SCHEDULE 14A --- INFORMATION REQUIRED IN PROXY
STATEMENT
SCHEDULE 14A INFORMATION
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 appropirate 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
BIOTECHNICA INTERNATIONAL, INC.
(Name of the Registrant as Specified in its Charter)
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
1-11.
(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:
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_____ 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
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BIOTECHNICA INTERNATIONAL, INC.
4001 War Memorial Drive
Peoria, IL 61614
(309) 681-0300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on November 12, 1997
To the Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the
"Annual Meeting") of BioTechnica International, Inc., a Delaware
corporation (the "Corporation" or "BioTechnica"), will be held at the
Signature Inn, 4112 North Brandywine Drive, Peoria, Illinois 61614, on
Wednesday, November 12, 1997 at 10:00 A.M., local time, for the following
purposes:
(1) To elect seven directors to serve until the next annual meeting
and until their successors shall be elected and shall qualify;
(2) To ratify the appointment of KPMG Peat Marwick LLP, as indepen-
dent auditors of the Corporation for the fiscal year ending
June 30, 1998; and
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
All of the above matters are more fully described in the
accompanying Proxy Statement, into which this Notice is incorporated by
reference.
The Board of Directors has fixed the close of business on September
19, 1997 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof, and only shareholders of record at the close of
business on that date will be entitled to vote.
IN ORDER THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING,
PLEASE FILL OUT, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY OR
PLAN TO ATTEND THE ANNUAL MEETING IN PERSON OR BY PROXY. A RETURN
ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE, IS ENCLOSED. IF YOU LATER
DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO AT
ANY TIME BEFORE THE VOTING, BY DELIVERING TO THE CORPORATION A WRITTEN
NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY
ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
By Order of the Board of Directors
Bruno Carette
President and Chief Executive Officer
Peoria, Illinois
October 15, 1997
BIOTECHNICA INTERNATIONAL, INC.
4001 War Memorial Drive
Peoria, IL 61614
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held on November 12, 1997
GENERAL INFORMATION
INTRODUCTION. This Proxy Statement is furnished in connection with
the solicitation by and on behalf of the Board of Directors of the
Corporation of proxies for use at the annual meeting of shareholders to
be held at the Signature Inn, 4112 North Brandywine Drive, Peoria,
Illinois 61614, on Wednesday, November 12, 1997, at 10:00 A.M., local
time, and at any adjournment thereof ("Annual Meeting"),and, together
with the enclosed Form of Proxy and Annual Report to Shareholders for the
fiscal year ended June 30, 1997 (the "Annual Report"), is being mailed to
the shareholders on or about October 20, 1997. Except for items
specifically incorporated by reference herein, the Annual Report does not
form any part of this Proxy Statement. The complete mailing address of
the Corporation's principal executive offices is 4001 War Memorial Drive,
Peoria, Illinois 61614.
REVOCABILITY OF PROXIES. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before
the voting by delivering to the Corporation a written notice of
revocation or a duly executed proxy bearing a later date or by attending
the meeting and voting in person.
COST OF SOLICITATION. The entire cost of this solicitation will be
paid by the Corporation. In addition, the Corporation may reimburse
brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such
beneficial owners. In addition to solicitation by mail, officers and
regular employees of the Corporation may solicit proxies from
shareholders by telephone, telegram or personal interview. Such persons
will receive no additional compensation for such services.
QUORUM AND VOTING. The authorized capital stock of the Corporation
consists of 150,000,000 shares of common stock, $.01 par value;
11,100,000 shares of Class A common stock, $.01 par value; 11,100,000
shares of Class B common stock, $.01 par value; and 2,000,000 shares of
Preferred Stock, $.01 par value (collectively, the shares of the common
stock, Class A common stock, Class B common stock, and Preferred Stock
may be referred to herein as the "Capital Stock"). As of September 19,
1997, there are outstanding 104,055,577 shares of common stock;
- - -0- shares of Class A common stock, -0- shares of Class B common stock;
and 900,000 shares of Class A Preferred Stock. All of the issued and
outstanding shares of common stock of record as of September 19, 1997 are
entitled to vote at the Annual Meeting.
Only shareholders of record (not including Treasury Shares) of the
104,055,577 shares of the common stock, outstanding as of the close of
business on September 19, 1997, will be entitled to vote. Each share of
common stock is entitled to one vote upon each matter submitted to a vote
of the shareholders of the Corporation at the Annual Meeting or any
adjournment thereof. The presence, in person or by proxy, of the holders
of a majority of the outstanding shares of the common stock entitled to
vote is necessary to constitute a quorum at the Annual Meeting. Votes
submitted as abstentions on any matter to be voted on at the Annual
Meeting will be counted as votes against such matters. Broker non-votes
will not count for or against the election of directors, or the
ratification of the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Corporation.
PROPOSAL 1: ELECTION OF DIRECTORS
In accordance with the Corporation's Bylaws, the Board of Directors
has fixed the number of directors at seven (7). At the Annual Meeting,
the shareholders of the Corporation will be asked to consider and vote
upon the election of seven (7) directors to serve until the next annual
meeting and until their successors shall be elected and shall qualify.
