PRELIMINARY COPY - SUBJECT TO COMPLETION - DATED NOVEMBER 1, 2002
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Preliminary Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No.)
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[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
ELITE PHARMACEUTICALS, INC.
---------------------------
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[ELITE PHARMACEUTICALS LETTERHEAD]
November [__], 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Elite Pharmaceuticals, Inc. to be held at [__], Thursday, December 12, 2002, at
the Sheraton Crossroads Hotel, Crossroads Corporate Center, 1 International
Boulevard, Mahwah, New Jersey 07495.
This year you will be asked to consider the election of directors. This
matter is explained more fully in the attached proxy statement, which you are
encouraged to read.
The Board of Directors recommends that you approve the election of
directors and urges you to return your signed proxy card, or cards, at your
earliest convenience, whether or not you plan to attend the annual meeting. The
proxy will be returned to any stockholder who attends the meeting and requests
such return.
Thank you for your continued interest and support in your company.
Very truly yours,
Atul M. Mehta, Ph.D.
President and Chief Executive
Officer for The Board of Directors
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
ELITE PHARMACEUTICALS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Elite
Pharmaceuticals, Inc. (the "Company", "Elite", "us" or "we") will be held at the
Sheraton Crossroads Hotel, Crossroads Corporate Center, 1 International
Boulevard, Mahwah, New Jersey 07495, on December 12, 2002 at [_______], to
consider and act upon the following:
1. The election of seven directors to serve for a period of one year and
thereafter until their successors shall have been duly elected and shall have
qualified.
2. The transaction of such other business as may properly come before the
meeting or any adjournment thereof that were not known a reasonable time before
the solicitation.
The Board of Directors has fixed the close of business on November 1, 2002 as
the date for determining the stockholders of record entitled to receive notice
of, and to vote at, the Annual Meeting.
These proposals are described in further detail in the attached Proxy Statement.
By Order of the Board of Directors
/s/ Mark I. Gittelman
Mark I. Gittelman
Secretary
Northvale, New Jersey
November [__], 2002
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ELITE PHARMACEUTICALS, INC.
165 LUDLOW AVENUE
NORTHVALE, NEW JERSEY 07647
PRELIMINARY PROXY STATEMENT
---------------------------
Annual Meeting of Stockholders
To Be Held December 12, 2002
INTRODUCTION
This proxy statement is being furnished to stockholders of Elite
Pharmaceuticals, Inc. (the "Company", "Elite", "us" or "we") on or about
November [__], 2002, in connection with a solicitation by the Board of Directors
of the Company of proxies to be voted at the Annual Meeting of Stockholders to
be held at the Sheraton Crossroads Hotel, Crossroads Corporate Center, 1
International Boulevard, Mahwah, New Jersey 07495 on December 12, 2002, at
[________] and any adjournments or postponements thereof. At the meeting, the
Board of Directors will propose that the Company's stockholders elect seven
nominees to the Board of Directors of the Company to serve until the 2003 annual
meeting of stockholders and until their successors are elected and qualified.
STOCKHOLDERS ENTITLED TO VOTE
Only holders of record of the Company's common stock, par value $.01 per share
(the "Common Stock"), at the close of business on November 1, 2002 (the record
date fixed by the Board of Directors) will be entitled to receive notice of, and
to vote at, the Annual Meeting. At the close of business on the record date,
there were [___________] shares of Common Stock outstanding and entitled to vote
at the Annual Meeting (including voting rights attributable to the shares of an
Elite subsidiary which are convertible into shares of Elite's Common Stock).
Each such share is entitled to one vote.
VOTING; REVOCATION OF PROXY; QUORUM AND VOTE REQUIRED
A form of proxy is enclosed for use at the Annual Meeting. Each proxy may be
revoked at any time before it is exercised by giving written notice to the
Secretary of the Annual Meeting, by submitting a duly executed, later-dated
proxy, or by attending the Annual Meeting and voting at the meeting. Attendance
at the Annual Meeting is not by itself sufficient to revoke your proxy. All
shares represented by valid proxies pursuant to this solicitation (and not
revoked before they are exercised) will be voted as specified in the form of
proxy. If the proxy is signed but no specification is given, the shares will be
voted FOR the Board's nominees for election to the Board of Directors.
A majority of the shares outstanding on the record date will constitute a quorum
for purposes of the Annual Meeting. Assuming that a quorum is present, the
election of directors will be effected by a plurality vote. For purposes of
determining the votes cast with respect to any matter presented for
consideration at the Annual Meeting, only those votes cast "for" or "against"
are included. Abstentions and broker non-votes are counted only for the purpose
of determining whether a quorum is present at the Annual Meeting.
COSTS AND METHOD OF SOLICITATION
Solicitation of proxies may be made by directors and officers of the Company by
mail, telephone, facsimile transmission or other electronic media and in person.
We will not solicit proxies via the Internet, such as Internet chat rooms and/or
posting on websites. Solicitation of proxies may be made by directors, officers
and regular employees of Elite for which they will receive no additional
compensation as well as by employees of Georgeson Shareholder Communications,
Inc. The entire cost of soliciting proxies will be borne by the Company. Upon
request, the Company will reimburse the reasonable fees and expenses of banks,
brokers, custodians, nominees and
fiduciaries for forwarding proxy materials to, and obtaining authority to
execute proxies from, beneficial owners for whose accounts they hold shares of
Common Stock.
SETTLEMENT OF ELECTION CONTEST
On August 5, 2002, a group of stockholders led by Harris Freedman, Sharon Will
and Michael H. Freedman (the "Freedman Group") commenced a consent solicitation
(the "Consent Solicitation") to solicit consents in favor of the removal of
three of Elite's directors and the election of three nominees proposed by the
Freedman Group. Elite opposed the Consent Solicitation as not being in Elite's
best interests. The Consent Solicitation ended on October 4, 2002 with the
Freedman Group failing to obtain the approval of Elite stockholders who held a
majority of Elite's Common Stock.
