UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a -101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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14a-6(e)(2))
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[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IMAX CORPORATION
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
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[IMAX LOGO]
IMAX Corporation
2525 Speakman Drive
Mississauga, Ontario, Canada, L5K 1B1
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of shareholders of IMAX
CORPORATION (the "Company") will be held at Stony Brook Manhattan, 2nd Floor,
401 Park Avenue South, New York, New York, USA, 10016 on Wednesday, April 13,
2005 at 10:30 a.m. (the "Meeting"), for the purposes of:
(1) receiving the consolidated financial statements for the fiscal year
ended December 31, 2004, together with the auditors' report thereon;
(2) electing directors;
(3) appointing auditors and authorizing the directors to fix the
auditors' remuneration; and
(4) transacting such other business as may properly be brought before
the Meeting or any adjournments thereof.
By Order of the Board,
/s/ G. MARY RUBY
------------------------------------
G. MARY RUBY
Senior Vice President, Legal Affairs
and Corporate Secretary
Mississauga, Ontario
March 11, 2005
SHAREHOLDERS WHO ARE UNABLE TO BE PRESENT AT THE MEETING ARE REQUESTED TO
COMPLETE AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE PROVIDED FOR THAT
PURPOSE. PROXIES MUST BE DEPOSITED WITH COMPUTERSHARE INVESTOR SERVICES INC.,
C/O STOCK AND BOND TRANSFER DEPT., 9TH FLOOR, 100 UNIVERSITY AVENUE, TORONTO,
ONTARIO, CANADA, M5J 2Y1 OR AT THE CORPORATE HEADQUARTERS OF THE COMPANY NOTED
ABOVE ON OR BEFORE 5:00 P.M. (EASTERN TIME) ON APRIL 11, 2005.
[IMAX LOGO]
PROXY CIRCULAR
AND
PROXY STATEMENT
MARCH 11, 2005
IMAX CORPORATION
2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1
tel: 905-403-6500 fax: 905-403-6540
www.imax.com
TABLE OF CONTENTS
GENERAL INFORMATION............................................................................................. 1
SOLICITATION OF PROXIES BY MANAGEMENT........................................................................... 1
INFORMATION ON VOTING........................................................................................... 1
Record Date for Notice of Annual Meeting and Provisions Relating to Voting................................. 1
Appointment and Delivery of Proxies........................................................................ 1
Revocability of Proxies.................................................................................... 1
Proxy and Voting by Mail or Delivery....................................................................... 2
Proxy and Voting by Telephone.............................................................................. 2
Proxy and Voting by Internet............................................................................... 2
Voting By Proxy............................................................................................ 2
Exercise of Discretion by Proxies.......................................................................... 2
VOTING SHARES................................................................................................... 3
PRINCIPAL SHAREHOLDERS OF VOTING SHARES......................................................................... 3
FINANCIAL STATEMENTS AND AUDITORS' REPORT....................................................................... 3
SHAREHOLDER PROPOSALS FOR THE COMPANY'S 2006 ANNUAL MEETING..................................................... 3
ELECTION OF DIRECTORS........................................................................................... 4
NOMINEES FOR ELECTION........................................................................................... 4
Directors who Continue in Office after the Meeting......................................................... 5
EXECUTIVE OFFICERS.............................................................................................. 6
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT.................................................................. 8
Section 16(a) Beneficial Ownership Reporting Compliance.................................................... 9
EXECUTIVE COMPENSATION.......................................................................................... 9
Summary Compensation Table................................................................................. 9
Options Granted............................................................................................ 10
Aggregated Option Exercises and Year-End Option Values..................................................... 11
Pension Plans.............................................................................................. 11
Employment Contracts....................................................................................... 12
Equity Compensation Plans.................................................................................. 14
CODE OF ETHICS.................................................................................................. 14
COMPENSATION COMMITTTEE INTERLOCKS AND INSIDER PARTICIPATION.................................................... 14
REPORT ON EXECUTIVE COMPENSATION................................................................................ 14
Composition of Compensation Committee...................................................................... 14
Base Salary................................................................................................ 15
Annual Incentive Compensation.............................................................................. 15
Stock Options.............................................................................................. 15
Executive Share Ownership Plan............................................................................. 16
Compensation of Co-Chief Executive Officers................................................................ 16
Performance Graph.......................................................................................... 17
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE.................................................................... 17
DIRECTORS' COMPENSATION......................................................................................... 17
CORPORATE GOVERNANCE............................................................................................ 17
Committees of the Board.................................................................................... 18
Audit Committee............................................................................................ 18
Compensation Committee..................................................................................... 18
Governance Committee....................................................................................... 18
Option Committee........................................................................................... 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................................. 19
Shareholders' Agreements................................................................................... 19
Registration Rights Agreements............................................................................. 19
AUDITOR INDEPENDENCE............................................................................................ 19
Audit Fees................................................................................................. 19
Audit-Related Fees......................................................................................... 19
Tax Fees................................................................................................... 19
All Other Fees............................................................................................. 19
Audit Committee's Pre-Approval Policies and Procedures..................................................... 20
REPORT OF THE AUDIT COMMITTEE................................................................................... 20
APPOINTMENT OF AUDITORS......................................................................................... 20
AVAILABLE INFORMATION........................................................................................... 20
APPROVAL BY BOARD OF DIRECTORS.................................................................................. 20
APPENDIX "A".................................................................................................... A-1
[IMAX LOGO]
IMAX Corporation
2525 Speakman Drive
Mississauga, Ontario, Canada, L5K 1B1
GENERAL INFORMATION
The Annual Meeting (the "Meeting") of shareholders of IMAX Corporation
(the "Company") will be held at Stony Brook Manhattan, 2nd Floor, 401 Park
Avenue South, New York, New York, USA, 10016, on Wednesday, April 13, 2005 at
10:30 a.m., for the purposes of: (i) receiving the consolidated financial
statements for the fiscal year ended December 31, 2004, together with the
auditors' report thereon; (ii) electing directors; (iii) appointing auditors and
authorizing the directors to fix the auditors' remuneration; and (iv)
transacting such other business as may properly be brought before the Meeting or
any adjournments thereof.
The Notice of Annual Meeting, this document and the Proxy will be released
on or about March 11, 2005 to security holders of the Company's Common Shares as
of the close of business on March 9, 2005, the record date for the Annual
Meeting.
SOLICITATION OF PROXIES BY MANAGEMENT
THIS PROXY CIRCULAR AND PROXY STATEMENT (THE "CIRCULAR") IS FURNISHED IN
CONNECTION WITH THE SOLICITATION BY THE MANAGEMENT OF THE COMPANY OF PROXIES TO
BE USED AT THE ANNUAL MEETING OF SHAREHOLDERS OF THE COMPANY TO BE HELD ON
WEDNESDAY, APRIL 13, 2005 AT STONY BROOK MANHATTAN, 2ND FLOOR, 401 PARK AVENUE
SOUTH, NEW YORK, NEW YORK, USA, 10016 AT 10:30 A.M., AND AT ANY ADJOURNMENTS
THEREOF FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF ANNUAL MEETING.
While management intends to solicit most proxies by mail, some proxies may be
solicited by telephone or other personal contact by directors or officers of the
Company. Directors and employees will not receive any additional compensation
for such activity. The Company will, upon request, pay brokers and certain other
persons who hold the Company's Common Shares for others, their reasonable
expenses for sending proxy materials to the beneficial owners of the Company's
Common Shares. The cost of solicitation will be borne by the Company.
INFORMATION ON VOTING
RECORD DATE FOR NOTICE OF ANNUAL MEETING AND PROVISIONS RELATING TO VOTING
The Board of Directors has fixed March 9, 2005 as the record date for the
Meeting. Accordingly, each holder of Common Shares of record on that date is
entitled to one vote for each Common Share shown as registered in the
shareholder's name on the list of shareholders prepared as of March 9, 2005.
APPOINTMENT AND DELIVERY OF PROXIES
The persons named in the accompanying Proxy are directors and officers of
the Company. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON, WHO NEED NOT BE A
SHAREHOLDER OF THE COMPANY, OTHER THAN THE PERSONS DESIGNATED AS PROXYHOLDERS IN
THE ACCOMPANYING PROXY, TO ATTEND AND ACT ON BEHALF OF THE SHAREHOLDER AT THE
MEETING. To exercise this right, a shareholder may either insert such other
person's name in the blank space provided in the accompanying Proxy, or complete
another appropriate form of proxy.
REVOCABILITY OF PROXIES
A shareholder who has given a Proxy may revoke it by depositing an
instrument in writing (including another proxy) executed by the shareholder or
his attorney authorized in writing at the registered office of the Company at
any time up to and including 5:00 p.m., Eastern Time, on the second last
business day prior to the day of the Meeting or any adjournment thereof, or with
the chairman of the Meeting on the day of the Meeting or at any adjournment
thereof at any time before it is exercised on any particular matter or in any
other manner permitted by law including attending the Meeting in person.
Unless otherwise indicated, all references in this document to dollar amounts
are to U.S. dollars. All information contained in this document is at March 11,
2005, unless otherwise indicated.
1
PROXY AND VOTING BY MAIL OR DELIVERY
To vote by mail or delivery, your paper proxy must be completed, signed
and returned in accordance with the instructions on the paper proxy. To be
valid, a Proxy must be dated and signed by the shareholder or his attorney
authorized in writing. The Proxy, to be acted upon, must be deposited with the
Company c/o its transfer agent, Computershare Investor Services Inc., c/o Stock
& Bond Transfer Dept., 9th Floor, 100 University Avenue, Toronto, Ontario,
Canada, M5J 2Y1 or at the Corporate Headquarters of the Company, by 5:00 p.m.,
Eastern Time, on Monday, April 11, 2005 or 5:00 p.m. on the second last business
day prior to the date of any adjournment of the Meeting, or with the chairman of
the Meeting on the day of the Meeting or any adjournment of the Meeting prior to
the commencement of the Meeting or the adjournment, as the case may be.
PROXY AND VOTING BY TELEPHONE
To vote by telephone, call the toll-free number shown on the proxy form
provided. Using a touch-tone telephone to select your voting preferences, follow
the instructions of the "Vote voice" and REFER TO YOUR HOLDER ACCOUNT NUMBER AND
ACCESS NUMBER PROVIDED ON THE PROXY that was delivered to you by mail.
NOTE THAT VOTING BY TELEPHONE IS NOT AVAILABLE IF YOU WISH TO APPOINT A
PERSON AS A PROXY OTHER THAN THE PERSONS NAMED ON THE PROXY FORM. In such a
case, your proxy should be voted by mail, delivery, or Internet.
PROXY AND VOTING BY INTERNET
To vote your proxy by Internet, visit the website address as shown on the
proxy form provided. Follow the on-line voting instructions given to you over
the Internet and REFER TO YOUR HOLDER ACCOUNT NUMBER AND ACCESS NUMBER PROVIDED
ON THE PROXY that was delivered to you by mail.
VOTING BY PROXY
For the purpose of voting by Proxy, proxies marked as "WITHHOLD" will be
treated as present for the purpose of determining a quorum but will not be
counted as having been voted in respect of any matter to which the instruction
to "WITHHOLD" is indicated.
By completing and returning a proxy, you are authorizing the person named
in the proxy to attend the Meeting and vote your shares on each item of business
you are entitled to vote on, according to your instructions. IF THERE ARE NOT
INSTRUCTIONS WITH RESPECT TO YOUR PROXY, YOUR COMMON SHARES WILL BE VOTED IN
FAVOUR OF THE ELECTION OF DIRECTORS AND THE APPOINTMENT OF AUDITORS AND
AUTHORIZING THE DIRECTORS TO FIX THE AUDITORS' REMUNERATION, IN EACH CASE, AS
REFERRED TO IN THIS CIRCULAR.
Proxies returned by intermediaries as "non-votes" because the intermediary
has not received instructions from the non-registered shareholder with respect
to the voting of certain shares or, under applicable stock exchange or other
rules, the intermediary does not have the discretion to vote those shares on one
or more of the matters that come before the Meeting, will be treated as not
entitled to vote on any such matter and will not be counted as having been voted
in respect of any such matter. Shares represented by broker "non-votes" will,
however, be counted in determining whether there is a quorum.
