<PAGE> 1
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] 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> 2
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 Wyndham Hotel, 1601 Biscayne Boulevard, Miami, Florida on Thursday,
June 17, 1999, at 10:00 a.m., local time, for the following purposes:
1. to elect eight directors to serve until the 2000 annual
meeting of shareholders;
2. to approve the 1999 Employee Stock Purchase 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, 1999
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
CAROL J. GILLESPIE
Secretary
Miami, Florida
May 3, 1999
------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE
ENCLOSED ENVELOPE
------------------------------------------------------------
<PAGE> 3
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 June 17, 1999 (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 May 3, 1999. Record holders of the common stock of IVAX, par value $.10
per share ("Common Stock"), at the close of business on April 19, 1999 (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, approximately
109,451,902 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 eight 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 eight nominees who receive the highest number of affirmative votes
cast with respect to shares of Common Stock voting in person or by proxy at the
meeting will be elected as the directors of IVAX. Votes that are withheld,
abstentions and broker non-votes are not counted as affirmative votes. Approval
of the 1999 Employee Stock Purchase Plan will require the affirmative vote of a
majority of the shares of Common Stock voting in person or by proxy at the
meeting. See "Approval of 1999 Employee Stock Purchase Plan - Vote Required."
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 March 31, 1999.
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
------------------- ---------- --------
Phillip Frost, M.D. 15,862,572 (1) 14.3%
4400 Biscayne Boulevard
Miami, Florida 33137
Azure Limited 5,958,492 (2) 5.4%
c/o Charter Management, Ltd.
Town Mills, Trinity Square
St. Peter Port
Guernsey, Channel Islands
BASF Corporation 6,284,700 (3) 5.7%
3000 Continental Drive - North
Mount Olive, New Jersey 07828
- --------------------
FOOTNOTES ON NEXT PAGE.
<PAGE> 4
(1) Includes 2,740,475 shares held directly, 1,404 shares held for Dr.
Frost's benefit under the IVAX Corporation Employee Savings Plan, 381,250
shares which may be acquired by Dr. Frost pursuant to stock options
exercisable within 60 days of March 31, 1999, 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 nominee for Charter Trust Company, the
trustee of the Isaac Kaye Family Trust, created by Mr. Isaac Kaye in
1988. The beneficiaries of the Isaac 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 provided by BASF Corporation to IVAX on April 7,
1999.
ELECTION OF DIRECTORS
The Board of Directors of IVAX (the "Board") set the number of
directors constituting the Board at eight. 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
decides to reduce the number of directors constituting the Board.
MARK ANDREWS. Mr. Andrews, age 48, 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. Upon the merger
of American Exploration Company into Louis Dreyfus Natural Gas Corp. (oil and
gas exploration and production) in October 1997, Mr. Andrews became the Vice
Chairman of the Board of Directors of the combined entity. Mr. Andrews has also
served as Chairman of the Board of Directors of Vault Mortgage Company (mortgage
brokerage), and as President of Great Spirits Company LLC (consumer products
distribution), since 1998.
ERNST BIEKERT, PH.D. Dr. Biekert, age 74, 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.
CHARLES M. FERNANDEZ. Mr. Fernandez, age 37, has served as a director
of IVAX since May 1998. He has served as Chairman of the Board, Chief Executive
Officer and President of Continucare Corporation (integrated health care) since
1996. From 1985 to 1995, he served as Executive Vice President and as a director
of Heftel Broadcasting Corporation (radio broadcasting).
JACK FISHMAN, PH.D. Dr. Fishman, age 68, has served as a director of
IVAX since 1987. From 1991 to 1995, he served as IVAX's Chief Scientific
Officer, and from 1991 to 1997, he served as a Vice Chairman of the Board. 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.
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<PAGE> 5
NEIL FLANZRAICH. Mr. Flanzraich, age 55, has served as Vice Chairman
and President of IVAX since May 1998 and as a director of IVAX since 1997. He
was a shareholder and served as Chairman of the Life Sciences Legal Practices
Group of Heller Ehrman White & McAuliffe from 1995 to May 1998. From 1981 to
1994, he served in various capacities at Syntex Corporation (pharmaceuticals),
most recently as its Senior Vice President, General Counsel and a member of the
Corporate Executive Committee. From 1994 to 1995, after Syntex Corporation was
acquired by Roche Holding Ltd., he served as Senior Vice President and General
Counsel of Syntex (U.S.A.) Inc., a Roche subsidiary. He is Chairman of the
Board of Directors of North American Vaccine, Inc. (vaccine research and
development), and is a director of Whitman Education Group, Inc. (proprietary
education), LXR Biotechnology, Inc. (biopharmaceuticals) and Continucare
Corporation (integrated health care).
