SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material under ss.240.14a-12
IVAX CORPORATION
(Name of Registrant as Specified in its Charter)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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IVAX CORPORATION
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The date, time and place of the annual shareholders' meeting of IVAX
Corporation are as follows:
Date: Thursday, June 27, 2002
Time: 10:00 a.m.
Place: Renaissance Hotel
1601 Biscayne Boulevard
Miami, Florida
Matters to be voted on:
1. Election of nine directors
2. Any other matters properly brought before the shareholders at
the meeting
Only shareholders of record at the close of business on April 29, 2002
are entitled to notice of and to vote at the meeting or any adjournments
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
STEVEN D. RUBIN
SECRETARY
Miami, Florida
May 31, 2002
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PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE PROMPTLY
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TABLE OF CONTENTS
PAGE
----
Record Date.............................................................1
Note on Stock Split.....................................................1
Agenda..................................................................1
Quorum..................................................................1
Voting..................................................................1
Revocation of Proxy.....................................................1
Election of Directors...................................................2
Director Compensation...................................................3
Meetings and Committees of the Board of Directors.......................3
Section16(a) Beneficial Ownership Reporting Compliance..................4
Certain Relationships and Related Transactions..........................4
Security Ownership of Management and Principal Security Holders.........5
Executive Compensation..................................................6
Employment Agreements...................................................7
Change in Control Agreements............................................7
Stock Options...........................................................8
Performance Graph.......................................................9
Report of Compensation and Stock Option Committee.......................10
Compensation Committee Interlocks and Insider Participation.............11
Independent Auditors....................................................12
Audit Fees..............................................................12
Financial Information Systems Design and Implementation Fees............12
All Other Fees..........................................................12
Report of the Audit Committee...........................................13
Multiple Shareholders Sharing the Same Address..........................13
Shareholder Proposals for 2003 Annual Meeting...........................14
Expenses of Solicitation................................................14
Other Business..........................................................14
IVAX CORPORATION
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of IVAX
Corporation in connection with its solicitation of proxies for use at the annual
meeting of shareholders to be held at 10:00 a.m. on Thursday, June 27, 2002 at
the Renaissance Hotel, 1601 Biscayne Boulevard, Miami, Florida, and at any
adjournments thereof. Mailing of the proxy statement and the accompanying proxy
card to shareholders will commence on or about May 31, 2002.
RECORD DATE
As of the record date, April 29, 2002, we had 195,629,736 shares of our
common stock outstanding. Record holders of our common stock on April 29, 2002
are entitled to one vote for each share held on all matters to be considered at
the annual meeting.
NOTE ON STOCK SPLIT
We split our common stock on a 3 for 2 basis effective on February 22,
2000 and on a 5 for 4 basis on May 18, 2001. All shares, share prices and
related figures in this proxy statement are restated to reflect these stock
splits.
AGENDA
1. Election of nine directors
2. Any other matters properly brought before the shareholders at
the meeting
QUORUM
A majority of the outstanding shares of common stock, represented in
person or by proxy, constitutes a quorum for transaction of business at the
meeting.
VOTING
You may vote in person by attending the meeting or by mail by
completing and returning the proxy. To vote your proxy by mail, mark your vote
on the enclosed proxy card, then follow the instructions on the proxy card. We
will follow your voting instructions. If there are no voting instructions, we
will vote signed proxies "for" the Board's nominees. The persons named in the
proxy will use their discretion on any other matters. With respect to the
proposal to elect nine directors, you may vote in favor of all nominees or
withhold your votes as to all or specific nominees. The nine director nominees
who receive the highest number of votes will be elected. Votes that are withheld
or abstentions will be excluded from the vote, but they will count for purposes
of determining whether a quorum is present. Brokers that do not receive
instructions from beneficial owners are permitted to exercise voting discretion
with respect to the election of directors. Shares for which brokers have not
received instructions are referred to as "broker non-votes." Broker non-votes
will have no effect on the vote, but will be counted in determining whether a
quorum is present.
REVOCATION OF PROXY
Your proxy may be revoked at any time prior to its exercise by giving
written notice to our Secretary at 4400 Biscayne Boulevard, Miami, Florida
33137, by delivering a later dated proxy, or by voting in person at the meeting.
ELECTION OF DIRECTORS
Our Board of Directors set the number of directors constituting the
Board at nine. The persons named below were designated by the Board as nominees
for election as directors to hold office until the next annual meeting of
shareholders or until their successors are elected and qualified. All of the
nominees are currently directors. Each nominee has agreed to be named in the
proxy statement and to serve as a director if elected. If any of the nominees
withdraws or is unable to serve as a director of IVAX, then the proxy will be
voted for such other person who is designated a nominee by the Board of
Directors.
MARK ANDREWS Director since 1987
Mark Andrews, age 51, has served as the Chairman and President of Great
Spirits Company LLC (consumer products) since founding it in 1998. He served as
the Chairman of the Board of Directors and Chief Executive Officer of American
Exploration Company (oil and gas exploration and production) from 1980 until its
merger into Louis Dreyfus Natural Gas Corp. (oil and gas exploration and
production) in October 1997 when he became the Vice Chairman of the Board of
Directors of the combined entity. Mr. Andrews has also served as Chairman of the
Board of Directors of Vault Mortgage Company (mortgage brokerage) since 1998.
ERNST BIEKERT, PH.D. Director since 1991
Ernst Biekert, age 77, has been a professor at the University of
Heidelberg in Germany since 1968. He was the Chairman of the Board and Chief
Executive Officer of Knoll A.G. (pharmaceuticals) from 1968 to 1985. Dr. Biekert
was a consultant to BASF A.G. (chemicals and pharmaceuticals) from 1985 to 1987
and was Chairman of its pharmaceutical division from 1975 to 1985.
CHARLES M. FERNANDEZ Director since 1998
Charles M. Fernandez, age 40, has been the President, Chief Executive
Officer, and a director of Big City Radio, Inc. (broadcasting/internet) since
1999. He has also been the Chairman of the Board of Continucare Corporation
(integrated healthcare) since 1996 and was its Chief Executive Officer from 1996
to 1999. He has also been Vice-Chairman of HealthCare2Net Solutions (internet
solutions) since 1999. From 1985 to 1996, he was the Executive Vice President
and a director of Heftel Broadcasting Corporation (radio broadcasting). From
1998 to 1999 he was a director of Frost Hanna Capital Group, Inc. (investment
company).
JACK FISHMAN, PH.D. Director since 1987
Jack Fishman, age 71, has been an Adjunct Professor at The Rockefeller
University since 1982 and director of Research at the Strang Cornell Cancer
Research Laboratory, a non-profit entity associated with Cornell University
Medical College, since 1991. He served as our Chief Scientific Officer from 1991
to 1995, as a Vice Chairman of the Board from 1991 to 1997 and as our President
from 1988 to 1991. Dr. Fishman served as a Research Professor of Biochemistry
and Molecular Biology at the University of Miami from 1988 to 1992.
NEIL FLANZRAICH Director since 1997
Neil Flanzraich, age 58, has served as our Vice Chairman and President
since May 1998. He was a shareholder and served as Chairman of the Life Sciences
Legal Practices Group of Heller Ehrman White & McAuliffe (law firm) from 1995 to
1998. From 1981 to 1994, he served in various capacities at Syntex Corporation
(pharmaceuticals), most recently as its Senior Vice President, General Counsel
and a member of the Corporate Executive Committee. From 1994 to 1995, after
Syntex Corporation was acquired by Roche Holding Ltd. (pharmaceuticals), he
served as Senior Vice President and General Counsel of Syntex (U.S.A.) Inc., a
Roche subsidiary. He was Chairman of the Board of Directors of North American
Vaccine, Inc. (vaccine research and development) from 1991 to 2000. He is a
director of Whitman Education Group, Inc. (proprietary education), of IVAX
Diagnostics, Inc. (laboratory instruments), a subsidiary of ours, and of
Continucare Corporation (integrated healthcare).
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PHILLIP FROST, M.D. Director since 1987
Phillip Frost, age 65, has served as our Chairman of the Board of
Directors and Chief Executive Officer since 1987. He served as our President
from July 1991 until January 1995. He was the Chairman of the Department of
Dermatology at Mt. Sinai Medical Center of Greater Miami, Miami Beach, Florida
from 1972 to 1990. Dr. Frost was Chairman of the Board of Directors of Key
Pharmaceuticals, Inc. from 1972 to 1986, Vice Chairman of the Board of Directors
of North American Vaccine, Inc. (vaccine research and development) from 1989 to
2000, and Vice Chairman of the Board of Directors of Continucare Corporation
(integrated healthcare) from 1996 to 2002. He is Chairman of the Board of
Directors of Whitman Education Group, Inc. (proprietary education), a director
of IVAX Diagnostics, Inc. (laboratory instruments), a subsidiary of ours, a
director of Ladenburg Thalman Financial Services, Inc. (investment banking and
brokerage company), and a director of Northrop Grumman Corporation (aerospace).
