SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / 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 Rule 14(a)-12
BIOSYNTECH, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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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:
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(4) Date Filed:
-2-
BIOSYNTECH, INC.
475 BOULEVARD ARMAND-FRAPPIER
LAVAL, QUEBEC, CANADA H7V 4B3
--------------
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 12, 2001
--------------
To the Holders of Common Stock of BioSyntech, Inc. and
Holders of Exchangeable Preferred Stock of Bio Syntech Canada, Inc.:
We invite you to attend our annual meeting of stockholders on July
12, 2001, at 2:00 p.m. eastern standard time, at the Hilton Laval ,2225
Autoroute des Laurentides, Laval, Quebec (Tel:1-800-363-7940). At the annual
meeting, you will hear an update on our operations, have a chance to meet some
of our directors and executives and act on the following matters:
1. To elect two Class I directors to our board of directors to
serve for a three-year term;
2. To approve an amendment to our employee stock option incentive
plan to increase the total number of shares of our common
stock available for issuance under such option plan from
2,500,000 shares to 3,900,000 shares;
3. To ratify the appointment of Ernst & Young LLP as our
independent auditors for the fiscal year ending March 31,
2002; and
4. To consider and act upon such other business as may properly
come before the annual meeting and any adjournment thereof.
This booklet includes this formal notice of the annual meeting and
the proxy statement. The proxy statement tells you more about the agenda and
procedures for the annual meeting. It also describes how our board of directors
operates and gives personal information about our director nominees.
Stockholders of record at the close of business on June 19, 2001
will be entitled to vote at the annual meeting. In addition, holders of record
of shares of exchangeable preferred stock of Bio Syntech Canada, Inc. as of the
close of business on June 19, 2001 have voting rights in that number of shares
of our common stock equal in number to the number of shares of such exchangeable
preferred stock held. Even if you only own a few shares, we want your shares to
be represented at the annual meeting. I urge you to complete, sign, date, and
return your proxy card, if you hold shares of our common stock, or your voting
instruction card, if you hold shares of exchangeable preferred stock, promptly
in the enclosed envelope.
We have also provided you with the exact place and time of the
annual meeting if you wish to attend in person.
Dr. Amine Selmani
President and Chief Executive Officer
June 20, 2001
Laval, Quebec
BIOSYNTECH, INC.
475 BOULEVARD ARMAND-FRAPPIER
LAVAL, QUEBEC, CANADA H7V 4B3
(450) 686-2437
PROXY STATEMENT
--------------------------------
GENERAL INFORMATION
This proxy statement contains information related to the annual
meeting of stockholders of BioSyntech, Inc. to be held on Thursday, July 12,
2001, at 2:00 p.m. eastern standard time, at the Hilton Laval, 2225 Autoroute
des Laurentides, Laval, Quebec, and any adjournment thereof. This proxy
statement was first mailed to our stockholders and holders of exchangeable
preferred stock on approximately June 22, 2001.
ABOUT THE ANNUAL MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, stockholders will hear an update on our
operations, have a chance to meet some of our directors and executives and will
act on the following matters:
1) To elect two Class I directors to our board of directors to
serve for a three-year term;
2) To approve an amendment to our employee stock option incentive
plan to increase the total number of shares of our common stock
available for issuance under such option plan from 2,500,000
shares to 3,900,000 shares;
3) To ratify the appointment of Ernst & Young LLP as our
independent auditors for the fiscal year ending March 31, 2002;
and
4) To consider and act upon such other business as may properly
come before the annual meeting and any adjournment thereof.
WHO MAY VOTE
Stockholders of BioSyntech, Inc., as recorded in our stock register
on June 19, 2001, may vote at the annual meeting. As of that date, we had
29,182,250 shares of common stock outstanding. We have only one class of voting
shares. All shares in this class have equal voting rights of one vote per share.
Holders of record of shares of exchangeable preferred stock of Bio Syntech
Canada Inc. as of June 19, 2001, have voting rights in the number of shares of
our common stock held in trust equal to the number of shares of such
exchangeable preferred stock held by them. References to "stockholders" in this
proxy statement include holders of exchangeable preferred stock, unless the
context otherwise requires. References to "proxy card" in this proxy statement
should be interchanged with "voting instruction card" if you hold shares of
exchangeable preferred stock, unless the context otherwise does not require.
HOW TO VOTE
You may vote in person at the annual meeting or by proxy. We
recommend that you vote by proxy even if you plan to attend the annual meeting.
You can always change your vote at the annual meeting.
Our board of directors is asking for your proxy. Giving your proxy
means that you authorize us, or the trustee if you hold shares of exchangeable
preferred stock, to vote your shares at the annual meeting in the manner you
direct. You may vote for all, some, or none of our director nominees. You may
also vote for or against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card but do not specify
how to vote, we will vote your shares in favor of all our director nominees, the
approval of the increase of shares reserved for issuance under our employee
stock option incentive plan and the ratification of the appointment of Ernst &
Young LLP as our independent auditors.
You may receive more than one proxy card depending on how you hold
your shares. If you hold shares through someone else, such as a broker, you may
get materials from it asking how you want to vote. The latest proxy card
received from you will determine how your shares will be voted.
REVOKING A PROXY
The execution of a proxy or sending voting instructions to the
trustee, as the case may be, will in no way affect your right to attend the
annual meeting and to vote in person. Any proxy or voting instructions to the
trustee executed and returned by you may be revoked at any time thereafter if
written notice of revocation is given to our Secretary to the address given
above prior to the vote to be taken at the annual meeting, or by execution of a
subsequent proxy or giving voting instruction to the trustee that is presented
to the annual meeting or if you attend the annual meeting and vote by ballot,
except as to any matter or matters upon which a vote shall have been cast
pursuant to the authority conferred by such proxy or voting instruction to the
trustee prior to such revocation.
QUORUM
The holders of a majority of the outstanding shares of our common
stock, whether present in person or represented by proxy, will constitute a
quorum for each of the matters identified in the notice of this year's annual
meeting, as well as for any other matters that may come before the annual
meeting.
