SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
Alcide Corporation
8561 154th Avenue, NE
Redmond, Washington 98052
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 13, 1998
----------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Alcide
Corporation (the "Company") will be held at The University Club located at 1
West 54th Street, New York, NY on Tuesday, October 13, 1998 at 10:00 a.m.
(1) To elect four directors of the Board of Directors for the ensuing
year;
(2) To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending May 31, 1999; and
(3) 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 28,
1998 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 28, 1998
ALCIDE CORPORATION
8561 154th Avenue, NE
Redmond, Washington 98052
---------------------------------------
PROXY STATEMENT
For Annual Meeting of Stockholders
October 13, 1998
-----------------
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 Tuesday, October 13, 1998 at 10:00 a.m. local time and at any
adjournment thereof. Each stockholder giving 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 and 2, described in this Proxy Statement. 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 "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
28, 1998.
VOTING SECURITIES
Only stockholders of record at the close of business on August 28, 1998
will be entitled to notice of, and to vote at, the Annual Meeting. Each share
of Common Stock is entitled to one vote. In 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 four 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 item 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 ratify the selection of 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, 1998 there were 2,563,148 shares of Alcide Common Stock
outstanding, net of Treasury Stock.
-2-
SHARE OWNERSHIP BY DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership, as of August 1, 1998, 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 for director; (c) each
of the executive officers included in the Summary Compensation Table, and (d)
all directors and executive officers as a group. Each of the named persons has
sole voting and investment power with respect to the shares shown, except as
stated below.
COMMON STOCK
------------
NAME NO. OF SHARES OF PERCENTAGE OF
---- COMMON STOCK COMMON STOCK (%)
------------ ---------------
Thomas L. Kempner 468,401 (1) 18.3
Loeb Partners Corp.
61 Broadway, 24th Floor
New York, NY 10006
Joseph A. Sasenick 100,580 (2) 3.9
John P. Richards 45,400 (3) 1.8
G. Kere Kemp, BVSc, MRCVS 19,700 (4) .7
William G. Spears 8,940 (5) .3
Kenneth N. May, Ph.D. 6,755 (6) .3
All directors and executive 649,776 (7) 25.3
officers as a
group (6 persons)
- ------------
(1) 201,946 shares of Common Stock are held by Loeb Investors Company V and
26,964 shares are held by Loeb Investors Company VIII, entities for which Mr.
Kempner serves as Managing Partner. 172,550 shares are held in family trusts
and other entities for which Mr. Kempner serves as either a trustee or has
shared voting and dispositive power. Mr. Kempner disclaims any beneficial
interest as to 296,502 shares of the above listed Common Stock.
Also includes 39,507 shares issuable upon exercise of stock options that
are exercisable within 60 days of August 1, 1998. Of these, 4,275 options were
granted to Mr. Kempner as director's fees and 35,232 options where granted to
Loeb Partners Corporation for services rendered to the Company.
(2) Includes 64,925 shares issuable upon exercise of stock options that are
exercisable within 60 days of August 1, 1998, of which 24,500 options to
purchase Common Stock were transferred by Mr. Sasenick to trusts for his family
for which Mr. Sasenick is trustee.
(3) Includes 37,900 shares issuable upon exercise of stock options that are
exercisable within 60 days of August 1, 1998.
(4) Includes 18,034 shares issuable upon exercise of stock options that are
exercisable within 60 days of August 1, 1998.
(5) Includes 6,602 shares issuable upon exercise of stock options that are
exercisable within 60 days of August 1, 1998.
(6) Includes 3,000 shares issuable upon exercise of stock options that are
exercisable within 60 days of August 1, 1998.
(7) Includes 169,968 shares issuable upon exercise of stock options that
are exercisable within 60 days of August 1, 1998.
