SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, For Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
POLYDEX PHARMACEUTICALS LIMITED
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(Name of Registrant as Specified in Its Charter
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
TO OUR MEMBERS:
The 1999 Annual General Meeting of the Members will be held at 10:00 a.m.,
local time, on Thursday, June 24, 1999, at the registered office of the
Company at Sandringham House, 83 Shirley Street, Nassau, Bahamas.
At the Annual General Meeting, Members will elect two Directors, the
names of whom are set forth in the accompanying Proxy Statement, to serve
until the Annual General Meeting in 2002 or until their successors are
elected. Members will also vote on a proposal to amend the Articles of
Association to set the voting power of the Company's Class B Preferred Shares
at two votes per share. In addition, Members will vote on a proposal to amend
the Articles of Association to increase the authorized Common Shares of the
Company from four million to ten million Common Shares. Management will also
report on fiscal year 1999 results. We urge you to attend the meeting and to
vote for these proposals. These matters are described in more detail in the
attached Proxy Statement, which we encourage you to read carefully.
The formal notice of the Annual General Meeting and the Proxy Statement
containing information relative to the meeting follow this letter.
Whether or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card and return it in the envelope provided to assure
that your shares will be voted. If you do attend the meeting, and the Board
of Directors joins me in hoping you will, there will be an opportunity to
revoke your proxy and to vote in person.
Sincerely,
George G. Usher
Chairman of the Board, President
and Chief Executive Officer
May 24, 1999
POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
NOTICE OF 1999 ANNUAL GENERAL MEETING OF THE MEMBERS
May 24, 1999
NOTICE IS HEREBY GIVEN that the 1999 Annual General Meeting of the
Members of Polydex Pharmaceuticals Limited (the "Company") will be held at
the registered office of the Company at Sandringham House, 83 Shirley Street,
Nassau, Bahamas, on Thursday, June 24, 1999, at 10:00 a.m., local time, for
the following purposes:
1. To vote on the proposal to elect two directors to the Company's Board of
Directors, the names of whom are set forth in the accompanying Proxy
Statement, to serve until the Annual General Meeting of the Members in
2002 or until their successors are elected;
2. To vote on the proposal to amend the Company's Articles of Association
to set the voting power of the Company's Class B Preferred Shares at two
votes per share;
3. To vote on the proposal to amend the Company's Articles of Association
to increase the authorized Common Shares of the Company from four
million to ten million Common Shares;
4. To transact such further or other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 6, 1999,
as the date for the determination of the Members entitled to notice of, and
to vote at, the meeting and any adjournment thereof (the "Record Date").
Only holders of the Common Shares and the Class B Preferred Shares of record
at the close of business on the Record Date are entitled to notice of, and to
vote at, the 1999 Annual General Meeting. The Company's Annual Report to
Shareholders for the year ended January 31, 1999, is being mailed to Members
with the Proxy Statement.
The Proxy Statement which accompanies this Notice contains additional
information regarding the proposals to be considered and voted upon at the
Annual General Meeting, and Members are encouraged to read it in its entirety.
You are cordially invited to attend the 1999 Annual General Meeting.
Whether or not you expect to be present at the Annual General Meeting, please
complete, date and sign the enclosed proxy card and return it promptly in the
envelope provided. If you do attend the Annual General Meeting, you may
revoke your Proxy in accordance with the methods described in the Proxy
Statement under the heading "Solicitation and Revocability of Proxies" and
vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS,
SHARON L. WARDLAW
Secretary
May 24, 1999
POLYDEX PHARMACEUTICALS LIMITED
Sandringham House, 83 Shirley Street, Nassau, Bahamas
PROXY STATEMENT
1999 Annual General Meeting, June 24, 1999
SOLICITATION AND This Proxy Statement ("Proxy Statement") is expected to be
REVOCABILITY OF mailed on or about May 18, 1999, to the holders of the
PROXIES Common Shares and the Class B Preferred Shares
(the"Members") of Polydex Pharmaceuticals Limited (the
"Company") in connection with the solicitation by the Board of Directors of the
Company for the 1999 Annual General Meeting of the Members ("Annual Meeting") to
be held at 10:00 a.m., local time, on Thursday, June 24, 1999 at the Company's
registered office at Sandringham House, 83 Shirley Street, Nassau, Bahamas.
Although the Company believes that the solicitation of proxies will be
primarily by mail, proxies may also be solicited personally or by telephone
by officers and employees of the Company who will not receive additional
compensation for such solicitation. The cost of solicitation of proxies will
be borne directly by the Company. All dollar amounts in this proxy statement
are stated in U.S. dollars unless otherwise indicated.
