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 14a-11(c) or Rule
14(a)-12
BIOSYNTECH, INC.
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(Name of Registrant as Specified in Charter)
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(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
-2-
BIOSYNTECH, INC.
475 Boulevard Armand-Frappier
Laval, Quebec, Canada H7V 4B3
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NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 30, 2000
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To the Holders of Common Stock of BioSyntech, Inc. and
Holders of Exchangeable Preferred Stock of Bio Syntech Canada, Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders
(the "Annual Meeting") of BioSyntech, Inc., a Nevada corporation (the
"Company"), will be held at the Queen Elizabeth Hotel at 900 Rene-Levesque
Boulevard West, Montreal, Quebec, Canada H3B 4A5, on November 30, 2000 at 11:00
A.M., local time, for the following purposes:
1. To approve the adoption of the Amended and Restated
Articles of Incorporation of the Company;
2. To elect six members of the Board of Directors;
3. To approve the adoption of the Company's Stock Option
Incentive Plan and Bio Syntech Canada, Inc.'s Stock
Option Incentive Plan;
4. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year
ending March 31, 2001; and
5. To transact such other business as may properly be
brought before the Annual Meeting or any adjournment
thereof.
The Board of Directors has fixed the close of business on October
25, 2000 as the record date for the Annual Meeting (the "Record Date"). Holders
of record of Common Stock on the stock transfer books of the Company at the
close of business on the Record Date are entitled to notice of, and 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 Record Date have voting
rights in that number of shares of the Company's Common Stock equal in number to
the number of shares of such exchangeable preferred stock held.
By Order of the Board of Directors
Anthony Casola
Chief Financial Officer & Secretary
Dated: October 30, 2000
Laval, Quebec, Canada
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE URGED TO
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE THAT IS
PROVIDED.
BIOSYNTECH, INC.
475 Boulevard Armand-Frappier
Laval, Quebec, Canada H7V 4B3
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PROXY STATEMENT
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INTRODUCTION
This Proxy Statement is being furnished to the holders of shares of
common stock, $.001 par value (the "Common Stock") of BioSyntech, Inc. (the
"Company") and the holders of exchangeable preferred stock (the "Exchangeable
Shares") of the Company's subsidiary, Bio Syntech Canada, Inc. ("Bio Syntech
Canada") in connection with the solicitation of the accompanying Proxy for use
at the 2000 Annual Meeting of Stockholders of the Company (the "Annual Meeting")
to be held at the Queen Elizabeth Hotel at 900 Rene-Levesque Boulevard West,
Montreal, Quebec, Canada H3B 4A5, on November 30, 2000, at 11:00 a.m., and any
adjournment thereof.
The approximate date on which this Proxy Statement and the
accompanying Proxy will first be sent or given to the Company's stockholders and
the holders of Exchangeable Shares is November 1, 2000.
RECORD DATE AND VOTING SECURITIES
Only holders of record of Common Stock and Exchangeable Shares at
the close of business on October 25, 2000, the record date (the "Record Date")
for the Annual Meeting, will be entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof. As of the Record Date, there were
29,182,250 shares of Common Stock outstanding, which includes 15,177,036 shares
of Common Stock that were issued in trust (the "Trust Shares") for the benefit
of the holders of Exchangeable Shares.
The Company has only one class of voting shares. All shares in this
class have one vote per share. The Exchangeable Shares are exchangeable on a
share-for-share basis into the Trust Shares. Each holder of Exchangeable Shares
has voting rights in that number of Trust Shares as equals the number of
Exchangeable Shares held by such holder. References herein to "stockholders"
include holders of Exchangeable Shares unless the context otherwise requires.
VOTING OF SHARES AND TRUST SHARES
Stockholders represented by Proxies or voting instructions to the
trustee of the Trust Shares (the "Trustee") that are properly executed, duly
returned and not revoked will be voted in accordance with the instructions
contained therein. If no specification is indicated in the Proxy or voting
instructions to the Trustee, all such shares will be voted (i) for the adoption
of the Amended and Restated Articles of Incorporation, (ii) for election as
directors of the persons who have been nominated by the Board of Directors,
(iii) for approval of the adoption of the Company's Stock Option Incentive Plan
(the "BSYI Option Plan") and Bio Syntech Canada's Stock Option Incentive Plan
(the "BSC Option Plan", and together with the BSYI Option Plan, the "Option
Plans"), (iv) for the ratification of the appointment of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending March 31, 2001 and
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(v) on any other matter that may properly be brought before the Annual Meeting,
in accordance with the judgment of the person or persons voting the Proxies or
the Trustee.
The execution of a Proxy or voting instructions to the Trustee will
in no way affect a stockholder's right to attend the Annual Meeting and to vote
in person. Any Proxy or voting instructions to the Trustee executed and returned
by a stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company 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
the stockholder attends the Annual Meeting and votes 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.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
VOTES NEEDED
The holders of a majority of the outstanding shares of Common Stock,
whether present in person or represented by proxy, will constitute a quorum for
each of the matters identified in the notice of the Annual Meeting, as well as
for any other matters that may come before the Annual Meeting.
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 and the ratification of the auditors.
The affirmative vote of a majority of the outstanding shares of
Common Stock is required to approve the adoption of the Amended and Restated
Articles of Incorporation. In tabulating the votes on the proposal to approve
the adoption of the Amended and Restated Articles of Incorporation, abstentions
and broker non-votes will have the same effect as a negative vote.
A plurality of the votes cast is required for the election of
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.
The affirmative vote of a majority of the votes cast is required to
approve the adoption of the Option Plans and the proposal to ratify the
appointment of Ernst & Young LLP. In tabulating the votes on the proposals to
approve the adoption of the Option Plans 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 Option Plans and the proposal to ratify the appointment of
Ernst & Young LLP are approved.
ATTENDING IN PERSON
Only stockholders, their proxy holders, and the Company's invited
guests may attend the Annual Meeting. If a person wishes to attend the Annual
Meeting, but holds his shares through someone else,
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such as a broker, the person must bring proof of his ownership and
identification with a photo to the Annual Meeting. For example, the person could
bring an account statement showing that he owned shares of Common Stock or
Exchangeable Shares as of the Record Date as acceptable proof of ownership.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information as of the Record Date
regarding the beneficial ownership of shares of Common Stock by the Company's
current directors and executive officers, nominees for director, those persons
or entities who, to the Company's knowledge, beneficially own more than 5% of
the Common Stock and by all directors and executive officers as a group. Unless
otherwise indicated, each stockholder has sole voting power and dispositive
power with respect to the indicated shares:
Shares of Common Percentage of Common
Name and Address of Stock Beneficially Stock Beneficially
Beneficial Owner Owned (1)(2) Owned
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9083-1496 Quebec Inc. (3) 7,640,000 26.2%
475 Boulevard Armand-Frappier,
Laval, Quebec, Canada H7V 4B3
Amine Selmani (3) 9,062,500(4) 30.5%
475 Boulevard Armand-Frappier,
Laval, Quebec, Canada H7V 4B3
Marie-Claire Pilon 0 --
475 Boulevard Armand-Frappier,
Laval, Quebec, Canada H7V 4B3
Denis N. Beaudry (5) 25,000(6) (7)
3744 Jean Brillant, Suite 6332,
Montreal, Quebec, Canada
H3T 1P1
Pierre Alary 25,000(6) (7)
1101 Parent Street, Saint-Bruno,
Quebec, Canada J3V 6E6
Jean-Yves Bourgeois 25,000(6) (7)
1010 Sherbrouke West, Suite 1100,
Montreal, Quebec, Canada H3A 2R7
Pierre Ranger 125,000(8) (7)
2655 boul. Daniel Johnson,
Laval, Quebec, Canada H7P 5Y2
Anthony Casola 0 --
475 Boulevard Armand-Frappier,
Laval, Quebec, Canada H7V 4B3
All Officers and Directors 9,262,500(9) 31.0%
as a group (7 persons)
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(1) Includes rights to acquire shares of Common Stock through the exchange
of Exchangeable Shares.
(2) A person is deemed to be the beneficial owner of voting securities that
can be acquired by such person within 60 days after the Record Date
upon the exercise or conversion of options, warrants or convertible
securities. Each beneficial owner's percentage ownership is determined
by assuming that options, warrants and convertible securities that are
held by such person (but not those held by any other person) and that
are exercisable or convertible within 60 days after the Record Date
have been exercised or converted.
(3) Dr. Selmani does not own directly any Exchangeable Shares or Common
Stock. However, by virtue of his ownership of 9083-1496 Quebec Inc.,
Dr. Selmani has shared voting and dispositive power with respect to the
7,640,000 Exchangeable Shares owned by 9083-1496 Quebec Inc. Dr.
Selmani also may be deemed the beneficial owner of 337,500 shares of
Common Stock that would be held by him upon exercise of options to
purchase 25,000 shares of Common Stock granted under the BSYI Option
Plan and exchange of 312,500 Exchangeable Shares issuable upon exercise
of options granted to Dr. Selmani under the BSC Option Plan.
(4) Includes an aggregate of 1,085,000 shares of Common Stock (which
includes 200,000 shares issuable upon the exercise of options granted
under the BSC Option Plan) beneficially owned by Monique Jarry, the
spouse of Dr. Selmani. Ms. Jarry is deemed to be the beneficial owner
of such shares of Common Stock by reason of her beneficial ownership of
the same number of Exchangeable Shares.