Unless authority to vote for any of the nominees named below is withheld,
the shares represented by the enclosed proxy will be voted for the
election of such nominees as directors of the Corporation. The Board of
Directors has no reason to believe that any nominee will become
unavailable for election. However, in the event any one or more of such
nominees shall unexpectedly become unavailable for election, the shares
represented by the enclosed proxy will be voted for the election of such
other persons as may be designated by the Board of Directors.
The following information is furnished with respect to the nominees for
election as Directors of the Corporation:
Principal Occupations the Last Director
Name Age Five Years; Other Directorships Since
Claude Agier 53 Mr. Agier has been a member of the
Limagrain Cooperative since 1966 and 1994
has served as a director of all the
companies belonging to the Field
Seeds Division of the Limagrain Group
since 1985. Mr. Agier manages a farm
of 150 acres.
George R. Allbritten 66 Mr. Allbritten retired as the Vice 1994
President-Finance, Secretary, Treasurer,
and Chief Financial Officer of the
Corporation on August 31, 1994, an office
he had held since October 1993. From
December 1990 to October 1993, Mr.
Allbritten was President-Chief Operating
Officer of Ferry-Morse Seed Company, a
subsidiary of Limagrain, where he also
served as Senior Vice President from 1983
to 1990 and Vice President-Finance from
1973 to 1983.
Bruno Carette 42 Mr. Carette was appointed Chief Execu- 1997
tive Officer of the Corporation effective
September 1, 1997. In addition, he has
served as President and Chief Operating
Officer since July 1, 1996. He served
as Vice President, Sales and Marketing
of the Corporation from 1994 to 1996.
From 1990 to 1993, Mr. Carette was
Company Production Manager at Vilmorin
S.A., a Limagrain affiliate. Prior to
that, he was the Overseas Production
Manager for Vilmorin S.A. from 1988 to
1990.
Ralph W.F. Hardy 63 In 1996, Dr. Hardy became President of 1984
the National Agricultural Biotechnology
Council and a Board member and Corporate
Secretary of the United States Department
of Agriculture's Alternative Agriculture
Research and Commercialization Corpora-
tion. From September 1987 until August
1995, Dr. Hardy was President and Chief
Executive Officer of the Boyce Thompson
Institute for Plant Research at Cornell
University. From November 1984 to January
1986, Dr. Hardy was President and Chief
Operating Officer of the Corporation.
Serge Lebreton 57 Mr. Lebreton joined the Limagrain Coop- 1997
erative Board of Directors in 1969 as
Vice Chairman/Treasurer. In 1984 he
was appointed President of the Corn
Seeds Division of the Limagrain Group.
Since 1993, he has been the President
of the Bio-Health Division of the Group
and Chairman of the Dolisos companies.
He serves as President of the regional
section of ONIC (Office National Inter-
professional des Cereales) and as a
member of the Board of Directors of a
local banking agency of the Credit
Agricole.
Claude Lescoffit 50 Mr. Lescoffit is an Engineer of Ecole 1997
des Mines de Paris. After several years
in French Research Laboratories, and in-
dustrial experience in the steelmaking
and automotive industry, he joined
Michelin in 1982. In 1987, he became
Executive Vice President in charge of
process engineering. He was a member of
the Executive Committee of Michelin.
He joined Groupe Limagrain in 1996 as
Corporate Vice President in charge of
development of biotechnologies. In 1997,
he became Chief Executive Officer of
Limagrain Agro-Genetics, the field seeds
division of Limagrain. He is also Presi-
dent of the Executive Committee of BIOGEMMA,
a joint venture in biotechnology between
several seed companies in Europe.
Laurent Petoton 61 Mr. Petoton has been a member of the 1994
Limagrain Cooperative since 1971 and
has served as director since 1978. He
has been Chairman of the Board of
Directors of Force Limagrain BV (Holland)
since 1989 and has served as a director
of all the companies belonging to the
Field Seeds Division of the Limagrain
Group since 1985. Mr. Petoton is a
Board member of the local branch of the
Credit Agricole Bank.
DIRECTOR'S COMPENSATION, MEETINGS AND COMMITTEES
Groupe Limagrain Holding S.A. ("Limagrain"), through its majority-owned
subsidiary, Limagrain Genetics Corp. ("LG Corp."), owns approximately 94%
of the common stock and 100% of the preferred stock of the Corporation.
Limagrain has nominated and elected three members of its Board of
Directors and one member of its senior management to serve on the Board
of Directors of the Corporation.
Directors who are not salaried employees of, or consultants to, the
Corporation or representatives of Limagrain are entitled to receive an
annual retainer of $4,000 each. Directors who are salaried employees of
the Corporation are not entitled to any additional remuneration above and
beyond their salary. Directors who are representatives of Limagrain are
not entitled to any remuneration from the Corporation. Directors who are
consultants to the Corporation are not entitled to any additional
remuneration above and beyond the amounts set forth in their individual
consulting agreements. Messrs. Lebreton, Lescoffit, Agier and Petoton are
considered representatives of Limagrain, and therefore, received no
remuneration from the Company for their services as Directors of the
Corporation. Dr. Hardy and Mr. Hittinger (a director of the Corporation
until resigning in August, 1997), had consulting agreements with the
Corporation which provided for the payment of $15,000 per year. During
the year ended June 30, 1997 ("Fiscal 1997"), Dr. Hardy and Mr. Hittinger
were paid $15,000. Mr. Allbritten received an annual retainer of $4,000.
