Document:

Exhibit 4.65

DRAXIS HEALTH INC.

DEFERRED SHARE UNIT PLAN

FOR EMPLOYEES

 

1.             INTRODUCTION

 

1.1                                 Purpose

 

The DRAXIS Health Inc. Deferred Share Unit
Plan for senior management employees has been established to provide such
employees of DRAXIS Health Inc. and its subsidiaries with the opportunity to
acquire share equivalent units convertible to cash or Common Shares of DRAXIS
Health Inc. upon the termination of employment of an employee.  Acquiring such units will allow these
employees to participate in the long-term success of DRAXIS Health Inc. and
will promote a greater alignment of interests between such employees and the
shareholders.

 

1.2                                 Definitions

 

For
purposes of the Plan:

 

(a)                                  “Annual
Remuneration” means the Base Salary and Bonus payable to an Eligible Employee
by the Company in or in respect of each financial year;

 

(b)                                 “Applicable
Withholding Taxes” means any and all taxes and other source deductions or other
amounts which the Company is required by law to withhold from any amounts to be
paid or credited hereunder;

 

(c)                                  “Award Date” means each date on which
Deferred Share Units are credited to an Eligible Employee in accordance with
Section 3.1, which shall be, unless otherwise determined by the Committee,
January 1st of each financial year in which the Eligible Employee is
eligible to participate in the Plan, except (i) in 2000 the first year of
the Plan in which case the Award Date shall be February 1, 2000; and
(ii) in the case of bonuses earned in respect of any particular year in which
case the Award Date shall be the day, within the first calendar quarter of the
year following the particular year, on which the amount of the Bonus is
awarded;

 

(d)                                 “Award
Market Value” means the last reported sale price of Common Shares on The
Toronto or NASDAQ Stock Exchanges (as selected by the Committee) on December 31
of the fiscal year just ended, or if such day is not a business day, then the
last business day in December except in respect of 1999 when the date
shall be deemed to be February 1, 2000;

 

(e)                                  “Base
Salary” means the regular base salary received by an Eligible Employee from the
Company during the relevant financial year as 

 

 

determined by the Company
from time to time excluding vacation pay in lieu of time off, Bonuses, service
awards or any special compensation;

 

(f)                                    “Bonus”
means an amount in addition to Base Remuneration calculated and awarded by the
Board to an Eligible Employee following completion of a financial year in
respect of such Employee’s contribution to the operations of the Company for
such financial year, excluding for greater certainty, any payments under the
Stock Ownership Plan or, its predecessor, the Stock Purchases and Bonus Plan;

 

(g)                                 “Board” means the board of
directors of the Company;

 

(h)                                 “Committee”
means the committee of the Board responsible for recommending to the Board the
eligibility of an employee to participate in this Plan;

 

(i)                                     “Common Shares” means the
common shares of the Company;

 

(j)                                     “Company”
means DRAXIS Health Inc. or any of its subsidiaries or affiliates’ as defined
in the Canada Revenue Agency Interpretation Bulletin IT-337R4, that may adopt
the Plan pursuant to its terms;

 

(k)                                  “Deferred
Share Unit” means a unit equivalent in value to a Common Share, credited by
means of a bookkeeping entry in the books of the Company in accordance with an
election made by an Eligible Employee pursuant to Section 3;

 

(l)                                     “Deferred
Share Units outstanding under the Plan” or “Deferred Share Units credited to an
Employee’s Account” at a particular time for the purposes of Articles 4 and 5
shall be deemed to include at any particular time in any particular financial
year Deferred Share Units subsequently granted in respect of a Bonus determined
in respect of a completed financial year and in respect of which an Eligible
Employee has made an election pursuant to Section 3.2;

 

(m)                               “Deferred
Share Unit Amount” has the meaning given thereto in Section 4.1;

 

(n)                                 “Dividend
Equivalents” means a bookkeeping entry whereby each Deferred Share Unit is
credited with the equivalent amount of the dividend or other distribution paid
on a Common Share in accordance with Section 3.3;

 

(o)                                 “Dividend
Market Value” means the average of the daily high and low board lot trading
prices of Common Shares on The Toronto or Nasdaq Stock Exchanges (as selected
by the Committee) on each of the five

 

2

 

trading days prior to the
Award Date on which there was a trade of a board lot of Common Shares;

 

(p)                                 “Election
Form” means a document substantially in the form of Schedule “A” to this Plan;

 

(q)                                 “Eligible
Employee” means a person who is, at the relevant time, an employee of the
Company or any of its subsidiaries and is designated by the Committee as
eligible to participate in the Plan;

 

(r)                                    “Plan”
means this DRAXIS Health Inc. Deferred Share Unit Plan for Employees, as
amended from time to time;

 

(s)                                  “Redemption
Date” means a date selected by the Eligible Employee which shall in no event be
earlier than the date of the Eligible Employee’s Termination and no later than
the end of the first calendar year commencing after the Eligible Employee’s
Termination.

 

(t)                                    “Redemption
Value” means the average of the daily high and low board lot trading prices of
Common Shares on The Toronto or Nasdaq Stock Exchanges on each of the five
trading days prior to the Redemption Date on which there was a trade of a board
lot of Common Shares.  Should Common
Shares (as selected by the Committee) no longer be publicly traded at the
relevant time such that the Redemption Value cannot be determined in accordance
with the formula set out herein, such value shall be determined by the
Committee in good faith and shall depend upon the fair market value of the
Common Shares at the Redemption Date, which fair market value shall not be less
than the trading value of the Common Shares on the last day they were publicly
traded unless the Board determines that such trading value does not reflect the
fair market value of the Common Shares at the Redemption Date based upon a
valuation obtained by a third party qualified business valuator as may be
designated by the Company’s auditors.

 

(u)                                 “Termination”
with respect to an Eligible Employee means the date upon which such employee
ceases to hold any position as a director, officer or employee of the Company,
any of its subsidiaries or affiliates, and is no longer otherwise employed by
any such company, all as determined in accordance with Interpretation Bulletin
IT-337R4, and which includes the date of the death of an Eligible Employee.

 

1.3                                 Effective Date
of Plan

 

The effective date of the Plan shall be February 1,
2000 or such other later date as the Board may determine.

 

3

 

2.                                      ADMINISTRATION

 

2.1                                 Administration
of the Plan

 

The Plan shall be administered by the Board
of Directors which shall, without limitation, have full and final authority in
its discretion, but subject to the express provisions of the Plan, to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating
to it and to make all other determinations deemed necessary or advisable for
the administration of the Plan.  The
Board of Directors may delegate any or all of its authority with respect to the
administration of the Plan and any or all of the rights, powers and discretions
with respect to the Plan granted to it hereunder to the Committee or such other
committee of directors of the Company as the Board of Directors may designate
and upon such delegation the Committee or other committee of directors, as the
case may be, as well as the Board of Directors, shall be entitled to exercise
any or all of such authority, rights, powers and discretions with respect to
the Plan.  The directors of the Company
may fully participate in voting and in other deliberations or proceedings of
the Board of Directors in respect of the Plan, notwithstanding: (i) the
eligibility of any of the directors to participate in the Plan; and (ii) that
any of the directors may hold Deferred Share Units granted pursuant to the
Plan.

 

2.2                                 Taxes and
Other Source Deductions

 

The Company shall be authorized to deduct
from any amount to be paid or credited hereunder any Applicable Withholding
Taxes in such manner as the Company determines.

 

3.                                      DEFERRED SHARE
UNITS

 

3.1                                 Award of
Deferred Share Units

 

(a)           Each
Eligible Employee shall be credited with Deferred Share Units in respect of
that part of an Eligible Employee’s Base Salary which such Eligible Employee
has elected to receive in the form of Deferred Share Units as provided in Section 3.2,
in the manner set forth in this Plan. 
All Deferred Share Units to be credited to an Eligible Employee will be
credited to an account maintained for the Eligible Employee on the books of the
Company.  The Deferred Share Units to be
credited to an Eligible Employee will be credited to such account on each Award
Date in respect of the portion of his or her base Salary to be credited in
Deferred Share Units to be earned in the financial year commencing on the Award
Date.  The number of Deferred Share Units
(including fractional Deferred Share Units) to be credited on each Award Date
shall be determined by dividing (a) the amount of the applicable portion
of the Base Salary to be credited in Deferred Share Units on that Award Date by
(b) the Award Market Value.