(5) Denis N. Beaudry is the representative of Polyvalor, Inc. ("Polyvalor")
on the Company's Board of Directors. The shares reflected in the table
above do not include 1,072,000 Exchangeable Shares beneficially owned
by Polyvalor, which are exchangeable on a one-for-one basis for shares
of 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 of the Company's Board of Directors.
(6) Represents 25,000 shares of Common Stock issuable upon exercise of
options granted to such Directors under the BSYI Option Plan.
(7) Less than 1.0%.
(8) Represents (i) 25,000 shares of Common Stock issuable upon exercise of
options granted under the BSYI Option Plan and (ii) 100,000 shares of
Common Stock that would be beneficially owned by Dr. Ranger upon
exchange of 100,000 Exchangeable Shares issuable upon exercise of
options granted to Dr. Ranger under the BSC Option Plan.
(9) Includes an aggregate of 125,000 shares of Common Stock issuable upon
exercise of options granted under the BSYI Option Plan and 612,500
shares of Common Stock issuable upon exchange of 612,500 Exchangeable
Shares issuable upon exercise of options granted under the BSC Option
Plan.
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PROPOSAL NO. 1
APPROVING ADOPTION OF THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF THE COMPANY
The Board of Directors recommends the approval of the adoption of
proposed Amended and Restated Articles of Incorporation. The Board of Directors
believes Amended and Restated Articles of Incorporation are required to ensure
that the Company's Articles of Incorporation conform to the requirements of the
General Corporation Law of the State of Nevada (the "NGCL"). In approving this
proposal, the stockholders will also be (i) ratifying a change in the Company's
name from "Dream Team International, Inc." to "BioSyntech, Inc."; (ii) approving
an increase from 50,000,000 to 100,000,000 in the Company's authorized shares of
Common Stock and the creation a new class of Preferred Stock consisting of five
million (5,000,000) shares, par value $.001 per share (the "Preferred Stock");
(iii) approving the classification of the Board of Directors, (iv) confirming
the elimination of preemptive rights, and (v) eliminate a restriction on where
the Company can conduct business and hold Board of Director and stockholder
meetings. The amended provisions relating to the Company's capital structure
will also remove references to any prior actions by the Company relating to its
capital structure.
The following describes the ratification of the name change, the
proposed changes in the Company's capital structure, the classification of the
Board of Directors, the confirmation of elimination of preemptive rights and the
elimination of restrictions on where the Company can conduct business and hold
meetings. The Amended and Restated Articles of Incorporation are attached hereto
as Annex I and this discussion of the Amended and Restated Articles of
Incorporation is qualified in its entirety by reference to Annex I.
Change in Corporate Name
Prior to February 2000, the Company was a publicly-traded
corporation without operations known as "Dream Team International, Inc."
Pursuant to an Amalgamation Agreement and related agreements, as amended (the
"Exchange Agreements"), dated February 15, 2000 by and among the Company, its
then wholly-owned subsidiary 9083-5661 Quebec Inc., a Quebec corporation
("9083-5661"), Bio Syntech Ltd., a Quebec corporation, and the shareholders of
Bio Syntech (the "Bio Syntech Shareholders"), on February 29, 2000, Bio Syntech
Ltd. became a subsidiary of the Company. In connection with the Exchange
Agreements, the Company sought to change its name to "BioSyntech, Inc." so that
the Company's name would be aligned with its operating business. Ratification of
the name change is necessary because while the name change was purportedly
approved on December 28, 1999 by written consent of the holders of the majority
of the then outstanding shares of Common Stock, certain required formalities of
law were not observed. In addition to ensuring that the Company's name would be
aligned with its operating business, the ratification of the name change would
eliminate potential confusion over the identity of the Company, because it has
been doing business and has filed reports with the United States Securities and
Exchange Commission (the "SEC") as "BioSyntech, Inc." since February 29, 2000.
There will be no consequences to stockholders from the ratification
of the name change. If this proposal is adopted, stockholders will not be
required to exchange outstanding stock certificates for new certificates.
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Increase in Authorized Capital
The Company is currently authorized to issue 50,000,000 shares of
Common Stock. As of the Record Date, 29,182,250 shares of Common Stock were
issued and outstanding (including 15,177,036 Trust Shares), 4,000,000 shares of
Common Stock that are reserved for issuance upon the exercise of options granted
or to be granted under the Option Plans and 2,380,214 shares of Common Stock
that are reserved for issuance upon exercise of warrants. If this Proposal No. 1
is approved, the Company's authorized shares of Common Stock would increase from
fifty million (50,000,000) shares to one hundred million (100,000,000) shares
and five million (5,000,000) shares of Preferred Stock would be authorized.
The Company anticipates that it will seek to raise additional equity
capital over the next several years. These efforts may include both public and
private offerings of Common Stock, as well as other securities exercisable for
or convertible into Common Stock. The Company currently does not have any
specific plans, understandings or agreements for the issuance or use of the
proposed additional shares of Common Stock or Preferred Stock. The Board of
Directors believes that if an increase in the authorized number of shares of
Common Stock and the authorization of Preferred Stock were to be postponed until
a specific need arose, the delay and expense incident to obtaining the approval
of the Company's stockholders at that time could significantly impair the
Company's ability to meet its financing objectives.
The Board of Directors believes the proposed increase in the number
of authorized shares of Common Stock is necessary to provide the Company with
the flexibility to act in the future with respect to financing programs,
acquisitions, mergers, stock splits, convertible debt financing, employee
benefit plans and other corporate purposes. If the proposed Amended and Restated
Articles of Incorporation become effective, the Board of Directors will be free
to issue the additional authorized shares of Common Stock without further action
on the part of stockholders (except as may be required for a particular
transaction by applicable law, requirements of regulatory agencies or by stock
exchange or automated quotation system rules). The additional shares of Common
Stock to be authorized will have rights identical to the shares of Common Stock
currently outstanding.
The Board of Directors also believes the complexity of modern
business financing and possible future transactions require greater flexibility
in the Company's capital structure than currently exists. Should Preferred Stock
be issued, the powers, preferences and rights, such as dividend or interest
rates, conversion prices, voting rights, redemption prices, maturity dates and
similar matters, would be determined by the Board of Directors, without further
authorization of the stockholders. If this proposal is approved, the Board of
Directors would be permitted to issue Preferred Stock from time to time for any
proper corporate purpose. Shares of Preferred Stock could be issued publicly or
privately, in one or more series, and each series of Preferred Stock would rank
senior to the Common Stock with respect to dividend and/or liquidation rights
and could have greater voting power than the Common Stock.
The authorization of additional shares of Common Stock pursuant to
this proposal will itself have no dilutive effect upon the proportionate voting
power of the present stockholders of the Company. However, to the extent that
the Company subsequently issues shares of Common Stock and Preferred Stock to
persons other than the present stockholders, the issuance could have a
substantial dilutive effect on present stockholders. The issuance of additional
shares of Common Stock and Preferred Stock may also have the effect of diluting
the stock ownership of persons seeking to obtain control of the Company.
Although the Board of Directors has no present intention of doing so, the
Company's authorized but unissued Common Stock and Preferred Stock could be
issued in one or more transactions that would make it more difficult or costly,
and less likely, to take control of the Company. The proposed amendment to the
Company's Articles of Incorporation is not being recommended in response to any
specific effort to obtain control of the Company of which the Company is aware.
No stockholder of the
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Company will have any preemptive rights regarding future issuance of any shares
of Common Stock or Preferred Stock.
Classified Board of Directors
If this Proposal No. 1 is approved, the Company's Articles of
Incorporation and Bylaws would provide for classified terms of the directors of
the Company, effective immediately and affecting the directors elected at the
Annual Meeting.
Under the proposal, the Board of Directors would be divided into
three classes with each Class I director elected to serve until the 2001 annual
meeting of stockholders, each Class II director elected to serve until the 2002
annual meeting of stockholders, and each Class III director elected to serve
until the 2003 annual meeting of stockholders. At each annual meeting of
stockholders following this Annual Meeting, the number of directors equal to the
number of directors in a class whose term expires at the time of such annual
meeting would be elected to serve until the third succeeding annual meeting of
stockholders. Notwithstanding the foregoing, directors would serve until their
successors are elected and qualified or until their death, resignation or
removal from office. Vacancies that occur during the year would be filled by the
majority vote of the remaining members of the Board of Directors then in office,
and each person so elected would serve the remainder of the full term of the
class to which the new director was elected.
The Board of Directors believes that the three-year term of a
classified board, with its election of approximately one-third of the directors
each year, will help assure the continuity and stability of the Company's
long-term policies in the future, since a majority of the directors at any given
time will have prior experience as directors of the Company. In addition, the
Board of Directors believes that a classified Board of Directors will permit it
to represent more effectively the interests of all stockholders in a variety of
situations, including dealing with proposals or actions by a disruptive
substantial stockholder or stockholder group. The Company is not currently aware
of any such proposals or actions.
A classified board will also have an effect of making it more
difficult to replace incumbent directors and management, even if the reason for
the desired change is inadequate performance. So long as the Board of Directors
is classified into three classes, a minimum of three annual meetings of
stockholders would generally be required to replace the entire Board of
Directors, absent intervening vacancies. While the proposal is not intended as a
takeover-resistive measure in response to a specific threat, it may discourage
the acquisition of large blocks of the Company's shares by causing it to take
longer for a person or group of person who acquire such block of shares to
effect a change in management.
