Exhibit 4.23
XX. XXXXX X. XXXX
[DRAXIS LOGO] CHAIRMAN OF THE BOARD
PRIVATE AND CONFIDENTIAL
HAND DELIVERED
September 24, 2003
Xx. Xxxxxx Xxxxxx
00 Xxx Xxxxxx Xxxx Xxxx
Xxxxxxx, XX X0X 0X0
Dear Xx. Xxxxxx:
This letter is further to our agreement that Draxis Health Inc. ("Draxis") will
establish for your benefit a Retirement Compensation Allowance ("RCA").
We confirm that the RCA, which has been attached hereto as Schedule "A", is in
the total amount of $1.4 million and will be paid as follows:
(1) Payment of $600,000.00 in August, 2003; and
(2) The remaining $800,000.00 to be paid in quarterly instalments
over the next eight (8) fiscal quarters at the beginning of each
quarter commencing with the fourth quarter of 2003 (the
"Commencement Date"), and ending with fourth quarter of 2005
(the "Completion Date").
(hereinafter the "RCA Payments")
We are writing to confirm that in consideration for the grant of the RCA, and
the RCA Payments, you agree that your Employment Agreement dated April 15, 1999,
as amended by letter dated June 14, 2000, (the "Agreement") shall be interpreted
in accordance with the following provisions:
TERMINATION BY DRAXIS FOR CAUSE - SECTION 16(a)
All RCA Payments shall cease effective immediately upon termination for cause.
TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE - SECTION 16(b)
The RCA Payments shall qualify as notice pursuant to Section 16(b) of the
Agreement for the purposes of calculating notice or pay in lieu thereof.
TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE - SECTION 16(c)
(l) The severance payments set out in Section 16 (c) of the Agreement (the
"Severance Payments") shall be reduced by the RCA Payments. In the event
that you are terminated in accordance with Section 16(c) of the
Agreement prior to the Completion Date, the Severance Payments shall be
reduced by the amount of the RCA payments made as at the date of
termination.
(2) Following the Completion Date all payments pursuant to the RCA shall
cease and you acknowledge that you shall have no further entitlement for
RCA Payments or Severance Payments thereafter.
(3) The Severance Payments and RCA Payments constitute full and final
payment of all monies payable pursuant to Section 16(c) of the
Agreement, and are inclusive of all statutory payments which may be
owing to you upon termination, including but not limited to any monies
or payments for termination pay and severance under the provisions of
the Ontario EMPLOYMENT STANDARDS ACT (the "Act"). You agree that upon
termination in accordance with the Agreement, you shall have no right or
claim to any further compensation, including but not limited to any
claim pursuant to the Act for termination pay and severance pay.
(4) You agree that the RCA Payments constitute appropriate consideration for
the amendments to the Agreement set out herein, and further, that such
payments constitute a greater right or benefit than the payments which
you would have received upon termination for termination pay and
severance pay pursuant to the Act.
TERMINATION PAYMENT FOLLOWING CHANGE OF CONTROL - SECTION 16(d)
Any payments pursuant to the Change of Control provisions of the Agreement shall
be reduced by the RCA Payments. For clarity, the RCA Payments made as at and/or
subsequent to the date of termination shall be deducted from the lump sum amount
payable pursuant to 16(d)(1)(C).
TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY - 16(3)(e)
In the event that you qualify for payments pursuant to Section 16(3)(e) of the
Agreement, any monies deemed payable shall be reduced by the RCA Payments.
DEATH - 16(3)(f)
In the event that you should die during the term of the Agreement, your estate
shall be entitled to the benefit of any unpaid RCA Payments.
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Except as set out herein, the Agreement shall remain in full force and effect.
Please confirm your agreement with the terms and conditions of this letter by
signing below and returning the original to my attention.
Yours very truly,
DRAXIS HEALTH INC.
/s/ Xxxxx X. Xxxx
Per: Xx. Xxxxx X. Xxxx
Chairman of the Board
cc: Xxxx Xxxxxx
Xxxx Xxxxxx
I have read and understand and, having had the opportunity to seek independent
legal advice, I accept the terms outlined above in this letter agreement.
/s/ Xxxxxx Xxxxxx
----------------------------------- ----------------------------------------
Date Xx. Xxxxxx Xxxxxx
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RETIREMENT COMPENSATION ARRANGEMENT
TRUST AGREEMENT
This Agreement made as of this 1st day of July 2003.
