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 14a-11(c) or 14a-12
POLYDEX PHARMACEUTICALS LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
TO OUR MEMBERS:
The 2000 Annual General Meeting of the Members will be held at 10:00
a.m., local time, on Thursday, June 22, 2000, at the registered office of the
Company at Sandringham House, 83 Shirley Street, Nassau, Bahamas.
At the Annual General Meeting, Members will elect two Directors, the
names of whom are set forth in the accompanying Proxy Statement, to serve until
the Annual General Meeting in 2003 or until their successors are elected.
Members will also vote on a proposal to authorize the Board of Directors to
appoint the Company's independent public accountants and fix their remuneration.
Management will also report on fiscal year 2000 results. We urge you to attend
the meeting and to vote for these proposals. These matters are described in more
detail in the attached Proxy Statement, which we encourage you to read
carefully.
The formal notice of the Annual General Meeting and the Proxy
Statement containing information relative to the meeting follow this letter.
Whether or not you plan to attend the meeting, please complete, date
and sign the enclosed proxy card and return it in the envelope provided to
assure that your shares will be voted. If you do attend the meeting, and the
Board of Directors joins me in hoping you will, there will be an opportunity to
revoke your proxy and to vote in person.
Sincerely,
George G. Usher
Chairman of the Board, President
and Chief Executive Officer
May 26, 2000
POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
NOTICE OF 2000 ANNUAL GENERAL MEETING OF THE MEMBERS
May 26, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual General Meeting of the
Members of Polydex Pharmaceuticals Limited (the "Company") will be held at the
registered office of the Company at Sandringham House, 83 Shirley Street,
Nassau, Bahamas, on Thursday, June 22, 2000, at 10:00 a.m., local time, for the
following purposes:
1. To vote on the proposal to elect two directors to the Company's Board
of Directors, the names of whom are set forth in the accompanying
Proxy Statement, to serve until the Annual General Meeting of the
Members in 2003 or until their successors are elected;
2. To vote on the proposal to authorize the Board of Directors to appoint
the Company's independent public accountants and fix their
remuneration; and
3. To transact such further or other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 5, 2000,
as the date for the determination of the Members entitled to notice of, and to
vote at, the meeting and any adjournment thereof (the "Record Date"). Only
holders of the Common Shares and the Class B Preferred Shares of record at the
close of business on the Record Date are entitled to notice of, and to vote at,
the 2000 Annual General Meeting. The Company's Annual Report to Shareholders for
the year ended January 31, 2000, is being mailed to Members with the Proxy
Statement.
The Proxy Statement which accompanies this Notice contains additional
information regarding the proposals to be considered and voted upon at the
Annual General Meeting, and Members are encouraged to read it in its entirety.
You are cordially invited to attend the 2000 Annual General Meeting.
Whether or not you expect to be present at the Annual General Meeting, please
complete, date and sign the enclosed proxy card and return it promptly in the
envelope provided. If you do attend the Annual General Meeting, you may revoke
your Proxy in accordance with the methods described in the Proxy Statement under
the heading "Solicitation and Revocability of Proxies" and vote your shares in
person.
BY ORDER OF THE BOARD OF DIRECTORS,
SHARON L. WARDLAW
Secretary
May 26, 2000
POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
PROXY STATEMENT
2000 Annual General Meeting, June 22, 2000
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement ("Proxy Statement") is expected to be mailed on or about
May 29, 2000, to the holders of the Common Shares and the Class B Preferred
Shares (the "Members") of Polydex Pharmaceuticals Limited (the "Company") in
connection with the solicitation by the Board of Directors of the Company for
the 2000 Annual General Meeting of the Members ("Annual Meeting") to be held at
10:00 a.m., local time, on Thursday, June 22, 2000 at the Company's registered
office at Sandringham House, 83 Shirley Street, Nassau, Bahamas.
Although the Company believes that the solicitation of proxies will be
primarily by mail, proxies may also be solicited personally or by telephone by
officers and employees of the Company who will not receive additional
compensation for such solicitation. The cost of solicitation of proxies will be
borne directly by the Company. All dollar amounts in this proxy statement are
stated in U.S. dollars unless otherwise indicated.
Proxies given by Members for use at the Annual Meeting may be revoked
at any time prior to their use. In addition to revocation in any manner
permitted by Bahamian law, a proxy may be revoked in any one of the following
ways:
(a) by signing a form of proxy bearing a later date then the
proxy to be revoked, and depositing it with the Secretary of
the Company prior to the Annual Meeting;
(b) as to any matter on which a vote has not already been cast
pursuant to the authority conferred by such proxy, by
signing written notice of revocation and delivering it to
either the Secretary of the Company or the Chairman of the
Annual Meeting;
(c) by attending the Annual Meeting in person and personally
voting the shares represented by the proxy; or
(d) by instrument in writing executed by the Member or by his
attorney authorized in writing, or, if the Member is a
corporation, under its corporate seal, or by an officer or
attorney thereof duly authorized, and deposited either at
the head office of the Company at any time up to and
including the last business day preceding the day of the
Annual Meeting, or any adjournment thereof, at which the
proxy is to be used, or with the Chairman of such Annual
Meeting on the day of the meeting, or any adjournment
thereof.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called for the purposes of (1) electing directors,
(2) authorizing the Board of Directors to appoint the Company's independent
public accountants and fix their remuneration, and (3) transacting such other
business as may properly come before the meeting.