Confirmation of Elimination of Preemptive Rights
If this Proposal No. 1 is approved, stockholders of the Company will
be confirming the elimination from the Company's Articles of Incorporation of
preemptive rights. A stockholder's preemptive right is the right to maintain a
proportionate ownership interest in a corporation through the purchase of that
proportionate interest of any newly-issued shares. The NGCL provides that
existing stockholders have no preemptive rights unless such rights are
explicitly provided for in a Nevada corporation's Articles of Incorporation. The
Company's current Articles of Incorporation, which were drafted at the time of
its 1994 incorporation, provide that except to the extent limited or denied by
NGCL ss.78.265, stockholders shall have preemptive rights. NGCL ss.78.265
relates to corporations incorporated prior to October 1, 1991 and is therefore
inapplicable to the Company. Notwithstanding that the reference in the Company's
Articles of Incorporation is to an inapplicable statute, the Board of Directors
believes that the clear intent of the incorporator (whose acts were subsequently
ratified by the then incumbent
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Board of Directors) was to limit the grant of preemptive rights to stockholders
to the extent provided in NGCL ss.78.265. That statute provides that a
preemptive right does not exist with respect to the acquisition of shares that
upon issuance are registered under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Common Stock, the only presently
authorized class of capital stock of the Company, was registered under Section
12 of the Exchange Act in August 1999. As a result, were the incorporator's
intent to be given effect, stockholders of the Company would not have any
preemptive rights with respect to any issuances of Common Stock subsequent to
that date and for so long as the Common Stock were to be so registered. The
Board of Directors believes that the present text of the Company's Articles of
Incorporation relating to preemptive rights is merely the result of a
draftsman's error and should be corrected by the proposed Amended and Restated
Articles of Incorporation. Such correction would be consistent with the
Company's status as a publicly held corporation and its intention to access
public and private equity financing to develop its business. Although no
particular equity financing is presently contemplated by the Company, the Board
of Directors believes that should there be a question as to whether the
stockholders have preemptive rights, the Company's opportunities could be
narrowed or even eliminated and the terms and conditions of future proposed
financings could be adversely affected. To confirm the elimination of preemptive
rights, this Proposal No. 1 would remove all references in the Company's
Articles of Incorporation to preemptive rights, with the result that the
stockholders of the Company would have no preemptive rights under any
circumstances.
Establishing Principal Offices and Holding Meetings Outside the United States
If this Proposal No. 1 is approved, a provision in the Articles of
Incorporation of the Company which requires that it conduct business and hold
Board of Directors and stockholders' meetings only in the United States will be
eliminated. This provision was drafted before it was contemplated that the
Company would enter into the Exchange Agreement. As a result of the Exchange
Agreements, the Company's operations are conducted and managed in Canada and
Canadian citizens, through their ownership of Exchangeable Shares, have voting
power over a majority of the outstanding shares of Common Stock. The Articles of
Incorporation as presently drafted do not reflect the current status of
operations, ownership and management of the Company. The effect of Proposal No.
1 would be to conform the Article of Incorporation to such status.
Required Vote
The affirmative vote of a majority of the outstanding shares of
Common Stock is required to approve the proposal to amend and restate the
Company's Articles of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE PROPOSAL TO ADOPT THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF THE COMPANY
PROPOSAL 2
ELECTION OF THE BOARD OF DIRECTORS
Unless otherwise specified, all Proxies received will be voted in
favor of the election of the persons named below as directors of the Company. If
Proposal No. 1 is approved, the directors would be divided into three classes.
At the Annual Meeting, two Class I Directors would be elected, each to serve a
one-year term until the 2001 Annual Meeting of Stockholders and until their
successors are elected and qualified. The nominees for Class I Directors are Ms.
Marie-Claire Pilon and Mr. Pierre Alary. At the Annual Meeting, two Class II
Directors would be elected, each to serve a two-year term until the 2002
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Annual Meeting of Stockholders and until their successors are elected and
qualified. The nominees for Class II Directors are Mr. Jean-Yves Bourgeois and
Dr. Pierre Ranger. At the Annual Meeting, two Class III Directors would be
elected, each to serve a three-year term until the 2003 Annual Meeting of
Stockholders and until their successors are elected and qualified. The nominees
for Class III Directors are Dr. Amine Selmani and Mr. Denis N. Beaudry.
Following the Annual Meeting, one class of directors would be elected each year,
and the members of such class would hold office for a three-year term and until
their successors are duly elected and qualified, or until their death,
resignation or removal from office. If Proposal No. 1 is not approved, then six
directors will be elected at the Annual Meeting each to serve for a one-year
term until the 2001 Annual Meeting of Stockholders and until their successors
are elected and qualified.
Each of the nominees, other than Marie-Claire Pilon, has been
serving as a director of the Company since February 2000. The terms of office of
the current directors expire at the Annual Meeting, and when their successors
are duly elected and qualify. Management has no reason to believe that any of
the nominees will be unable or unwilling to serve as a director, if elected.
Should any of the nominees not remain a candidate for election at the date of
the Annual Meeting, the Proxies will be voted in favor of those nominees who
remain candidates and may be voted for substitute nominees selected by the Board
of Directors. The names of the nominees and certain information concerning them
are set forth below:
Nominee(1) Proposed Class Age
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Marie-Claire Pilon Class I 46
Pierre Alary Class I 43
Jean-Yves Bourgeois Class II 33
Pierre Ranger Class II 45
Amine Selmani Class III 43
Denis N. Beaudry Class III 57
(1) Mr. Beaudry is the nominee of Polyvalor which has the right to appoint one
nominee to the Board of Directors. See "Certain Relationships and Related
Transaction - Agreement with Polyvalor." There are no family relationships among
the directors and executive officers of the Company.
Amine Selmani Ph.D.- Dr. Selmani has served as Chairman of the Board
and President of the Company since February 2000, Chief Executive Officer of the
Company from February 2000 to September 2000 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.
10
Marie-Claire Pilon - Ms. Pilon became the Chief Executive Officer of
the Company in September 2000. Ms Pilon is a pharmacist and holds an Executive
Masters in Business Administration from the University of New Haven,
Connecticut. Prior to joining the Company, Ms Pilon held a number of senior
positions within both the North American and European pharmaceutical industry.
Most recently, Ms. Pilon was a Senior 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.
Denis N. Beaudry - Mr. Beaudry has been a director of the Company
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 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 of the firms Lumenon
Innovative Lightwave Technologies, Inc., Sinlab Inc., Phytobiotech Inc.,
Polyplan Inc., Odotech Inc. and COESI Inc.
Pierre Alary, CA - Mr. Alary has been a director of the Company
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 has held various positions from September 1978 to August
1998, including as Senior Partner, at Ernst & Young LLP, specializing in the
biotechnology industry.
Jean-Yves Bourgeois - Mr. Bourgeois has been a director of the
Company since February 2000. Since 1999, 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 1998 to 1999.
From 1997 to 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 1992 to 1997, Mr. Bourgeois held
various positions, including the head of corporate finance for eastern Canada,
at Gordon Capital, a securities broker/dealer, where he specialized in high
technology and biotechnology industries.
Pierre Ranger MD - Dr. Ranger has been a director of the Company
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 Medical Degree from the University of Montreal in 1979 and
Diploma of Sports Medicine in 1996.
11
Committees of the Board of Directors
The Board of Directors has formed a Compensation Committee, which
administers the BSYI Option Plan and makes recommendations concerning salaries
and incentive compensation for employees of and consultants to the Company, and
an Audit Committee, which reviews the Company's financial statements and
accounting policies, resolves potential conflicts of interest, receives and
reviews the recommendations of the Company's independent auditors and confers
with the Company's independent auditors with respect to the training and
supervision of internal accounting personnel and the adequacy of internal
accounting controls. The Compensation Committee is currently composed of Mr.
Bourgeois (Chairman), Mr. Alary and Dr. Ranger and the Audit Committee is
currently composed of Mr. Alary (Chairman), Mr. Beaudry and Mr. Bourgeois.
The Company presently does not have a nominating committee, the
customary functions of such committee being performed by the entire Board of
Directors.
Meetings
The Board of Directors held one meeting during the fiscal year ended
March 31, 2000. The Compensation Committee and the Audit Committee each held one
meeting during the fiscal year ended March 31, 2000. All directors were present
at each meeting of the Board of Directors and each meeting of a Committee in
which they members of. From time to time, the members of the Board of Directors
act by unanimous written consent pursuant to the NGCL.
Other Executive Officers
Anthony Casola - Mr. Casola has been the Chief Financial Officer and
Secretary of the Company 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.
Board of Directors Compensation
The Board of Directors does not currently pay directors fee for
service on the Board of Directors. Directors are reimbursed for their expenses
incurred in attending meetings of the Board of Directors. Under the terms of the
BSYI Option Plan, directors are eligible for the grant of options.
The Board of Directors will determine the remuneration of directors
during the current and subsequent fiscal years. In August 2000, options to
purchase 50,000 shares of Common Stock at an exercise price of US$4.00 per share
was granted to each of Messrs. Selmani, Beaudry, Alary, Bourgeois and Ranger
under the BSYI Option Plan. In August 2000, options to purchase 175,000 shares
of Common Stock at an exercise price of US$4.00 per share was granted to Ms.
Pilon under the BSYI Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH OF THE NOMINEES
12
EXECUTIVE COMPENSATION
Compensation of Executives
The following table sets forth, for the periods indicated, all
compensation awarded to, earned by or paid to the Chief Executive Officer of Bio
Syntech Ltd., which was merged with the Company's wholly-owned subsidiary, Bio
Syntech Canada, effective February 29, 2000. No other executive officers of the
Company and Bio Syntech Ltd. received annual compensation in excess of US
$100,000 during the periods indicated. The Company's functional currency is the
Canadian dollar. All amounts presented in this Proxy Statement in U.S. currency
are identified as such. Other amounts are expressed in Canadian dollars.