PHILLIP FROST, M.D. Dr. Frost, age 62, has served as Chairman of the
Board of Directors 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 (integrated health care), and a director of Northrop
Grumman Corp. (aerospace). He is Vice Chairman of the Board of Trustees 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 51, has served as a director of IVAX
and as IVAX's Vice Chairman-Technical Affairs since February 1995, as IVAX's
Chief Technical Officer since July 1996, and as Chairman, Chief Executive
Officer and President of DVM Pharmaceuticals, Inc., IVAX's veterinary products
subsidiary, since March 1998. 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.
ISAAC KAYE. Mr. Kaye, age 69, 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.
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. On December 3, 1998, an additional grant of non-qualified
options to purchase 5,000 shares of Common Stock was made to each non-employee
director under IVAX's 1994 Stock Option Plan. These options vested immediately,
expire December 2, 2008, and have an exercise price equal to the fair market
value of the Common Stock on December 3, 1998.
3
<PAGE> 6
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held eight meetings during 1998. During 1998, all incumbent
directors attended at least seventy-five percent (75%) of the meetings of the
Board and the committees of the Board on which they served. 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 policies and procedures of IVAX. The Audit Committee's current members
are Messrs. Andrews and Fernandez and Drs. Fishman and Hsiao. It held four
meetings during 1998.
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 and other highly compensated employees, 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 Messrs. Andrews and Fernandez and Dr. Biekert. It held five
meetings during 1998.
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 Drs. Biekert, Fishman and Hsiao. It held two meetings during 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires IVAX's
directors, executive officers and ten percent (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
ten percent (10%) shareholders are required to furnish IVAX with copies of all
Section 16(a) reports 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 1998, IVAX's directors, executive officers and ten percent (10%)
shareholders complied with all Section 16(a) filing requirements applicable to
them, except that Charles M. Fernandez inadvertently filed a late Form 3 upon
becoming a director of IVAX in May 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Whitman Education Group, Inc. ("Whitman") leases approximately 7,747
square feet of office space from IVAX in Miami, Florida at an annual rental of
$144,598. The lease may be terminated by either party upon 180 days notice.
Certain executive officers and directors of IVAX serve as directors of Whitman.
In addition, Dr. Frost is a principal shareholder of Whitman.
In January 1998, IVAX sold all of the outstanding shares of PharmAir
Corporation, the primary asset of which is the IVAX corporate jet (the
"Airplane"), to Aircraft 45470 Acquisition Corp., a corporation beneficially
owned by Dr. Frost, for $1,800,000 in cash. The purchase price was determined
based upon two independent appraisals of the Airplane, as well as several
bona-fide written offers to purchase the Airplane.
4
<PAGE> 7
The Board of Directors, with Dr. Frost abstaining, approved the sale. IVAX paid
$331,295 to PharmAir for use of the Airplane in 1998 and intends to make
additional payments to PharmAir for use of the Airplane in 1999.
In connection with its share repurchase program, IVAX repurchased a
total of two million shares of Common Stock from Azure Limited in two
transactions. Immediately before each of the transactions, and as of March 31,
1999, Azure Limited owned more than five percent (5%) of the outstanding Common
Stock. On December 7, 1998, IVAX purchased one million shares of Common Stock
from Azure Limited for $10.00 per share. The closing price of the Common Stock
on that date was $10.6875. An additional one million shares were purchased from
Azure Limited on February 26, 1999 for $14.25 per share. The closing price of
the Common Stock on February 26, 1999 was $14.75 per share.
During 1998, IVAX paid approximately $44,786 on behalf of Dr. Frost as
an advancement of expenses incurred in the defense of an action filed in the
United States District Court for the Eastern District of New York on October
14, 1997 styled MARK FEDER, DERIVATIVELY ON BEHALF OF IVAX CORPORATION v.
PHILLIP FROST AND FROST-NEVADA LIMITED PARTNERSHIP. This action alleged a
derivative claim on behalf of IVAX pursuant to Section 16(b) of the Securities
Exchange Act, 15 U.S.C. Section 78p(b), and sought disgorgement of profits
purportedly obtained by Dr. Frost and FNLP as a result of purchases of Common
Stock by them and sales of Common Stock by another corporation. The complaint,
which alleged that such transactions resulted in "short-swing profits" of at
least $3 million, sought damages in an unspecified amount, as well as interest
and attorneys' fees. On March 23, 1999, the court granted the defendants'
motion to dismiss the action, ruling that the plaintiff had failed to state a
cause of action against the defendants.
STOCK OWNERSHIP OF MANAGEMENT
The following table indicates, as of March 31, 1999, the number of
shares of Common Stock beneficially owned by each director, each nominee for
director, each executive officer named in the "Summary Compensation Table," and
by all directors and executive officers as a group, and the percentage that
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.