Proxies given by Members for use at the Annual Meeting may be revoked at
any time prior to their use. In addition to revocation in any manner
permitted by Bahamian law, a proxy may be revoked in any one of the following
ways:
(a) by signing a form of proxy bearing a later date then the proxy to be
revoked, and depositing it with the Secretary of the Company prior to
the Annual Meeting;
(b) as to any matter on which a vote has not already been cast pursuant to
the authority conferred by such proxy, by signing written notice of
revocation and delivering it to either the Secretary of the Company or
the Chairman of the Annual Meeting;
(c) by attending the Annual Meeting in person and personally voting the
shares represented by the proxy; or
(d) by instrument in writing executed by the Member or by his attorney
authorized in writing, or, if the Member is a corporation, under its
corporate seal, or by an officer or attorney thereof duly authorized,
and deposited either at the head office of the Company at any time up
to and including the last business day preceding the day of the Annual
Meeting, or any adjournment thereof, at which the proxy is to be used,
or with the Chairman of such Annual Meeting on the day of the meeting,
or any adjournment thereof.
PURPOSES OF The Annual Meeting has been called for the purposes of
ANNUAL MEETING (1) electing directors, (2) amending the Articles of
Association to set the voting power of the Company's Class B
Preferred Shares at two votes per share, (3) amending the Articles of
Association to increase the authorized Common Shares of the Company from four
million to ten million Common Shares and (4) transacting such other business as
may properly come before the meeting.
-1-
VOTING OF The Board of Directors has fixed the close of business on
SECURITIES May 6, 1999, as the date for determining the Members
entitled to notice of, and to vote at, the Annual Meeting and any adjournment
thereof (the "Record Date"). A total of 3,016,917 Common Shares of a par value
of U.S. $0.0166 (the six recurring) each (the "Common Shares") and 899,400
Class B Preferred Shares of a par value of U.S. $0.0166 (the six recurring) each
(the "Class B Preferred Shares") were outstanding at the close of business on
that date. Each Common Share and each Class B Preferred Share is entitled to
one vote on any matter presented at the Annual Meeting for consideration and
action by the Members. In addition, the Company has authorized 100,000 Class A
Preferred Shares of a par value of U.S. $0.10 each (the "Class A Preferred
Shares"), none of which are outstanding.
A quorum for the transaction of business at the meeting shall be members
present holding or represented by proxy between them not less than one-third
of all Common Shares which are issued at the record date fixed by the
directors and which entitle the holder thereof to vote. Voting of Common
Shares and Class B Preferred Shares is on a non-cumulative basis. Assuming
the presence of a quorum, the affirmative vote of the holders of a majority
of the Common Shares and Class B Preferred Shares voting at the meeting is
required for approval of (i) the election of each of the nominees for
director, (ii) the amendment to set the voting power of the Company's Class B
Preferred Shares at two votes per share, and (iii) the amendment to increase
the authorized Common Shares of the Company from four million to ten million
Common Shares.
All valid proxies received in response to this solicitation will be
voted in accordance with the instructions indicated thereon by the Members
giving such proxies. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, SUCH PROXIES
WILL BE VOTED FOR (1) THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THIS
PROXY STATEMENT, (2) THE AMENDMENT TO SET THE VOTING POWER OF THE COMPANY'S
CLASS B PREFERRED SHARES AT TWO VOTES PER SHARE, AND (3) THE AMENDMENT TO
INCREASE THE AUTHORIZED SHARE CAPITAL OF THE COMPANY TO TEN MILLION COMMON
SHARES.
For voting purposes, abstentions will be counted for the purpose of
establishing a quorum and will not be voted. Broker non-votes will not be
counted for the purpose of establishing a quorum and will not be voted.
OWNERSHIP OF The following tables set forth certain information regarding
VOTING beneficial ownership of the Common Shares and the Class B
SECURITIES Preferred Shares, as of May 6, 1999, by (i) persons owning
beneficially 5% or more of the Class B Preferred Shares and/or the Common
Shares, (ii) each of the Company's directors and certain of its executive
officers, and (iii) all directors and executive officers as a group:
SECURITY OWNERSHIP OF MANAGEMENT:
Name and Title Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Class B George G. Usher 599,400 66.64%
Preferred Shares Chairman of the Board,
Director, President and CEO
Class B Thomas C. Usher 300,000 33.36%
Preferred Shares Vice-Chairman and Director
Class B All Directors and Executive 899,400 100%
Preferred Shares Officers as a Group
-2-
Name and Title Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ---------------- -------------------- ------------
Common Shares Joseph Buchman 101,736 (2) 3.24%
Director
Common Shares Derek John Michael Lederer ---- ----
Director
Common Shares Natu M. Patel (3) 3,900 ----
Former Director and
Vice President
Common Shares John L.E. Seidler ---- ----
Director
Common Shares George G. Usher 126,335 (4) 4.02%
Chairman of the Board,
Director, President and CEO
Common Shares Ruth L. Usher 642,472 (5) 20.47% (7)
Director
Common Shares Thomas C. Usher 642,472 (6) 20.47% (7)
Vice-Chairman and Director
Common Shares Sharon L. Wardlaw 4,240 (8) *
Secretary and Treasurer
Common Shares All Directors and Executive 878,683 (9) 27.99% (9)
Officers as a Group
(7 persons)
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* Less than one percent (1%).
