UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 Commission Only (as Permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-12
INTERPHARM HOLDINGS, INC.
-------------------------
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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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:
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(4) Date Filed:
1
[INTERPHARM HOLDINGS, INC. LOGO]
INTERPHARM HOLDINGS, INC.
75 Adams Avenue
Hauppauge, New York 11788
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 16, 2005
To the Stockholders of Interpharm Holdings, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders
of Interpharm Holdings, Inc., a Delaware corporation, to be held at the American
Stock Exchange, 86 Trinity Place, New York, New York 10006, on Friday, December
16, 2005, at 10:00 a.m. local time, for the following purposes:
1. To elect five members to the Board of Directors of the Company to
serve until their respective successors are elected and qualified; and
2. To ratify and approve Marcum & Kliegman, LLP, as our independent
public accountants, to audit our financial statements for the fiscal
year ending June 30, 2006; and
3. To transact such other matters as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on November 9,
2005 (the "Record Date") are entitled to notice of, and to vote at the meeting.
A proxy statement and proxy are enclosed herewith. If you are unable to
attend the meeting in person you are urged to sign, date and return the enclosed
proxy promptly in the enclosed addressed envelope, which requires no postage if
mailed within the United States. If you attend the meeting in person, you may
withdraw your proxy and vote your shares. Also enclosed herewith is our 2005
Annual Report.
By Order of the Board
of Directors
Maganlal K. Sutaria, Chairman
Hauppauge, New York
November 8, 2005
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PROXY STATEMENT
INTERPHARM HOLDINGS, INC.
75 Adams Avenue
Hauppauge, New York 11788
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 16, 2005
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The Board of Directors of Interpharm Holdings, Inc., a Delaware
corporation (the "Company," "we" or "us"), is soliciting the enclosed proxy for
the annual meeting of stockholders to be held on December 16, 2005, at 10:00
a.m. local time, at the American Stock Exchange, 86 Trinity Place, New York, New
York 10006, or any continuation or adjournment thereof. At the meeting, the
stockholders will be asked to vote on proposals, which are listed in the notice
of annual meeting of stockholders and described in more detail below.
This proxy statement and the enclosed proxy card are being mailed on or
about November 16, 2005, to all stockholders entitled to vote at the meeting.
Our 2005 Annual Report on Form 10-K is also being mailed to all stockholders
entitled to vote at the annual meeting. The Annual Report does not constitute a
part of the proxy solicitation material.
At the meeting, our stockholders will be asked:
1. To elect five members to the Board of Directors to serve until their
respective successors are elected and qualified;
2. To ratify and approve Marcum & Kliegman, LLP, as our independent
public accountants, to audit our financial statements for the fiscal
year ending June 30, 2006; and
3. To approve such other matters as may properly come before the
meeting or any adjournment thereof.
Record Date; Outstanding Shares
Only stockholders of record at the close of business on November 9,
2005 (the "Record Date") are entitled to receive notice of, and vote at our
annual meeting. As of the Record Date, the classes of stock entitled to vote at
the meeting, and the number of shares of each class outstanding and entitled to
vote consisted of:
o 32,463,607 shares of $.01 par value per share common stock;
o 7,611 shares of series A convertible preferred stock, par value $.01
per share
o 1,458 shares of series B convertible preferred stock, par value $.01
per share
o 279,208 shares of series C convertible preferred stock, par value
$.01 per share
o 1,464,567 shares of Series K convertible preferred stock, par value
$.01 per share
Each share of our common and preferred stock is entitled to one vote on
all matters. As of the Record Date, we had 34,216,451 shares of our common and
voting preferred stock outstanding with each share entitled to one vote. The
Series A-1 preferred stock (of which there were 4,855,386 shares outstanding as
of the Record Date) is not entitled to vote. We do not have any other voting
securities.
Expenses of Soliciting Proxies
We will pay the expenses of soliciting proxies to be voted at the
annual meeting. Following the original mailing of the proxies and other proxy
materials, we or our agents may supplement the solicitation of proxies by mail,
telephone, internet, telegraph or in person. Following the original mailing of
the proxies and other proxy materials, we will request that brokers, custodians,
nominees and other record holders of our common stock forward copies of the
proxy and other annual meeting materials to persons for whom they hold shares of
common stock and request authority for the exercise of proxies. In these cases,
we will reimburse such record holders for their reasonable expenses if requested
to do so.
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Revocability of Proxies
If you attend the meeting, you may vote in person, regardless of
whether you have submitted a proxy. Any person giving a proxy in the form
accompanying this proxy statement may revoke it at any time before it is voted.
A proxy may be revoked by (i) written notice of revocation or submission of a
new proxy sent to our Corporate Secretary at 75 Adams Avenue, Hauppauge, New
York 11788, or (ii) attending the meeting and voting in person.
Voting and Votes Required for Approval
Every stockholder of record is entitled to one vote, for each share
held, on each proposal or item that comes before the meeting. There are no
cumulative voting rights. By submitting your proxy, you authorize Bhupatlal K.
Sutaria, or any person designated as his substitute, to represent you and vote
your shares at the meeting in accordance with your instructions. If the meeting
is adjourned, Mr. Sutaria or his substitute will be authorized to vote your
shares at any adjournment or postponement of the meeting.
To vote by mail, please sign, date and complete the enclosed proxy and
return it in the enclosed self-addressed envelope, to North American Transfer
Agent, PO Box 311, Freeport, New York 11520-0311. If you hold your shares
through a bank, broker or other nominee, it will give you separate instructions
for voting your shares.
In addition to solicitations by mail, we may solicit proxies in person,
by telephone, facsimile or e-mail. In the event that additional solicitation
material is used, it will be filed with the SEC prior to its use.
Proposal 1: Election of Directors. Directors are elected by a plurality
vote and the six nominees who receive the most votes will be elected. In the
election of Directors, votes may be cast in favor of or withheld with respect to
each nominee.
Proposal 2: Ratification of Selection of Auditors. The affirmative vote
of stockholders owning at least a majority of our shares of common and preferred
stock entitled to vote, and voting together as a single class, present in person
or represented by proxy at our annual meeting at which a quorum is present is
necessary for ratification of the selection of our auditors.
Tabulation of Votes
The votes received by proxy will be tabulated and certified by our
transfer agent, North American Transfer. All other votes will be tabulated by an
inspector of election at the meeting.
