SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. __)
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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
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
DRAGON PHARMACEUTICAL INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ______________________________________________
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4) Date Filed: __________________________________________________________
DRAGON PHARMACEUTICAL INC.
1055 West Hastings Street, Suite 1900
Vancouver, British Columbia
Canada V6E 2E9
Telephone (604) 669-8817
To Our Stockholders:
You are cordially invited to attend the annual meeting of the stockholders
of Dragon Pharmaceutical Inc. to be held at 10:00 a.m. local time, on June 26,
2003 at our principal executive offices located at 1055 West Hastings Street,
Suite 1900, Vancouver, British Columbia.
At the meeting, you will be asked to elect six nominees to the Board of
Directors and ratify the appointment of the independent accountants. We hope you
will plan to attend the stockholders' meeting. However, in order that we may be
assured of a quorum, we urge you to sign and return the enclosed proxy in the
postage-paid envelope provided as promptly as possible, whether or not you plan
to attend the meeting in person.
/s/ Alexander Wick
Alexander Wick
President
May 16, 2003
DRAGON PHARMACEUTICAL INC.
1055 West Hastings Street, Suite 1900
Vancouver, British Columbia
Canada V6E 2E9
Telephone (604) 669-8817
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD June 26, 2003
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Dragon
Pharmaceutical Inc. ("Dragon" or "Company"), a Florida corporation, will be held
at the Company's principal executive offices located at 1055 West Hastings
Street, Suite 1900, Vancouver, British Columbia, on Thursday June 26, 2003 at
10:00 a.m. local time, for the purpose of considering and acting on the
following proposals:
1. To elect the six nominees named in the proxy statement as directors to
serve for one-year terms or until their successors have been elected
and qualified;
2. To ratify the appointment of Moore Stephens Ellis Foster Ltd.,
Chartered Accountants, to audit Dragon's financial statements for the
year ending December 31, 2003; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on May 15, 2003, are
entitled to receive notice of and to vote at the meeting. Stockholders are
invited to attend the meeting in person.
Please sign and date the accompanying proxy card and return it promptly in
the enclosed postage-paid envelope whether or not you plan to attend the meeting
in person. If you attend the meeting, you may vote in person if you wish, even
if you previously have returned your proxy card. The proxy may be revoked at any
time prior to its exercise.
By Order of the Board of Directors
/s/ Matthew Kavanagh
Secretary
May 16, 2003
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT
IN THE ENCLOSED ENVELOPE.
DRAGON PHARMACEUTICAL INC.
1055 West Hastings Street, Suite 1900
Vancouver, British Columbia
Canada V6E 2E9
Telephone (604) 669-8817
PROXY STATEMENT
We are furnishing this proxy statement to you in connection with our 2003
annual meeting to be held on Thursday June 26, 2003, at 10:00 a.m. local time at
the principal executive offices of the Company located at 1055 West Hastings
Street, Suite 1900, Vancouver, British Columbia, and at any adjournment thereof.
The matters to be considered and acted upon are the election of six nominees as
directors and such other business as may properly come before the meeting.
The enclosed proxy is solicited on behalf of our board of directors and may
be revocable by you at any time prior to the voting of such proxy. All properly
executed proxies delivered pursuant to this solicitation will be voted at the
meeting and in accordance with instructions, if any.
Our annual report for the year 2002, including financial statements, is
accompanying this proxy statement. Such report and financial statements are not
a part of this proxy statement except as specifically incorporated herein.
This proxy statement is being mailed on or about May 20, 2003.
ABOUT THE MEETING
What is the purpose of the Annual Meeting?
At the annual meeting, you will vote on the matters outlined in the
accompanying Notice of Annual Meeting of Stockholders, including election of the
directors and ratification of independent accountants.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date,
May 15, 2003 (the Record Date), are entitled to vote at the annual meeting, or
any postponements or adjournments of the meeting.
What are the Board's recommendations on the proposals?
The Board recommends a vote FOR each of the nominees, and FOR the
ratification of Moore Stephens Ellis Foster Ltd., Chartered Accountants, as
independent accountants.
How do I vote?
Sign and date each proxy card you receive and return it in the
postage-prepaid envelope enclosed with your proxy materials. If you are a
registered stockholder and attend the meeting, you may deliver your completed
proxy card in person.
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If your shares are held by your broker or bank, in "street name," you will
receive a form from your broker or bank seeking instructions as to how your
shares should be voted. If you do not instruct your broker or bank how to vote,
your broker or bank will vote your shares if it has discretionary power to vote
on a particular matter.
Can I change my vote after I return my proxy card?
Yes. You have the right to revoke your proxy at any time before the meeting
by notifying the Secretary of the Company in writing, voting in person or
returning a later-dated proxy card.
Who will count the vote?
The Secretary will count the votes and act as the inspector of election.
Our transfer agent, Computershare Trust Company of Canada., will tally the
proxies and provide this information at the time of the meeting.
What shares are included on the proxy card(s)?
The shares on your proxy card(s) represent ALL of your shares. If you do
not return your proxy card(s), your shares will not be voted.
What does it mean if I get more than one proxy card?
If your shares are registered differently and are in more than one account,
you will receive more than one proxy card. Sign and return all proxy cards to
ensure that all your shares are voted. We encourage you to have all accounts
registered in the same name and address (whenever possible). You can accomplish
this by contacting our transfer agent, Computershare Trust Company of Canada
((604) 661-9400), or, if your shares are held in "street name," by contacting
the broker or bank who holds your shares.
How many shares can vote?
There were 20,334,000 shares of common stock as of the Record Date. Every
stockholder is entitled to one vote for each share of common stock held. The
Company has no other voting securities outstanding.
What is a "quorum"?
A "quorum" is a majority of the outstanding shares entitled to vote. They
may be present in person or represented by proxy. For the purposes of
determining a quorum, shares held by brokers or nominees for which we receive a
signed proxy will be treated as present even if the broker or nominee does not
have discretionary power to vote on a particular matter or if instructions were
never received from the beneficial owner. These shares are called "broker
non-votes." Abstentions will be counted as present for quorum purposes.