NAME OR IDENTITY SHARES PERCENT
OF GROUP BENEFICIALLY OWNED(1) OF CLASS
-------- --------------------- --------
Mark Andrews 57,000 (2) *
Ernst Biekert, Ph.D. 35,000 (3) *
Charles M. Fernandez 110,000 (3) *
Jack Fishman, Ph.D. 2,063,085 (4) 1.9%
Neil Flanzraich 105,724 (5) *
Phillip Frost, M.D. 15,862,572 (6) 14.3%
Jane Hsiao, Ph.D. 3,253,465 (7) 2.9%
Isaac Kaye 411,250 (3) *
Rafick G. Henein, Ph.D. 155,000 (3) *
All directors and executive
officers as a group (10 persons) 22,086,729 (8) 19.8%
- --------------------
* Represents beneficial ownership of less than one percent (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 such
act.
(2) Includes 35,000 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999 and 2,800 shares held by a
trust for the benefit of Mr. Andrews' children. Mr. Andrews disclaims
beneficial ownership of the shares held by the trust for the benefit of
his children.
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<PAGE> 8
(3) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999 as follows: Dr. Biekert
(35,000), Mr. Fernandez (10,000), Mr. Kaye (381,250) and Dr. Henein
(125,000).
(4) Includes 15,000 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999. Dr. Fishman disclaims
beneficial ownership of an additional 9,200 shares held by his wife.
(5) Includes 105,000 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999 and 724 shares held for Mr.
Flanzraich's benefit under the IVAX Corporation Employee Savings Plan.
(6) Includes 2,740,475 shares held directly, 1,404 shares held for Dr.
Frost's benefit under the IVAX Corporation Employee Savings Plan, 381,250
shares which may be acquired pursuant to stock options exercisable within
60 days of March 31, 1999, 12,723,695 shares held by Frost-Nevada Limited
Partnership ("FNLP"), and 15,748 shares which may be acquired by FNLP
upon conversion of $500,000 in principal amount of IVAX's 6 1/2%
Convertible Subordinated Notes Due 2001. Dr. Frost is the sole limited
partner of FNLP and the sole shareholder, an officer and a director of
Frost-Nevada Corporation, the general partner of FNLP. Dr. Frost
disclaims beneficial ownership of an additional 163,034 shares held of
record by his wife.
(7) Includes 984,285 shares held as trustee for the benefit of certain family
members, 256,250 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999, 2,100 shares held by her
children and 1,891 shares held on Dr. Hsiao's behalf under the IVAX
Corporation Employee Savings Plan.
(8) Includes an additional 300 shares of Common Stock and 33,333 additional
shares of Common Stock which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 1999.
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by IVAX during 1998 to the Chief Executive Officer
and to each of the four highest paid executive officers other than the Chief
Executive Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------- ------------
SHARES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ------------- ------------
($) ($) ($)(1) (#) ($)(2)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 1998 575,000 0 0 150,000 4,800
CHIEF EXECUTIVE OFFICER 1997 575,000 0 0 0 4,800
1996 579,246 0 0 75,000 4,500
Isaac Kaye (3) 1998 550,301 0 -- 150,000 0
DEPUTY CHIEF EXECUTIVE OFFICER 1997 521,520 0 -- 0 0
1996 525,000 0 63,167 75,000 0
Neil Flanzraich (4) 1998 296,154 147,754 -- 400,000 4,800
PRESIDENT 1997 -- -- -- -- --
1996 -- -- -- -- --
Jane Hsiao, Ph.D. 1998 338,462 200,000 0 200,000 4,800
CHIEF TECHNICAL OFFICER 1997 299,808 25,000 -- 100,000 4,800
1996 274,993 75,000 -- 75,000 4,500
Rafick G. Henein, Ph.D. (5) 1998 575,000 54,000 38,500 75,000 4,800
SENIOR VICE PRESIDENT 1997 165,865 150,000 148,208 250,000 4,800
1996 -- -- -- -- --
</TABLE>
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FOOTNOTES ON NEXT PAGE.
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<PAGE> 9
(1) Except for years prior to the executive officer's employment by IVAX, a
"--" under the "Other Annual Compensation" column indicates that the
aggregate amount of perquisites and other personal benefits given to the
executive officer, valued on the basis of aggregate incremental cost to
IVAX, was less than either $50,000 or ten percent (10%) of the total
annual salary and bonus for the executive officer during that year. For
Mr. Kaye, the amount included in "Other Annual Compensation" consists of
the use of an automobile and reimbursement for a chauffeur, parking and
other automobile related expenses. For Dr. Henein, the amount included in
"Other Annual Compensation" for 1998 represents an additional annual
payment of $38,500 made pursuant to the terms of his employment agreement
and, for 1997, such amount represents the foregoing annual payment,
taxable relocation expenses and a $100,000 payment to cover the loss on
the sale of his former residence. In addition, Dr. Henein received
perquisites in 1998, the aggregate amount of which was less than either
$50,000 or ten percent (10%) of his total annual salary and bonus for
1998.
