SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
Bentley Pharmaceuticals, Inc.
--------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------
BENTLEY PHARMACEUTICALS, INC.
65 LAFAYETTE ROAD
THIRD FLOOR
NORTH HAMPTON, NH 03862
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 22, 2002
------------
North Hampton, NH
April 18, 2002
To the Stockholders of
Bentley Pharmaceuticals, Inc.
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting (the "Meeting") of
Stockholders of BENTLEY PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), will be held on Wednesday, May 22, 2002 at 11:00 a.m., local time,
at the Grand Hyatt New York, located at Park Avenue at Grand Central Station
(42nd Street), New York, New York 10017 for the purpose of considering and
acting upon the following matters:
(1) The election of three Class III Directors to serve until the 2005
Annual Meeting of Stockholders, or until the election and
qualification of their respective successors; and
(2) The transaction of such other business as may properly be brought
before the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 18, 2002 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the Meeting. A complete list of the Stockholders entitled to vote
will be available for inspection by any Stockholder during the Meeting; in
addition, the list will be open for examination by any Stockholder, for any
purpose germane to the Meeting, during ordinary business hours, for a period of
at least 10 days prior to the Meeting, at the Company's principal place of
business located at 65 Lafayette Road, Third Floor, North Hampton, New Hampshire
03862.
You are cordially invited to attend the Meeting. Whether or not you intend
to attend the Meeting, you are urged to complete, sign and date the enclosed
form of proxy, and return it promptly in the enclosed reply envelope. No postage
is required if mailed in the United States. Returning your proxy does not
deprive you of your right to attend the Meeting and to vote your shares in
person. This solicitation is being made on behalf of the Company's Board of
Directors.
By Order of the Board of Directors
MICHAEL D. PRICE
Secretary
BENTLEY PHARMACEUTICALS, INC.
65 Lafayette Road
Third Floor
North Hampton, NH 03862
--------------------------
PROXY STATEMENT
For Annual Meeting of Stockholders
May 22, 2002
------------------------
This Proxy Statement, to be mailed to stockholders on or about April 22,
2002, is furnished in connection with the solicitation by the Board of Directors
of Bentley Pharmaceuticals, Inc., a Delaware corporation (the "Company"), of
proxies in the accompanying form ("Proxy" or "Proxies") for use at the 2002
Annual Meeting of Stockholders of the Company to be held on Wednesday May 22,
2002 at 11:00 a.m., local time at the Grand Hyatt New York located at Park
Avenue at Grand Central Station (42nd Street), New York, New York 10017 and at
any adjournments or postponements thereof (the "Meeting").
All Proxies received will be voted in accordance with the specifications
made thereon or, in the absence of any specification, for the election of all of
the nominees named herein to serve as Directors. Any Proxy given pursuant to
this solicitation may be revoked by the person giving it any time prior to the
exercise of the powers conferred thereby by notice in writing to Michael D.
Price, Secretary of the Company, 65 Lafayette Road, Third Floor, North Hampton,
New Hampshire 03862, 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.
Only holders of record of the Company's issued and outstanding Common
Stock, $.02 par value (the "Common Stock"), as of the close of business on April
18, 2002 (the "Record Date") will be entitled to notice of, and to vote at, the
Meeting. As of the Record Date, there were issued and outstanding 17,219,170
shares of the Company's Common Stock, each of which is entitled to one vote upon
each matter at the Meeting. The holders of a majority of the shares entitled to
vote at the Meeting will constitute a quorum for the transaction of business.
Proxies submitted which contain abstentions or broker non-votes will be deemed
present at the Meeting in determining the presence of a quorum. A plurality of
the votes cast at the Meeting at which a quorum is present will be required for
the election of Directors. Shares of Common Stock that are voted to abstain and
shares which are subject to broker non-votes will not be considered cast with
respect to the proposal to elect Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 18, 2002 as to (i)
each person (including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) who is known to the Company to
be the beneficial owner of more than five percent of the Company's Common Stock,
its only class of voting securities, (ii) each Director and nominee for Director
of the Company, (ii) each Executive Officer of the Company named in the Summary
Compensation Table set forth below, and (iii) all current executive officers and
directors as a group.
Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all securities
beneficially owned by them. Beneficial ownership exists when a person either has
the power to vote or sell common stock. A person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days from the
applicable date, whether upon the exercise of options or otherwise. Except as
otherwise indicated, the address for those beneficial holders who own more than
5% of the Company's Common Stock is the address for the Company's headquarters.
PERCENTAGE
NUMBER OF SHARES OF OF COMMON
COMMON STOCK STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING
------------------------------------ ------------------ -----------
Michael McGovern(1).......................................... 2,793,428 14.96%
Director
5910 Long Island Drive
Atlanta, GA 30328
Renaissance U.S. Growth and Income Trust PLC(2)........ 1,104,400 6.41%
8080 North Central Expressway
Suite 210, LB59
Dallas, TX 75206-1857
Renaissance Capital Growth and Income Fund III, Inc.(3).. 924,979 5.37%
8080 North Central Expressway
Suite 210, LB59
Dallas, TX 75206-1857
Salomon Smith Barney Holdings Inc.(4)........................ 747,333 4.34%
388 Greenwich Street
New York, NY 10013
Citigroup Inc.(4)
399 Park Avenue
New York, NY 10043
James R. Murphy(5)........................................... 911,694 5.06%
Chairman of the Board, President, Chief
Executive Officer and Director
Robert M. Stote, M.D.(6)..................................... 630,345 3.54%
Senior Vice President, Chief Science
Officer and Director
Michael D. Price(7).......................................... 530,001 2.99%
Vice President, Chief Financial Officer,
Secretary, Treasurer and Director
Robert J. Gyurik(8).......................................... 144,544 *
Vice President of Pharmaceutical
Development and Director
Jordan A. Horvath(9)......................................... 57,184 *
Vice President and General Counsel
(table continues on next page)
2
PERCENTAGE
NUMBER OF SHARES OF OF COMMON
COMMON STOCK STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER (continued) BENEFICIALLY OWNED OUTSTANDING
------------------------------------ ------------------ -----------
Charles L. Bolling(10)....................................... 103,528 *
Director
Miguel Fernandez(11)......................................... 77,568 *
Director
William A. Packer(12)........................................ 72,800 *
Director
All executive officers and directors as a group
(9 persons)(13).............................................. 5,321,092 25.41%
---------------------------------
* Less than one percent
(1) Includes 1,313,500 shares of the Company's Common Stock issuable upon
exercise of Class B Warrants, 75,000 shares of the Company's Common Stock
issuable upon exercise of vested stock options and 69,200 shares of the
Company's Common Stock issuable upon exercise of stock options that become
exercisable within 60 days. Excludes 100,000 shares of the Company's Common
Stock issuable upon exercise of stock options which are not vested.
