SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year
Ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Transition
period from to
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Commission File Number 0-26144
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INTERNATIONAL MUREX TECHNOLOGIES CORPORATION
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(Exact name of registrant as specified in its charter)
BRITISH COLUMBIA, CANADA NOT APPLICABLE
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2255 B. QUEEN STREET EAST, SUITE 828
TORONTO, ONTARIO M4E 1G3
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(Address, including zip code, of principal executive officers)
(519) 836-8016
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON SHARES, NO PAR VALUE
SHAREHOLDER RIGHTS PLAN
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No .
----- ------
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in the definitive proxy statement incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Registrant's outstanding Common
Shares held by non-affiliates of the Registrant as of March 5,
1998 was U.S. $146,495,755. There were 16,742,372 Common Shares
outstanding as of March 5, 1998.
DOCUMENTS INCORPORATED BY REFERENCE:
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None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The following table sets forth information concerning the
individuals serving on the Board of Directors including their
ages, positions and tenure with IMTC as of the date of March 12,
1998:
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NAME/POSITION AGE DIRECTOR SINCE
------------- ---- ---------------
GEORGE BRAZIER 57 March 11, 1998
Director
C. ROBERT CUSICK 51 February 3, 1989
Chief Executive Officer,
President and Director
J. TREVOR EYTON, O.C.(1) 63 January 21, 1997
Director
THOMAS L. GAVAN, M.D.(1) 68 April 17, 1990
Director
NORBERT J. GILMORE, 55 April 17, 1990
Ph.D.,M.D.(2)
Director
JAY A. LEFTON(1) 41 December 9, 1991
Director
HARTLAND M. MACDOUGALL, 67 January 21, 1997
CVO, O.C.(2)
Director
STANLEY E. READ, Ph.D., 57 April 17, 1990
M.D.(2)
Director
VICTOR A. RICE(2) 57 April 15, 1994
Director (previously a
director from April 17,
1990 to
November 30, 1992)
F. MICHAEL P. WARREN, Q.C. 62 June 28, 1989
Chairman and Director (previously a
director from June 5,
1986 to
August 27, 1987)
1 Member of the Audit Committee
2 Member of the Compensation Committee
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The Directors of IMTC are elected at each Annual Meeting and hold
office until the next Annual Meeting or until their successors
are appointed.
GEORGE BRAZIER has been a partner of the firm of DuMoulin Black,
Vancouver, British Columbia for more than the past five years.
He is also a member of the Board of Directors of United Compass
Resources Limited. DuMoulin Black has and is currently providing
legal counsel for the company in British Columbia.
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<PAGE>
C. ROBERT CUSICK has been President and Chief Executive Officer
(CEO) of IMTC since December 1, 1996 and Vice Chairman since
November 1993, having previously served as President and CEO of
IMTC from April 1990 to October 1993 and as Chief Financial
Officer from March 1995 to December 1996. He continues to serve
in various executive positions for a number of the Company's
subsidiaries. Mr. Cusick is a certified public accountant and
has served in various executive positions in manufacturing,
banking and real estate prior to joining the Company.
THE HONORABLE J. TREVOR EYTON, O.C. has served as a member of
the Canadian Senate since September 1990. In addition, Mr. Eyton
serves as the Senior Chairman of EdperBrascan Corporation. From
1962 to 1979 Mr. Eyton was a partner of the law firm Tory Tory
DesLauriers & Binnington of Toronto, Ontario. Mr. Eyton also
serves as a director of other companies such as General Motors of
Canada Limited, M. A. Hanna Company and Noranda Inc.
DR. THOMAS L. GAVAN, M.D. served as the Chairman of the Division
of Laboratory Medicine of The Cleveland Clinic Foundation, a
medical clinic in Cleveland, Ohio from 1985 until his retirement
on December 31, 1991. He is a member of the Board of Governors
of the College of American Pathologists. He is also a past
President of the National Committee for Clinical Laboratory
Standards.
DR. NORBERT J. GILMORE, PH.D., M.D. has been a Senior Physician
of the Royal Victoria Hospital, Montreal, Quebec since 1987, and
a member of its Division of Clinical Immunology since 1974. He
has been a member of the Faculty of Medicine at McGill University
in Montreal since 1974 and has been a Professor of Medicine since
1994. He has also been a Member of the McGill Centre for
Medicine, Ethics and Law since 1986. He was Chairman of the
National Advisory Committee on AIDS from 1983 to 1989, co-founder
of the Canadian Foundation for AIDS Research ("CanFAR"), its
President from 1988 to 1989, and was Chairman of the Expert
Committee on AIDS and Prisons of the Correctional Service of
Canada from 1992 to 1994.
