IMMUCOR, INC.
3130 Gateway Drive
Norcross, GA 30091
October 12, 1998
Securities and Exchange Commission
Washington, D. C. 20549
Dear Sir or Madam:
We are transmitting our definitive proxy statement pursuant to SEC Rules 14a-6c
and 14a-3c and form of proxy card relating to the Company's 1998 Annual Meeting
of Shareholders to be held on November 12, 1998.
Sincerely yours,
Steven C. Ramsey
Vice President-Finance
<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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X Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
- ----- -----
X Preliminary Proxy Statement Confidential, For Use of the Commission
- ----- ----- Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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- -----
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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IMMUCOR, INC. (Commission File No. 0-14820)
(Name of Registrant as Specified in Its Charter)
Steven C. Ramsey,
Secretary
(770)441-2051
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
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X No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and 0-11.
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(1) Title of each class of securities to which transaction applies;
(2) Aggregate number of securities to which transaction applies;
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filling fee is calculated and state how
it was determined);
(4) Proposed maximum aggregate value of transaction;
(5) Total fee paid.
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule
- ----- 0-11 (a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number or the form or schedule and the date of its filing.
(1) Amount previously paid;
(2) Form, Schedule or Registration Statement No.;
(3) Filing Party;
(4) Date Filed.
<PAGE>
IMMUCOR, INC.
3130 Gateway Drive
P.O. Box 5625
Norcross, Georgia 30091-5625
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
NOVEMBER 12, 1998.
Notice hereby is given that the 1998 Annual Meeting of Shareholders
(the "Meeting") of Immucor, Inc. will be held on Thursday, November 12, 1998, at
4:00 p.m., local time, at the Holiday Inn Select-Peachtree Corners, 6050
Peachtree Industrial Blvd., Norcross, Georgia 30071 for the following purposes:
1. To elect eight members to the Board of Directors;
2. To approve the Immucor, Inc. 1998 Stock Option Plan; and
3. To transact such other business as properly may come before the
Meeting or any adjournment thereof.
Information relating to the above matters is set forth in the Proxy
Statement accompanying this Notice. Only shareholders of record at the close of
business on October 2, 1998, will be entitled to receive notice of and to vote
at the Meeting or at any adjournment thereof.
A Proxy Statement and a Proxy solicited by the Board of Directors are
enclosed herewith. Please sign, date and return the Proxy promptly in the
enclosed envelope. If you attend the Meeting, you may, if you wish, revoke your
Proxy and vote in person.
By Order of the Board of Directors,
STEVEN C. RAMSEY
Secretary
Date: October 12, 1998
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND THE MEETING AND VOTE IN PERSON.
<PAGE>
IMMUCOR, INC.
3130 Gateway Drive
P.O. Box 5625
Norcross, GA 30091-5625
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
NOVEMBER 12, 1998.
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Immucor, Inc. ("Immucor" or the
"Company") for use at the Annual Meeting of Shareholders (the "Meeting") of the
Company to be held on Thursday, November 12, 1998, and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of the Meeting.
The Annual Meeting will be held at 4:00 p.m., local time, at the Holiday Inn
Select-Peachtree Corners, 6050 Peachtree Industrial Blvd., Norcross, Georgia
30071. It is anticipated that this Proxy Statement and the accompanying Proxy
will be mailed to shareholders on or about October 12, 1998. A copy of the
Company's 1998 Annual Report is being mailed to the Company's shareholders along
with this Proxy Statement.
The record date for shareholders entitled to vote at the Meeting was
Friday, October 2, 1998. On that date, the Company had outstanding and eligible
to be voted 7,731,818 shares of Common Stock, $.10 par value ("Common Stock"),
with each share entitled to one vote. There are no cumulative voting rights. The
presence, in person or by proxy, of a majority of the shares of Common Stock
outstanding on the record date is necessary to constitute a quorum at the Annual
Meeting. Abstentions and broker nonvotes are counted for purposes of determining
the presence or absence of a quorum for the transaction of business.
Any Proxy given pursuant to this solicitation may be revoked prior to
the Meeting by delivering an instrument revoking it, by delivering a duly
executed Proxy bearing a later date to the Secretary of the Company or by voting
in person at the Annual Meeting. If a Proxy is properly completed and returned
by the shareholder in time to be voted at the Annual Meeting and is not revoked
prior to the vote, it will be voted at the Meeting in the manner specified
therein. If the Proxy is returned but no choice is specified therein, it will be
voted "FOR" the election to the Board of Directors of all the nominees listed
below under "ELECTION OF DIRECTORS," (or any substitute nominee designated by
the Board), and "FOR" the approval of the Immucor, Inc. 1998 Stock Option Plan.
ELECTION OF DIRECTORS
The number of directors has been set by the Board of Directors at
eight. The Board of Directors has nominated the following eight persons to serve
as directors until the next annual meeting after they are elected or until their
earlier death, resignation or removal from office. All of the nominees are
currently directors of the Company. Messrs. Gallup, Eatz and Dr. De Chirico are
also executive officers of the Company. All executive officers serve at the
pleasure of the Board of Directors.