(2) The amounts set forth 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.
(3) Mr. Kaye's salary and other compensation is paid in British pounds. The
information in the table is based on the average exchange rate during the
applicable year.
(4) Mr. Flanzraich's employment commenced in May 1998.
(5) Dr. Henein's employment commenced in July 1997.
EMPLOYMENT AGREEMENTS
In November 1997, IVAX entered into employment agreements with Dr.
Frost and Mr. Kaye, pursuant to which Dr. Frost serves as Chairman and Chief
Executive Officer and Mr. Kaye serves as Deputy Chief Executive Officer and as
Chief Executive Officer of Norton Healthcare Limited, IVAX's United Kingdom
subsidiary. Pursuant to the agreements, Dr. Frost receives an annual base
salary of $575,000, and Mr. Kaye receives an annual base salary of $575,000
less certain automobile-related expenses paid on his behalf. The agreements
provide for severance payments if either executive's employment is terminated
under certain circumstances. The agreements have five-year terms, and
automatically renew for additional two-year terms thereafter unless terminated
by either party.
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 one hundred percent (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 has a five-year term, and automatically renews for additional
two-year terms thereafter unless terminated by either party.
In January 1998, IVAX entered into an employment agreement with Dr.
Hsiao pursuant to which she serves as Chief Technical Officer of IVAX.
Pursuant to the agreement, Dr. Hsiao receives an annual base salary of not
less than $300,000. The agreement provides for severance payments if Dr.
Hsiao's employment is terminated under certain circumstances. The agreement
has a five-year term, and automatically renews for additional two-year terms
thereafter unless terminated by either party.
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<PAGE> 10
In May 1998, IVAX entered into an employment agreement with Mr.
Flanzraich pursuant to which he serves as Vice Chairman and President of IVAX.
Pursuant to the agreement, Mr. Flanzraich was paid a signing bonus of $100,000
and is entitled to receive an annual base salary of not less than $500,000. The
agreement provides for severance payments if Mr. Flanzraich's employment is
terminated under certain circumstances. The agreement has a five-year term, and
automatically renews for additional two-year terms thereafter unless terminated
by either party.
CHANGE IN CONTROL AGREEMENTS
IVAX has entered into change in control employment agreements with
certain officers, including Dr. Frost, Mr. Kaye, Mr. Flanzraich, Dr. Hsiao and
Dr. Henein. These agreements are intended to provide protection to key employees
and to provide for continuity of management in the event of a change in control
of IVAX. The agreements become effective if a change in control occurs during
the three-year period that commences on the execution of the agreement. The
period is automatically renewed each year for an additional three years, unless
IVAX provides notice of non-renewal.
Under the change in control agreements, a change in control includes
any of the following events: (1) the acquisition of forty percent (40%) or more
of IVAX's common stock by a person or group; (2) a change in the majority of
IVAX's board (other than a change approved by the incumbent board); (3)
approval by the shareholders of a reorganization, merger or consolidation; or
(4) approval by the shareholders of a liquidation or dissolution or sale of all
or substantially all of the assets of IVAX. Exceptions are provided for certain
transactions, including those where the existing shareholders of IVAX maintain
effective control.
Once the agreements become effective upon a change in control, they
have a term of three years. Each agreement provides that a covered officer will
have a position, responsibilities and authority at least commensurate with
those held during the ninety days preceding the change in control. Each
agreement also provides that the covered officer will be paid an annual base
salary equal to the highest salary received during the twelve months preceding
the change in control; will be entitled to an annual bonus equal to the average
annual bonus paid during the three years preceding the change in control; will
be entitled to a one-time special bonus equal to his annual base salary plus
the higher of his last annual bonus or the average annual bonus paid during the
three years preceding the change in control if the officer remains employed
with IVAX through the six month anniversary of the change in control; and will
be entitled to continued participation in IVAX's benefit plans, fringe
benefits, office support and staff, vacation, and expense reimbursement on the
same basis as prior to the change in control, and in any case no less favorable
than those provided by IVAX to peer executives (as defined in the agreements).
