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 ss.240.14a-11(c) or ss.240.14a-12
IVAX CORPORATION
-----------------------------------------------
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee:
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(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
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6000
NOTICE OF ANNUAL SHAREHOLDERS MEETING
The annual shareholders meeting of IVAX Corporation ("IVAX") will be
held at the Crowne Plaza Hotel, 1601 Biscayne Boulevard, Miami, Florida on
Thursday, September 18, 1997, at 10:00 a.m., local time, for the following
purposes:
1. to elect nine directors to serve until the 1998 annual
meeting of shareholders; and
2. to transact such other business as may properly come before
the meeting.
Only shareholders of record at the close of business on August 6, 1997
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 IVAX's offices 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
August 12, 1997
---------------------------------------
PLEASE SIGN, DATE AND RETURN YOUR PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE
---------------------------------------
<PAGE>
IVAX CORPORATION
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of IVAX
Corporation ("IVAX") in connection with its solicitation of proxies for use at
the annual meeting of shareholders to be held on September 18, 1997 (the "Annual
Meeting") at the time and place set forth in the accompanying Notice of Annual
Shareholders Meeting, and at any adjournments thereof. Mailing of the proxy
statement and the accompanying proxy card to shareholders will commence on or
about August 12, 1997. Record holders of common stock, par value $.10 per share
("Common Stock"), at the close of business on August 6, 1997 (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, 121,458,131 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 meeting, in
the discretion of the persons named in the proxy. With respect to the proposal
to elect nine directors, shareholders may vote in favor of all nominees or
withhold their votes as to all or specific nominees. If no direction is given on
a proxy, it will be voted for the election of all nominees. A proxy delivered
pursuant to this solicitation is revocable at any time prior to its exercise by
giving written notice to IVAX's Secretary, by delivering a later dated proxy, or
by voting in person at the meeting. Attendance at the 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 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 meeting. Accordingly, votes that are withheld and
broker non-votes will not affect the outcome of the election.
PRINCIPAL SECURITY HOLDERS
The following table sets forth certain information with respect to the
only persons known by IVAX to own beneficially in excess of five percent of the
outstanding shares of Common Stock as of August 6, 1997.
NAME AND ADDRESS OF PERCENT
BENEFICIAL OWNER NUMBER OF SHARES OF CLASS
------------------- ---------------- --------
Phillip Frost, M.D. 15,484,734 (1) 12.8%
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
BASFIN Corporation 6,284,700 (3) 5.2%
3000 Continental Drive - North
Mount Olive, New Jersey 07828
- --------------------
FOOTNOTES ON NEXT PAGE.
<PAGE>
(1) Includes 2,450,475 shares held directly, 1,066 shares held for Dr.
Frost's benefit under the IVAX Corporation Employee Savings Plan, 293,750 shares
which may be acquired pursuant to stock options exercisable within 60 days of
August 11, 1997, 12,723,695 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 IVAX's 6 1/2% Convertible Subordinated Notes Due
2001. Dr. Frost is the sole limited partner of FNLP and the sole shareholder, an
officer and a director of Frost-Nevada Corporation, the general partner of FNLP.
Dr. Frost disclaims beneficial ownership of an additional 163,034 shares held of
record by his wife. Dr. Frost is a director and executive officer of IVAX.
(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 IVAX.
(3) Based on information contained in a Schedule 13D filed by BASFIN
Corporation on September 24, 1996.
On November 20, 1996, Bergen Brunswig Corporation ("Bergen"), filed a
Schedule 13D with the Securities and Exchange Commission reporting that, in
connection with the execution of an Agreement and Plan of Merger, dated as of
November 10, 1996, between, among others, IVAX and Bergen (the "Merger
Agreement"), IVAX granted Bergen an option to purchase up to 30,177,342 shares
of Common Stock under certain circumstances (the "Option") and Dr. Frost and
Frost Nevada Limited Partnership each entered into a Voting Agreement with
Bergen (the "Voting Agreement"). The Schedule 13D, as amended on March 21, 1997,
states that Bergen may be the beneficial owner of 45,311,726 shares (or
approximately 29.9%) of the Common Stock by virtue of the Option and the Voting
Agreement. Bergen unilaterally terminated the Merger Agreement on March 20,
1997, and filed a lawsuit against IVAX in federal court alleging, among other
things, various breaches of the Merger Agreement. IVAX believes that Bergen's
unilateral termination of the Merger Agreement caused both the Option and the
Voting Agreement to terminate, and that Bergen should no longer be deemed the
beneficial owner of such shares of Common Stock.