JAY A. LEFTON has been a partner of the firm of Aird & Berlis,
Barristers and Solicitors, Toronto, Ontario since 1986, where he
specializes in corporate and securities law. He is a member of
the Ontario Biotechnology Advisory Board as well as a member of
the Board of Governors, the Commercial Developments Committee and
the Technology Transfer and Industrial Liaison Committee of Mount
Sinai Hospital, Toronto, Ontario. Mr. Lefton sits on the board
of directors of various charitable organizations. He is also a
member of the Board of Directors of Sumtra Diversified Inc. and
Harley Street Software, Ltd. Aird & Berlis has and is currently
providing legal counsel for the Company in Ontario.
HARTLAND M. MACDOUGALL CVO, O.C. recently retired as the Deputy
Chairman of London Life Insurance Company and London Insurance
Group Incorporated when it was sold to the Great West Life
Assurance Company. He was the former Chairman of Royal Trust and
related companies from 1984 to 1993 when it was sold to the Royal
Bank of Canada. Prior to that Mr. MacDougall was a career banker
with Bank of Montreal from 1953, serving as a director from 1974
to 1984 and the last four years as Vice Chairman.
DR. STANLEY E. READ, PH. D., M.D. has been the director of the
HIV/AIDS Comprehensive Care Program since 1988 and the Head of
the Division of Infectious Diseases since 1992 at The Hospital
for Sick Children in Toronto, Ontario. He has been Professor of
Pediatrics and Microbiology at the University of Toronto since
1990 and was an Associate Professor of Pediatrics and
Microbiology at the University of Toronto from 1980 to 1990. He
was the Director of the Infectious Disease Training Program at
The Hospital for Sick Children, Toronto, Ontario, between 1986
and 1990. He also has been an Associate in the Department of
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Medicine at the Toronto General Hospital since 1983 as well as an
Adjunct Professor at Rockefeller University in New York, New York
since 1980. He is on the Board of Directors of CanFAR and has
been the Chairman of its Scientific Advisory Committee since
1992.
VICTOR A. RICE has been a director of the Company since April 15,
1994, and had previously served as a director from April 17, 1990
to November 30, 1992. He has been Chief Executive and a director
of LucasVarity plc since 1996, having been Chairman and Chief
Executive Officer of Varity Corporation from 1980 to 1996. He
serves as a director of American Precision Industries, Inc.
F. MICHAEL P. WARREN, Q.C. a founder of IMTC, has served as
Chairman of the Board of the Company since April 1990. He has
also served in various executive positions for the Company's UK
and other subsidiaries since February 1992. Mr. Warren was a
partner of the firm of Owen, Bird, Barristers and Solicitors,
Vancouver, British Columbia from 1970 through January 1992. Mr.
Warren also serves as a Director of Biotechna Environmental
Technologies Corporation.
EXECUTIVE OFFICERS
The following table sets forth information concerning the
individuals serving as Executive Officers of IMTC:
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NAME AGE POSITION DIRECTOR
----- ---- --------- AND/OR
POSITION SINCE
--------------
F. MICHAEL P. WARREN 62 Chairman April 17, 1990
C. ROBERT CUSICK 51 President & CEO February 3, 1989
STEVEN C. RAMSEY 49 CFO and Vice March 1, 1995
President/
Controller
GUIDO GUIDETTI 47 Vice President December 3, 1996
R. PETER SILVESTON 48 Vice President December 3, 1996
CATHERINE M. 37 Vice President, May 1, 1997
BARDWICK Corporate
Communications
JILL A. GILMER 38 Corporate November 13, 1992
Secretary
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The career synopsis of all Executive Officers not listed below is
contained in the section entitled "Directors."
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<PAGE>
STEVEN C. RAMSEY has served as Chief Financial Officer since
December 1996 and as Vice President/ Controller since March 1995.
From May 1993 until August 1996, he served as Finance Director of
the Company's UK subsidiaries. Mr. Ramsey joined the Company as
Vice President, Finance of Murex Corporation in February 1992.