Summary Compensation Table
Annual Compensation (1) Long-Term
----------------------- Compensation (Awards):
Securities
Name and Position Fiscal Year Salary Bonus Underlying Options (#)
----------------- ------------ ------ ----- ----------------------
Amine Selmani 2000 $120,000 $0 -
President and Chief 1999 $120,000 $0 312,500(2)
Executive Officer 1998 $0 $0 -
- ----------------
(1) Certain of the executive officers of the Company routinely receive
other benefits from the Company, the amounts of which are customary in the
Company's industry. The Company has concluded, after reasonable inquiry, that
the aggregate amounts of such benefits during each of the periods reflected in
the table above did not exceed the lesser of US$50,000 or 10% of the
compensation set forth above for any named individual in respect of any such
period.
(2) Represents options to purchase Exchangeable Shares awarded under the
BSC Option Plan.
Option Grants
No options were granted to Dr. Selmani in the fiscal year ended
March 31, 2000. The Company has never granted any stock appreciation rights.
Aggregated Fiscal Year-End Option Exercises and Option Values
Dr. Selmani did not exercise any options during the past fiscal
year. The following table sets forth certain information regarding unexercised
stock options held by Dr. Selmani as of March 31, 2000.
Number of Securities Underlying Unexercised
Options at Value of Unexercised In-The-Money Options at
March 31, 2000(#) March 31, 2000($)
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
---- ------------------------- ----------------------------
Amine Selmani 312,500/0 $1,596,094/0
- -----------------
(1) Based on the market value, as reported on the Over the Counter Bulletin
Board, of US$5.6250 per share of Common Stock at March 31, 2000 and an exercise
price of $0.75 (US$0.5175) per share.
13
Other Compensation Plans
The Company has no pension plan or other compensation plans for its
executive officers or directors.
Employment Agreement
Marie-Claire Pilon Employment Agreement
The Company has entered into a three-year employment agreement with
Marie-Claire Pilon dated as of August 7, 2000. Since September 2000, Ms. Pilon
has served as Chief Executive Officer with such duties and responsibilities as
are determined by the Board of Directors from time to time. Ms. Pilon receives
an annual base salary of $165,000, which is to be reviewed annually, plus a
bonus payment at the discretion of the Compensation Committee. The Company also
granted Ms. Pilon options to purchase 175,000 shares of Common Stock at an
exercise price of US$4.00 per share, vesting in three installments commencing
August 2001. Throughout the term of her employment and for a period of two years
thereafter, the agreement restricts Ms. Pilon's ability to engage in activities
competitive with those of the Company. Additionally, during the same time
period, Ms. Pilon has agreed that she will not solicit any person employed by
the Company to leave its employ, or employ or solicit for employment any person
who is employed by the Company. If Ms. Pilon's employment is terminated by the
Company without cause, she is entitled to receive her base salary for six months
or for 12 months, depending upon the date of termination. Ms. Pilon will not be
entitled to receive any salary if she is terminated for cause, disability or
death.
Anthony Casola Employment Agreement
The Company has entered into a three-year employment agreement with
Anthony Casola dated as of September 2000. Since September 2000, Mr. Casola has
served as Chief Financial Officer and Secretary with such duties and
responsibilities as are determined by the Company's Board of Directors,
President or Chief Executive Officer from time to time. Mr. Casola receives an
annual base salary of $125,000, which is to be reviewed annually, plus a bonus
payment at the discretion of the Compensation Committee. The Company also
granted Mr. Casola options to purchase 50,000 shares of Common Stock at an
exercise price of US$4.00 per share, vesting in three installments commencing
September 2001. Throughout the term of his employment and for a period of two
years thereafter, the agreement restricts Mr. Casola's ability to engage in
activities competitive with those of the Company. Additionally, during the same
time period, Mr. Casola has agreed that he will not solicit any person employed
by the Company to leave its employ, or employ or solicit for employment any
person who is employed by the Company. If Mr. Casola's employment is terminated
by the Company without cause, he is entitled to receive his base salary for four
months or for 12 months, depending upon the date of termination. Mr. Casola will
not be entitled to receive any salary if he is terminated for cause, disability
or death.
14
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act as amended, requires the Company's
directors and executive officers, and persons who beneficially own more than ten
percent of the Company's Common Stock, to file with the SEC reports of ownership
of Common Stock and other equity securities of the Company. Officers, directors
and more than ten percent stockholders 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 on review of the copies of such reports furnished to the
Company during the fiscal year ended March 31, 2000, all required Section 16(a)
filings by beneficial owners were complied with.
Certain Relationships And Related Transactions
Exchange Agreements
As a result of the Exchange Agreements, the Company became the
record and beneficial owner of all of the issued and outstanding shares of Bio
Syntech Canada's Common Stock and the Bio Syntech Shareholders were issued
Exchangeable Shares. The Exchangeable Shares are exchangeable on a
share-for-share basis for an aggregate of 15,177,036 shares of 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 (the "Trust
Agreement"), by and among the Company, Pierre Barnard (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, the Company's Chairman of the Board, President and
the beneficial holder of more than 5% of the outstanding Common Stock. Dr.
Selmani has shared voting and dispositive power with respect to 7,640,000
Exchangeable Shares 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
Common Stock that would be held by him upon exercise of options to purchase
25,000 shares of Common Stock granted under the BSYI Option Plan and exchange of
312,000 Exchangeable Shares issuable upon exercise of options granted to Dr.
Selmani under the BSC Option Plan. 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 Shares (including 200,000
Exchangeable Shares issuable under the BSC Option Plan).
Under the terms of the Trust Agreement, each beneficial holder of
Exchangeable Shares has voting rights in that number of Trust Shares equal to
the number of Exchangeable Shares held. Consequently, the Bio Syntech
Shareholders held through the Trustee, securities with voting rights equal to
approximately 55.7% (currently approximately 52%) of the total voting power of
the outstanding Common Stock immediately after the Transactions. At such time as
the holders of Exchangeable Shares may exchange such shares for Common Stock,
they will have the right to direct the disposition of such Common Stock. Under
the terms of the Trust Agreement, the Trustee will abstain from voting any of
the Trust Shares as to which he does not receive voting instructions from the
holders of Exchangeable Shares.
The sole source of consideration for issuance to the Bio Syntech
Shareholders of the Exchangeable Shares was the exchange of the Bio Syntech Ltd.
shares held by them. At such time as the Bio Syntech Shareholders may exchange
their Exchangeable Shares for Common Stock, the sole source of consideration for
the transfer to them of the Common Stock will be such Exchangeable Shares.
The Exchange Agreements were structured to provide the Bio Syntech
Shareholders with a capital gain deferral under applicable Canadian tax laws,
rules and regulations.
15
Agreement with Polyvalor
In October 1997, the Company 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, the Company acquired from Polyvalor
all rights related to certain patents and know-how. In consideration of said
assignment, the Company agreed to pay to Polyvalor a royalty of 5% on all gross
sales of all products and services sold by the Company, up to a maximum
cumulative amount of $3,000,000. In connection with the Assignment Agreement,
the Company's subsidiary Bio Syntech Canada, issued to Polyvalor 1,072,000
shares of its Exchangeable Shares and granted Polyvalor the right to nominate
one director to the Company's Board of Directors. As a result of the
Transactions, the Exchangeable Shares are exchangeable on a share for share
basis for Common Stock, and Polyvalor has the right to nominate one director to
the Company's Board of Directors.
PROPOSAL 3
ADOPTION OF STOCK OPTION INCENTIVE PLANs OF THE COMPANY
AND BIO SYNTECH CANADA
The Board of Directors has unanimously approved for submission to a
vote of the stockholders a proposal to approve the Option Plans as set forth in
Annex II and Annex III to this Proxy Statement. This discussion is qualified in
its entirety by reference to Annex II and Annex III. As used herein with respect
to the Option Plans, references to the Company include Bio Syntech Canada and
other subsidiaries of the Company, where appropriate.
The purposes of the Option Plans are to enable the Company to
attract and retain persons of ability as directors, officers and key employees
with managerial, professional or supervisory responsibilities, to retain able
consultants and advisors, and to motivate such persons to use their best efforts
on behalf of the Company, by providing them with an equity participation in the
Company.
The Board of Directors believes that it is in the of best interests
of the Company and its stockholders to approve the Option Plans because the
Option Plans provide the Company with greater ability to attract and retain key
personnel.
16
The Option Plan
The Participants
Options to purchases shares Common Stock and Exchangeable Shares
(the "Options") may be granted to (i) directors, officers and other full-time
salaried employees of the Company with managerial, professional or supervisory
responsibilities, and (ii) consultants and advisors who render bona fide
services to the Company, in each case, if the Board of Directors determines that
such officer, employee, consultant or advisor has the capacity to make a
substantial contribution to the success of the Company. There are 36 employees
and directors who are eligible to be granted Options under the BSYI Option Plan.
There are 25 employees and directors who hold Options under the BSC Option Plan.
The Shares
Under the BSYI Option Plan, options to purchase up to an aggregate
of 2,500,000 shares of Common Stock may be granted, of which options to purchase
525,000 shares of Common Stock have been granted at an exercise price of US$4.00
per share. Under the BSC Option Plan, options to purchase up to an aggregate of
1,500,000 Exchangeable Shares may be granted, all of which have been granted at
exercise prices varying between CDN $0.75 and US $1.50 per share.