ELECTION OF DIRECTORS
The Board of Directors of IVAX (the "Board") set the number of
directors constituting the Board at nine directors. The persons named below were
designated by the Board 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, unless the Board
determines to reduce the number of directors constituting the Board. Lloyd
Bentsen, Dante B. Fascell, Harold S. Geneen and Harvey M. Krueger, who currently
serve as directors, have determined to not stand for re-election at the Annual
Meeting.
MARK ANDREWS. Mr. Andrews, age 46, has served as a director of IVAX
since 1987. He has served as the Chairman of the Board of Directors and Chief
Executive Officer of American Exploration Company (oil and gas exploration and
production) since 1980, and was its President from 1980 to 1988.
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<PAGE>
ERNST BIEKERT, PH.D. Dr. Biekert, age 72, has served as a director of
IVAX since 1991. He is a professor at the University of Heidelberg in Germany.
He was the Chairman of the 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.
JACK FISHMAN, PH.D. Dr. Fishman, age 66, has served as a director of
IVAX since 1987 and as a Vice Chairman of the Board since 1991. From 1991 to
February 1995, he served as IVAX'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 IVAX 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, age 60, has served as Chairman of the
Board and Chief Executive Officer of IVAX since 1987. He served as IVAX'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. (vaccine
research and development), Vice Chairman of the Board of Directors of
Continucare Corporation (managed health care), Vice Chairman of the Board of
Directors of Pan Am Corporation (airline), and a director of Northrop Grumman
Corp. (aerospace) and American Exploration Company (oil and gas exploration and
production). He is a trustee of the University of Miami and a member of the
Board of Governors of the American Stock Exchange.
JANE HSIAO, PH.D. Dr. Hsiao, age 49, has served as a director of IVAX
and as IVAX's Vice Chairman-Technical Affairs since February 1995. From 1992
until February 1995, she served as IVAX's Chief Regulatory Officer and Assistant
to the Chairman, and as Vice President-Quality Assurance and Compliance of Baker
Norton Pharmaceuticals, Inc., IVAX'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, age 64, has served as a director of IVAX
since 1987. Mr. Kasprick is a private investor. He has served as a director of
North American Vaccine, Inc. (vaccine research and development) since 1989, 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, age 67, has served as Deputy Chief Executive
Officer and a director of IVAX since 1990, and as Chief Executive Officer of
Norton Healthcare Limited, IVAX's principal United Kingdom pharmaceutical
subsidiary, since 1990. Mr. Kaye is a director of Whitman Education Group, Inc.
(proprietary education).
JOHN H. MOXLEY III, M.D. Dr. Moxley, age 62, has served as a director
of IVAX since 1989. He has served as Managing Director, North American Health
Care Division, of Korn/Ferry International (executive recruiting firm) since
1992 and as Vice President since 1989. 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).
MICHAEL WEINTRAUB. Mr. Weintraub, age 58, has served as a director of
IVAX since 1987. Mr. Weintraub is a private investor. Since 1979, he has been a
director of Gibson Security Corp., a privately-owned investment company, and has
served as its Chairman and President since 1990.
3
<PAGE>
DIRECTOR COMPENSATION
Each director who is not employed by IVAX 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 IVAX's 1994 Stock Option Plan,
non-employee directors automatically are granted each year, on the first
business day following IVAX's annual meeting of shareholders, non-qualified
options to purchase 5,000 shares of 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held nine meetings during 1996. During 1996, all directors
attended at least 75% of the meetings of the Board and the committees of the
Board on which they served except for Mr. Fascell, Dr. Fishman, and Mr. Krueger.
