SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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240.14a-12
Alcide Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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ALCIDE CORPORATION
8561 154TH AVENUE, NE
REDMOND, WASHINGTON 98052
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 15, 1996
-------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Alcide
Corporation will be held at The University Club located at 1 West 54th Street,
New York, NY on October 15, 1996 at 10:00 a.m.
(1) To elect five directors of the Board of Directors for the ensuing
year;
(2) To approve a Stock Option Plan for Nonemployee Directors;
(3) To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending May 31, 1997; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has designated the close of business on August 27,
1996 as the record date for determination of stockholders of the Company
entitled to notice of and to vote at the meeting and any adjournment thereof.
The stock transfer books will not be closed. A list of stockholders entitled to
vote at the meeting will be available for inspection at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THE BOARD
OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL STOCKHOLDERS TO BE PRESENT AT
THE MEETING. ALL STOCKHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE
MEETING, ARE REQUESTED TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT
IN THE RETURN ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE. STOCKHOLDERS WHO
ATTEND THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE IN PERSON.
By order of the Board of Directors,
John P. Richards
EXECUTIVE VICE PRESIDENT
SECRETARY
Redmond, Washington
August 27, 1996
ALCIDE CORPORATION
8561 154TH AVENUE, NE
REDMOND, WASHINGTON 98052
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 15, 1996
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The accompanying proxy is being solicited on behalf of the Board of
Directors of ALCIDE CORPORATION (the "Company"), for use at the Annual Meeting
of Stockholders to be held at The University Club located at 1 West 54th Street,
New York, NY, on October 15, 1996 at 10:00 a.m. local time. Each stockholder
giving such a proxy has the power to revoke the same by written notice to the
Secretary of the Company at any time before it is voted. Furthermore, any
stockholder giving a proxy may revoke the same prior to its use at the Annual
Meeting by attending the meeting and voting in person. Subject to such
revocation, properly executed proxies will be voted in the manner directed by
such stockholder and, if no direction is made, will be voted in favor of Items
1, 2 and 3. All expenses in connection with the solicitation will be borne by
the Company. The Company will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses
incurred in connection with forwarding proxies to beneficial owners of shares of
the Company's common stock. The Company has retained American Securities
Transfer and Trust, Inc. to assist in the solicitation at a cost that is not
expected to exceed $10,000 plus reasonable out-of-pocket expenses.
This Proxy Statement and the accompanying form of proxy are being first
mailed or given to the holders of the Company's Common Stock on or about August
27, 1996.
VOTING SECURITIES
Only stockholders of record at the close of business on August 27, 1996
will be entitled to vote at the Annual Meeting. Each share of Common Stock is
entitled to one vote. At the election of directors, each holder of Common Stock
(the "Common Stockholder(s)") may cumulate such Common Stockholder's votes and
give one nominee a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the Common Stockholder's
shares are entitled, or may distribute the Common Stockholder's votes on the
same principle among as many nominees as the Common Stockholder sees fit.
The five nominees who receive the greatest number of votes, present in
person or by proxy at the annual meeting, will be elected directors.
Abstentions from voting and broker nonvotes on the election of directors will
have no impact on the outcome of this proposal since they have not been cast in
favor of any nominee. The affirmative vote of holders of a majority of the
shares of common stock present, in person or by proxy and entitled to vote at
the annual meeting, is required to approve the Stock Option Plan for Nonemployee
Directors and to ratify the independent auditors. Abstention from voting on
this matter will have the practical effect of voting against this proposal since
shares are present at the meeting and entitled to vote but are not voting in
favor of the proposal. Broker nonvotes will have no effect on the outcome of
the proposal since they are not considered shares entitled to vote on the
proposal.
On August 1, 1996 there were 2,599,201 shares of Alcide Common Stock
outstanding, net of Treasury Stock.
1
SHARE OWNERSHIP BY DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership, as of June 1, 1996, of the Common Stock by (a) each person
known by the Board of Directors to beneficially own more than 5% of the
outstanding Common Stock; (b) each Director and nominee of Director; (c) each of
the executive officers included in the Summary Compensation Table, and (d) all
Directors and executive officers as a group.
Name No. of Shares Percentage
- ---- ------------- -----------
Common Stock Common Stock
------------ ------------
Thomas L. Kempner 503,118 (1) 18.0
Loeb Partners Corp.
61 Broadway, 24th Floor
New York, NY 10006
Joseph A. Sasenick 135,939 (2) 4.9
John P. Richards 35,000 (3) 1.3
Aaron Stern, M.D., Ph.D. 31,062 (4) 1.1
G. Kere Kemp, BVSc, MRCVS 13,250 (5) .5
William G. Spears 10,979 (6) .4
Kenneth N. May, Ph.D. 1,400 ---
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TOTAL 730,748 26.2
------- ----
------- ----
- --------
(1) Includes an aggregate of 219,663 shares of Common Stock held of record
by Loeb Investors Co. V and 26,964 shares of Common Stock held of record by Loeb
Investors Co. 105, for which entities Mr. Kempner serves as Managing Partner,
and an aggregate of 187,550 shares of Common Stock held in family trusts and
other entities, for which entities Mr. Kempner serves as either trustee for the
benefit of himself and other Kempner family members or has shared voting and
dispositive power. As to 315,639 shares of Common Stock, Mr. Kempner disclaims
any beneficial interest. 29,434 shares of Common Stock in the aggregate are
owned by him individually.