He is Chairman of the Board of Trustees of the University of Miami and a member
of the Board of Governors of the American Stock Exchange.
JANE HSIAO, PH.D. Director since 1995
Jane Hsiao, age 54, has served as our Vice Chairman-Technical Affairs
since February 1995, as our Chief Technical Officer since July 1996, and as
Chairman, Chief Executive Officer and President of DVM Pharmaceuticals, Inc.,
our veterinary products subsidiary, since March 1998. From 1992 until February
1995, she served as our Chief Regulatory Officer and Assistant to the Chairman,
and as Vice President-Quality Assurance and Compliance of IVAX Research, Inc.,
our principal proprietary pharmaceutical subsidiary. From 1987 to 1992, Dr.
Hsiao was Vice President-Quality Assurance, Quality Control and Regulatory
Affairs of IVAX Research, Inc. She is a director of IVAX Diagnostics, Inc.
(laboratory instruments), a subsidiary of ours.
ISAAC KAYE Director since 1990
Isaac Kaye, age 72, has served as our Deputy Chief Executive Officer
since 1990 and as Chairman and Chief Executive Officer of IVAX UK, our principal
United Kingdom pharmaceutical subsidiary, since 1990.
RICHARD C. PFENNIGER, JR. Director since 2002
Mr. Pfenniger, age 46, has been Chief Executive Officer and Vice
Chairman of Whitman Education Group, Inc. (proprietary education) since 1997 and
a director of Whitman Education Group, Inc. since 1992. Mr. Pfenniger was our
Chief Operating Officer from 1994 to 1997. He served as our Senior Vice
President - Legal Affairs and General Counsel from 1989 to 1994. Mr. Pfenniger
is also a director of Continucare Corporation (integrated healthcare).
DIRECTOR COMPENSATION
During 2001, each director who was not employed by us received an
annual fee of $15,000 for his or her service as a director. In addition, each
director is reimbursed for expenses incurred in attending board and committee
meetings. Pursuant to our 1994 Stock Option Plan, non-employee directors
automatically are granted each year, on the first business day following our
annual meeting of shareholders, non-qualified options to purchase 7,500 shares
of common stock at an exercise price equal to the fair market value of the
common stock on the date of the grant, and having a term of ten years.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board held 9 meetings, including 4 regularly scheduled meetings and
5 special meetings, during 2001. During 2001, all incumbent directors attended
at least seventy-five percent (75%) of the meetings of the Board and the
committees of the Board on which they served. Our Board of Directors has three
standing committees: the Audit Committee, the Compensation and Stock Option
Committee and the Regulatory Compliance Committee. The Board does not have a
nominating committee, and the usual functions of such a committee are performed
by the entire Board.
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AUDIT COMMITTEE - 7 MEETINGS
The American Stock Exchange has adopted regulations applying to audit
committees and audit committee members. These rules require that we adopt an
audit committee charter, and that all members of our audit committee be
"Independent," as defined in Section 121(A) of the American Stock Exchange
listing standards. We were in compliance with these regulations as of June 14,
2001 as required.
FUNCTION MEMBERS
- -------- -------
o Review adequacy of internal systems of o Charles M. Fernandez (Chairman)
accounting controls o Mark Andrews
o Recommend appointment of independent o Jack Fishman, Ph.D.
auditors
o Meet with independent auditors
and internal auditors regarding
their examination of the books
and records
o Review financial statements
o Review management's disclosures
o Review findings and
recommendations of auditors
o Review other matters regarding
financial affairs and internal
policies and procedures
COMPENSATION AND STOCK OPTION COMMITTEE - 8 MEETINGS
FUNCTION MEMBERS
- -------- -------
o Recommend or approve compensation of o Mark Andrews (Chairman)
directors, executive officers and other o Ernst Biekert, Ph.D.
highly paid employees o Charles M. Fernandez
o Review employee benefit programs
o Authorize stock option grants and establish
terms of stock option agreements
REGULATORY COMPLIANCE COMMITTEE - 3 MEETINGS
FUNCTION MEMBERS
- -------- -------
o Review compliance with regulatory requirements o Ernst Biekert, Ph.D. (Chairman)
o Review quality assurance functions of o Jack Fishman, Ph.D.
worldwide operations. o Jane Hsiao, Ph.D.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and ten percent (10%) shareholders to file initial
reports of ownership and reports of changes in ownership of common stock and
other of our equity securities with the Securities and Exchange Commission and
the American Stock Exchange. Directors, executive officers and ten percent (10%)
shareholders are required to furnish us with copies of all Section 16(a) reports
they file. Based on a review of the copies of such reports furnished to us and
written representations from our directors and executive officers that no other
reports were required, we believe that, during 2001, our directors, executive
officers and ten percent (10%) shareholders complied with all Section 16(a)
filing requirements applicable to them.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Whitman Education Group, Inc. ("Whitman") leases approximately 6,964
square feet of office space from us in Miami, Florida at an annual rental of
$302,827. The lease may be terminated by either party upon 180 days notice. Dr.
Frost, our Chairman of the
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Board of Directors and Chief Executive Officer, is Chairman of the Board of
Directors of Whitman. Mr. Flanzraich, our Vice Chairman, President and a
director, is a director of Whitman. Mr. Pfenniger, one of our directors, is
Chief Executive Officer and Vice Chairman of the Board of Directors of Whitman.
In addition, Dr. Frost is a principal shareholder of Whitman.
We paid approximately $2,600,000 to PharmAir Corporation ("PharmAir")
for use of an airplane in 2001 and intend to make additional payments to
PharmAir for use of the airplane in 2002. PharmAir is indirectly beneficially
owned by Dr. Frost.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table indicates, as of March 31, 2002, information about
the beneficial ownership of our common stock by (1) each director, (2) each
executive officer named in the "Summary Compensation Table," (3) all directors
and executive officers as a group, and (4) each person who we know beneficially
owns more than 5% of our common stock. All shares were owned directly with sole
voting and investment power unless otherwise indicated.
SHARES PERCENT
NAME BENEFICIALLY OWNED(1) OF CLASS
---- --------------------- --------
Mark Andrews 82,750 (2) *
Ernst Biekert, Ph.D. 56,250 (3) *
Charles M. Fernandez 41,875 (4) *
Jack Fishman, Ph.D. 3,580,403 (5) 1.78%
Neil Flanzraich 940,818 (6) *
Phillip Frost, M.D. 31,645,193 (7) 15.70%
Rafick G. Henein, Ph.D. 685,817 (8) *
Jane Hsiao, Ph.D. 6,659,098 (9) 3.30%
Isaac Kaye 970,312 (10) *
Richard C. Pfenniger, Jr. 175,815 (11) *
Azure Limited 11,172,172 (12) 5.54%
All directors and executive 44,891,271 (13) 22.23%
officers as a group (11 persons)
- --------------------
* Represents beneficial ownership of less than one percent (1%).
(1) For purposes of this table, beneficial ownership is computed pursuant to
Rule 13d-3 under the Securities Exchange Act of 1934.
(2) Includes 23,125 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002. Mr. Andrews disclaims
beneficial ownership of 5,250 shares held by a trust for the benefit of
his children.
(3) Includes 13,750 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002.
(4) Includes 41,875 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002.
(5) Includes 13,750 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002. Dr. Fishman disclaims
beneficial ownership of 12,500 shares held by his wife.
(6) Includes 923,437 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002.
(7) Includes 773,437 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002, 750 shares held jointly by
Dr. Frost and his wife, 24,290,428 shares held by Frost Gamma LP,
5,000,000 shares held by Frost-Nevada Limited Partnership ("FNLP"),
140,625 shares held by Frost Phi, LLLP, 499,375 shares which may be
acquired by Frost Gamma LP upon conversion of 4 1/2% convertible senior
subordinated notes due 2008 and 937,500 shares which may be acquired by
Frost Gamma LP upon exercise of a warrant. Dr. Frost is the sole limited
partner of Frost Gamma LP and the sole shareholder of Frost-Nevada
Corporation which is the sole shareholder of Frost Gamma, Inc., the
general partner of Frost Gamma LP. Dr. Frost is the sole limited partner
of FNLP and the sole shareholder of Frost-Nevada Corporation, the general
partner of FNLP. Dr. Frost is the sole shareholder of Frost Phi, Inc., the
general partner of Frost Phi, LLLP. Dr. Frost disclaims beneficial
ownership of 305,688 shares held directly
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and indirectly by his wife (not including the 750 shares they hold
jointly). Dr. Frost's business address is IVAX Corporation, 4400 Biscayne
Boulevard, Miami, Florida 33137.
(8) Includes 632,811 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002.
(9) Includes 820,312 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002 and 1,476,427 shares held as
trustee for the benefit of certain family members.
(10) Includes 56,250 shares held by Woodworth Investment Ltd., which is wholly
owned by the Woodworth Trust, of which Mr. Kaye is a potential
beneficiary, and 773,437 shares which may be acquired pursuant to stock
options exercisable within 60 days of March 31, 2002.