(2) The number of shares is based on information contained in Amendment No. 5
to Schedule 13G, dated December 26, 2000. The Schedule 13G was signed by
Russell Cleveland as President of Renaissance Capital Group, Inc., the
investment manager of Renaissance U.S. Growth and Income Trust PLC. Mr.
Cleveland is a former Director of the Company.
(3) The number of shares is based on information contained in Amendment No. 7
to Schedule 13G, dated December 7, 2000. The Schedule 13G was signed by
Russell Cleveland as President and CEO of Renaissance Capital Growth and
Income Fund III, Inc. Mr. Cleveland is a former Director of the Company.
(4) The number of shares is based on information contained in Schedule 13G,
dated February 6, 2002. Salomon Smith Barney Holdings Inc. and Citigroup
Inc. filed the Schedule 13G as a group, indicating shared voting and
dispositive power of the securities held.
(5) Includes 1,300 shares of the Company's Common Stock owned by Mr. Murphy's
sons, as to which Mr. Murphy disclaims beneficial ownership, and 3,907
shares of the Company's Common Stock held in Mr. Murphy's 401(k) Retirement
Plan. Also includes 745,400 shares of the Company's Common Stock issuable
upon exercise of vested stock options, 57,600 shares of the Company's
Common Stock issuable upon exercise of stock options that become
exercisable within 60 days and 1,500 shares of the Company's Common Stock
issuable upon exercise of Class B Warrants. Excludes 100,000 shares of the
Company's Common Stock issuable upon exercise of stock options which are
not vested.
(6) Includes 4,145 shares of the Company's Common Stock held in Dr. Stote's
401(k) Retirement Plan, 567,500 shares of the Company's Common Stock
issuable upon exercise of vested stock options, 10,000 shares of the
Company's Common Stock issuable upon exercise of stock options that become
exercisable within 60 days and 5,000 shares of the Company's Common Stock
issuable upon exercise of Class B Warrants. Excludes 37,500 shares of the
Company's Common Stock issuable upon exercise of stock options which are
not vested.
(7) Includes 101 shares of the Company's Common Stock owned by Mr. Price's son,
as to which Mr. Price disclaims beneficial ownership, and 4,198 shares of
the Company's Common Stock held in Mr. Price's 401(k) Retirement Plan. Also
includes 446,500 shares of the Company's Common Stock issuable upon
exercise of vested stock options and 50,000 shares of the Company's Common
Stock issuable upon exercise of stock options that become
(footnotes continue on next page)
3
exercisable within 60 days. Excludes 50,000 shares of the Company's Common
Stock issuable upon exercise of stock options which are not vested.
(8) Includes 9,970 shares of the Company's Common Stock and 1,000 shares of the
Company's Common Stock issuable upon exercise of Class B Warrants owned by
Mr. Gyurik's IRA and 3,574 shares of the Company's Common Stock held in Mr.
Gyurik's 401(k) Retirement Plan. Also includes 40,000 shares of the
Company's Common Stock issuable upon exercise of vested stock options and
50,000 shares of the Company's Common Stock issuable upon exercise of stock
options that become exercisable within 60 days. Excludes 100,000 shares of
the Company's Common Stock issuable upon exercise of stock options which
are not vested.
(9) Includes 50,000 shares of the Company's Common Stock issuable upon exercise
of vested stock options and 2,884 shares of the Company's Common Stock held
in Mr. Horvath's 401(k) Retirement Plan. Excludes 120,000 shares of the
Company's Common Stock issuable upon exercise of stock options which are
not vested.
(10) Includes 67,628 shares of the Company's Common Stock issuable upon exercise
of vested stock options and 27,900 shares of the Company's Common Stock
issuable upon exercise of stock options that become exercisable within 60
days.
(11) Includes 44,200 shares of the Company's Common Stock issuable upon exercise
of vested stock options and 27,900 shares of the Company's Common Stock
issuable upon exercise of stock options that become exercisable within 60
days.
(12) Includes 44,200 shares of the Company's Common Stock issuable upon exercise
of vested stock options and 27,900 shares of the Company's Common Stock
issuable upon exercise of stock options that become exercisable within 60
days.
(13) Includes 1,401 shares of the Company's Common Stock owned by family members
of certain of the executive officers and directors, as to which each
executive officer or director disclaims beneficial ownership. Also includes
2,080,428 shares of the Company's Common Stock issuable upon exercise of
vested stock options, 320,500 shares of the Company's Common Stock that
become exercisable within 60 days, 1,320,000 shares of the Company's Common
Stock issuable upon exercise of Class B Warrants, 18,708 shares of the
Company's Common Stock held in 401(k) Retirement Plan accounts of various
executive officers and 9,970 shares of the Company's Common Stock and 1,000
shares of the Company's Common Stock issuable upon exercise of Class B
Warrants held by the IRA account of an executive officer. Excludes 507,500
shares of the Company's Common Stock issuable upon exercise of stock
options which are not vested.