-3-
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires directors, certain of the Company's officers and
persons who own more than 10% of a registered class of the Company's securities,
to file reports of ownership and changes in ownership of Common Stock and other
equity securities of the Company with the Securities and Exchange Commission
(the "Commission"). Directors, officers and greater than 10% stockholders are
required by the Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on the Company's review of the copies of such reports it has
received, or written representations from certain reporting persons that no
forms were required for those persons, the Company believes that during the
previous fiscal year all filing requirements applicable to its directors,
certain officers or greater than 10% beneficial owners were complied with by
such persons.
-4-
ITEM 1 - ELECTION OF DIRECTORS
The Board of Directors presently consists of four members, all of whom are
up for re-election 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 four 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. Holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting
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, 1998, his
position 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 71. 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 Energy Research Corporation; IGENE Biotechnology, Inc.; Roper
Starch Worldwide, Inc.; Intermagnetics General; Northwest Airlines, Inc.
Emeritus; and CCC Information Services Group, Inc.
JOSEPH A. SASENICK, 8561 154th Avenue, NE, Redmond, WA 98052
Age 58. 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 Executive Committee and Board of Directors of the Washington Biotechnology
and Biomedical Association and on the Board of Directors of the Technology
Alliance, a special program of the Greater Seattle Chamber of Commerce.
Previously held senior management positions at Abbott Laboratories and The
Gillette Company.
WILLIAM G. SPEARS, 45 Rockefeller Plaza, New York, NY 10020
Age 60. Director of the Company since 1989. Chairman and Chief Executive
Officer of Key Asset Management, the investment advisory subsidiary of KeyCorp
since 1996. Presently serves on the Board of Directors of United HealthCare
Corp., Chairman, HealthCare Chaplaincy Board of Trustees, and Vice Chairman of
Quinnipiac College Board of Trustees.
KENNETH N. MAY, PH.D., 203 McElwee Street, North Wilkesboro, NC 28659
Age 67. 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. Technical advisor and consultant to the National Broiler Council on
food safety matters; and 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTOR
NOMINEES.
-5-
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met two times during the fiscal year ended May 31,
1998 and held three telephonic meetings. Messrs. Sasenick, Kempner and Spears
participated in all five 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. Kenneth N. May participated in four meetings of the Board of
Directors and the total number of meetings held by all committees of the Board
of Directors on which he serves.
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 1998 were
Thomas L. Kempner, Chairman, and Kenneth N. May. The Committee met one time
during the past fiscal year.
The Nominating Committee recommends a slate of directors for the ensuing
term. Nominating Committee members during fiscal year 1998 were William G.
Spears, Chairman, and Thomas L. Kempner. The Committee held discussions at a
Board of Directors meeting one time during the past 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 1998 were
Thomas L. Kempner, Chairman, William G. Spears and Joseph A. Sasenick. The
Committee met one time during the past 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 1998 were Thomas L.
Kempner, Chairman, and William G. Spears. The Committee met one time during the
fiscal year.
COMPENSATION OF DIRECTORS
For the fiscal year ended May 31, 1998, directors who do not also benefit
from a consulting or employment agreement with the Company received $1,000 cash
compensation per Board meeting attended, a $6,000 cash retainer and a grant of
stock options having an aggregate exercise price of $25,000. In the past fiscal
year, this compensation applied to William G. Spears. It did not apply to Thomas
L. Kempner or Dr. Kenneth N. May, both of whom have consulting arrangements with
the Company, or to Joseph A. Sasenick, who received salary as an officer of the
Company.
-6-
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in fiscal years ended
May 31, 1998, 1997 and 1996 by the Chief Executive Officer and two other
executive officers whose aggregate salary and bonus each exceeded $100,000 in
the most recent fiscal year (the "Named Executive Officers").
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
NUMBER OF SHARES
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) UNDERLYING OPTIONS (#)
--------------------------- ---- ---------- --------- ----------------------
Joseph A. Sasenick,
President/CEO 1998 207,608 170,000 5,000
1997 197,722 170,000 5,000
1996 190,575 150,645 5,000
John P. Richards,
Executive Vice President/CFO 1998 134,627 75,000 4,000
1997 128,209 80,000 4,000
1996 123,585 70,455 4,000
G. Kere Kemp
Executive Vice President/
Chief Scientific Officer 1998 98,128 75,000 4,000
1997 91,720 65,000 4,000
1996 88,275 35,000 3,000
-7-
OPTION GRANTS IN THE LAST FISCAL YEAR
The following tables summarizes the Named Executive Officers' stock option
grants during fiscal year 1998.