 

(b)           Each
Eligible Employee shall be credited with Deferred Share Units in respect of
that part of an Eligible Employee’s Bonus which such Eligible Employee has
elected to 

 

4

 

receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan.  All Deferred Share Units to be credited to an
Eligible Employee will be credited to an account maintained for the Eligible
Employee on the books of the Company. 
The Deferred Share Units to be credited to an Eligible Employee will be
credited to such account as of the Award Date for a relevant financial year
upon determination of the Bonus earned following completion of such financial
year.  The number of Deferred Share Units
(including fractional Deferred Share Units) to be credited effective each Award
Date shall be determined by dividing (a) the amount of the applicable
portion of the Bonus to be credited in Deferred Share Units effective that
Award Date by (b) the Award Market Value determined in respect of that
Award Date.

 

3.2                                 Election

 

Each Eligible Employee shall have the right
to elect on December 1 of each financial year (except 2000 the first year
of the Plan in which case the date shall be February 1, 2000) whether such
Employee wishes to receive some of such Employee’s Annual Remuneration for the
immediately succeeding financial year (or for that part of the year remaining
in the case of 2000) in the form of Deferred Share Units.  This election shall be made by completing,
signing and delivering to the Secretary of the Company the Election Form: (a) in
the case of an existing employee, by December of the financial year
preceding the financial year to which such election is to apply; or (b) in
the case of 2000 by February 1, 2000. 
In each case, the election, when made, shall only apply prospectively
with respect to the Eligible Employee’s Annual Remuneration yet to be earned.

 

3.3                                 Credits for
Dividends

 

(a)           An Eligible Employee’s account shall be credited with
Dividend Equivalents in the form of additional Deferred Share Units on each
dividend payment date in respect of which ordinary course cash dividends are
paid on Common Shares.  Such Dividend
Equivalents shall be computed by dividing: (a) the amount obtained by
multiplying the amount of the dividend declared and paid per Common Share by
the number of Deferred Share Units recorded in the Eligible Employee’s account
on the record date for the payment of such dividend, by (b) the Dividend
Market Value, with fractions computed to three decimal places.

 

(b)           All
Dividend Equivalents credited hereunder at any particular time in a year to an
Eligible Employee in the form of Deferred Share Units shall be adjusted as of
the particular dividend payment date to reflect the determination at the end of
a year of additional Deferred Share Units in respect of a Bonus concerning
which an Eligible Employee has made an election pursuant to the provisions of
3.1 and 3.2.

 

3.4                                 Reporting of
Deferred Share Units

 

Statements of the Deferred Share Unit
accounts will be provided to the Eligible Employees at least annually.

 

5

 

4.                                      REDEMPTION OF
DEFERRED SHARE UNITS

 

4.1                                 Redemption of
Deferred Share Units

 

(a)           An
Eligible Employee shall be entitled on the Redemption Date to redeem the
Deferred Share Units credited to the Eligible Employee’s account for an amount
(the “Deferred Share Unit Amount”) equal to the product that results from
multiplying (i) the number of Deferred Share Units recorded in the
Eligible Employee’s account on the Redemption Date by (ii) the Redemption
Value. Upon payment in full by the Company to the Eligible Employee of the
value of the Deferred Share Unit Amount, the Deferred Share Units shall be
cancelled. An Eligible Employee wishing to redeem any Deferred Share Units
shall give notice of the redemption to the Company not later than ten (10) business
days prior to the Redemption Date selected by such employee.

 

(b)           The Deferred Share Unit Amount
payable to an Eligible Employee, less any Applicable Withholding Taxes, may be
used to acquire Common Shares on the open market through an independent broker
designated by the Company (the “Designated Broker”) or may be paid in cash less
Applicable Withholding Taxes to the Eligible Employee, at the discretion of the
Company. 
The Company will also make a cash payment, less any
Applicable Withholding Taxes, to the Eligible Employee with respect to the
value of fractional Deferred Share Units standing to the Eligible Employee’s
credit.

 

(c)           If the Company has determined, that
payment of the Deferred Share Unit Amount be made in the form of Common Shares
purchased on the open market through a Designated Broker, as described in Section 4.1
(b) above, the Company will calculate the number of whole Common Shares to
be purchased by the Designated Broker on the open market on behalf and for the
benefit of the Eligible Employee.  The
number of Common Shares will be determined by dividing (i) the Deferred
Share Unit Amount payable, less any Applicable Withholding Taxes, by (ii) the
Redemption Value of a Common Share as determined on the Redemption Date or, if
the Redemption Date is not a trading date for shares on the Toronto and Nasdaq
Stock Exchanges, on the next such trading date and the Company shall advise the
Designated Broker of the specified number of whole Common Shares to be
purchased on behalf of the Eligible Employee. The Designated Broker will
purchase the specified number of whole Common Shares as soon practicable after
being notified by the Company.  On or before
the date of settlement with respect to the purchase of the Common Shares by the
Designated Broker, the Company, acting as agent for the Eligible Employee, will
pay the purchase price of the specified number of Common Shares to the
Designated Broker, together with any reasonable brokerage fees or commissions
related thereto.  The Company will also
make a cash payment, less any Applicable Withholding Taxes, to the Eligible
Employee with respect to the value of fractional Deferred Share Units still
standing to the Eligible Employee’s credit after the maximum number of whole
Common Shares has been purchased as described above.

 

(d)           Deferred
Share Unit Amounts paid by the Company in accordance with (a) through (c) above
will be paid to or on behalf of the Eligible Employee no later than 60 

 

6

 

days after the Redemption Date. Notwithstanding the
foregoing and anything else in this Plan, any Deferred Share Unit Amount shall
be received by an Eligible Employee (or a successor described in Section 4.2)
not later than the end of the first calendar year commencing after the Eligible
Employee’s Termination.

 

4.2                                 Death of
Eligible Employee Prior to Redemption

 

Upon the death of an Eligible Employee prior
to the redemption of the Deferred Share Units credited to the account of such
Eligible Employee under the Plan, a dependant relation or legal representative,
shall be entitled to redeem the Deferred Share Units in accordance with Section 4.1.  For greater certainty, the Deferred Share
Unit Amount payable shall be equivalent to the amount which would have been
paid to the Eligible Employee pursuant to and subject to Section 4.1,
calculated as if the Redemption Date were the date following the Employee’s
death.

 

4.3           In
the event a Redemption Date occurs prior to the end of a financial year, the
number of Deferred Share Units awarded to an Eligible Employee in respect of
his Annual Remuneration for that particular year shall, for the purposes of
calculating the Redemption Value, be reduced proportionately to reflect that
the Eligible Employee was employed by the Company for less than that particular
full financial year.

 

5.                                      GENERAL

 

5.1                                 Adjustments to
Deferred Share Units

 

In the event of the declaration of any stock
dividend, a subdivision, consolidation, reclassification, exchange, or other
change with respect to the Common Shares, or a merger, consolidation, spin-off,
acquisition of control or other distribution (other than ordinary course cash
dividends) of the Company’s assets to its shareholders, the account of each
Eligible Employee and the Deferred Share Units outstanding under the Plan shall
be adjusted to appropriately reflect the event. 
However, no amount will be paid to, or in respect of, an Eligible
Employee under the Plan or pursuant to any other arrangement, and no Deferred
Share Units will be granted to such Eligible Employee to compensate for a
downward fluctuation in the price of Common Shares, nor will any other form of
benefit be conferred upon, or in respect of, an Eligible Employee for such
purpose.

 

5.2                                 Designation of
Beneficiary

 

An Eligible Employee may, by written notice
to the Secretary of the Company, designate a person to receive the benefits
payable under the Plan on the Eligible Employee’s death, and may also by
written notice to the Secretary of the Company alter or revoke such designation
from time to time, subject always to the provisions of any applicable law.  Such written notice shall be in such form and
shall be executed in such manner as the Committee in its discretion may from
time to time determine.