(1) As of May 6, 1999, the Record Date, the Company had outstanding 899,400
Class B Preferred Shares and 3,016,917 Common Shares and options
exercisable within sixty (60) days to purchase an additional 122,077 Common
Shares, for a total of 3,138,994 Common Shares.
(2) Includes 91,736 shares owned directly by Joseph Buchman's spouse, as to
which Joseph Buchman disclaim's beneficial ownership.
(3) Natu M. Patel resigned as a Director and Vice President of the Company on
July 14, 1998.
(4) Includes 12,772 shares owned directly by George G. Usher, 100,000 shares
owned by a company controlled by George G. Usher, and 7,100 shares under
option to George G. Usher, subject to acquisition within sixty (60) days.
Also includes 6,463 shares owned directly by his spouse as to which George
G. Usher disclaims beneficial ownership.
(5) Includes 127,141 shares owned directly by Ruth L. Usher. Also includes
457,754 shares owned directly by her spouse, Thomas C. Usher, and 57,577
shares under option to Thomas C. Usher, subject to acquisition within sixty
(60) days, as to all of which Ruth L. Usher disclaims beneficial ownership.
(6) Includes 457,754 shares owned directly by Thomas C. Usher and 57,577 shares
under option to Thomas C. Usher, subject to acquisition within sixty (60)
days. Also includes 127,141 shares owned directly by his spouse, Ruth L.
Usher, as to which Thomas C. Usher disclaims beneficial ownership. Does
not include shares owned by George G. Usher, his son, or by the family of
George G. Usher.
-3-
(7) Percent of class of the combined holdings of both Ruth L. Usher and Thomas
C. Usher, each of whom disclaims beneficial ownership as to the holdings of
the other.
(8) Includes 2,040 shares owned directly by Sharon L. Wardlaw and 2,200 shares
under option to Sharon L. Wardlaw, subject to acquisition within sixty (60)
days.
(9) Includes 101,736 shares beneficially owned by Joseph Buchman, 126,335
shares beneficially owned by George G. Usher, 692,472 shares beneficially
owned in total by Ruth L. Usher and Thomas C. Usher, and 4,240 shares
beneficially owned by Sharon L. Wardlaw.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
- -------------- ------------------- -------------------- ------------
Class B George G. Usher 599,400 66.64%
Preferred Shares 421 Comstock Road
Toronto, Ontario,
Canada M1L 2H5
Class B Thomas C. Usher 300,000 33.36%
Preferred Shares 421 Comstock Road
Toronto, Ontario,
Canada, M1L 2H5
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class (1)
Common Shares Ruth L. Usher 642,472 (2) 20.47% (4)
421 Comstock Road
Toronto, Ontario,
Canada M1L 2H5
Common Shares Thomas C. Usher 642,472 (3) 20.47% (4)
421 Comstock Road
Toronto, Ontario
Canada M1L 2H5
Common Shares Alec D. Keith 219,681 7.00%
4802 N. Greentree Drice
Litchfield Park, AZ 85340
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(1) As of May 6, 1999, the Record Date, the Company had outstanding 899,400
Class B Preferred Shares and 3,016,917 Common Shares and options
exercisable within sixty (60) days to purchase an additional 122,077 Common
Shares, for a total of 3,138,994 Common Shares.
(2) Includes 127,141 shares owned directly by Ruth L. Usher. Also includes
457,754 shares owned directly by her husband, Thomas C. Usher, and 57,577
shares under option to Thomas C. Usher, subject to acquisition within sixty
(60) days, as to all of which Ruth L. Usher disclaims beneficial ownership.
(3) Includes 457,754 shares owned directly by Thomas C. Usher and 57,577 shares
under option to Thomas C. Usher, subject to acquisition within sixty (60)
days. Also includes 127,141 shares owned directly by his wife, Ruth L.
Usher, as to which Thomas C. Usher disclaims beneficial ownership. Does
not include shares owned by George G. Usher, his son, or by the family of
George G. Usher.
-4-
(4) Percent of class of the combined holdings of both Ruth L. Usher and Thomas
C. Usher, each of whom disclaims beneficial ownership as to the holdings of
the other.
BOARD OF The Board of Directors currently consists of six members. The
DIRECTORS directors of the Company are divided into three classes,
designated as Class I, Class II and Class III. At each Annual Meeting, one
class of directors is elected to serve for a three-year term or until their
respective successors are duly elected and qualified. Natu M. Patel resigned as
a Class II Director and Vice President effective July 14, 1998. Thomas R. Ulie
resigned as a Class I Director effective June 22, 1998. On August 25, 1998,
John L.E. Seidler was appointed by the Board of Directors as a Class I Director.