The Board does not have a nominating committee, and the usual functions of such
a committee are performed by the entire Board.
AUDIT COMMITTEE. The principal functions of the Audit Committee include
reviewing the adequacy of IVAX's internal systems of accounting controls,
recommending to the Board the appointment of independent auditors, conferring
with independent auditors and internal auditors concerning the scope of their
examinations of the books and records of IVAX and their independence, reviewing
the financial statements of IVAX and management's disclosures, reviewing the
independent auditors' findings and recommendations, and considering other
appropriate matters regarding the financial affairs and internal polices and
procedures of IVAX. The Audit Committee's current members are Messrs. Andrews,
Geneen, Kasprick and Krueger, and it held six meetings during 1996.
COMPENSATION AND STOCK OPTION COMMITTEE. The principal functions of the
Compensation and Stock Option Committee are to approve or recommend to the Board
remuneration arrangements and compensation plans involving IVAX's directors and
executive officers, to review with management IVAX's employee benefit programs,
and to administer IVAX's stock option plans. The Compensation and Stock Option
Committee's current members are Mr. Weintraub and Dr. Moxley, and it held four
meetings during 1996.
REGULATORY COMPLIANCE COMMITTEE. The principal function of the
Regulatory Compliance Committee is to review with management IVAX's compliance
with regulatory requirements. The Regulatory Compliance Committee's current
members are Messrs. Fascell and Bentsen and Drs. Biekert and Fishman, and it
held four meetings during 1996.
EXECUTIVE OFFICERS WHO ARE NOT NOMINEES
Set forth below is a summary of the background and business experience
of the executive officers of IVAX who are not nominees for director.
DAVID R. BETHUNE. Mr. Bethune, age 56, has served as President and
Chief Operating Officer of IVAX since July 1997. From 1995 until he joined IVAX,
he served as President and Chief Executive Officer of Aesgen, Inc., a
privately-held generic pharmaceutical company. From 1992 until 1995, Mr. Bethune
was Group Vice President of American Cyanamid with responsibility for that
company's worldwide pharmaceutical operations. From 1988 until 1992, he served
as President of Lederle Laboratories, a division of American Cyanamid.
SAMUEL BRODER, M.D. Dr. Broder, age 52, has served as IVAX's Senior
Vice President-Research and Development and Chief Scientific Officer since March
1995. Prior to joining IVAX, he held various positions at the National Cancer
Institute since 1972, serving as its Director from 1989 until February 1995.
4
<PAGE>
MICHAEL W. FIPPS. Mr. Fipps, age 54, has served as IVAX'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.
RAFICK G. HENEIN, PH.D. Dr. Henein, age 57, has served as a Senior Vice
President of IVAX and as the President and Chief Executive Officer of Zenith
Goldline Pharmaceuticals, Inc., IVAX's principal United States-based generic
pharmaceutical subsidiary, since July 1997. He held various positions in the
Novopharm Limited organization, a Canadian-based pharmaceutical company, since
1988, rising to the position of President and Chief Executive Officer of
Novopharm International in 1996.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires IVAX'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 of IVAX with the Securities and Exchange Commission and the American
Stock Exchange. Directors, executive officers and 10% shareholders are required
to furnish IVAX with copies of all Section 16(a) forms they file. Based on a
review of the copies of such reports furnished to IVAX and written
representations from IVAX's directors and executive officers that no other
reports were required, IVAX believes that, during 1996, IVAX's directors,
executive officers and 10% shareholders complied with all Section 16(a) filing
requirements applicable to them.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the purchase of certain patents relating to the
compound nalmefene, a subsidiary of IVAX agreed to pay to Dr. Fishman $87,500
upon the first commercial sale of a product covered by the patents relating to
the compound nalmefene as partial consideration to Dr. Fishman for the waiver of
certain rights as the inventor under such patents. Such payment was made during
1997.
IVAX is a party to a consulting agreement with Mr. Bentsen, a director
of IVAX, pursuant to which he receives each year (1) $25,000, less any fees paid
for his service as a director of IVAX, and (2) options to purchase 25,000 shares
of Common Stock, less any options received for his service as a director of
IVAX.