Mr. Carette is an employee of the Corporation and, therefore, receives no
additional remuneration above and beyond his salary.
The Board of Directors of the Corporation held two (2) meetings during
Fiscal 1997. During that fiscal year, no incumbent director attended
fewer than 100% of the meetings of the Board of Directors and the
committees of the Board of Directors upon which he served.
The Board of Directors has appointed an Audit Committee and a
Compensation Committee. The Audit Committee consists of Dr. Hardy, and
Messrs. Allbritten, Carette and Lescoffit. The Audit Committee's
functions are to recommend the selection of independent auditors and to
carry out such activities related to the financial statements of the
Corporation as the Board of Directors shall from time to time request.
The Audit Committee held one (1) meeting during Fiscal 1997.
The Compensation Committee, which consists of Messrs. Agier, Petoton
and Lescoffit, reviews and approves employment policies and administers
the 1992 Stock Incentive Plan. The Compensation Committee held one (1)
meeting during Fiscal 1997.
A vote of a plurality of all shares of the common stock present in
person or by proxy and voting at the Annual Meeting is necessary for the
election of the nominees as directors of the Corporation. IF LIMAGRAIN,
WHICH CONTROLS APPROXIMATELY 94% OF THE ISSUED AND OUTSTANDING SHARES OF
COMMON STOCK OF THE CORPORATION, VOTES ITS SHARES IN FAVOR OF THE
ELECTION OF THE NOMINEES FOR THE BOARD OF DIRECTORS NAMED ABOVE, THEN
SUCH NOMINEES WILL BE ELECTED TO THE BOARD OF DIRECTORS, REGARDLESS OF
THE VOTE OF ANY OTHER SHAREHOLDER.
THE BOARD OF DIRECTORS RECOMMENDS ELECTION OF THE NOMINEES LISTED ABOVE
AS DIRECTORS OF THE CORPORATION.
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
auditors, to audit the financial statements of the Corporation for the
fiscal year ending June 30, 1998. KPMG Peat Marwick LLP has audited the
Corporation's financial statements annually since 1981.
Representatives of KPMG Peat Marwick LLP will be available for the
Annual Meeting with the opportunity to make a statement and to respond to
appropriate questions.
A vote of the majority of all shares present in person or by proxy and
voting at the Annual Meeting is necessary for the ratification of KPMG
Peat Marwick LLP as the Corporation's independent auditors for the fiscal
year ending June 30, 1998. If the appointment of KPMG Peat Marwick LLP is
not approved at the Annual Meeting, the Board of Directors will consider
the selection of another accounting firm. IF LIMAGRAIN, WHICH CONTROLS
APPROXIMATELY 94% OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF
THE CORPORATION, VOTES ITS SHARES IN FAVOR OF THE RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1998, THE APPOINTMENT WILL
BE RATIFIED REGARDLESS OF THE VOTE OF ANY OTHER SHAREHOLDER.
THE BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION OF THE APPOINTMENT
OF KPMG PEAT MARWICK LLP AS THE CORPORATION'S AUDITORS FOR THE FISCAL
YEAR ENDING JUNE 30, 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning the
record and beneficial ownership of each shareholder known to the
Corporation to be the beneficial owner of more than five percent of the
Corporation's common stock as of September 20, 1997. The persons
identified have sole voting and investment power with respect to all such
shares unless otherwise noted.
Number of Shares of Approximate Percentage
Common Stock of Common Stock
Beneficially Owned(1) Beneficially Owned(2)
Groupe Limagrain 98,277,178(3) 94%
Holding S.A.
BP1
63720 Chappes
France
(1)None of the shares disclosed in this column represent shares with
respect to which the holders thereof have the right to acquire bene-
ficial ownership as specified in Rule 13d-3(d)(1) under the Securi-
ties Exchange Act of 1934, as amended.
(2)Percentages of common stock held are based on 104,055,577 shares of
common stock outstanding as of September 19, 1997, excluding
39,160 treasury shares.
(3)Consists of 98,277,178 shares of common stock owned beneficially
and of record by its subsidiary LG Corp.
MANAGEMENT OF BIOTECHNICA
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of September 19, 1997, certain
information regarding the beneficial ownership of the common stock held
by each director, each nominee for election as a director and by all
directors and executive officers as a group. None of the directors
beneficially own any other class of equity securities other than common
stock. The persons identified have sole voting and investment power with
respect to such shares unless otherwise noted. Claude Agier, George
Allbritten, Bruno Carette, Claude Lescoffit, Serge Lebreton, and Laurent
Petoton are not record or beneficial owners of any shares of common stock
of the Corporation.
Number of Shares of Approximate Percentage
Common Stock of Common Stock
Beneficially Owned Beneficially Owned
Ralph W.F. Hardy 4,830 *
All directors and executive 11,080 *
officers as a group--nine
(9) persons
*Denotes less than 1%
INFORMATION ABOUT EXECUTIVE OFFICERS
Information about the executive officers of the Corporation who are
not nominees for election as Directors is set forth below. All executive
officers serve at the discretion of the Board of Directors and are
members of the BioTechnica International, Inc./LG Seeds, Inc. Operating
Committee.
During Fiscal 1997 and until August 31, 1997, Mr. Emmanuel Rougier
served as Chief Executive Officer of the Corporation. He was not an
employee of the Corporation, nor did he receive any direct compensation
from the Corporation. (See "CERTAIN RELATIONSHIPS AND OTHER RELATED
TRANSACTIONS-LIMAGRAIN GENETICS INTERNATIONAL SERVICE AGREEMENT").
Effective September 1, 1997, Mr. Bruno Carette, President and Chief
Operating Officer of the Corporation assumed the duties of Chief
Executive Officer.
Position with the Corporation, Principal
Name Age Occupations During the Last Five Years
Roger E. Bonsack 45 Mr. Bonsack was appointed National Sales Manager
of the Corporation as of July 1, 1996. Prior to
that date, he was the Location Sales and
Marketing Manager of the Corporation's Tekamah,
NE Service Center since July, 1991. Prior to
that, he served in various management positions
with Dekalb Genetics.
Jacqui Doublier 46 Mr. Doublier was appointed Manager, Marketing
and Product Development of the Corporation as of
September 16, 1996. Prior to that, he was
Export Sales Manager from 1989 to 1996 at
Vilmorin S.A., a Limagrain affiliate in the
field of vegetable seeds.
Edward M. Germain 45 Mr. Germain was appointed Vice President,
Finance, Chief Financial Officer and Secretary
of the Corporation as of July 1, 1996. Prior
to that date, he served as Chief Financial
Officer and Secretary of the Corporation since
November 1, 1994. Prior to that, he served as
Controller of Shissler Seed Company from 1993
to 1994 and held various financial and
management positions with Briggs Industries,
Inc. and Pekin Energy Company.
Larry D. Rieffel 50 Mr. Rieffel was appointed Vice President,
Production and Logistics as of July 1, 1996.
Prior to that date he served as Corporate
Production and Logistics Manager of the
Corporation since July 1, 1994. Prior to that,
he served in various senior management positions
of the Corporation and with NobleBear Seed
Company before it was acquired by the
Corporation.
Barbara A. Wittig 31 Ms. Wittig was appointed Human Resources,
Training and Internal Communications Manager of
the Corporation as of July 1, 1997. Prior to
that date, she was the Human Resources Manager
of the Corporation since August, 1994. Prior to
that, she served in various positions with
Dialysis Centers of America and Burns Interna-
tional Security Services.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The following is the report of the Compensation Committee of the
Corporation (the "Committee") on executive compensation for Fiscal 1997
for executives of the Corporation other than the CEO.
COMPENSATION PHILOSOPHY: The Committee believes that it is in the
best interest of the shareholders of the Corporation for the Corporation
to attract, maintain and motivate top quality management personnel,
especially its executive officers. The general philosophy of the
Committee is to integrate (i) reasonable levels of annual base
compensation and (ii) annual cash bonuses based on achievement of short-
term corporate and individual performance goals, such that executive
compensation levels will be higher in years in which performance goals
are achieved or exceeded.
The elements of the Committee's integrated compensation philosophy are
summarized as follows:
BASE COMPENSATION LEVELS: The base compensation levels for the
management of the Corporation are determined according to the
compensation policy in place at Limagrain for its executives.
PERFORMANCE BASED COMPENSATION: The compensation package for
management of the Corporation also includes performance-based elements.
Annual cash bonuses can be earned based on achievement of Corporation
and/or individual base performance goals determined at the beginning of
the year by the Committee for Mr. Carette, President and Chief Executive
Officer of the Corporation, and proposed by Mr. Carette and reviewed by
the Committee for all other executives. Economic results are the primary
measure of Corporate performance.
RELATIONSHIP OF CORPORATE PERFORMANCE TO FISCAL 1997 COMPENSATION: For
Fiscal 1997, the potential performance based compensation amount for Mr.
Carette consisted of a cash bonus to be paid subsequent to the end of the
fiscal year. The amount to be paid will be calculated based on two
factors: (i) an amount based on an amount approximately equal to cash
generated by operations above a certain level; and (ii) an amount based
upon the financial results of Limagrain Genetics International. As of
August 31, 1997, the amount of any such bonus, if any, has not been
calculated.
A substantially similar arrangement existed for Fiscal 1996 under
which Mr. Carette received a cash bonus of $-0-.