VOTES NEEDED
Broker "non-votes" and the shares as to which a stockholder abstains
from voting are included for purposes of determining whether a quorum of shares
is present at a meeting. A broker "non-vote" occurs when a nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner. Brokers that do not
receive instructions from the stockholders are entitled to vote on the election
of directors, the approval of the amendment to our employee stock option
incentive plan and the ratification of the auditors.
A plurality of the votes cast is required for the election of our
Class I directors. In tabulating the vote on the election of directors,
abstentions and broker "non-votes" will be disregarded and will have no effect
on the outcome of such vote.
2
The affirmative vote of a majority of the votes cast is required to
approve the adoption of the amendment to our employee stock option incentive
plan and the proposal to ratify the appointment of Ernst & Young LLP. In
tabulating the votes on the proposals to approve the adoption of the amendment
to our employee stock option incentive plan and ratify the appointment of Ernst
& Young LLP, abstentions and broker non-votes are not considered shares entitled
to vote on the applicable proposals and are not included in determining whether
the adoption of the amendment to our employee stock option incentive plan and
the proposal to ratify the appointment of Ernst & Young LLP are approved.
ATTENDING IN PERSON
Only our stockholders and their proxy holders, holders of
exchangeable preferred stock and their trustee, and our invited guests may
attend the annual meeting. If you wish to attend the annual meeting in person
but you hold your shares through someone else, such as a broker, you must bring
proof of your ownership and an identification with a photo to the annual
meeting. For example, you could bring an account statement showing that you
owned our shares as of June 19, 2001 as acceptable proof of ownership.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information as of June 19, 2001
regarding the beneficial ownership of shares of our common stock by our current
directors and executive officers as defined in Item 402(a)(2) of Regulation S-B
and those persons or entities who, to our knowledge, beneficially own more than
5% of our common stock. For the purposes of calculating beneficial ownership,
the shares of common stock beneficially owned by Messrs. Denis N. Beaudry,
Pierre Alary, Jean-Yves Bourgeois, and Pierre Ranger represent shares of our
common stock issuable upon the exercise of stock options exercisable within
sixty days after June 19, 2001. The address of all of our officers and directors
and owners of more than 5% of our common stock is 475 Boulevard Armand-Frappier,
Laval, Quebec, Canada H7V 4B3, unless otherwise specified.
Shares of Common Percentage of Common
Name and Address of Stock Beneficially Stock Beneficially
Beneficial Owner Owned Owned
- ------------------------- ------------------ --------------------
9083-1496 Quebec Inc. 7,640,000 26.2%
Amine Selmani 9,087,500 30.5%
Denis N. Beaudry 50,000 *
3744 Jean Brillant, Suite 6332,
Montreal, Quebec, Canada
H3T 1P1
Pierre Alary 50,000 *
1101 Parent Street, Saint-Bruno,
Quebec, Canada J3V 6E6
Jean-Yves Bourgeois 50,000 *
1010 Sherbrouke West,
Suite 1100, Montreal, Quebec, Canada
H3A 2R7
3
Shares of Common Percentage of Common
Name and Address of Stock Beneficially Stock Beneficially
Beneficial Owner Owned Owned
- ------------------------- ------------------ --------------------
Pierre Ranger 150,000 *
2655 boul. Daniel Johnson,
Laval, Quebec, Canada H7P 5Y2
Marie-Claire Pilon 0 --
2-111 Mackay Street, Ottawa,
Ontario, Canada K1M 2B4
All Officers and Directors 9,412,500 31.9%
as a group (8 persons)
The percentages shown with an `*' mean that the director or
executive officer owns less than 1.0% of the outstanding shares of our common
stock. The information shown above also includes rights to acquire shares of
common stock through the exchange of exchangeable preferred stock.
Dr. Selmani owns all of the outstanding shares of 9083-1496 Quebec
Inc. and has shared voting and dispositive power with respect to the 7,640,000
shares of exchangeable preferred stock owned by 9083-1496 Quebec Inc. Dr.
Selmani also may be deemed the beneficial owner of 312,500 shares of common
stock that would be held by him upon exchange of 312,500 shares of exchangeable
preferred stock issuable upon exercise of options. Monique Jarry, spouse of Dr.
Selmani, holds 1,085,000 shares of exchangeable preferred stock, including
200,000 shares issuable upon the exercise of options, which are also included in
the beneficial ownership of Dr. Selmani reported above.
Denis N. Beaudry is the representative of Polyvalor, Inc. on our
board of directors. The shares reflected in the table above do not include
1,072,000 shares of exchangeable preferred stock beneficially owned by
Polyvalor, which are exchangeable on a one-for-one basis for shares of our
common stock, as to which Mr. Beaudry disclaims beneficial ownership. Please see
"Certain Relationships and Related Transactions" for a description of the
agreements under which Polyvalor is entitled to designate a member to our board
of directors.
The information for all Officers and Directors as a group includes
the share ownership information of the officers who are not specifically
identified in the table.
4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our amended and restated certificate of incorporation provides for
the classification of our board of directors into three classes. The current
term of the Class I directors will expire at this year's annual meeting and when
their successors are duly elected and qualified. Of the nominees for election,
Mr. Pierre Alary is currently a Class I director. Management has no reason to
believe that any of its two nominees will be unable or unwilling to serve as a
director, if elected. Should any nominee not be a candidate at the time of this
year's annual meeting (a situation which we do not anticipate to happen),
proxies may be voted in favor of the remaining nominees and may be also voted
for a substitute nominee selected by our board of directors.
Unless authority is specifically withheld, proxies will be voted for
the election of the nominees named below, to serve as Class I directors for a
term of office to expire at the annual meeting of stockholders in 2004 and until
their successors have been duly elected and qualified. The Class II and Class
III directors will continue to serve for the remainder of their respective
terms, with the Class II directors having a term that will expire at the 2002
annual meeting of stockholders and the Class III directors having a term that
will expire at the 2003 annual meeting of stockholders.
The following table lists our nominees as directors. There are no
family relationships among the directors, director nominees and our executive
officers.