Effective January 17, 1996, John Klein, the former President of IVAX's
North American Multi-Source Pharmaceutical Group, and Zenith Laboratories, Inc.,
a subsidiary of IVAX, agreed to terminate Mr. Klein's employment agreement. 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 received an annual salary of $400,000 through December 31, 1996
and will receive an annual consulting fee of $400,000 through December 31, 1998.
Mr. Klein agreed to refrain from competing with Zenith through January 1, 1999.
Effective March 5, 1997, IVAX entered into an employment agreement with
Robert Strauss to serve as President and Chief Operating Officer and as a
director of IVAX. Pursuant to the agreement, Mr. Strauss was granted options to
purchase 700,000 shares of Common Stock, and he received an annual salary of
$475,000 and certain employee benefits. The agreement provided for severance
payments if Mr. Strauss' employment was terminated under certain circumstances.
On July 25, 1997, Mr. Strauss resigned as President and Chief Operating Officer
and as a director of IVAX. In connection with his resignation, Mr. Strauss was
paid $950,000 and the vesting of 300,000 of his stock options was accelerated.
Whitman Education Group, Inc. ("Whitman") leases approximately 6,825
square feet of office space from IVAX in Miami, Florida at an annual rental of
$140,783. The lease may be terminated by either party
5
<PAGE>
upon 30 days notice. Certain executive officers and directors of IVAX serve as
directors of Whitman. In addition, Dr. Frost is a principal shareholder of
Whitman.
STOCK OWNERSHIP OF MANAGEMENT
The following table indicates, as of August 6, 1997, the number of
shares of Common Stock beneficially owned by each director, each executive
officer named in the "Summary Compensation Table," 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.
SHARES PERCENT
NAME OR IDENTITY BENEFICIALLY OF
OF GROUP OWNED(1) CLASS
---------------- ------------- -------
Mark Andrews 25,000 (2) *
Lloyd Bentsen 54,000 (2) *
Ernst Biekert, Ph.D. 25,000 (2) *
Dante B. Fascell 23,750 (2) *
Jack Fishman, Ph.D. 2,072,753 (3) 1.7%
Phillip Frost, M.D. 15,484,734 (4) 12.8%
Harold S. Geneen 30,500 (2) *
Jane Hsiao, Ph.D. 3,133,818 (5) 2.6%
Lyle Kasprick 212,751 (2) *
Isaac Kaye 323,750 (2) *
Harvey M. Krueger 26,500 (2) *
John H. Moxley, III, M.D. 34,750 (2) *
Michael Weintraub 65,000 (6) *
Samuel Broder, M.D. 84,996 (7) *
Richard C. Pfenniger, Jr. 317,808 (8) *
All directors and executive officers
as a group (17 persons) 21,737,302 (9) 17.9%
- --------------------
* 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.
(2) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of August 6, 1997 as follows: Mr. Andrews (25,000),
Mr. Bentsen (50,000), Dr. Biekert (25,000), Mr. Fascell (23,750), Mr. Geneen
(25,000), Mr. Kasprick (25,000), Mr. Kaye (293,750), Mr. Krueger (25,000), and
Dr. Moxley (25,000).
(3) Includes 10,468 shares held by a child and 9,200 shares held by his
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 2,450,475 shares held directly, 1,066 shares held on Dr.
Frost's behalf under the IVAX Corporation Employee Savings Plan, 293,750 shares
which may be acquired pursuant to stock options exercisable within 60 days of
August 6, 1997, 12,723,695 shares held by FNLP, and 15,748 shares which may be
acquired by FNLP upon conversion of $500,000 in principal amount of IVAX's 6
1/2% Convertible Subordinated Notes Due 2001. Dr. Frost is the sole limited
partner of FNLP and the sole shareholder, an
6
<PAGE>
officer and a director of Frost-Nevada Corporation, the general partner of FNLP.
Dr. Frost disclaims beneficial ownership of an additional 163,034 shares held of
record by his wife.
(5) Includes 984,285 shares held as trustee for the benefit of certain
family members, 137,500 shares which may be acquired pursuant to stock options
exercisable within 60 days of August 6, 1997, 2,100 shares held by her children,
and 994 shares held on Dr. Hsiao's behalf under the IVAX Corporation Employee
Savings Plan.
(6) Includes 25,000 shares which may be acquired pursuant to currently
exercisable options. Mr. Weintraub disclaims beneficial ownership of (i) an
additional 311,649 shares held in a trust of which Mr. Weintraub is co-trustee,
(ii) an additional 5,000 shares held by Bankers Asset Management Company, of
which Mr. Weintraub is the Chairman, President and a 50% stockholder, and (iii)
an additional 94,063 shares held by the estate of a deceased family member for
whom Mr. Weintraub has been designated a co-personal representative.
(7) Includes 83,750 shares which may be acquired pursuant to stock
options exercisable within 60 days of August 6, 1997, and 1,146 shares held on
his behalf under the IVAX Corporation Employee Savings Plan.
(8) Includes 196,250 shares which may be acquired pursuant to stock
options exercisable within 60 days of August 6, 1997, 1,093 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. Mr.
Pfenniger served as Chief Operating Officer of IVAX Corporation until his
resignation, effective March 5, 1997.
(9) Includes shares noted in footnotes (2) through (7) as beneficially
owned and an additional 20,000 shares of common stock and 140,000 additional
shares of common stock which may be acquired pursuant to stock options
exercisable within 60 days of August 6, 1997.
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by IVAX during 1996 to the Chief Executive Officer
and to each of the four highest paid executive officers other than the Chief
Executive Officer.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------------ LONG-TERM
NAME AND OTHER ANNUAL COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ------------- ------------
($) ($) ($) (#) ($)(1)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 1996 579,246 0 0 75,000 4,500
CHIEF EXECUTIVE OFFICER 1995 550,000 0 0 75,000 4,500
1994 425,000 50,000 0 50,000 4,400
Isaac Kaye (2) 1996 525,000 0 0 75,000 63,167
DEPUTY CHIEF EXECUTIVE OFFICER 1995 500,000 0 0 75,000 48,600
1994 332,150 0 0 50,000 49,484
Richard C. Pfenniger, Jr. (3) 1996 375,820 0 0 75,000 4,500
1995 328,333 0 0 75,000 4,500
1994 258,720 50,000 0 100,000 4,400
Samuel Broder, M.D. (4) 1996 371,101 0 0 75,000 4,500
CHIEF SCIENTIFIC OFFICER 1995 239,393 0 0 150,000 57,300
1994 -- -- -- -- --
Jane Hsiao, Ph.D. 1996 276,235 75,000 12,722 75,000 4,500
VICE CHAIRMAN - TECHNICAL 1995 264,447 0 0 50,000 4,500
AFFAIRS 1994 200,000 0 0 25,000 4,400
<FN>
- --------------------
(1) Except for Mr. Kaye and Dr. Broder, the amounts included in the
"All Other Compensation" column represent matching contributions made by IVAX
under the IVAX Corporation Employee Savings Plan, an employee retirement plan
maintained under Section 401(k) of the Internal Revenue Code. For Mr. Kaye, such
amounts consist of the use of an automobile and reimbursement for a chauffeur,
parking and other automobile related expenses. For Dr. Broder, such amount
includes matching contributions under the IVAX Corporation Employee Savings Plan
and, for 1995, taxable relocation expenses totaling $52,800.
(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. Pfenniger served as Chief Operating Officer of IVAX until his
resignation, effective March 5, 1997.
(4) Dr. Broder's employment with IVAX commenced in March 1995.
</FN>
</TABLE>
In March 1997, IVAX approved a retention plan for certain employees,
including Dr. Broder, Dr. Hsiao, and Mr. Fipps. The retention plan provides for
certain payments if a change in control of IVAX occurs and within one year
thereafter the employee is terminated due to a reduction in work-force or the
employee terminates his or her employment as a result of a significant reduction
in position, authority, responsibility or base salary or a requirement that the
employee work more than 60 miles from his or her workplace on the termination
date. The amount of the payment for the individuals mentioned above is three
times the higher of the employee's annual base salary as of the termination date
or the highest annual compensation paid to the employee during any of the three
calendar years preceding the termination date. In addition, the plan provides
for the continued payment of health insurance for three years following the
termination.
