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ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MANAGEMENT INFORMATION CIRCULAR
This Notice and Management Information Circular,
along with accompanying materials, require your immediate attention.
If you have any questions regarding the information described in this Notice and
Management Information Circular or require assistance with voting your shares,
please contact Laurel Hill Advisory Group at 1-877-452-7184 (416-304-0211 collect)
or by email at assistance@laurelhill.com
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOUR OF ALL PROPOSED RESOLUTIONS.
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Aeterna Zentaris Inc. (the "Corporation" or "Aeterna Zentaris") will be held at
the offices of Norton Rose Fulbright US LLP, located on the 33rd floor at 666 Fifth Avenue, New York, NY 10103-3198, on Tuesday, May 10, 2016, at 10:30 a.m.
(Eastern time) for the following purposes:
receive the audited consolidated financial statements of the Corporation as at and for the year ended December 31, 2015, together with the
auditors' report thereon;
appoint auditors and to authorize the directors to determine their compensation;
consider and, if deemed advisable, to adopt an ordinary resolution (the full text of which is set out in the accompanying management information circular)
approving, ratifying and confirming the renewal of the Corporation's stock option plan and approving and authorizing, for a period of three years after the date of the meeting, all unallocated options
issuable pursuant to the Corporation's stock option plan;
consider and, if deemed advisable, to adopt, with or without variation, an ordinary resolution (the full text of which is set out in the accompanying
management information circular) approving, ratifying and confirming the shareholder rights plan adopted by the Corporation's Board of Directors on March 29, 2016; and
transact such other business as may properly come before the meeting.
record date for the determination of shareholders of Aeterna Zentaris entitled to receive notice of and to vote at the meeting is April 1, 2016.
shareholders of Aeterna Zentaris, it is very important that you read these materials carefully and vote your shares, either by proxy or in person at the meeting.
following pages tell you more about how to exercise your right to vote your shares and provide additional information relating to the matters to be dealt with at the meeting.
order of the Board of Directors,
/s/ Philip A. Theodore
Shareholders unable to attend the meeting are requested to complete and sign the enclosed form of proxy and to return it in the stamped envelope provided. To be valid, proxies
must reach the office of Computershare Trust Company of Canada, Share Ownership Management, 1500 Robert-Bourassa Boulevard, 7th Floor, Montreal, Quebec, H3A 3S8, no later
than forty-eight (48) hours (excluding Saturdays, Sundays and holidays) prior to the close of business on the date of the meeting or any adjournment or postponement thereof. The time limit for
the deposit of proxies may be waived by the Chair of the Meeting without notice.
If you are a non-registered shareholder of Aeterna Zentaris Shares and have received these materials through your broker, custodian, nominee or other intermediary, please
complete and return the voting instruction form provided to you by your broker, custodian, nominee or other intermediary in accordance with the instructions provided therein.
Aeterna Zentaris Inc., 1 Place Ville Marie, Suite 2500, Montreal, Quebec, Canada, H3B 1R1,
c/o Norton Rose Fulbright Canada LLP
MANAGEMENT INFORMATION CIRCULAR
| SECTION 1. INTRODUCTION | 1 | |
| SECTION 2. INFORMATION CONCERNING VOTING AT THE MEETING | 1 | |
| 2.1 Your Vote is Important | 1 | |
| 2.2 Voting | 1 | |
| 2.3 How to Vote Registered Shareholders | 2 | |
| 2.4 How to Vote Non-Registered Shareholders | 3 | |
| 2.5 Completing the Form of Proxy | 4 | |
| 2.6 Changing your Vote | 5 | |
| SECTION 3. VOTING SHARES, QUORUM AND PRINCIPAL SHAREHOLDERS | 5 | |
| 3.1 Voting Shares and Quorum | 5 | |
| 3.2 Principal Shareholders | 5 | |
| SECTION 4. PRESENTATION OF THE FINANCIAL STATEMENTS | 5 | |
| SECTION 5. ELECTION OF DIRECTORS | 5 | |
| SECTION 6. DISCLOSURE OF COMPENSATION | 8 | |
| 6.1 Remuneration of Directors | 8 | |
| 6.2 Compensation of Executive Officers | 10 | |
| 6.3 Compensation Discussion & Analysis | 12 | |
