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 [ ]
[X] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] 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 MEETING OF SHAREHOLDERS
The date, time and place of the annual shareholders' meeting of IVAX
Corporation are as follows:
Date: Thursday, June 15, 2000
Time: 10:00 a.m.
Place: Wyndham Hotel
1601 Biscayne Boulevard
Miami, Florida
Matters to be voted on:
1. Election of eight directors
2. Amendment to our Articles of Incorporation to increase the number of
authorized shares of common stock
3. Any other matters properly brought before the shareholders at the
meeting
Only shareholders of record at the close of business on April 17, 2000
are entitled to notice of and to vote at the meeting or any adjournments
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
CAROL J. GILLESPIE
SECRETARY
Miami, Florida
May 15, 2000
-----------------------------------------
PLEASE SIGN, DATE AND RETURN YOUR PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE
-----------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
Record Date..................................................................1
Note on Stock Split..........................................................1
Agenda.......................................................................1
Quorum.......................................................................1
Voting.......................................................................1
Revocation of Proxy..........................................................1
Election of Directors........................................................2
Director Compensation........................................................3
Meetings and Committees of the Board of Directors............................3
Section16(a) Beneficial Ownership Reporting Compliance.......................4
Certain Relationships and Related Transactions...............................5
Stock Ownership of Management and Principal Security Holders.................5
Executive Compensation.......................................................6
Employment Agreements........................................................7
Change in Control Agreements.................................................8
Stock Options................................................................9
Performance Graph............................................................10
Report of Compensation and Stock Option Committee............................10
Compensation Committee Interlocks and Insider Participation..................12
Amendment to Articles of Incorporation.......................................12
Independent Auditors.........................................................14
Shareholder Proposals for 2001 Annual Meeting................................14
Expenses of Solicitation.....................................................14
Other Business...............................................................14
<PAGE>
IVAX CORPORATION
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of IVAX
Corporation in connection with its solicitation of proxies for use at the annual
meeting of shareholders to be held at 10:00 a.m. on Thursday, June 15, 2000 at
the Wyndham Hotel, 1601 Biscayne Boulevard, Miami, Florida, and at any
adjournments thereof. Mailing of the proxy statement and the accompanying proxy
card to shareholders will commence on or about May 15, 2000.
RECORD DATE
As of the record date, April 17, 2000, we had 156,386,315 shares of our
common stock outstanding. Record holders of our common stock on April 17, 2000
are entitled to one vote for each share held on all matters to be considered at
the annual meeting.
NOTE ON STOCK SPLIT
We split our common stock on a 3 for 2 basis effective on February 22,
2000. All shares, share prices and related figures in this proxy statement are
restated to reflect the stock split.
AGENDA
1. Election of eight directors
2. Amendment to our Articles of Incorporation to increase the number
of authorized shares of common stock
3. Any other matters properly brought at the meeting
QUORUM
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.
VOTING
We will follow your voting instructions. If there are no voting
instructions, we will vote signed proxies "for" the Board's nominees and "for"
the amendment to the Articles of Incorporation. The persons named in the proxy
will use their discretion on any other matters. With respect to the proposal to
elect eight directors, you may vote in favor of all nominees or withhold your
votes as to all or specific nominees. The eight director nominees who receive
the highest number of votes will be elected. To amend the Articles of
Incorporation, a majority of the votes cast must be in favor of the amendment,
provided a quorum exists. Votes that are withheld or abstentions will be
excluded from the vote, but they will count for purposes of determining whether
a quorum is present. Brokers that do not receive instructions from beneficial
owners are permitted to exercise voting discretion with respect to the election
of directors, but not with respect to the amendment. Broker non-votes will have
no effect on the vote, but will be counted in determining whether a quorum is
present.
REVOCATION OF PROXY
Your proxy may be revoked at any time prior to its exercise by giving
written notice to our Secretary at 4400 Biscayne Boulevard, Miami, Florida
33137, by delivering a later dated proxy, or by voting in person at the meeting.
1
<PAGE>
ELECTION OF DIRECTORS
Our Board of Directors 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 currently directors. Each has agreed to be named in the proxy
statement and to serve as director if elected. If any of the nominees withdraws
or is unable to serve as a director of IVAX, then the proxy will be voted for
such other person who is designated a nominee by the Board of Directors.
