Exhibit 4.24
April 27, 2004
PERSONAL & CONFIDENTIAL
Xx. Xxxxx Xxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Since July 17, 1998, the date you executed your original employment
agreement (the "Original Agreement"), and April 15, 1999 the date you executed
your revised employment agreement (the "Revised Agreement") DRAXIS Health Inc.
("DRAXIS" or the "Corporation") has developed and expanded, commensurate with
the corporate growth and staffing changes, your duties and responsibilities. In
addition, there have been modifications to the terms of the Original Agreement
and Revised Agreement. Accordingly, both parties agree that it is beneficial to
formally confirm the current terms and conditions of your employment with
DRAXIS.
1. EMPLOYMENT
Since July 1, 2003, you shall and have been employed with DRAXIS as its
Senior Vice President Corporate Development and Strategic Planning, on the terms
and conditions contained in this Agreement. You will report to the Chief
Executive Officer, of DRAXIS ("CEO"). Without limiting the scope of your duties
and responsibilities as Senior Vice President Corporate Development and
Strategic Planning, your responsibilities will be to work with the CEO of DRAXIS
and the other business unit leaders on developing, reviewing, screening and
negotiating business opportunities at the corporate level and within the
operating divisions. You will seek out new opportunities for the accretive
growth of DRAXIS and its core businesses. In that capacity you will work closely
with the business unit leaders at Draximage Inc. and Draxis Pharma Inc. and/or
other business units DRAXIS may acquire or establish. You will act in all
instances as the CEO's direct representative to and in those divisions. You will
also be a member of DRAXIS's Executive Operations Committee ("EOC") and will be
expected to enter into a cooperative working relationship with the other members
of the EOC. In addition, you will perform any additional employment
responsibilities assigned to you by the CEO of DRAXIS from time to time,
provided that such responsibilities are consistent with the executive nature of
the position.
2. BASE SALARY
DRAXIS will pay to you during the term of this Agreement, effective
January 1, 2004 a gross salary of $250,000.00 per annum ("Base Salary"), payable
semi-monthly, in arrears, in 24 equal installments of $10,416.66. Such salary
shall be subject to review in accordance with DRAXIS's regular administrative
practices of salary review applicable to the executive officers of DRAXIS. Any
salary increases shall be determined on merit on the recommendation of the CEO
of DRAXIS and approval of the Board of Directors of DRAXIS. The CEO of DRAXIS
will inform you of any increases in your salary in advance of the implementation
date.
As an officer of the Corporation, DRAXIS will provide and pay for
directors' and officers' liability insurance and in any event will indemnify and
save you harmless from any action arising within the scope of your employment
responsibilities for DRAXIS, and its Affiliates (as such term is defined in the
CANADA BUSINESS CORPORATION ACT) ("Affiliates") [hereinafter collectively
referred to as the "DRAXIS Group"].
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PERSONAL & CONFIDENTIAL Page 2
3. BENEFITS
You will be entitled to participate in all benefit plans which DRAXIS
shall, from time to time make available to its executive employees, subject to
applicable eligibility rules thereof. The benefits currently offered are:
- major medical
- drug
- dental
- group life
- long term disability
- accidental death and dismemberment
You will also be entitled to an amount equivalent to 5% of your Base
Salary in lieu of participation in DRAXIS's Retirement Savings Program.
4. STOCK OPTION PLAN
Subject to DRAXIS Board of Directors' approval, you will be eligible to
participate in the DRAXIS Stock Option Plan, copy thereof provided herewith as
Schedule "A", which DRAXIS shall, from time to time, make available to
employees, in accordance with the terms and conditions of said plan. As at the
date hereof, the following grants of stock options to you remain outstanding and
may be exercised by you in accordance with the terms and conditions pursuant to
which each grant was made and the terms of this Agreement:
NO. OF OPTIONS PRICE EXPIRY DATE
-------------- ----- -----------
20,000 $ 2.50 Oct. 31/07
30,000 $ 2.32 Dec. 31/07
100,000 $ 2.36 July 14/13
5. DEFERRED SHARE UNIT PLAN
You will be eligible to participate in DRAXIS's Deferred Share Unit Plan,
in accordance with the terms and conditions of that plan, a copy thereof
provided herewith as Schedule "B". The Deferred Share Unit Plan has been
established to provide selected employees of DRAXIS and its Affiliates with the
opportunity to acquire share equivalent units convertible to cash or common
shares of DRAXIS.
6. DISCRETIONARY BONUS
The Board of Directors of DRAXIS, in its sole discretion, and upon
recommendation of the CEO of DRAXIS, based on the Bonus and Objectives Plan that
is in force for all senior executives of DRAXIS, may declare a bonus payable.
Such bonus payment is not guaranteed and payment of a discretionary bonus in any
prior year is not a promise or guarantee of payment in subsequent years.
Further, to receive any discretionary bonus payment, should one be declared, you
must be employed on December 31st of the calendar year for which the bonus is
declared. Should a discretionary bonus be declared, you may be eligible to
receive an amount up to a maximum equivalent to 40% of your Base Salary or such
other amount as may be determined by the CEO of DRAXIS and the Board of
Directors of DRAXIS, in their sole discretion.
7. MEMBERSHIPS AND PUBLICATIONS
DRAXIS will pay all professional memberships, dues and levies deemed
necessary to the conduct of your position.
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PERSONAL & CONFIDENTIAL Page 3
8. VACATION
You shall be entitled to four weeks vacation per annum to be taken at a
time or times acceptable to the CEO of DRAXIS, having regard to its operations.
There shall be no vacation time carried over from one calendar year into the
following calendar year, unless previous authorization has been received from
the CEO of DRAXIS.
9. EXPENSES
DRAXIS agrees that it shall reimburse you for Automobile mileage
allowance as permitted by Canada Customs and Revenue Agency, all other
reasonable traveling and other out-of-pocket expenses actually and properly
incurred in connection with your duties with DRAXIS and within the policies that
are enacted from time to time by DRAXIS with respect to executive expenses. For
all such expenses you agree you will furnish statements and vouchers as and when
required by DRAXIS.
DRAXIS agrees to provide you with a mobile phone, a BlackBerry and a
portable laptop that will remain at all time the property of Draxis.
DRAXIS will reimburse you for independent legal counsel with respect to
the review of this agreement to a maximum of $1,000 upon presentation of
appropriate receipts.
10. DEDUCTIONS
All salary and other payments and allowances outlined in this Agreement
are subject to such withholding and deduction at source as may be required by
law.
11. EMPLOYEE'S COVENANTS
You agree that you shall devote the whole of your working time, attention
and ability to the business of DRAXIS and shall use reasonable best efforts to
promote the interests of DRAXIS.
You agree that you shall duly and diligently perform all the duties
assigned to you while in our employ and shall well and faithfully serve DRAXIS.
You also agree that while employed with DRAXIS you shall not, without the
prior written consent of DRAXIS, engage or otherwise be concerned in any other
business or occupation, or become a director, officer, agent or employee of any
other entity, save and except your involvement with Xxxx Xxxxxxx Group Inc. and
"Ultimate Essentials", which DHI hereby agrees you can continue.
Furthermore, you specifically agree that you shall respect and comply
with by the DRAXIS's Disclosure and Xxxxxxx Xxxxxxx Policy, as amended from time
to time copy thereof provided herewith as Schedule "C" to form an integral part
of this Agreement, the DRAXIS's Code of Ethics and Business Conduct as amended
from time to time, copy thereof provided herewith as Schedule "D" to form an
integral part of this Agreement, and all and any relevant rules and legislation,
such as, without limiting the generality of the foregoing, the rules on Xxxxxxx
Xxxxxxx in the TSX COMPANY MANUAL, the
ONTARIO SECURITIES ACT, the CANADIAN
BUSINESS CORPORATIONS ACT and QUEBEC SECURITIES ACT. You acknowledge that your
senior position with DRAXIS will deem you an insider of DRAXIS and therefore
subject to applicable mandated insider regulatory and company share trading
policies and restrictions.
12. CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION
(a) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
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PERSONAL & CONFIDENTIAL Page 4
As DRAXIS's Senior Vice President Corporate Development and Strategic
Planning, you acknowledge that you are creating, having access to, and require
knowledge of confidential and commercially valuable information of the DRAXIS
Group, the unauthorized use or disclosure of which could cause the DRAXIS Group
serious and irreparable damage.
(1) "Confidential Information" means all information, and all
documents and other tangible things recording any such information, relating to
or useful in connection with the business of the DRAXIS Group, whether or not a
trade secret within the meaning of the applicable law, which at the time or
times concerned is not generally known to Competitors (as defined below) and
which has been or is from time to time disclosed to or developed by you as a
result of your employment with DRAXIS. Confidential Information includes, but is
not limited to, the following information of the DRAXIS Group:
(i) new products;
(ii) marketing strategies and plans;
(iii) development strategies and plans;
(iv) manufacturing processes and technologies;
(v) research in progress and unpublished manuals or know
how;
(vi) regulatory filings;
(vii) identity of and relationship with licensees, licensors
or suppliers;
(viii) finances, financial information, financial management
systems;
(ix) market research;
(x) market experience with products;
(xi) customer lists;
(xii) compensation and benefits provided to employees;
(xiii) any other research, information or documents which you
are told or reasonably ought to know that the DRAXIS
Group regards as proprietary or confidential; and
(xiv) any legal advice provided to the DRAXIS Group, its
officers, directors, employees or agents during the
course of your employment and any details involving the
DRAXIS Group's position with respect to any litigation
matter or prospective litigation matter which exists at
the time of termination.
(2) You agree that you shall hold all Confidential Information in the
strictest confidence, as a fiduciary. Without limiting such obligation, you
shall use Confidential Information only at times and places designated by the
DRAXIS Group in furtherance of the business of the DRAXIS Group. You shall not,
except where the DRAXIS Group otherwise provides its prior written consent or
where required by law, directly or indirectly disclose to any Person any
Confidential Information, directly or indirectly sell, give, loan or otherwise
transfer any Confidential Information or copy thereof to any Person, publish,
lecture on or display any Confidential Information to any Person or use
Confidential Information for your own benefit or the benefit of any other
Person.
(3) Your obligations under this Section shall remain in effect with
respect to each item of Confidential Information until the date upon which such
Confidential Information has been publicly disclosed in a manner properly
authorized by the DRAXIS Group or otherwise has become known to Competitors
without any breach of this Section by you.
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PERSONAL & CONFIDENTIAL Page 5
(4) For purposes of this Agreement, "Competitor" shall mean any Person
which engages or is preparing to engage, in whole or in part, in the design,
development, manufacture, marketing or sale of any products or services which
compete directly with a product or service which, during the 12 months prior to
the termination of this Agreement and your employment hereunder for any reason,
the DRAXIS Group marketed or at the time of termination of this Agreement and
your employment hereunder, is then preparing to market.
(5) For purpose of this Agreement, "Person" shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations.
(b) NON-SOLICITATION AND NON-COMPETITION
(1) You acknowledge that the pharmaceutical and over-the-counter drug
industries are highly competitive businesses. You are a key executive of DRAXIS,
and as a result of your senior position, you confirm that you have acquired
extensive background in and knowledge of the DRAXIS Group's business and the
pharmaceutical and over-the-counter drug industries in which the DRAXIS Group
operates. You further acknowledge that the DRAXIS Group develops and markets its
products on a North American basis, more particularly in Canada and in the
eastern part of the United States comprising the states of Connecticut, Florida,
Delaware, Georgia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South
Carolina, Vermont, Virginia, and West Virginia [hereinafter referred to as the
"Territory"]. Accordingly, you agree that in the course of your employment with
DRAXIS, and thereafter for a period of one year (or if such period is held to be
excessive by a court of competent jurisdiction then for a period of six months)
you shall not, without the prior written authorization of the CEO of DRAXIS
whether as principal, as agent, or as an employee of, or in partnership, or
association with any other Person, in any manner whatsoever directly or
indirectly:
(i) become employed by or associated or affiliated with any
Competitor of the DRAXIS Group in the Territory in a
function dealing with a product or service, which
during the twelve-month period immediately prior to the
termination of this Agreement and your employment
hereunder, for any reason, competed directly with a
product or service of the DRAXIS Group;
(ii) seek to employ or encourage others to employ or
otherwise engage employees, agents or subcontractors of
the DRAXIS Group (who are employees, agents or
subcontractors on the date this Agreement terminated)
or seek to in any way disrupt their business
relationship with the DRAXIS Group;
(iii) obtain by any means whatsoever the business of any
Person who at the time of the termination of this
Agreement and your employment hereunder, was a customer
of the DRAXIS Group, if to obtain such business may
result in a reduction of that Person's business with
the DRAXIS Group;
(iv) approach any Person who at the time of the termination
of this Agreement and your employment hereunder was a
customer of the DRAXIS Group with the intention of
soliciting or enticing the business of that Person away
from the DRAXIS Group.