| 6.4 Incentive Plan Awards Value Vested or Earned During the Year | 21 | |
| 6.5 Securities Authorized for Issuance under Equity Compensation Plans | 23 | |
| 6.6 Performance Graph | 24 | |
| 6.7 Summary | 25 | |
| SECTION 7. EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS | 25 | |
| SECTION 8. APPOINTMENT OF AUDITORS AND AUDIT COMMITTEE DISCLOSURE | 28 | |
| 8.1 Appointment of Auditors | 28 | |
| 8.2 Audit Committee Disclosure | 28 | |
| 8.3 Composition of the Audit Committee | 28 | |
| 8.4 Education and Relevant Experience | 29 | |
| 8.5 Pre-Approval Policies and Procedures | 29 | |
| 8.6 External Auditor Service Fees | 29 | |
| SECTION 9. RENEWAL OF OUR STOCK OPTION PLAN | 29 | |
| SECTION 10. APPROVAL OF A NEW SHAREHOLDER RIGHTS PLAN | 30 | |
| 10.1 Recommendation of the Board and Management | 31 | |
| 10.2 Objectives and Background of the Rights Plan | 31 | |
| 10.3 Summary of the Rights Plan | 32 | |
| 10.4 Certain Canadian Federal Income Tax Considerations of the Rights Plan | 36 | |
| 10.5 Certain United States Federal Income Tax Considerations of the Rights Plan | 37 | |
| 10.6 Term | 38 | |
| 10.7 Ordinary Resolution | 38 | |
| SECTION 11. STATEMENT OF CORPORATE GOVERNANCE PRACTICES | 39 | |
| SECTION 12. INDEBTEDNESS OF DIRECTORS AND OFFICERS | 39 | |
| SECTION 13. INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS | 39 | |
| SECTION 14. SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING OF SHAREHOLDERS | 39 | |
| SECTION 15. ADDITIONAL INFORMATION | 39 | |
| SECTION 16. MAIL SERVICE INTERRUPTION | 40 | |
| SECTION 17. DIRECTORS' APPROVAL | 40 | |
| SCHEDULES: | ||
| Schedule A: Statement of Corporate Governance Practices | A-1 | |
| Schedule B: Mandate of the Board of Directors | B-1 | |
| Schedule C: Audit Committee Charter | C-1 | |
| Schedule D: Mandate of the Nominating, Governance and Compensation Committee | D-1 |
MANAGEMENT INFORMATION CIRCULAR
SECTION 1. INTRODUCTION
This management information circular (the "Circular") is being furnished in connection with the solicitation of proxies by
and on behalf of the management of Aeterna Zentaris Inc. (the "Corporation", "Aeterna Zentaris", "we" or "our") for use at the annual meeting of our shareholders (the "Meeting") and any
adjournment(s) or postponement(s) thereof. No person has been authorized to give any information or to make any representation in connection with any matters to be considered at the Meeting other than
those contained in this Circular and, if given or made, any such information or representation must not be relied upon as having been authorized.
addition to solicitation by mail, our employees or our agents, we may solicit proxies by telephone or by other means. We will bear the entire cost of any such solicitation. We may also reimburse
brokers and other persons holding our common shares (the "Common Shares") in their names, or in the names of nominees, for their costs incurred in sending proxy materials to beneficial or
non-registered owners and obtaining their proxies or voting instructions. We have appointed The Laurel Hill Advisory Group Company ("Laurel Hill") as our soliciting agent. For this service, and other
advisory services, we will pay Laurel Hill CAN$30,000 and we will reimburse Laurel Hill for its out-of-pocket expenses.
contained in this Circular is given as of April 1, 2016 unless otherwise specifically stated. Our directors and executive officers are generally paid in their home country currency.
Unless otherwise indicated, all compensation information included in this Circular is presented in US dollars and, to the extent a director or officer has been paid in a currency other than US dollars
(Canadian dollars or euros), the amounts have been converted from such person's home country currency to US dollars based on the following annual average exchange rates: for the financial year ended
December 31, 2015: 1.000 = US$1.110 and CAN$1.000 = US$0.783; for the financial year ended December 31, 2014: 1.000 = US$1.329 and
CAN$1.000 = US$0.905; and for the financial year ended December 31, 2013: 1.000 = US$1.329 and CAN$1.000 = US$0.971.
November 17, 2015, we completed a consolidation of our issued and outstanding Common Shares on a 100-to-1 basis (the "Share Consolidation"). All references in this Circular to Common Shares
and stock options outstanding prior to November 17, 2015 have been retroactively adjusted to reflect and give effect to the Share Consolidation.