4
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Articles of Incorporation and By-Laws provide for a
classified Board of Directors. The Board is divided into three classes
designated Class I, Class II and Class III. The nominees included in Class III
below are being presented for election as Class III Directors to hold office
until the 2005 Annual Meeting of Stockholders. Unless instructed to the
contrary, the persons named in the enclosed Proxy intend to cast all votes
pursuant to Proxies received in favor of the persons listed under the heading
"Nominees" below as Directors. The nominees have indicated to the Company their
availability for election; Messrs. Murphy, Stote and Fernandez are presently
Directors. In the event that the nominees should not continue to be available
for election, the holders of the Proxies may exercise their discretion to vote
for a substitute. Officers hold office until the meeting of the Board of
Directors following each Annual Meeting of Stockholders and until their
successors have been chosen and qualified.
The following information is furnished with respect to the nominees and
each other continuing member of the Company's Board of Directors.
CLASS OF YEAR
POSITIONS WITH DIRECTOR FIRST
THE COMPANY (UPON BECAME
NAME AGE PRESENTLY HELD ELECTION) DIRECTOR
---- --- -------------- --------- --------
NOMINEES:
James R. Murphy 52 Chairman of the Board, President, III 1993
Chief Executive Officer and Director
Robert M. Stote, M.D. 62 Senior Vice President, Chief III 1993
Science Officer and Director
Miguel Fernandez 71 Director III 1999
DIRECTORS WHOSE TERMS OF OFFICE
CONTINUE AFTER THE MEETING:
Michael McGovern 58 Vice Chairman and Director I 1997
Michael D. Price 44 Vice President, Chief Financial I 1995
Officer, Secretary, Treasurer
and Director
Charles L. Bolling 78 Director II 1991
Robert J. Gyurik 55 Vice President of Pharmaceutical II 1998
Development and Director
William A. Packer 67 Director II 1999
5
BACKGROUND OF NOMINEES
JAMES R. MURPHY has served as one of the Company's Directors since 1993.
Mr. Murphy became President of the Company in September 1994, was named Chief
Executive Officer effective January 1995 and became Chairman of the Board in
June 1995. Prior to rejoining the Company, Mr. Murphy served as Vice President
of Business Development at MacroChem Corporation, a publicly owned
pharmaceutical and drug delivery company, from March 1993 through September
1994. From September 1992 until March 1993, Mr. Murphy served as a consultant in
the pharmaceutical industry with his primary efforts directed toward product
licensing. Prior thereto, Mr. Murphy served as Director - Worldwide Business
Development and Strategic Planning of the Company from December 1991 to
September 1992. Mr. Murphy previously spent 14 years in pharmaceutical research
and product development with SmithKline Corporation and in international
business development with contract research and consulting laboratories. Mr.
Murphy received a B.A. in Biology from Millersville University.
ROBERT M. STOTE, M.D. became Senior Vice President and Chief Science
Officer of the Company in March 1992 and has served as one of the Company's
Directors since 1993. Prior to joining the Company, Dr. Stote was employed for
20 years by SmithKline Beecham Corporation serving in a variety of executive
clinical research positions. Dr. Stote was Chief of Nephrology at Presbyterian
Medical Center of Philadelphia from 1972 to 1989 and was Clinical Professor of
Medicine at the University of Pennsylvania. Dr. Stote also serves as a Director
of Datatrak International, Inc. and of Auxilium Pharmaceuticals, Inc. Dr. Stote
received a B.S. in Pharmacy from the Albany College of Pharmacy, an M.D. from
Albany Medical College and is Board Certified in Internal Medicine and
Nephrology. He was a Fellow in Nephrology and Internal Medicine at the Mayo
Clinic and is currently a Fellow of the American College of Physicians.
MIGUEL FERNANDEZ has served as one of the Company's Directors since 1999.
Mr. Fernandez served from 1980 to 1996 as President of the International
Division and corporate Vice President at Carter-Wallace, Inc., where he was
responsible for all product lines outside of the United States. Prior thereto,
Mr. Fernandez was employed for approximately eight years by SmithKline Beecham,
where his last position was Vice President for Latin America. Before SmithKline
Beecham, Mr. Fernandez served as Managing Director of Warner Lambert in
Argentina for two years. From 1962 to 1970, Mr. Fernandez was employed by
Merck/Frost in Canada. Mr. Fernandez attended the University of British Columbia
in Canada and received an M.B.A. from the Ivey School of Business at the
University of Western Ontario in London, Ontario, Canada. Mr. Fernandez has been
retired since 1996.
BACKGROUND OF CONTINUING DIRECTORS
MICHAEL MCGOVERN has served as one of the Company's Directors since 1997
and was named Vice Chairman of the Company in October 1999. Mr. McGovern serves
as President of McGovern Enterprises, a provider of corporate and financial
consulting services, which he founded in 1975. Mr. McGovern is Chairman of the
Board of Specialty Surgicenters, Inc. and Training Solutions Interactive, Inc.;
is Vice Chairman of the Board of Employment Technologies, Inc. and is a Director
on the corporate board of the Reynolds Development Company. Mr. McGovern
received a B.S. and M.S. in accounting and his Juris Doctor from the University
of Illinois.
MICHAEL D. PRICE became Chief Financial Officer, Vice President/Treasurer
and Secretary of the Company in October 1993, April 1993 and November 1992,
respectively, and has served as one of the Company's Directors since 1995. He
has served the Company in other capacities since March 1992. Prior to joining
the Company, he was employed as a financial and management consultant with Carr
Financial Group from March 1990 to March 1992. Prior thereto, he was employed as
Vice President of Finance with Premiere Group, Inc. from June 1988 to February
1990. Prior thereto, Mr. Price was employed by Price Waterhouse from January
1982 to June 1988 where his last position with that firm was as an Audit
Manager. Mr. Price received a B.S. in Business Administration with a
concentration in Accounting from Auburn University and an M.B.A. from Florida
State University. Mr. Price is a Certified Public Accountant licensed by the
State of Florida.
6
CHARLES L. BOLLING has served as one of the Company's Directors since 1991.
Mr. Bolling served from 1968 to 1973 as Vice President of Product Management and
Promotion (U.S.), from 1973 to 1977 as Vice President of Commercial Development
and from 1977 to 1986 as Director of Business Development (International) at
SmithKline & French Laboratories. Mr. Bolling has been retired since 1986.
