[GRAPHIC OMITTED]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Neogen
Corporation (the "Company"), a Michigan corporation, will be held on October
8, 1998 at 9:00 a.m., local time, at the University Club of Michigan State
University, 3435 Forest Road, Lansing, MI 48909, for the following purposes:
1. To elect nine directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of BDO Seidman, LLP as independent auditors of
the Company for the fiscal year ending May 31, 1999.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business August 10, 1998 are
entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date, and return the enclosed proxy card as promptly as possible in the
postpaid envelope enclosed for that purpose. Any shareholder attending the
meeting may vote in person even if he or she returned a proxy.
Sincerely,
/s/ G. Bruce Papesh
G. Bruce Papesh
Secretary
Lansing, Michigan
August 28, 1998
- -----------------------------------------------------------------------------
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
YOU ARE REQUESTED TO COMPLETE AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
- -----------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of Neogen Corporation (the
"Company") for use at the Annual Meeting of Shareholders to be held October
8, 1998, at 9:00 a.m., or at any adjournment thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of
Shareholders. The Annual Meeting will be held at the University Club of
Michigan State University, 3435 Forest Road, Lansing, MI 48909. The Company's
telephone number is (517) 372-9200.
These proxy solicitation materials were mailed on or about August 28, 1998,
together with the Company's 1998 Annual Report to Shareholders, to all
shareholders entitled to vote at the meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it any time before its use by delivering to the Company, before the
meeting, a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
Voting and Solicitation
Every shareholder voting at the annual meeting has one vote for each share on
all matters. The Company's By-Laws do not provide for cumulative voting in
the election of directors. Shares represented by valid, executed and dated
proxies in the enclosed form will be voted if received in time for the
meeting in accordance with the instructions thereon. Unless your proxy is
otherwise marked, it will be voted FOR management's nominees for the board of
directors, and FOR ratification of the appointment of the Company's
independent auditor.
A simple majority of the shares issued and outstanding as of August 10, 1998
(the "Record Date") must be present or represented at the Annual Meeting to
constitute a quorum. For election of directors, the nine individuals
receiving the most votes will be elected for the term indicated. Approval for
any other item of business to be voted upon at the Annual Meeting will
require the affirmative vote of a majority of the votes cast by the holders
of common shares at the meeting and entitled to vote. Abstentions, withheld
votes and broker nonvotes will not be deemed votes cast in determining
approval of any proposal, but will be counted in determining the number of
common shares present or represented by proxy in determining whether a quorum
is present.
The cost of soliciting proxies will be borne by the Company. The Company has
retained the services of American Stock Transfer & Trust to aid in the
solicitation of proxies. The Company estimates that the cost of soliciting
proxies will be less than $2,000 including out-of-pocket expenses. The
Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies may also be solicited by certain
of the Company's directors, officers, and regular employees, without
additional compensation, personally or by telephone, telegram, facsimile or
letter.
Record Date and Principal Share Ownership
Shareholders of record at the close of business on August 10, 1998 are
entitled to notice of and to vote at the meeting. At the Record Date,
6,232,079 shares of the Company's Common Stock were issued and outstanding.
At the Record Date, the following were known by the Company to be the
beneficial owners of more than 5% of the Company's Common Stock.
1
<PAGE>
<TABLE>
<CAPTION>
Number Percent
Name and Address of Shares of Total
- -------------------------------------------------------------------------------
<S> <C> <C>
Kenneth B. Dart and Robert C. Dart
c/o Ross Financial Corporation and DCL-RU Corporation
P.O. Box 31363-SMB
Mirco Commerce Center
Cayman Islands, B.W.I. 333,575 5.4%
James L. Herbert (1)
Neogen Corporation
620 Lesher Place
Lansing, MI 48912 321,552 5.1%
<FN>
(1) Includes 59,342 shares of Common Stock which Mr. Herbert has the right to
acquire by exercise of options within 60 days of August 10, 1998.
</TABLE>
Deadline for Receipt of Shareholder Proposals
Proposals of shareholders which are intended to be presented by such
shareholders at the Company's next Annual Meeting of Shareholders must be
received by the Company no later than April 28, 1999 in order that they may
be included in the proxy statement and form of proxy relating to that
meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
A board of nine directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
Company's nine nominees named below, all of whom are presently directors of
the Company. In the event that any nominee of the Company is unable or
declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons
are nominated for election as directors, the proxy holders intend to vote all
proxies received by them for nominees listed below. Shareholders may only
vote for nine directors. The Company is not aware of any nominee who will be
unable or will decline to serve as a director. The term of office of each
person elected as a director will continue until the next Annual meeting of
Shareholders or until his successor has been elected and qualified.
The names of the nominees, and certain information about them, are set forth
below:
<TABLE>
<CAPTION>
Name of Nominee Age Position Director Since
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Herbert D. Doan (1) (2) 75 Chairman, Board of Directors 1982
James L. Herbert 58 President and Chief Executive Officer of the Company, Director 1982
G. Bruce Papesh (3) 51 Secretary, Director 1993
Gordon E. Guyer, Ph.D. (3) 72 Director 1990
Robert M. Book (2) 68 Director 1990
Leonard E. Heller, Ph.D. (3) 53 Director 1992
Jack C. Parnell (1) 63 Director 1993
Thomas H. Reed (1)(2) 53 Director 1995
Lon M. Bohannon 45 Vice President and Chief Financial Officer of the Company, Director 1996
<FN>
(1) Member, Compensation Committee
(2) Member, Stock Option Committee
(3) Member, Audit Committee
</TABLE>
2
<PAGE>
Information concerning nominees for the Board of Directors follows:
Herbert D. Doan has been a director of the Company since September 1982 and
the Company's Chairman of the Board of Directors since October 1984. Mr. Doan
has served as President of the Herbert H. and Grace A. Dow Foundation since
February 1996 and is chairman of the Michigan Molecular Institute, a position
he has held since 1964. He was formerly President and Chief Executive Officer
of Dow Chemical Company. He has been active as an independent venture
capitalist for the past five years.
James L. Herbert has been President, Chief Executive Officer, and a director
of the Company since he joined Neogen in June 1982. He previously held the
position of Corporate Vice President of DeKalb Ag Research, a major
agricultural genetics and energy company. He has management experience in
animal biologics, specialized chemical research, medical instruments,
aquaculture, animal nutrition, and poultry and livestock breeding and
production.
Dr. Gordon E. Guyer joined the Board of Directors in January 1990. Dr. Guyer
retired in 1996 as director for the Michigan Department of Agriculture, a
position he held since 1993. Dr. Guyer served as interim President of
Michigan State University from 1991 to 1993 and was Vice President of
Governmental Affairs for the University from 1988 until 1991. From 1986 to
1988, he was Director of the Department of Natural Resources for the State of
Michigan.
Robert M. Book was elected to the Board of Directors in November 1990. Since
January 1993, Mr. Book has served as President of AgriVista, Inc., a company
that provides agricultural consulting and marketing services. He served as
President of the Indiana Institute of Agriculture, Food and Nutrition, from
1983 through 1992. He was formerly Group Vice President of Agriculture
Marketing for Elanco Products Company.
Dr. Leonard E. Heller was elected to the Board of Directors in October 1992.
He is currently a self-employed independent consultant in the area of
medical, biomedical, and pharmaceutical information systems. From 1992 to
1993, he was Secretary, Cabinet for Human Resources for the Commonwealth of
Kentucky. From 1986 to 1993 he was part owner of O. J. Packaging Inc., a
retail packaging company, and a general partner in Illinois Diversatech, a
real estate development partnership located in Manteno, Illinois.
G. Bruce Papesh was elected to the Board of Directors in October 1993 and was
elected Secretary in October 1994. Since 1987, Mr. Papesh has served as
President of Dart, Papesh & Co., an investment consulting and financial
services firm. Mr. Papesh provides investment services to Kenneth B. Dart and
Robert C. Dart, who exercise control over two companies that own 5.4% of the
Company's Common Stock. Mr. Papesh asserts that he has no investment power
over the Company's common stock owned by Kenneth B. Dart or Robert C. Dart.
Mr. Papesh also serves on the Board of Directors of Immucor, Inc., a publicly
traded immunodiagnostics company that manufactures and markets products for
the human clinical blood bank industry.
Jack C. Parnell was elected to the Board of Directors in October 1993. Since
1991, he has held the position of Governmental Relations Advisor with the law
firm of Kahn, Soares and Conway. In 1989, Mr. Parnell was appointed by
President Bush to serve as Deputy Secretary for the U.S. Department of
Agriculture. From 1983 to 1989, he served in three different senior
governmental positions for the State of California, including Secretary for
the California Department of Food and Agriculture from 1987 to 1989. Prior to
1987, Mr. Parnell was a private entrepreneur who owned and operated various
businesses including diversified cattle and farming operations. The firm of
Kahn, Soares and Conway currently act as the Company's government relations
advisor.
Thomas H. Reed was elected to the Board of Directors in October 1995.
Effective April 1, 1998, Mr. Reed became Vice President of MLE Marketing, a
division of Southern States Cooperative, Inc. Prior to that date, he served
as President and Chief Executive Officer for the Michigan Livestock Exchange,
where he worked beginning in 1977. Mr. Reed is a member of the Board of
Directors of the National Livestock Producers Association and is a former
chairman of the Michigan State University Board of Trustees. He has served as
an officer or director of numerous trade organizations and financial
institutions.
Lon M. Bohannon was elected to the Board of Directors in October 1996. Mr.
Bohannon joined Neogen in October 1985 as Vice President of Finance and was
promoted to Vice President - Administration and Chief Financial Officer in
November
3
<PAGE>
1994. He is responsible for all areas of accounting, finance, human
resources and investor relations. A CPA, Mr. Bohannon served as
Administrative Controller for Federal Forge, Inc., a metal forging and
stamping firm, from March 1980 until October 1985, and worked at the Public
Accounting Firm of Ernst & Young from June 1975 to March 1980.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES HEREIN.
Security Ownership of Management
The following table sets forth the beneficial ownership of Common Stock of
the Company as of August 10, 1998 for each current director, nominee and for
all current directors and executive officers as a group:
<TABLE>
<CAPTION>
Name Number of Shares Percent of Total
- --------------------------------------------------------------------
<S> <C> <C>
Herbert D. Doan (1) 306,890 4.9%
James L. Herbert (1) 321,552 5.1%
Gordon E. Guyer, Ph.D. (1) 22,001 *
Robert M. Book (1) 10,001 *
Leonard E. Heller, Ph.D. (1) 60,768 1.0%
G. Bruce Papesh (1) 6,001 *
Jack C. Parnell (1) 16,001 *
Thomas H. Reed (1) 7,601 *
Lon M. Bohannon (1) 90,937 1.5%
All current directors and
executive officers as a group
(sixteen persons) (1) 976,278 15.1%
<FN>
* Less than 1%
(1) Includes the following shares of Common Stock which current directors
and executive officers have the right to acquire by exercise of options
within 60 days of August 10, 1998: Mr. Doan - 24,001 shares; Mr.
Herbert - 59,342 shares; Dr. Guyer - 22,001 shares; Mr. Book - 10,001
shares; Dr. Heller - 18,001 shares; Mr. Papesh - 6,001 shares; Mr.
Parnell - 16,001 shares; Mr. Reed - 7,001 shares; Mr. Bohannon - 15,800
shares; all current directors and executive officers as a group -
238,449 shares.
</TABLE>
Board Meetings and Committees
The Board of Directors of the Company held six meetings during the fiscal
year ended May 31, 1998. Each of the incumbent directors attended at least
75% of the aggregate of all meetings of the Board and Committees of which he
was a member held during the period he served on the Board or Committee.