(c) REASONABLENESS
You agree that the obligations set out in Sections 12(a) and (b) together
with your other obligations under this Agreement are reasonably necessary for
the protection of the DRAXIS Group's proprietary and business interests and you
expressly agree that:
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PERSONAL & CONFIDENTIAL Page 6
(i) the scope of each of the covenants set out in Sections
12(a) and (b) above are in all respects, and in
particular, in respect of Territory, time and subject
matter, necessary and reasonable because the DRAXIS
Group is marketing its products on a North American
basis;
(ii) given your general knowledge and experience, the
obligations contained in this Agreement will not
preclude you from becoming gainfully employed with
other employers who are not Competitors following
termination of this Agreement and your employment
hereunder for any reason;
(iii) your agreement to Sections 12(a) and (b) is a key
incentive to DRAXIS formalizing the current terms and
conditions of your employment.
(d) BREACH OF AGREEMENT
You also recognize that any breach of the terms and conditions of this
Agreement by you will result in material damage to the DRAXIS Group, although it
may be difficult for the DRAXIS Group to establish the monetary value of such
damage. You therefore agree that the DRAXIS Group shall be entitled to
injunctive relief, in addition to any other remedies available to it, in a court
of appropriate jurisdiction in the event of any breach or threatened breach by
you of any of the provisions of this Agreement.
13. TERMINATION OF EMPLOYMENT
If at the end of two years of service (which period shall commence as of
July 1, 2003), you determine, solely at your discretion, that the position of
Senior Vice President Corporate Development and Strategic Planning is not
satisfactory for you, during that window (which shall be deemed to be the period
between June 1, 2005 to June 30, 2005) it is agreed between the parties that
your termination payment shall be the sum of $390,000, less any required
deductions, which sum represents the termination payment DRAXIS would have paid
to you following the Shire Transaction.
In addition, if your employment is terminated without cause during the
period commencing July 21, 2003 and ending July 21, 2005, your termination
payment shall be equal to two times your Base Salary at that date, less any
required deductions. In addition to said salary payment, DRAXIS shall pay you
the following amounts: (i) all outstanding vacation pay and any earned but
unpaid salary up to the date of such termination within two weeks of the date of
termination; (ii) reimburse you for any business expenses incurred by you up to
and including the date of such termination following provision by you of
applicable receipts; and (iii) ensure it has complied with all statutory
obligations imposed by the
ONTARIO EMPLOYMENT STANDARDS ACT. This payment shall
be guaranteed and shall not be subject to set off or deduction as a result of
your obtaining alternate employment following such termination or otherwise
mitigating any damages arising from such termination. In all other instances,
the following Termination Provisions shall prevail:
(a) TERMINATION BY DRAXIS FOR CAUSE
DRAXIS may terminate this Agreement and your employment hereunder at any
time for cause without notice and without payment of any kind of compensation
either by way of anticipated earnings or damages of any kind.
(b) TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE
DRAXIS may terminate this Agreement and your employment hereunder by
providing to you one year's actual notice of termination. The amount of the
notice shall consist solely of Base Salary for the actual year. At its sole
discretion, DRAXIS may provide to you a shorter period of notice of termination,
in which case, the payments referred to in Section 13(c) shall be applicable,
but such payments as may be required by Sections 13(c) (1) and (4) shall be
reduced by the notice provided, so that the total notice and
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PERSONAL & CONFIDENTIAL Page 7
payments in lieu of notice provided to you shall be equivalent to one year from
the date you are advised of the termination.
(c) TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE
DRAXIS may terminate this Agreement and your employment hereunder, in its
sole discretion, without notice and without cause, effective immediately upon
the date you are advised of the termination.
Except as outlined in Section 13(b), if your employment is terminated
without cause pursuant to this Section, DRAXIS shall:
1) Pay to you a severance allowance equivalent to one year of
your then current Base Salary in a lump sum, within two weeks
following the date of such termination.
2) Pay to you all outstanding vacation pay and any earned but
unpaid salary up to the date of such termination within two
weeks of the date of termination.
3) Reimburse you for any business expenses incurred by you up to
and including the date of such termination following provision
by you of applicable receipts.
4) Ensure it has complied with all statutory obligations imposed
by the
ONTARIO EMPLOYMENT STANDARDS ACT.
The payment referred to in paragraph 1, above, shall be guaranteed and
shall not be subject to set off or deduction as a result of your obtaining
alternate employment following such termination or otherwise mitigating any
damages arising from such termination. Further, the payment referred to in
paragraph 1, above, is inclusive of all statutory payments, including statutory
termination and severance, which may be owed to you.
The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.
Upon termination of your employment in accordance with this
Section 13(c), you shall return to DRAXIS all stock options, and other
securities which have not vested or accrued during your employment with DRAXIS.
(d) TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL
(1) In accordance with section 13(d) (2) below, if there is a Change
of Control (as hereinafter defined) you shall be entitled to the following:
A. the amounts of any unpaid Base Salary earned up to and
including date of termination;
B. any unpaid vacation pay earned up to and including date of
termination;
C. a lump sum amount, equal to: (A) two times your then current
Base Salary in effect immediately prior to the date of the
Change of Control: and (B) two times the amount paid to you,
for the preceding calendar year immediately prior to the date
of the Change of Control, as a discretionary bonus;
D. any additional statutory obligations imposed by the
ONTARIO
EMPLOYMENT STANDARDS ACT;
E. the right to exercise all stock options and other securities
including those not
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PERSONAL & CONFIDENTIAL Page 8
then otherwise exercisable as provided for below.
The payments referred to in paragraph 13(d), above, shall be guaranteed
and shall not be subject to set off or deduction as a result of your obtaining
alternate employment following termination or otherwise mitigating any damages
arising from termination. Further, notwithstanding paragraph 13(d) (1) (D)
above, the payment referred to in paragraph 13(d) (1) (C) above, is inclusive of
all statutory payments, including statutory termination and severance, which may
be owed to you following termination.
The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.
For the purposes of this Agreement, a Change of Control shall be deemed
to occur in the following circumstances.
In the event that at any date following the date of signature hereof:
(i) any change in the ownership as of the date hereof, direct or
indirect, of the outstanding shares of the Corporation as a
result of which an individual, partnership, association,
trust, unincorporated organization, ("Person") or group of
Persons, hold shares and/or other securities in excessive of
the number which, directly or following conversion or exercise
thereof, will entitle the holders thereof to cast 20% or more
of the votes attaching to all such shares and/or other
securities of the Corporation which may be cast to elect the
directors of the Corporation; or
(ii) the sale, transfer or any manner of disposition of 50% or more
of the assets of the Corporation to an arm's length Person;
and the Board of Directors of the Corporation (the "Board of Directors")
recommends acceptance of such offer to the Shareholders of the Corporation (the
"Shareholders") or, if the Board of Directors has made no recommendation, the
Shareholders have approved or accepted the proposed transaction, then any
option, including options not then otherwise exercisable held by the you, shall
become immediately exercisable upon the issuance of the recommendation of the
Board of Directors or the approval or acceptance of the Shareholders, as the
case may be.
For greater clarity, no provision in this
employment agreement shall be
deemed to supersede any provision of the Stock Option Plan of DRAXIS, as amended
from time to time, with respect to the right to exercise options held by the
employee in certain circumstances.
(2) Except for the ability to exercise all stock options upon a Change
of Control as provided in paragraph 13(d)(1)(E), the payments and entitlements
outlined in paragraph 13(d) (1) shall become due and payable if, and only if:
A. there has been a Change of Control; and
B. within 24 months following any Change of Control:
(i) your employment is terminated without cause by
DRAXIS or by any successor employer to DRAXIS,
as the case may be; or
(ii) by its conduct as described below, DRAXIS or any
successor employer to DRAXIS, as the case may
be, constructively terminates your employment
by:
- relocating without just cause the
position and/or location of
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your principal office more than 20
kilometers from the location of your
office on the date immediately prior to
the Change of Control, without your
consent; or
- materially reducing without just cause
your title, reporting relationship,
responsibilities or authority without
your consent; or
- reducing without just cause the salary
paid to you by the successor employer or
terminating without just cause or
materially reducing without just cause
the value of your benefit programs,
including, but not limited to, life
insurance benefits, accidental death and
dismemberment benefits, long term
disability benefits, extended health
coverage and dental benefits, which are
referred to in Section 3 above;
C. and, you elect in writing to receive the payments outlined in
Section 13(d)(1)
(e) TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY
If, as a result of incapacity due to physical or mental illness, you are
unable to render services of substantially the kind and nature, and
substantially to the extent required to be rendered in accordance with this
Agreement, and if such incapacity is expected to continue for a period of at
least twelve consecutive months from the date such incapacity commenced
("Absence Date") this Agreement may be deemed to be frustrated. Your employment
hereunder shall cease to be effective on the tenth day after written notice of
cessation of employment ("Notice of Cessation") to you, provided that prior to
such cessation DRAXIS has been furnished with the written certification of a
qualified medical doctor designated by DRAXIS and you jointly which states that
you are and are expected to continue to be for at least twelve consecutive
months from the Absence Date, unable to render such services by reason of such
incapacity and the date upon which such incapacity commenced. If DRAXIS and you
are unable to agree on the designation of a qualified medical doctor to make
such determination, then each party shall designate a medical doctor who,
together, shall agree upon a third qualified medical doctor to make such
determination. The decision of the third medical doctor shall be binding on
DRAXIS and you. You consent to submit to such examination as may be required by
any such medical doctor or doctors.
If your employment ceases pursuant to this Section, you shall be entitled
to receive a total amount equivalent to one year of your then current Base
Salary, commencing on the date upon which the Notice of Cessation is delivered
and payable in 24 regular payments equivalent to your regular semi-monthly Base
Salary on the regular DRAXIS pay days. If you are in receipt of disability
benefits payable pursuant to the benefit plans described above, then each
semi-monthly payment payable by DRAXIS shall be reduced by an amount equivalent
to the disability benefits payment received during that pay period.
Notwithstanding the cessation of your employment pursuant to this Section, you
shall be entitled to retain and exercise, within a period of 6 months following
the Notice of Cessation, all stock options which have vested or accrued during
your employment with DRAXIS.
(f) DEATH
In the event that you should die during the term of this Agreement, your
employment shall automatically terminate. All salary, vacation pay and any bonus
payments earned to date of death but unpaid will be paid to your estate,
however, no other payment of any compensation either by way of anticipated
earnings or damages of any kind shall be paid and Section 13(h) shall be
applicable.
(g) RESIGNATION AND RETIREMENT
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PERSONAL & CONFIDENTIAL Page 10
You shall provide DRAXIS with three months notice, in writing, of your
resignation or your retirement from DRAXIS. Unless the Board of Directors of
DRAXIS otherwise determines, you shall return to DRAXIS all stock options
granted to you during your employment with DRAXIS which become exercisable after
the date you cease to be an employee of DRAXIS and/ or the DRAXIS Group.
(h) NO FURTHER NOTICE OR COMPENSATION
Upon termination of your employment under this Agreement, you shall not
be entitled to any further grants of stock options nor shall you be entitled to
any further participation in any other incentive plan of the DRAXIS Group other
than as specifically set forth in this Agreement. For all purposes, "termination
of your employment" and "termination date" shall be the final day of employment
with DRAXIS, and shall not be deemed to include any period during which you may
be entitled to statutory notice, statutory termination pay or any contractual or
common law notice period and in particular, shall not be deemed to include the
notice period identified in Sections 13(c) (1) or 13(d) (1) (C).