Voting by Street Name Holders
If you are the beneficial owner of shares held in "street name" by a
broker, the broker, as the record holder of the shares, is required to vote
those shares in accordance with your instructions. If you do not give
instructions to the broker, the broker will nevertheless be entitled to vote the
shares with respect to "discretionary" items but will not be permitted to vote
the shares with respect to "non-discretionary" items (in which case, the shares
will be treated as "broker non-votes").
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the annual
meeting is one-third of the issued and outstanding shares of common and Series
A, B, C and K preferred stock, collectively, at the annual meeting, in person or
by proxy. Shares that are voted "FOR," "AGAINST" or "WITHHELD FROM" a matter are
treated as being present at the meeting for purposes of establishing a quorum
and are also treated as shares represented and voting the votes cast at the
annual meeting with respect to such matter.
While there is no definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions, we believe that abstentions
should be counted for purposes of determining both: (i) the presence or absence
of a quorum for the transaction of business; and (ii) the total number of votes
cast with respect to a proposal (other than the election of directors). In the
absence of controlling precedent to the contrary, we intend to treat abstentions
in this manner. Accordingly, abstentions will have the same effect as a vote
against the proposal.
Under current Delaware case law, while broker non-votes (i.e. the votes
of shares held of record by brokers as to which the underlying beneficial owners
have given no voting instructions) should be counted for purposes of determining
the presence or absence of a quorum for the transaction of business, broker
non-votes should not be counted for purposes of determining the number of votes
cast with respect to the particular proposal on which the broker has expressly
not voted. We intend to treat broker non-votes in this manner. Thus, a broker
non-vote will make a quorum more readily obtainable, but the broker non-vote
will not otherwise affect the outcome of the voting on a proposal.
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PROPOSALS TO STOCKHOLDERS
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board of Directors presently consists of five members. The Board of
Directors has determined to nominate the existing five directors. Unless
otherwise instructed, the proxy holder will vote the proxies received by him for
the nominees named below. In the event that any nominee is unable or declines to
serve as a director at the time of the annual meeting, the proxies will be voted
for any nominee who shall be designated by the current Board of Directors to
fill the vacancy. The term of office of each person elected as a director will
continue until the next annual meeting of stockholders or until a successor has
been duly elected and qualified or until his or her earlier resignation, removal
from office, death or incapacity.
Article III of our By-laws gives power to our Board of Directors to
change the number of directors of the Company by resolution and to fill any
vacancies created by an increase in the number of directors by a vote of the
directors without the necessity of a vote by stockholders on such matter.
Certain members of the Board have expressed a desire to enlarge our Board of
Directors and elect candidates who have significant and relevant business
experience. Accordingly, the Board of Directors may do so from time to time
between annual meetings of stockholders.
The following table sets forth the names and ages of all current
directors and all persons nominated or chosen to become directors along with
their current positions, offices and term:
Name of Nominee Age Position with Interpharm Director Since
--------------- --- ------------------------ --------------
Dr. Maganlal K. Sutaria 69 Chairman May 2003
David Reback (1)(2)(3)(4) 63 Director November 1997
Stewart Benjamin (1)(4) 40 Director May 2001
Dr. Mark Goodman (2)(3)(4) 63 Director March 2004
Kennith Johnson (1)(2)(3)(4) 52 Director November 2004
(1) Member of the audit committee
(2) Member of the compensation committee
(3) Member of the nominating committee
(4) Member of corporate governance committee
The Board of Directors has determined that David Reback, Stewart
Benjamin, Kennith Johnson and Dr. Mark Goodman are independent (as independence
is defined in Section 121A of the listing standards of the American Stock
Exchange).
The following information with respect to the principal occupation or
employment of the nominees, the name and principal business of the corporation
or other organization in which such occupation or employment is carried on and
other affiliations and business experience during the past five years has been
furnished to us by the respective nominees:
DR. MAGANLAL K. SUTARIA is a cardiovascular surgeon who received his
medical degree from the Medical College, Ahmedabad, Gujarat University in 1961
and since 1991 served as the Chairman of Interpharm, Inc. Dr. Sutaria has been a
Director and Chairman of our Board of Directors since May 29, 2003.
DAVID C. REBACK has served as a director since November 1997. Since
1969, Mr. Reback has been a partner with Reback & Potash, LLP, a law firm
specializing in litigation, appellate matters and real estate. Mr. Reback
received a B.A. from Syracuse University, and in 1965 he received a Juris
Doctor's degree from Syracuse University College of Law.
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STEWART BENJAMIN has served as a Director since May 2001. Mr. Benjamin
is a certified public accountant in the State of New York. From January 1996 to
the present, Mr. Benjamin has been self-employed as a sole practitioner under
the name of Stewart H. Benjamin, CPA, P.C. From 1985 through December 1995, Mr.
Benjamin was employed as a staff accountant in both private industry and local
public accounting firms. Mr. Benjamin received a Bachelor of Business
Administration degree from Pace University in 1985.
DR. MARK GOODMAN has been a cardiologist for more than 30 years and is
currently in private practice and is affiliated with Winthrop University
Hospital in Mineola, New York and North Shore University Hospital in Manhasset,
New York. Dr. Goodman has participated in a number of drug trials as a primary
investigator for a number of drug companies, including, Pfizer, Ciba
Pharmaceuticals and Kos Pharmaceuticals. Dr. Goodman has also served on advisory
panels to Medtronic Pacemaker Corporation and Bristol-Myers Squibb Company. Dr.
Goodman is a graduate of Brooklyn College and has served as a Director since
March 25, 2004.
KENNITH JOHNSON has served as a Director since November 18, 2004. He
currently serves as the Chairman of our Audit Committee. Since November 2001,
Mr. Johnson has been a financial and strategy consultant with Johnson & Scanlon
Associates. From January 2001 to November 2001, Mr. Johnson was Senior Vice
President and Chief Financial Officer of Movado Group, Inc., a manufacturer and
distributor of Swiss watches, fine jewelry and tableware products. Prior thereto
he was Vice President, Chief Financial Officer and Chief Administrative Officer
of Precise International/Weger N.A., a privately held manufacturer, distributor
and importer of Swiss made sports watches, fine jewelry and other products.
Directors are elected by a plurality vote and the five nominees who
receive the most votes of our Series A, B,C and K preferred stock and common
stock, voting together as a class, will be elected. In the election of
directors, votes may be cast in favor of or withheld with respect to each
nominee.