Nominee Proposed Class Age
------- -------------- ---
Pierre Alary Class I 44
Serge Savard Class I 55
PIERRE ALARY, CA - Mr. Alary has been a director of BioSyntech since
February 2000. Since August 1998, Mr. Alary has been a Vice President for
finance and information technologies at Bombardier Transport, a designer,
manufacturer and distributor of rail cars. Prior to joining Bombardier
Transport, Mr. Alary was a Senior Partner at Ernst & Young LLP from April 1988
to August 1998, specializing in the biotechnology industry. As Senior Partner,
Mr. Alary was in charge of providing audit and consulting services to major
manufacturing companies and high technology companies, more specifically
biotechnology companies. He has also participated in a number of special
financing engagements for manufacturing companies in respect of equity
financing.
SERGE SAVARD - Since 1993, Mr. Savard has been a partner with
Thibault, Messier, Savard, a real estate investment firm. Prior to 1993, Mr.
Savard served in various capacities with the Montreal Canadiens Hockey Club,
including as Vice President and General Manager. Mr. Savard is deeply involved
in several aspects of amateur sports and is associated with several
philanthropic organizations.
Class I directors must be elected by a plurality of the votes cast,
in person or by proxy, at this year's annual meeting.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ELECTION OF EACH OF ITS NOMINEES.
5
INFORMATION REGARDING OTHER DIRECTORS
AMINE SELMANI PHD, 43 - CLASS III DIRECTOR - Dr. Selmani has served
as our Chairman of the -Board, and President since February 2000, as our Chief
Executive Officer from February 2000 to September 2000 and starting January
2001, and Chairman of the Board, President and Chief Executive Officer of Bio
Syntech Canada and its predecessor corporation since its inception in November
1997. Prior to founding the predecessor corporation of Bio Syntech Canada in May
1995, Dr. Selmani had eight years of teaching experience at the Chemical
Engineering Department and Biomedical Institute of Ecole Polytechnique as an
Associate Professor from 1992 to 1997 and as an Assistant Professor from 1989 to
1992. Dr. Selmani received his Bachelor of Science and Master of Science Degrees
in Physical Chemistry in 1979 and 1981, respectively, from the University of
Bordeaux, France. He also obtained his Doctoral and Post Doctoral Degrees in
Materials Science from the University of Montreal in 1985 and Dalhousy
University in 1988, respectively.
DENIS N. BEAUDRY, 57 - CLASS III DIRECTOR - Mr. Beaudry has been a
director of BioSyntech since February 2000. Mr. Beaudry has been President and
general manager of Polyvalor, Montreal, Quebec, Canada, a limited partnership
formed by the Ecole Polytechnique for the purpose of commercializing the
intellectual property of the Ecole Polytechnique. His role consists of enhancing
the value of research results for commercial use by means of start-up of
high-tech companies in which Polyvalor holds a participation or interest. Since
1984, he has occupied the position of director of the Centre de Developpement
Technologique of the Ecole Polytechnique whose sphere of activities includes
technology transfer, licensing of technology and software, joint creation with
private industry of laboratories and research centers, strategic alliances,
research partnerships, industrial chairs and the emergence of high technology
enterprises. Mr. Beaudry was President of the Quebec Association of University
Research Directors in 1992, and is at present a member of the Board of Directors
of Lumenon Innovative Lightwave Technologies, Inc., the Centre des Technologies
Textiles, the College Rosemont, the Corporation de Financement de l'Institut de
Cardiologie de Montreal, the Centre de Technologies du Gaz Naturel, the
Corporation Commerciale de Materiaux Composites, the Centre de Developpement
Rapide de Produits et de Procedes, and the firms Sinlab Inc., Phytobiotech Inc.,
Polyplan Inc., Odotech Inc. and COESI Inc.
JEAN-YVES BOURGEOIS, 33 - CLASS II DIRECTOR - Mr. Bourgeois has been
a director of BioSyntech since February 2000. Since July1999, Mr. Bourgeois has
been a director and Senior Vice President in charge of corporate finance for
eastern Canada of Canaccord, a securities broker/dealer. Prior to joining
Canaccord, Mr. Bourgeois served as a Chief Financial Officer for Aeterna
Laboratories from July 1998 to July 1999. From July 1997 to July 1998, Mr.
Bourgeois had also been in charge of small capital market development,
specializing in high technology and biotechnology industries, for TD Securities,
a securities broker/dealer. From 1993 to July 1997, Mr. Bourgeois was a partner
at Gordon Capital, a securities broker/dealer, where he specialized in high
technology and biotechnology industries and became the head of corporate finance
for eastern Canada in May 1996.
PIERRE RANGER MD, 45 - CLASS II DIRECTOR - Dr. Ranger has been a
director of BioSyntech since February 2000. Since 1991, Dr. Ranger has been a
teaching professor in the orthopedic residents program at the CMDP Sacred Heart
Hospital of Montreal. Dr. Ranger received his Doctoral of Medicine Degree from
the University of Montreal in 1979 and Diploma of Sports Medicine in 1996.
MARIE-CLAIRE-PILON, 46 - CLASS I DIRECTOR - Ms. Pilon has been a
director of BioSyntech since November 2000. From September to December 2000, Ms.
Pilon served as our Chief Executive Officer. Ms Pilon is a pharmacist and holds
an Executive Masters in Business Administration from the University
6
of New Haven, Connecticut. From 1999 to August 2000, Ms. Pilon served as
business development consultant to private and publicly traded companies. In
that role, she assumed the responsibilities of Executive Vice President of
Business Development for Nastech Pharmaceutical Company, Inc., a publicly traded
nasal drug delivery company. From 1996 to 1999, Ms. Pilon was Vice-President of
Biovail Corporation International, a full service pharmaceutical company engaged
in the formulation, registration, clinical testing and manufacture of drug
products utilizing advanced drug delivery technologies. From 1994 to 1995, Ms.
Pilon was Executive Director for Business Development for the Benefit Research
Group, a Quintiles company specializing in Health Economics and Outcomes
Research. From 1981 to 1994, Ms. Pilon held positions of increasing
responsibilities within the industry. As described under the "Legal Proceedings"
section, Marie-Claire Pilon has commenced an action against BioSyntech and our
President, Dr. Selmani, alleging that she was wrongfully dismissed as an
employee. Ms. Pilon's term as a Class I director terminates during this year's
annual meeting of stockholders and until her successor has been elected and
qualified. She is not a director nominee in this year's annual meeting of
stockholders.