EXERCISE OF DISCRETION BY PROXIES
The person appointed as proxyholder has discretionary authority and may
vote the Common Shares represented thereby as such person considers best with
respect to amendments or variations to matters identified in the Notice of
Annual Meeting, and with respect to any other matter which may properly come
before the Meeting. As of the date of this Circular, management of the Company
is not aware of any such amendment, variation or other matter proposed or likely
to come before the Meeting. However, if any such amendment, variation or other
matter properly comes before the Meeting, it is the intention of the persons
named in the accompanying Proxy to vote on such other business in accordance
with their judgement.
2
VOTING SHARES
On March 9, 2005 the Company had 39,580,829 Common Shares issued and
outstanding, each carrying the right to one vote at all meetings of the
shareholders of the Company.
A quorum for the transaction of business at the Meeting shall be at least
two persons present in person, each being a shareholder entitled to vote thereat
or a duly appointed proxyholder for such a shareholder and together holding or
representing by Proxy not less than 33-1/3% of the outstanding Common Shares of
the Company entitled to be voted at the Meeting.
PRINCIPAL SHAREHOLDERS OF VOTING SHARES
The Company is not aware of any persons who as of March 9, 2005,
beneficially owned or exercised control or direction over more than 5% of the
Company's Common Shares except:
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF PERCENT OF OUTSTANDING
BENEFICIAL OWNER OF COMMON SHARES COMMON SHARES (1) COMMON SHARES (2)
-------------------------------------------------------- ----------------------- ----------------------
RICHARD L. GELFOND 2,422,900 (3) 6.0%
Suite 2100, 110 East 59th Street, New York, New York
BRADLEY J. WECHSLER 2,332,800 (4) 5.8%
Suite 2100, 110 East 59th Street, New York, New York
Statements as to securities beneficially owned by the above-mentioned
beneficial owners, or as to securities, over which they exercise control or
direction, are based upon information obtained from such beneficial owners and
from records available to the Company.
(1) Includes number of Common Shares owned at March 9, 2005 and Common Shares
as to which each individual had at March 9, 2005 the right to acquire
beneficial ownership through the exercise of vested options plus options
that vest within 60 days of that date.
(2) Based on dividing the number of Common Shares beneficially owned by such
person by 39,580,829 Common Shares outstanding as of March 9, 2005
adjusted for shares issuable through the exercise of vested options, held
by such person, plus options, held by such person, that vest within 60
days of that date.
(3) Included in the amount shown are 850,000 Common Shares as to which Mr.
Gelfond had the right to acquire beneficial ownership as of March 9, 2005
through the exercise of options.
(4) Included in the amount shown are 850,000 Common Shares as to which Mr.
Wechsler had the right to acquire beneficial ownership as of March 9, 2005
through the exercise of options.
FINANCIAL STATEMENTS AND AUDITORS' REPORT
The Board of Directors will submit to the shareholders at the Meeting the
consolidated financial statements for the fiscal year ended December 31, 2004,
and the Auditors' Report thereon. A copy of these financial statements and the
Auditors' Report is included in the Annual Report to Shareholders, which is
being mailed to the Company's shareholders together with this Circular.
SHAREHOLDER PROPOSALS FOR THE COMPANY'S 2006 ANNUAL MEETING
If a shareholder wishes to propose any matter for a vote by the Company's
shareholders at its 2006 annual meeting, he/she must send his/her proposal to
the Company's corporate office at IMAX Corporation, 2525 Speakman Drive,
Mississauga, Ontario, Canada, L5K 1B1, Attention: Corporate Secretary. The
Company may omit the proposal from next year's proxy circular and proxy
statement under applicable U.S. securities laws if it is not received by the
Company's Corporate Secretary at the address noted above by November 11, 2005
and may omit the proposal from next year's proxy circular and proxy statement
under applicable Canadian corporate law if it is not received by the Company's
Corporate Secretary at the address noted above by December 11, 2005.
3
ELECTION OF DIRECTORS
The Company's articles permit the Company to have between one and 15
directors, with the actual number determined by the Board of Directors. The
number of directors presently in office is eight.
At the Meeting, shareholders will be asked to approve the election of
directors, by ordinary resolution, which requires that a majority of the votes
cast at the Meeting be in favour of the resolution for the election of nominees.
IN THE ABSENCE OF ANY INSTRUCTION ON THE ACCOMPANYING PROXY, IT IS THE INTENTION
OF THE PERSONS NAMED BY MANAGEMENT IN THE PROXY TO VOTE THE COMMON SHARES
REPRESENTED BY THE PROXY IN FAVOUR OF THE RESOLUTION.
The Board of Directors is divided into three classes, each of which serves
for a three year term. The Board of Directors is currently composed of Neil S.
Braun, Kenneth G. Copland, Michael Fuchs, Richard L. Gelfond, Garth M. Girvan,
David W. Leebron, Marc A. Utay and Bradley J. Wechsler. At the Meeting the term
of Class II directors expires. The term of Class I directors expires in 2006.
The term of Class III directors expires in 2007.
During the fiscal year ended December 31, 2004, the Board of Directors
held five meetings. The Audit Committee held nine meetings and the Governance
Committee held two meetings. During the fiscal year ended December 31, 2004, no
director attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the board on which he served, with the exception of Mr. Fuchs.
While the Company encourages each director to attend each annual meeting
of shareholders, it has no formal policy concerning such attendance. Six
directors attended last year's annual and special meeting of shareholders. The
Company does not have a formal policy regarding shareholders communicating with
the Board of Directors, although shareholders may do so in writing to IMAX
Corporation, 2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1,
Attention: Board of Directors and Secretary to the Board. The Secretary forwards
all shareholder communications to the Board of Directors.
NOMINEES FOR ELECTION
The individuals noted below are to be nominated for election to the Board
of Directors of the Company in Class II.
The following table lists certain information concerning the persons to be
nominated for election to the Board of Directors of the Company in Class II and
the directors whose terms continue after the Meeting.
CURRENT POSITION
NOMINEES FOR ELECTION AS CLASS II DIRECTORS FOR THE TERM EXPIRING IN 2008 WITH THE COMPANY
------------------------------------------------------------------------------------------------------ ----------------
+++ = + Garth M. Girvan, 55, Toronto, Ontario. Director
Garth M. Girvan, a director of the Company since March 1994, is a partner of McCarthy Tetrault,
Canadian counsel to the Company. Mr. Girvan is a director of Corby Distilleries Limited and is a
Canadian citizen.
* = David Leebron, 50, Houston, Texas. Director
David W. Leebron, a director of the Company since September 2003, has been the President of Rice
University since July 1, 2004. Prior to July 1, 2004, Mr. Leebron held the position of Dean and Lucy
G. Moses Professor of Law at Columbia University School of Law since 1996 and Professor of Law since
1989. Mr. Leebron is a member of the American Bar Association and on the Council on Foreign Relations.
Mr. Leebron serves as Chairman of the Governance Committee of the Company.
= + Marc A. Utay, 45, New York, New York. Director
Marc A. Utay, a director of the Company since May 1996, has been the Managing Partner of Clarion
Capital Partners, a private equity investment firm, since November 1999. Prior to joining Clarion, Mr.
Utay was a Managing Director of Wasserstein Perella & Co. Inc. and a member of Wasserstein Perella's
Policy Committee. Mr. Utay was co-head of Wasserstein Perella's Leveraged Finance, Retailing and
Media, Telecommunication and Entertainment groups. Until December 2002, Mr. Utay was also a Senior
Advisor to Dresdner Kleinwort Wasserstein. Prior to his joining Wasserstein Perella, Mr. Utay was
Managing Director at Bankers Trust Company where he specialized in leveraged finance and mergers and
acquisitions. Mr. Utay is a director of P & F Industries, Inc. Mr. Utay serves as Chairman of the
Option Committee of the Company.
4
DIRECTORS WHO CONTINUE IN OFFICE AFTER THE MEETING EXPIRY OF TERM OF OFFICE
------------------------------------------------------------------------------------------------------ ------------------------
* Neil S. Braun, 52, New York, New York. 2006
Neil S. Braun, a director of the Company since June 2003, has been the President, Feature Films and
Television, IDT Entertainment since January 2005 and the President of Vanguard Animation, LLC since
2001. He was the President of Vast Video Inc. prior to this and was President of iCast Corporation a
wholly-owned subsidiary of CMGI, Inc. during 1999. From 1994 to 1998, Mr. Braun was President of NBC
Television Network. Mr. Braun also sits on the Share our Strength and Westhampton Beach Performing
Arts Center boards of directors and is a member of the University of Pennsylvania School of Arts and
Sciences Board of Overseers, all non-profit organizations.
* Kenneth G. Copland, 67, Toronto, Ontario. 2007
Kenneth G. Copland, a director of the Company since June 1999, is the Chairman of KGC Ltd. Mr. Copland
was the Vice-Chairman of BMO Nesbitt Burns Inc. from 1994 to May 2001. He is Chairman of Humber
College Foundation and HC Educational Ventures Limited. Mr. Copland is a director of the Investment
Dealers Association of Canada. Mr. Copland serves as the Chairman of the Audit Committee and is a
Canadian citizen.
+++ Michael Fuchs, 59, New York, New York. 2006
Michael Fuchs, a director of the Company since October 2002; previously he was a director of the
Company from May 1996 to June 1999. Mr. Fuchs is the Chairman and director of Autobytel.com and the
Chairman of Bryant Park Restoration Corporation. Mr. Fuchs held the position of Chairman and Chief
Executive Officer of Home Box Office from October 1984 until November 1995. In May 1995, he also
became chairman of Warner Music Group. Mr. Fuchs is also on the Board of Trustees of the Simon
Wiesenthal Center and a member of the board of the Alzheimer Association.
Richard L. Gelfond, 49, New York, New York. 2007
Richard Gelfond has been Co-Chairman of the Company since June 1999 and Co-Chief Executive Officer
since May 1996. From March 1994 to June 1999, Mr. Gelfond served as Vice Chairman of the Company. Mr.
Gelfond serves as Chairman of the Board of Trustees of the Stony Brook Foundation, Inc., affiliated
with Stony Brook University, and is on the Board of Directors for Brookhaven Science Associates, the
Management Company of Brookhaven National Laboratories. He is also Vice Chairman of the New York
Historical Society and a Member of the Motion Picture Academy of Arts & Science. Mr. Gelfond served as
the Chairman of the Columbia Shuttle Memorial Trust Steering Committee, which was established in
co-operation with NASA to support the families of the seven crew members of the STS-107 mission of the
Space Shuttle Columbia, which came to tragic end on February 1, 2003.
Bradley J. Wechsler, 53, New York, New York. 2007
Bradley J. Wechsler has been Co-Chief Executive Officer of the Company with Mr. Gelfond since May
1996. From March 1994 to June 1999, Mr. Wechsler served as Chairman of the Company and has served as
Co-Chairman with Mr. Gelfond since June 1999. Mr. Wechsler serves on the boards of NYU Hospital, where
he is a Vice Chairman and member of the Executive Committee, the American Museum of the Moving Image,
Math for America, the Ethical Culture Fieldston Schools and Apollo Investment Corporation. Mr.
Wechsler is also a Member of the Motion Picture Academy of Arts & Science.
* Member, Audit Committee of the Company
+++ Member, Compensation Committee of the Company
= Member, Governance Committee of the Company
+ Member, Option Committee of the Company
The Board of Directors recommends that you vote in favour of the election
of the nominees whose names are set forth above.
THE PERSONS NAMED IN THE ACCOMPANYING PROXY INTEND TO VOTE FOR THE
ELECTION OF THE NOMINEES WHOSE NAMES ARE SET FORTH ABOVE. IF ANY OF THE ABOVE
NOMINEES IS FOR ANY REASON UNABLE TO SERVE AS A DIRECTOR, PROXIES IN FAVOUR OF
MANAGEMENT WILL BE VOTED FOR ANOTHER NOMINEE IN THEIR DISCRETION UNLESS THE
SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT SUCH SHAREHOLDER'S SHARES ARE TO BE
WITHHELD FROM VOTING ON THE ELECTION OF DIRECTORS.
Management does not anticipate that any of the nominees for election as
directors will be unable to serve as a director. Each director elected will hold
office until the expiry of the term for which he has been elected or until his
successor is elected or appointed, unless his office is earlier vacated.
5
Shareholders who wish to have the Board of Directors consider the
nomination of any person for director at the 2006 meeting of shareholders should
communicate with the Company's Corporate Secretary at the Company's corporate
office.
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of the Company.
