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Nordion Inc. (NYSE:NDZ)

2013 Annual Shareholders Meeting

March 06, 2013 11:00 am ET

Executives

William D. Anderson - Chairman

G. Peter Dans - Chief Financial Officer and Senior Vice President

Steve M. West - Chief Executive Officer, President, Director, Member of Technology Committee and Interim Chief Operating Officer of Targeted Therapies

William D. Anderson

Okay. Good morning. Welcome to the 2013 Annual Shareholders Meeting of Nordion Inc. I'm Bill Anderson, Chairman of the Board of Directors, and I will act as Chairman of the Meeting.

Joining me today at the front are 3 officers of the corporation: Steve West, the CEO; Peter Dans, Chief Financial Officer; and Chris Ashwood, our Senior VP of corporate services.

Some of the information we share with you today may contain forward-looking information, which we remind you is not a guarantee of future performance and is of course subject to risks and uncertainties. I refer you to the full text of our statement of forward-looking information on the screen at the front of the room.

As in the past, the format of the meeting will be to first deal with the formality for the annual meeting. Steve will provide his thoughts about the past year and more importantly, the outlook for the company, and I will return to offer a few words on behalf of the board, as well as to facilitate any questions that you may have.

In addition, if you have any matters that you would like to discuss with any members of management or the board, I would invite you to do so at the reception that will take place following the meeting.

Agendas for today's meeting are on the chairs throughout the room. If you don't have one, please raise your hand and we will provide you with one. Now if we could move to the formalities of the meeting. I would like to call the meeting to order, and I would request that Peter Dans act as Secretary of the meeting and CIBC Mellon Trust by its representatives, Gregory Ashby and Karen Girard [ph] from Canadian Stock Transfer Company to act as scrutineer. Peter, would you please confirm that notice of the meeting has been properly mailed?

G. Peter Dans

Mr. Chairman, I have a declaration of CIBC Mellon Trust company that the notice of meeting, information circular and proxy were mailed on February 8, 2013, and could confirm that the notice of meeting was properly mailed.

Steve M. West

Thanks, Peter. I therefore declare that the notice calling the meeting has been probably given and would ask that the statutory declaration as to the mailing of notice of meeting, information circular and proxy be attached to the minutes of this meeting.

The scrutineers' preliminary report on attendance has been provided to me, and it indicates that there are 124 shareholders holding just over 42 million common shares represented in person or by proxy at this meeting. This represents 67.85% of the issued and outstanding common shares. I am advised by the secretary that this represents a quorum and that this meeting is therefore, properly constituted.

Accordingly, I declare this meeting to be properly constituted for the transaction of business.

May I have a motion to dispense with the reading of the minutes of the March 7, 2012 annual meeting of shareholders and to approve the minutes?

Unknown Attendee

[indiscernible]

Steve M. West

Thank you, Will. Felicias [ph], may we have a seconder?

Unknown Attendee

[indiscernible]

William D. Anderson

Okay, thanks, Tom. All in favor? Please raise your hand.

[Voting]

William D. Anderson

Contrary, if any?

[Voting]

William D. Anderson

The motion is carried. I would like to formally table the company's annual report and financial statements for the year ended October 31, 2012, together with the auditor's report thereon. If there are any questions related to this report or to other financials, I would then ask that you hold them until the other presentations have been completed.

I would now like to move the election of directors. In addition to Steve West and myself, we have 7 directors to be elected for a term of 1 year. A summary of the experience and areas of expertise of each nominated Director is set out in the notice of meeting and information circular related to this meeting. May I have the nominations, please, and I would ask that each individual stand when their name is called.

Unknown Attendee

I nominate each of the following individuals for election to the Nordion Board: William Anderson, Jeffrey Brown, William Dempsey, Mary Mogford, Sean Murphy, Kenneth Newport, Adeoye Olukotun, Steve West and Janet Woodruff.

William D. Anderson

I would mention that Sean Murphy was here for our board meeting that ended a few minutes ago, but he had to get to the airport to catch a flight. So are there any further nominations?