Prior to joining the Company, Mr. Ramsey served in various
management capacities with Sprint and The Molson Companies
Limited.
GUIDO GUIDETTI has served as Vice President since December 1996.
He has also served as a Director and General Manager-Commercial
Operations of the Company's UK subsidiaries since joining the
Company in November 1993. Mr. Guidetti is responsible for the
continued development and management of the Company's worldwide
marketing and distribution network. Mr. Guidetti has over 18
years experience in the diagnostic products industry. Prior to
joining the Company, Mr. Guidetti was Director of Commercial
Operations Europe for Syntex's SYVA Diagnostics. Mr. Guidetti
also served in various management capacities at Abbott
Diagnostics for seven years and at Johnson & Johnson for more
than eight years.
R. PETER SILVESTON has served as Vice President since December
1996. He has also served as a Director and General Manager of the
Company's UK subsidiaries since 1992. Mr. Silveston is
responsible for operations, research and development, information
systems and legal and intellectual property matters. With over
26 years in the health care industry, Mr. Silveston was a member
of the executive management team of Wellcome Diagnostics at the
time of the acquisition of the business by the Company in
February 1992. Prior to joining Wellcome Diagnostics in 1989, he
served in various management positions in the pharmaceutical
business of The Wellcome Foundation Limited.
CATHERINE M. BARDWICK has served as Vice President of Corporate
Communications since May 1997. Prior to joining the Company in
1997, she provided investor/public relations services to the
Company through Bardwick Consulting.
JILL A. GILMER has served as Corporate Secretary of IMTC since
November 1992. She has also served in various other positions
with subsidiaries of the Company since August 1985.
THE BOARD OF DIRECTORS
During the year ended December 31, 1997, the Board of Directors
held four meetings. Every director, with the exception of Victor
A. Rice, attended an average of 90% of the meetings of the Board
and the committees on which they serve. On four other occasions,
the Board unanimously consented in writing to various resolutions
pertaining to the Company's affairs.
The Company pays each Director, other than a Director who is an
officer or employee of the Company, an annual fee in the amount
of $5,000. In addition, each such Director is paid a meeting fee
of $1,500 for each meeting of the Board of Directors and each
committee meeting attended. They are also reimbursed for out-of-
pocket expenses associated with attending these meetings. Non-
employee directors are granted annual options to purchase 10,000
common shares as of the annual meeting of shareholders under the
Employee Equity Incentive Plan, see Item 11 "Executive
Compensation". During 1997, a total of $114,500 was paid to the
non-executive Directors of the Company pursuant to this
arrangement. Beginning in 1998, the annual retainer will be
increased to $15,000 and meeting fees will remain $1,500 per
meeting.
In December 1997, the non-employee members of the Board were
awarded a lump sum bonus of $60,000. Based upon survey
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information obtained regarding director compensation for
companies that are similar in size to the Company and to properly
address and account for the past five years, it was determined
that the existing compensation package to these Board members was
inadequate and had been for several years. The lump-sum payment
was made in order to offset inadequate Director fees for service
in past years and in 1997.
COMMITTEES OF THE BOARD
The Board of Directors has two standing committees to assist in
carrying out its obligations. Committee positions held during
1997 are set forth in the table titled "Directors". The
principal responsibilities of each committee are described below.
The Audit Committee, comprised of three independent Directors, is
primarily concerned with the effectiveness of the Company's
accounting policies and practices, financial reporting and
internal controls. Specifically, the Committee recommends to the
Board of Directors the firm to be appointed as the Company's
independent public accountants, subject to ratification by the
shareholders; reviews and approves the scope of the annual
examination of the books and records of the Company and its
subsidiaries and reviews the audit findings and recommendations
of the independent public accountants; considers the
organization, scope and adequacy of the Company's internal audit
staff and provides oversight with respect to accounting
principles employed in the Company's financial reporting. This
Committee met six times during 1997.
The Compensation Committee, currently comprised of four non-
employee Directors, oversees the Company's compensation and
executive benefit policies and programs, including administration
of the Amended and Restated 1993 Employee Equity Incentive Plan
and the Employee Stock Purchase Plan. It also recommends to the
Board of Directors annual salaries, bonuses and stock option
awards for officers and certain other key executives. This
committee met once during 1997 and unanimously consented in
writing, on three separate occasions, to various resolutions
pertaining to Committee affairs.