What is required to approve each proposal?
For the election of the directors, once a quorum has been established, the
nominees for director who receive the plurality of votes will become our
directors. For the ratification of independent accountants, holders owning a
majority of shares of common stock appearing in person or by proxy at the
meeting will be required to approve the ratification of the independent
accountants.
3
If a broker indicates on its proxy that it does not have discretionary
authority to vote on a particular matter, the affected shares will be treated as
not present and not entitled to vote with respect to that matter, even though
the same shares may be considered present for quorum purposes and may be
entitled to vote on other matters.
What happens if I abstain?
Proxies marked "abstain" will be counted as shares present for the purpose
of determining the presence of a quorum, but for purposes of determining the
outcome of a proposal, shares represented by such proxies will not be treated as
affirmative votes. For proposals requiring an affirmative vote of a majority of
the shares present, an abstention is equivalent to a "no" vote.
How will we solicit proxies?
We will distribute the proxy materials and solicit votes. The cost of
soliciting proxies, which will be conducted by mail, will be borne by us. These
costs will include the expense of preparing and mailing proxy solicitation
materials for the meeting and reimbursements paid to brokerage firms and others
for their reasonable out-of-pocket expenses for forwarding proxy solicitation
materials to stockholders. Proxies may also be solicited in person, by
telephone, or by facsimile by our directors, officers and employees without
additional compensation.
4
STOCK OWNERSHIP
How much stock do our directors, executive officers, principal stockholders own?
The following table shows the amount of our common stock (symbol: TSE:DDD;
OTCBB:DRUG) beneficially owned (unless otherwise indicated) by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock, by
each of our executive officers and directors and the executive officers and
directors as a group. Except as otherwise indicated, all information is as of
May 11, 2003.
Shares Beneficially
Owned(1)
Name & Address of Beneficial Owner Number Percent
- ---------------------------------- ------ -------
Zhibin Cai and Yu Fongmei(2)
18 Main Street
Votian
Hubei, China 1,899,000 9.3%
Arbora Portfolio Management(3)
Gartenstrasse 38
Zurich, Switzerland 1,062,500 5.2%
Goldpac Investment Partners Ltd.(3)
P. O. Box 3321
Road Town, Tortola
BVI 1,110,000 5.5%
Chow Tail Fook Nominee Limited(3)
31F New World Tower
16-18 Queens Road Central
Hong Kong 2,000,000 9.8%
Hiu Min Liu(4)
5 Lin Hui City
Guan Zhen Lao Zheng Street
Hunan, China 2,247,000 9.8%
Alexander Wick,
President and Director 375,000(5) *
Longbin Liu,
Director 700,000(5) 3.3%
Ken Cai,
Director 500,000(5) 2.4%
Greg Hall,
Director 400,000(5) 1.9%
Philip Yuen,
Director 831,500(6) 4.1%
Yiu Kwong Sun,
Director 775,000(7) 3.8%
Matthew Kavanagh
Secretary 70,000(5) -0-
All directors (7 persons) and executive officers as a group 3,417,500(8) 15.2%
5
- ----------------------------------
* Represents less than one percent.
(1) Except as otherwise indicated, we believe that the beneficial owners of the
common stock listed above, based on information furnished by such owners or
publicly available, have sole investment and voting power with respect to
such shares, subject to community property laws where applicable.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock subject
to options or warrants currently exercisable, or exercisable within sixty
days, are deemed outstanding for purposes of computing the percentage
ownership of the person holding such option or warrants, but are not deemed
outstanding for purposes of computing the percentage ownership of any other
person.
(2) Zhibin Cai is the father of Mr. Ken Cai, one of our directors. Yu Fong Mei
is the mother of Mr. Ken Cai. They do not reside with Mr. Ken Cai.
(3) We have been unable to obtain information regarding the identity of the
principals and affiliates of Arbora Portfolio Management, Goldpac
Investment Partners Ltd. and Chow Tail Fook Nominee Limited.
(4) Hiu Min Liu is the sister of Dr. Longbin Liu, one of our directors. She
does not reside with Dr. Lui.
(5) Represents options exercisable within sixty days.
(6) Includes 62,500 shares of common stock owned and 175,000 shares of common
stock subject to options. Also includes 600,000 shares of common stock
owned by Global Equities Overseas Ltd. for which Mr. Yuen serves as a
director.
(7) Includes 175,000 shares of common stock subject to options exercisable
within sixty days. Also includes 600,000 shares of common stock owned by
Yukon Health Enterprise for which Mr. Sun serves as a director.
(8) Includes options and warrants to acquire 2,155,000 shares of common stock.
SECTION 16 TRANSACTIONS
Section 16(a) of the Exchange Act requires our executive officers and
directors to file reports of ownership and changes in ownership of our common
stock with the SEC. Executive officers and directors are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file.
Based on a review of the forms filed during 2002, we believe that our
executive officers and directors complied with all applicable filing
requirements.
PROPOSAL 1--ELECTION OF DIRECTORS
We currently have six directors. The term of office for the directors
elected at this meeting will expire at the next annual meeting of stockholders
to be held in 2004 or until his earlier death, resignation or removal. Unless
otherwise instructed, the proxyholders will vote the proxies received by them
for the six nominees named below. If any nominee of the Company is unable or
declines to serve as a director at the time of the annual meeting, the proxies
will be voted for any nominee designated by the present Board of Directors to
fill the vacancy. We have no reason to believe that any nominee, if elected,
will be unable to serve as director. Each director has agreed to serve as
director, if elected.
The following indicates the age, principal occupation or employment for the
last five years, and the year the director was first elected, for each nominee
as director.