Directors are elected by a plurality of the votes cast by the holders
of the Company's Common Stock at a meeting at which a quorum is present. A
"plurality" means that the nominees who receive the largest number of votes cast
are elected as directors up to the maximum number of directors to be chosen at
the meeting. Shareholders may vote in favor of all nominees, withhold their
votes as to all nominees or withhold their votes as to specific nominees.
Because directors are elected by a plurality of the votes cast, shares which are
withheld from voting will not be counted and will have no legal effect.
In the event that any person nominated for director by the Board of
Directors withdraws or for any reason is not able to serve as a director, the
Proxy will be voted for such other person, if any, as may be designated by the
Board of Directors as a substitute nominee, but in no event will the Proxy be
voted for more than eight nominees. The Board of Directors has no reason to
believe that any nominee will not serve if elected.
<PAGE>
The nominees have supplied the Company with the following concerning
their current age and positions with the Company or other principal employment:
<TABLE>
<CAPTION>
Director
Name Age Position with Company Since
<S> <C> <C> <C>
Edward L. Gallup 59 Chairman of the Board of Directors, President and 1982
Chief Executive Officer
Ralph A. Eatz 54 Director and Senior Vice President - Operations 1982
Dr. Gioacchino De Chirico 45 Director, Director of European Operations and 1994
President of Immucor Italia S.r.l
Daniel T. McKeithan 74 Director 1983
Didier L. Lanson 48 Director 1989
G. Bruce Papesh 51 Director 1995
Dennis M. Smith, Jr., MD 46 Director 1998
Joseph E. Rosen 54 Director 1998
</TABLE>
Edward L. Gallup has been Chairman of the Board of Directors, President
and Chief Executive Officer of the Company since its founding. Mr. Gallup has
worked in the blood banking business for over 34 years.
Ralph A. Eatz, who has been working in the blood banking reagent field
for over 30 years, has been a director and Vice President - Operations of the
Company since its founding and Senior Vice President - Operations since December
1988.
Dr. Gioacchino De Chirico has been Director of European Operations
since May 1998 and President of Immucor Italia S.r.l. since February 1994. From
1989 until 1994, he was employed in the United States by Ortho Diagnostic
Systems, Inc., a Johnson and Johnson Company, as General Manager,
Immunocytometry, with worldwide responsibility. From 1979 until 1989, he was
with Ortho Diagnostic Systems, Inc., in Italy, where he began as a sales
representative and held several management positions, including Product Manager
and European Marketing Manager for Immunology and Infectious Disease products.
Immucor Italia S.r.l. was acquired by the Company on September 30, 1991.
Daniel T. McKeithan has been a director of the Company since February
28, 1983. Since 1986, he has served as a consultant to health care companies.
From April 1979 until March 1986 he was employed by Blood Systems, Inc., a
supplier of blood and blood products, as a general manager and as Executive Vice
President of Operations. Mr. McKeithan also has 30 years experience in
pharmaceutical and diagnostic products with Johnson and Johnson, Inc., including
Vice President - Manufacturing of the Ortho Diagnostic Systems division.
Didier L. Lanson has been a director of the Company since October 24,
1989. Since September 1992, he has served as Vice President, Europe, of SyStemix
International, a publicly traded biotechnology company recently acquired by
Novartis Biotech Holding Company. He is currently Vice President Global
Operations and International Affairs of SyStemix Inc. and General Manager of
SyStemix International, a subsidiary of SyStemix Inc., located in France.
SyStemix Inc. is primarily engaged in the development of cellular and gene
therapy products. He was a director and the President and CEO of Diagnostics
Transfusion ("DT"), a French corporation which develops, manufactures and
distributes reagent products, and President and CEO of ESPACE VIE, a French
corporation which develops and markets pharmaceutical blood based products and
biotech products, from 1987 until December 1991.
G. Bruce Papesh is the co-founder of Dart, Papesh & Co., a Lansing,
Michigan based company that provides investment consulting and other financial
services. He has served as President of Dart, Papesh & Co. Inc., since 1987. Mr.
Papesh has over 28 years of experience in investment services while serving in
stock broker, consulting and executive management positions. Mr. Papesh also
serves as a director and as Secretary of Neogen Corporation, an agricultural
biotechnology company.
Dennis M. Smith, Jr., MD is the Chairman of the Section of Pathology
and the Director of Laboratories at Columbia Memorial Hospital in Jacksonville,
Florida. In addition to these duties, Dr. Smith is a member of the Board of
Directors of Medical Equity Partners, Jacksonville, Florida, Vice President of
Laboratory Physicians, St. Petersburg, Florida and Managing Director, Florida
Region of AmeriPath, Inc. Dr. Smith is a past president of the American
Association of Blood Banks and is currently Chairman of the Board of Trustees of
the National Blood Foundation. He has over 19 years of experience in the medical
field.
Joseph E. Rosen has been with Sera-Tec Biologicals since its inception
in 1969 and has served as President for the past 15 years. Mr. Rosen is
currently serving as Chairman of the Board of the American Blood Resources
Association, the plasma industry trade group, and has been a member of the Board
of Directors of several public and private health care companies. He has over 25
years of experience in the blood banking industry.