VOTING OF SECURITIES
The Board of Directors has fixed the close of business on May 5, 2000, as the
date for determining the Members entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof (the "Record Date"). A total of
3,028,673 Common Shares of a par value of U.S. $0.0167 each (the "Common
Shares") and 899,400 Class B Preferred Shares of a par value of U.S. $0.0167
each (the "Class B Preferred Shares") were outstanding at the close of business
on that date. Each Common Share is entitled to one vote on any matter presented
at the Annual Meeting for consideration and action by the Members. Each Class B
Preferred Share is entitled to two votes on any such matter. In addition, the
Company has authorized 100,000 Class A Preferred Shares of a par value of U.S.
$0.10 each (the "Class A Preferred Shares"), none of which are outstanding.
A quorum for the transaction of business at the meeting shall be
members present holding or represented by proxy between them not less than
one-third of all Common Shares which are issued at the record date fixed by the
directors and which entitle the holder thereof to vote. Voting of Common Shares
and Class B Preferred Shares is on a non-cumulative basis. Assuming the presence
of a quorum, the affirmative vote of the holders of a majority of the Common
Shares and Class B Preferred Shares voting at the meeting is required for
approval of (i) the election of each of the nominees for director, and (ii) the
authorization for the Board of Directors to appoint the Company's independent
public accountants and fix their remuneration.
All valid proxies received in response to this solicitation will be
voted in accordance with the instructions indicated thereon by the Members
giving such proxies. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, SUCH PROXIES WILL BE
VOTED FOR (1) THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY
STATEMENT, AND (2) THE AUTHORIZATION FOR THE BOARD OF DIRECTORS TO APPOINT THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS AND FIX THEIR REMUNERATION.
For voting purposes, abstentions will be counted for the purpose of
establishing a quorum and will not be voted. Broker non-votes will not be
counted for the purpose of establishing a quorum and will not be voted.
2
OWNERSHIP OF VOTING SECURITIES
The following tables set forth certain information regarding beneficial
ownership of the Common Shares and the Class B Preferred Shares, as of May 5,
2000, by (i) persons owning beneficially 5% or more of the Class B Preferred
Shares and/or the Common Shares, (ii) each of the Company's directors and
certain of its executive officers, and (iii) all directors and executive
officers as a group:
SECURITY OWNERSHIP OF MANAGEMENT:
Name and Title Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Class B George G. Usher 599,400 66.64%
Preferred Shares Chairman of the Board,
Director, President and CEO
Class B Thomas C. Usher 300,000 33.36%
Preferred Shares Vice-Chairman and Director
Class B All Directors and Executive 899,400 100%
Preferred Shares Officers as a Group
Name and Title of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Common Shares Joseph Buchman 123,586(2) 3.36%
Director
Common Shares Derek John Michael Lederer 22,600(3) *
Director
Common Shares John L.E. Seidler 11,850(4) *
Director
Common Shares George G. Usher 244,872(5) 6.66%
Chairman of the Board,
Director, President and CEO
Common Shares Ruth L. Usher 849,654(6) 23.09%(8)
Director
Common Shares Thomas C. Usher 849,654(7) 23.09%(8)
Vice-Chairman and Director
Common Shares Sharon L. Wardlaw 24,240(9) *
Secretary and Treasurer
Common Shares All Directors and Executive 1,276,762(10) 34.70%(10)
Officers as a Group
(7 persons)
- ----------
* Less than one percent (1%).
3
(1) As of May 5, 2000, the Record Date, the Company had outstanding
899,400 Class B Preferred Shares and 3,028,673 Common Shares and
options exercisable within sixty (60) days to purchase an additional
650,627 Common Shares, for a total of 3,679,300 Common Shares.
(2) Includes 91,736 shares owned directly by Joseph Buchman's spouse, as
to which Joseph Buchman disclaims beneficial ownership, and 31,850
shares under option to Joseph Buchman, subject to acquisition within
sixty (60) days.
(3) Included 22,600 shares under option to Derek John Michael Lederer,
subject to acquisition within sixty (60) days.
(4) Includes 11,850 shares under option to Derek John Michael Lederer,
subject to acquisition within sixty (60) days.