Further includes Mr. Kempner's right to acquire 4,275 shares of Common
Stock through the exercise of stock options granted to him as Director's fees.
In addition, Loeb Partners Corporation, which entity Mr. Kempner controls, has
been granted options to purchase 35,232 shares of Common Stock for services
rendered to the Company, all of which options are included in the table. Also
includes 25,922 shares of Common Stock issued to Loeb Partners Corporation
pursuant to a consulting agreement with the Company.
(2) Includes 123,000 options to purchase Common Stock granted to Mr.
Sasenick either under the Company's Incentive Stock Option Plan or as
non-qualified stock options by the Board of Directors. Further includes 46,000
options to purchase Common Stock which were transferred by Mr. Sasenick to
trusts for his family for which Mr. Sasenick is Trustee.
(3) Includes 34,000 options to purchase Common Stock granted to Mr.
Richards either under the Company's Incentive Stock Option Plan or as
non-qualified stock options by the Board of Directors.
(4) Includes Dr. Stern's right to acquire 3,866 shares of Common Stock
through exercise of stock options granted to him as Director's Fees and 17,196
shares of Common Stock through exercise of stock options granted to him for
services rendered to the Company.
2
(5) Includes 13,000 options to purchase Common Stock granted to Dr. Kemp
under the Company's Incentive Stock Option Plan by the Board of Directors.
(6) Includes 6,040 shares of Common Stock owned by Mr. Spears
individually. Further includes Mr. Spears' right to acquire 4,939 shares of
Common Stock through exercise of stock options granted to him as Director's
Fees.
3
ITEM 1 - ELECTION OF DIRECTORS
At the meeting five directors are to be elected to serve until the next
Annual Meeting of Stockholders or until their successors are elected and
qualified. It is intended that the proxies received will be voted, unless
directed otherwise, for the five nominees indicated below. However, should any
nominee become unavailable or prove unable to serve for any reason, proxies will
be voted for the election of such other person or persons as the Board of
Directors may select to replace such nominee. The Board has not been informed
that any of the nominees will not be available or will be unable to serve.
Directors are elected by a plurality of the votes cast by stockholders entitled
to vote at the Meeting. A majority of all stockholders must be present in
person or by proxy to constitute a quorum for purposes of holding the Meeting.
Each person named as a nominee for Director has advised the Company of his
willingness to serve if elected. The age of each nominee as of June 1, 1996,
his positions with the Company, the year in which he first became a Director of
the Company, his business experience during the past five years and other
directorships he holds are set forth below.
THOMAS L. KEMPNER, 61 Broadway, New York, NY 10006
Age 69. Chairman of the Board of the Company; Director of the Company
since 1983. Chairman and Chief Executive Officer of Loeb Partners Corporation,
a private investment banking firm, since 1979. Presently serves on the Boards
of Directors of The Arlen Corporation; Energy Research Corporation; IGENE
Biotechnology, Inc.; Roper Starch Worldwide, Inc.; Intermagnetics General;
Silent Radio, Inc.; and Northwest Airlines, Inc.
JOSEPH A. SASENICK, 8561 154th Avenue, NE, Redmond, WA 98052
Age 56. President and Chief Executive Officer of the Company since
February 1992; Director of the Company since 1991; President and Chief Operating
Officer of the Company from February 1991 to February 1992. Presently serves on
the Board of Directors of the Washington Biotechnology and Biomedical
Association. Managing Director/Partner of Vista Resource Group from 1988 to
February 1991. Previously held top management positions at Abbott Laboratories
and The Gillette Company.
WILLIAM G. SPEARS, 45 Rockefeller Plaza, New York, NY 10020
Age 58. Director of the Company since 1989. Chairman of the Board of
Spears, Benzak, Salomon & Farrell, an investment advisory subsidiary of KeyCorp.
Presently serves on the Boards of Directors of United HealthCare Corp. and
Osborn Communications Corp. Chairman, September 1996, HealthCare Chaplaincy
Board of Trustees and Vice Chairman of Quinnipiac Board of Trustees.
AARON STERN, M.D., PH.D., 100 Central Park S., New York, NY 10019
Age 71. Director of the Company since 1989. Chairman of the Board and
Chief Executive Officer of Dr. Aaron Stern, M.D., Ph.D., P.C., a professional
corporation; practicing psychoanalyst; corporate consultant; corporate director
and Adjunct Professor of Psychology and Psychoanalysis at Columbia University,
all of which positions have been held for more than the past five years;
Director and Senior Advisor, Tiger Management Corporation.
KENNETH N. MAY, PH.D., 203 McElwee Street, North Wilkesboro, NC 28659
Age 65. Director of the Company since 1995. Retired in August, 1989 as
Chairman, Chief Executive Officer and a director of Holly Farms Foods, Inc.,
completing 19 years with that company. Previously held positions as Professor
of Poultry Science at Mississippi State University and the University of
Georgia. Consultant for and director of Hudson Foods, Inc.; technical advisor
and consultant to the National Broiler Council on food safety matters. Serves
on the Board of Directors of Embrex, Inc. Dr. May has been active in the
Poultry Science Association and the National Broiler Council, and has served on
various committees for the USDA.
4
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met three times during the fiscal year ended May 31,
1996. Messrs. Kempner, Sasenick, Spears and Stern attended all three meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which they served. Dr. May, who was
first elected to the Board of Directors on October 24, 1995, attended two
meetings during the time he has been a Director.
