARTICLE IV NOTICES
Section 1. Whenever, under the provisions of the GCL, the Certificate of
Incorporation or these By-Laws, notice is required to be given to any director
or stockholder, it shall not be construed to mean personal notice, but such
notice may be given in writing, by mail, addressed to such director or
stockholder at his address as it appears on the records of the Corporation, with
postage thereon prepaid, and such notice shall be deemed to be given at the time
when the same shall be deposited in the United States mail. Notice to directors
may also be given by facsimile telecommunication.
Section 2. Whenever any notice is required to be given under the provisions
of the GCL, the Certificate of Incorporation or these By-Laws, a waiver thereof
in writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall be chosen by the Board of
Directors and shall be a Chairman, a President, a Vice-President, a Secretary
and Treasurer. The Board of Directors may also choose a chief executive officer,
additional Vice-Presidents, and one or more Assistant Secretaries and Assistant
Treasurers. Any number of offices may be held by the same person, unless the
certificate of incorporation or the by-laws otherwise provide.
Section 2. The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose a Chairman, a President, one or more
Vice-Presidents, a Secretary and a Treasurer.
Section 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board.
Section 4. The salaries of all officers and agents of the Corporation shall
be fixed by the Board of Directors.
Section 5. The officers of the Corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time, with or without cause, by the
affirmative vote of a majority of the Board of Directors. Any vacancy occurring
in any office of the Corporation shall be filled by action of the Board of
Directors.
THE CHAIRMAN
Section 6. The Chairman of the Board, shall, if present, preside at all
meetings of the Stockholders and the Board of Directors and exercise such other
powers and duties as may be from time to time assigned to him by the Board of
Directors. The Chairman of the Board shall report only to the Board of
Directors.
THE PRESIDENT
Section 7. The President shall be the chief executive officer of the
Corporation, shall preside at all meetings of the stockholders and the Board of
Directors in the absence of the Chairman, shall have general and active
management of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. If the same
individual is not both President and Chief Executive Officer of the Corporation,
the President shall report to and be subject to the authority of the Chief
Executive Officer. If the same individual is both President and Chief Executive
Officer of the Corporation, that individual shall report to and be subject to
the authority of the Chairman of the Board.
Section 8. The President shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the Corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
THE VICE PRESIDENTS
Section 9. In the absence of the President or in the event of his inability
or refusal to act, subject to the authority of the Board of Directors, the
Vice-President (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the directors, or in the absence of
any designation, then in the order of their election) shall perform the duties
of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The Vice-Presidents shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the Corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or President, under whose supervision the Secretary shall be. The Secretary
shall have custody of the corporate seal of the Corporation and shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his or her signature or by the signature of an Assistant
Secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
or her signature.
Section 11. The Assistant Secretary, or if there be more than one, the
assistant secretaries in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the Secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The Treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.
Section 13. The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his or her transactions as Treasurer and of the financial condition of the
Corporation.
Section 14. If required by the Board of Directors, the Treasurer shall give
the Corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties or his or her office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
Section 15. The Assistant Treasurer, or if there shall be more than one,
the Assistant Treasurers in the order determined by the Board of Directors (or
if there be no such determination, then in the order of their election) shall,
in the absence of the Treasurer or in the event of his or her inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1. The shares of the Corporation shall be represented by a
certificate or shall be uncertificated. Certificates shall be signed by, or in
the name of the Corporation by, the Chairman or Vice-Chairman of the Board of
Directors, or the President or a Vice-President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation. Upon the face or back of each stock certificate issued to represent
any partly paid shares, or upon the books and records of the Corporation in the
case of uncertificated partly paid shares, shall be set forth the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated. If the Corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the GCL, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series or stock, a
statement that the Corporation will furnish without charge to each Stockholder
who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications limitations or restrictions of such preferences
and/or rights. Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the GCL or a
statement that the Corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Any of or all the signatures on a certificate may be facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issues.