Name Age Position
---- --- ------------------------------------------------------------------------------------
Richard L. Gelfond.............. 49 Co-Chairman, Co-Chief Executive Officer and Director
Bradley J. Wechsler............. 53 Co-Chairman, Co-Chief Executive Officer and Director
Greg Foster..................... 42 President & Chairman, Filmed Entertainment
Francis T. Joyce................ 52 Chief Financial Officer
Robert D. Lister................ 36 Executive Vice President, Business & Legal Affairs and General Counsel
Larry O'Reilly.................. 42 Executive Vice President, Theatre Development
Brian Bonnick................... 48 Senior Vice President, Technology
David B. Keighley............... 56 Senior Vice President & President, David Keighley Productions 70MM Inc.
G. Mary Ruby.................... 47 Deputy General Counsel, Senior Vice President, Legal Affairs and Corporate Secretary
Mary C. Sullivan................ 41 Senior Vice President, Human Resources & Administration
Mark Welton..................... 41 Senior Vice President, Theatre Operations
Kathryn A. Gamble............... 37 Vice President, Finance and Controller
Edward MacNeil.................. 40 Vice President, Finance, Tax and Special Projects
RICHARD L. GELFOND has been Co-Chairman of the Company since June 1999 and
Co-Chief Executive Officer since May 1996. From March 1994 to June 1999, Mr.
Gelfond served as Vice Chairman of the Company. Mr. Gelfond serves as Chairman
of the Board of Trustees of the Stony Brook Foundation, Inc., affiliated with
Stony Brook University, and is on the Board of Directors for Brookhaven Science
Associates, the Management Company of Brookhaven National Laboratories. He is
also Vice Chairman of the New York Historical Society and a Member of the Motion
Picture Academy of Arts & Science. Mr. Gelfond served as the Chairman of the
Columbia Shuttle Memorial Trust Steering Committee, which was established in
co-operation with NASA to support the families of the seven crew members of the
STS-107 mission of the Space Shuttle Columbia, which came to a tragic end on
February 1, 2003.
BRADLEY J. WECHSLER has been Co-Chief Executive Officer of the Company
with Mr. Gelfond since May 1996. From March 1994 to June 1999, Mr. Wechsler
served as Chairman of the Company and has served as Co-Chairman with Mr. Gelfond
since June 1999. Mr. Wechsler serves on the boards of NYU Hospital, where he is
a Vice Chairman and member of the Executive Committee, the American Museum of
the Moving Image, Math for America, the Ethical Culture Fieldston Schools and
Apollo Investment Corporation. Mr. Wechsler is also a Member of the Motion
Picture Academy of Arts & Science
GREG FOSTER joined the Company in March 2001 as President, Filmed
Entertainment and was appointed President & Chairman, Filmed Entertainment in
September 2004. Prior to joining the Company, Mr. Foster was Executive
Vice-President of Production at MGM/UA. Prior to that Mr. Foster held other
senior positions including Senior Vice-President of Motion Picture Marketing
Research during his 15 years at MGM/UA. In 1999, Mr. Foster founded uMogul, a
financial services company and held the position of Chairman, Co-Founder and
President.
FRANCIS T. JOYCE joined the Company in March 2001 as Chief Financial
Officer. Prior to joining the Company, Mr. Joyce held the position of Chief
Financial Officer of the Internet company theglobe.com from 1998 until his
employment with the Company. From 1997 to 1998, Mr. Joyce served as Chief
Financial Officer of Reed Travel Group, a division of Reed Elsevier PLC and from
1994 to 1997 served as Chief Financial Officer of the Alexander Consulting
Group, a division of Alexander and Alexander Services Inc., an international
professional services firm. Mr. Joyce is a member of Financial Executive
International and the American Institute of Certified Public Accountants.
ROBERT D. LISTER joined the Company in May 1999 as Senior Vice President,
Legal Affairs and General Counsel and was appointed Executive Vice President,
Business & Legal Affairs in May 2001. Prior to joining the Company, Mr. Lister
was Vice President, General Counsel and Secretary of Clearview Cinemas, a film
exhibitor, from March 1998 until his employment with the Company. Prior to that,
Mr. Lister served as Associate General Counsel of Merit Behavioral Care
Corporation, a behavioral healthcare company, from March 1996 through March
1998. Mr. Lister serves on the board of Giant Screen Theater Association. Mr.
Lister is a member of the New York State Bar Association.
LARRY O'REILLY joined the Company in March 1994 as the Sales Manager, Film
Distribution and was appointed Executive Vice President, Theatre Development in
September 2004. Mr. O'Reilly has held various positions within the Company
including Manager, Business Development: Film; Director, Strategic Partnerships;
Director, Commercial Marketing: The Americas; Vice President, Sales, The
Americas; and Senior Vice President, Theatre Development & Film Distribution.
6
BRIAN BONNICK joined the Company in January 1999 as Vice President,
Research & Development and was appointed Senior Vice President, Technology in
August 2001. Prior to joining the Company, Mr. Bonnick was Vice President,
Engineering and Operations for Electrohome Corporation. Prior to that Mr.
Bonnick was Vice President and General Manager at TSB International Inc. a
telecommunications company. Mr. Bonnick is registered as a professional engineer
by the Association of Professional Engineers of Ontario.
DAVID B. KEIGHLEY joined the Company in February 1988, was appointed a
Senior Vice President of the Company in July 1997 and is President of David
Keighley Productions 70MM Inc., a subsidiary of the Company. Mr. Keighley is
responsible for motion picture and digital post-production and image quality
assurance for 15/70-format films.
G. MARY RUBY joined the Company in October 1987 as Associate General
Counsel and was appointed Senior Vice President, Legal Affairs in July 2001. Ms.
Ruby was General Counsel of the Company from February 1989 to February 1997. Ms.
Ruby is Deputy General Counsel and acts as Corporate Secretary to the Board of
Directors. In November 2004, Ms. Ruby was appointed by the Company's Audit
Committee as Chief Compliance Officer, responsible for oversight of the
Company's Whistle Blower Program. Ms. Ruby is a member of the Ontario Bar
Association.
MARY C. SULLIVAN joined the Company in January 1996 as Director, Human
Resources and was appointed Vice President, Human Resources and Administration
in 1998 and Senior Vice President, Human Resources and Administration in January
2000. Prior to joining the Company, Ms. Sullivan was Director, Human Resources
of Central Park Lodges. Ms. Sullivan is a director of the Women's Legal
Education and Action Fund and its Foundation.
MARK WELTON joined the Company in July 1997 as Director, Business Affairs
and was appointed Senior Vice President, Theatre Operations in October 2003.
Previous to that Mr. Welton was Senior Vice President, Business Affairs, a
position he held since September 2001. Prior to joining the Company Mr. Welton
was an Associate Lawyer at Stikeman, Elliot from 1994 until his employment with
the Company.
KATHRYN A. GAMBLE joined the Company in July 2001 as Vice President,
Finance and Controller. Prior to joining the Company Ms. Gamble served as Vice
President, Finance and Chief Financial Officer of the Internet company
Healthyconnect.com Inc. from 2000 until her employment with the Company. From
1996 to 2000, Ms. Gamble served as Vice President and Chief Financial Officer of
Med-Emerg International Inc., a healthcare company. Ms. Gamble is a member of
the Canadian Institute of Chartered Accountants.
EDWARD MACNEIL joined the Company in April 1994 as Director, Taxation &
Treasury and was appointed Vice President Finance, Tax and Special Projects in
September 2001. From October 1999 to August 2001, Mr. MacNeil held the position
of Director and Senior Vice President of Digital Projection Limited, a former
subsidiary of the Company. Prior to joining the Company Mr. MacNeil was a
Taxation Manager at PricewaterhouseCoopers. Mr. MacNeil is a member of the
Canadian Institute of Chartered Accountants.
7
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Shares as of March 9, 2005 or as otherwise
indicated in the notes below, including (i) all persons to be nominated for
election to the Board of Directors, individually; (ii) all directors and the
Named Executive Officers, individually, and (iii) all directors and executive
officers as a group.
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF PERCENT OF OUTSTANDING
NAME OF BENEFICIAL OWNER OF COMMON SHARES COMMON SHARES COMMON SHARES
------------------------------------------------------------ ----------------------- ----------------------
RICHARD L. GELFOND 2,422,900 (1) 6.0
BRADLEY J. WECHSLER 2,332,800 (2) 5.8
NEIL S. BRAUN 16,000 (3) *
KENNETH G. COPLAND 71,911 (4) *
MICHAEL FUCHS 46,185 (5) *
GARTH M. GIRVAN 87,636 (6) *
DAVID W. LEEBRON 15,300 (7) *
MARC A. UTAY 1,336,065 (8) 3.4
GREG FOSTER 273,500 (9) *
FRANCIS T. JOYCE 94,500 (10) *
ROBERT D. LISTER 96,083 (11) *
DAVID B. KEIGHLEY 34,800 (12) *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (19 PERSONS) 7,077,147 (13) 16.7
* less than 1%
Statements as to securities beneficially owned by directors and by
executive officers, or as to securities, over which they exercise control or
direction, are based upon information obtained from such directors and executive
officers and from records available to the Company.
The amount of Common Shares listed includes the number of Common Shares
owned at March 9, 2005 and Common Shares as to which each individual had at
March 9, 2005 the right to acquire beneficial ownership through the exercise of
vested options plus options that vest within 60 days of that date.
The percent of outstanding Common Shares is based on dividing the number
of Common Shares beneficially owned by the individual by 39,580,829 Common
Shares outstanding as of March 9, 2005 adjusted for shares issuable through the
exercise of vested options held, plus options held that vest within 60 days of
that date.
(1) Included in the amount shown are 850,000 Common Shares which Mr. Gelfond
had the right to acquire beneficial ownership through the exercise of
options.
(2) Included in the amount shown are 850,000 Common Shares which Mr. Wechsler
had the right to acquire beneficial ownership through the exercise of
options.
(3) Included in the amount shown are 16,000 Common Shares which Mr. Braun had
the right to acquire beneficial ownership through the exercise of options.
(4) Included in the amount shown are 61,911 Common Shares which Mr. Copland
had the right to acquire beneficial ownership through the exercise of
options
(5) Included in the amount shown are 46,185 Common Shares which Mr. Fuchs had
the right to acquire beneficial ownership through the exercise of options.
(6) Included in the amount shown are 61,738 Common Shares which Mr. Girvan had
the right to acquire beneficial ownership through the exercise of options.
(7) Included in the amount shown are 14,000 Common Shares which Mr. Leebron
had the right to acquire beneficial ownership through the exercise of
options.
(8) Included in the amount shown are 211,738 Common Shares which Mr. Utay had
the right to acquire beneficial ownership through the exercise of options.
(9) Included in the amount shown are 257,500 Common Shares which Mr. Foster
had the right to acquire beneficial ownership through the exercise of
options.
(10) Included in the amount shown are 92,000 Common Shares which Mr. Joyce had
the right to acquire beneficial ownership through the exercise of options.
8
(11) Included in the amount shown are 87,083 Common Shares which Mr. Lister had
the right to acquire beneficial ownership through the exercise of options.
(12) Included in the amount shown are 30,000 Common Shares which Mr. Keighley
had the right to acquire beneficial ownership through the exercise of
options.
(13) Included in the amount shown are 2,803,487 Common Shares as to which all
directors and executive officers as a group had the right to acquire
beneficial ownership through the exercise of options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and
persons who own more than 10% of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of ownership
on Form 3 and changes in ownership on Form 4 or Form 5 with the Securities and
Exchange Commission (the "SEC"). The Reporting Persons are also required by the
Exchange Act to furnish the Company with copies of all Section 16(a) reports
they file.
Based solely upon review of Forms 3 and 4 (and amendments thereto)
received from or written representations by the Reporting Persons, in respect of
the fiscal year ended December 31, 2004, the Company believes that reports on
Form 4 were not timely filed for Mr. O'Reilly regarding a purchase of Common
Shares and Messrs. Gelfond and Wechsler regarding a grant of options.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the periods indicated, the
compensation paid or granted by the Company to the individuals who served during
2004 as Chief Executive Officers and the four most highly compensated executive
officers of the Company, other than the Chief Executive Officers, who were
serving as executive officers at December 31, 2004 (collectively, the "Named
Executive Officers").