14. FAIR AND REASONABLE
The parties confirm that the notice requirements and pay in lieu of
notice provisions set out above in Section 13 are fair and reasonable and that
no further notice or payments of any kind are owed or required. The parties
agree that upon any termination of this Agreement by DRAXIS or upon any
termination of this Agreement by you, that you shall have no action, cause of
action, claim or demand, either statutory or at common law, against the DRAXIS
Group or any other Person as a consequence of such termination.
15. RETURN OF PROPERTY
In the event your employment with DRAXIS is terminated for any reason,
including resignation or retirement, you will immediately return all DRAXIS
property in your possession or under your control.
16. PROVISIONS OPERATING FOLLOWING TERMINATION
Notwithstanding any termination of your employment with or without cause,
Sections 11, 12, 13, 14 and 17 and any provision of this Agreement necessary to
give it efficacy shall continue in full force and effect following such
termination.
17. ACKNOWLEDGEMENT
You acknowledge that the DRAXIS Group shall not, for any purpose,
including in the event of a subsequent termination, be required to recognize or
take into account any prior service with your previous employers.
18. SEVERABILITY
If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.
19. NOTICE
Any notice to be given in connection with this Agreement shall be given in
writing and may be given by personal delivery or by registered mail addressed to
the recipient as follows:
To: Xxxxx Xxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx
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PERSONAL & CONFIDENTIAL Page 11
L4A 6C2
To: DRAXIS HEALTH Inc.
0000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: President and Chief Executive Officer
or such other address or individual as may be designated by notice by either
party to the other. Any notice given by personal delivery or by fax shall be
deemed to have been given on the day of actual delivery and, if made or given by
registered mail on the third day, other than a Saturday, Sunday or a statutory
holiday in
Ontario, following the deposit thereof in the mail.
20. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of
Ontario and Canada applicable thereto.
21. BENEFIT OF AGREEMENT
This Agreement shall enure to the benefit of and be binding upon your
heirs, executors, administrators and legal personal representatives and the
successors and assigns of DRAXIS respectively.
22. ENTIRE AGREEMENT
This Agreement and its Schedules constitute the entire agreement between
the parties with respect to your terms and conditions of employment and cancel
and supersede any prior understandings and agreements between the parties to
this Agreement, including, without limitation the Original Agreement. There are
no representations, warranties, forms, conditions, undertakings or collateral
agreements expressed, implied or statutory between the parties other than as
expressly set forth in this Agreement and its Schedules. You waive any right to
assert a claim in tort based on any pre-contractual representations, negligent,
or otherwise, made by the DRAXIS Group.
To acknowledge that the terms of employment as expressed in this
Agreement are acceptable to you, please execute the enclosed copy of this letter
as indicated below and return it to me at your earliest opportunity.
Yours truly,
DRAXIS PHARMA INC.
Per: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, M.D., F.R.C.S.C.
President and Chief Executive Officer of
Draxis Health Inc.
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL Page 12
I accept the above-noted terms of employment with Draxis Health Inc. as
Senior Vice President Corporate Development and Strategic Planning, I agree to
comply with and be bound by the terms of employment outlined in this Agreement.
Dated at , the day of , 2004.
/s/ Xxxxx Xxxxxxx
------------------------- --------------------------------
Witness Xxxxx Xxxxxxx
SCHEDULE A
STOCK OPTION PLAN OF DRAXIS HEALTH INC.
AS AMENDED AND SUBMITTED TO THE TSE
JUNE 27, 2001
STOCK OPTION PLAN
OF
DRAXIS HEALTH INC.
1. PURPOSE OF THE PLAN
The Draxis Health Inc. Stock Option Plan (the "Plan) is intended
to attract and retain highly qualified officers, directors and employees who
will be motivated towards the success of Draxis Health Inc. (the "Corporation")
or any of its subsidiaries.
2. ADMINISTRATION
This Plan shall be administered by the Board of Directors of
the Corporation (the "Board"). Subject to the terms of the Plan, the Board is
authorized to approve persons to whom options may be granted, to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and take all actions
necessary or advisable for the Plan's administration.
3. GRANTING OF OPTIONS
The Board may from time to time in the manner herein provided
grant options ("Options") to purchase common shares ("Shares") of the
Corporation to directors, officers, employees or area managers or arm's length
consultants of the Corporation and may provide for the number of Shares to be
optioned to each such director, officer, employee, area manager or arm's length
consultant.. Options shall be exercised on or prior to a date determined by the
Board of Directors at the date of the grant, which shall be no later than ten
years from the date of the grant and shall be subject to the terms, conditions,
limitations and prohibitions as are herein contained or as may be in effect at
the date of the grant.
4. SHARES SUBJECT TO PLAN
The aggregate number of Shares that may be issued pursuant to
the Plan shall be 7,500,000 Shares. The number of Shares reserved for issuance
to any one person pursuant to options granted pursuant to this Plan or otherwise
shall not exceed 5% of the outstanding Shares.
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PERSONAL & CONFIDENTIAL
5. PARTICIPANTS
The individuals who are eligible to receive Options hereunder
shall be directors, officers or employees of the Corporation or a subsidiary of
the Corporation or arm's length consultants of the Corporation or a subsidiary
of the Corporation (the "Eligible Optionees"). The Board shall from time to
time, in its sole discretion, determine which of those Eligible Optionees will
be granted Options under the Plan (the "Optionees") and the number of Shares to
be optioned to such Eligible Optionees. The Board shall not be precluded from
granting an Option to an Eligible Optionee solely because such Eligible Optionee
may previously have been granted an Option under the plan.
6. OPTION PRICE
The exercise price for an Option shall be fixed by the Board
when such Option is granted. Under no circumstances shall the exercise price for
any Option be less than the closing price of the Shares on The Toronto Stock
Exchange on the trading day immediately preceding the date of the grant.
7. OPTION TERMS
(a) Subject to paragraph 3 hereof, the period during which any
Option may be exercised, in whole or in part, shall be such
period as the Board may determine (the "Option Period").
(b) In the event that any Option has not been exercised in
respect of all Shares covered by the Option at the expiry
of the Option Period, the Option shall thereupon expire.
(c) In the event of the death of an Optionee on or prior to the
expiry of an Option, while in office and at a time when
such Optionee has not fully exercised any outstanding
Options, such Options, to the extent then exercisable but
unexercised, shall be exercisable by such Optionee's
executors or personal representatives within six (6) months
after such Optionee's death notwithstanding the expiration
date of the Option. In the event such Options are not
exercised at the expiry of such six-month period, such
Options shall expire.
(d) In the event of the total and permanent disability of an
Optionee (as determined by the Board of Directors), such
Optionee may, within six months after the date of such
determination of disability or such other longer period as
the Board of Directors may approve, notwithstanding the
expiration date of the Option, exercise such part of the
Option as is then exercisable. Unless the Board of
Directors otherwise determines, in the event the Optionee
has not exercised such Option at the expiry of such
six-month period, the Option shall expire.
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PERSONAL & CONFIDENTIAL
(e) Except as provided in subparagraphs 7(c) and (d) above, if
an Optionee ceases to hold office as a director, officer,
employee or area manager of the Corporation during the
Option Period, such part of the Option as is then
exercisable may be exercised by such Optionee for a period
of thirty (30) days after such Optionee ceases to hold such
office or position or for such longer period as the Board
of Directors may approve, after which time the Option shall
terminate; provided, however, that in no event may any
option be exercised outside the Option Period.
8. NON-ASSIGNABILITY
Each Option shall be non-assignable and non-transferable and
shall, subject to the terms hereof, be exercisable only by the Optionee to whom
it is granted.
9. RIGHTS OF OPTIONEES BEFORE EXERCISE OF OPTION
The Optionees shall not have any rights whatsoever as
shareholders in respect of the Shares covered by such Options until such Options
are exercised and payment for such Shares has been made.
10. EXERCISE OF OPTION
Subject to the provisions of the Plan, an Option may be
exercised from time to time by delivery to the Corporation at its registered
office of a written notice of exercise in the form attached hereto as Schedule A
specifying the number of Shares with respect to which the Option is being
exercised, and accompanied by payment in full of the purchase price for the
Shares then being purchased and a duly executed Stock Option Agreement.
11. SHARE CAPITAL ADJUSTMENTS
If the outstanding Shares subject to this Plan are changed
into or exchanged for a different number or kind of shares or securities, as a
result of one or more amalgamations, reorganizations, re-capitalization, stock
splits, consolidations, stock dividends in the nature of stock splits or the
like, appropriate adjustments shall be made in the number and/or kind of shares
or securities for which the Options may thereafter be granted under this Plan
and for which Options then outstanding under this Plan may thereafter be
exercised. Any such adjustment in outstanding Options shall be made without
changing the aggregate exercise price applicable to the unexercised portions of
such Option.
No fractional securities shall be issued upon the exercise of
an Option. Accordingly, if as a result of any adjustment under this paragraph,
an Optionee would be entitled to a fractional security, the Optionee shall have
the right to acquire only the adjusted number of whole securities and no payment
or other adjustment will be made with respect to fractional securities so
disregarded.
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PERSONAL & CONFIDENTIAL
12. LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event that the Corporation proposes to liquidate,
dissolve or wind-up, the Corporation shall give written notice thereof to each
Optionee and such Optionee shall be entitled to exercise all then exercisable
Options within thirty (30) days of the giving of such notice, provided, however,
that in no event may such Option be exercised outside of the Option Period. Upon
the expiration of such thirty (30) day period, all rights of Optionees to such
Options or to exercise the same shall terminate and cease to have any further
force or effect, unless otherwise determined by the Board of Directors.
13. CHANGE OF CONTROL
Notwithstanding the foregoing, in the event that at any date
following the date hereof:
(a) any change in the ownership as of the date hereof, direct
or indirect, of the outstanding shares of the Corporation
as a result of which an individual, partnership,
association, trust, unincorporated organization, ("person")
or group of Persons, hold shares and/or other securities in
excessive of the number which, directly or following
conversion or exercise thereof, will entitle the holders
thereof to cast 20% or more of the votes attaching all such
shares and/or other securities of the Corporation which may
be cast to elect the directors of the Corporation; or
(b) the sale, transfer or any manner of disposition of 50% or
more of the assets of the Corporation to an arm's length
Person;
and the Board of Directors recommends acceptance of such offer to the
Shareholders of the Corporation or, if the Board of Directors has made no
recommendation, the Shareholders have approved or accepted the proposed
transaction, then any Option outstanding hereunder, including Options not then
otherwise exercisable, shall become immediately exercisable upon the issuance of
the recommendation of the Board of Directors or the approval or acceptance of
the Shareholders, as the case may be.
14. AMENDMENT OR TERMINATION
The Board of Directors may terminate the Plan any time or,
with the consent of The Toronto Stock Exchange, amend the Plan at any time
provided, however, that except as permitted herein, the Board may not, without
the approval of the Optionee to whom Options have been granted, alter or impair
such Option.
The Board may from time to time make, amend and repeal such
regulations under the Plan as they deem expedient for the purpose of carrying
out the Plan and such regulations from time to time in force shall, together
with the Plan, be binding and conclusive on the Corporation and on all holders
of Options granted under the Plan and their legal personal representatives.
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
SCHEDULE "A"
STOCK OPTION PLAN
DRAXIS HEALTH INC.
ELECTION TO PURCHASE
TO: The Secretary of
Draxis Health Inc.
Pursuant to the terms of the stock option granted to me on
(the "Date of the Grant"), I hereby elect to purchase common
shares of Draxis Health Inc. which were the subject of such stock option. I
understand that such purchase is subject to all the terms and conditions of such
stock option and of the Draxis Health Inc. Stock Option Plan.
Enclosed is a certified cheque, bank draft or money order payable
to Draxis Health Inc. in the amount of $ , the full amount of the
exercise price for the number of common shares indicated above.