OPTIONS GRANTED IN FISCAL YEAR 1998
INDIVIDUAL GRANTS (1)
--------------------------------------------------
POTENTIAL REALIZABLE VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK PRICE APPRECIATION
SHARES TOTAL OPTIONS EXERCISE FOR OPTION TERM (3)
UNDERLYING GRANTED TO PRICE PER EXPIRATION -------------------
NAME OPTIONS EMPLOYEES (2) SHARE DATE 5% 10%
---- ------- ------------- ----- ---- -------- --------
Joseph A. Sasenick 5,000 29% $35.375 2007 $111,175 $281,875
John P. Richards 4,000 23% $35.375 2007 $88,940 $225,500
G. Kere Kemp 4,000 23% $35.375 2007 $88,940 $225,500
(1) The options have terms of 10 years from the date of grant and become
exercisable in equal annual installments over a period of five years. Upon the
occurrence of certain corporate transactions, the exercisability of the options
may be accelerated.
(2) Based on an aggregate of 18,000 shares subject to options granted to
employees during the fiscal year ended May 31, 1998.
(3) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates required by applicable regulations of the Commission and,
therefore, are not intended to forecast possible future appreciation, if any, of
the Common Stock price. Actual gains, if any, on stock option exercises depend
on the future performance of the Common Stock and overall stock market
conditions, as well as the option holders' continued employment during the
vesting period. The amount reflected in this table may not necessarily be
achieved.
OPTION YEAR-END VALUES TABLE
The following table provides information on option exercises during the last
fiscal year by the Named Executive Officers and options outstanding at May 31,
1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
SHARES VALUE NUMBER OF SHARES COVERED VALUE OF UNEXERCISED
ACQUIRED ON REALIZED BY UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NAME EXERCISE (#) -------- MAY 31, 1998 (#) MAY 31, 1998 ($) (2)
- ---- ----------- ($)(1) ---------------- -----------------------
------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Joseph A. Sasenick 43,805 2,153,777 85,425 17,000 2,690,364.05 267,312.50
John P. Richards 8,500 318,750 34,300 15,200 1,033,995.25 248,800.01
G. Kere Kemp 4,166 177,891 15,234 11,600 425,578.27 171,100.00
(1) These amounts represent the aggregate number of options exercised,
multiplied by the market price of the Common Stock at the time of exercise minus
the exercise price for each option.
(2) These amounts are based on the difference between the option exercise
price of $35.375 and the fair market value at fiscal year-end of $39.9375.
-8-
REPORT OF THE COMPENSATION COMMITTEE
Compensation programs at Alcide Corporation are designed to attract,
motivate and retain the executive talent needed to optimize stockholder value in
a competitive environment. The programs support the goal of increasing
stockholder 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 stockholder value through meeting long-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 programs are 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. 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 the Company to meet its annual operating
plan. A participant's individual award may vary from zero to 100 percent. For
fiscal year end 1998 the Committee approved bonuses for three participating
employees.
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 stockholders;
- encourage and create ownership and retention of the Company's stock;
- balance long-term with short-term decision making; and
- focus attention on building stockholder value through meeting
long-term financial and strategic goals.
-9-
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 1998 management incentive awards based on assessment
of executive performance against approved goals; and
- determined stock option awards to employees.
COMPENSATION OF THE PRESIDENT/CHIEF EXECUTIVE OFFICER
The CEO received a salary increase of 5% effective September 1, 1998, and a
bonus of $170,000. Pursuant to the Management Incentive 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 1998 reflected substantial improvement
over prior periods.