Family Relationships
The following are the family relationships among our nominees for
director and officers: Munish K. Rametra, our Executive Vice President, General
Counsel and Secretary, is married to the daughter of Maganlal K. Sutaria. Raj
Sutaria, an officer of Interpharm, Inc., is the son of Maganlal K. Sutaria and
the nephew of Bhupatlal K. Sutaria, our President. Maganlal K. Sutaria and
Bhupatlal K. Sutaria are brothers.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION AS A DIRECTOR OF EACH OF THE NOMINEES SET FORTH ABOVE. PROXIES
SOLICITED HEREBY WILL BE VOTED "FOR" EACH DIRECTOR NAMED ABOVE UNLESS A VOTE
AGAINST A NOMINEE OR AN ABSTENTION IS SPECIFICALLY INDICATED.
MANAGEMENT
The following table sets forth the names and ages of all current
Interpharm officers along with their current positions. Officers are appointed
to serve until the meeting of the board of directors following the next annual
meeting of stockholders and until their successors have been duly elected and
qualified.
Name Age Position
---- --- --------
Cameron Reid 51 Chief Executive Officer
Bhupatlal K. Sutaria 59 President
George Aronson 56 Chief Financial Officer
Munish K. Rametra 35 Executive Vice President, General Counsel,
Secretary
Raj Sutaria 33 Chief Operating Officer
CAMERON REID has served as the CEO of the Company since January 24,
2005. From 1992 through March 2004, Mr. Reid was the President of Dr. Reddy's
Laboratories, Inc. Prior to joining Dr. Reddy's, Mr. Reid was an Executive Vice
President of, and headed Roussel Corp., a division of Roussel UCLAF, a
pharmaceutical company based in Montvale, New Jersey. Mr. Reid holds a Bachelor
of Science degree in chemistry and geology from the University of Calgary. He is
also a graduate of the executive management program at INSEAD in France.
6
BHUPATLAL K. SUTARIA. Mr. Sutaria has served as the President of
Interpharm Inc. since 1990. Prior to joining Interpharm, Inc., Mr. Sutaria was
an entrepreneur involved in several of his own businesses, including a
motorcycle dealership and a franchised restaurant. Mr. Sutaria received a
Bachelor's degree in Chemistry from Saurashpra University in India in 1972 and a
Masters of Business Administration degree from the University of Palm Beach in
1974. Mr. Sutaria is the brother of Dr. Maganlal K. Sutaria.
GEORGE ARONSON became our Chief Financial Officer in January 2004.
Prior to joining Interpharm, from 1995 through 2003, Mr. Aronson served as the
Chief Financial Officer of Direct Insite Corporation, an application service
provider (ASP) for large enterprise customers. Prior to 1995, he served as Chief
Financial Officer of Hayim & Co., an importer/distribution organization from
1988 through 1994. Mr. Aronson holds a Bachelor of Science degree from Long
Island University and is a Certified Public Accountant in the State of New York,
is a member of the American Institute of Certified Public Accountants and the
Financial Executives Institute.
MUNISH K. RAMETRA has been our general counsel and Secretary since May
29, 2003. Prior to joining us, from 1999 to 2003, Mr. Rametra acted as a
financial and legal consultant to several private and public companies. Mr.
Rametra was an associate for the law firm of Sullivan and Cromwell from 1995 to
1999. Mr. Rametra attended the Stern School of Business at New York University
and New York University School of Law. Mr. Rametra is the son-in-law of Maganlal
K. Sutaria.
RAJ SUTARIA has been our Chief Operating Officer since November, 2004.
Between 1997 and 2004, Mr. Sutaria served as Production Manager, Director of
Manufacturing, Vice President and Chief Operating Officer of Interpharm, Inc.
Mr. Sutaria earned a B.B.A. in Marketing from the University of Colorado at
Boulder in 1997 and is the son of Maganlal K. Sutaria and the nephew of
Bhupatlal K. Sutaria.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
Our Board of Directors held a total of six meetings during the fiscal
year ended June 30, 2005. In addition, the Board of Directors acted two times by
unanimous written consent during the same period and the independent directors
met three times during the fiscal year without the presence of non-independent
directors and management. During the fiscal year ended June 30, 2005, each of
our directors attended at least 75% of the aggregate number of all meetings of
the Board of Directors and of the committees, if any, on which such director
served. The Board of Directors has standing Audit, Nominating, Compensation and
Corporate Governance Committees.
Audit Committee and Audit Committee Report
The Board of Directors created the audit committee in 1994. The audit
committee is responsible for reviewing reports of financial results, audits,
internal controls, and adherence to its Business Conduct Guidelines in
compliance with federal procurement laws and regulations. The committee
recommends to the Board of Directors the selection of Interpharm's outside
auditors and reviews their procedures for ensuring their independence with
respect to the services performed for Interpharm.
The audit committee is comprised of three directors: Kennith Johnson,
Stewart Benjamin and David Reback. In the opinion of the Board of Directors,
Messrs. Johnson, Benjamin and Reback are independent of management and free of
any relationship that would interfere with their exercise of independent
judgment as members of this committee and they are independent as defined in
Section 121(A) of the AMEX listing standards. The Board of Directors has adopted
a written charter for the audit committee. The Audit Committee met four times
during the fiscal year ended June 30, 2005.
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AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process
on behalf of the Board of Directors. The Committee is comprised of three
Directors and operates under a written charter adopted by the Board of
Directors. All of the audit committee members are independent within the meaning
of Rule 121(A) of the AMEX listing standards, and are "independent," as that
term is defined in Section 10A of the Securities Act of 1934, as amended.
Management has the primary responsibility for the financial statements and the
reporting process, including the Company's systems of internal control. In
fulfilling its responsibilities, the Committee reviewed the audited financial
statements in the Annual Report with management, including discussing with
management the quality and acceptability of the Company's financial reporting
and controls.
The Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting standards, their
judgments as to the quality and acceptability of the Company's financial
reporting and such other matters as are required to be discussed with the
Committee under generally accepted auditing standards, including the matters
required to be discussed by SAS 61 (Communication with Audit Committees). In
addition, the Committee has discussed with the independent auditors the
auditors' independence from management and the Company, including the matters in
the auditors' written disclosures required by Independent Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Furthermore,
the Audit Committee has considered whether the provision of non-audit services
by the independent auditors for the fiscal year ended June 30, 2005 is
compatible with maintaining their independence.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors that the audited financial
statements for the fiscal year ended June 30, 2005 be included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2005, for filing
with the SEC.