Following the Consent Solicitation, the Freedman Group filed a preliminary proxy
statement with the Securities and Exchange Commission and expressed an intention
to solicit proxies in favor of its nominees for director and to contest the
election of directors at Elite's annual meeting of stockholders. The Freedman
Group terminated its proxy solicitation on October 23, 2002 pursuant to the
terms of a Settlement Agreement among Elite and the Freedman Group (the
"Settlement Agreement"). A copy of the Settlement Agreement is attached to our
Form 8-K filed with the Securities and Exchange Commission (the "Commission") on
November 1, 2002. Pursuant to the Settlement Agreement
(i) the Freedman Group agreed to terminate its proxy solicitation immediately
and to support the election of the seven nominees for director recommended by
Elite's Board of Directors for election at the Annual Meeting. The Freedman
Group also agreed not to:
(a) become a participant in any solicitation of proxies for the Annual
Meeting or assist any third party in any solicitation of proxies for the Annual
Meeting;
(b) advise or influence any third party or assist any third party in so
advising or influencing any person or entity with respect to the giving or
withholding of any proxy or vote at the Annual Meeting, other than in favor of
the election of the Company Nominees (as defined in the Settlement Agreement);
(c) commence any action or assist any third party in commencing any action
to delay, accelerate or enjoin the Annual Meeting, to enjoin Elite's
solicitation of proxies for the Annual Meeting or to question whether this Proxy
Statement violates Rule 14a-9 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statement contained
therein, in light of the circumstances under which they were made, not
misleading;
(d) other than as expressly provided in the Settlement Agreement, grant any
proxy with respect to the Annual Meeting or deposit any of the Elite securities
held by the Freedman Group in a voting trust or subject them to a voting
agreement or other arrangement of similar effect with respect to the Annual
Meeting;
(e) make any proposal for consideration at the Annual Meeting; or
(f) participate in or assist any third party in any solicitation of written
consents with regard to Elite prior to the Annual Meeting.
(ii) Elite agreed to commence an exchange offer pursuant to which holders of
Elite's Class A Warrants which expire on November 30, 2002 (the "Old Warrants")
will have the opportunity to exchange those warrants for new warrants (the "New
Warrants") upon payment to Elite of $0.10 per share of Common Stock issuable
upon the exercise of the Old Warrants. The New Warrants will
(a) be exercisable for the same number of shares of Common Stock as the Old
Warrants,
(b) have an exercise price of $5.00 per share (subject to adjustment in
certain circumstances),
(c) expire on November 30, 2005, and
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(d) except as set forth herein will have substantially all of the same
other terms and conditions as the Old Warrants.
The Exchange Offer will be made to eligible warrantholders irrespective of
whether the Old Warrants have expired by their terms when the Exchange Offer is
consummated. The New Warrants will not be transferable except pursuant to
operation of law. The Exchange Offer must be registered under applicable federal
and state securities laws and will only be made pursuant to an effective
registration statement meeting applicable legal requirements.
(iii) Elite dismissed the lawsuit that it had commenced against the Freedman
Group for alleged violations of, among other things, Sections 13(d) and 14(a) of
the Exchange Act, and the rules and regulations of the Commission promulgated
thereunder in connection with the Consent Solicitation.
(iv) Elite agreed not to withdraw the nomination for directors for election at
the Annual Meeting of Richard A. Brown, John A. Moore or John P. de Neufville
unless any of such nominees dies, resigns or refuses to stand for election.
(iv) Elite and the Freedman Group exchanged releases regarding the Consent
Solicitation, the New Jersey Action and other matters related thereto.
Because this section is a summary, it does not describe every aspect of the
Settlement Agreement. This summary is subject to and qualified in its entirety
by reference to all of the provisions of the Settlement Agreement.
Elite estimates that the cost of fulfilling its obligations pursuant to the
Settlement Agreement will be approximately $[_________]. In connection with
Elite's opposition to the Consent Solicitation and the preparation of Elite's
preliminary proxy statement to oppose the Freedman Group's proxy solicitation,
Elite incurred $[________] in expenses associated with advertising, printing,
fees of attorneys, financial advisors, proxy solicitors, accountants, public
relations, transportation, litigation and related expenses and filing fees. All
of these expenses were borne by the Company. Such costs do not include the
amount represented by salaries and wages of regular employees and officers.
PROPOSAL 1
ELECTION OF DIRECTORS
BOARD OF DIRECTORS' NOMINEES
The holders of Elite's Common Stock will elect seven directors at the Annual
Meeting, each of whom will be elected for a one-year term. Unless a stockholder
either indicates "withhold authority" on his proxy card or indicates on his
proxy that his shares should not be voted for certain nominees, it is intended
that the persons named in the proxy will vote for the election of the persons
named in the table below to serve until the expiration of their terms and
thereafter until their successors shall have been duly elected and shall have
qualified. Discretionary authority is also solicited to vote for the election of
a substitute for any of said nominees who, for any reason presently unknown,
cannot be or refuses to be a candidate for election.
The Company's by-laws provide that the Board of Directors will consist of not
less than three nor more than ten members, the actual number of directors to be
determined by the Board from time to time. Pursuant to this authority, the Board
has determined that it is in the best interests of Elite to expand the number of
directors to be elected at the Annual Meeting to 7. As indicated under
"Settlement of Election Contest" above, Elite has agreed not to withdraw the
nominations of Messrs. Brown, Moore and de Neufville except under certain
circumstances. The expansion of the board of directors was suggested to Elite
during the recent consent solicitation involving Elite by some of the Company's
stockholders. The stockholders had suggested that the expansion of the board of
directors to include stockholders who have relevant business experience in the
pharmaceutical industry or who have capital markets or business experience would
make the board of directors stronger and benefit the Company. The Board
considered the suggestion and determined that the expansion of the board of
directors to seven members and to add the 3 new nominees as directors was in the
best interests of the Company and its stockholders.
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The table below sets forth the names and ages (as of November [__], 2002) of
each of the nominees, the other positions and offices presently held by each
such person within the Company, and the period during which each such person has
served on the Board of Directors of the Company. Each of the nominees for
director has agreed to serve if elected and has consented to being named in this
Preliminary Proxy Statement.