COMPENSATION OF FORMER CHIEF EXECUTIVE OFFICER: Effective August 31,
1997, Mr. Emmanuel Rougier resigned as Chief Executive Officer of the
Corporation to assume duties in another division of Limagrain. During
Fiscal 1997, Mr. Rougier served as Chief Executive Officer of the
Corporation. He did not receive any compensation directly from the
Corporation. Mr. Rougier was an employee of Limagrain, not the
Corporation. The Corporation entered into a service agreement (see
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS") with Limagrain Genetics
International, an affiliate of the Corporation, to provide various
management, administrative, and financial services. This service
agreement covered services provided by Mr. Rougier and, therefore, the
costs of Mr. Rougier's services were covered by and included in that
service agreement. The Corporation did not provide any additional direct
or indirect compensation to Mr. Rougier.
The Compensation Committee is composed of Messrs. Lescoffit, Petoton
and Agier, none of whom are employees of the Corporation, but all of whom
are representatives of Limagrain.
Claude Lescoffit, Chairman
Laurent Petoton
Claude Agier
STOCK PERFORMANCE GRAPH
The following line graph compares the yearly percentage change:
(i) in the Corporation's cumulative Total Stockholders Return (as
herein defined) (the "diamond" line); with
(ii) the cumulative Total Stockholders Return of the NASDAQ
United States Composite Index (the "triangle" line); with
(iii) the cumulative Total Stockholders Return of a customized group
of companies involved in the seed industry (the "Custom
Composite Index") (the "square" line).
"Total Stockholders Return" is calculated quarterly, with dividends
reinvested at the ex-dividend date for each quarter and return
compounded. The graph uses an initial investment of $100 on December 31,
1991, cumulating the total return for each month for each component,
BioTechnica, the NASDAQ United States Composite Index and the Custom
Composite Index, each assuming dividend reinvestment. The Custom
Composite Index was prepared by weighting the return of each group member
according to its respective market capitalization on a quarterly basis.
The Custom Composite Index consists of AgriBioTech, Inc., DEKALB
Genetics Corp. - Class B, Delta and Pine Land Co., Mycogen Corp., Pioneer
Hi-Bred International, The Scotts Company - Class A, and Zeneca Group
Plc-ADR. Some companies included in the Custom Composite Index became
publicly traded after December 1989. These companies and the dates they
began trading are: The Scotts Company-Class A-January 31, 1992; Zeneca
Group Plc ADR-May 12, 1993; Delta and Pine Land Co.-June 30, 1993; and
AgriBioTech, Inc.-December 13, 1993.
The Corporation's fiscal year currently ends June 30. Prior to 1994,
the Corporation's fiscal year ended July 31; prior to 1992, the
Corporation's fiscal year ended December 31.
The historical stock price performance shown on this graph is not
necessarily indicative of future performance.
7/92 7/93 6/94 6/95 6/96 6/97
BioTechnica Intl. $100 $ 75.00 $ 15.63 $ 8.34 $ 25.00 $ 4.17
Custom Composite $100 $105.78 $128.00 $193.20 $260.48 $394.56
Index
NASDAQ Market
Index $100 $122.76 $134.61 $157.88 $198.73 $239.40
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE: The following table summarizes, for each
of the last three fiscal periods, the compensation awarded, paid to or
earned by (i) the former CEO of the Corporation, (ii) the current CEO and
COO, who performed many of the functions normally associated with the CEO
function, and (iii) each of the four most highly compensated executive
officers other than the CEO or COO who served as executive officers of
the Corporation or its subsidiaries, as of June 30, 1997, whose annual
compensation exceeded $100,000, if any. The Corporation does not
currently award restricted stock, stock options, stock appreciation
rights, or other long-term incentive compensation under its executive
compensation program.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Name and Annual Compensation Awards All Other
Principal Position Year Salary Bonus Options/SARs Compensation
Emmanuel Rougier (1)
Former Chief
Executive Officer
Bruno Carette 1997 $107,570(2) $-0- (3)
President and Chief 1996 $ 88,225(2) $-0- (3)
Executive Officer 1995 $ 85,621(2) $-0- (3)
Note: Prior to July 1, 1996, Mr. Carette was Vice President-Sales and
Marketing of the Corporation. From July 1, 1996 to the present, he was
President and Chief Operating Officer. Effective September 1, 1997, Mr.
Carette assumed the duties of Chief Executive Officer upon the
resignation of Mr. Rougier.
No other officers of the Corporation had annual compensation in excess of
$100,000.
(1) Mr. Rougier was the Chief Executive Officer of the Corporation
until September 1, 1997. He is not paid by the Corporation. See
"COMPENSATION OF FORMER CHIEF EXECUTIVE OFFICER" and "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
(2) Includes personal use of Corporation automobile.
(3) Mr. Carette is covered under the retirement system established under
French law. The French retirement system is similar to the United
States social security system -- a company makes mandatory
contributions on behalf of all of its employees based on a
percentage of the employee's salary. The funds are paid to, and
administered by, a governmental entity. The amount of the
contribution on behalf of each employee is mandatory. In addition,
in France a company may elect to make additional contributions
on behalf of its employees and if a company chooses to do so,
such additional contributions are governed by the same principles
as for the mandatory contributions as described herein. Limagrain
normally makes additional contributions on behalf of all of its
employees. See discussion of Limagrain Genetics International
Service Agreement under "CERTAIN RELATIONSHIPS AND OTHER RELATED
TRANSACTIONS."