(5) Includes 12,772 shares owned directly by George G. Usher, 100,000
shares owned by a company controlled by George G. Usher, and 132,100
shares under option to George G. Usher, subject to acquisition within
sixty (60) days.
(6) Includes 84,323 shares owned directly by Ruth L. Usher, and 125,000
shares under option to Ruth L. Usher, subject to acquisition within
sixty (60) days. Also includes 457,754 shares owned directly by her
spouse, Thomas C. Usher, and 182,577 shares under option to Thomas C.
Usher, subject to acquisition within sixty (60) days, as to all of
which Ruth L. Usher disclaims beneficial ownership.
(7) Includes 457,754 shares owned directly by Thomas C. Usher and 182,577
shares under option to Thomas C. Usher, subject to acquisition within
sixty (60) days. Also includes 84,323 shares owned directly by his
spouse, Ruth L. Usher, and 125,000 shares under option to Ruth L.
Usher, as to all of which Thomas C. Usher disclaims beneficial
ownership. Does not include shares owned directly or indirectly by
George G. Usher, his son.
(8) Percent of class of the combined holdings of both Ruth L. Usher and
Thomas C. Usher, each of whom disclaims beneficial ownership as to the
holdings of the other.
(9) Includes 2,040 shares owned directly by Sharon L. Wardlaw and 22,200
shares under option to Sharon L. Wardlaw, subject to acquisition
within sixty (60) days.
(10) Includes 123,586 shares beneficially owned by Joseph Buchman, 22,600
shares beneficially owned by Derek John Michael Lederer, 11,850 shares
beneficially owned by John L.E. Seidler, 244,872 shares beneficially
owned by George G. Usher, 849,654 shares beneficially owned in total
by Ruth L. Usher and Thomas C. Usher, and 24,240 shares beneficially
owned by Sharon L. Wardlaw.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Class B George G. Usher 599,400 66.64%
Preferred Shares 421 Comstock Road
Toronto, Ontario,
Canada M1L 2H5
Class B Thomas C. Usher 300,000 33.36%
Preferred Shares 421 Comstock Road
Toronto, Ontario,
Canada, M1L 2H5
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Common Shares Ruth L. Usher 849,654(2) 23.09%(4)
421 Comstock Road
Toronto, Ontario,
Canada M1L 2H5
Common Shares Thomas C. Usher 849,654(3) 23.09%(4)
421 Comstock Road
Toronto, Ontario
Canada M1L 2H5
Common Shares George G. Usher 244,872(5) 6.66%
421 Comstock Road
Toronto, Ontario
Canada, M1L 2H5
- ----------
(1) As of May 5, 2000, the Record Date, the Company had outstanding
899,400 Class B Preferred Shares and 3,028,673 Common Shares and
options exercisable within sixty (60) days to purchase an additional
650,627 Common Shares, for a total of 3,679,300 Common Shares.
(2) Includes 84,323 shares owned directly by Ruth L. Usher, and 125,000
shares under option to Ruth L. Usher, subject to acquisition within
sixty (60) days. Also includes 457,754 shares owned directly by her
spouse, Thomas C. Usher, and 182,577 shares under option to Thomas C.
Usher, subject to acquisition within sixty (60) days, as to all of
which Ruth L. Usher disclaims beneficial ownership.
(3) Includes 457,754 shares owned directly by Thomas C. Usher and 182,577
shares under option to Thomas C. Usher, subject to acquisition within
sixty (60) days. Also includes 84,323 shares owned directly by his
spouse, Ruth L. Usher, and 125,000 shares under option to Ruth L.
Usher, as to all of which Thomas C. Usher disclaims beneficial
ownership. Does not include shares owned directly or indirectly by
George G. Usher, his son.
(4) Percent of class of the combined holdings of both Ruth L. Usher and
Thomas C. Usher, each of whom disclaims beneficial ownership as to the
holdings of the other.
(5) Includes 12,772 shares owned directly by George G. Usher, 100,000
shares owned by a company controlled by George G. Usher, and 132,100
shares under option to George G. Usher, subject to acquisition within
sixty (60) days.
5
BOARD OF DIRECTORS
The Board of Directors currently consists of six members. The directors of the
Company are divided into three classes, designated as Class I, Class II and
Class III. At each Annual Meeting, one class of directors is elected to serve
for a three-year term or until their respective successors are duly elected and
qualified.
Independent Directors Joseph Buchman, Derek John Michael Lederer and
John L.E. Seidler each received $7,000 as compensation for serving on the Board
for the fiscal year ending January 31, 2000. Director Ruth L. Usher received
$5,000 as compensation for serving on the Board for the fiscal year ending
January 31, 2000. George G. Usher and Thomas C. Usher, both of whom are
directors, receive payment as officers and employees of the Company. Family
relationships among the Company's officers and directors: Thomas C. Usher and
George G. Usher are father and son, and Thomas C. Usher and Ruth L. Usher are
husband and wife.
