<PAGE>
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NEOGEN CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NEOGEN CORPORATION
--------------------------------------------------------------------------------
(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)(4) 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 0-11/1/
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
/1/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGOS OF NEOGEN CORPORATION]
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
5, 2000 at 1:00 p.m., local time, at the University Club of Michigan State
University, 3435 Forest Road, Lansing, MI 48909, to consider and act upon the
following matters:
1. The election of three Class I directors to serve for a three year term.
2. To approve an amendment to the Company's 1997 Stock Option Plan increasing
from 400,000 to 1,400,000 the number of shares of the Company's common
stock authorized for issuance under the Plan.
3. 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 on August 7, 2000 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/ Thomas H. Reed
Thomas H. Reed
Secretary
Lansing, Michigan
August 28, 2000
-------------------------------------------------------------------------------
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 5, 2000, at
1:00 p.m., local time, 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 29, 2000,
together with the Company's 2000 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 ac-
cordance 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
the proposal to increase the number of shares authorized for issuance under the
1997 Stock Option Plan.
A simple majority of the shares issued and outstanding as of August 7, 2000
(the "Record Date") must be present or represented at the Annual Meeting to
constitute a quorum. For election of directors, the three 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 by telephone, telegram, facsimile or letter.
2
<PAGE>
Record Date and Principal Share Ownership
Shareholders of record at the close of business on August 7, 2000 are entitled
to notice of and to vote at the meeting. At the Record Date, 5,713,717 shares
of the Company's Common Stock were issued and outstanding. At the Record Date,
the following were known by the Company to be beneficial owners of more than 5%
of the Company's Common Stock.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Total
-------------------------------------------------------
<S> <C> <C>
James L. Herbert (1)
Neogen Corporation
620 Lesher Place
Lansing, MI 48912 380,126 6.7%
Herbert D. Doan (1)
P.O. Box 169
Midland, MI 48640 308,889 5.4%
</TABLE>
(1) Includes 115,416 shares and 7,334 shares of Common Stock which Mr. Herbert
and Mr. Doan, respectively, have the right to acquire by exercise of
options within 60 days of August 7, 2000.
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 May 4, 2001 in order that they may be
included in the proxy statement and form of proxy relating to that meeting.
3
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's By-Laws provide that the Company shall have at least five and
no more than nine directors, with the exact number to be determined by the
Board. The Board of Directors currently is comprised of nine directors. The
directors are classified into three classes to serve for the terms set forth
next to their names or until their successors have been duly qualified and
elected. Unless otherwise instructed, proxy holders will vote the proxies
received by them for the election of the nominees named below. All of the
nominees for director are currently directors of the Company. If any nominee
becomes unavailable for any reason it is intended that the proxies will be
voted for a substitute nominee designated by the Board. The Board of Directors
has no reason to believe that the nominees named will be unable to serve if
elected. Any vacancy occurring on the Board of Directors for any reason may be
filled by vote of a majority of the directors then in office until the next
meeting of shareholders.
<TABLE>
<CAPTION>
Expiration of
Nominees Proposed Term
-------- ------------------
<S> <C>
Class I:
Lon M. Bohannon............................................. 2003
Herbert D. Doan............................................. 2003
Gordon E. Guyer, Ph.D....................................... 2003
<CAPTION>
Directors Continuing in Office Expiration of Term
------------------------------ ------------------
<S> <C>
Class II:
Robert M. Book.............................................. 2001
Leonard E. Heller, Ph.D..................................... 2001
Jack C. Parnell............................................. 2001
Class III:
James L. Herbert............................................ 2002
G. Bruce Papesh............................................. 2002
Thomas H. Reed.............................................. 2002
</TABLE>
<TABLE>
<CAPTION>
Name of Directors Age Position Director Since
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James L. Herbert 60 Chairman, Board of Directors, President and CEO of the Company 1982
Thomas H. Reed (1) (3) 55 Secretary, Director 1995
Lon M. Bohannon 47 Vice President and Chief Operating Officer of the Company, Director 1996
Robert M. Book (2) 70 Director 1990
Herbert D. Doan (1) (2) 77 Director 1982
Gordon E. Guyer, Ph.D. (3) 74 Director 1990
Leonard E. Heller, Ph.D. (3) 55 Director 1992
G. Bruce Papesh (2) 53 Director 1993
Jack C. Parnell (1) 65 Director 1993
</TABLE>
(1) Member, Compensation Committee
(2) Member, Stock Option Committee
(3) Member, Audit Committee
4
<PAGE>
The following is a brief summary of the business experience, including the past
five years, for each of the nominees for and current members of the Board of
Directors.