Dr. Alexander Wick Director since September 1998
Dr. Wick, 64, has been President since September 2002 and is a Director of
Dragon. Dr. Wick holds a doctorate degree in synthetic organic chemistry from
the Swiss Federal Institute of Technology and has completed post-doctoral
studies at Harvard University. He has had leading positions in the
pharmaceutical research departments of F. Hoffmann-La Roche in the United States
and Switzerland and Synthelabo in France (Director of Chemical Research and
Development) for over 25 years in the field of antibiotics, prostaglandin,
vitamins, cardiovascular, CNS and AIDS. In 1995 he created the fine chemicals
company Sylachim S.A., a 100% subsidiary of Synthelabo, active in chemical
intermediates and API's for the world's largest pharmaceutical companies
(turnover of over 100 million Euros) and was its President until its acquisition
by the German conglomerate mg Technologies (Dynamit-Nobel GmbH) in 2001.
6
Dr. Longbin Liu, M.D. Director since September 1998
Dr. Liu, 39 is the Chairman of the Board of Directors of Dragon. He has 17
years of biotechnology experience in North America, Japan and China, most
recently as an Assistant Professor of Medicine in the Division of Cardiovascular
Medicine of the University of Massachusetts Medical Centre where he had served
since 1995, before joining Dragon in September 1998. Dr. Liu earned his medical
degree from Hunan Medical University in 1983. Dr. Liu was the President and
Chief Executive Officer of Dragon from September 1998 until he resigned from
those positions in September 2002.
Dr. Ken Z. Cai Director since July 1998
Dr. Cai, 37 is a Director of Dragon. Dr. Cai has a Ph.D in Mineral
Economics from Queen's University in Kingston, Ontario, as well as 18 years of
experience in mining, public company administration and financing. Since
February 1996, he has been a Director and the President and Chief Executive
Officer of Minco Mining and Metals Corporation, a Toronto Stock Exchange-listed
company involved in mining exploration and development in China. Dr. Cai has
extensive experience in conducting business in China for the past 17 years and
is currently the Chairman of the Board of four Sino-foreign joint ventures. Dr.
Cai served as Chief Financial Officer from September 1998 to March 2001.
Mr. Greg Hall Director since 1998
Mr. Hall, 45, is a Director of Dragon. Mr. Hall is a stockbroker with 18
years of corporate finance and public offerings experience. Since November 2001,
Mr. Hall has been a Senior Vice President of Golden Capital Securities Ltd. in
Vancouver, Canada. Prior to joining Golden Capital, Mr. Hall was with Yorkton
Securities Inc for 3 years and Canaccord Capital for ten years. He is a former
member/seat holder of the Vancouver Stock Exchange. Prior to joining Canaccord
Capital, Mr. Hall was the Co-Founder of both Pacific International Securities
and Georgia Pacific Securities Corporation.
Mr. Philip Yuen Pak Yiu Director since November 1999
Mr. Yuen, 66, is a Director of Dragon. Mr. Yuen has been a legal
practitioner in Hong Kong since graduating from law school in London, England in
1961. In 1965, he established the law firm of Yung, Yu, Yuen and Co. and is now
the principal partner of the firm. Mr. Yuen has over 30 years experience in the
legal field and has been a director of several large listed companies in various
industries. He is a director of the Association of China-appointed Attesting
Officers Limited in Hong Kong, a standing committee member of the Chinese
General Chamber of Commerce in Hong Kong, a member of the National Committee of
the Chinese People Political Consultative Conference and an arbitrator for the
China International Economic and Trade Arbitration Commission.
Dr. Yiu Kwong Sun Director since November 1999
Dr. Sun, 59, is a Director of Dragon. Dr. Sun graduated from the University
of Hong Kong Faculty of Medicine in 1967. He is a Founding Fellow of the Hong
Kong College of Family Physicians and a Fellow of the Hong Kong Academy of
Medicine. Since 1995, he has served as the Chairman of the Dr. Sun Medical
Centre Limited, which has been operating a network of medical centers in Hong
Kong and China for the past 20 years. He is also the Administration Partner of
United Medical Practice, which manages a large network of medical facilities
7
throughout Hong Kong and Macau. Dr. Sun has been a member of the Dr. Cheng Yu
Fellowship Committee of Management of the University of Hong Kong Faculty of
Medicine since 1997.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
NOMINEES LISTED ABOVE.
How are directors compensated?
Directors do not receive cash compensation for their services. Previously,
the Directors have periodically received stock options for their services.
However, no stock options were issued in 2002.
How often did the Board meet during fiscal 2002?
The Board of Directors met two times during fiscal 2002. All directors
attended both meetings. In addition, the Board took action five times by written
consent. The Board also has a Compensation and Audit Committee. The Audit
Committee met three times in 2002. The Board of Directors has no nominating
committee.
What committees has the Board established?
The Board of Directors has established an Audit Committee.
The Audit Committee is comprised of Messrs. Sun, Yuen and Hall. Messrs. Sun
and Hall are deemed independent directors of the Audit Committee. As part of its
responsibilities, the Audit Committee provides assistance to the Directors in
fulfilling their responsibility to the shareholders, potential shareholders and
the investment community relating to the Company's accounting, reporting
practices of the Company, the quality and integrity of the financial statements
of the Company, and the capital requirements of the Company. In order to assist
the Audit Committee and to more effectively communicate the purpose and
functions of the Audit Committee to the Board of Directors, management,
employees and our shareholders, the Audit Committee has adopted an Audit
Committee charter.
On October 6, 2000, Dragon entered into an acquisition agreement with
Aphatech Bioengineering to acquire its rights and technology relating to
developing a Hepatitis B vaccine through the application of genetic techniques
on hamster ovary cells. The purchase price was $4 million. Alphatech
Bioengineering is jointly owned by Dr. Longbin Liu and Mr. Philip Yuen. See
"Certain Transactions". Because of this transaction, Mr. Yuen is not deemed
independent for the purposes of the Audit Committee.
In accordance with SEC regulations, the following is the Audit Committee
Report. Such report is not deemed to be filed with the SEC.