------------------------------- ------------------------------------
DATE (PRINT NAME)
------------------------------------
(SIGNATURE)
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
SCHEDULE B
DEFERRED SHARE UNIT PLAN
DRAXIS HEALTH INC.
DEFERRED SHARE UNIT PLAN
FOR EMPLOYEES
1. INTRODUCTION
1.1 PURPOSE
The Draxis Health Inc. Deferred Share Unit Plan for senior management
employees has been established to provide such employees of Draxis Health Inc.
and its subsidiaries with the opportunity to acquire share equivalent units
convertible to cash or Common Shares of Draxis Health Inc. upon the termination
of employment of an employee. Acquiring such units will allow these employees to
participate in the long-term success of Draxis Health Inc. and will promote a
greater alignment of interests between such employees and the shareholders.
1.2 DEFINITIONS
For purposes of the Plan:
(a) "Annual Remuneration" means the Base Salary and Bonus payable to
an Eligible Employee by the Company in or in respect of each
financial year;
(b) "Applicable Withholding Taxes" means any and all taxes and other
source deductions or other amounts which the Company is required
by law to withhold from any amounts to be paid or credited
hereunder;
(c) "Award Date" means each date on which Deferred Share Units are
credited to an Eligible Employee in accordance with Section 3.1,
which shall be, unless otherwise determined by the Committee,
January 1st of each financial year in which the Eligible Employee
is eligible to participate in the Plan, except 2000 the first year
of the Plan in which case the Award Date shall be February 1,
2000;
(d) "Award Market Value" means the average of the daily high and low
board lot trading prices of Common Shares on The Toronto or Nasdaq
Stock Exchanges on each of the five trading days prior to the
Award Date on which there was a trade of a board lot of Common
Shares. Should Common Shares no longer be publicly traded at the
relevant time such that the Award Market Value cannot be
determined in accordance with the formula set out herein, such
value shall be determined by the Committee in good faith and shall
depend upon the fair market value of the Common Shares within the
period that commences one year before the Award Date and ends at
the time of the Award Date;
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PERSONAL & CONFIDENTIAL
(e) "Base Salary" means the regular base salary received by an
Eligible Employee from the Company during the relevant financial
year as determined by the Company from time to time excluding
vacation pay in lieu of time off, Bonuses, service awards or any
special compensation;
(f) "Bonus" means an amount in addition to Base Remuneration
calculated and awarded by the Board to an Eligible Employee
following completion of a financial year in respect of such
Employee's contribution to the operations of the Company for such
financial year, excluding for greater certainty, any payments
under the Stock Ownership Plan or, its predecessor, the Stock
Purchases and Bonus Plan;
(g) "Board" means the board of directors of the Company;
(h) "Committee" means the committee of the Board responsible for
recommending to the Board the eligibility of an employee to
participate in this Plan;
(i) "Common Shares" means the common shares of the Company;
(j) "Company" means Draxis Health Inc. or any of its subsidiaries or
affiliates as defined in paragraph 3 of the Canada Customs and
Revenue Agency Interpretation Bulletin IT-337R3 that may adopt the
Plan pursuant to its terms;
(k) "Deferred Share Unit" means a unit equivalent in value to a Common
Share, credited by means of a bookkeeping entry in the books of
the Company in accordance with an election made by an Eligible
Employee pursuant to Section 3;
(l) "Deferred Share Units outstanding under the Plan" or "Deferred
Share Units credited to an Employee's Account" at a particular
time for the purposes of Articles 4 and 5 shall be deemed to mean
and include at any particular time in any particular financial
year Deferred Share Units subsequently granted in respect of a
Bonus determined in respect of a completed financial year and in
respect of which an Eligible Employee has made an election
pursuant to Section 3.2;
(m) "Deferred Share Unit Amount" has the meaning given thereto in
Section 4.1;
(n) "Dividend Equivalents" means a bookkeeping entry whereby each
Deferred Share Unit is credited with the equivalent amount of the
dividend or other distribution paid on a Common Share in
accordance with Section 3.3;
(o) "Dividend Market Value" means the average of the daily high and
low board lot trading prices of Common Shares on The Toronto or
Nasdaq Stock Exchanges on each of the five trading days prior to
the Award Date on which there was a trade of a board lot of Common
Shares;
(p) "Election Form" means a document substantially in the form of
Schedule "A" to this Plan;
(q) "Eligible Employee" means a person who is, at the relevant time,
an employee of the Company or any of its subsidiaries and is
designated by the Committee as eligible to participate in the
Plan;
(r) "Plan" means this Draxis Health Inc. Deferred Share Unit Plan for
Employees, as amended from time to time;
(s) "Redemption Date" means the date upon which an Eligible Employee
ceases to be employed by the Company or any of its subsidiaries or
affiliates as defined in paragraph 3 of the Canada Customs and
Revenue Agency's Interpretation Bulletin IT 337R3; and
(t) "Redemption Value" means the average of the daily high and low
board lot trading prices of Common Shares on The Toronto or Nasdaq
Stock Exchanges on each of the five trading days prior to the
Redemption Date on which there was a trade of a board lot of
Common Shares. Should Common Shares no longer be publicly traded
at the relevant time such that the Redemption Value cannot be
determined in accordance with the formula set out herein the
provisions in this regard described in the definition of Award
Value shall apply mutatis mutandis.
1.3 EFFECTIVE DATE OF PLAN
The effective date of the Plan shall be February 1, 2000 or such other
later date as the Board may determine.
2. ADMINISTRATION
2.1 ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors which shall,
without limitation, have full and final authority in its discretion, but subject
to the express provisions of the Plan, to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Board of Directors may delegate any or all of its authority with respect to
the administration of the Plan and any or all of the rights, powers and
discretions with respect to the Plan granted to it hereunder to the Committee or
such other committee of directors of the Company as the Board of Directors may
designate and upon such delegation the Committee or other committee of
directors, as the case may be, as well as the Board of Directors, shall be
entitled to exercise any or all of such authority, rights, powers and
discretions with respect to the Plan. The directors of the Company may fully
participate in voting and in other deliberations or proceedings of the Board of
Directors in respect of the Plan, notwithstanding: (i) the eligibility of any of
the directors to participate in the Plan; and (ii) that any of the directors may
hold Deferred Share Units granted pursuant to the Plan.
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
2.2 TAXES AND OTHER SOURCE DEDUCTIONS
The Company shall be authorized to deduct from any amount to be paid or
credited hereunder any Applicable Withholding Taxes in such manner as the
Company determines.
3. DEFERRED SHARE UNITS
3.1 AWARD OF DEFERRED SHARE UNITS
(a) Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Base Salary which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account on each
Award Date in respect of the portion of his or her base Salary to be credited in
Deferred Share Units to be earned in the financial year commencing on the Award
Date. The number of Deferred Share Units (including fractional Deferred Share
Units) to be credited on each Award Date shall be determined by dividing (a) the
amount of the applicable portion of the Base Salary to be credited in Deferred
Share Units on that Award Date by (b) the Award Market Value.
(b) Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Bonus which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account as of
the Award Date for a relevant financial year upon determination of the Bonus
earned following completion of such financial year. The number of Deferred Share
Units (including fractional Deferred Share Units) to be credited effective each
Award Date shall be determined by dividing (a) the amount of the applicable
portion of the Bonus to be credited in Deferred Share Units effective that Award
Date by (b) the Award Market Value determined in respect of that Award Date.
3.2 ELECTION
Each Eligible Employee shall have the right to elect on December 1
of each financial year (except 2000 the first year of the Plan in which case the
date shall be February 1, 2000) whether such Employee wishes to receive some of
such Employee's Annual Remuneration for the immediately succeeding financial
year (or for that part of the year remaining in the case of 2000) in the form of
Deferred Share Units. This election shall be made by completing, signing and
delivering to the Secretary of the Company the Election Form: (a) in the case of
an existing employee, by December of the financial year preceding the financial
year to which such election is to apply; or (b) in the case of 2000 by February
1, 2000. In each case, the election, when made, shall only apply prospectively
with respect to the Eligible Employee's Annual Remuneration yet to be earned.
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
3.3 CREDITS FOR DIVIDENDS
(a) An Eligible Employee's account shall be credited with Dividend
Equivalents in the form of additional Deferred Share Units on each dividend
payment date in respect of which ordinary course cash dividends are paid on
Common Shares. Such Dividend Equivalents shall be computed by dividing: (a) the
amount obtained by multiplying the amount of the dividend declared and paid per
Common Share by the number of Deferred Share Units recorded in the Eligible
Employee's account on the record date for the payment of such dividend, by (b)
the Dividend Market Value, with fractions computed to three decimal places.
(b) All Dividend Equivalents credited hereunder at any particular time in a
year to an Eligible Employee in the form of Deferred Share Units shall be
adjusted as of the particular dividend payment date to reflect the determination
at the end of a year of additional Deferred Share Units in respect of a Bonus
concerning which an Eligible Employee has made an election pursuant to the
provisions of 3.1 and 3.2.
3.4 REPORTING OF DEFERRED SHARE UNITS
Statements of the Deferred Share Unit accounts will be provided to the
Eligible Employees at least annually.
4. REDEMPTION OF DEFERRED SHARE UNITS
4.1 REDEMPTION OF DEFERRED SHARE UNITS
(a) An Eligible Employee shall be entitled on the Redemption Date to redeem
the Deferred Share Units credited to the Eligible Employee's account for an
amount (the "Deferred Share Unit Amount") equal to the product that results from
multiplying (i) the number of Deferred Share Units recorded in the Eligible
Employee's account on the Redemption Date by (ii) the Redemption Value of the
Common Shares. Upon payment in full by the Company to the Eligible Employee of
the value of the Deferred Share Unit Amount, the Deferred Share Units shall be
cancelled.
(b) The Deferred Share Unit Amount payable to an Eligible Employee, less any
Applicable Withholding Taxes, may be used to acquire Common Shares on the open
market through an independent broker designated by the Company (the "Designated
Broker") or may be paid in cash less Applicable Withholding Taxes to the
Eligible Employee, at the discretion of the Company. The Company will also make
a cash payment, less any Applicable Withholding Taxes, to the Eligible Employee
with respect to the value of fractional Deferred Share Units standing to the
Eligible Employee's credit.
(c) If the Company has determined, that payment of the Deferred Share Unit
Amount be made in the form of Common Shares purchased on the open market through
a Designated Broker, as described in Section 4.1 (b) above, the Company will
calculate the number of whole Common Shares to be purchased by the Designated
Broker on the open market on behalf and for
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
the benefit of the Eligible Employee. The number of Common Shares will be
determined by dividing (i) the Deferred Share Unit Amount payable, less any
Applicable Withholdings Taxes, by (ii) the Redemption Value of a Common Share as
determined on the Redemption Date or, if the Redemption Date is not a trading
date for shares on the Toronto and Nasdaq Stock Exchanges, on the next such
trading date and the Company shall advise the Designated Broker of the specified
number of whole Common Shares to be purchased on behalf of the Eligible
Employee. The Designated Broker will purchase the specified number of whole
Common Shares as soon practicable after being notified by the Company. On or
before the date of settlement with respect to the purchase of the Common Shares
by the Designated Broker, the Company, acting as agent for the Eligible
Employee, will pay the purchase price of the specified number of Common Shares
to the Designated Broker, together with any reasonable brokerage fees or
commissions related thereto. The Company will also make a cash payment, less any
Applicable Withholdings Taxes, to the Eligible Employee with respect to the
value of fractional Deferred Share Units still standing to the Eligible
Employee's credit after the maximum number of whole Common Shares has been
purchased as described above.
(d) Deferred Share Unit Amounts paid by the Company in accordance with (a)
through (c) above will be paid to or on behalf of the Eligible Employee no later
than the end of the first calendar year after the Redemption Date.