<PAGE>
There are no family relationships among any of the directors or
executive officers of the Company.
For information concerning the number of shares of the Company's Common
Stock held by each nominee, see "PRINCIPAL HOLDERS OF VOTING SECURITIES" below.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION OF
EACH OF THE NOMINEES WHOSE NAMES APPEAR ABOVE AND PROXIES EXECUTED AND RETURNED
WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of October 2, 1998, the number of
shares of Common Stock of Immucor beneficially owned by each director and other
reporting insiders of the Company, and by each person known to the Company to
own more than 5% of the outstanding shares of Common Stock, and by all of the
executive officers and directors of the Company as a group.
Name of Beneficial Owner
(and address for those Shares Percent
owning more than five percent) Owned(1) of Class(1)
Edward L. Gallup 244,357 (2) 3.2%
Ralph A. Eatz 322,526 (2) 4.2%
Dr. Gioacchino De Chirico 60,000 (3) *
Steven C. Ramsey 5,000 *
Patrick D. Waddy 15,000 *
Didier L. Lanson 11,250 (4) *
Daniel T. McKeithan 56,278 (4) *
G. Bruce Papesh 500 (5) *
Dennis M. Smith, Jr., MD 40,312 *
Joseph E. Rosen - -
Wellington Management Co. LLP 522,000 (6) 6.8%
75 State Street
Boston, MA 02109
All directors and executive officers
as a group (ten persons) 755,223 9.8%
* less than 1%.
(1) Except as otherwise noted herein, percentages are determined on the
basis of 7,731,818 shares of Common Stock issued and outstanding plus
securities deemed outstanding pursuant to Rule 13-3(d)(1) of the
Securities Exchange Act of 1934, as amended. As a result, the
percentage of shares of Common Stock is calculated assuming that the
beneficial owner has exercised any options held by such beneficial
owner that are currently exercisable, or exercisable within 60 days of
October 2, 1998, and that no other options have been exercised by
anyone else. Unless otherwise indicated, the Company believes the
beneficial owner has sole voting and investment power over such shares.
(2) Includes for Messrs. Gallup and Eatz an option to acquire 89,250
shares at an exercise price of $9.33 and an option to acquire 45,000
shares at an exercise price of $6.00.
(3) Includes a currently exercisable option to acquire 15,000 shares of
Common Stock at an exercise price of $6.00 and an option to acquire
45,000 shares of Common Stock at an exercise price of $6.00.
<PAGE>
(4) Includes a currently exercisable option to acquire 3,750 shares
at $5.40 per share and a currently exercisable option to acquire 7,500
shares at $6.00 per share.
(5) Includes 400 shares over which Mr. Papesh shares investment power in
his role as an investment advisor.
(6) Wellington Management Co. LLP ("WMC") reported in a Schedule 13G dated
January 14, 1998, that WMC in its capacity as an investment adviser may
be deemed to beneficially own 522,000 shares or 6.8% of the Company,
which are held of record by clients of WMC. WMC indicated that it had
the shared power to vote or direct the vote of 335,000 shares and
shared power to dispose or to direct the disposition of 522,000 shares
and that it had no sole power to vote or dispose of the shares.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the
Board and through committees established in accordance with the Company's
Bylaws. The Board of Directors has established an Audit Committee which has the
responsibility of reviewing the Company's financial statements with management
and the independent auditors prior to the publication of such statements and
determining that all audits and examinations required by law are performed.
Messrs. McKeithan, Lanson and Papesh are members of the Company's Audit
Committee. The Board of Directors has also established a Stock Option Committee
which has the authority to grant stock options to employees from time to time
and to administer the Company's various stock plans. Messrs. Gallup, Eatz, Rosen
and Dr. Smith are members of the Company's Stock Option Committee. The Stock
Option Committee may not grant options to any of the Company's Executive
Officers without the approval of the Compensation Committee. The Compensation
Committee established by the Board is responsible for setting the annual
compensation of the Company's three executive officers and Mr. Ramsey. Messrs.
McKeithan, Lanson and Papesh are members of the Compensation Committee. The
Board does not have a standing nominating committee.
The Board of Directors met thirteen times, the Audit Committee and the
Compensation Committee met once, and the Stock Option Committee met six times
during the fiscal year ended May 31, 1998. Each Director attended at least 75%
of the total of all meetings of the Board of Directors and any committee on
which he served.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee has responsibility for determining the types and
amounts of executive compensation, including setting the number of stock options
that can be granted to executive officers as a group. Messrs. McKeithan, Papesh
and Lanson are members of the Compensation Committee. The Stock Option Committee
determines the number of shares to be granted to individual executive officers.