OPTION/SAR GRANTS IN FISCAL 1997
During Fiscal 1997, there were no options/SARs granted to any
director, officer or employee of the Corporation.
AGGREGATE OPTION/SAR EXERCISES IN FISCAL 1997
AND OPTION VALUES AT JUNE 30, 1997
During Fiscal 1997, there were no options/SARs exercised by any
officer, director or employee of the Corporation and there were no
unexercised in-the-money options/SARs outstanding to any officer,
director or employee as of June 30, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee has ever been (i) an
employee or officer of the Corporation or any of its subsidiaries or (ii)
had any relationship requiring disclosure under any paragraph of Item 404
or in Item 402(j)(3) of Regulation S-K promulgated by the Commission.
Messrs. Lescoffit, Agier and Petoton are representatives of Limagrain.
CERTAIN RELATIONSHIPS AND OTHER RELATED TRANSACTIONS
The Corporation, through relationships with LG Corp. (its 94.4 %
parent), is an affiliate of Limagrain. The Limagrain Group ("Limagrain
Group") consists of a cooperative of approximately 500 French farmers and
the multi-national group of companies owned by them. In total, these
companies represent the third largest seed company in the world. The
Limagrain Group is recognized as a leader in seed research, seed
production, and seed marketing, as well as biotechnology research and
applications. The Limagrain Group also has investments and joint
ventures with other companies throughout the world in various
agribusiness industries.
The Corporation has contractual relationships with a number of other
Limagrain affiliated companies. The terms of these contracts are
negotiated annually between the Corporation and each individual
affiliated company. Management believes that such contracts (i) are
reasonable, necessary and in the best interests of all of the
shareholders of the Corporation, and (ii) are on terms no less favorable
to the Corporation than the Corporation could obtain from non-affiliated
third parties or on which the Corporation could internally perform the
services provided in such contracts. The Audit Committee of the Board of
Directors of the Corporation has independently reviewed the basis for
these contracts and has recommended that the Board of Directors of the
Corporation approve and ratify such contracts as are in effect for the
current fiscal year. The Board of Directors of the Corporation,
including all of the Directors unaffiliated with Limagrain, has
unanimously voted to approve and ratify such contracts as are in effect
for the current fiscal year.
A summary of significant relationships follows below:
EXPORT HYBRID CORN SALES TO AFFILIATED COMPANIES
The Corporation produces and sells seed corn grown in the United
States to affiliates of Limagrain in Europe. These agreements are
renegotiated each year, based on product conditions at the time,
availability of extra capacity at the Corporation's production and
processing facilities, and the needs of the European affiliates of
Limagrain. Such negotiations are conducted on an arms-length basis by
management of the Corporation and a representative of the respective
affiliate. These agreements specifically identify the product to be
produced by the Corporation, the quantity to be purchased, and the
quality and specifications for that product. Management believes that
these contracts are a benefit to the Corporation in that they cover the
variable costs involved, contribute to absorbing fixed operating costs
and augment the profits of the Corporation. There is no assurance that
the Corporation and the Limagrain affiliates will continue to reach
agreement on such arrangements in the future and, in such event, there
will be a negative impact upon the Corporation's sales and profit
margins. During Fiscal 1997, the total sales made under these contracts
amounted to $2,977,000.
HYBRID CORN LICENSE AGREEMENT
The Corporation has entered into an agreement with LG Corp. to allow
the Corporation to market various proprietary hybrid corn genetics
developed through the LG Corp. research program. In exchange for the
right to sell these proprietary genetics, the Corporation has agreed to
pay royalties to LG Corp. For Fiscal 1997, the amount of these royalties
was approximately $71,000. Management anticipates that the royalty rate
will remain stable but that the dollar amount paid to LG Corp. under this
agreement will increase in the future due to an increase in the volume of
sales of these genetics.
Management believes the royalties paid under this agreement are as or
more favorable to the Corporation as compared to the royalties paid in
the seed corn industry generally for the use of proprietary genetic
material.
SOYBEAN GENETICS LICENSE AGREEMENT
The Corporation has entered into an agreement with LG Corp. to allow
the Corporation to market various proprietary soybean products developed
through its soybean research program. In exchange for the right to sell
these products, the Corporation has agreed to pay royalties to LG Corp.
For Fiscal 1997, the amount of these royalties was approximately $44,000.
LG Corp. makes the same type of products available to non-affiliated
competitor companies in the seed industry. Management believes the
royalty rates charged to the Corporation are as favorable to the
Corporation as compared to the royalty rates charged to non-affiliated
customers of LG Corp.
BIOTECHNOLOGY SERVICE AGREEMENT
The Corporation has entered into an agreement with BIOCEM S.A.
("BIOCEM") (an affiliate of Limagrain) to provide access to the
biotechnology research conducted by the Limagrain Group around the world.