Management is responsible for the Company's financial reporting process
including its systems of internal control, and for the preparation of
consolidated financial statements in accordance with generally accepted
accounting principles. The Company's independent auditors are responsible for
auditing those financial statements. Our responsibility is to monitor and review
these processes. It is not the Committee's duty or responsibility to conduct
auditing or accounting reviews or procedures. The Committee has relied, without
independent verification, on management's representation that the financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America
and on the independent auditors' report on the Company's financial statements.
The Committee's oversight does not provide it with an independent basis
to determine that management has maintained appropriate accounting and financial
reporting principles or policies, or appropriate internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Committee's considerations and
discussions with management and the independent auditors do not assure that the
Company's financial statements are presented in accordance with generally
accepted accounting principles, that the audit of the Company's financial
statements has been carried out in accordance with generally accepted auditing
standards or that the Company's independent accountants are in fact
"independent."
The Audit Committee is pleased to submit this report to the
stockholders with regard to the above matters.
/s/ Kennith Johnson
/s/ Stewart Benjamin
/s/ David Reback
The Company believes that Kennith Johnson and Stewart Benjamin qualify
as a "financial experts" as defined in Rule 401(k) of Regulation S-K.
Compensation Committee
In August 1994, the Board of Directors established a Compensation
Committee, which is responsible for decisions regarding salaries, stock option
grants and other matters regarding executive officers and key employees. Kennith
Johnson, David C. Reback and Dr. Mark Goodman currently serve on the
Compensation Committee. During the fiscal year ended June 30, 2005, the
compensation committee met three times.
8
Nominating Committee
In March, 2004 the Board of Directors established a Nominating
Committee, which is responsible for determination of the appropriate size,
functioning and needs of the Board, including, recruitment and retention of high
quality Board members, committee composition and structure, Board assessment of
director performance and related party and conflicts oversight. Kennith Johnson,
David C. Reback and Dr. Mark Goodman currently serve on the Nominating
Committee. All of the Nominating Committee members are independent within the
meaning of Rule 121(A) of the AMEX listing standards, and are "independent," as
that term is defined in Section 10A of the Securities Act of 1934, as amended.
During the fiscal year ended June 30, 2005 the Nominating Committee met one
time.
The Nominating Committee considers nominees recommended by any
stockholder entitled to vote in the election of directors. Any stockholder
wishing to nominate an individual for election to the Board must comply with the
advance notice procedures described in the "Stockholders' Proposals" section at
the end of this proxy statement. The nomination must contain the following
information about the nominee: name, age, business and residence addresses,
principal occupation or employment, the number of shares of common stock held by
the nominee, the information that would be required under SEC rules in a proxy
statement soliciting proxies for the election of such nominee as a director, and
a signed consent of the nominee to serve as a director of the Company, if
elected. The Nominating Committee has not specified any minimum qualifications
for serving on the Board. However, in its assessment of potential candidates,
the Nominating Committee will review the candidate's character, business
experience and understanding of the Company's business environment, and ability
to devote the time and effort necessary to fulfill his or her responsibilities,
all in the context of the perceived needs of the Board at that time.
A copy of our Nominating Committee Charter is available on our website
at www.interpharminc.com.
Corporate Governance Committee
In March, 2004, the Board of Directors established a Corporate
Governance Committee, which is responsible for reviewing the Company's corporate
governance and making recommendations as to changes and improvements as
necessary. Kennith Johnson, David C. Reback, Stewart Benjamin and Dr. Mark
Goodman currently serve on the Corporate Governance Nominating Committee. All of
the Nominating Committee members are independent within the meaning of Rule
121(A) of the AMEX listing standards, and are "independent," as that term is
defined in Section 10A of the Securities Act of 1934, as amended. During the
fiscal year ended June 30, 2005 the Corporate Governance Committee met one time.
BOARD OF DIRECTORS COMPENSATION
Compensation of Directors
All directors are entitled to reimbursement of reasonable travel and
lodging expenses related to attending meetings of the Board of Directors and any
committee on which they serve. In addition, the Company and its Compensation
Committee are currently working to determine the Board of Director's
compensation for the fiscal year ended June 30, 2005 and for the fiscal year
ending June 30, 2006.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of Interpharm
Holdings, Inc. (the "Company") is charged with developing and administering a
compensation policy for senior management that contains appropriate performance
incentives and equity-linked components, and reviewing annually the performance
of the executive officers of the Company.
The Compensation Committee also administers the stock option and stock
incentive plans and approves grants of stock options and other incentives under
those plans.
Compensation programs for executive officers are designed to attract,
retain and motivate employees who will contribute to the achievement of
corporate goals and objectives. Elements of executive compensation include
salaries, bonuses and awards of stock options, with the last two being variable.
The Committee's policy is to achieve a balance between cash and other
compensation in order to attract and retain qualified personnel, and to
incentivize them in their duties.
9
In making its decisions or recommendations, the Committee takes into
account factors it deems relevant to the specific compensation component being
considered, including: compensation paid by other business organizations of
comparable size in the same industry and related industries; profitability; the
attainment of annual individual and business objectives; an assessment of
individual contributions relative to others; and historic compensation awards.
The Committee considered the factors described above in determining
Cameron Reid's total compensation to serve as Chief Executive Officer.
Specifically, the Committee and the Board recognized Mr. Reid prior experience
and his key contributions in developing the Company's business plan while a
member of the Company's Board of Directors. While Mr. Reid's cash compensation
is the highest of any employee of the Company, at $300,000, it is less than that
earned by CEO's of comparable companies. In consideration of this, the Committee
awarded Mr. Reid options to purchase 2 million shares of Company common stock
which it believes to be fair compensation and adequate incentive to meet the
Company's long-term goals.
THE COMPENSATION COMMITTEE
/s/ David Reback
David Reback
/s/ Dr. Mark Goodman
Dr. Mark Goodman
/s/ Kennith Johnson
Kennith Johnson
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
In August 1994, the Board of Directors established a Compensation
Committee, which is responsible for decisions regarding salaries, stock option
grants and other matters regarding executive officers and key employees. During
the fiscal year ended June 30, 2005, David C. Reback, Kennith Johnson and Dr.
Mark Goodman were members of the Compensation Committee. In the opinion of the
Board of Directors, each of such persons is independent of management and free
of any relationship which would interfere with his exercise of independent
judgment as a member of our Compensation Committee.
