SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
[ ] 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 section 240.14a-11(c) or section 240.14a-12
IVAX CORPORATION
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee:
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
IVAX CORPORATION
PHILLIP FROST, M.D. MIAMI, FLORIDA
Chairman of the Board and
Chief Executive Officer
May 7, 1996
Dear Fellow Shareholder:
You are cordially invited to attend the 1996 annual meeting of
shareholders of IVAX Corporation (the "Company"). The meeting will be
held at 10:00 a.m. on Friday, June 7, 1996, at the Hotel
Inter-Continental, Grand Ballroom, 100 Chopin Plaza, Miami, Florida.
The enclosed notice and proxy statement contain details
concerning the business to be considered at the meeting. The Board of
Directors of the Company recommends a vote "FOR" the election of
fourteen directors to serve until the 1997 annual meeting of
shareholders and "FOR" the approval of the proposal to amend the
Company's 1994 Stock Option Plan.
We sincerely hope that you will be present at the annual
meeting. Whether or not you plan to attend, please complete, sign, date
and return the accompanying proxy card in the enclosed envelope to
ensure that your shares will be represented at the meeting.
A copy of the Company's 1995 Annual Report to Shareholders is
also enclosed.
Sincerely,
Phillip Frost, M.D.
<PAGE>
IVAX CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 7, 1996
To the Shareholders of
IVAX Corporation:
The annual shareholders meeting of IVAX Corporation (the "Company")
will be held at the Hotel Inter-Continental, Grand Ballroom, 100 Chopin Plaza,
Miami, Florida on Friday, June 7, 1996, at 10:00 a.m., local time, for the
following purposes:
(1) to elect fourteen directors to serve until the
1997 annual meeting of shareholders;
(2) to consider a proposal to amend the Company's 1994
Stock Option Plan to increase the number of shares
issuable pursuant to the plan and to modify the
method of payment for the exercise of stock options
under the plan; and
(3) to transact such other business as may properly
come before the meeting.
Only shareholders of record at the close of business on April 19, 1996
are entitled to notice of and to vote at the meeting or any adjournments
thereof. A list of such shareholders will be available for inspection during
normal business hours at the offices of the Company located at 4400 Biscayne
Boulevard, Miami, Florida during the 10 days preceding the meeting.
By Order of the Board of Directors
ARMANDO A. TABERNILLA
SECRETARY
Miami, Florida
May 7, 1996
YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE>
IVAX CORPORATION
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6000
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of IVAX
Corporation, a Florida corporation (the "Company"), in connection with its
solicitation of proxies for use at the annual meeting of shareholders to be held
on June 7, 1996 (the "Annual Meeting"), at the time and place set forth in the
accompanying Notice of Annual Meeting of Shareholders, and at any adjournments
thereof. Mailing of the proxy statement and the accompanying proxy card to
shareholders will commence on or about May 7, 1996.
Record holders of common stock, par value $.10 per share (the "Common
Stock"), at the close of business on April 19, 1996 (the "Record Date") are
entitled to one vote for each share held on all matters to be considered at the
Annual Meeting. On the Record Date, 120,282,758 shares of Common Stock were
outstanding and entitled to vote.
VOTING
All properly executed proxies delivered pursuant to this solicitation
and not revoked will be voted in accordance with the directions given and, in
connection with any other business that may properly come before the Annual
Meeting, in the discretion of the persons named in the proxy. With respect to
the proposal to elect fourteen directors to serve until the 1997 annual meeting,
shareholders may vote in favor of all nominees or withhold their votes as to all
or specific nominees. With respect to the other proposals to be voted upon,
shareholders may vote in favor of the proposal or against the proposal or may
abstain from voting. If no direction is given on a proxy, it will be voted for
the election of all director nominees and for the proposal to amend the
Company's 1994 Stock Option Plan to increase the number of shares issuable
pursuant to the plan and to modify the method of payment for the exercise of
stock options under the plan.
A proxy delivered pursuant to this solicitation is revocable at any
time prior to its exercise by giving written notice to the Secretary of the
Company, by delivering a later dated proxy, or by voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not, in itself, constitute
revocation of a proxy.
A majority of the outstanding shares of Common Stock, represented in
person or by proxy, constitutes a quorum for transaction of business at the
Annual Meeting. The election of directors will require the affirmative vote of a
plurality of the shares of Common Stock voting in person or by proxy at the
Annual Meeting; accordingly, votes that are withheld and broker non-votes will
not affect the outcome of the election. The proposal to amend the Company's 1994
Stock Option Plan requires the affirmative vote of a majority of the shares of
Common Stock voting in person or by proxy at the Annual Meeting; accordingly, an
abstention will have the same effect as a negative vote, but because shares held
by brokers will not be considered entitled to vote on matters as to which the
brokers withhold authority, broker non-votes will have no effect on the vote.
PRINCIPAL SECURITY HOLDERS
The following table sets forth certain information with respect to the
only persons known by the Company to own beneficially in excess of five percent
of the outstanding shares of Common Stock as of April 19, 1996.
<PAGE>
<TABLE>
<CAPTION>
NUMBER PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OF CLASS
------------------------------------ --------- --------
<S> <C> <C>
Phillip Frost, M.D. 14,226,184 (1) 11.8%
4400 Biscayne Boulevard
Miami, Florida 33137
Azure Limited 7,958,492 (2) 6.6%
c/o Charter Management, Ltd.
Town Mills
Trinity Square
St. Peter Port
Guernsey, Channel Islands
</TABLE>
- - ----------------
(1) Includes 65,250 shares held directly, 716 shares held for Dr.
Frost's benefit under the IVAX Corporation Employee Savings Plan, 193,750 shares
which may be acquired pursuant to stock options exercisable within 60 days of
April 19, 1996, 13,950,720 shares held by Frost-Nevada Limited Partnership
("FNLP"), and 15,748 shares which may be acquired by FNLP upon conversion of
$500,000 in principal amount of the Company's 6-1/2% Convertible Subordinated
Notes Due 2001. Dr. Frost is the sole limited partner of FNLP and the sole
shareholder, officer and director of Frost-Nevada Corporation, the general
partner of FNLP. Dr. Frost disclaims beneficial ownership of an additional
123,034 shares held of record by his wife. Dr. Frost is a director and executive
officer of the Company.
(2) Azure Limited holds the shares as trustee for Charter Trust
Company, the trustee of the I. Kaye Family Trust, created by Mr. Isaac Kaye in
1988. The beneficiaries of the I. Kaye Family Trust may include, among others,
Mr. Kaye's children. Mr. Kaye is neither a beneficiary nor a trustee of such
trust, and he disclaims beneficial ownership of all of the shares owned by
Azure Limited. Mr. Kaye is a director and executive officer of the Company.
ELECTION OF DIRECTORS
(ITEM NO. 1)
BOARD OF DIRECTORS
The Board of Directors set the number of directors constituting the
Board at fourteen directors. The persons named below were designated by the
Board of Directors as nominees for election as directors to hold office until
the next annual meeting of shareholders or until their successors are elected
and qualified. All of the nominees are incumbent directors and were previously
elected by the shareholders. Although management does not anticipate that any
nominee will be unable or unwilling to serve as director, in the event of such
an occurrence, proxies may be voted in the discretion of the persons named in
the proxy for a substitute designated by the Board of Directors, unless the
Board of Directors determines to reduce the number of directors constituting the
Board.
MARK ANDREWS Mr. Andrews has served as the Chairman of the Board
Director since 1987 of Directors and Chief Executive Officer of American
Age 45 Exploration Company (oil and gas exploration and
production) since 1980, and was its President from
1980 to 1988.
LLOYD BENTSEN Mr. Bentsen served as the 69th Secretary of the
Director since 1995 Treasury of the United States from January 1993
Age 75 until December 1994. From 1971 until his appointment
as Secretary of the Treasury, he served as a United
States
2
<PAGE>
Senator from the State of Texas. He is a director of
Panhandle Eastern, Inc. (natural gas) and American
International Group, Inc. (insurance).
ERNST BIEKERT, PH.D. Dr. Biekert is a professor at the University of
Director since 1991 Heidelberg in Germany. He was the Chairman of the
Age 71 Board and Chief Executive Officer of Knoll
A.G. (pharmaceuticals) from 1968 to 1985. Dr. Biekert
was a consultant to BASF A.G. (chemicals and
pharmaceuticals) from 1985 to 1987 and was Chairman of
its pharmaceutical division from 1975 to 1985.
DANTE B. FASCELL Mr. Fascell has been a partner of Holland & Knight,
Director since 1993 a Florida law firm, since May 1994. He was of counsel
Age 79 to Fine Jacobson Schwartz Nash & Block, P.A., a
Florida law firm, from 1993 to 1994. From 1955 to 1993,
he served as a member of the United States House of
Representatives, and was Chairman of the House Foreign
Affairs Committee from 1984 to January 1993.
JACK FISHMAN, PH.D. Dr. Fishman has served as Vice Chairman of the
Director since 1987 Board of Directors of the Company since 1991. From
Age 65 1991 to February 1995, he served as the Company's
Chief Scientific Officer. He is an Adjunct Professor at
The Rockefeller University and Director of Research of
Strang Cornell Cancer Research Laboratory, a non-profit
entity associated with Cornell University Medical
College. Dr. Fishman was President of the Company from
1988 to 1991, and served as a Research Professor of
Biochemistry and Molecular Biology at the University of
Miami from 1988 to 1992.