(11) Includes 81,250 shares which may be acquired pursuant to stock options
exercisable within 60 days of March 31, 2002.
(12) Based on representations from Azure Limited, Azure Limited holds the
shares as nominee for Charter Trust Company, the trustee of the Isaac Kaye
Family Trust. Mr. Kaye is neither a beneficiary nor a trustee of such
trust, and he disclaims beneficial ownership of all of the shares owned by
Azure Limited. Azure Limited's business address is c/o Charter Management,
Ltd., Trinity Square, St. Peter Port, Guernsey, Channel Islands.
(13) Includes all of the shares of common stock, identified in notes 2 through
11 above, that may be acquired pursuant to stock options exercisable
within 60 days of March 31, 2002, and 15,625 additional shares that may be
acquired pursuant to stock options exercisable within 60 days of March 31,
2002.
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by us during 2001, 2000 and 1999 to the Chief
Executive Officer and to each of the four highest paid executive officers other
than the Chief Executive Officer.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM
------------------------------------------------ COMPENSATION
SHARES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION STOCK OPTIONS COMPENSATION
------------------ ---- ------ ----- ------------ ------------- ------------
($) ($) ($) (#) ($)(1)
Phillip Frost, M.D 2001 735,000 487,500 0 562,500 5,100
CHIEF EXECUTIVE OFFICER 2000 700,000 650,000 0 562,500 5,100
1999 575,000 316,250(2) 0 0 4,800
Isaac Kaye (3) 2001 692,033 402,750 * 562,500 0
DEPUTY CHIEF EXECUTIVE OFFICER 2000 667,175 531,130 * 562,500 0
1999 541,716 287,500 * 0 0
Neil Flanzraich 2001 635,000 393,750 0 468,750 5,100
PRESIDENT 2000 600,000 525,000 0 468,750 5,100
1999 500,000 275,000(2) 0 0 4,800
Jane Hsiao, Ph.D 2001 635,000 393,750 * 468,750 5,100
CHIEF TECHNICAL OFFICER 2000 600,000 525,000 * 468,750 5,100
1999 400,000 270,000(2) * 0 4,800
Rafick G. Henein, Ph.D 2001 673,000 175,000 0 43,750 5,100
SENIOR VICE PRESIDENT 2000 648,500 200,000 0 150,000 5,100
1999 635,123 279,900(2) 0 70,313 4,800
* Value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
the executive officer.
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(1) The amounts set forth in the "All Other Compensation" column represent
matching contributions made by us under the IVAX Corporation Employee
Savings Plan, an employee retirement plan maintained under Section 401(k)
of the Internal Revenue Code.
(2) The amount included in "bonus" for 1999 includes a retention bonus of 5%
of 1999 base salary, which was paid to all our employees who were employed
in the United States for the period from July 1, 1998 through June 30,
1999, excluding those employees subject to collective bargaining
agreements or other retention programs.
(3) Mr. Kaye's salary and other compensation are paid in British pounds. The
information in the table is based on the average exchange rate during the
applicable year.
EMPLOYMENT AGREEMENTS
In November 1997, we entered into employment agreements with Dr. Frost
and Mr. Kaye, pursuant to which Dr. Frost serves as Chairman and Chief Executive
Officer and Mr. Kaye serves as Deputy Chief Executive Officer and as Chief
Executive Officer of IVAX UK, our United Kingdom subsidiary. Pursuant to the
agreements, Dr. Frost receives an annual base salary of not less than $575,000,
and Mr. Kaye receives an annual base salary of not less than $575,000 less
certain automobile-related expenses paid on his behalf. The agreements provide
for severance payments if either executive's employment is terminated under
certain circumstances. The agreements have five-year terms, and automatically
renew for additional two-year terms thereafter unless terminated by either
party.
In July 1997, we entered into an employment agreement with Dr. Henein
pursuant to which he serves as our Senior Vice President and as the President
and Chief Executive Officer of IVAX Pharmaceuticals, Inc. Pursuant to the
agreement, Dr. Henein was paid a signing bonus of $200,000 and he was granted
options to purchase 375,000 shares of common stock. He is entitled to an annual
base salary of not less than $575,000, an additional annual cash payment of
$38,500 and certain employee benefits, and he is eligible for an annual bonus of
up to one hundred percent (100%) of his base salary dependent on the performance
of IVAX Pharmaceuticals, Inc. We also agreed to pay Dr. Henein's relocation
expenses, including a $100,000 payment to cover the loss on the sale of his
former residence. The agreement provides for severance benefits if Dr. Henein's
employment is terminated under certain circumstances. The agreement has a
five-year term, and automatically renews for additional two-year terms
thereafter unless terminated by either party.
In January 1998, we entered into an employment agreement with Dr. Hsiao
pursuant to which she serves as our Chief Technical Officer. Pursuant to the
agreement, Dr. Hsiao receives an annual base salary of not less than $300,000.
The agreement provides for severance payments if Dr. Hsiao's employment is
terminated under certain circumstances. The agreement has a five-year term, and
automatically renews for additional two-year terms thereafter unless terminated
by either party.
In May 1998, we entered into an employment agreement with Mr.
Flanzraich pursuant to which he serves as our Vice Chairman and President.
Pursuant to the agreement, Mr. Flanzraich was paid a signing bonus of $100,000
and is entitled to receive an annual base salary of not less than $500,000. The
agreement provides for severance payments if Mr. Flanzraich's employment is
terminated under certain circumstances. The agreement has a five-year term, and
automatically renews for additional two-year terms thereafter unless terminated
by either party.
CHANGE IN CONTROL AGREEMENTS
We have entered into change in control employment agreements with
certain officers, including Dr. Frost, Mr. Kaye, Mr. Flanzraich, Dr. Hsiao and
Dr. Henein. These agreements are intended to provide protection to key employees
and to provide for continuity of management in the event of a change in control.
The agreements become effective if a change in control occurs during the
three-year period that commences on the execution of the agreement. The period
is automatically renewed each year for an additional three years, unless we
provide notice of non-renewal.
Under the change in control agreements, a change in control includes
any of the following events: (1) the acquisition of forty percent (40%) or more
of our common stock by a person or group; (2) a change in the
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majority of our Board (other than a change approved by the incumbent Board); (3)
approval by the shareholders of a reorganization, merger or consolidation; or
(4) approval by the shareholders of a liquidation or dissolution or sale of all
or substantially all of our assets. Exceptions are provided for certain
transactions, including those where our existing shareholders maintain effective
control.
Once the agreements become effective upon a change in control, they
have a term of three years. Each agreement provides that a covered officer will
have a position, responsibilities and authority at least commensurate with those
held during the ninety days preceding the change in control. Each agreement also
provides that the covered officer will be paid an annual base salary equal to
the highest salary received during the twelve months preceding the change in
control; will be entitled to an annual bonus equal to the average annual bonus
paid during the three years preceding the change in control; will be entitled to
a one-time special bonus equal to his annual base salary plus the higher of his
last annual bonus or the average annual bonus paid during the three years
preceding the change in control if the officer remains employed with us through
the six month anniversary of the change in control; and will be entitled to
continued participation in our benefit plans, fringe benefits, office support
and staff, vacation, and expense reimbursement on the same basis as prior to the
change in control, and in any case no less favorable than those provided by us
to peer executives (as defined in the agreements).
If, following a change in control, the officer is terminated for any
reason other than death, disability or for cause, or if such officer terminates
his or her employment agreement for good reason (as defined in the agreements)
or for any reason during the thirty-day period following the six month
anniversary of the change in control, then the officer is entitled to a
severance payment equal to two times the officer's annual base salary (as
defined in the agreements) plus the higher of his last annual bonus or the
average annual bonus paid during the three years preceding the change in
control. In addition, if the special bonus has not been paid to the officer, the
severance payment shall be increased by the amount of the special bonus. The
agreements also provide that the officer is entitled to continue to participate
in our welfare benefit plans for the full three-year period.
In the event that any payments made in connection with a change in
control would be subjected to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, we will "gross-up" the officer's
compensation for all federal, state and local income and excise taxes and any
penalties and interest.
STOCK OPTIONS
The following table sets forth information concerning stock option
grants made during 2001 to the executive officers named in the "Summary
Compensation Table." All stock options identified in the table are nonqualified
options and vest in four equal portions on each of the first, second, third and
fourth anniversaries of their date of grant.