PERFORMANCE GRAPH
Prior to May 30, 2003, we were in the computer/systems
integration business as Atec Group, Inc. On May 30, 2003, that business was
sold, Interpharm, Inc. was acquired and we changed our name to Interpharm
Holdings, Inc. SEC disclosure rules require that registrants provide a line
graph comparing the yearly percentage change in the registrant's cumulative
total stockholder return on a class of common stock registered under Section 12
of the Exchange Act with the cumulative total return of a broad equity market
index. We believe that historical stock prices prior to May 30, 2003 are not
representative of our current business and a comparison of our stock price
between May 30, 2003 and June 30, 2003 to an index would not be meaningful and
could be misleading. Accordingly, we have omitted this information prior to May
30, 2003.
The following chart compares for the period from May 30, 2003 to
June 30, 2005, the cumulative total stockholder return on the Common Stock with
(i) the S&P SmallCap 600 Index and (ii) the RDG Microcap Pharmaceutical Index
(the "RDG Industry Index"), and assumes an investment of $100 on May 30, 2003 in
each of the Common Stock, the stocks comprising the S&P SmallCap 600 Index and
the stocks comprising the RDG Industry Index. The total return for each of the
Company's Common Stock, the S&P SmallCap 600 Index and the RDG Industry Index
assumes the reinvestment of all dividends (although no dividends were declared
on the Company's Common Stock during such period). Each index is adjusted for
additions and deletions of securities from the index.
10
COMPARISON OF 25 MONTH CUMULATIVE TOTAL RETURN*
AMONG INTERPHARM HOLDINGS, INC., THE S & P SMALLCAP 600 INDEX
AND THE RDG MICROCAP PHARMACEUTICAL INDEX
[GRAPHIC CHART OMITTED]
* $100 invested on 5/30/03 in stock or index-including reinvestment of
dividends. Fiscal year ending June 30.
Copyright (c)2002, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm
11
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain compensation information for the
years ended June 30, 2005, 2004 and 2003 concerning our Chief Executive Officer
and other officers who earned in excess of $100,000 during the year ended June
30, 2005.
SUMMARY COMPENSATION TABLE
For the Years Ended June 30, 2005, 2004 and 2003
Annual Compensation Awards Payouts
ANNUAL COMPENSATION LONG TERM COMPENSATION
Awards Payouts
Name Other Restricted Securities
And Annual Stock Underlying All
Principal Year Compen- Awards Options/ LTIP Other
Position Position Ended Salary($) Bonus($) sation($) $ SARS Payouts Compensation
-------- --------- --------- ---------- ---------- ---------- ---------- --------- ---------- ----------
(1)
Cameron Reid CEO 6/30/2005 $ 76,154** $ -- $ 5,286 $ -- 2,000,000 $ -- $ --
6/30/2004 $ -- $ -- $ -- $ -- 1,000,000 $ -- $ --
6/30/2003 $ -- $ -- $ -- $ -- -- $ -- $ --
Dr Chairman 6/30/2005 $ 150,000 $ -- $ 16,938 $ -- -- $ -- $ --
Maganlal K /CEO* 6/30/2004 $ 151,385 $ 15,000 $ 16,938 $ -- -- $ -- $ --
Sutaria 6/30/2003 $ 150,000(2) $ -- $ 1,300 $ -- 1,200,000 $ -- $ --
Bhupatlal President 6/30/2005 $ 198,077 $ 15,000 $ 20,578 $ -- -- $ -- $ --
K. Sutaria 6/30/2004 $ 155,231 $ 34,000 $ 20,119 $ -- -- $ -- $ --
6/30/2003 $ 150,000(2) $ -- $ 1,100 $ -- 800,000 $ -- $ --
Raj Sutaria COO 6/30/2005 $ 165,288 $ 5,000 $ 11,702 $ -- -- $ -- $ --
6/30/2004 $ 145,307 $ 34,000 $ 15,314 $ -- -- $ -- $ --
6/30/2003 $ 140,000(2) $ -- $ 1,000 $ -- 750,000 $ -- $ --
Munish K EVP/ 6/30/2005 $ 164,865 $ 15,000 $ 29,474 $ -- -- $ -- $ --
Rametra Secretary 6/30/2004 $ 113,766 $ 10,000 $ 28,022 $ -- -- $ -- $ --
6/30/2003 $ 100,000(2) 1,000 $ -- 450,000 $ -- $ --
George CFO 6/30/2005 $ 147,692 $ 15,000 $ 20,746 $ -- 150,000 $ -- $ --
Aronson 6/30/2004 $ 67,308 $ 14,000 $ 8,640 $ -- 250,000 $ -- $ --
6/30/2003 $ -- $ -- $ -- $ -- -- $ -- $ --
* Dr. Maganlal Sutaria was the Chief Executive Officer of the Company from May
29, 2003 until January 2005. Cameron Reid became the Chief Executive Officer in
January, 2005.
** Pursuant to his agreement with us, as amended, Mr. Reid's annual salary is
$300,000, effective July 1, 2005.
(1) Includes Major Medical, auto expenses and mobile phone allowances.
(2) Based on compensation as set forth in employment agreements dated May 30,
2003.
12
Stock Option Grants in Last Fiscal Year
During the fiscal year ended June 30, 2005 we granted the following
options to the individuals mentioned in the above table:
# of Securities % of Grant
Underlying Total Granted Exercise Expiration Date
Name Options to Employees (1) Price Date Present Value
---- ------- ---------------- ----- ---- -------------
George Aronson (1) 25,000 0.78% $1.23 06/30/10 $19,750
(2) 125,000 3.88% $1.23 06/30/12 $111,783
Cameron Reid (1) 2,000,000 62.14% $1.23 06/30/10 $1,580,000
(1) Options are fully vested
(2) Options vest 25% 07/01/06, 25% 07/01/07, 25% 07/01/08 and 25%
07/01/09, and are subject to various performance criteria of the
employee and the Company
Year End Option Table
The following table sets forth certain information regarding the stock
options held as of June 30, 2005, by the individuals named in the above Summary
Compensation Table. None of such persons exercised any stock options during the
fiscal year ended June 30, 2005
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
Securities Value of Unexercised
Underlying
Unexercised In-the-Money-Options
Options at
Fiscal Year End At Fiscal Year End ($)(3)
(#)
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Cameron Reid (1) 3,000,000(1) 0 $ 0 $ 0
Dr. Maganlal K. 300,000 900,000 164,400 493,200
Sutaria (2)
Bhupatlal 200,000 600,000 109,600 328,800
Sutaria (2)
Raj Sutaria (2) 187,500 562,500 102,750 308,250
Munish K. 112,500 337,500 61,650 184,950
Rametra (2)
George Aronson(3) 275,000 125,000 0 0
13
(1) Represents options to acquire 3,000,000 shares at $1.23 per share
exercisable through June 30, 2010.