The following provides, as of May 6, 2000, the continuing directors
whose terms of office will continue after the Annual Meeting, their principal
occupation and employment, age, the year in which each became a director of the
Company, and directorships in companies having securities registered pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING IN 2001 (CLASS I DIRECTORS)
Year First
Elected
Name and Occupation Age Director
------------------- --- --------
JOSEPH BUCHMAN, Senior Account Executive with the 60 1981
Metropolitan Life Insurance Company since 1979.
JOHN L.E. SEIDLER, Executive Vice President of Manchester 65 1998
Partners International, Inc., a career management consulting firm,
since 1998. He previously was employed by Pfizer Pharmaceuticals
Group as Director of International Public Affairs from 1996 through
1998, and as Country Manager, Czech Republic from 1993 through 1996.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING IN 2002 (CLASS II DIRECTORS)
Year First
Elected
Name and Occupation Age Director
------------------- --- --------
DEREK JOHN MICHAEL LEDERER, Chartered Accountant. 58 1998
Principal of Derek Lederer, C.A., a public accounting firm, since
1970.
RUTH L. USHER, Retiree since 1991. 85 1979
6
PROPOSAL NO. 1
ELECTION OF BOARD MEMBERS
NOMINEES FOR TERMS
EXPIRING AT THE ANNUAL MEETING IN 2003 (CLASS II DIRECTORS)
The following two persons, each of whom is currently serving as a
director, have been nominated for re-election by the Board of Directors to serve
as directors for a term expiring at the Annual Meeting in 2003:
Year First
Elected
Name and Occupation Age Director
------------------- --- --------
GEORGE G. USHER, Chairman of the Board since January 27, 41 1988
1998. President and Chief Executive Officer of the Company since
1993 and 1996, respectively. Vice President of Dextran Products
Limited, a subsidiary of the Company, since 1987. Previously
employed by the Company in various positions since 1982.
THOMAS C. USHER, Vice-Chairman of the Company since 85 1979
November 1996. Chairman and Chief Executive Officer of the
Company from May 1972 to November 1996. Chairman of Dextran
Products Limited and of all of the Company's other subsidiaries
from their formation to November 1996.
All nominees for director have indicated their willingness to serve.
The Board of Directors has no reason to believe that any of the director
nominees will be unable to serve as a director. In the event, however, of the
death or unavailability of any director nominee or nominees, the proxy to that
extent will be voted for such other person or persons as the Board of Directors
may recommend.
VOTE REQUIRED. The affirmative vote of the holders of a majority of
the Common Shares and the Class B Preferred Shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to elect each of
the nominees for director. All proxies will be voted to elect each of the
nominees for director unless a contrary vote is indicated on the enclosed proxy
card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE NOMINEES FOR DIRECTOR.
7
PROPOSAL NO. 2
AUTHORIZATION FOR THE BOARD OF DIRECTORS TO APPOINT THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS AND FIX THEIR REMUNERATION
GENERAL. Ernst & Young Chartered Accountants (the "Accountants") has
been nominated for reappointment by the Board of Directors to serve as the
independent public accountants of the Company. The Company first engaged the
Accountant as the independent public accountant of the Company on December 18,
1996. The Accountant has indicated its willingness to continue to serve as the
independent public accountants of the Company.
VOTE REQUIRED. The affirmative vote of the holders of a majority of
the Common Shares and the Class B Preferred Shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to authorize the
Board of Directors to appoint Ernst & Young Chartered Accountants as the
independent public accountants of the Company and to fix their remuneration.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" AUTHORIZATION FOR THE
BOARD OF DIRECTORS TO APPOINT ERNST & YOUNG CHARTERED ACCOUNTANTS AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY AND TO FIX THEIR REMUNERATION.
8
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended January 31, 2000 there were 12 meetings of the
Board of Directors. Each director attended at least 75% of the aggregate number
of meetings held by the Board of Directors. The Board does not have any standing
nominating or compensation committees, nor are there any committees which
performed similar functions. Compensation decisions, including the granting of
options, are made by George G. Usher, Chairman, President and CEO, in his sole
discretion, with the advice of Thomas C. Usher, Vice-Chairman, and the Board as
a whole. The Company's Board of Directors has an Audit Committee. For the fiscal
year ended January 31, 2000, Independent Directors Derek John Michael Lederer
(Chair), and Joseph Buchman and Director George G. Usher comprised the Audit
Committee. On April 12, 2000, the Board appointed Independent Director John L.E.
Seidler to the Audit Committee to replace Director George G. Usher, who resigned
from the Audit Committee. During the fiscal year ended January 31, 2000 the
Audit Committee held 1 meeting.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee makes recommendations to the Board as to the engagement of
independent auditors to perform audit and non-audit services, reviews the scope
and results of their services, oversees the internal audit function, and reviews
the systems of internal control and audit with management and the independent
auditors. The Board of Directors has adopted an Audit Committee Charter, which
is included as Appendix I hereto. The Audit Committee reviews and reassesses the
adequacy of the Audit Committee Charter on an annual basis.