Independent Directors Joseph Buchman and Derek John Michael Lederer each
received $6,520 as compensation for serving on the Board for the fiscal year
ending January 31, 1999, while John L.E. Seidler received $5,680. Derek John
Michael Lederer received additional compensation for serving as Chair of the
Audit Committee of the Board during the Company's fiscal year ending January 31,
1999 totaling CDN$5,000, as well as options to purchase 750 Common Shares of the
Company's stock at an exercise price of $6.87 per share which expire May 31,
2004. George G. Usher and Thomas C. Usher, both of whom are directors, receive
payment as officers and employees of the Company. Prior to his resignation,
Natu M. Patel received payment as an officer of the Company. Family
relationships among the Company's officers and directors: Thomas C. Usher and
George G. Usher are father and son, and Thomas C. Usher and Ruth L. Usher are
husband and wife.
The following provides, as of May 6, 1999, the continuing directors whose
terms of office will continue after the Annual Meeting, their principal
occupation and employment, age, the year in which each became a director of the
Company, and directorships in companies having securities registered pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING IN 2000 (CLASS III DIRECTORS)
Year First
Elected
Name and Occupation Age Director
------------------- --- --------
GEORGE G. USHER, Chairman of the Board since 40 1988
January 27, 1998. President and Chief Executive
Officer of the Company since 1993 and 1996,
respectively. Vice President of Dextran
Products Limited, a subsidiary of the Company,
since 1987. Previously employed by the Company
in various positions since 1982.
THOMAS C. USHER, Vice-Chairman of the Company 84 1979
since November 1996. Chairman and Chief
Executive Officer of the Company from May 1972
to November 1996. Chairman of Dextran Products
Limited and of all of the Company's other
subsidiaries since their formation.
-5-
CONTINUING DIRECTORS WHOSE TERMS EXPIRE AT THE
ANNUAL MEETING IN 2001 (CLASS I DIRECTORS)
Year first
Elected
Name and Occupation Age Director
------------------- --- --------
JOSEPH BUCHMAN, Senior Account Executive with the 59 1981
Metropolitan Life Insurance Company since 1979.
JOHN L.E. SEIDLER, Executive Vice President of 64 1998
Manchester Partners International, Inc., a career
management consulting firm, since 1998. He previously
was employed by Pfizer Pharmaceuticals Group as
Director of International Public Affairs from 1996
through 1998, and as Country Manager, Czech Republic
from 1993 through 1996.
PROPOSAL NO. 1
ELECTION OF BOARD MEMBERS
NOMINEES FOR TERMS
EXPIRING AT THE ANNUAL MEETING IN 2002 (CLASS II DIRECTORS)
The following two persons, each of whom is currently serving as a director,
have been nominated for re-election by the Board of Directors to serve as
directors for a term expiring at the Annual Meeting in 2002:
Year first
Elected
Name and Occupation Age Director
------------------- --- --------
DEREK JOHN MICHAEL LEDERER, Chartered 57 1998
Accountant. Principal of Derek Lederer, C.A., a
public accounting firm, since
1970.
84 1979
RUTH L. USHER, Retiree since 1991.
All nominees for director have indicated their willingness to serve. The
Board of Directors has no reason to believe that any of the director nominees
will be unable to serve as a director. In the event, however, of the death or
unavailability of any director nominee or nominees, the proxy to that extent
will be voted for such other person or persons as the Board of Directors may
recommend.
VOTE REQUIRED. The affirmative vote of the holders of a majority of the
Common Shares and the Class B Preferred Shares present, in person or by proxy,
and entitled to vote at the Annual Meeting is required to elect each of the
nominees for director. All proxies will be voted to elect each of the nominees
for director unless a contrary vote is indicated on the enclosed proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE NOMINEES FOR DIRECTOR.
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PROPOSAL NO. 2
AMENDMENT TO ARTICLES OF ASSOCIATION TO SET THE
VOTING POWER OF THE COMPANY'S CLASS B PREFERRED SHARES
AT TWO VOTES PER SHARE
GENERAL. Currently, Article 2(d)(2) of the Articles of Association of
the Company (the "Articles") sets the voting power of the Company's Class B
Preferred Shares at one vote per share, as follows:
(2) the Class B Preferred Shares shall bestow upon the holders
thereof the right of one vote per share, which may be increased to five
votes per share upon the consent of the majority of the holders of the
Common Shares and the Class B Preferred Shares.
. On January 29, 1999, the Board of Directors adopted a resolution to
amend Article 2(d) of the Articles to set the voting power of the Company's
Class B Preferred Shares at two votes per share (the "Class B Preferred
Shares Amendment").