Through this agreement, the Corporation not only has access to the
results of the research but also has the right to propose topics for
future study.
During Fiscal 1997, the Corporation paid $50,000 to BIOCEM under the
terms of this agreement. Management believes that the fees paid pursuant
to this agreement are as or more favorable to the Corporation as compared
to (i) the fees that the Corporation would have to pay to a non-
affiliated party for substantially similar services and (ii) the costs
required to perform such services internally.
GROUPE LIMAGRAIN HOLDING SERVICE AGREEMENT
The Corporation has entered into an agreement with Limagrain whereby
Limagrain will provide various administrative, financial and accounting
services to the Corporation that the Corporation does not otherwise
provide for itself. Significant items covered under this agreement are:
a. STRATEGIC PLANNING AND CONTROL
Limagrain monitors the economic environment of the
Corporation, and the seed industry in general, and provides
advice and guidance to management in developing long-term
plans and objectives. In addition, Limagrain assists in the
preparation and review of the annual long-term planning
documents of the Corporation.
b. HUMAN RESOURCES AND BENEFITS
Limagrain provides assistance to the Corporation in the form of
recruitment services, career evaluation, training opportunities,
and compensation evaluation. In addition, Limagrain coordinates
and evaluates the benefit programs offered by Limagrain Group
companies in North America.
c. FINANCING/TREASURY ACTIVITIES
Limagrain provides technical support for the Corporation in
negotiations with its bankers. In addition, Limagrain provides
short-term financing to the Corporation to meet cash flow
requirements. Limagrain has been critical in negotiating
favorable interest rates and financing terms.
d. AUDITING SERVICES
Limagrain assists the Corporation in negotiations with its
outside auditors regarding the cost of services. Limagrain also
provides internal audit services to the Corporation.
The Corporation paid $150,000 to Limagrain under this service
agreement for Fiscal 1997. Management believes that the fees paid
pursuant to this agreement are as or more favorable to the Corporation as
compared to (i) the fees that the Corporation would have to pay to a non-
affiliated party for substantially similar services and (ii) the costs
required to perform such services internally.
LIMAGRAIN GENETICS INTERNATIONAL SERVICE AGREEMENT
The Corporation has entered into an agreement with Limagrain Genetics
International ("LGI") (an affiliate of Limagrain) whereby LGI will
provide various administrative, technical and marketing services to the
Corporation. LGI is the "division" of the Limagrain Group responsible
for the operations of the Corporation.
a. CHIEF EXECUTIVE OFFICER
LGI provided the services of the Chief Executive Officer
of the Corporation, Mr. Emmanuel Rougier. In addition,
LGI paid all travel and other expenses for Mr. Rougier in
his capacity as Chief Executive Officer of the Corporation.
b. BOARD OF DIRECTORS
In their capacity as Board members of LGI, four directors of
LGI are representatives of Limagrain on the Board of Directors
of the Corporation. No fees or costs are paid by the
Corporation for the services of these directors.
c. RESEARCH
LGI coordinates the traditional plant breeding programs of
the Limagrain Group for the crops the corporation markets.
The Corporation receives information on the results of
these activities and has the opportunity to provide
suggestions on potential avenues of future research.
d. MARKETING PLANNING
LGI provides advice and planning services to the Corporation
in regard to the development of business and marketing plans
and strategies.
e. ADMINISTRATIVE/ACCOUNTING SUPPORT
LGI provides expertise to the Corporation in monitoring
short-term planning and month-to-month financial analysis
and control.
f. BRAND NAME
LGI allows the Corporation to use the "LG" brand name and
logo in its marketing efforts.
The Corporation paid $100,000 to LGI under this service agreement for
Fiscal 1997. Management believes that the fees paid pursuant to this
agreement are as or more favorable to the Corporation as compared to (i)
the fees that the Corporation would have to pay to a non-affiliated party
for substantially similar services and (ii) the costs required to perform
such services internally.
LGI pays retirement and certain other benefits provided for under
French law on behalf of French citizens employed by the Corporation. The
Corporation reimburses these benefit costs to LGI. For Fiscal 1997,
these costs amounted to $62,000 and provided benefits for two employees
of the Corporation.
NICKERSON SA SERVICE AGREEMENT
The Corporation has entered into an agreement with Nickerson SA
("Nickerson") (an affiliate of Limagrain) whereby the Corporation will
provide office space and one employee to Nickerson for use in monitoring
its business in the United States. The agreement also calls for the
Corporation to pay invoices on behalf of Nickerson, which Nickerson
reimburses to the Corporation on a monthly basis.
Under the terms of this agreement, in addition to the reimbursement of
direct expenses as described above, Nickerson was invoiced $46,000 by the
Corporation for Fiscal 1997.
FINANCIAL TRANSACTIONS WITH AFFILIATES
At June 30, 1997, LG Corp. had three outstanding loans to the
Corporation:
(i) a two-year note in the amount of $3,260,846. The note is
subordinated to all debt outstanding to the Company's principal bank.
The note bears interest at five percent (5%) per annum and is due July 1,
1999.