The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has discussed with the
independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards). The Audit Committee has
received the written disclosures and the letter from the independent accountants
required by Independence Standards Board Standard No. 1 (Independence Standards
Board Standard No. 1), and has discussed with the independent account the
independent accountant's independence. Based on the review and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the Company's fiscal year ended January 31, 2000 for filing
with the United States Securities and Exchange Commission.
Audit Committee
Board of Directors
Derek John Michael Lederer (Chair)
Joseph Buchman
George G. Usher
9
COMPENSATION OF EXECUTIVE OFFICERS
Shown below is information concerning the annual and long-term compensation for
services in all capacities to the Company for the fiscal years ended January 31,
2000, 1999 and 1998 of those persons who were (i) the chief executive officer of
the Company at January 31 and (ii) the one other executive officer of the
Company who had total annual salary plus bonus that exceeded $100,000 for the
year ended January 31 (the "Named Officers"). No other officer of the Company
had a total annual salary plus bonus that exceeded $100,000 for the year ended
January 31.
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ ------------
Common Shares
Underlying
Name and Fiscal Option
Principal Position Year Salary Bonus Awards
- ------------------ ---- ------ ----- ------
George G. Usher 2000 $110,000 $ 25,000 7,100
Chairman of the 1999 $110,000 $ 25,000 82,100
Board, President 1998 $110,000 none 57,100
and Chief Executive
Officer
Thomas C. Usher 2000 $170,000 $ 50,000 57,577
Vice-Chairman 1999 $120,000 $100,000 132,577
1998 $120,000 none 107,577
10
OPTION GRANTS IN FISCAL YEAR 2000
The following table sets forth information with respect to the stock
options granted to the two Named Officers during the fiscal year ended January
31, 2000.
Percent of
Total
Number of Options
Securities Granted to Potential Realizable Value
Underlying Employees in Price on at Assumed Rate of Stock
Options Fiscal Year Exercise Date of Expiration Price Appreciation
Name Granted (1) Price Grant Date 5% 10%
---- ------- --- ----- ----- ---- ----------------------
George G. Usher 7,100 1.63% $4.50 $3.625 5/31/00 -- --
Thomas C. Usher 57,577 13.23% $4.50 $3.625 5/31/00 -- --
- ----------
(1) A total of 113,127 stock options were granted by the Company to
employees during the fiscal year ended January 31, 2000.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000 AND
2000 FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the two Named Officers,
the exercise of options to purchase Common Shares during the fiscal year ended
January 31, 2000, and the year-end value of unexercised options to purchase
Common Shares held by the two Named Officers at January 31, 2000.
Number of Secu-
rities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Year End; at Fiscal Year End;
Name Exercise Realized All Exercisable All Exercisable (1)
- ---- -------- -------- --------------- --------------------
George G. Usher -- -- 132,100 $99,845.10
Thomas C. Usher -- -- 182,577 $126,648.38
- ----------
(1) The market price of the Common Shares at January 31, 2000, the
Company's fiscal year end, was $5.031 per share.
11
EXECUTIVE OFFICERS
As of January 31, 2000, the following persons served as executive officers of
the Company. All executive officers serve for a one-year term or until their
successors are elected or appointed at the meeting of the Board of Directors
immediately following the Annual Meeting.
Name Age Title
- ---- --- -----
George G. Usher (1) 41 Chairman of the Board, President
and Chief Executive Officer
Thomas C. Usher (1) 85 Vice-Chairman of the Board
Sharon L. Wardlaw (2) 47 Chief Financial Officer, Secretary and
Treasurer
- ----------
(1) See "Board of Directors" for biographical information and period of
service.
(2) Sharon L. Wardlaw has served as the Chief Financial Officer, Secretary
and Treasurer of the Company since 1994. She also currently serves as the
President of Dextran Products Limited, a subsidiary of the Company. Since
joining the Company in 1984, she has been employed in various capacities.
EMPLOYMENT AGREEMENTS
George G. Usher and Thomas C. Usher are employed by the Company pursuant to
employment agreements. On December 22, 1993, the Company entered into an
employment agreement with George G. Usher which provided for his employment as
President of the Company for a five-year term commencing February 1, 1994 at an
annual salary of $65,000. This Employment Agreement was amended on June 4, 1996
to provide for his employment as Chief Executive Officer of the Company
commencing June 4, 1996 at an annual salary of $100,000. This Employment
Agreement was renewed for an additional five-year term commencing February 1,
2000 at an annual salary of $110,000.