LOST CERTIFICATES
Section 3. The Board of Directors may direct a new certificate or
certificates or uncertificated shares to be issued in place of any certificate
or certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming this certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates or uncertificated
shares, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Upon receipt of proper transfer instructions from tho registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the Corporation.
FIXING RECORD DATE
Section 5. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books owner or shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof except as otherwise provided by the GCL.
ARTICLE VII
GENERAL PROVISIONS DIVIDENDS
Section 1. Dividends upon the capital stock of the Corporation, subject to
the provisions of the Certificate of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The Board of Directors shall present at each annual meeting, and
at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
Corporation.
CHECKS
Section 4. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the Corporation shall be fixed by resolution
of the Board of Directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. The Corporation shall indemnify its officers, directors,
employees and agents to the fullest extent permitted by the GCL.
ARTICLE VIII
AMENDMENTS
Section 1. These By-Laws may be altered, amended or repealed or new By-Laws
may be adopted by the stockholders or by the Board of Directors, when such power
is conferred upon the Board of Directors by the Certificate of Incorporation, at
any regular meeting of the stockholders or of the Board of Directors or at any
special meeting of the stockholders or of the Board of Directors if notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such meeting. If the power to adopt, amend or repeal By-Laws is
conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal By-Laws. Notwithstanding the foregoing, the Board of Directors shall not
have the authority to repeal Sections 1 or 2 of Article III of these By-Laws.
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May , 1998, by and between
Bradley Pharmaceuticals, Inc., a Delaware corporation ("Bradley-Del.") and
Bradley Pharmaceuticals, Inc., a New Jersey corporation and the sole shareholder
of Bradley-Del. ("Bradley-NJ"). WHEREAS, the Board of Directors and the
shareholders of each of Bradley-Del. and Bradley-NJ have each approved the
merger of Bradley-Del. with and into Bradley-NJ in accordance with the General
Corporation Law of the State of Delaware (the "GCL") and the New Jersey Business
Corporation Act (the "NJBCA") upon the terms and subject to the conditions set
forth herein. NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Bradley-Del. and Bradley-NJ hereby agree as follows:
1. The Merger. Upon the terms and conditions hereof, and in accordance with
the GCL and the NJBCA, at the Effective Time (as defined below), Bradley-NJ
shall be merged (the "Merger") with and into Bradley-Del.
2. Effective Time. As soon as practicable following the execution hereof
Bradley-NJ and Bradley-Del. shall file with the Secretary of State of the State
of Delaware a certificate of ownership and merger executed in accordance with
the relevant provisions of the GCL, and Bradley-Del. and Bradley-NJ shall file
with the Secretary of State of the State of New Jersey a certificate of merger
executed in accordance with the relevant provisions of the NJBCA. The Merger
shall become effective at the time each such filing is completed (the "Effective
Time").
3. Effects of the Merger. The Merger shall have the effects set forth in
the GCL and the NJBCA. Without limiting the generality of the foregoing, at the
Effective Time: (a) the separate existence of Bradley-NJ shall cease; (b)
Bradley-Del as the surviving corporation (the "Surviving Corporation") shall
possess all of the rights, privileges, powers, immunities, purposes and
franchises, both public and private, of each of Bradley-NJ and Bradley-Del.; (c)
all real and personal property, tangible and intangible of every kind and
description belonging to Bradley-NJ and Bradley-Del. shall be vested in the
Surviving Corporation without further act or deed, and the title to any real
estate or any interest therein vested in either Bradley-NJ or Bradley-Del. shall
not revert or in any way be impaired by reason of the Merger; and (d) the
Surviving Corporation shall assume all the obligations of Bradley-NJ.
4. Certificate of Incorporation and Bylaws. The Certificate of
Incorporation and Bylaws of Bradley-Del. shall be the Certificate of
Incorporation and Bylaws of the Surviving Corporation.