STOCK OPTION GRANTS IN FISCAL YEAR 2001
PERCENT OF
SHARES TOTAL POTENTIAL REALIZABLE VALUE
UNDERLYING OPTIONS AT ASSUMED ANNUAL RATES OF
OPTIONS GRANTED TO EXERCISE EXPIRATION STOCK PRICE APPRECIATION FOR
NAME GRANTED (#) EMPLOYEES (%) PRICE ($) DATE OPTION TERM (1)($)
---- ----------- ------------- --------- ---- -----------------------------
Phillip Frost, M.D. 562,500 11.0% 28.8000 1/23/11 6,595,026.85 15,369,217.02
Isaac Kaye 562,500 11.0% 28.8000 1/23/11 6,595,026.85 15,369,217.02
Neil Flanzraich 468,750 9.2% 28.8000 1/23/11 5,495,855.71 12,807,680.85
Jane Hsiao, Ph.D. 468,750 9.2% 28.8000 1/23/11 5,495,855.71 12,807,680.85
Rafick G. Henein, Ph.D. 31,250 0.6% 25.9920 1/21/11 330,667.32 770,595.46
Rafick G. Henein, Ph.D. 12,500 0.2% 28.8000 3/15/11 131,289.89 305,961.26
(1) The dollar amounts under these columns represent the potential realizable
value of each grant of option assuming that the market price of IVAX'
common stock appreciates in value from the grant date at the 5% and 10%
annual rates prescribed by the SEC and therefore are not intended to
forecast possible future
8
appreciation, if any, of the price of IVAX' common stock or the ultimate
value realized by a named executive officer from stock options.
The following table sets forth information concerning stock option
exercises during 2001 by each of the executive officers named in the "Summary
Compensation Table" and the year-end value of unexercised options held by such
officers, based on the closing price of $20.41 on December 31, 2001.
STOCK OPTION EXERCISES IN FISCAL YEAR 2001
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END ($)
ACQUIRED ON VALUE --------------------------------- --------------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ----------- -------------- ---------------- ----------- --------------
Phillip Frost, M.D. 0 0 632,812 1,054,688 6,128,430 3,404,044
Isaac Kaye 93,750 1,040,939 632,812 1,054,688 6,128,430 3,404,044
Neil Flanzraich 0 0 689,062 539,063 9,480,406 4,837,194
Jane Hsiao, Ph.D. 0 0 583,937 914,063 7,457,814 3,377,169
Rafick G. Henein, Ph.D. 0 0 584,374 226,564 8,386,839 1,186,013
PERFORMANCE GRAPH
The graph and table set forth below compare the cumulative total
shareholder return on our common stock for the five-year period from December
31, 1996 through December 31, 2001 with the Dow Jones Pharmaceuticals Index and
the Dow Jones Total Market Index for the same period. By "cumulative total
shareholder return," we mean that for each year the amount of dividends paid
during that year, if any, has been added to the increase or decrease in the
value of a $100 investment made on December 31, 1996 in our common stock or in
the combination of stocks that make up each index. For the second and subsequent
years, the amount of dividends paid in prior years has been added to the
original investment as if the dividends had been reinvested, and the amount of
the increase or decrease during the year is based on this combined amount.
[INSERT 5 YEAR PERFORMANCE GRAPH]
YEAR-END 1996 1997 1998 1999 2000 2001
-------- ---- ---- ---- ---- ---- ----
IVAX Corporation 100 66 121 251 560 368
Dow Jones US Pharmaceuticals Index 100 154 229 207 286 239
Dow Jones US Total Market Index 100 132 164 202 183 161
9
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
The compensation of our executive officers, including our Chief
Executive Officer, is determined by the Compensation and Stock Option Committee
of our Board, which is presently composed of three non-employee directors. The
Committee seeks to ensure that our compensation policies are designed and
implemented to promote the goal of enhancing long-term shareholder value. The
Committee recognizes that the key to achieving this goal is to attract, retain
and motivate qualified and experienced executive officers. The Committee
therefore favors forms of compensation that will take maximum advantage of our
strengths and will enable those who succeed in building shareholder value to
share in the value that they have helped to create.
The Committee believes that a critical component of compensation for
our executives is the award of stock options at the time the executive joins us
and periodically thereafter. The Committee believes that providing executives
with opportunities to acquire significant stakes in our growth and prosperity
through the grant of stock options will enable us to attract and retain
qualified and experienced executive officers.
The Committee has implemented Guidelines Regarding Exercise of Stock
Options applicable to all managers, scientists and other professionals,
including all our executive officers, which are intended to encourage
individuals who have been awarded stock options to maintain ownership of a
meaningful portion of shares acquired upon exercise. These Guidelines provide
that the Committee will consider an individual's past compliance with the
guidelines in considering the award of additional options. In addition, our
Board of Directors has adopted Stock Ownership Guidelines for Officers, which
establish specific levels of stock ownership that officers are encouraged to
acquire and/or maintain as a concrete expression of their commitment to our
success.
In the performance graphs immediately preceding this report, we have
provided data indicating the total shareholder return on our stock over the past
five years. Due to operating losses in 1997, our stock underperformed both
comparator indices for the five-year period. We implemented a company-wide
salary freeze in 1997, and the salaries of the Chief Executive Officer and the
Deputy Chief Executive Officer were in fact reduced for that year. At that time,
we had no incentive compensation plan, and bonuses were paid only in exceptional
circumstances. However, in our four most recent years, we have succeeded in
returning the company to profitability, as a result of which the total return to
our shareholders has outperformed both our peer group and the general market.
To recognize the performance of the executives and senior management
employees who succeeded in restoring our company's upward momentum, the
Committee approved Management Incentive Compensation Plans for 1999, 2000 and
2001, which provide for the award of incentive bonuses and non-qualified stock
options to our senior managers. In an effort to cut costs during the current
economic downturn, bonuses were reduced company-wide for all executives and
senior managers for 2001.
EXECUTIVE OFFICERS (OTHER THAN THE CHIEF EXECUTIVE OFFICER). The Chief
Executive Officer, with the assistance of other executive officers, makes annual
base salary recommendations to the Committee for our executive officers. Such
recommendations are reviewed and approved by the Committee with any
modifications deemed appropriate. In reviewing and approving annual base salary
recommendations, the Committee considers several factors, including individual
performance, the executive's responsibilities, the compensation of executives in
similar positions at other companies in the industry, financial performance and
the economy as a whole.
Bonuses for our executive officers are intended to reward our executive
officers for positive contributions made during the prior year which benefitted
the company. During 2001 our executive officers overcame several challenges in
leading us to record earnings. While recognizing the hard work and positive
contributions of our executive officers, the Committee also recognized our
efforts to reduce costs during the current economic downturn and the bonuses
approved by the Committee for our executive officers reflected reductions of
12.5% to 25% from 2000 levels.
Stock options represent a significant portion of total compensation for
our executive officers. Options are generally awarded to executive officers at
the time that they join us and periodically thereafter. Stock options are
granted at the prevailing market price on the date of grant, and will only have
value if the value of our
10
common stock increases. Generally, grants vest in equal amounts over a four-year
period and have seven or ten year terms. Executives must be employed by us at
the time of vesting in order to exercise the options. Grants of stock options to
executive officers are generally made by the Committee upon the recommendation
of the Chief Executive Officer based on the level of an executive's position
with us, an evaluation of the executive's past and expected performance, the
number of outstanding and previously granted options, past compliance with our
guidelines, the company's performance and discussions with the executive. Stock
options were granted to our executive officers in January 2002 in part to reward
their contributions to our record financial results for 2001.
CHIEF EXECUTIVE OFFICER. For 2001, the Committee approved Dr. Frost's
base salary of $735,000 on the basis of the magnitude of his responsibilities,
his ability to influence our financial performance, and our record financial
performance during 2000. The Committee approved a bonus of $487,500, which was
25% less than the bonus approved for 2000. The Committee recognized Dr. Frost's
considerable contributions to our success in 2001, but the bonus reductions were
consistent with reductions made company wide. The determination of his
compensation package was subjective, with no specific weight given to any
particular factor. The Committee approved a grant of 562,500 stock options to
Dr. Frost in part to reward his contributions to our record financial results.
TAX MATTERS. Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally disallows a deduction for federal income tax purposes to
public companies for compensation over $1 million paid in any taxable year to
the chief executive officer or to any of the four other most highly compensated
executive officers. Qualifying performance-based compensation is not subject to
the limitation if certain requirements are satisfied. Based upon applicable
regulations, we believe that compensation expenses relating to options granted
under our 1994 Stock Option Plan would not be subject to the Section 162(m)
limitations. At this time, we do not intend to qualify other compensation paid
to executive officers for deductibility under Section 162(m). Therefore, such
compensation will be subject to the $1,000,000 deductibility limit and we will
not be allowed to deduct the amounts which exceed $1,000,000. The potential tax
implications of Section 162(m) will, however, continue to be evaluated with
respect to our compensation strategies and future decisions involving executive
compensation.
The Committee continually evaluates our compensation policies and
procedures with respect to its executive officers.
COMPENSATION AND STOCK OPTION COMMITTEE:
MARK ANDREWS (CHAIRMAN)
ERNST BIEKERT, PH.D.