Nominees and current members of the Board of Directors:
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, was
promoted to Vice President--Administration and Chief Financial Officer in
November 1994 and was named Chief Operating Officer in 1999. He is responsible
for all areas of the Company's operations except 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.
Herbert D. Doan has been a director of the Company since September 1982. He was
the Company's Chairman of the Board of Directors from October 1984 to October
1999. 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.
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.
The Board of Directors recommends a vote FOR the above nominees.
Other current members of the Board of Directors:
James L. Herbert has been President, Chief Executive Officer, and a director of
the Company since he joined Neogen in June 1982. He was named Chairman of the
Board in October 1999. 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.
Thomas H. Reed was elected to the Board of Directors in October 1995 and was
elected Secretary in October 1999. Mr. Reed formerly was Vice President of MLE
Marketing, a division of Southern States Cooperative, Inc. Prior to assuming
that position, he served as President and Chief Executive Officer for the
Michigan Livestock Exchange. 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.
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, a division of Eli Lilly & Co.
Dr. Leonard E. Heller was elected to the Board of Directors in October 1992. He
founded and is CEO of Health Management Services, LLC, a company that provides
services to physician and physician hospital business entities. He formerly was
Secretary for the Cabinet of Human Resources in Kentucky and Chairman of the
Governor's Task Force on Health Reform and consultant on health policy and
pharmaceutical distribution issues.
5
<PAGE>
G. Bruce Papesh was elected to the Board of Directors in October 1993 and was
Secretary from October 1994 to October 1999. Since 1987, Mr. Papesh has served
as President of Dart, Papesh & Co., an investment consulting and financial
services firm. 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. The firm of
Kahn, Soares and Conway currently acts as the Company's government relations
advisor.
Security Ownership of Management
The following table sets forth the beneficial ownership of Common Stock of the
Company as of August 7, 2000 for each current director, each nominee, each
executive officer listed in the summary compensation table below and for all
current directors and executive officers as a group:
<TABLE>
<CAPTION>
Name Number of Shares Percent of Total
-------------------------------------------------------------------------------
<S> <C> <C>
James L. Herbert (1) 380,126 6.7%
Thomas H. Reed (1) 9,600 *
Lon M. Bohannon (1) 117,868 2.1%
Robert M. Book (1) 12,000 *
Herbert D. Doan (1) 308,889 5.4%
Gordon E. Guyer, Ph. D. (1) 24,000 *
Leonard E. Heller, Ph.D. (1) 62,767 1.1%
G. Bruce Papesh (1) 8,000 *
Jack C. Parnell (1) 18,000 *
All current directors and executive officers
as a group (sixteen persons) (1) 1,084,737 19.0%
</TABLE>
*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 7, 2000: Mr. Herbert--108,030 shares; Mr. Reed--9,000
shares; Mr. Bohannon--38,800 shares; Mr. Book--12,000 shares; Mr. Doan--
7,334 shares; Dr. Guyer--14,000 shares; Dr. Heller--20,000 shares; Mr.
Papesh--8,000 shares; Mr. Parnell--18,000 shares; all current directors and
executive officers as a group--341,383 shares.
Board Meetings and Committees
The Board of Directors of the Company held six meetings during the fiscal year
ended May 31, 2000. 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 one time in fiscal year 2000, has responsibility of 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 fiscal year 2000, 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 three meetings during fiscal year 2000.
6
<PAGE>
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 2000. The Board will
consider nominees recommended by shareholders provided such recommendations are
in writing and received by the Company no later than May 4, 2001.
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, 2000 $171,828 $70,000 45,000 $5,840
Chief Executive Officer 1999 $162,376 $20,000 40,000 $4,555
1998 $153,163 $30,000 30,000 $3,852
Lon M. Bohannon, Vice President, 2000 $111,256 $16,500 20,000 $4,624
Chief Operating Officer 1999 $ 94,448 $16,000 17,000 $3,648
1998 $ 89,459 $15,000 15,000 $2,649
</TABLE>
(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
($310,000 at May 31, 2000) of an annuity owned by the Company is payable to
Mr. Herbert or his estate upon death, retirement or termination of
employment.