The Company's Board of Directors has Audit, Nominating, Executive and
Compensation/Stock Option Committees. Pertinent information relating to each
Committee is as follows:
The Audit Committee recommends to the Board of Directors the selection of
the Company's Independent Public Accountants and reviews with such accountants
the scope and results of their audit, the scope and results of the Company's
internal audit procedures and the adequacy of the Company's system of internal
control. In addition, the Committee approves non-audit professional services
performed by the Company's Independent Public Accountants and reviews the fees
for audit and non-audit services rendered to the Company by the Independent
Public Accountants. Audit Committee members during fiscal year 1996 were
Thomas L. Kempner, Chairman and Kenneth N. May. The Committee met one time
during the fiscal year.
The Nominating Committee recommends a slate of directors for the ensuing
term. Nominating Committee members during fiscal year 1996 were William G.
Spears, Chairman, and Thomas L. Kempner. The Committee held discussions at a
Board of Directors meeting one time during the fiscal year. No formal
procedures have been established for considering nominations by outside
stockholders.
The Executive Committee provides policy guidance to the Company's
management on a more frequent basis than practical by assembly of the total
Board of Directors. Executive Committee members during fiscal year 1996 were
Thomas L. Kempner, Chairman, William G. Spears, Aaron Stern and Joseph A.
Sasenick. The Committee met one time during the fiscal year.
The Compensation/Stock Option Committee approves management contracts,
changes in management compensation, management incentive awards and employee
stock options. Committee members during fiscal year 1996 were Thomas L.
Kempner, Chairman and William G. Spears. The Committee met one time during the
fiscal year.
5
REPORT OF THE COMPENSATION COMMITTEE
Compensation programs at Alcide Corporation are designed to attract,
motivate and retain the executive talent needed to optimize shareholder value in
a competitive environment. The programs support the goal of increasing
shareholder value of the Company by achieving specific financial and strategic
objectives.
Executive compensation programs are designed to provide:
- levels of base compensation competitive with comparable health care
companies;
- annual incentive compensation that correlates with the financial
performance of the Company; and
- long-term incentive compensation that focuses executive efforts on
building shareholder value through meeting longer-term financial and
strategic goals.
In designing and administering its executive compensation program, the
Company attempts to strike an appropriate balance among these various elements,
each of which is discussed in greater detail below.
BASE SALARY
Base salary is targeted at the fiftieth percentile level, consistent with
comparable companies. Alcide's salary increase program is designed to reflect
individual performance consistent with the Company's overall financial
performance as well as competitive practice. Annual performance reviews and
formal merit increase guidelines determine individual salary increases.
THE MANAGEMENT INCENTIVE PLAN
The Management Incentive Plan is designed to reward management-level
employees for their contributions to corporate and individual results. Payout
is made only if the annual operating plan goals are achieved. Each eligible
employee's award is expressed as a percentage of the participant's base salary
for the Plan year.
Individual performance is measured against objectives which reflect what
executives must accomplish in order for Alcide to meet its annual operating
plan. A participant's individual award may vary from zero to 100 percent. For
fiscal 1996 the Committee approved bonuses for three participating employees.
TOTAL ANNUAL CASH COMPENSATION (BASE SALARY PLUS BONUS)
Total cash compensation is set competitively at the fiftieth percentile,
consistent with comparable companies, assuming annual operating plans and
targets are achieved. Upper-quartile cash compensation can be attained if
business results significantly exceed the operating plan.
STOCK OPTION PLAN
The 1993 Stock Option Plan authorizes the granting of various stock-based
incentive awards to key employees of the Company. The plan has been designed
to:
- link the executive's financial success to that of the shareholders;
- encourage and create ownership and retention of the Company's stock;
- balance long-term with short-term decision making; and
- focus attention on building shareholder value through meeting longer-
term financial and strategic goals.
6
COMMITTEE ACTIVITIES
The following summarizes the Committee's activities:
- approved the Merit Increase Guidelines, which set salary grades,
ranges and increases.
- reviewed and determined salary increases for each corporate officer
based on performance.
- determined fiscal 1996 management incentive awards based on assessment
of executive performance against approved goals.
- determined stock option awards to employees.
COMPENSATION OF THE PRESIDENT/CHIEF EXECUTIVE OFFICER
The CEO received a salary increase of 5% effective September 1, 1996, and a
bonus of $150,645. Pursuant to the Alcide Corporation Stock Option Plan, Mr.
Sasenick was also awarded options to purchase 5,000 shares of the Company's
Common Stock. The Company's performance in Fiscal Year 1996 reflected
substantial improvement over prior periods, and results exceeded the aggressive
performance goals that had been established.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Company's Compensation Committee is an employee of the
Company. Mr. Kempner is Chairman of the Board and an outside director and Mr.
Spears is an outside director. There are no Compensation Committee interlocks
between the company and other entities involving Alcide executive officers or
Alcide Board members who serve as executive officers of such other entities.
Compensation Committee
Thomas L. Kempner, Chairman
William G. Spears
7
EXECUTIVE COMPENSATION - The following table summarizes compensation earned in
fiscal years 1996, 1995 and 1994 by the Chief Executive Officer, Joseph A.