PHILLIP FROST, M.D. Dr. Frost has served as Chairman of the Board of
Director since 1987 Directors and Chief Executive Officer of the Company
Age 59 since 1987. He served as the Company's President from
July 1991 until January 1995. He was the Chairman of
the Department of Dermatology at Mt. Sinai Medical
Center of Greater Miami, Miami Beach, Florida from 1972
to 1990. Dr. Frost was Chairman of the Board of
Directors of Key Pharmaceuticals, Inc. from 1972 to
1986. He is Chairman of the Board of Directors of
Whitman Education Group, Inc. (proprietary education),
Vice Chairman of the Board of Directors of North
American Vaccine, Inc., and a director of Northrop
Grumman Corp. (aerospace), American Exploration Company
(oil and gas exploration and production), and NaPro
BioTherapeutics, Inc. (biopharmaceutical research and
development). He is a trustee of the University of
Miami and a member of the Board of Governors of the
American Stock Exchange.
HAROLD S. GENEEN Mr. Geneen has served as the Chairman of the Board
Director since 1992 of Directors of Gunther International Ltd.(automated
Age 86 document assembly systems) since September 1993. He
also serves on the boards of a number of privately-held
companies. He was Chairman of the Board of Directors of
Finlay Enterprises, Inc. (retail jewelry) from 1988
through 1993. Mr. Geneen was Chairman of the Board of
Directors of ITT Corporation from 1965 until 1979,
remained on the Board of Directors of ITT Corporation
until 1983, and presently is Chairman Emeritus of ITT
Corporation. Mr. Geneen is also Chairman Emeritus of
ITT Hartford Group, Inc. and ITT Industries, Inc. He is
a member of the Board of Trustees of New York
University, the Board of Trustees of the Salk
Institute, and the Board of Governors of the University
of Miami School of Medicine.
3
<PAGE>
JANE HSIAO, PH.D. Dr. Hsiao has served as the Company's Vice
Director since 1995 Chairman-Technical Affairs since February 1995. From
Age 49 1992 until February 1995, she served as the Company's
Chief Regulatory Officer and Assistant to the Chairman,
and as Vice President-Quality Assurance and Compliance
of Baker Norton Pharmaceuticals, Inc., the Company's
principal proprietary pharmaceutical subsidiary. From
1987 to 1992, Dr. Hsiao was Vice President-Quality
Assurance, Quality Control and Regulatory Affairs of
Baker Norton Pharmaceuticals, Inc.
LYLE KASPRICK Mr. Kasprick is a private investor. He has served as a
Director since 1987 director of North American Vaccine, Inc. since 1989,
Age 63 and served as its Chairman from June 1991 to January
1995. Mr. Kasprick is a member of the Board of
Directors of the University of North Dakota Foundation.
ISAAC KAYE Mr. Kaye has served as Deputy Chief Executive Officer
Director since 1990 of the Company since 1990, and as Chief Executive
Age 66 Officer of Norton Healthcare Limited, the Company's
principal United Kingdom pharmaceutical subsidiary,
since 1990. Mr. Kaye is a director of Whitman Education
Group, Inc. (proprietary education).
HARVEY KRUEGER Mr. Krueger has served as a Senior Managing Director
Director since 1991 of Lehman Brothers since 1991. For more than five
Age 67 years prior thereto, he was a Managing Director of
Lehman Brothers and its predecessor companies. He is a
director of Automatic Data Processing, Inc. (computing
services), R.G. Barry Corp. (footwear), Chaus, Inc.
(women's clothing), and Electric Fuel Corp. (batteries
for electric automobiles). Mr. Krueger is also on the
International Advisory Board of Club Mediteranee, S.A.
(resorts).
JOHN H. MOXLEY III, M.D. Dr. Moxley has served as Vice President of Korn/Ferry
Director since 1989 International (executive recruiting firm) since 1989.
Age 61 From 1987 to 1989, he was a self-employed medical
consultant. From 1981 to 1987, Dr. Moxley served as
Senior Vice President of Corporate Planning and
Alternative Services for American Medical
International, Inc. (hospitals).
M. LEE PEARCE, M.D. Dr. Pearce is a private investor. He is a director of
Director since 1989 OrNda Healthcorp (hospitals).
Age 65
MICHAEL WEINTRAUB Mr. Weintraub is a private investor. Since 1979, he
Director since 1987 has been a director of Gibson Security Corp., a
Age 57 privately-owned investment company, and has served as
its Chairman and President since 1990.
DIRECTOR COMPENSATION
Each director who is not employed by the Company receives $10,000 per
year for his service as a director and is reimbursed for expenses incurred in
attending board and committee meetings. Pursuant to the Company's 1994 Stock
Option Plan, non-employee directors automatically are granted each year, on the
first business day following the Company's annual meeting of shareholders,
non-qualified options to purchase 5,000 shares of the Common Stock at an
exercise price equal to the fair market value of the Common Stock on the date of
the grant, and having a term of ten years.
4
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held nine meetings during 1995. During 1995, all
directors attended at least 75% of the meetings of the Board of Directors except
for Messrs. Fascell and Krueger and at least 75% of the meetings of the
committees of the Board of Directors on which they served during the period in
which they served except for Mr. Andrews, Mr. Bentsen, Dr. Fishman and Mr.
Krueger. The Board of Directors has four standing committees, described below.
The Board of Directors does not have a nominating committee, and the usual
functions of such a committee are performed by the entire Board of Directors.
EXECUTIVE COMMITTEE. The Executive Committee has the authority to act
for the Board of Directors on certain matters during intervals between meetings
of the Board of Directors. The Executive Committee, the current members of which
are Drs. Frost and Hsiao and Mr. Kaye, did not hold any meetings during 1995,
but did approve certain actions by written consent during the year.
AUDIT COMMITTEE. The principal functions of the Audit Committee include
reviewing the adequacy of the Company's internal systems of accounting controls,
recommending to the Board of Directors the appointment of independent auditors,
conferring with independent auditors and internal auditors concerning the scope
of their examinations of the books and records of the Company and their
independence, reviewing the financial statements of the Company and management's
disclosures, reviewing the independent auditors' findings and recommendations,
and considering other appropriate matters regarding the financial affairs of the
Company. The Audit Committee, the current members of which are Messrs. Andrews,
Geneen, Kasprick and Krueger, held four meetings during 1995.
COMPENSATION AND STOCK OPTION COMMITTEE. The principal functions of the
Compensation and Stock Option Committee are to approve or recommend to the Board
of Directors remuneration arrangements and compensation plans involving the
Company's directors and executive officers, to review with management the
Company's employee benefit programs, and to administer the Company's stock
option plans. The Compensation and Stock Option Committee, the current members
of which are Mr. Weintraub and Drs. Moxley and Pearce, held five meetings during
1995.
REGULATORY COMPLIANCE COMMITTEE. The principal function of the
Regulatory Compliance Committee is to review with management the Company's
compliance with regulatory requirements. The Regulatory Compliance Committee,
the current members of which are Messrs. Fascell and Bentsen and Drs. Biekert
and Fishman, held four meetings during 1995.
EXECUTIVE OFFICERS WHO ARE NOT NOMINEES
Set forth below is a summary of the background and business experience
of the executive officers of the Company who are not nominees for director.
SAMUEL BRODER, M.D. Dr. Broder, age 51, has served as the Company's
Senior Vice President-Research and Development and Chief Scientific Officer
since March 1995. He held various positions at the National Cancer Institute
since 1972, serving as its Director from 1989 until February 1995.
MICHAEL W. FIPPS. Mr. Fipps, age 53, has served as the Company's Chief
Financial Officer since July 1994. From 1973 to June 1994, he held various
positions at Bergen Brunswig Corporation (pharmaceutical wholesaler), serving as
its Vice President and Treasurer from 1985 to June 1994.
NORWICK B.H. GOODSPEED. Mr. Goodspeed, age 46, has been President and
Chief Executive Officer of McGaw, Inc., the Company's intravenous products
subsidiary, since December 1993. From May 1991
5
<PAGE>
until December 1993, Mr. Goodspeed was Senior Vice President, Sales and
Marketing of McGaw, Inc. From September 1988 to May 1991, he was the President
and Chief Executive Officer of Vical, Inc. (gene therapy).
RICHARD C. PFENNIGER, JR. Mr. Pfenniger, age 40, has served as the
Company's Chief Operating Officer since May 1994. He served as Senior Vice
President-Legal Affairs and General Counsel of the Company from 1989 to May
1994, and as Secretary from 1990 to 1994. Prior to joining the Company, Mr.
Pfenniger was engaged in private law practice, most recently as a member of the
law firm of Greer, Homer & Bonner, P.A. in Miami, Florida. Mr. Pfenniger is a
director of NaPro BioTherapeutics, Inc. (biopharmaceutical research and
development), Whitman Education Group, Inc. (proprietary education) and North
American Vaccine, Inc.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and 10% shareholders to file initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities with the Securities and Exchange Commission and the
American Stock Exchange. Directors, executive officers and 10% shareholders are
required to furnish the Company with copies of all Section 16(a) forms they
file. Based on a review of the copies of such reports furnished to the Company
and written representations from the Company's directors and executive officers
that no other reports were required, the Company believes that, during 1995, the
Company's directors, executive officers and 10% shareholders complied with all
Section 16(a) filing requirements applicable to them, except that Dr. Fishman
filed one late report relating to the transfer of 79,207 shares of Common Stock
into an exchange fund; Mr. Goodspeed filed one late report relating to the
cancellation of employee stock options and the grant of replacement options in
exchange therefor; and Dr. Broder filed one late report relating to the purchase
of 100 shares of Common Stock through a pension plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dr. Fishman is entitled to receive $87,500 upon the first commercial
sale of a product covered by the patents relating to nalmefene, a compound under
development by the Company. The payment was authorized in connection with the
purchase of certain patents relating to nalmefene, as partial consideration to
Dr. Fishman for the waiver of certain rights as the inventor under such patents.
The Company owns approximately 13% of the outstanding common stock of
NaPro BioTherapeutics, Inc. ("NaPro"), and is a party to an exclusive agreement
with NaPro to develop and market in certain territories paclitaxel supplied by
NaPro. Certain executive officers and directors of the Company serve as
directors of NaPro.
In November 1995, the Company sold its investment in 1,000,000 shares
of North American Vaccine, Inc. ("NAVA") Series A Convertible Preferred Stock
(the "Preferred Stock") to Frost-Nevada Limited Partnership, a limited
partnership beneficially owned by Dr. Frost, for $16,250,000 in cash. The
purchase price was determined based upon a discount from the market price of the
NAVA common stock into which the Preferred Stock is convertible. The Company
received an opinion of an independent valuation firm that the discount was
reasonable, and the Board of Directors of the Company, with the interested
directors abstaining, approved the sale. Certain executive officers and
directors of the Company serve as directors of NAVA. In addition, Dr. Frost is a
principal shareholder of NAVA.
Frost-Nevada Limited Partnership, a limited partnership beneficially
owned by Dr. Frost, held $1,000,000 in principal amount of certain convertible
subordinated debentures issued by the Company in 1990. The debentures bore
interest at 9% and were due on October 9, 1995. The debentures were
6
<PAGE>
converted in October 1995 pursuant to their terms into Common Stock at the
conversion price of $5.20 per share, which was a 20% premium over the market
price of the Common Stock on the date the debentures were issued.
Whitman Education Group, Inc. ("Whitman") is currently negotiating with
the Company to lease approximately 5,500 square feet of office space in Miami,
Florida from the Company. Certain executive officers and directors of the
Company serve as directors of Whitman. In addition, Dr. Frost is a principal
shareholder of Whitman.
The Company is a party to a consulting agreement with Mr. Bentsen
pursuant to which he receives each year (1) $25,000, less any fees paid for his
service as a director of the Company, and (2) options to purchase 25,000 shares
of Common Stock, less any options received for his service as a director of the
Company. The agreement has a term of one year, and automatically renews for
successive one year terms unless terminated by either party.
STOCK OWNERSHIP OF MANAGEMENT
The following table indicates, as of April 19, 1996, the number of
shares of Common Stock beneficially owned by each director (all of whom are also
nominees for director), each executive officer named in the "Summary
Compensation Table" under "Executive Compensation" below, and by all directors
and executive officers as a group, and the percentage such shares represent of
the total outstanding shares of Common Stock. All shares were owned directly
with sole voting and investment power unless otherwise indicated.
<TABLE>
<CAPTION>
SHARES
NAME OR IDENTITY BENEFICIALLY PERCENT OF
OF GROUP OWNED (1) CLASS
---------------- ------------ ----------
<S> <C> <C>
Mark Andrews 25,000 (2) *
Lloyd Bentsen 29,000 (2) *
Ernst Biekert, Ph.D. 25,000 (2) *
Dante B. Fascell 20,000 (2) *
Jack Fishman, Ph.D. 2,172,753 (3) 1.8%
Phillip Frost, M.D. 14,226,184 (4) 11.8%
Harold S. Geneen 30,500 (2) *
Jane Hsiao, Ph.D. 3,076,718 (5) 2.6%
Lyle Kasprick 212,751 (2) *
Isaac Kaye 223,750 (2) *
Harvey M. Krueger 26,500 (2) *
John H. Moxley III, M.D. 34,450 (2) *
M. Lee Pearce, M.D. 306,250 (6) *
Michael Weintraub 65,000 (7) *
John H. Klein 921,747 (8) *
Norwick B.H. Goodspeed 40,967 (2) *
Richard C. Pfenniger, Jr. 239,708 (9) *
All directors and executive 21,739,160 (10) 17.8%
officers as a group (19 persons)
</TABLE>
- - --------------------
* Represents beneficial ownership of less than 1%.
(1) For purposes of this table, beneficial ownership is computed
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934; the inclusion
of shares as beneficially owned should not be construed as an admission that
such shares are beneficially owned for purposes of Section 16 of the Securities
Exchange Act of 1934.
7
<PAGE>
(2) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of April 19, 1996 as follows: Mr. Andrews (25,000),
Mr. Bentsen (25,000), Dr. Biekert (25,000), Mr. Fascell (18,750), Mr. Geneen
(25,000), Mr. Kasprick (25,000), Mr. Kaye (193,750), Mr. Krueger (25,000), Dr.
Moxley (25,000), and Mr. Goodspeed (17,348).
(3) Includes 10,468 shares held by a child and 9,200 shares held by
Dr. Fishman's wife. Dr. Fishman disclaims beneficial ownership of an additional
60,000 shares held as co-trustee of certain trusts for the benefit of certain
family members.
(4) Includes 65,250 shares held directly, 716 shares held on Dr.
Frost's behalf under the IVAX Corporation Employee Savings Plan, 193,750 shares
which may be acquired pursuant to stock options exercisable within 60 days of
April 19, 1996, 13,950,720 shares held by Frost-Nevada Limited Partnership
("FNLP"), and 15,748 shares which may be acquired by FNLP upon conversion of
$500,000 in principal amount of the Company's 6-1/2% Convertible Subordinated
Notes Due 2001. Dr. Frost is the sole limited partner of FNLP and the sole
shareholder, officer and director of Frost-Nevada Corporation, the general
partner of FNLP. Dr. Frost disclaims beneficial ownership of an additional
123,034 shares held of record by his wife.
(5) Includes 984,285 shares held as trustee for the benefit of certain
family members, 81,250 shares which may be acquired pursuant to stock options
exercisable within 60 days of April 19, 1996, 1,600 shares held by her children
and 644 shares held on Dr. Hsiao's behalf under the IVAX Corporation Employee
Savings Plan.
(6) Excludes 200,000 shares donated by Dr. Pearce to a charitable
institution, of which he may be deemed to be the beneficial owner; Dr. Pearce
disclaims beneficial ownership of such shares.
(7) Includes 25,000 shares which may be acquired pursuant to currently
exercisable options. Mr. Weintraub disclaims beneficial ownership of an
additional 311,649 shares held by Gibson Security Corp., of which Mr. Weintraub
is Chairman, President, and co-trustee of a trust which owns 97.6% of the shares
of Gibson Security Corp.
(8) Includes 692,100 and 229,647 shares which may be acquired pursuant
to stock options held by Mr. Klein and Mr. Klein's wife, respectively, which are
excercisable within 60 days of April 19, 1996.
(9) Includes 117,500 shares which may be acquired pursuant to stock
options exercisable within 60 days of April 19, 1996, 743 shares held on his
behalf under the IVAX Corporation Employee Savings Plan, and 30 shares held by
Mr. Pfenniger's wife under the IVAX Corporation Employee Savings Plan.
(10) Includes shares noted in footnotes (2) through (9) as
beneficially owned and 62,500 additional shares which may be acquired pursuant
to stock options exercisable within 60 days of April 19, 1996.
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by the Company during 1995 to the Chief Executive
Officer and to each of the four highest paid executive officers other than the
Chief Executive Officer.
8
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
----------------------------------------------- ------------ ------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS
------------------ ---- ------ ----- ------------ -------------
($) ($) ($) (#) ($)(1)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 1995 550,000 - 0 - - 0 - 75,000 4,500
Chief Executive Officer 1994 425,000 50,000 - 0 - 50,000 4,400
1993 340,000 - 0 - - 0 - 200,000 3,400
Isaac Kaye (2) 1995 500,000 - 0 - - 0 - 75,000 48,600
Deputy Chief Executive 1994 332,150 - 0 - - 0 - 50,000 49,484
Officer 1993 228,140 - 0 - - 0 - 200,000 41,390
John H. Klein (3) 1995 400,010 - 0 - - 0 - - 0 - 19,153
1994 396,170 - 0 - - 0 - - 0 - 15,811
1993 300,170 262,649 - 0 - 980,250(4) 25,812
Richard C. Pfenniger, Jr. 1995 328,333 - 0 - - 0 - 75,000 4,500
Chief Operating Officer 1994 258,720 50,000 - 0 - 100,000 4,400
1993 200,000 25,000 - 0 - 65,000 4,501
Norwick B.H. Goodspeed 1995 275,000 173,469(5) - 0 - - 0 - 4,500
President, McGaw, Inc. 1994 250,000 75,000 - 0 - 110,000 4,337
1993 200,000 12,000 269,535(6) 15,690(7) 8,994
</TABLE>
- - ---------------
(1) Except for Messrs. Kaye, Goodspeed and Klein, the amounts included
in the "All Other Compensation" column represent matching contributions made by
the Company under the IVAX Corporation Employee Savings Plan, an employee
retirement plan maintained under Section 401(k) of the Internal Revenue Code.