Name and Positions with Director
Business Address Age the Company Since
---------------- --- ----------- -----
Dr. Atul M. Mehta 53 Chief Executive Officer, 1997
165 Ludlow Avenue President and Director
Northvale, NJ 07647
Donald S. Pearson 66 Director 1999
1251 7th Avenue North
# 309
Naples, FL 34102
Harmon Aronson 59 Director 1999
26 Monterey Drive
Wayne, NJ 07470
Eric L. Sichel 43 Director 2001
411 Highview Road
Engelwood, NJ 07631
John P. de Neufville 62 None N/A
P.O. Box 5357
North Branch, NJ 08876
John A. Moore 37 None N/A
101 Brookmeadow Road
Wilmington, DE 19807
Richard A. Brown 54 None N/A
1601 N. Tuscan Blvd., #7
Tuscan, AZ, 85716
The principal occupations and employment of each such person during the past
five years is set forth below. In each instance in which dates are not provided
in connection with a nominee's business experience, such nominee has held the
position indicated for at least the past five years.
Atul M. Mehta, Ph.D., the founder of Elite Laboratories, Inc. ("Elite Labs"),
has been a director of Elite Labs since its inception in 1990 and a director of
the Company since 1997. He has been employed as the President of Elite Labs
since 1990 and President of the Company since 1997. Prior to that, he was Vice
President at Nortec Development Associates, a company specializing in the
development of food, pharmaceutical and chemical specialty products, from 1984
to 1989. From 1981 to 1984, he was associated with Ayerst Laboratories, a
division of Wyeth, f/k/a American Home Products Corporation, in the solids
formulation section as Group Leader. His responsibilities included development
of formulations of ethical drugs for conventional and controlled-release dosage
forms for both USA and international markets. He received his B.S. degree in
Pharmacy with honors from Shivaii University, Kolhapur, India, and a BS, MS, and
a Doctorate of Philosophy in Pharmaceutics from the University of Maryland in
1981. Dr. Mehta is also a director of Elite Research, Ltd., formerly a joint
venture with Elan Pharmaceuticals and now a wholly owned subsidiary of the
Company. Other than Elite Labs and Elite Research, Ltd., no company with which
Dr. Mehta was affiliated in the past was a parent, subsidiary or other affiliate
of the Company.
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Donald S. Pearson, a director since 1999, has been employed since 1997 as the
President of Pearson & Associates, Inc., a company that provides consulting
services to the pharmaceutical industry. Prior to starting Pearson & Associates,
Mr. Pearson served for five years as the Director of Licensing at Elan
Pharmaceuticals, and prior to that he was employed by Warner-Lambert for thirty
years in various marketing, business development and licensing capacities. Mr.
Pearson holds a B.S. in Chemistry from the University of Arkansas and studied
steroid chemistry at St. John's University. He has served on the informal
advisory board of formerly a joint venture with Elan Pharmaceuticals for several
years; other than formerly a joint venture with Elan Pharmaceuticals, no company
with which Dr. Pearson was affiliated in the past was a parent, subsidiary or
other affiliate of the Company.
Harmon Aronson, Ph.D., a director since 1999, has been employed since 1997 as
the President of Aronson Kaufman Associates, Inc., a New Jersey-based consulting
firm that provides manufacturing, FDA regulatory and compliance services to the
pharmaceutical and biotechnology companies. Its clients include United States
and international firms manufacturing bulk drugs and finished pharmaceutical
dosage products who are seeking FDA approval for their products for the US
Market. Prior to 1997, Dr. Aronson was employed by Biocraft Laboratories, a
leading generic drug manufacturer, most recently in the position of Vice
President of Quality Management; prior to that he held the position of Vice
President of Non-Antibiotic Operations, where he was responsible for the
manufacturing of all the firm's non-antibiotic products. Dr. Aronson holds a
Ph.D. in Physics from the University of Chicago. Mr. Aronson is also a director
of Elite Research, Ltd. Other than Elite Research Ltd., no company with which
Dr. Aronson was affiliated in the past was a parent, subsidiary or other
affiliate of the Company.
Eric L. Sichel, M.D., a director since August 2, 2001, is President of Sichel
Medical Ventures, Inc., a company that provides biotechnology company
assessments and investment banking services. Dr. Sichel has been the owner and
President of Sichel Medical Ventures, Inc. since 1997. From 1995 through 1996,
Dr. Sichel was a senior analyst in the biotechnology field for Alex, Brown &
Sons, Inc. Prior to that, Dr. Sichel was affiliated with Sandoz Pharmaceuticals
Corp. in various capacities, including associate director of
transplantation/immunology. Dr. Sichel holds an M.B.A. from Columbia University
and an M.D. from UMDNJ--New Jersey Medical School, and is licensed to practice
medicine by the State of New York.
John P. de Neufville has been the Chief Executive Officer and President of
Voltaic, Inc., a supplier of electronic chemicals, since 1986. Mr. de Neufville
has been a member of Elite's board of advisors since 1997. He holds a Ph.D. in
applied physics and an M.S. in geology from Harvard University and a B.S. in
geology from Yale University.
John A. Moore has been Chief Executive Officer and President of Edson Moore
Healthcare Ventures, an investment entity, since July 2002. Since 1994, Mr.
Moore has been Chief Executive Officer and President of Optimer, Inc., a
research based polymer development company. Mr. Moore holds a B.A. in history
from Rutgers University.
Richard A. Brown, has been Chairman of the Board of Directors of Niadyne, Inc.,
a pharmaceutical development company, since 1997. From 1986 to the present, Mr.
Brown also has been President of Eagle Ventures, a healthcare venture capital
and investment banking company. Mr. Brown also worked in the securities field
for Tucker Anthony from 1972 to 1984 and Healthcare Ventures from 1984 to 1986.
Mr. Brown holds an A.B. from Hamilton College.
All of the nominees have agreed to serve if elected and consented to being named
in the proxy statement. Except as summarized above under "Settlement of Election
Contest" there are no arrangements between any director and any other person,
pursuant to which the director is to be selected as such. There is no family
relationship between the directors or persons nominated or chosen by the Company
to become directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE SEVEN
NOMINEES OF THE BOARD OF DIRECTORS DESCRIBED ABOVE.