Sasenick, and two other most highly paid executive officers, John P. Richards,
Executive Vice President, Chief Financial Officer and G. Kere Kemp, Vice
President Clinical Research, (the "named officers") in 1996.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
------------------- ----------------------
Number of
Shares
Other Value of Covered
Annual Restricted by Stock All Other
Compen- Stock Options Compen-
Name Year Salary Bonus sation Awards Granted sation
- ---- ---- ------- ------ ------- ---------- -------- ---------
Joseph A. Sasenick 1994 $156,250 $77,000 --- --- 10,000 ---
President 1995 $169,125 $135,645 --- --- 10,000 ---
Chief Executive Officer 1996 $190,575 $150,645 --- --- 5,000 ---
John P. Richards 1994 $99,170 $47,500 --- --- 10,000 ---
Executive Vice President 1995 $107,225 $70,455 --- --- 10,000 ---
Chief Financial Officer 1996 $123,585 $70,455 --- --- 4,000 ---
G. Kere Kemp 1994 $78,221 $28,000 --- --- 7,000 ---
Vice President 1995 $82,500 $40,425 --- --- 7,000 ---
Clinical Research 1996 $88,275 $35,000 --- --- 3,000 ---
OPTION GRANTS IN THE LAST FISCAL YEAR - The following tables summarizes the
named officers' stock option activity during fiscal year 1996.
Options Granted in Fiscal Year 1996
-----------------------------------
Number of Potential Gain at Assumed Annual
Shares Percent of Rates of Stock Price Appreciation
Covered by Total Options Exercise for Option Term
Stock Options Granted to Price Per Expiration ----------------------------------
Name Granted Employees Share Date 5% 10%
- ---- ------------- ------------- --------- ---------- ----- -----
Joseph A. Sasenick 10,000 28% $20.25 2005 $127,351 $322,733
John P. Richards 10,000 28% $20.25 2005 $127,351 $322,733
G. Kere Kemp 7,000 20% $20.25 2005 $89,146 $225,913
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
---------------------------------------------------------------------------------
Number of
Shares Number of Shares Covered Value of Un-exercised
Acquired on Value by Un-exercised Options at In-the-Money Options at
Name Exercise Realized May 31, 1996 May 31, 1996
- ---- -------- -------- ----------------------------- -----------------------------
Exercisable Un-exercisable Exercisable Un-exercisable
----------- -------------- ----------- --------------
Joseph A. Sasenick --- --- 123,000 16,000 $1,938,125 $95,750
John P. Richards --- --- 34,000 16,000 $549,250 $95,750
G. Kere Kemp --- --- 13,000 11,000 $187,775 $69,475
COMPENSATION OF DIRECTORS
For the fiscal year ended May 31, 1996, outside Directors who do not also
benefit from a consulting agreement with the Company received $1,000 cash
compensation per Board meeting attended, $6,000 annual cash retainer and an
annual grant of stock options having an aggregate exercise price of $25,000. In
the past fiscal year this compensation plan applied to Mr. William G. Spears and
Dr. Aaron Stern. It did not apply to Mr. Thomas L. Kempner or Dr. Kenneth N.
May, both of whom have consulting arrangements with the Company, or to
Mr. Joseph A. Sasenick, who received salary as an Officer of the Company.
8
PERFORMANCE GRAPH
Set forth below is a line graph comparing the performance of the Company's
Common Stock during the period May 31, 1991 through May 31, 1996 with the Nasdaq
Stock Market Index for U.S. companies and the Nasdaq Stock Market Index for
pharmaceutical stocks. The total return indices reflect reinvested dividends
and are weighted on a market capitalization basis at the time of each reported
data point. The stock price performance depicted in the performance graph shown
below is not necessarily indicative of future price performance.
- ----------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
- ----------------------------------------------------------------------------
Alcide 100 118.2 169.7 175.8 208.5 446.1
- ----------------------------------------------------------------------------
NASDAQ 100 117.4 141.2 148.6 176.9 257.1
- ----------------------------------------------------------------------------
Pharm Stock 100 122.0 102.3 93.0 101.8 187.9
- ----------------------------------------------------------------------------
9
EMPLOYMENT AGREEMENTS
JOSEPH A. SASENICK. Pursuant to an agreement entered into on February 4,
1991 and amended on February 4, 1992, February 4, 1993, February 4, 1994 and
August 14, 1995, which can be terminated by the Company for cause and by Mr.
Sasenick with 90-days' notice, Mr. Sasenick holds the position of President and
Chief Executive Officer, receiving a salary of $190,575 per annum. In addition
to the base salary, bonus compensation of 100% of base salary can be earned.
The awarding of such bonus shall be at the absolute and sole discretion of the
Board of Directors.
JOHN P. RICHARDS. Pursuant to an agreement entered into on July 29, 1991
and revised January 1, 1993, January 1, 1994 and August 14, 1995, which will
expire at the option of either party provided reasonable notice is given, Mr.
Richards receives a salary of $123,585 per annum. In addition to base salary,
bonus compensation of 100% of base salary can be earned. The awarding of such
bonus is dependent on a level of corporate profitability and individual
performance.
CERTAIN TRANSACTIONS
(A) CONSULTING AGREEMENTS:
LOEB PARTNERS CORPORATION. During the fiscal year ended May 31, 1996, the
Company paid Loeb Partners Corporation $60,000 in cash for executive and
management services provided by Mr. Kempner and Mr. Mintz. Mr. Kempner holds
approximately 51% of the voting equity of Loeb Holding Corporation, of which
Loeb is a 100% wholly-owned operating subsidiary.
The Company believes that the terms of its consulting agreement with Loeb
are at least as favorable to the Company as could have been provided by
unaffiliated third parties. The consulting agreement provides the Company with
the sole option of paying Loeb either in cash or in stock options for executive
services, thus removing any conflict of interest which might have arisen as a
consequence of Loeb's direct and indirect stock holding in the Company.