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
OTHER SECURITIES
NAME AND PRINCIPAL ANNUAL RESTRICTED UNDERLYING ALL OTHER
POSITION OF YEAR ENDED SALARY BONUS (1) COMPENSATION(2) STOCK AWARDS OPTIONS COMPENSATION (3)
NAMED EXECUTIVE OFFICER DECEMBER 31 ($) ($) ($) ($) (#) ($)
-------------------------- ----------- ----------- ----------- --------------- ------------ ----------- ----------------
Richard L. Gelfond 2004 500,000 750,000 Nil Nil 450,000 (4) 4,460 (5)
Co-Chairman and Co-Chief 2003 500,000 750,000 Nil Nil Nil 4,270
Executive Officer 2002 500,000 750,000 Nil Nil 700,000 (6) 4,077
Bradley J. Wechsler 2004 500,000 750,000 Nil Nil 450,000 (4) 4,652 (7)
Co-Chairman and Co-Chief 2003 500,000 750,000 Nil Nil Nil 4,414
Executive Officer 2002 500,000 750,000 Nil Nil 700,000 (6) 4,077
Greg Foster 2004 422,500 350,000 Nil Nil 150,000 (4) 4,340 (8)
President, Filmed 2003 394,519 250,000 Nil Nil 50,000 (4) 3,580
Entertainment 2002 370,288 250,000 Nil Nil 200,000 (9) 292
Francis T. Joyce 2004 306,192 116,000 Nil Nil Nil 4,652 (10)
Chief Financial Officer 2003 291,673 90,000 Nil Nil 66,000 (4) 4,414
2002 275,000 84,219 Nil Nil Nil 3,692
Robert D. Lister 2004 286,981 139,000 Nil Nil 55,000 4,316 (11)
Executive Vice President, 2003 255,000 100,000 Nil Nil 51,250 4,162
Business and Legal Affairs 2002 240,000 90,000 Nil Nil 40,000 3,692
& General Counsel
David B. Keighley 2004 291,047 220,000(12) Nil Nil 15,000 5,132 (13)
Senior Vice President and 2003 277,292 230,000 Nil Nil 15,000 4,774
President, David Keighley 2002 264,137(14) 209,250 Nil Nil Nil 3,692
Productions 70MM Inc.
(1) These amounts are paid under annual incentive arrangements that the
Company has with each of the Named Executive Officers, as detailed under
"Employment Contracts" below.
9
(2) The value of perquisites and other personal benefits for each Named
Executive Officer does not exceed the lesser of $50,000 and 10% of his
annual salary and bonus.
(3) These amounts reflect (i) the payment by the Company of life insurance
premiums on the lives of the Named Executive Officers, and (ii)
contributions to the Company's defined contribution pension plans.
(4) These options were granted in accordance with the Stock Option Plan to the
Named Executive Officer, in accordance with his employment agreement, as
detailed under "Employment Contracts" below.
(5) This amount reflects (i) the payment of $360 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(6) The Named Executive Officer received a grant of 100,000 options to
purchase Common Shares in accordance with the Stock Option Plan with
respect of the bonus for 2001 and a grant of 600,000 options to purchase
Common Shares in accordance with the Stock Option Plan in accordance with
his employment agreement as detailed under "Employment Contracts" below.
(7) This amount reflects (i) the payment of $552 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(8) This amount reflects (i) the payment of $240 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(9) 175,000 of these options were granted in accordance with the Stock Option
Plan to the Named Executive Officer, in accordance with his employment
agreement, as detailed under "Employment Contracts" below.
(10) This amount reflects (i) the payment of $552 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(11) This amount reflects (i) the payment of $216 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(12) The calculation in respect of the Named Executive Officer's 2004 bonus is
not yet finalized but is expected to approximate this total.
(13) This amount reflects (i) the payment of $1,032 by the Company of life
insurance premiums on the life of the Named Executive Officer, and (ii)
contributions of $4,100 to the Company's defined contribution pension
plans.
(14) This amount also includes $5,958 paid in 2003, with respect of the Named
Executive Officer's salary earned in 2002.
OPTIONS GRANTED
The following table sets forth information relating to individual grants
of options to purchase Common Shares of the Company to Named Executive Officers
under the Stock Option Plan during the fiscal year ended December 31, 2004 in
respect of services rendered or to be rendered to the Company.
INDIVIDUAL GRANTS
--------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS PARTICIPANTS EXERCISE PRICE ---------------------------
NAME GRANTED (#) IN FISCAL YEAR ($/SH) EXPIRATION DATE 5% ($) 10% ($)
------------------- ----------- -------------- -------------- --------------- --------- ---------
Richard L. Gelfond 450,000(1) 27.5 5.24 June 3, 2014 3,689,271 7,271,269
Bradley J. Wechsler 450,000(1) 27.5 5.24 June 3, 2014 3,689,271 7,271,269
Greg Foster 150,000(2) 9.2 6.89 Nov 1, 2011 707,787 1,378,037
Francis T. Joyce Nil n/a n/a n/a Nil Nil
Robert D. Lister 55,000(3) 3.4 5.59 June 24, 2011 331,022 576,780
David B. Keighley 15,000(4) 0.9 5.59 June 24, 2011 90,279 157,304
(1) These options were granted pursuant to the Named Executive Officer's
employment agreement, as detailed under "Employment Contracts" below, and
entitle the Named Executive Officer to purchase one Common Share for each
option. The market value of the Common Shares underlying the options was
equal to the exercise price on the date of the grant. 150,000 of these
options vest on each of December 3, 2004, June 3, 2005 and December 3,
2005, pursuant to such employment agreement.
(2) These options were granted pursuant to the Named Executive Officer's
employment agreement, as detailed under "Employment Contracts" below, and
entitle the Named Executive Officer to purchase one Common Share for each
option. The market value of the Common Shares underlying the options was
equal to the exercise price on the date of the grant. 50,000 of these
options vest
10
on each of November 1, 2006 and November 1, 2007 and 50,000 of these
options vest subject to certain performance criteria, pursuant to such
employment agreement.
(3) These options entitle the Named Executive Officer to purchase one Common
Share for each option. The market value of the Common Shares underlying
the options was equal to the exercise price on the date of the grant. The
stock options become exercisable in five instalments: 5,500 on June 24,
2005; 8,250 on June 24, 2006; 11,000 on June 24, 2007; 13,750 on June 24,
2008 and 16,500 on June 24, 2009.
(4) These options entitle the Named Executive Officer to purchase one Common
Share for each option. The market value of the Common Shares underlying
the options was equal to the exercise price on the date of the grant. The
stock options become exercisable in five instalments: 1,500 on June 24,
2005; 2,250 on June 24, 2006; 3,000 on June 24, 2007; 3,750 on June 24,
2008 and 4,500 on June 24, 2009.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information relating to options exercised
during the fiscal year ended December 31, 2004 and the year-end option values
for the Named Executive Officers.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT VALUE OF UNEXERCISED
SECURITIES FISCAL YEAR-END IN-THE-MONEY OPTIONS
ACQUIRED VALUE EXERCISABLE/ AT FISCAL YEAR-END
ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME (#) ($) (#) ($) (1)
----------------------- ----------- -------- ---------------------- -------------------------
Richard L. Gelfond (2) Nil Nil 850,000/300,000 2,367,800/903,000
Bradley J. Wechsler (2) Nil Nil 850,000/300,000 2,367,800/903,000
Greg Foster Nil Nil 249,166/218,334 1,051,613/319,337
Francis T. Joyce Nil Nil 92,000/44,000 405,680/41,360
Robert D. Lister (2) 25,000 128,558 68,749/112,501 272,580/290,070
David B. Keighley (2) Nil Nil 21,667/33,333 90,835/91,315
(1) Calculated based on the December 31, 2004 closing price of the Common
Shares on Nasdaq of $8.25.
(2) The Named Executive Officers voluntarily surrendered and returned to the
Company an aggregate of 861,000 options on December 31, 2004.
PENSION PLANS
The Company maintains defined contribution employee pension plans for its
employees, including its executive officers. The Company makes contributions to
these plans on behalf of employees in an amount up to 5% of their base salary
subject to certain prescribed maximums. During the fiscal year ended December
31, 2004, the Company contributed an aggregate of $24,600 to the Company's
defined contribution employee pension plan qualified under Section 401(k) of the
U.S. Internal Revenue Code on behalf of Messrs. Gelfond, Wechsler, Foster,
Joyce, Lister and Keighley.
On July 12, 2000, the Company established a defined benefit pension plan
covering its two Co-Chief Executive Officers. The plan provides for a lifetime
retirement benefit from age 55 determined as 75% of the member's best average 60
consecutive months of earnings during the 120 months preceding retirement. Once
benefit payments begin, the benefit is indexed annually to the cost of living
and further provides for 100% continuance for life to the surviving spouse. The
benefits were 50% vested as of July 12, 2000, the plan initiation date. The
vesting percentage increases on a straight-line basis from inception until age
55. The vesting percentage of a member whose employment terminates other than by
voluntary retirement shall be 100%. Also, upon the occurrence of a change in
control of the Company prior to termination of a member's employment, the
vesting percentage shall become 100%. The Company currently estimates that the
annual benefits upon retirement at normal retirement age (as defined in the
plan) will be approximately $1.0 million for each of the Co-Chief Executive
Officers. The Company intends to use the proceeds of life insurance policies
which were taken out contemporaneously with the establishment of the plan to
satisfy, in whole or in part, benefits due and payable under the plan.
11
EMPLOYMENT CONTRACTS
On November 3, 1998, the Company entered into renewal employment
agreements (the "1998 Agreements") with each of Messrs. Gelfond and Wechsler
(the "Executives") with effect from July 1, 1998 for a three-year term. Under
the 1998 Agreements, each of the Executives is to perform such services with
respect to the Company's business as may be reasonably requested from time to
time by the Board of Directors and which are consistent with his position as
Co-Chief Executive Officer. In addition, the Company is to use its best efforts
to cause the Executives to be elected to the Board of Directors. In addition, a
provision contained in their original employment agreements, dated March 1,
1994, was continued, whereby each of the Executives is also entitled to receive,
upon a sale of the Company, a cash bonus in an amount equal to the product of
(a) 0.375% and (b) the amount by which the sale or liquidation transaction
imputes an equity value in excess of Cdn. $150,000,000 to the Common Shares
originally issued by the Company (on a fully diluted basis but excluding the
Common Shares issued upon the conversion of the Class B convertible preferred
shares of the Company formerly outstanding which were converted into Common
Shares on June 16, 1994 and the Common Shares issuable upon the exercise of
warrants owned by each of Messrs. Gelfond and Wechsler). Under the 1998
Agreements, the Company is to equalize the Executives to the taxes which each of
the Executives would have paid had he earned his employment compensation and
paid taxes thereon solely in the United States. The employment agreements also
contain non-competition provisions.
On July 12, 2000, the Company entered into amendments to the employment
agreements of the Executives (the "2000 Amendments"). Pursuant to the 2000
Amendments, the Executives were each granted 180,000 restricted shares which, in
the event that regulatory or shareholder approval is not obtained, are deemed
phantom stock. The restricted shares, or phantom stock equivalent, became fully
vested on June 30, 2001. In 2003, a payment of $775,000 was made to each
Executive to reflect the value of the cancellation of 100,000 of the 180,000
phantom stock granted to each Executive in 2000. Under the 2000 Amendments, the
Company agreed to create a defined benefit plan, to provide retirement benefits
for the Executives (see description of this plan under "Pension Plans" above).
The 2000 Amendments further provide for the extension of the Executives'
non-competition covenants to four years beyond termination of employment and for
the agreement by the Executives to consult with the Company for three years
following the end of their employment with the Company.
On April 3, 2001, the Company entered into amendments to the employment
agreements of the Executives (the "2001 Amendments"), which extended their
respective employment terms through June 30, 2002. The restrictive covenants,
including non-competition provisions, of the Executives' existing employment
agreements, as well as other provisions not modified by the 2001 Amendments,
remain in force.
On April 23, 2002, the Company entered into amendments to the employment
agreements of the Executives (the "2002 Amendments"), which extended their
respective employment terms through June 30, 2004. The 2002 Amendments also
provide that each of the Executives will be considered for a bonus payable in
2003 and 2004 based upon performance to December 31, 2002 and December 31, 2003,
respectively, and for a further bonus payable on a pro rata basis for the period
from December 31, 2003 to June 30, 2004. Pursuant to the 2002 Amendments, on
April 23, 2002 the Executives were each granted 532,000 options to purchase
Common Shares in accordance with the Stock Option Plan, 50% of which vested on
each of July 1, 2002 and July 1, 2003. These options expire on April 23, 2012.
The Executives were also each granted 68,000 options to purchase Common Shares
in accordance with the Stock Option Plan on June 5, 2002, which options vested
on July 1, 2004. These options expire on June 5, 2012. The restrictive
covenants, including non-competition provisions, of the Executives' existing
employment agreements, as well as other provisions not modified by the 2002
Amendments, remain in force.