OUTSTANDING ELITE STOCK
As of November 1, 2002, there were [______________] shares of Elite common stock
outstanding.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the knowledge of the Company, there was no person who, at any time during the
fiscal year ended March 31, 2002, was a director, officer, beneficial owner of
more than 10% of any class of equity securities of the Company registered
pursuant to Section 12 of the Securities Exchange Act of 1934, who failed to
file on a timely basis the reports required by Section 16(a) of the Securities
Exchange Act of 1934 during the most recent fiscal year, except Dr. Atul M.
Mehta.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a party to an agreement whereby fees are paid to Gittelman & Co.,
P.C., a company wholly owned by Mark I. Gittelman, the Company's Chief Financial
Officer, Secretary and Treasurer, in consideration for services rendered by Mr.
Gittelman in his capacity as Chief Financial Officer and Treasurer. For the
fiscal years ended March 31, 2002 and 2001, the fees paid to that company were
$91,260 and $82,639, respectively.
COMMITTEES
The Board of Directors has an Audit Committee. The Board has no other standing
committees. The Audit Committee members are Donald S. Pearson, Harmon Aronson
and Eric L. Sichel.
The Audit Committee had one meeting during the fiscal year ended March 31, 2002.
The Company's Board of Directors has adopted a written charter for the Audit
Committee, a copy of which was included as an appendix to the Company's proxy
statement sent to stockholders in connection with the annual meeting of
stockholders held October 11, 2001.
The Company deems the members of its Audit Committee to be independent as
independence is defined in Section 121(A) of the American Stock Exchange Listing
Standards.
BOARD MEETINGS
The Board of Directors of the Company had three meetings during the fiscal year
ended March 31, 2002. No incumbent director attended fewer than 75% of the
aggregate of the meetings of the Board and its Audit Committee during that year.
AUDIT COMMITTEE REPORT
The Audit Committee reviewed and discussed the audited financial statements with
management. The Audit Committee discussed with the independent auditors of the
Company the matters required to be discussed by SAS 61 (Codification of
Statements on Auditing Standards, AU 380), as modified or supplemented. The
Audit Committee received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No. 1
(Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees), as modified or supplemented. The Audit Committee discussed
with the independent accountant the independent accountant's independence. Based
upon the foregoing review and discussions, the Audit Committee recommended to
the Board of Directors of the Company that the audited financial statements of
the Company be included in the Company's Annual Report on Form 10-K for the last
fiscal year ended March 31, 2002 as filed with the Commission.
The foregoing report of the Audit Committee is made by members of the Audit
Committee of the Company: Donald S. Pearson, Harmon Aronson and Eric L. Sichel.
COMPENSATION OF DIRECTORS
Each non-affiliated director receives $2,000 as compensation for each meeting of
the Board of Directors attended.
EXECUTIVE OFFICERS AND COMPENSATION
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The following section sets forth certain information regarding the Company's
executive officers.
BACKGROUND OF EXECUTIVE OFFICERS
YEAR OF
NAME OFFICES HELD FIRST ELECTION AGE
---- ------------ -------------- ---
Atul M. Mehta, Ph.D. Director, President and Chief Executive 1997 53
Officer
Mark I. Gittelman Chief Financial Officer, Secretary and 1998 42
Treasurer
For further information regarding Dr. Mehta's background, see "Board of
Directors' Nominees"
Mark I. Gittelman, CPA, the Chief Financial Officer, Secretary and Treasurer of
the Company, is the President of Gittelman & Co., P.C., an accounting firm in
Clifton, NJ. Prior to forming Gittelman & Co., P.C. in 1984, he worked as a
certified public accountant with the international accounting firm of KPMG Peat
Marwick, LLP. Mr. Gittelman holds a B.S. in accounting from New York University
and a Masters of Science in Taxation from Farleigh Dickinson University. He is a
Certified Public Accountant licensed in New Jersey and New York, and is a member
of the American Institute of Certified Public Accountants ("AICPA"), the
Securities and Exchange Practice Section of the AICPA, and the New Jersey State
and New York States Societies of CPAs. Other than Elite Labs, no company with
which Mr. Gittelman was affiliated in the past was a parent, subsidiary or other
affiliate of the Company.
All executive officers of the Company are serving until the next annual meeting
of directors and until their successors have been duly elected and qualified.
EXECUTIVE COMPENSATION
The following table provides information on the compensation of Dr. Atul M.
Mehta, the chief executive officer of the Company for the last three fiscal
years. No other executive officer of the Company received salary and bonus
exceeding $100,000 during those periods.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Name and Fiscal Salary Bonus Other Restricted Securities LTIP All other
principal Year ------ ----- Annual stock Underlying payouts compen-
position ---- Compen- awards options ------- sation
-------- sation ------ ------- ------
------
Atul M. 2001-02 $272,855 $30,000 $83,896 -- 50,000 -- --
Mehta 2000-01 $248,050 $45,000 $3,040 -- 425,000(1)(2) -- --
President 1999-00 $227,030 $25,000 $3,040 -- 500,000 -- --
and Chief
Executive Officer
(1) On December 15, 2000, Dr. Mehta surrendered options for 425,000 shares
of the Company's common stock (exercisable at $7.00 per share) and in return
received options for 425,000 shares of the Company's common stock exercisable on
January 2, 2001 and expiring January 1, 2006. The exercise price is 110% of the
opening price of the Company's common stock on January 2, 2001 adjusted upward
to the nearest half dollar of $7.00. On January 2, 2001, the stock of the
Company opened at $6.25 per share, therefore the exercise price for the stock
subject to these options is $7.00 per share.
-7-
(2) By action on February 21, 2002, the Board corrected a clerical error
in options for 425,000 shares of common stock of the Company previously granted
to Dr. Mehta. This correction did not result in any additional shares being
subject to options held by Dr. Mehta, any change in the exercise price or a
change in any other material terms.
The Company's fiscal year begins April 1 and ends March 31. The information is
provided for each fiscal year beginning April 1.
Other Annual Compensation represents use of a company car and premiums paid by
the Company for life insurance on Dr. Mehta's life for the benefit of his wife.
Reported below in this report is the purchase by the Company of options from Dr.