TEXT OF CLASS B PREFERRED SHARES AMENDMENT. The Class B Preferred
Shares Amendment will be formally implemented by amending the present Article
2(d) of the Articles as follows:
Delete the current paragraph 2(d)(2) of Article 2 in its entirety and
substitute therefor:
(2) the Class B Preferred Shares shall bestow upon the holders
thereof the right of two votes per share, which may be increased
incrementally up to five votes per share upon the consent of the
holders of a majority-in-interest of the Common Shares and the Class B
Preferred Shares.
REASONS FOR THE CLASS B PREFERRED SHARES AMENDMENT. The purpose of the
Class B Preferred Shares Amendment is to set the voting power of the
Company's Class B Preferred Shares at two votes per share.
ANTI-TAKEOVER EFFECT OF THE CLASS B PREFERRED SHARES AMENDMENT. The
increase in voting power of the Class B Preferred Shares could potentially be
used to discourage attempts by others to obtain control of the Company
through merger, tender offer, proxy contest or otherwise, which attempts
could increase the value of the Company's stock, by making such attempts more
difficult or costly to achieve.
The Board of Directors does not presently contemplate recommending to
the shareholders for their adoption any further amendments to the Articles of
Association that would affect the ability of third parties to effectuate a
change in control of the Company.
EFFECT OF THE CLASS B PREFERRED SHARES AMENDMENT. Upon Member approval
of the Class B Preferred Shares Amendment, the voting power of the Company's
Class B Preferred Shares will increase from one vote per share to two votes
per share.
VOTE REQUIRED. The affirmative vote of the holders of a majority of the
Common Shares and the Class B Preferred Shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to approve the
Class B Preferred Shares Amendment. All proxies will be voted to approve the
Class B Preferred Shares Amendment unless a contrary vote is indicated on the
enclosed proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
CLASS B PREFERRED SHARES AMENDMENT TO SET THE VOTING POWER OF THE COMPANY'S
CLASS B PREFERRED SHARES AT TWO VOTES PER SHARE.
-7-
PROPOSAL NO. 3
AMENDMENT TO ARTICLES OF ASSOCIATION TO INCREASE THE
AUTHORIZED SHARE CAPITAL TO TEN MILLION COMMON SHARES
GENERAL. Currently, Article 2(a) of the Articles of Association of the
Company provides that the authorized share capital of the Company is $91,650
divided into 4,000,000 Common Shares of $0.016 par value each, 100,000 Class
A Preferred Shares of $0.10 par value each, and 899,400 Class B Preferred
Shares of $0.016 par value each. On January 29, 1999, the Board of Directors
adopted a resolution to amend Article 2(a) of the Articles to increase the
authorized Common Shares of the Company from four million to ten million
Common Shares (the "Authorized Common Shares Amendment").
TEXT OF THE AUTHORIZED COMMON SHARES AMENDMENT. The Authorized Common
Shares Amendment will be formally implemented by amending the present Article
2(a) of the Articles as follows:
Delete the current second paragraph of Article 2(a) in its entirety and
substitute therefor:
The authorized share capital of the Company is U.S. $187,650
divided into 10,000,000 Common Shares of $0.016 par value each,
100,000 Class A Preferred Shares of $0.10 par value each, and 899,400
Class B Preferred Shares of $0.016 par value each.
REASONS FOR THE AUTHORIZED COMMON SHARES AMENDMENT. The purpose of the
Authorized Common Shares Amendment is to increase the authorized Common
Shares of the Company from four million to ten million Common Shares in order
to have additional Common Shares available for issuance in connection with an
acquisition or other transaction. Currently, no agreements or understandings
with regard to acquisitions or other transactions exist, and the Company has
no plans to issue further Common Shares, except pursuant to grants of
restricted Common Shares and options to purchase Common Shares to directors,
employees, consultants and research partners in the ordinary course of its
business consistent with past practices.
EFFECT OF THE AUTHORIZED COMMON SHARES AMENDMENT. Upon Member approval
of the Authorized Common Shares Amendment, the authorized Common Shares of
the Company will increase from four million Common Shares to ten million
Common Shares.
VOTE REQUIRED. The affirmative vote of the holders of a majority of the
Common Shares and the Class B Preferred Shares present, in person or by
proxy, and entitled to vote at the Annual Meeting is required to approve the
Authorized Common Shares Amendment. All proxies will be voted to approve the
Authorized Common Shares Amendment unless a contrary vote is indicated on the
enclosed proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AUTHORIZED COMMON SHARES AMENDMENT TO INCREASE THE AUTHORIZED COMMON SHARES
OF THE COMPANY FROM FOUR MILLION TO TEN MILLION COMMON SHARES.