Section 162(m) of the Internal Revenue Code of 1986, as amended, includes
potential limitations on the deductibility by the Company of certain
compensation in excess of $1 million paid or accrued with respect to any of the
executive officers whose compensation is required to be reported in the
Company's proxy statement. Certain performance-based compensation that has been
approved by stockholders is not subject to the deduction limit. For the current
fiscal year, the Committee does not expect there will be any nondeductible
compensation paid to the executive officers.
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 executives of other entities.
Compensation Committee
Thomas L. Kempner, Chairman
William G. Spears
-10-
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the performance of the Company's
Common Stock during the period May 31, 1993 through May 31, 1998 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.
[GRAPH]
1993 1994 1995 1996 1997 1998
----- ----- ----- ----- ----- -----
Alcide Corp. 100.0 103.6 122.9 262.9 354.3 456.4
NASDAQ Market 100.0 105.3 125.2 182.0 205.1 260.6
Pharm. Stocks 100.0 90.9 99.6 183.3 167.1 173.7
-11-
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 $207,608 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 $134,627 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.
G. KERE KEMP. Pursuant to a letter agreement entered into on March 1,
1998, which will expire at the option of either party provided reasonable notice
is given, Dr. Kemp receives a salary of $98,128 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
CONSULTING AGREEMENTS
LOEB PARTNERS CORPORATION. During the fiscal year ended May 31, 1998, the
Company paid Loeb Partners Corporation $60,000 in cash for executive and
management services provided by Mr. Kempner and Mr. Norman N. Mintz. Mr.
Kempner holds approximately 51% of the voting equity of Loeb Holding
Corporation, of which Loeb Partners 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. 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, 1998, the Company
paid Dr. Kenneth N. May 264 shares of Alcide Common Stock having an aggregate
purchase price of $12,012, plus $24,000 cash for consulting services in the
field of pathogen control on poultry and other food products, and as a director.
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.
ROYALTY AND CONSOLIDATION AGREEMENTS
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 payments, 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 $3,573,937 since 1983. During fiscal years
1998 and 1997, the amounts indicated below were paid to the following
individuals and entities, certain of whose principals were members of the Board:
Loeb Investors Co. V., $21,865 and $22,114; Loeb Investors Co. VIII, $863 and
$863, respectively.
Thomas L. Kempner is the managing partner of both Loeb Investors Company V
and Loeb Investors Company VIII.
-12-
ITEM 2 - 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 1999 fiscal year. It is not expected
that a representative from Arthur Andersen LLP will attend the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION
OF THE AUDITORS.
ANNUAL REPORT
The annual report of the Company for the fiscal year ended May 31, 1998
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 3 - 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 the Annual Meeting of Stockholders. 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 1999 Annual Meeting of Stockholders is presently scheduled to be held
on October 12, 1999. Under rules promulgated by the Commission, stockholders who
desire to submit proposals for inclusion in the Company's Proxy Statement of the
Board of Directors to be utilized in connection with the 1999 Annual Meeting of
Stockholders must submit such proposals no later than April 29, 1999.
Alternatively, pursuant to the Commission rules that became effective on
June 29, 1998, if the Company receives notice of stockholder proposals after
July 14, 1999, then the persons named as proxies in such Proxy Statement and
proxy will have discretionary authority to vote on such stockholder proposals,
without discussion of the matters in the Proxy Statement and without such
proposals appearing as separate items on the proxy card. Stockholder proposals
should be directed to the Company's Secretary, at the address of the Company set
forth on the first page of this Proxy Statement.
-13-
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 13, 1998
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 13, 1998 and at any adjournment thereof, upon
matters properly coming before the meeting, as set forth in the related Notice
of Meeting and Proxy Statement, which has 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
(except as marked to the contrary for all nominees listed below
below)
Nominees: Thomas L. Kempner, Joseph A. Sasenick, William G. Spears 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. Ratification of the selection of Arthur Andersen LLP as the independent
auditors of the Company for the fiscal year ending May 31, 1999.
(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 and 2.
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
------------------------------------
Signature if held jointly
Dated:__________________________, 1998
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE