1
EXHIBIT 99.1
[ALTAREX LOGO]
ALTAREX CORP.
Notice of Annual and Special Meeting of Shareholders
and
Management Information Circular
April 13, 1999
2
[ALTAREX LOGO]
ALTAREX CORP.
Registered Office: Executive Office:
Campus Tower, Suite 300 Suite 125, 303 Wyman Street
8625 - 112 Street Waltham, Massachusetts
Edmonton, Alberta T6G 2E1 02451
------------------------------------
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
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NOTICE IS HEREBY GIVEN that the annual and special meeting (the "Meeting")
of holders of common shares ("Shareholders") of AltaRex Corp. (the
"Corporation") will be held in the Angus Shaw Room at the Sheraton Grand Hotel,
10235 -101 Street, Edmonton, Alberta on May 19, 1999 at 2:30 p.m. (Edmonton
time), for the following purposes:
1. to receive the annual report of the directors to the shareholders and the
financial statements of the Corporation for the year ended December 31,
1998 and the auditors' report thereon;
2. to elect directors;
3. to appoint Ernst & Young LLP, Chartered Accountants, as auditors of the
Corporation and to authorize the directors to fix their remuneration;
4. to consider and, if deemed advisable, pass, with or without variation, a
resolution approving an amendment to the stock option plan of the
Corporation (the "Plan") increasing the number of common shares of the
Corporation reserved for issuance thereunder from 2,480,000 to 4,180,000,
the full text of which is set out in Schedule "A" to the accompanying
Management Information Circular of the Corporation (the "Circular"), all as
more particularly described in the Circular;
5. to consider and, if deemed advisable, pass, with or without variation, a
resolution approving an amendment to the Plan increasing the maximum
exercise period of options granted under the Plan from five years to ten
years, the full text of which is set out in Schedule "B" to the Circular,
all as more particularly described in the Circular;
6. to consider and, if deemed advisable, pass, with or without variation, a
resolution approving an amendment to the terms of certain options granted
under the Plan extending the exercise period of such options from five
years to ten years, the full text of which resolution is set out in
Schedule "C" to the accompanying Circular, all as more particularly
described in the Circular; and
7. to consider such other matters as may properly come before the Meeting or
any adjournment thereof.
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The Board of Directors of the Corporation has fixed the close of business
on April 12, 1999 as the record date (the "Record Date") for the purpose of
determining Shareholders entitled to receive notice of the Meeting, but the
failure of any Shareholder to receive notice of the Meeting does not deprive
such Shareholder of the right to vote at the Meeting. If a person has acquired
Common Shares of the Corporation after the Record Date, that person is entitled
to vote those shares at the Meeting upon establishing share ownership and
demanding the inclusion of his or her name on the list of shareholders of the
Corporation not later than ten days before the date of the Meeting.
By Order of the Board of Directors
(Signed) Edward M. Fitzgerald
Secretary
Waltham, Massachusetts
April 13, 1999
Shareholders who are unable to be present at the Meeting are requested to
complete and return the enclosed form of proxy in the envelope provided for that
purpose. The Board of Directors has specified that proxies must be received at
the Calgary office of the Corporation's transfer agent, Montreal Trust Company
of Canada, before 5:00 p.m. (Calgary time), on the last business day prior to
the Meeting or, if such meeting is adjourned, such time on the business day
immediately prior to the date to which such meeting is adjourned at the
following address, or may be deposited with the Chairman of the Meeting prior to
the commencement thereof:
AltaRex Corp.
c/o Montreal Trust Company of Canada
Suite 600
530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
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ALTAREX CORP.
ANNUAL AND SPECIAL MEETING
OF SHAREHOLDERS
To be held on May 19, 1999
MANAGEMENT INFORMATION CIRCULAR
This Management Information Circular is furnished in connection with the
solicitation of proxies by the management of AltaRex Corp. (the "Corporation")
for use at the Annual and Special Meeting of the holders (the "Shareholders") of
common shares (the "Common Shares") of the Corporation to be held in the Angus
Shaw Room of the Sheraton Grand Hotel, 10235 - 101 Street, Edmonton, Alberta, at
2:30 p.m. (Edmonton time) on May 19, 1999 (the "Meeting"), for the purposes set
forth in the notice of meeting which accompanies this Circular. The information
contained herein is given as of April 13, 1999, except where otherwise
indicated. There is enclosed herewith a form of proxy for use at the Meeting.
Each Shareholder who is entitled to attend at meetings of Shareholders is
encouraged to participate in the Meeting and Shareholders are urged to vote on
matters to be considered in person or by proxy.
APPOINTMENT AND REVOCATION OF PROXIES
Those Shareholders desiring to be represented by proxy must deposit their
respective forms of proxy with Montreal Trust Company of Canada ("Montreal
Trust"), Attention: Corporate Trust Department, 6th Floor, 530 - 8th Avenue
S.W., Calgary, Alberta T2P 3S8 by no later than 5:00 p.m. (Calgary time) on the
last business day preceding the date of the Meeting, or any adjournment thereof.
A proxy must be executed by the Shareholder or by his attorney authorized in
writing, or if the Shareholder is a corporation, under its seal or by an officer
or attorney thereof duly authorized. A proxy is valid only at the Meeting in
respect of which it is given or any adjournment of the Meeting.