-8-
BOARD During the fiscal year ended January 31, 1999, there were fifteen
MEETINGS AND meetings of the Board of Directors and action was taken on three
COMMITTEES occasions by unanimous written consent of the Board of Directors
in lieu of a meeting. Each director attended at least 75% of the aggregate
number of meetings held by the Board of Directors.
The Audit Committee makes recommendations to the Board as to the
engagement of independent auditors to perform audit and non-audit services,
reviews the scope and results of their services, oversees the internal audit
function, and reviews the systems of internal control and audit with
management and the independent auditors. During the fiscal year ended
January 31, 1999, the Audit Committee held two meetings. Directors Derek
John Michael Lederer (Chair), Joseph Buchman and George G. Usher comprise the
Audit Committee.
The Board does not have any standing nominating or compensation
committees, nor are there any committees which performed similar functions.
Compensation decisions, including the granting of options, are made by George
G. Usher, Chairman, President and CEO, in his sole discretion, with the
advice of Thomas C. Usher, Vice-Chairman, and the Board as a whole.
COMPENSATION Shown below is information concerning the annual and long-term
OF EXECUTIVE compensation for services in all capacities to the Company for
OFFICERS the fiscal years ended January 31, 1999, 1998 and 1997 of those
persons who were (i) the chief executive officer of the Company at January 31,
1999 and (ii) the two other executive officer of the Company who had total
annual salary plus bonus that exceeded $100,000 for the year ended January 31,
1999 (the "Named Officers"). No other officer of the Company had a total annual
salary plus bonus that exceeded $100,000 for the year ended January 31, 1999.
SUMMARY COMPENSATION TABLE
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------ -------------
Common Shares
Underlying
Name and Fiscal Option
Principal Position Year Salary Bonus Awards (1)
- ------------------ ------ ------ ----- ------------
George G. Usher 1999 $110,000 $25,000 82,100
Chairman of the 1998 $110,000 none 57,100
Board, President 1997 $108,211 none 571,000
and Chief Executive
Officer
Thomas C. Usher 1999 $120,000 $100,000 132,577
Vice-Chairman 1998 $120,000 none 107,577
1997 $120,000 none 1,275,766
Natu M. Patel (2) 1999 $110,000 none 31,000
Former Director and 1998 $110,000 none 11,000
Vice President 1997 $110,000 none 110,000
(1) Reflects the Company's completion on June 19, 1997 of a one-for-ten reverse
stock split of its Common Shares and Class B Preferred Shares.
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(2) Natu M. Patel resigned as a Director and Vice President of the Company on
July 14, 1998. The 31,000 option to purchase Common Stock granted to Natu
M. Patel expired automatically 60 days following his resignation.
OPTION GRANTS IN FISCAL YEAR 1999
The following table sets forth information with respect to the stock
options granted to the three Named Officers during the fiscal year ended
January 31, 1999.
Number of
Securities Percent of Total Potential Realizable Value
Underlying Options Granted Price on at Assumed Rate of Stock
Options to Employees in Exercise Date of Expiration Price Appreciation
Name Granted Fiscal Year (1) Price Grant Date 5% 10%
- ---- ------- --------------- -------- -------- ---------- ----------------
George G. Usher 7,100 1.63% $5.00 $3.75 5/31/99 ---- ----
75,000 17.24% $3.75 $3.75 5/31/04 $14,062.50 $28,125.00
Thomas C. Usher 57,577 13.23% $5.00 $3.75 5/31/99 ---- ----
75,000 17.24% $3.75 $3.75 5/31/04 $14,062.50 $28,125.00
Natu M. Patel (2) 11,000 2.53% $5.00 $3.75 5/31/99 ---- ----
20,000 4.60% $3.75 $3.75 5/31/04 $ 3,750.00 $ 7,500.00
- ---------------------------
(1) A total of 435,077 stock options were granted by the Company to employees
during the fiscal year ended January 31, 1999.
(2) Natu M. Patel resigned as a Director and Vice President of the Company on
July 14, 1998. The 31,000 options to purchase Common Stock granted to Natu
M. Patel expired automatically 60 days following his resignation.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999 AND
1999 FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the three Named Officers, the
exercise of options to purchase Common Shares during the fiscal year ended
January 31, 1999, and the year-end value of unexercised options to purchase
Common Shares held by the three Named Officers at January 31, 1999.
Number of Secu-
rities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Year End; at Fiscal Year End;
Name Exercise Realized All Exercisable All Exercisable (1)
- ---- ----------- -------- ------------------- --------------------
George G. Usher ---- ---- 132,100 ----
Thomas C. Usher ---- ---- 182,577 ----
Natu M. Patel (2) ---- ---- ---- ----
- ---------------------------
(1) The market price of the Common Shares at January 29, 1999, the last trading
day preceding the Company's fiscal year end, was $3.6875 per share.
(2) Natu M. Patel resigned as a Director and Vice President of the Company on
July 14, 1998. The 31,000 option to purchase Common Stock granted to Natu
M. Patel expired automatically 60 days following his resignation.
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EXECUTIVE As of January 31, 1999, the following persons served as executive
OFFICERS officers of the Company. All executive officers serve for a one-
year term or until their successors are elected or appointed at
the meeting of the Board of Directors immediately following the Annual Meeting.
Name Age Title
- ---- --- -----
George G. Usher (1) 40 Chairman of the Board, President
and Chief Executive Officer
Thomas C. Usher (1) 84 Vice-Chairman of the Board
Sharon L. Wardlaw (2) 46 Chief Financial Officer, Secretary and
Treasurer
- -------------------------
(1) See "Board of Directors" for biographical information and period of service.
(2) Sharon L. Wardlaw has served as the Chief Financial Officer, Secretary and
Treasurer of the Company since 1994. She also currently serves as the President
of Dextran Products Limited, a subsidiary of the Company. Since joining the
Company in 1984, she has been employed in various capacities.
EMPLOYMENT George G. Usher and Thomas C. Usher are employed by the Company
AGREEMENTS pursuant to employment agreements. On December 22, 1993, the
Company entered into an employment agreement with George G. Usher which provided
for his employment as President of the Company for a five-year term commencing
February 1, 1994 at an annual salary of $65,000. This Employment Agreement was
amended on June 4, 1996 to provide for his employment as Chief Executive Officer
of the Company commencing June 4, 1996 at an annual salary of $100,000. This
Employment Agreement was renewed for an additional five-year term commencing
February 1, 1999 at an annual salary of $110,000.
On December 22, 1993, the Company entered into an employment agreement
with Thomas C. Usher which provided for his employment as Chairman and Chief
Executive Officer of the Company for a five-year term commencing February 1,
1994 at an annual salary of $120,000 subject to CPI adjustments. This
Employment Agreement was amended on November 1, 1996 to provide for his
employment as Vice-Chairman of the Company commencing November 1, 1996 at an
annual salary of $120,000. This Employment Agreement was renewed for an
additional five-year term commencing February 1, 1999 under which Thomas C.
Usher will assume the additional title of Director of Research and
Development and receive an annual salary of $170,000.
TRANSACTIONS Since February 1, 1998, with the exception of Thomas C. Usher,
WITH THE none of the Company's directors, executive officers, nominees for
COMPANY election as directors or certain relatives or associates of such
persons has been indebted to the Company in an aggregate amount in excess of
$60,000. In August 1997, the Company loaned Thomas C. Usher, its Vice-Chairman
and a director, $691,500 at an interest rate of Canadian Prime plus 1.50% (the
"Loan"). The Loan was used to partially fund a $1,000,000 payment to the State
of Florida in order to allow Thomas C. Usher to regain possession of 430,000
Common Shares of the Company then held by the State as collateral security
relating to the liquidation of insurance companies formerly owned by Thomas C.
Usher. The Loan has no specific repayment terms. The amount outstanding under
the Loan as of January 31, 1999 was $685,809.89.
-11-
SECTION 16(a) Section 16(a) of the Exchange Act, requires the Company's
BENEFICIAL directors, executive officers and any person who beneficially
OWNERSHIP owns more than ten percent of the Common Shares to file with the
REPORTING SEC, Nasdaq and the Boston Stock Exchange an initial report of
COMPLIANCE ownership and reports of changes in ownership of Common Shares.
Officers, directors and greater-than-ten percent beneficial owners are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
reports they file.
To the Company's knowledge, based solely upon a review of Forms 3 and 4 and
amendments thereto furnished to the Company during its most recent fiscal year,
and Forms 5 furnished to the Company with respect to its most recent fiscal
year, and written representations from reporting persons that no other reports
were required, the Company believes that, during the fiscal year ended January
31, 1999, all filing requirements under Section 16(a) of the Securities Exchange
Act of 1934 applicable to its executive officers, directors and greater than 10%
beneficial owners were met.
COMPANY STOCK The following performance graph compares the cumulative total
PERFORMANCE returns of the Company's Common Shares, the Nasdaq Stock Market
Index and the Nasdaq Pharmaceuticals Stock Index over a five year period ended
January 31, 1999.
-12-
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
POLYDEX PHARMACEUTICALS LIMITED
[GRAPH]
LEGEND
Symbol CRSP Total Returns Index for: 01/1994 01/1995 01/1996 01/1997 01/1998 01/1999
- ------ ---------------------------- ------- ------- ------- ------- ------- -------
Polydex Pharmaceuticals Limited 100.0 27.0 46.1 29.7 24.7 13.3
Nasdaq Stock Market (US & Foreign) 100.0 97.3 132.9 173.3 203.7 312.4
Nasdaq Pharmaceuticals Stocks 100.0 77.3 145.7 145.7 137.4 192.6
SIC 2830-2839 US & Foreign
Notes:
A. The lines represents monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 01/31/1994.
-13-
There can be no assurances that the Company's stock performance will
continue into the future with the same or similar trends depicted in the
performance graph above. The Company does not make or endorse any predictions
as to future stock performance.
FINANCIAL The consolidated balance sheet, consolidated income statement and
STATEMENTS other financial statements together with the notes thereto for
the fiscal year ended January 31, 1999 are included in the
Company's 1999 Annual Report which accompanies this Proxy Statement.
INDEPENDENT Ernst & Young Chartered Accountants has been reappointed as
AUDITORS the Company's independent auditors for the fiscal year ending
January 31, 2000. A representative of Ernst & Young Chartered
Acountants is not expected to be present at the Annual Meeting.
1999 ANNUAL The Company will provide without charge to each person solicited
REPORT AND by this Proxy Statement, upon the written request of such person,
FORM 10-K a copy of the Company's Annual Report on Form 10-K, which
includes financial statements, for the fiscal year ended
January 31, 1999. Such requests should be directed to Debbie MacAskill,
Polydex Pharmaceuticals Limited, 421 Comstock Road, Toronto, Ontario, Canada
M1L 2H5.
2000 The 2000 Annual Meeting will be held on or about June 18, 2000.
MEMBER The deadline for Members to submit proposals to the Company
PROPOSALS Secretary for inclusion in the Proxy Statement for the 2000
Annual Meeting is expected to be February 18, 2000. The
inclusion of any proposal will be subject to applicable rules of the SEC. In
the event, however, that the date of the 2000 Annual Meeting is changed by
more than 30 calendar days from the date currently contemplated, a proposal
must be received by the Company within a reasonable time before the
solicitation in connection with the meeting is made. The Company's proxies
for its 2000 Annual General Meeting of the Members will confer discretionary
authority to vote on any matter that a shareholder does not give written
notice of by April 3, 2000.
OTHER BUSINESS Management knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the
Notice of Meeting. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the Board designated proxy holders
George G. Usher and Peter T. Higgs to vote the shares represented thereby on
such matters in accordance with their judgment.
By Order of the Board of Directors,
SHARON L. WARDLAW
Secretary
May 18, 1999
-14-
POLYDEX PHARMACEUTICALS LIMITED
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned member hereby appoints Peter T. Higgs and George G.
Usher proxies, with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated
on the other side, all the shares of Polydex Pharmaceuticals Limited standing
in the name of the undersigned with all powers which the undersigned would
possess if present at the Annual General Meeting of Members of the Company to
be held on June 19, 1999 or any adjournment thereof. IF NO SPECIFICATION IS
MADE, THE PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES
LISTED ON THE REVERSE SIDE, IN FAVOR OF THE PROPOSAL TO AMEND THE ARTICLES OF
ASSOCIATION TO SET THE VOTING RIGHTS OF THE COMPANY'S CLASS B PREFERRED
SECURITIES AT TWO VOTES PER SHARE, AND IN FAVOR OF THE PROPOSAL TO AMEND THE
ARTICLES OF ASSOCIATION TO INCREASE THE AUTHORIZED COMMON SHARES OF THE
COMPANY FROM FOUR MILLION TO TEN MILLION COMMON SHARES. AS TO ANY OTHER
MATTER OR IF ANY OF SAID NOMINEES IS NOT AVAILABLE FOR ELECTION, THE PROXIES
SHALL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
Please mark
your votes as / X /
indicated in
this example
(Continued from other side)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Item 2 - PROPOSAL TO AMEND THE ARTICLES OF FOR AGAINST ABSTAIN
FOR BOTH WITHHOLD ASSOCIATION TO SET THE VOTING POWER / / / / / /
NOMINEES AUTHORITY OF THE COMPANY'S CLASS B PREFERRED
LISTED FOR ALL SHARES AT TWO VOTES PER SHARE.
Item 1 - ELECTION OF DIRECTORS / / / /
Nominees: Derek John Michael Lederer and Item 3 - PROPOSAL TO AMEND THE ARTICLES OF / / / / / /
Ruth L. Usherlie ASSOCIATION TO INCREASE THE
AUTHORIZED COMMON SHARES OF THE
WITHHELD FOR: (Write that nominee's name in the space COMPANY FROM FOUR MILLION TO TEN
provided below. MILLION COMMON SHARES.
- --------------------------------------------------------
PLEASE DATE, SIGN AS NAME APPEARS HEREON, AND RETURN
PROMPTLY. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING
AS CORPORATE OFFICER, PARTNER, ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE. PLEASE NOTE ANY CHANGES IN YOUR ADDRESS ALONGSIDE
THE ADDRESS AS IT APPEARS IN THE PROXY.
Signature(s) Dated , 1999
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- FOLD AND DETACH HERE -