The standing committees of the Board of Directors are the Audit Committee,
the Compensation Committee and the Stock Option Committee. The Audit
Committee, which met two times in 1998, has responsibility for recommending
to the Board of Directors the firm of independent auditors to be retained by
the Company; reviewing with the Company's independent auditors the scope and
results of their audits; reviewing with the independent auditors and
management the Company's accounting and reporting principles, policies and
practices; and reviewing with the Company's independent auditors the adequacy
of the Company's accounting, financial and operating controls. The
Compensation Committee, which met twice during 1998, has responsibility for
reviewing and approving the Company's executive compensation policies and
makes recommendations concerning the Company's employee benefit programs. The
Stock Option Committee administers the Company's Stock Option Plan. This
committee held six meetings during 1998.
The Board of Directors serves as a committee of the whole for purposes of
recommending candidates for election to the Board of Directors. In this
capacity, the Board held one meeting in fiscal year 1998. The Board will
consider nominees recommended by shareholders provided such recommendations
are in writing and received by the Company no later than
4
<PAGE>
April 28, 1999. Recommendations should be addressed to: Corporate Secretary,
Neogen Corporation, 620 Lesher Place, Lansing, Michigan 48912.
Executive Compensation
The following table sets forth information regarding compensation paid or
accrued by the Company during the last three years for the Company's chief
executive officer and the only other executive officer (named "executive
officers") of the Company receiving annual cash compensation in excess of
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Fiscal Options All Other
Name and Principal Position Year Salary (1) Bonus Awarded Compensation (2)(3)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James L. Herbert, President, 1998 $153,163 $30,000 30,000 $3,852
Chief Executive Officer 1997 $148,092 $20,000 25,000 $2,229
1996 $137,989 $10,000 30,000 $1,846
Lon M. Bohannon, Vice President - 1998 $ 89,459 $15,000 15,000 $2,649
Administration & Chief Financial 1997 $ 84,612 $ 7,000 15,000 $1,785
Officer 1996 $ 80,540 $ 8,000 7,000 $1,799
<FN>
(1) Includes amounts contributed to the Company's 401(k) Retirement Savings
Plan by the named executive officer.
(2) Matching contributions paid to the Company's 401(k) Retirement Savings
Plan on behalf of the named executive officer.
(3) Under terms of a deferred compensation agreement, the current value of an
annuity owned by the Company is payable to Mr. Herbert upon death,
retirement or termination of employment.
</TABLE>
The following table contains information concerning the grant of options
under the Company's Stock Option Plan to the named executive officers of the
Company during the year ended May 31, 1998. No stock appreciation rights
(SARS) were granted during such period.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
<TABLE>
<CAPTION>
Percent of Total
Options Granted
to Employees Exercise Price Expiration
Name Granted in Fiscal Year Per Share Date
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James L. Herbert 945 (1) 0.7% $ 8.12 7/29/02
18,655 (2) 12.9% $ 8.12 7/29/07
10,400 (2) 7.2% $ 11.31 3/27/08
Lon M. Bohannon 15,000 (1) 10.3% $ 8.12 7/29/02
<FN>
(1) Options were granted at fair market value and vest over five years in
equal annual installments commencing with the first anniversary of the
grant date.
(2) Options were granted at fair market value and vest over three years in
equal annual installments commencing with the first anniversary of the
grant date.
</TABLE>
5
<PAGE>
The following table sets forth information for the named executive officers
with respect to the value of options exercised during the year ended May 31,
1998 and the value of outstanding and unexercised options held as of May 31,
1998, based upon the market value of the Company's Common Stock of $8.750 per
share on that date. There were no SARS outstanding or exercised as of or for
the year ended May 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options In-The-Money Options
Shares at May 31, 1998 at May 31, 1998 (2)
Acquired Value -------------------------- ---------------------------------
Name on Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James L. Herbert 18,000 $152,220 34,467 78,533 $58,834 $108,694
Lon M. Bohannon 13,400 $ 82,143 5,800 37,800 $10,050 $ 50,534
<FN>
(1) Represents the difference between the market price of the Common Stock
and the exercise price of the options on the date of exercise multiplied
by the number of shares acquired upon exercise.