4.2 DEATH OF ELIGIBLE EMPLOYEE PRIOR TO REDEMPTION
Upon the death of an Eligible Employee prior to the redemption of the
Deferred Share Units credited to the account of such Eligible Employee under the
Plan, a dependant relation or legal representative, shall be entitled to redeem
the Deferred Share Units in accordance with Section 4.1. For greater certainty,
the Deferred Share Unit Amount payable shall be equivalent to the amount which
would have been paid to the Eligible Employee pursuant to and subject to Section
4.1, calculated as if the Eligible Employee had previously ceased to be an
employee of the Company on the day prior to his or her death.
4.3 In the event a Redemption Date occurs prior to the end of a financial
year, the number of Deferred Share Units awarded to an Eligible Employee in
respect of his Annual Remuneration for that particular year shall, for the
purposes of calculating the Redemption Value, be reduced proportionately to
reflect that the Eligible Employee was employed by the Company for less than
that particular full financial year.
5. GENERAL
5.1 ADJUSTMENTS TO DEFERRED SHARE UNITS
In the event of the declaration of any stock dividend, a subdivision,
consolidation, reclassification, exchange, or other change with respect to the
Common Shares, or a merger, consolidation, spin-off, or other distribution
(other than ordinary course cash dividends) of the Company's assets to its
shareholders, the account of each Eligible Employee and the Deferred Share Units
outstanding under the Plan shall be adjusted to appropriately reflect the event.
However, no amount will be paid to, or in respect of, an Eligible Employee under
the Plan or
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PERSONAL & CONFIDENTIAL
pursuant to any other arrangement, and no Deferred Share Units will
be granted to such Eligible Employee to compensate for a downward fluctuation in
the price of Common Shares, nor will any other form of benefit be conferred
upon, or in respect of, an Eligible Employee for such purpose.
5.2 DESIGNATION OF BENEFICIARY
An Eligible Employee may, by written notice to the Secretary of the
Company, designate a person to receive the benefits payable under the Plan on
the Eligible Employee's death, and may also by written notice to the Secretary
of the Company alter or revoke such designation from time to time, subject
always to the provisions of any applicable law. Such written notice shall be in
such form and shall be executed in such manner as the Committee in its
discretion may from time to time determine.
5.3 AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN
(a) The Board may from time to time amend or suspend the Plan in whole or in
part and may at any time terminate the Plan. However, any such amendment,
suspension, or termination shall not adversely affect the right of any Eligible
Employee with respect to Deferred Share Units credited to such Eligible Employee
at the time of such amendment, suspension or termination, without the consent of
the affected Eligible Employee.
(b) If the Board terminates the Plan, no new Deferred Share Units will be
credited to the account of an Eligible Employee, but previously credited
Deferred Share Units and Deferred Share Units to be credited to the end of a
financial year with respect to any Bonus pursuant to Section 3.1 shall remain
outstanding and shall be entitled to Dividend Equivalents as provided under
section 3.3, and be paid in accordance with the terms and conditions of the Plan
existing at the time of termination. The Plan will finally cease to operate for
all purposes when the last remaining Eligible Employee receives payment, in cash
or Common Shares, in satisfaction of all Deferred Share Units recorded in the
Eligible Employee's account.
5.4 COMPLIANCE WITH LAWS
The administration of the Plan shall be subject to and performed in
conformity with all applicable laws and any applicable regulations of a duly
constituted authority. Should the Committee, in its sole discretion, determine
that it is not feasible or desirable to honour an election in favour of Deferred
Share Units due to such laws or regulations, its obligation shall be satisfied
by means of an equivalent cash payment (equivalence being determined on a
before-tax basis).
5.5 REORGANIZATION OF THE COMPANY
The existence of any Deferred Share Units shall not affect in any way the
right or power of the Company or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, or any amalgamation, combination, merger or
consolidation involving the Company or to create or issue
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
any bonds, debentures, shares or other securities of the Company or the rights
and conditions attaching thereto or to effect the dissolution or liquidation of
the Company or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar nature
or otherwise.
5.6 GENERAL RESTRICTIONS AND ASSIGNMENT
(a) Except as required by law, the rights of an Eligible Employee under the
Plan are not capable of being anticipated, assigned, transferred, alienated,
sold, encumbered, pledged, mortgaged or charged and are not capable of being
subject to attachment or legal process for the payment of any debts or
obligations of the Eligible Employee.
(b) Rights and obligations under the Plan may be assigned by the Company to a
successor in the business of the Company.
5.7 NO RIGHT TO SERVICE
Neither participation in the Plan nor any action taken under the Plan
shall give or be deemed to give any Eligible Employee a right to continued
employment with the Company or any of its subsidiaries and shall not interfere
with any right of the Company to terminate the employment of any Eligible
Employee at any time.
5.8 NO SHAREHOLDER RIGHTS
Under no circumstances shall Deferred Share Units be considered Common
Shares or shares of any other class of the Company, nor entitle any Eligible
Employee to exercise voting rights or any other rights attaching to the
ownership of Common Shares, nor shall any Eligible Employee be considered the
owner of the Common Shares by virtue of the award of Deferred Share Units.
5.9 GOVERNING LAW
The Plan shall be governed by, and interpreted in accordance with, the
laws of the Province of
Ontario and the laws of Canada applicable therein.
5.10 INTERPRETATION
In this text words importing the singular meaning shall include the
plural and VICE VERSA, and words importing the masculine shall include the
feminine and neuter genders.
5.11 SEVERABILITY
The invalidity or unenforceability of any provision of this Plan shall
not affect the validity or enforceability of any other provision and any invalid
or unenforceable provision shall be severed from this Plan.
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PERSONAL & CONFIDENTIAL
SCHEDULE "A"
DRAXIS HEALTH INC. DEFERRED SHARE UNIT PLAN
FOR DIRECTORS (THE "PLAN")
ANNUAL ELECTION FORM
1. ANNUAL REMUNERATION
(a) I elect to receive my Base Remuneration as follows (please check either
Box "A" or Box "B"):
A. _______% in Deferred Share Units (not to exceed 20%)
and
B. ________% in cash.
(b) I elect to receive my Bonus, if any, as follows: (Please check either Box
"C" or Box "D"
C. ________% in Deferred Share Units (not to exceed 100%)
D. ________% in cash.
2. DESIGNATION OF BENEFICIARY
In accordance with the terms of the Plan, I appoint as designated
beneficiary, or if previously done, I hereby revoke any designation of
beneficiary heretofore made by me under the Plan, and hereby appoint as
designated beneficiary to receive any payment in accordance with the Plan
that may fall due after my death:
______________________________________ [INSERT FULL NAME]; provided,
however, that if the above named beneficiary predeceases me such payment
shall be made to my estate.
3. I UNDERSTAND THAT:
- All capitalized terms shall have the meanings attributed to them under
the Plan.
- All payments will be net of any Applicable Withholding Taxes.
Xx. Xxxxx Xxxxxxx April 27, 2004
PERSONAL & CONFIDENTIAL
) --------------------------------------
Witness Signature ) Eligible Employee's Signature
)
) --------------------------------------)
Witness Name (please print) ) Eligible Employee's Name (please print)
)
) --------------------------------------
) Date
UNTIL THIS ELECTION FORM IS RETURNED TO THE SECRETARY OF THE COMPANY, 100% OF
THE ANNUAL REMUNERATION WILL BE RECEIVED IN THE FORM OF CASH.
SCHEDULE C
DRAXIS HEALTH DISCLOSURE AND XXXXXXX XXXXXXX POLICY
OBJECTIVE AND SCOPE
Draxis Health Inc. ("Draxis" or the "Company") is committed to providing timely,
factual, accurate and balanced disclosure of material information about the
Company, consistent with legal and regulatory requirements. The Company will
disseminate news regarding developments which could have a material impact on
the Company's operations and financial results on a timely basis, except where
confidentiality issues require a delay. It is imperative that the general public
has timely access to material information.
This Policy confirms in writing our existing disclosure policies and practices.
Its goal is to raise awareness of the Company's approach to disclosure among the
Board of Directors, senior management and employees of the Company and its
subsidiaries. This Policy extends to all employees of the Company and its
subsidiaries, its Board of Directors and those authorized to speak on its
behalf. It covers disclosures in documents filed with the securities regulators
and written statements made in the Company's annual and quarterly reports, news
releases, letters to shareholders, and information contained on the Company's
website and other electronic communications. It also extends to oral statements
and in particular presentations and speeches by senior management and oral
statements in meetings and telephone conversations with analysts and investors,
interviews with the media as well as press conferences and conference calls.
This Policy has been approved by the Board of Directors of the Company.
DISCLOSURE AND XXXXXXX XXXXXXX POLICY COMMITTEE
The President and Chief Executive Officer, upon consultation with the Board of
Directors' Nominating and Corporate Governance Committee, has established a
Disclosure and Xxxxxxx Xxxxxxx Policy Committee consisting of the President and
Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the Investor
Relations Officer (IRO), and the General Counsel and Secretary
The Disclosure and Xxxxxxx Xxxxxxx Policy Committee will determine when
developments not specifically addressed by this Policy require public disclosure
or require the imposition of trading restrictions or a blackout period and will
determine who specifically is affected by such restrictions. The Committee will
meet as conditions dictate. If appropriate, the Committee will review any
situation not specifically addressed by this Policy with the Nominating and
Corporation Governance Committee or the Board of Directors of the Company. A
written record of decisions will be maintained by the General Counsel and
Secretary.
IT IS ESSENTIAL THAT THE DISCLOSURE AND XXXXXXX XXXXXXX POLICY COMMITTEE BE
FULLY APPRISED BY ALL OFFICERS AND EMPLOYEES OF THE COMPANY OF ALL MATERIAL
COMPANY DEVELOPMENTS IN ORDER TO EVALUATE AND DISCUSS THOSE EVENTS TO DETERMINE
THE APPROPRIATENESS AND TIMING FOR PUBLIC RELEASE OF MATERIAL INFORMATION OR
WHETHER THE INFORMATION SHOULD REMAIN CONFIDENTIAL (IN KEEPING WITH SECURITIES
REGULATIONS AND STOCK EXCHANGE RULES), AND IF SO, HOW THAT UNDISCLOSED
CONFIDENTIAL INFORMATION WILL BE CONTROLLED AND FOR WHAT TIME PERIOD.
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PERSONAL & CONFIDENTIAL
The Disclosure and Xxxxxxx Xxxxxxx Policy Committee will be chaired by a
designated member of the Committee.
The Disclosure and Xxxxxxx Xxxxxxx Policy Committee will review and update this
Policy, if necessary, on an annual basis or as needed to ensure compliance with
changing securities regulations and guidelines. All modifications to this Policy
shall be approved by the Board of Directors of the Company.
DESIGNATED SPOKESPERSONS
The Company designates a limited number of spokespersons responsible for
communication with the investment community, investors, analysts, regulators and
the media. The CEO, the CFO and the IRO shall be the official spokespersons for
the Company. Individuals holding these offices may, from time to time, designate
others within the Company to speak on behalf of the Company as back-ups or to
respond to specific inquiries from the investment community or the media.
Employees who are not authorized spokespersons must not respond under any
circumstances to inquiries from the investment community or the media unless
specifically asked to do so by an authorized spokesperson. All such inquiries
shall be referred to the IRO.
Except for discussions with business partners by senior management, employees
should refrain from discussing confidential and potentially material affairs of
the Company with third parties, unless expressly authorized to do so.
RESPONSIBILITY FOR ELECTRONIC COMMUNICATIONS
This Policy also applies to electronic communications. Accordingly, officers and
personnel responsible for written public disclosures shall also be responsible
for electronic communications. The IRO is responsible for updating and
maintaining the investor relations section of the Company's website and is
responsible, along with the General Counsel, for monitoring all Company
information placed on the website to ensure that it is accurate, complete and up
to date. Any material changes in information must be updated immediately.
Although the Company views electronic communications as an extension of its
formal disclosure record, it recognizes that disclosure on its website does not
necessarily constitute adequate disclosure of information that is considered
material non-public information. Any disclosures of material information on its
website will be coordinated with full disclosure, which generally includes
appropriate dissemination of a news release.
Policies and practices relating to the construction and use of the Company
website shall be reviewed periodically by the Disclosure and Xxxxxxx Xxxxxxx
Policy Committee, using in part the guidelines set out in Appendix A, Guidelines
for the Company Website and the recommendation of any reports from external
website audits/reviews.
The IRO shall also be responsible for responses to electronic inquiries. Only
previously disclosed public information or information which could otherwise be
disclosed in accordance with this Policy shall be utilized in responding to
electronic inquiries.
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PERSONAL & CONFIDENTIAL
Employees are prohibited from participating in Internet chat room or newsgroup
discussions on matters pertaining to the Company's activities or its shares or
other securities. Employees who encounter a discussion pertaining to the Company
should advise the IRO immediately, so the discussion may be monitored.
MATERIAL INFORMATION
Material information is any information relating to the business and affairs of
the Company that results in, or would reasonably be expected to result in, a
significant change in the market price or value of the Company's securities or
that would reasonably be expected to have a significant influence on a
reasonable investor's investment decisions. To qualify as material information,
the United States Securities and Exchange Commission (SEC) states that there
must be a substantial likelihood that a fact would be viewed by a reasonable
investor as significantly altering the total mix of information available about
the Company. Material information consists of both material facts and material
changes relating to the business and affairs of the Company. Examples of
developments that may give rise to material information include, but are not
limited to, the following:
- Development of new products and developments affecting the Company's
resources, technologies, products or market
- Entering into or loss of significant contracts
- A significant acquisition, disposition or merger involving the Company
- A new issue of securities or a significant change in the Company's
capital structure
- Significant changes in senior management
- Significant litigation
- A significant change in the Company's lending arrangements
- A significant change in previously disclosed near-term expected revenues
or earnings
- Any other developments relating to the business and affairs of the
Company that would reasonably be expected to significantly affect the
market price or value of any of the Company's securities or that would
reasonably be expected to have a significant influence on a reasonable
investor's investment decisions.
PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATION
In complying with the requirement to disclose forthwith all material information
under applicable laws and stock exchange rules, the Company will adhere to the
following basic disclosure rules:
1. Material information will be publicly disclosed immediately, unless the
Disclosure and Xxxxxxx Xxxxxxx Policy Committee determines that such
disclosure would be unduly detrimental to the Company (in which case the
information will be kept confidential for a limited period of time until
the Committee determines it is appropriate to publicly disclose). In
appropriate circumstances, the Disclosure and Xxxxxxx Xxxxxxx Policy
Committee will cause a confidential material change report to be filed
with the applicable securities regulators, will periodically (at least
every 10 days) review its decision to keep the information confidential
and will promptly
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PERSONAL & CONFIDENTIAL
disclose any material change that is the subject of the confidential
material change report if required by applicable securities legislation.
2. Disclosure must include any information the omission of which would make
the rest of the disclosure misleading (half truths are misleading).
3. Unfavourable material information must be disclosed as promptly and
completely as favourable information.
4. No selective disclosure. Previously undisclosed material information must
not be disclosed to selected individuals or organizations (for example,
in an interview with an analyst or in a telephone conversation with a
major shareholder). If previously undisclosed material information has
been inadvertently disclosed to an analyst or any other person, such
information must be disclosed promptly via news release in compliance
with applicable SEC and Canadian regulatory and legal requirements. The
Company will always file documents containing material information
concurrently on all appropriate public files, including SEDAR and XXXXX.
5. Disclosure of material information must be updated if earlier disclosure
has become misleading as a result of intervening events.
CONFIDENTIAL INFORMATION
The withholding of confidential material information on the basis that
disclosure would be unduly detrimental to the Company's interest must be
infrequent and can only be justified where the potential harm to the Company or
to shareholders caused by immediate disclosure may reasonably be considered to
significantly outweigh the undesirable consequences of delaying disclosure.
Stock exchanges, specifically NASDAQ and the TSX, discourage delaying disclosure
for a lengthy period of time, since it is unlikely that confidentiality can be
maintained beyond the short term.
Examples of instances where disclosure might be unduly detrimental to the
Company include:
1. Release of the information would prejudice the ability of the Company to
pursue specific and limited near-term objectives or to complete a
transaction or series of transactions that are underway.
2. Disclosure of the information would provide competitors with confidential
corporate information that would be of significant benefit to them. A
decision to release a new product for example, or the details of the
features of a new product, may be withheld for competitive reasons.
3. Disclosure of information concerning the status of ongoing negotiations
would prejudice the successful completion of those negotiations.
NON GAAP FINANCIAL MEASURES
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PERSONAL & CONFIDENTIAL
Whenever the Company publicly discloses material information that includes a
non-GAAP financial measure, the disclosure must comply with applicable SEC and
Canadian legal requirements and guidelines. The non-GAAP financial measure must
be accompanied by a presentation of the most directly comparable financial
measure calculated and presented in accordance with GAAP and a reconciliation of
the differences between the non-GAAP financial measure and the most comparable
GAAP financial measure or measures. If the non-GAAP financial measure is made
public orally, telephonically, by webcast, by broadcast or by similar means, the
required reconciliation must be posted on the Company's website and the location
of the website must be made public in the same presentation in which the
non-GAAP financial measure is made public.
NEWS RELEASES
Once the Disclosure and Xxxxxxx Xxxxxxx Policy Committee determines that a
development is material, it will authorize the prompt issuance of a news
release, unless the Disclosure and Xxxxxxx Xxxxxxx Policy Committee determines
that such developments must remain confidential for the time being, in which
case any confidential filings required by applicable securities legislation will
be made and appropriate control of that inside information will be instituted.
Should a material statement inadvertently be made in a selective forum, the
Company will promptly issue a news release in order to fully and publicly
disclose that information in accordance with applicable SEC and Canadian
regulatory and legal requirements. The Disclosure and Xxxxxxx Xxxxxxx Policy
Committee shall determine at its discretion if the text of the news release
should be reviewed prior to publication by the Audit Committee (for financial
matters) and the Board of Directors (for financial and all other matters), the
Company's external auditors and outside counsel.
News releases will be disseminated through an approved news wire service that
provides simultaneous national and/or international distribution. News releases
will be transmitted to all stock exchange members, relevant regulatory bodies,
major national financial media and the local media in areas where the Company
has its headquarters and operations.
All press releases must be sent to the TSX for their review prior to their
release, giving the TSX reasonable time to provide any comments thereon. If a
stock exchange upon which shares of the Company are listed is open for trading
at the time of a proposed announcement, prior notice of a news release
announcing material information must be provided to the market surveillance
agency associated with the exchange to enable a trading halt, if deemed
necessary by the exchange. If a news release announcing material information is
issued outside of trading hours, market surveillance agencies must be notified
promptly and before the market reopens.
RUMOURS
So long as it is clear that the Company is not the source of the market rumour,
the Company does not comment, affirmatively or negatively, on rumours. This also
applies to rumours on the Internet. The Company's spokespersons will respond
consistently to those rumours, saying, "IT IS
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PERSONAL & CONFIDENTIAL
OUR POLICY NOT TO COMMENT ON MARKET RUMOURS OR SPECULATION." Should the stock
exchange request that the Company make a definitive statement in response to a
market rumour that is causing significant volatility in the stock, the
Disclosure and Xxxxxxx Xxxxxxx Policy Committee will consider the matter and
decide whether to make a policy exception. If the rumour is true in whole or in
part, the Company will immediately issue a news release disclosing the relevant
material information.
FORWARD LOOKING INFORMATION
The Company will not release earnings projections other than in a prospectus
grade offering document (and only in compliance with applicable securities
laws), will not confirm analysts' earnings estimates and will not attempt to
influence an analyst's opinions or conclusions. The Company may continue to
publicly disseminate non-material, forward-looking information to enable the
investment community to better evaluate the Company and its prospects. To the
extent that forward looking information is provided in a disclosure document,
the document is to be accompanied by meaningful cautionary language that warns
investors that there is a risk that the statement could change materially. In
the case of oral or electronically presented forward-looking statements, the
statement will be identified as such and the spokesperson will refer to a
readily available written document (news release, annual report) for the
cautionary language.
CONTACTS WITH ANALYSTS, INVESTORS AND THE MEDIA
The Company recognizes that analysts and the media are important conduits for
disseminating corporate information to the investing public and that analysts
play a key role in interpreting and clarifying existing public data and in
providing investors with context, industry trends, comparisons and background
information and details that cannot practically be put in public documents. The
Company will meet with analysts, investors and reporters on an individual or
small group basis as needed and will initiate contacts or respond to analyst,
investor and media calls in a timely, consistent and accurate fashion in
accordance with this disclosure policy. The Company will provide only
non-material information through individual and group meetings, in addition to
publicly disclosed information, recognizing that this information may be
constructed into a mosaic that could result in material information. The Company
cannot alter the materiality of information by breaking down the information
into smaller, non-material components. The Company will not engage in selective
disclosure of material non-public information to analysts, however it will
provide, through its website or otherwise, the same sort of detailed,
non-material information to individual investors or reporters that has been
provided to analysts. Any slides used in meetings with analysts or investors may
be posted on the website. It is highly desirable that where practicable more
than one Company representative be present at all individual and group meetings
with analysts, investors, media representatives.
The Company recognizes that analyst disclosure does not constitute adequate
disclosure of information that is considered material non-public information. If
material information is to be announced at an analyst or shareholder meeting or
a press conference, its announcement must be disseminated concurrently to the
general public via a full disclosure news release.
QUIET PERIODS
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PERSONAL & CONFIDENTIAL
In order to avoid the potential for selective disclosure or even the perception
or appearance of selective disclosure, the Company will observe a quiet period
prior to quarterly earnings announcements. Regular quiet periods commence 30
days before the issuance of a news release disclosing quarterly results and end
upon the issuance of said release. During the quiet period, no meetings or
telephone contacts with analysts and investors will be initiated and no guidance
will be provided, however the Company will respond to unsolicited inquiries
concerning factual matters.
If the Company is invited to participate, during a quiet period, in investment
meetings or conferences organized by others, the Disclosure and Xxxxxxx Xxxxxxx
Policy Committee will determine, on a case-by-case basis, if it is advisable to
accept the invitation. If accepted, the Company will exercise extreme caution to
avoid selective disclosure of any material, non-public information.
REVIEWING ANALYST DRAFT REPORTS AND MODELS
It is the Company's policy that upon request it may review draft research
reports or financial models solely for factual accuracy based on publicly
disclosed information and that it will provide no guidance. The Company will not
confirm, or attempt to influence, an analyst's opinions or conclusions. If
requested, the Company will review the sections of a draft research report or
model for the purpose of identifying factual errors consistent with NASD Rule
2711.
Analyst reports are proprietary products of the analysts' firms. Re-circulating
a report by an analyst may be viewed as an endorsement by the Company of the
report. For these reasons, the Company will not provide analyst reports through
any means to persons outside of the Company, including posting such information
on its website. The Company may post on its website a complete list, regardless
of the recommendation, of all the investment firms and analysts of which it is
aware who provide research coverage on the Company. If provided, such lists will
not include links to the analysts' or any other third parties' websites or
publications.
CONFERENCE CALLS
A conference call may be held with members of the investment community to
discuss quarterly or annual financial and operating results or major material
corporate developments. The Company will announce the date and time of the
conference call in advance on its website and in a news release containing all
relevant details for participating in or listening to the call. The conference
call may be broadcast simultaneously via webcast over the Internet. The media
and individual investors may call a toll-free number (or access the webcast over
the Internet) and listen to the call on a real-time basis.
At the beginning of the call, a Company spokesperson will provide appropriate
cautionary language with respect to any forward-looking information and will
direct participants to publicly available documents containing the assumptions,
sensitivities and a full discussion of the risks and uncertainties. A tape
recording of the conference call will be made available for a period of
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PERSONAL & CONFIDENTIAL
at least one month following the call on either a toll-free number or an
archived audio webcast on the Internet, for anyone interested in listening to a
replay.
After the conference call, the CFO, the IRO, the CEO (if he participated in the
conference call) and the General Counsel and Secretary will meet in a debriefing
session. If such debriefing identifies selective disclosure of previously
undisclosed material information, the Company will promptly disclose such
information, generally via news release. Any non-material supplemental
information provided to participants in the conference call will also be posted
on the website for others to view.