For Mr. Goodspeed, for 1993 and 1994, such amounts represent matching
contributions made by McGaw, Inc. ("McGaw") under McGaw's employee savings plan,
which was merged into the IVAX Corporation Employee Savings Plan effective
January 1, 1995, and for 1995 represent matching contributions made by the
Company under the IVAX Corporation Employee Savings Plan. For Mr. Klein, such
amounts consist of use of an automobile, reimbursement for automobile related
expenses and payment of term life insurance premiums, all of which were paid
pursuant to Mr. Klein's employment agreement, described below, and, for 1993
also include matching contributions made by Zenith Laboratories, Inc. ("Zenith")
under Zenith's employee savings plan, and for 1995 also include matching
contributions made by the Company under the IVAX Corporation Employee Savings
Plan. For Mr. Kaye, such amounts consist of the use of an automobile and
reimbursement for a chauffeur, parking and other automobile related expenses,
all of which were paid pursuant to Mr. Kaye's employment agreement, described
below.
(2) Mr. Kaye's salary and other compensation is paid in British pounds,
and the information in the table is based on the average exchange rate during
the applicable year.
(3) Mr. Klein served as the President of the Company's North American
Multi-Source Pharmaceutical Group from January 1, 1995 until his resignation
effective January 17, 1996.
(4) These options were granted to Mr. Klein pursuant to his employment
agreement, described below, and were assumed by the Company in connection with
the Company's acquisition of Zenith in December 1994. The number of options are
adjusted based upon the Zenith acquisition conversion ratio.
(5) This amount includes a $125,000 retention bonus paid by the Company
to Mr. Goodspeed on March 25, 1995 for continuing to serve as McGaw's President
during the year following the Company's acquisition of McGaw.
9
<PAGE>
(6) This amount includes payment to or on behalf of Mr. Goodspeed
totalling $254,373 for relocation expenses, and payments totalling $15,162 to
cover Mr. Goodspeed's tax liability on the relocation expenses paid directly to
him.
(7) These options were assumed by the Company in connection with the
Company's acquisition of McGaw in March 1994. The number of options are adjusted
based upon the McGaw acquisition conversion ratio.
Mr. Kaye was a party to an employment agreement with the Company and
Norton Healthcare Limited, a subsidiary of the Company ("Norton Healthcare"),
which expired on December 28, 1995. Pursuant to the agreement, Mr. Kaye was
entitled to receive an annual salary of at least 150,000 British pounds and
certain benefits for serving as Deputy Chief Executive Officer of the Company
and Chief Executive Officer of Norton Healthcare. The agreement restricts Mr.
Kaye from competing with the Company, Norton Healthcare and certain other
affiliated entities during his employment and for a period of 12 months from the
date of expiration of the employment agreement.
Mr. Klein was a party to an employment agreement with Zenith
Laboratories, Inc., a subsidiary of the Company ("Zenith"), which was entered
into in November 1993 prior to the Company's acquisition of Zenith and which was
terminated by the mutual agreement of the parties effective January 17, 1996.
Pursuant to the employment agreement, Mr. Klein was entitled to receive an
annual salary of at least $400,000 and certain benefits for serving as the
President and Chief Executive Officer of Zenith. As part of the agreement's
termination, the vesting period of certain options granted to Mr. Klein pursuant
to the agreement were accelerated, and Mr. Klein agreed to continue to serve as
a non-executive employee of Zenith until December 31, 1996 and as a consultant
to Zenith from January 1, 1997 to December 31, 1998. Mr. Klein will receive an
annual salary of $400,000 through December 31, 1996 and an annual consulting fee
of $400,000 through December 31, 1998. In addition, Mr. Klein is entitled to
continue to receive certain employee benefits until January 1, 1997. Mr.
Klein also agreed to refrain from competing with Zenith through January 1, 1999.
STOCK OPTIONS
The following table sets forth information concerning stock option
grants made during 1995 to the executive officers named in the "Summary
Compensation Table."
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN FISCAL YEAR 1995
PERCENT OF POTENTIAL REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS OPTIONS STOCK PRICE APPRECIATION FOR
NAME AND GRANTED GRANTED TO EXERCISE EXPIRATION OPTION TERM
PRINCIPAL POSITION(1) (2) EMPLOYEES PRICE DATE ----------------------------
(#) (%) ($) 5% 10%
($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Chief Executive Officer
Isaac Kaye 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Deputy Chief Executive Officer
Richard C. Pfenniger, Jr. 75,000 4.4 20.625 2/23/2002 629,775 1,467,675
Chief Operating Officer
</TABLE>
- - --------------------
(1) No stock options were granted to Mr. Klein or Mr. Goodspeed
during 1995.
(2) All options are nonqualified options and vest in equal portions
over four years.
The following table sets forth information concerning stock option
exercises during 1995 by each of the executive officers named in the "Summary
Compensation Table" and the year-end value of unexercised options held by such
officers.
10
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTION EXERCISES IN FISCAL YEAR 1995 AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME AND ON VALUE -------------------------- --------------------------
PRINCIPAL POSITION EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. - 0 - - 0 - 112,500 212,500 737,000 1,327,625
Chief Executive Officer
Isaac Kaye - 0 - - 0 - 112,500 212,500 737,000 1,327,625
Deputy Chief Executive Officer
John H. Klein(2) 882,225 22,395,282 392,100 588,150 4,848,317 4,697,357
Richard C. Pfenniger, Jr. - 0 - - 0 - 57,500 182,500 292,650 989,525
Chief Operating Officer
Norwick B.H. Goodspeed - 0 - - 0 - 15,713 114,250 292,587 999,217
President, McGaw, Inc.
</TABLE>
- - --------------------
(1) The value of unexercised in-the-money options represents the number
of options held at year-end 1995 multiplied by the difference between the
exercise price and $28.50, the closing price of the Common Stock at year-end
1995.
(2) Former President of the Company's North American Multi-Source
Pharmaceutical Group.
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the Common Stock for 1991 through 1995 with the Dow Jones
Pharmaceuticals Index and the Dow Jones Equity Market Index for the same period.
The graph and table assume an investment of $100 in the Common Stock and each
index on December 31, 1990 (the last trading day in 1990), and the reinvestment
of all dividends.
PERFORMANCE GRAPH HERE
11
<PAGE>
<TABLE>
<CAPTION>
YEAR-END 1990 1991 1992 1993 1994 1995
-------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
IVAX Corporation 100 740 560 551 366 550
Dow Jones Pharmaceutical Index 100 157 128 119 136 223
Dow Jones Equity Market Index 100 132 144 158 159 221
</TABLE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
The compensation of the Company's executive officers, including the
Chief Executive Officer, is determined by the Compensation and Stock Option
Committee of the Board of Directors (the "Committee"), which is composed of
three non-employee directors. The Committee's compensation policies are based on
a desire to enhance long-term shareholder value. To achieve this goal, the
Committee recognizes that it must adopt compensation policies which will
attract, retain and motivate qualified and experienced executive officers. In
attracting and retaining executives, the Committee recognizes that the Company
must compete for the services of executives with many other companies which
possess significantly greater financial resources than the Company and have
available more comprehensive compensation plans and arrangements than are
presently utilized by the Company. To adequately motivate executives in view of
the goal of enhancing shareholder value, the Committee recognizes that it must
design compensation policies which align the financial interests of the
Company's executive officers with those of its shareholders.
In light of these factors, the Committee believes that the best manner
presently available to the Company to attract, retain and motivate talented
executives is through the award of significant long-term compensation in the
form of stock options at the time the executive joins the Company and
periodically thereafter. The Committee believes that providing executives with
opportunities to acquire significant stakes in the growth and prosperity of the
Company through the grant of stock options will enable the Company to attract
and retain qualified and experienced executive officers. In addition, the
Committee believes that this approach to compensation creates an entrepreneurial
atmosphere which motivates executives to perform to their full potential. The
Committee believes that dependence on stock options for a significant portion of
executive compensation more closely aligns the executives' interests with those
of the Company's shareholders, since the ultimate value of such compensation is
directly dependant on the stock price.
Accordingly, the Committee has designed the compensation of executive
officers to consist of a reasonable annual salary, significant long-term
compensation in the form of stock options and, in certain limited circumstances,
cash bonuses for superior performance during a particular year. In addition, the
Committee has implemented Guidelines Regarding Exercise of Stock Options (the
"Guidelines"), applicable to all managers, scientists and other professionals,
including all executive officers of the Company, which are intended to encourage
individuals who have been awarded stock options to maintain ownership of a
meaningful portion of any shares acquired upon exercise. The Committee will
consider an individual's past compliance with the Guidelines in considering the
award of additional options.
EXECUTIVE OFFICERS (OTHER THAN THE CHIEF EXECUTIVE OFFICER). The Chief
Executive Officer, with the assistance of other executive officers, makes annual
salary recommendations to the Committee for the executive officers of the
Company. Such recommendations are reviewed and approved by the Committee with
any modifications deemed appropriate. In reviewing and approving annual salary
recommendations, the Committee considers several factors, including individual
performance, the executive's responsibilities, the cost of living, and the
financial performance of the Company, including the Company's revenues, net
income and earnings per share. The Company has not, however, established
specific performance goals or tied executive compensation to the achievement of
specific performance goals. The compensation determination is largely
subjective, and no specific weight is given to any particular factor. The
Committee may, in certain circumstances, pay a cash bonus to executives whose
individual performance during a particular year was outstanding, in the
subjective opinion of the Committee. The amount of any bonus is based upon the
12
<PAGE>
recommendation of the Chief Executive Officer. The Company has not set specific
goals for executives or tied the payment of bonuses to specific goals.
Stock options represent a significant portion of total compensation for
the Company's executive officers. Options are generally awarded to executive
officers at the time that they join the Company and periodically thereafter.
Stock options are granted at the prevailing market price on the date of grant,
and will only have value if the value of the Company's stock price increases.
Generally, grants vest in equal amounts over a four-year period and have
seven-year terms. Executives must be employed by the Company at the time of
vesting in order to exercise the options. Grants of stock options to executive
officers are generally made upon the recommendation of the Chief Executive
Officer based on the level of an executive's position with the Company, an
evaluation of the executive's past and expected performance, the number of
outstanding and previously granted options, past compliance with the Guidelines,
and discussions with the executive. The determination of the timing and number
of stock options granted to the executive officers is made by the Committee on a
subjective basis, with no specific weight given to any particular factor.
CHIEF EXECUTIVE OFFICER. The Committee approved Dr. Frost's base salary
of $550,000 for 1995, and also granted to Dr. Frost options to purchase 75,000
shares of Common Stock, on the basis of the magnitude of his responsibilities,
his strong leadership of the Company, and his direct impact on the performance
of the Company. The determination of his compensation package was subjective,
with no specific weight given to any particular factor. The Committee also noted
that Dr. Frost was compensated below the levels paid to chief executive officers
with comparable qualifications, experience, and responsibilities at other
similarly-situated companies. The stock options granted to Dr. Frost have a term
of seven years, vest in equal parts over four years, and have an exercise price
equal to the fair market value of the Common Stock on the date of grant.
TAX MATTERS. Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally disallows a deduction for federal income tax purposes to
public companies for compensation over $1 million paid in any taxable year to
the Company's Chief Executive Officer or to any of the four other most highly
compensated executive officers of the Company. Qualifying performance-based
compensation is not subject to the limitation if certain requirements are
satisfied. Based upon applicable regulations, the Company believes that
compensation expenses relating to options granted under its stock option plans
will not be subject to the Section 162(m) limitations.
The Committee continually evaluates the Company's compensation policies
and procedures with respect to its executive officers.
COMPENSATION COMMITTEE:
JOHN H. MOXLEY III, M.D.
M. LEE PEARCE, M.D.
MICHAEL WEINTRAUB
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 1995 fiscal year, the following directors served on
the Compensation and Stock Option Committee of the Board of Directors: John
H. Moxley III, M.D., M. Lee Pearce, M.D. and Michael Weintraub. None
of such persons are or have been executive officers of the Company, and no
interlocking relationships exists between such persons and the directors or
executive officers of the Company.
13
<PAGE>
AMENDMENT TO THE COMPANY'S 1994 STOCK OPTION PLAN
(ITEM NO. 2)
DESCRIPTION OF THE 1994 PLAN
The Company's 1994 Stock Option Plan (the "1994 Plan") was adopted by
the Company's Board of Directors in April 1994 and approved by the shareholders
of the Company in July 1994. The purpose of the 1994 Plan is to provide the
Company with an effective means to attract and retain highly qualified personnel
as well as to provide additional incentive to employees and others who provide
services to the Company and who can contribute significantly to the Company's
success. The 1994 Plan is designed to comply with the requirements of Section
16(b) of the Securities Exchange Act of 1934, and the Company intends that
options granted under the 1994 Plan qualify for an exception to the disallowance
rule of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). A maximum of 3,000,000 shares of Common Stock may be issued under the
1994 Plan, and as of March 31, 1996, approximately 25,337 shares remained
available for issuance under the 1994 Plan. No employee may receive stock
options under the 1994 Plan in any given year to purchase a number of shares
greater than one percent of the number of shares of Common Stock outstanding as
of the date the 1994 Plan was adopted. If a stock option expires, terminates or
becomes unexercisable for any reason without being exercised in full, the
unpurchased shares which were subject to such stock option shall be available
for further grant under the 1994 Plan. No options may be granted under the 1994
Plan after June 30, 2004.
The 1994 Plan is administered by the Compensation and Stock Option
Committee of the Board of Directors (the "Committee"), which, under the terms of
the 1994 Plan, must consist of at least two directors who are "disinterested
persons" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 and who are "outside directors" as defined for purposes of
Section 162 (m) of the Code. The Committee has the authority to interpret the
provisions of the 1994 Plan and to make all determinations deemed necessary or
advisable for its administration.
The 1994 Plan provides for the issuance of options intended to be
incentive stock options within the meaning of Section 422 of the Code and
non-qualified stock options not intended to meet the requirements of Section 422
of the Code. Incentive stock options may be granted only to employees of the
Company and its subsidiaries, and non-qualified options may be granted to
employees, directors, independent contractors and agents of the Company and its
subsidiaries. As of March 31, 1996, ten non-employee directors, approximately
7,916 employees, and an indeterminate number of independent contractors and
agents were eligible to receive stock options under the 1994 Plan. Subject to
the provisions of the 1994 Plan, the Committee determines the persons to whom
grants are made and the vesting, timing, amounts, and other terms of such
grants. Incentive stock options which first become exercisable in any calendar
year for shares with a fair market value on the date of grant in excess of
$100,000 are treated as non-qualified stock options to the extent of such
excess.
The exercise price of options may not be less than the fair market
value of the Common Stock on the date of grant, except with respect to
substitute options issued in connection with certain corporate transactions, and
except that the exercise price of any incentive stock option granted to the
holder of more than 10% of the outstanding Common Stock may not be less than
110% of the fair market value of the Common Stock on the date of grant. The term
of each option may not exceed ten years, except the term of any incentive stock
option granted to a holder of more than 10% of the outstanding Common Stock may
not exceed five years. The option price may be paid in cash or by check or such
other consideration as the Committee shall determine. In general, all
outstanding options granted to an employee terminate 12 months after the
optionee ceases to be an employee, except that such options terminate (i)
immediately (unless otherwise determined by the Committee) if the optionee's
employment is terminated for deliberate, willful
14
<PAGE>
or gross misconduct and (ii) 36 months after retirement. Options granted
under the 1994 Plan are not assignable or transferable other than by will or by
the laws of descent and distribution, or, in the case of non-qualified stock
options, pursuant to a qualified domestic relations order, and, during the
optionee's lifetime, the options may be exercised only by the optionee.
The 1994 Plan provides for an automatic grant of non-qualified stock
options to acquire 5,000 shares of Common Stock to non-employee directors of the
Company each year on the first business day following the Company's annual
meeting of shareholders. The exercise price of such options is equal to the fair
market value of the Common Stock on the date of the grant, and such options have
a term of ten years.
The number of shares of Common Stock covered by outstanding options,
the number of shares of Common Stock available for issuance under the 1994 Plan,
the number of shares of Common Stock with respect to which options are to be
granted to non-employee directors, the maximum number of shares of Common Stock
with respect to which options may be granted to any employee in any given year,
and the exercise price per share of outstanding options, are proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or stock dividend. In the event of a
dissolution or liquidation, outstanding options will terminate prior to such
transaction, unless otherwise provided by the Committee. Upon the occurrence of
certain specified events resulting in a change in control of the Company, the
vesting of all outstanding options under the 1994 Plan will be automatically
accelerated.
The Committee may amend or terminate the 1994 Plan in such respects as
the Committee deems advisable, except that shareholder approval is required to
increase the number of shares of Common Stock subject to the 1994 Plan, to
change the class of persons eligible to participate in the 1994 Plan, to
materially increase the benefits accruing to participants under the 1994 Plan,
or to increase the maximum number of shares of Common Stock with respect to
which options may be granted to any employee in any year. No amendment or
termination of the 1994 Plan will affect previously granted awards without the
optionee's consent unless the Committee determines that such amendment is in the
best interest of the shareholders or optionees.
AMENDMENTS TO THE 1994 PLAN
On January 17, 1996, the Committee approved an amendment to the 1994
Plan permitting an additional method of payment for the exercise of stock
options under the 1994 Plan -- the delivery to the Company of an executed
irrevocable option exercise notice, together with irrevocable instructions to a
broker-dealer to sell (or margin) a sufficient portion of the shares to be
acquired upon exercise and deliver the sale (or margin loan) proceeds directly
to the Company to pay for the exercise price. This payment method was made
immediately available to all optionees except for those optionees subject to
Section 16 of the Securities Exchange Act of 1934. On February 21, 1996, the
Committee recommended that this amendment to the 1994 Plan be submitted to the
shareholders for approval so that the additional payment method would be
available to all optionees, including those optionees that are subject to
Section 16 of the Securities Exchange Act of 1934. On February 21, 1996, the
Committee also approved an amendment to the 1994 Plan, subject to shareholder
approval, to increase the number of shares of Common Stock issuable pursuant to
the 1994 Plan from 3,000,000 shares to 7,000,000 shares. The increase in the
number of shares available for issuance under the 1994 Plan is necessary for the
Company to continue to have the ability to grant options to attract and retain
highly qualified personnel and to provide incentives to individuals who can
contribute significantly to the Company's success.