(2) Options are exercisable at $0.682 per share. These options have the
following vesting provisions: 25% of the options vested on January 1, 2005 and
an additional 25% will vest on each following December 31 beginning December 31,
2005.
(3) Options are exercisable at $1.23 per share. 275,000 of such options are
fully vested and are exercisable through June 30, 2010. 125,000 of such options
vest 25% on July 1, 2006, 2007, 2008 and 2009, respectively, and are exercisable
through June 30, 2012.
Ten Year Option/SAR Repricing
The following table sets forth information regarding options held by
executive officers of the Company that have been re-priced, during the ten year
period ended June 30, 2005.
Length of
Number of original
securities option term
underlying Market price of Exercise price remaining at
options/SAR's stock at time at time of date of
repriced or of repricing or repricing or New exercise repricing or
Name Date amended amendment amendment price amendment
Cameron Reid June 30, 2005 1,000,000 $ 1.23 $ 3.97 $ 1.23 8.8 years
Chief Executive Officer June 30, 2005 2,000,000 $ 1.23 $ 2.24 $ 1.23 9.6 years
George Aronson June 30, 2005 250,000 $ 1.23 $ 4.41 $ 1.23 8.6 years
Chief Financial Officer June 30, 2005 25,000 $ 1.23 $ 2.24 $ 1.23 9.6 years
Jeff Weiss June 30, 2005 90,000 $ 1.23 $ 2.24 $ 1.23 4.6 years
V.P Sales and Marketing June 30, 2005 30,000 $ 1.23 $ 2.24 $ 1.23 5.6 years
June 30, 2005 30,000 $ 1.23 $ 2.24 $ 1.23 6.6 years
Ken Cappell June 30, 2005 106,000 $ 1.23 $ 1.94 $ 1.23 4.6 years
V.P. - Intellectual Property June 30, 2005 22,000 $ 1.23 $ 1.94 $ 1.23 4.6 years
June 30, 2005 22,000 $ 1.23 $ 1.94 $ 1.23 4.6 years
In January, 2005, our Board of Directors approved the stock option repricing
program as a result of a significant reduction in the price of our common stock
subsequent to the original grant of certain options. The Board determined that
the options having an exercise price above the market price at that time no
longer provided meaningful incentive to the option holders to remain in our
employ and to maximize shareholder value. The Board believed that the exchange
of new stock options with a lower exercise price for our existing stock options
would once again provide incentive to our officers, directors and employees to
continue to provide services to us and to maximize shareholder value.
14
Equity Compensation Plan Information
The following table gives information about our common stock that may
be issued upon the exercise of options, warrants and rights under all of our
equity compensation plans as of June 30, 2005. The table includes the following
plans: 1997 Stock Option Plan and 2000 Flexible Stock Plan.
------------------------------------------------------------------------------------------------------------------------
Plan category Number of securities Weighted average Number of securities
to be issued upon exercise price of remaining available for
exercise of outstanding options, future issuance
outstanding options, warrants and rights
warrants and rights
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans approved by 0 0 0
security holders
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans not approved
by security holders
1997 Stock Option Plan 1,436,370 $1.97 0
2000 Flexible Stock Plan(1) 11,217,500 $0.891 5,211,938
----------------------------------------------------------------------------------------------------------------------
Total 12,653,870 $1.01 5,211,938
----------------------------------------------------------------------------------------------------------------------
(1) Securities available for future issue increase each year by 10% of
our outstanding common stock at the beginning of each year. The total amount of
common stock available under the plan cannot exceed 20 million shares.
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth as of November 9, 2005, certain
information with respect to the beneficial ownership of our voting securities by
(i) any person known by Interpharm to be the beneficial owner of more than 5% of
our voting securities, (ii) each director and nominee, (iii) each executive
officer named in the Summary Compensation table appearing herein and (iv) all
directors and executive officers as a group.
Amount and
Name and Nature of
Address of Title of Beneficial Percent of
Beneficial Owner Class Ownership Class (1)
---------------- ----- --------- ---------
Maganlal K. Sutaria(2) Common Stock 343,500 1.05%
75 Adams Avenue
Hauppauge, NY 11788
Raj Sutaria(3) Common Stock 6,951,198 21.30%
75 Adams Avenue
Hauppauge, NY 11788 Series K Preferred 512,599 35.00%
Common and Series K
Combined 7,463,797 21.96%
Voting Power
Bhupatlal K. Sutaria(4) Common Stock 204,000 0.63%
75 Adams Avenue
Hauppauge, NY 11788
Munish K. Rametra and Mona Rametra (5) Common Stock 3,987,971 12.29%
75 Adams Avenue
Hauppauge, NY 11788 Series K Preferred 292,913 20.00%
Common and Series K
Combined 4,280,884 12.62%
Voting Power
Dr. Mark Goodman (6) Common Stock 100,000 *
75 Adams Avenue
Hauppauge, NY 11788
David Reback (7) Common Stock 17,500 *
75 Adams Avenue
Hauppauge, NY 11788
Stewart Benjamin(8) Common Stock 17,500 *
75 Adams Avenue
Hauppauge, NY 11788
Ravi Sutaria Common Stock 4,361,443 13.49%
75 Adams Avenue
Hauppauge, NY 11788 Series K Preferred 366,141 25.00%
Common and Series K
Combined 4,654,356 13.77%
Voting Power
Perry Sutaria(9) Common Stock 4,073,051 12.60%
75 Adams Avenue
Hauppauge, NY 11788 Series K Preferred 292,913 20.00%
Common and Series K
Combined 4,365,964 12.92%
Voting Power
Kennith Johnson Common Stock 27,500 *
75 Adams Avenue
Hauppauge, NY 11788
Cameron Reid (10) Common Stock 2,000,000 5.82%
75 Adams Avenue
Hauppauge, NY 11788
George Aronson (11) Common Stock 275,000 *
75 Adams Avenue
Hauppauge, NY 11788
All Directors and Total Voting Power 23,312,501 68.77%
Officers as a
Group (9 persons)
(1) Computed based upon a total of 32,463,607 shares of common stock and
1,464,567 shares of Series K Preferred Stock outstanding as of November 7, 2005
and 7,438 shares of common stock into which the Series, A, B and C Preferred
Stock are convertible.