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, 2000. No stock appreciation rights (SARS) were
granted during such period.
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------
Potential Realized Value at
Assumed Annual Rates of
Percent of Total Stock Price Appreciation
Options Granted at End of Option Term
to Employees Exercise Price Expiration ---------------------------
Name Granted in Fiscal Year Per Share Date 5% 10%
---------------- ------- ---------------- -------------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
James L. Herbert 36,228(1) 18.3% $6.50 08/24/04 $ 65,059 $ 143,764
8,772(2) 4.4% $6.50 08/24/09 $ 35,858 $ 90,872
Lon M. Bohannon 19,015(1) 9.6% $6.50 08/24/04 $ 34,148 $ 75,458
985(2) .5% $6.50 08/24/09 $ 4,026 $ 10,204
</TABLE>
(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.
7
<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,
2000 and the value of outstanding and unexercised options held as a May 31,
2000, based upon the market value of the Company's Common Stock of $6.00 per
share on that date. There were no SARS outstanding or exercised as of or for
the year ended May 31, 2000.
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, 2000 at May 31, 2000(2)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James L.
Herbert 0 $ 0 79,482 90,518 $ 0 $ 0
Lon M.
Bohannon 0 $ 0 24,000 50,000 $ 0 $ 0
</TABLE>
(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 Common Stock
at May 31, 2000 of $6.00 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, 2000 upon the exercise of all in-the-money options.
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 are
granted non-qualified options to purchase 5,000 shares of Common Stock when
first elected to the Board of Directors and non-qualified options to purchase
2,000 shares of Common Stock upon subsequent election to, or commencement of
annual service on, 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.
Compensation Committee Report on Executive Compensation
General. The Compensation Committee's overall compensation policy applicable
to the Company's executive officers is to provide a compensation program that
is intended to attract and retain qualified executives for the Company and to
provide them with incentives to achieve Company goals and increase shareholder
value. The Compensation Committee implements this policy through establishing
salaries and bonuses. The Compensation Committee's current policy is not to
provide significant pension or other retirement benefits for the Company's
employees.
Salaries. The Compensation Committee's policy is to provide salaries that are
generally similar to those of similar executive officers in similar companies.
The Compensation Committee determines comparable salaries through discussions
with candidates for such positions, Company research and independent surveys
concerning the salaries paid by similar companies.
Performance Bonuses. The payment of bonuses to executive officers is directly
related to their achievement of corporate and individual performance goals
established at the beginning of the year. The amount of the bonus paid, if any,
varies among the executive officers depending on their success in achieving
individual performance goals and on their contribution to the achievement of
corporate performance goals.
8
<PAGE>
Stock Options. Stock options are awarded by the Stock Option Committee of the
Board of Directors. The Stock Option Committee's policy is to award stock
options to the Company's officers in amounts reflecting the participant's
position and ability to influence the Company's overall performance. Options
are intended to provide participants with an increased incentive to make
contributions to the long-term performance of growth of the Company, to join
the interests of participants with the interests of shareholders of the Company
and to attract the retain qualified employees. The Stock Option Committee's
policy has been to grant options with terms of five to ten years to provide a
long-term incentive and to fix the exercise price of the options at the fair
market value of the underlying shares on the date of grant. As a result, such
options will only have value if the price of the underlying shares increases.
Fiscal 2000 Compensation Decisions Regarding James Herbert. The compensation
of James L. Herbert, President and Chief Executive Officer, is recommended by
the Compensation Committee to the Board of Directors based on the Committee's
knowledge of the level necessary to enable the Company to remain competitive
and retain top management.
In addition, Mr. Herbert's compensation is based on the Committee's subjective
assessment of his progress toward achieving Company goals and objectives
pertaining to the development and marketing of products dedicated to food and
animal safety. Particular consideration is given to progress toward enhancing
long-term shareholder value which includes overall growth in sales and
operating and net profit for the Company's most recent fiscal year.