MEETINGS AND COMMITTEES
Our board of directors held two formal meetings during the fiscal
year ended March 31, 2001 and, from time to time, our board of directors also
acted by unanimous written consent. All the members of the board of directors
attended both meetings. Our board has an audit committee and a compensation
committee. We do not have a standing nominating committee. The customary
functions of such committee are performed by the entire board of directors.
The compensation committee administers our employee stock option
incentive plan and makes recommendations concerning salaries and incentive
compensation for executive officers, employees and consultants. For the fiscal
year ended March 31, 2001, the compensation committee was composed of Mr.
Bourgeois (Chairman), Mr. Alary and Dr. Ranger.
AUDIT COMMITTEE REPORT
The audit committee reviews our financial statements and accounting
policies, resolves potential conflicts of interest, receives and reviews the
recommendations of the our independent auditors and confers with the our
independent auditors with respect to the training and supervision of internal
accounting personnel and the adequacy of internal accounting controls. For the
fiscal year ended March 31, 2001, the members of our audit committee were Mr.
Alary (Chairman), Mr. Beaudry and Mr. Bourgeois. The audit committee has adopted
a written audit committee charter that is attached hereto as Appendix A.
The audit committee held four meetings during the fiscal year ended
March 31, 2001. All its members were present in all meetings. The members of the
audit committee have reviewed and discussed our audited financial statements
with our management and have discussed matters required to be discussed by SAS
61 (Codification of Statements on Auditing Standards, AU Section 380) with Ernst
& Young LLP, our independent auditors for the fiscal year ended March 31, 2001.
The audit committee has received the written disclosures and the letter from
Ernst & Young LLP, as required by the Independent Standards Board Standard No.
1, and have recommended that the audited financial statements be included in our
annual report for the fiscal year ended March 31, 2001.
BOARD OF DIRECTORS COMPENSATION
We do not currently compensate directors for their service on the
board of directors. Our directors are reimbursed for their expenses incurred in
attending meetings of the board of directors.
7
Under the terms of our employee stock option incentive plan, directors are
eligible for the grants of options.
In August 2000, options to purchase 50,000 shares of our common
stock at an exercise price of USD $4.00 per share were granted under our
employee stock option incentive plan to each of Messrs. Selmani, Beaudry, Alary,
Bourgeois and Ranger.
The board of directors will determine the remuneration of our
directors during the current and subsequent fiscal years.
MANAGEMENT
EXECUTIVE OFFICERS
The following table contains certain information regarding our
additional executive officers:
NAME POSITION WITH THE COMPANY, OCCUPATION FOR THE PAST AGE
FIVE YEARS AND CURRENT PUBLIC DIRECTORSHIPS
- --------------------------------------------- --------------------------------------------------------------------------------------
Anthony Casola
CHIEF FINANCIAL OFFICER AND SECRETARY. Mr. Casola has been our Chief Financial Officer, 38
Chief Accounting Officer and Secretary since September 2000. From August 1990 to June
2000, Mr. Casola worked for Naya Inc., a branded bottled water manufacturer, where he held
various senior positions in the accounting and finance areas such as Vice President for
Corporate Development, Director of Finance, Controller and Accounting Manager. Mr. Casola
obtained his Bachelor of Commerce degree from McGill University in June 1986. He has also
been designated as a Certified Management Accountant since January 1989.
Ajay Gupta CHIEF OPERATING OFFICER. Dr. Gupta has been employed by us since June 2000 as Director for 39
Business & Product Development. In November 2000 Dr. Gupta was nominated as our Chief
Operations Officer. From May 1999 to June 2000, Dr. Gupta worked for ITR Laboratories
Canada as Director, Analytical/ADME/Pharmacy, being responsible for the overall
administration and scientific direction of the three departments. From January 1997 to May
1999, Dr. Gupta worked for Neurochem Inc. as Director of Chemistry. He was responsible
for the overall administration and scientific direction of the chemistry department
involved in drug discovery and drug development in the areas of Alzheimer's, Type II
Diabetes, Epilepsy, Kidney failure and Congestive heart disease. From January 1994 to
January 1997, Dr. Gupta worked for MDS Inc. formerly known as Phoenix International Life
Sciences Inc. as Manager, GMP Synthesis/Senior Research Chemist being responsible for the
overall administration of GMP's synthesis department and evaluation of new technologies.
8
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVES
The following table sets forth all compensation awarded to our Chief
Executive Officer. No other executive officers received annual compensation in
excess of USD $100,000 during the periods indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
(CDN$) Compensation (Awards):
------- ----------------------
Securities
Name and Position Fiscal Year Salary Bonus Underlying Options (#)
Amine Selmani 2001 $185,000 $0 50,000
President and Chief 2000 $120,000 $0 -
Executive Officer 1999 $120,000 $0 312,500
OPTION GRANTS
Options to purchase 50,000 shares of our common stock at a price of
USD $4.00 were granted to Dr. Selmani in the fiscal year ended March 31, 2001.
Options granted to Dr. Selmani for fiscal year ended March 31, 2001 comprised
30.3% of all the options granted under our employee stock option incentive plan
for such period. We have never granted any stock appreciation rights.
AGGREGATED FISCAL YEAR-END OPTION EXERCISES AND OPTION VALUES
Dr. Selmani did not exercise any options during the fiscal year
ended March 31, 2001. The following table sets forth certain information
regarding unexercised stock options held by Dr. Selmani as of March 31, 2001.
Number of Securities Underlying Value of Unexercised In-The-
Unexercised Options at Money Options at
March 31, 2001(#) March 31, 2001 (in USD)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Amine Selmani 337,500/25,000 $50,355/$3,730
The value of the unexercised in-the-money options is based on the market value,
as reported on the Over the Counter Electronic Bulletin Board, of USD $0.6250
per share of common stock at March 31, 2001 and an exercise price of USD $0.4758
(CDN $0.75) per share.
OTHER COMPENSATION PLANS
The Company has no pension plan or other compensation plans for its
executive officers or directors.