CHARLES M. FERNANDEZ
April 26, 2002
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neil Flanzraich is a director of Whitman Education Group, Inc., served
on their Compensation Committee and is an executive officer and director of
ours. Richard C. Pfenniger, Jr. is the Chief Executive Officer, Vice Chairman
and a director of Whitman Education Group, Inc. and is a director of ours.
11
INDEPENDENT AUDITORS
Ernst & Young LLP has been selected by our Board to serve as our
independent certified public accountants for the fiscal year ending December
31, 2002. Arthur Andersen LLP, acted as our independent public accountants for
the year ended December 31, 2001 and for the quarter ended March 31, 2002. On
May 24, 2002, our board, upon the recommendation and approval of the Audit
Committee, terminated the engagement of Arthur Andersen LLP and engaged the
services of Ernst & Young LLP as its new independent certified public
accountants for the fiscal year ending December 31, 2001, effective immediately.
None of Arthur Andersen LLP's reports on the Company's consolidated
financial statements as of and for the fiscal years ended December 31, 2000 and
2001 contained an adverse opinion or a disclaimer of opinion nor was any such
audit report qualified or modified as to uncertainty, audit scope or accounting
principles.
During the two most recent fiscal years ended December 31, 2000 and
2001, and the subsequent interim period through May 24, 2002, there were no
disagreements between the Company and Arthur Andersen LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to Arthur Andersen
LLP's satisfaction, would have caused Arthur Andersen LLP to make reference to
the subject matter of the disagreement in connection with its reports.
None of the reportable events described under Item 304(a)(1)(v) of
Regulation S-K occurred within the two most recent fiscal years ended December
31, 2000 and 2001, or within the interim period through May 24, 2002.
A letter from Arthur Andersen LLP to the Securities and Exchange
Commission was attached as Exhibit 16.1 to our Form 8-K filed with the
Securities and Exchange Commission on May 24, 2002.
During the two most recent fiscal years ended December 31, 2000 and
2001, and the subsequent interim period through May 24, 2002, the Company did
not consult with Ernst & Young LLP regarding any of the matters or events set
forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
Representatives of Ernst & Young LLP are expected to be present at the
annual meeting, will have the opportunity to make a statement if they desire
and will be available to answer questions. Representatives of Arthur Andersen
LLP will be invited to be present at the annual meeting. Should they choose to
attend, they will have the opportunity to make a statement if they desire and
will be available to answer questions.
AUDIT FEES
The aggregate fees billed by Arthur Andersen LLP for professional
services rendered for the audit of our annual financial statements for 2001 and
the review of the financial statements in our Forms 10-Q for 2001 was
approximately $1.1 million.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed by Arthur Andersen LLP for financial
information systems design and implementation services rendered to us during the
year was approximately $3.7 million. These services were provided to our
domestic subsidiary, IVAX Pharmaceuticals, Inc., related to the implementation
of a new enterprise resource planning system.
ALL OTHER FEES
The aggregate fees billed by Arthur Andersen LLP for all other services
rendered to us for the year ended December 31, 2001 were approximately $3.4
million, including approximately $0.8 million of tax consulting services, $1.2
million of investigation services related to one of our agreements, and $1.4
million of audit related fees. Audit related fees include accounting assistance
on proposed transactions and standards, acquisition due diligence, assistance
with registration statements, comfort letters and consents, employee benefit
plan audits and statutory audits of foreign subsidiaries.
REPORT OF THE AUDIT COMMITTEE
The American Stock Exchange has adopted new regulations applying to audit
committees and audit committee members. These rules require that all members of
our audit committee be "Independent," as defined in the American Stock Exchange
listing standards. Our Audit Committee was composed solely of independent
directors as of June 14, 2001 as required.
In connection with the preparation and filing of our Annual Report on
Form 10-K for the year ended December 31, 2001, and in accordance with its
written charter adopted by our Board, the Audit Committee:
o reviewed and discussed the audited financial statements with our
management;
o discussed with Arthur Andersen LLP, our independent auditors, the
matters required to be discussed by Statement of Auditing Standards 61
(Communication with Audit Committees); and
o received the written disclosures and the letter from Arthur Andersen
LLP required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discussed the
independence of Arthur Andersen LLP with Arthur Andersen LLP. In
connection with this discussion, the Audit Committee also considered
whether the provision of services by the independent auditors not
12
related to the audit of IVAX' financial statements is compatible with
maintaining the independent auditors' independence.
Based on the review and discussions referred to above, among other
things, the Audit Committee recommended to our Board that the audited financial
statements be included in our Annual Report on Form 10-K for the year ended
December 31, 2001 and that Ernst & Young be appointed to audit our financial
statements for 2002.
The Audit committee has reviewed and assessed the adequacy of the Audit
Committee Charter attached hereto as Appendix I.
AUDIT COMMITTEE:
CHARLES M. FERNANDEZ (CHAIRMAN)
MARK ANDREWS
JACK FISHMAN, PH.D.
May 24, 2002
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF OUR
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE REPORT OF THE AUDIT
COMMITTEE, THE REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE AND THE
PERFORMANCE GRAPH ABOVE SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
MULTIPLE SHAREHOLDERS SHARING THE SAME ADDRESS
Recent changes in the regulations regarding the delivery of copies of
proxy materials and annual reports to shareholders permit us, banks, brokerage
firms and other nominees to send one annual report and proxy statement to
multiple shareholders who share the same address under certain circumstances.
This practice is known as "householding." Shareholders who hold their shares
through a bank, broker or other nominee may have consented to reducing the
number of copies of materials delivered to their address. In the event that a
shareholder wishes to revoke a "household" consent previously provided to a
bank, broker or other nominee, the shareholder must contact the bank, broker or
other nominee, as applicable, to revoke such consent. In any event, if a
shareholder wishes to receive a separate proxy statement for the 2002 annual
meeting or a 2001 annual report, the shareholder may receive printed copies by
contacting IVAX Corporation Investor Relations, 4400 Biscayne Boulevard, Miami,
Florida 33137 by mail or by calling (305) 575-6000.
Any shareholders of record sharing an address who now receive multiple
copies of our annual reports and proxy statements and who wish to receive only
one copy of these materials per household in the future should also contact IVAX
Corporation Investor Relations by mail or telephone as instructed above. Any
shareholders sharing an address whose shares of common stock are held by a bank,
broker or other nominee who now receive multiple copies of our annual reports
and proxy statements, and who wish to receive only one copy of these materials
per household, should contact the bank, broker or other nominee to request that
only one set of these materials be delivered in the future.
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
If you want to bring business before the 2003 annual meeting, you must
follow the procedures outlined in our by-laws. A copy of these procedures is
available upon request from our Secretary at our executive office. One of the
procedural requirements in the by-laws is timely notice in writing of the
business you propose to bring before the meeting. Notice must be received not
less than 60 days nor more than 90 days prior to the meeting. If notice is
timely received and in compliance with all the procedures, then our proxy
13
holders will have the right to exercise discretionary voting authority with
respect to the proposal, without including information regarding the proposal in
our proxy materials.
If you want to include a shareholder proposal in the proxy statement
for the 2003 annual meeting of shareholders, it must be delivered to our
Secretary at our executive office before January 16, 2003 in order to be
considered for inclusion in the proxy statement for that meeting.
EXPENSES OF SOLICITATION
The cost of this solicitation will be borne by us. In addition to the
use of the mail, our regular employees may solicit proxies personally or by
telephone or facsimile. We will reimburse brokers, banks, and other custodians,
nominees and fiduciaries for their reasonable expenses in forwarding
solicitation materials to beneficial owners of common stock.
OTHER BUSINESS
At the date of mailing of this proxy statement, we are not aware of any
business to be presented at the annual meeting other than the proposals
discussed above. If other proposals are properly brought before the meeting, any
proxies returned to us will be voted as the proxyholders see fit.
You can obtain a copy of our Annual Report on Form 10-K for the year
ended December 31, 2001 at no charge by writing to us at Investor Relations,
4400 Biscayne Boulevard, Miami, Florida 33137.
May 31, 2002
14
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of Directors
in fulfilling its oversight responsibilities by reviewing the quality and
integrity of the Corporation's financial reports; the Corporation's systems of
Internal controls regarding finance and accounting; and the Corporation's
auditing, accounting and financial reporting processes generally. The
Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.
o Review and appraise the audit efforts of the Corporation's independent
accountants and internal auditing function.
o Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal auditing
function, and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section III of this Charter.
II. COMPOSITION
The Committee shall be comprised of three or more directors, each of whom shall
be independent directors, and free from any relationship that, in the opinion of
the Board, may interfere with the exercise of his or her independent judgement
as a member of the Committee or independence from management and the
Corporation. All members of the Committee shall be financially literate as this
qualification is interpreted by the Board (or must become financially literate
within a reasonable period of time after his or her appointment), and at least
one member of the Committee shall have accounting or related financial
management expertise.
III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Committee shall:
REVIEW FINANCIAL REPORTS
1. Review and discuss the Corporation's audited financial statements with
the Corporation's management.