15
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS. The grant of an incentive stock option has no
immediate Federal income tax consequences to the optionee or to the Company. The
exercise of an incentive stock option while the optionee is an employee or
within three months after termination of employment generally has no immediate
tax consequences to the Company or to the optionee. If the optionee is subject
to the alternative minimum tax, however, the exercise of an incentive stock
option would result in an increase in the optionee's alternative minimum taxable
income equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price. If an optionee holds the shares acquired
pursuant to the exercise of an incentive stock option for the required holding
period, the optionee generally recognizes long-term capital gain or loss upon a
subsequent sale of the shares in the amount of the difference between the amount
realized upon the sale and the exercise price of the shares. In such a case, the
Company is not entitled to a deduction in connection with the grant or exercise
of the incentive stock option or the sale of shares acquired pursuant to such
exercise. If, however, an optionee exercises an incentive stock option more than
three months after termination of employment or disposes of the shares prior to
the expiration of the required holding period, the optionee generally recognizes
ordinary income equal to the excess of the fair market value of the shares on
the date of exercise (or the proceeds of disposition, if less) over the exercise
price, and the Company is entitled to a corresponding deduction if the
compensation constitutes an ordinary and necessary business expense and the
limitations of Section 162(m) of the Code do not apply. If the amount realized
upon such a disposition exceeds the fair market value of the shares on the date
of exercise, the excess generally would be treated as long-term or short-term
capital gain. The required holding period is the longer of two years from the
date the option was granted and one year after the date of issuance of the
shares upon exercise of the option.
NON-QUALIFIED STOCK OPTIONS. The grant of a non-qualified stock option
has no immediate federal income tax consequences to the optionee or the Company.
Upon the exercise of a non-qualified stock option, the optionee recognizes
ordinary income (subject to employment taxes) in an amount equal to the excess
of the fair market value of the shares on the date of exercise over the exercise
price, and the Company is entitled to a corresponding deduction if the
compensation constitutes an ordinary and necessary business expense and the
limitations of Section 162(m) of the Code do not apply. The optionee's tax basis
in the shares is the exercise price plus the amount of ordinary income
recognized by the optionee, and the optionee's holding period will commence on
the date the shares are received. Upon a subsequent sale of the shares, any
difference between the optionee's tax basis in the shares and the amount
realized on the sale generally is treated as long-term or short-term capital
gain or loss.
CHANGE IN CONTROL. Under the 1994 Plan, upon the occurrence of certain
"change in control" transactions, all options then outstanding under the plan
become immediately exercisable. Under certain circumstances, compensation
payments attributable to such options may be treated as "parachute payments"
under the Code, in which case a portion of such payments may be nondeductible to
the Company and the recipient may be subject to a 20% excise tax.
OPTIONS GRANTED UNDER THE 1994 PLAN
As of March 31, 1996, options to purchase approximately 2,899,250
shares of Common Stock were outstanding under the 1994 Plan at exercise prices
ranging from $16.50 to $30.125 per share (the fair market value of the Common
Stock as of the dates of grant), and options to purchase approximately 614,507
shares of Common Stock were exercisable at prices ranging from $16.50 to $24.25
per share. Except for options granted under the 1994 Plan to non-employee
directors, which have a ten year term and vest immediately, and options granted
to independent contractors and agents of the Company and its subsidiaries, which
have different vesting schedules, all options granted under the 1994 Plan have
terms of
16
<PAGE>
seven years and vest in equal portions over four years. As of April 26,
1996, the closing price of the Common Stock as reported on the American Stock
Exchange composite tape was $30 1/2.
As described above, the Committee has discretion to determine the
persons to whom grants of options are to be made, the number of options to be
granted and the terms and conditions of any grant. Accordingly, except for the
automatic grants to non-employee directors of the Company, it is not possible to
identify the persons who will receive options under the 1994 Plan, the actual
number of options to be granted to any individual under the 1994 Plan, or the
terms and conditions of any option to be granted.
The table below indicates, as of March 31, 1996, the aggregate number
of options granted under the 1994 Plan since its inception to the persons and
groups indicated, and the number of outstanding options held by such persons and
groups as of such date.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR GROUP OPTIONS GRANTED OPTIONS OUTSTANDING
--------------------------- ---------------- -------------------
<S> <C> <C>
Phillip Frost, M.D.* 75,000 75,000
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Isaac Kaye* 75,000 75,000
DEPUTY CHIEF EXECUTIVE OFFICER
John H. Klein** - 0 - - 0 -
Richard C. Pfenniger, Jr. 125,000 125,000
CHIEF OPERATING OFFICER
Norwick B.H. Goodspeed - 0 - - 0 -
PRESIDENT OF MCGAW, INC.
Mark Andrews* 5,000 5,000
Lloyd Bentsen* 25,000 25,000
Ernst Biekert, Ph.D.* 5,000 5,000
Dante B. Fascell* 5,000 5,000
Jack Fishman, Ph.D.* - 0 - - 0 -
Harold S. Geneen* 5,000 5,000
Jane Hsiao, Ph.D.* 50,000 50,000
Lyle Kasprick* 5,000 5,000
Harvey M. Krueger* 5,000 5,000
John H. Moxley, III, M.D.* 5,000 5,000
M. Lee Pearce, M.D.* - 0 - - 0 -
Michael Weintraub* 5,000 5,000
All current executive officers, as a group 475,000 475,000
All current directors who are not
executive officers, as a group 65,000 65,000
All employees, other than executive
officers, as a group 2,491,350 2,296,750
</TABLE>
- - --------------------
* Nominee for Director
** Former President of the Company's North American Multi-Source
Pharmaceutical Group
In February and March 1996, the Committee approved the grant of
additional options for 2,078,813 shares of Common Stock, subject to
shareholder approval of the amendment to the 1994 Plan to increase the
number of shares issuable under the 1994 Plan. Of such options, options to
purchase 75,000 shares were granted to each of the following executive
officers, Dr. Frost, Mr. Kaye, Mr. Pfenniger, Mr. Goodspeed, Dr. Hsiao and
Dr. Broder, and options to purchase 10,000 shares were granted to Mr. Fipps.
The remaining options were granted to employees of the Company and its
subsidiaries. None of the options described in this paragraph are included
in the above table.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
PROPOSAL TO AMEND THE 1994 PLAN.
17
<PAGE>
INDEPENDENT AUDITORS
Arthur Andersen LLP, independent public accountants, was appointed by
the Board of Directors to audit the Company's financial statements for 1996.
This firm has acted as independent public accountants for the Company since
1986. Representatives of Arthur Andersen LLP are expected to attend the Annual
Meeting and will have an opportunity to make a statement if they desire and to
respond to appropriate questions raised by shareholders.
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's
1997 annual meeting of shareholders must be received by the Secretary, IVAX
Corporation, 4400 Biscayne Boulevard, Miami, Florida 33137, no later than
January 7, 1997, in order to be considered for inclusion in the Company's proxy
statement and form of proxy card relating to such meeting.
EXPENSES OF SOLICITATION
The cost of this solicitation will be borne by the Company. In addition
to the use of the mail, regular employees of the Company may solicit proxies
personally or by telephone or facsimile. The Company will reimburse brokers,
banks, and other custodians, nominees and fiduciaries for their reasonable
expenses in forwarding solicitation materials to beneficial owners of Common
Stock.
OTHER BUSINESS
As of the date of this proxy statement, the Board of Directors knows of
no business to be presented at the Annual Meeting other than as set forth in
this proxy statement. If other matters properly come before the meeting, the
persons named as proxies will vote on such matters in their discretion.
May 7, 1996
18
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APPENDIX
FORM OF PROXY
IVAX CORPORATION
4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Phillip Frost, M.D. and Richard C. Pfenniger,
Jr., and each of them severally, as proxies of the undersigned, each with the
power to appoint his substitute, and hereby authorizes each of them to vote as
designated on the reverse side, all the shares of Common Stock, par value $0.10
per share, of IVAX Corporation (the "Company") held of record by the undersigned
at the close of business on April 19, 1996, at the Annual Meeting of
Shareholders to be held on June 7, 1996, and at any adjournment of such meeting,
and, in their discretion, to vote such shares upon such other business as may
properly come before the meeting.
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES AND "FOR" THE APPROVAL OF THE
PROPOSAL TO AMEND THE COMPANY'S 1994 STOCK OPTION PLAN.
PLEASE COMPLETE, SIGN, AND DATE THIS PROXY ON THE REVERSE SIDE, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued on other side)
<PAGE>
(continued from other side)
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS
<S> <C> <C>
FOR each nominee WITHHOLD AUTHORITY to vote for Mark Andrews; Lloyd Bentsen; Ernst Biekert, Ph.D.;
listed (except as all nominees listed. Dante B. Fascell; Jack Fishman, Ph.D.; Phillip
marked to the Frost, M.D.; Harold S. Geneen; Jane Hsiao, Ph.D.;
contrary). Lyle Kasprick; Isaac Kaye; Harvey M. Krueger; John
H. Moxley III, M.D.; M. Lee Pearce, M.D.; and
Michael Weintraub.
[ ] [ ] ----------------------------------------------------
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in
the space provided above.)
2. Proposal to amend the Company's 1994 Stock Option Plan to increase the
number of shares issuable pursuant to the Plan and to modify the method of
payment for the exercise of stock options under the Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned acknowledges receipt of the
accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement for the
June 7, 1996 meeting.
Dated: ____________________________________, 1996
_________________________________________________
Signature
_________________________________________________
Signature if held jointly
(Please sign exactly as name or names appear hereon.
Full title of one signing in representative capacity
should be clearly designated after signature. Names
of all joint holders should be written even if signed
by only one.)
PLEASE COMPLETE, SIGN, AND DATE THIS PROXY, AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE. Postage is not necessary if mailed in the United
States.
</TABLE>
<PAGE>
APPENDIX
IVAX CORPORATION
1994 STOCK OPTION PLAN
(revised 2/21/96)
1. PURPOSES. The purposes of this 1994 Stock Option Plan (the "Plan") are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees of the Company
or its Subsidiaries as well as other individuals who perform services for the
Company or its Subsidiaries, and to promote the success of the Company's
business. Options granted hereunder may be either Incentive Stock Options or
Nonqualified Stock Options, at the discretion of the Committee and as reflected
in the terms of the written option agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the common stock, $.10 par value per share,
of the Company.
"COMPANY" shall mean IVAX Corporation, a Florida corporation.
"COMMITTEE" shall mean the committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan.
"CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
interruption or termination of service as an Employee. Service as an
Employee shall not be considered interrupted for purposes of the Plan,
in the case of sick leave, military leave, or any other bona fide leave
of absence approved by the Committee.
"EMPLOYEE" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary. The payment of a
director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"INCENTIVE STOCK OPTION" shall mean a stock option intended to qualify
as an "incentive stock option" within the meaning of Section 422 of the
Code.
"NONQUALIFIED STOCK OPTION" shall mean a stock option not intended to
qualify as an "incentive stock option" within the meaning of Section
422 of the Code.
"OPTION" shall mean a stock option granted pursuant to the Plan.
"OPTIONED STOCK" shall mean the Common Stock subject to an Option.
"OPTIONEE" shall mean the recipient of an Option.
"PARENT" shall mean a "parent corporation" of the Company, whether now
or hereafter existing, as defined in Section 424(e) of the Code.
<PAGE>
"RULE 16B-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act or any successor rule.
"SHARE" shall mean a share of Common Stock, as adjusted in accordance
with Section 13 of the Plan.
"SUBSIDIARY" shall mean a "subsidiary corporation" of the Company,
whether now or hereafter existing, as defined in Section 424(f) of the
Code.
3. STOCK. Subject to the provisions of Section 13 of the Plan, the maximum
aggregate number of Shares which may be issued under the Plan is 7,000,000. If
an Option should expire or become unexercisable for any reason without having
been exercised in full, the unpurchased Shares which were subject thereto shall,
unless the Plan shall have been terminated, become available for further grant
under the Plan.
4. ADMINISTRATION.
(a) COMMITTEE. The Plan at all times shall be administered by a
Committee appointed by the Company's Board of Directors. The Committee shall
consist of not less than two members of the Board of Directors, each of whom is
a "disinterested person" as defined in Rule 16b-3 and an "outside director" as
defined for purposes of Section 162(m) of the Code.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the Plan, the
Committee shall have the authority, in its discretion: (i) to grant Incentive
Stock Options or Nonqualified Stock Options; (ii) to determine the fair market
value of the Common Stock; (iii) to determine the exercise price per Share of
Options to be granted; (iv) to determine the persons to whom, and the time or
times at which, Options shall be granted and the number of Shares to be
represented by each Option; (v) to determine the vesting schedule of Options to
be granted; (vi) to prescribe, amend and rescind rules and regulations relating
to the Plan; (vii) to determine the terms and provisions of each Option granted
under the Plan (which need not be identical); (viii) to accelerate the exercise
date of any Option; (ix) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted by the Committee; (x) subject to the provisions of the Plan and subject
to such additional limitations and restrictions as the Committee may impose, to
delegate to specific members of management or to a committee of management
personnel the authority to determine: (A) the persons to whom, and the time and
times at which, Options shall be granted and the number of Shares to be
represented by each Option, (B) the vesting schedule of Options; (C) the term of
Options, and (D) other terms and conditions of any Options; provided that the
Committee shall not have the authority to delegate such matters with respect to
awards to be granted to any person subject to Section 16 of the Exchange Act or
any "covered employee" under Section 162(m) of the Code; and (xi) to interpret
the Plan and make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee may require the voluntary surrender of
all or any portion of any Option granted under the Plan as a condition precedent
to a grant of a new Option to such Optionee. Subject to the provisions of the
Plan, such new Option shall be exercisable at the price, during the period and
on such other terms and conditions as are specified by the Committee at the time
the new Option is granted. Upon surrender, the Options surrendered shall be
unexercisable and the Shares previously subject to such Options shall be
available for the grant of other Options.
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(c) EFFECT OF THE COMMITTEE'S DECISION. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all Optionees.
5. ELIGIBILITY. Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options may be granted to Employees, non-Employee directors
(in accordance with the provisions of Section 6 of the Plan), independent
contractors and agents. Any person who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options. Subject to the
provisions of Section 13 of the Plan, the maximum number of Shares with respect
to which Options may be granted under the Plan to any Employee in any calendar
year is 1% of the authorized and outstanding Shares of Common Stock on the date
of adoption of the Plan.
Except as otherwise provided under the Code, to the extent that the aggregate
fair market value of stock for which Incentive Stock Options (under all stock
option plans of the Company and of any Parent or Subsidiary) are exercisable for
the first time by an Employee during any calendar year exceeds $100,000, such
Options shall be treated as Nonqualified Stock Options. For purposes of this
limitation, (a) the fair market value of stock is determined as of the time the
Option is granted, (b) the limitation is applied by taking into account Options
in the order in which they were granted, and (c) Incentive Stock Options granted
before 1987 are not to be taken into account.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment by the Company, nor shall it interfere in any way
with his right or the Company's right to terminate his employment at any time.
6. AUTOMATIC GRANT OF OPTION TO NON-EMPLOYEE DIRECTORS. Subject to Section 3 of
the Plan, each person who is a non-Employee director of the Company on the first
business day following any annual meeting of shareholders of the Company shall
automatically receive on such date an Option to acquire 5,000 Shares, as
adjusted in accordance with Section 13 of the Plan. The exercise price for the
Shares to be issued pursuant to Options granted under this Section 6 shall be as
set forth in Section 9(a)(ii) of the Plan. The Options granted pursuant to this
Section 6 shall have a term of ten years from the date of grant. The foregoing
formula may not be amended more than once every six months other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder. Non-Employee directors shall have the
right, if they so wish, to decline receipt of any Options to be granted under
this Section 6.
7. TERM OF PLAN. The Plan shall become effective upon its adoption by the Board
of Directors of the Company; provided that, if the Plan is not approved by the
shareholders of the Company in accordance with Section 18 of the Plan within
twelve months after the date of adoption by the Board of Directors, the Plan and
any Options granted thereunder shall terminate and become null and void. The
Plan shall continue in effect until June 30, 2004 unless sooner terminated in
accordance with Section 15 of the Plan.
8. TERM OF OPTION. The term of each Option shall be ten years from the date of
grant thereof or, except for Options granted pursuant to Section 6 of the Plan,
such shorter term as may be determined by the Committee. However, in the case of
an Incentive Stock Option granted to an Employee who, immediately before the
Incentive Stock Option is granted, owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any Parent or
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<PAGE>
Subsidiary, the term of the Incentive Stock Option shall be five years from the
date of grant thereof or such shorter time as may be determined by the
Committee.
9. EXERCISE PRICE AND CONSIDERATION.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Committee,
but shall be subject to the following:
(i) In the case of an Incentive Stock Option: (A) granted to an
Employee who, immediately before the grant of such Incentive Stock Option, owns
stock representing more than 10% of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the per Share exercise price shall be
no less than 110% of the fair market value per Share on the date of grant; and
(B) granted to any other Employee, the per share exercise price shall be no less
than the fair market value per Share on the date of grant.
(ii) In the case of a Nonqualified Stock Option, the per Share exercise
price shall be no less than the fair market value per Share on the date of grant
and, with respect to Options granted to non-Employee directors as provided in
Section 6 of the Plan, shall be equal to the fair market value per Share on the
date of the grant.
(b) Notwithstanding Section 9(a) of the Plan, in the event the Company
substitutes an Option for a stock option issued by another corporation in
connection with a corporate transaction, such as a merger, consolidation,
acquisition of property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code) or partial or complete liquidation involving the Company and such other
corporation, the exercise price of such substituted Option shall be as
determined by the Committee in its discretion (subject to the provisions of
Section 424(a) of the Code in the case of a stock option that was intended to
qualify as an "incentive stock option") to preserve, on a per share basis
immediately after such corporate transaction, the same ratio of fair market
value per option share to exercise price per share which existed immediately
prior to such corporate transaction under the option issued by such other
corporation.
(c) The fair market value per Share shall be determined by the
Committee in its discretion; provided, however, that if the Common Stock is
listed on a stock exchange, the fair market value per Share shall be the closing
price on such exchange on the date of grant of the Option, as reported in the
Wall Street Journal.
(d) The consideration to be paid for the Shares to be issued upon
exercise of an Option shall consist of cash or check in an amount equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised or such other consideration as the Committee shall determine. Payment
may also be made, in the discretion of the Committee, by delivery (including by
facsimile) to the Company or its designated agent of an executed irrevocable
option exercise form together with irrevocable instructions to a broker-dealer
designated by the Company to sell (or margin) a sufficient portion of the Shares
and deliver the sale (or margin loan) proceeds directly to the Company to pay
for the exercise price; provided that Optionees subject to Section 16 of the
Exchange Act shall not be entitled to make payment by such method until either
the holders of a majority of the outstanding shares of the Company entitled to
vote have approved an amendment to the Plan permitting payment
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<PAGE>
by such method or counsel to the Company has advised the Committee that such
approval is not required by Rule 16b-3. For purposes of this Section 9(d), the
exercise date of such Option shall be the date on which such documents have been
delivered to the Company or its designated agent.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Committee, including performance criteria with respect to the Company and/or the
Optionee, and as shall be permissible under the terms of the Plan. An Option may
not be exercised for a fraction of a Share. An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is
exercised has been received by the Company. Full payment may, as authorized by
the Committee, consist of any consideration and method of payment allowable
under Section 9(d) of the Plan.
