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EXHIBIT 99.1
LOGO
PHOENIX INTERNATIONAL LIFE SCIENCES INC.
NOTICE OF ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual and Special Meeting of the holders
of common shares of PHOENIX INTERNATIONAL LIFE SCIENCES INC. (the "Corporation")
will be held in the Auditorium of the Montreal Exchange, 800 Victoria Square,
4th floor, Montreal, Quebec, H4Z 1A9, Tuesday, December 14, 1999 at 9:30 a.m.
(local time) for the following purposes:
(1) to receive the report of the directors, together with the balance sheet,
the statement of earnings and retained earnings, the statement of changes
in financial position and the auditors' report relating thereto for the
fiscal year ended August 31, 1999;
(2) to elect directors for the ensuing year;
(3) to appoint auditors for the ensuing year and authorise the directors to fix
their remuneration;
(4) to adopt a resolution amending the Key Employee Share Option Plan; and
(5) to transact such other business as may properly come before the Meeting and
any adjournment thereof.
The information circular for solicitation of proxies for the Meeting is
appended to this Notice. A copy of the annual report to shareholders and a form
of proxy for the Meeting are also enclosed with this Notice.
Saint-Laurent, Quebec, November 2, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David Moszkowski
- -------------------------
DAVID MOSZKOWSKI
Senior Vice President,
Chief Financial Officer and Secretary
Holders of common shares may exercise their rights by attending the
Meeting or by completing a form of proxy. The holders of common shares who will
be unable to attend the Meeting in person are kindly asked to sign and return
the enclosed form of proxy.
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PHOENIX INTERNATIONAL LIFE SCIENCES INC.
INFORMATION CIRCULAR FOR SOLICITATION OF PROXIES
This Circular is furnished in connection with the solicitation by the management
of PHOENIX INTERNATIONAL LIFE SCIENCES INC. (the "Corporation") of proxies which
will be used to vote at the Annual and Special Meeting (the "Meeting") of the
holders of common shares of the Corporation to be held on December 14, 1999 at
the time, place and for the purposes set forth in the foregoing Notice, and at
any adjournment thereof.
The solicitation of proxies will be made primarily by mail. However, the
management of the Corporation can solicit proxies at a nominal cost by
telephone, telegram or by personal interview. The Corporation will pay brokers
and other persons holding shares for others, their reasonable expenses for
sending proxy material to beneficial owners in order to obtain voting
instructions. The Corporation will bear all expenses in connection with the
solicitation of proxies.
PROXIES
In order to be voted at the Meeting, a proxy must be received by the Secretary
of the Corporation prior to the Meeting. A proxy may be revoked at any time by
the person giving it to the extent that it has not been exercised. A proxy may
be revoked by filing a written notice with the Secretary of the Corporation. The
powers of the proxy holders may also be revoked if the holder of common shares
attends the Meeting in person and so requests.
The persons whose names are printed on the enclosed form of proxy will vote all
the shares in respect of which they are appointed to act in accordance with the
instructions indicated on the form of proxy.
Every proxy given to any of the persons named in the form of proxy confers
discretionary authority with respect to amendments or variations to the matters
identified in the Notice and with respect to any other matter that may properly
come before the Meeting.
The persons whose names are printed on the enclosed form of proxy are directors
and executive officers of the Corporation. Every holder of common shares has the
right to appoint a person (who may not be a shareholder) to act on his behalf at
the Meeting other than those whose names are printed on the form of proxy. To
exercise this right, the holder of common shares must insert his nominee's name
in the blank space provided for such purpose in the form of proxy or prepare
another proxy in proper form.
VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SHARES
The common shares are the only securities of the share capital of the
Corporation which carry voting rights. As at November 2, 1999, the Corporation
has 27,141,871 common shares outstanding (the "Common Shares").
The holders of Common Shares of record as at November 8, 1999 will be entitled
to one vote per Common Share held. To be entitled to vote, shareholders having
acquired their shares after November 8, 1999 will have to establish ownership of
the transferred shares and request, at least ten (10) days before the Meeting,
that their name be entered on the shareholders list.
As at November 2, 1999, to the knowledge of the Corporation's directors and
executive officers, the only persons who owned, directly or indirectly, or who
exercised control or direction over more than 10% of the outstanding Common
Shares were the following:
Number of Percentage of
Name Type of ownership Common Shares Common Shares
- ---- ----------------- ------------- -------------
Van Berkom & Associates Inc. Registered & Beneficial 3,411,000 12.57%
Mr. Lucien Steru Registered & Beneficial 3,138,325 11.56%
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ELECTION OF DIRECTORS
The Articles of the Corporation stipulate that the Board of Directors
shall consist of a minimum of three directors and a maximum of fifteen
directors. The present number of directors is seven. For the 2000 fiscal year,
management proposes that the Board of Directors shall consist of eight members.
Except where the authority to vote in favour of the directors is withheld, the
persons whose names are printed on the form of proxy intend to vote FOR the
election of the eight nominees whose names are set forth in the following table.