2. Review, with the Corporation's director of corporate audit, the scope
and results of the Corporation's internal audit activity.
3. Review with management and the independent accountants the interim
financial statements prior to filing the 10-Q and publicly releasing
quarterly earnings. The Chair of the Committee may represent the entire
Committee for purpose of this review.
INDEPENDENT ACCOUNTANTS
4. Review and recommend to the Board of Directors the engagement of
Independent accountants including approval of their fee and the scope
and timing of their audit of the Corporation's financial statements.
5. Review, with the independent accountants, the accountant's report on
the Corporation's financial statements.
6. Evaluate the performance of the independent accountants; where
appropriate, recommend that the Board of Directors replace the
independent accountants and approve any proposed discharge of the
independent accountants.
7. On an annual basis, obtain from the Corporation's independent public
accountants written disclosure delineating all relationships between
such accountants and the Corporation and its affiliates, including the
written disclosure and letter required by Independence Standards Board
(ISB) Standard No. 1, as it may be modified or supplemented.
8. From time to time, as appropriate, actively engage the Corporation's
independent public accountants in a dialogue with respect to any
disclosed relationships or services that may impact the objectivity and
independence of such accountants and recommend to the Board of
Directors appropriate action in response to the outside accountant's
report to satisfy itself of the accountant's independence.
9. Inform the independent accountants that they are ultimately accountable
to the Board of Directors and the Audit Committee, as representatives
of the shareholders.
10. Periodically discuss with the independent accountants out of the
presence of management the Corporation's internal controls, including
their recommendations, if any, for improvements in the Corporation's
internal controls and the implementations of such recommendations, the
fullness and accuracy of the Corporation's financial statements and
certain other matter required to be discussed by Statement on Auditing
Standards No. 61 (SAS 61) *, as it may be modified.
REVIEWING AND IMPROVING PROCESS
11. As part of its job to foster open communication, the Committee should
meet at least annually with the Corporation's management, the
Corporation's directors of corporate audit and the independent
accountants in separate executive sessions to discuss any matters that
the Committee or each of these groups believe should be discussed
confidentially.
12. In consultation with the independent accountants and the internal
auditors, review the integrity and quality of the organization's
financial reporting processes, both internal and external, and the
independent accountant's perception of the Corporation's financial and
accounting personnel.
13. Consider the independent accountant's judgements about the quality and
appropriateness of the Corporation's accounting principles as applied
and significant judgements affecting its financial reporting.
14. Consider and recommend to the Board of Directors, if appropriate, major
changes to the Corporation's financial reporting, auditing and
accounting principles and practices as suggested by the independent
accountants, management, or the internal auditing function.
ETHICAL AND LEGAL COMPLIANCE
15. Review the adequacy and appropriateness of the Corporation's Code of
Business Conduct.
16. State in the Audit Committee's Report in the Corporation's annual proxy
statement whether based on the review and discussions referred to in
items 1, 8, 10, and 11 above, the Committee recommended to the Board of
Directors that the audit financial statements be included in the
Corporation's Annual Report on Form 10-K for the last fiscal year.
2
OTHER
17. Review and, if appropriate recommend updates of this Charter annually.
18. Perform any other activities consistent with this Charter, the
Corporation's By-laws and applicable law, as the Committee or the Board
deems necessary or appropriate.
* SAS 61 requires independent auditors to communicate certain matters related to
the conduct of an audit to those who have responsibility for oversight of the
financial reporting process, specifically the Audit Committee. Among the matters
to be communicated to the Audit Committee are: (1) methods used to account for
significant unusual transactions; (2) the effect of authoritative guidance or
consensus; (3) the process used by management in formulating particularly
sensitive accounting estimates and the basis for the accountant's conclusions
regarding the reasonableness of those estimates; and (4) disagreements with
management over the application of accounting principles, the basis for
management's accounting estimates, and the disclosures in the financial
statements.
3
IVAX
IVAX Corporation
4400 Biscayne Boulevard
Miami, FL 33137
Telephone: 305-575-6000
May 28, 2002
Dear Fellow Shareholders:
We are enclosing our annual report and proxy for our upcoming Annual
Shareholder's Meeting on June 27, 2002, and we would like to briefly summarize
below some recent developments.
- - On May 24, 2002, our Board of Directors appointed Ernst & Young LLP as the
company's independent public auditor, replacing Arthur Andersen LLP.
- - We continue to repurchase our stocks and bonds. We have repurchased
approximately 52.7 million shares of our common stock, at an average price
of $10.30 per share, since February 1998. We have also repurchased $100
million face value of our convertible debentures starting in the third
quarter of 2001. In addition, over the past two months, our Chairman and
CEO, Phillip Frost, M.D., purchased 100,000 shares of our common stock.
- - Our Board of Directors was expanded to nine members earlier this month
with the appointment of Richard C. Pfenniger, Jr. Since 1997, Mr.
Pfenniger has been Chief Executive Officer of Whitman Education Group,
Inc., a proprietary provider of career-oriented post secondary education,
and has served on its Board of Directors since 1992. He previously served
as IVAX' Chief Operating Officer from 1994 to 1997 and he is a member of
the Board of Directors of Continucare Corporation, an integrated health
care company. Mr. Pfenniger is also a lawyer and was formerly a CPA.
- - Also this month, Mr. Stephane Joly joined the company as President of
IVAX-France. Earlier this year, IVAX-France launched one of our
proprietary asthma products and also acquired a line of brand-equivalent
(generic) products. Mr. Joly has more than 17 years of experience in the
pharmaceutical industry, most recently heading Bayer Classics in France.
- - In April, Richard Denness joined IVAX as vice president of sales and
marketing. Mr. Denness is responsible for integrating the activities of
IVAX' sales organizations around the world. His first priority is to
support IVAX Laboratories, our U.S. proprietary pharmaceuticals
subsidiary, in its national roll-out of several important proprietary
products, including QVAR(R) and NASAREL(R). Mr. Denness has more than 13
years of domestic and international sales and marketing experience in the
pharmaceutical industry, mostly with Schering-Plough Corporation.
- - In April, we announced our earnings for the first quarter of 2002,
enclosed is a copy.
- - Earlier this month, in Mexico we launched BECLAZONE(TM) (beclomethasone)
and AEROSIAL(TM) (budesonide), each in our patented, breath-activated
EASI-BREATHE(TM) inhaler. This marked the introduction of our innovative
device in Latin America. Product registrations are also pending in other
Latin American countries. In February, in France we launched ECOBEC
(beclomethasone) in our EASI-BREATHE inhaler. Also, so far this year we
have received five additional regulatory approvals for our asthma products
in Europe and Canada.
- - In April, we obtained exclusive U.S. rights to the asthma product, QVAR, a
novel formulation of beclomethasone dipropionate in a non-ozone depleting
HFA (hydrofluoroalkane) propellant. Earlier this month, we received FDA
approval for the pediatric use of QVAR for the treatment of asthma in
children 5 through 11 years of age. QVAR is already approved and marketed
for asthma treatment in adults and older children.
- - In March, we acquired the European rights to the intranasal steroid
products, NASAREL(R) and NASALIDE(R), for the treatment of allergic
rhinitis. This complements our acquisition in late 2001 of the U.S. rights
to these products.
- - We expect to start in the near future a multi-center Phase II study of an
oral form of BNP-166 for Crohn's disease (regional ileitis), an
inflammatory disease of the small bowel. BNP-166 is one of the "soft
corticosteroids" we are developing for gastrointestinal, respiratory and
skin disorders. Our patented "soft corticosteroids" are designed to
provide the anti-inflammatory action of classic corticosteroids without
their side effects.
- - We plan to begin a multi-center Phase II study later this year for our
patented, brain-targeted estrogen, E2CDS, for the treatment of
postmenopausal symptoms. E2CDS is designed to concentrate in the brain. In
contrast, conventional HRT drugs achieve limited levels in the brain, but
reach higher than desired levels in other parts of the body. Studies
indicate that elevated levels of circulating estrogens may be associated
with side effects, including the development of various cancers. E2CDS is
also to be studied to prevent and treat Alzheimer's disease and to
increase libido.
- - In April, we acquired substantially all of the products comprising the
generic pharmaceutical business of Merck & Co., Inc.'s subsidiary in
France. France is a large pharmaceutical market and the government has
indicated its desire to expand the use of generic drugs.
- - So far during 2002, we have received five approvals for our Abbreviated
New Drug Applications (ANDAs) from the United States Food and Drug
Administration (FDA) and received two approvable notifications for pending
ANDAs. We also have received an additional seven generic approvals in
Europe.
On behalf of our Board of Directors, management and 8,000 employees around the
world, we look forward to your continued support of IVAX as we continue our
progress.