Incentive compensation payments to Mr. Herbert are made partially in the form
of cash intended to reward Mr. Herbert for achievement of individual and
corporate objectives, partially in the form of stock options, intended to
provide Mr. Herbert with increased incentive to focus on long-term performance
growth of the Company that will enhance shareholder value, and partially in the
form of contributions to an annuity owned by the Company and payable to Mr.
Herbert or his estate upon death, retirement or termination of employment.
Mr. Herbert did not participate in the approval of his own compensation, but
did participate in discussion of the Company's performance for fiscal 2000 and
the determination of bonuses for other executive officers of the Company.
By the Compensation Committee
Herbert D. Doan (Chairman)
Jack C. Parnell
Thomas H. Reed
9
<PAGE>
Audit Committee Report
The Audit Committee has adopted the following Charter governing its membership
criteria and activities:
AUDIT COMMITTEE CHARTER
The Audit Committee shall be appointed by the Chairman of the Board of
Directors of Neogen Corporation and shall consist of Directors of the Company
who are independent of Management and the Company. All Audit Committee members
shall be financially literate and one or more members shall have accounting or
financial management expertise. This Charter, shall be amended as necessary and
approved annually by the Board of Directors of Neogen Corporation.
The Audit Committee shall provide assistance to the Board of Directors of
Neogen Corporation in fulfilling its oversight responsibilities to the
shareholders and other stakeholders related to the Company's financial
statements and financial controls. The Audit Committee shall maintain open
dialog between Directors, Independent Auditors, and Management. The Committee
is empowered to investigate any financial matter brought to its attention with
full access to all books, records, facilities, and personnel of the Company and
the power to retain outside counsel or other experts for this purpose.
The Audit Committee shall have a clear understanding with Management and the
Independent Auditors that the Independent Auditors are ultimately accountable
to the Board of Directors of Neogen Corporation and the Audit Committee. The
Audit Committee shall have the ultimate authority and responsibility to
evaluate and, where appropriate, recommend to the Board the replacement of the
Independent Auditors. Annually the Committee shall review and recommend to the
Board of Directors the selection of the Company's Independent Auditor.
The Audit Committee shall report in Neogen Corporation's Proxy statement that
it has:
1) Discussed with the Independent Auditors the matters required to be
discussed by Statement on Auditing Standards #61. These matters
include communications of any significant changes in accounting
procedures, sensitive accounting estimates, and significant
adjustments in financial reporting. In addition, the auditor requires
that the Audit Committee be informed of serious difficulties in
dealing with management related to the performance of the audit or of
any disagreements and unresolved issues significant to the financial
statements.
2) Received from the Independent Auditors disclosures regarding the
auditors independence required by Independence Standards Board
Statement #1. These disclosures include receiving a written statement
of any professional and business relationships that may impair its
independence.
3) Reviewed and discussed the audited financial statements with
Management and the Independent Auditors and that based on this review
and discussion it recommends to the Board of Directors that the
audited financial statements be included in the Company's report on
Form 10-K.
Recommendation
Based upon the completion of the items outlined in the charter, the Audit
Committee recommends to the Board of Directors that the financial statements be
included in the Annual Report on Form 10-K for the period ended May 31, 2000
for filing with the SEC.
By the Audit Committee
Dr. Leonard E. Heller (Chairman)
Dr. Gordon E. Guyer
Thomas H. Reed
10
<PAGE>
Stock Performance Graph
The following line graph compares for the fiscal years ended May 31, 1996,
1997, 1998, 1999, and 2000 (i) the yearly cumulative total shareholder return
on the Company's common stock with (ii) the cumulative total return of the
Russell 2000 Index and with (iii) a Peer Group Index. The Peer Group consists
of Strategic Diagnostics Corporation, Idexx Laboratories, Inc., Synbiotics
Corporation, MEDTOX Scientific, Inc., ImmuCell Corporation, Hemagen
Diagnostics, Inc., and Embrex, Inc.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C> <C>
Neogen Corporation $100 $114 $100 $125 $100 $86
Peer Group $100 $131 $65 $104 $98 $179
Russell 2000 Index $100 $134 $131 $149 $136 $148
</TABLE>
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, 2000 except that one
report covering one transaction in fiscal year 1999 was filed late by Gerald S.
Traynor, a Company Vice President and one report covering one transaction in
fiscal year 2000 was filed late by Lon M. Bohannon, a Company Vice President
and Chief Operating Officer. As of the date hereof the Company is not aware of
any failure to file a required report.