Report of the Audit Committee
The Audit Committee oversees the financial reporting process for the
Company on behalf of the Board of Directors. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the annual financial statements
included in the annual report and filed with the Securities and Exchange
Commission as well as the unaudited financial statements filed with the
Company's quarterly reports on Form 10-Q.
In accordance with Statements on Accounting Standards (SAS) No. 61,
discussions were held with management and the independent auditors regarding the
8
acceptability and the quality of the accounting principles used in the reports.
These discussions included the clarity of the disclosures made therein, the
underlying estimates and assumptions used in the financial reporting, and the
reasonableness of the significant judgments and management decisions made in
developing the financial statements. In addition, the Audit Committee has
discussed with the independent auditors their independence from Dragon and its
management, including the matters in the written disclosures required by
Independence Standards Board Standard No. 1.
The Audit Committee has also met and discussed with Dragon's management,
and its independent auditors, issues related to the overall scope and objectives
of the audits conducted, the internal controls used by Dragon, and the selection
of Dragon's independent auditors. In addition, the Audit Committee discussed
with the independent auditors with and without management present the specific
results of audit investigations and examinations and the auditor's judgments
regarding any and all of the above issues.
Pursuant to the reviews and discussions described above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, for filing with the Securities and Exchange Commission.
By the Audit Committee
Mr. Greg Hall
Mr. Philip Yuen Pak Yiu
Dr. Yiu Kwong Sun.
Executive Officers of Dragon
The names, ages and background for at least the past five years for each
person who served as an executive officer during the past fiscal year is as
follows:
Name Position Age Period
---- -------- --- ------
Dr. Alexander Wick President and Director 64 September 1998 - present
Longbin Liu Director 39 September 1998 - present
President and Chief Executive September 1998 - September 2002
Officer
James Harris Vice President, Marketing and 49 January 2003 - present
Sales
Robert Walsh VP, Marketing and Sales 42 January 2003 - present
Director, Corporate Development April 2000 - January 2003
Matthew Kavanagh Secretary, Principal Financial 47 July 2001 - present
and Accounting Officer
Rita Jervis Vice President, Corporate 44 December 2000 - November 2002
Development
Anna Liu Controller 34 September 1998 - March 31, 2002
Dr. Alexander Wick. See "Election of Directors."
Dr. Longbin Liu, M.D. See "Election of Directors."
9
Mr. James Harris is the Vice President Marketing and Sales for the Company.
Mr. Harris has over 22 years of experience within the above field in several
capacities of increasing responsibility, working with various firms ranging from
large multinationals to small generic companies. Mr. Harris spent eight years
with Amgen most recently as a National Accounts Manager and ten years with Bayer
in various sales and marketing capacities.
Mr. Robert Walsh is Director, Corporate Development. And was the Vice
President Marketing and Sales for the Company. Mr. Walsh joined the Company in
April of 2000 and was the Vice President of Marketing and Sales for the Company
until January 2003. Mr. Walsh served for 22 years in Special Operations and
Medical Intelligence assignments in the U.S. Army. Prior to joining the Company,
Mr. Walsh held the position of International Marketing Manager with a
Seattle-based biotechnology company.
Mr. Matthew Kavanagh, CA is Director of Finance and Corporate Compliance
(Principal Accounting and Financial Officer) and Secretary of the Company. Mr.
Kavanagh joined Dragon in July 2001 and brings 14 years experience as a
Chartered Accountant in both public practice and industry. For the past eight
years, Mr. Kavanagh has been the Controller and Senior Financial Officer for a
publicly listed venture capital corporation and, most recently, for a private
international auction and liquidation company.
Ms. Rita Jervis, RN, B.Comm. was the Vice President Corporate Development
for the Company until November 1, 2002. Ms Jervis has 15 years of strategic
planning, product development and marketing experience in the biotechnology
industry. Ms. Jervis held marketing and project management positions with QLT
Inc. prior to forming a biotechnology consulting firm through which she worked
with many emerging health sector companies in hands-on project management and
interim senior executive roles. In addition to her work with industry, Ms.
Jervis served as founding Managing Director of BIRC Corporation, a biotechnology
venture capital organization, and Executive Director of both the B.C.
Biotechnology Alliance and the B.C. Consortium for Clinical Trials. Ms. Jervis
left the Company in November, 2002.
Ms. Anna Liu was the Controller for the Company. Ms. Liu is a Certified
General Account Candidate and has been working as an accountant for North
American companies with Chinese operations for five years. Ms. Liu received her
Masters in Economics from the University of British Columbia. Ms. Liu left the
Company in March 2002.
Report on Executive Compensation
The Board of Directors has furnished the following report on executive
compensation:
Dragon has developed and implemented a compensation policy, plan, and
program which attempts to enhance the profitability of Dragon, and thus
shareholder value, by aligning closely the financial interests of Dragon
executive officers with those of its shareholders. For Dragon, earnings per
share growth and return on average shareholders' equity are critical elements in
the establishment of long-term incentive programs. The process involved in the
executive compensation determination for fiscal 2002 is summarized below.
Compensation for each of the persons named in the Executive Compensation
Table, as well as other senior executives, consists of a base salary, an annual
bonus, and long-term incentive compensation. Long-term incentives of stock
options.
10
The Board has approved a Human Resources Policy that provides a framework
to determine base salaries and annual bonuses after a subjective evaluation of
various factors, including salaries paid to senior managers with comparable
qualifications, experience, and responsibilities at other corporations,
individual job performance, local market conditions, and the Boards perception
of the overall financial performance of Dragon (particularly operating results),
without considering specific performance targets or objectives, and without
assigning particular weights to individual factors. As to executive officers
other than the Chief Executive Officer, the Board also considers the
recommendations made by the Chief Executive Officer.
By the Board of Directors
Dr. Alexander Wick Dr. Longbin Liu, M.D.