On December 22, 1993, the Company entered into an employment agreement
with Thomas C. Usher which provided for his employment as Chairman and Chief
Executive Officer of the Company for a five-year term commencing February 1,
1994 at an annual salary of $120,000 subject to CPI adjustments. This Employment
Agreement was amended on November 1, 1996 to provide for his employment as
Vice-Chairman of the Company commencing November 1, 1996 at an annual salary of
$120,000. This Employment Agreement was renewed for an additional five-year term
commencing February 1, 2000 under which Thomas C. Usher will assume the
additional title of Director of Research and Development and receive an annual
salary of $170,000.
TRANSACTIONS WITH THE COMPANY
Since February 1, 1999, with the exception of Thomas C. Usher, none of the
Company's directors, executive officers, nominees for election as directors or
certain relatives or associates of such persons has been indebted to the Company
in an aggregate amount in excess of $60,000. In August 1997, the Company loaned
Thomas C. Usher, its Vice-Chairman and a director, $691,500 at an interest rate
equal to the prime rate of Toronto Dominion Bank plus 1.50% (the "Loan"). The
Loan was used to partially fund a $1,000,000 payment to the State of Florida in
order to allow Thomas C. Usher to regain possession of 430,000 Common Shares of
the Company then held by the State as collateral security relating to the
liquidation of insurance companies formerly owned by Thomas C. Usher. The Loan
has no specific repayment terms. The amount outstanding under the Loan as of
January 31, 2000 was $623,829. In August 1999, Thomas C. Usher personally
assumed all of the assets and liabilities of Novadex Corp., including the
balance of receivables (the "Receivables") due to the Company from Novadex Corp.
The Receivables have no specific repayment terms. The total outstanding amount
of the Receivables as of January 31, 2000 was $859,066.
12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires the Company's directors, executive
officers and any person who beneficially owns more than ten percent of the
Common Shares to file with the SEC, Nasdaq and the Boston Stock Exchange an
initial report of ownership and reports of changes in ownership of Common
Shares. Officers, directors and greater than ten-percent beneficial owners are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file.
To the Company's knowledge, based solely upon a review of Forms 3 and
4 and amendments thereto furnished to the Company during its most recent fiscal
year, and Forms 5 furnished to the Company with respect to its most recent
fiscal year, and written representations from reporting persons that no other
reports were required, the Company believes that, during the fiscal year ended
January 31, 2000, all filing requirements under Section 16(a) of the Securities
Exchange Act of 1934 applicable to its executive officers, directors and greater
than 10% beneficial owners were met.
COMPANY STOCK PERFORMANCE
The following performance graph compares the cumulative total returns of the
Company's Common Shares, the Nasdaq Stock Market Index and the Nasdaq
Pharmaceuticals Stock Index over a five year period ended January 31, 2000.
13
[CHICAGO GSB LOGO]
CRSP CENTER FOR RESEARCH IN
SECURITY PRICES
The University of Chicago
Graduate School of Business
725 South Wells Street
Suite 800
Chicago, Illinois 60607
Tel 773.702.7467
Fax 773.702.3036
mail@crsp.uchicago.edu
www.crsp.com
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
POLYDEX PHARMACEUTICALS LIMITED
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
Produced on 04/05/2000 including data to 01/31/2000
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
- --------------------------------------------------------------------------------
CRSP Total Returns Index for: 01/1995 01/1996 01/1997 01/1998 01/1999 01/2000
- ----------------------------- ------- ------- ------- ------- ------- -------
POLYDEX PHARMACEUTICALS LIMITED 100.0 170.8 108.3 91.7 49.2 67.1
Nasdaq Stock Market (US & Foreign) 100.0 140.9 183.6 215.6 331.2 526.6
Nasdaq Pharmaceuticals Stocks 100.0 188.5 188.5 177.8 249.4 481.6
SIC 2830-2839 US & Foreign
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 01/31/1995.