Each director elected will hold office until the next Annual Meeting or until
that director's successor is duly elected, unless the office is vacated earlier
in accordance with the relevant provisions of the applicable laws.
The following table sets forth, for each person nominated by management
for election as a director, his name, municipality of residence, the year in
which he first became a director, principal occupation of each director of the
Corporation and the number of Common Shares of the Corporation beneficially
owned, directly or indirectly, or over which control or direction was exercised
by each nominee as at November 2, 1999:
Common Shares
beneficially owned
or
over which control
Name and Director or
municipality of residence Since Principal occupation direction is exercised
- ------------------------- -------- -------------------- ----------------------
Claude E. Forget(1) 1989 Consultant and Director of 14,900
Montreal, Quebec the Corporation
Lucien Steru 1997 President and Chief Operating 3,138,325
Brussels, Belgium Officer- Phoenix
International (Europe)
Bertram A. Spilker 1997 Senior Vice President, None
Bethesda, Maryland Pharmaceutical Research
Manufacturers Association
(Pharmaceutical research)
Robert Raich(1)(2) 1997 Senior Partner Spiegel 5,000
Westmount, Quebec Sohmer, Attorneys (Law firm)
David Goldman(1)(2) 1997 Executive Vice President and None
Toronto, Ontario Chief Operating Officer,
Noranda Inc. (Mining/metal
producer)
Jean E. Douville 1999 Chairman of the Board, 9,900
Town of Mont-Royal, Quebec Schroders & Associates
Canada Inc. (Acquisition
fund)
R. Ian Lennox 1999 Chief Executive Officer of None
Toronto, Ontario the Corporation; Chairman of
the Board, Drug Royalty
Corporation (Biotech)
Roger A. Korman 1999 General Manager, IMS Health None
Westmount, Quebec Canada (Pharmaceutical
Research, statistics)
(1) Member of the Audit Committee.
(2) Member of the Human Resources Committee.
All of the directors have been engaged in their present occupation or in
other executive capacities with the companies or firms with which they currently
hold positions for more than five years or have been elected to their present
term of office by holders of Common Shares of the Corporation at a meeting, the
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notice of which was accompanied by an Information Circular for Solicitation of
Proxies, except for: (i) R. Ian Lennox who was previously President and Chief
Executive Officer of Drug Royalty Corporation from 1997 to 1999. Mr. Lennox was
President and Chief Executive Officer of Monsanto Company (Canada) Inc. between
1991 and 1997; (ii) Mr. Jean E. Douville who, since 1997, is Chairman of the
Board of Schroders and Associates Canada Inc. where he previously held the
position of President from 1994 to 1997. Mr. Douville has also been a Director
of the Corporation from 1994 until 1997.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation paid in respect of the named
executive officers (being the Chief Executive Officer and the four other most
highly compensated executive officers of the Corporation in a policy making role
whose total salary and bonus exceeded $100,000) for the last three completed
financial years (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Long term
Compensation/Awards
Annual compensation ----------------------
----------------------------------------- Common
Other(1) Shares
Name and Principal Annual Options All Other(2)
Position Year Salary(5) Bonus Compensation Granted Compensation
- ------------------ ---- --------- ------- ------------ ------- ------------
($) ($) ($) (#) ($)
R. Ian Lennox(3) 1999 -- -- -- -- --
Chief Executive 1998 -- -- -- -- --
Officer 1997 -- -- -- -- --
John W. Hooper, Ph.D.(4) 1999 396,963 -- 1,014,175(4) 28,213 9,512
Outgoing Chairman and 1998 364,510 186,189 13,425 28,198 12,910
Chief Executive Officer 1997 242,124 46,123 11,650 -- 3,736
Lucien Steru, M.D. 1999 419,345 -- -- 21,768 --
President and Chief 1998 421,860 131,907 -- 21,757 --
Operating Officer, 1997 25,644 -- -- 62,500 --
(Europe)
Susan Thornton, Ph.D. 1999 414,370 152,725 10,548 10,746 --
President and Chief 1998 208,250 79,957 5,814 135,750 --
Operating Officer, 1997 -- -- -- -- --
(IBRD), Phase II-IV
James J. Conklin, M.D. 1999 331,496 -- 7,534 -- --
Senior Vice President 1998 -- -- -- -- --
and General Manager 1997 -- -- -- -- --
Scientific Software
Division
Stephane Huguet, M.D. 1999 326,420 46,450 56,000 9,944 891
President and Chief 1998 192,708 210,671 39,333 259,939 773
Operating Officer 1997 -- -- -- -- --
(1) Represents interest benefits on interest free loans and car allowances.
(2) Represents premiums paid in respect of disability insurance.
(3) Mr. R. Ian Lennox joined the Corporation in September, 1999 as Chief
Executive Officer following the departure of John W. Hooper and his annual
salary will be approximately $420,000.
(4) Mr. John W. Hooper left the Corporation on August 31, 1999. He received
a $1,000,000 retirement package.
(5) Includes compensation paid to the Named Executive Officer by the Corporation
or by its subsidiaries.
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Worldwide Executive Remuneration Plan
On September 29, 1998 the Board of Directors of the Corporation approved
the Worldwide Executive Remuneration Plan ("WERP") applicable solely to
executives of the Corporation. This plan has three goals: (i) adjusting salaries
for incumbent executives whose salaries are significantly lower than specified
by the policy outlined in the plan; (ii) establishing a bonus plan based on
corporate and local profitability and achievement of objectives; (iii) the
granting of annual stock options to the highest levels of executives under the
Corporation's Key Employee Share Option Plan, as decided by the Human Resources
Committee of the Board of Directors, and consistent with industry practice.
Pursuant to the WERP, salaries, grades and titles for executives are
established based on various criteria. The Human Resources Committee and the
Corporate Executive Committee share the responsibility of determining the grades
and titles under which the Corporation's executives are categorised. The WERP
also provides a detailed determination of how titles are to be attributed to the
Corporation's executives.
Bonus calculations are separated in four categories: corporate, local,
objectives and outstanding achievement. Every executive is graded in each of
these categories and if a certain level of achievement of targets is not met the
responsible executive is not eligible for any bonus payment.
Long Term Incentive Plan
There is no long-term incentive plan for the benefit of employees of the
Corporation.
Key Employee Share Option Plan
On October 24, 1994, the Corporation established a Key Employee Share
Option Plan (the "Plan") in order to attract and retain highly qualified
directors and employees who are motivated toward the success of the Corporation
and to encourage share ownership in the Corporation by such persons. The
individuals who are eligible to receive options to purchase Common Shares under
the Plan are directors, senior executives and key employees of the Corporation
and its subsidiaries, as determined from time to time by the Human Resources
Committee of the Board of Directors which administers the Plan.
All options granted under the Plan are eligible to be exercised within
ten years of the date of grant. Under the terms of the Plan, the vesting periods
for the options are as follows: (i) up to 4% of the options are exercisable
after one year from the date of their grant; (ii) up to 16%, after two years
from the date of their grant; (iii) up to 36%, after three years from the date
of their grant; (iv) up to 64%, after four years from the date of their grant;
and (v) up to 100% after five years from the date of their grant. The
Corporation proposes a resolution to modify the vesting periods for the options
granted under the Plan as follows: (i) up to 20% of the options will be
exercisable after one year from the date of their grant; (ii) up to 40%, after
two years from the date of their grant; (iii) up to 60%, after three years from
the date of their grant; (iv) up to 80%, after four years from the date of their
grant; and (v) up to 100% after five years from the date of their grant. An
adjustment period will be provided for under the Plan, as awarded, during the
2000 fiscal year for all previously issued and outstanding options taking into
account the proposed modifications.
The price at which Common Shares may be purchased is determined by the
Human Resources Committee but may not be less than the average of the market
price (as defined) of the Common Shares on the Montreal Exchange and the Toronto
Stock Exchange at the time of their grant. Financial assistance for the purchase
of Common Shares under the Plan is not currently provided.
The maximum number of Common Shares that may be issued under the Plan may
not exceed 2,428,920 Common Shares. The Corporation proposes that the number of
Common Shares reserved for issuance be raised to 4,000,000. Furthermore, under
the Plan, as modified, the maximum number of Common Shares that may be optioned
in favour of any single individual would not exceed five percent (5%) of all of
the outstanding number of Common Shares.
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As at August 31, 1999, 70 key employees of the Corporation, as well as former
Chrysalis shareholders held options to purchase 2,140,677 Common Shares, at
prices ranging from $5.00 to $85.02 per Common Share.
Options granted in 1997, 1998 and 1999 to the Named Executive Officers are
mentioned in the tables entitled "Summary Compensation Table" and "Option Grants
During the 1999 Financial Year."
Option Grants During the 1999 Financial Year
No options were granted to any of the Named Executive Officers during the
1999 financial year.
Aggregate Number of Options Exercised during the 1999 Financial Year and
Financial Year-end Option values
The following table summarises, for each Named Executive Officers, the
number of Common Shares of the Corporation covered by options exercised during
the financial year ended on August 31, 1999, if any, the aggregate value
realized upon exercise, if any, and the total number of Common Shares of the
Corporation covered by unexercised options held at August 31,1999. The value of
unexercised in-the-money options at August 31, 1999 is the difference between
the exercise or base price of the underlying Common Shares of the Corporation
and the fair market value of these shares on August 31, 1999, which was $8.85
per share. These values, unlike the amounts set forth on the column "Aggregate
Value Realized", if any, have not been, and may never be, realized. The
underlying options have not been, and may not be exercised. Actual gains, if
any, on exercise will depend on the value of the Corporation's Common Shares on
the date of exercise. There can be no assurance that these values will be
realized. For a description of the principal terms of the options, see "Summary
Compensation Table -- Key Employee Share Option Plan" in this Circular.
Value of
Unexercised
Aggregate Unexercised In-the-money
Securities Value of Options at Options at
Acquired Realized Financial Year-end Financial Year-end
Named Executive During security (Exercisable/ (Exercisable/
Officers Financial Year ($) Unexercisable) Unexercisable)
- --------------- -------------- --------- ------------------ ------------------
R. Ian Lennox None None -- --
John W. Hooper None None 41,128/27,085 $154,350/$8,396
Lucien Steru None None 10,870/73,368 $270/$6,478
Susan Thornton None None 125,429/10,317 $133/$3,198
James J. Conklin None None -- --
Stephane Huguet None None 250,397/9,547 $123/$2,960
Employment contracts
Mr. John W. Hooper entered into a new employment agreement with the
Corporation on April 22, 1999. On August 31, 1999, Mr. Hooper left his
employment with the Corporation. Pursuant to a separation agreement, Mr. Hooper
was paid $1,000,000. He was immediately replaced by Mr. Claude E. Forget at the
position of Chairman of the Board.
Mr. Lucien Steru's employment contract dated August 7, 1997 states that
he was hired as President and Chief Operating Officer of I.T.E.M. Europe S.A.,
a subsidiary of the Corporation.
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Mr. Stephane Huguet's employment contract dated November 7, 1997 states that he
was hired as President and Chief Operating Officer of Phoenix Canadian
operations. In the event Mr. Huguet ceases to be an employee of the Corporation
following: (i) a successful take-over bid; (ii) any change in salary,
responsibility, status, benefits or residence made without Mr. Huguet's prior
written consent; (iii) any act on the part of the Corporation amounting to
constructive dismissal according to a Court of competent jurisdiction; and
(iv) a change of control of the Corporation, he will receive adequate monetary
compensation. Such monetary compensation includes an amount equal to a maximum
18 months of Mr. Huguet's gross base salary. On May 26, 1999, Mr. Huguet and the
Corporation entered into an agreement that modified Mr. Huguet's employment
contract in the following way: If Mr. Huguet resigns from his employment with
the Corporation during period of ten (10) weeks following the nomination of
a new Chief Executive Officer during the 1999 calendar year, he will be entitled
to receive $144,000 of severance as complete and final payment of all amounts
due to Mr. Huguet by the Corporation.
Mrs. Susan Thornton's employment contract dated June 1,1998 states that she was
hired as President and Chief operating Officer of Phoenix International Life
Sciences (IBRD) Inc., Phase II-IV, a subsidiary of the Corporation. In the event
Mrs. Thornton ceases to be an employee of the Corporation following: (i) a
successful take-over bid; (ii) any change in salary, responsibility, status,
benefits or residence made without Mrs. Thornton's prior written consent;
(iii) any act on the part of the Corporation amounting to constructive dismissal
according to a Court of competent jurisdiction; and (iv) a change of control of
the Corporation, she will receive adequate monetary compensation. Such monetary
compensation includes a minimum amount equal to Mrs. Thornton gross annual
salary divided by 12 and multiplied by the number of years of employment at
Phoenix International.
Mr. James J. Conklin's employment contract dated September 1, 1998 states that
he was hired as Senior Director and General Manager Scientific Software,
a division of the Corporation, at a starting base salary of US$220,000.
Mr. R. Ian Lennox's employment with the Corporation started in September, 1999
when was hired as Chief Executive Officer of the Corporation at a starting base
salary of $420,000.
Concurrently with the signature of their employment contracts, each of the Named
Executive Officer has signed a Confidentiality, Proprietary Rights, Regulatory
Compliance and Non-Competition Agreement with the Corporation, the violation
thereof giving rise to damages ranging from $50,000 to $100,000.
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
1. Composition of the Committee
During the 1999 financial year, the Committee was composed of three members of
the Board of Directors, namely Mr. John W. Hooper, who was also Chairman and
Chief Executive Officer of the Corporation, and Messrs. Raich and Goldman, two
outside directors. The Committee met periodically during the fiscal year ended
August 31, 1999.
2. Mandate of the Committee
The mandate of the Committee consists of the following duties:
(a) Review and approve executive compensation policies to ensure that the
Corporation is able to recruit, retain and motivate performance-oriented
executive officers;
(b) Review and approve the terms on which executive officers of the Corporation
are hired and pursuant to which their employment is terminated, prior to
such hiring or termination;
(c) Assess at least annually the performance of the President and determine
his compensation and benefits;
(d) Assess annually with the President the performance of executive officers of
the Corporation and determine their compensation and benefits;
(e) Recommend to the Board of Directors the executive officers to be hired by
the Corporation;
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(f) Administer the Key Employee Share Option Plan;
(g) Review and make a recommendation to the Board of Directors in respect of
the Employee Profit Sharing Plan and, if approved, administer same;
(h) Review and comment on the organizational structure of the Corporation, the
assignment of responsibilities and the terms of the various standard
agreements entered into with non-executive employees;
(i) Ensure proper management succession planning for the Corporation and make
recommendations to the Board of Directors with respect thereto;
(j) Review annually the compensation and benefits, if any, of the directors in
their capacity as directors, and make recommendations to the Board of
Directors with respect thereto;
(k) Implementing a process for selecting nominees for election to the Board of
Directors and recruiting new candidates for Board membership and make
recommendations to the Board of Directors with respect thereto;
(l) Review, on an annual basis, the relationship between each director and the
management of the Corporation as well as between each director and any
significant shareholder;
(m) Implementing a process to assess, on an annual basis, the effectiveness of
the Board of Directors and its various committees; and
(n) Submit to the Board of Directors draft descriptions of the respective roles
of the Board of Directors and of the management.