On June 3, 2004, the Company entered into amendments to the employment
agreements of the Executives (the "2004 Amendments"), which extended their
respective employment terms through December 31, 2005. The 2004 Amendments also
provided that each of the Executives will be considered for a bonus payable in
2005 and 2006 based upon performance to December 31, 2004 and December 31, 2005,
respectively. Pursuant to the 2004 Amendments, on June 3, 2004 the Executives
were each granted 450,000 options to purchase Common Shares in accordance with
the Stock Option Plan, 150,000 of which shall vest on each of December 3, 2004,
June 3, 2005, and December 3, 2005. These options expire on June 3, 2014. The
restrictive covenants, including non-competition provisions, of the Executives'
existing employment agreements, as well as other provisions not modified by the
2004 Amendments, remain in force.
On March 9, 2001, the Company and Greg Foster entered into an employment
agreement. The agreement was for a two-year term and provided for a signing
bonus, annual base salaries and minimum annual bonuses for each year of the
term. Under the agreement, Mr. Foster was granted 75,000 options to purchase
Common Shares in accordance with the Stock Option Plan on March 19, 2001. These
options expire on March 19, 2011. Mr. Foster also received an additional grant
of 75,000 options to purchase Common Shares in accordance with the Stock Option
Plan on March 19, 2002. These options expire on March 19, 2009. Mr. Foster has
agreed to restrictive covenants, including confidentiality and non-competition
covenants. The agreement provides that the employment of Mr. Foster may be
terminated at any time for cause or without cause.
12
On August 8, 2002, the Company entered into an amendment to the employment
agreement with Mr. Foster, under which Mr. Foster's employment term was extended
to March 18, 2005. Under the amended agreement, Mr. Foster received an annual
salary of $400,000, and effective March 19, 2004, received an annual salary of
$425,000. The amendment further provides that Mr. Foster is entitled to receive
a minimum annual bonus of $200,000 for the third year of the employment term,
and a minimum annual bonus of $100,000 in respect of the fourth year of the
employment term in the event the agreement is not renewed. Pursuant to the
amendment, Mr. Foster was granted 100,000 options to purchase Common Shares in
accordance with the Stock Option Plan on September 6, 2002, which options shall
vest as to 50% on each of September 6, 2004 and September 6, 2005 and expire on
September 6, 2009. Mr. Foster was granted 50,000 options to purchase Common
Shares in accordance with the Stock Option Plan on March 18, 2003, which options
shall vest subject to certain performance criteria and expire on March 18, 2010.
The restrictive covenants, including confidentiality and non-competition
provisions, of Mr. Foster's existing employment agreement, remain in force.
On October 28, 2004, the Company entered into an amendment to the
employment agreement with Mr. Foster, under which Mr. Foster's employment term
was extended to June 30, 2006. Under the amended agreement, Mr. Foster received
an annual salary of $450,000, and effective November 10, 2004, received an
annual salary of $475,000. The amendment further provides that Mr. Foster is
entitled to receive a minimum annual bonus of $200,000 for the year ending
December 31, 2004 and the year ending December 31, 2005, and a minimum annual
bonus of $100,000 in respect of the year ending December 31, 2006 in the event
the agreement is not renewed. Pursuant to the amendment, Mr. Foster was granted
100,000 options to purchase Common Shares in accordance with the Stock Option
Plan on November 1, 2004, which options shall vest as to 50% on each of November
1, 2006 and November 1, 2007 and expire on November 1, 2011. The agreement also
provided for Mr. Foster to receive a grant of 50,000 options to purchase Common
Shares in accordance with the Stock Option Plan on November 1, 2004, which
options shall vest subject to certain performance criteria and expire on
November 1, 2011. If Mr. Foster's employment is terminated without cause prior
to the end of the employment term, the Company must continue to pay Mr. Foster
his annual base salary and benefits for the greater of the remainder of his
employment term and six months. The restrictive covenants, including
confidentiality and non-competition provisions, of Mr. Foster's existing
employment agreement, remain in force.
On May 9, 2001, the Company and Francis T. Joyce entered into an
employment agreement. The agreement was for a two-year term and provided for an
annual base salary and a minimum annual bonus in respect of 2001 as well as a
discretionary bonus based on a percentage of base salary throughout the
employment term. Pursuant to the agreement, Mr. Joyce was granted 100,000
options to purchase Common Shares in accordance with the Stock Option Plan on
May 15, 2001, which options vested as to 33,333 on each of May 15, 2002 and May
15, 2003, and as to 33,334 on May 15, 2004. These options expire on May 15,
2008. Mr. Joyce has agreed to restrictive covenants, including confidentiality
and non-competition covenants. The agreement provides that the employment of Mr.
Joyce may be terminated at any time for cause or without cause. If Mr. Joyce's
employment is terminated without cause prior to the end of the employment term,
the Company must continue to pay Mr. Joyce his annual salary, pro-rata bonus and
benefits for a minimum of twelve months, subject to mitigation by Mr. Joyce.
On May 14, 2003, the Company entered into an amendment to the employment
agreement with Mr. Joyce, under which Mr. Joyce's employment term was extended
until May 14, 2005. The amendment provided for an annual salary of $300,000 and,
effective May 14, 2004, an annual salary of $310,000. Pursuant to the amendment,
Mr. Joyce was granted 66,000 options to purchase Common Shares in accordance
with the Stock Option Plan on June 16, 2003, which options shall vest as to
22,000 on each of June 16, 2004, June 16, 2005 and June 16, 2006. These options
expire on June 16, 2010. The restrictive covenants, including confidentiality
and non-competition provisions, of Mr. Joyce's existing employment agreement,
remain in force.
On May 17, 1999, the Company and Robert D. Lister entered into an
employment agreement. The agreement was for a two-year term and provided for
annual base salary and a minimum annual bonus in respect of 1999. The agreement
contains restrictive covenants, including confidentiality and non-competition
covenants.
On April 4, 2001, the Company entered into an amendment to the employment
agreement with Mr. Lister, under which Mr. Lister's employment term was extended
until December 31, 2003. The amendment provided that if Mr. Lister's employment
is terminated without cause prior to the end of the employment term, or his
agreement is not renewed, the Company must continue to pay Mr. Lister his annual
salary, target bonus and benefits for the greater of the remainder of his
employment term and twelve months, subject to mitigation by Mr. Lister.
On January 1, 2004, the Company entered into an amendment to the
employment agreement with Mr. Lister, under which Mr. Lister's employment term
was extended until June 30, 2006. The amendment provided for an annual salary of
$275,000, subject to an annual review. The restrictive covenants, including
confidentiality and non-competition provisions, of Mr. Lister's existing
employment agreement, remain in force.
13
On July 15, 1997, the Company, David Keighley Productions 70 MM Inc.
(formerly 70MM Inc.) ("DKP/70MM"), a wholly-owned subsidiary of the Company and
David B. Keighley entered into an employment agreement. The agreement was for a
five-year term and provided for an annual base salary, annual bonus and
additional bonus of 10% of any excess of DKP/70MM audited profit before taxes
over an enumerated pre-tax profit threshold. Under the agreement, Mr. Keighley
has agreed to restrictive covenants, including confidentiality and
non-competition covenants. The agreement provides that the employment of Mr.
Keighley may be terminated at any time for cause or without cause.
EQUITY COMPENSATION PLANS
The following table sets forth information regarding the Company's Equity
Compensation Plans as of December 31, 2004:
Number of securities
remaining available for
Number of securities to Weighted average future issuance under equity
be issued upon exercise exercise price of compensation plans (excluding
of outstanding options, outstanding options, securities reflected in
Plan category warrants and rights warrants and rights column (a))
----------------------------- ----------------------- -------------------- -----------------------------
(a) (b) (c)
Equity compensation plans
approved by security holders 5,593,101 $6.82 2,139,294
Equity compensation plans not
approved by security holders
350,000(1) $6.06 Nil
--------- ----- ---------
Total 5,943,101 $6.78 2,139,294
========= ===== =========
(1) Warrants issued to certain strategic partners of the Company. Of the
350,000 outstanding warrants, the Company believes that only 200,000 will
ultimately vest. The warrants generally expire 5 years after the date of
grant or vesting. At December 31, 2004, 200,000 warrants were vested and
exercisable.
CODE OF ETHICS
The Company has a Code of Ethics applicable to all employees, including
the Company's Co-Chief Executive Officers, Chief Financial Officer and
Controller and all other persons performing similar functions, and all directors
and consultants. A copy of the Code of Ethics is available, without charge, at
www.imax.com or upon written request to the Company at IMAX Corporation, 2525
Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1, Attention: Corporate
Secretary. Any amendments to, or waivers of, the Code of Ethics, which
specifically relate to any financial professional will be disclosed promptly
following the date of such amendment or waiver at www.imax.com.
COMPENSATION COMMITTTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2004, two members of the Board of Directors served as members of
the Compensation Committee: Messrs. Girvan and Fuchs.
The law firm of McCarthy Tetrault, of which Mr. Girvan is a senior
partner, provided legal services to the Company on several matters in 2004 and
is expected to provide legal services in 2005.
No executive officers of the Company serve on boards of directors or
compensation committees of any other entities that had or have had one or more
of its executive officers serving as a member of the Company's Board of
Directors.
REPORT ON EXECUTIVE COMPENSATION
COMPOSITION OF COMPENSATION COMMITTEE
The Board of Directors constituted a Compensation Committee in November
1996. The current members of the Compensation Committee are Messrs. Girvan and
Fuchs. The Compensation Committee did not participate in executive compensation
decisions in respect of 2004 other than the compensation of Messrs. Gelfond and
Wechsler. The compensation of the Company's employees was established through
guidelines set by the Board of Directors.
14
Compensation for all of the Company's employees, including its Named
Executive Officers, is based on each employee's job responsibilities and on his
or her individual performance over time. The Company's executive compensation
program has three principal components: base salary, annual variable incentive
compensation and stock options. The Company believes these components
collectively provide a fair and competitive pay package and an appropriate
relationship between an executive's compensation, the executive's performance
and the Company's performance.
BASE SALARY
A salary range is established for each salaried position in the Company,
including each Named Executive Officer position other than the Executives. The
Company utilizes independently-produced survey data of the salaries paid at
groups of other companies which are regarded as comparable to the Company in the
various locations in which employees of the Company are located, to confirm that
the midpoint of each salary range is generally equal to the average salary of
equivalent positions at such groups of comparable companies. The groups of
comparable companies are chosen based on their industry, size and revenues, as
such factors are thought to be relevant to compensation conditions in the
locations of the Company's employees. Each executive officer's base salary is
determined by reviewing his or her sustained job performance over time, based on
individual performance and performance of the business or staff unit over which
the executive officer exercises responsibility. Business or staff unit
performance is assessed on return on total capital, achievement of sales or
production targets, effectiveness of cost-containment measures, progress toward
implementation of process improvements and other factors relevant to each
executive officer's position. The relative weight attributed to each factor,
with respect to each executive officer, is an inherently subjective judgement.
ANNUAL INCENTIVE COMPENSATION
Certain employees of the Company, including most of its executive officers
other than the Co-Chief Executive Officers, receive a portion of their annual
compensation in the form of bonuses under the Management Incentive Plan. Bonuses
are awarded under this plan provided annual operating objectives targets are
achieved by the Company and provided that personal performance standards are
achieved by the participating employees. An aggregate of $2,195,888 has been
paid to all employees participating in this plan in respect of 2004.
STOCK OPTIONS
The Company's long-term incentive compensation for executive officers and
other key managers is provided through grants of stock options. The Company has
a stock option plan (the "Stock Option Plan") under which the Company may grant
options to officers, employees, consultants and eligible directors (the
"Participants") to purchase Common Shares on terms that may be determined,
within the limitations of the Stock Option Plan. The Stock Option Plan has
received shareholder approval and is administered by the Option Committee of the
Board of Directors. The number of stock options granted is determined by a
competitive compensation analysis and is based on each individual's salary range
and responsibility.