ROBERT J. GYURIK has served as one of the Company's Directors since 1998
and became Vice President of Pharmaceutical Development of the Company in March
1999. Mr. Gyurik was Manager of Development and Quality Control at MacroChem
Corporation, a position he held from May 1993 to February 1999. From 1971 to
1993 Mr. Gyurik worked in various research and development positions at
SmithKline Beecham. Prior thereto, Mr. Gyurik worked at Schering as a Medicinal
Chemist. Mr. Gyurik received a B.A. in Biology and Chemistry from Immaculata
College. Mr. Gyurik is a member of the American Chemical Society, International
Society for Chronobiology and the New York Academy of Sciences.
WILLIAM A. PACKER has served as one of the Company's Directors since 1999.
Mr. Packer has been a business and industry consultant to a number of
biopharmaceutical companies since 1998. From 1992 until 1998, Mr. Packer was
President and Chief Financial Officer of Virus Research Institute, Inc., a
publicly owned biotechnology company. Prior to this, Mr. Packer was employed by
SmithKline Beecham Plc, where he held various senior management positions, the
most recent as Senior Vice President, Biologicals, in which position he was
responsible for the direction of SmithKline's global vaccine business. Mr.
Packer is a Chartered Accountant.
COMMITTEES OF THE BOARD OF DIRECTORS; BOARD OF DIRECTORS MEETINGS
The Board of Directors has an Audit Committee, a Compensation Committee and
a Strategic Planning Committee. The Audit Committee recommends to the Board of
Directors the appointment of independent auditors to audit the Company's
consolidated financial statements, reviews the Company's internal control
procedures and advises the Company on tax and other matters connected with the
finances and reporting obligations of the Company. The Audit Committee also
reviews with management the annual audit and other work performed by the
independent auditors. The Compensation Committee administers the Company's Stock
Option Plans and reviews and recommends to the Board of Directors the nature and
amount of compensation to be paid to the Company's executive officers and
employees that earn in excess of $100,000 annually. The Strategic Planning
Committee advises the Board and Management with respect to the strategic
direction of the Company. The Audit Committee currently consists of Messrs.
Charles Bolling, Miguel Fernandez and William Packer (chairman); the
Compensation Committee currently consists of Messrs. Charles Bolling, Miguel
Fernandez, Michael McGovern (chairman) and William Packer; and the Strategic
Planning Committee currently consists of Messrs. Charles Bolling, Miguel
Fernandez (chairman), Michael McGovern, James Murphy and William Packer.
During 2001, the Board of Directors held eight meetings, the Audit
Committee held 2 meetings, the Compensation Committee held 6 meetings and the
Strategic Planning Committee held 3 meetings. Each Director attended at least
75% of the total number of meetings of the Board of Directors which were held
during the period he served as a Director in 2001 and meetings of each Committee
on which such Director served.
7
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2001 were Messrs. Charles
L. Bolling, Russell Cleveland, Miguel Fernandez, Michael McGovern and William
Packer, all of whom were at the time of service non-employee Directors. No
member of the Compensation Committee has a relationship that would constitute an
interlocking relationship with Executive Officers or Directors of the Company or
another entity.
REMUNERATION OF NON-EMPLOYEE DIRECTORS
The Company pays Directors who are not employees fees of $3,000 for each
in-person meeting of the Board of Directors, $500 for each telephone meeting and
$500 for each committee meeting attended, which do not take place on the same
day as board meetings, in addition to reimbursing expenses incurred in attending
meetings. Each Director who is not an employee is automatically granted options
to purchase a number of shares of the Company's Common Stock equal to 2/10 of 1%
of the number of outstanding shares of the Company's Common Stock upon his or
her election to the board. Thereafter, each continuing non-employee Director is
entitled to receive annually, options to purchase the number of shares of the
Company's Common Stock equal to 2/10 of 1% of the number of outstanding shares
of the Company's Common Stock outstanding on the date of our annual
stockholder's meeting. For his additional time and effort, Mr. McGovern, the
Company's Vice Chairman, was awarded additional options to purchase 100,000
shares of Common Stock for each of 2000 and 2001 and 50,000 for 2002. During
2001, options to purchase 239,500 shares of Common Stock were granted to
Directors who are not employees at exercise prices ranging from $5.70 to $7.10
per share, representing not less than the fair market value of the Common Stock
on the dates of the grants. These options expire on dates ranging from January
1, 2011 to August 30, 2011.
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation for 1999, 2000 and
2001 paid to or accrued by the Company for the Chief Executive Officer and the
executive officers at December 31, 2001 whose total cash compensation in 2001
exceeded $100,000. Except as provided in the table below or otherwise discussed
below, the Company paid no other compensation to them.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------------------
Annual Compensation Awards Payouts
------------------- ------------------------ -------
Securities
Other Restricted Underlying LTIP All
Annual Stock Options/ Payouts Other
Name and Principal Position Year Salary ($) Bonus ($) Comp.($)(1) Awards($) SARs (#) ($) Comp.
--------------------------- ---- ---------- --------- ----------- --------- -------- ------- -----
James R. Murphy (2)............ 2001 $390,000 $100,000 $12,000 --- --- --- $70,135
Chairman of the Board, 2000 $366,923 $170,000 $12,000 --- --- --- $11,984
President, Chief Executive 1999 $295,577 --- --- $120,000 --- --- $6,389
Officer and Director
Robert M. Stote (3)............ 2001 $121,752 $15,000 --- --- --- --- $12,336
Senior Vice President, Chief 2000 $ 94,589 $15,000 --- --- --- --- $12,336
Science Officer and Director 1999 $110,449 --- --- $ 22,500 --- --- $6,836
Michael D. Price (4)........... 2001 $212,000 $50,000 --- $ 39,313 --- --- $22,114
Vice President, Chief 2000 $188,685 $30,000 --- --- --- --- $11,007
Financial Officer, 1999 $176,231 --- --- $ 22,500 --- --- $5,507
Treasurer, Secretary and
Director
Robert J. Gyurik (5)........... 2001 $175,000 $50,000 --- --- --- --- $42,081
Vice President of 2000 $138,903 $30,000 --- --- --- --- $10,973
Pharmaceutical Development 1999 $ 99,808 --- --- $ 67,500 --- --- ---
and Director
Jordan A. Horvath (6).......... 2001 $304,500 --- --- --- --- --- $10,757
Vice President and General 2000 $112,734 --- --- --- --- --- $ 16
Counsel
-------------------------------------
(1) The value of perquisites provided to the named executive officers did not
exceed $50,000 or 10% of total compensation in any case.