9
EMPLOYMENT AGREEMENTS
AJAY GUPTA - We have entered into an indefinite employment agreement
with Ajay Gupta dated as of November 2000. Mr. Gupta will serve as Chief
Operating Officer with duties and responsibilities which are determined by our
board of directors from time to time. Mr. Gupta shall be entitled to an annual
base salary of $135,000 which shall be reviewed annually plus a bonus payment at
the discretion of the compensation committee. The board of directors also
granted Mr. Gupta options to purchase 75,000 shares of our common stock at an
exercise price of U.S. $1.25 per share, vesting in three installments commencing
December 31, 2000. Mr. Gupta is subject to a confidentiality and
non-solicitation agreement during the term of his employment and for an
additional three year period following the termination of his employment. Mr.
Gupta, or his estate, will be entitled to receive his full salary for a period
of three months if he is terminated without cause, death or disability. He will
not be entitled to receive any salary if he is terminated for cause.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act as amended, requires our directors
and executive officers, and persons who beneficially own more than ten percent
of the shares of our common stock, to file with the Securities and Exchange
Commission reports of ownership of shares of our common stock and any of our
other equity securities. Our officers, directors and more than ten percent
stockholders are required by securities regulation to furnish us with copies of
all Section 16(a) reports they file. To our knowledge, based solely on review of
the copies of such reports furnished to us during the fiscal year ended March
31, 2001, all required Section 16(a) filings by beneficial owners were complied
with.
LEGAL PROCEEDINGS
Marie-Claire Pilon, our former Chief Executive Officer and a member
of our Board of Directors, commenced an action on January 23, 2001 in Superior
Court, Province of Quebec, District of Montreal, against BioSyntech and our
Chairman of the Board, Dr. Amine Selmani. Ms. Pilon alleged that as our Chief
Executive Officer, she was wrongfully dismissed as an employee and is seeking
$223,590 in compensation allegedly due, $20,000 for punitive damages and $15,000
for additional damages. BioSyntech and Dr. Selmani deny these allegations and
intend to vigorously defend this action.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EXCHANGE AGREEMENTS
As a result of the Exchange Agreements, we became the record and
beneficial owner of all of the issued and outstanding shares of Bio Syntech
Canada's common stock and the former Bio Syntech Ltd. stockholders were issued
exchangeable preferred stock. The exchangeable preferred stock are exchangeable
on a share-for-share basis for an aggregate of 15,177,036 shares of our common
stock, which were issued in accordance with the Exchange Agreements and are held
in trust under the terms of an Exchange and Voting Agreement, by and among us,
Pierre Barnard as the Trustee, Bio Syntech Ltd. and 9083-5661. The foregoing
transactions are referred to collectively hereinafter as the "Transactions". Bio
Syntech Ltd. was founded in 1995 by Dr. Amine Selmani, our Chairman of the
Board, President and the beneficial holder of more than 5% of the outstanding
shares of common stock. Dr. Selmani has shared voting and dispositive power with
respect to 7,640,000 exchangeable preferred stock owned by 9083-1496 Quebec Inc.
as a result of the Transactions. He may also be deemed the beneficial owner of
337,500 shares of our common stock that would be held by him upon exercise of
options to purchase 50,000 shares of common stock granted under our employee
stock option incentive plan and exchange of
10
shares of 312,000 exchangeable preferred stock issuable upon exercise of options
granted to Dr. Selmani under the employee stock option incentive plan of Bio
Syntech Canada. In addition, Monique Jarry, the spouse of Dr. Selmani, may be
deemed to be the beneficial owner of 1,085,000 shares of Common Stock by virtue
of her ownership of exchangeable preferred stock, which includes 200,000 shares
of exchangeable preferred stock issuable under the employee stock option
incentive plan of Bio Syntech Canada.
Under the terms of the Exchange and Voting Agreement, each
beneficial holder of exchangeable preferred stock has voting rights in that
number of shares of common stock held in trust equal to the number of
exchangeable preferred stock held. Consequently, the former Bio Syntech Ltd.
stockholders held through the Trustee, securities with voting rights equal to
approximately 55.7% (currently approximately 52%) of the total voting power of
the outstanding shares of our common stock immediately after the Transactions.
At such time as the holders of exchangeable preferred stock may exchange such
shares for shares of our common stock, they will have the right to direct the
disposition of such shares of common stock. Under the terms of the Exchange and
Voting Agreement, the Trustee will abstain from voting any of the shares held in
trust as to which he does not receive voting instructions from the holders of
exchangeable preferred stock.
The sole source of consideration for issuance to the former Bio
Syntech Ltd. stockholders of the exchangeable preferred stock was the exchange
of the Bio Syntech Ltd. shares held by them. At such time as the former Bio
Syntech Ltd. stockholders may exchange their exchangeable preferred stock for
shares of our common stock, the sole source of consideration for the transfer to
them of shares of our common stock will be such exchangeable preferred stock.
The Exchange Agreements were structured to provide the former Bio
Syntech Ltd. stockholders with a capital gain deferral under applicable Canadian
tax laws, rules and regulations.
AGREEMENT WITH POLYVALOR
In October 1997, our predecesor company, Bio Syntech Ltd., entered
into a technology assignment agreement, as amended in September 1999 and as
amended and restated March 15, 2000 (the "Assignment Agreement"), with Polyvalor
Limited Partnership, a Canadian limited partnership, as represented by its
General Partner, Polyvalor. Polyvalor is an entity created by Ecole
Polytechnique de Montreal (the University of Montreal's engineering faculty,
"Ecole Polytechnique") for the purpose of commercializing the technology in
which Ecole Polytechnique has an interest. Through the Assignment Agreement, we
acquired from Polyvalor all rights related to certain patents and know-how. In
consideration of said assignment, we agreed to pay to Polyvalor a royalty of 5%
on all gross sales of all products and services sold by us, up to a maximum
cumulative amount of $3,000,000. In connection with the Assignment Agreement,
our subsidiary Bio Syntech Canada, issued to Polyvalor 1,072,000 shares of its
exchangeable preferred stock and granted Polyvalor the right to nominate one
director to our board of directors. As a result of the Transactions, the
exchangeable preferred stock are exchangeable on a share for share basis for
shares of our common stock, and Polyvalor has the right to nominate one director
to our board of directors.
11
PROPOSAL NO. 2
APPROVAL OF INCREASE OF SHARES RESERVED FOR ISSUANCE
UNDER THE EMPLOYEE STOCK OPTION INCENTIVE PLAN
Our board of directors proposes that the amendment to our employee
stock option incentive plan to increase the authorized number of shares reserved
for issuance upon the exercise of options granted or to be granted under such
plan from 2,500,000 shares to 3,900,000 shares of common stock be approved.