Administration of the Option Plans
The Option Plans are administered by the Board of Directors of the
respective entity. The Board of Directors may delegate its authority and
responsibilities to a remuneration committee (the "Compensation Committee"). If
such delegation is made, any references to the Board of Directors herein shall
be applicable to the Compensation Committee. Under the terms of both Option
Plans, the Board of Directors has the authority to determine, subject to the
terms and conditions of the Option Plans, the persons to whom options are
granted, the number of shares covered by options granted to each optionee, and
the terms and conditions of each option, including its duration. The aggregate
number of shares underlying options that may be granted at any time to any one
person is that number of shares that is equal to 5% of the number of shares of
the Company that are issued and outstanding at such time.
The Option Plans 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 either of the Option Plans.
Option Price
Under both Option Plans, stock options to purchase either shares of
Common Stock or Exchangeable Shares, as the case may be, shall granted at an
exercise price as established by the Board of Directors, but in no event shall
the exercise price be lower than the fair market value of the Common Stock or
the Exchangeable Shares, as the case maybe, as of the date of grant.
Terms of Options
Options under both Option Plans may be granted for a term of up to
10 years. Both Option Plans provide that if an Option, or portion thereof,
expires, lapses without being exercised or is terminated, canceled or
surrendered for any reason without being exercised in full, the unpurchased
shares of Common Stock or Exchangeable Shares, as the case may be, that were
subject to such Option or portion thereof shall be available for future grants
of stock options.
17
Options granted under both Option Plans are not assignable or
transferable, except by will or the laws of intestate succession. Options
granted under both Option Plans may be exercised by the optionee (or the
optionee's legal representative) only while the optionee is employed by the
Company, 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 shall be entitled to exercise
the Option within one year after the decedent's death. 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 shall not, in any case, be exercisable beyond its stated expiration
date.
The exercise price and the number and kind of shares that may be
purchased upon exercise of Options granted under both Option Plans, and the
number of shares subject to options that may be granted under both Option Plans,
are subject to adjustment in certain events, including stock splits,
recapitalizations, mergers and reorganizations.
Options Granted under the Option Plan
During the fiscal year ended March 31, 2000 and through the Record
Date, options to purchase shares of Common Stock have been granted pursuant to
the Option Plans to (i) the Chairman of the Board and President, (ii) the Chief
Executive Officer, (iii) each Director nominee, (iv) each officer of the Company
(v) all current executive officers as a group and (vi) all employees, including
all current officers who are not executive officers, as a group as follows.
Name Number of Options #(1)(2)
---- -------------------------
Amine Selmani 362,500
Chairman of the Board and President
Marie-Claire Pilon 175,000
Chief Executive Officer
Denis N. Beaudry 50,000
Director
Pierre Alary 50,000
Director
Jean-Yves Bourgeois 50,000
Director
Pierre Ranger 50,000
Director
Anthony Casola 50,000
Chief Financial Officer & Secretary
All Officers as a Group (3 persons) 587,500
All Employees as a Group 587,500
(3 persons)
18
(1) On the Record Date, the last reported sales price of the Common
Stock as reported on the Over the Counter Electronic Bulletin Board
was US $2.0625 per share.
(2) Information contained in this table is duplicative of information
contained in "Executive Compensation" and does not signify
additional grants of options to purchase shares of Common Stock.
Registration of Shares
The Company intends to file a registration statement under the
Securities Act of 1933, as amended, with respect to the Common Stock issuable
pursuant to the BSYI Option Plan and the shares of Common Stock issuable upon
the exchange of Exchangeable Shares issuable pursuant to the BSC Option Plan, if
both Option Plans are approved by the Company's stockholders.
Required Vote
The affirmative vote of a majority of the votes cast is required for
approval of the adoption of the Option Plans. An abstention, withholding of
authority to vote or broker non-vote, therefore, will not have the same legal
effect as an "against" vote and will not be counted in determining whether the
proposal has received the requisite stockholder vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE APPROVAL OF THE ADOPTION OF THE STOCK OPTION INCENTIVE PLAN
OF EACH OF THE COMPANY AND BIO SYNTECH CANADA
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF AUDITORS OF THE COMPANY
The Board of Directors appointed Ernst & Young LLP, certified public
accountants, as the Company's independent auditors for the fiscal year ending
March 31, 2001. Although the selection of auditors does not require
ratification, the Board of Directors has directed that the appointment of Ernst
& Young LLP be submitted to stockholders for ratification due to the
significance of such appointment to the Company. If stockholders do not ratify
the appointment of Ernst & Young LLP, the Board of Directors will consider the
appointment of other certified public accountants.
The Company's auditors for the fiscal year ended March 31, 2000 were
Ernst & Young LLP. Ernst & Young LLP has advised the Company that a
representative will be present at the Annual Meeting at which time he will
respond to appropriate questions submitted by stockholders and will make such
statements as he may desire.
Required Vote
The approval of the proposal to ratify the appointment of Ernst &
Young LLP requires the affirmative vote of a majority of the votes cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF ERNST & YOUNG LLP
19
STOCKHOLDER PROPOSALS
Stockholder proposals made in accordance with Rule 14a-8 under the
Exchange Act and intended to be presented at the Company's 2001 Annual Meeting
of Stockholders must be received by the Company at its principal office in
Laval, Quebec, Canada no later than May 20, 2001 for inclusion in the proxy
statement for that meeting.
In addition, the Company's Bylaws require that a stockholder give
advance notice to the Company of nominations for election to the 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 the
Company's proxy statement in accordance with Rule 14a-8). Such stockholder's
notice must be given in writing, include the information required by the Bylaws
of the Company, and be delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Company at its principal offices. The
Company must receive such notice not less than 45 days prior to the date in the
current year that corresponds to the date in the prior year on which the Company
first mailed its proxy materials for the prior year's annual meeting of
stockholders. While the Company has not yet set the date of its 2001 Annual
Meeting of Stockholders, if it were held on November 30, 2001 (the date that
corresponds to the date on which the Annual Meeting is being held), notice of a
director nomination or stockholder proposal made otherwise than in accordance
with Rule 14a-8 would be required to be given to the Company no later than
September 16, 2001.
ANNUAL REPORT
All stockholders of record as of the Record Date, have been sent, or
are concurrently herewith being sent, a copy of the Company's Annual Report on
Form 10-KSB for the fiscal year ended March 31, 2000, which contains certified
financial statements of the Company for the fiscal year ended March 31, 2000.
OTHER MATTERS
The 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
Chief Financial Officer and Secretary
20
ANNEX I
AMENDED AND RESTATED ARTICLES OF INCOPORATION
OF
BIOSYNTECH, INC.
ARTICLE I
The name of this corporation is BioSyntech, Inc. (the "Corporation").
ARTICLE II
The nature of the business is to engage in any lawful activity.
ARTICLE III
The capital stock shall consist of 100,000,000 shares of common
stock, $0.001 par value; and 5,000,000 shares of preferred stock, par value
$.001 per share ("Preferred Stock").
Preferred Stock. The Board of Directors is expressly authorized to
provide for the issuance of all or any shares of the Preferred Stock, in one or
more series, and to fix for each such series such voting powers, full or
limited, or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such series (a "Preferred Stock Designation") and as may be permitted
by the General Corporation Law of Nevada (the "NGCL"). The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of all of the then outstanding shares
of capital stock of the Corporation, voting together as a single class, without
a separate vote of the holders of the Preferred Stock, or any series thereof,
unless a vote of any such holders is required pursuant to the NGCL or any
Preferred Stock Designation.
ARTICLE IV
A. Directors shall be elected by a plurality of votes cast and,
commencing with the election of directors at the 2000 annual meeting of
stockholders of the Corporation, shall be divided into three classes, with
respect to the time that they severally hold office, as nearly equal in number
as possible, with the initial term of office of the first class of directors to
expire at the 2001 annual meeting of stockholders of the Corporation and until
their respective successors are elected and qualify (the "Class I Directors"),
the initial term of office of the second class of directors to expire at the
2002 annual meeting of stockholders of the Corporation and until their
respective successors are elected and qualify (the "Class II Directors") and the
initial term of office of the third class of directors to expire at the 2003
annual meeting of stockholders of the Corporation and until their respective
successors are elected and qualify (the "Class III Directors"). Commencing with
the 2001 annual meeting of stockholders of the Corporation, directors elected to
succeed those directors whose terms have thereupon expired shall be elected for
a term of office to expire at the third succeeding annual meeting of
stockholders of the Corporation after their election and until their respective
successors are elected and qualify.
B. (1) If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain or attain, if
possible, the equality of the number of directors in each class, but in no case
shall a decrease in the number of directors shorten the term of any incumbent
director. If such equality is not possible, the increase or decrease shall be
apportioned among the classes in such a way that the difference in the number of
directors in any two classes shall not exceed one. Notwithstanding the
foregoing, there shall be no increase or decrease in the number of directors in
a particular class if such increase or decrease conflicts with Section 78.330 of
the NGCL.
(2) Newly created directorships resulting from any increase in
the authorized number of directors or any vacancies on the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause (other than a vacancy resulting from removal by the
stockholders, in which case such vacancy shall be filled by the stockholders)
may be filled by a majority vote of the directors then in office (unless
otherwise required by the NGCL), though less than a quorum, and a director so
chosen shall hold office for the unexpired portion of the term of the class in
which such Director was chosen to serve and until his successor is elected and
qualifies. No decrease in the numbers of authorized directors constituting the
whole Board of Directors shall shorten the term of any incumbent director.