Between: DRAXIS HEALTH INC., a company incorporated under the laws of the
Province of Ontario, having its head office in the Province of Ontario
(hereinafter referred to as the "Company")
-and-
XX. XXXXXX XXXXXX, XXXXXX XXXXXX, and XXXXXX X. XXXX, trustees of the
Retirement Compensation Arrangement Trust for Xx. Xxxxxx Xxxxxx of
Draxis Health Inc. (the "Trust") in the province of Ontario
(hereinafter referred to as the "Trustees").
A. WHEREAS pursuant to the terms of a Retirement Compensation Arrangement
(hereinafter called the "RCA") dated July 1st, 2003, the parties hereto
agree to enter into a trust agreement whereby the Trustees agree to act
as Trustees and to administer a trust in accordance with the terms and
conditions of this Agreement;
B. AND WHEREAS the Company has established a trust for the purposes of
providing retirement benefits for some or all of its employees, known as
the Retirement Compensation Arrangement Trust for Xx. Xxxxxx Xxxxxx of
Draxis Health Inc. from the Effective Date and has appointed the
Trustees to administer the Trust as of the Effective Date;
C. AND WHEREAS the Trustees have agreed to act as Trustees in accordance
with the terms and conditions contained herein;
D. AND WHEREAS contributions by the Company are made in connection with
benefits that are to be or may be received or enjoyed by the Members
(hereinafter referred to as the "Member") on, after or in contemplation
of a substantial change in the services rendered by the Member, the
retirement of the Member, the disability or death of the Member or the
loss of office or employment of the Member;
E. The RCA Plan Text requires the Company to pay contributions into trust
to fund the plan benefits and the Company hereby agrees to transfer to
the Trustees the sum of $600,000.00 as an initial contribution.
NOW THEREFORE that in consideration of the member continuing to provide faithful
service to the Company and the Company providing the RCA Plan to the Member and
such other good and valuable consideration and the sum of $10.00 now paid by
each party to each of the other
parties (receipt and sufficiency of which is hereby acknowledged by each of the
parties), the parties hereto agree as follows:
1. INTERPRETATION
1.1 DEFINITIONS. The following terms have the meanings given:
"AGREEMENT" means this trust agreement as amended from time to time;
"BENEFICIARY" means the beneficiaries referred to in Schedule "A";
"EFFECTIVE DATE" means the date on which the Company provides funds to
establish the Trust Fund to the Trustee;
"INCOME TAX ACT" means the Income Tax Act of Canada, as amended from
time to time;
"MEMBER" means a person who is enrolled in the Plan by the Company under
the Terms and Conditions set out in Schedule "A";
"PLAN" means the Retirement Compensation Arrangement ("RCA") Plan as
amended from time to time attached hereto as Schedule "A";
"POWERS" shall be deemed to mean and include those things which the
Trustees may, in their sole and absolute discretion, do or refrain from
doing in the management, supervision or carrying out of this Trust and
the doing or refraining from doing any act shall not violate any duty to
the Members and any Beneficiaries of the Trust and such powers shall not
be limited by any statutory limitations set out in the Ontario Trustee
Act or any other relevant provincial legislation;
"RCA" means a Retirement Compensation Arrangement within the meaning of
the INCOME TAX ACT (CANADA);
"TRUSTEES" means the individuals that from time to time act as the
Trustees of the Trust Fund;
"TRUST FUND" means the trust fund established pursuant to this
Agreement.
1.2 NUMBER AND GENDER. Unless the context requires otherwise, words
importing the singular include the plural and vice versa, and words
importing gender include both genders.
1.3 HEADINGS. The headings in this Agreement are included solely for the
ease of reference and are not to be used to interpret this Agreement.
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2. ESTABLISHMENT AND ACCEPTANCE OF TRUST
2.1 ESTABLISHMENT. In order to establish and settle a trust to fund Plan
benefits, the Company will contribute $10.00 to the Trustees.
2.2 TRUST FUND. All contributions received by the Trustees in connection
with the Plan, together with any earnings, profits, increments and
accruals arising thereon, reduced by authorized payments shall
constitute a Trust Fund which shall be held by the Trustees pursuant to
the trust provisions settling the trust set out within this Agreement
and dealt with in accordance with the enabling powers contained within
this Agreement.
2.3 ACCEPTANCE. The Trustees hereby accept the trusts created by the terms
of the Agreement and the powers set out within this Agreement and agree
to hold, invest, distribute and administer the Trust Fund in accordance
with this Agreement.
2.4 SUBJECT TO AGREEMENTS. The Trust Fund shall be held by the Trustees in
trust for the Member subject to the terms and conditions contained
herein and at no time shall any part of the Trust Fund be used for or
diverted to purposes other than those consistent with the terms of this
Agreement and the RCA.
3. USE OF TRUST FUND
3.1 The Trust Fund shall be used solely for the purposes of paying amounts
that are payable under the Plan and any taxes, expenses for
administration and other amounts payable in respect of the Trust Fund.
4. PAYMENTS FROM THE TRUST FUND
4.1 PAYMENTS OF BENEFITS. The Trustees shall make payments from the Trust
Fund in accordance with the terms of the Plan.
4.2 WITHHOLDING. The Trustees shall withhold from any plan payments to be
made to the Member pursuant to this Agreement any amount required by the
Income Tax Act or any other governing statute to be withheld.
4.3 TAXES. The Trustees shall pay from the Trust Fund all taxes of whatever
kind that may be levied or assessed under existing or future laws upon
or in respect of the Trust Fund or any assets forming a part thereof.
This paragraph also applies to any interest or penalty applicable in
respect of any taxes.
4.4 SALE OF ASSETS. If the Trustees must sell assets in order to make a
payment and have not been directed by the Company as to which assets are
to be sold for this purpose, the Trustees may select the assets to be
sold in the Trustees' sole discretion.
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5. INVESTMENT OF TRUST FUND
5.1 INVESTMENT DIRECTIONS. The Company shall direct the Trustees in the
investment of the Trust Fund and may, from time to time, delegate the
power to direct the investments to one or more other persons, including
the Trustees.
5.2 PERMISSIBLE INVESTMENTS. The Trustees may acquire any investments
whatsoever, notwithstanding that the investments may not be authorized
by law. For greater certainty, and without in any way limiting the
foregoing, the Trustees may acquire interests in pooled funds,
partnerships, life insurance policies, annuity contracts and loans of
private companies including the Company.
6. RETIREMENT COMPENSATION ARRANGEMENT
6.1 It is intended that the Plan and the Trust Fund be a retirement
compensation arrangement for the purposes of the INCOME TAX ACT
(CANADA).
7. POWERS OF TRUSTEES
7.1 Without in any way limiting or derogating from the powers and
authorities otherwise available to the Trustees, the Trustees have the
following powers and authorities in the administration and investment of
the Trust Fund, to be exercised in accordance with this Agreement:
a) PURCHASE OF PROPERTY. To invest the Trust Fund or any part
thereof in such manner and in such loans, bonds, securities or
other property (including securities issued by the Trustees or
its affiliates or by the Company), and upon such terms as the
Trustees shall consider advisable, without being restricted to a
class of investments which the Trustees may be permitted by law
to make.
b) SALE, EXCHANGE, CONVEYANCE AND TRANSFER OF PROPERTY. To sell,
exchange, convey, transfer or otherwise dispose of any
securities or other property held by it, upon such terms and for
such consideration as the Trustees consider suitable.
c) EXERCISE OF OWNER'S RIGHTS. To vote upon any stocks, bonds or
other securities; to give general or special proxies or powers
of attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights, or other
options, and to make any payments incidental thereto; to oppose,
or consent to, or otherwise participate in corporate
reorganizations or other changes affecting corporate securities;
and generally to exercise any of the powers of an owner with
respect to all stocks, bonds, securities or other property held
as part of the Trust Fund.
d) REGISTRATION OF INVESTMENTS. To cause any securities or other
property held or forming part of the Trust Fund to be registered
in their own name as Trustees, or in the name of one or more of
its nominees as Trustee(s), and to be represented by
certificates which include securities of the same class and
nature held for other accounts for which the Trustees act in a
fiduciary capacity; to hold any securities
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in bearer form; and to hold securities of an issuer utilizing a
book-based central depository system for which certificates are
not being issued, in which case the books and records of the
Trustees shall at all times show such securities or the
proportionate interest thereof that are part of the Trust Fund.
e) ACQUIRE LIFE INSURANCE. To apply for and purchase as an
authorized investment of the Trust Fund life insurance on the
life of any person including the Member.
f) INSURANCE. To accept as assignee for consideration or as a
donation to the Trust Fund any life insurance policy or policies
on the life of any person and/or benefits under any such policy
or policies and to use and apply any portion of the Trust Fund
in the payment or pre-payment of premiums upon or for the
purpose of maintaining in force any such insurance, whether
applied for and purchased by the Trustees or accepted by them as
assignees or donees and any insurance so purchased by or donated
to or otherwise acquired and held by the Trustees shall be
deemed to be an authorized investment in a like manner so shall
any payment or pre-payment of any premium thereon. The Trustees
are specifically authorized to acquire universal life policies
with some or all of the contributions to the Trust Fund.
