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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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o Soliciting Material Pursuant to §240.14a-12 |
Lifecore Biomedical, Inc.
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to be held on
November 17, 2005
1. | To elect four directors for three-year terms; provided that, if Proposal 2 is adopted, such directors will be elected for one-year terms. | ||
2. | To approve a proposal to amend the Company’s Amended and Restated Articles of Incorporation and Amended Bylaws to eliminate the classified Board structure. | ||
3. | To ratify the appointment of Grant Thornton LLP as independent certified public accountants of the Company for the current fiscal year ending June 30, 2006. | ||
4. | To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof. |
By Order of the Board of Directors, /s/ Dennis J. Allingham | |||||
Dennis J. Allingham | |||||
President, CEO and Secretary | |||||
Dated: | October 19, 2005 Minneapolis, Minnesota |
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Appendix A |
Table of Contents
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 17, 2005
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Amount Beneficially | Percent of | |||||||
Name and Address of Beneficial Owner | Owned (1)(2) | Class | ||||||
The Vertical Group, L.P. 25 DeForest Avenue Summit, NJ 07901 | 1,171,600 | (3) | 9.0 | % | ||||
Dennis J. Allingham | 354,350 | 2.6 | % | |||||
Orwin L. Carter, Ph.D. | 99,000 | * | ||||||
Andre P. Decarie | 95,000 | * | ||||||
Joan L. Gardner | 101,034 | (4) | * | |||||
Thomas H. Garrett | 88,000 | * | ||||||
Luther T. Griffith | — | * | ||||||
Larry D. Hiebert | 66,300 | * | ||||||
David M. Noel | 41,750 | * | ||||||
Richard W. Perkins | 172,500 | (5) | 1.3 | % | ||||
John E. Runnells | 31,800 | * | ||||||
Directors/Officers as a group (10 persons) | 1,049,234 | (6) | 7.5 | % | ||||
Less than 1% |
(1) | Unless otherwise indicated, ownership is direct and the beneficial owner has full voting and investment power. | |
(2) | Includes the following shares subject to options which are or will become exercisable within 60 days of August 28, 2005: Mr. Allingham, 352,750 shares; Dr. Carter, 82,000 shares; Mr. Decarie, 95,000 shares; Ms. Gardner, 92,034 shares; Mr. Garrett, 88,000 shares; Mr. Hiebert, 66,300 shares; Mr. Noel, 41,750 shares; Mr. Perkins, 111,000 shares; and Mr. Runnells, 30,000 shares. | |
(3) | Based upon information supplied by The Vertical Group, L.P. as of September 2, 2005. | |
(4) | Includes 5,000 shares held by a partnership in which Ms. Gardner is a partner. | |
(5) | Includes 55,500 shares held by various trusts of which Mr. Perkins is the sole trustee and 6,000 shares held by a foundation created by Mr. Perkins. | |
(6) | Includes 958,834 shares which certain directors and officers have the right to purchase pursuant to stock options which are or will become exercisable within sixty days of August 28, 2005. |
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Name and Principal Occupation | Age | Director Since | Term Expires | |||||||
Dennis J. Allingham (Class III) | 55 | 2004 | 2005 | |||||||
Mr. Allingham was appointed President, Chief Executive Officer and Secretary and to the Board of Directors in February 2004. Mr. Allingham previously served as Executive Vice President of the Company since November 1997. He served as Chief Financial Officer of the Company from January 1996 to March 2004. Mr. Allingham has also been General Manager of the Hyaluronan Division since November 1996 and General Manager of the Oral Restorative Division since November 1997. | ||||||||||
Joan L. Gardner (Class III) | 59 | 1992 | 2005 | |||||||
Ms. Gardner has had a career in community service. Ms. Gardner is currently a trustee of Hamline University in St. Paul, Minnesota and board member of the FR Bigelow Foundation. She formerly chaired the Boards of Trustees of the Biomedical Research Institute and The Children’s Hospital, Incorporated, served on the board of the National Association of Children’s Hospitals and Related Institutes and chaired its Education Council and recently retired from the board of Children’s Hospitals and Clinic where she chaired the Quality Committee. Ms. Gardner currently serves on the Compensation Committee. | ||||||||||
Thomas H. Garrett (Class III) | 60 | 1996 | 2005 | |||||||
Mr. Garrett has been a business consultant since July 1996. Prior to July 1996, Mr. Garrett was a partner at the law firm of Lindquist & Vennum P.L.L.P. of Minneapolis, Minnesota and served as its Managing Partner from 1993 through 1995. Mr. Garrett is also a director of St. Jude Medical, Inc. He currently serves as Chairman of the Compensation Committee. | ||||||||||
John E. Runnells (Class III) | 60 | 2002 | 2005 | |||||||