In July 1997, IVAX entered into an agreement with Mr. Bethune pursuant
to which he serves as IVAX's President and Chief Operating Officer. Pursuant to
the agreement, Mr. Bethune receives an annual
8
<PAGE>
base salary of $400,000 and certain employee benefits, and he was granted
options to purchase 350,000 shares of Common Stock. IVAX also agreed to pay Mr.
Bethune's relocation expenses, including up to a $60,000 payment to cover
expenses associated with the sale of his former residence. The agreement
provides for severance payments if Mr. Bethune's employment is terminated under
certain circumstances.
In July 1997, IVAX entered into an employment agreement with Dr. Henein
pursuant to which he serves as a Senior Vice President of IVAX and as the
President and Chief Executive Officer of Zenith Goldline Pharmaceuticals, Inc.
Pursuant to the agreement, Dr. Henein was paid a signing bonus of $150,000 and
he was granted options to purchase 250,000 shares of Common Stock. He is
entitled to an annual base salary of $575,000, an additional annual cash payment
of $38,500 and certain employee benefits, and he is eligible for an annual bonus
of up to 100% of his base salary dependent on the performance of Zenith Goldline
Pharmaceuticals, Inc. IVAX also agreed to pay Dr. Henein's relocation expenses,
including a $100,000 payment to cover the loss on the sale of his former
residence. The agreement provides for severance benefits if Dr. Henein's
employment is terminated under certain circumstances. The agreement is effective
until July 2002, and automatically renews for additional two year terms
thereafter unless terminated by either party.
STOCK OPTIONS
The following table sets forth information concerning stock option
grants made during 1996 to the executive officers named in the "Summary
Compensation Table." All stock options identified in the table are nonqualified
options and vest in equal portions over four years.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN FISCAL YEAR 1996
PERCENT OF POTENTIAL REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE EXPIRATION OPTION TERM
NAME GRANTED EMPLOYEES PRICE DATE ----------------------------
---- ------- ---------- -------- ---------- 5% 10%
(#) (%) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 75,000 2.9 26.75 2/20/2003 816,750 1,903,360
Isaac Kaye 75,000 2.9 26.75 2/20/2003 816,750 1,903,360
Richard C. Pfenniger, Jr. 75,000 2.9 26.75 2/20/2003 816,750 1,903,360
Samuel Broder, M.D. 75,000 2.9 26.75 2/20/2003 816,750 1,903,360
Jane Hsiao, Ph.D. 75,000 2.9 26.75 2/20/2003 816,750 1,903,360
</TABLE>
The following table sets forth information concerning stock option
exercises during 1996 by each of the executive officers named in the "Summary
Compensation Table" and the year-end value of unexercised options held by such
officers.
<TABLE>
<CAPTION>
STOCK OPTION EXERCISES IN FISCAL YEAR 1996
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
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ------------ ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 0 0 193,750 206,250 0 0
Isaac Kaye 0 0 193,750 206,250 0 0
Richard C. Pfenniger, Jr. 0 0 101,250 208,750 0 0
Samuel Broder, M.D. 10,000 78,750 27,500 187,500 0 0
Jane Hsiao, Ph.D. 0 0 137,500 87,500 0 0
</TABLE>
9
<PAGE>
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the Common Stock for 1992 through 1996 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, 1991, and the reinvestment of all dividends.
[PERFORMANCE GRAPH OMITTED]
YEAR-END 1991 1992 1993 1994 1995 1996
- -------- ---- ---- ---- ---- ---- ----
IVAX Corporation 100 76 75 49 74 27
Dow Jones Pharmaceuticals Index 100 82 76 87 143 179
Dow Jones Equity Market Index 100 109 119 120 166 206
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
The compensation of IVAX'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 presently composed of two
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 IVAX must
compete for the services of executives with many other companies which possess
significantly greater financial resources than IVAX and have available more
comprehensive compensation plans and arrangements than are presently utilized by
IVAX. 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 IVAX's executive officers with
those of its shareholders.