Additionally, whenever an issue arose which, in the opinion of a majority of
disinterested members of the Board of Directors, presented a potential conflict
of interest between Loeb and the Company, Mr. Kempner abstained from voting on
such issue.
KENNETH N. MAY. During the fiscal year ended May 31, 1996, the Company
paid Dr. Kenneth N. May 600 shares of Alcide Common stock having an aggregate
purchase price of $12,150, plus $24,000 cash for consulting services in the
field of pathogen control on poultry and other food products.
The Company believes that the terms of its consulting agreement with Dr.
May are at least as favorable to the Company as could have been provided by
unaffiliated third parties.
(B) ROYALTY AND CONSOLIDATION AGREEMENT
The Company has an ongoing obligation pursuant to certain royalty and
consolidation agreements to pay to patent holders, some of whom were founders of
and early investors in the Company, a royalty of 50% of its license revenues and
8% of its net sales of its covered manufactured products subject to said
agreements. As the Company does not presently anticipate entering into
sublicense agreements for products requiring royalty payment, its obligation to
pay a royalty of 50% of its license revenues should have no material impact on
the financial condition of the Company. The Company does anticipate paying a
royalty of 8% of the net sales of its products to the extent they are subject to
royalty payments, which payments will increase the Company's costs by such
amount. Payments have aggregated $2,888,674 since 1983. During fiscal year
1996 and 1995, the amounts indicated below were paid to the following
individuals and entities, certain of whose principals were members of the Board:
Old Hill Associates, $60,360 and $80,506; Loeb Investors Co. V., $19,543 and
$24,629; Loeb Investors Co. VIII, $729 and $973, respectively.
Loeb Investors Co. V and Loeb Investors Co. VIII are partners with others
in Old Hill Associates. Thomas L. Kempner is the managing partner of both Loeb
Investors Co. V and Loeb Investors Co. VIII.
10
ITEM 2 - PROPOSAL TO APPROVE THE 1996 STOCK OPTION PLAN FOR NONEMPLOYEE
DIRECTORS
The purposes of the 1996 Stock Option Plan for Nonemployee Directors are to
attract and retain the services of experienced and knowledgeable Directors of
the Company and to provide an incentive for such Directors to increase their
proprietary interest in the Company's long-term success and progress. The Board
of Directors is responsible for overall management of the Company, and outside
Directors provide valuable services to the Company in that capacity,
particularly in the Company's long-range strategic planning. Management
believes that the Company must, in order to reward and retain its existing
outside Directors, as well as to attract future outside Directors, increase the
equity incentives for Nonemployee Directors.
The Director Plan was adopted by the Board of Directors on January 22,
1996, subject to stockholder approval. The text of the Director Plan is
published in this proxy statement as Exhibit A; the following summary is
qualified by reference to such text for a more complex statement of its
provisions.
STOCK SUBJECT TO THE DIRECTOR PLAN. The Director Plan provides for the
grant of options to acquire up to a total of 50,000 shares of Common Stock, to
be granted to nonemployee directors who do not provide separate consulting
services to the Company for a fee or who are not employed by or affiliated with
an entity that provides such services to the Company ("Nonemployee Directors").
TERMS AND CONDITIONS OF STOCK OPTION GRANTS. Pursuant to the Director
Plan, each Nonemployee Director in office on January 22, 1996, the date the
Director Plan was adopted by the Board of Directors, will receive an automatic
grant of a number of non-qualified stock options determined by dividing $25,000
by the market price of the Common Stock on that date. Thereafter, each
Nonemployee Director will receive, upon his or her initial election and annually
upon reelection, an automatic grant of a number of nonqualified stock options
determined by dividing $25,000 by the market price of the Common Stock on the
date of grant. The exercise price of the stock options will be the closing
market price of the Common Stock on the date of grant. Options granted under
the Director Plan are fully vested at the time of grant. The options have a
ten-year life but cannot be exercised later than thirty-six months after
termination of service as a Director. Current Nonemployee Directors will
receive their automatic grant upon reelection at this year's annual
stockholder's meeting.
TAX CONSEQUENCES. The stock options granted under the Director Plan are
taxed pursuant to rules under Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"). A Director will not be deemed to receive any income at
the time an option is granted nor will the Company be entitled to a deduction at
that time. When any part of an option is exercised, the Director will be deemed
to have received ordinary income in an amount equal to the difference between
the option price and the fair market value at the time of exercise of the shares
to which the option pertains. The Company will be entitled to a tax deduction
in an amount equal to the amount of ordinary income realized by the Director.
RESTRICTIONS ON TRANSFER. Options granted under the Director Plan are not
transferable or assignable other than (i) by will or the laws of descent and
distribution or (ii) to the extent permitted by Rule 16b-3 under the Exchange
Act as then applicable to the Company's employee benefit plans, by gift or other
transfer to either (a) any trust or estate in which the original optionee or
such person's spouse or other immediate family member has a substantial benefit
interest or (b) a spouse or other immediate family member.
ELECTION TO RECEIVE STOCK IN LIEU OF CASH COMPENSATION. Each Eligible
Director may elect to reduce all or a portion of the cash compensation otherwise
payable for his or her services as a director, including the annual retainer and
any fees payable for serving on the Board of Directors or a committee of the
Board, by a specified dollar amount or percentage and to receive in lieu thereof
a number of shares of Common Stock equal in value to the amount of the reduction
divided by the fair market value of the Common Stock on the date the cash
compensation would have been paid.