(ii) a two-year note in the amount of $1,000,000. The note is
subordinated to all debt outstanding to the Company's principal bank.
The note bears interest at five percent (5%) per annum and is due July 1,
1999.
(iii) a two-year note in the amount of $1,000,000. The note bears
interest at five percent (5%) per annum and is due July 1, 1999.
In addition, from time to time during Fiscal 1997, the Corporation was
advanced cash by LG Corp. and other Limagrain affiliates, to allow the
Corporation to meet covenants under the revolving credit arrangement with
its principal bank. The Corporation reimbursed LG Corp. and other
Limagrain affiliates for actual interest costs and fees incurred to
borrow these funds. Except as described above, all of these advances
have been repaid to LG Corp. and other Limagrain affiliates as of June
30, 1997.
Management believes these loans bear interest at or below a rate which
the Corporation would be able to obtain from an unaffiliated lender for
an unsecured loan.
There is no assurance that LG Corp., or any other affiliate of
Limagrain, will continue to (i) guarantee the Corporation's credit
arrangement (which it has not had the legal obligation to do since
November 1994), (ii)loan funds to the Corporation, or (iii) invest
additional equity in the Corporation. In addition, there is no assurance
that, without such guarantees, loans, and/or investments, the Corporation
would not be out of compliance with terms of its bank line of credit
during seasonal fluctuations in the Corporation's borrowing base and net
tangible assets, respectively.
TAX SHARING AGREEMENT
The Corporation, LG Corp., and each of LG Corp.'s other subsidiaries
entered into a Tax Sharing Agreement as of November 30, 1994. The
purpose of this Tax Sharing Agreement is to provide for an annual system
of allocating federal tax liabilities and certain state and local tax
liabilities of LG Corp., the Corporation, and each of LG Corp.'s other
subsidiaries for purposes of computing each member's annual earnings and
profits and making cash payments between the members to reflect the
allocation of such tax liabilities. Generally, the parties to the Tax
Sharing Agreement have agreed to allocate their consolidated income tax
liabilities in accordance with the method provided in Section 1552(a)(1)
of the Internal Revenue Code, as amended, and the regulations promulgated
thereunder.
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented at the Annual Meeting. If any other business is properly
brought before the Annual Meeting, it is intended that the shares
represented by the enclosed proxy will be voted in respect thereof in
accordance with the judgment of the persons voting the proxies.
DEADLINE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS
Proposals of shareholders of the Corporation which are intended to be
presented by the Corporation at the Corporation's 1998 annual meeting of
shareholders must be received by the Corporation no later than June 12,
1998, that they may be included in the Proxy Statement and Form of Proxy
relating to that meeting.
GENERAL
In order that your shares may be represented if you do not plan to
attend the meeting, and in order to assure the required quorum, please
sign, date and return your proxy promptly.
INCORPORATION BY REFERENCE
The following information from the Corporation's Annual Report to
Shareholders for the fiscal year ended June 30, 1997, and which
accompanies this Proxy Statement is incorporated herein by reference:
"Business," "Properties," "Market for the Registrant's Common Equity and
Related Stockholder Matters," and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
By Order of the Board of Directors
/s/ Bruno Carette
President and Chief Executive Officer
October 15, 1997
Appendix I: Proxy Card
BIOTECHNICA INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON NOVEMBER 12, 1997.
The undersigned hereby appoints Bruno Carette and Edward M. Germain, and each
of them, with power of substitution in each, the proxy (the "Proxy") for and
in the name of the undersigned to vote all shares of Common Stock, $.01 par
value, of BioTechnica International, Inc. (the "Corporation") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Corporation to be held on November 12, 1997, and at any adjournments
thereof, upon matters set forth in the Notice of Meeting, as indicated on the
reverse side of this proxy card.
(Continued and to be voted, signed and dated on reverse side)
Please mark your
X votes as in this
example
1. Election FOR all nominees Withheld Authority
of listed at right (except to to vote for all nominees
Directors vote as marked to the nominees
contrary below) listed at right
_______ _______
Nominees:
Claude Agier
George Allbritten
Bruno Carette
Ralph W. F. Hardy
Serge Lebreton
Claude Lescoffit
Laurent Petoton
Instructions: To withhold authority to vote
for any nominee, write that nominee's
name in the space provided below:
____________________________________
FOR AGAINST ABSTAIN
2. Approval of the appointment of KPMG Peat
Marwick LLP, independent certified public
accountants, as auditors for the Corporation
for the fiscal year ending June 30, 1998: ____ _____ ____
3. In their discretion, the Proxies are further authorized to vote upon
such other business as may properly come before this meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY TEH UNDERSIGNED SHAREHOLDER, IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR PROPOSAL 2.
Note: These matters have been proposed by the Corporation and are not
related to or conditioned on the approval of other matters.
Signature: ____________Date:_______ Signature:_____________Date:________
Note: Where stock is registered jointly in the name of two or more persons,
all should sign. Signature(s) should correspond exactly with the names shown
above. Please sign and date and return promptly in the enclosed envelope.
No postage need be affixed if mailed in the United States.