If, following a change in control, the officer is terminated for any
reason other than death, disability or for cause, or if such officer terminates
his employment agreement for good reason (as defined in the agreements) or for
any reason during the thirty-day period following the six month anniversary of
the change in control, then the officer is entitled to a severance payment
equal to two times the officer's annual base salary (as defined in the
agreements) plus the higher of his last annual bonus or the average annual
bonus paid during the three years preceding the change in control. In addition,
if the special bonus has not been paid to the officer, the severance payment
shall be increased by the amount of the special bonus. The agreements also
provide that the officer is entitled to continue to participate in IVAX's
welfare benefit plans for the full three-year employment period.
In the event that any payments made in connection with a change in
control would be subjected to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, IVAX will "gross-up" the officer's
compensation for all federal, state and local income and excise taxes and any
penalties and interest thereon.
8
<PAGE> 11
STOCK OPTIONS
The following table sets forth information concerning stock option
grants made during 1998 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.
STOCK OPTION GRANTS IN FISCAL YEAR 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES OF
SHARES TOTAL STOCK PRICE APPRECIATION FOR
UNDERLYING OPTIONS OPTION TERM
OPTIONS GRANTED TO EXERCISE EXPIRATION ----------------------------
NAME GRANTED EMPLOYEES PRICE DATE 5% 10%
- ---- ------- --------- ----- ---- ----------- ---------
(#) (%) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 150,000 2.9 8.9375 7/30/2005 545,769 1,271,874
Isaac Kaye 150,000 2.9 8.9375 7/30/2005 545,769 1,271,874
Neil Flanzraich 400,000 7.8 8.7500 5/25/2005 1,424,851 3,320,510
Jane Hsiao, Ph.D. 200,000 3.9 8.9375 7/30/2005 727,692 1,695,832
Rafick G. Henein, Ph.D. 75,000 1.5 8.9375 7/30/2005 272,885 635,937
</TABLE>
The following table sets forth information concerning stock option
exercises during 1998 by each of the executive officers named in the "Summary
Compensation Table" and the year-end value of unexercised options held by such
officers, based on the closing price of $12.4375 on December 31, 1998.
STOCK OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE ---------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 0 0 343,750 206,250 0 525,000
Isaac Kaye 0 0 343,750 206,250 0 525,000
Neil Flanzraich 0 0 5,000 400,000 4,688 1,475,000
Jane Hsiao, Ph.D. 0 0 200,000 325,000 0 700,000
Rafick G. Henein, Ph.D. 0 0 125,000 200,000 437,500 700,000
</TABLE>
9
<PAGE> 12
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the Common Stock for 1994 through 1998 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, 1993 and the reinvestment of all dividends.
PERFORMANCE GRAPH HERE
<TABLE>
<CAPTION>
YEAR-END 1993 1994 1995 1996 1997 1998
-------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
IVAX Corporation 100 66 100 36 24 44
Dow Jones Pharmaceuticals Index 100 115 188 236 366 545
Dow Jones Equity Market Index 100 101 139 171 229 294
</TABLE>
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
three non-employee directors. The Committee seeks to ensure that IVAX's
compensation policies are designed and implemented to promote the goal of
enhancing long-term shareholder value. The Committee recognizes that the key to
achieving this goal is to attract, retain and motivate qualified and
experienced executive officers. To attract and retain the most qualified
executives, IVAX must compete with many other companies that possess
significantly greater financial resources and have available more comprehensive
compensation plans and benefit arrangements than are presently offered by IVAX.
The Committee therefore favors forms of compensation that will take maximum
advantage of the Company's strengths and will enable those who succeed in
building shareholder value to share in the value that they have helped to
create.
In light of these factors, the Committee believes that a critical
component of compensation for executives of IVAX is the award 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
10
<PAGE> 13
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 Committee believes that this approach to compensation creates
an entrepreneurial atmosphere that motivates executives to perform to their full
potential. The Committee believes that emphasis on stock options for a
significant portion of executive compensation more closely aligns the
executives' interests with those of IVAX's shareholders, since the value of such
compensation is directly dependent on growth in stock value.
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 shares acquired upon exercise. The Committee will
consider an individual's past compliance with the Guidelines in considering the
award of additional options. In addition, the Board of Directors has recently
adopted Stock Ownership Guidelines for officers, which establish specific
levels of stock ownership that officers are encouraged to maintain as a
concrete expression of their commitment to the success of IVAX. The ability to
exercise stock options in order to achieve these ownership objectives helps the
officers to build their stake in the Company while at the same time enjoying
the benefit of any increased value that their efforts have helped to create.
The Committee did not establish any formal bonus plan for 1998. 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. 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,
the compensation of executives in similar positions at other companies in the
industry, and the financial performance of IVAX. The determination of annual
base salary 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 Common Stock 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 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 1998, the Committee approved Dr. Frost's
base salary of $575,000, and also granted to Dr. Frost options to purchase
150,000 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 1998. 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.