11
<PAGE>
PROPOSAL 2
AMENDMENT TO NEOGEN CORPORATION 1997 STOCK OPTION PLAN
At the meeting, shareholders will be asked to consider and act upon a proposal
to approve an amendment to the Neogen Corporation 1997 Stock Option Plan (the
"Plan") increasing the number of shares authorized for issuance from 400,000
shares to 1,400,000 shares.
The Board of Directors believes that it is in the Company's and its
shareholders' best interests to approve the amendments to the Plan to allow the
Company to continue to grant stock options to secure for the Company the
benefits of the additional incentive inherent in the ownership of its Common
Stock by directors, Scientific Review Council ("SRC") members, and key
employees (including officers), to help the Company attract, secure and retain
the services of these persons and to provide these persons with an opportunity
to acquire or enlarge their stock ownership so they might have a direct
interest in the Company's success. Non-employee directors and SRC members do
not receive any other compensation for their services as directors, committee
members or SRC members of the Company. As of May 31, 2000, 12,000 shares were
available for issuance under the plan.
The Company will furnish a full copy of the Plan, as amended, without charge to
each person who forwards a written request including representation that he or
she was a shareholder on August 7, 2000 to: Corporate Secretary, Neogen
Corporation, 620 Lesher Place, Lansing, Michigan 48912. The Company's Board of
Directors has approved the amendment to the Plan, subject to shareholder
approval. The major features of the Plan are summarized below, but this is only
a summary and is qualified in its entirety by reference to the actual text.
Capitalized terms not otherwise defined in this Proxy Statement have the
meanings given them in the Plan. As of the Record Date, the closing sale price
of the Company's Common Stock was $6.375.
Approval of the Amendment to the Plan
The approval by a majority of the votes cast by the holders of Common Shares at
the meeting and entitled to vote on the action is necessary for shareholder
approval of the Plan. Abstentions, withheld votes and broker nonvotes will not
be deemed votes cast in determining approval of this 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 Board of Directors recommends a vote FOR Proposal 2.
OTHER MATTERS
Independent Public Accountant
BDO Seidman L.L.P. is the independent auditor for the Company and its
subsidiaries and has reported on the consolidated financial statements included
in the Annual Report of the Company which accompanies this proxy statement. The
Company's independent auditor is appointed by the Board of Directors.
Representatives of BDO Seidman L.L.P. are expected to be present at the Annual
Meeting of Shareholders and will be available to respond to appropriate
questions and will have an opportunity to make a statement at the meeting if
they desire to do so.
Other Proposals
Neither the Company nor its Board of Directors intends to bring before the
Annual Meeting any matters other than those set forth in the Notice of Annual
Meeting, and they have no present knowledge that any other matters will be
presented for action at the Meeting by others. However, if any other matters
properly come before such Meeting, it is the intention of the persons named in
the enclosed form of proxy to vote in accordance with their best judgement.
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Neogen Corporation will furnish a copy of its Annual Report on Form 10-K for
the year ended May 31, 2000, without exhibits, without charge to each person
who forwards a written request including representation that he/she was a
shareholder on August 7, 2000 to: Corporate Secretary, Neogen Corporation, 620
Lesher Place, Lansing, Michigan 48912.
By order of the Board of Directors
/s/ Thomas H. Reed
Thomas H. Reed
Secretary
Dated: August 28, 2000
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PROXY - NEOGEN CORPORATION
Annual Meeting of Shareholders - October 5, 2000
The undersigned hereby appoints Thomas H. Reed 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.)
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SEE REVERSE
SIDE
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<PAGE>
A [X] Please mark your
votes as in this
example using dark
ink only.
FOR WITHHELD Nominees:
1. ELECTION OF DIRECTORS [ ] [ ] Herbert D. Doan, Gordon E. Guyer,
and Lon M. Bohannon
To withhold authority to vote for any individual nominee(s)
write his or their names in the following space:
--------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To approve an amendment to the [ ] [ ] [ ]
Company's 1997 Stock Option
Plan increasing from 400,000 to
1,400,000 the number of shares
of the Company's Common Stock
authorized for issuance under
the plan.
SIGNATURE(S) DATE ,2000
-------------------- ------------
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.