- --------------------------------------------------------------------------------
9616 -C- Copyright 2000
[CHICAGO GSB LOGO]
CRSP CENTER FOR RESEARCH IN
SECURITY PRICES
The University of Chicago
Graduate School of Business
725 South Wells Street
Suite 800
Chicago, Illinois 60607
Tel 773.702.7467
Fax 773.702.3036
mail@crsp.uchicago.edu
www.crsp.com
Comparison of Five-Year Cumulative Total Returns
Performance Report for
POLYDEX PHARMACEUTICALS LIMITED
Prepared by the Center for Research in Security Prices
Produced on 04/05/2000 including data to 01/31/2000
Company Index: CUSIP Ticker Class Sic Exchange
73172820 POLXF 2830 NASDAQ
Fiscal Year-end is 01/31/2000
Market Index: Nasdaq Stock Market (US & Foreign)
Peer Index: Nasdaq Pharmaceutical Stocks
SIC 2830-2839 US & Foreign
Date Company Index Market Index Peer Index
01/31/1995 100.000 100.000 100.000
02/28/1995 95.833 105.084 103.778
03/31/1995 75.000 108.377 102.295
04/28/1995 70.833 111.902 105.168
05/31/1995 75.000 114.651 106.494
06/30/1995 70.833 111.902 105.168
07/31/1995 112.500 132.740 129.215
08/31/1995 129.167 135.335 144.498
09/29/1995 120.833 138.645 148.655
10/31/1995 75.000 137.568 143.037
11/30/1995 100.000 140.789 150.220
12/29/1995 79.167 139.928 173.294
01/31/1996 170.833 140.878 188.458
02/29/1996 162.500 146.415 184.816
03/29/1996 145.833 146.725 180.313
04/30/1996 145.833 158.717 189.634
05/31/1996 125.000 165.947 196.055
06/28/1996 137.500 158.093 175.161
07/31/1996 87.500 143.816 156.168
08/30/1996 108.333 152.071 167.485
09/30/1996 108.333 163.479 179.182
10/31/1996 116.667 161.729 171.094
11/29/1996 125.000 171.563 168.655
12/31/1996 104.167 171.318 173.834
01/31/1997 108.333 183.632 188.452
02/28/1997 108.333 173.774 189.670
03/31/1997 100.000 162.537 165.093
04/30/1997 91.667 167.399 155.307
9616 Copyright -C- 2000
[CHICAGO GSB LOGO]
CRSP CENTER FOR RESEARCH IN
SECURITY PRICES
The University of Chicago
Graduate School of Business
725 South Wells Street
Suite 800
Chicago, Illinois 60607
Tel 773.702.7467
Fax 773.702.3036
mail@crsp.uchicago.edu
www.crsp.com
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
POLYDEX PHARMACEUTICALS LIMITED
Prepared by the Center for Research in Security Prices
Produced on 04/05/2000 including data to 01/31/2000
Date Company Index Market Index Peer Index
05/30/1997 91.667 186.297 178.708
06/30/1997 85.000 192.084 178.227
07/31/1997 147.500 212.106 183.297
08/29/1997 121.667 211.557 181.116
09/30/1997 130.000 224.775 199.917
10/31/1997 116.667 212.619 189.740
11/28/1997 121.667 213.061 183.838
12/31/1997 99.167 209.195 179.533
01/30/1998 91.667 215.600 177.821
02/27/1998 68.333 236.155 183.619
03/31/1998 55.000 245.145 197.261
04/30/1998 55.000 249.297 192.381
05/29/1998 40.000 235.800 185.645
06/30/1998 48.333 250.737 182.550
07/31/1998 40.417 247.456 184.098
08/31/1998 30.000 197.517 141.156
09/30/1998 32.917 223.259 172.111
10/30/1998 32.917 233.710 183.666
11/30/1998 42.917 257.574 192.662
12/31/1998 45.833 289.741 228.400
01/29/1999 49.167 331.217 249.372
02/26/1999 45.000 302.188 233.736
03/31/1999 33.333 324.881 250.605
04/30/1999 35.000 336.038 230.591
05/28/1999 48.333 327.316 245.598
06/30/1999 61.667 356.048 255.297
07/30/1999 47.084 350.726 284.708
08/31/1999 38.750 363.343 309.356
09/30/1999 37.083 363.770 291.585
10/29/1999 37.500 393.350 295.249
11/30/1999 55.000 442.680 331.425
12/31/1999 60.833 543.782 424.970
01/31/2000 67.083 526.560 481.585
The index level for all series was set to 100.0 on 01/31/1995
9616 Copyright -C- 2000
There can be no assurances that the Company's stock performance will
continue into the future with the same or similar trends depicted in the
performance graph above. The Company does not make or endorse any predictions as
to future stock performance.
FINANCAL STATEMENTS
The consolidated balance sheet, consolidated income statement and other
financial statements together with the notes thereto for the fiscal year ended
January 31, 2000 are included in the Company's 2000 Annual Report which
accompanies this Proxy Statement.
INDEPENDENT AUDITORS
Ernst & Young Chartered Accountants served as the Company's independent auditors
for the fiscal year ending January 31, 2001. A representative of Ernst & Young
Chartered Accountants is not expected to be present at the Annual Meeting.
2000 ANNUAL REPORT AND FORM 10-K
The Company will provide without charge to each person solicited by this Proxy
Statement, upon the written request of such person, a copy of the Company's
Annual Report on Form 10-K, which includes financial statements, for the fiscal
year ended January 31, 2000. Such requests should be directed to Debbie
MacAskill, Polydex Pharmaceuticals Limited, 421 Comstock Road, Toronto, Ontario,
Canada M1L 2H5.