11
<PAGE> 14
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 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, 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:
MARK ANDREWS
ERNST BIEKERT, PH.D.
CHARLES FERNANDEZ
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neil Flanzraich served on the Compensation and Stock Option Committee
of IVAX's Board of Directors but resigned from that committee upon becoming an
officer of IVAX in May 1998.
An executive officer of Continucare Corporation, Charles M. Fernandez,
serves on the Compensation and Stock Option Committee of IVAX's Board of
Directors. Phillip Frost, M.D. and Neil Flanzraich serve on the Board of
Directors of Continucare Corporation. Dr. Frost and Mr. Flanzraich are both
executive officers and directors of IVAX.
APPROVAL OF 1999 EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The 1999 Employee Stock Purchase Plan (the "Section 423 Plan") for
IVAX ("IVAX" or the "Company") was unanimously adopted by the Board on February
26, 1999, subject to approval by shareholders. At the same time, the Board
authorized the implementation of similar plans for non-U.S. employees. These
plans are designed to encourage the purchase by participants of shares of
Common Stock. The Section 423 Plan is intended to comply with the requirements
of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"),
and to assure the participants of the tax advantages provided thereby (and
described below in the section entitled "Certain Federal Income Tax
Consequences"). In order for the transfer of stock under the Section 423 Plan
to qualify for this treatment, the Section 423 Plan must be approved by
shareholders of the Company within twelve months of the plan's adoption. A
total of 2,800,000 shares of Common Stock will initially be eligible for
purchase by the Company's employees under the Section 423 Plan. The Section 423
Plan provides for automatic annual increases in the number of shares
authorized, each in an amount equal to: (i) the lesser of (a) 16,000 shares of
Common Stock, and (b) the amount which causes the aggregate number of shares of
Common Stock available under the Section 423 Plan to equal two and one-half
percent (2.5%) of the then outstanding shares of Common Stock; or (ii) a lesser
amount determined by the Board.
12
<PAGE> 15
The number of shares of Common Stock authorized for issuance under the
Section 423 Plan are also subject to adjustment by the Board in the event of a
recapitalization, stock split, stock dividend or similar corporate transaction.
Subject to certain procedural requirements, all United States
employees of the Company who work more than twenty hours per week will be
eligible to participate in the Section 423 Plan, except that employees who are
five percent (5%) or more shareholders of the Company or any subsidiary of the
Company will not be eligible to participate.
Pursuant to the Section 423 Plan, each eligible employee will be
permitted to purchase shares of Common Stock through regular payroll deductions
in an amount equal to one percent (1%) to twenty percent (20%) of the
employee's base pay (as elected by the employee) for each payroll period.
Participating employees will be able to purchase shares of Common Stock with
such accumulated payroll deductions at the end of a three-month offering period
at a purchase price equal to the lesser of eighty-five percent (85%) of the
fair market value of the Common Stock on: (i) the date the three-month offering
period begins; or (ii) the date the three-month offering period ends. Under the
Section 423 Plan, the fair market value of the shares of Common Stock which may
be purchased by any employee during any calendar year may not exceed $25,000.
The Company estimates that there are approximately 1,030 employees who
are potential participants in the Section 423 Plan, four of whom are currently
executive officers of the Company.
Since the amount of benefits to be received by each participant is
determined by his or her elections, the amount of future benefits to be
allocated to any individual or group of individuals under the Section 423 Plan
is not determinable. Similarly, the amount of benefits which would have been
received by or allocated to any individual or group of individuals for the 1998
fiscal year if the Section 423 Plan had been in effect is not determinable.
THE BOARD UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS APPROVE THE SECTION 423 PLAN.
The following summary of the Section 423 Plan is qualified in its
entirety by reference to the full text of the Section 423 Plan, a copy of which
will be made available to any shareholder upon written request.
SUMMARY OF THE SECTION 423 PLAN
PURPOSE. The purpose of the Section 423 Plan is to align employee and
shareholder long-term interests by facilitating the purchase of Common Stock by
employees and to enable employees to develop and maintain significant ownership
of Common Stock. An additional purpose of the Section 423 Plan is to comply
with the requirements of Section 423 of the Code, and thus to obtain for the
participants the tax advantages provided thereby (described below in the
section entitled "Certain Federal Income Tax Consequences").
ADMINISTRATION. The Section 423 Plan will be administered by the Board
or a committee appointed by the Board. The Board (or its committee) may make
such rules and regulations and establish such procedures for the administration
of the Section 423 Plan as it deems appropriate.