 

7

 

5.3                                 Amendment,
Suspension, or Termination of Plan

 

(a)           The Board may from time to time amend or suspend the Plan
in whole or in part and may at any time terminate the Plan.  However, any such amendment, suspension, or
termination shall not adversely affect the right of any Eligible Employee with
respect to Deferred Share Units credited to such Eligible Employee at the time
of such amendment, suspension or termination, without the consent of the
affected Eligible Employee.

 

(b)           If
the Board terminates the Plan, no new Deferred Share Units will be credited to
the account of an Eligible Employee, but previously credited Deferred Share
Units and Deferred Share Units to be credited to the end of a financial year
with respect to any Bonus pursuant to Section 3.1 shall remain outstanding
and shall be entitled to Dividend Equivalents as provided under section 3.3,
and be paid in accordance with the terms and conditions of the Plan existing at
the time of termination.  The Plan will
finally cease to operate for all purposes when the last remaining Eligible
Employee receives payment, in cash or Common Shares (in accordance with Section 4.1(b)),
in satisfaction of all Deferred Share Units recorded in the Eligible Employee’s
account.

 

5.4                                 Compliance
with Laws

 

The administration of the Plan shall be
subject to and performed in conformity with all applicable laws and any
applicable regulations of a duly constituted authority.  In particular, the Plan shall at all times be
operated in accordance with the requirements of subsection 6801(d) of the
Regulations to the Income Tax Act
(Canada).  Should the Committee, in its
sole discretion, determine that it is not feasible or desirable to honour an
election in favour of Deferred Share Units due to such laws or regulations, its
obligation shall be satisfied by means of an equivalent cash payment
(equivalence being determined on a before-tax basis).

 

5.5                                 Reorganization
of the Company

 

The existence of any Deferred Share Units
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its
business, or any amalgamation, combination, merger or consolidation involving
the Company or to create or issue any bonds, debentures, shares or other
securities of the Company or the rights and conditions attaching thereto or to
effect the dissolution or liquidation of the Company or any sale or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar nature or otherwise.

 

5.6                                 General
Restrictions and Assignment

 

(a)           Except
as required by law, the rights of an Eligible Employee under the Plan are not
capable of being anticipated, assigned, transferred, alienated, sold,
encumbered, 

 

8

 

pledged, mortgaged or charged and are not capable of
being subject to attachment or legal process for the payment of any debts or
obligations of the Eligible Employee.

 

(b)           Rights
and obligations under the Plan may be assigned by the Company to a successor in
the business of the Company.

 

5.7                                 No Right to
Service

 

Neither
participation in the Plan nor any action taken under the Plan shall give or be
deemed to give any Eligible Employee a right to continued employment with the
Company or any of its subsidiaries and shall not interfere with any right of
the Company to terminate the employment of any Eligible Employee at any time.

 

5.8                                 No Shareholder
Rights

 

Under no circumstances shall Deferred Share
Units be considered Common Shares or shares of any other class of the Company,
nor entitle any Eligible Employee to exercise voting rights or any other rights
attaching to the ownership of Common Shares, nor shall any Eligible Employee be
considered the owner of the Common Shares by virtue of the award of Deferred
Share Units.

 

5.9                                 Governing Law

 

The Plan shall be governed by, and
interpreted in accordance with, the laws of the Province of Ontario and the
laws of Canada applicable therein.

 

5.10                           Interpretation

 

In
this text words importing the singular meaning shall include the plural and vice versa, and words importing the
masculine shall include the feminine and neuter genders.

 

5.11                           Severability

 

The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision and any invalid or unenforceable provision shall be severed
from this Plan.