DISCLOSURE RECORD
The Company will maintain a file containing all public information about the
Company, including continuous disclosure documents, news releases, analysts'
reports, transcripts or tape recordings of conference calls and newspaper
articles.
The minimum retention period for material corporate information posted on the
website shall be one year. Specifically, news releases shall be kept for a
period of two years, quarterly and annual reports for five years.
TRADING RESTRICTIONS AND BLACKOUT PERIODS
It is illegal for anyone to purchase or sell securities of any public company
with knowledge of material non-public information affecting that company that
has not been publicly disclosed. Except in the necessary course of business, it
is also illegal for anyone to inform any other person of material non-public
information.
INSIDERS, EMPLOYEES, SERVICE PROVIDERS OR THOSE IN A "SPECIAL RELATIONSHIP" (AS
SUCH TERM IS DEFINED IN APPLICABLE SECURITIES LEGISLATION) WITH KNOWLEDGE OF
CONFIDENTIAL OR MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY ARE PROHIBITED
FROM TRADING UNTIL THE INFORMATION HAS BEEN FULLY DISCLOSED AND A REASONABLE
PERIOD OF TIME HAS PASSED FOR THE INFORMATION TO BE WIDELY DISSEMINATED.
QUARTERLY TRADING BLACKOUT PERIODS WILL APPLY TO ALL EMPLOYEES DESIGNATED AS
INSIDERS WHEN FINANCIAL STATEMENTS ARE BEING PREPARED BUT RESULTS HAVE NOT YET
BEEN PUBLICLY DISCLOSED. QUARTERLY BLACKOUT PERIODS FOR INSIDERS WILL COMMENCE
ON THE 15TH DAY FOLLOWING THE END OF A QUARTER (IF SUCH 15TH DAY IS NOT A
WORKING DAY, THE PERIOD WILL COMMENCE ON THE WORKING DAY IMMEDIATELY PRECEDING
THIS 15TH DAY) AND END TWO FULL BUSINESS DAYS FOLLOWING THE ISSUANCE OF A NEWS
RELEASE DISCLOSING QUARTERLY RESULTS.
QUARTERLY BLACKOUT PERIODS WILL ALSO APPLY TO ALL EMPLOYEES DURING PERIODS WHEN
FINANCIAL STATEMENTS HAVE BEEN PREPARED FOR REVIEW BY THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS BUT RESULTS HAVE NOT YET BEEN PUBLICLY DISCLOSED. THE
BLACKOUT PERIOD FOR ALL EMPLOYEES COMMENCES THE FIFTH BUSINESS DAY PRIOR TO THE
RELEASE OF THE COMPANY'S QUARTERLY OR ANNUAL FINANCIAL RESULTS AND ENDS TWO FULL
BUSINESS DAYS FOLLOWING THE ISSUANCE OF A NEWS RELEASE DISCLOSING QUARTERLY
RESULTS.
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PERSONAL & CONFIDENTIAL
During a blackout period, an employee or an Insider may, after informing the
General Counsel and Secretary, exercise any options that are due to expire
during the blackout period in question. However, the employee or Insider must
hold the shares received upon the exercise of such options during the remainder
of the blackout period.
Blackout periods may be prescribed from time to time as a result of special
circumstances relating to the Company pursuant to which Insiders of the Company
would be precluded from trading in securities of the Company.
Insiders shall not sell, directly or indirectly, securities of the Company or
its affiliates if the Insider does not own or has not fully paid for the
securities to be sold. An Insider shall not, directly or indirectly, sell a call
or buy a put in respect of a security of the Company or its affiliates.
TO PROTECT THE REPUTATION OF THE COMPANY AND AVOID THE APPEARANCE OF
IMPROPRIETY, ALL DIRECTORS, OFFICERS AND OTHER INSIDERS ARE REQUIRED TO
PRE-CLEAR ALL PROPOSED TRADES IN THE COMPANY'S SECURITIES (INCLUDING THE
EXERCISE OF STOCK OPTIONS) WITH THE GENERAL COUNSEL AND SECRETARY OR OTHER
DESIGNATED OFFICER OF THE COMPANY.
Insiders are personally responsible for filing accurate and timely xxxxxxx
xxxxxxx reports.
MAINTAINING CONFIDENTIALITY
Any employee privy to confidential information is prohibited from communicating
such information to anyone else, unless it is necessary to do so in the course
of business. Efforts will be made to limit access to such confidential
information to only those who need to know the information and such persons will
be advised that the information is to be kept confidential.
Communication by e-mail leaves a physical track of its passage that may be
subject to later decryption attempts. All confidential information being
transmitted over the Internet must be secured by the strongest encryption and
validation methods practically available. Where possible, employees should avoid
using e-mail to transmit confidential information.
Outside parties privy to undisclosed material information concerning the Company
will be told that they must not divulge such information to anyone else, other
than in the necessary course of business and that they may not trade in the
Company's securities until the information is generally disclosed. The obtaining
of a signed confidentiality agreement is desirable in these situations.
In order to prevent the misuse or inadvertent disclosure of material
information, the procedures set forth below should be observed at all times:
1. Confidential matters should not be discussed in places where the
discussion may be overheard, such as elevators, hallways, restaurants,
airplanes or taxis.
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PERSONAL & CONFIDENTIAL
2. Confidential documents should not be read in public places and should not
be discarded where others can retrieve them. Similarly, employees should
not leave confidential information at their homes or other locations
outside of their work location.
3. Transmission of documents by electronic means, such as by fax or directly
from one computer to another, should be made only where it is reasonable
to believe that the transmission can be made and received under secure
conditions.
4. Unnecessary copying of confidential documents should be avoided and
documents containing confidential information should be promptly removed
from conference rooms and work areas after meetings have concluded. Extra
copies of confidential documents should be shredded or otherwise
destroyed.
5. Access to confidential electronic data should be restricted through the
use of passwords.
6. Documents and files containing confidential information should be kept in
a safe place to which access is restricted to individuals who "need to
know" that information in the necessary course of business.
7. All proprietary information, including computer programs and other
records, remain the property of the Company and may not be removed,
disclosed, copied or otherwise used except in the normal course of
employment or with the prior permission.
XXXXXXX XXXXXXX
Xxxxxxx xxxxxxx is strictly regulated by Part XXI of the TSX Company Manual,
applicable provincial securities legislation such as Section 76 and 134 of the
Ontario Securities Act and the Regulations under the Act and Part XI of the
Canadian Business Corporations Act.
An "insider" is defined in the
Ontario Securities Act as every director or
senior officer of a reporting issuer (i.e. the Company), every director or
senior officer of a company that is itself an insider or subsidiary of a
reporting issuer (i.e. Draximage and Draxis Pharma) and any person or company
who beneficially owns, directly or indirectly, voting securities of a reporting
issuer or who exercises control or direction over voting securities of a
reporting issuer or a combination of both carrying more than 10% of the voting
rights attached to all voting securities of that reporting issuer. Similar
definitions apply in other provincial legislation.
Section 76 of the
Ontario Securities Act prohibits any person or company in a
"special relationship" with a listed company from trading on the basis of
undisclosed material information on the affairs of that company. Those
considered to be in a "special relationship" with a listed company include those
that are insiders, affiliates or associates of the listed company, a person or
company proposing to make a take over bid of the listed company and a person or
company proposing to become a party to a reorganization, amalgamation, merger or
similar business relationship with the listed company. A person or company in a
"special
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PERSONAL & CONFIDENTIAL
relationship" also includes those involved, or which were involved, in
the provision of business or professional services for the listed company,
including employees.
The contravention of applicable xxxxxxx xxxxxxx regulations and laws is a
serious civil offence and may lead to civil and/or criminal sanction.
Employees are encouraged to discuss any questions or concerns they might have
about xxxxxxx xxxxxxx activities with the General Counsel and Secretary of the
Company.
The Company designates all its officers, directors, and certain employees as
insiders or designated insiders for the purpose of compliance with applicable
securities laws. This designation will be reviewed on an annual basis by the
Disclosure and Xxxxxxx Xxxxxxx Policy Committee. Such individuals have strict
controls on their ability to trade shares of the Company and have stringent
insider reporting obligations to various Canadian securities commissions. Such
trading restrictions may even continue for a reasonable period of time after an
individual ceases to be an officer, director or employee because of his/her
continued possession of insider information. There may also be times when other
individuals employed by the Company or its affiliates will be deemed by the
Disclosure and Xxxxxxx Xxxxxxx Policy Committee insiders for a period of time
(i.e. because of close involvement in a transaction, in-licensing or access to
confidential information not yet publicly disseminated). Those individuals will
be advised of their status at that time by the General Counsel and Secretary of
the Company.
COMMUNICATION AND ENFORCEMENT
All current and new directors, officers, authorized spokespersons and employees
will be advised of this Policy and educated about its importance. This Policy
will be brought to the attention of all employees and directors on an annual
basis.
An employee who violates this Policy may face disciplinary action up to and
including termination of his or her employment with the Company. The violation
of this Policy may also violate certain securities laws. If the Company
discovers that an employee has violated such securities laws, it may refer the
matter to the appropriate regulatory authorities, which could lead to penalties,
fines or imprisonment.
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APPENDIX A - GUIDELINES FOR THE COMPANY WEBSITE
Points to be considered in the evaluation and review of the Company website may
include, but are not limited to the following:
1. Investor relations material will be contained within a separate section
of the website and shall include a notice that advises the reader that
the information posted was accurate at the time of posting, but may be
superseded by subsequent disclosures. The investor relations portion of
the Company website should be sufficiently distinct in graphic style
and/or colours and/or page labelling to ensure users are aware they are
in the investor relations section.
2. All factual or material information and data posted to the website,
including text and audio-visual material, should show the date such
material was issued and/or posted to the website.
3. News releases will be posted on the Company's website immediately or as
soon as possible after notification by the wire service provider of
dissemination over the news wires.
4. The Company may post on the investor relations section of its website a
complete list, regardless of the recommendation, of all the investment
firms and analysts who provide formal research coverage on the Company.
The Company may request the approval of analysts to be included on such a
list. This list, if provided on the website, will not include links to
the analysts' or any other third party websites or publications.
5. Links from the Company website to a third party website will include a
notice that advises the reader that he or she is leaving the Company's
website and that the Company is not responsible for the contents of the
other site. The Company will be sensitive to any concerns about the
endorsement of information on third party websites (over which it has no
control).
SCHEDULE D
DRAXIS HEALTH INC.
CODE OF ETHICS AND BUSINESS CONDUCT
1. PURPOSE AND SCOPE
It is the policy of Draxis Health Inc. (the "Corporation") to conduct its
business affairs honestly, ethically and in full accordance with the law.
Conduct that may raise questions as to the Corporation's, or any of its
employee's, director's or representative's honesty, integrity, impartiality, or
reputation, or activities that could cause embarrassment to the Corporation or
damage its reputation is prohibited. Any activity, conduct, or transaction that
is or may appear to be unethical, illegal, or improper business conduct must be
avoided.
In this Code, "Corporation" shall also include the subsidiaries of the
Corporation and "Representative" shall mean the Corporation's President and
Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") or any person
performing similar functions, and any other employee, director, officer or
consultant engaged by the Corporation or its subsidiaries. All Representatives
are subject to this Code. Compliance with this Code is essential to preserving
and enhancing the Corporation's reputation as a responsible corporate citizen
and ultimately in maximizing shareholder value.
Violation of the Code is a serious matter that could subject Representatives or
the Corporation to legal liability and furthermore, in the case of
Representatives who are employees, disciplinary sanctions including termination.
This Code is not meant to be a complete code of ethics and business conduct
covering every eventuality. Consequently, should a Representative be confronted
with a situation where further guidance is required, the matter should be
discussed with designated persons as set forth in section 6 of this Code.
2. CONDUCT AND BEHAVIOUR
2.1 Each Representative is accountable for observing rules of conduct
that are normally accepted as standard in a business enterprise.
2.2 Representatives shall give precedence to ethical principles and
obligations in their decisions and actions. They shall respect all
ethical obligations deriving from applicable laws, acts and
regulations. Representatives shall not condone unethical conduct.
3. CONFLICT OF INTEREST
3.1 It is the policy of the Corporation that transactions with other
business entities, universities or other organizations and
individuals shall not be influenced or affected by the personal
interests or activities of any Representative. Activities or
personal interests of the Representatives or their immediate
family members which are actually or potentially harmful or
detrimental to the best interests of the
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Corporation or which create the appearance of a conflict of
interest should be avoided so as not to reflect negatively on the
reputation of the Corporation or its Representatives. All
transactions between the Corporation and its affiliates shall be
completed on a fair market basis by reference to terms and
conditions available from arm's length third parties. Any actual
or apparent conflicts of interest between the Corporation and its
affiliates shall be resolved on the basis that the Corporation's
Representatives must act in the best interests of the Corporation.
3.2 Activities or personal interests of Representatives, including
those of their immediate family members, which may or could appear
to influence the objective decisions required in the performance
of their Corporation responsibilities are considered to be a
conflict of interest and are prohibited unless a waiver is granted
by the Corporation's Board of Directors or designated committee in
accordance with this Code. Such conflicts may create a presumption
of favouritism or damage the reputation of the Corporation or its
Representatives in the eyes of others with whom the Corporation
may transact business, including shareholders and the investment
community.
3.3 All Representatives have a responsibility to protect the
Corporation's assets against loss, theft, abuse and unauthorized
use or disposal. No Representative of the Corporation may use
Corporation assets, facilities or positions to promote personal
interests.
4. INTEGRITY OF BOOKS AND RECORDS AND COMPLIANCE WITH SOUND ACCOUNTING
PRACTICES
4.1 PREPARATION OF BOOKS AND RECORDS
Accuracy and reliability in the preparation of all business
records is a critical importance to the decision making process
and to the proper discharge of financial, legal and reporting
obligations by the Corporation. All business records, expense
accounts, invoices, bills, payroll, corporate records and other
reports are to be prepared with care and honesty. False or
misleading entries are not permitted in the Corporation's books
and records.
4.2 FINANCIAL TRANSACTIONS
All financial transactions are to be properly recorded in the
books of account and accounting procedures are to be supported by
the necessary internal controls. All books and records of the
Corporation must be available for audit purposes.
All Representatives responsible for establishing and managing the
Corporation's financial reporting systems must ensure that:
(i) all business transactions are properly authorized;
(ii) all records fairly and accurately reflect the transactions
or occurrences to which they relate;
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(iii) all records fairly and accurately reflect in reasonable
detail the Corporation's assets, liabilities, revenues and
expenses;
(iv) the Corporation's accounting records do not contain any
false or intentionally misleading entries;
(v) no transactions are intentionally misclassified as to
accounts, departments or accounting periods;
(vi) all transactions are supported by accurate documentation in
reasonable detail and recorded in the proper account and in
the proper accounting period; and
(vii) no information is concealed from the CFO or controller, the
independent auditors, the Audit Committee or the Board of
Directors.
4.3 RESPONSIBILITIES OF REPRESENTATIVES
Full, fair, accurate, timely and understandable disclosure in the
reports and other documents that the Corporation files with, or
submits to, its regulators and in the Corporation's other public
communications must comply fully with the Corporation's
obligations under securities laws and other applicable laws and
meet expectations of the Corporation's shareholders and other
members of the investment community.
The highest standard of care must be exercised in preparing such
reports, documents and other public communications. In accordance
with the guidances set forth below, a Representative must:
(i) not intentionally cause Corporation documents to be
incorrect in any way;
(ii) not create or participate in the creation of any records
that are intended to conceal anything that is improper;
(iii) properly and promptly record or cause to be recorded all
disbursements of funds;
(iv) co-operate with the CFO, controller and external auditors;
(v) report, in accordance with section 6 of this Code, any
knowledge of any untruthful or inaccurate statements or
records or transactions that do not appear to serve a
legitimate commercial purpose;
(vi) not make any unusual financial arrangements with a client
or a supplier (such as over-invoicing or under-invoicing)
for payments on their behalf to a third party;
(vii) comply with generally accepted accounting principles at all
times. However, technical compliance with GAAP may not be
sufficient and, to the extent that technical compliance
with GAAP would render financial information that the
Corporation reports misleading, additional disclosure will
be required;
(viii) comply with the Corporation's system of internal accounting
controls at all times. No action designed to circumvent
such controls and procedures will be tolerated; and
(ix) comply with the Corporation's disclosure controls and
procedures at all times. No action designed to circumvent
such controls and procedures will be tolerated.
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5. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
5.1 All Representatives are expected to act in full accordance with
all domestic and foreign laws, rules and regulations applicable to
the business of the Corporation. Violation of laws, rules or
regulations or compromise of the Corporation's ethical
expectations could result in written reprimands or other
disciplinary action, including termination and criminal or civil
legal proceedings where applicable.
5.2 The Corporation is involved, from time to time, in matters which
are sensitive in nature and important to the Corporation, its
Representatives and its shareholders. Securities laws impose
certain obligations on the Corporation regarding the disclosure of
information to the investing public. To comply with these laws and
the regulations promulgated thereunder, the Corporation has
established a Disclosure and Xxxxxxx Xxxxxxx Policy which is
applicable to all Representatives. In addition, the following
policies and procedures are applicable to all Representatives:
5.2.1 CONFIDENTIALITY: The Corporation's ability to effectively
discharge its disclosure obligations under the securities
laws can be adversely affected by the premature or
otherwise unauthorized disclosure of internal information
relating to the Corporation. All Representatives,
therefore, must make every effort to maintain the
confidentiality of the Corporation's internal information.
These efforts include securely handling and storing all
sensitive documents. Representatives should not communicate
internal information to friends, family or other third
parties, except as may be required in the ordinary course
of business.
5.2.2 DESIGNATED SPOKESPERSON: The Corporation designates a
limited number of spokespersons responsible for
communication with the media, investors and analysts. The
President and CEO, the CFO and the Investor Relations
Officer ("IRO") shall be the official spokespersons for the
Corporation. Individuals holding these offices may, from
time to time, designate others within the Corporation to
speak on behalf of the Corporation as back-ups or to
respond to specific inquiries from the investment community
or the media.
Employees who are not authorized spokespersons must NOT
respond under any circumstances to inquiries from the
investment community or the media unless specifically asked
to do so by an authorized spokesperson. All such inquiries
shall be referred to the IRO.
Except for discussions with business partners by senior
management, employees should refrain from discussing
confidential and potentially material affairs of the
Corporation with third parties, unless expressly authorized
to do so.
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5.2.3 TRADING OF SECURITIES: The Disclosure and Xxxxxxx Xxxxxxx
Policy of the Corporation sets forth the prohibitions
concerning unauthorized trades of the Corporation's
securities and other guidelines that must be respected by
Representatives with respect to trades of the Corporation's
securities.
6. REPORTING OF CODE VIOLATIONS (WHISTLEBLOWING)
6.1 Representatives have a responsibility to promptly report any
conduct or proposed conduct that they reasonably believe to be a
violation of this Code.
6.1.1 If a Representative reasonably believes that a violation of
the Code has or may occur, they should speak to either:
(i) to the Director or Vice President of Human Resources; or
(ii) if the Representative is uncomfortable in talking to the
Director or Vice President of Human Resources, and only in
the case of financial and internal controls and accounting
matters, to the Chairman of the Audit Committee of the
Board of Directors; or
(iii) if the Representative is uncomfortable in talking to the
Director or Vice President of Human Resources, and in the
case of non-financial matters, to the General Counsel and
Secretary;
In either case, the contacted individual will work with the
Representative to investigate the concern. In the case of
financial and internal controls and accounting matters, if the
alleged violation is reported to the Director or Vice President of
Human Resources, then that individual will follow the procedures
stated in Section 6.2.
Reported violations of this Code will be handled promptly,
professionally, and with as much confidentiality as possible. All
reports will be investigated and forwarded to appropriate members
of management or the Board of Directors for follow up.
6.1.2 A Representative accused of violating this Code will be
given an opportunity to present his or her version of the
events at issue. If it has been determined that a
Representative has violated this Code, disciplinary
measures may be taken against the Representative. Depending
on the nature and severity of the violation, disciplinary
action may include termination. Certain violations also may
require the Corporation to refer the matter to criminal or
civil authorities for investigation or prosecution.
6.1.3 Any supervisor who directs or approves of conduct in
violation of this Code, or who has knowledge of such
conduct and does not immediately report it, will be subject
to disciplinary action, up to and including termination.
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6.1.4 In the case of an alleged violation by an executive officer
or director, the Chairman of the Board of Directors, the
CEO and/or the Audit Committee of the Board of Directors,
as applicable, are responsible for determining whether a
violation has occurred and, if so, what disciplinary
measures are appropriate.
6.2 If a Representative with concerns about questionable accounting,
or auditing matters chooses to report such concerns to the
Director or Vice President of Human Resources, then the Director
or Vice President of Human Resources will forward all concerns to
the Audit Committee unless the Director or Vice President of Human
Resources first determines that the allegations are without merit.
In any event, the Director or Vice President of Human Resources
will maintain a comprehensive list of all concerns received
regarding accounting, internal accounting controls, and auditing
matters and provide it to the Audit Committee each fiscal quarter.
6.3 The Corporation does not consider reporting a known or suspected
violation of the Code to be an act of "disloyalty" and it is
against Corporation policy to retaliate against any Representative
who reports what he reasonably believes to be a violation or
suspected violation of this Code. This means that Representatives
will not be disciplined, fired, or discriminated against in any
way for voicing concern about a violation or potential violation
so long as the Representative acts honestly and in good faith. Any
reprisal or retaliation against a Representative who has in good
faith reported a known or suspected violation of this Code is
itself cause for disciplinary action, including termination.
7. DISCLOSURE & REVIEW
Compliance with this Code will be monitored by the Board of Directors of
the Corporation. Where appropriate, either the Nominating and Corporate
Governance Committee or the Audit Committee of the Board of Directors is
responsible for granting any waivers of this policy. Any waivers granted
hereunder to Representatives will be disclosed in a news release
containing the information prescribed by law.
I have read, understand and agree to comply with the letter and intent of this
Code of Ethics and Business Conduct.
------------------------------- ------------------------------------
Witness [NAME OF EMPLOYEE]
------------------------------------
Date
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TABLE OF CONTENTS
1. EMPLOYMENT.............................................................1
2. BASE SALARY............................................................1
3. BENEFITS...............................................................2
4. STOCK OPTION PLAN......................................................2
5. DEFERRED SHARE UNIT PLAN...............................................2
6. DISCRETIONARY BONUS....................................................2
7. MEMBERSHIPS AND PUBLICATIONS...........................................2
8. VACATION...............................................................3
9. EXPENSES...............................................................3
10. DEDUCTIONS.............................................................3
11. EMPLOYEE'S COVENANTS...................................................3
12. CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.........3
(a) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION...............3
(b) NON-SOLICITATION AND NON-COMPETITION.....................5
(c) REASONABLENESS...........................................5
(d) BREACH OF AGREEMENT......................................6
13. TERMINATION OF EMPLOYMENT..............................................6
(a) TERMINATION BY DRAXIS FOR CAUSE.................................6
(b) TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE.............6
(c) TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE..........7
(d) TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL...............7
(e) TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY.............9
(f) DEATH...........................................................9
(g) RESIGNATION AND RETIREMENT......................................9
(h) NO FURTHER NOTICE OR COMPENSATION..............................10
14. FAIR AND REASONABLE...................................................10
15. RETURN OF PROPERTY....................................................10
16. PROVISIONS OPERATING FOLLOWING TERMINATION............................10
17. ACKNOWLEDGEMENT.......................................................10
18. SEVERABILITY..........................................................10
19. NOTICE................................................................10
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20. GOVERNING LAW.........................................................11
21. BENEFIT OF AGREEMENT..................................................11
22. ENTIRE AGREEMENT......................................................11