Throughout this section, we will refer to our employee stock option incentive
plan as the "option plan".
The option plan is administered by the compensation committee of the
board of directors. The compensation committee may from time to time designate
individuals to whom options to purchase shares of common stock may be granted
and the number of shares to be optioned to each. The total number of shares of
common stock to be optioned to any one individual may not exceed 5% of the total
of the issued and outstanding shares of our common stock. The option price per
share of common stock that is the subject of any option is fixed by the
compensation committee when such option is granted and cannot involve a discount
to the market price at the time the option is granted. The period during which
an option is exercisable may not exceed 10 years from the date of grant. In the
event the we encounter basic changes in our organization and capitalization,
including a reorganization, merger or consolidation, or the purchase of shares
pursuant to a tender offer for shares of our common stock, in the discretion of
the compensation committee, each option may become fully and immediately
exercisable.
The option plan may be amended, suspended, reinstated or terminated
by the board of directors; provided, however, that without approval of affected
optionees, no amendment may be made that adversely affects the benefits accruing
to optionees under the option plan.
Options granted under the option plan are not assignable or
transferable, except by will or the laws of intestate succession. Stock options
granted under the option plan may be exercised by the optionee (or the
optionee's legal representative) only while the optionee is employed by us, or
within 90 days after termination of employment due to a permanent disability, or
within one year after termination of employment due to retirement. The executor
or administrator of a deceased optionee's estate or the person or persons to
whom the deceased optionee's rights thereunder have passed by will or by the
laws of descent and distribution will be entitled to exercise the option within
one year after the decedent's death. Stock options expire immediately in the
event an optionee is terminated with cause or resigns. All of the aforementioned
exercise periods are subject to the further limitation that an option will not,
in any case, be exercisable beyond its stated expiration date.
At last year's annual meeting, a majority of our stockholders
approved the option plan. The option plan enables us to remain highly
competitive and provide sufficient equity incentives to attract and retain
highly-qualified and experienced employees. The option plan allows our board of
directors to grant options to (i) our directors, officers and other full-time
salaried employees with managerial, professional or supervisory
responsibilities, and (ii) consultants and advisors who render us bona fide
services, in each case, if the compensation committee determines that such
officer, employee, consultant or advisor has the capacity to make a substantial
contribution to our success.
By unanimous written consent on June 15, 2001, our board of
directors voted to increase the authorized number of shares available for
issuance under the option plan from 2,500,000 to 3,900,000 shares of our common
stock. The board of directors believes that approval of this amendment is in our
best interest because the availability of an adequate reserve of shares under
the option plan is an important factor in attracting, motivating and retaining
qualified officers and employees essential to our success and in aligning their
long-term interests with those of the stockholders.
12
The option plan currently only authorizes the issuance of a maximum
of 2,500,000 shares of common stock pursuant to the exercise of options granted
thereunder. As of June 19, 2001, stock options to purchase 450,000 shares of
common stock are outstanding under the option plan, or 18% of the number of
shares authorized to be issued under the option plan, at exercise prices ranging
from $1.97 to $6.31 per share, vesting over a two-year or three-year periods. As
of June 19, 2001, none of the options have been exercised. Delays in increasing
the authorized number of options that could be granted under the option plan may
prevent us from retaining or attracting highly-qualified and experienced
employees. If the amendment is approved, the option plan will be authorized to
issue options for a maximum of 3,900,000 shares of our common stock, less than
15% of the current outstanding shares of our common stock.
During the fiscal year ended March 31, 2001 and through the record
date for the annual meeting, options to purchase shares of common stock have
been granted pursuant to the option plan to (i) the chief executive officer,
(ii) all current executive officers as a group (iii) all employees, including
all current officers who are not executive officers, as a group, and (iv)
non-employee directors during the fiscal year ended March 31, 2001 and through
the record date as follows:
NUMBER OF OPTIONS GRANTED
-------------------------
Dr. Amine Selmani,
Chief Executive Officer 50,000
& President
Executive Group 125,000
Non-Executive Officer Employee Group 25,000
Non-Executive Director Group 200,000
The affirmative vote of a majority of the votes cast by holders of
our common stock is required to approve the increase.
REGISTRATION OF SHARES
We filed a registration statement on Form S-8 under the Securities
Act of 1933, as amended, with respect to the 2,500,000 shares of common stock
issuable pursuant to the option plan on April 3, 2001. We plan to file a new
registration statement under the Securities Act of 1933, as amended, with
respect to the additional 1,400,000 shares of common stock issuable pursuant to
the option plan, if the proposed amendment to the option plan is approved.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE INCREASE OF SHARES RESERVED FOR ISSUANCE UNDER
OUR EMPLOYEE STOCK OPTION INCENTIVE PLAN
13
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors appointed Ernst & Young LLP to serve as our
independent auditors for the fiscal year ending March 31, 2002. While we are not
required to do so, our board of directors is submitting to stockholders for
ratification the appointment of Ernst & Young LLP as our independent auditors in
order to ascertain the stockholders' views. If the stockholders do not ratify
the appointment of Ernst & Young LLP, our board of directors will consider the
appointment of other independent auditors.
Representatives of Ernst & Young LLP are expected to be present at
the annual meeting and to be available to respond to appropriate questions. Such
representatives will have the opportunity to make a statement if they desire to
do so.
AUDIT FEES
Ernst & Young LLP billed us and our subsidiaries an aggregate of CDN
$100,000 for the following professional services: audit of our annual
consolidated financial statements for the fiscal year ended March 31, 2001
included in our annual report on Form 10-KSB and review of our interim financial
statements included in our quarterly reports on Form 10-QSB for the periods
ended June 30, 2000, September 30, 2000 and December 31, 2000.
Ernst & Young LLP billed us and our subsidiaries an aggregate of CDN
$67,250 for audit related services rendered during the fiscal year ended March
31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Ernst & Young LLP did not render any professional service related to
financial information systems design and implementation services for the fiscal
year ended March 31, 2001.
ALL OTHER FEES
Ernst & Young LLP billed us and our subsidiaries an aggregate of CDN
$20,250 for other services rendered during the fiscal year ended March 31, 2001.