In light of these factors, the Committee believes that a critical
component of compensation for executives of IVAX is the award of significant
long-term compensation in the form of stock options at the time the executive
joins IVAX and periodically thereafter. The Committee believes that providing
executives with opportunities to acquire significant stakes in the growth and
prosperity of IVAX through the grant of stock options will enable IVAX to
attract and retain qualified and experienced executive officers. In addition,
the
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<PAGE>
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 IVAX's shareholders, since the ultimate value of such compensation is
directly dependent on the stock price.
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 IVAX, 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.
The Committee also believes that executives should be provided
meaningful short term incentives in the form of bonuses. Accordingly, in 1996,
the Committee implemented a bonus plan to recognize, motivate and provide
meaningful short-term financial incentives for certain key management level
employees, including certain executive officers of IVAX, who can have a
significant impact on the achievement of pre-established performance targets.
For executive officers who were not employed by an IVAX subsidiary, the plan
provided for payment of bonuses only if IVAX achieved a certain consolidated
earnings per share target for fiscal year 1996. The amount of the bonus payable
to such an executive officer would have been equal to the executive's base
salary multiplied by the executive's bonus level, which ranged from 25% to 50%.
If the target would have been achieved, 50% of the maximum bonus would have been
paid to the executive and the remaining 50% of the maximum bonus would have been
paid in the discretion of the Committee, based on the executive's individual
performance during the year and the recommendation of management to the
Committee. For executive officers who were employed by an IVAX subsidiary, 25%
of the maximum bonus was dependent upon achievement of the target described
above and 25% of the maximum bonus was dependent upon achievement of a separate
operating income target established for the subsidiary. The remaining 50% of the
maximum bonus amount was discretionary, based on the executive's individual
performance during the year and the recommendation of management to the
Committee. An executive officer was only eligible for the discretionary portion
of the bonus if the applicable target was achieved. IVAX did not achieve the
consolidated earnings per share target established under the bonus plan for
1996, and only one of IVAX's subsidiaries eligible to participate in the bonus
plan achieved its operating income target under the bonus plan.
In addition to the bonus plan, 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 such bonus is based upon the recommendation of the
Chief Executive Officer.
EXECUTIVE OFFICERS (OTHER THAN THE CHIEF EXECUTIVE OFFICER). The Chief
Executive Officer, with the assistance of other executive officers, makes annual
base salary recommendations to the Committee for the executive officers of IVAX
and recommends a bonus level for the executive officers under the bonus plan.
Such recommendations are reviewed and approved by the Committee with any
modifications deemed appropriate. In reviewing and approving annual base salary
recommendations, the Committee considers several factors, including individual
performance, the executive's responsibilities, the cost of living, and the
financial performance of IVAX, including IVAX's revenues, net income and
earnings per share. In reviewing and approving annual bonus levels under the
bonus plan, the Committee considers primarily the executive's responsibilities
and ability to affect IVAX's financial results. The determination of annual base
salary and bonus level is largely subjective, and no specific weight is given to
any particular factor.
Stock options represent a significant portion of total compensation for
IVAX's executive officers. Options are generally awarded to executive officers
at the time that they join IVAX 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 IVAX'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 IVAX at the time of vesting in order to exercise the
11
<PAGE>
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 IVAX, 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. For 1996, the Committee approved Dr. Frost's
base salary of $575,000 and a bonus level of 50% under the bonus plan, 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 ability to influence IVAX's
financial performance, and IVAX's performance during 1995. 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
IVAX's Chief Executive Officer or to any of the four other most highly
compensated executive officers of IVAX. Qualifying performance-based
compensation is not subject to the limitation if certain requirements are
satisfied. Based upon applicable regulations, IVAX believes that compensation
expenses relating to options granted under its stock option plans will not be
subject to the Section 162(m) limitations. At this time, the Company does not
intend to qualify other compensation paid to its executive officers for
deductibility under Section 162(m). The potential tax implications of Section
162(m) will, however, continue to be evaluated with respect to the Company's
compensation strategies and future decisions involving executive compensation.