The persons named in the enclosed form of proxy are directors and/or
officers of the Corporation and will represent management of the Corporation at
the Meeting. Each Shareholder submitting a proxy has the right to appoint a
person to represent him, her or it at the Meeting other than the persons
designated in the form of proxy furnished by the Corporation. The Shareholder
may exercise this right by striking out the names of the persons so designated
and inserting the name of the desired representative in the blank space
provided, and depositing the proxy with Montreal Trust at the place and within
the time specified above for the deposit of proxies.
An instrument of proxy may be revoked by the person giving it at any time
prior to the exercise thereof. If a person who has given a proxy attends
personally at the Meeting at which such proxy is to be voted, such person may
revoke the proxy and vote in person. In addition to revocation in any other
manner permitted by law, a proxy may be revoked by instrument in writing
executed by the Shareholder or his or her attorney duly authorized in writing,
or if the Shareholder is a corporation, under its seal or by an officer or
attorney thereof duly authorized, and deposited either with Montreal Trust at
any time up to and including 5:00 p.m. (Calgary time) on the last business day
preceding the Meeting or any adjournment thereof, at which the proxy is to be
used, or with the Chairman of the Meeting, on the day of the Meeting or any
adjourned meeting prior to the commencement thereof. Such revocation shall be
deemed effective upon such deposit in either manner.
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EXERCISE OF DISCRETION
The Common Shares represented by properly executed proxies designated in
the printed portion of the accompanying form of proxy will be voted or withheld
from voting on any ballot that may be called for, and, where the Shareholder
specifies a choice with respect to any matter to be acted upon, such Common
Shares will be voted in accordance with any specification so made. The persons
appointed under the enclosed form of proxy are conferred with discretionary
authority with respect to amendments or variations of those matters specified in
the proxy and with respect to any other matters which may properly be brought
before the Meeting or any adjournment thereof in accordance with their best
judgement. As at the date of this Circular, the management of the Corporation
know of no such amendment, variation, or other matter.
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Unless otherwise specified, proxies in the accompanying form will be voted
in favour of: (a) the election of the nominees, hereinafter set forth, as
directors of the Corporation; (b) the appointment of Ernst & Young LLP,
Chartered Accountants, as auditors of the Corporation; (c) the resolution
approving an amendment to the stock option plan of the Corporation (the "Plan")
increasing the number of Common Shares reserved for issuance thereunder, the
full text of which is set out in Schedule "A" hereto; (d) the resolution
approving an amendment to the Plan increasing the maximum exercise period of
options granted thereunder, the full text of which is set out in Schedule "B"
hereto; and (e) the resolution approving the amendment to the expiry date of
certain options granted under the Plan, the full text of which is set out in
Schedule "C" hereto.
QUORUM AND VOTING
Shareholders present in person or represented by proxy representing not
less than 10% of the outstanding Common Shares are necessary to provide a quorum
at the Meeting. Voting at the Meeting will be by a show of hands, each
Shareholder having one vote, unless a poll is requested or required, in which
each Shareholder is entitled to one vote for each share held. Unless otherwise
indicated herein, in order to approve a resolution proposed at the Meeting a
majority of greater than 50% of the votes cast will be required.
PERSONS MAKING THE SOLICITATION
This solicitation is made on behalf of the management of the Corporation.
The cost incurred in the preparation and mailing of this Circular and the
accompanying proxy will be borne by the Corporation. In addition to the use of
mail, proxies may be solicited by personal delivery, telephone or any form of
electronic communication or by directors, officers and employees of the
Corporation who will not be directly compensated therefor.
RECORD DATE
The Board of Directors has fixed the close of business on April 12, 1999 as
the record date (the "Record Date") for the purpose of determining Shareholders
entitled to receive notice of the Meeting. The failure of any Shareholder to
receive notice of the Meeting does not deprive such Shareholder of the right to
vote at the Meeting. If a person has acquired Common Shares after the Record
Date, that person is entitled to vote those Common Shares at the Meeting upon
establishing ownership of the Common Shares and demanding the inclusion of his,
her or its name on the list of holders of Common Shares maintained by the
Corporation not later than ten days before the date of the Meeting.
PRINCIPAL HOLDERS OF VOTING SECURITIES
As at April 13, 1999, the Corporation had outstanding 16,512,613 Common
Shares. The following table sets forth the particulars, as at the date of this
Circular, with respect to those persons who, to the knowledge of the directors
or officers of the Corporation, beneficially own or exercise control or
direction over more than 10% of the Common Shares (being the only class of
shares of the Corporation outstanding):
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Percentage of Common
Name Number of Common Shares Shares
- ---- ----------------------- ------
DR. ANTOINE A. NOUJAIM 3,924,700 Common Shares (1) 23.8% (1)
(1) This number does not include 375,000 Common Shares issuable upon the
exercise of stock options held by Dr. Noujaim which are exercisable at a
price of $1.80 per share until July 26, 2001.
As of the date hereof, to the knowledge of the directors and officers of
the Corporation, there are no other persons who are holders of record or are
beneficial owners, directly or indirectly, of shares conferring over 10% of the
voting rights attached to the issued and outstanding Common Shares.
Except as disclosed above, as at the date hereof, the current directors and
officers of the Corporation as a group own directly or indirectly or exercise
control or direction over a total of 508,159 Common Shares representing
approximately 3.1% of the issued and outstanding Common Shares.
PARTICULARS OF MATTERS TO BE ACTED UPON
Election Of Directors
At the Meeting, it is proposed that six directors be elected and hold
office until the next annual meeting of Shareholders or until their successors
are elected or appointed. There are currently seven directors of the
Corporation. In accordance with the Business Corporations Act (Alberta) and
pursuant to the by-laws of the Corporation, the current directors of the
Corporation cease to hold office at the close of the Meeting.