g) BORROWING. To borrow or raise money for the purposes of the
Trust on such terms and conditions as the Trustees consider
appropriate, and to use the property of the Trust Fund to secure
the repayment of the amount borrowed or raised with the purpose
of such borrowing to ultimately benefit the Member and
Beneficiary.
h) RETENTION OF PROPERTY ACQUIRED. To accept and retain any
securities or other property received or acquired by them as
Trustees, whether or not such securities or other property would
normally be purchased as investments for the Trust Fund.
i) BANK ACCOUNTS. To open and operate an account with a bank, trust
company or securities brokerage firm and to retain cash in the
account. Any cash deposited with the Trustees or an affiliate
shall be credited with interest at the usual rate for such
deposits (without any liability to account for any profit
resulting from the use of the cash while on deposit).
j) EXECUTION OF INSTRUMENTS. To make, execute, acknowledge and
deliver all documents of transfer and conveyance and all other
instruments that may be necessary or appropriate to carry out
the Trustees' powers.
k) TAX ELECTIONS. To make, or refrain from making, any election,
determination, designation, allocation or apportionment that is
required or permitted by any taxing statute. This power shall be
exercised in accordance with the direction of the Member and, in
the absence of such direction, in the Trustees' absolute
discretion.
l) SETTLEMENT OF CLAIMS AND DEBTS. To settle, compromise, or submit
to arbitration any claims, debts or damages due to owing to or
from the Trust Fund; to
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commence or defend suits or legal or administrative proceedings;
and to represent the Trust Fund in all suits and legal and
administrative proceedings.
m) EMPLOYMENT OF AGENTS AND OTHERS. To retain suitable agents,
lawyers (who may be counsel for the Company), accountants,
actuaries and other competent and qualified persons for the
purpose of seeking professional advice of issues and matters
pertaining to the Trust Fund, the Plan, tax matters and any and
all other issues that may or will impact upon the Plan, the
Member or Beneficiary.
n) POWER TO COMMINGLE. To consolidate the Trust Fund where there
are a number of employees covered as Members under the Plan, for
the purposes of investment, or any part thereof, with any other
trust funds for which the Trustees are trustee into a single
common fund, and to divide the common fund into units or
proportionate interests that are held by the trust funds for
each respective Member.
o) NON-ARM'S LENGTH TRANSACTIONS. To enter into a transaction with
the Trustees (acting in any other capacity), a Member or
Beneficiary of the Trust Fund or any other non-arm's length
person, if the Trustees are permitted to enter into the
transaction with such a non-arm's length person.
p) POWER TO DO ANY NECESSARY ACT. To do all such acts, take all
such proceedings, and exercise all such rights and privileges,
not specifically mentioned, as the Trustees consider necessary
to administer the Trust Fund.
8. ACCOUNTS AND RECORDS
8.1 MAINTENANCE OF ACCOUNTS. The Trustees shall prepare and maintain
accurate and detailed accounts of all investments and transactions in
respect of the Trust Fund as set out herein. Within ninety (90) days
following the end of each calendar year and within ninety (90) days
after the removal, replacement or resignation of a Trustee, the Trustees
shall file with the Company a statement setting forth all investments
and cash transactions effected by it during such calendar year or during
the period from the close of the last calendar year to the date of such
removal, replacement or resignation, in respect of the Trust Fund.
8.2 INSPECTION OF RECORDS. The accounts and records of the Trust Fund will
be open for inspection and audit upon written notice to the Trustee by
any person specified by a Member or Beneficiary. The Trustee shall
respond to such notice within ninety (90) days of receiving the request
in writing.
9. PROVISION OF INFORMATION
9.1 The Company shall provide the Trustees with a copy of the RCA Plan Text
and of each amendment to that text, and with any other information
required by the Trustees to fulfill their responsibilities under this
Agreement.
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10. RESPONSIBILITIES AND LIMITATIONS
10.1 ADEQUACY OF THE TRUST FUND. The Trustees have no responsibility to
ensure the adequacy of the Trust Fund to make payments under the Plan.
10.2 LOSS TO THE TRUST FUND. The Trustees shall not be liable for the making,
retention or sale of any investment nor for any loss to or diminution of
the Trust Fund, unless due to the Trustees' own bad faith, reckless
disregard of duties, willful default or misconduct ("Fault").
10.3 RELIANCE ON INFORMATION AND ADVICE. The Trustees shall not be liable for
any act or omission in reliance on information provided to them or on
the advice of suitable counsel and advisors except where the liability
arises because of Fault on the part of the Trustees.
10.4 RELIANCE ON DESIGNATION. The Trustees are hereby empowered to rely upon
the Member's Beneficiary Designation pursuant to the RCA Plan in
Schedule "A".