Mehta. The purchase price for those options of $80,896 is included above in
"Other Annual Compensation."
OPTION GRANTS IN LAST FISCAL YEAR
During the fiscal year ended March 31, 2002, the Board of the Company authorized
the issuance to Dr. Mehta of options to acquire 50,000 shares of the common
stock of the Company, vesting over a period of five years at the rate of 10,000
shares per year beginning February 21, 2003, exercisable at a price equal to
110% of the closing price of the stock on February 21, 2002 ($8.25 per share).
By action on January 25, 2001, the Board purchased options held by Dr. Mehta for
20,214 shares of the common stock of the Company at a price of $4.00 per share.
The options carried an exercise price of $2.00 per share. The then current
market price for the stock was in excess of $7.50. Dr. Mehta had intended to
exercise the option for these shares and then sell the shares. The purchase
price for the option arrived at by the Board took into account the amount which
would be necessary to purchase the options and cover taxes payable by Dr. Mehta
on the transaction.
OPTION/SAR GRANTS TABLE IN LAST FISCAL YEAR
(a) (b) (c) (d) (e)
Number of % of Total Options Exercise or
Name Securities Granted to Employees Base Price Expiration date
---- Underlying Options in Fiscal Year ($/sh) ---------------
Granted -------------- ------
-------
Atul M. Mehta 50,000 2.8% $8.25 2-20-07
Options for 500,000 shares which were granted to Dr. Mehta during the fiscal
year ended March 31, 2000 vest at the rate of 100,000 shares per year on each
December 31 beginning December 31, 2001. The options expire on the earlier of
(a) one year after Dr. Mehta ceases to be employed by the Company or to serve as
an officer or director of the Company or (b) March 31, 2010. Notwithstanding,
the options shall become fully vested and exercisable if Dr. Mehta's employment
agreement or his position as an officer and director is terminated by the
Company for any reason or if it expires as a result of the Company giving notice
of nonrenewal. If the board of directors of the Company votes to approve the
acquisition of more than 50% of the stock of the Company by any person or
entity, the Company may require Dr. Mehta to exercise or sell the options. In
addition to the above stated options, by Board action on September 22, 2000, Dr.
Mehta was granted a preemptive right to acquire shares of the Company in a
sufficient number to maintain his percentage ownership of the shares
outstanding. Under this preemptive right, upon issuance by the Company of shares
of common stock for any reason, or of securities convertible into common stock
upon demand, Dr. Mehta shall be permitted to purchase shares of common stock of
the Company sufficient to maintain the greater of his percentage ownership of
outstanding common stock of the Company determined on an absolute basis and upon
a fully diluted basis as existed prior to the stock issuance. The price which
Dr. Mehta shall pay for such stock shall be the lower of (x) the then current
market price (discounted 15% if the shares are not registered) or (y) the price
to be paid by the party in the transaction triggering the preemptive right. The
right shall be exercised and the price shall be paid within 120 days of the
issuance of the stock triggering the preemptive right.
-8-
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUE
TABLE
a b c d e
No. of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at FY-End at FY-End
Name Shares Acquired Value Exercisable/ Exercisable/
---- on Exercise Realized Unexercisable Unexercisable
----------- -------- ------------- -------------
Dr. Atul M. Mehta None $0 1,025,000/450,000 $3,600,528
These options and the shares underlying them are unregistered, and their market
value is unknown and incalculable. However, the registered common stock of the
Company was trading for $7.74 per share as of the close of business on March
28, 2002. It is on this hypothetical value that the figures in column (e) are
calculated. These figures may have no relation to the actual value of the
unexercised options.
EMPLOYMENT AGREEMENT
The only employment agreement which the Company has with an executive officer is
the Amended and Restated Employment Agreement entered into March 31, 2000 and
amended on July 18, 2002, between the Company and Dr. Atul M. Mehta (the
"Agreement"). The Agreement provides:
o that the Company will employ Dr. Mehta for a period of five years ending
December 31, 2005 (unless sooner terminated pursuant to provisions of the
Agreement). At the end of the five years, the Agreement will be
automatically renewed for an additional five year term with an annual
salary to be agreed to, unless either party gives written notice of
nonrenewal by December 31, 2004. The Agreement is automatically extended
for periods of one year after December 31, 2010 unless either party gives
notice of nonrenewal at least one year prior to the date of expiration.
o for an annual salary of $242,000, which amount is to be increased by the
board of directors not less than 10% annually beginning January 1, 2001.
o that Dr. Mehta will receive 5% of the net profit of the Company each fiscal
year.
o for an annual bonus in an amount determined by the Board.
o that Dr. Mehta will receive options to purchase Elite common stock at a
price of $10.00 per share in a total amount of 500,000 shares, exercisable
in increments of 100,000 shares annually beginning December 31, 2000. The
options shall be exercisable from the date of vesting until one year after
Dr. Mehta ceases to be employed by the Company or to serve as an officer
and director of the Company or March 31, 2010, whichever is earlier.
o that the options are exercisable by Dr. Mehta if the Agreement or Dr.
Mehta's position as an officer and director is terminated by the Company
for any reason or if the Agreement is not renewed by the Company.
o that the Agreement will terminate upon (a) Dr. Mehta's death, (b) election
of either party if Dr. Mehta is unable to perform his duties on account of
disability for a total period of 120 days or more during any consecutive
period of twelve months, (c) by the Company upon "severe cause" and (d) by
Dr. Mehta upon the occurrence of certain events.
o that if the Agreement is terminated due to Dr. Mehta's death, his surviving
spouse, or his estate if his spouse does not survive, shall receive Dr.
Mehta's salary, incentive commissions, benefits and any deferred
compensation accrued through the last day of the third calendar month
following the month in which termination occurred; in addition, one-half of
his salary would be paid for an additional period of three years.
-9-
o that if the Agreement is terminated by the Company because of Dr. Mehta's
disability or upon "severe cause", Dr. Mehta will receive his salary,
incentive commissions, benefits and any deferred compensation through the
last day of the calendar month in which the termination occurs.
o that if the Agreement is terminated by Dr. Mehta upon the occurrence of one
of the events specified, including a "change in control" as defined, Dr.