FILINGS UNDER SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
("Section 16(a)") requires Directors, Executive Officers and
persons, if any, owning more than ten percent of a class of the
Company's registered equity securities to file reports of
holdings and transactions of their shares with the Securities and
Exchange Commission ("SEC") and the Nasdaq National Market
System.
Based solely upon a review of the copies of the forms furnished
to the Company or written representations that no other reports
were required, the Company believes that during the preceding
year filings applicable to executive officers and directors were
met except for the following late filings on Form 4: Mr. Cusick's
open market purchase of 2,500 shares on March 4, 1997 was filed
August 20, 1997; sales from a previous option exercise by Dr.
Gavan of 7,500 shares on March 4, 1997, 2,500 shares on March 7,
1997 and 5,000 shares on March 10, 1997 were filed on August 20,
1997; an option exercise and sale by Ms. Gilmer of 2,000 shares
on June 6, 1997 was filed on August 7, 1997; sales from a
previous option exercise by Dr. Gilmore of 2,500 shares on March
11, 1997 and of 2,500 shares on June 10, 1997 were filed on
August 20, 1997 and September 8, 1997, respectively; an open
market purchase by Mr. Guidetti of 1,105 shares on March 31, 1997
was filed on December 1, 1997; sales from a previous option
exercise by Mr. Lefton of 5,000 shares on March 11, 1997, 2,500
shares on March 12, 1997 and 12,500 shares on March 13, 1997 were
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<PAGE>
filed on August 20, 1997; and an open market purchase by Mr.
Silveston of 2,519 shares was reported on December 1, 1997.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or
accrued by the Company during the Company's three most recent
fiscal years to the Company's Chief Executive Officer and the
four most highly compensated executive officers during the fiscal
year ended December 31, 1997.
=====================================================================
SUMMARY COMPENSATION TABLE(1)
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ANNUAL COMPENSATION
-------------------------------------------------
BONUS ($) OTHER ANNUAL
----------------------- COMPEN-
EXECUTIVE SALARY SATION
OFFICER YEAR ($) CASH(3) NON-CASH(4) ($)(5)
------------------------------------------------------------------------
C. Robert 1997 $269,439 $927,500 $363,236
Cusick 1996 230,625 163,407
President/CEO 1995 225,000
F. Michael P. 1997 238,236 833,825 363,236 $ 55,750
Warren 1996 230,625 163,407 56,290
Chairman 1995 225,000
Steven C. 1997 134,365 375,000 85,073
Ramsey 1996 126,034 39,315
CFO & V.P./ 1995 121,800
Controller
Guido 1997 213,851 544,017 133,763
Guidetti 1996 187,747 67,065
Vice
President
R. Peter 1997 167,467 344,804 104,750
Silveston 1996 144,822 56,866
Vice
President
------------------------------------------------------------------------
==========================================================================
SUMMARY COMPENSATION TABLE(1)
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LONG TERM
COMPENSATION
---------------
AWARDS(2)
---------- ALL
SECURITIES OTHER
UNDERLYING COMPEN-
EXECUTIVE OPTIONS/SARS SATION
OFFICER YEAR (#) ($)(6)
-----------------------------------------------------------------------
C. Robert 1997 22,700 $20,500
Cusick 1996 250,400 17,216
President/CEO 1995 20,760
F. Michael P. 1997 22,700 102,853
Warren 1996 250,400 14,922
Chairman 1995
Steven C. 1997 5,300 18,271
Ramsey 1996 31,800 12,078
CFO & V.P./ 1995 12,180
Controller
Guido 1997 8,400 42,770
Guidetti 1996 35,200 37,549
Vice
President
R. Peter 1997 6,600 33,493
Silveston 1996 31,300 28,964
Vice
President
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(1) Amounts paid in currencies other than U.S. dollars have been
converted at applicable exchange rates.
(2) As of December 31, 1997, there were no shares of restricted stock
outstanding. A portion of the options granted in 1996 and 1997 are
not exercisable, see table entitled "Aggregated Options/SAR
Exercises in Last Fiscal Year and Year-End Options SAR Value."
(3) Amount includes cash payout based on criteria set forth in the
Senior Management Incentive Plan.
(4) Represents the value of a stock bonus awarded by the Compensation
Committee in September 1996 to executive officers and other key
managers following the settlement by the Company of its HCV patent
litigation against Chiron Corporation and Johnson & Johnson/Ortho
Diagnostic Systems, Inc. and their respective affiliates. During
the four years of this litigation throughout Europe and Australia,
the executive officers and key managers were under threat of
personal litigation and significant liability in regard to the
matters in dispute exposing them to adverse judgements in damages.
For purposes of this table, the shares were valued at $6 each based
on the fair market value of the Company's common shares on the date
of the award. The underlying shares were issued during 1997.
(5) Includes the amount of perquisites and other personal benefits paid
in excess of the lesser of $50,000, or 10% of the aggregate salary
and bonus.
(6) Amounts paid by the Company to tax-qualified defined contribution
retirement plan or to UK "Money Purchase" pension scheme.
=========================================================================
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The following table includes individual options/stock appreciation rights
(SARs) granted to the Chief Executive Officer and other named executives
during 1997.
=========================================================================
OPTION/SAR GRANTS IN LAST FISCAL YEAR
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NUMBER PERCENT POTENTIAL
OF OF TOTAL REALIZABLE VALUE
OPTIONS OPTIONS/ EXERCISE AT ASSUMED ANNUAL
/ SARS SARS OR BASE EXPIRATION RATES OF STOCK
NAME GRANTED GRANTED PRICE DATE PRICE
(#) TO APPRECIATION FOR
EMPLOYEES OPTION TERM ($)
IN FISCAL ----------------
YEAR
5.00% 10.00%
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C. Robert 22,700 7.51% $7.125 3/19/2002 $50,117 $105,597
Cusick
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F. 22,700 7.51% $7.125 3/19/2002 50,117 105,597
Michael
P. Warren
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Steven C. 5,300 1.75% $7.125 3/19/2002 11,701 24,655
Ramsey
-------------------------------------------------------------------------
Guido 6,600 2.78% $7.125 3/19/2002 18,546 39,076
Guidetti
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R. Peter 22,700 2.18% $7.125 3/19/2002 14,572 30,702
Silveston
=========================================================================
The following table shows the value of all options held by the Chief
Executive Officers and other named executives as of December 31, 1997. No
options were exercised by the Chief Executive Officer or the other named
executives during 1997.
=========================================================================
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTIONS SAR VALUE
-------------------------------------------------------------------------
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SAR AT YEAR-END (#) OPTIONS/SAR AT YEAR-END ($)
---------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------
C. Robert 225,200 47,900 $1,562,325 $241,506
Cusick
F. Michael 225,200 47,900 1,562,325 241,506
P. Warren
Steven C. 25,900 11,200 179,681 56,500
Ramsey
Guido 27,600 16,000 191,475 77,400
Guidetti
R. Peter 25,650 12,250 177,947 58,584
Silveston
=========================================================================
MANAGEMENT CONTRACTS
No management functions of the Company are performed to any substantial
degree by a person other than the Directors or executive officers of the
Company listed in the "Summary Compensation Table" and no other executive
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management contracts exist, other than those described below.
During 1997, the Company amended and restated the employment contracts with
Messrs Cusick and Warren. The agreements each have similar terms and
conditions. The agreements have initial terms of three years with
automatic renewal in one year increments thereafter unless notification is
provided. The base salary for Mr. Warren was set at his then current base
salary of $238,625 per annum. Mr. Cusick's base salary was set at $265,000
providing an increase of his base salary based on his assumption of the
duties of Chief Executive Officer. Both agreements allow for cost of
living increases equal to the percentage increase in the Consumer Price
Index beginning January 1, 1998. These agreements incorporate two-year non-
competition and non-solicitation provisions of the Company's customers and
employees. If the Company terminates either of these executives for other
than cause, they will be entitled to receive twenty-four months base
compensation. These agreements also include provisions for deferral of
compensation and for compensation pursuant to a change in control as
further described in the section entitled "Termination of Employment or
Change in Control".
In July 1995, the Company entered into an employment agreement with Mr.
Ramsey. This agreement has an initial one year term with automatic renewal
in one year increments thereafter unless notification is provided. Under
the terms of the agreement, base salary was set at $122,960 and will be
adjusted annually by an amount equal to the Consumer Price Index starting
January 1, 1996. This agreement incorporates one-year non-competition and
non-solicitation provisions of the Company's customers and employees. If
the Company terminates Mr. Ramsey for other than cause, he will be entitled
to receive an amount equal to his current annual base salary. Mr. Ramsey's
contract also includes provisions for compensation pursuant to a change in
control as further described in the section entitled "Termination of
Employment or Change in Control".
Messrs. Guidetti and Silveston do not currently have employment contracts.
However, UK employment policies dictate that they are entitled to twelve
months pay in lieu of notice in the event the Company terminates their
employment. In the event that either resigns his position, each is
required to provide the Company with six months notice. In addition, by
letter agreement dated January 12, 1996, the Company has provided for
compensation pursuant to a change in control as further described in the
section entitled, "Termination of Employment or Change in Control."
TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
In addition to the termination provisions of the employment contracts
described above, IMTC adopted change of control provisions (the
"Provisions") for its executive officers and certain other key managers in
September 1995 and subsequently amended certain provisions relating to US
executives in November 1997. The Company believes that these Provisions
will protect and enhance the Company's ability to maintain a sound and
vital management team despite a possible change in control. The Provisions
guarantee salary for 299% of the 5 year annual average of all compensation
for Messrs. Warren and Cusick and other benefits (medical, vacation,
disability, etc.) for a period of twenty-four months. For Messrs. Ramsey,
Guidetti, Silveston and other key employees the Provisions guarantee base
salary and other benefits for twenty-four months. In addition, to the
extent that the change of control payment amount to a recipient who is a
U.S. taxpayer would exceed the maximum amount to avoid an excise tax under
the Internal Revenue Code of 1986 as amended (the"Code"), the payment
amount would be increased to cover the excise tax liability. The Provisions
also incorporate terms that enable an acquiring company to retain key
managers. All of the Provisions have been incorporated into existing
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employment agreements and continue with the term of each. The total amount
payable to all participants will be set aside in trust upon a triggering
event pursuant to the terms of the Provisions.
OTHER COMPENSATION MATTERS
Except to the extent set forth herein, no other compensation was paid by
IMTC to executive officers during the 1997 fiscal year, including personal
benefits and securities or property paid or distributed, which compensation
is not offered on the same terms to all full time employees other than
those covered by a collective agreement. The value of any such other
compensation, paid under terms available to all full-time employees
however, does not exceed the lesser of 10% of the total compensation or
$50,000 for any executive officer named in the Summary Compensation Table,
except as disclosed therein.
INDEBTEDNESS OF DIRECTORS AND NAMED EXECUTIVE OFFICERS OF THE COMPANY
In February 1997, Drs. Gavan, Gilmore and Read each borrowed $60,000 from
the Company in order to exercise expiring options. Each borrowing was
evidenced by a promissory note and payment of the principal amount and
interest was due in full on December 15, 1997. Interest accrued on unpaid
balances at an annual rate of 8.89%, the Company's current borrowing rate.
No balances remained outstanding as of December 31, 1997.
In December 1997, Mr. Ramsey borrowed $131,250 from the Company in order to
pay the tax liability associated with bonus payments made in the form of
shares the Company holds in another public company. The borrowing is
evidenced by a promissory note and payment of the principal amount and
interest is due in full on December 15, 1998. Interest accrues on unpaid
balances at an annual rate of 8.89%, the Company's current borrowing rate.
EMPLOYEE BENEFIT PLANS
The Company provides a range of benefit plans to all employees throughout
the world. Following is a brief summary of the plans in which executive
officers may participate.
PROFIT SHARING PLANS
The US 401(k) Plan is a tax-qualified, defined contribution plan
administered by an administration committee appointed by the Board of
Directors of a wholly-owned US subsidiary of the Company. Employees are
eligible to make contributions on a pre-tax basis, receive an allocation or
employer matching and profit sharing contributions at the next scheduled
enrollment after being employed for three months. A participant is always
fully vested in his or her own contributions and investment earnings on
those contributions. A participant will vest in the profit sharing and
matching contributions made on his or her behalf, and earnings thereon, at
the rate of 20% per year beginning after his or her first year of service
and become fully vested after five years of service. Generally, a
participant will not receive distributions from the US 401(k) Plan until
termination of employment, disability or death.
The UK "money purchase" pension scheme (the "UK Plan") has been approved by
the Inland Revenue under Chapter 1, Part XIV of the Income and Corporation
Taxes Act of 1988. All permanent employees are eligible to join the UK Plan
on the day they become employed and are between the ages of 18 and 60. Each
participant is required to contribute an amount equal to 2.5% of base
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salary. The company contributes 7.5% of base salary to each participants
account. Additional contributions can be made for which the Company
matches up to 2.5% of base salary. The total contribution paid by the
participant cannot exceed the lower of 15% of annual earnings or a figure
determined by Inland Revenue annually. A participant is always fully
vested in his or her own contributions and investment earnings on those
contributions. A participant will vest in the Company's matching
contributions beginning after his or her second year as a member of the UK
Plan. Generally, a participant will not receive Company distributions from
the UK Plan unless he or she reaches retirement age or transfers all
amounts to another qualified plan.
EMPLOYEE EQUITY INCENTIVE PLAN
In May 1993, the Company's Board of Directors adopted the International
Murex Technologies Corporation Employee Equity Incentive Plan (the "1993
Plan") which was approved by Shareholders in June 1993 and further amended
by Shareholder approval in June 1994. The purpose of the 1993 Plan is to
provide long-term compensation incentives for superior performance in the
interest of Shareholders by key employees of the Company, and its
subsidiaries, as well as equity-based compensation for members of the Board
of Directors. The 1993 Plan is intended to strengthen the Company's long
term financial performance and its ability to attract and retain management
employees and directors upon whose judgment, initiative and efforts the
Company's continued success, growth and development are dependent. The
maximum number of common shares of the Company which may be issued pursuant
to awards under the 1993 Plan is no more than 2,000,000 shares.
The Compensation Committee determines the terms and conditions of the
options granted under the 1993 Plan, including the type of option and the
time and manner in which each option becomes exercisable. Generally, the
exercise period for any option, including any extension which the Committee
may from time to time decide to grant, may not exceed ten years from the
date of grant. The option price per share will be determined by the
Committee at the time any option is granted and may not be less than the
fair market value or, in the case of an incentive stock option granted to a
ten percent Shareholder, 110% of the fair market value, on the date the
option is granted.
As amended in June 1994 and beginning with the 1994 annual meeting of the
Company's Shareholders, each non-employee member of the Board of Directors
of the Company in office immediately following such meeting will
automatically be granted an option to purchase 10,000 common shares at a
price per share equal to the closing price of the Company's shares on the
day prior to grant. Each option granted to a director is immediately
exercisable and expires on the tenth anniversary of the date of grant.
As of December 31, 1997, the 1993 Plan had 1,640,650 options outstanding to
approximately 46 individuals of which options held by the executive
officers represent 42% of the outstanding options.
1990 STOCK OPTION PLAN
The 1990 Stock Option Plan (the "1990 Plan") provided that Directors,
officers and employees of IMTC and its majority owned subsidiaries were
eligible to receive options (or rights) to purchase common shares of the
Company within a fixed period of time and at a specified price per share,
subject to any necessary regulatory approvals. The 1993 Plan replaced the
1990 Plan and no additional options or rights will be granted under the
1990 Plan.
As of December 31, 1997, the 1990 Plan had no options outstanding.
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<PAGE>
QUALIFIED EMPLOYEE STOCK PURCHASE PLAN (ESPP)
The Company's ESPP became effective July 1, 1993 upon approval by the
Company's Shareholders. It was amended and restated in 1996. The ESPP,
which is intended to qualify under Section 423 of the Internal Revenue Code
of 1986, as amended, (the "Code") is designed to encourage all eligible
employees of the Company and its subsidiaries, where permitted by
applicable law, to acquire an equity interest in the Company through the
purchase of common shares at a price equal to 85% of the closing market
price the day prior to the purchase. The Company believes that employees
who participate in the ESPP will have a closer identification with the
Company by virtue of their ability as shareholders to participate in and
benefit from its future growth. Four executive officers purchased a total
of 2,561 shares by participating in the ESPP during 1997.