(2) "All Other Compensation" for Mr. Murphy includes:
o in 2001, principal and interest of $55,537 forgiven on a loan made by
the Company to Mr. Murphy in 2000 to assist Mr. Murphy's payment of
taxes on shares of the Company's Common Stock awarded by the Company
to him in 1999;
o matching contributions in cash to Mr. Murphy's 401(k) plan in the
amount of $970 in 2000 and $5,000 in 1999;
o matching contributions in shares of the Company's Common Stock to Mr.
Murphy's 401(k) plan valued at $10,500 in 2001 and $9,530 in 2000; and
o life insurance premiums of $4,098 in 2001, $1,484 in 2000 and $1,389
in 1999.
(3) "All Other Compensation" for Dr. Stote includes:
o matching contributions in cash to Dr. Stote's 401(k) plan in the
amount of $283 in 2000 and $5,000 in 1999;
o matching contributions in shares of the Company's Common Stock to Dr.
Stote's 401(k) plan valued at $10,500 in 2001 and $10,217 in 2000; and
o life insurance premiums of $1,836 in 2001, 2000 and 1999.
(4) "All Other Compensation" for Mr. Price includes:
o in 2001, principal and interest of $11,107 forgiven on a loan made by
the Company to Mr. Price in 2000 to assist Mr. Price's payment of
taxes on shares of the Company's Common Stock awarded by the Company
to him in 1999;
o matching contributions in cash to Mr. Price's 401(k) plan in the
amount of $551 in 2000 and $5,000 in 1999;
o matching contributions in shares of the Company's Common Stock to Mr.
Price's 401(k) plan valued at $10,500 in 2001 and $9,949 in 2000; and
o life insurance premiums of $507 in 2001, 2000 and 1999.
(footnotes continue on next page)
9
(5) Mr. Gyurik joined the Company in March 1999. "All Other Compensation" for
Mr. Gyurik includes:
o in 2001, principal and interest of $31,030 forgiven on a loan made by
the Company to Mr. Gyurik in 2000 to assist Mr. Gyurik's payment of
taxes on shares of the Company's Common Stock awarded by the Company
to him in 1999;
o matching contributions in cash to Mr. Gyurik's 401(k) plan in the
amount of $263 in 2000;
o matching contributions in shares of the Company's Common Stock to Mr.
Gyurik's 401(k) plan valued at $10,500 in 2001 and $10,237 in 2000;
and
o life insurance premiums of $551 in 2001 and $473 in 2000.
(6) Mr. Horvath joined the Company in August 2000. "All Other Compensation" for
Mr. Horvath includes:
o matching contributions in shares of the Company's Common Stock to Mr.
Horvath's 401(k) plan valued at $10,500 in 2001; and
o life insurance premiums of $257 in 2001 and $16 in 2000.
The Company has entered into employment agreements with each of Messrs.
Murphy, Stote, Price, Gyurik and Horvath which set forth their relationships
with the Company. The agreements expire on December 31, 2003 and renew annually
for one year terms. Under the agreements, each individual is paid a base salary
and provided with life insurance, with salary increases, bonuses and stock
option grants at the discretion of the board's compensation committee (except
for Mr. Murphy's agreement, which provides for a minimum stock option grant of
50,000 options per annum and Mr. Horvath's initial agreement, which provides for
minimum salary increases of 5% per year). All employees are full time, with the
exception of Dr. Stote who is a part-time employee.
The agreements may be terminated on one year's notice and, if terminated
earlier without cause, upon payment of severance equal to one year's salary, a
bonus equal to the greater of the employee's bonus target for the current year
or actual bonus for the prior year and vesting of options based on the number of
months employment during the vesting period. If the employee is terminated
within 12 months of a change of control of the Company, or if the employee
terminates his employment within 12 months after a change of control because his
job changes, the Company breaches his employment agreement or he is required to
move his residence, then the severance is increased to twice his annual salary,
twice the average of bonuses in the prior two years, immediate vesting of all
stock options and continuation of health benefits for two years (or until
receiving comparable benefits from another employer), and the option to keep in
place life insurance at the employee's expense. No severance is paid on a
termination for cause. In Mr. Murphy's agreement, severance following a change
in control is 2.99 times salary. Mr. Horvath's initial agreement provides that,
on termination without cause, severance will be two years' salary and
acceleration of all options and, following a termination after a change of
control, severance will be 2.99 times salary and bonus.
STOCK OPTION PLANS
1991 Stock Option Plan. The Company's 1991 Stock Option Plan was adopted in
1991 and was amended several times to increase the number of shares issuable
under it to a total of 1,000,000. While no options could be granted under the
1991 plan after September 30, 2001, all options granted prior to that date will
continue to vest and remain outstanding in accordance with the terms of the 1991
Plan.
2001 Employee's Stock Option Plan. The Company's 2001 Employee Stock Option
Plan was adopted and approved in 2001. The Company may issue incentive stock
options, as defined in the Internal Revenue Code of 1986, or non-qualified stock
options to purchase up to 1,000,000 shares of the Company's Common Stock to the
Company's employees under this plan. During 2001, options to purchase 123,500
shares of the Company's Common Stock were granted to employees who are not
executive officers. Such options were granted at prices ranging from $5.25 to
$7.90 per share, representing the fair market value of the Company's Common
Stock on the dates of grant. These options expire on various dates ranging from
May 9, 2011 to November 8, 2011.