Sincerely,
/s/ Phillip Frost, M.D. /s/ Isaac Kaye /s/ Neil Flanzraich /s/ Jane Hsiao, Ph.D
- ----------------------- --------------------- ------------------------ --------------------------------------
Phillip Frost, M.D. Isaac Kaye Neil Flanzraich Jane Hsiao, Ph.D
Chairman and Deputy Chief Vice Chairman and Vice Chairman - Technical Affairs
Chief Executive Officer Executive Officer President and Chief Technical Officer
THIS LETTER CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS REGARDING PRODUCT
DEVELOPMENT EFFORTS AND PRODUCT PERFORMANCE AND OTHER NON-HISTORICAL FACTS WHICH
ARE BEING MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES
THAT CANNOT BE PREDICTED OR QUANTIFIED AND, CONSEQUENTIALLY, ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, THAT
MULTI-CENTER PHASE II CLINICAL TRIALS FOR E2CDS AND BNP-166 MAY NOT BE COMMENCED
OR COMPLETED ON A TIMELY BASIS OR AT ALL, MAY FAIL, MAY NOT ACHIEVE THE EXPECTED
RESULTS OR EFFECTIVENESS AND/OR MAY NOT GENERATE DATA THAT WOULD SUPPORT THE
APPROVAL OR MARKETING OF THIS PRODUCT FOR THE INDICATIONS BEING STUDIED OR FOR
OTHER INDICATIONS; THAT THESE COMPOUNDS MAY NOT HAVE SUPERIOR EFFECTIVENESS AND
FEWER SIDE EFFECTS THAN CURRENTLY AVAILABLE PRODUCTS; THAT IVAX' PATENTS
PERTAINING TO THESE PRODUCTS MAY BE INVALIDATED OR MAY OTHERWISE NOT SUCCEED IN
PREVENTING OTHER SIMILAR AND/OR COMPETITIVE PRODUCTS; AND THAT OTHERS MAY
DEVELOP PRODUCT FORMULATIONS THAT ARE SUPERIOR TO THE IVAX FORMULATIONS. IN
ADDITION TO THE RISK FACTORS SET FORTH ABOVE, IVAX' FORWARD LOOKING STATEMENTS
MAY ALSO BE ADVERSELY AFFECTED BY GENERAL MARKET FACTORS, COMPETITIVE PRODUCT
DEVELOPMENT, PRODUCT AVAILABILITY, FEDERAL AND STATE REGULATIONS AND
LEGISLATION, THE REGULATORY PROCESS FOR NEW PRODUCTS AND INDICATIONS,
MANUFACTURING ISSUES THAT MAY ARISE, TRADE BUYING PATTERNS, PATENT POSITIONS AND
LITIGATION, AMONG OTHER THINGS. FOR FURTHER DETAILS AND DISCUSSION OF THESE AND
OTHER RISKS AND UNCERTAINTIES, SEE IVAX' ANNUAL REPORT ON FORM 10-K AND OTHER
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
IVAX
IVAX Corporation
4400 Biscayne Boulevard
Miami, FL 33137
Telephone: 305-575-6000
IVAX REPORTS SALES AND EARNINGS FOR FIRST QUARTER OF 2002
- EXPECTS IMPROVEMENT IN SUBSEQUENT QUARTERS -
MIAMI - April 30, 2002 - IVAX Corporation (AMEX: IVX, LSE: IVX.L) today
reported net income for the first quarter of 2002 of $23.5 million, or $.12 per
share, on net revenues of $272.2 million. This compares to net income of $60.1
million, or $.29 per share, on net revenues of $259.9 million in the same
quarter a year ago.
Commenting on the first quarter's financial results, Neil Flanzraich,
vice chairman and president of IVAX Corporation said, "The operating environment
this quarter was extremely challenging. While our net revenues increased over
the prior year's quarter, these gains were not enough to offset the rapid price
erosion in the United States from brand and generic competition for ONXOL(TM),
our brand-equivalent paclitaxel product, a significant currency devaluation in
Argentina, reductions in government purchases of our products in Mexico and
continued pricing pressures in the United Kingdom."
Net income for the prior year's quarter reflected a gain on the partial
sale of IVAX Diagnostics, Inc. of $.05 per share. Net income for the first
quarter of 2002 included $.02 per share from the early retirement of debt and
$.02 per share due to the impact of FASB 142, related to the treatment of
goodwill.
Mr. Flanzraich continued, "Had the pricing of ONXOL been the same as a
year ago, sales during the first quarter would have produced an additional $.08
per share. Also, had the Argentinean peso not been devalued, our net income
would have been $.03 per share higher. These unaudited calculations give a sense
of the impact these events had on the quarter's results. As discussed below, we
have already moved aggressively to address the issues that contributed to the
relative weakness of the first quarter. We expect significant improvement in
subsequent quarters and plan to update investors on our progress periodically
through IVAX Webcast meetings."
In the United States:
- IVAX is well on its way to becoming an important U.S. proprietary
pharmaceutical company, and is actively expanding its sales force to
market and sell IVAX' existing proprietary products and the
innovative drugs coming from the company's proprietary pipeline
- IVAX is rapidly expanding the sales and profitability of its
brand-equivalent business
- IVAX' veterinary products subsidiary is on track for record sales
and profits
- IVAX expects to receive milestone payments and increasing royalties
from higher sales of Elmiron, a proprietary urology product
- IVAX expects to enter into strategic partnerships and licensing
agreements for products in its proprietary pipeline that will
generate milestone and royalty payments and reduce development costs
In Argentina:
- IVAX' local management team exceeded the operating profit budget for
the first quarter in local currency, notwithstanding the political
and economic turmoil
- IVAX is in the process of acquiring currently marketed products and
introducing products from its research pipeline
- IVAX is planning to further reduce costs by consolidating three
manufacturing facilities into a single, modern facility
In Mexico:
- IVAX recently hired a new general manager with substantial industry
experience and a track record of success to lead its Mexican
operation
- IVAX has already implemented cost cutting strategies
- IVAX is introducing new products from acquisitions and its research
pipeline through a growing sales force to increase sales to the
private sector and reduce reliance on government purchases. On May
7th, in connection with the international celebration of World
Asthma Day, IVAX-Mexico is launching BECLAZONE(TM) (beclomethasone)
and AEROSIAL(TM) (budesonide) in the company's EASI-BREATHE(TM)
inhaler
In the United Kingdom:
- IVAX-UK is improving its operating efficiency and is expanding
activities in India to reduce the cost of developing
brand-equivalent products
As a reflection of the Board and management's confidence in the future
of IVAX, the company continues to repurchase its securities. Since February
1998, IVAX has repurchased more than 51 million shares of its common stock at an
average price of $10.16 per share. In addition, starting in the third quarter of
2001, IVAX has repurchased $100 million in face value of its convertible
debentures.
Dr. Phillip Frost, chairman and chief executive officer of IVAX
Corporation concluded, "We believe the real news about IVAX is not our first
quarter financial results, but in the progress we have made in building an
important multinational pharmaceutical company."
IVAX Corporation, headquartered in Miami, Florida, discovers, develops,
manufactures, and markets branded and brand equivalent (generic) pharmaceuticals
and veterinary products in the U.S. and internationally.
Copies of this and other news releases may be obtained free of charge
from IVAX' web site at www.ivax.com. Shareholders and prospective investors can
register to automatically receive the company's press releases via email at
WWW.IVAX.COM/COMNEWSV2.HTM.