10.5 DIRECTIONS. The Trustees shall not be liable for any act or omission in
respect of any direction given in accordance with this Agreement except
where the liability arises because of Fault on the part of the Trustees.
10.6 PROCEEDINGS. The Trustees are not required to institute, prosecute or
defend any proceedings relating to the Trust Fund, or to exercise any
other powers referred to in subparagraph 7.1(l), unless they have been
first indemnified to their satisfaction against any expenses or
liabilities which may incur as a result thereof.
10.7 COMPLIANCE WITH THE LAW. The Trustees shall comply with any law, order
or regulation which requires the Trustees to take or refrain from taking
any action under this Agreement.
10.8 CONFLICT OF INTEREST. The Trustees may do the following:
a) On their own behalf or on behalf of other accounts that they
manage, deal with securities of the same class or nature as are
held by the Trust Fund;
b) Use in other capacities knowledge gained in their capacity as
Trustees of the Trust Fund; and;
c) Hold any office, position or employment with a corporation, and
receive remuneration therefor.
10.9 PERSONS DEALING WITH TRUSTEES. A person dealing with the Trustees need
not inquire into the decisions or authority of the Trustees or to see
the application of any money, securities or any other property paid,
delivered or lent to the Trustees.
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11. TRUSTEES' COMPENSATION EXPENSES
11.1 AMOUNT OF COMPENSATION. The remuneration of the Trustees during the
terms of this Agreement shall be paid by the Company and shall be set
from time to time by the Company with the agreement of the Trustees and
payable as set out in the Plan. The said sum shall be a global payment
in respect of the duties and obligations of the Trustees under this
Agreement, the Plan and under any other similar agreements between the
Trustees and the Company.
11.2 PAYMENT FROM THE TRUST FUND. Subject to paragraph 11.3, the Trustees'
compensation and all expenses incurred by the Trustees in the
administration of the Trust Fund shall be paid from the Trust Fund.
11.3 PAYMENT BY COMPANY. If the Company and the member agree, the Company
shall pay the Trustees' compensation and all expenses incurred by the
Trustees in the administration of the Trust Fund, other than
compensation and expenses relating to the custody and investment of the
Trust Fund. The Trustees are entitled to payment from the Trust Fund for
any compensation or expenses that remain unpaid for thirty (30) days.
The Company shall reimburse the Trust Fund for any such amounts paid to
the Trustees.
12. RESIGNATION, REMOVAL, REPLACEMENT OF TRUSTEES
12.1 RESIGNATION BY A TRUSTEE. A Trustee may, terminate his or her duties and
obligations by giving sixty (60) days notice in writing to the Company,
in which event the Company shall immediately use its best efforts to
appoint a new Trustee (which may be a trust company licensed to carry on
the business of a trust company in Canada). The Trustees shall forthwith
transfer the Trust Fund, together with all records, accounts, receipts
and other documents in respect thereof, to such person and in such
manner as the Company directs.
12.2 REMOVAL BY COMPANY. The Company may remove a Trustee at any time by
giving sixty (60) days notice in writing to the Trustee and in such
event shall appoint a new Trustee (which may be a trust company licensed
to carry on the business of a trust company in Canada). After receiving
such notice of removal, a Trustee shall forthwith transfer the Trust
Fund, together with all records, accounts, receipts and other documents
in respect thereof to such new Trustee, at the time and in the manner
directed by the Company.
12.3 SUCCESSOR TRUSTEE. A new Trustee may be appointed by the Company as a
successor Trustee and upon such appointment being made, the successor
Trustee shall be bound by the terms of this trust Agreement including
the same powers and duties in the Plan Text or any amended or similar
version of this trust Agreement or the Plan Text. In that regard, the
successor Trustee shall execute all the necessary documents to complete
its appointment as successor Trustee.
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13. AMENDMENT
13.1 This Agreement may be amended from time to time by an instrument in
writing executed by the Company and the Trustees. No amendment may be
made that conflicts with the terms of the RCA Plan and this Agreement.
14. GENERAL
14.1 PAYMENTS TO MINORS AND INCOMPETENTS. If any person to whom a payment is
to be made is a minor or is otherwise incompetent to receive the payment
or to give a release for it, the payment may be made to the legal
representative of the person. If there is no legal representative, the
payment may be made in the manner determined by the Trustees.
14.2 SEVERABILITY. If any provision in this Agreement is found to be invalid
or unenforceable, the remaining provisions shall not be affected, and
this Agreement shall be construed as if the invalid or unenforceable
provision were not in the Agreement.