10
2001 Directors' Stock Option Plan. The Company's 2001 Directors' Stock
Option Plan was adopted and approved in 2001. The Company may issue
non-qualified stock options to purchase up to 500,000 shares of the Company's
Common Stock to our Directors under this plan.
The following table sets forth the details of options granted to the
individuals listed in the Summary Compensation table during 2001. No stock
appreciation rights have been granted to date.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED
--------------------------------------------------------------- ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERMS
OPTIONS EMPLOYEES IN PRICE EXPIRATION ----------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ----------- ----------- --------- ---- ------ -------
James R. Murphy ......... 75,000 13.7% $5.88 - $6.00 1/1 - 5/9/11 $281,635 $713,718
Robert M. Stote, M.D..... 10,000 1.8% $6.00 5/9/11 $ 37,734 $ 95,625
Michael D. Price ........ 50,000 9.1% $6.00 5/9/11 $188,688 $478,123
Robert J. Gyurik......... 50,000 9.1% $6.00 5/9/11 $188,688 $478,123
Jordan A. Horvath........ --- --- --- --- --- ---
The following table sets forth certain information concerning the number
and value at December 31, 2001 of shares of the Company's Common Stock subject
to unexercised options held by the individuals listed in the Summary
Compensation Table. No shares of the Company's Common Stock were acquired by
these individuals on exercise of stock options in 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FY-END OPTIONS/SARS
(# SHARES) AT FY-END($)(1)
---------- ---------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
James R. Murphy......................... 745,400 57,600 $4,574,706 $241,344
Robert M. Stote, M.D.................... 567,500 10,000 $3,496,316 $41,900
Michael D. Price........................ 446,500 50,000 $2,778,957 $209,500
Robert J. Gyurik........................ 40,000 50,000 $ 122,850 $209,500
Jordan A. Horvath....................... 50,000 100,000 $ 122,000 $244,000
--------------
(1) Based on the difference between the closing price per share of the
Company's Common Stock on December 31, 2001 and the option exercise prices.
No long-term incentive plan awards were granted to the individuals listed
in the Summary Compensation table during 2001.
11
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and any persons who own more
than 10% of any class of the Company's equity securities, to file certain
reports relating to their ownership of such securities and changes in such
ownership with the Securities and Exchange Commission, the American Stock
Exchange and the Pacific Stock Exchange and to furnish the Company with copies
of such reports. To the Company's knowledge, during 2001, all Section 16(a)
filing requirements have been satisfied.
401(K) RETIREMENT PLAN
The Company sponsors a 401(k) retirement plan (the "401(k) Plan") under
which eligible employees may contribute, on a pre-tax basis, between 1% and 15%
of their respective total annual income from the Company, subject to maximums
set by U.S. tax law. All full-time employees who work for the Company in the
U.S. are eligible to participate in the 401(k) Plan. All employee contributions
are allocated to the employee's individual account and are invested in various
investment options as directed by the employee. Employees' cash contributions
are fully vested and nonforfeitable. The Company made matching contributions to
the 401(k) Plan in 2001 by granting 13,658 shares of the Company's Common Stock
valued at $82,959. The Company currently matches 100% of each eligible
employee's contribution in 2002 with shares of the Company's Common Stock. All
of the Company's matching contributions vest 25% each year for the first four
years of each employee's employment.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 2000 the Company made loans to three executive officers to assist
each of them in making their income tax payments for shares of the Company's
Common Stock which the Company granted to them in 1999. The Company loaned
$250,000 to Mr. Murphy, $50,000 to Mr. Price and $140,000 to Mr. Gyurik. The
loans bear interest at the rate of 2.37% annually, are due in March 2003 and are
secured by shares of the Company's Common Stock owned by the three individuals
(Mr. Murphy, 18,700 shares; Mr. Price, 4,000 shares; Mr. Gyurik, 10,700 shares).
Interest on the loans accrues quarterly. In December 2001 and January 2002, the
Company agreed to forgive part of the principal and interest on the loans as
detailed in the following chart. All of the amounts forgiven are considered
income to the three individuals.
JAMES R. MURPHY MICHAEL D. PRICE ROBERT J. GYURIK
--------------- ---------------- ----------------
Initial amount of loan................................. $250,000 $50,000 $140,000
Principal forgiven in December 2001................. 27,850 5,570 15,879
Interest forgiven in December 2001.................. 27,687 5,537 15,151
Principal forgiven in January 2002.................. 55,209 11,042 30,847
Interest forgiven in January 2002................... 439 88 245
Principal balance at March 31, 2002.................... $166,941 $33,388 $93,274
12
AUDIT COMMITTEE REPORT
In accordance with its charter adopted by the Board of Directors, the Audit
Committee assists the Board in fulfilling its responsibilities relating to the
Company's audited financial reports, accounting procedures and financial
controls. The Audit Committee reviews the procedures and results of the
Company's independent audits, and provides a direct communications link to the
Board of Directors from Deloitte & Touche, LLP, the Company's independent
auditors, and the Company's chief financial officer to help assure the quality
of the Company's financial reporting and control systems.
During 2001, the Audit Committee met 2 times and the committee chair, as
representative of the committee, and members of the committee held discussions
with the chief financial officer and independent auditors regarding the interim
financial information contained in the Company's quarterly reports on Form 10-Q
prior to filing with the Securities and Exchange Commission.
Auditor Independence and 2001 Audit. To fulfill its duties, the Audit
Committee obtained a formal written report of the independent auditors
describing all relationships between the auditors and the Company that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committee." In addition,
the Audit Committee discussed with the auditors any relationships that may
impact their objectivity and independence and satisfied itself as to the
auditors' independence. The Audit Committee also discussed with management and
the independent auditors the quality and adequacy of the Company's internal
controls. The Audit Committee reviewed with the independent auditors their audit
plans, audit scope and identification of audit risks.