5. Directors. The directors of Bradley-NJ at the Effective Time shall be
the initial directors of the Surviving Corporation, until their successors shall
have been duly elected or appointed and qualified.
6. Officers. The officers of Bradley-NJ at the Effective Time shall be the
initial officers of the Surviving Corporation, until their successors shall have
been duly appointed.
7. Conversion of Stock of Bradley-Del. and Bradley-NJ.
(a) At the Effective Time, each share of Class A common stock, no par
value, of Bradley-NJ (the "Bradley-NJ Class A Common Stock") issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
converted into and become one fully paid and nonassessable share of Class A
common stock, par value $.01 per share, of Bradley-Del. (the "Bradley-Del.
Class A Common Stock"). At the Effective Time, each share of the Stock, no
par value of Bradley-NJ (the "Bradley-NJ Class B Stock") issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of holder thereof, be converted
into and become one fully paid and nonassessable share of Class B Common
Stock, par value $.01 per share, of Bradley-Del. (the "Bradley-Del. Class B
Stock"). Upon the surrender to Bradley-Del. of any certificates evidencing
shares of Bradley-NJ Class A Stock or Bradley-NJ Class B Stock by any
holder thereof, Bradley-Del. agrees to issue to such holder certificates
evidencing an equal number of shares of Bradley-Del. Class A Stock or
Bradley-Del. Class B Stock, as the case may be.
(b) Each share of capital stock of Bradley-Del. issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and
retired and cease to exist.
8. Warrants and Options. At the Effective Time, any warrants or options to
purchase shares of Bradley-NJ Class A Stock or Bradley-NJ Class B Stock (the
"Rights") issued by Bradley-NJ and outstanding at the Effective Time shall, by
virtue of the Merger and without any action on the part of the holders of the
Rights, be converted into and become warrants or options, as the case may be
(the "New Rights") to purchase an equal number of shares of Bradley-Del. Class A
Stock or Bradley-Del. Class B Stock, as the case may be, upon substantially the
same terms and conditions as the Rights and any other rights and obligations
contained in the certificates evidencing the Rights shall be deemed to be and
shall become the rights and obligations of Bradley-Del. At the Effective Time,
by its signature below, Bradley-Del. assumes absolutely, unconditionally and
irrevocably the obligations of Bradley-NJ under the certificates evidencing the
Rights. At the Effective Time, Bradley-Del. agrees to reserve for issuance
shares of Bradley-Del. Class A Stock and Bradley-Del. Class B Stock equal in
number to the number of shares of Bradley-NJ Class A Stock and Bradley-NJ Class
B Stock for which the New Rights may be exercised. Upon the surrender to
Bradley-Del. of any certificate evidencing Rights by any holder of Rights,
Bradley-Del. agrees to issue to any such holder a certificate evidencing New
Rights to purchase that number of shares of Bradley-Del. Class A Stock or
Bradley-Del. Class B Stock, as the case may be, equal to the number of shares of
Bradley-NJ Class A Stock or Bradley-NJ Class B Stock for which the Rights so
surrendered were exercisable.
9. Other Actions. From and after the Effective Time, the parties hereto
shall take such other and further actions, in addition to the filings described
in paragraph 1, as may be required by law to make the Merger effective.
10. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws; provided, however, that the consummation and effectiveness of the Merger
shall be governed by and construed in accordance with the laws of the State of
Delaware and the laws of the State of New Jersey.
11. Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
12. Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement except for Sections 4, 7, and 8 (which are intended to be for the
benefit of the persons referred to therein, and may be enforced by such
persons).
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf by its duly authorized officers, all as of the day and
year first above written.
BRADLEY PHARMACEUTICALS, INC.,
a New Jersey Corporation
By:____________________________________
DANIEL GLASSMAN, President
BRADLEY PHARMACEUTICALS, INC.,
a Delaware corporation
By:____________________________________
DANIEL GLASSMAN, President