The audit committee has considered whether the provision by Ernst &
Young LLP of the services covered by the fees other than the audit fees is
compatible with maintaining Ernst & Young LLP's independence and believes that
it is compatible.
The affirmative vote of a majority of the votes cast by holders of
our common stock is required to ratify the appointment of Ernst & Young LLP as
our independent auditors for fiscal year ending March 31, 2002.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR
INDEPENDENT AUDITORS FOR FISCAL YEAR ENDING MARCH 31, 2002
14
SOLICITATION STATEMENT
We will bear all expenses in connection with the solicitation of
proxies. In addition to the use of the mails, solicitations may be made by our
regular employees, by telephone, telegraph or personal contact, without
additional compensation. We will, upon their request, reimburse brokerage houses
and persons holding shares of common stock in the names of nominees for their
reasonable expenses in sending solicited material to their principals.
STOCKHOLDER PROPOSALS
Stockholder proposals made in accordance with Rule 14a-8 under the
Exchange Act and intended to be presented at our annual meeting of stockholders
in 2002 must be received by us at our principal office in Laval, Quebec, Canada
no later than March 26, 2002 for inclusion in the proxy statement for that
annual meeting.
In addition, our bylaws require that a stockholder give advance
notice us of nominations for election to the our board of directors and of other
matters that the stockholder wishes to present for action at an annual meeting
of stockholders (other than matters included in our proxy statement in
accordance with Rule 14a-8). Such stockholder's notice must be given in writing,
include the information required by our bylaws, and be delivered or mailed by
first class United States mail, postage prepaid, to the our Secretary at our
principal offices. We must receive such notice not less than 45 days prior to
the date next year that corresponds to the date when we first mailed our proxy
materials for this year's annual meeting of stockholders. While we have not yet
set the date of our annual meeting of stockholders in 2002, if it were held on
July 12, 2002 (the date that corresponds to this year's annual meeting), notice
of a director nomination or stockholder proposal made otherwise than in
accordance with Rule 14a-8 would be required to be given to us no later than May
29, 2002.
ANNUAL REPORT
We have sent, or are concurrently sending, all of our stockholders
of record as of June 19, 2001 a copy of our annual report for the fiscal year
ended March 31, 2001. Such annual report contains our certified consolidated
financial statements for the fiscal year ended March 31, 2001.
OTHER MATTERS
Our board of directors knows of no other business that will be
presented to the annual meeting. If any other business is properly brought
before the annual meeting, it is intended that proxies in the enclosed form will
be voted with respect to any such matters in accordance with the judgment of the
persons voting the proxies.
By order of the board of directors,
Anthony Casola
Secretary
June 19, 2001
15
Appendix A
CHARTER OF THE AUDIT COMMITTEE
OF
BIOSYNTECH, INC.
The Audit Committee of the Board of Directors of
BioSyntech, Inc. (the "Corporation) (the "Committee") shall assist the Board of
Directors in fulfilling its oversight responsibilities with respect to the
financial reports and other financial information provided by the Corporation to
the stockholders and to the general public, the Corporation's internal controls,
and the Corporation's audit, accounting and financial reporting processes
generally. The Committee shall serve as an independent and objective monitor of
the performance of the Corporation's financial reporting process and system of
internal control; review and appraise the audit efforts of the Corporation's
independent accountants; and provide for open, ongoing communication among the
independent accountant, financial and senior management, and the Board of
Directors concerning the Corporation's financial position and affairs. The
Committee will report its actions to the Board of Directors with such
recommendations as the Committee may deem appropriate. The Committee shall be
governed in accordance with the By-Laws of the Corporation as well as have the
following powers and duties:
1. Structure and Composition. The Committee shall be
composed of at least three independent directors who are all capable of reading
, understanding and analyzing financial statements, or who will become
financially literate within a reasonable time after being appointed to the
Committee. At least one member of the Committee shall have past employment
experience in finance or accounting, or any comparable experience or background
which results in that committee member having financial sophistication. The
members of the Committee shall elect the Chairman (the "Chairman") from among
themselves. The independence of a director shall be determined in accordance
with the rules and regulations of the securities market where the Corporation's
shares of Common Stock are traded. The duties and responsibilities of a member
of the Committee are in addition to those duties generally pertaining to a
member of the Board of Directors.
2. General Financial Oversight. The Committee shall meet
with the independent accountants and the principal accounting officers of the
Corporation to ascertain that reasonable procedures and controls are followed to
safeguard the Corporation's assets and that adequate examinations are made to
ensure the reasonableness of the results reported in the financial statements
for the fiscal year. Specifically, the Committee shall:
o Review the financial information contained in the Corporation's
Quarterly Report on Form 10-QSB prior to its filing with the
Securities and Exchange Commission (the "SEC"), the Corporation's
earning announcement prior to release, and the results of the
independent accountant's review of Interim Financial Information
pursuant to SAS 71. The Chairman may represent the Committee, either
in person or by telephone conference call, for the purpose of this
review.
o Review with management and the independent accountants at the
completion of the annual audit and prior to filing the Corporation's
annual report on Form 10-KSB (the "Annual Report") with the SEC, the
accuracy and completeness of the following :
(i) the Corporation's financial statements included in
the Annual Report and related footnotes;
(ii) the independent accountant's audit of the financial
statements and their report;
(iii) any significant changes required in the
independent accountant's examination plan;
(iv) any serious difficulties or disputes with
management encountered during the course of the audit;
and
(v) other matters related to the conduct of the audit
which are to be communicated to the Committee under
generally accepted auditing standards, including
discussions relating to the independent accountants'
judgement about such matters as to the quality, not just
the acceptability, of the Corporation's accounting
practices and other items set forth in SAS 61
(Communications with Audit Committees) or other such
auditing standards that may in time modify, supplement
or replace SAS 61.
o The Committee will have prepared and reviewed the Audit Committee
Report for inclusion in the annual stockholder's meeting proxy
statement. The Committee must state whether it:
(i) has reviewed and discussed the audited financial
statements with management;
(ii) has discussed with the independent accountant the
matters required to be discussed by SAS 61, as may be
modified, supplemented or replaced;
(iii) has received the written disclosures from the
independent accountants required by Independence
Standards Board Standard No. 1 ("ISBS No. 1"), as may be
modified or supplemented, and has discussed with the
accountant their independence; and
-2-
(iv) has recommended to the Board of Directors, based on
the review and discussions referred to in above items
(i) through (iii), that the Corporation's financial
statements be included in the Annual Report on Form 10-K
for the last fiscal year for filing with the SEC.