Messrs. Gallup, Eatz, Rosen and Dr. Smith are members of the Stock Option
Committee. Ralph A. Eatz has been a director and Vice President - Operations of
the Company since its founding, and Senior Vice President - Operations since
December 1988 and participates in decisions on executive compensation. Neither
Mr. McKeithan, Mr. Papesh nor Mr. Lanson are, nor have they ever been, officers
or employees of the Company. Edward L. Gallup and Ralph A. Eatz are the founders
of the Company, have been directors and executive officers of the Company since
its inception, and each of them participates in decisions on all stock options
granted. Neither Mr. Rosen nor Dr. Smith are, nor have they ever been, officers
or employees of the Company.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and certain of the Company's other officers for services
rendered in all capacities to the Company for the last three fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------ -----------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Compensation (1) Options (2) Compensation (3)
- ------------------------------------- -------- ------------ ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Edward L. Gallup 1998 $190,253 $35,619 - $4,752
Chairman of the Board, President 1997 183,993 33,415 - 4,812
and Chief Executive Officer 1996 176,587 31,633 - 4,945
Ralph A. Eatz 1998 185,091 29,628 - 4,726
Director and Senior Vice 1997 178,593 28,108 - 4,782
President - Operations 1996 170,913 26,738 - 4,975
Dr. Gioacchino De Chirico 1998 150,575 12,752 - -
Director of European Operations and 1997 177,188 13,021 - -
President, Immucor Italia, S.r.l. 1996 180,073 11,731 - -
Steven C. Ramsey (4) 1998 14,385 - 30,000 -
Vice President - Chief Financial
Officer and Secretary
Richard J. Still (5) 1998 137,928 15,764 - 3,241
Former Director, Senior Vice 1997 178,593 24,639 - 4,778
President - Finance, Treasurer and 1996 170,981 23,058 - 5,038
Secretary
Josef Wilms (6) 1998 29,156 2,408 - 75,461
Former President, Immucor GmbH 1997 193,548 16,093 - -
1996 202,131 17,663 - -
<FN>
(1) Includes the value of life insurance premiums and an allowance for
automobile expenditures for each of the above named executive officers
as follows: For 1998 - for Messrs. Gallup, Eatz, Still, Wilms and Dr.
De Chirico, life insurance premiums of $26,019, $20,028, $9,364, $317
and $3,152, respectively, and an allowance for automobile expenditures
for Messrs. Gallup, Eatz and Dr. De Chirico of $9,600 each, for Mr.
Still $6,400 and for Mr. Wilms $2,091. For 1997 - for Messrs. Gallup,
Eatz, Still, Wilms and Dr. De Chirico, life insurance premiums of
$23,815, $18,508, $15,039, $1,898 and $3,421, respectively, and an
allowance for automobile expenditures for Messrs. Gallup, Eatz, Still
and Dr. De Chirico of $9,600 each and for Mr. Wilms $14,195. For 1996 -
for Messrs. Gallup, Eatz, Still, Wilms and Dr. De Chirico, life
insurance premiums of $22,033, $17,138, $13,458, $2,059 and $2,131,
respectively, and an allowance for automobile expenditures for Messrs.
Gallup, Eatz, Still and Dr. De Chirico of $9,600 each and for Mr.
Wilms $15,604.
(2) Represents options granted under the 1995 Stock Option Plan to purchase
shares of the Company's Common Stock at an exercise price of $8.38. 50%
of the options are exercisable beginning April 20, 2000, and 25% per
year thereafter.
(3) Represents amounts the Company contributed to the 401(k) retirement
plan on behalf of the named executive officers and for Mr. Wilms'
consulting fees for August 1 through December 31, 1997.
(4) Mr. Ramsey assumed the position of Vice President and Chief Financial
Officer in April 1998.
(5) Mr. Still resigned as Director, Senior Vice President-Finance,
Treasurer and Secretary in January 1998.
(6) Mr. Wilms resigned as President of Immucor GmbH in July 1997 and was
retained as a consultant until December 31, 1997.
</FN>
</TABLE>
<PAGE>
Stock Options
Options Granted. During the fiscal year ended May 31, 1998, stock
options were granted to Mr. Ramsey under the 1995 Stock Option Plan. No other
options have been granted during the fiscal years ended May 31,1998, 1997 and
1996 to the executive officers listed in the Summary Compensation Table.
The table below sets forth information regarding the options granted
during the fiscal year ended May 31, 1998, to Mr. Ramsey.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------------
Number of % of Total Potential Realizable Value at
Securities Options Assumed Annual Rates of
Underlying Granted to Exercise or Stock Price Appreciation
Options Employees Base Price Expiration For Option Term
-------------------------------
Name Granted (#) in Fiscal Year ($/share) Date 5% 10%
- ---- -------------------------------- ----------------------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Steven C. Ramsey (1) 30,000 9.6% $8.38 4/19/08 $158,100 $400,800
<FN>
(1) 50% of the options are exercisable beginning April 20, 2000, and 25%
per year thereafter.
</FN>
</TABLE>
Option Holdings
The table below presents information concerning option exercises during the past
fiscal year and the value of unexercised options held as of the end of the
fiscal year by each of the individuals listed in the Summary Compensation Table.