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<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SHARES HELD BY DIRECTORS
The following table sets forth as of March 12, 1998 the number and
percentage of common shares of the Company owned beneficially by each
Director and by all Directors and Executive Officers of the Company as a
group:
---------------------------------------------------------------------------
Percentage
of
Outstanding
No. of Common Common
Shares Shares if
Percentage Acquirable all Options
Number of of upon Exercise Owned or
Outstanding Outstanding of Options Controlled
Shares Common Owned or are
Name and Location Owned(2) Shares Controlled(2) Exercised(1)
----------------- --------- -------- ------------ ------------
GEORGE BRAZIER 0 0% 0 0%
Vancouver, British
Columbia
C. ROBERT CUSICK 82,847 .5% 261,750 2.0%
Pittsburgh,
Pennsylvania
J. TREVOR EYTON 0 * 20,000 0.1%
Toronto, Ontario
THOMAS L. GAVAN 0 * 60,000 0.4%
Bay Village, Ohio
NORBERT J. GILMORE 1,500 * 60,000 0.4%
Montreal, Quebec
JAY A. LEFTON 800 * 60,000 0.4%
Toronto, Ontario
HARTLAND M. 0 * 20,000 0.1%
MACDOUGALL
Toronto, Ontario
STANLEY E. READ 5,500 * 60,000 0.4%
Toronto, Ontario
VICTOR A. RICE 25,000 0.1% 60,000 0.5%
Buffalo, New York
F. MICHAEL P. 336,544(4) 2.0% 261,750 3.5%
WARREN
Anguilla, BWI
ALL OFFICERS AND 525,901 3.1% 1,000,600(3) 5.6%
DIRECTORS AS A
GROUP (14 persons)
*Less than 0.1%
-----------------------
1 The stock ownership information is based upon the number of common
shares outstanding and the number of common shares which may be
acquired upon the exercise of outstanding options (as applicable) as
of 60 days after March 12, 1998.
2 Unless otherwise indicated, each person has sole voting and investment
powers with respect to the shares specified opposite his name.
3 Does not include 34,300 common shares which may be acquired upon the
exercise of unvested options that were granted March 19, 1997.
4 Includes 109,715 shares owned of record by Proteus BioResearch
Corporation, of which Mr. Warren is entitled to 18,286 common shares;
23,900 shares owned of record by Hygeia Diagnostics Corporation, of
which Mr. Warren owns one-half of the outstanding common shares; and
158,284 shares owned of record by QGB Investments Limited, of which
Mr. Warren is entitled to 22,421.
-13-
<PAGE>
---------------------------------------------------------------------------
BENEFICIAL OWNERS OF MORE THAN 5% OF VOTING STOCK
To the knowledge of the Directors and executive officers of the Company, no
person beneficially owned, directly or indirectly, or exercised control or
direction over shares representing more than 5% of the outstanding common
shares of the Company as of March 12, 1998, unless otherwise noted, except
the following:
---------------------------------------------------------------------------
No. of
Outstanding
Common Shares Percentage of
Owned or Outstanding
Name Controlled Common Shares
----- --------------- -------------
The Estate of Edward J. 1,983,013(1) 11.8%
DeBartolo, Sr.
7620 Market Street
Youngstown, Ohio
Edward J. DeBartolo, Jr. 2,533,450(1) 15.1%
7620 Market Street
Youngstown, Ohio
Citicorp and its wholly- 1,069,117(2) 6.4%
owned subsidiaries,
Citibank, NA(US);
399 Park Avenue
New York, New York
University of Notre Dame 1,000,000 5.9%
Notre Dame, Indiana
Oracle Partners, L.P. and 866,500(3) 5.1%
Oracle Institutional
Partners, L.P.
Larry Feinberg, General Partner
712 Fifth Avenue, 45th Floor
New York, New York
---------------------------------
1 Based solely upon information furnished to the Company on Schedule 13D
dated November 12, 1996. Edward J. DeBartolo, Jr. and Marie Denise
DeBartolo York are co-executors of The Estate of Edward J. DeBartolo,
Sr. and as such disclaim beneficial ownership of these shares except
to the extent of their presently indeterminate pecuniary interest.
2 Based solely upon information furnished to the Company on Schedule 13G
dated February 13,1998 including data as of December 31, 1997.
---------------------------------------------------------------------------
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None, except as disclosed in Item 11 " Executive Compensation".
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized:
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By: /s/ C. Robert Cusick
-----------------------------------
C. Robert Cusick, Vice Chairman, Chief
Executive Officer, President and Director
DATE: March 27, 1998
------------------