2000 MEMBER PROPOSALS
The 2001 Annual Meeting will be held on or about June 23, 2001. The deadline for
Members to submit proposals to the Company Secretary for inclusion in the Proxy
Statement for the 2000 Annual Meeting is expected to be February 23, 2001. The
inclusion of any proposal will be subject to applicable rules of the SEC. In the
event, however, that the date of the 2001Annual Meeting is changed by more than
30 calendar days from the date currently contemplated, a proposal must be
received by the Company within a reasonable time before the solicitation in
connection with the meeting is made. The Company's proxies for its 2001 Annual
General Meeting of the Members will confer discretionary authority to vote on
any matter that a shareholder does not give written notice of by April 8, 2001.
OTHER BUSINESS
Management knows of no business which will be presented for consideration at the
Annual Meeting other than as stated in the Notice of Meeting. If, however, other
matters are properly brought before the Annual Meeting, it is the intention of
the Board designated proxy holders George G. Usher and Peter T. Higgs to vote
the shares represented thereby on such matters in accordance with their
judgment.
By Order of the Board of Directors,
SHARON L. WARDLAW
Secretary
May 26, 2000
14
APPENDIX I
POLYDEX PHARMACEUTICALS LIMITED
BOARD OF DIRECTORS
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
board of directors. The committee shall be appointed by the board of directors
and shall comprise at least three directors, each of whom are independent of
management and the Company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All committee members shall
be financially literate, and at least one member shall have accounting or
related financial management expertise.
STATEMENT OF POLICY
The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements and the legal
compliance and ethics programs as established by management and the board. In so
doing, it is the responsibility of the committee to maintain free and open
communication between the committee, independent auditors, the internal auditors
and management of the Company. In discharging its oversight role, the committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
The following shall be the principal recurring processes of the audit committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the committee may supplement them as
appropriate.
1 The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives
of the Company's shareholders. The committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate,
replace the independent auditors. The committee shall discuss with the
auditors their independence from management and the Company and the
matters included in the written disclosures required by the
Independence Standards Board. Annually, the committee shall review and
recommend to the board the selection of the Company's independent
auditors, subject to shareholders' approval.
15
2. The committee shall discuss with the internal auditors and the
independent auditors the overall scope and plans for their respective
audits including the adequacy of staffing and compensation. Also, the
committee shall discuss with management, the internal auditors, and
the independent auditors the adequacy and the effectiveness of the
accounting and financial controls, including the Company's system to
monitor and manage business risk, and legal and ethical compliance
programs. Further, the committee shall meet separately with the
internal auditors and the independent auditors, with and without
management present, to discuss the results of their examinations.
3. The committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the committee by the independent
auditors under generally accepted auditing standards. The chair of the
committee may represent the entire committee for the purposes of this
review.
4. The committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K (or the annual report to shareholders if
distributed prior to the filing of Form 10-K), including their
judgment about the quality, not just acceptability, of accounting
principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements. Also, the
committee shall discuss the results of the annual audit and any other
matters required to be communicated to the committee by the
independent auditors under generally accepted auditing standards.
16
PROXY
POLYDEX PHARMACEUTICALS LIMITED
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned member hereby appoints Peter T. Higgs and George G. Usher
proxies, with power to act without the other and with power of substitution, and
hereby authorizes them to represent and vote, as designated on the other side,
all the shares of Polydex Pharmaceuticals Limited standing in the name of the
undersigned with all powers which the undersigned would possess if present at
the Annual General Meeting of Members of the Company to be held on June 22, 2000
or any adjournment thereof. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES LISTED ON THE REVERSE SIDE, AND IN
FAVOR OF THE PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS TO APPOINT THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY AND FIX THEIR REMUNERATION. AS TO
ANY OTHER MATTER OR IF ANY OF SAID NOMINEES IS NOT AVAILABLE FOR ELECTION, THE
PROXIES SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
TRIANGLE FOLD AND DETACH HERE TRIANGLE
(Continued from other side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Item 1 - ELECTION OF DIRECTORS Nominees: George G. Usher and Thomas C. Usher
FOR BOTH WITHHOLD WITHHELD FOR: (WRITE THAT NOMINEE'S NAME IN
NOMINEES AUTHORITY FOR THE SPACE PROVIDED BELOW.)
LISTED ALL
/ / / / -------------------------------------------
Item 2 - PROPOSAL TO AUTHORIZE THE BOARD OF DIRECTORS TO APPOINT THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY AND FIX THEIR REMUNERATION
FOR AGAINST ABSTAIN
/ / / / / /
Dated:_______________________________, 1999
___________________________________________
Signature(s)
___________________________________________
Signature(s)
Please date, sign as name appears hereon,
and return promptly. Joint owners should
each sign. When signing as corporate
officer, partner, attorney, executor,
administrator, trustee or guardian, please
give full title. Please note any changes in
your address alongside the address as it
appears in the proxy.
- --------------------------------------------------------------------------------
TRIANGLE FOLD AND DETACH HERE TRIANGLE