The Audit Committee discussed and reviewed with the independent auditors
all communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committee" and reviewed the results of the independent
auditors' examination of the financial statements.
2001 Financial Statements and Recommendations of the Committee. The Audit
Committee reviewed the Company's audited financial statements as of and for the
year ended December 31, 2001 with management and the independent auditors.
Management has the responsibility for the preparation of the Company's financial
statements and the independent auditors have the responsibility for the
examination of those statements.
Based on the review discussed above and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the Company's audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001 for filing with
the Securities and Exchange Commission.
Audit Fees. The aggregate fees billed for professional services rendered by
the independent auditors for the audit of the Company's financial statements as
of and for the year ended December 31, 2001 and the review of the financial
statements in the Company's Form 10-Q filings for the year were $135,000.
All Other Fees. The aggregate fees billed by the independent auditors
during 2001 for non-audit and non-information systems related services were
$86,025. These services consisted of accounting compliance and research
services, as well as tax consultation, tax compliance and tax research services.
The Audit Committee considered whether, and has determined that, the provision
of these services is compatible with maintaining the independent auditors'
independence. The independent auditors did not provide professional services
during 2001 for the operation of the Company's information systems or financial
system design and implementation.
13
DISCLAIMER
This report is being provided to the Company's stockholders solely for
informational purposes. You should not consider this report to be "soliciting
material" or to be "filed" with the SEC. It also is not subject to the SEC's
proxy rules or to the liabilities of Section 18 of the U.S. Security Exchange
Act of 1934. In addition, this report shall not be deemed to be incorporated by
reference into any prior or subsequent filing by the Company under the Federal
securities laws.
AUDIT COMMITTEE
William A. Packer, Chairman
Charles L. Bolling
Miguel Fernandez
14
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors, which is currently
comprised of all non-employee Directors of the Company, determines, to the
extent not fixed pursuant to the terms of applicable employment agreements, the
compensation of the Chief Executive Officer, other employee members of the Board
of Directors, and all other executive employees whose annual compensation
exceeds $100,000. The compensation levels of such officers, directors and
employees are subject to the approval of the Board of Directors.
The Compensation Committee, being responsible for overseeing and approving
executive compensation and grants of stock options, is in a position to
appropriately balance the current cash compensation considerations with the
longer-range incentive-oriented growth outlook associated with stock options.
The main objectives of the Company's compensation structure include
rewarding individuals for their respective contributions to the Company's
performance, providing executive officers with a stake in the long-term success
of the Company and providing compensation programs and policies that will
attract, retain and motivate qualified executive personnel. The Board of
Directors and the Compensation Committee place a great deal of importance on
recruiting, hiring, retaining and motivating high quality personnel and
recognize that by offering executives employment agreements, it can be more
successful in recruiting experienced executives from large, established
pharmaceutical companies. Historically, the members of the Board of Directors
and the Compensation Committee have chosen to achieve these objectives through
salary increases, bonuses and periodic stock option grants. The Committee
considered each of these factors in approving the compensation for Mr. Murphy,
who serves as President and Chief Executive Officer.
In determining compensation, the Compensation Committee considers, among
other things, the performance of the Company, improvement in financial position,
strategic alliances, acquisition of products, product registration, raising of
capital, compensation levels in competing companies, individual contributions to
the Company and the length of service with the Company. The Compensation
Committee also surveyed executive compensation of similarly situated companies
and retained the services of an independent law firm, experienced in employment
and compensation matters, for the purpose of obtaining independent, objective
guidance with respect to the Committee's performance of its duties.
Compensation through the periodic grant of Common Stock and stock options
under the Company's stock option plans is intended to coordinate executives' and
stockholders' long-term interests by creating a direct link between a portion of
executive compensation and increases in the price of Common Stock and the
long-term success of the Company. This method of compensation also permits the
Company to preserve its cash resources.
During 2001 the Committee undertook a comprehensive review of the
employment agreements that the Company enters into with each of its officers. It
updated the provisions of the agreement and the Company is entering into the new
agreement with each officer as their current agreement expires.
For the year 2001, Mr. Murphy, recommended merit increases and base salary
amounts for each officer other than himself based on his assessment of each
officer's individual performance and accomplishment of corporate and personal
objectives. We evaluated Mr. Murphy's recommendations regarding each officer's
compensation, taking into account the officer's tenure and our subjective
assessment of individual performance. We considered Mr. Murphy's recommendations
with respect to merit increases and base salary amounts. We reviewed the
accomplishments and performance of such
15
officers and comparative compensation data from similar or competing companies
and then approved compensation packages for each of the Company's officers.
A significant portion of the direct compensation of officers consists of
annual incentive bonuses. Bonus targets are closely tied to performance
measures, at both the corporate level and at individual areas of responsibility.
Mr. Murphy recommended specific bonuses for all officers other than himself. We
evaluated Mr. Murphy's recommendations regarding each officer's bonus, taking
into account Mr. Murphy's assessment of each officer's individual performance
and our subjective assessment of individual performance, in addition to
accomplishment of corporate objectives. We then approved the bonuses to be
awarded for the calendar year 2001.
Future increases in executive compensation will be based upon the
satisfaction of pre-established individual objectives, extraordinary individual
contributions, corporate milestones and financial performance of the Company.
DISCLAIMER
This report is being provided to the Company's stockholders solely for
informational purposes. You should not consider this report or the stock price
performance graph that follows to be "soliciting materials" or to be "filed"
with the SEC. They are not subject to the SEC's proxy rules or to the
liabilities of Section 18 of the U.S. Security Exchange Act of 1934. In
addition, this report and the performance graph shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the Company
under the Federal securities laws.