The following table sets forth, in respect of each nominee, all positions
currently held with the Corporation, principal occupation or employment within
the preceding five years, and the approximate number of Common Shares of the
Corporation beneficially owned, directly or indirectly, or over which voting
control is exercised as of April 13, 1999. The information contained below is
based upon information furnished by the respective nominee and by the
Corporation, other than the information provided below with respect to the
Common Shares which was provided to the Corporation by the respective nominee.
The Corporation has not received notice of, and management is not aware of, any
proposed nominees in addition to those named.
Each of the nominees is currently a director of the Corporation. Mr.
Georges Hibon, currently a director of the Corporation, has decided not to stand
for election as a director for the ensuing year. Management extends its
appreciation to Mr. Hibon for his contribution to the Corporation.
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Number of Common
Office or Position in the Corporation, if any, Shares Owned
Name, Municipality of Residence and Principal Occupation within the Last Beneficially or Subject
and Director Since Five Years to Control or Direction
Dr. Antoine A. Noujaim Chairman of the Board of Directors and 3,924,700(1)
Edmonton, Alberta Chief Scientific Officer. President and
December 1, 1995 Chief Executive Officer of the Corporation
from November 1995 to February 22, 1998;
President of Biomira Research Inc., from
1994 to 1995; Senior Vice President of the
Immunoconjugate Division of Biomira Inc.
from 1989 to 1994; Director of Biomira Inc.
from 1985 to 1995.
Richard E. Bagley President, Chief Executive Officer and 50,000
Weston, Massachusetts Director of the Corporation since February
February 23, 1998 23, 1998. Chairman and Chief Executive
Officer of ProScript Inc. from September,
1995 to February, 1998. President and
Chief Executive Officer of ImmuLogic
Pharmaceutical Corporation from 1990 to 1994.
William R. McMahan Director of the Corporation. President of 197,159(2)
Calgary, Alberta Oxbow Capital Corporation and Oxbox
July 15, 1996 Investments Inc. from October, 1993 to
present. Prior thereto, he was Director of
International Marketing, Oxbow Resources
Limited from January, 1992 to October,
1993. Mr. McMahan is also the President,
Chief Executive Officer and Director of
Oxbow Equities Corp., a mutual fund
company listed on The Toronto Stock Exchange.
Jean-Claude Gonneau Director of the Corporation. Managing 11,000
Paris, France Director, Donaldson, Lufkin & Jenrette (an
January 29, 1997 investment dealer).
The Honourable Monique Begin Director of the Corporation. Professor Nil
Ottawa, Ontario Emeritus, University of Ottawa. Dean,
May 14, 1998 Faculty of Health Sciences, University of
Ottawa from 1990 to 1997. Minister
of National Health and Welfare for the
Government of Canada from September 1977 to
September 1984.
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Number of Common
Office or Position in the Corporation, if any, Shares Owned
Name, Municipality of Residence and Principal Occupation within the Last Beneficially or Subject
and Director Since Five Years to Control or Direction
Dr. Jim A. Wright Director of the Corporation. Founder Nil
Toronto, Ontario Chairman, President and Chief Scientific
May 14, 1998 Officer of GeneSense Technologies Inc.
since 1987. Terry Fox Senior Research
Scientist of the National Cancer Institute of
Canada since 1990. Associate Director,
Manitoba Institute of Cell Biology since
1989. Professor of Microbiology,
Biochemistry and Moleculer Biology at the
University of Manitoba.
Note:
(1) Also see "Principal Shareholders".
(2) These shares are directly held by 668355 Alberta Ltd. Mr. McMahan is a
director of 668355 Alberta Ltd. and a trust established for the benefit of
his family is a major shareholder of 668355 Alberta Ltd.
The Corporation is required, pursuant to the Business Corporations Act
(Alberta), to appoint annually from among its members an audit committee
comprised of not less than three members. At present the Audit Committee
consists of Dr. Jim A. Wright, The Honourable Monique Begin and Jean-Claude
Gonneau.
Appointment Of Auditors
It is proposed that Ernst & Young LLP, Chartered Accountants be appointed
as the auditors of the Corporation to hold office until the next annual meeting
of Shareholders at a remuneration to be fixed by the Board of Directors of the
Corporation. Ernst & Young was initially appointed as auditor of the Corporation
on July 15, 1996 and has served continuously as auditors since that date.
Amendment of Share Option Plan
The Corporation has approved, subject to approval by the Shareholders and
any necessary regulatory approval, an amendment to the Corporation's share
option plan (the "Plan"). The amendment to the Plan would, upon approval by
Shareholders, (i) increase the maximum number of Common Shares reserved for
issuance under the Plan from 2,480,000 to 4,180,000 Common Shares, and (ii)
increase the maximum exercise period of options granted under the Plan from five
years from the date of grant to ten years from the date of grant. As at April
13, 1999, an aggregate of 2,255,499 options to acquire Common Shares were
currently outstanding under the Plan. See "Stock Options".
In accordance with the rules of The Toronto Stock Exchange (the "TSE"), the
proposed amendment to the Plan must be approved by the affirmative vote of a
majority of the votes cast in person or by proxy at the Meeting, other than by
insiders of the Corporation to whom shares may be issued pursuant to the Plan or
by associates of such persons. To the best of the Corporation's knowledge there
were, as at April 13, 1999, 4,933,859 Common Shares held by insiders of the
Corporation and their associates which will not be counted for purposes of
determining such approval.