C. Unless these Articles of Incorporation otherwise provide, where
the Board of Directors is classified as provided in Section 78.330 of theNGCL,
any director or the entire Board of Directors may be removed by stockholders
only for cause, and the affirmative vote of at least a majority of the voting
power of all the then outstanding shares of Voting Stock, voting together as a
single class, shall be required to effect such removal.
ARTICLE V
This Corporation shall have perpetual existence.
ARTICLE VI
This Corporation shall have a president, a secretary, and a
treasurer, to be chosen by the Board of Directors. Any person may hold two or
more offices.
ARTICLE VII
The resident agent of this Corporation shall be National Corporate
Research, Ltd. until such time as the Board of Directors considers it advisable
to change resident agents.
ARTICLE VIII
The capital stock of the Corporation, after the fixed consideration
therefor has been paid or performed, shall not be subject to assessment, and the
holder thereof is not individually liable for the debts and liabilities of the
Corporation.
ARTICLE IX
No director or officer of the Corporation shall be personally liable
to the Corporation of any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer for acts or
omission which involve intentional misconduct, fraud or a knowing violation of
law, or the payment of dividends in violation of Section 78.300 of the NGCL. Any
repeal or modification of this Article by the stockholders of the Corporation
shall only be prospective, and shall not adversely affect any limitation on the
personal liability of a director of the Corporation for acts or omissions prior
to such repeal or modification.
I, the undersigned, being the Chief Executive Officer of the
Corporation, pursuant to the General Corporation Law of the State of Nevada, do
make and file these Amended and Restated Articles of Incorporation, hereby
declaring and certifying that the facts stated within are true, and accordingly
have hereunto set my hand this 1st day of December, 2000.
-----------------------------------
Marie-Claire Pilon
475 Boulevard Armand-Frappier
Laval, Quebec, Canada H7V 4B3
Annex II
BIOSYNTECH INC
STOCK OPTION INCENTIVE PLAN
1. NAME AND PURPOSE OF PLAN
1.1 The stock option plan constituted hereby shall be known as the Stock
Option Incentive Plan.
1.2 The purpose of the Plan is to provide a means whereby those
Employees of the Company and its Subsidiaries who have the principal
responsibility for the successful administration and management of the Company
and whose present and potential contributions are important to its success can
obtain a proprietary interest in the Company thereby providing an incentive for
continuing beneficial service to the Company.
2. INTERPRETATION
In this Plan and in any Option, unless the context otherwise requires:
"Board" means, at any time, the board of directors of the Company in
office at that time;
"Company" means BIOSYNTECH INC, any of its subsidiaries and any
successor or continuing company resulting from amalgamation of the
Company and any other company or resulting from any other form of
corporate reorganization;
"Employee"means an individual who is a bona fide employee, director,
or officer of the Company and an individual or entity which is a
consultant of the Company;
"Employment" means the relationship of an individual who is a bona
fide employee, director, or officer of the Company and the
relationship of an individual or entity which is a consultant of the
Company;
"Market Price" on any particular day means an average of daily high
and low board lot trading prices (with no discount) for the
immediately preceding five days on which trades occurred, on any
public market on which the shares of the company are traded;
"Option" means any option granted pursuant to the Plan;
"Optionee" means an Employee who has been granted an Option;
"Option Price" means the price at which Optioned Shares may be
subscribed for pursuant to an Option.
"Optioned Shares" means Shares which are the subject of an Option;
"Plan" means the Stock Option Incentive Plan as embodied herein and
as from time to time amended in accordance with the provisions
hereof;
"Shares" means Common Shares without par value in the capital of the
Company, as constituted at the effective date hereof;
"Subsidiary" has the same meaning, with respect to the Company, as
that term has under the Quebec Companies Act .
2.1 The masculine gender shall include the feminine gender and singular
shall include the plural and vice versa.
3. SHARES SUBJECT TO THE PLAN
3.1 The aggregate number of Shares which may be issued in respect of
which Options may be granted, at any time, shall be 2,500,000 which number of
Shares shall include the balance of authorized and unissued Shares in respect of
which Options are outstanding at that time (or such number, class and kind of
shares which, in accordance with section 12 hereof, shall be substituted
therefor or into which they shall be altered) and the requisite number of Shares
shall from time to time be appropriated for the purposes of the Plan and
reserved and set aside for issue upon the due exercise of Options. If any Option
shall expire or terminate for any reason without having been exercised in full,
any Optioned Shares not subscribed for thereunder shall be available for further
Options.
3.2 The aggregate number of Shares in respect of which Options may be
granted, at any time to any one person, shall be that number of Shares which is
equal to 5% of the number of Shares of the Company which are issued and
outstanding at that time, (or such number, class and kind of shares which, in
accordance with section 12 hereof, shall be substituted therefor or into which
they shall be altered).
4. GRANT OF OPTIONS AND ADMINISTRATION OF THE PLAN
Subject only to the express provisions of the Plan, the Board shall have the
sole authority:
- - to determine, in its own discretion, each Employee to whom, and the
time or times at which, and the Option Price and term for which, an
Option shall be granted and the number of Optioned Shares to be
subject to the Option;
- - to determine and approve from time to time the form of Options, and
to authorize an officer or officers to execute and deliver any
Option on behalf of the Company;
- - to interpret the Plan and to amend the Plan;
- - to modify or cancel the vesting period established in respect of any
or all Options, notably in the case of a take-over bid of the
Company or other form of going pivate transaction;
- - to delegate its authority hereunder or any part thereof to the
remuneration committee of the Board; and
- - to make all other determinations and perform all such other actions
as the Board deems necessary or advisable to implement and
administer the Plan.
2
4.2 In making any determinations under subsection 4.1, the Board may
take into account the nature of the services rendered by the Employee, his
present and potential contribution to the success of the Company and its
Subsidiaries and such other factors as to the Board in its discretion shall deem
applicable to carry out the purposes of the Plan. The Board may, in its
discretion, authorize the granting of additional Options to an Optionee before
an existing Option has terminated.
4.3 All decisions and interpretations of the Board respecting the Plan
or Options shall be binding and conclusive on the Company and on all Optionees
and their respective legal personal representatives and on all Employees.
5. TERM OF OPTIONS
5.1 No Option shall be for a term longer than ten years from the date of
the granting of the Option.
6. OPTION PRICE
6.1 The Option Price in any Option shall not be an amount less than the
Market Price of the Optionned Shares.
7. EXERCISE OF OPTIONS
7.1 Subject to the provisions of this section and sections 10 and 11
hereof and to any specific vesting period established by the Board at the time
of the grant, each Option shall be exercisable in whole at any time or in part
from time to time during the term thereof.
7.2 An Option may be exercised at the applicable times and in the
applicable amounts by giving to the Company written notice of exercise signed by
the Optionee specifying the number of Shares to be subscribed for and
accompanied by full payment for the Shares to be subscribed for in cash or by
cheque certified by a Canadian chartered bank.
7.3 Except as provided in sections 9, 10 and 11 hereof, no Option may be
exercised in whole or in part at any time unless at the time of such exercise
the Optionee is an Employee.
7.4 At any time the Board may, by notice in writing to all Optionees
under the Plan, require each Optionee to elect, within such period as the Board
shall prescribe, to subscribe and pay for all the Optioned Shares then remaining
unsubscribed for under his Option, or to accept termination of his Option in the
event of his failing within such period to so elect or to exercise his Option
and to subscribe and pay for all such remaining Optioned Shares.
3
8. RIGHTS OF OPTIONEE
8.1 No Optionee shall have any of the rights of a member of the Company
with respect to any Optioned Shares until such Optioned Shares have been issued
to him upon exercise of the Option and full payment therefor has been made by
him to the Company.
9. NON-TRANSFERABILITY OF OPTIONS
No Option shall be assignable or transferable by an Optionee and any
purported assignment or transfer of an Option shall be void and
shall render the Option void, but if the employment or position of
an Optionee with the Company or any of its Subsidiaries, as the case
may be, is terminated by reason of his death, the Optionee's legal
personal representative or representatives may exercise the Option
in accordance with section 10.
10. DEATH OR RETIREMENT OF OPTIONEE
10.1 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by reason of his death at
any time during the term of an Option, then, until the earlier of the expiry
date of the Option specified at the time of its grant, or the date which is one
year from the death of the Optionee, the Option may be exercised by the
Optionee's legal personal representative or representatives as to such maximum
number of Optioned Shares which the Optionee would have otherwise been entitled
to exercise the Option in respect of at the date of his death.
10.2 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by reason of his
retirement in accordance with the Company's policies relating to retirement of
Employees at any time during the term of an Option, then, until the earlier of
the expiry date of the Option specified at the time of its grant, or the date
which is one year from the retirement of the Optionee, the Option may be
exercised by the Optionee or by the Optionee's legal personal representative or
representatives if the Optionee dies within the period so specified as to such
maximum number of Optioned Shares which the Optionee would have otherwise been
entitled to exercise the Option in respect of at the date of his retirement.
11. TERMINATION OF EMPLOYMENT OF OPTIONEE
11.1 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated for any reason other than
as specified in section 10 or subsection 11.2, then, until the earlier of the
expiry date of the Option specified at the time of its grant, or the date which
is 90 days from the termination of employment of the Optionee, the Optionee may
exercise his Option in respect of the number of Optioned Shares which the
Optionee was entitled to subscribe and pay for under the Option on the date of
termination of his employment.