All grants pursuant to the Stock Option Plan are made with an exercise
price equal to the fair market value of the Company's Common Shares on the date
of grant. An option will be exercisable for a maximum period of 10 years from
the date of grant, subject to earlier termination if the Participant's
employment, consulting arrangement or term of office with the Company
terminates. The Board of Directors determines vesting requirements. If a
Participant's employment, consulting arrangement or term of office with the
Company terminates for any reason, any options which have not vested will
generally be surrendered for cancellation without any consideration being paid
therefor. If the Participant's employment, consulting arrangement or term of
office is terminated without cause or by reason of such Participant's
resignation, death or permanent disability, the Participant (or the
Participant's estate) will generally be entitled to exercise the Participant's
vested options for a period thereafter. If the Participant's employment,
consulting arrangement or term of office is terminated for cause, such
Participant's vested options will be surrendered for cancellation without any
consideration being paid therefor. Under the Stock Option Plan, the Board of
Directors through the Option Committee has the authority to prescribe additional
terms and conditions to grants of options thereunder. On August 12, 2004, the
Board of Directors adopted amendments to the Stock Option Plan which provide
that all options granted shall immediately vest and become fully exercisable
upon a change of control and the occurrence of other stated events. If the
Participant is a party to an employment agreement with the Company or any of its
subsidiaries and breaches any of the restrictive covenants in such agreement,
such Participant will be required to surrender all unexercised options for
cancellation without any consideration being paid therefor and will be obligated
to pay to the Company an amount equal to the aggregate profit realized by such
Participant with respect to any prior option exercises. During 2004, 1,572,985
options were cancelled by or voluntarily surrendered and returned to the
Company. Options to purchase 5,593,101 Common Shares have been granted and are
outstanding under the Stock Option Plan as of December 31, 2004. Under the terms
of the Stock Option Plan, the maximum number of Common Shares that the Company
may issue under options is 7,732,395 Common Shares as of December 31, 2004.
During 2004, 1,633,486 stock options were granted to Stock Option Plan
Participants including certain of the Company's executive officers. Certain
Named Executive Officers received options to purchase Common Shares of the
Company, as detailed in the "Options Granted" Table above. In determining the
number of options to grant to the Named Executive Officers, consideration was
given to information about stock option grants to executive officers in
comparable companies of similar revenue, size and market segment or industry. In
addition consideration is given as to the number of options granted to other
executive officers.
15
EXECUTIVE SHARE OWNERSHIP PLAN
The Company believes that it is important to align the interests of IMAX
management with those of its shareholders, and that this can be achieved, in
part, by encouraging executives to have significant personal holdings of IMAX
Common Shares. In 2003, the Company adopted formal guidelines that set out the
expected share ownership for Senior Executives, ranging from one to two times
base salary. Current executives are required to meet these minimum shareholding
guidelines by fiscal 2008, and new executives within five years of appointment.
In addition, once executives have met their initial shareholding requirement,
they are required to maintain the minimum percentage ownership requirement.
COMPENSATION OF CO-CHIEF EXECUTIVE OFFICERS
The Compensation Committee of the Board of Directors makes recommendations
to the Board of Directors regarding the compensation of the Co-Chief Executive
Officers. The pay-for-performance philosophy of the Company's executive
compensation program applies equally to the Co-Chief Executive Officers. The
base salary and option components of the Co-Chief Executive Officers' 2004
compensation were fixed by the provisions of the 2004 Agreements. The bonus
component of their 2004 compensation was recommended by the Compensation
Committee and approved by the Board of Directors after careful assessment of
their personal contributions to the performance of the Company.
The Co-Chief Executive Officers' performance was assessed in light of a
number of quantitative and qualitative factors, which included corporate
financial results and strategic planning objectives. Early in 2004, management
of the Company developed, and the Board of Directors approved, a business plan
for fiscal 2004. The business plan included a series of specific objectives
related to the Company's performance for the year. These included, among others,
targeted theatre signings, original IMAX formatted films and IMAX DMR versions
of Hollywood films, specified Research & Development objectives and overall
performance targets related to budgeted profit and loss and cash flows. The
bonus component of the Co-Chief Executive Officers' compensation was assessed by
the Compensation Committee in light of the overall success in achieving these
objectives, in the context of the overall performance by the Company in 2004. In
this process, the Compensation Committee assessed the contributions of the
Co-Chief Executive Officers to the achievement of the objectives set out in the
Business Plan, consideration of bonuses paid to the Co-Chief Executive Officers
in prior years, the success of the Co-Chief Executive Officers in handling
unexpected challenges which arose during the year and more general assessments
of the leadership role played by the Co-Chief Executive Officers during the
year. While the Compensation Committee took into account the level of
achievement of each of the objectives, specific relative weightings were not
assigned to individual factors in the Compensation Committee's assessment and
there was no specific relationship between any one of these factors and the
bonuses recommended by the Compensation Committee to the Board. Following an
assessment of the Compensation Committee's recommended bonus payments for the
Co-Chief Executive Officers these payments were then approved by the Board of
Directors.
The foregoing Report on Executive Compensation, dated March 11, 2005, has
been furnished by G.M. Girvan and M. Fuchs, as members of the Compensation
Committee and by N.S. Braun, K.G. Copland, M. Fuchs, G.M. Girvan, D.W. Leebron
and M.A. Utay, as members of the Board of Directors.
16
PERFORMANCE GRAPH
The following graph compares the total cumulative shareholder return for
$100 invested (assumes that all dividends were reinvested) in Common Shares of
the Company against the cumulative total return of the Nasdaq Composite Index,
the Toronto Stock Exchange (the "TSX") S&P/TSX Composite Index and the Bloomberg
Hollywood Reporter Index on December 31, 2000 to the end of the most recently
completed fiscal year.
CUMULATIVE VALUE OF $100 INVESTMENT
[PERFORMANCE GRAPH]
31-Dec-00 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04
---------- ---------- ---------- ---------- ----------
IMAX 100 73.45 146.91 287.64 300.00
Nasdaq 100 78.86 54.27 81.86 89.07
S&P/TSX Composite 100 82.43 72.75 112.71 138.54
Bloomberg Hollywood Reporter 100 88.90 67.34 91.95 93.37
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
As contemplated under Section 124 of the Canada Business Corporations Act,
the Company has acquired insurance coverage with a yearly limit of $70,000,000
in respect of potential claims against its directors and officers and in respect
of losses for which the Company may be required or permitted by law to indemnify
such directors and officers. The insurance, in respect of which a $962,240
yearly premium was paid by the Company, includes a $100,000 deductible for each
claim under the policy other than claims made under U.S. securities law as to
which a deductible of $500,000 applies.
DIRECTORS' COMPENSATION
Directors are reimbursed for expenses incurred in attending meetings of
the Board of Directors and Committees of the Board of Directors. In addition,
members of the Board of Directors who are not also employees of the Company
receive Cdn. $20,000 per year (or may elect to receive options to purchase
Common Shares of the Company in lieu of this payment) plus Cdn. $1,500 for each
meeting of the Board of Directors attended in person and Cdn. $750 for each
telephone meeting of the Board of Directors or meeting of any committee of the
Board of Directors, whether participating in person or by telephone. In
addition, each of the directors who are not also employees of the Company are
granted options annually to purchase 8,000 Common Shares, in accordance with the
Stock Option Plan, at an exercise price equal to the market value of the Common
Shares of the Company on the date of grant which vest on the date of grant and
expire on the earlier of the date which is two years after the termination of
the Optionee's service as a director of the Company or seven years after the
date of the grant.
CORPORATE GOVERNANCE
Over the last several years, there have been extensive regulatory changes
based on reforms arising out of the Sarbanes Oxley Act of 2002 (the "SOX"), the
reforms of the SEC, the new listing requirements of the Nasdaq Stock Market, the
newly promulgated and/or proposed reforms of the Ontario Securities Commission
and the guidelines for improved corporate governance of the TSX (the "TSX
Guidelines"). With shares listed on the TSX and Nasdaq, the Company reviews its
governance policies and practices against these standards under the direction of
its Board of Directors and Governance Committee.
The TSX passed a by-law in 1995 which requires companies incorporated in
Canada and listed on the TSX to disclose their corporate governance practices in
their annual meeting materials. This by-law contains a number of guidelines
relating to corporate governance practices which have been considered in light
of the unique opportunities and challenges facing the Company, as well as the
nature of its share ownership. Appendix "A" to this Circular describes the
Company's various governance practices with reference to the TSX Guidelines and,
where applicable, with the Nasdaq Stock Market listing standards and the
National Association of Securities Dealers ("NASD") Marketplace Rules, as these
rules have been approved by the SEC.
17
The Board of Directors has assumed responsibility for identifying and
recommending candidates for election to the Board of Directors and believes,
considering the size and composition of the Board of Directors, that this is the
most efficient means to identify nominees for election to the Board of
Directors. Such candidates are then nominated for election by majority of
independent directors, as defined in Rule 4200 (a)(15) of the NASD Marketplace
Rules. The Company had previously established a nominating committee in
accordance with an agreement concerning various matters of corporate governance
with a former shareholder. This shareholder disposed of its shares in the
Company in 2003 and, subsequently, the committee was eliminated. The Board of
Directors has not adopted a formal charter regarding the nominating function.
The Board of Directors evaluates potential new candidates for the Board of
Directors on an ongoing basis in light of opportunities and risks facing the
Company, and the competencies, skills and personal qualities that are desirable
to add value to the Company and to contribute to the effective governance of the
Company. Candidates are identified from a number of sources including
recommendations from Board members, management and others.
The Board of Directors has determined that the following directors are
"independent" within the meaning of Rule 4200(a)(15) of the NASD Marketplace
Rules: Messrs. Braun; Copland; Fuchs; Girvan and Leebron.
COMMITTEES OF THE BOARD
The Board of Directors has delegated some of its duties to four specific
committees of the Board: Audit Committee, Compensation Committee, Governance
Committee and Option Committee. Each of these committees are appointed annually
and have a written mandate which sets out its principal duties and
responsibilities.
AUDIT COMMITTEE
The Audit Committee is currently composed of Messrs. Copland, Braun and
Leebron, all independent directors as defined in Rule 4200 (a)(15) of the NASD
Marketplace Rules, who have an understanding of financial statements and
financial affairs. The Board of Directors had determined that Mr. Copland, an
independent director, qualifies as an audit committee financial expert. The
membership of the Audit Committee currently complies with the TSX Guidelines.
The Audit Committee operates under a written mandate, the Audit Committee
Charter, adopted by the Company's Board of Directors. A copy of the Audit
Committee Charter is available at www.imax.com or upon written request to the
Company at IMAX Corporation, 2525 Speakman Drive, Mississauga, Ontario, Canada,
L5K 1B1, Attention: Corporate Secretary. The preceding information in this
paragraph shall not be deemed to be "soliciting material" or to be "filed" with
the SEC, nor shall such information be incorporated by reference into any future
filing under the U.S. Securities Act of 1933, as amended (the "1933 Act"), or
the Exchange Act, as amended, except to the extent that the Company specifically
incorporates it by reference in such filing.
The Audit Committee meets with the external auditors of the Company, both
with and without management present, to review the Company's accounting
policies, its quarterly and year-end financial statement information and their
presentation, and significant financial issues which may arise for the Company.
The Audit Committee will review and assess the adequacy of the Audit Committee
Charter on an annual basis.
COMPENSATION COMMITTEE
The Compensation Committee is currently composed of Messrs. Girvan and
Fuchs. The Compensation Committee is responsible for setting objectives for the
Co-Chief Executive Officers, assessing their performance on a periodic basis and
reviewing certain grants under the Stock Option Plan, from time to time. The
Report on Executive Compensation is included above. A copy of the Compensation
Committee Charter is available at www.imax.com or upon written request to the
Company at IMAX Corporation, 2525 Speakman Drive, Mississauga, Ontario, Canada,
L5K 1B1, Attention: Corporate Secretary.
GOVERNANCE COMMITTEE
The Governance Committee is currently composed of Messrs. Leebron, Girvan
and Utay. In light of recent developments in corporate governance requirements
and the disclosure thereof, the Company established a formal governance
committee in the fall of 2002. The Governance Committee is responsible for
monitoring and evaluating the Company's compliance with regard to the recently
enacted regulations in connection with SOX; monitoring and evaluating compliance
with the Company's articles, by-laws and governance agreements; monitoring and
evaluating the Company's corporate policies and practices, with particular
attention to the Company's disclosure and trading policies; and monitoring the
effectiveness of the Board of Directors in the discharge of its general
oversight responsibilities. A copy of the Governance Committee Charter is
available at www.imax.com or upon written request to the Company at IMAX
Corporation, 2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1,
Attention: Corporate Secretary.
OPTION COMMITTEE
The Option Committee is currently composed of Messrs. Utay and Girvan. The
Option Committee is responsible for performing the functions required of it
under the Stock Option Plan including the grant of options to Participants under
the Stock Option Plan, from time to time, subject to guidelines determined by
the Company's human resources department and the Compensation Committee. The
Option Committee enacts written resolutions from time to time authorizing the
grant of stock options but does not conduct formal meetings.