SECTION 2. INFORMATION CONCERNING VOTING AT THE MEETING
2.1 Your Vote is Important
As a shareholder, it is very important that you read the following information on how to vote your Common Shares, either by proxy or in person at the
Meeting. These materials are being sent to both our registered and non-registered shareholders. Please return your proxy as specified in this Circular and in the form of proxy.
You can attend the Meeting or you can appoint someone else to vote for you as your proxyholder. A shareholder entitled to vote at the Meeting may, by
means of a proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the Meeting in the manner and to the extent authorized by
the proxy and with the authority conferred by the proxy. Voting by proxy means that you are giving the person named on your form of proxy the authority to vote your Common Shares for you at the
Meeting and at any adjournment or postponement thereof.
can choose from among four different ways to vote your Common Shares by proxy:
persons who are named on the form of proxy are our directors and officers and will vote your shares for you. You have the right to appoint someone else to be your proxyholder. If you appoint
someone else, he or she must attend the Meeting to vote your Common Shares.
2.3 How to Vote Registered Shareholders
You are a registered shareholder if your name appears on your share certificate or on the register of shareholders maintained by our registrar and
transfer agent. If you are not sure whether you are a registered shareholder, please contact Computershare Trust Company of Canada ("Computershare") by telephone toll-free at 1-800-564-6253 or by
e-mail at service@computershare.com.
Voting by proxy using the telephone is only available to shareholders located in Canada and the United States. Call 1-866-732-VOTE (8683) toll-free
in Canada and 1-312-588-4290 toll-free in the United States from a touchtone telephone and follow the instructions provided. Your voting instructions are then conveyed by using touchtone selections
will need your Control Number located on your form of proxy or in the e-mail addressed to you if you have chosen to receive this Circular electronically.
you choose the telephone, you cannot appoint any person other than the directors and officers named on your form of proxy as your proxyholder.
The cut-off time for voting by telephone is 5:00 p.m. (Eastern Time) on May 6, 2016.
Complete, date and sign your form of proxy and fax it to Computershare Trust Company of Canada, Attention: Proxy Department at 1-866-249-7775 (toll
free in North America) or 416-263-9524 (international).
you return your proxy by fax, you can appoint a person other than the directors and officers named in the form of proxy as your proxyholder. This person does not have to be a shareholder. Fill in
the name of the person you are appointing in the blank space provided on the form of proxy. Complete your voting instruction on the form of proxy, and date and sign the form. Make sure that the person
you appoint is aware that he or she has been appointed and attends the Meeting.
The cut-off time for voting by fax is 5:00 p.m. (Eastern Time) on May 6, 2016.
Go to the website www.investorvote.com and follow the instructions on the screen. Your voting instructions are then conveyed electronically over the
will need your Control Number located on your form of proxy or in the e-mail addressed to you if you have chosen to receive this Circular electronically.
you return your proxy via the Internet, you can appoint a person other than the directors and officers named in the form of proxy as your proxyholder. This person does not have to be a shareholder.
Indicate the name of the person you are appointing by following the instructions online.
The cut-off time for voting over the Internet is 5:00 p.m. (Eastern Time) on May 6,
Complete, date and sign your form of proxy and return it in the envelope provided to you or deliver it to one of Computershare's principal offices in
Calgary, Halifax, Montreal, Toronto, Vancouver or Winnipeg for receipt before 5:00 p.m. (Eastern time) on May 6, 2016 or with the Secretary of the Meeting prior
to commencement of the Meeting on the day of the Meeting or on the day of any adjournment or postponement thereof. A list of addresses for the principal offices of
Computershare is set forth on page 40 of this Circular.
you return your proxy by mail, you can appoint a person other than the directors or officers named in the form of proxy as your proxyholder. This person does not have to be a shareholder. Fill in
the name of the person you are appointing in the blank space provided on the form of proxy. Complete your voting instruction on the form of proxy, and date and sign the form. Make sure that the person
you appoint is aware that he or she has been appointed and attends the Meeting.
the section titled "Completing the Form of Proxy" for more information.
In Person at the Meeting
You do not need to complete or return your form of proxy.
will be required to register your attendance for the Meeting with the scrutineer at the registration desk.
2.4 How to Vote Non-Registered Shareholders