[Voting]

William D. Anderson

If not, may I have the motion that the nominations be closed.

Unknown Attendee

[indiscernible]

William D. Anderson

Thank you, John. [ph] May I have a seconder?

Unknown Attendee

[indiscernible]

William D. Anderson

Okay. Thank you. All in favor, please raise your hand?

[Voting]

William D. Anderson

And contrary, if any?

[Voting]

William D. Anderson

I declare the nominations closed. The scrutineer has advised me that proxies representing an excess of 90% of the votes cast have been deposited authorizing Peter Dans and/or Chris Ashwood to vote for the election of the directors nominated. However, we will also vote this resolution by way of ballot, with the ballots to be collected and tabulated at the end of the presentation of each of the items of business to be voted upon today.

The next item of business is the appointment of auditors. The directors and management of the company recommend a vote for our present auditors, Ernst & Young, as auditors of the company to hold office until the next annual meeting of shareholders, and to authorize the directors to fix their remuneration as auditors.

The scrutineer has advised me that proxies representing approximately 99.5% of the votes cast have been deposited authorizing again, Peter or Chris, to vote for the appointment of Ernst & Young as auditors of the company and to authorize the directors to fix their remuneration.

We will also vote on this resolution by way of ballot. I understand the representatives of CIBC Mellon provided registered shareholders as they came in today with a ballot with respect to each of the foregoing resolutions. If any registered shareholder did not receive a ballot, if you can please raise your hand now and you will be provided with one. Please complete the ballot by voting for or withhold in the case of resolutions regarding the election of directors and the appointment of auditors. And if you could now take a minute to complete the ballot and sign it. Once you have done so, you can pass the ballots to the end of the row and a representative of CIBC Mellon will collect and tabulate the ballots. Are there any ballots in the room that have been filled out and need to be collected? It doesn't appear so, so I think we're okay. All right, thanks.

The next item of business is the CEO's remarks, and I'd call upon Steve to provide his thoughts about the past year and to share his outlook for 2013.

Steve M. West

Thank you, Bill, and good morning, ladies and gentlemen, and thank you for joining us today. Global experience, global opportunity, this was the theme of our 2012 annual report. It's a theme that speaks to our inherent strength as an organization and our future potential. Today, Nordion has extensive global experience, leadership positions in key markets, broad global reach and best-in-class products that are shipped to 60 countries around the world. Our world-class team and processes, our leading products, our established global relationships, these aspects are what make Nordion unique and differentiated in the healthcare space.

Without a doubt, 2012 was a challenging year for Nordion. In September last year, we received an unfavorable decision in our arbitration with Atomic Energy of Canada Limited over the canceled MAPLE facilities, which were to serve as the source of Nordion's long-term medical isotope supply. That outcome, combined with the cancellation of the moly-99 agreement with JSC Isotope, which was replaced with permission to enter into negotiations with RIAR, creating uncertainty in our medical isotope business line.

As we've shared, our team is actively investigating options around the world for long-term supply and secure a supply of medical isotopes that is vital in the medical community.

Nordion also benefits from being a diversified multifaceted business. As our strategic supply team is pursuing alternative sources of medical isotope supply, we continue to maximize our global leadership position in sterilization technologies and leverage our TheraSphere brand to establish a leadership position in the treatment of liver cancer worldwide.

Our strategies as an organization remain intact, investing and growing, TheraSphere, maintaining our leadership position in sterilization technologies and optimizing our medical isotope business.

In 2012, Nordion experienced growth and made inroads in emerging markets with its innovative liver cancer treatment, TheraSphere. In 2013, we plan to continue to invest in our sales and marketing infrastructure and skills to maximize the value of this high potential growth product.

Sterilization technologies maintain a global leadership position in gamma processing worldwide by signing long-term customer agreements and demonstrating a continued excellence in regulatory compliance and logistics. We are well-positioned to capitalize on opportunities in the growing medical device industry, while selectively investing in growth and continuing to sustain our market-leading position.