THIS PRESS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, REGARDING,
AMONG OTHER THINGS, STATEMENTS RELATING TO GOALS, PLANS AND PROJECTIONS
REGARDING THE COMPANY'S FINANCIAL POSITION, RESULTS OF OPERATIONS, MARKET
POSITION, PRODUCT DEVELOPMENT AND BUSINESS STRATEGY. THESE STATEMENTS INVOLVE
RISKS AND UNCERTAINTIES THAT CANNOT BE PREDICTED OR QUANTIFIED AND,
CONSEQUENTLY, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES
INCLUDE, AMONG OTHERS, THE UNCERTAINTY THAT THE IMPACT OF COMPETITIVE PRODUCTS
AND PRICES MAY BE GREATER THAN ANTICIPATED; THAT POLITICAL AND ECONOMIC
INSTABILITY IN SOME COUNTRIES IN WHICH WE CONDUCT OUR BUSINESS, PARTICULARLY
ARGENTINA AND OTHER LATIN AMERICAN COUNTRIES, MAY ADVERSELY AFFECT THE REVENUE
OUR FOREIGN OPERATIONS GENERATE; THAT IVAX HAS IN THE PAST AND MAY IN THE FUTURE
EXPERIENCE DIFFICULTIES IN OBTAINING RAW MATERIALS NECESSARY FOR THE PRODUCTION
OF IVAX' PRODUCTS, PARTICULARLY PACLITAXEL, ON COMMERCIALLY REASONABLE TERMS OR
AT ALL; THAT EXISTING PACLITAXEL PRODUCTS AND ANY SUBSEQUENTLY APPROVED
PACLITAXEL PRODUCTS MAY DIMINISH THE GROWTH PROSPECTS AND DEMAND FOR IVAX'
PACLITAXEL; THAT IVAX MAY NOT BE ABLE TO PURCHASE ADDITIONAL COMPANIES, PRODUCTS
OR TECHNOLOGIES ON COMMERCIALLY REASONABLE TERMS OR AT ALL, OR ENTER INTO
STRATEGIC PARTNERSHIPS OR LICENSING AGREEMENTS WHICH WOULD GENERATE MILESTONE OR
ROYALTY PAYMENTS OR REDUCE COSTS; THAT IVAX MAY NOT INCREASE ITS SALES FORCE;
THAT BENEFITS ANTICIPATED FROM ACQUISITIONS WILL NOT OCCUR; THAT BENEFITS
ANTICIPATED FROM TAX STRUCTURES WILL NOT OCCUR; THAT THE COMPOUNDS AND PRODUCTS
IN IVAX' RESEARCH PIPELINE WILL NOT BE SUCCESSFULLY DEVELOPED, WILL NOT RECEIVE
REGULATORY APPROVAL OR WILL NOT BE SUCCESSFULLY COMMERCIALIZED; THAT IVAX'
BUSINESSES AND SALES AND PROFITABILITY MAY NOT GROW AS ANTICIPATED OR AT ALL;
THAT IVAX' EFFORTS TO ADDRESS THIS QUARTER'S WEAKNESSES MAY NOT ACHIEVE THE
EXPECTED RESULTS; THAT COST CUTTING STRATEGIES MAY NOT BE SUCCESSFUL; THAT
ANTICIPATED IMPROVEMENT IN SUBSEQUENT QUARTERS MAY NOT BE SIGNIFICANT OR OCCUR
AT ALL; THAT IVAX' VETERINARY PRODUCTS MAY NOT ACHIEVE RECORD SALES AND PROFITS;
THAT THE ANTICIPATED LAUNCH OF PRODUCTS IN MEXICO MAY BE DELAYED; AND THAT SALES
OF ELMIRON MAY NOT INCREASE AND IVAX MAY NOT RECEIVE ANTICIPATED RELATED
MILESTONE PAYMENTS OR INCREASING ROYALTIES. IN ADDITION TO THE RISK FACTORS SET
FORTH ABOVE, IVAX' FORWARD-LOOKING STATEMENTS MAY ALSO BE ADVERSELY AFFECTED BY
GENERAL MARKET FACTORS, COMPETITIVE PRODUCT DEVELOPMENT, PRODUCT AVAILABILITY,
CURRENT AND FUTURE BRANDED AND GENERIC COMPETITION FOR THE COMPANY'S PRODUCTS,
FEDERAL AND STATE REGULATIONS AND LEGISLATION, THE REGULATORY PROCESS FOR NEW
PRODUCTS AND INDICATIONS, MANUFACTURING ISSUES THAT MAY ARISE, TRADE BUYING
PATTERNS, EXCHANGE RATE FLUCTUATIONS, PATENT POSITIONS AND THE TIMING AND
OUTCOME OF LEGAL PROCEEDINGS, AMONG OTHER THINGS. FOR FURTHER DETAILS AND
DISCUSSION OF THESE AND OTHER RISKS AND UNCERTAINTIES, SEE IVAX' ANNUAL REPORT
ON FORM 10-K AND OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. IVAX
UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE ANY FORWARD-LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS.
CONTACT:
Thomas E. Beier
Senior Vice President, Finance & Chief Financial Officer
305.575.6563
or
Howard A. Goldman
Director/Investor Relations & Corporate Communications
305.575.6043
WWW.IVAX.COM
IVAX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS
--------------------------
PERIOD ENDED MARCH 31, 2002 (1,2) 2001 (1)
--------- ---------
(In thousands, except per share data)
Net revenues $ 272,225 $ 259,932
Cost of sales 150,250 123,724
--------- ---------
Gross profit 121,975 136,208
--------- ---------
Selling and marketing 42,146 27,502
General and administrative 27,266 23,721
Research and development 19,054 18,883
Amortization of intangible assets 3,015 3,593
Restructuring costs 488 --
--------- ---------
Total operating expenses 91,969 73,699
--------- ---------
Income from operations 30,005 62,509
Total other income (expense), net (10,362) 11,477
--------- ---------
Income from continuing operations
before income taxes and minority interest 19,644 73,986
Tax provision 3,851 13,755
--------- ---------
Income from continuing operations
before minority interest 15,793 60,231
Minority interest 94 (99)
--------- ---------
Income from continuing operations 15,887 60,132
Extraordinary item - gains on
extinguishment of debt, net of tax
3,413 --
Cumulative effect of a change in accounting
principle 4,161 --
--------- ---------
Net income $ 23,461 $ 60,132
========= =========
BASIC EARNINGS PER SHARE:
Income from continuing operations $ 0.08 $ 0.30
Extraordinary item, net of tax $ 0.02 --
Cumulative effect $ 0.02 --
--------- ---------
Net Income $ 0.12 $ 0.30
========= =========
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.08 $ 0.29
Extraordinary item, net of tax $ 0.02 --
Cumulative effect $ 0.02 --
--------- ---------
Net Income $ 0.12 $ 0.29
========= =========
AVERAGE SHARES OUTSTANDING:
Basic 196,227 199,255
========= =========
Diluted 199,988 206,270
========= =========
- -------------
(1) RESULTS OF OPERATIONS INCLUDE THE RESULTS OF IVAX MEXICO AND NETPHARMA
SUBSEQUENT TO THEIR ACQUISITIONS.
(2) RESULTS OF OPERATIONS INCLUDE THE RESULTS OF LAB CHILE SUBSEQUENT TO ITS
ACQUISITION.
IVAX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
---------- ------------
(In thousands) (unaudited)
ASSETS
Cash & cash equivalents $ 113,357 $ 178,264
Marketable Securities, short term 146,606 154,842
Other current assets 635,068 665,833
Property, plant and equipment, net 350,919 356,304
Other assets 708,266 750,206
---------- ----------
Total assets $1,954,216 $2,105,449
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt $ 4,156 $ 52,199
Other current liabilities 345,014 349,162
Long-term debt 877,920 913,486
Other long-term liabilities 68,551 57,536
Minority interest 15,790 14,712
Shareholders' equity 642,785 718,354
---------- ----------
Total liabilities and shareholders' equity $1,954,216 $2,105,449
========== ==========
- ------------------------------------------------------------------------------
IVAX CORPORATION AND SUBSIDIARIES
REVENUES BY REGION
PERIOD ENDED MARCH 31, THREE MONTHS
(In thousands) 2002 2001
--------- ---------
North America
External sales $ 102,964 $ 138,743
Intersegment sales 276 386
Other revenues 7,736 121
--------- ---------
Net revenues - North America 110,976 139,250
--------- ---------
Europe
External sales 85,283 70,288
Intersegment sales 14,389 7,741
Other revenues 8,540 15,205
--------- ---------
Net revenues - Europe 108,212 93,234
--------- ---------
Latin America
External sales 58,777 26,509
Other revenues 400 229
--------- ---------
Net revenues - Latin America 59,177 26,738
--------- ---------
Corporate & Other
External sales 7,280 8,371
Intersegment sales (14,665) (8,127)
Other revenues 1,245 466
--------- ---------
Net revenues - Corporate & Other (6,140) 710
--------- ---------
Consolidated net revenues $ 272,225 $ 259,932
========= =========
IVAX CORPORATION
4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I (whether one or more of us) appoint Phillip Frost, M.D. and Neil Flanzraich
and each of them separately, as my proxies, each with the power to appoint his
substitute, and authorize each of them to vote as designated on the reverse
side, all of my shares of Common Stock of IVAX Corporation (the "Company") held
of record by me at the close of business on April 29, 2002, at the Annual
Meeting of Shareholders to be held on June 27, 2002, and at any adjournment of
the meeting, and, in their discretion, to vote my shares on any other business
as may properly come before the meeting.
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED BY ME. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF ALL DIRECTOR NOMINEES.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE, AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued and to be signed on other side)
(continued from other side)
1. ELECTION OF DIRECTORS
FOR each nominee WITHHOLD AUTHORITY to vote for Mark Andrews; Ernst Biekert, Ph.D.;
listed (except as all nominees listed Charles M. Fernandez; Jack Fishman, Ph.D.;
marked to the Neil Flanzraich; Phillip Frost, M.D.; Jane
contrary) Hsiao, Ph.D., Isaac Kaye and
Richard C. Pfenniger, Jr.
[ ] [ ] (INSTRUCTION: To withhold authority
to vote for any individual nominee,
draw a line through such nominee's
name.
I acknowledge receipt of the
accompanying Notice of Annual
Meeting of Shareholders and Proxy
Statement for the June 27, 2002
meeting.
Dated: ___________________________, 2002
___________________________________________
Signature
___________________________________________
Signature if held jointly
(Please sign exactly as name or
names appear on this Proxy. When
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person. Please date the Proxy.)
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE. Postage is not necessary if mailed in the United
States.