Mr. Runnells has been a Managing Director of The Vertical Group, Inc., an investment management and venture capital firm focused on the medical device industry, since 1992. Prior to that time, he was a co-founder (in 1984) and Managing Director of Paddington Partners, an investment firm that merged with The Vertical Group, Inc. in 1992. He currently serves on the board of directors of Axya Medical, Inc., Incumed Inc., Dynamic Implants, Inc., Orbital Fixation, Inc., Spondylogix, Inc. and SPMR, Inc., all privately held companies. He currently serves as the Lead Director and Chairman of the Governance and Nominating Committee. |
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Name and Principal Occupation | Age | Director Since | Term Expires | |||||||
Orwin L. Carter, Ph.D. (Class I) | 63 | 1989 | 2006 | |||||||
Dr. Carter is a self-employed business consultant. From April 1996 to May 1999, he was Vice President of Finance and Administration at Hamline University. Dr. Carter is a director of Theragenics Corporation. He currently serves on the Audit Committee and the Governance and Nominating Committee. | ||||||||||
Luther T. Griffith (Class I) | 52 | 2004 | 2006 | |||||||
Mr. Griffith is the Chairman and majority shareholder of Care Technologies, Inc., a manufacturer of wireless monitoring and locating systems targeted to assisted living and retirement communities, since 1995. Mr. Griffith is also President of Griffith Resources, Inc., which provides consulting and capital resources to small businesses in the process of change, since 1994. Mr. Griffith is also an “Angel Investor” in various early stage companies. From 1978 through 1994, Mr. Griffith served in numerous management capacities for Alexander & Alexander Services, Inc. | ||||||||||
Richard W. Perkins (Class II) | 74 | 1983 | 2007 | |||||||
Mr. Perkins is President, Chief Executive Officer and a director of Perkins Capital Management, Inc., an investment management firm, where he has held those positions since January 1985. Mr. Perkins is a director of the following public companies: Synovis Life Technologies, Inc., CNS, Inc., PW Eagle, Inc., iNTELEFILM Corp., Nortech Systems, Inc., Two Way TV (US), Inc., Teledigital, Inc. and Vital Images, Inc. He currently serves on the Audit Committee and the Compensation Committee. |
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Members: | Luther T. Griffith,Chairman Orwin L. Carter, Ph.D. Richard W. Perkins |
Members: | Thomas H. Garrett,Chairman Joan L. Gardner Richard W. Perkins |
Members: | John E. Runnells,Chairman Orwin L. Carter, Ph.D. Joan L. Gardner Luther T. Griffith |
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Joan L. Gardner
Richard W. Perkins
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Long-Term | ||||||||||||||||
Fiscal | Annual Compensation | Compensation | ||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Stock Options (1) | ||||||||||||
Dennis J. Allingham | 2005 | 289,802 | 108,300 | — | ||||||||||||
President and Chief | 2004 | 243,720 | 41,250 | 105,000 | ||||||||||||
Executive Officer | 2003 | 201,907 | 5,000 | 3,500 | ||||||||||||
Andre P. Decarie (2) | 2005 | 176,266 | 61,250 | — | ||||||||||||
Vice President of Sales | 2004 | 172,377 | 24,500 | 35,000 | ||||||||||||
and Marketing — ORD | 2003 | 153,192 | 3,875 | 2,500 | ||||||||||||
David M. Noel | 2005 | 136,635 | 49,950 | — | ||||||||||||
Vice President of Finance and | 2004 | 113,073 | 19,500 | 60,000 | ||||||||||||
Chief Financial Officer | 2003 | 103,292 | — | 1,000 | ||||||||||||
Larry D. Hiebert | 2005 | 136,743 | 51,300 | — | ||||||||||||
Vice President of Operations | 2004 | 119,421 | 19,500 | 60,000 | ||||||||||||
2003 | 111,908 | — | 1,000 | |||||||||||||
Kipling Thacker, Ph.D. | 2005 | 119,784 | 46,800 | 30,000 | ||||||||||||
Vice President of New Business | 2004 | 102,974 | 21,161 | 2,000 | ||||||||||||
Development | 2003 | 103,260 | 5,800 | — |
(1) | Number of shares of common stock purchasable under option grants. | |
(2) | Mr. Decarie left the Company in July 2005. |
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Potential Realizable Value | ||||||||||||||||||||||||
% of Total | at Assumed Annual Rates | |||||||||||||||||||||||
Options | Exercise | of Stock Price | ||||||||||||||||||||||
Granted to | or Base | Appreciation of Option | ||||||||||||||||||||||
Options | Employees | Price Per | Expiration | Term (4) | ||||||||||||||||||||
Name | Granted | in Last Year | Share (2) | Date (3) | 5% | 10% | ||||||||||||||||||
Kipling Thacker | 30,000 | (1) | 15.9 | % | $ | 10.790 | 1/7/2015 | $ | 203,573 | $ | 515,894 |
(1) | Fully vested and exercisable on date of grant. | |
(2) | All options were granted at the market value of the Company’s common stock based upon the last reported price on the date of grant. The exercise price and tax withholding obligations related to exercise may be paid by delivery of already owned shares or by offset of the underlying shares, subject to certain conditions. | |
(3) | All options have a ten-year term, subject to termination of employment. | |