3. Compensation Policies
Compensation for each of the Named Executive Officers, as well as for all other
executive officers, consisted, for the fiscal year ended August 31, 1999, of
a base salary, along with annual incentives in the form of bonuses, and, in
certain cases, a longer term incentive in the form of stock options.
All actions or decisions taken by the Committee with respect to compensation
issues were approved, authorized and ratified by the Board of Directors.
4. Base Salary
The Corporation has considered it desirable for executives in acquired
companies, existing executives in the Corporation's original operations, and
newly hired executives, to be remunerated on an equitable basis worldwide.
Effective September 29, 1998 the Board of Directors of the Corporation approved
the Worldwide Executive Remuneration Plan ("WERP") in order to meet these
objectives. See "Worldwide Executive Remuneration Plan" for details on the terms
and conditions of the WERP.
5. Annual Bonus
Effective September 1st, 1998, executive bonuses currently consist of up to
three components, based on worldwide profitability (Corporate Bonus),
profitability of the local business unit (Local Bonus), and achievement of
personal objectives (Objectives Bonus). Bonuses will be paid based on the
percentage achievement for each of these components, multiplied by a "Base
Bonus" for each component. Base Bonuses are specified percentages of the salary
paid to the executive in the relevant fiscal year.
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All executive bonuses are subject to approval by the Human Resources Committee
of the Board of Directors.
(a) Base Bonuses as Percentage of Salary
The percentage of the executive's paid salary that will be used for bonus
calculations and the allocation of this between three categories of performance,
are listed below for each type of executive:
BASE BONUS AS A PERCENTAGE OF SALARY
Related to Related to Related to
Corporate Fiscal Target of Strategic Total
Nominal Grade Net Profit Business Unit Objectives Base Bonus
------------- ---------- ---------------- ---------- ----------
CEO 37.5% 0% 12.5% 50%
COO 10.0% 20% 10.0% 40%
CFO 20.0% 0% 15.0% 35%
Other Line Executive 7.5% 15% 7.5% 30%
Staff Executive 10.0% 0% 15.0% 25%
In the event that 100% of the target is met, the executive will be entitled to
a bonus of 100% of the Base Bonus.
With respect to the Corporate Bonus, if less than 70% of target is met, no
Corporate Bonus will be payable.
With respect to the Local Bonus, if less than 70% of either the corporate or
local achievement target is met, no Local Bonus will be payable.
Subject to the preceding paragraphs, if between 70% and 130% of target is
achieved, Corporate and Local Bonuses are proportional to the percentage of
achievement on a scale of 0-200% of the Base Bonus. Both fiscally based bonuses
are capped at 130% achievement, equivalent to 200% of Base Bonus.
The Objectives Bonus is payable regardless of corporate or local financial
achievement.
(b) Corporate Bonus
The Corporate Bonus is based on the Corporation's worldwide earnings per share
(EPS), as compared to the budgeted earnings per share.
(c) Local Bonus
The Local Bonus is based on the pretax profit of the local business unit.
(d) Objectives Bonus
The Objectives Bonus will be paid based on the percentage achievement of
non-financial objectives and based on a specified percentage of the salary paid
to the executive in the relevant fiscal year. At the end of the relevant fiscal
year, the direct supervisor (or the HR Committee of the Board for the CEO)
discusses with the executive the extent to which these objectives are achieved
and the bonus is calculated accordingly.
(e) Bonus for Outstanding Achievement when Financial Performance is Depressed
If the Corporation does not achieve 70% of its financial objectives in any
particular year, and/or if a particular business unit does not achieve 70% of
its financial objectives, then fiscally related bonuses may be minimal or zero.
In such cases, the Human Resources Committee of the Board of Directors has the
discretion to grant Outstanding Performance Bonus awards to deserving
executives.
6. Stock Options
The Key Employee Share Option Plan ("Plan") was established on October 24, 1994
in the context of the Corporation's initial public offering. The Plan is
designed to enable the Corporation to attract and
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retain directors and employees who will be motivated toward the success of the
Corporation and to encourage share ownership in the Corporation by such persons.
On July 31, 1995, the Committee decided that options be granted to certain
present and future key employees (as defined) based on the position held in the
Corporation and the level of responsibilities associated with such position. See
"Compensation of Executive Officers -- Option Grants During the 1999 Financial
Year" for details on the terms and conditions of options granted under the Plan.