Mehta will receive all accrued salary, incentive commissions, benefits and
any deferred compensation through the later of May 22, 2006 or the third
anniversary of such termination.
Dr. Mehta's Agreement was amended in July 2002 to amend the definition of
"change in control". The change was made in connection with Elite's
consideration and implementation of anti-takeover defenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Shown in the table below is any person (including any "group") known to the
Company to be the beneficial owner of more than five percent (5%) of any class
of the Company's voting securities as of October [__], 2002.
Title of Class Name and Address of Amount of Percent
-------------- Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- --------
Common Dr. Atul M. Mehta, Director/Officer 2,962,700(1) 26.4%
165 Ludlow Avenue
Northvale New Jersey 07647
Common Jerome Belson 928,000(2) 9.2%
495 Broadway
New York, NY 10012
Common John P. de Neufville and Mely Rahn, Trustees 766,100(3) 7.9%
Margaret de Neufville Revocable Trusts
197 Meister Avenue
North Branch, NJ 08876
Common Bakul and Dilip Mehta 630,000 6.5%
P. O. Box 438
Muscat, Sultanate of Oman
Common Bridge Ventures, Inc. 859,470(4) 8.6%
1241 Gulf of Mexico Drive
Longboat Key, FL 24228
SMACS Holding Corp.
1241 Gulf of Mexico Drive
Longboat Key, FL 24228
Bridge Ventures, Inc. Employee
Pension Plan
1241 Gulf of Mexico Drive
Longboat Key, FL 24228
Saggi Capital Corp.
9 Prospect Hill Road Ext.
Pine Plains, NY 12567
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Saggi Capital Corp. Money Purchase Plan
9 Prospect Hill Road Ext.
Pine Plains, NY 12567
Saggi Capital Corp. Profit Sharing Plan
9 Prospect Hill Road Ext.
Pine Plains, NY 12567
Harris Freedman
1241 Gulf of Mexico Drive
Longboat Key, FL 24228
Sharon Will
9 Prospect Hill Road Ext.
Pine Plains, NY 12567
Michael H. Freedman
200 East 89th Street, Suite 17A
New York, NY 10128
Common Shelly Bay Holdings, Inc. 849,291(5) 8.0%
101 Brookmeadow Road
Wilmington, Delaware 19807
Shelly Bay Holdings, Ltd.
c/o Consolidated Limited
Par La Ville Place
14 Par-La-Ville Road
Hamilton HM JX, Bermuda
John Moore
101 Brookmeadow Road
Wilmington, Delaware 19807
(1) Includes (i) 6,300 shares held by the Amar Mehta Trust; (ii) 6,300 shares
held by Mrs. Mehta as custodian for Anand Mehta; (iii) 200,000 shares held by
Mehta Partners, LP; and (iv) options to purchase 1,475,000 shares of common
stock held by Dr. Mehta (including options for 400,000 shares which do not begin
vesting until December 31, 2002 and then vest 100,000 shares on that date and
100,000 shares annually thereafter for three years and options for 50,000 shares
which begin vesting on December 31, 2002 and then vest 10,000 shares on that
date and 10,000 shares annually thereafter for four years).
(2) Includes (i) 35,000 shares held by Maxine Belson, wife of Jerome Belson;
(ii) 50,000 shares by the Jerome Belson Foundation; (iii) 28,000 shares owned by
the Grandchildren of Jerome Belson; and (iv) warrants for 256,000 shares.
(3) Represents (i) 331,000 shares held in trust for the benefit of John P. de
Neufville; (ii) 410,000 shares held in trust for David T. de Neufville; and
(iii) options personally held by John P. de Neufville to purchase 25,000 shares.
(4) Based on information contained in a Schedule 13D, as amended, filed by the
foregoing persons on August 26, 2002 who have formed a group within the meaning
of Section 13(d) of the Securities Exchange Act of 1934. Consists of (a) 2,000
shares of common stock owned by Harris Freedman, (b) 369,970 shares of common
stock owned by Bridge Ventures, Inc. (including 85,250 shares of common stock
issuable upon exercise of warrants owned by Bridge Ventures, Inc.), (c) 121,000
shares of common stock owned by SMACS Holding Corp. (including 75,000 shares of
common stock issuable upon exercise of warrants owned by SMACS Holding Corp.),
(d) 102,200
-11-
shares of common stock owned by Bridge Ventures, Inc. Employee Pension Plan
(including 10,000 shares of common stock issuable upon exercise of warrants
owned by Bridge Ventures, Inc. Employee Pension Plan), (e) 7,500 shares of
common stock owned by Sharon Will, (f) 217,500 shares of common stock owned by
Saggi Capital Corp. (including 110,000 shares of common stock issuable upon
exercise of warrants owned by Saggi Capital Corp.), (g) 7,450 shares of common
stock owned by Saggi Capital Corp. Money Purchase Plan, (h) 8,350 shares of
common stock owned by Saggi Capital Corp. Profit Sharing Plan, and (i) 23,500
shares of common stock owned by Michael H. Freedman (including 5,000 shares of
common stock issuable upon exercise of warrants owned by Michael H. Freedman).
(5) Based on information contained in a Schedule 13G filed by Shelly Bay
Holdings, Inc., Shelly Bay Holdings, Ltd. and John Moore on August 27, 2002, the
849,291 shares of common stock beneficially owned by John Moore include the
849,291 shares of common stock beneficially owned by Shelly Bay Holdings, Inc.
and the 849,291 shares of common stock beneficially owned by Shelly Bay
Holdings, Ltd. These shares of common stock are comprised of (i) 667,500 shares
of common stock issuable upon the exchange of 13,487 shares of the Series A
Preferred Stock, par value $1.00 per share, of Elite Labs, the wholly-owned
subsidiary of the Company, (ii) 81,791 shares issuable upon the payment and
exchange of in-kind dividends on the Series A Preferred Stock of Elite Labs
accrued through and as of June 29, 2002, and (iii) the exercise of a warrant to
purchase 100,000 shares of common stock (exercisable through October 17, 2005)
at an exercise price of $18.00 per share. The Series A Preferred Stock of Elite
Labs became exchangeable by the reporting persons into shares of common stock of
the Company on October [__], 2002.