3. Selection of Independent Accountants. The Committee
shall recommend the firm of independent accountants to be nominated for the
ensuing year at the Board of Directors meeting when such action is taken.
o Before recommending a continuing independent accountant, the
Committee shall ensure the receipt for the year of, and review with
the independent accountant, a written statement required by ISBS
No.1, as may be modified or supplemented, and discuss their
continued independence with the accountant. The Committee will
recommend that the Board of Directors take appropriate action on any
disclosed relationships that may reasonably be brought to bear on
the independence of the accountants and satisfy itself that the
Corporation has engaged independent accountants as required by the
Securities Act of 1933,as amended.
o Together with the Board of Directors, the Committee shall submit
to the stockholders for ratification or rejection at the annual
meeting of stockholders the independent accountants selected.
4. Controls, Policies and Procedures Oversight. The
members of the Committee shall meet from time to time to review accounting
policies followed, changes therein, internal and accounting controls, and any
issues that may be raised by the independent accountants. At the discretion of
the Chairman, the principal accounting officers of the Corporation may be
invited to attend the meetings of the Committee with the independent
accountants. The Committee may request the independent accountants to report on
the adequacy of their examination, their views of the Corporation's internal
controls, and on the Corporation's compliance with accepted accounting
principles adopted by the accounting profession, as well as the effect of
unusual or extraordinary transactions. The Committee shall also be responsible
for the following:
o Obtain the approval of the full Board of Directors of this Charter
and shall review and reassess this Charter as conditions dictate, at
least on annual basis;
o Periodically review the adequacy of the Corporation's accounting,
financial, and auditing personnel resources.
5. Advice; Legal Representation. The Committee is
authorized to confer with the Corporation's management and other employees to
whom it may deem necessary or appropriate to fulfill its duties. The Committee
is authorized to conduct or authorize investigations into any matter within the
Committee's scope of responsibilities. The Committee also is authorized to seek
outside legal or other advice to the extent it deems necessary or appropriate,
provided it shall keep the Board of Directors advised as to the nature and
extent of such outside advice.
-3-
BIOSYNTECH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2001 ANNUAL MEETING OF STOCKHOLDERS
JULY 12, 2001
The undersigned hereby appoints each of Amine Selmani and Anthony
Casola as the undersigned's proxy, with full power of substitution, to vote all
of the undersigned's shares of Common Stock in BioSyntech, Inc. (the "Company"),
at the 2001 Annual Meeting of Stockholders of the Company to be held on July 12,
2001, at 2:00 p.m. eastern standard time, at the Hilton Laval, 2225 Autoroute
des Laurentides, Laval , Quebec, Canada, or at any adjournment, on the matters
described in the Notice of 2001 Annual Meeting of Stockholders and Proxy
Statement and upon such other business as may properly come before such annual
meeting or any adjournments thereof, hereby revoking any proxies heretofore
given.
PROPOSAL 1 The election of Pierre Alary and Serge Savard to Class I of the
Board of Directors for a term of three years:
Withhold Authority
For All To Vote For All
Nominees ___ Nominees ___
---------------------------------------------------
---------------------------------------------------
To withhold authority to vote for any individual
nominee(s), print names above.
PROPOSAL 2 Approve the increase in the number of shares reserved for
issuance under the Company's Employee Stock Option Incentive
Plan from 2,500,000 to 3,900,000 shares:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 3 Ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 2002:
FOR / / AGAINST / / ABSTAIN / /
DISCRETIONARY AUTHORITY:
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the annual meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 2 AND 3 AND FOR EACH OF THE DIRECTOR NOMINEES.
Dated: _______________________, 2001
----------------------------------
(Signature)
----------------------------------
(Signature)
Please sign your name exactly as it
appears hereon. When shares are held by
joint owners, 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 or
limited liability company, please sign in
full entity name by authorized person.
BIOSYNTECH, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
JULY 12, 2001
VOTING INSTRUCTIONS FORM FOR
HOLDERS OF EXCHANGEABLE PREFERRED STOCK OF
BIO SYNTECH CANADA INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BIOSYNTECH, INC.
The undersigned hereby instructs Pierre Barnard in his capacity as
trustee of the shares of Common Stock of BioSyntech, Inc. (the "Company") which
were issued for the exchangeable preferred stock of the Bio Syntech Canada, Inc.
with full power of substitution, to vote all of the undersigned's shares of
exchangeable preferred stock, at the 2001 Annual Meeting of Stockholders of the
Company to be held on July 12, 2001, at 2:00 p.m. eastern standard time, at the
Hilton Laval, 2225 Autoroute des Laurentides, Laval , Quebec, Canada, or at any
adjournment, on the matters described in the Notice of 2001 Annual Meeting of
Stockholders and Proxy Statement and upon such other business as may properly
come before such annual meeting or any adjournments thereof, hereby revoking any
proxies heretofore given.
PROPOSAL 1 The election of Pierre Alary and Serge Savard to Class I of the
Board of Directors for a term of three years:
Withhold Authority
For All To Vote For All
Nominees ___ Nominees ___
---------------------------------------------------
---------------------------------------------------
To withhold authority to vote for any individual
nominee(s), print names above.
PROPOSAL 2 Approve the increase in the number of shares reserved for
issuance under the Company's Employee Stock Option Incentive
Plan from 2,500,000 to 3,900,000 shares:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 3 Ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending March 31, 2002:
FOR / / AGAINST / / ABSTAIN / /
DISCRETIONARY AUTHORITY:
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the annual meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF PROPOSALS 2 AND 3 AND FOR EACH OF THE DIRECTOR NOMINEES.
----------------------------------
Number of exchangeable preferred
stock held
Dated: _______________________, 2001
----------------------------------
(Signature)
----------------------------------
(Signature)
Please sign your name exactly as it
appears hereon. When shares are held by
joint owners, 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 or
limited liability company, please sign in
full entity name by authorized person.