(2) The foregoing figure reflects the ownership of 43,500 shares of common stock
and vested options to acquire 300,000 shares. It does not include non-vested
options to acquire 900,000 shares of common stock, 350,000 options held by his
spouse and 1,873,900 shares of Series A-1 Preferred Stock held by an annuity he
controls.
16
(3) The foregoing figure includes vested options to acquire 187,500 shares, but
does not include non-vested options to acquire 562,500 shares of common stock or
his beneficial interest in Series A-1 Preferred Stock held by a trust of which
he is a beneficiary.
(4) The foregoing figure includes vested options to acquire 200,000 shares, but
does not include non-vested options to acquire 600,000 shares of common stock
and 400,000 options held by his spouse.
(5) The foregoing includes vested options to acquire 112,500 shares., but does
not include non-vested options held by Munish K. Rametra to acquire 337,500
shares of common stock or Mona Rametra's beneficial interest in Series A-1
Preferred Stock held by her and by a trust of which she is a beneficiary.
(6) The foregoing figure includes 47,500 shares owned by Dr. Goodman's wife. Dr.
Goodman has been granted a power of attorney to sell such shares.
(7) The foregoing figure includes vested options to acquire 17,500, but excludes
non-vested options to acquire 5,000 shares of common stock.
(8) The foregoing figure includes 17,500 shares of common stock which may be
acquired upon exercise of currently exerciseable options and excludes non-vested
options to acquire an additional 5,000 shares of common stock.
(9) The foregoing figure does not include his beneficial interest in Series A-1
Preferred Stock held by a trust of which he is a beneficiary.
(10) The foregoing figure does not include 1,000,000 non-vested options to
purchase common stock. Mr. Reid's options have an exercise price of $3.97 per
share and will not vest until out common stock trades at $15 per share for six
months.
(11) The foregoing figure includes vested options to acquire 275,000 shares, but
excludes non-vested options to acquire 125,000 shares of common stock.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We lease our 100,000 square foot facility at 75 Adams Avenue in
Hauppauge, New York which is owned by Sutaria Family Realty, LLC which is owned
by Perry Sutaria, Raj Sutaria and Mona Rametra.
No third party assessment or appraisal of the lease was made at the
time it was entered into or at any subsequent time. Interpharm, Inc. is
obligated to pay minimum annual rent of $480,000, plus property taxes,
insurance, maintenance and other expenses related to the leased facility. Upon a
change in ownership of the Company, and every three years thereafter, the annual
rent will be adjusted to fair market value, as determined by an independent
third party.
In February and April 2005, we purchased 5.0 Class A membership
interests ("Interests") from each of Cameron Reid ("Reid"), our Chief Executive
Officer, and John Lomans ("Lomans"), who has no affiliation with us, for an
aggregate purchase price of $1,022,500 (including costs of $22,500) of APR, LLC,
a Delaware limited liability company primarily engaged in the development of
complex bulk pharmaceutical products ("APR"). The purchases were made pursuant
to separate Class A Membership Interest Purchase Agreements dated February 16,
2005 between us and Reid and Lomans (the "Purchase Agreements"). At the time of
the purchases, Reid and Lomans owned all of the outstanding Class A membership
interests of APR, which had outstanding 100 Class A membership interests and 100
Class B membership interests. The two classes of membership interests have
different economic and voting rights, and the Class A members have the right to
make most operational decisions. The Class B interests are held by one of our
major customers and suppliers. As a result, we currently own 10 Interests out of
the 100 Interests now outstanding.
In accordance with the terms of the Purchase Agreements, we have
granted to Reid and Lomans each a proxy to vote 5 of the Interests owned by us
on all matters on which the holders of Interests may vote. Our Board of
Directors approved the purchases of Interests at a meeting held on February 15,
2005, based on an analysis and advice from an independent investment banking
firm. Reid did not participate during the deliberations on this matter. We are
accounting for our investment in APR pursuant to the cost method of accounting.
17
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
To our knowledge, except as set forth below, based solely on a review
of such materials as are required by the Securities and Exchange Commission,
none of our officers, directors or beneficial holders of more than ten percent
of our issued and outstanding shares of Common Stock has failed to timely file
with the Securities and Exchange Commission any form or report required to be so
filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 during
the fiscal year ended June 30, 2005:
Form 3 for Rajs Holdings I, LLC filed in November, 2005; and
Form 4s for Mona Rametra, Perry Sutaria, Ravi Sutaria and Raj Sutaria filed in
November, 2005.
18
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
Our Audit Committee has recommended the appointment of Marcum &
Kliegman, LLP as our independent auditor for the fiscal year ending June 30,
2006. Acting on that recommendation, the Board of Directors appointed Marcum &
Kliegman, LLP as our auditor for the fiscal year ending June 30, 2006. Marcum &
Kliegman, LLP served as our independent auditor for the two fiscal years ended
June 30, 2005 and the six month period ended June 30, 2003, and provided
services to us with respect to those periods that included, but were not limited
to, consultations on various tax and information services matters, as well as
consultation with respect to the acquisition of Interpharm, Inc.
Audit and Non-Audit Fees
The following table sets forth the fees billed to us for the fiscal
years ended June 30, 2005 and June 30, 2004 by Marcum & Kliegman, LLP:
Fiscal Year Fiscal Year
Ended Ended
June 30, 2004 June 30, 2005
------------- -------------
Audit Fees $102,250 $ 151,500
Audit Related Fees (1) 29,532 0
Tax Fees (2) 46,445 26,021
All Other Fees 12,368(3) 21,048(4)
(1) Consists of fees for services relating to accounting
consultation and review of documents filed with the SEC.
(2) Consists of tax filing and tax related compliance and other
advisory services.
(3) Consists primarily of consultation with respect to government
grant applications.
(4) Consists primarily of consultation on real estate acquisition
and accounting policies.
The Audit Committee of our Board of Directors determined that the
provision of the above non-audit services is compatible with Marcum & Kliegman,
LLP maintaining its independence.