The Company is informed and believes that as of [__________], 2002, Cede & Co.
held [_____________] shares of the Company's common stock and [_____________]
Class A Warrants for shares of the common stock of the Company as nominee for
Depository Trust Company, 55 Water Street, New York, New York 10004. It is the
Company's understanding that Cede & Co. and Depository Trust Company both
disclaim any beneficial ownership therein and that such shares are held for the
account of numerous other persons, no one of whom is believed to beneficially
own five percent or more of the common stock of the Company.
SECURITY OWNERSHIP OF MANAGEMENT
Shown below, as of October 1, 2002, are the shares of the Company beneficially
owned by all directors and nominees, by the executive officers and by the
directors and executive officers of the Company as a group.
Title of Class Name and Address of Amount of Percent
-------------- Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- --------
Common Dr. Atul M. Mehta, Director/Officer 2,962,700(1) 26.4%
165 Ludlow Avenue
Northvale NJ 07647
Common Donald S. Pearson, Director 78,750(2) 0.8%
1305 Peabody Avenue
Memphis, TN 38104
Common Harmon Aronson, Director 60,000(3) 0.6%
26 Monterey Drive
Wayne, NJ 07470
Common Eric L. Sichel, Director 30,000(4) 0.3%
411 Highview Road
Englewood, NJ 07631
Common Mark I. Gittelman, Chief Financial Officer, 10,000(5) 0.1%
Treasurer and Secretary
300 Colfax Avenue
Clifton, NJ 07013
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Common Officers and Directors as a Group 3,141,450 27.7%
Nominees
--------
Common John P. de Neufville 766,100(6) 7.9%
197 Meister Avenue
North Branch, NJ 08876
Common John Moore 849,292(7) 8.6%
101 Brookmeadow Road
Wilmington, Delaware 19807
Common Richard A. Brown 461,500(8) 4.9%
P.O. Box 8706
Longboat Key, Florida 34228
(1) Includes (i) 6,300 shares held by the Amar Mehta Trust; (ii) 6,300 shares
held by Mrs. Mehta as custodian for Anand Mehta; (iii) 200,000 shares held by
Mehta Partners, LP; and (iv) options to purchase 1,475,000 shares of common
stock held by Dr. Mehta (including options for 400,000 shares which do not begin
vesting until December 31, 2002 and then vest 100,000 shares on that date and
100,000 shares annually thereafter for three years and options for 50,000 shares
which do begin vesting until December 31, 2002 and then vest 10,000 shares on
that date and 10,000 shares annually thereafter for four years).
(2) Includes options to purchase 60,000 shares. Options for 40,000 shares are
vested. The remaining options vest in increments of 10,000 shares each on
September 1, 2002 and January 2, 2003.
(3) Comprised of options to purchase 60,000 shares. Options for 40,000 shares
are vested. The remaining options vest in increments of 10,000 shares each on
September 1, 2002 and January 2, 2003.
(4) Comprised of options to purchase 30,000 shares. Options for 10,000 shares
are vested. Options for the remaining shares vest in increments of 10,000 each
on August 2, 2003 and August 2, 2004.
(5) Comprised of options to purchase 10,000 shares.
(6) Comprised of (I) 331,100 shares held in trust for the benefit of John P. de
Neufville; (ii) 410,000 shares held in trust for David T. de Neufville; and
(iii) options personally held by John P. de Neufville to purchase 25,000 shares.
(7) Comprised of (I) 667,500 shares of common stock issuable upon the exchange
of 13,487 shares of the Series A Preferred Stock, par value $1.00 per share, of
Elite Labs, the wholly-owned subsidiary of the Company, beneficially owned by
John Moore, Shelly Bay Holdings, Inc. and Shelly Bay Holdings, Ltd., (ii) 81,791
shares issuable upon the payment and exchange of in-kind dividends on the Series
A Preferred Stock of Elite Labs accrued through and as of June 29, 2002
beneficially owned by John Moore, Shelly Bay Holdings, Inc. and Shelly Bay
Holdings, Ltd., and (iii) the exercise of a warrant to purchase 100,000 shares
of common stock (exercisable through October 17, 2005) at an exercise price of
$18.00 per share, beneficially owned by John Moore, Shelly Bay Holdings, Inc.
and Shelly Bay Holdings, Ltd. The Series A Preferred Stock of Elite Labs became
exchangeable by the reporting persons into shares of common stock of the Company
on October [__], 2002.
(8) Comprised of (I) 125,000 Class A Warrants held by Richard A. Brown, (ii)
261,500 shares of common stock held by Richard A. Brown, (iii) 50,000 shares of
common stock held by the Alexander Brown Trust and (iv) 25,000 Class A Warrants
held by the Alexander Brown Trust.
-13-
Information on the stock ownership of these persons was provided to the Company
by the persons.
COMPARATIVE STOCKHOLDER RETURN
The graph which follows compares the yearly percentage change in the Company's
cumulative total stockholder return on its common stock with the cumulative
total stockholder return of (1) all United States companies traded on the
American Stock Exchange (where the Company's common stock is now traded) and (2)
51 companies traded on the American Stock Exchange which carry the Standard
Industrial Classification (SIC) code 283 (Pharmaceuticals). The graph was
prepared by the Center for Research in Security Prices at the University of
Chicago Graduate School of Business, Chicago, IL.
The stock of the Company was traded on the NASDAQ over-the-counter bulletin
board from July 23, 1998 until February 24, 2000. The stock of the Company began
trading on the American Stock Exchange on February 24, 2000. The period covered
by the comparison begins September 1998 because no trading data was available
for the period from July 23, 1998 through August 31, 1998. The Company's fiscal
year ends on March 31.
-14-
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
ELITE PHARMACEUTICALS, INC.