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director or executive officer of the Company, nor any nominee for
election as a director or any security holder of record as of the date of this
Circular who owned, of record or to the Company's knowledge, more than 5% of the
outstanding Common Shares, or any member of such person's immediate family, had
any material interest, direct or indirect, in any transaction during the last
fiscal year, or since the commencement of the current fiscal year, in any
completed or proposed transaction which has materially affected or will
materially affect the Company except:
The law firm of McCarthy Tetrault, of which Mr. Girvan is a senior
partner, provided legal services to the Company on several matters in 2004 and
is expected to provide legal services in 2005.
Mr. Utay is the Managing Partner of Clarion Capital Partners, LLC which
leases office space from the Company for an annual rent of approximately
$120,000.
SHAREHOLDERS' AGREEMENTS
The Company, Wasserstein Perella Partners, L.P., Wasserstein Perella
Offshore Partners, L.P., WPPN, Inc., and the Michael J. Biondi Voting Trust
(collectively "WP"), and each of Messrs. Gelfond and Wechsler were parties to a
Second Amended and Restated Shareholders' Agreement (the "Shareholders'
Agreement") dated as of February 9, 1999, which amended and restated the
previous amended and restated shareholders' agreement among those parties dated
June 16, 1994 and which terminated on March 1, 2004.
REGISTRATION RIGHTS AGREEMENTS
The Company, WP and Messrs. Gelfond and Wechsler entered into a
registration rights agreement (the "Registration Rights Agreement") dated as of
February 9, 1999, which carried forward the corresponding provisions of the June
16, 1994 shareholders' agreement, and pursuant to which each of Messrs. Gelfond
and Wechsler have certain rights to cause the Company to use its best efforts to
register their securities under the 1933 Act. Messrs. Gelfond and Wechsler are
entitled to make two such demand registrations. Messrs. Gelfond and Wechsler
also have unlimited piggyback rights to register their securities under the
Registration Rights Agreement whenever the Company proposes to register any
securities under the 1933 Act, other than the registration of securities
pursuant to an initial public offering or the registration of securities upon
Form S-4 or S-8 under the 1933 Act or filed in connection with an exchange offer
or an offering of securities solely to the Company's existing shareholders.
Numerous provisions of the Registration Rights Agreement terminated in 2002,
when WP ceased to be a shareholder of the Company.
Messrs. Gelfond and Wechsler, and certain shareholders of the Company
entered into another shareholders' agreement on January 3, 1994 as amended on
March 1, 1994 (the "Selling Shareholders' Agreement") which includes, among
other things, registration rights, tag along rights and drag along rights.
AUDITOR INDEPENDENCE
PricewaterhouseCoopers LLP ("PWC") are the principal independent
accountants of the Company. PWC, or one of its predecessors, have been the
auditors of the Company for more than five years.
AUDIT FEES
For professional services rendered by PWC for the audit of the Company's
financial statements, audit of internal control over financial reporting, and
review of the quarterly financial statements included in the Company's Form
10-Ks and 10-Qs and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements during the
fiscal year ended December 31, 2004, PWC billed the Company $1,164,481 (2003 -
$406,245).
AUDIT-RELATED FEES
For professional services rendered by PWC for assurance and related
services that are reasonably related to the performance of the audit or review
of financial statements and which includes consultations concerning financial
accounting and reporting standards, for review of operational effectiveness of
systems, and for services related to debt financing during the fiscal year ended
December 31, 2004, PWC billed the Company $275,072 (2003 - $578,466).
TAX FEES
For professional services rendered by PWC for tax compliance, tax advice
and tax planning during the fiscal year ended December 31, 2004, PWC billed the
Company $13,126 (2003 - $133,171).
ALL OTHER FEES
PWC did not bill the Company for services rendered during the fiscal year
ended December 31, 2004, other than the services described above.
19
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
Section 10A(i)(1) of the Exchange Act and related SEC rules require that
all auditing and permissible non-audit services to be performed by a company's
principal accountants be approved in advance by the Audit Committee of the Board
of Directors, subject to a de minimus exception set forth in the SEC rules (the
"De Minimus Exception"). Pursuant to Section 10A(i)(3) of the Exchange Act and
related SEC rules, the Audit Committee has established procedures by which the
Chairman of the Audit Committee may pre-approve such services provided the
pre-approval is detailed as to the particular service or category of services to
be rendered and the Chairman reports the details of the services to the full
Audit Committee at its next regularly scheduled meeting. None of the
audit-related or non-audit services described above were performed pursuant to
the De Minimus Exception during the periods in which the pre-approval
requirement has been in effect.
REPORT OF THE AUDIT COMMITTEE
The following is the report of the Audit Committee with respect to the
Company's audited financial statements for the fiscal year ended December 31,
2004.
The Audit Committee meets privately with PWC on a periodic basis and PWC
has unrestricted access to the Audit Committee. The Audit Committee has reviewed
and discussed the Company's audited financial statements for the fiscal year
ended December 31, 2004 with senior management. The Audit Committee has
discussed with PWC the matters required to be discussed by SAS 61 (Codification
of Statements on Accounting Standards) which include, among other items, matters
related to the conduct of the audit of the Company's financial statements. The
Audit Committee has also received written disclosures and the letter from PWC
required by Independence Standards Board Standard No. 1 (which relates to the
accountant's independence from the Company and related entities) and has
discussed with PWC their independence from the Company. Based on the review and
discussions referred to above, the Audit Committee recommended to the Company's
Board of Directors that the Company's audited financial statements be included
in the Company's Annual Report on Form 10-K and the Company's Annual Information
Form for the fiscal year ended December 31, 2004.
The information contained in this report shall not be deemed to be
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the 1933 Act, or the
Exchange Act, as amended, except to the extent that the Company specifically
incorporates it by reference in such filing.
The foregoing Report of the Audit Committee, dated March 11, 2005, has
been furnished by K.G. Copland, N.S. Braun and D.W. Leebron as members of the
Audit Committee of the Board of Directors.
APPOINTMENT OF AUDITORS
At the Meeting, the shareholders will be asked to approve the appointment
of PricewaterhouseCoopers LLP, Chartered Accountants, as auditors of the Company
to hold office until the close of the next annual meeting of shareholders at a
remuneration rate to be fixed by the Board of Directors.
Representatives of PWC are expected to be present at the Meeting and to be
available to respond to appropriate questions and to make statements as they
desire.
Shareholders will be asked to approve the appointment by ordinary
resolution, which requires that a majority of the votes cast at the Meeting be
in favour of the resolution. IN THE ABSENCE OF ANY INSTRUCTION ON THE
ACCOMPANYING PROXY, IT IS THE INTENTION OF THE PERSONS NAMED BY MANAGEMENT IN
THE PROXY TO VOTE THE COMMON SHARES REPRESENTED BY THE PROXY IN FAVOUR OF THE
RESOLUTION.
AVAILABLE INFORMATION
THE COMPANY MAKES AVAILABLE FREE OF CHARGE ITS ANNUAL REPORTS ON FORM
10-K, QUARTERLY REPORTS ON FORM 10-Q AND CURRENT REPORTS ON FORM 8-K AS SOON AS
REASONABLY PRACTICABLE AFTER THE SUCH FILING HAS BEEN MADE WITH THE SEC. REPORTS
ARE AVAILABLE AT WWW.IMAX.COM OR BY CALLING INVESTOR RELATIONS AT 905-403-6500.
ADDITIONAL INFORMATION RELATING TO THE COMPANY IS AVAILABLE AT WWW.SEDAR.COM.
APPROVAL BY BOARD OF DIRECTORS
The contents and the sending of this Proxy Circular and Proxy Statement to
each shareholder entitled to receive notice of the Meeting, to each director and
to the auditors of the Company have been approved by the Board of Directors.
DATED at Mississauga, Ontario, Canada, March 11, 2005.
/s/ G. Mary Ruby
------------------------------------
G. MARY RUBY
Senior Vice President, Legal Affairs
and Corporate Secretary
20
APPENDIX "A"
IMAX CORPORATION
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The following table indicates how the Company's system of corporate
governance aligns with the Toronto Stock Exchange Guidelines (the "TSX
Guidelines"). Where applicable, the Company has also disclosed a comparison with
the Nasdaq Stock Market listing standards and the National Association of
Securities Dealers ("NASD") Marketplace Rules, as those rules have been approved
by the United States Securities and Exchange Commission (the "SEC").
TSX CORPORATE GOVERNANCE GUIDELINE COMMENTS
---------------------------------- ----------------------------------------------------------------------------------
1. The Board of Directors should explicitly The Company aligns with this Guideline as the Board of Directors has assumed the
assume responsibility for stewardship of duty of stewardship and assesses and monitors management's performance although
the Company, and specifically assume management conducts the day to-day operations of the Company. The Company has also
responsibility for: adopted a Code of Ethics that applies to all directors, officers and employees of
the Company. A copy of the Code of Ethics is available at www.imax.com.
(a) Adoption of a strategic planning The Company aligns with this Guideline. The development of the Company's strategic
process undertakings is an interactive process with Board involvement and input. The formal
annual strategic objectives and operating plan and budget are reviewed and approved
at a dedicated meeting with the Board of Directors.
(b) Identification of principal risks, The Company aligns with this Guideline. The Audit Committee and the Board of
and implementing risk management systems Directors have specifically identified the Company's principal operational and
strategic risks and are continually working with management in the development of
appropriate controls and procedures which constitute the Company's risk management
systems. The Audit Committee has been delegated the responsibility to work with
management and external professional advisors to review and if necessary improve,
internal procedures and controls and to establish risk management processes. The
principal risks to the business are identified in the Company's Annual Report on
Form 10-K.
(c) Succession planning and monitoring The Company aligns with this Guideline. The Compensation Committee reviews and
senior management reports to the Board of Directors on succession issues relating to the Co-Chief
Executive Officers. The Board of Directors, through the Compensation Committee,
defines its expectations of the Co-Chief Executive Officers by establishing annual
performance objectives, conducting annual performance assessments and establishing
annual compensation and bonus levels based on actual performance to objectives. The
Board of Directors also receives operational reports at least quarterly by the
Co-Chief Executive Officers to ensure accountability of senior management.
(d) Communications policy The Company aligns with this Guideline. The Company has verified through the
establishment of a formal Disclosure Committee that procedures are in place to
ensure effective communication between the Company and its shareholders and the
public. The Company promptly provides full, true and plain disclosure of all
material information, as required by law. In addition, all material press releases
and other significant corporate disclosures are reviewed by counsel prior to being
disclosed. The Company has a website on which the Company posts all of the
Company's press releases, Annual Reports, SEC filings and other meaningful
information. The Company's Investor Relations Department has also implemented
procedures to enhance effective communication with the Company's shareholders and
the public. For example, the Investor Relations Department maintains a distribution
list of persons who have requested information about the Company and delivers to
those persons all material press releases, including earnings releases, either by
facsimile or by e-mail. The Company also holds quarterly meetings with analysts and
institutional investors by telephone conference call, which are open to the
financial press as well as the public. Recordings of the meetings are available for
playback for appropriate periods of time.
A - 1
(e) Integrity of internal control and The Company aligns with this Guideline. The Audit Committee is responsible for
management information systems overseeing the Company's internal control structure over financial reporting. This
responsibility includes monitoring and reviewing accounting controls, procedures
and policies, information gathering systems and management reporting. The external
auditors report to the Audit Committee, when requested, on matters relating to
internal controls and procedures.
2. A majority of directors should be The Company aligns with this Guideline. A majority of the directors (6 out of 8)
"unrelated" (free from conflict of are independent from management and free from any interest business or other
interest) relationship that could or could reasonably be perceived to, materially interfere
with the director's ability to act in the Company's best interests (as such terms
are used in the TSX Guidelines). The Board of Directors has determined that five of
the six "unrelated directors" qualify as "independent directors", as that
expression is defined in Rule 4200(a)(15) of the National Association of Securities
Dealers ("NASD") Marketplace Rules.