PARTICIPATION. Subject to certain procedural requirements, all United
States employees of the Company who work more than twenty hours per week will
be eligible to participate in the Section 423 Plan, except that employees who
are five percent (5%) or more shareholders of the Company or any subsidiary of
the Company will not be eligible to participate. Designations of corporations
participating in the Section
13
<PAGE> 16
423 Plan may be made from time to time by the Board from among the subsidiary
corporations of the Company, including corporations which become subsidiaries
after the adoption and approval of the Section 423 Plan.
PURCHASE OF SHARES. Pursuant to the Section 423 Plan, each eligible
employee will be permitted to purchase shares of the Common Stock through
regular payroll deductions in an aggregate amount equal to one percent (1%) to
twenty percent (20%) of the employee's base pay (as elected by the employee)
for each payroll period. Under the Section 423 Plan, the fair market value of
the shares of Common Stock which may be purchased by any employee during any
calendar year may not exceed $25,000.
STOCK PURCHASE PRICE. Except as discussed under "Restriction on
Transfer" below, participating employees will be able to purchase shares of
Common Stock with payroll deductions at the end of a three-month offering
period at a purchase price equal to the lesser of eighty-five percent (85%) of
the fair market value of Common Stock: (i) on the date the three-month offering
period begins; or (ii) on the date the three-month offering period ends.
NONTRANSFERABLE RIGHT TO PURCHASE. A right to purchase shares of
Common Stock which is granted to a participant under the Section 423 Plan is
not transferable other than by will or the laws of descent and distribution,
and is exercisable, during the participant's lifetime, only by the participant.
RESTRICTION ON TRANSFER. A participating employee may not sell, assign
or otherwise transfer (other than by will or the laws of descent and
distribution) any or all shares of Common Stock acquired under the Section 423
Plan before the expiration of one (1) year from the date on which the employee
purchased such shares of Common Stock. In addition, if an employee sells any
shares of Common Stock acquired under the Section 423 Plan less than three (3)
years from the date of purchase, the purchase price for any additional shares
purchased under the Section 423 Plan during the one-year period following such
sale will be equal to the full fair market value, rather than eighty-five
percent (85%) of such fair market value.
AMENDMENTS TO OR DISCONTINUANCE OF THE SECTION 423 PLAN. The Board may
from time to time amend or terminate the Section 423 Plan; provided, however,
that (i) no such amendment or termination may adversely affect the rights of
any participant without the consent of such participant and (ii) to the extent
required by Section 423 of the Code or any other law, regulation or stock
exchange rule, no such amendment shall be effective without the approval of
shareholders entitled to vote thereon. Additionally, the Board may make such
amendments as it deems necessary to comply with applicable laws, rules and
regulations.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING DISCUSSION ADDRESSES ONLY THE GENERAL FEDERAL INCOME TAX
CONSEQUENCES OF OPTIONS GRANTED PURSUANT TO THE SECTION 423 PLAN. IT DOES NOT
ADDRESS THE IMPACT OF STATE AND LOCAL TAXES, THE FEDERAL ALTERNATIVE MINIMUM
TAX, AND SECURITIES LAW RESTRICTIONS, AND IS NOT INTENDED AS TAX ADVICE TO
PARTICIPANTS IN THE SECTION 423 PLAN, WHO SHOULD CONSULT THEIR OWN TAX
ADVISORS. FURTHERMORE, THE TAX CONSEQUENCES ARE COMPLEX AND SUBJECT TO CHANGE,
AND A TAXPAYER'S PARTICULAR SITUATION MAY BE SUCH THAT SOME VARIATION OF THE
DESCRIBED RULES IS APPLICABLE.
The Section 423 Plan is intended to qualify as an "employee stock
purchase plan" as defined in Section 423 of the Code. Assuming such
qualification, a participant will not recognize any taxable income as a result
of participating in the Section 423 Plan, exercising options granted pursuant
to the Section 423 Plan or receiving shares of Common Stock purchased pursuant
to such options. A participant may, however, be required to recognize taxable
income as described below.
14
<PAGE> 17
If a participant disposes of any shares of Common Stock purchased
pursuant to the Section 423 Plan at least two years after the first day of the
applicable offering period and at least one year after the date of purchase
(such disposition, a "Qualifying Transfer"), or if he or she dies (whenever
occurring) while owning any shares purchased under the Section 423 Plan, the
participant generally will recognize ordinary income, for the taxable year in
which such disposition or death occurs, in an amount equal to the lesser of:
(i) the actual gain recognized upon the sale (the amount by which the sales
price for the shares exceeds the purchase price); or (ii) the fifteen percent
(15%) purchase price discount received under the Section 423 Plan, if
applicable. In the case of a Qualifying Transfer, (a) the basis of the disposed
shares will be increased by an amount equal to the amount of ordinary income so
recognized, and (b) the participant will recognize a long-term capital gain or
loss, as the case may be, equal to the difference between the amount realized
from the disposition of the shares and the basis for such shares.