Pursuant to the WERP, in addition to options granted on hiring of an executive,
annual stock option awards are provided to certain of the most senior
executives, as decided from time to time by the Human Resources Committee of the
Board of Directors. These awards are made each year at the first meeting of the
Human Resources Committee of the Board of Directors following the fiscal year
end. The number of options to be awarded annually is calculated by taking the
total value of the salary paid to the executive in the fiscal year, multiplying
by the exchange rate of the Canadian dollar at the end of that year, multiplying
by a fraction which will be different for each senior executive, and dividing by
the year end share price for shares of the Corporation in Canadian dollars.
Annually awarded options vest 20% for each completed year of service following
the award of such options. In order to implement this aspect of the plan, the
Corporation's Key Employee Share Option Plan was amended to provide for the 20%
annual vesting as described under the heading "Key Employee Share Option Plan".
7. Other Compensation
Executive officers of the Corporation are entitled to certain additional
perquisites, including use of an automobile and reimbursement of certain
traveling expenses. These perquisites and other personal benefits are considered
part of a competitive compensation package and are not related to corporate
performance. The aggregate annual amount of such other personal benefits is no
greater than the lesser of $50,000 or 10% of the total of annual base salary and
bonus reported for each Named Executive Officer.
Compensation of the Chief Executive Officer
Effective April 22, 1999, Mr. Hooper entered into an employment agreement
whereby he agreed to continue to provide his services for an indeterminate
period at a salary of $420,000 per year. Mr. Hooper's employment with the
Corporation ended on August 31, 1999.
The bonus to be paid for the fiscal year ended August 31, 1999 will be
determined in accordance with the policies detailed under "Compensation
Policies" and "Annual Bonus".
8. Other Business
In accordance with its mandate, the Committee also reviewed, commented and made
recommendations with respect to the current and proposed organizational
structure, the description of the responsibilities assigned to each executive
officer, the terms and conditions of all employment agreements entered into with
each executive officer (namely employment, confidentiality and non competition
agreements) and the terms and conditions of the standard agreements entered into
with non executive employees.
Report submitted by the Human Resources Committee:
Robert Raich, Chairman
John W. Hooper
David Goldman
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Corporation stock performance graph
[GRAPH]
PHOENIX INTERNATIONAL LIFE SCIENCES
Closing Share Price PHX vis-a-vis TSE 300 co for the period Sep. 01/98-Aug.
31/99
DATE PHX TSE
25-Sep-98 9.23 5846
16-Oct-98 10.05 5880
6-Nov-98 12.48 6418
18-Dec-98 15.8 6353
8-Jan-99 16.7 6869
19-Jan-99 17 6730
19-Feb-99 16.38 6409
12-Mar-99 13.5 6562
1-Apr-99 13.18 6625
23-Apr-99 12.53 7029
14-May-99 12 6887
4-Jun-99 11.75 6940
25-Jun-99 9.5 6939
16-Jul-99 9.3 7286
6-Aug-99 9.1 6878
27-Aug-99 8.83 7106
Compensation of Directors
During the financial year ended August 31, 1999, an annual remuneration of
$10,000 was paid to each director who was not a full time employee of the
Corporation. In addition, fees of $750 were paid to any such director who
attended a meeting of the Board of Directors or of a committee of the Board of
Directors. All directors are also entitled to the reimbursement of their
travelling expenses when attending such meetings.
For the financial year ended August 31, 1999, the total cash compensation paid
to directors was $103,282, including reimbursement of their expenses.
The Corporation carries directors' and officers' liability insurance in an
amount limited to $50 million. For fiscal 1999, the total annual premium in
respect to directors' and officers' liability insurance was approximately
$60,000, all of which was paid by the Corporation and charged to income.
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INDEBTEDNESS OF DIRECTORS AND SENIOR EXECUTIVES
The aggregate amount outstanding to the Corporation for indebtedness incurred
other than in connection with the purchase of securities of the Corporation, by
its directors and officers and former directors and officers was $56,250 as at
August 31, 1999:
TABLE OF INDEBTEDNESS OF DIRECTORS
AND SENIOR EXECUTIVES OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS
Largest Amount
Involvement of Outstanding during Amount Outstanding
Name and Principal Position the Corporation Fiscal 1999 August 31, 1999(1)
- --------------------------- --------------- ------------------ ------------------
Judy Zilber
Bedminster, New Jersey
Senior Vice President,
Business Development,
Marketing & Scientific
Communications Lender $60,000 $56,250
(1) This loan bares no interests.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
General
In February 1995, The Toronto Stock Exchange Committee on Corporate Governance
in Canada issued its final report containing a series of guidelines for
effective corporate governance (the "Governance Guidelines"). These guidelines
(which are not mandatory) deal with the constitution of board of directors and
board committees, their functions, the effectiveness and education of board
members, their independence from management and other means of ensuring sound
corporate governance. The Toronto Stock Exchange has, in accordance with the
recommendations contained in such report, adopted as a listing requirement that
disclosure be made by each listed company of its corporate governance system
with reference to the Governance Guidelines. In July 1995, the Montreal Exchange
also adopted such listing requirement and issued guidelines similar to the
Governance Guidelines.