14.3 DISPUTES. Should any difference of opinion at any time exist between the
Trustees, the Company, the Member or Beneficiary in relation to the
commission or omission of any acts, or otherwise, in the execution of
the Trusts herein, the decision of the person holding the position of
President of the Company at the time the dispute arose, or should he or
she be unwilling or unable to render such decision, an arbitrator agreed
upon by the parties shall be selected and the decision of the arbitrator
shall be final and binding upon the parties. The Parties shall share
equally the cost of the arbitrator.
15. GOVERNING LAW
15.1 This Agreement shall be subject to and construed under the laws of the
Province of Ontario.
16. BINDING UPON HEIRS AND SUCCESSORS
16.1 This Agreement shall endure to the benefit of and be binding on the
parties to this Agreement and their respective legal and personal
representatives, successors and permitted assigns.
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IN WITNESS WHEREOF the Company and the Trustees have executed this Agreement as
of the date at the top of page 1.
SIGNED IN THE PRESENCE OF
/s/ Xxxxxxx X. Xxxxxx
------------------------------------ ----------------------------------------
Witness Per: Xxxxxxx X. Xxxxxx, General Counsel
I have the authority to bind the Company
/s/ Xxxxxx Xxxxxx
------------------------------------ ----------------------------------------
Witness Per: Xx. Xxxxxx Xxxxxx
I have the authority to bind the Trust
/s/ Xxxxxx Xxxxxx
------------------------------------ ----------------------------------------
Witness Per: Xxxxxx Xxxxxx
I have the authority to bind the Trust
/s/ Xxxxxx X. Xxxx
------------------------------------ ----------------- ----------------------
Witness Per: Xxxxxx X. Xxxx
I have the authority to bind the Trust
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SCHEDULE A
RETIREMENT COMPENSATION ARRANGEMENT (RCA) PLAN
FOR XX. XXXXXX XXXXXX
OF DRAXIS HEALTH INC.
Effective Date: July 1, 2003
Signed on August 28th, 2003 at City of Toronto, Canada
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
General Counsel & SECRETARY
----------------------------------------
Title
TABLE OF CONTENTS
PAGE
1. DEFINITIONS..............................................................1
2. ELIGIBILITY AND ENROLMENT................................................5
3. CONTRIBUTIONS............................................................6
4. BENEFIT OPTIONS ON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL........7
5. PLAN BENEFITS............................................................8
6. BENEFITS ON DEATH OR DISABILITY PRIOR TO COMMENCEMENT OF ANNUITY.........9
7. RIGHT TO CEASE CONTRIBUTIONS TO THE PLAN................................10
8. FUNDING AND ADMINISTRATION OF THE PLAN..................................11
9. MISCELLANEOUS PROVISIONS................................................12
10. AMENDMENT OF THE PLAN...................................................13
-i-
1. DEFINITIONS
ACTUARY
means a Fellow of the Canadian Institute of Actuaries.
ANNIVERSARY DATE
means January 1st of each year following the Effective Date.
BENEFICIARY
means, if there is no Spouse, the person designated by a Member under the Plan
to receive benefits arising from the death of a Member. If the Member fails to
make a designation, any benefits will be paid to the Member's estate.
CHANGE OF CONTROL OF THE COMPANY
means the purchase by a third party of shares of the Company containing in
excess of 50% of the voting rights of shareholders.
COMPANY
means Draxis Health Inc.
CONTINUOUS
means, in relation to employment, membership or service, without regard to
periods of temporary suspension of the employment, membership or service of a
Member and without regard to periods of layoff from employment, not exceeding 26
consecutive weeks during such absence.
DISABILITY
means the continuous and complete inability of the Member to engage in any
gainful occupation or employment, whether with the Company or otherwise, for
which the Member is, or becomes, reasonably qualified by training, education or
experience. The Member must at all times be under the regular care of a legally
qualified doctor.
EARNINGS
means the base salary, bonus and taxable value of benefits of the Member.
INVESTMENT INCOME
means the investment income credited to a Member Account. The value of the
investment income shall be determined by the Company. Investment Income shall be
credited from the day
a contribution is credited to the date the benefit is to be provided on death,
retirement, disability, withdrawal or the effective date of Canadian
non-residency of a Member or Change of Control or sale of the Company.
MEMBER
means a person who is enrolled in the Plan by the Company.
MEMBER ACCOUNT
means the contributions allocated under this Plan to the Account of a Member.
The Member Account will include accrued investment income.
NORMAL RETIREMENT DATE
means the first day of the month immediately following the Member's 70th
birthday. If the Member's birthday is the first day of a month, the Normal
Retirement Date is the Member's 70th birthday.