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The Board of Directors has determined that the proposed amendments to the
Plan are in the best interests of the Corporation and the Shareholders. The
Board of Directors recommends that Shareholders vote in favour of the
resolutions in this regard, the full text of which are set out in Schedule "A"
and Schedule "B" to this Circular, respectively. Unless specified in the
enclosed form of proxy that Common Shares represented by the form of proxy shall
be voted against these resolutions, the persons designated in the enclosed form
of proxy intend to vote "For" each of these resolutions.
Amendment to the Term of Certain Outstanding Options
The Corporation has approved, subject to approval by Shareholders and any
necessary regulatory approval, an amendment to the terms of certain outstanding
options granted under the Plan extending the exercise period of such options
from five years from the original date of grant to ten years from the original
date of grant. The outstanding options which will be so amended are listed in
Exhibit "1" to Schedule "C" to this Circular.
In accordance with the rules of the TSE, the proposed amendment to such
options must be approved by the affirmative vote of a majority of the votes cast
in person or by proxy at the Meeting, other than by the holders of such options
or by their associates. To the best of the Corporation's knowledge there were as
of April 13, 1999 4,933,859 Common Shares held by persons to whom such options
were granted and their associates, which will not be counted for purposes of
determining such approval.
The Board of Directors has determined that the proposed amendment to such
options, as listed in Exhibit "1" to Schedule "C" to the Circular, is in the
best interests of the Corporation and the Shareholders. The Board of Directors
recommends that Shareholders vote in favour of the resolution in this regard,
the full text of which is set out in Schedule "C" to this Circular. Unless
specified in the enclosed form of proxy that Common Shares represented by the
form of proxy shall be voted against this resolution, the persons designated in
the enclosed form of proxy intend to vote "For" the resolution.
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EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table sets forth the compensation paid to Richard E. Bagley,
Dr. Antoine A. Noujaim, Dr. R. Madiyalakan, Dr. Thomas Sykes and Blaine Schamber
(the "Named Executive Officers") for each of the fiscal years ended December 31,
1998 and 1997 and the period from July 17, 1996 to December 31, 1996.
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SUMMARY COMPENSATION TABLE
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Annual Compensation Long-Term
------------------- Compensa-
tion Awards
-----------
Common
Other Annual Shares All Other
Compen- Under Compen-
Name and Salary Bonus sation Options sation
Principal Position Year (5) ($) ($) ($) Granted (#) ($)(4)
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Richard E. Bagley (1) 1998 315,179 Nil Nil 825,000 Nil
President and Chief - - - - - -
Executive Officer - - - - - -
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Dr. Antoine A. Noujaim (1) 1998 220,000 Nil Nil Nil 6,880
Chairman of the Board, 1997 220,000 Nil Nil Nil 6,312
Chief Scientific Officer and 1996 78,602 Nil Nil 375,000 Nil
Former President and Chief
Executive Officer
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Dr. R. Madiyalakan (2) 1998 131,706 Nil Nil Nil 32,991
Former Vice-President, 1997 105,000 5,771 Nil 10,000 3,997
Planning and Chief 1996 36,559 Nil Nil 25,000 465
Scientific Officer
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Dr. Thomas Sykes 1998 167,135 Nil Nil Nil 51,589
Vice-President, Preclinical 1997 105,000 Nil Nil 10,000 4.269
and Support Operations 1996 36,559 Nil Nil 25,000 465
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Blaine Schamber(3) 1998 116,250 Nil Nil 40,000 11,021
Controller; previously Vice- 1997 105,000 Nil Nil 10,000 4,206
President, Finance and 1996 35,941 Nil Nil 25,000 464
Corporate Development
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Notes:
(1) Dr. Noujaim became an officer of the Corporation on July 17, 1996. Dr.
Noujaim ceased to be the President and Chief Executive Officer of the
Corporation on February 23, 1998 and Mr. Richard E. Bagley was appointed
President and Chief Executive Officer of the Corporation on that date.
(2) Dr. Madiyalakan ceased to be an officer of the Corporation in September
1998. He currently serves as a consultant to the Corporation under a
services agreement that expires on September 30, 1999 and the amounts which
appear on the table do not include compensation earned thereunder.
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(3) Mr. Schamber ceased to be the Vice President, Finance and Corporate
Development of the Corporation in July, 1998. He currently serves as
Controller of the Corporation.
(4) Compensation under the column "All Other Compensation" is with respect to
employee benefits such as health care, life insurance and a group
retirement savings plan. The aggregate amount of perquisites and other
personal benefits, securities and property did not exceed the lesser of
$50,000 and 10 percent of the total annual salary and bonus of the Named
Executive Officer.
(5) 1996 figures are for the period from July 17, 1996 to December 31, 1996.
1997 and 1998 figures are for the period from January 1 to December 31 of
those years.
Stock Options Granted to Named Executive Officers
The following table details information with respect to the grant of
options by the Corporation to the Named Executive Officers during the financial
year of the Corporation ended December 31, 1998.
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OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
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MARKET VALUE OF
COMMON SHARES
COMMON % OF TOTAL UNDERLYING
SHARES UNDER OPTIONS EXERCISE OR BASE OPTIONS ON THE
OPTIONS GRANTED TO PRICE DATE OF GRANT
GRANTED EMPLOYEES IN ($/COMMON ($/COMMON EXPIRATION
NAME # FINANCIAL YEAR SHARE) SHARE) DATE
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Richard E. Bagley 825,000 57% $3.00 $3.00 March 4,
2003
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Blaine J. Schamber 40,000 3% $2.18 $2.18 May 13, 2003
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The following table details information with respect to all options of the
Corporation exercised by the Named Executive Officers during the last financial
year of the Corporation and all options held by the Named Executive Officers and
outstanding on December 31, 1998.
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR END AND FINANCIAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
COMMON SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON AGGREGATE AT DECEMBER 31, AT DECEMBER 31, 1998
EXERCISE VALUE REALIZED 1998 EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE(#) UNEXERCISABLE($)(1)
- ------------------------------------------------------------------------------------------------------------------------
Richard E. Bagley Nil Nil Nil/825,000 NA/NA
- ------------------------------------------------------------------------------------------------------------------------
Dr. Antoine A. Noujaim Nil Nil 250,000/125,000 NA/NA
- ------------------------------------------------------------------------------------------------------------------------
Dr. Thomas R. Sykes Nil Nil 26,666/8,334 NA/NA
- ------------------------------------------------------------------------------------------------------------------------
Blaine J. Schamber Nil Nil 26,666/48,334 NA/NA
- ------------------------------------------------------------------------------------------------------------------------
Dr. R. Madiyalakan Nil Nil Nil/26,666 NA/NA
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Note:
(1) None of the unexercised options were in-the-money as at December 31, 1998.
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Employment Agreements
The Corporation entered into a letter agreement with Richard E. Bagley
dated February 28, 1998 which provides that if Mr. Bagley's employment is
terminated without cause he will receive U.S. $250,000, which is equivalent to
severance pay of one year's salary.
The Corporation entered into a letter agreement with Dr. Thomas Sykes dated
March 25, 1998 as amended on April 21, 1998 which provides that, if Dr. Sykes'
employment is terminated without cause prior to the year 2000, he will receive
U.S.$150,000 equivalent to severance pay of one year's salary. Thereafter, if
terminated without cause, he will receive U.S. $75,000 equivalent to severance
pay of six months salary.
The Corporation entered into an employment contract with Mr. Schamber dated
January 1, 1997. This agreement is for a three year term and is renewable on an
annual basis for additional and successive one year terms upon the expiration of
the initial three year term and each successive one year term at a salary
mutually agreeable by the Corporation and Mr. Schamber. If Mr. Schamber is
terminated at any time during the initial three year term of his employment
contract, then he shall be entitled to the lesser of the balance of his salary
for the initial three year term of the employment contract and one year's
salary.
Composition of Compensation Committee
The composition of the Compensation Committee of the Board of Directors of
the Corporation (the "Compensation Committee") consists of William R. McMahan,
Dr. Anthony A. Noujaim and Richard E. Bagley. Mr. McMahan is the Chairman of
the Compensation Committee.
Each of the members of the Compensation Committee, as a director of the
Corporation, has received options to purchase Common Shares pursuant to the
Corporation's stock option plan. See "Stock Options". As a director of the
Corporation, Mr. McMahan receives an annual fee. See "Executive Compensation -
Compensation of Directors". As officers of the Corporation, Messrs. Noujaim and
Bagley receive certain compensation. See "Executive Compensation - Compensation
of Executive Officers".
Report on Executive Compensation
It is the task of the Compensation Committee to periodically review the
compensation structure of the Corporation with respect to its executive officers
to ensure that the Corporation continues to attract and retain quality and
experienced individuals to its management team and to motivate these individuals
to perform to the best of their ability and in the best interests of the
Corporation. The Compensation Committee makes recommendations with respect to
the compensation of the Corporation's executive officers to the Board of
Directors, which gives final approval with respect to any executive compensation
matters and issues.
The primary objectives of the Corporation's executive compensation program
are to enable the Corporation to attract, motivate and retain outstanding
individuals and to align their success with that of the Corporation's
shareholders through the achievement of strategic corporate objectives and
creation of shareholder value. The level of compensation paid to an individual
is based on the individual's overall experience, responsibility and performance.
Factors also to be considered are the compensation levels of similarly situated
positions in the biopharmaceutical industry and other labour markets in which
the Corporation competes for employees. The Compensation Committee compares
remuneration for executive officers of the Corporation to the remuneration for
similar executives in the relevant labour markets. In
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the case of newly hired employees, the individual's performance and compensation
level in his or her prior positions will also be a determining factor.
The key components for the compensation of the executive officers of the
Corporation are base salaries, bonuses and stock options. It is the policy of
the Corporation that the base salaries paid to its executive officers, in
addition to the criteria set out above, reflect the individual responsibility
and experience of the executive officer and the contribution that is expected
from the executive officer. Base salaries and bonuses are reviewed by the
Compensation Committee on an annual basis to ensure that these criteria are
satisfied. Stock options under the Corporation's stock option plan are granted
by the Board of Directors to executive officers from time to time as a long-term
performance incentive.
This report submitted on behalf of the Compensation Committee: Messrs.
McMahan, Noujaim and Bagley.
Compensation of Directors
Effective in 1998, each director of the Corporation, with the exception of
Dr. Noujaim and Mr. Bagley, receives a fee of U.S. $10,000 per annum. Further,
all directors are eligible to receive stock options and are entitled to receive
reimbursement of their reasonable out-of-pocket disbursements incurred on the
business of the Corporation. In the aggregate, a total of $71,501 in fees was
paid to members of the Board of Directors during the period from January 1, 1998
to December 31, 1998.