On October 19, 1995, the Board of Directors of the Corporation created an ad hoc
committee to review the Governance Guidelines and report to the Board of
Directors as to specific measures, if any, to be taken by the Corporation with
respect thereto. On November 3, 1995, a special meeting of the Board of
Directors was held to discuss the report of such committee and adopt the
necessary resolutions.
The following is a summary of the particulars of the system of corporate
governance of the Corporation and its current compliance with the Governance
Guidelines as well as the plans of the Board of Directors to assure a greater
degree of compliance with the Governance Guidelines during the current and
future fiscal years of the Corporation.
Mandate of the Board
The mandate of the Board of Directors is to supervise the management of the
business and affairs of the Corporation. In order to better fulfil its mandate,
the Board of Directors has formally acknowledged its responsibility for, among
other matters,
- - Reviewing, at the beginning of each fiscal year, a strategic plan prepared
and elaborated by management and assessing the achievement of the objectives
set for the immediately preceding year;
- - Ensuring that it is properly informed, on a timely basis, of all important
issues and developments involving the Corporation and its business
environment;
- - Identifying, with management, the principal risks of the Corporation's
business and the systems put in place to manage these risks as well as
monitoring, on a regular basis, the adequacy of such systems;
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- - Ensuring proper succession planning including appointing, training and
monitoring senior management;
- - Ensuring proper communication with shareholders, customers and governments;
and
- - Monitoring the efficiency of internal control and management information
systems,
And has taken, when necessary, specific measures in this respect. Some of these
duties are reflected in the extended mandate of the Human Resources Committee.
See "Compensation of Executive Officers -- Human Resources Committee Report on
Executive Compensation -- Mandate of the Committee".
Composition of the Board and of its Committees
The Governance Guidelines recommend that a board of directors be constituted
with a majority of individuals who qualify as "unrelated directors". The
Governance Guidelines define an "unrelated director" as a director who is
independent of management and is free from any interest and any business or
other relationship which could, or could reasonably be perceived to, materially
interfere with the director's ability to act with a view to the best interests
of the Corporation, other than interests and relationships arising from
shareholding. The Governance Guidelines also recommend that a board of directors
should examine its size.
The Board of Directors followed such recommendations. Upon review of (i) the
size of the Corporation, (ii) the rapid changes in the business and regulatory
environment within which the Corporation presently operates, (iii) the
increasing number of important duties assigned to unrelated directors appointed
on the various committees, the Board of Directors concluded that, for the next
fiscal year, two new unrelated director should be appointed, Mr. Roger A. Korman
and Mr. Jean E. Douville, and that Mr. R. Ian Lennox and Mr. Lucien Steru should
be the only senior executives to continue to serve on the Board of Directors.
In August 1997, with the Corporation's acquisition of I.T.E.M. Holdings, Mr.
Lucien Steru was appointed to the Board of Directors. Since he continues to be
employed by the Corporation, he is considered a related Director. In September
1999, Mr. R. Ian Lennox commenced his functions as an employee of the
Corporation as Chief Executive Officer. On October 4, 1999, Mr. Lennox became a
member of the Board.
Thus, the proposed Board of Directors for fiscal 2000 consists of six unrelated
directors and of two related directors: Mr. R. Ian Lennox, Chief Executive
Officer of the Corporation, and Mr. Lucien Steru, the President and Chief
Operating Officer of Phoenix International (Europe), a subsidiary the
Corporation.
A further Governance Guideline recommends that the Audit Committee be made up of
outside directors only. This guideline also states that other board committees
should be comprised of outside directors, a majority of which should be
unrelated directors.
At a meeting of the Audit Committee held on October 25, 1999, and Audit
Committee Charter was adopted by the Corporation. This Charter follows the
recommendations of the Blue Ribbon Committee on improving the effectiveness of
Corporate audit committees. This Committee is the joint creation of the New York
Stock Exchange and the National Association of Security Dealers.
Set out below is a description of the committees of the Board of Directors and
their mandate.
Audit Committee
The mandate of the Audit Committee consists in reviewing (i) the annual and
interim financial statements of the Company and certain other public disclosure
documents required by regulatory authorities, (ii) the nature and scope of the
annual audit as proposed by the auditors and management and, (iii) with the
auditors and management, the adequacy of the internal accounting control
procedures and systems within the Corporation, and make recommendations to the
Board of Directors in respect thereto. The Board of Directors will, in the
course of the current fiscal year, examine and, if necessary, redefine or
clearly specify the mandate of the Audit Committee and ensure that such
committee reports, at least on a quarterly basis, to the Board of Directors.
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Human Resources Committee
Following a recommendation of the ad hoc committee on corporate governance, the
Board of Directors changed the name of the Compensation Committee to that of the
"Human Resources Committee" and expanded the matters which are to be dealt with
by such committee. The mandate of the Human Resources Committee is outlined
above under "Compensation of Executive Officers -- Human Resources Committee
Report on Executive Compensation -- Mandate of the Committee".