COMPENSATION COMMITTEE
Michael McGovern, Chairman
Charles L. Bolling
Miguel Fernandez
William Packer
16
COMMON STOCK PERFORMANCE
The graph presented below compares the cumulative total stockholder return
on the Company's Common Stock for the five years ended December 31, 2001 with
the cumulative total stockholder return for such period reflected in the
Standard and Poor's (S&P) 500 Stock Index and in a peer group index of three
competing pharmaceutical companies (Andrx Group, Cima Labs Inc. and Noven
Pharmaceuticals, Inc.) (the "New Peer Group") as well as three competing
pharmaceutical companies that were listed in the Company's 2001 proxy statement
(Dura Pharmaceuticals, Inc., MacroChem Coporation and Noven Pharmaceuticals,
Inc. (the "Old Peer Group"). Dura Pharmaceuticals, Inc. was not included in the
New Peer Group because it merged with another company and the peer group was
then reconstituted to more closely reflect companies that are comparable to the
Company. The graph (and the information relating to it) was obtained by the
Company from S&P. The comparative returns shown in the graph assume (i) the
investment of $100 in the Company's Common Stock, the common stock of the
companies included in the S&P 500 Stock Index and the common stock of the
companies in the New Peer Group and the Old Peer Group at the market close on
December 31, 1996 and (ii) the reinvestment of all dividends.
[GRAPH APPEARS HERE]
17
TOTAL SHAREHOLDER RETURNS
(Dividends Reinvested)
ANNUAL RETURN PERCENTAGE
Years Ending
Company Name / Index Dec 97 Dec 98 Dec 99 Dec 00 Dec 01
--------------------------------------------------------------------------------------------------------------------
BENTLEY PHARMACEUTICALS -9.52 -36.84 312.50 -5.05 73.45
S&P 500 INDEX 33.36 28.58 21.04 -9.10 -11.89
NEW PEER GROUP 15.72 29.63 95.74 174.61 0.36
OLD PEER GROUP -7.33 -59.36 12.55 78.07 -47.42
INDEXED RETURNS
Base Years Ending
Period
Company Name / Index Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01
--------------------------------------------------------------------------------------------------------------------
BENTLEY PHARMACEUTICALS 100 90.48 57.14 235.71 223.81 388.19
S&P 500 INDEX 100 133.36 171.48 207.56 188.66 166.24
NEW PEER GROUP 100 115.72 150.01 293.62 806.31 809.24
OLD PEER GROUP 100 92.67 37.67 42.39 75.49 39.70
New Peer Group Old Peer Group
-------------- --------------
ANDRX GROUP DURA PHARMACEUTICALS INC
CIMA LABS INC MACROCHEM CORP
NOVEN PHARMACEUTICALS INC NOVEN PHARMACEUTICALS INC
18
MISCELLANEOUS
VOTING REQUIREMENTS
Directors are elected by a plurality of the votes cast at the Meeting at
which a quorum is present (Proposal 1).
INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors of the Company selected
Deloitte & Touche LLP to serve as the Company's independent auditors for the
year ended December 31, 2001 and for the year ending December 31, 2002.
Representatives of Deloitte & Touche LLP do not plan to be present at the
Meeting.
STOCKHOLDER PROPOSALS
From time to time stockholders may present proposals for consideration at a
meeting, which may be proper subjects for inclusion in the proxy statement and
form of proxy related to that meeting. Stockholder proposals intended to be
included in the Company's proxy statement and form of proxy relating to the
Company's 2003 Annual Meeting of Stockholders must be received by the Company at
its office at 65 Lafayette Road, North Hampton, New Hampshire 03862 by December
19, 2002. Any such proposals, as well as any questions relating thereto, should
be directed to the Secretary of the Company at such address.
ADDITIONAL INFORMATION
The cost of solicitation of Proxies, including the cost of reimbursing
banks, brokers and other nominees for forwarding Proxy solicitation material to
the beneficial owners of shares held of record by them and seeking instructions
from such beneficial owners, will be borne by the Company. The Company has not
engaged a proxy solicitor to solicit proxies; however, proxies may be solicited
without extra compensation by certain officers and regular employees of the
Company. Proxies may be solicited by mail and, if determined to be necessary, by
telephone, telegraph or personal interview.
OTHER MATTERS
Management does not intend to bring before the Meeting any matters other
than those specifically described above and knows of no matters other than the
foregoing to come before the Meeting. If any other matters or motions properly
come before the Meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in accordance with their judgment on such
matters or motions, including any matters dealing with the conduct of the
Meeting.
By Order of the Board of Directors
MICHAEL D. PRICE
Secretary
North Hampton, NH
April 18, 2002
19
BENTLEY PHARMACEUTICALS, INC.
ANNUAL MEETING OF STOCKHOLDERS - MAY 22, 2002
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Stock of Bentley Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), hereby appoints James R. Murphy, Michael
D. Price and Jordan A. Horvath and each of them, as proxies for the undersigned,
each with full power of substitution, for and in the name of the undersigned to
act for the undersigned and to vote, as designated below, all of the shares of
stock of the Company that the undersigned is entitled to vote at the 2002 Annual
Meeting of Stockholders of the Company, to be held on Wednesday, May 22, 2002,
at 11:00 a.m., local time, at the Grand Hyatt New York, located at Park Avenue
at Grand Central Station (42nd Street), New York, New York 10017 and at any
adjournments or postponements thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
1. The election of Class III Directors until the 2005 Annual Meeting of
Stockholders, or until the election and qualification of their respective
successors:
|_| FOR ALL NOMINEES |_| WITHHOLD AUTHORITY to vote for all nominees
(INSTRUCTION: To withhold authority Nominees: Miguel Fernandez
for any individual nominee, strike James R. Murphy
a line through the nominee's name Robert M. Stote, M.D.
on the list at right.)
2. Upon such other matters as may properly come before the Annual Meeting and
any adjournments or postponements thereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL CLASS III DIRECTOR NOMINEES LISTED ABOVE.
-1-
The undersigned hereby acknowledges receipt of (i) the Notice of Annual Meeting,
(ii) the Proxy Statement and (iii) the Company's 2001 Annual Report.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
Dated: ______________________, 2002
--------------------------------------------
Signature
--------------------------------------------
Print Full Name
--------------------------------------------
Signature
--------------------------------------------
Print Full Name
NOTE: Please sign exactly as your name appears hereon and mail it promptly. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
-2-