Dr. Ken Cai Mr. Greg Hall
Mr. Philip Yuen Pak Yiu Dr. Yiu Kwong Sun
During 2002, the Company's Compensation Committee consisted of Messrs.
Hall, Yuen and Sun, all of who are non-employee directors. No member of the
Compensation Committee has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.
The following table sets forth the compensation fiscal years 2002, 2001 and
2000 for those persons who served as president during year 2002. No other
officers or directors received annual compensation in excess of $100,000 during
year 2002.
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------------------------------------- -----------------------------------------------------------
Awards Payout
----------------------- ------------
Restricted Securities LTIP All Other
Other Annual Stock Underlying Payout ($) Compensation ($)
Year Salary Bonus ($) Compensation ($) Award(s) Options (#)
------------------------------------------------- ----------------------- ----------------------------------
Alexander Wick 2002 $0 (1) -0- -0- -0- -0- -0- -0-
President
Longbin Liu 2002 $112,500(1)(2) -0- -0- -0- -0- -0- -0-
President 2001 $168,000(2) -0- -0- -0- -0- -0- -0-
2000 $72,000(2) -0- -0- -0- 400,000 -0- -0-
Ken Cai 2002 $80,000(3) -0- -0- -0- -0- -0- -0-
Former Chief 2001 $168,000(3) -0- -0- -0- -0- -0- -0-
Financial Officer
(1) Dr. Liu resigned as President and Chief Executive Officer in September
2002. Dr. Wick was appointed President in September 2002 and has not drawn
any compensation.
11
(2) We had entered into oral consulting agreements with Dr. Liu pursuant to
which he provided administrative services to the Company. Dr. Liu, as
President, was paid $150,000 annually. The amount paid to Dr. Liu in 2002
represents Dr. Liu's salary through September 2002. The compensation
figures for the year ended December 31, 2001, include retroactive
recognition of amounts owing from prior to January 1, 2001. This consulting
agreement is terminable at will.
(3) Dr. Cai served as Chief Financial Officer from September 1998 until March
2001. Dr. Cai's salary for 2001 represents retroactive recognition of
amounts owing from prior to January 1, 2001. During 2002 Dr. Cai was paid
for consulting services to the Company.
Employment Agreements
Dr. Wick is not drawing a salary from the Company. In April 2003, Dr. Wick
received options to acquire 200,000 shares of common stock at $0.68 per share.
Effective January 2002, the Company has been paying Mr. Cai $80,000 per
year for consulting services, relating to investment opportunities and investor
relations.
Equity Compensation Plan Information
The shareholders of the Company approved the share option plan at the
Annual General Meeting held on December 18, 2001. There are currently 4,500,000
shares reserved under the plan. As of March 15, 2003, there were options to
acquire 3,288,000 shares of common stock outstanding.
The following table provides aggregate information as of the end of the
fiscal year ended December 31, 2002 with respect to all compensation plans
(including individual compensation arrangements) under which equity securities
are authorized for issuance.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
A B C
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Plan Category Number of securities to be Weighted-average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance under
warrants and rights rights equity compensation plans
(excluding securities
reflected in column A)
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders 3,288,000 $1.82 1,212,000
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders 1,050,000 $2.46 0
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 4,338,000 $1.98 1,212,000
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
The equity compensation plans not approved by security holders represents
warrants to purchase 1, 000,000 shares of common stock at $2.50 per share
granted to Dr. Liu and Novagen in connection with a Patent Development
Agreement. See "Certain Transactions". These warrants expire on January 14,
12
2007. Also included are warrants to purchase 50,000 shares at $1.70 per share,
issued for consulting services. These warrants expire on November 14, 2004.
PROPOSAL 2--RATIFICATION OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of Dragon's Audit Committee, the Board of Directors
has appointed Moore Stephens Ellis Foster Ltd., Charted Accountants, as Dragon's
independent accountants to audit the consolidated financial statements of Dragon
and its subsidiaries for the 2003 fiscal year.
Moore Stephens has served as Dragon's independent accountants for the
fiscal year ended December 31, 2002, and during the course of that fiscal year
they were also engaged by Dragon to provide certain non-audit services. During
the year ended December 31, 2002, the following fees were paid for services
provided by Moore Stephens.
Audit fees. The aggregate fees paid for the annual audit of Dragon's
financial statements included in Dragon's Form 10-K for the year ended December
31, 2002 and the review of Dragon's quarterly reports on Form 10-Q for such
year, amounted to approximately $60,000.
Financial Information Systems Design and Implementation Fees. For the year
ended December 31, 2002, Dragon paid no fees to Moore Stephens related to the
design or implementation of a hardware or software system to compile source data
underlying Dragon's financial statements or generate information significant to
Dragon's financial statements.
All Other Fees. For the year ended December 31, 2002, Dragon did not pay
Moore Stephens for any non-audit services.
The affirmative vote of the holders owning a majority of the shares of
common stock present and voting at the annual meeting is required to ratify the
appointment.
If the appointment is not ratified, Dragon's Board of Directors may select
other independent accountants. Representatives of Moore Stephens will be present
at the Annual Meeting to respond to appropriate questions from the shareholders
and will be given the opportunity to make a statement should they desire to do
so.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF MOORE STEPHENS AS OUR INDEPENDENT ACCOUNTANTS FOR THE YEAR 2003
CERTAIN TRANSACTIONS
Except as otherwise indicated below, we have not been a party to any
transaction, proposed transaction, or series of transactions in which the amount
involved exceeds $60,000, and in which, to our knowledge, any of our directors,
executive officers, five percent beneficial security holders, or any member of
the immediate family of the foregoing persons has had or will have a direct or
indirect material interest.