MARK ANDREWS Director since 1987
Mark Andrews, age 49, 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. Director since 1991
Ernst Biekert, age 75, 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 Director since 1998
Charles M. Fernandez, age 38, has been the President, Chief Executive
Officer, and a director of Big City Radio, Inc. (broadcasting/internet) since
1999. He has also been the Chairman of the Board of Continucare Corporation
(integrated health care) since 1996 and was its Chief Executive Officer from
1996 to 1999. He has also been Vice-Chairman of HealthCare2Net Solutions
(internet solutions) since 1999. From 1985 to 1996, he was the Executive Vice
President and a director of Heftel Broadcasting Corporation (radio
broadcasting). From 1998 to 1999 he was a director of Frost Hanna Capital Group,
Inc. (investment company).
JACK FISHMAN, PH.D. Director since 1987
Jack Fishman, age 69, 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. He served as our Chief Scientific Officer from 1991 to 1995, as a Vice
Chairman of the Board from 1991 to 1997 and as our President from 1988 to 1991.
Dr. Fishman served as a Research Professor of Biochemistry and Molecular Biology
at the University of Miami from 1988 to 1992.
NEIL FLANZRAICH Director since 1997
Neil Flanzraich, age 56, has served as our Vice Chairman and President
since May 1998. He was a shareholder and served as Chairman of the Life Sciences
Legal Practices Group of Heller Ehrman White & McAuliffe from 1995 to 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
2
<PAGE>
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).
PHILLIP FROST, M.D. Director since 1987
Phillip Frost, age 63, has served as our Chairman of the Board of
Directors and Chief Executive Officer since 1987. He served as our 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. Director since 1995
Jane Hsiao, age 52, has served as our Vice Chairman-Technical Affairs
since February 1995, as our Chief Technical Officer since July 1996, and as
Chairman, Chief Executive Officer and President of DVM Pharmaceuticals, Inc.,
our veterinary products subsidiary, since March 1998. From 1992 until February
1995, she served as our Chief Regulatory Officer and Assistant to the Chairman,
and as Vice President-Quality Assurance and Compliance of Baker Norton
Pharmaceuticals, Inc., our 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 Director since 1990
Isaac Kaye, age 70, has served as our Deputy Chief Executive Officer
since 1990 and as Chairman of Norton Healthcare Limited, our principal United
Kingdom pharmaceutical subsidiary, since 1990.
DIRECTOR COMPENSATION
During 1999, each director who was not employed by us received an
annual fee of $10,000 for his or her service as a director. Beginning in 2000,
this annual fee was increased to $15,000. In addition, each director is
reimbursed for expenses incurred in attending board and committee meetings.
Pursuant to our 1994 Stock Option Plan, non-employee directors automatically are
granted each year, on the first business day following our annual meeting of
shareholders, non-qualified options to purchase 7,500 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 six meetings during 1999. During 1999, 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.
3
<PAGE>
AUDIT COMMITTEE - 6 MEETINGS
<TABLE>
<CAPTION>
FUNCTION MEMBERS
<S> <C>
o Review adequacy of internal systems of o Charles M. Fernandez (Chairman)
accounting controls o Mark Andrews
o Recommend appointment of independent auditors o Jack Fishman, Ph.D.
o Meet with independent auditors and internal o Jane Hsiao, Ph.D.
auditors regarding their examination of the books
and records
o Review financial statements
o Review management's disclosures
o Review findings and recommendations of auditors
o Reviewing other matters regarding financial
affairs and internal policies and procedures
</TABLE>
COMPENSATION AND STOCK OPTION COMMITTEE - 6 MEETINGS
<TABLE>
<CAPTION>
FUNCTION MEMBERS
<S> <C>
o Recommend or approve compensation of directors, o Mark Andrews (Chairman)
executive officers and other highly paid employees o Ernst Biekert, Ph.D.
o Review employee benefit programs o Charles M. Fernandez
o Authorize stock option grants and establish terms
of stock option agreements
</TABLE>
REGULATORY COMPLIANCE COMMITTEE - 2 MEETINGS
<TABLE>
<CAPTION>
FUNCTION MEMBERS
<S> <C>
o Review compliance with regulatory requirements o Ernst Biekert, Ph.D. (Chairman)
o Review quality assurance functions of worldwide o Jack Fishman, Ph.D.
operations. o Jane Hsiao, Ph.D.