<TABLE>
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired On Value May 31, 1998 May 31, 1998 (1)
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---------------- ------------ ------------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward L. Gallup - - 134,250 15,000 $118,125 $39,375
Ralph A. Eatz - - 134,250 15,000 118,125 39,375
Dr. Gioacchino De Chirico - - 60,000 15,000 157,500 39,375
Steven C. Ramsey - - - 30,000 - 7,350
Richard J. Still 31,800 $96,300 102,450 - 34,650 -
Josef Wilms (2) 43,600 158,670 234,400 - 129,456 -
<FN>
(1) Based on the difference between the exercise price and the closing
price for the Common Stock on May 31, 1998, of $8.625 as reported by
NASDAQ.
(2) Includes warrants to purchase 143,750 shares of Common Stock at an exercise price of $7.75, issued in
connection with the acquisition of Immucor GmbH.
</FN>
</TABLE>
<PAGE>
Employment Contracts, Termination of Employment and Change of Control
Arrangements
The Company has in effect employment agreements (the "Agreements") with
two of its executive officers: Edward L. Gallup and Ralph A. Eatz (individually,
"the Employee") entered into on January 1, 1986. Each of the Agreements renews
for a period of five years from each anniversary date unless sooner terminated.
If the Company terminates the employment of the Employee "without cause", the
Employee would receive his base annual salary for the remainder of the five year
period as renewed in a single lump sum payment upon such termination. "Without
cause" is defined in the Agreements to include (i) the sale, exchange or other
disposition, in one transaction, or in a series of related transactions, of at
least 20% of the Company's outstanding shares of capital stock (but not
including a purchase and sale of the Company's Common Stock by an underwriter in
a public offering), (ii) the sale of substantially all of the Company's assets
to a purchaser or a group of associated purchasers, whether in a single
transaction or a series of related transactions, (iii) under certain
circumstances, the merger or consolidation of the Company, or (iv) the
occurrence of any change in control of the Company within the meaning of the
federal securities law. "Without cause" also includes the relocation of the
Employee without the Employee's consent.
Immucor GmbH had in effect an employment agreement with Josef Wilms,
prior to his resignation, effective for an indefinite period and subject to
termination by either party at the end of each calendar half year upon six
months prior notice. A termination by Immucor GmbH required a decision by the
Company as its sole shareholder. Under the terms of the employment agreement,
Mr. Wilms agreed to refrain from competition with Immucor GmbH for a period of
two years following the termination of the agreement, and Immucor GmbH agreed to
pay Mr. Wilms monthly installments of 1/16 of his annual compensation for such
forbearance. Immucor GmbH had the right to release Mr. Wilms from his
noncompetition obligations, in which case Mr. Wilms would not have been paid. A
new agreement signed in fiscal 1998 supercedes the above and releases Immucor
from any further obligations under the Employment Agreement and requires Mr.
Wilms to refrain from competition with Immucor, Inc. until December 31, 1999.
Currently, Mr. Wilms is no longer an employee or consultant to the Company. See
Item 13 - "Certain Relationships and Related Transactions."
The Company has in effect employment agreements (the "Agreements") with
Dr. Gioacchino De Chirico entered into on December 31, 1993. The Agreements
renew for a period of five years from each anniversary date unless sooner
terminated based upon sales performance of Immucor Italia. The Company may only
terminate the employment agreements "for cause", as defined in the agreements.
If the Company terminates the employment of the Employee "without cause", the
Employee would receive his base annual salary for the remainder of the five year
period as renewed upon such termination. Dr. De Chirico has agreed to refrain
from competition with Immucor Italia, S.r.l. following the termination of the
agreements for a period of two years if he is terminated without cause, and for
a period of four years if he is terminated for cause or if he voluntarily
terminates the agreements.
The Company has in effect an employment agreement (the "Agreement")
with Mr. Steven C. Ramsey entered into on April 7, 1998. The Agreement renews
for a period of eighteen months from each anniversary date unless sooner
terminated. If the Company terminates employment "without cause", the Employee
would continue to receive his base compensation in installments payable every
two weeks for a period of eighteen months. "Without cause" is defined in the
Agreement to include (i) the sale, exchange or other disposition, in one
transaction, or in a series of related transactions, of at least 20% of the
Company's outstanding shares of capital stock, (ii) the sale of substantially
all of the Company's assets to a purchaser or a group of associated purchasers,
whether in a single transaction or a series of related transactions, (iii) under
certain circumstances, the merger or consolidation of the Company, or (iv) the
occurrence of any change in control of the Company within the meaning of the
federal securities law. Mr. Ramsey has agreed to refrain from competition with
Immucor for a period of three years after his employment has terminated and for
any additional period that he is compensated by the Company.
Compensation Committee Report
Executive Officer Compensation
Daniel T. McKeithan, Didier L. Lanson and G. Bruce Papesh are the
members of the Compensation Committee of the Company's Board of Directors which
was formed on November 10, 1992. The Compensation Committee annually determines
the salary, incentive bonus and other compensation to be provided to the
Company's executive officers. The Committee believes the Board must act on the
shareholders' behalf when establishing executive compensation programs, and the
Committee has developed a compensation policy which is designed to attract and
retain qualified key executive officers critical to the Company's overall
long-term success. As a result, the Committee develops a base salary, bonus
incentive, and other long-term incentive compensation plans for its executive
officers.
<PAGE>
Base Salary. The base salaries for the executive officers are governed
by the terms of their employment agreements. See "Employment Contracts,
Termination of Employment and Change of Control Arrangements" above. The
employment agreements contain the general terms of each officer's employment and
establish the minimum compensation that such officers are entitled to receive,
but do not prohibit, limit or restrict these officers' ability to receive
additional compensation from the Company, whether in the form of base salary,
bonus, stock options or otherwise. In determining whether the base salaries of
the executive officers should be increased, the Committee considers numerous
factors including the qualifications of the executive officer and the amount of
relevant individual experience the executive officer brings to the Company, the
financial condition and results of operations of the Company, and the
compensation necessary to attract and retain qualified management.
The Compensation Committee awarded four percent (4%) increases in the
base salaries of the executive officers in August 1996 and August 1997 and a ten
percent (10%) increase in August 1998.
Incentive Bonus. Each year the Compensation Committee recommends to the
Board of Directors an incentive cash bonus pool to be paid to the Company's
executive officers, as well as all other managers within the Company, based upon
the Company's operating results. The amount of the bonus pool varies from year
to year at the discretion of the Compensation Committee. During the fiscal years
ended May 31, 1997 and 1998, no bonuses were paid.
Long-Term Incentives. The Company's stock option program is the
Company's primary long-term incentive plan for executive officers and other key
employees. The Compensation Committee reviews the financial performance of the
Company, such as increases in income from operations and earnings per share, in
determining whether options should be granted, the number of options to be
granted, and the number of options that can be granted to executive officers as
a group. The Stock Option Committee then determines the number of shares to be
granted to individual executive officers. In this way, the long-term
compensation of executive officers and other key employees are aligned with the
interests of the Company's shareholders. As a result, each key individual is
provided a significant incentive to manage the Company's performance from the
perspective of an owner of the business with an equity stake. The number of
shares subject to each option grant is based upon the executive officer's
tenure, level of responsibilities and position within the Company. Stock options
are granted at market price and will only increase in value if the Company's
stock price increases. In addition, all stock option grants require various
periods of minimum employment beyond the date of the grant in order to exercise
the option. During 1995, the Company implemented the 1995 Stock Option Plan, a
broad based plan, and issued options to executive officers and other key
employees. No options were issued to executive officers in 1996 or 1997. During
the fiscal year ended May 31, 1998, stock options were granted to Mr. Ramsey
under the 1995 Stock Option Plan.
Chief Executive Officer Compensation
No statistical criteria were used to establish the compensation of Mr.
Gallup, but rather his base salary, stock options and portion of the bonus pool,
if any, were subjectively determined taking into account he was one of the
founders of the Company, has been Chairman of the Board of Directors, President
and Chief Executive Officer of the Company since 1982, and has worked in the
blood banking business for over 34 years. The Compensation Committee believes
the salary paid and the options granted to Mr. Gallup will help align his
interests with those of the Company and its shareholders. No bonus was earned
by, or options granted to, Mr.
Gallup in 1997 or 1998.
Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code limits, with certain
exceptions, the Company's corporate tax deduction for compensation paid to
certain officers of the Company to no more than $1,000,000 per executive per
year. Given the current level of compensation paid to the executive officers of
the Company, the Company has not needed to address Section 162(m).
Compensation Committee Members Stock Option Committee Members
Daniel T. McKeithan Edward L. Gallup
Didier L. Lanson Ralph A. Eatz
G. Bruce Papesh Joseph E. Rosen
Dennis M. Smith, Jr., MD
<PAGE>
Performance Graph
The following performance graph compares the cumulative total
shareholder return on an investment of $100 in the Common Stock of the Company
for the last five fiscal years with the total return of the S & P 500 and a Peer
Group Index for the Company's last five fiscal years. There is only one other
public company engaged in the blood bank reagent business that is not a division
of a larger publicly-held company. For this reason the Peer Group Index is Gamma
Biologicals, Inc.
COMPARISON OF CUMULATIVE TOTAL RETURNS*
<TABLE>
<CAPTION>
STARTING
BASIS
DESCRIPTION 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
IMMUCOR INC (%) -16.67 82.50 32.88 -26.80 -2.82
IMMUCOR INC ($) $100.00 $83.33 $152.08 $202.08 $147.92 $143.75
S & P 500 (%) 4.26 20.19 28.44 29.41 30.68
S & P 500 ($) $100.00 $104.26 $125.31 $160.94 $208.28 $272.19
PEER GROUP ONLY (%) 98.11 -31.89 -4.80 2.84 12.78
PEER GROUP ONLY ($) $100.00 $198.11 $134.92 $128.45 $132.11 $148.99
PEERS + YOUR COMPANY (%) 12.95 31.40 24.39 -21.96 0.49
PEERS + YOUR COMPANY ($) $100.00 $112.95 $148.42 $184.62 $144.08 $144.78
</TABLE>
ASSUMES INITIAL INVESTMENT OF $100 ON JUNE 1, 1993
*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
NOTE: TOTAL RETURNS BASED ON MARKET CAPITALIZATION
Compensation of Directors
Members of the Board of Directors, who are not also executive officers
of the Company, receive $500 per meeting and are reimbursed for all travel
expenses to and from meetings of the Board. In addition, the Company provides
each of the non-employee directors a grant of an option to purchase shares of
the Company's Common Stock upon their election as a director at the stock's then
current fair market value, and at the direction of the Board, they may receive
additional options. The amount of shares subject to the option is determined at
the time of the grant. Messrs. McKeithan and Lanson hold 13,750 options each and
Messrs. Papesh, Rosen and Dr. Smith hold 10,000 options each to purchase shares
of the Company's Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and regulations of
the Securities and Exchange Commission thereunder require the Company's
executive officers and directors and persons who own more than ten percent of
the Company's Common Stock, as well as certain affiliates of such persons, to
file initial reports of ownership and changes in ownership with the Securities
and Exchange Commission. Executive officers, directors and persons owning more
than ten percent of the Company's Common Stock are required by Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received by it and written representations that no other reports were required
for those persons, the Company believes that, during the fiscal year ended May
31, 1998, all filing requirements applicable to its executive officers,
directors and owners of more than ten percent of the Company's Common Stock were
complied with.
<PAGE>
Certain Relationships and Related Transactions.
The Company's German subsidiary, Immucor Mediziniche Diagnostik GmbH
("Immucor GmbH"), leases approximately 1,566 square meters of space from a
corporation of which Josef Wilms' son is a majority stakeholder. Josef Wilms was
formerly the President of Immucor GmbH and a director of the Company. Rental
payments for the 1998 fiscal year totaled $184,500, and the lease term extends
through April 2009.
In fiscal 1997, Mr. Josef Wilms, the former president of the Company's
German subsidiary, Immucor GmbH, borrowed, prior to his resignation, $300,000
from the Company at 6% interest, secured by his warrants to purchase 143,750
shares of the Company's Common Stock. At May 31, 1998 the amount outstanding
under the loan was $167,000, and at July 14, 1998 the loan including accrued
interest was fully paid.
In July 1997, management of the Company discovered that Mr. Wilms had
caused Immucor GmbH to make unauthorized loans to him since 1994. The amounts
advanced were documented in the records of Immucor GmbH, including interest
rates ranging from 7.75% to 9.5%, and were generally paid down by the end of
each accounting period, but were not disclosed to the Company's management. The
largest aggregate amounts outstanding under the Immucor GmbH loans were $29,600
in fiscal 1994, $290,000 in fiscal 1995, $669,000 in fiscal 1996 and $1,311,000
in fiscal 1997. At May 31, 1997, the outstanding amount under the Immucor GmbH
loan was approximately $1,300,000, and at May 31, 1998 the aggregate amount
under the loan was approximately $528,000.
The Company believes it has adequate collateral to extinguish the remaining
debt and, with Mr. Wilm's assistance, is arranging for the liquidation of this
collateral.
In July 1997, Mr. Wilms resigned as a director of the Company and as an
employee of Immucor GmbH, but remained a managing director of Immucor GmbH, with
limited authority, through December 31, 1997. Mr. Wilms remained as a consultant
to the Company through December 31, 1997 on European sales and marketing
matters. For these consulting services Mr. Wilms was paid approximately $75,000.
Mr. Wilms has had no continuing employment or consulting relationship with
Immucor, Inc. or Immucor GmbH since December 31, 1997.
Mr. Wilms and his family granted liens on certain property owned by them to
collateralize the loans from the Company. Since May 31, 1998, the Company
arranged the sale of some of the collateral bringing the aggregate amount
payable to the Company by Mr. Wilms to approximately $137,000 as of August 31,
1998.
<PAGE>
PROPOSAL TO APPROVE THE IMMUCOR, INC. 1998
STOCK OPTION PLAN
Introduction
The Company is seeking shareholder approval of the Company's 1998 Stock
Option Plan (the "Plan").
The purpose of the Plan is to secure for the Company and its
shareholders the benefits arising from capital stock ownership by those who will
contribute to its future growth and continued success.
Description of Plan
Common Stock Subject to the Plan. 1,000,000 shares of the Company's
Common Stock have been reserved for use upon the exercise of Options granted
from time to time under the Plan. That number would be adjusted in the event of
any change in the outstanding shares of Common Stock by reason of any stock
dividend, stock split or similar corporate change involving the Common Stock. On
October 2, 1998, that last sale price for the Common Stock was $9.50 per share.
As of the date of this Proxy Statement, no options have been granted under the
Plan.
Administration of the Plan. The Stock Option Committee of the Board of
Directors manages the Plan. The Committee is subject to the Board of Directors
of the Company, and the Board of Directors may exercise all the powers of the
Committee, subject to applicable law.
Participation. The Committee will determine which employees and
directors of the Company will be granted options (the "Participants"), the
number of shares of Common Stock to be covered by those options, the terms and
conditions of each option and any voting and transfer restrictions on the Common
Stock issued upon exercise of each option.
Terms of Options. On the date of grant, the Committee will determine
the option exercise price, the vesting schedule and the expiration date for each
option. The Committee may, in its discretion, accelerate the exercisability of
any option at any time and for any reason. Upon exercise, Participants must pay
for the underlying shares of Common Stock in cash or by tendering shares of
Common Stock owned by the Participant, and the Committee also has discretion to
accept a promissory note of the Participant instead. Options under the Plan are
not transferable except under state laws governing estates upon a Participant's
death.
Termination of Employment. The Committee has the authority to determine
the rights of employees upon termination concerning their options, and may
provide for immediate or deferred termination of an option, and acceleration of
vesting.
Amendment of Plan. The Board of Directors of the Company may at any
time amend, suspend or terminate the Plan. Unless expressly authorized in the
Plan, no amendment, suspension or termination of the Plan may adversely affect
any option previously granted under the Plan without the consent of the
Participant affected.
Federal Tax Consequences of Options. Under current federal income tax
laws, generally the grant of a non-qualified stock option does not result in any
income to the Participant for federal income tax purposes, or any deduction for
the Company. At the time of exercise, however, the Participant generally will
recognize ordinary income to the extent that the fair market value of the shares
received exceeds the option exercise price, and the Company may take a
corresponding deduction. Upon a sale of the shares, the Participant will
recognize long-term capital gain if the shares have been held for the required
holding period. The amount of the long-term capital gain will be the sale price
less the fair market value of the shares on the exercise date.
If the option is an incentive stock option, no income will be
recognized for federal income tax purposes at the time of grant or exercise, and
the Company will not receive any corresponding deduction. The optionee will be
subject to federal income tax when the optionee sells the shares acquired upon
the exercise of the incentive stock option. Upon a sale of the shares, the
Participant will recognize long-term capital gain if the shares have been held
for the required holding periods. The amount of the long-term capital gain will
be the sale price less the option exercise price. The Company will not be
entitled to a federal income tax deduction as to any amount taxed as long-term
capital gain in connection with the sale of shares acquired upon the exercise of
an incentive stock option.
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code. In addition, the Plan generally is not subject to the Employee Retirement
Income Security Act of 1974.
Required Vote; Recommendation
Approval of the Plan requires a majority of the total votes cast in
person or by proxy. Abstentions and broker nonvotes will have no effect on the
vote.
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL
OF THE PLAN AND PROXIES EXECUTED AND RETURNED WILL BE SO VOTED UNLESS CONTRARY
INSTRUCTIONS ARE INDICATED THEREON.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP, Atlanta, Georgia, acted as the Company's independent
certified public accountants for the fiscal year ended May 31, 1998.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting and will have the opportunity to make a statement if they desire to do
so and to respond to appropriate questions.
The Company has not yet selected anyone to act as the Company's
independent certified public accountants for its fiscal year ending May 31,
1999. The Board makes such a selection annually at an Audit Committee meeting at
the end of the calendar year.
MISCELLANEOUS
The expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by the Company. Copies of
solicitation material may be furnished to banks, brokerage houses and other
custodians, nominees and fiduciaries for forwarding to the beneficial owners of
shares of the Company's Common Stock, and normal handling charges may be paid
for such forwarding service. In addition to solicitations by mail, directors and
regular employees of the Company may solicit Proxies in person or by telephone,
telegraph or otherwise.
The Company will furnish without charge a copy of its Annual Report on
Form 10-K filed with the Securities and Exchange Commission for the fiscal year
ended May 31, 1998, including financial statements and schedules thereto, to any
record or beneficial owner of its Common Stock as of October 2, 1998, who
requests a copy of such report. Any request for the Form 10-K should be in
writing addressed to: Steven C. Ramsey, Vice President - Chief Financial Officer
and Secretary, Immucor, Inc., 3130 Gateway Drive, PO Box 5625, Norcross, GA
30091-5625. If the person requesting the Form 10-K was not a shareholder of
record on October 2, 1998, the request must include a representation that such
person was a beneficial owner of Common Stock of the Company on that date. A
copy of any exhibits to the Form 10-K will be furnished on request and upon the
payment of the Company's expenses in furnishing such exhibits.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's
1999 annual meeting must be received by the Company no later than June 11, 1999,
in order to be considered for inclusion in the Company's Proxy Statement and
form of Proxy for that meeting. If a proposal intended to be presented by a
shareholder at the 1999 annual meeting, for which the shareholder does not seek
inclusion in the Company's Proxy Statement and form of Proxy for that meeting,
is not received by the Company by August 25, 1999, then the management proxies
appointed in the enclosed Proxy will be allowed to use their discretionary
voting authority with respect to the proposal.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors knows of no matters other than those stated
above which are to be brought before the Meeting. However, if any other matter
should be presented for consideration and voting, it is the intention of the
persons named in the enclosed form of Proxy to vote the Proxy in accordance with
their judgment on such matter.
By Order of the Board of Directors
STEVEN C. RAMSEY
Secretary
October 12, 1998