 

9

 

SCHEDULE “A”

 

DRAXIS HEALTH INC.  DEFERRED SHARE UNIT PLAN

FOR DIRECTORS (the “Plan”)

 

ANNUAL ELECTION FORM

 

1.                                      Annual
Remuneration

 

(a)                                  I elect to receive my Base Remuneration
as follows (please check either Box “A” or Box “B”):

 

A.                                                   % in Deferred Share Units (not to exceed 20%)

 

and

 

B.                                                     % in cash.

 

(b)                                 I elect to receive my Bonus, if
any, as follows: (Please check either Box “C” or Box “D”

 

C.                                     % in Deferred Share Units (not
to exceed 100%)

 

D.                                    % in cash.

 

2.                                      Designation of
Beneficiary

 

In accordance with the terms of the Plan, I appoint as designated
beneficiary, or if previously done, I hereby revoke any designation of
beneficiary heretofore made by me under the Plan, and hereby appoint as
designated beneficiary to receive any payment in accordance with the Plan that
may fall due after my death:

 

                                                                            
[insert full name]; provided,
however, that if the above named beneficiary predeceases me such payment shall
be made to my estate.

 

 

 

10

 

 

3.             I understand
that:

 

·                  All capitalized terms shall have the meanings
attributed to them under the Plan.

 

·                  All payments will be net of any Applicable
Withholding Taxes.

 

 

	
   

  	
  )

  	
   

  	
   

  
	
  Witness Signature

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  Eligible Employee’s Signature

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
  Witness Name (please print)

  	
  )

  	
   

  	
  Eligible Employee’s Name (please print)

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  Date

  

 

Until
this Election Form is returned to the Secretary of the Company, 100% of
the Annual Remuneration will be received in the form of cash.

 

 

 

 

11Exhibit 4.66

 

DRAXIS
HEALTH INC.

 

 

TERMS
OF REFERENCE FOR THE NON-EXECUTIVE CHAIR

 

	
  Title:

  	
   

  	
  Chair of the Board

  
	
   

  	
   

  	
   

  
	
  Appointment:

  	
   

  	
  The Chair of the Board serves at the pleasure of the Board of
  Directors (the “Board”) and shall be appointed annually. The Chair must be an
  independent Director.

  
	
   

  	
   

  	
   

  
	
  Reports:

  	
   

  	
  The Chair maintains open communication with the Chief Executive
  Officer. The Chair has unfettered two-way communication with all senior
  officers.

  
	
   

  	
   

  	
   

  
	
  Function:

  	
   

  	
  The Chair’s primary role includes ensuring that the
  Board functions properly, that it meets its obligations and responsibilities,
  and that its organization and mechanisms are in place and are working
  effectively.

  

 

Key
Responsibilities:

 

1.                                       Provides leadership to the Board of
Directors with respect to its functions as described in the Board’s written
mandate and as otherwise may be appropriate, including overseeing the logistics
of the operations of the Board.

 

2.                                       Chairs meetings of the Corporation’s Board
and meetings of Shareholders.

 

3.                                       Ensures that the Board meets on a regular
basis and at least quarterly and that the Board meets at every regularly scheduled Board meeting without management present.

 

4.                                       In consultation with the Chief Executive
Officer, establishes a calendar for holding meetings of, and sets the agendas
for the meetings of, the Board and the Shareholders.

 

5.                                       In collaboration with the Chief Executive
Officer and the Secretary, ensures that agenda items for all Board, Board
Committee, and Shareholder meetings are ready for presentation and that
adequate information is distributed to Directors in advance of such meetings in
order that Directors may properly inform themselves on matters to be acted upon
and ensures that there will be timely distribution of minutes that are to be
distributed to all Board members.

 

6.                                       Acts as liaison and maintains communication
with all Directors and Board Committee Chairs to optimize and co-ordinate input
from Directors, and optimizes effectiveness of the Board and Board Committees.

 

7.                                       Ensures that the Board receives adequate
and regular updates from the Chief Executive Officer on all issues important to
the business and affairs of the Corporation.

 

 

8.                                       Meets periodically with the Chief Executive
Officer and the Secretary to optimize the liaison function and ensure efficient
communication between management and the Board.

 

9.                                       At the request of the President and Chief
Executive Officer, provides assistance on major policy issues such as
acquisitions, divestitures, and new strategic initiatives and when requested by
the President and Chief Executive Officer, represent the Board and/or the
Company in conducting such initiatives with a third party.

 

 

 

2

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