(2) Represents the difference between the closing market price of the Common
Stock at May 31, 1998 of $8.750 per share and the exercise price per
share of in-the-money options multiplied by the number of shares which
could be acquired at May 31, 1998 upon the exercise of all in-the-money
options.
</TABLE>
Compensation of Directors
The Company does not pay director's fees to any director for attendance at
meetings of the Board or Standing Committees. All non-employee directors
receive automatic, non-qualified options to purchase 5,000 shares of Common
Stock of the Company when first elected to the Board of Directors and
non-qualified options to purchase 2,000 shares of Common Stock of the Company
upon subsequent annual election to the Board of Directors. The options expire
ten years after the date of grant and vest over three years in equal annual
installments commencing with the first anniversary of the date of grant. All
directors are eligible to receive reimbursement for all ordinary travel
expenses related to attendance at Board or committee meetings.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission ("SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than ten-percent shareholders
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with during the two fiscal years ended May 31, 1998 and May 31,
1997.
6
<PAGE>
PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
It is proposed that the shareholders ratify the appointment of BDO Seidman,
LLP as independent auditors of the Company for the year ending May 31, 1999.
BDO Seidman, LLP served as the Company's independent auditors for the fiscal
year ended May 31, 1998. Representatives of BDO Seidman, LLP are expected to
be present at the meeting with the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS.
Neogen Corporation will furnish a copy of its Annual Report on Form 10-KSB
for the year ended May 31, 1998, without exhibits, without charge to each
person who forwards a written request including representation that he/she
was a shareholder on August 10, 1998 to: Corporate Secretary, Neogen
Corporation, 620 Lesher Place, Lansing, Michigan 48912.
By Order of the Board of Directors
/s/ G. Bruce Papesh
G. Bruce Papesh
Secretary
Dated: August 28, 1998
7
<PAGE>
[ PROXY CARD ]
PROXY - NEOGEN CORPORATION
Annual Meeting of Shareholders - October 8, 1998
The undersigned hereby appoints G. Bruce Papesh and James L. Herbert, and
each of them with full power to appoint his substitute, attorneys and proxies
to represent the shareholder and to vote and act with respect to all shares
that the shareholder would be entitled to vote on all matters which come
before the annual meeting of shareholders of Neogen Corporation referred to
above and at any adjournment of that meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF THIS PROXY IS
PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATIONS ARE MADE, THE SHARES WILL BE VOTED FOR EACH
OF THE PROPOSALS ON THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTER, INCLUDING
SUBSTITUTION OF DIRECTOR NOMINEES, WHICH MAY COME BEFORE THE MEETING.
(Continued and to be signed on the reverse side.)
SEE REVERSE
SIDE
<PAGE>
/ X / Please mark your votes as in this example.
FOR WITHHELD
1. ELECTION OF
DIRECTORS / / / /
To withhold authority to vote for any individual nominee(s) write his or
their names in the following space: ____________________________________
Nominees: Herbert D. Doan, James L. Herbert, G. Bruce Papesh, Gordon E.
Guyer, Robert M. Book, Leonard E. Heller, Jack C. Parnell, Thomas
H. Reed, and Lon M. Bohannon
FOR AGAINST ABSTAIN
2. To ratify the appointment of BDO Seidman,
LLP as independent auditors of
the company for the fiscal year ending
May 31, 1999. / / / / / /
SIGNATURE(S) _________________________________ DATE ____________ , 1998
NOTE: Please sign exactly as your name appears on this proxy. If signed for
estates, trusts, or corporations, title or capacity should be stated.
If shares are held jointly, each holder should sign.