13
In August 1998, pursuant to a share exchange agreement, we issued 7,000,000
shares of our common stock and warrants to purchase 1,000,000 shares of our
common stock in exchange for all of the outstanding shares of Allwin Newtech
Ltd. At the time of this transaction, Messrs. Liu, Cai and Yuen were officers or
directors of Allwin Newtech. However, none of these individuals listed in the
foregoing sentence held any positions or owned shares of First Geneva
Investments, Inc., our predecessor. As a result of the acquisition; (i) the
former shareholders of Allwin Newtech became 87.5% shareholders of First Geneva
and Allwin Newtech became a wholly-owned subsidiary of First Geneva; (ii) the
President of First Geneva, Mr. Maskerine, continued as our President (until
September, 1998); and (iii) Messrs. Liu, Cai and Cheng, who were President and
directors of Allwin Newtech, became our directors. With the exception of Mr.
Maskerine, all of the other principal stockholders listed above acquired their
shares in this exchange transaction.
During 2000 and 2001, we rented space for our executive offices from Minco
Mining and Metals Corporation for CDN $2,500 per month. Mr. Cai, one of our
directors, is President of Minco Mining. We believe that this rent was
competitive with rent that would be charged by a non-affiliated landlord for
comparable space.
Messrs. Ken Cai, Jackson Cheng and Longbin Liu served as directors of Sanhe
Kailong at the time of entering into our joint venture with Sinoway Biotech.
Sanhe Kailong was formed, however, for the purpose of developing a joint venture
with Sinoway Biotech. Subsequent to the joint venture formation, Mr. Cheng
resigned from the Board of Sanhe Kailong and was replaced by Mr. Greg Hall. They
continue to serve as directors of Sanhe Kailong. Messrs. Ken Cai, Philip Yuen
and Longbin Liu also serve as officers and directors of Allwin Newtech, our
wholly-owned subsidiary. Messrs. Ken Cai, Longbin Liu and Philip Yuen had served
prior to the joint venture and continue to serve as three of the five directors
of Nanjing Huaxin, a joint venture in which we own a 75% interest.
A finder's fee of $763,150 was paid in conjunction with the sale of Units
of common stock and warrants in December, 1999. Of this amount, $175,000 was
paid to the law firm of Yung, Yu, Yuen and Company of which Mr. Philip Yuen, a
director of Dragon, is a partner.
On April 19, 1999, 135,000 shares of Dragon's common stock were issued to
four lenders as compensation for making certain loans to Dragon. One of the
lenders was Hui Min Liu, the sister of Dr. Longbin Liu, who received 22,500
shares of common stock.
On October 6, 2000, we entered into an acquisition agreement with Alphatech
Bioengineering to acquire its rights and technology relating to developing
Hepatitis B vaccine through the application of genetic techniques on hamster
ovary cells. Alphatech Bioengineering's Hepatitis B vaccine is in the
development stage. Alphatech Bioengineering is jointly owned by Dr. Longbin Liu
and Mr. Philip Yuen, two of our directors. On June 5, 2001, the Company amended
the agreement with Alphatech to allow the Company to pursue additional options
for the Hepatitis B Vaccine project. Under the terms of the amended agreement,
the Company would explore different options for the Hepatitis B Vaccine project
including, but not limited to, joint venture partnerships, establishing a
production facility, and selling the project to a third party.
In the event that the Company did not find an option regarding the
Hepatitis B Vaccine project suitable to the Company within nine months from the
date of the Amended Agreement, Dr. Longbin Liu, one of the principals of
Alphatech, would repurchase the Hepatitis B Vaccine project and assume
operational development for a purchase price of US $4.0 million, which was the
purchase price that Dragon originally paid to Alphatech. Dr. Liu was the
President and CEO of Dragon at the time of both transactions. The Company
14
decided not to pursue the project and Dr. Liu demanded to repurchase the project
on the agreed terms. Dr. Liu has paid the Company US $500,000 with the balance
of US$3.5 million, plus interest accruing at 6% per annum from September 2002,
due September 5, 2003.
The amount owing by Dr. Liu to the Company is unsecured. The Company has
requested that Dr. Liu provide collateral for the amount owing, however, Dr.
Liu, while reaffirming his intention to abide by the terms of the amended
agreement and pay the amount owing plus accrued interest when due, has declined
to do so. The amount owing is not due until September 2003, however, given the
significant amount involved and the lack of security, the Company has chosen to
conservatively value the amount owing and has set up a provision for the full
amount, less a nominal amount of $100. The Company fully intends to pursue
collection of the full amount owing, including accrued interest, when due. The
amount collected will be recorded as non-operating income when received.
Further, Dr. Liu also has a 90% interest in RecomGen, a private company
registered in China. RecomGen is developing tPA for treating heart attacks and
strokes. RecomGen was incorporated by Dr. Liu, and Dr. Liu's involvement in
RecomGen began prior to our establishment. We are currently in discussion with
Dr. Liu regarding the possible acquisition of technology and/or biotech products
from RecomGen. However, there is no understanding, commitment or agreement to
make such acquisition and no assurance can be given that any acquisition or
transaction with RecomGen will occur.
During fiscal year 2000, the Company paid $400,000 to Guanzhou Recomgen
Biotech Co. Ltd. ("Guanzhou Recomgen"), a company incorporated in China, for the
funding of its TPA research and development programs with the intention of
acquiring the technology. Guanzhou Recomgen is controlled by Dr. Longbin Liu.
Subsequent to the year-end, due to financial market and economic conditions, the
Company decided not to proceed with the funding and the acquisition. In
accordance with the agreement, Guanzhou Recomgen refunded the $400,000 to the
Company.
Pursuant to an agreement dated August 15, 1999, the Company entered into a
joint research project for the development of rhTPO drug ("rhTPO") with Shenzhen
Kelong Chuang Jian Enterprise Co. Ltd. ("Kelong"), a company incorporated in
China. Dr. Longbin Liu is a principal shareholder of Kelong. The Company's
maximum commitment to this project is US$543,540 (RMB 4,500,000). Under the
terms of the agreement, Kelong and the Company will jointly own the drug licence
of rhTPO. Kelong and the Company will then obtain its own individual production
permit of the rhTPO drug product. The Company paid $483,140 (RMB 4,000,000)
towards the early development phase of this project in fiscal year 2000 and the
amount has been accounted for as research expense. Dragon remaining obligation
was US$60,400 (RMB 500,000) for clinical testing of the rhTPO drug after the
clinical testing permit has been issued by the regulatory authorities. Dragon
has decided to no longer pursue development of TPO and is pursuing the sale of
the technology to a third party.