Pre-Approval of Services by the Independent Auditor
The Audit Committee has adopted a policy for approval of audit and
permitted non-audit services by our independent auditor. The Audit Committee
will consider annually and approve the provision of audit services by its
external auditor and consider and, if appropriate, approve the provision of
certain defined audit and non-audit services. Our Management, may, however,
approve de minimus amounts for non-audit services without the approval of the
Audit Committee.
The Audit Committee also will consider on a case-by-case basis and, if
appropriate, approve specific engagements in excess of $15,000. Any proposed
specific engagement may be presented to the Audit Committee for consideration at
its next regular meeting or, if earlier consideration is required, to the Audit
Committee or one or more of its members. The member or members to whom such
authority is delegated shall report any specific approval of services at its
next regular meeting. The Audit Committee will regularly review summary reports
detailing all services being provided to us by our external auditor. During the
fiscal year ended June 30, 2005 , 100% of the Audit Related Fees and all other
fees were approved by the Audit Committee.
A representative of Marcum & Kliegman, LLP is expected to be present at
the Annual Meeting, either in person, or via teleconference, to respond to
appropriate questions and to make such statements as may be appropriate. In the
event stockholders do not ratify the appointment of Marcum & Kliegman, LLP as
our independent auditor for the fiscal year ending June 30, 2006, such
appointment will be reconsidered by the Board of Directors.
In order to approve this proposal, the affirmative vote of a majority
of the votes cast at the meeting, in person or by proxy, must be received in
favor of this proposal. Unless a contrary choice is specified, proxies solicited
by the Board of Directors will be voted "FOR" ratification the selection of
Marcum & Kliegman, LLP as our auditor.
19
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF MARCUM & KLIEGMAN, LLP AS OUR INDEPENDENT AUDITOR FOR
FISCAL 2006.
STOCKHOLDER COMMUNICATIONS
We encourage stockholder communications to the Board of Directors
and/or individual Directors. Stockholders who wish to communicate with the Board
of Directors or an individual Director should send their communications to the
care of Munish K. Rametra, Corporate Secretary, Interpharm Holdings, Inc., 75
Adams Avenue, Hauppauge, New York 11788. Communications regarding financial or
accounting policies should be sent to the attention of the Chairman of the Audit
Committee. All other communications should be sent to the attention of the
Chairman of the Nominating Committee.
STOCKHOLDERS' PROPOSALS
A stockholder of record may present a proposal for action at the 2006
Annual Meeting of Stockholders provided that we receive such proposal at our
executive office no later than June 30, 2006. We anticipate that the 2006 Annual
Meeting will be held in December 2006. The proponent may submit a maximum of one
(1) proposal of not more than five hundred (500) words for inclusion in our
proxy materials for a meeting of security holders. At the 2006 Annual Meeting,
management proxies will have discretionary authority, under Rule 14a-4 of the
Securities Exchange Act of 1934, to vote on stockholder proposals that are not
submitted for inclusion in our proxy statement unless received by us before
September 1, 2006.
GENERAL
Unless contrary instructions are indicated on the proxy, all shares of
Series A, B, C and K preferred stock and common stock represented by valid
proxies received pursuant to this solicitation (and not revoked before they are
voted) will be voted FOR Proposal Nos. 1 and 2.
OTHER BUSINESS
The Board of Directors knows of no business other than that set forth
above to be transacted at the meeting, but if other matters requiring a vote of
the stockholders arise, the persons designated as proxies will vote the shares
of common stock represented by the proxies in accordance with their judgment on
such matters. If a stockholder specifies a different choice on the proxy, his or
her shares of common stock will be voted in accordance with the specification so
made.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO FILL IN, SIGN
AND RETURN THE FORM OF PROXY IN THE PREPAID ENVELOPE PROVIDED, NO MATTER HOW
LARGE OR SMALL YOUR HOLDINGS MAY BE.
By Order of the Board of Directors,
Maganlal K. Sutaria, Chairman
Hauppauge, New York
November 8, 2005
20
INTERPHARM HOLDINGS, INC.
75 Adams Avenue, Hauppauge, New York 11788
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting and 2005 Proxy Statement and hereby appoints Bhupatlal K.
Sutaria, attorney and proxy, with full power of substitution and resubstitution,
to vote all shares of the Common Stock, par value $0.01 per share, and all
shares of Series A, B, C and K Preferred Stock, of Interpharm Holdings, Inc., a
Delaware corporation (the "Company"), held of record by the undersigned at the
close of business on November 9, 2005 at the annual meeting of stockholders of
the Company to be held on December 16, 2005 at 10:00 a.m., local time, at The
American Stock Exchange, and at any postponement or adjournment thereof, as
indicated in this Proxy:
IF THIS PROXY IS PROPERLY DATED AND EXECUTED, THE SHARES REPRESENTED HEREBY WILL
BE VOTED IN THE MANNER DIRECTED AND, IN THE ABSENCE OF DIRECTION AS TO THE
MANNER OF VOTING, WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE SLATE OF
NOMINEES TO BE VOTED UPON BY THE HOLDERS OF COMMON STOCK AND PREFERRED STOCK SET
FORTH IN THE PROXY STATEMENT, AND FOR RATIFICATION OF THE APPOINTMENT OF MARCUM
& KLIEGMAN, LLP AS THE COMPANY'S INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING
JUNE 30, 2006.
PLEASE MARK, SIGN, DATE AND RETURN IMMEDIATELY Please mark vote in box using
dark ink only.
1. Election of Directors:
WITH AUTHORITY TO VOTE FOR WITHHOLD AUTHORITY
ALL NOMINEES LISTED BELOW TO VOTE FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
Nominees: Dr. Maganlal K. Sutaria, David C. Reback, Stewart Benjamin, Dr. Mark
Goodman and Kennith Johnson.
--------------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided above.)
(Continued and to be signed on the reverse side)
2. Ratification of the appointment of Marcum & Kliegman, LLP as the Company's
independent auditor for the fiscal year ending June 30, 2006.
____ FOR ____ AGAINST ____ ABSTAIN
3. As recommended by the Board of Directors, or in the absence of such
recommendation in their own discretion, to vote upon such other business as may
properly come before said meeting or any postponement or adjournment thereof.
Dated:
---------------------------
(Signature)
---------------------------
Please Print Name
---------------------------
Signature if held jointly
---------------------------
Please Print Name
Please date this Proxy and sign exactly as the name(s) appears on the enclosed
envelope and return the signed Proxy in the enclosed envelope. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give the full title. If a
corporation, please sign in full corporate name by the president or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized person.
21