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
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 of our equity securities with the Securities and Exchange Commission and
the American Stock Exchange. Directors, executive officers and ten percent (10%)
shareholders are required to furnish us with copies of all Section 16(a) reports
they file. Based on a review of the copies of such reports furnished to us and
written representations from our directors and executive officers that no other
reports were required, we believe that, during 1999, our directors, executive
officers and ten percent (10%) shareholders complied with all Section 16(a)
filing requirements applicable to them, except that one Form 4 was inadvertently
filed late by each of Mark Andrews and Jack Fishman, and Rafick G. Henein
inadvertently filed late his Form 5.
4
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Whitman Education Group, Inc. ("Whitman") leases approximately 7,885
square feet of office space from us in Miami, Florida at an annual rental of
$147,221. The lease may be terminated by either party upon 180 days notice.
Certain of our executive officers and directors serve as directors of Whitman.
In addition, Dr. Frost is a principal shareholder of Whitman.
We paid $1,637,453 to PharmAir Corporation ("PharmAir") for use of an
airplane in 1999 and intend to make additional payments to PharmAir for use of
the airplane in 2000. PharmAir is indirectly beneficially owned by Dr. Frost.
As of March 31, 1999, BASF Corporation ("BASF") owned more than five
percent (5%) of our outstanding common stock. On November 19, 1999, we purchased
6,832,650 shares of our common stock from BASF for $12.00 per share. The closing
price of the common stock on that date was $13.67. We borrowed fifty million
dollars ($50,000,000) from Frost-Nevada Limited Partnership to pay for part of
the purchase of the stock from BASF. The loan has a term of fourteen (14) months
and bears simple interest at the rate of ten percent (10%) per year. In
connection with this transaction, we also granted to Frost-Nevada Limited
Partnership a warrant to purchase seven hundred fifty thousand (750,000) shares
of common stock at a price of $12.00 per share, exercisable immediately and
expiring seven (7) years from the date of grant.
Big City Radio, Inc. is negotiating to lease approximately 2,000 square
feet of office space from us in Miami, Florida at an annual rental of
approximately $42,000. The lease may be terminated by either party upon 30 days
notice. One of our directors serves as an officer and director of Big City
Radio, Inc.
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SECURITY HOLDERS
The following table indicates, as of March 31, 2000, information about
the beneficial ownership of our common stock by (1) each director, (2) each
executive officer named in the "Summary Compensation Table," (3) by all
directors and executive officers as a group, and (4) and by each person who we
know beneficially owns more than 5% of our 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 55,200(2) *
Ernst Biekert, Ph.D. 60,000(3) *
Charles M. Fernandez 172,500(3) *
Jack Fishman, Ph.D. 2,995,363(4) 1.92%
Neil Flanzraich 312,293(5) *
Phillip Frost, M.D. 24,478,454(6) 15.56%
Jane Hsiao, Ph.D. 4,905,394(7) 3.13%
Isaac Kaye 401,250(3) *
Rafick G. Henein, Ph.D. 355,514(8) *
All directors and executive 33,846,017(9) 21.29%
officers as a group (10 persons)
- --------------------
* 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.
(2) Includes 7,500 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2000 and 4,200 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.
5
<PAGE>
(3) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2000 as follows: Dr. Biekert
(60,000), Mr. Fernandez (22,500) and Mr. Kaye (356,250).
(4) Includes 30,000 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2000. Dr. Fishman disclaims
beneficial ownership of an additional 13,800 shares held by his wife.
(5) Includes 307,500 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2000 and 1,404 shares held for Mr.
Flanzraich's benefit under the IVAX Corporation Employee Savings Plan.
(6) Includes 4,209,334 shares held directly, 2,328 shares held for Dr. Frost's
benefit under the IVAX Corporation Employee Savings Plan, 356,250 shares
which may be acquired pursuant to stock options exercisable within 60 days
of March 31, 2000, 19,160,542 shares held by Frost-Nevada Limited
Partnership ("FNLP") and 750,000 shares which may be acquired by FNLP upon
exercise of a warrant. 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 244,551 shares held by his wife. Dr. Frost's
business address is 4400 Biscayne Boulevard, Miami, Florida 33137.
(7) Includes 1,476,427 shares held as trustee for the benefit of certain
family members, 412,500 shares which may be acquired pursuant to stock
options exercisable within 60 days of March 31, 2000 and 3,059 shares held
on Dr. Hsiao's behalf under the IVAX Corporation Employee Savings Plan.
(8) Includes 309,375 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2000 and 220 shares held for Dr.
Henein's benefit under the IVAX Corporation Employee Savings Plan.
(9) Includes all of the shares of common stock, identified in notes 1 through
7 above, that may be acquired pursuant to stock options exercisable within
60 days of March 31, 2000, plus 109,374 additional shares that may be
acquired pursuant to stock options exercisable within 60 days of March 31,
2000.
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by us during 1999 to the Chief Executive Officer
and to each of the four highest paid executive officers other than the Chief
Executive Officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------- -------------
SHARES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ------------- ------------
($) ($) ($) (#) ($)(1)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 1999 575,000 316,250(2) 0 0 4,800
CHIEF EXECUTIVE OFFICER 1998 575,000 0 0 225,000 4,800
1997 575,000 0 0 0 4,800
Isaac Kaye (3) 1999 541,716 287,500 * 0 0
DEPUTY CHIEF EXECUTIVE OFFICER 1998 550,301 0 * 225,000 0
1997 521,520 0 * 0 0
Neil Flanzraich (4) 1999 500,000 275,000(2) 0 0 4,800
PRESIDENT 1998 296,154 147,754 0 600,000 4,800
1997 -- -- 0 -- --
Jane Hsiao, Ph.D. 1999 400,000 270,000(2) * 0 4,800
CHIEF TECHNICAL OFFICER 1998 338,462 200,000 * 300,000 4,800
1997 299,808 25,000 * 150,000 4,800
Rafick G. Henein, Ph.D. (5) 1999 635,123 279,900(2) 0 56,250 4,800
SENIOR VICE PRESIDENT 1998 613,500 75,000 * 112,500 4,800
1997 204,365 200,000 109,708 375,000 4,800
</TABLE>
6
<PAGE>
* Value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
the executive officer.
(1) The amounts set forth in the "All Other Compensation" column represent
matching contributions made by us under the IVAX Corporation Employee
Savings Plan, an employee retirement plan maintained under Section 401(k)
of the Internal Revenue Code.
(2) The amount included in "bonus" for 1999 includes a retention bonus of 5%
of 1999 base salary, which was paid to all our employees who were employed
in the United States for the period from July 1, 1998 through June 30,
1999, excluding those employees subject to collective bargaining
agreements or other retention programs.
(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. For Dr. Henein, the amount
included in "salary" for each year includes additional cash compensation
of $38,500 payable pursuant to his employment agreement and the amount
included in "Other Annual Compensation" for 1997 represents taxable
relocation expenses and a $100,000 payment to cover the loss on the sale
of his former residence.
EMPLOYMENT AGREEMENTS
In November 1997, we 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, our 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, we entered into an employment agreement with Dr. Henein
pursuant to which he serves as our Senior Vice President 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 $200,000 and he was
granted options to purchase 375,000 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. We 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, we entered into an employment agreement with Dr. Hsiao
pursuant to which she serves as our Chief Technical Officer. 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.
In May 1998, we entered into an employment agreement with Mr.
Flanzraich pursuant to which he serves as our Vice Chairman and President.
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.
7
<PAGE>
CHANGE IN CONTROL AGREEMENTS
We have 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.
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 we
provide 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 our common stock by a person or group; (2) a change in the majority of our
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 our assets. Exceptions are provided for certain transactions, including
those where our existing shareholders 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 us through
the six month anniversary of the change in control; and will be entitled to
continued participation in our 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 us
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 or her 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 our welfare benefit plans for the full three-year 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, we will "gross-up" the officer's
compensation for all federal, state and local income and excise taxes and any
penalties and interest.
8
<PAGE>
STOCK OPTIONS
The following table sets forth information concerning stock option
grants made during 1999 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 1999
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE VALUE
SHARES TOTAL AT ASSUMED ANNUAL RATES OF
UNDERLYING 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. 0 0 - - - -
Isaac Kaye 0 0 - - - -
Neil Flanzraich 0 0 - - - -
Jane Hsiao, Ph.D. 0 0 - - - -
Rafick G. Henein, Ph.D. 56,250 6.3 8.9167 6/03/06 204,187 475,842
</TABLE>
The following table sets forth information concerning stock option
exercises during 1999 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 $17.1667 on December 31, 1999.
STOCK OPTION EXERCISES IN FISCAL YEAR 1999
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Phillip Frost, M.D. 0 0 628,125 196,875 1,939,871 1,891,418
Isaac Kaye 0 0 628,125 196,875 1,939,871 1,891,418
Neil Flanzraich 0 0 157,500 450,000 1,771,258 5,100,030
Jane Hsiao, Ph.D. 0 0 459,375 328,125 2,087,520 3,165,645
Rafick G. Henein, Ph.D. 0 0 309,375 234,375 3,467,599 2,460,559
</TABLE>
9
<PAGE>
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on the common stock for 1995 through 1999 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, 1994 and the reinvestment of all dividends.
PERFORMANCE GRAPH HERE
<TABLE>
<CAPTION>
YEAR-END 1994 1995 1996 1997 1998 1999
-------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
IVAX Corporation 100 150 54 36 66 136
Dow Jones Pharmaceuticals Index 100 164 206 320 475 424
Dow Jones Equity Market Index 100 138 169 227 292 351
</TABLE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
The compensation of our executive officers, including the Chief
Executive Officer, is determined by the Compensation and Stock Option Committee
of the Board of Directors, which is presently composed of three non-employee
directors. The Committee seeks to ensure that our 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. The
Committee therefore favors forms of compensation that will take maximum
advantage of our strengths and will enable those who succeed in building
shareholder value to share in the value that they have helped to create.
The Committee believes that a critical component of compensation for
our executives is the award of stock options at the time the executive joins us
and periodically thereafter. The Committee believes that providing executives
with opportunities to acquire significant stakes in our growth and prosperity
through the grant of stock options will enable us to attract and retain
qualified and experienced executive officers.
The Committee has implemented Guidelines Regarding Exercise of Stock
Options applicable to all managers, scientists and other professionals,
including all our executive officers, 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
10
<PAGE>
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 our success.
In January of 2000, the Compensation Committee approved the 1999
Management Incentive Compensation Plan, which provides for the award of
incentive bonuses and non-qualified stock options to our senior managers. The
plan provides for the establishment of goals at the beginning of the year and
the award of cash bonuses and stock options at the end of the year based on the
manager's achievement of his or her goals for the year and on the performance of
the company and the manager's business unit.
Prior to the approval of this plan, we did not have a formal
compensation plan and we believe that this plan will help us meet our objectives
of attracting, retaining and motivating managers with competitive compensation
opportunities, paying for performance, and building and encouraging the
ownership of our shares.
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 our executive officers. 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 our financial performance.
Stock options represent a significant portion of total compensation for
our executive officers. Options are generally awarded to executive officers at
the time that they join us 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 our common stock increases. Generally, grants vest in
equal amounts over a four-year period and have seven or ten year terms.
Executives must be employed by us at the time of vesting in order to exercise
the options. Grants of stock options to executive officers are generally made by
the Committee upon the recommendation of the Chief Executive Officer based on
the level of an executive's position with us, an evaluation of the executive's
past and expected performance, the number of outstanding and previously granted
options, past compliance with our guidelines, the company's performance and
discussions with the executive. Stock options were granted to executive officers
in January 2000 for their contributions to the company's outstanding financial
results for 1999.
CHIEF EXECUTIVE OFFICER. For 1999, the Committee approved Dr. Frost's
base salary of $575,000 and bonus of $287,500, on the basis of the magnitude of
his responsibilities, his ability to influence our financial performance, and
our performance during 1999. 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. In January of 2000, the
Committee approved a grant of 450,000 stock options to Dr. Frost for his
performance in 1999, which is not reflected on the table for the Stock Option
Grants In Fiscal Year 1999, because these stock options were granted in 2000.
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. Qualifying performance-based compensation is not subject to
the limitation if certain requirements are satisfied. Based upon applicable
regulations, we believe that compensation expenses relating to options granted
under our stock option plans will not be subject to the Section 162(m)
limitations. At this time, we do not intend to qualify other compensation paid
to 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 our compensation strategies and future decisions involving executive
compensation.
11
<PAGE>
The Committee continually evaluates our compensation policies and
procedures with respect to its executive officers.
COMPENSATION AND STOCK OPTION COMMITTEE:
MARK ANDREWS (CHAIRMAN)
ERNST BIEKERT, PH.D.
CHARLES M. FERNANDEZ
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Charles M. Fernandez is the Chairman of the Board of Continucare
Corporation and serves on the Compensation and Stock Option Committee of our
Board. Phillip Frost, M.D. serves on the Board of Directors of Continucare
Corporation and is an executive officer and director of ours.
AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED SHARES
The Board of Directors believes it is in our best interest to approve a
proposal to amend our Articles of Incorporation ("Articles") to increase the
number of shares of common stock we are authorized to issue from 250 million to
350 million. We ask that you approve the following resolution to amend our
Articles of Incorporation to increase the number of authorized shares.
PROPOSED RESOLUTION
RESOLVED, that Article III of the company's Articles of Incorporation is amended
to read as follows:
ARTICLE III - CAPITAL STOCK
The aggregate number of shares which the Corporation shall have the
authority to issue is 350,000,000 shares of Common Stock, par value $0.10
per share.
REASONS FOR THE PROPOSAL
Approval of the proposal will give us continued flexibility to:
/bullet/ Split our stock or issue stock dividends
/bullet/ Pursue growth opportunities through acquisitions
/bullet/ Provide equity-based incentives to our employees
FUTURE STOCK SPLITS: Earlier this year we split our common stock on a 3
for 2 basis, following a significant increase in the market price for our
shares. Although approximately 51 million shares were used for that purpose, we
did not increase the number of our authorized shares before effecting the split,
which was issued in the form of a stock dividend. We may not be able to effect
another stock split without an amendment to the Articles, due to the number of
shares currently outstanding and those reserved for issuance under our
convertible notes, outstanding warrants, and various employee benefit plans. We
cannot assure you that our stock price will continue to increase or that the
Board will declare another stock split at any price or at all. Approval of this
proposal, though, will give us the flexibility to maintain a reasonable stock
price by permitting future stock splits or stock dividends, if the Board deems
it appropriate. Approval of the proposed amendment at this time will help avoid
the expense and delay of holding a special shareholders meeting or having to
wait for the next annual meeting if the Board decides to enact a future stock
split.
12
<PAGE>
SUPPORT FOR OUR GROWTH STRATEGY: Approval of the proposed amendment
also will support our growth strategy. We have acquired a number of companies to
broaden our product lines, expand our geographic market presence, add scientific
expertise and new technologies, and otherwise enhance our competitive position.
We have paid for some of these acquisitions with shares of common stock, which
enables us to conserve our cash, gives the selling shareholders an ongoing stake
in the success of the combined enterprises, and in some instances enables us to
treat the transaction as a pooling of interests. Our strategy includes
evaluating future acquisition opportunities as they arise, and structuring each
transaction in a manner that will be most advantageous to us and to the selling
shareholders. Approval of the proposal will give us continued flexibility in
determining the optimal form of consideration to use for future acquisitions,
whether common stock, cash, or a combination of both.
EQUITY-BASED INCENTIVE COMPENSATION: Approval of the proposed amendment
will allow us to continue to offer equity-based incentive compensation to our
employees and directors. Such compensation may include stock options and
restricted stock, as well as stock that our employees purchase under our
retirement savings plan and our employee stock purchase plan. Equity-based
compensation is an important element of our compensation program because it
helps align our employees' interests with yours by tying a significant portion
of their pay to increases in the stock's value.
NO FURTHER APPROVAL BEFORE ISSUANCE AND NO PROPORTIONATE SUBSCRIPTION RIGHTS
If this proposal is approved, the Board of Directors can issue any of
these shares without your further approval, unless your approval is required by
law or stock exchange rules.
In addition, you will not have any rights to subscribe to any of the
shares on a proportionate basis. As a result, the issuance of these shares could
reduce your proportionate ownership share of IVAX.
ANTI-TAKEOVER IMPACT
We have not proposed the increase in the number of authorized shares
with the intention of using the additional shares for anti-takeover purposes. We
could, however, use these shares to make more difficult or to discourage an
attempt to gain control of IVAX. Doing so might discourage an attempted
change-in-control that could result in a higher price for your shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT TO THE
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES.
13
<PAGE>
INDEPENDENT AUDITORS
Arthur Andersen LLP, independent public accountants, was appointed by
the Board to audit our financial statements for 2000. This firm has acted as our
independent public accountants 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 you.
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
If you want to bring business before the 2001 annual meeting of
shareholders, you must follow the procedures outlined in our by-laws. A copy of
these procedures is available upon request from our Secretary at our executive
office. One of the procedural requirements in the by-laws is timely notice in
writing of the business you propose to bring before the meeting. Notice must be
received not less than 60 days nor more than 90 days prior to the meeting. If
notice is timely received and in compliance with all the procedures, then our
proxy holders will have the right to exercise discretionary voting authority
with respect to the proposal, without including information regarding the
proposal in our proxy materials.
If you want to include a shareholder proposal in the proxy statement
for the 2001 annual meeting of shareholders, it must be delivered to our
Secretary at our executive office before January 15, 2001 in order to be
considered for inclusion in the proxy statement for that meeting.
EXPENSES OF SOLICITATION
The cost of this solicitation will be borne by us. In addition to the
use of the mail, our regular employees may solicit proxies personally or by
telephone or facsimile. We 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
At the date of mailing of this proxy statement, we are not aware of any
business to be presented at the annual meeting other than the proposals
discussed above. If other proposals are properly brought before the meeting, any
proxies returned to us will be voted as the proxyholders see fit.
You can obtain a copy of our Annual Report on Form 10-K for the year
ended December 31, 1999 at no charge by writing to us at Investor Relations,
4400 Biscayne Boulevard, Miami, Florida 33137.
May 15, 2000
14
<PAGE>
IVAX CORPORATION
4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I (whether one or more of us) appoint Phillip Frost, M.D. and Neil Flanzraich
and each of them separately, as my proxies, each with the power to appoint his
substitute, and authorize each of them to vote as designated on the reverse
side, all of my shares of Common Stock of IVAX Corporation (the "Company") held
of record by me at the close of business on April 17, 2000, at the Annual
Meeting of Shareholders to be held on June 15, 2000, and at any adjournment of
the meeting, and, in their discretion, to vote my shares on any other business
as may properly come before the meeting.
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED BY ME. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF ALL DIRECTOR NOMINEES AND "FOR" THE AMENDMENT TO THE ARTICLES OF
INCORPORATION.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued and to be signed on other side)
<PAGE>
(continued from other side)
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS
<S> <C> <C>
FOR each nominee WITHHOLD AUTHORITY to vote Mark Andrews; Ernst Biekert, Ph.D.;
listed (except as for all nominees listed Charles M. Fernandez; Jack Fishman, Ph.D.;
marked to the Neil Flanzraich; Phillip Frost, M.D.; Jane
contrary) Hsiao, Ph.D.and Isaac Kaye.
[ ] [ ] (INSTRUCTION: To withhold authority to vote
for any individual nominee, draw a line
through such nominee's name.
<CAPTION>
2. AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
I acknowledge receipt of the accompanying
Notice of Annual Meeting of Shareholders
and Proxy Statement for the June 15, 2000
meeting.
Dated: _____________________________, 2000
__________________________________________
Signature
__________________________________________
Signature if held jointly
(Please sign exactly as name or names
appear on this Proxy. When shares are held
by joint tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by
president or other authorized officer. If
a partnership, please sign in partnership
name by authorized person. Please date the
Proxy.)
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. Postage is not
necessary if mailed in the United States.
</TABLE>