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CAPITAL ADJUSTMENTS. In the event of any split or consolidation of shares
or any like capital adjustment or any stock dividend, the number and price per
share of shares covered by unexercised options will be proportionately adjusted.
Upon a merger (other than a merger of the Company in which a proportionate
ownership of the Company prior to the merger is the same as the proportionate
ownership of the surviving corporation), consolidation, acquisition of property
or stock, separation, reorganization or liquidation of the Company as a result
of which stockholders of the Company receive cash, stock or other property in
exchange for or in connection with their shares, (i) all cash compensation that
the director has elected to receive in shares of Common Stock will be
immediately paid in cash and (ii) the Director will have the right immediately
prior to such event to exercise all options in total, regardless of when the
option would otherwise be exercisable. To the extent an option is not
exercised, it will terminate unless it is assumed by the successor corporation
in a merger.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THE 1996 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS.
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ITEM 3 - RATIFICATION OF SELECTION OF ALCIDE AUDITORS
The Board of Directors, upon the recommendation of the Company's Audit
Committee, has appointed Arthur Andersen LLP as the Company's certified
independent public accountants for the 1997 fiscal year. It is not expected
that a representative from Arthur Andersen LLP will attend the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL, AND UNLESS MARKED TO THE
CONTRARY, PROXIES RECEIVED FROM THE STOCKHOLDERS WILL BE VOTED IN FAVOR THEREOF.
ANNUAL REPORT
The annual report of the Company for the year ended May 31, 1996 including
audited financial statements and all other information required to be included
in the Company's annual report on Form 10-K are being mailed concurrently to
stockholders of record.
ITEM 4 - OTHER MATTERS
The Board of Directors does not know of any business which will be
presented at the Meeting other than those matters set forth in the accompanying
Notice of Meeting. If any other matters are properly presented at the Meeting
for action, it is intended that the persons named in the accompanying form of
proxy and acting thereunder will vote in accordance with their best judgment on
such matters.
STOCKHOLDER PROPOSALS
The 1997 Annual Meeting of Stockholders is presently scheduled to be held
on October 15, 1997. Under rules promulgated by the Securities and Exchange
Commission, stockholders who desire to submit proposals for inclusion in the
Proxy Statement of the Board of Directors to be utilized in connection with the
1997 Annual Meeting of Stockholders must submit such proposals to the secretary
of the Company no later than April 24, 1997.
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EXHIBIT A
ALCIDE CORPORATION
1996 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
SECTION 1. PURPOSES
The purposes of the Alcide Corporation 1996 Stock Option Plan for
Nonemployee Directors (the "Plan") are to attract and retain the services of
experienced and knowledgeable nonemployee directors for Alcide Corporation (the
"Company") and to provide added incentive to such directors by providing an
opportunity for stock ownership in the Company.
SECTION 2. ADMINISTRATION
The administrator of the Plan (the "Plan Administrator") shall be the Board
of Directors of the Company (the "Board"). Subject to the terms of the Plan,
the Plan Administrator shall have the power to construe the provisions of the
Plan, to determine all questions arising hereunder and to adopt and amend such
rules and regulations for the administration of the Plan as it may deem
desirable.
SECTION 3. SHARES SUBJECT TO THE PLAN
Subject to adjustment in accordance with Section 6 hereof, the total number
of shares of the Company's common stock (the "Common Stock") which may be issued
under the Plan is 50,000, as such Common Stock was constituted on the effective
date of the Plan (the "Shares"). The Shares shall be shares currently
authorized but unissued or subsequently acquired by the Company and shall
include shares representing the unexercised portion of any option granted under
the Plan which expires or terminates without being exercised in full.
SECTION 4. ELIGIBILITY
Each member of the Board elected or appointed who is not otherwise an
employee of the Company or any parent or subsidiary corporation, and who does
not receive compensation from the
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Company or any parent or subsidiary of the Company for services as a consultant
or in any capacity other than as a director, or who is not employed by or
affiliated with an entity that provides such services to the Company (an
"Eligible Director") shall be eligible to participate in the Plan.
SECTION 5. GRANTS OF OPTIONS
5.1 ORIGINAL GRANTS
Each person who is an Eligible Director on January 22, 1996, the date of
adoption of the Plan by the Board, shall automatically receive the grant of an
option to purchase that number of Shares calculated by dividing $25,000 by the
closing price on the date of such adoption as reported on the Nasdaq National
Market on the date of such adoption or, if no Common Stock was traded on such
date, on the next preceding day on which Common Stock was so traded.
5.2 ANNUAL GRANTS
Commencing with the 1996 Annual Meeting of Shareholders, each Eligible
Director continuing service as an Eligible Director immediately following an
Annual Meeting of Shareholders shall, immediately following such Annual Meeting,
automatically receive the grant of an option to purchase that number of Shares
calculated by dividing $25,000 by the closing price on the date of such Annual
Meeting of Shareholders as reported on the Nasdaq National Market on the day the
option is granted or, if no Common Stock was traded on such date, on the next
preceding day on which Common Stock was so traded.
5.3 AVAILABILITY OF SHARES
No Shares shall be issued under the Plan if the effect of such issuance
would be to obligate the Company to issue more Shares than are reserved under
Section 3. If insufficient Shares are reserved under Section 3 to fully fund
one or more grants to be made under Section 5 on the same date of grant, then
the Shares available shall be divided by the number of Eligible Directors then
entitled to a grant and each such Eligible Director shall be granted an option
for that number of Shares.