We have entered into a Patent Development Agreement with Dr. Longbin Liu
and Novagen whereby we have the first right to select and acquire one patent
resulting from the discover of a new gene or protein. In consideration of the
right under the Patent Development Agreement, we paid Dr. Liu and Novagen
$500,000 in the aggregate and warrants to purchase 1,000,000 shares of common
stock at an exercise price of $2.50 per share.
We have entered into a Project Development Agreement with Dr. Liu dated
January 14, 2002 whereby Dr. Liu has agreed to conduct the research and
development of G-CSF and Insulin for Dragon. Dragon will make payment for the
development of G-CSF as follows: (i)US$500,000 to be provided at the
commencement of the research in the G-CSF Project; (ii) US$500,000 to be
provided when cell-line and related technology is established and animal
experimentation commences in the G-CSF Project; and (iii) US$300,000 to be
provided when a permit for clinical trials for G-CSF has been issued by the
State Drug Administration of China ("SDA"); (iv) US$200,000 to be provided when
15
a new drug license for G-CSF is issued to Dragon by the SDA and (v)U.S$500,000
to be paid as a bonus if the SDA issues the new drug license for G-CSF to Dragon
before January 14, 2004.
Dragon will make payment for the development of Insulin as follows: (i)
US$750,000 to be provided by at the commencement of the research in the Insulin
Project; (ii) US$750,000 to be provided when cell-line and related technology is
established and animal experimentation commences in the Insulin Project; (iii)
US$300,000 to be provided when a permit for clinical trials for Insulin has been
issued by the SDA; (iv) US$200,000 to be provided when a new drug license for
Insulin is issued to Dragon by the SDA and (v) US$500,000 to be paid as a bonus
if the SDA issues the new drug license for Insulin to Dragon before January 14,
2005.
For both the G-CSF and Insulin Projects: (i) If Dragon elects to cease
development of the project it will forfeit any payments made and lose ownership
of the Project, but it will not be obligated to make any further payments toward
the Project; and (ii) if an application for permit for clinical trials is not
submitted within three years with respect to the G-CSF Project by or four years
with respect to the Insulin Project or if the SDA rejects the Project for
technical or scientific reasons or if development of the project is terminated
by Dr. Liu, then the Dr. Liu will refund to Dragon all amounts paid, without
interest or deduction, with respect to the Project within six months.
STOCK PERFORMANCE GRAPH
The stock price performance graph below is required by the Securities and
Exchange Commission. It shall not be deemed to be incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, or under the Securities Exchange Act of
1934, except to the extent that we specifically incorporates this information by
reference, and shall not otherwise be deemed soliciting material or filed under
such acts.
The following graph compares, beginning at the fiscal year end 1998, which
represents the first fiscal year in which the Company's common stock was quoted
on the OTC Bulletin Board under the symbol DRUG, the cumulative stockholders
return for the (i) the Company; (ii) the Amex Biotech Index and Standard &
Poor's Pharma & Biotech Index. Due to the discontinuation of the S&P Drug Index
by Standard & Poor's in 2002, the Company has substituted the Standard & Poor's
Pharma & Biotech Index (the "S&P Pharma & Biotech") a substantially similar
index in its place. The graph assumes the investment of $100 on December 31,
1998, in the Company's common stock and the Amex Biotech Index, and further
assumes no payment or reinvestment of dividends. Further, the graph does not
reflect price fluctuations that may have occurred during the year. Finally, the
historical stock price performance of the Company's common stock in the graph is
not necessarily indicative of future stock price performance.
16
Dragon Pharmaceutical VS. Amex Biotech and S&P Pharma & Biotech
[GRAPH OMITTED]
12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
-------- -------- -------- -------- --------
Dragon Pharmaceutical $100.00 $491.65 $266.66 $182.00 $61.00
Amex Biotech $100.00 $211.59 $342.87 $313.62 $182.72
S&P Pharma & Biotech $100.00 $91.69 $121.88 $105.04 $83.92
Proposals of Stockholders
To be considered for inclusion in Dragon's Proxy Statement and form of
proxy for next year's annual meeting, shareholder proposals must be delivered to
the Secretary of Dragon, 1055 West Hastings Street, Suite 1900, Vancouver,
British Columbia V6E 2E9, no later than 5:00 p.m. on January 16, 2003. However,
if the date of next year's annual meeting is set more than 30 days from the date
of this year's meeting, the notice must be received by the Secretary in a
reasonable time before we mail our proxy statement. All proposals must meet the
requirements of Rule 14a-8 of the Exchange Act.
For any proposal that is not submitted for inclusion in next year's proxy
statement (as described in the preceding paragraph) but is instead sough to be
presented directly at next year's annual meeting, SEC rules permit management to
vote proxies in its discretion if Dragon (a) receives notice of the proposal
before the close of business on April 1, 2004, and advises shareholders in the
next year's proxy statement about the nature of the matter and how management
intends to vote on such matter, or (b) does not receive notice of the proposal
prior to the close of business on April 1, 2004.
Notices of intention to present proposal at the 2004 Annual Meeting should
be address to Dragon, 1055 West Hastings Street, Suite 1900, Vancouver, British
Columbia V6E 2E9, Attention: Secretary. Dragon reserves the right to reject,
rule out of order, or take other appropriate action with respect to any proposal
that does not comply with these and other applicable requirements.
17
Annual Report to Stockholders
The Annual Report on Form 10-K for the year ended December 31, 2002,
including audited financial statements, has been mailed to the stockholders
concurrently with this proxy statement, but such report is not incorporated in
this proxy statement and is not deemed to be a part of the proxy solicitation
material.