4
11.2 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by the Company or any
Subsidiary for lawful cause, all of the rights of the Optionee under his Option
shall terminate and the Option shall become null and void effective immediately
upon such termination taking effect.
11.3 Nothing contained in the Plan or any Option shall confer on any
Optionee any right to, or guarantee of continued employment by the Company or
any Subsidiary, or in any way limit the right of the Company or a Subsidiary to
terminate the employment of the Optionee at any time.
12. CHANGES IN CAPITALIZATION OR NUMBER OF OUTSTANDING SHARES
12.1 If, and whenever, prior to the issuance by the Company of all the
Optioned Shares under an Option, the Shares are from time to time consolidated
into a lesser number of Shares or subdivided into a greater number of Shares,
the number of Optioned Shares remaining unissued under the Option shall be
decreased or increased proportionately, as the case may be, and the subscription
price to be paid by the Optionee for each such Share shall be adjusted
accordingly.
12.2 If from time to time any other change is made in the capital of the
Company or the Company amalgamates or combines, merges or consolidates with one
or more other companies or corporations (and the right so to do is hereby
expressly reserved by the Company) whether by way of arrangement, by exchange of
shares, or otherwise, in each such case each Option shall, unless the provisions
of paragraph 7.4 are made applicable, extend to and cover the number, class and
kind of shares or other obligations to which the holder of the Option would have
been entitled had the Option been fully exercised immediately prior to the date
such amalgamation, merger, combination or consolidation becomes effective and
the then prevailing subscription price of the Shares or other obligations so
covered shall be correspondingly adjusted if and to the extent that the Board
considers it to be equitable and appropriate.
12.3 Except as expressly provided in this section 12, the issue by the
Company of shares of any class, or of securities convertible into shares of any
class, for cash or property, or for labour or services, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of Optioned Shares.
12.4 No Option shall in any way affect the right or power of the Company
or its members to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital structure of the Company or its
business, or any amalgamation, combination, merger or consolidation of the
Company, or any issue of bonds debentures, shares with special rights and
restrictions ranking ahead of or affecting the shares or the rights thereof, or
the dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business or
5
any other corporate act or proceeding, whether of a similar character or
otherwise.
13. AMENDMENT AND TERMINATION OF THE PLAN
13.1 The Board may at any time terminate the Plan or make such amendments
to the Plan as it shall deem advisable provided that no such termination or
amendment shall adversely affect any outstanding Option except with the consent
of all affected Optionees.
14. RIGHT TO OPTIONS
14.1 Nothing contained herein or in any resolution adopted or hereafter
adopted by the Board or any action taken by the Board shall vest the right in
any person whomsoever to receive any Option. No person shall acquire any of the
rights of an Optionee unless and until a written Option, in form satisfactory to
the Board, shall have been duly executed on behalf of the Company and delivered
to the Optionee and executed and delivered by the Optionee to the Company. Any
agreement purporting to be an Option shall, to the extent it may be contrary to
the express provisions of the Plan, be unenforceable by the Optionee against the
Company.
15. REGULATORY AND STOCK EXCHANGE APPROVALS OR CONSENTS
15.1 The Plan and all Options are subject to all consents, receipts,
approvals or other authorization by any securities commission, administrative
agency, other governmental authority or stock exchange on which shares in the
capital of the Company are or may become listed, which are requisite to the Plan
and the granting of Options.
16. EFFECTIVE DATE OF THE PLAN
16.1 The Plan shall become effective when it has been approved by the
Board and all requisite consents, receipts, approvals or other authorizations
have been obtained and complied with.
6
Annex III
BIO SYNTECH CANADA INC
STOCK OPTION INCENTIVE PLAN
1. NAME AND PURPOSE OF PLAN
1.1 The stock option plan constituted hereby shall be known as the Stock Option
Incentive Plan.
1.2 The purpose of the Plan is to provide a means whereby those Employees of the
Company and its Subsidiaries who have the principal responsibility for the
successful administration and management of the Company and whose present and
potential contributions are important to its success can obtain a proprietary
interest in the Company thereby providing an incentive for continuing beneficial
service to the Company.
2. INTERPRETATION
In this Plan and in any Option, unless the context otherwise requires:
"Board" means, at any time, the board of directors of the Company in
office at that time;
"Company" means BIOSYNTECH INC, any of its subsidiaries and any
successor or continuing company resulting from amalgamation of the
Company and any other company or resulting from any other form of
corporate reorganization;
"Employee"means an individual who is a bona fide employee, director,
or officer of the Company and an individual or entity which is a
consultant of the Company;
"Employment" means the relationship of an individual who is a bona
fide employee, director, or officer of the Company and the
relationship of an individual or entity which is a consultant of the
Company;
"Market Price" on any particular day means an average of daily high
and low board lot trading prices (with no discount) for the
immediately preceding five days on which trades occurred, on any
public market on which the shares of the company are traded;
"Option" means any option granted pursuant to the Plan;
"Optionee" means an Employee who has been granted an Option;
"Option Price" means the price at which Optioned Shares may be
subscribed for pursuant to an Option.
"Optioned Shares" means Shares which are the subject of an Option;
"Plan" means the Stock Option Incentive Plan as embodied herein and
as from time to time amended in accordance with the provisions
hereof;
"Shares" means Common Shares without par value in the capital of the
Company, as constituted at the effective date hereof;
"Subsidiary" has the same meaning, with respect to the Company, as
that term has under the Quebec Companies Act .
2.1 The masculine gender shall include the feminine gender and singular
shall include the plural and vice versa.
3. SHARES SUBJECT TO THE PLAN
3.1 The aggregate number of Shares which may be issued in respect of
which Options may be granted, at any time, shall be 1,500,000 which number of
Shares shall include the balance of authorized and unissued Shares in respect of
which Options are outstanding at that time (or such number, class and kind of
shares which, in accordance with section 12 hereof, shall be substituted
therefor or into which they shall be altered) and the requisite number of Shares
shall from time to time be appropriated for the purposes of the Plan and
reserved and set aside for issue upon the due exercise of Options. If any Option
shall expire or terminate for any reason without having been exercised in full,
any Optioned Shares not subscribed for thereunder shall be available for further
Options.
3.2 The aggregate number of Shares in respect of which Options may be
granted, at any time to any one person, shall be that number of Shares which is
equal to 5% of the number of Shares of the Company which are issued and
outstanding at that time, (or such number, class and kind of shares which, in
accordance with section 12 hereof, shall be substituted therefor or into which
they shall be altered).
4. GRANT OF OPTIONS AND ADMINISTRATION OF THE PLAN
Subject only to the express provisions of the Plan, the Board shall have the
sole authority:
- - to determine, in its own discretion, each Employee to whom, and the
time or times at which, and the Option Price and term for which, an
Option shall be granted and the number of Optioned Shares to be
subject to the Option;
- - to determine and approve from time to time the form of Options, and
to authorize an officer or officers to execute and deliver any
Option on behalf of the Company;
- - to interpret the Plan and to amend the Plan;
- - to modify or cancel the vesting period established in respect of any
or all Options, notably in the case of a take-over bid of the
Company or other form of going pivate transaction;
- - to delegate its authority hereunder or any part thereof to the
remuneration committee of the Board; and
- - to make all other determinations and perform all such other actions
as the Board deems necessary or advisable to implement and
administer the Plan.
2
4.2 In making any determinations under subsection 4.1, the Board may
take into account the nature of the services rendered by the Employee, his
present and potential contribution to the success of the Company and its
Subsidiaries and such other factors as to the Board in its discretion shall deem
applicable to carry out the purposes of the Plan. The Board may, in its
discretion, authorize the granting of additional Options to an Optionee before
an existing Option has terminated.
4.3 All decisions and interpretations of the Board respecting the Plan
or Options shall be binding and conclusive on the Company and on all Optionees
and their respective legal personal representatives and on all Employees.
5. TERM OF OPTIONS
5.1 No Option shall be for a term longer than ten years from the date of
the granting of the Option.
6. OPTION PRICE
6.1 The Option Price in any Option shall not be an amount less than the
Market Price of the Optionned Shares.
7. EXERCISE OF OPTIONS
7.1 Subject to the provisions of this section and sections 10 and 11
hereof and to any specific vesting period established by the Board at the time
of the grant, each Option shall be exercisable in whole at any time or in part
from time to time during the term thereof.
7.2 An Option may be exercised at the applicable times and in the
applicable amounts by giving to the Company written notice of exercise signed by
the Optionee specifying the number of Shares to be subscribed for and
accompanied by full payment for the Shares to be subscribed for in cash or by
cheque certified by a Canadian chartered bank.
7.3 Except as provided in sections 9, 10 and 11 hereof, no Option may be
exercised in whole or in part at any time unless at the time of such exercise
the Optionee is an Employee.
7.4 At any time the Board may, by notice in writing to all Optionees
under the Plan, require each Optionee to elect, within such period as the Board
shall prescribe, to subscribe and pay for all the Optioned Shares then remaining
unsubscribed for under his Option, or to accept termination of his Option in the
event of his failing within such period to so elect or to exercise his Option
and to subscribe and pay for all such remaining Optioned Shares.
3
8. RIGHTS OF OPTIONEE
8.1 No Optionee shall have any of the rights of a member of the Company
with respect to any Optioned Shares until such Optioned Shares have been issued
to him upon exercise of the Option and full payment therefor has been made by
him to the Company.