If the participant disposes of any shares other than by a Qualifying
Transfer, the participant generally will recognize ordinary income in an amount
equal to the excess of the fair market value of the disposed shares on the date
of disposition over their purchase price. The amount of ordinary income will be
added to the participant's basis in the shares, and any additional gain or
resulting loss recognized on the disposition of the shares will be a capital
gain or loss. A capital gain or loss will be long-term if the participant's
holding period is more than twelve months; otherwise it will be short-term.
The Company will be entitled to a tax deduction equal to the amount of
compensation income recognized by the participant as a result of the
disposition. Otherwise, the Company will not be entitled to any tax deduction
with respect to the grant or exercise of options under the Section 423 Plan or
the subsequent sale by participants of shares purchased pursuant to the Section
423 Plan. A transfer by the estate of the participant of shares purchased by
the participant under the Section 423 Plan has the same federal income tax
effect on the Company as a Qualifying Transfer.
VOTE REQUIRED
Approval of the Section 423 Plan will require the affirmative vote of
a majority of the shares of Common Stock present, or represented by proxy, and
entitled to vote at the meeting. Under applicable Florida law, in determining
whether such proposal has received the requisite number of affirmative votes,
abstentions will be counted and will have the same effect as a vote against
this proposal 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 for this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" THIS PROPOSAL.
UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED BY
IVAX WILL BE VOTED IN FAVOR OF THE
EMPLOYEE STOCK PURCHASE PLAN.
INDEPENDENT AUDITORS
Arthur Andersen LLP, independent public accountants, was appointed by
the Board to audit IVAX's financial statements for 1999. 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.
15
<PAGE> 18
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
If a shareholder desires to bring business before the annual meeting,
the shareholder must follow procedures outlined in IVAX's by-laws. A copy of
these procedures is available upon request from the Secretary of IVAX, 4400
Biscayne Boulevard, Miami, Florida 33137. One of the procedural requirements in
the by-laws is timely notice in writing of the business the shareholder
proposes to bring before the meeting. Notice must be received not less than 60
days nor more than 90 days prior to the meeting.
If a shareholder wants to nominate a person for election to the Board
other than a director nominated by the Board, notice of the proposed nomination
must be received by the Secretary not less than 60 days nor more than 90 days
prior to the meeting. A copy of the by-law provisions governing the requirement
for notice is available upon request from the Secretary. The notice of
nomination is required to contain certain information about both the nominee
and the shareholder making the nomination. A nomination which does not comply
with the above procedure will be disregarded.
If a shareholder notifies IVAX of an intent to present a proposal at
IVAX's 2000 annual meeting of shareholders less than 60 days prior to the
meeting (and for any reason the proposal is voted upon at that annual meeting),
IVAX's proxy holders will have the right to exercise discretionary voting
authority with respect to the proposal, if presented at the meeting, without
including information regarding the proposal in its proxy materials.
Under the rules of the Securities and Exchange Commission, any
shareholder proposals intended to be presented at IVAX's 2000 annual meeting of
shareholders must be received by the Secretary no later than January 3, 2000,
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.
May 3, 1999
16
<PAGE> 19
(MAP)
WYNDHAM HOTEL
MIAMI-BISCAYNE BAY
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 Wyndham Hotel Miami-Biscayne Bay.
FROM MIAMI INTERNATIONAL AIRPORT:
Take Airport Exit to SR-112 East (Miami Beach/Downtown).
Approximately 4 miles, pass through toll booth (25 cents) 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 Wyndham Hotel Miami-Biscayne Bay, which is located on the
left side of the street at the OMNI International Mall.
<PAGE> 20
APPENDIX A
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 Neil Flanzraich, and
each of them severally, as proxies of the undersigned, each with the power to
appoint their 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, 1999, at the Annual Meeting of
Shareholders to be held on June 17, 1999, 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
1999 EMPLOYEE STOCK PURCHASE 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> 21
(continued from other side)
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS
FOR each nominee WITHHOLD AUTHORITY to vote for Mark Andrews; Ernst Biekert, Ph.D.; Charles M.
listed (except as all nominees listed. Fernandez; Jack Fishman, Ph.D.; Neil Flanzraich;
marked to the Phillip Frost, M.D.; Jane Hsiao, Ph.D. and Isaac
contrary). Kaye.
[ ] [ ] (INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided above.)
2. APPROVE 1999 EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned acknowledges receipt of the
accompanying Notice of Annual Meeting of Shareholders
and Proxy Statement for the June 17, 1999 meeting.
Dated: , 1999
------------------------------------
-------------------------------------------------
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.)
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>