Directors and Officers Liability Insurance
The Corporation provides liability insurance for directors and officers of
the Corporation. The policy does not distinguish between the liability insurance
for its directors and officers, the coverage being the same for both groups. The
premium for the 12-month period ended December 31, 1998 was approximately
$32,000 all of which was borne by the Corporation. The policy limit is
$5,000,000 per year with a corporate deductible of $25,000 per loss. The
individual directors and officers of the Corporation are insured against losses
arising from claims against them for certain of their acts, errors or omissions
in such capacity. The Corporation is insured against losses arising out of any
liability to indemnify a director or officer.
Performance Graph
The following performance graph compares the yearly increase in the
Corporation's cumulative total shareholder return on the Common Shares since
August 2, 1996 (the first trading day on the TSE for the Common Shares following
July 17, 1996), with the cumulative total shareholder return on the TSE 300
Index and the TSE Biotech/Pharmaceutical Index, assuming the reinvestment of
dividends, where applicable, for a comparable period.
[Graph which compares yearly increase in the Corporation's
cumulative total shareholder return on its Common
Shares Since August 2, 1996]
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INDEX AUGUST 2, DECEMBER 31, DECEMBER 31, 1997 DECEMBER 31, 1998
1996 1996
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AltaRex $100 $107.1 $51.0 $7.8
- -----------------------------------------------------------------------------------------------------------------------
TSE 300 Index $100 $118.2 $133.6 $129.3
- -----------------------------------------------------------------------------------------------------------------------
TSE Biotech/ $100 $132.3 $125.6 $168.7
Pharmaceutical Index
- -----------------------------------------------------------------------------------------------------------------------
INDEBTEDNESS OF DIRECTORS AND OFFICERS
No individual who is, or at any time during the most recent completed
financial year of the Corporation was, a director, executive officer or senior
officer of the Corporation, nor any proposed nominee for election as a director
of the Corporation, nor any associate of any one of them is, or at any time
since the beginning of the most recent completed financial year of the
Corporation has been, indebted to the Corporation or any of its subsidiaries or
was indebted to another entity, which such indebtedness is, or was at any time
during the most recent completed financial year of the Corporation, the subject
of a guarantee, support agreement, letter of credit or other similar arrangement
or understanding provided by the Corporation or any of its subsidiaries, except
for Dr. Thomas Sykes.
Table Of Indebtedness Of Directors,
Executive Officers And Senior Officers
- -----------------------------------------------------------------------------------------------------------------------
LARGEST AMOUNT OUTSTANDING
NAME AND INVOLVEMENT DURING FISCAL YEAR ENDED AMOUNT OUTSTANDING AS
PRINCIPAL POSITION OF ALTAREX DECEMBER 31, 1998 OF THE DATE HEREOF
- -----------------------------------------------------------------------------------------------------------------------
Dr. Thomas Sykes, Lender U.S. $25,000 U.S. $25,000
Vice-President,
Pre-Clinical and
Support Operations
- -----------------------------------------------------------------------------------------------------------------------
Dr. Sykes was granted a U.S. $25,000 loan in connection with his relocation
from Edmonton, Alberta to Waltham, Massachusetts. This loan bears no interest
during its stated term and is due in its entirety on May 14, 2003. Any overdue
amounts will bear interest at 9.5% per annum until paid.
STOCK OPTIONS
The Plan is designed to develop the interest of the directors, officers,
employees and other persons who provide ongoing services to the Corporation and
its subsidiaries in the growth and development of the Corporation by providing
such persons with the opportunity to acquire an increased proprietary interest
in the Corporation and to better enable the Corporation and its Subsidiaries to
attract and retain persons of desired experience and ability. An amendment to
the terms of the Plan has been approved by the Board of Directors and
Shareholders are being asked to approve such amendment at the Meeting. See
"Particulars of Matters to be Acted Upon - Amendment to Stock Option Plan".
16
- 13 -
The maximum number of Common Shares which may be reserved for issuance to
any person under the Plan or any other previously established or proposed share
compensation arrangement of the Corporation in respect of all options granted to
any one person at any one time may not exceed 5% of the issued and outstanding
Common Shares. The maximum number of Common Shares reserved for issuance at any
time pursuant to the Plan is currently 2,480,000 but will be increased to
4,180,000, subject to the approval of Shareholders at the Meeting and applicable
regulatory approval. The vesting and expiry date of options granted under the
Plan are determined by the Board of Directors at the time the options are
granted provided that the expiry date shall not be later than 5 years from the
date of grant of such option. Subject to the approval of Shareholders at the
Meeting and applicable regulatory approval, the maximum expiry date of options
granted under the Plan will be increased to 10 years from the date of grant of
such option and the expiry date of certain outstanding options will be extended.
See "Particulars of Matters to be Acted Upon". The exercise price of options
granted under the Plan is fixed by the Board of Directors and shall either be
the closing price of the Common Shares on the TSE on the first date preceeding
the date of grant or alternatively the weighted average of the trading prices of
the Common Shares for the five days proceeding the date of grant.
As at April 13, 1999, there were outstanding options to purchase a total of
2,255,499 Common Shares under the Plan and the following table sets out in
detail all stock options issued and outstanding under the Plan.
- -----------------------------------------------------------------------------------------------------------------
GROUP NUMBER OF SHARES DATE OF GRANT EXERCISE PRICE EXPIRY DATE
UNDER OPTION PER SHARE
- -----------------------------------------------------------------------------------------------------------------
Directors (excluding 382,500 July 26, 1996 1.80 July 26, 2001
Executive Officers) 12,500 July 8, 1997 3.68 July 8, 2002
(six in total) 30,000 January 22, 1998 2.96 January 22, 2003
100,000 May 21, 1998 2.18 May 21, 2003
- -----------------------------------------------------------------------------------------------------------------
Executive Officers 25,000 July 26, 1996 1.80 July 26, 2001
(four in total) 10,000 February 11, 1997 5.90 February 11, 2002
824,130 March 4, 1998 3.00 March 4, 2003
870 July 6, 1998 3.00 July 6, 2003
175,000 September 15, 1998 0.91 September 15, 2003
175,000 December 23, 1998 0.53 December 23, 2003
- -----------------------------------------------------------------------------------------------------------------
Employees 108,500 July 26, 1996 1.80 July 26, 2001
(28 in total) 13,333 February 4, 1997 6.00 February 4, 2002
10,000 February 11, 1997 5.90 February 11, 2002
14,000 July 8, 1997 3.68 July 8, 2002
3,000 November 7, 1997 3.30 November 7, 2002
10,000 February 1, 1998 2.84 February 1, 2003
105,000 May 21, 1998 2.18 May 21, 2003
50,000 August 4, 1998 1.15 August 4, 2003
50,000 November 30, 1998 0.80 November 30, 2003
- -----------------------------------------------------------------------------------------------------------------
17
- 14 -
- -----------------------------------------------------------------------------------------------------------------------
Group Number of Shares Date of Grant Exercise Price Expiry Date
- -----------------------------------------------------------------------------------------------------------------------
CONSULTANTS
- -----------
Dr. Terry Allen 5,000 July 8, 1997 3.68 July 8, 2002
Dr. Richard Baum 10,000 July 8, 1997 3.68 July 8, 2002
Dr. Beatrice Leveugle 5,000 July 8, 1997 3.68 July 8, 2002
Dr. Gerry Miller 5,000 July 8, 1997 3.68 July 8, 2002
Dr. John Samuels 5,000 July 8, 1997 3.68 July 8, 2002
Dr. Constantine Bona 10,000 July 8, 1997 3.68 July 8, 2002
Dr. Jean-Francois Chatal 10,000 July 8, 1997 3.68 July 8, 2002
Dr. David Goodwin 10,000 July 8, 1997 3.68 July 8, 2002
Dr. James Lown 10,000 July 8, 1997 3.68 July 8, 2002
Dr. Dean Mann 10,000 July 8, 1997 3.68 July 8, 2002
Dr. Paul Muller 10,000 July 8, 1997 3.68 July 8, 2002
Dr. Aldo Serafini 10,000 July 8, 1997 3.68 July 8, 2002
Dr. David Wishart 5,000 November 7, 1997 3.30 November 7, 2002
Dr. R. Madiyalakan 26,666 September 30, 1998 0.72 October 30, 1999
Genome Securities Inc. 25,000 July 17, 1998 1.40 July 17, 2003
- -----------------------------------------------------------------------------------------------------------------------
INTERESTS OF INSIDERS IN MATERIAL TRANSACTIONS
Except as described elsewhere herein, none of the Corporation's insiders,
proposed nominees for election as directors of the Corporation or their
associates and affiliates, has any material interest in any transaction with the
Corporation since the commencement of the Corporation's last financial year.
BOARD APPROVAL
The contents and the sending of this Circular have been approved by the
Board of Directors of the Corporation.
By Order of the
Board Of Directors
/s/ Edward M. Fitzgerald
Senior Vice President, Chief Financial
Officer and Secretary
18
- 15 -
CERTIFICATE
The foregoing contains no untrue statement of a material fact and does not
omit to state a material fact that is required to be stated or that is necessary
to make a statement not misleading in light of the circumstances in which it was
made.
/s/ Richard E. Bagley /s/ Edward M. Fitzgerald
President and Chief Executive Officer Senior Vice President, Chief Financial Officer
and Secretary
Waltham, Massachusetts
April 13, 1999
19
SCHEDULE "A"
Amendment to Stock Option Plan
BE IT RESOLVED THAT:
1. The stock option plan of the Corporation (the "Plan") be and is hereby
amended such that the maximum number of Common Shares which may be reserved
for issuance for all purposes at any time pursuant to the Plan shall be
increased from 2,480,000 to 4,180,000.
2. Any officer or director of the Corporation is hereby authorized, for and on
behalf of the Corporation, to execute and deliver such documents and
instruments and to take such other actions as such officer or director may
determine to be necessary or advisable to implement this resolution and the
matters authorized hereby, such determination to be conclusively evidenced
by the execution and delivery of such documents or instruments and the
taking of any such actions.
20
SCHEDULE "B"
Amendment to Stock Option Plan
BE IT RESOLVED THAT:
1. The stock option plan of the Corporation (the "Plan") be and is hereby
amended such that the maximum date after which an option granted under the
Plan shall expire is extended from five years from the date of grant to ten
years from the date of grant.
2. Any officer or director of the Corporation is hereby authorized, for and on
behalf of the Corporation, to execute and deliver such documents and
instruments and to take such other actions as such officer or director may
determine to be necessary or advisable to implement this resolution and the
matters authorized hereby, such determination to be conclusively evidenced
by the execution and delivery of such documents or instruments and the
taking of any such actions.
21
SCHEDULE "C"
Amendment to Certain Outstanding Option Grants
1. The terms of the outstanding options granted under the stock option plan of
the Corporation which are listed in Exhibit "1" to this resolution are
hereby amended in each case such that the current expiry date of such
option grant is extended to the new expiry date specified in such Exhibit
in respect thereof.