9. NON-TRANSFERABILITY OF OPTIONS
No Option shall be assignable or transferable by an Optionee and any
purported assignment or transfer of an Option shall be void and
shall render the Option void, but if the employment or position of
an Optionee with the Company or any of its Subsidiaries, as the case
may be, is terminated by reason of his death, the Optionee's legal
personal representative or representatives may exercise the Option
in accordance with section 10.
10. DEATH OR RETIREMENT OF OPTIONEE
10.1 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by reason of his death at
any time during the term of an Option, then, until the earlier of the expiry
date of the Option specified at the time of its grant, or the date which is one
year from the death of the Optionee, the Option may be exercised by the
Optionee's legal personal representative or representatives as to such maximum
number of Optioned Shares which the Optionee would have otherwise been entitled
to exercise the Option in respect of at the date of his death.
10.2 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by reason of his
retirement in accordance with the Company's policies relating to retirement of
Employees at any time during the term of an Option, then, until the earlier of
the expiry date of the Option specified at the time of its grant, or the date
which is one year from the retirement of the Optionee, the Option may be
exercised by the Optionee or by the Optionee's legal personal representative or
representatives if the Optionee dies within the period so specified as to such
maximum number of Optioned Shares which the Optionee would have otherwise been
entitled to exercise the Option in respect of at the date of his retirement.
11. TERMINATION OF EMPLOYMENT OF OPTIONEE
11.1 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated for any reason other than
as specified in section 10 or subsection 11.2, then, until the earlier of the
expiry date of the Option specified at the time of its grant, or the date which
is 90 days from the termination of employment of the Optionee, the Optionee may
exercise his Option in respect of the number of Optioned Shares which the
Optionee was entitled to subscribe and pay for under the Option on the date of
termination of his employment.
4
11.2 If the employment or position of an Optionee with the Company or any
of its Subsidiaries, as the case may be, is terminated by the Company or any
Subsidiary for lawful cause, all of the rights of the Optionee under his Option
shall terminate and the Option shall become null and void effective immediately
upon such termination taking effect.
11.3 Nothing contained in the Plan or any Option shall confer on any
Optionee any right to, or guarantee of continued employment by the Company or
any Subsidiary, or in any way limit the right of the Company or a Subsidiary to
terminate the employment of the Optionee at any time.
12. CHANGES IN CAPITALIZATION OR NUMBER OF OUTSTANDING SHARES
12.1 If, and whenever, prior to the issuance by the Company of all the
Optioned Shares under an Option, the Shares are from time to time consolidated
into a lesser number of Shares or subdivided into a greater number of Shares,
the number of Optioned Shares remaining unissued under the Option shall be
decreased or increased proportionately, as the case may be, and the subscription
price to be paid by the Optionee for each such Share shall be adjusted
accordingly.
12.2 If from time to time any other change is made in the capital of the
Company or the Company amalgamates or combines, merges or consolidates with one
or more other companies or corporations (and the right so to do is hereby
expressly reserved by the Company) whether by way of arrangement, by exchange of
shares, or otherwise, in each such case each Option shall, unless the provisions
of paragraph 7.4 are made applicable, extend to and cover the number, class and
kind of shares or other obligations to which the holder of the Option would have
been entitled had the Option been fully exercised immediately prior to the date
such amalgamation, merger, combination or consolidation becomes effective and
the then prevailing subscription price of the Shares or other obligations so
covered shall be correspondingly adjusted if and to the extent that the Board
considers it to be equitable and appropriate.
12.3 Except as expressly provided in this section 12, the issue by the
Company of shares of any class, or of securities convertible into shares of any
class, for cash or property, or for labour or services, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of Optioned Shares.
12.4 No Option shall in any way affect the right or power of the Company
or its members to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital structure of the Company or its
business, or any amalgamation, combination, merger or consolidation of the
Company, or any issue of bonds debentures, shares with special rights and
restrictions ranking ahead of or affecting the shares or the rights thereof, or
the dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business or
5
any other corporate act or proceeding, whether of a similar character or
otherwise.
13. AMENDMENT AND TERMINATION OF THE PLAN
13.1 The Board may at any time terminate the Plan or make such amendments
to the Plan as it shall deem advisable provided that no such termination or
amendment shall adversely affect any outstanding Option except with the consent
of all affected Optionees.
14. RIGHT TO OPTIONS
14.1 Nothing contained herein or in any resolution adopted or hereafter
adopted by the Board or any action taken by the Board shall vest the right in
any person whomsoever to receive any Option. No person shall acquire any of the
rights of an Optionee unless and until a written Option, in form satisfactory to
the Board, shall have been duly executed on behalf of the Company and delivered
to the Optionee and executed and delivered by the Optionee to the Company. Any
agreement purporting to be an Option shall, to the extent it may be contrary to
the express provisions of the Plan, be unenforceable by the Optionee against the
Company.
15. REGULATORY AND STOCK EXCHANGE APPROVALS OR CONSENTS
15.1 The Plan and all Options are subject to all consents, receipts,
approvals or other authorization by any securities commission, administrative
agency, other governmental authority or stock exchange on which shares in the
capital of the Company are or may become listed, which are requisite to the Plan
and the granting of Options.
16. EFFECTIVE DATE OF THE PLAN
16.1 The Plan shall become effective when it has been approved by the
Board and all requisite consents, receipts, approvals or other authorizations
have been obtained and complied with.
6
BIOSYNTECH, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
2000 ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 30, 2000
The undersigned hereby appoints each of Amine Selmani and
Marie-Claire Pilon 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 2000 Annual Meeting of Stockholders of the Company to be held
on November 30, 2000 at 11:00 A.M. local time, at the Queen Elizabeth Hotel at
900 Rene-Levesque Boulevard West, Montreal, Quebec, Canada H3B 4A5, or at any
adjournment, on the matters described in the Notice of 2000 Annual Meeting and
Proxy Statement and upon such other business as may properly come before such
meeting or any adjournments thereof, hereby revoking any proxies heretofore
given.
PROPOSAL 1 Approve the adoption of the Company's Amended and Restated
Articles of Incorporation:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 2 The election of Dr. Amine Selmani, Denis N. Beaudry, Pierre
Alary, Jean-Yves Bourgeois, Dr. Pierre Ranger, Marie-Claire
Pilon:
Withhold Authority
For All To Vote For All
Nominees ___ Nominees ___
---------------------------------------------------------------
---------------------------------------------------------------
To withhold authority to vote for any individual nominee(s),
print names above.
PROPOSAL 3 Approve the adoption of the Company's Stock Option Incentive
Plan and Bio Syntech Canada, Inc.'s Stock Option Incentive
Plan:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 4 Ratify the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending March 31, 2001:
FOR / / AGAINST / / ABSTAIN / /
(continued and to be signed on reverse side)
21
Each properly executed proxy will be voted in accordance with specifications
made on the reverse side hereof. If no specifications are made, the shares
represented by this Proxy will be voted for approval of Proposals 1, 2, 3 and 4.
----------------------------------------
Signature
----------------------------------------
Signature if held jointly
Dated: ___________, 2000
Please sign exactly as set forth herein.
If signed as executor, attorney,
administrator, trustee or guardian,
indicate the capacity in which you are
acting. When signing as joint tenants,
all parties in the joint tenancy should
sign. Proxies by corporations should be
signed with full corporate name by a
duly authorized officer and bear
corporate seal.
Please promptly sign and return the Proxy Card in the enclosed envelope.
BIOSYNTECH, INC.
2000 ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 30, 2000
VOTING INSTRUCTION FORM FOR
HOLDERS OF EXCHANGEABLE PREFERRED STOCK OF
BIO SYNTECH CANADA, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BIOSYTECH, 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 2000 Annual Meeting of Stockholders of
the Company to be held on November 30, 2000 at 11:00 A.M. local time, at the
Queen Elizabeth Hotel at 900 Rene-Levesque Boulevard West, Montreal, Quebec,
Canada H3B 4A5, or at any adjournment, on the matters described in the Notice of
2000 Annual Meeting and Proxy Statement and upon such other business as may
properly come before such meeting or any adjournments thereof, hereby revoking
any proxies heretofore given.
PROPOSAL 1 Approve the adoption of the Company's Amended and Restated
Articles of Incorporation:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 2 The election of Dr. Amine Selmani, Denis N. Beaudry, Pierre
Alary, Jean-Yves Bourgeois, Dr. Pierre Ranger, Marie-Claire
Pilon:
Withhold Authority
For All To Vote For All
Nominees ___ Nominees ___
---------------------------------------------------------------
---------------------------------------------------------------
To withhold authority to vote for any individual nominee(s),
print names above.
PROPOSAL 3 Approve the adoption of the Company's Stock Option Incentive
Plan and Bio Syntech Canada, Inc.'s Stock Option Incentive
Plan:
FOR / / AGAINST / / ABSTAIN / /
PROPOSAL 4 Ratify the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending March 31, 2001:
FOR / / AGAINST / / ABSTAIN / /
(continued and to be signed on reverse side)
Each properly executed instruction will be voted in accordance with
specifications made on the reverse side hereof. If no specifications are made,
the shares represented by this Voting Instruction Form will be voted for
approval of Proposals 1, 2, 3 and 4.
----------------------------------------
Signature
----------------------------------------
Signature if held jointly
Dated: ___________, 2000
Please sign exactly as set forth herein.
If signed as executor, attorney,
administrator, trustee or guardian,
indicate the capacity in which you are
acting. When signing as joint tenants,
all parties in the joint tenancy should
sign. Instructions by corporations
should be signed with full corporate
name by a duly authorized officer and
bear corporate seal.
Please promptly sign and return the Voting Instruction Form in the enclosed
envelope.