Independence from Management and Evaluation of the Board and Each Director
Since the nomination of R. Ian Lennox as Chief Executive Officer of the
Corporation and the nomination of Mr. Claude E. Forget as Chairman of the Board,
the Corporation believes that it meets the requirements of the Governance
Guidelines that state that the independence of a board is most simply achieved
by appointing a chair who is not a member of management. Mr. John W. Hooper was
Chairman of the Board and Chief Executive Officer until August 31, 1999 when he
left his employment with the Corporation. The Human Resources Committee is
responsible for implementing a process to assess annually the effectiveness of
the Board of Directors and its various committees.
Other
The Corporation considers that orienting and educating new directors is an
important element of ensuring responsible corporate governance. In this regard,
a formal orientation and education program will be established. The proposed
program contemplates that each new director, in addition to discussions with the
Chairman of the Board with respect to the business and the operation of the
Corporation, will be provided with a record of historical public information on
the Corporation, a copy of the mandate of each committee and prior minutes of
the Board of Directors. The Board of Directors has undertaken to refine such
program and implement it.
In certain circumstances, it may be appropriate for an individual director to
engage an outside advisor at the expense of the Corporation. The engagement of
outside advisor is subject to the approval of the lead director.
Furthermore, reference is made to the definition of the mandate of the Human
Resources Committee for particulars of other measures taken to assure a greater
degree of compliance with the Governance Guidelines and increase the
effectiveness of the Board of Directors.
APPOINTMENT OF AUDITORS
Ernst & Young, chartered accountants, have been the auditors of the Corporation
since July 22, 1994.
Except where the authority to vote in favour of the appointment of Ernst & Young
is withheld, the persons whose names are printed on the form of proxy intend to
vote FOR the appointment of Ernst & Young, chartered accountants, as auditors of
the Corporation and to vote FOR authorising the Board of Directors to determine
their remuneration. The auditors will hold office until the next annual meeting
or until their successors are appointed.
GENERAL
Except as otherwise specifically indicated, the information contained herein is
given as at November 2, 1999. The management of the Corporation presently knows
of no matters to come before the Meeting other than matters identified in the
Notice of Meeting. If any matters which are not known should properly come
before the Meeting, the persons named in the form of proxy will vote on such
matters according to their best judgement.
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APPROVAL OF THE DIRECTORS
The directors of the Corporation have approved the content and the sending of
this Circular.
Saint-Laurent, Quebec, November 2, 1999.
Chairman of the Board
/s/ Claude E. Forget
- --------------------------
MR. CLAUDE E. FORGET
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PHOENIX INTERNATIONAL LIFE SCIENCES INC.
The undersigned shareholder of PHOENIX INTERNATIONAL LIFE SCIENCES INC. (the
"Corporation") hereby appoints Mr. R. Ian Lennox, failing whom, Mr. David
Moszkowski, OR INSTEAD OF THE FOREGOING,
as the proxyholder of the undersigned
to attend and act for and on behalf of the undersigned at the ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS OF THE CORPORATION TO BE HELD ON DECEMBER 14, 1999 (the
"Meeting"), and at any adjournment thereof, to the same extent and with the same
power as if the undersigned were present in person thereat and with authority to
vote and act in the said proxyholder's discretion with respect to amendments or
changes to matters referred to in the notice of the Meeting and with respect to
other matters which may properly come before the Meeting. THIS PROXY IS
SOLICITED BY AND ON BEHALF OF THE MANAGEMENT OF THE CORPORATION.
The said proxyholder is specifically directed to vote or withhold from voting
shares registered in the name of the undersigned as indicated below:
(1) VOTE FOR [ ] OR WITHHOLD FROM VOTING [ ]
in respect of the election of the nominees for directors
of the Corporation, as a group, as listed in the
Information Circular for Solicitation of Proxies.
(2) VOTE FOR [ ] OR WITHHOLD FROM VOTING [ ]
in respect of the appointment of Ernst & Young as auditors
of the Corporation and authorizing the directors to fix
their remuneration.
(3) VOTE FOR [ ] OR AGAINST [ ]
in respect of the resolution amending the Key Employee
Share Option Plan as described in the Information Circular
for Solicitation of Proxies.
Date: Signature: _____________________________
NOTES:
This form of proxy must be executed by the shareholder or his attorney
authorized in writing or, if the shareholder is a corporation, under the
corporate seal or by an officer or attorney thereof duly authorized. Joint
shareholders must each sign. Executors, administrators, trustees, etc., must
indicate their capacity when signing. If undated, this proxy is deemed to bear
the date on which it was mailed to the shareholder. A shareholder may appoint as
proxyholder a person (who need not be a shareholder) other than the persons
whose names are already printed on this form of proxy to attend and act on his
behalf at the Meeting by inserting the name of such other person in the space
provided above or by completing another proper form of proxy. The shares
represented by this proxy will, on a show of hands or any ballot that may be
called for, be voted or withheld from voting in accordance with the instructions
given by the shareholder; in the absence of any contrary instructions, this
proxy will be voted for in respect of the itemized matters.
PROXY
PLEASE COMPLETE AND RETURN IN THE
ENVELOPE PROVIDED.