PLAN
means the Retirement Compensation Arrangement for Xxxxxx Xxxxxx of Draxis Health
Inc. which is governed by subsection 248(1) of the Income Tax Act (Canada).
PLAN YEAR
means for the first Plan Year, the period beginning on the Effective Date to the
Anniversary Date. Subsequent Plan Years shall be 12 months commencing on the
Anniversary Date.
SALE OF COMPANY
means the sale of all voting shares of the Company to a third party.
SPOUSE
means, in relation to the Member, a person of the opposite sex
1. who at the relevant time was married to the Member and not living
separate or apart, or
2. if there is no person to whom subclause 1 applies, a person of the
opposite sex who is cohabitating with the Member or in a conjugal
relationship for at least three years immediately preceding the relevant
time and is presented as the consort of the Member in public.
2
TRUSTEES
means either a trust company or an insurance company licensed to transact life
insurance business in Canada, or
three or more individuals, at least three of whom reside in Canada and one of
whom must be independent to the extent that the individual is neither a
shareholder, partner or employee of the Company.
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1. CONSTRUCTION OF THE PLAN
1.1 GENERAL
The Plan provides benefits to the Member which are intended to
supplement his retirement income.
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2. ELIGIBILITY AND ENROLMENT
2.1 ELIGIBILITY
Xx. Xxxxxx Xxxxxx, a Senior Executive shall join the Plan when
designated by the Company.
2.2 ENROLMENT
To enroll as a Member of the Plan, an eligible employee must complete a
Plan enrolment form.
2.3 INFORMATION
The Company will provide the Member with a written explanation of the
Plan.
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3. CONTRIBUTIONS
3.1 MEMBER CONTRIBUTIONS
Members may contribute to this Plan on a voluntary basis subject to a
Certificate signed by an Actuary.
3.2 COMPANY CONTRIBUTIONS
Each Plan Year, the Company is required to allocate contributions on
behalf of the Member, in such amounts, at such times, determined by the
Company, subject to a Certificate signed by an Actuary.
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4. BENEFIT OPTIONS ON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL
4.1 The Member must withdraw from the Plan if employment with the Company
terminates before Normal Retirement Date.
4.2 The Member may elect to withdraw from the Plan if the Company undergoes
a Change of Control. The Company will provide a statement of the
Member's benefits to the Member upon termination of employment or Change
of Control.
4.3 The Member will provide written confirmation of the benefit option
chosen within 60 days of the receipt of the benefit statement.
4.4 The Company will provide funds in cash or in kind equal to the Member
Account.
4.5 The Member may elect any one or a combination of the following options
for the funds equal to the Member Account:
1. payment from the Plan of a single lump sum or equal annual
installments of equivalent value over a period of up to 20 years
2. the purchase of a deferred or immediate annuity from a financial
carrier licensed to provide life or other annuities.
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5. PLAN BENEFITS
5.1 RETIREMENT DATES
1. NORMAL RETIREMENT DATE
The Member's lump sum, installment payments or normal retirement
annuity shall begin on or after the Member's Normal Retirement
Date.
2. EARLY RETIREMENT DATE
The Member may elect to begin annuity benefits or any other form
of benefit payment on the first day of any month.
3. POSTPONED RETIREMENT DATE
a) The Member should he remain in the service of the
Company after Normal Retirement Date may elect to
continue participation in the Plan.
b) The Member may elect to defer the annuity benefits past
Normal Retirement Date.
c) The Member should he be past Normal Retirement Date and
elects to begin payment of benefits must cease
participation in the Plan no later than the day
preceding the first payment of such benefits.
5.2 AMOUNT OF BENEFITS
The amount of the Member's lump sum, installment payments or annuity
will be determined by applying the value of the Vested Member Account to
installment or annuity rates in effect at the date the benefit commences
or the annuity is purchased.
5.3 NORMAL FORM OF BENEFIT
The normal form of benefit is payable annually for 20 years during the
lifetime of the Member, whom failing the Spouse of the Member. In the
event neither the Member or Spouse survives the 20 year period, the
commuted value of the remaining payments shall be payable to the
Beneficiary of the Member.
5.4 TRANSFER OPTION
The Member may elect to transfer the value of the Member Account as
outlined in Section 4.5.
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6. BENEFITS ON DEATH OR DISABILITY PRIOR TO COMMENCEMENT OF ANNUITY
6.1 If the Member dies or becomes disabled before actual retirement date,
the Company shall accelerate future Company Contributions to the Plan
otherwise payable to December 2005 and a benefit equal to the value of
the Member Account including such accelerated contributions at the date
of death or disability shall be paid in a lump sum or in accordance with
Article 6 to the Member or Beneficiary.
On disability the benefit shall be paid to the Member.
If the Member has a Spouse at the date of death, the Spouse will receive
a death benefit representing the Member Account.
If the Member does not have a Spouse at the date of death, the
Beneficiary will receive a death benefit representing the Member
Account.
6.2 If the Spouse is the Beneficiary, the Spouse may elect:
1. to receive the death benefit as a lump sum cash payment or in
installment payments for up to 20 years
2. to purchase an immediate or deferred annuity with a financial
carrier licensed to provide annuities. The annuity may be
guaranteed for a maximum period equal to 15 years.
6.3 The Member and Spouse may jointly waive the Spouse's entitlement to the
death benefit by filing the waiver.
6.4 The amount of annuity or installment payments, if applicable, will be
determined by applying the value of the Member Account to the annuity or
installment payment rates in effect on the date of the Member's death.
6.5 If the Beneficiary is an individual other than the Spouse, or the
Member's estate, the Beneficiary shall receive the death benefit in a
lump sum cash payment.
6.6 The Company shall provide a statement of the Member's death benefit upon
receiving confirmation of the Member's death or disability.
6.7 THE DEATH OR DISABILITY BENEFIT SHALL be paid upon receipt of the
Member's, Xxxxxx's or Beneficiary's written direction.
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7. RIGHT TO CEASE CONTRIBUTIONS TO THE PLAN
7.1 The Company may, on giving written prior notice to the Member,
permanently cease making contributions to the Plan at any time.
7.2 The Company will make all contributions required by the terms of the
Plan up to the date of termination of the Plan.
7.3 The Company will provide the Member with a written statement of the
benefits and options available to the Member.
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8. FUNDING AND ADMINISTRATION OF THE PLAN
8.1 ADMINISTRATION
The Company has the final authority for all interpretations of the Plan
provisions.
The Company has adopted this Plan for the purpose of providing periodic
retirement income to the Member, in respect of his service as an
employee.
The administrator of the Plan is the Company. The Company may delegate
specific administrative functions and tasks to the Trustees or other
parties.
8.2 FUNDING
The Plan is financed by Company contributions with the exception of
Member voluntary contributions.
8.3 INVESTMENTS OF THE FUND
The Company shall establish an RCA Trust and the Trustees appointed by
the Company to administer this Trust shall invest contributions made to
the Plan at their sole discretion, subject to such investments being
permitted under the terms of the Trust Deed.
8.4 ADMINISTRATION FEES
All fees arising due to the administration of the Plan will be paid by
the Company.
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9. MISCELLANEOUS PROVISIONS
9.1 BENEFICIARY
The Member may appoint a Beneficiary or change the Beneficiary
previously appointed at any time under the terms and conditions of the
Plan.
Beneficiary appointments made under the Plan are revocable unless the
Member instructs otherwise in writing.
9.2 MARRIAGE BREAKDOWN
If, as the result of the breakdown of the Member's marriage or other
conjugal relationship, a benefit will be paid to the Spouse of the
Member, as ordered by a written agreement, decree, order or judgement,
the Member will provide a copy to the Company. The Spouse will receive a
benefit not greater than 50% of the benefit to which the Member is
entitled under the terms of the Plan. The remaining Member benefit will
not be adjusted or replaced as a result of the marriage breakdown.
9.3 DISCLOSURE REQUIREMENTS
1. Any person entitled to benefits under the Plan, including the
Member, Spouse or a duly authorized agent, may request to
examine or receive a copy of any document relating to the Plan.
The request must be made in writing to the administrator of the
Plan.
2. The Company shall provide the Member with a written statement of
Plan benefits at least annually. If the Member terminates
employment with the Company, dies, becomes disabled, becomes a
Non-Resident or retires, or the Company is sold or undergoes a
Change of Control the Company shall provide the Member or
Beneficiary with a written statement of the benefits and options
available.
3. The Company shall provide the Member with a written explanation
of any amendment to the Plan.
9.4 SURRENDER OR ASSIGNMENT
Benefits payable under this Plan are not capable of assignment or
alienation during the lifetime of the Member. Benefits payable under
this Plan shall not be charged, anticipated or given as security.
Assignment of benefits may occur to the extent outlined in Section 9.2,
Marriage Breakdown. No right or interest in the benefits of the Member
or personal representative, dependent or any other person, is capable of
being assigned or otherwise alienated during the lifetime of the Member.
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10. AMENDMENT OF THE PLAN
10.1 The Company reserves the right to amend any provision of the Plan or to
terminate the Plan. Any amendment will be signed by the Company.
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