OTHER BUSINESS
Dragon does not know of any business to be presented for action at the
meeting other than those items listed in the notice of the meeting and referred
to herein. If any other matters properly come before the meeting or any
adjournment thereof, it is intended that the proxies will be voted by the Proxy
Holders in accordance with their best business judgment.
By Order of the Board of Directors
/s/Matthew Kavanagh
Vancouver, British Columbia Matthew Kavanagh, Secretary
18
ANNUAL GENERAL MEETING OF MEMBERS OF
Dragon Pharmaceutical Inc. (the "Company")
TO BE HELD AT Suite 1900, 1055 West Hastings Street
Vancouver, B.C. V6E 2E9
ON Thursday, June 26, 2003, AT 10:00 AM
The undersigned member ("Registered Shareholder") of the Company hereby
appoints, Dr. Alexander Wick, a Director of the Company, or failing this person,
Dr. Ken Cai, a Director of the Company, or in the place of the foregoing,
______________________________ as proxyholder for and on behalf of the
Registered Shareholder with the power of substitution to attend, act and vote
for and on behalf of the Registered Shareholder in respect of all matters that
may properly come before the Meeting of the Registered Shareholders of the
Company and at every adjournment thereof, to the same extent and with the same
powers as if the undersigned Registered Shareholder were present at the said
Meeting, or any adjournment thereof.
The Registered Shareholder hereby directs the proxyholder to vote the securities
of the Company registered in the name of the Registered Shareholder as specified
herein.
Proposals (For full detail of each item, please see the enclosed Notice of
Meeting and Proxy Statement.)
1. To elect the following nominees to serve as directors, each to hold office
until 2004 annual meeting of shareholders or until his/her successor has
been duly elected and qualified. o
Nominees:
Dr.Alexander Wick Dr. Longbin Liu Dr. Ken Cai
Greg Hall Dr. Y.K. Sun Philip Yuen
________ FOR ALL NOMINEES ________ ABSTAIN
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through his/her name in the list above.)
2. To ratify the appointment of Moore Stephens Ellis Foster, Ltd., Chartered
Accountants, as independent accountants to audit Dragon's financial
statements for the year ending December 31, 2003. For
________ FOR ________ AGAINST ________ ABSTAIN
3. To transact such other business as may properly come before the Meeting
________ FOR ________ AGAINST ________ ABSTAIN
The undersigned Registered Shareholder hereby revokes any proxy previously given
to attend and vote at said Meeting.
SIGN HERE:
-----------------------------------------------------
Please Print Name:
-----------------------------------------------------
Date:
-----------------------------------------------------
Number of Shares
Represented by Proxy:
-----------------------------------------------------
THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED AND DATED.
SEE IMPORTANT INFORMATION AND INSTRUCTIONS ON REVERSE
INSTRUCTIONS FOR COMPLETION OF PROXY
1. This Proxy is solicited by the Management of the Company.
2. This form of proxy ("Instrument of Proxy") must be signed by you, the
Registered Shareholder, or by your attorney duly authorized by you in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and if executed by an attorney, officer,
or other duly appointed representative, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.
3. If this Instrument of Proxy is not dated in the space provided, authority
is hereby given by you, the Registered Shareholder, for the proxyholder to
date this proxy seven (7) calendar days after the date on which it was
mailed to you, the Registered Shareholder, by o.
4. A Registered Shareholder who wishes to attend the Meeting and vote on the
resolutions in person, may simply register with the scrutineers before the
Meeting begins.
5. A Registered Shareholder who is not able to attend the Meeting in person
but wishes to vote on the resolutions, may do the ------------------
following:
(a) appoint one of the management proxyholders named on the Instrument of
Proxy, by leaving the wording appointing a nominee as is (i.e. do not
strike out the management proxyholders shown and do not complete the
blank space provided for the appointment of an alternate proxyholder).
Where no choice is specified by a Registered Shareholder with respect
to a resolution set out in the Instrument of Proxy, a management
appointee acting as a proxyholder will vote in favour of each matter
identified on this Instrument of Proxy and for the nominees of
management for directors and auditor as identified in this Instrument
of Proxy;
OR
(b) appoint another proxyholder, who need not be a Registered Shareholder
of the Company, to vote according to the Registered Shareholder's
instructions, by striking out the management proxyholder names shown
and inserting the name of the person you wish to represent you at the
Meeting in the space provided for an alternate proxyholder. If no
choice is specified, the proxyholder has discretionary authority to
vote as the proxyholder sees fit.
6. The securities represented by this Instrument of Proxy will be voted or
withheld from voting in accordance with the instructions of the Registered
Shareholder on any poll of a resolution that may be called for and, if the
Registered Shareholder specifies a choice with respect to any matter to be
acted upon, the securities will be voted accordingly. Further, the
securities will be voted by the appointed proxyholder with respect to any
amendments or variations of any of the resolutions set out on the
Instrument of Proxy or matters which may properly come before the Meeting
as the proxyholder in its sole discretion sees fit.
If a Registered Shareholder has submitted an Instrument of Proxy, the Registered
Shareholder may still attend the Meeting and may vote in person. To do so, the
Registered Shareholder must record his/her attendance with the scrutineers
before the commencement of the Meeting and revoke, in writing, the prior votes.
================================================================================
To be represented at the Meeting, this proxy form must be received at the office
of Computershare Trust Company of Canada by mail or by fax no later than forty
eight (48) hours (excluding Saturdays, Sundays and holidays) prior to the time
of the Meeting, or adjournment thereof or may be accepted by the Chairman of the
Meeting prior to the commencement of the Meeting. The mailing address is:
================================================================================
Computershare Trust Company of Canada
Proxy Dept. 100 University Avenue 9th Floor
Toronto Ontario M5J 2Y1
================================================================================
Fax: Within North American: 1-866-249-7775 Outside North America:(416) 263-9524
================================================================================