Produced on 05/29/2002 including data to 03/28/2002
[THE FOLLOWING DATA APPEARED AS A LINE CHART IN THE PRINTED MATERIAL]
AMEX
Elite AMEX Stocks
Pharmaceuticals, Stock Market (SIC 2830-2839
Inc. (US Companies) US Companies) Drugs
09/03/1998 100.0 100.0 100.0
03/31/1999 158.4 117.5 136.2
03/31/2000 1780.0 166.6 267.8
03/30/2001 880.0 132.9 156.3
03/28/2002 1238.4 135.0 110.1
--------------------------------------------------------------------------------
Legend
Symbol CRSP Total Returns Index for: 09/1998 03/1999 03/2000 03/2001 03/2002
[Box] Elite Pharmaceuticals, Inc. 100.0 158.4 1780.0 880.0 1238.4
[Star] AMEX Stock Market (US Companies) 100.0 117.5 166.6 132.9 135.0
[Triangle] AMEX Stocks (SIC 2830-2839
US Companies) Drugs 100.0 136.2 267.8 156.3 110.1
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 09/30/1998.
E. Data for Elite Pharmaceuticals, Inc. from 09/1996 to 01/2000 was provided
by the client.
--------------------------------------------------------------------------------
Prepared by CRSP (www.crsp.uchicago.edu), Center for Research in Security
Prices, Graduate School of Business, The University of Chicago. Used with
permission.
-15-
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors selects the independent public accounting firm for the
Company each year at its annual meeting following the annual meeting of
stockholders. Miller, Ellin & Co., LLP New York, New York, is the independent
public accounting firm for the Company.
AUDIT FEES
The aggregate fees billed for professional services rendered by Miller, Ellin &
Co., LLP, the principal accountants of the Company for the most recent fiscal
year ended March 31, 2002, for the audit of the Company's annual financial
statements for the most recent fiscal year ended March 31, 2002 and the reviews
of the financial statements included in the Company's Forms 10-Q filed during
that fiscal year were approximately $43,000.
ALL OTHER FEES
No fees were billed for services rendered to the Company by Miller, Ellin & Co.,
LLP for the most recent fiscal year ended March 31, 2002 other than those
services specified in the immediately preceding section.
PRINCIPAL OFFICE
The Company's principal offices are located at 165 Ludlow Avenue, Northvale, New
Jersey 07647, and its telephone number is (201) 750-2646.
ABSENCE OF APPRAISAL RIGHTS
Under Delaware law, you do not have appraisal rights with respect to the matters
to be considered at the Annual Meeting.
OTHER MATTERS
We are not aware of any matters to be presented at the Annual Meeting other than
those described in this preliminary proxy statement. However, if other matters
which are not known a reasonable time before the solicitation should come before
the annual meeting, it is intended that the holders of proxies solicited hereby
will vote on such matters in their discretion.
A COPY OF THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED
MARCH 31, 2002, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL
OR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the next Annual
Meeting of Stockholders must be received by the Company at the address specified
below no later than the close of business on July 7, 2003 in order for such
proposal to be eligible for inclusion in the Company's proxy statement and form
of proxy for the 2003 Annual Meeting. Any proposal should be addressed to Mark
I. Gittelman, Secretary, Elite Pharmaceuticals, Inc., 165 Ludlow Avenue,
Northvale, New Jersey 07647 and should be sent by certified mail, return receipt
requested.
WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, proxy statements and other information with the SEC
under the Securities Exchange Act of 1934, as amended. The SEC maintains an
Internet world wide web site that provides access, without charge, to reports,
proxy statements and other information about issuers, like Elite, who file
electronically with the SEC. The address of that site is http://www.sec.gov.
-16-
You also may obtain copies of these materials by mail from the Public Reference
Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, at prescribed rates. These materials are also
available from the SEC in person at any one of its public reference rooms.
Please call the SEC at l-800-SEC-0330 for further information on its public
reference rooms. You may read and copy this information at the following
location of the SEC:
Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
You can also obtain, without charge, reports, proxy statements and other
information, including without limitation, any information we may incorporate by
reference herein, about the Company, by contacting: Elite Pharmaceuticals, Inc.,
165 Ludlow Avenue, Northvale, New Jersey 07647, Attn: Corporate Secretary,
telephone: (201) 750-2646, facsimile: (201) 750-2755.
November [__], 2002 By Order of the Board of Directors
Mark I. Gittelman, Secretary
-17-
PRELIMINARY PROXY
ELITE PHARMACEUTICALS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS.
November [__], 2002
The undersigned acknowledges receipt of the Company's proxy materials and
revokes any prior proxy and hereby appoints Atul M. Mehta and Mark I. Gittelman,
and each of them, attorneys and proxies, with power of substitution in each of
them, to vote for and on behalf of the undersigned at the annual meeting of the
stockholders of the Company to be held on December 12, 2002 or at any
adjournment or postponement thereof, upon matters properly coming before the
meeting, as set forth in the related Notice of Meeting and Proxy Statement, both
of which have been received by the undersigned. Without otherwise limiting the
general authorization given hereby, said attorneys and proxies are instructed to
vote as follows:
The Board of Directors recommends a vote "FOR" the Board's nominees for
Director.
1. Election of the Board's nominees for Director.
/ / FOR ALL NOMINEES LISTED BELOW / /| WITHHOLD AUTHORITY TO VOTE FOR ALL
NOMINEES LISTED BELOW
Nominees: Atul M. Mehta, Harmon Aronson, Donald S. Pearson, Eric L. Sichel,
John P. de Neufville, John A. Moore and Richard A. Brown.
Discretionary authority is also granted to vote for the election of a substitute
for any of said nominees who, for any reason presently unknown, cannot be a
candidate for election.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE LISTED
ABOVE, WRITE THE NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
2. Upon all such other matters as may properly come before the meeting which
were not known a reasonable time before the solicitation, as they in their
discretion may determine. As of the date of this proxy statement, the Board of
Directors was not aware of any such other matters.
-18-
UNLESS OTHERWISE SPECIFIED IN THE SQUARES OR SPACE PROVIDED IN THIS PROXY, THIS
PROXY WILL BE VOTED FOR EACH OF THE BOARD'S NOMINEES.
Dated: [_________________], 2002
Signed:
Please sign this proxy and return it promptly whether or not you expect to
attend the meeting. You may nevertheless vote in person if you attend.
Please sign exactly as your name appears hereon. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or if one
signs, he should attach evidence of his authority.
-2-
-19-