(b) RIGHTS AS A SHAREHOLDER. Until the issuance, which in no event
(except as provided in Section 16 of the Plan) will be delayed more than thirty
days from the date of the exercise of the Option, of the stock certificate
evidencing such Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in the
Plan. Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
11. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OF STATUS AS AN EMPLOYEE. If any Employee ceases to be
in Continuous Status as an Employee, other than (i) by reason of retirement or
(ii) as a result of a termination by the Company for deliberate, willful or
gross misconduct, any Option held by such Employee shall be exercisable within
twelve months after the date he ceases to be in Continuous Status as an Employee
(or such longer period as the Committee shall determine) to the extent the
Employee was entitled to exercise such Option as of the date of his termination
of employment.
(b) RETIREMENT OF OPTIONEE. If any Employee ceases to be in Continuous
Status as an Employee by reason of such Employee's retirement, any Option held
by such Employee shall be exercisable within thirty-six months after the date he
ceases to be in Continuous Status as an Employee to the extent that he was
entitled to exercise such Option as of the date of his retirement. For purposes
of the Plan, "retirement" means termination of services as an Employee at or
after age 65 other than as a result of deliberate, willful or gross misconduct.
(c) TERMINATION FOR MISCONDUCT. If any Employee ceases to be in
Continuous Status as an Employee as a result of a termination by the Company for
deliberate, willful or gross misconduct, any Option held by such Employee shall
terminate immediately and automatically on the date of his termination as an
Employee unless otherwise determined by the Committee.
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<PAGE>
(d) DEATH OF OPTIONEE. Subject to the provisions of the Plan, any
Option held by an Optionee at the time of his death may be subsequently
exercised by the legal representative of the Optionee's estate or by the person
or persons who acquired the right to exercise the Option by bequest or
inheritance but only to the extent the Optionee was entitled to exercise such
Option as of the date of his death. In the event of the death of an Optionee
during the final three months of the time period specified in Section 11(a) or
11(b), as applicable, the Option may be exercised, at any time within three 3
months following the date of his death, by the Optionee's estate or by a person
or persons who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise such
Option as of the date of his death.
(e) EXPIRATION OF OPTIONS. None of the events described above in this
Section 11 shall extend the period of exercisability of the Option beyond the
expiration date thereof. To the extent that an Optionee was not entitled to
exercise an Option on the date he ceased to be in Continuous Status as an
Employee or the date of the Optionee's death, or if he does not exercise such
Option (which he was entitled to exercise) within the time period specified in
this Section 11, the Option shall terminate and become null and void.
Notwithstanding the provisions of Section 11(a), 11(b) or 11(d) of the Plan, no
Options shall be exercisable after an Optionee ceases to be in Continuous Status
as an Employee in the event the Optionee shall have during the time period in
which his Options are exercisable, engaged in deliberate action which, as
determined by the Committee, causes substantial harm to the interests of the
Company or constitutes a breach of any obligation of the Optionee to the
Company. In such event, the Optionee shall forfeit all rights to any unexercised
Option as of the date of such deliberate action.
12. NON-TRANSFERABILITY OF OPTIONS. An Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution or, in the case of a
Nonqualified Stock Option, pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder, and, except with respect to a
qualified domestic relations order as aforesaid, may be exercised, during the
lifetime of the Optionee, only by the Optionee.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CHANGE IN CONTROL; DISSOLUTION.
(a) Subject to any required action by the shareholders of the Company,
each of (i) the number of shares of Common Stock covered by each outstanding
Option, (ii) the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, (iii) the price per share of Common Stock covered by each such
outstanding Option, (iv) the number of shares of Common Stock to be granted to
non-Employee directors pursuant to Section 6 of the Plan, and (v) the maximum
number of Shares with respect to which Options may be granted to any Employee,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split or the payment of a
stock dividend with respect to the Common Stock or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that (a) each such
adjustment with respect to an Incentive Stock Option shall comply with the rules
of Section 424(a) of the Code (or any successor provision) and (b) in no event
shall any adjustment be made which would render any Incentive Stock Option
granted hereunder other than an "incentive stock option" as defined
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<PAGE>
in Section 422 of the Code; and provided further, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
(b) If: (1) any person (as defined for purposes of Section 13(d) and
14(d) of the Exchange Act, but excluding the Company and any of its wholly-owned
subsidiaries) acquires direct or indirect ownership of 50% or more of the
combined voting power of the then outstanding securities of the Company as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise; or (2) the shareholders of the Company
approve (A) any consolidation or merger of the Company in which the Company is
not the surviving corporation (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of the surviving corporation immediately after the
merger), or (B) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company to an entity which is not a wholly-owned subsidiary of the
Company, then the exercisability of each Option outstanding under the Plan shall
be automatically accelerated so that each such Option shall, immediately prior
to the specified effective date of any of the foregoing transaction, become
fully exercisable with respect to the total number of Shares subject to such
Option and may be exercisable for all or any portion of such Shares. Upon the
consummation of any of such transaction, all outstanding Options under the Plan
shall, to the extent not previously exercised, terminate and cease to be
outstanding.
(c) In the event of the proposed dissolution or liquidation of the
Company, all outstanding Options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee.
14. TIME FOR GRANTING OPTIONS. The date of grant of an Option shall be the date
on which the Committee makes the determination granting such Option or such
later date as the Committee may specify. Notice of the determination shall be
given to each Employee to whom an Option is so granted within a reasonable time
after the date of such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Subject to the limitations set forth in Section 6 of the Plan, the
Committee may amend or terminate the Plan from time to time in such respects as
the Committee may deem advisable; provided that, the following revisions or
amendments shall require approval of the Company's shareholders in accordance
with Section 18 of the Plan (i) any increase in the number of Shares subject to
the Plan, other than in connection with an adjustment under Section 13 of the
Plan; (ii) any change in the designation of the class of persons eligible to be
granted Options; (iii) any material increase in the benefits accruing to
participants under the Plan; or (iv) any increase in the maximum number of
Shares with respect to which Options may be granted to any Employee.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment or termination or
modification of the Plan shall in any manner affect any Option theretofore
granted without the consent of the
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<PAGE>
Optionee, except that the Committee may amend or modify the Plan in a manner
that does affect Options theretofore granted upon a finding by the Committee
that such amendment or modification is in the best interest of shareholders or
Optionees.
16. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the advice of counsel for the Company with
respect to such compliance. As a condition to the exercise of an Option, the
Company may require the person exercising such Option to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required
by law.
17. OPTION AGREEMENTS. Options shall be evidenced by written option agreements
in such form as the Committee shall approve. Such agreements shall contain such
provisions, including, without limitation, restrictions upon the exercise of the
Option, as the Committee shall determine.
18. SHAREHOLDER APPROVAL. The effectiveness of the Plan shall be subject to
approval by the shareholders of the Company, in a separate vote, within twelve
months after the date the Plan is adopted. The approval of such shareholders of
the Company shall be solicited substantially in accordance with Section 14(a) of
the Exchange Act and the rules and regulations promulgated thereunder, and shall
be obtained, at a duly held shareholders' meeting, by the affirmative vote of
the holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon.
19. INDEMNIFICATION OF COMMITTEE MEMBERS. In addition to such other rights of
indemnification as they may have as Directors, the members of the Committee
shall be indemnified by the Company against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved to the extent required by and in the manner provided
by the Articles of Incorporation and Bylaws of the Company), or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Committee member did not act in good faith and in a manner
he reasonably believed to be in and not opposed to the best interests of the
Company; provided that within 60 days after institution of any such action, suit
or proceeding a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
20. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any
other stock option or incentive or other compensation plans in effect for the
Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.
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<PAGE>
21. HEADINGS. Headings of Articles and Sections hereof are inserted for
convenience and reference; they constitute no part of the Plan.
22. WITHHOLDING. The Company and any Subsidiary may, to the extent permitted by
law, deduct from any payments or transfers of any kind due to an Optionee the
amount of any federal, state, local or foreign taxes required by any
governmental regulatory authority to be withheld or otherwise deducted with
respect to the Options or the Optioned Stock.
23. GOVERNING LAW. The Plan, the Options granted hereunder and all related
matters shall be governed by, and construed and enforced in accordance with, the
laws of the State of Florida.
24. COMPLIANCE WITH RULE 16B-3. It is the intent of the Company that this Plan
comply in all respects with Rule 16b-3 (or any successor rule) in connection
with any Option granted to a person who is subject to Section 16 of the Exchange
Act. Accordingly, any provision of this Plan or any Option agreement that does
not comply with the requirements of Rule 16b-3 (or any successor rule) as then
applicable to any such person shall be construed or deemed amended to the extent
necessary to conform to such requirements, except that such automatic amendment
shall not apply to any other participant in the Plan who is not (at the time of
such application) subject to Section 16 of the Exchange Act. Any action taken by
the Committee pursuant to the Plan that does not comply with the requirements of
Rule 16b-3 (or any successor rule) shall be null and void.
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