3. Disclose, for each director, whether he or The Company aligns with this Guideline. A determination on an ongoing basis is made
she is "related", and how that conclusion as to whether each director is an "unrelated director". In order to make that
was reached determination, all relationships of the directors with the Company are annually
analyzed on the basis of answers given by each of the directors to a detailed
questionnaire. Messrs. Wechsler and Gelfond cannot be qualified as "unrelated
directors" since they are the Co-Chief Executive Officers of Company. The other
directors, namely Messrs. Braun, Copland, Fuchs, Leebron, Girvan and Utay are
"unrelated directors" for purposes of the TSX Guidelines. None of these "unrelated
directors" work in the day-to-day operations of the Company, or are party to any
material contracts with the Company or personally receive any fees from the Company
other than as directors. The Board of Directors has determined that legal services
provided by McCarthy Tetrault to the Company do not interfere with the ability of
Mr. Girvan, who is a partner of such firm, to act in the Company's best interests.
More information about each director can be found in the Directors Table on page 4
of this Proxy Circular and Proxy Statement.
4. The Board of Directors should appoint a The Board of Directors as a whole evaluates potential new candidates for the Board
Committee of directors responsible for of Directors on an ongoing basis in light of opportunities and risks facing the
proposing to the full Board of Directors Company, and the competencies, skills and personal qualities that are desirable to
new nominees for election to the board and add value to the Company and to contribute to effective governance of the Company.
for assessing directors on an ongoing basis Candidates are identified from a number of sources including from recommendations
from Board members, management and others.
The Board of Directors will consider nominees recommended by shareholders. The
names and biographies of any such proposed nominees should be sent to IMAX
Corporation, 2525 Speakman Drive, Mississauga, Ontario L5K 1B1, Attention:
Corporate Secretary.
5. Implement a process for assessing the The Company aligns with this Guideline. The Company's Governance Committee is
effectiveness of the Board of Directors, mandated to review and to assess the effectiveness of the Board of Directors, its
its committees and individual directors committees and individual directors, and to make recommendations for improvements.
6. Provide an orientation and education The Company aligns with this Guideline. The Company has developed and implemented
program for new directors orientation materials and procedures for new directors. In this regard, a Board of
Directors Manual is provided to all new Board members. Reports, materials and
presentations relating to the Company's business are periodically provided to the
Board of Directors. New directors also have access to fellow directors and senior
management.
A - 2
7. Examine board size with a view to The Company aligns with this Guideline. The Board of Directors has considered this
determining the impact of the number of issue and in 2003 reduced the size of the Board from 11 to 8. The Board of
directors upon board effectiveness and Directors is of the view that its current size and composition are suited to the
where appropriate, undertake a program to Company's circumstances and allow for the efficient functioning of the Board of
reduce the number of directors to a number Directors as a decision-making body and the appropriate staffing of committees (in
that will facilitate more effective accordance with the TSX Guidelines) to which active mandates have been delegated.
decision making
8. The Board of Directors should review The Company aligns with this Guideline. The mandate of the Company's Governance
compensation of directors in light of Committee includes reviewing and recommending to the Board of Directors proposals
risks and responsibilities involved in for the remuneration of directors. See "Directors' Compensation" on page 17 of
being a director this Proxy Circular and Proxy Statement.
The members of the Governance Committee are "unrelated" directors for the purposes
of this Guideline. In addition, the Board of Directors has determined that the
members of the Governance Committee qualify as "independent directors", as that
expression is defined in Rule 4200(a)(15) of the NASD Marketplace Rules.
9. Committees of the Board of Directors The Company aligns with this Guideline. The Company's Governance Committee, Audit
should generally be composed of outside Committee and Compensation Committee are composed solely of outside
(non-management) directors, a majority of (non-management) directors all of whom are "unrelated" in accordance with this
whom are unrelated Guideline.
10. Appoint a committee responsible for The Company aligns with this Guideline. The Governance Committee is responsible
approach to corporate governance issues for the Company's approach to corporate governance. As part of its mandate, the
and guidelines. Governance Committee reviews the Company's policies and procedures and the Code of
Ethics on a periodic basis, adopting best practices to meet the needs and
circumstances of the Company.
11. (a)Define limits to management's The Company aligns with this Guideline. The Board of Directors has both statutory
responsibilities by developing mandates and regulatory duties and standards of care in its role of overseeing the
for the Board of Directors management and affairs of the Company. In addition, the Board of Directors has
duties, including contribution to and approval of all strategic objectives and
business plans and all significant initiatives including acquisitions,
divestitures, financings and capital expenditures. In addition, through various
committees, it oversees the development and implementation of procedures and
controls for the management of risk, the Company's communication policy and the
integrity of the Company's internal control and management systems.
(b)The Board of Directors should approve The Company aligns with this Guideline. The Co-Chief Executive Officers'
the CEO's corporate objectives objectives, as noted above, are reviewed and approved by the full Board of
Directors, on recommendations of the Compensation Committee, on an annual basis.
12. Establish procedures to ensure the Board The Company aligns with this Guideline. The Board of Directors meets independently
can function independently of management of management on a regularly scheduled basis, at least quarterly. The Board of
Directors has assigned certain of its responsibilities to the Governance Committee
which is comprised solely of directors who are not members of management, which
ensures that the Board of Directors fulfills its responsibilities under the
Company's system of corporate governance and has established an Audit Committee
with a specific mandate (see item 13 below). All Committees of the Board of
Directors are comprised solely of directors who are not members of management.
A - 3
13. (a) Establish an audit committee with a The Company aligns with this Guideline. The Company has established an Audit
specifically defined mandate Committee that is mandated to: oversee the retention, independence, performance
and compensation of the Company's independent auditors and the establishment and
oversight of the Company's systems of internal accounting and auditing control. In
particular, the Audit Committee is responsible for ensuring that there are
adequate internal controls over accounting and financial reporting systems. The
Audit Committee is permitted and encouraged to consult with management, internal
accountants, and the Company's independent auditors on matters related to the
preparation of the Company's annual and quarterly financial status and the
internal controls, published financial statements, accounting principles and
auditing procedures. In addition, the Audit Committee must meet separately with
the Company's external auditors without management, at least once a year and more
frequently as required, during which the Company's financial statements, internal
controls and procedures are discussed. In accordance with Nasdaq's listing
standards, the Company has adopted a formal charter for the Audit Committee that
details its mandate, a copy of which is available at www.imax.com.
(b) All members of the Audit Committee The Company aligns with this Guideline. All members of the Audit Committee are
should be non-management directors non-management directors.
All of the members of the Audit Committee are "independent" within the meaning of
Rule 4200(a)(15) of the NASD Marketplace Rules and are financially literate. The
composition of the Audit Committee satisfies Rule 4350(d)(2) of the NASD
Marketplace Rules.
14. Implement a system to enable In performing the Board's or director's individual responsibilities, directors
individual directors to engage outside may, with the authorization of the Governance Committee, engage outside advisors
advisors, at the Company's expense at the Company's expense.
A - 4
[IMAX LOGO]
[BAR CODE]
[IMAX LOGO] [COMPUTERSHARE LOGO]
9th Floor, 100 University Avenue
Toronto, Ontario M5J 2Y1
www.computershare.com
000001
SAM SAMPLE
123 SAMPLES STREET
SAMPLETOWN SS X9X X9X SECURITY CLASS COMMON SHARES
HOLDER ACCOUNT NUMBER
C9999999999 IND
FORM OF PROXY - ANNUAL MEETING TO BE HELD ON APRIL 13, 2005
THIS FORM OF PROXY IS SOLICITED BY AND ON BEHALF OF MANAGEMENT.
NOTES TO PROXY
1. EVERY HOLDER HAS THE RIGHT TO APPOINT SOME OTHER PERSON OF THEIR CHOICE,
WHO NEED NOT BE A HOLDER, TO ATTEND AND ACT ON THEIR BEHALF AT THE
MEETING. IF YOU WISH TO APPOINT A PERSON OTHER THAN THE PERSONS WHOSE
NAMES ARE PRINTED HEREIN, PLEASE INSERT THE NAME OF YOUR CHOSEN
PROXYHOLDER IN THE SPACE PROVIDED (SEE REVERSE).
2. If the securities are registered in the name of more than one owner (for
example, joint ownership, trustees, executors, etc.), then all those
registered should sign this proxy. If you are voting on behalf of a
corporation or another individual you may be required to provide
documentation evidencing your power to sign this proxy with signing
capacity stated.
3. This proxy should be signed in the exact manner as the name appears on the
proxy.
4. If this proxy is not dated, it will be deemed to bear the date on which it
is mailed by Management to the holder.
5. THE SECURITIES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
HOLDER, HOWEVER, IF SUCH A DIRECTION IS NOT MADE IN RESPECT OF ANY MATTER,
THIS PROXY WILL BE VOTED AS RECOMMENDED BY MANAGEMENT.
6. The securities represented by this proxy will be voted or withheld from
voting, in accordance with the instructions of the holder, on any ballot
that may be called for and, if the holder has specified a choice with
respect to any matter to be acted on, the securities will be voted
accordingly.
7. This proxy confers discretionary authority in respect of amendments to
matters identified in the notice of meeting or other matters that may
properly come before the meeting.
VOTE USING THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!
VOTING BY MAIL may be the only method for holdings held in the name of a
corporation or holdings being voted on behalf of another individual.
VOTING BY MAIL OR BY INTERNET, are the only methods by which a holder may
appoint a person as proxyholder other than the Management nominees named on the
reverse of this proxy. Instead of Fold mailing this proxy, you may choose one of
the two voting methods outlined below to vote this proxy. Please have this proxy
in hand when you call.
[TELEPHONE ICON] TO VOTE USING THE TELEPHONE [MOUSE ICON] TO VOTE USING THE INTERNET
(ONLY AVAILABLE WITHIN CANADA AND U.S.)
- Call the toll free number listed BELOW from a touch tone - Go to the following web site:
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1-800-401-7942 www.computershare.com/ca/proxy
- Proxy Instructions must be received by 5:00 pm, Eastern Time, - Proxy Instructions must be received by 5:00 pm, Eastern
on April 11, 2005. Time, on April 11, 2005.
TO VOTE BY TELEPHONE OR THE INTERNET, YOU WILL NEED TO PROVIDE YOUR HOLDER
ACCOUNT NUMBER AND ACCESS NUMBER LISTED BELOW.
HOLDER ACCOUNT NUMBER C9999999999 ACCESS NUMBER 99999
IF YOU VOTE BY TELEPHONE OR THE INTERNET, DO NOT MAIL BACK THIS PROXY.
Proxies submitted must be received by 5:00 pm, Eastern Time, on April 11, 2005
+ SAM SAMPLE C9999999999 [BAR CODE] +
IND C01
APPOINTMENT OF PROXYHOLDER
The undersigned common shareholder PRINT THE NAME OF THE PERSON YOU ARE
of IMAX Corporation (the "Company") APPOINTING IF THIS PERSON IS SOMEONE
hereby appoints Bradley J. Wechsler, OR OTHER THAN THE CHAIRMAN OF THE
failing whom, Richard L.Gelfond, MEETING.
failing whom, Robert D.Lister, ________________
failing whom, G. Mary Ruby,
as my/our proxyholder with full power of substitution and to vote in accordance
with the following direction (or if no directions have been given, as the
proxyholder sees fit) and all other matters that may properly come before the
Annual Meeting of IMAX CORPORATION to be held at Stony Brook Manhattan, 2nd
Floor, 401 Park Avenue South, New York, New York, USA, 10016 on April 13, 2005
at 10:30 am and at any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR WITHHOLD
01. Garth M. Girvan [TRIANGLE] [ ] [ ]
02. David W. Leebron [TRIANGLE] [ ] [ ]
03. Marc A. Utay [TRIANGLE] [ ] [ ]
2. APPOINTMENT OF AUDITORS
In respect of the appointment of PricewaterhouseCoopers LLP as auditors
of the Company and authorizing the directors to fix their remuneration. FOR [TRIANGLE] [ ] WITHHOLD [TRIANGLE] [ ]
AUTHORIZED SIGNATURE(s) - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
I/We authorize you to act in accordance with my/our instructions set out above.
I/We hereby revoke any proxy previously given with respect to the Meeting. IF NO
VOTING INSTRUCTIONS ARE INDICATED ABOVE, THIS PROXY WILL BE VOTED AS RECOMMENDED
BY MANAGEMENT.
Signature(s)
______________________ ______________________
Date
FINANCIAL STATEMENTS REQUEST INTERIM FINANCIAL REPORTS
In accordance with securities Mark this box if you would
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elect annually to receive [ ] reports by mail. You may
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please mark your selection.
If you do not mark the box, or do not return this PROXY or register online, then
it will be assumed you do NOT want to receive interim financial statements.
- 99999 001682 1PI IMXQ +