The Committee continually evaluates IVAX's compensation policies and
procedures with respect to its executive officers.
COMPENSATION COMMITTEE:
JOHN H. MOXLEY III, M.D.
MICHAEL WEINTRAUB
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, none of the directors who served on the Compensation and
Stock Option Committee of the Board were executive officers of IVAX, and no
interlocking relationships exists between such persons and the directors or
executive officers of IVAX.
INDEPENDENT AUDITORS
Arthur Andersen LLP, independent public accountants, was appointed by
the Board to audit IVAX's financial statements for 1997. This firm has acted as
independent public accountants for IVAX 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.
12
<PAGE>
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder proposals intended to be presented at IVAX's 1998
annual meeting of shareholders must be received by the Secretary, IVAX
Corporation, 4400 Biscayne Boulevard, Miami, Florida 33137, no later than April
15, 1998, in order to be considered for inclusion in IVAX's proxy statement and
form of proxy card relating to such meeting.
EXPENSES OF SOLICITATION
The cost of this solicitation will be borne by IVAX. In addition to the
use of the mail, regular employees of IVAX may solicit proxies personally or by
telephone or facsimile. IVAX 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 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.
August 12, 1997
13
<PAGE>
[MAP HERE]
CROWN PLAZA HOTEL
1601 BISCAYNE BOULEVARD
MIAMI, FL 33132
PH: (305)374-0000
DIRECTIONS:
FROM INTERSTATE-95:
Take Interstate-95 to 195 East (Miami Beach). Drive east on 195 to the Biscayne
Boulevard Exit. At the first traffic light, turn left and drive south on
Biscayne Boulevard about twenty blocks to the Crowne Plaza Hotel which is
located on the left side of the street at the OMNI International Mall.
FROM MIAMI INTERNATIONAL AIRPORT:
Take Airport Exit to SR-112 East (Miami Beach/Downtown).
Approximately 4 miles, pass through toll booth (.25) and follow signs to 195
East (Miami Beach). Head east on 195 to the Biscayne Boulevard Exit. At first
traffic light turn left and drive south on Biscayne Boulevard about twenty
blocks to the Crown Plaza Hotel which is located on the left side of the street
at the OMNI International Mall.
IN OUR CONTINUING EFFORTS TO REDUCE EXPENSES WHEREVER POSSIBLE, IVAX WILL NOT
BE OFFERING SAMPLE BAGS NOR PROVIDING BREAKFAST AT THIS YEAR'S ANNUAL MEETING
<PAGE>
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., Michael W. Fipps, and
Armando A. Tabernilla, 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 August
6, 1997, at the Annual Meeting of Shareholders to be held on September 18, 1997,
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.
PLEASE COMPLETE, SIGN, AND DATE THIS PROXY ON THE REVERSE SIDE, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued on other side)
<PAGE>
<TABLE>
<CAPTION>
(continued from other side)
1. ELECTION OF DIRECTORS
<S> <C> <C>
FOR each nominee WITHHOLD AUTHORITY to vote Mark Andrews; Ernst Biekert, Ph.D.; Jack Fishman,
listed (except as for all nominees listed. Ph.D.; Phillip Frost, M.D.; Jane Hsiao, Ph.D.; Lyle
marked to the Kasprick; Isaac Kaye; John H. Moxley III, M.D.; and
contrary). Michael Weintraub.
[ ] [ ] ___________________________________________________
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in
the space provided above.)
The undersigned acknowledges receipt of the accompanying
Notice of Annual Meeting of Shareholders and Proxy
Statement for the September 18, 1997 meeting.
Dated: ____________________________________, 1997
__________________________________________________
Signature
__________________________________________________
Signature if held jointly
(Please sign exactly as name or names appear hereon. Full
title of one signing in a representative capacity should be
clearly designated after signature. Names of all joint
holders should be written even if signed by only one.)
</TABLE>
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.