2. Any officer or director of the Corporation is hereby authorized for and on
behalf of the Corporation, to execute and deliver such documents and
instruments and to take such other actions as such officer or director may
determine to be necessary or advisable to implement this resolution and the
matters authorized hereby, such determination to be conclusively evidenced
by the execution and delivery of such documents and instruments and the
taking of actions.
22
EXHIBIT "1" to SCHEDULE "C"
NUMBER
OPTION GRANTEE OF OPTIONS CURRENT EXPIRY DATE NEW EXPIRY DATE
- -------------- ---------- ------------------- ---------------
William R. McMahan 7,500 July 26, 2001 July 26, 2006
Jean-Claude Gonneau 10,000 July 8, 2002 July 8, 2007
William R. McMahan 2,500 July 8, 2002 July 8, 2007
Kate Agopsowicz 2,000 July 26, 2001 July 26, 2006
Donna Bortnick 1,250 July 26, 2001 July 26, 2006
Trudy Chimko 3,750 July 26, 2001 July 26, 2006
Sue Edwards 2,000 July 26, 2001 July 26, 2006
Xiaomei Geng 3,750 July 26, 2001 July 26, 2006
Walter Korz 5,000 July 26, 2001 July 26, 2006
Michelle Kuzma 3,750 July 26, 2001 July 26, 2006
Corlaine Legge 3,750 July 26, 2001 July 26, 2006
Celia Lo 2,000 July 26, 2001 July 26, 2006
Birgit Schultes 6,250 July 26, 2001 July 26, 2006
Connie Sykes 25,000 July 26, 2001 July 26, 2006
James Tasker 12,500 July 26, 2001 July 26, 2006
Thomas Woo 12,500 July 26, 2001 July 26, 2006
Thomas R. Sykes 25,000 July 26, 2001 July 26, 2006
Blaine Schamber 25,000 July 26, 2001 July 26, 2006
Antoine Noujaim 375,000 July 26, 2001 July 26, 2006
Blaine Schamber 10,000 February 11, 2002 February 11, 2007
Thomas R. Sykes 10,000 February 11, 2002 February 11, 2007
Robert Anthony Newman 13,333 February 4, 2002 February 4, 2007
Dr. Terry Allen 5,000 July 8, 2002 July 8, 2007
Dr. Richard Baum 10,000 July 8, 2002 July 8, 2007
Dr. Beatrice Leveugle 5,000 July 8, 2002 July 8, 2007
Dr. Gerry Miller 5,000 July 8, 2002 July 8, 2007
Dr. John Samuels 5,000 July 8, 2002 July 8, 2007
Dr. Constantin Bona 10,000 July 8, 2002 July 8, 2007
Dr. Jean-Francois Chatal 10,000 July 8, 2002 July 8, 2007
Dr. David Goodwin 10,000 July 8, 2002 July 8, 2007
Dr. James Lown 10,000 July 8, 2002 July 8, 2007
Dr. Dean Mann 10,000 July 8, 2002 July 8, 2007
Dr. Paul Muller 10,000 July 8, 2002 July 8, 2007
Dr. Aldo Serafini 10,000 July 8, 2002 July 8, 2007
Jim Pankovich 4,000 July 8, 2002 July 8, 2007
Dr. Weimin Qi 5,000 July 8, 2002 July 8, 2007
Dr. Ting Wang 5,000 July 8, 2002 July 8, 2007
Dr. David Wishart 5,000 November 7, 2002 November 7, 2007
Christian Hanson 3,000 November 7, 2002 November 7, 2007
George Hibon 30,000 January 22, 2003 January 22, 2008
Glenn Neumann 10,000 February 1, 2003 February 1, 2008
Richard E. Bagley 824,130 March 4, 2003 March 4, 2008
Richard E. Bagley 870 March 4, 2003 March 4, 2008
Monique Begin 30,000 May 21, 2003 May 21, 2008
Jean-Claude Gonneau 20,000 May 21, 2003 May 21, 2008
William R. McMahan 20,000 May 21, 2003 May 21, 2008
Jim Wright 30,000 May 21, 2003 May 21, 2008
Donna Bortnick 1,000 May 21, 2003 May 21, 2008
Trudy Chimko 5,000 May 21, 2003 May 21, 2008
23
- 2 -
NUMBER
OPTION GRANTEE OF OPTIONS CURRENT EXPIRY DATE NEW EXPIRY DATE
- -------------- ---------- ------------------- ---------------
Wendy Garinther 1,500 May 21, 2003 May 21, 2008
Walter Korz 5,000 May 21, 2003 May 21, 2008
Marc Legault 4,000 May 21, 2003 May 21, 2008
Dan Liu 1,500 May 21, 2003 May 21, 2008
Robert Anthony Newman 12,000 May 21, 2003 May 21, 2008
Heather Schramm 2,000 May 21, 2003 May 21, 2008
Birgit Schultes 25,000 May 21, 2003 May 21, 2008
Louise Tan 5,000 May 21, 2003 May 21, 2008
Haiyan Xia 1,500 May 21, 2003 May 21, 2008
Denzhu Xu 1,500 May 21, 2003 May 21, 2008
Blaine Schamber 40,000 May 21, 2003 May 21, 2008
Genome Securities Inc. 25,000 July 17, 2003 July 17, 2008
Robert Anthony Newman 25,000 August 4, 2003 August 4, 2008
Birgit Schultes 25,000 August 4, 2003 August 4, 2008
Edward Fitzgerald 175,000 September 15, 2003 September 15, 2008
Joseph McPherson 50,000 November 30, 2003 November 30, 2008
Christopher Nicodemus 175,000 December 23, 2003 December 23, 2008