The global healthcare landscape is complex and continues to challenge. It is a challenging market. This is also one of the world's largest and fastest-growing industries. Today, driven by aging populations around the world, this sector is dynamic, filled with potential, and I believe Nordion has taken the necessary steps to create a foundation for shareholder value.

As we look to 2013, Nordion remains well-positioned globally. We have solid business planned, high barriers to entry and core competencies that set us apart in our markets. We have the global experience to continue to maximize the global opportunities before us.

Thank you very much for coming today. And with that, I will now turn it back to Bill Anderson.

William D. Anderson

Thanks, Steve. I just would make a few brief comments. Steve described 2012 was a year that presented significant challenges to Nordion. I believe the management team, led by Steve, faced those challenges and continues to take the necessary steps to address them. As we previously announced in 2012, the board launched an internal investigation and Nordion made voluntary disclosure to enforcement and regulatory authorities related to a potential improper payments.

Since that time, Nordion has taken several important steps in support of improving compliance within the organization. New compliance policies and procedures are in place, intensive training-based design going with our staff, and existing policies have been improved and revised.

We've not yet had a final resolution of this matter with the authorities in Canada or the U.S.

In addition, in the fall of 2012, Nordion announced a strategic realignment, which transformed the company from a functional model into a business unit model. With the objective of improving the overall strategic effectiveness, it was designed to reflect the unique product life cycles and needs of the customers in each of Nordion's businesses. Nordion is now organized into 2 distinct business units, Targeted Therapies and Specialty Isotopes with Specialty Isotopes business in companies, both the sterilization technology and medical isotopes segments. This realignment will enable improved market agility, clearer focus and direct leadership accountability to better serve customers and to build shareholder value.

With respect to the Board of Directors, in 2012, we welcomed to the board, Jeff Brown, the CEO and founding member of Brown Equity Partners. Jeff brings both broad financial and transactional experience to the board. Importantly, we want to thank Bob Luba, who is retiring, having served as the director of the company since 1996. Bob has reached our mandatory retirement age, and we thank him for his wisdom and dedicated service to the board. Bob, your insights and challenges will definitely be missed and we all thank you very much.

Finally, in January of this year, the board and management initiated a strategic review of the business with a view to enhancing shareholder value and creating new opportunities. Jefferies & Company have been engaged to advise and to assist in this review. The review is ongoing and we are still in an early stage of the process. The Nordion team remains and are focused on the execution of the company's strategic priorities during this time. We intend to keep our stakeholders informed as developments warrant.

Today, Nordion is an organization that is relied upon by patients and physicians worldwide. I want to thank the entire Nordion team for their tireless dedication and hard work over the past 12 months.

The scrutineers have now confirmed that all of the items tabled today have passed with the majority of votes cast. We will forthwith, after the termination of this meeting, post the scrutineer's reports on SEDAR and issue a press release to indicate what the exact results were of the ballots.

I therefore declare that, a ballot having been cast, each of the 9 Director nominees have been duly elected by the required majority of votes, and also the resolution for the appointment of Ernst & Young as auditors of the Corporation for the next year with the remuneration to be under discretion of the directors has also been duly passed by the majority of votes.

Before I conclude and open the floor to questions, could I please have a motion to terminate the formal part of the meeting?

Unknown Attendee

[indiscernible]

William D. Anderson

All right. Thank you, Tamra. May I have a seconder?

Unknown Attendee

[indiscernible]

William D. Anderson

Dawn. Thank you. All in favor, please raise your hands?

[Voting]

William D. Anderson

And contrary, if any?

[Voting]

William D. Anderson

I declare the motion carried. So I would now, although we've never had questions or haven't for a couple of years, I would open the floor for questions from any of our shareholders. If you are a shareholder in the room and have a question, we would appreciate it if you would move to one of the microphones, so everyone can hear you. And please, if you don't mind, also indicate your name. For those of you on line today, please ensure that you indicate your name and so I would just ask if there are any questions.

Question-and-Answer Session

William D. Anderson

One person got up and I thought he was actually going to ask a question, but he left. As there are no questions, I do declare the meeting is terminated. Thank you.

Operator

The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.

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