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SECTION 6. TERMS AND CONDITIONS OF OPTIONS
Each option granted to an Eligible Director under the Plan (such an
Eligible Director, an "Optionee") and the issuance of Shares thereunder shall be
subject to the following terms:
6.1 OPTION AGREEMENT
Each option shall be evidenced by an option agreement (an "Agreement") duly
executed on behalf of the Company. Each Agreement shall comply with and be
subject to the terms and conditions of the Plan. Any Agreement may contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Plan Administrator.
6.2 OPTION EXERCISE PRICE
The option exercise price for an option shall be the closing price as
reported on the Nasdaq National Market on the day the option is granted or, if
no Common Stock was traded on such date, on the next preceding day on which
Common Stock was so traded.
6.3 VESTING AND EXERCISABILITY
Each option granted hereunder shall be fully vested and immediately
exercisable on the date of grant, subject to shareholder approval of the Plan.
6.4 TIME AND MANNER OF EXERCISE OF OPTION
Each option may be exercised in whole or in part at any time and from time
to time, subject to Shareholder approval of the Plan; PROVIDED, HOWEVER, that no
fewer than 100 Shares purchasable under the option (or the remaining Shares then
purchasable under the option, if less than 100 Shares) may be purchased upon any
exercise of any option hereunder and that only whole Shares will be issued
pursuant to the exercise of any option.
Any option may be exercised by giving written notice, signed by the person
exercising the option, to the Company stating the number of Shares with respect
to which the option is being exercised, accompanied by payment in full for such
Shares, which payment may be in whole or in part (a) in cash or by check, (b) in
shares of Common Stock already owned for at least six months by the person
exercising the option, valued at fair market value at the time of such exercise,
or (c) by delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker,
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to properly deliver to the Company the amount of sale or loan proceeds to pay
the exercise price, all in accordance with the regulations of the Federal
Reserve Board.
6.5 TERM OF OPTIONS
Each option shall expire ten years from the date of the granting thereof.
In the event that an Optionee ceases to be a director of the Company for
any reason, the options granted to such Optionee may be exercised by him or her
only within thirty-six months after the date such Optionee ceases to be a
director of the Company.
6.6 Transferability
During an Optionee's lifetime, an option may be exercised only by the
Optionee or a permitted assignee of the Optionee (as provided below), and
options granted under the Plan and the rights and privileges conferred thereby
shall not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution or, to the extent permitted by applicable law and
Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (i) designation by the Optionee in
writing during the Optionee's lifetime of a beneficiary to receive and exercise
options in the event of the Optionee's death or (ii) by gift or other transfer
of an option to a spouse or other immediate family member or to any trust or
estate in which the original Optionee or such Optionee's spouse or other
immediate family member has a substantial interest, except that any option so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the option. Any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any option under the Plan or
of any right or privilege conferred thereby, contrary to the provisions of the
Plan, or the sale or levy or any attachment or similar process upon the rights
and privileges conferred hereby, shall be null and void.
6.7 Holding Period
Any sales by persons subject to Section 16 of the Exchange Act of shares of
Common Stock obtained upon the exercise of any option granted under the Plan
within six months after the date the option was granted may result in
short-swing profit recovery under Section 16(b) of the Exchange Act.
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SECTION 7. ELECTION TO RECEIVE STOCK IN LIEU OF CASH COMPENSATION
Commencing on January 22, 1996, each Eligible Director may elect to reduce
all or a portion of the cash compensation otherwise payable for services to be
rendered by him or her as a director (including the annual retainer and any fees
payable for serving on the Board or a Committee of the Board, but excluding any
expense reimbursement) by a specified dollar amount or a percentage of such
retainer and/or fees and to receive in lieu thereof a whole number of Shares
equal in value to the amount of the reduction divided by the fair market value
of the Common Stock on the date the cash compensation would have been paid.
Such Shares shall be delivered to each such Eligible Director as soon as
practicable after the date the cash compensation would have been paid. The
value of any fractional Shares shall be paid to the Eligible Director in cash on
the date the Shares are delivered.
Any such election shall be made in writing on a form provided by the
Company and shall state the dollar amount or percentage by which the Eligible
Director desires to reduce the cash compensation.
SECTION 8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
8.1 Recapitalization
The aggregate number and class of shares which may be issued under the
Plan, the number and class of shares covered by each outstanding option and the
exercise price per share thereof (but not the total price), and the number and
class of shares that may be made subject to options as set forth in Section 5 of
the Plan, shall all be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock of the Company resulting from a
split or consolidation of shares or any like capital adjustment, or the payment
of any stock dividend.
8.2 Effect of Liquidation or Reorganization
Upon a merger (other than a merger of the Company in which the holders of
shares of Common Stock immediately prior to the merger have the same
proportionate ownership of shares of Common Stock in the surviving corporation
immediately after the merger), consolidation, acquisition of property or stock,
separation, reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company, as a result of which the
shareholders of the Company receive cash, stock or other property in exchange
for or in connection with their
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shares of Common Stock, then (i) the exercisability of each option outstanding
under the Plan shall be automatically accelerated so that each such option
shall, immediately prior to the specified effective date for any such
transaction, become fully exercisable with respect to the total number of shares
of Common Stock purchasable under such option and may be exercised for all or
any portion of such shares and (ii) all cash compensation which has been earned
by an Eligible Director who has elected to receive Shares in lieu of cash
compensation but which has not yet been converted into Shares, shall be paid
immediately in cash. To the extent an option is not exercised, it shall
terminate, except that in the event of a merger in which shareholders of the
Company receive capital stock of another corporation in exchange for their
shares of Common Stock, such unexercised option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation. Any such assumed or equivalent
option shall be fully exercisable with respect to the total number of shares
purchasable under such option.