(4) | Gains are reported net of the option exercise price, but before taxes associated with exercise. These amounts represent certain assumed rates of appreciation only. Actual gains, if any, on stock option exercises are dependent on the future performance of the common stock, overall stock market conditions, as well as the option holder’s continued employment through the vesting period. The amounts reflected in this table may not necessarily be achieved. |
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Shares | Value of Unexercised | |||||||||||||||||||||||
Acquired | Number of Unexercised | in-the-Money Options at | ||||||||||||||||||||||
on | Value | Options at Year-End | Year-End (2) | |||||||||||||||||||||
Name | Exercise | Realized (1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Dennis J. Allingham | — | $ | — | 352,750 | 1,750 | $ | 910,195 | $ | 5,285 | |||||||||||||||
David M. Noel | — | — | 41,750 | 24,250 | 178,351 | 66,851 | ||||||||||||||||||
Andre P. Decarie | 5,000 | 57,500 | 95,000 | 15,000 | 381,600 | 37,125 | ||||||||||||||||||
Larry D. Hiebert | — | — | 66,300 | 23,250 | 215,152 | 65,029 | ||||||||||||||||||
Kipling Thacker | — | — | 53,050 | 3,000 | 26,388 | 10,320 |
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6/30/00 | 6/30/01 | 6/30/02 | 6/30/03 | 6/30/04 | 6/30/05 | |||||||||||||||||||
Lifecore Biomedical, Inc. | $ | 100.00 | $ | 63.49 | $ | 144.00 | $ | 71.87 | $ | 77.97 | $ | 138.53 | ||||||||||||
Nasdaq Medical Device Mfg. Index | 100.00 | 115.01 | 104.89 | 113.05 | 162.25 | 163.12 | ||||||||||||||||||
Nasdaq Market Index | 100.00 | 55.38 | 37.56 | 41.77 | 53.12 | 53.07 |
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Orwin L. Carter
Richard W. Perkins
2005 | 2004 | |||||||
Audit Fees (1) | $ | 81,600 | $ | 63,000 | ||||
Audit-Related Fees | — | — | ||||||
Tax Fees (2) | 55,000 | 15,000 | ||||||
All Other Fees (3) | 161,600 | 30,000 |
(1) | Audit fees consisted of audit work performed in preparation of the Company’s annual financial statements and review of the quarterly financial statements included in our quarterly reports on Form 10-Q for fiscal years 2005 and 2004. | |
(2) | Tax fees consisted of federal and state income tax return preparation and tax planning and tax advice related to the Company’s stock option plans. | |
(3) | Other fees include fees for Sarbanes-Oxley compliance, audit of the Company’s 401K Plan and other financial consulting services. |
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AND BYLAWS TO ELIMINATE THE CLASSIFIED BOARD STRUCTURE
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President, CEO and Secretary
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AND THE AMENDED BYLAWS OF LIFECORE BIOMEDICAL, INC.
A-1
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A-2
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A-3
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LIFECORE BIOMEDICAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
Thursday, November 17, 2005
Lifecore Biomedical, Inc. | ||
3515 Lyman Boulevard, Chaska, Minnesota 55318 | proxy |
This proxy is solicited by the Board of Directors for use at the Annual Meeting on November 17, 2005.
The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify below.
If no choice is specified, the proxy will be voted FOR Items 1, 2 and 3.
The undersigned hereby appoints Dennis J. Allingham and David M. Noel, and each of them, as proxies, with full power of substitution to vote all shares of common stock which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders of Lifecore Biomedical, Inc., to be held in Minneapolis, MN on November 17, 2005 or at any adjournments thereof, upon any and all matters which may properly be brought before the meeting or adjournments thereof, hereby revoking all former proxies.
See reverse for voting instructions.
Table of Contents
-Please detach here-
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
1. | Election of directors: | 01 Dennis J. Allingham 02 Joan L. Gardner | 03 Thomas H. Garrett 04 John E. Runnells | o | Vote FOR all nominees (except as marked) | o | Vote WITHHELD from all nominees | |||||||||
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.) | ||||||||||||||||
2. | Proposal to amend the Company’s Amended and Restated Articles of Incorporation and Amended Bylaws to eliminate the classified Board structure. | o For | o Against | o Abstain | ||||
3. | Proposal to ratify and approve the appointment of Grant Thornton LLP as independent certified public accountants of the Company for the current fiscal year ending June 30, 2006. | o For | o Against | o Abstain | ||||
4. | In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTEDFOR EACH PROPOSAL.
Address Change? Mark Box o | Dated: , 2005 | |
Indicate changes below: |
Signature(s) in Box
Please sign exactly as your name(s) appear on Proxy. If held in joint tenancy, all persons must sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.