8.3 Fractional Shares
In the event of any adjustment in the number of shares covered by any
option, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
SECTION 9. EXPENSES
All costs and expenses of the adoption and administration of the Plan shall
be borne by the Company; none of such expenses shall be charged to any
participant in the Plan.
SECTION 10. AMENDMENT AND TERMINATION
The Board may amend, terminate or suspend the Plan at any time, in its sole
and absolute discretion; PROVIDED, HOWEVER, that if required to qualify the Plan
under Rule 16b-3 under Section 16(b) of the Exchange Act, no amendment may be
made more than once every six months that would change the amount, price, timing
or vesting of the options, other than to comply with changes in the Internal
Revenue Code of 1986, as amended, or the rules and regulations thereunder;
PROVIDED FURTHER that if required to qualify the Plan under Rule 16b-3, no
amendment that would
(a) materially increase the number of Shares that may
be issued under the Plan,
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(b) materially modify the requirements as to
eligibility for participation in the Plan,
(c) materially increase the benefits accruing to
participants under the Plan, or
(d) otherwise require Shareholder approval under any
applicable law or regulation
shall be made without the approval of the Company's shareholders.
SECTION 11. MISCELLANEOUS
11.1 Participant's or Successor's Rights as Shareholder
Neither an Optionee nor the Optionee's successor in interest shall have any
rights as a shareholder of the Company with respect to any Shares subject to an
option granted to such person until such person becomes a holder of record of
such Shares. An Eligible Director who has made an election to receive Shares in
lieu of cash compensation shall not have any rights as a shareholder of the
Corporation until such cash compensation is converted into Shares and such
person becomes a holder of record of such Shares.
11.2 Limitation as to Directorship
Neither the Plan, nor the granting of an option, nor the making of an
election to receive Shares in lieu of cash compensation, nor any other action
taken pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has a right to
continue as a director for any period of time or at any particular rate of
compensation.
11.3 Regulatory Approval and Compliance
The Company shall not be required to issue any certificate or certificates
for Shares upon the exercise of an option granted under the Plan, or pursuant to
an Eligible Director's election to receive Shares in lieu of cash compensation
or to record as a holder of record of Shares the name of the individual
exercising an option under the Plan, or the individual who has made an election
to receive stock in lieu of cash compensation without obtaining to the complete
satisfaction of the Company the approval of all regulatory bodies deemed
necessary by the Company, and without complying,
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to the Company's complete satisfaction, with all rules and regulations under
federal, state or local law deemed applicable by the Company.
11.4 Compliance With Rule 16b-3
It is the intention of the Company that the Plan and the transactions under
the Plan comply in all respects with the requirements for exemption under
Rule 16b-3 promulgated under Section 16(b) of the Exchange Act and, to the
extent required by Rule 16b-3, that Plan participants remain disinterested
persons ("Disinterested Persons") for purposes of administering other employee
benefit plans of the Company and having such other plans be exempt from
Section 16(b) of the Exchange Act. Therefore, if any Plan provision is later
found not to be in compliance with Rule 16b-3 or if any Plan provision would
disqualify Plan participants from remaining Disinterested Persons, that
provision shall be deemed null and void, and in all events the Plan shall be
construed in favor of its meeting the requirements of Rule 16b-3.
SECTION 12. EFFECTIVE DATE AND DURATION
The Plan shall be effective upon the date of approval by the Company's
Board. The Plan shall continue in effect unless it is terminated by action of
the Board or the Company's shareholders, but such termination shall not affect
the then-outstanding terms of any options.
ADOPTED BY THE COMPANY'S BOARD OF DIRECTORS ON JANUARY 22, 1996 AND
SUBMITTED FOR APPROVAL BY THE COMPANY'S SHAREHOLDERS ON OCTOBER 15, 1996.
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ALCIDE CORPORATION
8561 154th Avenue NE, Redmond, WA 98052
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of the Stockholders, October 15, 1996
The undersigned hereby appoints John P. Richards and Norman N. Mintz as
proxies each with power of substitution in each of them, to vote for and on
behalf of the undersigned at the Annual Meeting of the Stockholders of the
Company to be held on October 15, 1996, and at any adjournment thereof, upon
matters properly coming before the meeting, as set forth in the related Notice
of Meeting and Proxy Statement, both of which have been received by the
undersigned. Without otherwise limiting the general authorization given hereby,
said proxies are instructed to vote as follows:
1. Election of the Board's nominees for Directors.
(THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR")
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary all nominees listed below
below)
Nominees: Thomas L. Kempner, Joseph A. Sasenick, William G. Spears, Aaron
Stern, M.D., Pd.D. and Kenneth N. May, Ph.D.
INSTRUCTION: To withhold authority to vote for any individual nominee listed
above, write that nominee's name in the space provided below.
2. Approval of the 1996 Stock Option Plan for Nonemployee Directors.
(THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR")
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of the selection of Arthur Andersen LLP as the independent
auditors of the Company for the fiscal year ending May 31, 1997.
(THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR")
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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 in the manner directed herein
by the undersigned holder.
If no direction is made, this proxy will be voted for Proposals 1, 2 and 3.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
-----------------------------------
Signature
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Signature if held jointly
Dated: , 1996
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PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE